Environmental, Social & Governance Report
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2021 ENVIRONMENTAL, SOCIAL & GOVERNANCE REPORT COMMITTED TO WHAT MATTERS. INSPIRING CONFIDENCE. At Carrier, we’re committed to what matters – addressing the planet’s most complex challenges and inspiring confidence for people everywhere. It’s why we create solutions that help ensure healthy, safe, sustainable and intelligent indoor environments, and enable the safe transport and storage of food, medicine and vaccines. We are building on decades of leadership in sustainability to set ever-higher standards and fostering a workplace culture that emphasizes inclusion so each and every Carrier employee feels like they _belong. Now with our 2030 environmental, social and governance goals, we continue to push ourselves to think bigger and be better. We’ve set ambitious goals and put meaningful metrics behind them. By innovating, empowering our people and operating with integrity, we can continue to do good for our planet, our people and our communities. Together, we’re solving the challenges of today, creating a more sustainable tomorrow and inspiring confidence around the world. Table of Contents Introduction Approach Governance Solutions Operations People & Culture Communities ESG Indices TABLE OF ABOUT THIS CONTENTS REPORT Introduction 3 Operations 30 Carrier’s 2021 Environmental, Social & About This Report 3 Carrier Excellence 31 Governance (ESG) Report covers performance A Message From Our Chairman & Chief Executive Officer 4 Environment, Health & Safety 32 for calendar year 2020. The information and Our Business 6 Product Safety & Quality 38 data included in this report are based on Our Response to the COVID-19 Pandemic 8 Supply Chain 39 the best available information and data at 2020 Highlights 9 publication and are subject to change. In some People & Culture 41 cases, information and data are estimated. Approach 10 Culture & Engagement 43 Materiality Assessment 11 Development & Career Progression 45 Our Stakeholders 12 Diversity & Inclusion 48 2020 Goals Results 13 Benefits 53 2030 Environmental, Social & Governance Goals 14 Communities 54 Governance 15 Positively Impacting Communities 55 Governance Framework 16 Investing in Education 56 Ethics & Compliance 17 Promoting Sustainability 56 Solutions 20 ESG Indices 58 Innovation, Research & Development 21 ESG Topics 59 Product & Service Lifecycle 23 GRI Content Index 61 Healthy Buildings & Connected Cold Chain 26 SASB Disclosure 78 TCFD Disclosure 79 Carrier 2021 Environmental, Social & Governance Report 3 Table of Contents Introduction Approach Governance Solutions Operations People & Culture Communities ESG Indices At Carrier, our vision is to create organizations alike to tackle these issues with new solutions that make a positive thinking and new technology – and at Carrier, we are in a unique position to do our part to make a impact on people and our planet. positive impact. While the COVID-19 pandemic Today, HVAC contributes an estimated 15% of the presents unprecedented world’s greenhouse gas emissions. Food waste challenges, it also underscores is also a major contributor. If food waste were a the importance of the work we country, it would be the third-largest emitter of do as the world leader in healthy, greenhouse gases. In fact, more than one-third of all food produced is wasted every year, resulting safe, sustainable and intelligent in an estimated 4.4 gigatons of greenhouse gas David Gitlin, Chairman building and cold chain solutions. emissions. As the global leader in these spaces, we & Chief Executive Officer are seizing the opportunity – and the responsibility Our company is well positioned to address three – to drive change through smart, sustainable and of the world’s most critical challenges: climate efficient solutions. change, the need for healthy indoor environments, and the safe distribution of food and vaccines. In 2020, we met or exceeded our prior targets “ ESG is fundamental to As we address the challenges of today, we are to reduce greenhouse gas emissions, water our culture and business, committed to keeping our eyes on tomorrow – consumption and hazardous waste generation and leading the way for future generations. The and to increase recycling. And, just months after and is at the forefront of reality is that without concerted action to address becoming a stand-alone company, we announced everything we do.” profound societal issues such as climate change, our 2030 environmental, social and governance the negative consequences to our planet and our goals. Building on three decades of achieving future will be irreversible. But I’m encouraged and environmental targets, we’ve set new goals around excited by significant and meaningful action from the areas of people, planet and our communities, governments, corporations and nongovernmental and have put meaningful metrics behind them. Carrier 2021 Environmental, Social & Governance Report 4 Table of Contents Introduction Approach Governance Solutions Operations People & Culture Communities ESG Indices We recognize our goals are ambitious, but In addition to the challenge of climate change, we ESG is fundamental to our culture and business, challenging ourselves to think bigger and be have also reached a critical juncture for change and is at the forefront of everything we do. better is what we do every day. We are investing across our society. The long-standing need for in our factories and operations, optimizing existing meaningful action to address social injustice and methods and innovating new digitally enabled racial equity has reached a tipping point. Diversity solutions to drive down our energy consumption and inclusion have always been integral at Carrier, while helping our customers – from large but we understand that we can and must do enterprises to individual homeowners – reduce more to create an environment where everyone their carbon footprints. I’m confident that these feels like they _belong, which is our diversity and actions and our collective commitment will allow inclusion brand. We are driving change through David Gitlin us to deliver on these bold new goals. our diversity and inclusion strategy with key Chairman & Chief Executive Officer, Carrier actions, metrics, accountability, and a culture that respects and includes all employees. I am proud of the progress we are making. Carrier 2021 Environmental, Social & Governance Report 5 Table of Contents Introduction Approach Governance Solutions Operations People & Culture Communities ESG Indices OUR BUSINESS 2020 Net Sales Breakdown About Carrier Carrier is the leading global provider of healthy, safe, sustainable and intelligent building and cold chain solutions with a world-class, diverse workforce. Through our performance-driven culture, we are driving 53% 19% 28% shareowner value by growing sales and investing strategically to strengthen our position in the markets we serve. HVAC REFRIGERATION FIRE & SECURITY $17.5B 100+ COMMERCIAL & TRANSPORT & PRODUCTS & 2020 NET SALES NEW PRODUCTS RESIDENTIAL COMMERCIAL FIELD for the sixth consecutive year $9.5B $3.3B $5.0B 80+ ~8,000 Net sales Net sales Net sales BRANDS ACTIVE PATENTS and pending patent applications worldwide Americas 55% Net sales 160+ ~$9B EMEA 30% COUNTRIES GOODS COOLED by region by Carrier on ocean daily Asia Pacific 15% ~56,000 ~90M EMPLOYEES HOMES PROTECTED by Kidde New Equipment 72% Net sales mix Service & $419M Aftermarket 28% 2020 RESEARCH and DEVELOPMENT Read in conjunction with Form 10-K. Carrier 2021 Environmental, Social & Governance Report 6 Table of Contents Introduction Approach Governance Solutions Operations People & Culture Communities ESG Indices Our Business Segments HVAC Carrier’s HVAC segment provides solutions to meet the The OptiClean Dual-Mode heating and cooling needs of residential and commercial Air Scrubber & Negative Air customers, while enhancing building performance, energy Machine was named as one of efficiency and sustainability. Through an industry-leading TIME’s 100 Best Inventions family of brands, we offer an innovative and complete portfolio of 2020. of products, including building automation and services that help optimize indoor environments to enhance human health, safety and productivity. Refrigeration Carrier’s Refrigeration segment provides a healthier, safer, more Carrier Transicold’s EverFRESH sustainable and more intelligent cold chain through the reliable active controlled-atmosphere transport and preservation of food, medicine and other perishable system added a carbon cargo. Our refrigeration and monitoring products, services and dioxide injection option to digital solutions strengthen the connected cold chain and are help refrigerated containers designed for trucks, trailers, shipping containers, intermodal better preserve low-respiring, applications, food retail and warehouse cooling. high-value perishable cargo. Fire & Security Carrier’s Fire & Security segment provides a wide range of Autronica launched AutroGuard, residential, commercial and industrial technologies designed a multipurpose commercial to help save lives and protect property. Our globally recognized detector with a sound and light brands provide product and technology innovations that are alarm. The new chamber design supported by installation, maintenance and monitoring enables quicker and more through a network of channel partners and our own field reliable smoke detection. service business, along with web-based and mobile applications, and cloud-based services. Carrier 2021 Environmental, Social & Governance Report 7 Table of Contents Introduction