The information below, as well as the policies and related content elsewhere in this report, is intended to help you understand the performance and impact of the entity known as Ingersoll-Rand plc in 2019 now renamed Trane Technologies plc in March 2020 through the environmental, social, human rights and business practices we work to uphold.
The European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017 (S.I. 360/2017) (as amended) (the “2017 Regulations”) require us to disclose certain non-financial information in the Directors’ Report (the “Irish Directors’ Report”) accompanying our Irish statutory financial statements. For the purposes of the 2017 Regulations, the sections entitled Description of Business Model, Environmental Matters, Employee Matters, Social Matters, Human Rights, and Anti-Corruption and Anti-Bribery set out below are incorporated by reference into the Irish Directors’ Report.
Our integrated 2019 Annual Report and 2019 ESG Report provide additional information that may be relevant to investors in assessing sustainability commitments and achievements but, except as expressly provided above, the integrated 2019 Annual Report and 2019 ESG Report are not incorporated by reference into the Irish Directors’ Report. Copies of this 2019 Annual Report and our 2019 ESG Report can be accessed at www.TraneTechnologies.com.
We are a world leader in creating comfortable, sustainable and efficient environments. In 2019, our two business segments, Climate and Industrial, featured strong brands and highly differentiated products within their respective markets. In 2019, we generated revenue and cash primarily through the design, manufacture, sale and service of a diverse portfolio of industrial and commercial products that include well-recognized, premium brand names such as Ingersoll Rand, Trane, Thermo King, American Standard,® ARO,® and Club Car.
To achieve our mission, we continue to focus on growth by increasing our recurring revenue stream from parts, service, controls, used equipment and rentals; and to continuously improve the efficiencies and capabilities of the products and services of our businesses. We also continue to focus on operational excellence strategies as a central theme to improving our earnings and cash flow.
Approach Our commitment to sustainability extends to the environmental impacts of our people, operations, and products and services. From the efficiency of our buildings to our progress in managing energy, water and waste, we continue to find ways to reduce our impact on the environment and embed sustainability throughout our businesses. We proactively engage with key external and internal stakeholders to identify the most material sustainability-related matters and metrics for operations strategy as well as public disclosure. We also think about the stakeholder groups most impacted by these material topics through the lens of a value chain assessment that we perform. These commitments are embedded in an Environment, Health and Safety (“EHS”) Policy which defines our stakeholders, our roles and responsibilities and our goals and targets with respect to EHS matters and our Business Partner Code of Conduct which requires our business partners to adhere to our standards.
Due diligence processes We have a vital role to play in mitigating global climate change by reducing the environmental impact of our operations, products and services. This responsibility begins by setting specific and measurable climate commitments and working to achieve these goals. In addition, we work to systematically ensure that our suppliers share our values and adhere to our standards of business ethics, health and safety, environmental and social responsibility as specified in our Business Partner Code of Conduct. Suppliers must have an effective environmental policy and conduct their operations in a way that protects the environment. They must also obtain and keep current all required environmental permits and meet all applicable environmental rules, regulations and laws in the countries where they do business.
Policy outcomes/Key Performance Indicators Our global Climate Commitment is the foundation of our efforts to increase energy efficiency and reduce the greenhouse gas emissions related to our operations and products. In 2010, we launched the Center for Energy Efficiency and Sustainability (CEES) to help our customers and our company leverage best practices in sustainability. Within the company, the CEES is a strategic business catalyst that helps us understand the benefits that sustainability can have in growing our company and reducing our own operational footprint, while helping increase the pace of sustainable innovation.
Our energy consumption from fuels and electricity totaled 3,720 billion kilojoules in 2019. Greenhouse gases emitted indirectly through the use of electricity, and directly, through the burning of fuels or emissions of refrigerants, totaled 541,935 metric tons of CO2e.
Approach As a global organization that employs approximately 50,000 people, we are committed to building a progressive, diverse and inclusive environment in which people of all backgrounds are treated with equality and respect. We also aim to provide a safe, secure workplace that supports employee well-being and productivity. Investing in our associates and creating a culture where they feel engaged and included is key to unleashing the power of their innovation and creativity, and to delivering the enduring results that create a sustainable world. We formalize these aspirations in our Environment, Health and Safety Policy which addresses employee health and safety among other matters.
We provide annual anti-harassment training to all salaried employees worldwide and we set policies in key employee areas, including our Global Human Rights Policy, our U.S. Equal Employment Opportunity Policy, and our Policy Prohibiting Harassment or Discrimination, which are made available to our employees worldwide.
Due diligence processes To reinforce our commitment to cultivate a diverse and inclusive workplace, we were the first company in our industry to enter the Paradigm for Parity Coalition, a pledge to bring gender parity to our corporate leadership structure by 2030. We also provide anti-harassment training to all salaried employees and make clear policies available to employees worldwide. In addition, creating and sustaining a safety-focused, zero-incident culture is a priority for us. We communicate our safety expectations through quarterly CEO town hall meetings as well as monthly environmental, health and safety meetings at both the facility and service-organization levels.
Policy outcomes/Key Performance Indicators Consistently high annual employee engagement scores demonstrate that we are creating an environment where our people are learning, thriving and expanding their capabilities. We offer a range of learning experiences for managers and employees to expand our culture of inclusion. For example, our Women’s Leadership Program helps accelerate career advancement for high-potential women. Our Bridging Connections sessions create an opportunity for employees to speak openly about topics such as race, gender, ethnicity and sexual orientation, and address issues related to unconscious bias. In addition, our growing number of employee resource groups serve as a foundation to discuss these topics at a deeper level and to engage in the learning and training critical to building a stronger company.
Approach Through a variety of social sustainability initiatives, we seek to engage directly with the communities in which our associates live and work, which helps to create shared value and engage our worldwide team in the mission and purpose of the company. Our commitment to social sustainability is also expressed through our supplier diversity program.
Our most prominent community initiatives include our Glocal (global + local) program. Launched in 2014 by our CEES, Glocal encourages our employees to partner with local nonprofits and community organizations to advance our social sustainability efforts and nurture authentic engagement. We have identified and are taking action regarding specific social and environmental imperatives that create shared value, result in sustained customer and employee loyalty, and improve the communities where we have business operations. These actions include increasing female representation in the fields of science, technology, engineering and math, addressing nutrition and food waste reduction and supporting housing and shelter needs, among others. Our supplier diversity program embraces suppliers whose ownership is primarily minorities, women, veterans, LGBTQ individuals or people with disabilities.
Due diligence processes We track employee and community engagement data including the number of volunteers who participate in community or sustainability initiatives during the year and the number of hours volunteered. We use a 7-step strategic sourcing process that includes a Supplier Diversity Matrix, which enables us to avoid using price as the primary driver for supplier selection.
Policy outcomes/Key Performance Indicators Implementing Glocal and our supplier diversity program has contributed to significant increases in global contributions as measured by the number of associates who have volunteered to participate in community or sustainability initiatives, the total number of hours volunteered and the dollar value of philanthropic giving.
Spending on goods and services purchased from diverse-owned businesses also is up significantly in 2019.
Approach We believe in fundamental standards that support our commitment to our employees, our business partners, our customers and our communities. We have adopted a number of policies which underline our commitment to human rights. Our Global Human Rights Policy aligns with basic working conditions and human rights concepts advanced by international organizations such as the International Labor Organization and the United Nations. Our Modern Slavery and Human Trafficking Statement outlines our commitment to taking steps to ensure that human trafficking and forced labor is not taking place in our supply chain or business. Our Business Partner Code of Conduct (BPCoC) prohibits human trafficking, including forced or child labor.
Due diligence processes We engage in reasonable due diligence and screening of customers and distributors to ensure compliance with laws that regulate international trade. We screen 100% of new suppliers on human rights and labor practices. In 2019, we formalized our process for onsite assessments of our supplier ESG practices, including human rights. We also established a Global Procurement Sustainability Council to work with suppliers on improving conditions and addressing non-compliances.
Policy outcomes Our Global Human Rights Policy is communicated to employees through our Code of Conduct training. As part of our annual compliance training, we have implemented a full training course dedicated to anti-human trafficking. Salaried employees in roles such as Legal, Human Resources and Global Integrated Supply Chain are assigned courses based on function and associated risks.
Approach We are proud of our strong business ethics and sustainable business practices, and our values centered in integrity, respect, teamwork, innovation and courage. Our values, ethics and commitment to sustainability are core to how we operate and serve customers.
Our Business Partner Code of Conduct applies to all entities doing business with us and communicates our expectations that our business partners will practice the highest legal, moral and ethical standards when conducting our affairs. This Code holds our business partners to the same high standards to which we hold ourselves.
Due diligence processes Business partners and service providers are risk-rated and vetted with higher risk third parties undergoing enhanced compliance due diligence. We leverage the services of a third-party vendor to conduct compliance screenings from thousands of global public records databases.
Policy outcomes Salaried employees receive role-based, online compliance training every year. Employees receive specific training on anti-corruption on a cycle determined by the risk rating of their role. Previous roles assigned to anti-corruption training were Business Strategy; Customer Service; Finance; General Management; Global Integrated Supply Chain; Human Resources; Legal; Marketing; and Sales. In 2019, employees in services roles received anti-corruption training.