revenue from innovation in 2021
new products and services
in Research & Development spend in 2021
As we consider the role of our technology and innovation in the climate change equation, it’s critical that our products, solutions, and systems address two distinct needs in the market: combatting climate change and simultaneously enabling humanity to adapt to the changing climate around us. At Trane Technologies, we are committed to delivering healthy spaces through life-sustaining cooling and high-quality indoor environments that enable people all over the world to adapt and contribute to humanity’s resiliency to the effects of climate change. At the same time, we continue to innovate so that those critical solutions become increasingly sustainable over time to combat climate change at its core. It is at this intersection of healthy and efficient spaces that our leadership in technology and innovation enables our sustainability strategy while driving business success and financial performance.
To combat climate change and decarbonize the systems that govern our way of life, we must work across macro systems – or systems of systems – at the intersection of global need and our expertise. This system-level approach and the UN SDGs inform our 2030 Sustainability Commitments and guide our research, development, and innovation strategy. The power of our innovation strategy is in our purpose-driven approach. Our teams deliver market-driven and technology-enabled innovation to bring our purpose to life across the organization and ultimately to our customers.
Our work through the end of this decade focuses on the following five areas:
Identifying and embracing innovation that could transform the way we heat and cool spaces today – including commercial buildings, homes, industrial processes, transit, and transportation of refrigerated goods.
Innovating ways to decarbonize the built environment, including how cities are built, how they operate, and how people move within them.
Developing a sustainable system that minimizes food waste and reduces the climate impact of the food value network, encompassing the entire range of activities from production to consumption. Aligned to the Food and Agriculture Organization (FAO) of the UN concept and framework around Sustainable Food Systems.
Addressing the evolution of health and wellness networks and the rise of telehealth, home health and wellness, distributed healthcare, pharma (including vaccines and biopharma), and the transport of high value goods (blood, plasma, organs) within and across these networks. Based on the World Health Organization strategy for environmentally sustainable health systems.
Extending the previous four pillars into the area of equity and innovation that enables people all over the world in all economic segments access to life-sustaining heating and cooling, food, healthy spaces, and a healthy planet as basic human rights.
Our focus on technology and innovation permeates every area of our company because it helps us meet the global challenges of our time while consistently driving business success. By listening to and working with our customers and global suppliers, and applying advanced data analytics and market intelligence, we continually focus our core capabilities and ensure we operate in the right markets.
Global teams and frequent exchange programs foster enterprise-wide collaboration, facilitate knowledge sharing, and build a culture of innovation. Product growth teams, which include product management, engineering, and operations professionals, manage all aspects of our product portfolios, identify new market opportunities, and generate, develop, and launch offerings within our market segments. Business leaders coach teams by applying Lean principles that align to our company-wide business operating system. Our product engineers enhance their skills through regular participation in emerging-technology research and development teams, and our product managers regularly connect with our customers and the market to identify unmet needs we can address. Product growth teams are supported by our engineering technology centers, which amplify our technical capability globally and work to ensure core technical learnings are shared among our business units. Intellectual property generated as a result of this ongoing activity is governed at the business unit level to ensure we are building a strong portfolio of intellectual assets that fuel our competitiveness into the future.
Our enterprise innovation and advanced technology teams manage innovation for emerging markets and seek new technologies to develop into offerings for underserved or undiscovered markets. With an ecosystem of internal and external partners, we source and incubate ideas, develop and pilot new technologies, and innovative offerings, deploying them to our corresponding business units once we advance technology and commercial understanding and readiness through our Technology Development and Innovation processes. A cross-functional, cross-business unit steering committee, including our Chief Technology and Sustainability Officer, oversees each project. A healthy pipeline of ideas is generated, managed, and prioritized by working across an ecosystem of innovation partners that include accelerators, universities, national labs, NGOs, clean tech investors and emerging technology partners globally. Using this world-class approach, the learnings collected through every project contributes to the success of future products and services. Management of intellectual assets at the enterprise level is governed by an intellectual property committee that ensures our portfolio of patents across the business units and the enterprise teams aligns to our sustainability strategy and positions the company for future growth.
Acquisition of Farrar Scientific
Aligned to our Sustainable Health Networks pillar, in 2021 we announced the acquisition of Farrar Scientific, a leader in temperature-controlled refrigeration solutions for biopharmaceuticals, and established our Trane Technologies Life Sciences Solutions business. This strategic acquisition extends our reach in the growing biopharmaceuticals market, supplements existing capability in this space, and is our first major acquisition in the life sciences arena. By growing our capability in this critical vertical, we will deliver sustainable solutions throughout this emerging market space and enable the decarbonization of the cold chain in health networks globally.
Operation Possible is our crowd-sourcing innovation program that engages every employee at Trane Technologies to solve some of the world’s biggest problems. An essential part of our innovation practice, Operation Possible is connected to all our innovation pillars. In January 2021, employees submitted almost 400 problems they were inspired to solve in communities facing the impacts of climate change, poverty, or urbanization. The Co-Existence of Food Loss and Hunger was chosen as the challenge to begin solving. Within two months, employees generated almost 300 solution ideas aligned with SDG 2: Zero Hunger and our Access to All pillar. During the summer, employees evaluated and improved their initial concepts through virtual “jam sessions” attended by hundreds of global employees. In October 2021, employee teams presented the final four concepts during an enterprise-wide, live virtual showcase event. Multiple concepts are already under development with prototyping and validation for in-market use. In the first year, 5,000 employees across the world engaged with the Operation Possible program, connecting them to our company purpose and becoming part of the open innovation process. The program – and the spirit of collaboration it achieved – motivated other internal teams to adopt similar crowdsourcing processes, making our innovation more inclusive and diverse.
“During the jam sessions, the energy, the passion and the sense of community that I felt was like nothing I had ever felt before. I felt like it was a safe space to share my ideas, even though there were engineers in the room.”
Center for Healthy & Efficient Spaces
The Center for Healthy & Efficient Spaces (CHES), led by our Vice President of Innovation, guides our efforts, and those of our industry, on issues tied to the effect that indoor environmental quality (IEQ) can have on people’s health, productivity, and well-being – while continuing to advance sustainable outcomes for the world.
“This has been a successful first year for our Center for Healthy and Efficient Spaces. Our focus on thought leadership, innovation, partnerships, and indoor air quality testing standards has led to solid results. We believe our approach around assessing, mitigating, and managing indoor environments will meet the evolving need for healthy and efficient spaces and will be critical to ensuring we balance both human and planetary health.”
IEQ provides a holistic view of the conditions inside a building, including thermal comfort, lighting, acoustics, and indoor air quality (IAQ), and how they affect occupants. As part of our Sustainable Health Networks pillar, CHES convenes leading internal and external experts to simplify the complexity around IEQ to make it meaningful for customers and consumers, and advance IEQ policy, strategies, and solutions.
IEQ as a story
Trane Technologies – Indoor Environmental Quality in Daily Life
Now, more than ever before, people are spending most of their time inside.
There is unmistakable evidence that healthier indoor spaces are good for people and efficient spaces are better for the planet.
We’ve innovated for decades to create cleaner, more comfortable, and more efficient places for you to live and work.
Whether it’s homes, schools, offices, public transit or any other dynamic space – Trane Technologies works shoulder to shoulder with businesses and our communities to sustainably create the healthiest, most efficient environments possible – with no trade-offs.
The way you feel, and function indoors is the result of many things existing harmoniously. Each one is critical, so we figure out how they work together and dynamically optimize them to meet the needs of anyone inside.
Getting your day started is something sacred. It’s where you set yourself up for everything in front of you – it’s where you focus, pet a furry friend, and leave a little encouragement for loved ones before you get to work.
Trane is right there with you – leveraging geofencing technology and sensing devices to dynamically optimize your environment regardless of where you are.
Because no one can gear up for a big day if you’re not comfortable. But as we know, the comfort of home is not usually the only place you are.
Each space you enter has a different effect on our safety, our comfort, and our planet. Public transport is a unique part of any day. You’re in it less but surrounded by more.
Feeling safe and healthy on your way to and from work is paramount. We get that. That’s why Thermo King offers the safest, most effective solution that works in the background to reduce the spread of pathogens by sanitizing incoming air and stopping viruses, bacteria, and contaminants from entering the passenger areas.
So keep that mask on and know that we’re doing our part too.
We’ve all got varied and complex things to accomplish throughout the day. Air quality is a foundational element in creating and maintaining healthy and safe indoor spaces. When air quality is improved, we take notice. But it’s important to address the rest of your environment so you can feel productive and passionate about what’s in front of you.
Poor lighting and bad sound design also have an enormous influence, impacting you in ways you may not realize.
Trane uses time controlled, human centric lighting sequences that vary color temperature, intensity and other scientific variables. It’s tied to our natural circadian rhythms so you can be the right kind of productive when you need to be. That’s an impact you can feel – and quantify.
The ability to learn and our overall cognitive growth is directly affected by the acoustics of the spaces we’re in. Trane manages the acoustical quality of the commercial HVAC system, allowing the right amount of ambient sound to keep you focused and let the creativity flow.
The indoor spaces we inhabit are as diverse and unique as we are.
Today, we’re managing for better environments,
Tomorrow, a healthier planet for all.
In 2021, we published the second season of our Healthy Spaces podcast, invested heavily into research and testing of emerging IAQ technologies, and published scientific papers to share findings and bring transparency and clarity to the market of air cleaning devices. In partnership with industry organizations and the International WELL Building Institute, CHES engaged in policy and standards work that resulted in a new building rating that will reward building owners and operators for collecting and using building and human performance metrics to gain insight into, and improve, their IEQ. We also actively participate in relevant ASHRAE committees that aim to create a uniform standard for air quality devices.
Our focus on IEQ is targeted at building the industry’s resiliency to future pandemics and establishing our commitment to balancing human health with planetary health. In 2021, the focus on IAQ across our businesses made up approximately 2% of sales revenue and we continue to see strong demand in the marketplace for solutions that deliver both healthy and efficient spaces.
Case-study: Decarbonizing the Built Environment for Healthier Communities
According to the European Environment Agency, air pollution is the single largest environmental risk in Europe, causing over 300,000 premature deaths a year. Electrification does not only benefit the environment by reducing direct carbon emissions - it can also improve air quality by reducing localized emissions and fine particulate matter, a typical by-product of traditional fossil fuel boiler systems.
Trane helped a hospital in Malta reduce fossil fuel related energy use by over 58% and avoid nearly 6,000 metric tons of CO2e direct emissions and improve the IEQ for staff and patients alike. Read More about Mater Dei Hospital
Read more about the Center for Healthy & Efficient Spaces.
In 2021, we invested $193 million in research and development, focusing on:
Product and system-level improvements such as increasing energy efficiency.
Developing and implementing lower-GWP refrigerants.
Reducing material content in products.
Designing products for circularity.
We have increased this investment over time, aligned to our business growth. By leveraging our enterprise innovation, advanced technology, and engineering technology center teams, this investment has generated revenue from new products at the world-class rate of 20.5% of our overall revenue – ensuring that we are balancing our portfolio between new and mature product lines. This 20.5% is Trane Technologies' Innovation Revenue metric. We define it as the revenue occurring in the current reporting year that is derived from new solutions or new markets launched within the prior 36 months. We have demonstrated this level of R&D effectiveness consistently over the past several years and will continue to invest to grow our business while meeting our 2030 Sustainability Commitments.
We also invested over $300 million in business development activities including mergers and acquisitions, minority investments, and strategic partnerships across multiple sectors including life sciences, the built environment, IEQ, and clean technology. Over 90% of this investment is focused on advancing our sustainability-related objectives.
*World class performance for revenue from new products — also defined as the portfolio vitality index — is 20-25%, to ensure that mature and emerging products work together to balance risk and opportunity.
Recognition: Trane Technologies China
On December 9, 2021, Trane Technologies China was named one of the “2021 Sci-Tech Innovation Leading Companies” at the International Sci-Tech Innovation Festival for its outstanding performance in the field of science and technology innovation and good reputation. It fully recognizes Trane Technologies’ outstanding contributions as an innovator and leader in the industry. The 2021 International Sci-Tech Innovation Festival is jointly launched by syobserve.com and a wide range of domestic media, bringing together more than 400 global innovative technology companies to compete on the same stage and present their innovation achievements.