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Non-Financial Statements European Union Directive

Introduction

The information below, and the policies and related content elsewhere in this report, describes the performance and impact of Trane Technologies plc, a public limited company incorporated in Ireland in 2009, 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 2021 Annual and ESG Reports also provide information that may be relevant to investors in assessing sustainability commitments and achievements but, except as expressly provided above, the 2021 Annual and ESG Reports are not incorporated by reference into the Irish Directors’ Report. Copies of the 2021 Annual Report and ESG Report can be accessed at www.TraneTechnologies.com.

Description of Business Model

Trane Technologies is a global climate innovator that brings efficient and sustainable climate solutions to buildings, homes and transportation driven by strategic brands Trane and Thermo King and an innovative, environmentally responsible portfolio of services and products.

In 2021, we generated revenue and cash primarily through the design, manufacture, sale and service of a diverse portfolio of climate control products and services for Heating, Ventilation and Air Conditioning (HVAC) and transport refrigeration solutions. We are focused on growth by increasing our recurring revenue stream from parts, service, controls, used equipment and rentals; improving the efficiencies and capabilities of our operations and products and services for our customers; and applying operational excellence strategies which are central to continued growth of our earnings and cash flow.

Environmental Matters

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 are focused on reducing our impact on the environment and embedding sustainability throughout our businesses. We engage with key stakeholders to identify the most material sustainability-related matters and metrics for operations strategy as well as public disclosure. We also look at 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 that defines our stakeholders, our roles and responsibilities, and our goals and targets with respect to EHS matters and our Business Partner Code of Conduct (“BPCoC”).

Due diligence processes: We have a vital role to play in mitigating global climate change by reducing our environmental impact. This responsibility begins by setting specific and measurable climate commitments and working to achieve these goals. We engage in risk-based due diligence of our business partners and suppliers to ensure compliance with international trade laws and regulations. Gathering adherence information also helps us continuously assess and improve our human rights policies. 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 operate.

Policy outcomes / Key Performance Indicators: Our global Sustainability Commitment is the foundation of our efforts to increase energy efficiency and reduce the greenhouse gas emissions related to our operations and products. Our Center for Energy Efficiency and Sustainability (CEES) helps our customers and our company leverage best practices in sustainability. It is a strategic business catalyst that helps us understand the benefits that sustainability can have in growing our company and reducing our operational footprint, while helping increase the pace of sustainable innovation. 

Our energy consumption from fuels and electricity totaled 2.9 billion kilojoules in 2021. Greenhouse gases emitted indirectly through the use of electricity, and directly, through the burning of fuels or emissions of refrigerants, totaled 394,896 metric tons of CO2e.

  • Absolute energy consumption in 2021 – 2,791,321,430,000 (equivalent to 818,056 MWh; 2.9 billion kilojoules) 
  • Absolute Scope 1 and 2 emissions in 2021 – 394,896 metric tons CO2 e in 2021

Employee Matters

Approach: As a global company that employs more than 36,000 people, we are committed to building a diverse, inclusive and uplifting workplace, where everyone can bring their full, best self to work. We are committed to providing a safe, secure environment that supports the health, well-being, safety and productivity of our people. Investing in our team members and creating a culture where they feel engaged and included is key to unleashing the power of their innovation and creativity. This commitment to our employees is formalized through several policies designed to protect the fundamental rights of people associated with our business and maintain overall integrity. These policies include: our EHS Policy that addresses employee health and safety among other matters, a Global Human Rights Policy, U.S. Equal Employment Opportunity Policy, and our Policy Prohibiting Harassment and/or Discrimination. All policies are made available to our employees worldwide and affirm these commitments.

Due diligence processes: We provide anti-harassment training to all salaried employees and ensure all policies are clear and available to employees globally. Creating and sustaining a safety-focused, zero-incident culture is a priority. We communicate our safety expectations through quarterly CEO town hall meetings and monthly EHS meetings at the facility and service-organization levels. In addition, to support our commitments to advance diversity and inclusion, we were the first in our industry to sign up for important business coalitions such as Paradigm for Parity – dedicated to achieving gender parity in corporate leadership, and CEO Action for Diversity and inclusion – committed to advancing diversity and inclusion at work. We are also a founding member of the OneTen Coalition which is committed to training, hiring, and advancing one million Black Americans over the next ten years.

Policy outcomes / Key Performance Indicators: Consistently high annual employee engagement scores demonstrate that we are cultivating an uplifting culture where our people are learning, thriving and expanding their capabilities. We offer a range of learning experiences for managers and employees to enhance our culture of inclusion. Because conversations about culture, diversity, and inclusion can be challenging, we encourage these conversations to facilitate constructive discussions that can foster an uplifting and inclusive workplace. For example, our annual CEO Day of Understanding ensures we share progress toward our diversity and inclusion goals, and our Bridging Connections series helps us create authentic connections. Our Employee Resource Groups (ERGs) serve as a catalyst for our people to appreciate the strength and value of our diverse workforce. In 2021, more than 11,000 people globally participated in ERG events – a 70% increase compared to 2020. In addition:

  • 23.1% of management positions were held by women
  • 24.6% of senior leadership positions were held by women
  • 89% of our people participated in the annual employee engagement survey
  • near top quartile employee engagement score

Social Matters

Approach: Through a variety of social sustainability initiatives, we seek to engage directly with the communities where 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 the Sustainable Futures program, which promotes increased learning for underrepresented students by enhancing learning environments, accelerating student success and opening career pathways. We are taking action on 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 the representation of women and racially and ethnically diverse people in the fields of science, technology, engineering and math, addressing nutrition and food waste reductions. Our supplier diversity program embraces suppliers whose ownership is diverse, including racially and
ethnically diverse people, women, veterans, LGBTQ individuals or people with disabilities.

Due diligence processes: We track employee and community engagement data including the hours and number of volunteers who participate in community or sustainability initiatives. 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 the Sustainable Futures program has contributed to increases in global contributions as measured by the number of associates who have participated in community or sustainability initiatives, the total number of hours volunteered and the dollar value of philanthropic giving. And, our supplier diversity program continues to drive economic growth for diverse-owned businesses.

  • Added 71 new diverse suppliers, representing $5.9M in spending, in 2021.
  • $11,302,397 in total philanthropic giving
  • 29,541 hours volunteered by employees globally

Human Rights 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 that support 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 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 also established a Global Procurement Sustainability Council to work with suppliers on improving conditions and addressing non-compliances.

In 2021, we used our supplier risk assessment process to review 417 suppliers for environmental impacts. Trane Technologies did not identify any suppliers as having significant actual and potential negative environmental impacts.

Policy outcomes: Our Global Human Rights Policy is communicated to employees through our Code of Conduct training, which includes a course on anti-human trafficking.

Anti-Corruption and Anti-Bribery

Approach: We are proud of our strong business ethics and sustainable business practices, and our Leadership Principles. Our purpose, Code of Conduct and Leadership Principles are core to how we operate and serve customers.

Our BPCoC 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.

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 research issues from thousands of global public records databases.

Policy outcomes: Salaried employees receive role-based, online compliance training every year. In 2021, 100% of U.S. salaried employees received anti-corruption training.