Growth Through Sustainability

In today's rapidly evolving business landscape, innovative companies are debunking the idea that sustainability and profitability are mutually exclusive. At Trane Technologies, our robust sustainability strategy is embedded in our business plan, driving significant value and growth. Our commitment to sustainability is enhancing our operations and propelling our financial performance and innovation to new heights, while also helping our customers operate more sustainably. 

A clear vision and solid business strategy 

Sustainability and growth require long-term commitments. While Trane Technologies was launched just over five years ago, our core HVAC and refrigeration businesses are over 100 years old and our sustainability-focused business trajectory was set in motion nearly two decades ago.  
 
When we became Trane Technologies in 2020, investors already valued our focus as a climate innovator and the alignment of our investments and business strategy. We embraced global megatrends, using them as a spur for new ideas and focusing our investment on sustainable innovation. Today, our full products and services portfolio is focused on improving energy efficiency for our customers and driving more sustainable outcomes.

Continued customer demand for more sustainable solutions and our focus on innovation have driven impressive financial performance, including a compound annual revenue growth rate of 12% since 2020 and a 286% increase in total shareholder returns over the same period, almost three times the rate of the S&P 500. 

Sustainable practices provide a high return on investment 

One common misconception is that sustainability is more expensive—but it pays off when it’s built into business strategy. We are a participating member of the U.S. Department of Energy’s Better Buildings Initiative, a program that partners with public and private sector leaders with the goal of improving energy efficiency in buildings and factories across the country. Its research shows that every dollar invested in building modernization returns an average of $3 in energy savings over five years. Considering rising energy costs and the fact that many inefficient buildings waste an average of 30% of energy after the meter, this convergence is the sweet spot for technology and innovation in our business. 

Today, thermal management systems in our commercial HVAC portfolio are 70% more energy efficient than they were six years ago, and many offer heat recovery and energy storage to enhance energy optimization. 

We see first-hand results in our own 100-year old La Crosse, Wisconsin facility, now operating with our Trane® Thermal BatteryTM Storage Source Heat Pump system, a first-of-its-kind solution to advance and integrate electrified, low-carbon heating and cooling and energy storage. The new system saved 15 million gallons of water in 2023—a reduction of 85% from the prior year. It is also estimated to reduce the overall energy use of the building by 28% compared to the previous system. 

Trane's humble beginnings were in this same century-old plant, and now it manufactures some of the largest, yet most efficient, chiller systems we make for high-tech semiconductor and data center industries. 

A compelling demand for innovation  

Our biggest decarbonization opportunity is reducing emissions related to the use of our products. This idea is what drives our Gigaton Challenge to reduce one billion metric tons of GHG emissions from our customers’ footprint by 2030 (from a 2019 baseline). Delivering on a commitment this big is transformational, not just for our business, but for us all. 

Estimates show that electricity could represent up to 70% of final energy demand by 2050. This transition will require a massive expansion of clean power systems, and we can achieve it through the falling costs of renewables, increased availability of energy storage solutions and more solutions that simply reduce energy needs in the first place. 

We helped Organon, a global pharmaceutical company in the Netherlands, optimize the heating and cooling needs of its largest production facility while supporting its 2035 carbon neutrality goal. The company is saving nearly 7,700 gigajoules of energy a year—equivalent to almost 243,000 cubic meters of gas—with the implementation of three high-efficiency heat pumps with energy recovery.

As electrified and highly-efficient systems are combined with AI-enhanced solutions and autonomous controls, buildings can be optimized for numerous variables such as weather, pollution, occupancy and building design, supercharging the ability to optimize energy performance. 

Our customers' sustainability and resiliency goals have also challenged us to reduce the carbon intensity associated with our products’ life cycles, which is why we expanded our 2030 Sustainability Commitments to reduce embodied carbon by 40%. Our focus is driving innovation in product development as we design products for circularity, and upstream with some of our most significant material suppliers of low-carbon steel, aluminum and copper.  

This level of improvement, advancement and achievement is the result of a clearly defined long-term strategy, strong demand and a consistent commitment to innovation.

Engagement in culture and purpose

We believe innovation and growth come from everyone, so we actively nurture a culture that embraces all that people bring to our company. Our latest Annual Employee Engagement survey score of 82 out of 100, places us in the top quartile of external benchmarks. Additionally, our sustainability index, measuring team sentiment on our sustainability efforts, increased by 2 points, making it one of our highest engagement areas, underscoring the importance employees put on our sustainability-focused purpose. 

We embed sustainability into our everyday work and operating model. Our Center for Energy Efficiency and Sustainability (CEES) has been at the heart of our sustainability efforts for 15 years. This dedicated team shapes our sustainability strategy, oversees product stewardship, and drives education and advocacy to elevate sustainability standards both within our company and globally.

We encourage salaried team members across the company to set at least one sustainability goal each year, and we integrate these objectives into their annual plans. We’ve also rapidly grown a global network of almost 1,000 Sustainability Ambassadors who help identify and replicate sustainable business practices across our global footprint.  
 
These seemingly simple steps to engage our workforce in our sustainability strategy have a very real impact on scaling our efforts and empowering our people to own the actions that will help us grow.