As a purpose-driven company, we have an opportunity to lead the climate industry in ESG best practices. Our Company’s core purpose is to create a more sustainable world, and we embrace this purpose throughout our organization, starting at the very top. In 2021, we updated our leadership principles to reflect our ongoing prioritization and monitoring of ESG topics. We also clarified the Board of Directors’ commitment to ESG topics, codified in a Letter on the Urgency of Sustainability in our 2021 Proxy Statement.
GRI 102-18, 102-20
Trane Technologies' Board of Directors oversees ESG matters and helps guide the company towards fulfilling its core purpose. We align our organization’s ESG practices with this purpose, including our 2030 Sustainability Commitments and our enterprise policies and standards.
GRI 102-22, 102-26, 102-29, 102-32
Our Board comprises several committees, including the Audit Committee; the Human Resources and Compensation Committee; the Sustainability, Corporate Governance, and Nominating Committee; the Finance Committee; the Technology and Innovation Committee; and the Executive Committee.
The Board of Directors’ Sustainability, Corporate Governance, and Nominating Committee oversees the Company’s sustainability efforts, including the development and implementation of policies relating to ESG issues. Members monitor the Company’s performance against its sustainability and ESG objectives, including the risks of climate change.
Ultimately, the Sustainability, Corporate Governance, and Nominating Committee makes ESG policy recommendations to the Board based on its findings. The ESG recommendations influence the company’s approach to climate change risk assessments and its sustainability goals. The Sustainability, Corporate Governance, and Nominating Committee assists the Board in evaluating the performance of the Board committees and each committee conducts an annual self-evaluation.
The Audit Committee oversees the integrity of the Company’s financial statements, including its accounting policies, and financial reporting. It reviews disclosure practices including human capital management and other ESG disclosures included in the Company’s periodic reports.
The Technology and Innovation Committee assists the Board in strategies for innovation and solutions aimed at addressing climate change, GHG emissions, energy-efficient and low-emission products, and product life cycle and materials. It supports the Sustainability, Corporate Governance and Nominating Committee in its review of environmental and sustainability practices as needed.
The Human Resources and Compensation Committee reviews key human capital management initiatives related to leadership talent recruitment and retention, diversity and inclusion, pay equity, and hourly wages. The committee sets, reviews, and approves annual ESG factors for the Company’s Annual Incentive Matrix (AIM).
The AIM remuneration structure for our top executives and 2,300 leaders across the company includes financial, environmental, sustainability, and workforce diversity goals. These goals include specific annual targets on our path to meeting our ambitious 2030 commitments on emissions reduction, gender parity and workforce diversity. Our Board of Directors reviews the enterprise leadership team’s performance against their ESG goals and reviews their sustainability strategies, among other performance factors.
Starting in 2021, all salaried team members have a sustainability goal as part of their annual performance review objectives. We give our employees the freedom to choose how they approach sustainability and define their goal. Some decide to integrate a goal into their daily job at Trane Technologies, while others volunteer in their community or define their own sustainability-related objective. Our Human Resources Team noticed intense interest in the new performance review approach throughout 2021. The feedback was positive; employees enjoyed the chance to explore sustainability independently and align their actions with our ESG practices in a way that resonated with them.
Our management and leadership teams at Trane Technologies consult an independent council for ESG topic guidance. The Advisory Council on Sustainability advises our company on the impacts of climate change, infrastructure development, energy policy, circular design, product impacts, social progress, and emerging technology, among other topics. The council helps the company evaluate these issues to understand their impact on Trane Technologies’ operations. In addition to the Advisory Council on Sustainability, Trane Technologies participates in global initiatives to discuss climate change risks that shape our actions. See a full list of our Charters for more detail.
Our Center for Energy Efficiency and Sustainability (CEES) integrates sustainability practices into our everyday operations. CEES also facilitates our work with governments, NGOs, universities, and industry leaders. The team tracks and discloses our progress against commitments while carefully monitoring emerging requirements and ESG trends.
In addition to the CEES, our business units recently began developing sustainability councils, which guide the respective business unit’s sustainability strategies that support Trane Technologies’ 2030 Sustainability Commitments. We encourage the expansion of these councils, as their creation allows each business unit to find its own path to our sustainability goals.
Trane Technologies maintains two $1 billion senior unsecured revolving Credit Facilities, one of which matures in April 2023 and the other in June 2026. The facilities support our commercial paper program and can be used for working capital and other general corporate purposes. The terms of the 2026 Credit Facility include ESG metrics related to two of our sustainability commitments: a reduction in GHG intensity and an increase in the percentage of women in management. Trane Technologies' annual performance against these ESG metrics may result in price adjustments to the 2026 commitment fee and applicable interest rate.