THE POWER OF CUMMINS

SUSTAINABILITY PROGRESS REPORT 2014-2015 ABOUT THE COVER

One of the most visible signs of the “Power of Cummins” is the Company’s QSK95, the largest high-speed diesel engine Cummins has ever built. The engine was chosen by Siemens to power its Charger locomotive in the United States. Siemens won a multi-state, $225 million contract to build 35 diesel-electric locomotives.

Cummins employees are shown pushing the QSK95 into a test cell at the Company’s Seymour Engine Plant in Seymour, Indiana (U.S.A.). You can learn more about the Company’s big year in passenger rail on page 18.

The QSK95, by the way, is also powering a new line of generators. You can learn more about that on page 40. THE POWER OF CUMMINS SUSTAINABILITY PROGRESS REPORT 2014-2015 SUSTAINABILITY PROGRESS REPORT // INTRODUCTION

ABOUT THIS REPORT CUMMINS DATA BOOK ABOUT OUR WEBSITE

Cummins’ 2014-2015 Sustainability As we hope you’ll see from reading Cummins will introduce its first Cummins has a website dedicated Progress Report is presented in the this report, Cummins is a global Sustainability Data Book in June 2015. to its sustainability efforts at spirit of the Global Reporting Initiative company that wants to make a This report will include all of the data www.cummins.com/sustainability. (GRI). The GRI’s goal is to develop difference for all of its stakeholders, in our Sustainability Progress Report The site includes past reports dating a consistent way for companies today and in the future. plus additional data, especially as it back to 2003, sustainability-related across the globe to voluntarily report pertains to Cummins’ environmental videos and more. Cummins posts This report was posted in May on their environmental, social and performance. It is designed for those its answers to the Carbon Disclosure 2015 and is the Company’s economic performance. who want a complete statistical look Project there and the Company’s 12th annual edition. at the Company. The Data Book will new Sustainability Data Book will The report reflects Cummins’ broad EXECUTIVE SUMMARY be posted at www.cummins.com/ be posted there as well. If you have view of sustainability, including safety, sustainability where we will also suggestions for the site, please diversity, employee development Cummins has prepared an post Cummins’ submission to contact Blair Claflin, Director – and governance in addition to the Executive Summary of this report. the Carbon Disclosure Project. Sustainability Communications, Company’s environmental initiatives, The summary includes some of the at [email protected]. its community service programs and most important statistical material You can find more financial data Cummins’ financial performance. in the full report as well as a number about the Company’s performance of condensed versions of the in Cummins’ annual 10-K report. The theme of this year’s report stories within this report. It is available in the Investor is “The Power of Cummins.” Relations section at cummins.com. The Company’s power isn’t limited You can get the Executive You can find a link to that report at to its products or its record financial Summary by going to www.cummins.com/sustainability. year. The Company uses its strength www.cummins.com/sustainability. in many other ways, ranging from its Look on the left-hand menu push for environmental sustainability, for a link to “Past Reports.” to its efforts to build stronger communities, to its ability to serve customers in remote locations such as Myanmar and Madagascar.

2 SUSTAINABILITY PROGRESS REPORT // INTRODUCTION 2012 2013 2014

ECONOMIC

Revenue $17.3 billion $17.3 billion $19.2 billion

Earnings $1.65 billion $1.48 billion $1.65 billion

KEY PERFORMANCE INDICATORS EBIT $2.35 billion $2.16 billion $2.5 billion Cummins takes a broad view of sustainability, 2012 2013 2014 including the environment, corporate responsibility, ENVIRONMENTAL safety, diversity, employee development and governance. The Company uses a number of GHG emissions (thousands of metric tons CO2e) 729 750 788 key performance indicators (KPIs) to evaluate Energy consumption1 how it’s doing. You will find them listed (thousands of MMBtu) 11,711 12,077 12,746 throughout this report. Water use (millions of gallons) 1,069 958 972

Water intensity reduction2 22% 30% 36% 1 Primary energy excludes sold electricity and associated fuel usage 2 Intensity defined as adjusted for sales (energy / GHG) or hours worked (water) Energy intensity reduction2,3 33% 30% 34% 3 Reduction includes consolidated entities only GHG intensity reduction2,3 35% 33% 35%

Recycling rate 88% 89% 90%

2012 2013 2014

EMPLOYEES

Major incidents / dangerous occurrences rate 0.056 0.047 0.057

Incidence rate 0.69 0.65 0.61

Women leaders in the workforce 19% 20% 20%

Every Employee Every Community (EEEC) participation rate 63% 68% 73%

Environmental Challenge employee participation 12,000 11,500 13,600

Greenhouse gas reduction as part of the Environmental Challenge (metric tons) 4.3 19 22.4 3 SUSTAINABILITY PROGRESS REPORT TABLE OF CONTENTS

6 INTRODUCTION 18 COVER STORY 45 62 INNOVATION A NOTE FROM INNOVATION’S KEY THE CHAIRMAN CUMMINS HELPS CUMMINS’ ROLE AT CUMMINS PASSENGER RAIL PRACTICES 8 PICK UP SPEED IN HELP PROTECT 64 NORTH AMERICA ENVIRONMENT JULIUS PERR AWARDS CUMMINS AROUND THE WORLD 65 CUMMINS GOES VIRTUAL IN LAUNCH OF QSK95 SERIES 66 IN MYANMAR, CUMMINS POWER GENERATION IS CONNECTING A NATION TO THE WORLD

24 ENVIRONMENT 68 CUMMINS ESTABLISHES 51 NEW SUSTAINABILITY GOALS 10 CUMMINS EMPLOYEES IN THE NEW NISSAN TRUCK U.K. ARE DETERMINED RECYCLERS INCLUDES CUMMINS’ OUR RECOGNITION 27 CUMMINS MAKES PROGRESS 52 INNOVATION, ON ENVIRONMENTAL GOALS 12 EMPLOYEE TEAMS RECOGNIZED COMMITMENT TO THROUGH FACILITIES WHO WE ARE EXCELLENCE 30 ENVIRONMENTAL AWARDS 13 CUMMINS PRODUCTS ALWAYS HAVE THE ENVIRONMENT IN MIND 54 VISION, MISSION, VALUES MAKING CONSERVATION WORK AND PRINCIPLES 35 AT CUMMINS’ MEGASITE 14 NEW PRODUCTS REFLECT CUMMINS’ COMMITMENT 56 HOW WE DO IT TO ENVIRONMENT CUMMINS’ PARTNERSHIPS 15 44 PRODUCE GREEN RESULTS OUR KEY TOOLS CUMMINS’ SMARTADVANTAGE 60 PROVIDES FUEL ECONOMY 70 FOR CUSTOMERS RESEARCH PARTNERSHIP ON 16 EMISSIONS HELPS PROTECT CUMMINS’ ETHOS ENGINE PUBLIC HEALTH SCORES BIG REDUCTIONS OUR HISTORY IN CARBON DIOXIDE

4 SUSTAINABILITY PROGRESS REPORT // TABLE OF CONTENTS

72 86 121 UPDATE: SUPERTRUCK’S NEW TRIP BUS PROJECT LOOKS TO HELP CUMMINS FOCUSING ON SCHOOLS LOWER COSTS EMPOWERING EMPLOYEES TO 73 REDUCE CYBER SECURITY THREATS 87 104 RIGHT ENVIRONMENT NEW INDIA TECH CENTER 122 NEARS COMPLETION SCHOOL CHILDREN IN INDIA BECOME ‘SUPER HEROES’ FOR CUMMINS GOVERNMENT RELATIONS THE ENVIRONMENT THROUGH STRENGTHENS AND POLITICAL ACTIVITY 74 CORPORATE RESPONSIBILITY EDUCATION PROJECT DIVERSITY 124 FINANCIAL & OPERATIONS EMPLOYEES TAKE 88 VALUE IN 2014 CUMMINS ACHIEVES RECORD CORPORATE CUMMINS’ ENGINE FOR GIVING BACK FINANCIAL YEAR IN 2014 RESPONSIBILITY 106 95 DIVERSITY HELPS 127 VALUE TO HEART SOLVE HARD PROBLEMS THE CUMMINS FOUNDATION CENTER’S GOAL IS A 109 HEALTHIER EMPLOYEE 96 HEALTH & SAFETY DIVERSITY AT WORK 128 CUMMINS REDOUBLES ITS HEALTH AND SAFETY EFFORTS IN 2015 CUMMINS’ SOUTHERN INDIANA 110 LOGISTICS CENTER SETS 99 DIVERSITY PROCUREMENT NEW STANDARD FOR CELEBRATES OUTSTANDING YEAR CUMMINS’ SUPPLY CHAIN CUMMINS WINS PRESTIGIOUS 77 HEALTH AND SAFETY AWARD 112 130 ENVIRONMENTAL CHALLENGE 100 CUMMINS ‘HIRE TO DEVELOP’ ENJOYS ANOTHER PHILOSOPHY CUMMINS TEAMS SUCCESSFUL YEAR SAFETY AT CUMMINS IS PART OF EVERYONE’S JOB UP TO DELIVER 114 GOVERNANCE 80 FOR CUSTOMERS 102 CUMMINS ENCOURAGES BROADER IN MADAGASCAR ENVIRONMENTAL ADOPTION OF ETHICAL PRINCIPLES CHALLENGE WINNERS ‘KNIGHT KNUCKLE’ 118 INVENTOR CREATES 82 BOARD LEADS CUMMINS TECHNICAL EDUCATION PROGRAM A SAFER CUMMINS INTO THE FUTURE INCREASES OPPORTUNITIES FOR WOMEN IN TURKEY 120 STRESS TESTS PUT CUMMINS 84 PLANTS IN THE MIDDLE OF 132 CUMMINS HELPS CITY SIMULATED DISASTERS CUMMINS HELPS PATIENTS TAKE GET WISE ABOUT WASTE FLIGHT IN FIGHT AGAINST CANCER 5 SUSTAINABILITY PROGRESS REPORT // INTRODUCTION

A NOTE FROM THE CHAIRMAN

I sometimes surprise people when I tell them deep underground. And it must be number of variables before an engine reliable. Cummins’ on-highway truck is ever placed in a test cell. Cummins is a high-tech company, rivaling anything engines regularly travel a million Cummins is probably best known for they might find in Silicon Valley. miles if properly maintained – almost diesel engines, but we also design and 10 times what most people expect The outside of our engines look much Cummins’ turbochargers, spinning at build engines that run on natural gas, from their cars. Cummins’ generators as they did when our founder Clessie 120,000 revolutions per minute (rpm), biofuels and diesel-electric hybrids.

INTRODUCTION can power hospitals, data centers Cummins first experimented with boost engine power while providing We are experimenting with everything and other critical buildings for tens diesels more than 95 years ago. the heat necessary for chemical from 3-D printing to electrification and of thousands of hours. But the cutting-edge technology on reactions in our aftertreatment start-stop technology (page 70). the inside enables our customers to systems. The aftertreatment converts Like many Silicon Valley companies, Our mission demands that get the power they need with near oxides of nitrogen, a key contributor to Cummins has engineers developing “everything we do leads to a cleaner, zero emissions to do business in smog, into nitrogen and water that can smart and predictive technology for healthier, safer environment” and some of the most competitive, be safely emitted into the atmosphere. onboard diagnostics. They also help in 2014 Cummins adopted its first demanding applications in the world. ensure our fuel systems and other These advances have helped reduce comprehensive environmental components work well together. Our fuel injectors, for example, must diesel engine emissions in North sustainability plan. This plan introduced be in a near perfect cylindrical form America by nearly 100 percent over But we also have chemists exploring goals to further reduce our use of to precisely apply fuel at more than the past 20 years. You can put a reactions to remove pollutants water, energy and our greenhouse gas 30,000 pounds per square inch (psi) handkerchief over the exhaust pipe of from emissions. And our experts in emissions while increasing recycling to enhance combustion while reducing a diesel engine today with the proper computational fluid dynamics and at the Company. We made significant emissions. They can’t do their job aftertreatment and it will remain white thermal management use advanced progress on these goals (page 27) and if there is an error as small as the even after the driver revs the engine. computer modeling to simulate the have established new goals starting diameter of a single strand of hair. harsh environment inside an engine. in 2015 for our products in use and Our technology has to work in extreme They can test an almost limitless internal logistics (page 24). heat and cold, at high altitudes and

6 SUSTAINABILITY PROGRESS REPORT // INTRODUCTION

For all of these reasons, technical Cummins’ global reach positions innovation is critical to Cummins us to take advantage of an exciting when it comes to sustainability. opportunity that exists in our industry That’s as true for a very large engine today. A growing number of countries Linebarger has been working at Cummins like the QSK95 powering a locomotive are adopting more stringent emissions for more than 20 years. Here’s a quick look (page 18), as it is for the Company’s regulations to protect their natural at his career at the Company. new 5.0L V8 Turbo Diesel for pickup resources. We believe Cummins’ trucks (page 68). technical expertise, and a proven CHAIRMAN AND CHIEF EXECUTIVE OFFICER Jan. 1, 2012, to present record for providing the right solution We operate in a unique business PRESIDENT AND CHIEF OPERATING OFFICER at the right time and place, will help 2008-2011 environment. A significant portion us continue to expand globally. EXECUTIVE VICE PRESIDENT, PRESIDENT – of Cummins’ customers build their POWER GENERATION BUSINESS own engines. When they buy ours, Clessie might not recognize all of the 2005-2008 it is usually because the innovation high-tech features added to Cummins VICE PRESIDENT – POWER GENERATION 2003-2005 and quality we provide gives them engines today, but I think he’d be VICE PRESIDENT AND CHIEF FINANCIAL OFFICER a competitive advantage. pleased to see that innovation and 2000-2003

quality continue to be integral to VICE PRESIDENT – SUPPLY CHAIN MANAGEMENT The Company invested a record everything we do. 1998-2000 $754 million in research and MANAGING DIRECTOR – development in 2014, up more than HOLSET ENGINEERING COMPANY (a division of Cummins), 1997-1998 7 percent from the year before, and SENIOR MANAGER – ENGINEERING OPERATIONS launched more than one new or AND TECHNICAL CENTER LEADER, HOLSET improved product each week to 1996-1997 ensure we continue to provide Tom Linebarger ENGINE COMPANY ASSISTANT TO GROUP VICE PRESIDENT FOR WORLDWIDE OPERATIONS, a competitive advantage for our Chairman and Chief Executive Officer PROGRAM MANAGER – ADVANCED FUEL SYSTEMS customers wherever they operate. Cummins Inc. 1994-1996 INTERNSHIP – ASSISTANT TO PLANT MANAGER Columbus MidRange Engine Plant, 1992

7 SUSTAINABILITY PROGRESS REPORT // INTRODUCTION COLUMBUS, INDIANA (U.S.A.) KENT, Cummins announced in January 2015 that Distribution UNITED KINGDOM Business President Pamela Carter, the first woman to Cummins Power Generation Kent received the Export lead one of the Company’s four main business units, Award in September 2014 at the UK Best Factory was retiring. Carter, who became Indiana’s first African- awards for a second year in a row. The plant was American woman Attorney General in 1993, had been also highly commended in the supply chain category. with Cummins since 1997. She initially served as the Company’s Vice President – General Counsel and Corporate Secretary. She then held several key positions before becoming President of the Distribution Business Unit from 2007 until she retired. JAMESTOWN, JUÁREZ, NEW YORK (U.S.A.) MEXICO The Jamestown Engine Plant celebrated its 40th BUENOS AIRES, year in production in 2014. JEP opened in 1974 as In June 2014, Cummins Filtration was named a component manufacturing plant for Cummins and “PACCAR Mexico 2013 Supplier of the Year.” ARGENTINA didn’t produce its first engine (the L-10) until 1979. PACCAR leaders said Cummins exceeded Three Cummins ISZ13 powered Ginaf Rally Power Today, the 1 million-square-foot plant employs their expectations in sales, field support, Trucks were part of the 2015 Le Dakar race across 1,500 people and produces 480 engines per day. operational logistics, customer service Argentina, Chile and Bolivia. The aim of the three-year and parts delivery. project between Ginaf and Cummins was to develop a new rally truck platform that is lighter and easier to maneuver than its predecessor.

CUMMINS AROUND THE WORLD Here’s a look at some of what was happening at the Company around the world in 2014-2015. CARTER JAMESTOWN

8 SUSTAINABILITY PROGRESS REPORT // INTRODUCTION

PHALTAN, INDIA PUNE, QUEENSLAND, The Cummins India Foundation launched INDIA a skills development program in June 2014 Cummins India partnered AUSTRALIA for residents around the Company’s Megasite. with Tata Motors to compete The first installation of a Cummins QSK95 generator Working with the Yashaswi Institute of in the popular T1 Prima Truck in a commercial project outside North America took Technology, the program is designed to Racing Championship in 2014. place at the new $1.8 billion Sunshine Coast Public build skills in employment and entrepreneurship. The massive and powerful University Hospital. Four QSK95 generator sets were Tata Prima trucks, powered delivered to the new hospital in early December by Cummins ISL engines, 2014, where they will provide standby power. proved to be popular among The hospital is under construction and will open CASABLANCA, India’s many race fans. at the end of 2016. MOROCCO

Cummins officially opened its newly expanded and renovated North Africa regional office in Casablanca, Morocco in March 2015. The office will serve as a dedicated regional hub for customers SHANGHAI, CHINA in 19 countries. It was first established in Casablanca in 2011 Cummins and Jardine Engineering officially began operations in the power and has been growing ever since. solutions business during a ceremony in January 2015. It is the 16th joint venture involving Cummins in China. The business will develop, sell, deliver and service gas powered generation projects in China. This map includes Cummins plants, offices and distributors.

PUNE PHALTAN SHANGHAI

9 SUSTAINABILITY PROGRESS REPORT // INTRODUCTION

OUR RECOGNITION

Cummins received several awards in 2014 and 2015 that touched on the sustainability of the Company.

CORPORATE ENVIRONMENT RESPONSIBILITY / ETHICS Cummins was named to the DOW JONES SUSTAINABILITY INDEX Cummins was named one of the WORLD’S MOST ETHICAL COMPANIES FOR NORTH AMERICA in 2014. in 2015 by the Ethisphere Institute. The institute recognizes a company’s The Company has been on the North commitment to ethical leadership, compliance practices and corporate American Index since 2006. The survey social responsibility. This was the eighth straight year that the institute measures a company’s sustainability in a wide range of areas including the selected Cummins for its list. environment, corporate responsibility, human resources, finance and more.

Cummins in 2014 was named a member of the Cummins was ranked 105th among the 500 largest public companies in FTSE4GOOD INDEX, a stock market indices, the United States in NEWSWEEK’S 2015 GREEN RANKINGS. which measures for investors the performance In 2014, Cummins facilities in the United Kingdom won two National Recycling of companies demonstrating strong social, Awards for their waste minimization and recycling efforts – CORPORATE governance and environmental practices. RECYCLER OF THE YEAR and the WASTE PREVENTION AWARD.

Cummins was one of 11 global The awards are sponsored by Materials Recycling World in the U.K. Cummins companies named winners of the facilities in the U.K. reduced their total waste generated by almost 31 percent 2014 GOLDEN PEACOCK AWARD or 8,729 metric tons between 2012 and 2013 and increased their recycling for Excellence in Corporate Governance rate from 96.4 percent to 98 percent. by the Institute of Directors. The group Cummins India won the SPARSHA – BEST PROJECT AWARD in 2014 initiated the Golden Peacock awards in 1991 to establish a benchmark for for its efforts to conserve water across the Company’s facilities in India. corporate excellence in areas such as sustainability, human resources, corporate The award was presented by the Lakshya Corporate Social Responsibility social responsibility, health and safety, governance and the environment. program organized by the National Institute of Industrial Engineering, a pioneering academic institute for higher education.

10 SUSTAINABILITY PROGRESS REPORT // INTRODUCTION

DIVERSITY / WORKPLACE BUSINESS In 2014, Cummins received a perfect Cummins was recognized in 2014 by Chrysler Group LLC as one of its score for a 10th consecutive year in the 2013 SUPPLIERS OF THE YEAR during the Company’s 2014 Annual 2015 CORPORATE EQUALITY INDEX Strategy Meeting and Supplier Awards ceremony. Cummins was recognized awarded by the Human Rights Campaign. in two categories, marking the first time it received two awards in the same The group is the largest U.S. civil rights year. Cummins was recognized as the Powertrain Supplier of the Year organization for lesbian, gay, bisexual and transgender (LGBT) employees. and the Technical Cost Reduction Supplier of the Year.

Cummins, in 2015, was named 21st in Forbes magazine’s list of the Frost & Sullivan recognized Cummins with its 2014 U.S. OVERALL BEST award TOP 25 EMPLOYERS IN AMERICA. The list was based on a survey HEAVY-DUTY TRUCK ENGINES PRODUCT LEADERSHIP of more than 20,000 American workers at large U.S. firms or institutions. based on the results of a survey distributed by the consulting firm. According to Frost & Sullivan, the majority of respondents said they think Cummins was named one of the Cummins is the “best” brand of heavy-duty truck engines for their fleets. TOP 50 COMPANIES FOR DIVERSITY by DiversityInc magazine for a ninth consecutive year in 2015. Cummins ranked 21st on the magazine’s list.

The Minority Corporate Counsel Association (MCCA) named Cummins the 2014 EMPLOYER OF CHOICE FOR THE MIDWEST REGION OF THE UNITED STATES. MCCA’s Employer of Choice Award honors general counsels and their law departments for their success in internal and external diversity and inclusion initiatives.

11 SUSTAINABILITY PROGRESS REPORT // INTRODUCTION

WHO WE ARE Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems.

WORLD HEADQUARTERS STOCK SYMBOL FORTUNE 500 RANKING (traded on New York Stock Exchange) FOUNDED IN 1919 (2015) 500 Jackson Street Columbus, IN 47201 WEB SITE CMI www.cummins.com 154

SALES / EARNINGS EMPLOYEES CUSTOMERS Worldwide, approximately The Company’s customers are located In 2014, Cummins earned 54,600 people. in approximately 190 countries and territories that Cummins reaches through a $1.65 billion on revenues of More than 60 percent of the network of more than 600 company-owned Company’s employees are and independent distributor locations and located outside the United States. $19.2 billion. approximately 7,200 dealer locations.

12 SUSTAINABILITY PROGRESS REPORT // INTRODUCTION

VISION, MISSION, VALUES AND PRINCIPLES

OUR VISION Making people’s lives better by unleashing the Power of Cummins.

OUR MISSION OUR VALUES

We unleash the INTEGRITY // Strive to do what is right and what we say we will do. Power of Cummins by: INNOVATION // Apply the creative ingenuity necessary to make us better, faster, first.

»» Motivating people to act DELIVER SUPERIOR RESULTS // Exceed expectations consistently. like owners, working together. CORPORATE RESPONSIBILITY // Serve and improve the communities in which we live.

»» Exceeding customer expectations DIVERSITY // Embrace the diverse perspectives of all people and honor both with dignity and respect. by always being the first to market GLOBAL INVOLVEMENT // Seek a world view and act without boundaries. with the best products.

»» Partnering with our customers OUR STRATEGIC PRINCIPLES

to make sure they succeed. Leverage Complementary Businesses // Cummins is a family of complementary businesses that create »» Demanding that everything value for our customers by leveraging relationships and applying innovative technology across business boundaries. we do leads to a cleaner, Increase Shareholder Value // Cummins’ financial success is measured by growth in shareholder healthier, safer environment. value. We will focus on ROE / ROANA and Earnings Growth (not Revenue Growth) as the principal »» Creating wealth for drivers of shareholder value. all stakeholders. Seek Profitable Growth // Cummins will seek profitable growth by leveraging our assets and capabilities to grow in market segments with favorable industry dynamics and where Cummins can establish an advantage. OUR PERSONALITY

Decisive. Driven to win. Relentlessly Pursue Cost Leadership // Cummins will pursue an operational strategy of cost leadership. Agile. Passionate. Caring. Lead in Critical Technologies // Cummins will be the market leader in technologies most critical to our customers’ success and our Company’s performance.

Create the Right Work Environment // Cummins will assure that the physical and cultural work environment is conducive to excellent performance and continuous improvement.

13 SUSTAINABILITY PROGRESS REPORT // INTRODUCTION

HOW WE DO IT

Cummins is organized into four business units:

CUMMINS CUMMINS CUMMINS ENGINE POWER DISTRIBUTION BUSINESS GENERATION BUSINESS The Engine Business manufactures COMPONENTS BUSINESS Cummins Distribution sells and services and markets a complete line of diesel Power Gen is a global provider of power BUSINESS the full range of Cummins products for and natural gas engines for on-highway generation systems, components and Cummins Emission Solutions over 20 application segments in over and off-highway use. Markets include services in standby power, distributed designs and manufactures exhaust 190 countries around the globe. heavy- and medium-duty trucks, buses, power generation, as well as auxiliary aftertreatment technology and solutions light-duty trucks and industrial uses such power in mobile applications. It also for the light-, medium-, heavy-duty as agricultural, construction, mining, marine, provides a full range of services and high-horsepower engine markets. oil and gas and military equipment. including long-term operation and Cummins Filtration designs and maintenance contracts and turnkey builds heavy-duty air, fuel, hydraulic and temporary power solutions. and lube filtration and chemical and exhaust system technology products.

Cummins Fuel Systems designs and manufactures new fuel systems.

Cummins Turbo Technologies designs and builds turbochargers to boost engine power and related products.

14 SUSTAINABILITY PROGRESS REPORT // INTRODUCTION

OUR KEY TOOLS

Cummins is a company with operations across the globe. To help ensure the Company operates smoothly, Cummins relies on three primary tools:

SIX SIGMA CUMMINS OPERATING SYSTEM CUMMINS BUSINESS MODEL

Cummins is a major proponent »» An estimated $5.78 billion in savings The Cummins Operating System The Cummins Business Model is a of Six Sigma, using the business have been identified at the Company helps develop common practices simplified view of how the Company improvement tool to save the since Six Sigma started at Cummins and approaches to improve customer is organized that starts and ends Company and its customers 15 years ago. satisfaction. The 10 practices are: with customers and the business. billions of dollars. »» Cummins customers have saved »» Put the customer first and The business model was updated provide real value. Since it was initiated at Cummins an estimated $1.15 billion through in 2013 to more accurately reflect in 2000, Six Sigma has provided a Six Sigma since it was first offered »» Synchronize flows (material, how Cummins delivers products common process and language for to them in 2005. physical and information). and services to our customers employees to solve problems and »» Design quality in every step around the world through an Cummins also uses Six Sigma in develop new products and processes. of the process. integrated supply chain. The new its community involvement work, model more clearly represents how helping its community partners »» Involve people and promote Six Sigma uses data-based analysis to we work together to meet or exceed improve their efficiency and address team work. identify defects and variation in a wide customer expectations. range of manufacturing and business major problems. In 2014, Cummins »» Ensure equipment and tools are available and capable. situations. Here’s a quick look at what employees completed 156 Community Six Sigma has meant to Cummins: Impact Six Sigma projects. »» Create functional excellence.

»» Establish the right environment. »» As of the end of 2014, approximately 21,000 people »» Treat preferred suppliers as partners. had been trained how to use »» Follow common problem- Six Sigma tools at the Company solving techniques.

since the process was introduced. »» Use Six Sigma as the primary

process improvement method.

15 SUSTAINABILITY PROGRESS REPORT // INTRODUCTION

1944

1937

Cummins earns Miller becomes Executive Vice President of Cummins. Cummins has a rich history, replete with examples its first profit. of innovation, entrepreneurship and vision. 1934 1945 Here’s a look at some highlights over the last 95 years: J. Irwin Miller, great-nephew Clessie Cummins leaves of W.G. Irwin, becomes Cummins and moves to general manager of California where he continues OUR HISTORY Cummins at the age of 24. inventing until his death in 1968.

Cummins barnstorms across the Miller becomes Chairman Cummins takes Irwin for a ride country, demonstrating the power of the Cummins Board. in a used Packard limousine that and fuel efficiency of the diesel he equipped with a diesel engine engine in his Coast to Coast 1951 on Christmas Day, convincing Cummins Diesel Test Bus. Irwin of the engine’s potential. Irwin invests a much-needed Clessie Cummins creates the infusion of cash. Cummins Engine Company Miller is commissioned as a lieutenant based in Columbus, Indiana 1929 in the Navy Air Corps, where he served (U.S.A.). William G. Irwin, aboard the carrier Langley during World who employed Cummins as War II. He saw action in the Marshall a driver, supplies nearly all of Islands and New Guinea. the $50,000 in startup capital. 1932 1942 1919

16 SUSTAINABILITY PROGRESS REPORT // INTRODUCTION

1962 2012 Cummins begins operations in India, first as a joint venture 1973 with one plant in Pune. Today, the Company owns all or part of Cummins acquires Holset, a 20 manufacturing facilities in the country British turbocharger manufacturer. and employs nearly 14,000 people. Turbochargers today play a key role 2000 in a number of engine functions. Cummins establishes 1963 its Mission and Values around its Vision of President and Chief Operating 1975 Officer Tom Linebarger succeeds Miller helps Dr. Martin Luther King, Jr. “Making people’s Tim Solso as Chairman and with some of the organizing behind Cummins enters lives better by CEO on Jan. 1, 2012. During the 1963 March on Washington. China as part of a deal involving unleashing the Solso’s 10 years leading Miller was acting as leader of the heavy construction equipment Cummins the Company National Council of Churches. with Cummins engines. Power of Cummins.” experienced record growth.

Miller lays out his thinking on Corporate Responsibility Cummins purchases 86 percent of Cummins names Rich Freeland in Cummins’ 1972 Annual Report. “While some still the Onan Corporation in suburban President and Chief Operating argue that business has no social responsibility, Minneapolis, Minnesota (U.S.A.), Officer in July 2014. Freeland had we believe that our survival in the very long run is which would become the basis been the Engine Business Unit as dependent upon responsible citizenship in our for its Power Generation Business. President since 2010. communities and in the society as it is on responsible technological, financial and production performance.” 1986 2014

Miller retires as Chairman of the Board, although he remains active with the Company until his death in 2004.

1977 1972

17 SUSTAINABILITY PROGRESS REPORT // COVER STORY

CUMMINS HELPS PASSENGER RAIL PICK UP SPEED IN NORTH AMERICA

From its Ontario-inspired shades of green to its custom seats, handy power outlets and COVER STORY Wi-Fi, the UP Express will have plenty to keep passengers talking about as it whisks visitors from Toronto’s Pearson International Airport to Union Station downtown for the Pan American Games in 2015.

Few people, however, will likely notice over the 25-minute trip what’s beneath Nippon Sharyo’s state-of-the art railcars. Cummins’ underfloor QSK19-R diesel engine will power the new service, but Company leaders say they’ll understand if riders focus instead on the new train’s passenger amenities and eye-catching exterior.

Toronto’s new rail service, when fully implemented, is expected to remove more than one million cars annually in and around Canada’s largest city. (Photo courtesy of METROLINX.)

18 The Cummins QSK19-R powers more than 1,700 railcars currently in use in THE POWER intercity operations in Germany, the United OF CUMMINS Kingdom, Australia, China and elsewhere.

“At Cummins, we are all about preferred engine for Siemens’ partnering in our customers’ success,” new Charger locomotive. said Melina Kennedy, the Company’s Siemens won a multi-state, General Manager – Global Rail and $225 million contract in 2014 to Defense Business. “We’re very pleased build 35 diesel-electric locomotives that our ultra-clean diesel technology now in development for intercity is seen as a way to help move people projects in the United States. more efficiently while significantly »» Siemens’ Charger locomotive The QSK19-R reducing emissions and improving with the QSK95 will also power the environment.” All Aboard Florida, the first privately When these passenger rail initiatives BUILDING ON PROVEN SUCCESS owned, operated and maintained started looking for a fuel-efficient Powering the 18 railcars included in For the QSK19-R, Cummins is passenger-rail system in the United engine meeting the U.S. Environmental Toronto’s UP Express is merely one building on a platform with a long States. The service, which will Protection Agency’s (EPA) stringent example of how Cummins is playing history of success. an increasingly important role today eventually connect Miami and Tier 4 Final regulations that went into The engine powers more than in passenger rail in North America. Orlando, Florida (U.S.A.), is effect Jan. 1, 2015, Cummins had 1,700 railcars currently in use in Other projects in the works include: expected to begin operations the right product at the right time to in late 2016 from Miami to Fort deliver the power and torque they intercity operations in Germany, »» Cummins’ QSK19-R will power Lauderdale and West Palm Beach. needed to succeed. the United Kingdom, Australia, 14 Nippon Sharyo railcars headed China and elsewhere. The cars are Cummins is following a familiar “With over 100 Tier 4 locomotive, to the Sonoma Marin Area Rail self-propelled, with the engine typically path in each of these endeavors. switcher, and railcar installations Transit (SMART) system north of San installed under the car. They usually The Company is combining more already on order, this means that Francisco, California (U.S.A.), as part run in pairs with the ability to add than 90 years of diesel engine know- Cummins will power almost every of a more than $200 million project non-powered cars in between to how with a rich tradition of innovation Tier 4 passenger rail project underway to expand rail service between Santa increase passenger capacity. and a deep technical knowledge of Rosa and San Rafael, California. in North America and we have the fuel systems, aftertreatment and hundreds of additional installation The QSK19-R was the first railcar »» Cummins’ QSK95 engine, the other components critical to meeting options under consideration,” said engine produced in North America largest high-speed diesel engine demanding emissions regulations in Randy Nelson, Manager – Cummins certified to meet EPA’s Tier 4 Final the Company has ever built, is the North America. Rail Business Development. emissions standards, the toughest

19 SUSTAINABILITY PROGRESS REPORT // COVER STORY

in the world. The underfloor QSK19-R Smart electronic engine controls and is the latest generation of the 19-liter, advanced combustion techniques 6-cylinder engine manufactured at result in a smooth delivery of power, the Cummins Seymour Engine Plant providing a comfortable travel in Seymour, Indiana (U.S.A.). experience for passengers even when a railcar is running at its top speed of To meet Tier 4 Final regulations, 90 mph (145 km/h). The engine runs Ed Pence, Vice President and General Manager – Cummins High-Horsepower Engine and the equivalent Stage IIIB quietly with minimal vibration due to Business, speaks at the ground breaking for the technical center offices at Seymour, standards for railcars in Europe, Indiana (U.S.A.) in June 2014. an upgraded common-rail fuel system the engine is fully integrated with that can precisely balance fueling Cummins’ Selective Catalytic RENOVATION AND EXPANSION AIMS TO SAVE ENERGY across the engine’s six cylinders. Reduction (SCR) aftertreatment Cummins doesn’t want to just build clean, efficient engines. system that reduces exhaust When the service is fully implemented It wants to build those engines in ways that are clean and efficient. emissions to extremely low levels. in Toronto, the UP Express is expected The Company is finishing up a more than $250 million renovation to remove the equivalent of more than SCR-based systems convert oxides and expansion of its Seymour Engine Plant in Indiana (U.S.A.) where a million vehicles annually in and of nitrogen (NOx), which can cause both the QSK95 and QSK19-R engines are produced. The work was around Canada’s largest city. smog, into nitrogen and water that announced in 2012 and is expected to wrap up in 2015. can be safely emitted into the The 18 railcars that are part of the In addition to energy efficient lighting and other features in the atmosphere. With the use of SCR service will have a flexible seating renovation, the work includes two state-of-the-art test cells where aftertreatment, engine combustion capacity of 173 for a three-car the power generated by the QSK95 engines being tested can can be optimized to improve fuel configuration. Additional space for be captured using what’s called regenerative dynamometers to efficiency. Engines with Cummins’ standing passengers is also available either help power the facility or be sold to the local power utility. SCR package have delivered up during busy periods. Air conditioning The dynamometers are among the largest in the world. to 6 percent better fuel economy. is generated from the QSK19-R by means of a high-efficiency drive The QSK19-R also has very fast Even before the engines make their way to the test cells, design shaft, eliminating the need for an torque response. This allows railcars changes can be tested using the latest computer technology in additional engine. a new technical center that will adjoin the plant. That can reduce to achieve rapid acceleration from the time engines have to run in test cells. idle – an important advantage in A very similar configuration will also reducing trip times on routes with power the railcars for the Sonoma It’s all part of the Company’s mission that “everything we do leads short distances between stations. to a cleaner, healthier, safer environment.” 20 SUSTAINABILITY PROGRESS REPORT // COVER STORY

Marin Area Rapid Transit system. INNOVATION IN A BIG WAY SMART wants to build a line serving While relatively new, the QSK95 has Sonoma and Marin counties, north been quickly making a name for itself. of San Francisco. Eventually leaders Introduced in November of 2011, the want to link the project to Larkspur, engine is eight feet tall, 14 feet long California, with ferry connections and capable of producing up to between Larkspur and San Francisco. 4,400 horsepower (2,983 kW) – The project also includes an extensive the largest high speed diesel bicycle and pedestrian path. Cummins has ever built.

The initial operating segment between Dubbed the “Hedgehog,” the engine Santa Rosa and San Rafael is slated was developed after Company Cummins’ QSK95 engine (left) to open in late 2016. leaders saw potential markets for will power Siemens’ Charger locomotive (below) in several a bigger engine in the Company’s large North American projects. (Rendering courtesy of Siemens.)

21 SUSTAINABILITY PROGRESS REPORT // COVER STORY

WHY PASSENGER portfolio for rail, marine, mining and a long life. Advanced electronics It was the perfect fit when Siemens, TRAINS ARE GOOD other industries. The QSK95 is also enable custom calibration for specific known for its precision engineering, FOR THE ENVIRONMENT powering the largest generator ever duty cycles. The engine also features decided to enter the passenger rail

Passenger trains are generally built by Cummins Power Generation, SCR technology and includes all of the industry in North America. Siemens considered more efficient than which was introduced in the final fuel economy benefits associated with chose the QSK95 when it needed an cars because of their relatively quarter of 2014 (page 40). Selective Catalytic Reduction. American-made engine to complete a high occupancy. A car may new locomotive it planned to build at Working from a “clean sheet,” with The engine is ideal for passenger rail, have only a single occupant. its solar-powered rail manufacturing lots of flexibility to innovate, engineers providing clean power in a relatively hub in Sacramento, California (U.S.A.). According to U.S. Bureau designed the QSK95 not only to meet small footprint compared with heavy, of Transportation Statistics, a EPA Tier 4 emissions regulations, but medium-speed diesels traditionally Siemens’ new diesel-electric Charger passenger train in 2012, the most with remanufacturing in mind to ensure used in locomotive applications. locomotive is technically based on the recent numbers available, used company’s Eurosprinter, Eurorunner about 1,561 Btu’s per passenger and Vectron locomotive platforms, mile compared with around and will be capable of reaching 3,861 Btu’s per passenger speeds up to 125 miles per hour. mile for cars. When officials from Illinois, California

When a new passenger rail service and Washington (state) jointly bid begins, supporters expect a certain a contract for 35 diesel-electric number of drivers will give up locomotives with an option for their cars and switch to the train, another 222 locomotives for regional resulting in an environmental benefit. and mainline trains, Siemens was the winner. The trains will also serve parts of Missouri and Michigan. The 35 locomotives are scheduled to be delivered starting in 2016.

The QSK95 engine, which will be used in Siemens’ Charger locomotive, is prepared for testing at Cummins’ engine plant in Seymour, Indiana (U.S.A.).

22 SUSTAINABILITY PROGRESS REPORT // COVER STORY

The $225 million, multi-state contract LOOKING TO THE FUTURE RAIL BUSINESS WINS GOLDEN SPANNER AWARDS isn’t the only big development in Even with all of these developments Cummins’ rail business in 2014 celebrated achievements in powering Siemens’ rail efforts in the United taking place, passenger rail will still customers in the United Kingdom, winning several prestigious Spanner States. The company’s Charger be relatively limited in North America – Awards in London. locomotive with the QSK95 will also especially when compared with Europe power a ground-breaking initiative The awards, hosted annually by industry magazine Modern Railways, and other parts of the world. Skeptics called All Aboard Florida. recognize the work of the U.K. Rail Maintenance Depots located question whether North Americans will throughout the country in maintaining the vehicles that transport ever be willing to give up their cars in The privately owned, operated and thousands of passengers every day in the United Kingdom. maintained passenger rail service will large numbers to travel by train. eventually connect Miami and Orlando, The awards divide train fleets into categories and award the best But advocates say as traffic making intermediate stops in Fort operators from each category: Golden Spanners for the most reliable congestion grows on North American Lauderdale and West Palm Beach. fleet, Silver Spanners for the most improved fleet and Bronze Spanners highways and concern increases Service from Miami to West Palm for the fleet with the fastest incident recovery. The assessment is based about managing natural resources Beach is scheduled to begin in late on performance data for reliability and engineering performance in the wisely, the climate improves 2016 and from West Palm Beach rail industry. significantly for passenger rail. to Orlando in 2017. Cummins-powered train fleets scored big in the 2014 awards “This is a very exciting and important The initial five trainset purchase to ceremony with a total of three Gold Spanners, two Silver Spanners time for passenger rail,” Cummins’ serve the Miami to Fort Lauderdale and two Bronze Spanners. Kennedy said. “Our hope is the high and West Palm Beach segment technology we’re developing coupled “The team at Cummins provides innovative and reliable power and support will consist of two diesel-electric with our deep knowledge of engines to our award-winning customers so they can be successful in their business locomotives, one on each end will help Cummins customers develop goals as they serve thousands of passengers every day,” said Cummins of four passenger coaches. successful solutions to moving Rail and Defense Business General Manager Melina Kennedy. All Aboard Florida’s leaders expect, people quickly and efficiently, with “These awards are due to the successful collaboration, hard work when fully implemented, the passenger as little impact on the environment and partnerships among many people and organizations and exemplify rail service will remove 3 million cars as possible.” Cummins’ promise of dependability to our customers,” she added. from the road annually.

23 SUSTAINABILITY PROGRESS REPORT // Cummins’ products in-use team THE POWER worked with customers in 2014 to ENVIRONMENT complete projects reducing nearly OF CUMMINS 700,000 metric tons of carbon dioxide.

ENVIRONMENTAL SUSTAINABILITY GOALS

CUMMINS ESTABLISHES Environmental Icons NEW SUSTAINABILITYENGINE FUEL GOALSRAW EFFICIENCY MATERIALS

Cummins is establishing new goals to address two of the The Company knows it can make It is not uncommon for the Company’s a difference in this area, having engines to run one million miles or Company’s biggest environmental opportunities, improved ENERGY done more than 100 fuel-economy more over their lifetime, so there is efficiency of its products in use and more efficient logistics projectsRAW with Cummins customers plenty of opportunity to help customers LOGISTICS MATERIALS within Cummins’ own operations. using Six Sigma tools since 2004. keep their engines running longer and Those projects saved customers more efficiently. “Going forward, Cummins will continue Here’s a look at the new goals:

ENVIRONMENT more than 100 million gallons of to be a catalyst for environmental Cummins defines products in-use fuel and prevented the release of action,” said Chairman and Chief PRODUCTS COMMUNICATIONS engines as those that are currently in WATER IN USE more &than MARKETING 1 million tons of CO2 Executive Officer Tom Linebarger. operation or a new original equipment into the atmosphere. “Our vision and mission demand it, manufacturer (OEM) installation that our business success depends on it, PRODUCTS The projects included optimizing incorporates new approaches for fuel and the ingenuity and energy of our IN-USESUPPLIER GOAL vehicleEMPLOYEE specifications and engine efficiency. These new approaches can ENGAGEMENT ENGAGEMENT employees can make it happen.” operating parameters, fleet and be applied at the OEM, with customers Partner with customers to driver training and advanced at their location after they purchase The new goals are in addition to improve the efficiency of our WASTE engine integration with the vehicle. the product from an OEM, or at a the goals the Company set publicly products in use, reaching by distributor branch. for waste, water and energy in 2020 an annualFACILITIES reduction & of Market research studies show OPERATIONS 2014 (page 27). 3.5 million metric tons (MMT) fuel efficiency is one of the most significant factors when a customer Cummins’ Action Committee for of carbon dioxide (CO2 ), saving buys equipment that uses fuel. In 2014 alone, the Environmental Sustainability (ACES) 350 million gallons of fuel. Fuel efficiency projects with customers Company’s fuel-efficiency has been working on the new goals Cummins produced 1.1 million engines not only saves them money while work reduced CO for the past year, which, like the 2 in 2014 (including joint ventures), and reducing greenhouse gases (GHGs), emissions from products 2014 goals, are timed to 2020. carbon dioxide emissions from these it also upholds Cummins’ promise of in use equal to the CO2 engines in use represent 99 percent dependability and customer support. footprint of Cummins’

of its CO2 footprint. global facilities.

24 All others 1 percent

Products in use 99 percent

CUMMINS’ ENVIRONMENTAL FOOTPRINT Cummins conducted a thorough environmental impact analysis to GHGs determine its environmental footprint.

The Company’s new goal presents an PRODUCT LIFECYCLE opportunity for Cummins’ products in-use team to do this work faster and expand beyond current initiatives. Cummins facilities Having a public goal as part of the 01 12 percent RAW MATERIALS Company’s global Environmental & PROCESSING Sustainability Plan also keeps

Cummins accountable to its Raw materials & external stakeholders. processing 02 88 percent WATER The Company made significant CUMMINS progress in 2014 and completed FACILITIES projects reducing nearly

700,000 metric tons of CO2. The team has worked across 03 regions and market segments to LOGISTICS & TRANSPORTATION Logistics & Products in use identify opportunities and accelerate 3 percent transportation fuel-efficiency improvement efforts 4 percent with a project list numbering close to 200 from 2014 to 2020. In the past 04 Cummins facilities PRODUCTS IN USE 19 percent year, the team has also trained more than 450 people in fuel-efficiency improvement work globally. WASTE 05 END OF LIFE Raw materials & processing 74 percent

25 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT

Environmental Icons ENGINE FUEL RAW EFFICIENCY MATERIALS

ENERGY area for its global environmental The main focus of the Company’s The Company’s new Southern Indiana Logistics RAW Center is expected to help the Company move LOGISTICS sustainabilityMATERIALS plan. goal is on shipments from suppliers products much more efficiently page( 128). to Cummins facilities and shipments Cummins spends close to between Cummins own facilities, as $442 million in transporting goods LOGISTICS GOAL its business units supply each other. across the Cummins network. In 2014, Cummins is taking a phased-in Use the mostPRODUCTS efficient method COMMUNICATIONS WATER IN USE the Company& MARKETING adopted a transportation The transportation management and mode to move goods implementation approach, which network optimization initiative to get system will help Cummins reduce across the Cummins network began as a pilot in North America in the most out of its transportation the total number of miles goods travel 2014 followed by a European launch to reduce CO per kilogram of 2 system as part of Cummins’ larger by combining shipments of different in January 2015, with India integration goods movedSUPPLIER by 10 percent supplyEMPLOYEE chain transformation. products going to common locations. ENGAGEMENT ENGAGEMENT occurring in the third quarter of 2015. by 2020. The Company will also be able to The Company is now using a global Transportation is a key element of reduce the number of less-than-full The logistics team is working with the transportation management system WASTE the logistics process that impacts truckload shipments. Company’s many internal business unit to improve the speed and visibility the supply chain from suppliers and external stakeholders to achieve FACILITIES & of goods moved and have better The management system will also to customers.OPERATIONS Transforming how this goal as Cummins transitions from analytics to manage the process. help Cummins’ logistics professionals Cummins moves raw materials third-party providers to a self-managed Adding a goal for CO reduction not choose the most efficient way – and finished goods across the supply 2 process. Working with carriers in India, only will quantify the environmental whether by road, rail or sea – to ship chain is at the core of the Company’s Brazil and Asia-Pacific is a priority, as benefit that Cummins expects them. As a result of these efforts, the transportation, logistics and warehouse those are regions where Cummins can to achieve through this system, Company expects to save $40 million achieve the biggest CO reductions. strategy as well as an important priority 2 but accelerates and expands its to $64 million annually.

efforts globally.

26 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // GOALS Since 2010, direct water use is down THE POWER by 14 percent, while water use adjusted OF CUMMINS for hours worked is down 36 percent.

CUMMINS MAKES PROGRESS

ON ENVIRONMENTALEnvironmental Icons GOALS ENGINE FUEL RAW EFFICIENCY MATERIALS Cummins made significant progress on all of the goals it of 2010, direct water use is down by The Company’s water neutrality ENERGY 14 percent, while water use adjusted for work is progressing as expected. established in 2014 to reduce its use of water and energy RAW LOGISTICS hours worked isMATERIALS down by 36 percent. Working toward achieving this goal and the waste it produces in its facilities. is promoting awareness about the As the Company prepared to connection between water use in The Company is close to its energy PRODUCTS establish its waterCOMMUNICATIONS goals, some sites WATERWATER IN USE & MARKETING the Company’s plants and the goal, which is tied to 2015, and is began their efforts even ahead of GOALS needs in its communities. already close to its overall target the announcement. In fact, four sites for water consumption by 2020. SUPPLIER EMPLOYEE Reduce direct water ENGAGEMENTincluding threeENGAGEMENT engine plants in China Cummins defines water neutrality But officials say it remains to be seen use across Cummins and the Technical Center in Columbus, as off-setting the Company’s own WASTE if the Company can reach its water by 33 percent by 2020, Indiana (U.S.A.), saved more than water use at a particular location FACILITIES & goal over an extended period of time. adjusted for hours worked. OPERATIONS67 million gallons, about 7 percent through conservation and with of the Company’s total water use community improvements that “We want to show we can consistently Achieve water neutrality at in 2014. These achievements either conserve water or make meet these goals before we develop 15 Cummins manufacturing have placed Cummins ahead of its new water sources available. new ones,” said Mark Dhennin, sites where water is in short 33 percent goal, but the Company Cummins Director of Energy Efficiency supply, also by 2020. Because the Company is still validating is not yet ready to claim success. and Environment. “We’re off to a good its calculations, Cummins is not yet BASELINE YEAR: 2010 start and there’s been some great work With several new facilities open prepared to confirm sites as water done, but there is still a lot of work Cummins used 972 million gallons of that are continuing to ramp up neutral, but has approximately six ahead before we can say we met water in 2014. While this is an increase production, Cummins must sites, primarily in India, that have our 2020 goals.” of 14 million gallons from 2013, ensure it continues producing implemented significant projects results through the next phase of toward achieving water neutrality. Here’s a 12-month progress the number represents a 9 percent decrease in water use intensity since growth and production demands. report on each of the six goals The Company’s efforts already last year. Since the goal’s baseline year Cummins established: underway range from expanding water

reservoirs in Pune, India; to creating

27 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // GOALS

Environmental Icons ENGINE FUEL RAW EFFICIENCY MATERIALS reservoirs and improving irrigation Since the baseline year of 2010, one site awaiting validation as Achieving the second goal by 2015 practices in Cummins India’s Model Cummins’ total waste disposed zero disposal. will require the Company to double ENERGY Village program in Nandal village decreased by aboutRAW 22 percent in its energy efficiency reductions at LOGISTICS MATERIALS Under Cummins’ definition of zero (page 54); to digging a new well absolute terms, while experiencing the same time Cummins’ business disposal, waste can only be burned for a school in Xiangyang, China, a 41 percent reduction in disposal is changing. for energy recovery after reasonable establishing a rain water harvesting PRODUCTSadjusted for hoursCOMMUNICATIONS worked. WATER IN USE & MARKETING efforts have been made to reduce, The Company is adding several new system and teaching students the Compared with 2013, Cummins’ reuse or recycle, and then only if buildings that will use energy but not importance of using water wisely. total waste disposed in 2014 SUPPLIER EMPLOYEE there is a net energy gain, creating produce revenue, engage in more ENGAGEMENTdecreased by 2,000ENGAGEMENT metric tons more energy than is needed merely joint ventures in the engine business, on an absolute basis or 20 percent, WASTEWASTE to sustain combustion. and produce more high-horsepower adjusted for hours worked. Environmental Icons FACILITIES & ENGINE FUEL RAW GOALS EFFICIENCYengines, which requireMATERIALS a lot of fuel OPERATIONS Facilities and operations staff have to test. Increase recycling rate ENERGY updated some waste management ENERGY from 89 percent in 2014 AND GHG These changes haveRAW been challenging, processes to ensure goal success. LOGISTICS MATERIALS to 95 percent by 2020. but Cummins is on track to meet The team is conducting “deep dive” GOALS both its energy and GHG goals. Reach “zero disposal” status waste evaluations at the 10 sites Reduce energy use and PRODUCTSThe Company is COMMUNICATIONSleveraging lessons at 30 sites by 2020 where that account for 50 percent of the WATER IN USE & MARKETING greenhouse gas (GHG) from programs such as the ISO50001 100 percent of waste is Company’s waste disposal. A waste emissions by 25 percent energy management system and reduction toolkit will be included in the recycled in a useful manner. SUPPLIER EMPLOYEE and 27 percent, respectively, ENGAGEMENTthe Department ofENGAGEMENT Energy’s Superior formal waste reduction plan at those compared to a 2005 baseline Energy Performance program. BASELINE YEAR: 2010 sites. Concurrent quarterly waste and adjustedWASTE to sales, by 2015. reviews by business unit and region FACILITIESIn & 2014, the Company’s GHG Cummins continues to make progress OPERATIONS are expected to provide greater on its public waste management BASELINE YEAR: 2005 emissions both increased on an insight into progress and facilities goals. In fact, the Company’s sites absolute basis (up 8.6 percent) and The focus on energy and greenhouse best-practice sharing. in the United Kingdom have already decreased when adjusted for sales gas was the first company-wide achieved a collective 99 percent (down 2 percent) from the prior year. As with the Company’s water neutrality initiative of its kind at Cummins, recycling rate. The Company all Compared with the energy / GHG goal goal, Cummins has formalized its targeting a specific set of together recycled 90.4 percent baseline year of 2005, emissions have definition of “zero disposal.” Four sites environmental impacts around the of its total waste generated in decreased 35 percent, while increasing have been validated as zero disposal globe. An initial goal was set for 2010. 2014, equivalent to approximately by 10 percent on an absolute basis. under this criteria. There is currently 165,000 metric tons of waste. 28 Environmental Icons Environmental Icons ENGINE FUEL RAW ENGINE FUEL RAW EFFICIENCY MATERIALS EFFICIENCY MATERIALS

Environmental IconsENERGY Environmental IconsENERGY ENGINE FUEL RAW ENGINE FUEL RAW RAW RAW EFFICIENCY MATERIALS EFFICIENCY MATERIALS LOGISTICS MATERIALS LOGISTICS MATERIALS

WATER NEUTRALITY REDUCE DIRECT WATER USE SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT ENERGY ENERGY RAW RAW LOGISTICS LOGISTICS PRODUCTS2020 GOAL 15 SITESMATERIALSCOMMUNICATIONS 2020PRODUCTS GOAL 33 PERCENTMATERIALSCOMMUNICATIONS WATER IN USE & MARKETING WATER IN USE & MARKETING 2014 PROGRESS 36 PERCENT

PRODUCTS COMMUNICATIONS PRODUCTS COMMUNICATIONS SUPPLIER EMPLOYEE SUPPLIER EMPLOYEE ACTUAL PENDING IN USE & MARKETING IN USE & MARKETING ENVIRONMENTAL WATER ENGAGEMENT ENGAGEMENT WATER ENGAGEMENT ENGAGEMENT 0 6

GOAL PROGRESS WASTE WASTE ZERO DISPOSAL SUPPLIER EMPLOYEE INCREASE RECYCLINGSUPPLIER RATE EMPLOYEE ENGAGEMENT ENGAGEMENT ENGAGEMENT ENGAGEMENT FACILITIES & FACILITIES & OPERATIONS OPERATIONS Cummins’ water and waste 2020 GOAL 30 SITES 2020 GOAL 95 PERCENT facility goals have a goal year of WASTE WASTE FACILITIES & 2014 PROGRESSFACILITIES & 90 PERCENT 2020, while the energy and GHG OPERATIONS OPERATIONS ACTUAL PENDING goals are set to be met in 2015. 4 1 Environmental Icons Environmental Icons ENGINE FUEL RAW ENGINE FUEL RAW The charts to the right show REDUCE ENERGYEFFICIENCY USE MATERIALS REDUCE GHG EMISSIONSEFFICIENCY MATERIALS the Company’s goal progress 2015 GOAL 25 PERCENT 2015 GOAL 27 PERCENT ENERGY ENERGY RAW RAW visually, while the data table 2014 PROGRESS LOGISTICS34 PERCENT MATERIALS 2014 PROGRESSLOGISTICS 35 PERCENT MATERIALS below gives more detail.

PRODUCTS COMMUNICATIONS PRODUCTS COMMUNICATIONS SitesWATER that are pending validation INare USE not yet confirmed to have& MARKETING met the goal, but have enough data and WATERevidence to support the commencementIN USE or & MARKETING continuation of the validation process. Sites pending validation are not necessarily guaranteed to qualify as “actual” once the validation process is complete.

ENVIRONMENTAL PERFORMANCESUPPLIER EMPLOYEE SUPPLIER EMPLOYEE ENGAGEMENT ENGAGEMENT ENGAGEMENT ENGAGEMENT Includes all consolidated operations and joint ventures subscribing to Cummins’ Enterprise Environmental Management System. WHAT IS THE IMPACT? WASTE WASTE

Since 2010, Cummins substantially Environmental PerformanceFACILITIES & 2010 2011 2012FACILITIES & 2013 2014 OPERATIONS OPERATIONS reduced facility water and waste, Energy consumption (thousands of MMBtu)1 11,847 12,263 11,711 12,077 12,746 adjusted for hours worked, and GHG GHG emissions (thousands of metric tons CO2e) 760 783 729 750 788 emissions, adjusted for sales. Generated waste (thousands of metric tons) 171 188 179 177 183 The Company avoided impacts Disposed waste (thousands of metric tons) 22 25 21 20 18 equivalent to these real-life examples. Recycled waste (thousands of metric tons) 149 164 158 157 165

Recycling rate (%) 87 87 88 89 90 Emissions equal to taking 46,700 passenger U.S. hazardous waste (metric tons) 98 101 104 85 92 cars off the road annually Water use (millions of gallons) 1,135 1,083 1,069 958 972

Water for drinking, Number of Enterprise ISO 14001 certified entities 67 76 81 86 102 sanitation and hygiene Number of Enterprise ISO 14001 certified manufacturing sites 53 55 63 67 71 for 284,000 people for a year Net sales (millions U.S. dollars) 13,226 18,048 17,334 17,301 19,221 Energy intensity reduction since 2005 (%) 2,3 16 35 33 30 34

3,500 garbage GHG intensity reduction since 2005 (%) 2,3 16 36 35 33 35 trucks full of waste Water intensity reduction since 2010 (%) 2 0 21 22 30 36

1 2 Primary energy excludes sold electricity and associated fuel29 usage Intensity defined as adjusted for sales (energy / GHG) or hours worked (water) 3 Reduction includes consolidated entities only SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRODUCT STEWARDSHIP

PRODUCT STEWARDSHIP

CUMMINS PRODUCTS ALWAYS HAVE THE ENVIRONMENT IN MIND

Products are at the center of the Company’s vision to make It was clear from this analysis that potential to reduce both the resources the Company’s top priority must be used to make a product as well as how people’s lives better by unleashing the power of Cummins. products, both in design and in use. much fuel is burned when that product From powering fire trucks that keep Here is Cummins’ view of The analysis led Cummins to establish is put to use. communities safe, to heavy-duty product stewardship: its products in-use goal (page 24) After the Company completed a trucks that deliver goods, to generators and design for environment initiative. ENVIRONMENTAL lifecycle analysis (LCA) on its flagship supporting hospitals, Cummins makes IMPACT ANALYSIS PRODUCT DESIGN ISX15L engine in 2013, Cummins a difference around the world by continued to approach product working to meet the needs of all After an intensive study and analysis, There will always be a need for moving stewardship with a lifecycle mindset. of its stakeholders. Cummins adopted its first-ever goods and providing power for the Since the material-embodied energy- comprehensive environmental world to do important work, and it The Company’s technology leadership to-weight ratio is consistent across sustainability plan in 2014 that builds is critical to develop technologies and innovation enable Cummins to all engine sizes, the Company is on the good work the Company has that will do those in the cleanest and meet increasingly more stringent using this comprehensive information previously done in this area. most efficient way possible. Cummins emissions regulations across the engineers are thinking about ways to develop Cummins’ design for globe. The Company’s customers This new plan prioritizes actions to make the Company’s products environment strategy. The Company have come to depend on Cummins’ by Cummins to address its biggest even more environmentally friendly will continue to perform LCAs on other clean technology for the power and environmental opportunities, from the in the future. Cummins products as necessary. reliability they need to succeed, materials the Company buys to the The Company’s design for environment whatever the job. emissions of its products. Cummins Seventy percent of a product’s strategy will focus on materials and examined its entire environmental environmental footprint is determined Product stewardship means the fuel efficiency. Improving fuel efficiency footprint, focusing on the key areas during the earliest phases of the Company has an environmental not only means reducing the fuel of water, waste, energy and design process, according to the mindset about its products as consumption of Cummins products, greenhouse gases (GHGs). U.S. Environmental Protection Agency employees think about their design, (EPA). So Cummins has tremendous but also includes designing for use, remanufacture and end of life. alternative energy sources as well as

30 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT Cummins puts millions of pounds of product back to useful life through the Company’s remanufacturing operations.

Cummins biggest opportunity to Based on previous Cummins fuel- expand its product stewardship efficiency projects, the Company beyond the upfront design will be expects that a 3 to 5 percent reduction working with customers to improve the in fuel usage can be achieved for many efficiency of its products in use. This is customers through optimization tools, a win-win as it saves customers money system-level expertise and various for fuel and it reduces greenhouse gas fuel-economy engine features. emissions. And through the Company’s REMANUFACTURING products in-use goal, Cummins can make a difference right now (page 24). Cummins’ remanufacturing is the Company’s “green business.” reducing the amount of fuel burned in PRODUCTS IN USE The Company has partnered with Remanufacturing maximizes benefits the Company’s development testing. While Cummins products can change customers on fuel-efficiency projects for customers and the environment the world for the better, the Company Material efficiency includes designing for many years. As part of Cummins’ by planning and designing Cummins must also ensure it minimizes the with less material and designing Environmental Sustainability plan, products to have a long and environmental impact of its products with circular material flow in mind, the Company has added more people increasingly more fuel-efficient life. such as recycled material use and in use, helping customers reduce and tools to accelerate and expand In 2014, some 50 million pounds remanufacturing. their own environmental footprints. this important work. High-horsepower engines in use are a priority given the of Cummins product was put back On-highway transportation Cummins is beginning to integrate large amount of fuel they burn and into use thanks to remanufacturing. represents approximately 20 percent tools and training programs into its the corresponding CO emissions. Remanufacturing requires about to 30 percent of the world’s GHG 2 new product development process to 85 percent less energy than emissions. Greenhouse gas emissions take into account the environmental manufacturing the same product with from Cummins products in use are impacts of all phases of the product new parts. Water is saved since new the Company’s largest environmental lifecycle, including raw material On-highway and mining metal does not need to be extracted. extraction, manufacturing, product impact and represent 99 percent engines account for Remanufacturing at Cummins had use and end of life. Cummins expects of Cummins’ greenhouse footprint 74 percent of Cummins due to fossil fuel use, which emits sales of about $595 million in 2014. to report more on its design for product CO2 emissions. carbon dioxide (CO ). The Company’s remanufacturing environment strategy in 2016. 2 Eighty percent of product CO emissions come 2 from engines fewer than 10 years old. 31 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRODUCT STEWARDSHIP This report includes a lot of statistics

about carbon dioxide (CO2 ), a colorless gas that contributes to global warming. In many instances, statistics are based

on metric tons of CO2 . operations include nine global facilities The old methods of grinding and As more regions around the world So, how much is a metric ton of CO ? and offer about 4,500 part numbers. machining are gradually being replaced 2 consider regulating greenhouse with additive technologies, specialized gas emissions (GHGs) and fuel Through the common application coating technologies and more. 1 consumption, Cummins sees an of salvage technology, component The emerging field of mechatronics, opportunity for technological innovation re-use guidelines and remanufacturing- which combines mechanical and that can benefit vehicle owners and specific policies and procedures, the electrical engineering and computer 2 the environment. The Company Company has become increasingly science, is creating new systems such supports a separate engine standard sophisticated in what it can as robotics and digitally controlled in these regulations to provide a clear remanufacture and for how long 3 combustion engines. direction for innovation, addressing it can extend a product’s life. the component that burns all the fuel The Company is also investing in 4 In many cases, remanufactured and emits the carbon dioxide (CO2 ). technologies to assess remaining products today are “upcycled” It ensures enforceable requirements. useful life. The expanding number FOUR TRACTOR TRAILERS FULL! to include design, emissions, fuel of emissions control components, A regulatory framework that includes economy and quality upgrades. such as diesel particulate filters, a combination of engine and vehicle Lighter, more compact engine designs also present business opportunities The Company continues to advocate standards is also the most cost- combined with new materials (compact for remanufacturing. globally for sound public policy and effective way for customers to realize graphite and aluminum) and special regulations that are tough, clear fuel savings and retain their ability REGULATORY INTEGRITY coatings are changing Cummins’ and enforceable. to choose the right powertrain and approach to remanufacturing and Cummins’ product stewardship vehicle to purchase in order to do There is growing public demand for making engines more fuel efficient. is underpinned by the Company’s their work. better environmental regulations of The Company is also developing commitment to regulatory integrity, all kinds by governments in almost MATERIAL COMPLIANCE specific rebuild kits to improve fuel advocating now for cleaner and every country. Customers increasingly Material compliance is a key economy at time of rebuild. more efficient products for the need Cummins’ products to meet new future, and ensuring improvements component of Cummins’ product environmental regulations and provide intended by regulation are delivered stewardship. The Company maintains the power and reliability that helps In 2014, Cummins in the real world. a comprehensive corporate policy them compete and win. By getting out remanufactured regarding the use of prohibited and Cummins has a long history of in front of regulations and participating 15,673 engines; restricted substances in its products. supporting regulatory actions to make in the rule-making process, the 6 percent of them were Cummins’ policies take into account the environment cleaner, going back Company is in a very good position originally manufactured key global environmental regulations to the 1970s as a strong advocate for to not only comply but excel. as well as very specific ones driven in 2010 or later. the Clean Air Act in the United States.

32 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRODUCT STEWARDSHIP

by the European Union such as Cummins’ efforts resulted in a process »» Cummins will provide its customers, a Product Safety Committee that Registration, Evaluation, Authorization both compliant to Section 1502 of the partners, employees and society is accountable for applying the and Restriction of Chemicals (REACH), Dodd Frank Act in the United States with products that are safe to policies and procedures in its area. Restriction of Hazardous Substances on conflict minerals, and one that sets operate, maintain, adjust and These Product Safety Committees (RoHS), and End of Life Vehicle for the expectation of responsible sourcing repair when used as intended. integrate into the Corporate Product automotive products. practices throughout the Company’s » Each Cummins employee » Safety Council, which is managed supply base. Conflict minerals are will regard product safety REACH addresses the production by the corporate Director of Product mined in conditions of armed conflict as a top priority. and use of chemical substances Safety. This network allows for and human rights abuses in the and their potential impacts on both »» Each Cummins employee is collaboration and rapid communication Democratic Republic of Congo and human health and the environment, responsible for applying the on safety-related matters. adjacent countries. while RoHS restricts the use of certain policy in his or her individual In compliance with the Company’s hazardous substances in electrical U.S. laws require companies that are and collective work activity. Product Safety Policy in 2014, and electronic products. publicly traded on U.S. exchanges to » Each Cummins employee » Cummins voluntarily initiated five disclose whether they use specified is expected to adhere to the Compliance with the Company’s product safety campaigns impacting minerals from those countries such spirit as well as the letter of policies is designed into the materials approximately 91,000 Cummins as tungsten, tantalum and gold in the Product Safety Policy. it uses and Cummins partners with engines and/or Cummins components. their products (page 117). its suppliers to ensure the Company’s Cummins has a set of standardized These campaigns were reported to the global compliance requirements are met. PRODUCT SAFETY corporate and local policies and relevant public agencies as required by applicable laws and improvements Responsible sourcing of Cummins’ Mission demands that procedures in order to meet the were made on each of the products minerals is important to Cummins. everything the Company does Corporate Product Safety Policy. at issue. The Company maintains global leads to a “cleaner, healthier, safer Each Cummins Business Unit has policies to carry out key processes environment.” That makes product such as the Reasonable Country of safety a top priority. Cummins Origin Inquiry process, consistent Product Safety Policy says: with the Organization for Economic »» Cummins will design, manufacture, Co-operation and Development sell, distribute and service all (OECD) due diligence framework. products so that they are safe to use for the described and

intended purpose.

Cummins Power Generation employees conduct a product safety review on a generator at the business unit’s test facility at Manston, Kent, United Kingdom. 33 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT

CUSTOMER SPECIFIC PROJECTS

Cummins and its distributors work with end- user customers, often including their partners

and suppliers, on projects that are tailored ENGINE IMPROVEMENTS AND FEATURES to each customer application and operation. Cummins continually improves engine calibrations Project scope includes data collection, analysis and increases the options available to customers such and specific improvement recommendations. as recent additions ADEPT (idle cruise management, page 38), naturally aspirated air compressors and Connected Diagnostics (page 38).

DRIVETRAIN AND EQUIPMENT OPTIMIZATION

Cummins collaborates extensively with vehicle and equipment manufacturers and suppliers, BEST PRACTICES such as Eaton and Allison Transmission, to design products that meet customer The ongoing work Cummins does needs while improving efficiency. This work with customers for on-highway truck also includes hybrid and start/stop technology. and bus, construction equipment and mine vehicles helps the Company incorporate best-practice improvements in subsequent installations.

PARTNERING WITH CUSTOMERS FOR BETTER FUEL EFFICIENCY

Cummins provides a complete set of collaborative solutions to help customers maximize their fuel efficiency and reduce POWERSPEC greenhouse gas emissions. From the development of Cummins’ PowerSpec is a powerful electronic tool that supports customer products that are optimized for specific market segments, fuel efficiency beginning at the ordering process and continuing through to the use of software to assist in the truck specification the life of the vehicle. The tool can optimize equipment set-up during the process, to the ability to customize electronic engine settings order, tailor operation of the engine by customizing electronic parameters and parameters, Cummins helps customers reduce their and provide real-time data and information for optimal in-use performance. carbon footprint throughout the life of the truck.

34 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRODUCTS ENGINE BUSINESS Cummins produces engines for on-highway use, off-highway use and high-horsepower engines for mining, rail, marine, oil and gas, and power PRODUCTS generation applications. On-highway engines range from engines for pickup trucks to the engines for large tractor-trailers hauling freight. Off-highway NEW PRODUCTS engines include engines for construction, agriculture and industrial uses. Tremendous strides have been made in engine emissions in North America REFLECT CUMMINS’ since the U.S. Environmental Protection Agency (EPA) began regulating them in the 1970s. On-highway diesel engine emissions, for instance, are down COMMITMENT more than 95 percent for particulate matter (PM) and oxides of nitrogen (NOx), reaching near-zero emission levels.

TO ENVIRONMENT Advances in fuel economy, meanwhile, have greatly reduced the output of carbon dioxide (CO ), a key contributor to global warming. Cummins had another good year bringing new products 2 to market in 2014. The Company introduced more than Cummins has been a pioneer in clean diesel technology, advances in combustion, electronic controls, fuel systems, filtration, air handling, exhaust aftertreatment 60 products or product updates, many addressing and more to reduce emissions and improve fuel economy. It has achieved emissions, fuel efficiency or both. these advances both working on its own and in partnership with others.

The Company has a distinct advantage countries enact stricter regulations For example, in the highly competitive North American Heavy-Duty Truck when it comes to designing and to protect their air, land and water. engine market, Cummins and Eaton introduced a new powertrain package building clean, fuel-efficient engines for the ISX15 on-highway engine in 2013 that produced industry-leading The Company recognizes that its and generators that provide the power fuel economy. Through hardware and software enhancements, the package products must deliver real economic customers need to succeed while integrated power and fuel-shifting strategies to provide an estimated benefits to Cummins’ customers, meeting the regulations applicable 3 percent to 6 percent improvement in fuel economy. including not just the performance in any particular market. customers have come to depend The two companies announced in 2014 that the SmartAdvantage Cummins is the only independent upon but also reliability, durability Powertrain package (page 44) was being expanded to include engine manufacturer with the in- and low cost of ownership, too. applications for the ISX12, a smaller engine ideal for regional hauling. house capability to produce all of the Here’s a look at some of the In addition to diesel, the Company has also been a leader in the critical subsystems required to build major environmental sustainability development of engines that run on biodiesel, natural gas and other an engine or generator. The Company developments in Cummins products alternative fuels to provide customers with the option that best works believes its technical expertise gives over the past year, organized by for them to meet their own sustainability goals. it a competitive advantage as more business segment. All this knowledge comes together in the Company’s Engine Business Unit. Some of the most significant environmental sustainability developments in the business in 2014 and early 2015 start on the next page. 35 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRODUCTS

ENGINE EFFICIENCY NOTABLE: During the tour, customers will have an opportunity to interact with Cummins Cummins in March 2015 announced plans for a mobile showcase experts to learn about current and future products and technologies including of its products and technologies available for customers in the real 2017 prototype engines powering the truck fleet for the tour, as well as North American truck market to help them operate more efficiently. engine system displays representing the Company’s product lineup for the The Cummins Redefining Tour will visit dozens of cities across North American truck market. the United States and Canada beginning in the summer of 2015 (see www.cumminstour.com for schedule). QUOTABLE: “We are very excited to announce the 2015 Redefining Tour,” said Amy Boerger, Vice President – North American Engine Business. “The Cummins powered fleet not only demonstrates our products in a real-world application, it also allows us Cummins announced its Redefining Tour at the Mid-America Trucking Show in Louisville, Kentucky (U.S.A.), in 2015. to bring product demonstrations and displays directly to our customers – some Company experts will meet with customers on the tour of whom we don’t have the opportunity to engage with on a regular basis.” to talk about current and future products.

36 Cummins has more than doubled the number of engines THE POWER 10 liters and above that it has OF CUMMINS remanufactured since 2008.

ISB6.7 QSX15 NOTABLE: AND ISL9 The QSX15 features more horsepower and industry-leading Cummins announced in February hydraulic capacity in a durable platform. The QSX15 is Allison Transmission Holdings and Cummins 2015 the start of production of manufactured at Cummins’ Jamestown Engine Plant in announced in March 2015 that they had the QSX15 for John Deere 9R/9RT Jamestown, New York (U.S.A.), the heart of heavy-duty received certification from the California Air Series Tractors. The 15-liter engine manufacturing at Cummins. Typically, more than Resources Board (CARB) to sell the model engine, which meets EPA Tier 4 400 engines are built per day at the plant. year 2015 Allison H 40/50 EP hybrid propulsion Final and European Union Stage system paired with the Cummins ISB6.7 and IV emissions standards, is the QUOTABLE: ISL9 diesel-electric hybrid engines for transit largest horsepower engine in “The Jamestown Engine Plant plays an important role buses and coaches. The pairing was first the John Deere four-wheel-drive in our Company’s ability to produce a broad range of announced in November 2014. tractor range. engines for different customers around the world serving a wide variety of markets,” said Hugh Foden, Executive NOTABLE: Director – Off-Highway Business. Allison’s H 40/50 EP hybrid propulsion system is used for both straight and articulated transit buses. It has improved fuel economy up to 25 percent over similar diesel buses. Additionally, its regenerative braking NOTABLE: QSK50 capability can significantly extend the brake change Cummins is applying its experience in diesel electric Cummins announced in November interval by as much as 350 percent. to introduce optimized ratings for variable speed diesel- 2014 the availability of its QSK50 electric technology that is ideal for low-load applications QUOTABLE: marine engine for variable speed such as offshore support vessels, ferry boats, passenger “Cummins is pleased the hybrid system has received diesel-electric applications. vessels and fishing boats. Early reports show significantly 2015 certification from the ARB as it will provide transit reduced fuel consumption, reduced carbon dioxide (CO ) 2 customers another viable solution designed to meet emissions and lower system weight compared to fixed their business needs,” said Laura Chasse, general speed diesel applications. manager of the North American Bus Business.

QUOTABLE: “Cummins will play a critical role in the advancement of this more efficient technology, supplying engines to system integrators for packaging into complete variable speed diesel electric packages,” said Waldemar Marchetti, Director of Strategic Growth – Offshore. 37 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRODUCTS

6.7L CONNECTED ADEPT TECHNOLOGY TURBO DIESEL DIAGNOSTICS Cummins in March 2015 introduced ADEPT technology (Advanced Dynamic Efficient Cummins announced in August 2014 that its Cummins announced in February 2015 details Powertrain), a new suite of electronic features 6.7L Turbo Diesel was the first diesel engine surrounding Connected Diagnostics, the first that will deliver fuel-economy gains of up to in a medium-duty vehicle certified to meet application within the Connected Solutions suite 3 percent initially for ISX15 customers operating Low Emission Vehicle III standards from that has been designed to work with leading with automated manual transmissions. the California Air Resources Board (CARB). telematics providers. Cummins Connected

Solutions is a group of products that utilize the NOTABLE: NOTABLE: connection of a Cummins electronic engine to ADEPT utilizes load-, speed- and grade-sensing The new standard applies to all vehicles under a vehicle’s on-board telematics system. technology to initiate adjustments to speed, power 14,000 pounds Gross Vehicle Weight Rating. and transmission gear to take advantage of vehicle The Cummins 6.7L Turbo Diesel powers the NOTABLE: momentum for better fuel economy. The technology Ram Heavy-Duty lineup. Connected Diagnostics gathers engine data also eliminates unnecessary downshifting to keep to provide customers with immediate expert QUOTABLE: the engine operating in the most fuel-efficient “sweet recommendations in response to engine fault “Being the first in this segment to certify to these spot.” The first ADEPT package will be available in information. Connected Diagnostics utilizes new standards demonstrates our commitment the third quarter of 2015, and customers will be Cummins’ expert guidance to provide thorough to the environment and meeting more stringent able to upgrade as future packages are released. recommendations so customers can make requirements without hardware changes allows us to the most informed decision at the time of the QUOTABLE: maintain the proven capability and reliability that our notification. This will help maintain productivity “The release of ADEPT in 2015 signifies Cummins’ customers have grown to expect,” said Jeff Caldwell, and maximize uptime for customers. commitment to deliver customer-focused innovation General Manager – Global Pickup and Van Business. as soon as it is ready for market,” said Amy Boerger, QUOTABLE: Vice President – North American Engine Business. “Cummins is excited to provide this service for our customers to help enable their success,” said John Malina, Executive Director of Connectivity and Data Integration. “We are committed to continuing our promise of providing exceptional customer support, and Connected Diagnostics is one more tool that allows us to deliver on this promise.”

38 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRODUCTS REMANUFACTURED ENGINES The number of remanufactured engines 10 liters and above has more than doubled since 2008.

YEAR NUMBER OF ENGINES

2008 3,759 NATURAL REMANUFACTURING 2009 2,728 GAS ENGINES Remanufacturing of engines and parts 2010 3,357 provides customers with a high-quality, Cummins’ goal is to provide customers with 2011 4,770 sustainable option that’s good for the the engine that makes sense for their particular 2012 5,408 environment and good for their bottom line. sustainability needs. That’s why the Company 2013 5,880 makes engines that run on a variety of fuels, Instead of sending tons of metal to landfills and 2014 7,661 including natural gas. the scrap heap, remanufacturing recycles and reuses resources, providing customers with Cummins has been developing a full line of natural significant savings while greatly reducing the gas engines both through its Engine Business need to mine new materials. manufacturing a new engine or part. Cummins and through Cummins Westport Inc. The joint reclaims about 50 million pounds of product venture partnership was established with Westport This conserves natural resources and minimizes annually, avoiding 200 million pounds of Innovations Inc. of Vancouver, British Columbia the greenhouse gas emissions associated with greenhouse gas emissions per year. (Canada), in 2001. excavating, refining and machining materials used for new parts. A Cummins remanufactured engine Every remanufactured engine or part is completely Cummins Westport’s natural gas engines are or part requires about 85 percent less energy than disassembled, cleaned, inspected, fully restored available as factory-installed options from more and tested to meet original specifications or better. than 50 truck and bus manufacturers, establishing If an upgrade has been made from the original the joint venture as the leading North American design or material of a particular part or engine, provider of natural gas engines for on-highway it will be added as it is remanufactured. commercial vehicles. TO LEARN MORE Independent of the joint venture, Cummins Engine You can learn more about Cummins’ complete Business has been building natural gas engines line of engines at cumminsengines.com. for many years, especially in the Company’s High-Horsepower business, primarily for power generation and gas compression customers. Every remanufactured engine or part at Cummins is disassembled, cleaned, inspected, fully restored and tested to meet original specifications or better.

39 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT

POWER GENERATION QSK95 SERIES Cummins Power Generation is committed to providing products that Cummins Power Generation in November 2014 introduced the minimize their impact on the environment. The business unit is developing QSK95 Series, a new line of high-performance generator sets cleaner combustion techniques with natural gas and diesel reciprocating engineered with the highest kilowatt per square-foot ratio in its engine generators, plus factory-integrated exhaust aftertreatment that class, resulting in a smaller footprint that achieves a 20 percent allows these products to meet stringent global emissions standards. improvement in power density.

As part of its global emissions strategy, Cummins Power Generation NOTABLE: QUOTABLE: focuses on meeting or exceeding U.S. EPA and European Union The new series uses Cummins’ most “The QSK95 Series produces up to emissions standards, as these standards are the world’s most powerful engine to offer best-in-class 3.5 megawatts of power, occupying stringent and all-encompassing. This strategy assures end-users fuel economy. Over the course of less floor space than lower-rated of the best power generation solution for their application, 8,000 hours of operation, the QSK95 generator sets. They are designed to regardless of country or continent. can achieve fuel savings of more lower the total cost of ownership by than $400,000. Fewer maintenance reducing installation expenses, fuel Cummins Power Generation has been in the forefront of the move to requirements, longer service intervals costs and maintenance requirements— cleaner, quieter and more efficient diesel engine-powered generator and 25,000 hours to major overhaul all while maintaining Cummins’ high sets, improving the fuel efficiency of all its engines because less fuel make these generator sets ideal as standards of reliability,” said Tony consumed means fewer emissions overall. primary sources of power, but they Satterthwaite, then president of Sophisticated electronic engine controls have virtually eliminated are also excellent for standby power Cummins Power Generation. (He has visible smoke, and better engine design has reduced lubricating oil with their smaller footprint and higher since taken a new position leading the consumption to only 0.15 percent of fuel consumed – the best in power density. Company’s Distribution Business Unit.) the industry. Power Gen’s lean-burn gas engine generators used in combined heat and power applications significantly reduce wasted energy and overall emissions.

Here’s a look at some of the key sustainability developments at Cummins Power Generation over the past year.

40 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRODUCTS

QSK19 60 HZ GRID CODES GRID CODE GENERATOR SET Cummins Power Generation announced in January ALTERNATOR RANGE 2015 that certified Grid Code Compliant generator Cummins Power Generation in Cummins Generator Technologies (CGT), sets had been delivered successfully to a customer December 2014 announced it had a division of Cummins Power Generation, in Germany. Grid Codes have been introduced in extended its range of gas-fueled announced in July 2014 the availability of Europe to help improve the stability of today’s generator set capabilities with a range of “Grid Code Ready” STAMFORD power grids that have become increasingly a natural gas version that has and AvK alternators. Customers will benefit reliant on numerous renewable energy sources. U.S. EPA Mobile Off-Highway from exclusive access to a certification

(MOH) emissions certification. NOTABLE: modelling tool, which can be used with any The introduction of the certified Transmission and distribution system operators in Europe prime mover when used in conjunction with model means that the generator are defining sets of rules that specify how grid-connected real-time practical data. set is now deployable across a power sources must perform, including generator sets NOTABLE: wider variety of applications. and their associated components. These rules, known The new Grid Code Ready line of alternators was as Grid Codes, require embedded generation schemes NOTABLE: engineered to meet global Grid Code regulations to stay connected to the grid during certain grid faults, Natural gas represents an attractive ahead of the German certification deadline. unlike the traditional approach where generator sets energy source at sites where the Ranging between 25-10,000 kVA, the Grid Code could come off the grid at such times. resilience of a fuel supply is critical. Ready alternators are designed to help generator set

In adverse weather conditions or in QUOTABLE: manufacturers meet the global Grid Code legislation the aftermath of a natural disaster, “With the growing demand to meet Grid Code roll out that started in Germany on Jan. 1, 2015, the diesel fuel needed to maintain a requirements in Europe, the introduction of Cummins before progressing to the rest of Europe and beyond. vital service may run out before fuel Grid Code Compliant products means power providers TO LEARN MORE deliveries to the affected area can be can continue to rely on one manufacturer for their You can learn more about Cummins Power re-established. Generator sets that generator set needs,” said Andrew Stone, Cummins Generation’s complete line of generators and run on natural gas offer a significant Director of Global Project Companies. related products at power.cummins.com. advantage in that the gas they utilize can be supplied continuously even Cummins Generator Technologies’ complete when other infrastructure, such as line of alternators and related products can be roads, are out of service. found at cumminsgeneratortechnologies.com.

41 COMPONENTS Four units within the Company’s Components Business Unit play a critical role in helping the Company’s engines operate efficiently and with near zero emissions: Cummins Emission Solutions, Cummins Filtration, CUMMINS FILTRATION Cummins Turbo Technologies and Cummins Fuel Systems. Here’s a look at some of the sustainability highlights from the Components group: Modern diesel engines require extremely clean fuel and lubrications to support the very precise equipment that helps engines run efficiently and reduces engine emissions and noise. Cummins Filtration has been an industry leader in both fuel CUMMINS EMISSION SOLUTIONS and lube filters. Cummins Emission Solutions (CES) designs, manufactures and integrates FLEETGUARD NOTABLE: exhaust aftertreatment systems. It has grown into a more than $2 billion NanoNet filtration media removes operation since it was created in 2002, propelled in part by the growing LF14000NN and retains 98.7 percent of all regulation of engine emissions around the world. Cummins Filtration announced in particles as small as 4 microns February 2015 the release of the (12 times smaller than the smallest ECOFIT Fleetguard LF14000NN lube filter particle visible to the human eye). SINGLE MODULE for Cummins ISX15 diesel engines. That process is critical to keeping It is the Company’s first lube filter engines running cleanly and efficiently. Cummins Emission Solutions announced in March 2015 that with NanoNet media, a patented it was introducing the first of its next generation of ultra-high QUOTABLE: polymeric nanotechnology- efficiency aftertreatment systems, the EcoFit Single Module. “Many of the characteristics that based synthetic media originally The EcoFit Single Module is up to 60 percent smaller and make NanoNet media so successful developed for Fleetguard fuel 40 percent lighter than the EPA 2013 solution it supersedes, in fuel filter applications translate filter applications. while improving emissions reduction performance. well to lube filters,” said Brad Long, Senior Engineering Technical Advisor, NOTABLE: QUOTABLE: Cummins Filtration. “By pairing The smaller size enables better heat “We’ve achieved incredible results NanoNet with our proven StrataPore management and retention for improved with this product through an entirely synthetic media, we can offer a lube fuel economy capability, while the new engineering approach to filter that’s suited to meet the needs simple single-pass exhaust flow design aftertreatment systems,” said of today’s advanced engine platforms meets customer requests for a simpler, John Carroll, General Manager – and lubricants.” easier-to-integrate solution. CES’ Global On-Highway Business. TO LEARN MORE TO LEARN MORE You can learn more about Cummins You can learn more about Filtration at cumminsfiltration.com. Cummins Emission Solutions at cumminsemissionsolutions.com.

42 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRODUCTS

CUMMINS FUEL SYSTEMS

Cummins Fuel Systems help enable engines to meet increasing emissions regulations while maximizing fuel-economy standards. The group’s CUMMINS TURBO TECHNOLOGIES world-class technologies help deliver fuel at the pressure levels necessary Turbochargers boost power and efficiency with a minimum of weight, for outstanding results. and produce heat for chemical reactions critical to some exhaust In both new product production and remanufacturing, the group is a critical aftertreatment systems. Cummins Turbo Technologies (CTT) produces partner to Cummins engine applications and other key external partners. durable and innovative turbochargers to meet the global challenges of emissions reduction, fuel consumption and total cost of ownership. HEAVY-DUTY FUEL PUMP TWO-STAGE TURBOCHARGER At a trade show in Germany in September 2014, Cummins revealed a selection of next generation innovations capable of improving the Cummins Turbo Technologies in March 2015 officially launched its fuel efficiency of modern diesel engines. The selection included a new Two-Stage Turbocharger. The Two-Stage system with Rotary new Heavy-Duty Fuel Pump. Turbine Control is Cummins’ most sophisticated turbocharger to date, delivering high efficiency and low emissions levels. NOTABLE: QUOTABLE: The new high-pressure oil-lubricated “Over the last few years we have seen NOTABLE: QUOTABLE: pump for heavy-duty engines, which continued demand for smaller, lighter, This integrated technology “Advances in air handling complements the Company’s robust high-quality components to drive was developed in partnership technology and improved system injectors, offers industry-leading diesel engine efficiency improvements, with Cummins Engine Business integration continue to provide injection pressure of 2600 bar and a as well as the industry requirement and Nissan, specifically for use on new turbocharging solutions that leak-free system design that reduces from manufacturers for equal and the 2016 Nissan TITAN XD pickup enable customers to achieve their parasitic loss, increasing fuel economy. higher power outputs,” said Suzanne truck (page 68). The technology was emission and efficiency targets without The pump offers a highly modular and Wells, Executive Director – Sales and developed at the Company’s technical compromising engine performance,” adaptable design which is lighter than Marketing, Components Business. centers in Huddersfield in the United said Jonathan Wood, Executive previous pumps, allowing for flexibility Kingdom and Columbus, Indiana Director – Research and Engineering. in customer integration. (U.S.A.). It offers a flexible architecture TO LEARN MORE that efficiently integrates and packages You can learn more about two turbochargers in series to deliver Cummins Turbo Technologies at high performance levels. cumminsturbotechnologies.com.

43 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRODUCTS

CUMMINS’ SMARTADVANTAGE PROVIDES FUEL ECONOMY FOR CUSTOMERS

One of the Company’s most recent fuel-efficiency successes has been focused on engine and transmission integration.

The SmartAdvantage Powertrain takes the innovation it has provided the power of Cummins ISX15 and to the marketplace. ISX12 engines with SmartTorque2 Customer fuel-efficiency improvements and combines it with the smooth using SmartAdvantage count toward shifting of the Eaton Fuller Advantage meeting Cummins’ products in-use 10-speed automated transmission for environmental sustainability goal improved fuel economy. The engine (page 24). Average customer fuel- and transmission share critical data, efficiency improvement was 3.3 percent determining the torque required to in 2014, which in 2015 will translate deliver the power level that drivers into savings of about 2.3 million gallons need without wasting fuel. simple,” said Vernon Nance, who Mark Stanton is Maintenance Director for CalArk of fuel, 23,400 metric tons of carbon Trucking, which has seen a significant increase in oversees CalArk truck purchasing fuel economy using the SmartAdvantage Powertrain. Customer feedback on fuel-economy dioxide avoidance and $9.4 million. as President of Arkansas Equipment savings and overall performance has Leasing, Inc. “Our drivers like the and the rest from the benefits of the CalArk is a 650-truck fleet based been excellent and there have been trucks overall and with help from total SmartAdvantage package. The in Little Rock, Arkansas (U.S.A.), numerous media accolades, including Cummins we are still making changes improvement is based on comparisons whose trucks deliver goods in the “top product” lists by publications in the settings that should help our with trucks in the fleet that have an 48 contiguous United States and such as the Commercial Carrier drivers even more.” early 2013 ISX15 engine with Eaton’s Canada. The fleet has 100 International Journal, Heavy Duty Trucking and Ultrashift Plus transmission. trucks equipped with SmartAdvantage Today’s Trucking. CalArk saw a 5 percent total and 50 more on order. increase in fuel economy from using Cummins made improvements to The SmartAdvantage Powertrain was SmartAdvantage with a late 2013 CalArk’s earlier 2013 ISX15 engines “We chose SmartAdvantage for the named an Automotive News PACE ISX15 engine. Nearly half came from using lessons it learned from the miles per gallon savings, plain and Award Finalist for 2014, recognizing drive fuel economy from the engine SmartAdvantage package.

44 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRACTICES

PRACTICES

CUMMINS’ PRACTICES HELP PROTECT ENVIRONMENT

Cummins is constantly working to shrink the Company’s environmental footprint with a special focus on the waste, water and energy Cummins uses in the production process.

The Company’s Enterprise 18001 Occupational Health & Safety The water strategy, adopted in 2011, Cummins sites in water-scarce areas like Environmental Management System Management System, to create San Luis Potosí use low-water vegetation establishes four priority areas: (EMS), created in 2003, plays a critical the Enterprise Health, Safety and for site landscaping. role in Cummins’ global environmental Management System (HSEMS) »» Water conservation. footprint reductions and other (page 49). »» Water risk management in improvements. The Company business operations. Here’s a look at some of the scorecards, expert advice and more adopted a model that includes a Company’s key practices and »» Water and community engagement. to help sites manage that risk. common framework to ensure a strategies in this important area: »» Water in the supply chain. similar look, feel and fundamental The Company’s strategy also takes into approach throughout the organization. WATER STRATEGY The Company recognizes that account the important role water plays outside of Cummins’ operations in The EMS has the flexibility to allow Cummins’ global water strategy water is vital to food production, water-scarce communities. Cummins individual sites and businesses to goes beyond conservation to sanitation, power generation and works with community leaders in those address risks and opportunities most address water as a business risk more. So conservation is a goal at all locations to help them establish their important to them. Cummins has and a key consideration in building Cummins sites. But the Company also own conservation initiatives. integrated health and safety processes stronger communities, a central recognizes water as an operational goal of the Company’s Corporate risk, especially in parts of the world and procedures with the environment Finally, Cummins’ strategy Responsibility initiative. where water is scarce. Cummins’ since 2007, in accordance with identifies the critical role water environmental leaders provide the international standard OHSAS plays in the Company’s supply chain.

45 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRACTICES

HAI HO RIVER BASIN Beijing Foton Cummins Engine Co.

Here are the four areas where PANUCO RIVER BASIN Cummins facilities face the biggest San Luis Potosí – all facilities KRISHNA RIVER BASIN Phaltan Megasite – all facilities water risk. Each of these locations Pune – Cummins India Limited and also falls within the Company’s Cummins Technical Center India priority regions for achieving water neutrality (see page 27).

PARANA RIVER BASIN São Paulo – Cummins Brazil Limited

The size of the dot represents the amount of water withdrawn in a particular region.

Almost 90 percent of Cummins’ can often spot prime opportunities WASTECummins STRATEGY operations» »inRecycling water-stressed of waste is Cummins areas water footprint exists in the supply for improvement. Cummins global waste strategy is next priority. chain, mostly associated with the For more detailed analysis, Cummins built around the belief that through »» Finally, waste to energy through extraction and production of metals. has developed true cost and risk waste reduction, reuse and recycling, incineration is only considered The Company is beginning to address analysis tools. Each of these tools the Company can drive improvements after reasonable efforts have been this challenge by considering water help provide more insight into the in processes and procedures. It was made to reduce, reuse or recycle. in its material selection practices often hidden costs of water. On-site developed after an in-depth study and promoting awareness of Reducing packaging or “right-sizing” costs include factors such as pumping, of the Company’s waste footprint water management techniques incoming parts are examples of ways heating and chemical usage, which are in 2011. Cummins has a robust with its supply base and in its Cummins tries to avoid the generation often not considered when evaluating database that contains waste purchasing processes. of waste. Reusing waste might involve a project. metrics as far back as 2005. reusing pallets or finding an alternative As part of its strategy, Cummins has However, the most significant The Company uses a waste use without any reprocessing. developed tools to help the Company consideration can be the risk of hierarchy consistent with current Recovery and reuse of solvents is better understand and prioritize its impacting production. By understanding industry standards: another example. The recycling of water management opportunities. this exposure, Cummins is working metals, paper or wood also reduce Perhaps the most important tool is »» Cummins’ first priority is to to promote equipment selection and the amount of waste that has to the water balance. By thoroughly avoid the generation of waste. management choices that mitigate be disposed. understanding everywhere water goes »» The Company’s next priority risks where Cummins operates in in a facility, Cummins facility leaders is the reuse of waste. The Company’s ultimate goal is water-scarce environments. “Zero Disposal” at Cummins’ facilities.

46 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRACTICES

Cummins’ waste footprint Iron and steel make up the largest component of Cummins’ waste footprint.

Iron and steel 56% Cummins is improving its existing The Company has established Wood 13% General refuse 9% facilities by installing high-efficiency ASHRAE 189.1 international Cardboard 9% “smart” lighting and energy-efficient standards developed by the U.S. Liquids 5% Process-derived 4% windows, doors, walls and roofs Green Building Council and others Composted 2% Other 2% to reduce heat gain or loss. as Cummins’ minimum standard High-efficiency heating, cooling for global construction. and recirculation systems also Cummins is also committed to create significant savings as well as obtaining certification for the energy-efficient boilers and burners. ISO 50001 international energy The Company defines Zero Disposal ENERGY STRATEGY Cummins has also been working to management standard at 15 key as completely avoiding the disposal Saving energy has bottom-line recover energy generated by engines facilities by 2016. Three of the of waste according to Cummins’ benefits. Cummins also recognizes the and generators in its test cells by 15 have been certified. waste hierarchy. Waste to energy is link between energy conservation and installing equipment that can capture only considered if there is no other reducing greenhouse gases (GHGs). The Company will partner with the that power for use by the plant or for option and it produces a net energy Reducing energy use is both a win government under its strategy to sale to a local utility. gain, creating more energy than for the Company and a win for the needed to merely sustain combustion. environment, too.

Cummins is also committed to Energy use by facility type The Company’s strategy focuses in millions of British thermal units avoiding the production of hazardous on four key areas: waste and properly handling hazardous * »» Saving and conserving energy Facility type Electricity Diesel Natural gas Other fuels materials in the workplace. by improving existing facilities Manufacturing - Heavy 4,931,252 970,398 808,611 83,187 The definition for what constitutes Manufacturing - Light 2,217,688 92,115 363,379 29,817 »» Building energy conservation hazardous waste varies widely Test / Research & development 677,920 616,403 220,865 10,230 into new construction by country. For U.S. sites that do Distribution / Services 554,561 39,136 146,507 6,195 »» Optimizing manufacturing and produce hazardous waste, however, Warehouses 397,606 10,931 72,149 1,335 product testing processes Cummins has a formal pre- Offices / Data centers 461,582 2,914 34,645 6 qualification process to ensure »» Enhancing energy management *Includes generation, transmission & distribution losses the waste is handled properly.

47 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRACTICES

experiment with alternative forms GLOBAL BUILDING STANDARD Cummins’ global building standard Cummins’ global building standard applies of energy. For example, Cummins is based on the international standard not only to new construction, but to renovations Cummins has nearly 550 facilities of older buildings as well, incorporating green has significant solar installations at encompassing more than 34 million established by the American Society features such as efficient lighting and water its facilities in Jamestown, New York of Heating, Refrigerating and Air fixtures. The former Irwin Bank headquarters in square feet across the globe. As of Columbus, Indiana (U.S.A.) underwent a major (U.S.A.), and Huddersfield in the the first quarter of 2015, 47 major Conditioning Engineers (ASHRAE) renovation in 2014 when Cummins took over United Kingdom. the property for office and conference space. new projects were under way 189.1 to ensure implementation of energy and water efficiency. Cummins is a partner in the U.S. at the Company with a planned capital expense of $800 million Department of Energy’s Better While the Leadership in Energy and by the U.S. Green Building Council. over multiple years. Buildings Challenge, which includes Environmental Design (LEED) Silver Cummins expects ASHRAE 189.1 the Jamestown facility (page 58). to provide better realized returns and Having efficient buildings is not only a standard is an industry-respected The Company committed to a allow the Company to consider the good return on investment, it is critical norm, Cummins is a market leader 25 percent reduction in U.S. energy total cost of ownership in its buildings. to reaching Cummins’ energy and with the adoption of ASHRAE 189.1. efficiency intensity by the end of 2015, ASHRAE 189.1, with its more greenhouse gas (GHG) goals. Both the ASHRAE and LEED and achieved a 42 percent reduction international scope, is also a better standards have been recognized by the end of 2014. fit for Cummins buildings.

48 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRACTICES

EMPLOYEES CELEBRATE JUNE ENVIRONMENTAL MONTH

Carpooling in San Louis Potosí, Mexico; a facility-wide dumpster dive (pictured below) in Charleston, South Carolina (U.S.A.); community water conservation in Dewas, India; more than 12,000 “Find it. Fix it.” At a minimum, all new buildings will HEALTH, SAFETY reports in engine plant sites — these are just a few of the actions be ASHRAE 189.1 compliant or LEED AND ENVIRONMENTAL 10,000 employees took at home, work and in the community Silver equivalent unless business cases MANAGEMENT SYSTEM during Cummins’ 2014 Global June Environment Month. prove otherwise. In most instances, Cummins Health, Safety and Cummins’ ASHRAE 189.1 compliant The Company celebrated the announcement of its Global Environmental Environmental Management System buildings would fall between the silver Sustainability Plan by dedicating an entire month to environmental (HSEMS) ensures a common approach and gold LEED standard. education and action. Cummins asked employees during the month of to implementing the Company’s June to engage in environmental stewardship at work, at home and in As part of Cummins’ 2015 investment environmental standards at its sites the community by reducing personal water and energy consumption plan to reduce GHGs, the Company worldwide. The system has served and minimizing waste. will lessen its footprint in new buildings as the framework for driving continual by making four considerations when improvement and efforts beyond These actions are not only consistent with the Company’s environmental choosing a building site: compliance at Cummins operations mission and vision, but mirrored the goals set forth in the plan. Weekly around the world. Cummins expects education materials and project models helped site leaders spread the »» The region’s climate all sites to comply with policy, word and provide guidance. »» The carbon intensity of the procedures and initiatives. building and site In 2015, Cummins will add a “personal tracker” tool, which will allow Cummins’ HSEMS model deploys a employees to commit to specific environmental conservation actions. »» The cost of the energy source common framework to ensure a similar The monetary savings and environmental benefits, customized by region, »» The carbon intensity of the look, feel and fundamental approach can be communicated back to employees so they can understand the energy source throughout the organization, with positive environmental impact they are making. flexibility to allow individual sites and Taking these four factors into businesses to address opportunities account with the ASHRAE and risks most important to them. 189.1 standard, Cummins expects Broad objectives and targets are set its buildings will yield about a at the corporate level to establish 21 percent emissions reduction. direction for critical corporate initiatives. Cummins’ business units and sites then build upon them to

49 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRACTICES

establish site-specific objectives By the end of 2014, the Company’s AUDITOR CERTIFICATION recycled materials. They provided that align with Company priorities independent auditor certified PROGRAM an audit report with “limited but address site-specific needs 104 entities, representing 347 sites independent assurance,” which Environmental goals are measured and challenges. and corporate offices as part of the the Company included as part through a structured audit process. HSEMS. Cummins’ HSEMS scope of its external reporting. Cummins policies apply to more than A third party auditor, Bureau Veritas has been extended to encompass just its employees, also extending Certification (BVC), certifies the Cummins supplements the audit manufacturing joint ventures and to contingent workers, suppliers, health, safety and environment sampling conducted by BVC by distributors. They are committed contractors and even clients working (HSE) management enterprise conducting its own annual audits using to registering their sites by the at Company facilities. Cummins’ system and the environmental internally trained HSE auditors. Every end of 2015. expectations extend beyond the metrics Cummins collects. site is audited on an annual basis. Company’s physical boundaries, By incorporating practices and Two of Cummins’ key sustainability The Company has developed encompassing maintenance and procedures into the HSEMS to stakeholders, the Carbon Disclosure an internal environmental auditor support services that often occur at meet the new ISO 50001 Energy Project and Dow Jones Sustainability certification process, where employees customers’ locations or even remote Management Standard, Cummins has Index, consider independent data complete a training course and then areas where its products are used. delivered a common global approach verification an important factor in a series of audit levels. In 2014, to make energy efficiency a standard Cummins strategically drives their evaluation of environmental more than 60 people have been practice across the Company. certification to recognized performance and transparency. trained and there is a pool of 96 HSE standards. Since 2003, the Broad objectives and targets are set Cummins believes the audit validates leaders certified as HSE Lead Auditors. Company has focused on its at the corporate level to establish its considerable efforts at data quality, This structured audit program manufacturing locations with direction for critical corporate initiatives. placing the Company among a validates performance and provides 90 percent of manufacturing Cummins’ business units and sites relatively small number that pursue this a mechanism for HSE auditors sites certified to ISO14001 and then build upon them to establish level of performance and validation. to share best practices. Through OHSAS 18001. By 2015, Cummins site-specific objectives that align with Since 2011, BVC has also audited these practices, Cummins is not expects the HSEMS Enterprise Company priorities but address site- Cummins’ environmental footprint and only improving sites – it is building to consist of dual-certified sites, specific needs and challenges. At the the Company’s data collection and the Company’s next generation representing 100 percent of the Global level, three sites obtained the verification processes. BVC’s audit of HSE leaders. Company’s manufacturing and ISO 50001 certification in 2013 and included greenhouse gases (GHGs), distribution locations. eight sites worked toward their ISO water used, landfilled waste and 50001 implementation in 2014,

with a certification target for 2015.

50 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRACTICES HUDDERSFIELD’S ADVICE

Here’s some advice from CTT Huddersfield on how to put together an effective recycling program:

»» Do the research. CUMMINS EMPLOYEES IN THE Employees like to see the business case and review data.

U.K. ARE DETERMINED RECYCLERS »» Keep working even when roadblocks or resistance occur. Employees at Cummins Turbo Technologies (CTT) in It’s perhaps no wonder that the »» Work with individual areas plant won the Campbell Institute’s within the site to see what Huddersfield, United Kingdom, don’t have one or two prestigious Innovation Challenge works for them. recycling bins to choose from when they separate their for the Environment award for 2014. »» Effective communication is waste – they have nine color-coded receptacles. extremely important. To say Cummins facilities in the U.K. The plant also has a special waste “We continually strive to improve our take recycling very seriously might segregation yard to make sure waste management operations here be something of an understatement. increased their recycling rate from recycling remains are properly at Huddersfield,” said Jennifer Hirst, In addition to the Campbell Institute 96.4 percent to 98 percent. These results sorted before they are hauled away. Facilities Energy Engineer at the plant. award, Company facilities won two cover Cummins sites in Cumbernauld, And a leaderboard in the plant reports “We conduct waste dives and welcome national recycling awards for their Darlington, Daventry, Huddersfield, not only on the facility’s progress in overall waste reduction ideas and waste minimization and recycling Kent and Stamford, as well as offices recycling, but also encourages some suggestions. Through positive integration, efforts – Corporate Recycler of the and regional distribution centers. healthy competition among employee CTT continues to push the boundaries Year and the Waste Prevention Achieving these kind of results are groups at the site. within sustainable operations.” Award – from Materials Recycling critical if Cummins is to meet its World in the U.K. environmental sustainability goals The group recognizes best practices for waste. Those goals call for the inside and outside the waste industry Company to increase its recycling in the United Kingdom, including both rate to 95 percent by 2020 and the public and private sector. achieve “zero disposal” status at 30 Cummins’ sites by that same year. Cummins facilities in the country reduced their total waste generated “This recognition is the result of the by 30.76 percent or 8,729 metric hard work and commitment exhibited tons between 2012 and 2013 and by the many people involved in the region’s waste reduction efforts,” said Cummins Turbo Technologies employees in Ernie Smith, Environmental Affairs Huddersfield make multiple sorts in their waste for recycling before trash leaves the plant. Manager and leader of Cummins’ waste efforts. “Congratulations to all.” 51 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRACTICES

EMPLOYEE TEAMS RECOGNIZED THROUGH FACILITIES THE POWER OF CUMMINS ENVIRONMENTAL AWARDS Cummins has challenged employee teams since 2005 to complete improvement In addition to the environmental benefits, the winning project from projects that reduce the Company’s environmental footprint in the more than San Luis Potosí, Mexico, produced an annual savings of more than 200 Cummins facilities and operations globally. $330,000, paying for itself in about two years. In appreciation of their efforts, the In recognition of their achievement, “A major reason that Cummins has Chairman’s Environmental Award a team representative presented the been able to confidently put forth recognizes employees and teams project to the Cummins Board of new and ambitious environmental that implemented outstanding Directors. In addition, representatives sustainability goals is because of environmental improvements at their from the top three winning projects the excellent work that teams like sites. Winning projects were chosen shared their work during the Six these have been doing in Cummins based on the greatest environmental Sigma Expo along with leading Six facilities and operations for years,” impact, economic efficiency, employee Sigma and Health and Safety projects. said Alan Resnik, Director of and leadership engagement, innovation Facilities and Operations The winners of the Chairman’s and replicability. Environmental Management. Environmental Award are often viewed Of the 30 projects submitted, the New as best practices for other facilities “I congratulate all of the teams for and ReCon Parts project from San to implement because they have their outstanding results, creativity Luis Potosí, Mexico, was named the been proven effective. As Cummins and continued enthusiasm for the Top Environmental Project. The project continues to set environmental environment,” Resnik said. saved water by installing water-free performance goals, the Chairman’s The 2014 Chairman’s urinals, reduced water demand from Environmental Award-winning projects Environmental Award winners, cooling towers, and saved water, are important to help the Company by category, are as follows: energy and chemicals used during find innovative, bottom-up solutions the cylinder head salvage process. to minimize waste, water and energy.

52 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRACTICES

MULTI-MEDIA WASTE Achieved water reduction with satisfaction and substantial reductions low-cost solutions such as installing in resource consumption and POLLUTION MANAGEMENT a high-efficiency dishwashing waste generation. PREVENTION CV MEDIA RECYCLING system, changing dish detergent and working with the food services ENERGY, WATER AND Cummins Filtration, GREEN vendor to conserve water. WASTE EFFICIENCY Neillsville, Wisconsin (U.S.A.)* BUILDING Engine Business Unit (EBU) New and Significant cost savings and waste SUPPLY CHAIN GREEN FACILITY ReCon Parts, San Luis Potosí, Mexico* reduction achieved by collecting and SECURES GREEN FUTURE processing CV media polymer waste MANAGEMENT Saved water by installing water-free Cummins Turbo Technologies, that can be reused in production, ELECTRONIC LITERATURE urinals and reduced water demand Wuxi, China reducing the use of virgin raw material. WASTE REDUCTION from cooling towers. Water, energy Project showcased proper and chemicals used during the cylinder Cummins Power Generation, application of green building head salvage process also reduced. WATER Fridley, Minnesota (U.S.A.) principles during the new plant MANAGEMENT Cross-functional project converted start-up phase that resulted in high ENERGY WATER CONSERVATION printed product manuals to electronic recycling of waste and significant versions resulting in significant cost reductions in water and energy use. MANAGEMENT Cummins Generator reduction improved customer Technologies (CGT), CARBON FOOTPRINT *Indicates the top three winners

REDUCTION San Luis Potosí, Mexico

EBU India Parts Distribution Center, Phaltan, India*

Engaged employees at all levels to achieve significant and cost-effective energy-efficiency improvements.

Employee teams collaborated to prevent multi-media pollution at New and ReCon Parts in San Luis Potosí, Mexico. The project earned the team recognition as the Top Environmental Project for the 2014 Chairman’s Environmental Award. 53 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PRACTICES By various means, Cummins helped provide an additional 20 million gallons THE POWER of water to village residents living near OF CUMMINS the Company’s Megasite in India.

MAKING CONSERVATION WORK AT CUMMINS’ MEGASITE

Water is a precious resource in much of India. So when of land under cultivation, resulting approach: water conservation within in increased agricultural output and its own operations, within the nearby Cummins employees at the Company’s Megasite in Phaltan better incomes to the farmers.” community and by developing public looked at sustainable water management techniques to meet water bodies. The site has made significant progress their water goals, they wanted to make a difference not only toward water neutrality, which at REACHING OUT at the site but in nearby communities, too. Cummins means consistently reaching Water conservation at the Megasite the equivalent of what the Company “Our employees working at the “Not only is it one of our environmental itself is being accomplished by limiting uses at any particular site either Megasite are going beyond the good sustainability goals, but it’s also the the use of treated water, stopping through water conservation at the they are doing at work to conserve right thing to do to help our local water leaks at the site, using drip site, water conservation within nearby and preserve the water supply for the farmers enhance their living by making irrigation for landscaping so water is communities, developing other sources villagers who live near our site,” said water available for drinking as well as released slowly, harvesting rainwater, of water or by some combination of S. Ravichandran, Head of Corporate agricultural purposes. Our work has using low-flow water fixtures and by the three. But it’s too early to declare Responsibility for Cummins India. helped bring an additional 80 acres other steps. complete success. Outside the Company’s property, The Megasite currently has eight plants Cummins employees met and spoke in operation in addition to a general to many villagers, farmers and rural administration building housing a government leaders in order to fully health center, childcare center and understand their water needs and a gymnasium. The site consumed water availability. 14 million gallons of water in 2014. Cummins is working to accomplish Rainfall alone isn’t enough to meet water neutrality through a three-fold everyone’s needs. Villages lack proper water management techniques and

Cummins helped build two storage areas capable had no initiatives to improve ground of holding 10 million gallons of water for use by the villages near the Megasite in Phaltan, India.

54 THE POWER OF THE SUN

At the India Parts Distribution Center at the Megasite, the team reduced GHG emissions by 27 percent by opening the building up to more natural light.

The plant also installed solar panels to provide hot water for

the cafeteria and for washing dams of 38,600 metric cubic feet, to help control the temperature. While Village residents join Cummins employees in utensils. In addition, the plant marking the start of work to store more water which could store another 10 million not ideal from an energy perspective, for residents living near the Megasite. installed solar streetlights, and gallons of water. Teaching villagers they are critical in water-scarce areas motion-sensing lights in the how to maintain the improvements because evaporative coolers use a lot In traditional testing, energy from the manufacturing and office areas. was also an important part of making of water to achieve their cooling effect. engine is dissipated, and therefore these improvements sustainable. By installing regenerative wasted, through evaporative cooling The outreach effort at the village dynamometers to capture the energy towers. Cummins uses the AC won one of the Company’s 19 produced in engine test cells, the regenerative dynamometer to capture water percolation; so what rain the Environmental Challenge grants. plant was able to save both energy the mechanical energy of the motor area received often washed quickly The Challenge is a competition and reduce cooling load. This allows and return (or regenerate) it to the away. Farmers who had land but sponsored by Cummins’ Corporate cooling systems to be smaller. With AC power source. Through this not enough water were left with no Responsibility team (see page 77). the reduced cooling demand and the project, the Company saved choice but to do other work, impacting ENERGY MANAGEMENT recovered power, the Phaltan location $35,036, 1.2 million liters of water agriculture in a significant way. and achieved a 12 percent reduction Cummins looks at plant improvements was able to implement air cooling in greenhouse gases. In Nandal village, de-silting the holistically, and while it is ideal to systems that, while less efficient by retention area behind a dam increased themselves, give an integrated solution have solutions that save both energy It’s steps like those, Megasite the capacity of the tank, resulting in that improves energy and water and water, sometimes one must take leaders say, that will help them an estimated 10.5 million gallons positions for the site as a whole across precedence over another. For example, reach the Company’s Environmental of water being made available. both media. High-horsepower engines in the Phaltan high-horsepower plant, Sustainability goals. Cummins helped build two more non-evaporative coolers were installed require of a lot of testing fuel because of their large size.

55 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PARTNERSHIPS & POLICY

PARTNERSHIPS & POLICY

CUMMINS’ PARTNERSHIPS PRODUCE GREEN RESULTS

Cummins’ partnerships have helped the Company meet its product emissions goals, use energy more efficiently and much more. Cummins’ policy advocacy has helped RESEARCH AND DEVELOPMENT The U.S. Department of Energy’s Maria Vargas talks with Randy Myers, Jamestown Engine bring environmental solutions to the marketplace. COLLABORATION Plant (JEP) Director of Machining and Facilities, about the plant’s energy efficiency efforts. Cummins longstanding partnerships Four of the Company’s (GHG) and fuel-efficiency standards in JEP is Cummins’ Showcase Project as part with the U.S. Department of Energy of the Company’s participation in the Better 10 environmental sustainability the U.S. for medium- and heavy-duty Buildings, Better Plants Challenge. (DOE) and other federal and state principles focus on partnerships commercial vehicles. The Company is agencies directly support the United with legislative and regulatory entities now working with regulators to build States’ goal of reducing greenhouse and vehicle freight efficiency targets to develop sound public policy to on the success of Phase 1 and help gas (GHG) emissions and net oil and completed its 55 percent brake reduce Cummins’ impact on the shape the next stage of GHG and fuel- imports. The partnerships also help the thermal efficiency (BTE) technology environment. They are: efficiency standards known as Phase U.S. achieve further improvements in scoping and demonstration efforts. 2. A key aspect for Phase 2 is to »» Help develop responsible regulations energy productivity while sustaining a The team identified two clear BTE maintain the same regulatory structure »» Promote technology development steady reduction in criteria emissions pathways, one using diesel fuel with separate standards for the engine from the nation’s transportation and and another using alternative fuels. »» Advocate for incentives to and the rest of the vehicle. Separate distributed power generation fleet. »» The ATLAS (Advanced Technology accelerate progress standards are critical for the regulation Light Automotive Systems) project »» Support a balanced global approach to achieve environmental and user The Company’s current and recently team significantly exceeded its benefits while recognizing the diversity completed public-private projects Cummins worked closely with the 40 percent fuel economy and complexity of the commercial involving DOE, except where U.S. government and a variety of improvement target, at Tier 2 / vehicle sector. noted, include: stakeholders to develop the Phase Bin 2 criteria emission levels, by 1 rule, the first-ever greenhouse gas »» The SuperTruck Project team delivering a 60 percent improvement significantly exceeded its engine in Corporate Average Fuel Economy

56 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PARTNERSHIPS & POLICY

(CAFE) compared to the program’s see page 70), a partnership with at the DOE’s system of national As producers of natural gas engines, gasoline engine powered baseline the California Energy Commission, laboratories with their counterparts Cummins and Cummins Westport ½ ton pickup truck. Numerous significantly exceeded its at Cummins. They jointly work on are contributing to the study of innovative engine features delivered 50 percent greenhouse gas (GHG) such things as combustion modeling fugitive methane emissions related outstanding performance and emission reduction target through and diagnostics, materials science, to evaporative losses and incomplete emissions while weighing a downsized medium-duty engine/ catalysis fundamentals, hybridization combustion from vehicles, and fugitive 80 pounds less than the all- powertrain optimized for E85 and more. emissions associated with fueling aluminum gasoline baseline ethanol. Vehicle tests completed infrastructure. The study is led by ENVIRONMENTAL engine, including aftertreatment. in Sacramento, California (U.S.A.), West Virginia University. The results DEFENSE FUND showed a 50 percent to 80 percent of the study will be submitted for »» The SLTNR (Sustained Low Cummins continues to collaborate Temperature NOx Reduction) GHG reduction, depending on peer-review in 2015. with the Environmental Defense Fund project was launched in early 2015 the drive cycle and type of (EDF) to learn more about fugitive GOVERNMENT RELATIONS to develop and demonstrate catalyst ethanol feedstock. methane emissions from natural gas The Company’s Government and reductant delivery technologies »» The HD Ultra-Low NOx Natural vehicles and the fuel supply chain. Relations staff continues to advocate capable of improving the robustness Gas program, a partnership with Through the sponsorship of a series globally for policies, legislation, of high-performance NOx (oxides California’s South Coast Air Quality of 16 independent studies, EDF is government research funding and of nitrogen) aftertreatment over Management District (SCAQMD) coordinating the work of close to regulatory guidelines that promote temperature-challenged real- and other California entities, is 100 universities, research facilities products and technologies that world-duty cycles. developing 0.02 gram/bhp-hr NOx and industry partners that are benefit the environment. » The EDPCI (E85/Diesel Premixed technologies, while maximizing » contributing to this research Compression Ignition) project was engine efficiency. This technology Cummins’ Government Relations including Cummins and the joint also launched about the same time, addresses the needs of regions efforts in the United States include venture Cummins Westport. building on learning from SuperTruck in California and other places working with Congress, the White (see page 72), to develop and worldwide where significant Information is being collected in House, state governments, trade demonstrate high-efficiency dual- ambient air-quality issues persist. several core areas: production, associations and industry to support fuel engine operation in Class 8 gathering lines and processing the Environmental Protection Agency Underlying Cummins’ system- trucks that commonly haul freight facilities, long-distance pipelines (EPA) in developing greenhouse integration programs is a valuable on North American highways. and storage, local distribution gas regulations in the U.S. for portfolio of collaborative research and and commercial trucks and heavy-duty vehicles, and to broadly »» The Ultra-Low Carbon Powertrain development agreements that team, refueling stations. educate policy makers about how program (also known as ETHOS, and fund, world-class researchers

57 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT

regulations, economic development environment for emissions regulations and competitiveness can co-exist if and a non-discriminatory certification/ developed properly. testing mechanism for engines CUMMINS’ JAMESTOWN ENGINE PLANT and vehicles. The Company also In India, Cummins pushed for RECOGNIZED FOR ENERGY EFFICIENCY supports a broad consensus on fuel- new generator emission standards Cummins’ Jamestown Engine Plant showed off its energy-efficiency efforts in 2014, economy regulations by working with recently released by the federal earning a “top visit” accolade from U.S. Department of Energy (DOE) officials. government, trade associations and government for generator engines industry partners. When the Company joined the Better Buildings, Better Plants program as below 800 kW. Cummins strongly a Challenge Partner in 2011, it was required to share a Showcase Project, supported the adoption of these Cummins is encouraging the U.S. one that models leading energy-efficiency practices, involves significant new standards, which will help government to provide technical investment and results in substantial energy savings. improve India’s air quality. assistance and share best practices based on its leadership in this area Cummins’ plant in Jamestown, close to the famed Lake Chautauqua in New In the transportation area, the of regulation. The Company is also York state (U.S.A.), was undergoing a deep retrofit upgrade that made it the Company is pushing for stronger working with the Chinese government perfect choice. Critical equipment had been updated, leading to increased emissions and fuel-economy to identify opportunities to promote energy efficiency, as well as greater reliability and operational stability. rules, along with low sulfur diesel combined heat and power solutions, requirements across the country. The Company initiated a phased, whole-building energy and infrastructure telematics, natural gas engine Cummins also worked with the Society improvement project, setting aside $5.1 million specifically for energy-efficiency applications and hybrid technology. projects. Leaders say the plant is on track to achieve a 30 percent reduction in of Indian Automobile Manufacturers energy use and cost. (SIAM) to organize the “Emissions In Colombia, Cummins worked with Roadmap for the Future” roundtable in the U.S. and Colombian governments Maria Vargas, Senior Program Advisor in the DOE’s Office of Energy Efficiency Delhi, which was attended by industry to eliminate barriers for the and Renewable Energy and Andre deFontaine, Program Manager in the and government representatives who importation of remanufactured goods. Advanced Manufacturing Office, came to tour the plant in late 2014, discussed the importance of diesel fuel Remanufacturing provides benefits joined by several members of the media. efficiency as well as a clear emissions for the environment by using about Plant leadership updated them on heating, air conditioning and air handling roadmap for India. 85 percent less energy compared upgrades; LED lighting on the shop floor; compressed air and roofing improvements to the mining, refining, melting and In China, Cummins is advocating and the 2 megawatt solar array on the roof. It is capable of generating about a third machining of new material. of the plant’s power on the sunniest days. There are more than 7,000 solar panels for an overall effective enforcement covering about half a million square feet on the roof.

58 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PARTNERSHIPS & POLICY

SCIENCE AND TECHNOLOGY Other senior international scientists The university is investigating the SUSTAINABILITY REPORTING ADVISORY COUNCIL and engineers are invited to participate process parameters that allow for Cummins takes a number of steps Cummins seeks advice from its as advisors depending on the topic. the most energy efficient Additive to report on its environmental Science and Technology Advisory Manufacturing, using both metals and The Safety, Environment and performance to the public and Council in developing products to polymers. In the future, MIT will assess Technology Committee of the Cummins work with other companies to comply with various standards, reduce additional environmental impacts Board of Directors also advises senior share best practices. the Company’s environmental footprint of Additive Manufacturing in the leaders and the technical leadership at and meet customer demands. fabrication of engine components. For the past nine years, the Cummins regarding: Company has participated in the The Council, formed in 1993, has » Environmental and technological BUSINESS COALITIONS » Carbon Disclosure Project (CDP) given Cummins access to some of strategies, compliance programs AND COUNCILS reporting initiative, supported by the country’s leading scientific experts and major projects as they relate The Company sits on the U.S. an institutional investor consortium and policymakers from the worlds of to the Company and its products. EPA’s Clean Air Act Advisory Council that seeks to encourage greater academia, industry and government. and the North American Council for »» Public policy developments, public environmental reporting The Council was restructured in 2010 Freight Efficiency. strategies and positions taken among companies. to make it easier to access a broader by the Company regarding safety, In addition, Cummins is a member group of international specialists and CDP asks companies to provide environmental and technical matters. of the Business Roundtable’s align their expertise with specific topics details on their carbon emissions, »» Progress of strategic environmental S.E.E. (Society, Environment and being addressed at a particular time. their response to the impact of programs and policies. Economy) Change initiative, which climate change on their markets and The permanent council members are: encourages member companies to regulatory environment, their use of ACADEMIC PARTNERSHIPS lead by example and adopt business »» Chairman Dr. Gerald Wilson, energy and planning for the future. Cummins has continued to partner former Dean of Engineering strategies and projects that measurably with universities around the world Cummins has participated in the at the Massachusetts Institute improve society, the environment and to collaborate on important CDP Water Disclosure Project for of Technology the economy. environmental research topics. For the past two years and was one of » Dr. Harold Brown, former Chairman and CEO Tom Linebarger » example, the Massachusetts Institute a handful of companies to agree U.S. Secretary of Defense leads the Business Roundtable’s of Technology’s Environmentally Benign to have its responses scored. and former President of the International Engagement Committee Manufacturing Group is evaluating the Cummins’ water program was California Institute of Technology and Cummins has been a regular environmental impacts of advanced rated in the “leadership” category. contributor to the Roundtable’s manufacturing technologies, annual sustainability report. such as Additive Manufacturing. 59 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PARTNERSHIPS & POLICY

RESEARCH PARTNERSHIP ON EMISSIONS HELPS PROTECT PUBLIC HEALTH

Cummins’ partnerships to address emissions regulations go back many years.

In 1977, the U.S. Environmental science, Schacht brought the engine Protection Agency (EPA) amended and vehicle industries together with the Clean Air Act to place new controls then EPA Administrator Doug Costle on diesel emissions and the industry in 1980 to form the Health Effects was challenged to adapt to the Institute (HEI). Funded jointly by unprecedented regulation. the EPA and industry, HEI is a non-partisan and not-for-profit At the time, very little was known organization committed to providing about the effects of diesel emissions high-quality, impartial, and relevant on health. In response to the EPA’s science regarding the effects of air new regulation, then Cummins pollution on health. Chairman and CEO Henry Schacht decided to form a consortium of HEI has funded more than experts and interested parties to 250 studies in North America, objectively and independently study Europe, and Asia, producing important the health effects of diesel emissions. research on carbon monoxide, air toxics, nitrogen oxides, diesel exhaust, Guided by the belief that all of society ozone, particulate matter, and other benefits from objective and rigorous pollutants. The institute’s work has been published in over 200 research Cummins and health effects experts discuss the future of diesel emissions during a panel and special reports. hosted by Cummins in Columbus, Indiana (U.S.A.), in February 2015.

60 SUSTAINABILITY PROGRESS REPORT // ENVIRONMENT // PARTNERSHIPS & POLICY

Thirty-five years after the creation of evaluation of lifetime exposure measurement techniques of emissions large cities like Beijing where vehicle the institute, Cummins’ partnership to exhaust from new technology levels that are also used in Cummins’ emissions are the largest source of with HEI is just as strong as it was diesel engines (NTDE). It found no own research and development of dangerous particulate matter. at the institute’s creation. As it has evidence of carcinogenic lung tumors. emissions technology. Other strategic topics for HEI include grown, HEI’s work has continued The Advanced Collaborative Emissions “The lung tissue samples that showed studying the health effects of biofuels, to investigate health effects in Study (ACES) also confirmed that the clean results are really a credit to the the toxicity of gas direct injection in anticipation of regulation. Cummins concentrations of particulate matter engineers who were able to bring passenger vehicles (GDI), and relies on the institute as a trusted and toxic air pollutants emitted from emissions levels down so low,” examining the impact of traffic source of information when NTDE are more than 90 percent lower said Dan Greenbaum, HEI President, and port emissions on health. working with regulators worldwide than emissions from traditional older during a health effects panel discussion to create clear, responsible and diesel engines (TDE). hosted by Cummins in February 2015. enforceable emission standards. “This study is significant because Even as improvements have been “In the inimitable words of Henry it is the culmination of 30 years of TO LEARN MORE made to diesel emissions, air quality Schacht, ‘facts are friendly,’” said technology development to clean continues to be a serious challenge in You can learn more about Brian Mormino, Cummins Executive diesel exhaust,” said Cummins’ many parts of the world. According to the Health Effects Institute Director of Worldwide Environmental Rich Wagner, Director of Global the World Health Organization, urban by going to its website at Strategy and Compliance. “We aren’t Product Certification and Compliance. outdoor air pollution is estimated to www.healtheffects.org. afraid to ask the tough questions. Cummins’ relationship with HEI is cause 3.1 million premature deaths Our currency is credibility and credible There you can find its annual mutually beneficial; the Company per year worldwide. health effects science is the bedrock report, posted in February often provides technical consultation of good regulations.” To reflect this reality, HEI has expanded 2015, and its report on and guidance to HEI studies. For its research in India and China where lifetime animal exposure to The institute posed some tough example, Cummins served on the ambient particulate matter pollution new technology diesel engine questions in a recent study that was working group for the lifetime exposure is the fourth largest disease burden exhaust, which found no the first to conduct a comprehensive study and helped identify the study’s causing premature death and in evidence of lung cancer.

61 SUSTAINABILITY PROGRESS REPORT // INNOVATION Aleksey Yezerets, Cummins Director of Catalyst Technology at the Tech Center in Columbus, Indiana (U.S.A.), says there is a chemical plant behind every Cummins engine. INNOVATION’S KEY ROLE AT CUMMINS

At Cummins, innovation is one of the Company’s six core values, calling on employees to “apply the creative ingenuity necessary to make us better, faster, first.” That value is almost tangible at any of Cummins’ global network of technical centers. INNOVATION The Company’s Advanced Engineering Asked about the future of innovation and Technology organization looks out at Cummins, Dr. John Wall, Vice six to 10 years and sometimes longer, President – Chief Technical Officer, well upstream of product development. puts it this way: The engineers and scientists who “We need to know our markets make up this group are discovering, better than anyone else. We need inventing and applying the to know our technologies better most advanced technologies than anyone else. And we need in engines, power generation and to be able to combine these so related products. Their work is vital we can differentiate our products to Cummins’ sustainability. in the eyes of our customers.” The Company uses very powerful works with Indiana University’s Big Red It’s a critical time for research and THE CUMMINS COMMITMENT computer models to simulate II super computer, one of the fastest technology. For years, increasingly the harsh environment inside an research computers in the world. stringent North American emissions In just the past five years, Cummins engine and how an engine works regulations have driven innovation at has more than doubled its investment Cummins researchers can study many in real-world applications. To get the Company. Now that engines have into research and development, design variables using these computer the computing power it needs, reached near zero emissions levels, increasing its contribution from $362 models before an engine is ever put the Cummins Technical Center in that’s not as true. million in 2009 to $754 million in 2014. in a test cell. That saves money on Columbus, Indiana (U.S.A.), regularly

62 SUSTAINABILITY PROGRESS REPORT // INNOVATION

“We are a global team. We benefit from the insights and talents of engineers all around the world who work together to deliver innovative technologies and products to our customers.”

DR. JOHN WALL CUMMINS VICE PRESIDENT – CHIEF TECHNICAL OFFICER

fuel and other related expenses while The simulations can even account say “You have to love it.” Otherwise, Wayne Eckerle, Cummins Vice President of Research & Technology, talks to a reporter also making it possible to develop for different driving styles – fast, an employee wouldn’t stay with it. from The Star in Indianapolis, Indiana (U.S.A.) much more robust designs that simply slow, or a driver who is more erratic. Eckerle, by the way, has a Ph.D. about technology at the Company. weren’t possible when the majority of in fluid mechanics. Cummins is always studying design testing was conducted in a test cell. advances. For example, it has virtual Cummins not only has mechanical and Over time, Cummins has developed Computers today can simulate the reality available in technical centers in electrical engineers working in research an effective way to conduct its product interaction between the engine and Columbus, Indiana; São Paulo, Brazil, and technology but also chemists who research. To help ensure general the vehicle while running a specific and at its newest global tech center are exploring the chemical reactions research continues into areas such route almost anywhere in the world, scheduled to be completed in India necessary to convert pollutants into as combustion and alternative fuels, according to Tara Hemami, Director – by the end of 2015 (see ). page 73 something that can be safely emitted that work is covered by corporate Systems Performance Analysis. into the atmosphere. funds. As an idea becomes ripe for CUMMINS PEOPLE product development, Eckerle says its The most powerful computer models, “There is a chemical plant behind funding is taken over by the applicable every engine,” said Aleksey Yezerets, CUMMINS’ INVESTMENT IN of course, won’t get a company far if business unit at the Company. Cummins Director of Catalyst RESEARCH & DEVELOPMENT it doesn’t have the right people using them. The Cummins research and Technology who works at the This is true not only in the United YEAR FUNDING technology team is smart, diverse Tech Center in Columbus. States, but for Advanced Technology 2009 $362 million and dedicated to finding solutions Teams in India and China. THE CUMMINS WAY 2010 $414 million for customers. With fuel efficiency now getting more “We are a global team,” Wall said. 2011 $629 million Today, most of the new hires in research attention, Cummins is researching all “We benefit from the insights and 2012 $728 million and technology for salaried positions kinds of alternative fuels as well as talents of engineers all around the 2013 $713 million have doctorates or master’s degrees. electrification. It’s also testing new world who work together to deliver 2014 $754 million The work is so complicated that Wayne processes such as 3-D printing and innovative technologies and products Eckerle, Cummins Vice President its potential to produce lighter, more to our customers.” of Research & Technology, likes to complex components.

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JULIUS PERR AWARDS

Fifteen years ago, the U.S. Environmental Protection Agency inventors of Cummins’ technologies and that was beneficial for everybody,” that provide great value to Currier said. (EPA) mandated that beginning with the 2007 model year, the Company. pollution from heavy-duty highway vehicles would have to The Perr award is named for Dr. Julius The team, which was recognized at Perr, a Hungarian refugee who made be reduced by more than 90 percent. Cummins’ 2014 Technical Leaders his home in Indiana and spent 41 years That requirement meant Cummins’ that worked on the effort the Conference, received a total of as a mechanical engineer at Cummins. engineers and scientists had to cut prestigious Dr. Julius Perr 13 patents for NOx reduction Dr. Perr submitted more than oxides of nitrogen (NOx) in diesel Innovation Award. technologies and the fundamental 300 U.S. patents to improve engine exhaust without compromising know-how developed during this technology and was named as inventor “It was the experience of a career,” power or price. project has since been used in all or co-inventor on 80 patents. said chemist Neal Currier, a 22-year Cummins products for emissions- The result of their hard work: veteran of the Company. “These 13 individuals have carried on critical engine applications. 13 patents that redefined the industry, Dr. Perr’s legacy by making Cummins Currier was one of 13 Cummins put cleaner trucks on the road years “We got cleaner trucks on the road stronger through innovation,” said scientists and engineers who received before they were required, and earned years before they were required, John Wall, Vice President and Chief the Perr Award, given annually to the every member of the Cummins team Technical Officer.

Here are the Perr award winners and how many of the 13 NOx reduction patents their names are listed on:

Mike Cunningham (7), Neal Currier (3), Jim Fier (1), Sam Geckler (4), Lyle Kocher (2), Wei Lu (1), Paul Miller (1), Sriram Popuri (5), Mike Ruth (4), Brad Stroia (3), Stewart Sullivan (1), Joan Wills (3), Alex Yezerets (2).

64 SUSTAINABILITY PROGRESS REPORT // INNOVATION

The virtual launch for the QSK95 generator series saved both money and jet fuel to get CUMMINS GOES people to the event. VIRTUAL IN LAUNCH OF QSK95 SERIES

When it came time to introduce the largest generator set Cummins has ever built, the Company opted for a more environmentally friendly approach in keeping with the product’s fuel-saving capabilities.

FEATURES OF THE Rather than invite potential customers, The only thing missing from the typical with more than 10 times the number QSK95 SERIES media and Company leaders to travel trade show experience? Tired feet – of attendees. to the launch of the QSK95 generator and who misses that? The QSK95 Series generator sets “We realized that we could series, Cummins brought the launch are engineered with the highest Cummins worked with the international showcase this powerful product to anyone interested in the form of a kilowatt per square foot ratio in company ON24 Virtual Environments and all of its attributes in a way that digital trade show. their class, resulting in a smaller to build the online launch for the saved the Company money and footprint that achieves a 20 percent In early November 2014, Cummins QSK95 Series. made it easier for people to be part improvement in power density. President and Chief Operating Officer of the announcement,” said Craig More than 2,000 participants attended This means customers will need Rich Freeland and other senior leaders Wilkins, who worked closely on the event, which was followed by more less space in their facilities, which unveiled the generator sets via three the launch and now serves as than 500 expert-led group chats and lowers installed costs. And, in web presentations scheduled during Director of Corporate & Global more than 400 private chats about multiple-generator applications, convenient business hours around Strategic Accounts for Cummins the generator set. fewer generators are required to the world. Power Generation. achieve the desired power output, During planning, Cummins Visitors could check out the generator The generator sets are engineered to resulting in substantial cost savings. estimated the cost of transporting in the virtual Exhibit Hall or talk with deliver reliable, mission-critical power 150 participants and executing Cummins employees and other visitors protection without interruption. Over an in-person launch at more than in the digital Networking Lounge. the course of 8,000 hours of operation, $750,000. By comparison, the virtual They could also watch presentations in the QSK95 Series can achieve fuel launch cost less than $100,000 and adjoining rooms about the generator or savings of more than $400,000. saved a significant amount of jet fuel hear from the Company’s top leaders. 65 SUSTAINABILITY PROGRESS REPORT // INNOVATION

IN MYANMAR, CUMMINS POWER GENERATION IS CONNECTING A NATION TO THE WORLD

Imagine a nation where only 25 percent of the population has electricity and less than 10 percent have a mobile telephone.

Then, the government begins to shift The end result will be a nation to a more democratic system, and with open, accessible lines a nation with an extremely limited of communication. infrastructure and no global reach “With Cummins equipment is suddenly open for business. working on these cell towers, we are Welcome to Myanmar, where empowering people in Myanmar to Cummins Power Generation has been get connected to the rest of the world,” working with Irrawaddy Green Towers said J.P. Singh, marketing manager (IGT) since September 2014 to supply for the project. “Cummins has been battery hybrid and diesel generator developing this hybrid technology for solutions sized from 8 kVA to 80 kVA years and is now working in close with extra-large fuel tanks to power partnership with our customer in hundreds of new cell phone tower Myanmar to deploy it in a way sites. Two-thirds of those sites are off that will help millions of people.” the country’s insufficient power grid

and located in remote locations.

66 The battery-hybrid model supplied by SUSTAINABILITY PROGRESS REPORT // INNOVATION Cummins can cut the time a generator THE POWER must run by more than half, extending OF CUMMINS its life by as much as two-thirds.

Myanmar represents one of the total cost of ownership and ensuring Not only is Cummins technology the truck weighed too much. The few remaining telecommunications uninterrupted operations. playing a key role in transforming team ultimately found an alternative. frontiers, but the new government communications for the 60 million Anderson said teamwork is key to The battery-hybrid model can cut the wants to move quickly to expand people who live in Myanmar, but the getting through such challenges, and time the generator must run by more access, pushing to grow from conditions surrounding the installation small changes that can speed up the than half, extending its life by as much 10 percent penetration earlier this of these power packages have forced process are enormously helpful. as two-thirds and significantly lowering decade to 80 percent by 2016. Cummins to adapt in ways that will diesel fuel usage and carbon dioxide That’s why engineers working on the benefit the Company as it enters IGT contracted with Cummins to (CO ) emissions. These attributes are Myanmar project added forklift slots 2 other markets with underdeveloped supply and install a power package especially critical in a nation with a and eye bolts to the generators and infrastructures. that includes a generator, hybrid nascent and unpredictable power grid. cabinets to make transportation more control and renewable battery pack. Small changes can make an installation uniform and efficient. These design “Leveraging our proven experience in The Company is also working with much faster as the components travel changes have since been used for hybrid power, we designed a hybrid IGT to potentially deploy additional from a central warehouse to a remote a rollout in Ethiopia and will be product specifically for the telecom renewable technologies. project site where local residents must deployed in other challenging industry to provide the best value sometimes be enlisted to clear a path territories in the future. Cummins’ advanced hybrid power to our customers,” said Alan Zhao, just to ensure a truck can access the systems are engineered to optimize director of the telecom business “We worked hard to develop installation site. capital expenditure while lowering at Cummins. technologies that are helping to Cummins after-market engineer open up the telecommunication Kyle Anderson, who has overseen market and connect a nation to a number of Myanmar installations the world,” Zhao said. in country, described the logistics of “Through that process, we’re also deploying materials for hundreds of learning on a continuous journey sites as “a little bit overwhelming.” how to make our product better and Anderson recalled one installation prepare for future projects,” he added. where a generator set couldn’t be “Every challenge is an opportunity transported over a bridge because to develop solutions that make us stronger as a company, enable our Cummins learned many lessons working customers to grow and help make to power cell phone towers in remote parts of Myanmar. the world a greener place.”

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NEW NISSAN TRUCK INCLUDES CUMMINS’ INNOVATION, COMMITMENT TO EXCELLENCE

When you turn the key on the all-new 2016 Nissan TITAN XD powered by the Cummins 5.0L V8 Turbo Diesel, it almost purrs to life.

Don’t be fooled. The TITAN XD is all Nissan Sales & Marketing, tiger, no housecat. Service & Parts, Nissan U.S.A.

The powerful engine, a clean sheet The new pickup made its much- design, was also developed to meet anticipated debut at the 2015 North the latest emissions regulations using American International Auto Show in Cummins’ most recent innovations: Detroit, Michigan (U.S.A.), followed by sophisticated turbocharger technology, a celebratory event at the Columbus state-of-the-art filters and Selective Engine Plant in January 2015, where Catalytic Reduction (SCR) technology the engines will be made. that reduces emissions. Bringing the TITAN XD to life, though, The result: a strong, fuel-conscious has been a decade-long journey and diesel engine to power Nissan’s light- a lesson in perseverance. duty pickup truck line. First, some background. It served as the Company’s President and COO Rich Freeland praises headquarters in the 1920s and has the dedication of Cummins employees in the “There is no question that the new The Columbus Engine Plant development of the 5.0L V8 Turbo Diesel engine. TITAN will turn heads, and with the (CEP) was originally built around been expanded 26 times, including available Cummins 5.0L V8 Turbo a two-story Civil War-era house extensive work in the 1940s during Diesel we expect to win new fans and purchased by Cummins co-founders World War II. The building has been at attract buyers looking for this unique Clessie Cummins and W.G. Irwin in the center of some of the Company’s configuration,” said Fred Diaz, Columbus, Indiana (U.S.A.). most important developments. Divisional Vice President,

68 ABOUT THE ENGINE

Cummins 5.0L V8 Turbo Diesel engine has been optimized for the next generation TITAN XD. Cummins also is developing a version of the engine for commercial vehicle customers. “It’s difficult to walk from one end of “We were faced with the recession in The 5.0L V8 Turbo Diesel success this plant to the other without feeling 2009, and we came out of that with story would not have been possible This new engine will offer the right a little nostalgic,” said Jeff Caldwell, a great engine, a great plant, great without a Southern Indiana workforce balance of power, performance General Manager of Cummins Global people,” Freeland said. “We were and leadership that never gave up. and fuel economy while delivering Pickup and Van business. missing one thing: the customer.” the dependability Cummins Freeland highlighted Cummins’ customers expect. With a torque About 15 years ago, however, Enter Nissan and the TITAN. commitment to its employees at rating of 555 (lb-ft) and more than Cummins stopped making engines Discussions actually began in 2007, the TITAN XD launch in Columbus. 310 horsepower, the Cummins at the plant for a variety of reasons. but it wasn’t until August 2013 before “We are committed to winning and 5.0L V8 Turbo Diesel will provide the partnership became official. “It was, quite frankly, a sad day for growing in Southern Indiana, and we’re light-truck customers the me,” said Cummins President and “This is an exciting announcement committed to do it with our two unions. combination of towing capacity Chief Operating Officer Rich Freeland, for our Cummins team,” Cummins Other companies are running away and mileage that is expected a 35-year Cummins employee, Chairman and CEO Tom Linebarger from that, we’re running to it because in the highly competitive speaking at the January ceremony. said at the time. “We are bringing our we have terrific leadership and a terrific North American truck market. “I always felt it left a hole in the heart innovation and latest technology in workforce here,” Freeland said. The Cummins 5.0L V8 Turbo of this company.” engines and aftertreatment products Caldwell, the pickup and van general Diesel will be built at the to a new segment of customers.” Until the TITAN XD, that is. manager, lauded employees for Columbus Engine Plant in Eighteen months and 150 new jobs sticking with the project and seeing Columbus, Indiana (U.S.A.). In 2006, the Company announced later, hundreds of Columbus Engine it through to fruition. This plant has the latest plans to build a light-duty diesel Plant workers looked on as the truck technological innovations engine, but then the global economic “We’ve looked back. We’ve looked they’d worked so hard to bring to life to continue the 90-plus-year downturn stalled the project. forward. Here we are today, and this finally rolled onto the shop floor. tradition of building the highest is another big day in the history of quality Cummins engines. the CEP,” Caldwell said.

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CUMMINS’ ETHOS ENGINE SCORES BIG REDUCTIONS IN CARBON DIOXIDE

It may lack a sleek, aerodynamic design, but Cummins’ ETHOS 2.8L Demonstration Vehicle still turned heads like a sports car as it cruised around California’s capital during the summer of 2014.

Built in partnership with the California “The Cummins ETHOS engine, Using corn derived E-85, the high- pathway for future fuels because Energy Commission (CEC), the test developed through a research thermal efficiency and power-to-weight non-food feed stocks are dramatically vehicle’s engine and powertrain partnership with CEC, clearly ratio of the engine resulted in 50 to more abundant. Two cellulosic plants reduced carbon dioxide (CO2 ) demonstrates that by combining 58 percent lower well-to-wheels CO2 started up in 2014 in North America emissions by as much as 80 percent innovative engine design and emissions compared with the gasoline and another was nearing completion during testing compared to a baseline, combustion approaches with low- engine baseline. Using second- in 2015. gasoline-powered, medium-duty truck. carbon alternative fuels, we can generation, cellulosic derived E-85, The Cummins ETHOS 2.8L engine determine a path to significant the powertrain’s efficiency features CO is the primary greenhouse also incorporates an integrated stop- 2 reductions in greenhouse gas delivered 75 percent to 80 percent gas (GHG) emitted through human start system, which further reduces emissions,” said Wayne Eckerle, lower well-to-wheels CO2 emissions, activities, accounting for the vast fuel consumption and emissions. Cummins Vice President – depending on the drive cycle. majority of GHG emissions in the In stop-start mode, the engine shuts Research and Technology. United States. The ETHOS 2.8L Cellulosic E-85 uses non-edible down after the vehicle comes to a engine is designed to use E-85, The engine also delivered the power plant sources so it is less intensive to complete stop and the brake pedal a clean-burning blend of 85 percent (up to 250 horsepower) and peak produce in terms of land use, tilling, remains depressed. As the driver’s ethanol and 15 percent gasoline, torque (up to 450 lb.-ft.) of gasoline fertilizing and harvesting than corn- foot is lifted from the brake, the at diesel-like cylinder pressures to and diesel engines nearly twice its based E-85. While not available in system automatically starts the take full advantage of the favorable 2.8-liter displacement. high volumes today, cellulosic ethanol engine to seamlessly allow combustion attributes of the biofuel. represents a promising production acceleration from a stop.

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The Cummins ETHOS 2.8L engine was tested Additional partners in the project While the ETHOS project is over, it is There are many factors involved such in California during the summer of 2014. included Valvoline, which provided still generating a lot of inquiries despite as the availability of ethanol in general NextGen engine oils specifically relatively low prices for diesel which and the availability of the fuel from

designed for lower CO2 emissions, has removed much of the cost benefits non-edible sources. That’s the nature Cummins’ system controls, along and Freightliner Custom Chassis, of ethanol. Meanwhile, product of Cummins’s Strategic Principle with a robust starter, smart alternator which provided a prototype MT45 developers are looking for ways to to “Lead in Critical Technologies.” and sensors, handle the additional Class 5 step-van vehicle. incorporate the many lessons from It requires looking 5 to 10 years ahead. stop-start duty cycle and maintain ETHOS into future product designs. A final, on-road validation test phase “It’s not unusual for a project like reliable operation over the life of the took place in July 2014 in Sacramento, Samuel Geckler, Director – Advanced this to be done and for people to engine. Cummins worked closely with California (U.S.A.), managed by Systems Integration at the Cummins be working on this technology for Allison Transmission to integrate the Cummins Pacific, the California Technical Center in Columbus, the next 10 years,” Geckler said. 2000 Series transmission for smooth and Hawaii distributor for Cummins. Indiana (U.S.A.), calls the ETHOS “But I think we have learned a and efficient stop-start operation. The project team made a final report to project “just outstanding.” But tremendous amount from ETHOS.” The transmission is equipped with the California Energy Board in August he says it can take some time for hydraulic circulation features to ensure of 2014 and prepared an academic commercialization to take place smooth operation and quick vehicle paper on ETHOS in October of 2014. on any initiative of this nature. launch during stop-start driving.

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UPDATE: SUPERTRUCK’S NEW TRIP

After meeting the president and hosting dignitaries at the Company, a division of PACCAR, to When U.S. President Barack lead one of several SuperTruck teams. Obama called for new fuel-efficiency U.S. Department of Energy (DOE), the Cummins-Peterbilt Their team had several objectives as standards for medium- and heavy-duty SuperTruck is finally getting a rest. part of the public-private partnership, commercial vehicles in 2014, he did it including demonstration of a clean in front of the SuperTruck developed But the most significant part of its Cummins Principal Investigator and highly efficient engine with an by Cummins and Peterbilt. more than four-year journey could for SuperTruck. “This has been advanced waste heat recovery system just be starting. an extremely valuable project.” Work on SuperTruck wrapped up and an aerodynamic tractor and trailer. in a test cell. The final objective “We learned a tremendous amount Done in partnership with the DOE, The Cummins-Peterbilt SuperTruck was developing a way for the engine not just about features like waste SuperTruck started in 2012 to spur made headlines in February of 2014 to reach 55 percent Brake Thermal heat recovery but about the base innovation in the industry. Cummins when the companies announced it Efficiency (BTE), a key measure of engine itself,” said David Koeberlein, partnered with the Peterbilt Motors achieved 10.7 miles per gallon (mpg) engine efficiency. The engine went from under real-world driving conditions. 42 to 50 percent BTE during on-road At one time, that would have been testing. The Cummins team reached considered impossible. Most trucks the 55 percent goal and work was today get between about 5.5 and completed in June 2014. 6.5 mpg. It remains to be seen how many of Using the industry leading Peterbilt the SuperTruck’s features become Model 579 tractor, the Cummins- commercially available, but Koeberlein Peterbilt SuperTruck was powered by says elements are already working an engine based on the Company’s their way into product development. ISX15. It converted exhaust heat into While it may no longer be on the road, power delivered to the crankshaft, he says SuperTruck’s influence could used route information to optimize fuel be around for years to come. use, and included many other features.

President Barack Obama called for new fuel-efficiency standards for trucks in front of the SuperTruck developed by Cummins and Peterbilt. 72 SUSTAINABILITY PROGRESS REPORT // INNOVATION

NEW INDIA TECH CENTER NEARS COMPLETION

Some of the unique architectural The Cummins Technical Center India is In Cummins’ journey to becoming a global company from scheduled to become fully operational in 2016. features of the design, which a multinational, there is an increased focus on developing also strongly promote the »» Energy-efficient India as a global engineering hub for undertaking green building concept, are: air-conditioning system. research and development for the Company worldwide. »» Integration of test cells, labs and »» Conducive design allowing easy office space to create synergy accessibility to the differently-abled. Against this backdrop, the Cummins A global, cross business unit and smoothen interaction and Technical Center India (CTCI), is being technical center, CTCI will provide »» Collaborative work spaces collaboration between all entities. established in Pune, Maharashtra, India. shared engineering services as well resulting in optimization of space. Offices and social areas are well as business unit specific development »» Rain water harvesting. This new building will co-locate integrated with labs and test cells. capabilities and resources. A three- laboratories, engineering facilities and »» Recycled STP (Sewage level building, CTCI, once completed, »» Large atria with green spines engineers from across India. Geared Treatment Plant) water for will include 36 engine test cells and introduced to allow natural light toward strengthening the Company’s gardening and flushing. various labs along with engine-build within the building, thus reducing capabilities to design technologies for and tear-down space and other areas energy consumption. Engineers will work together in the future, this Center will house over essential to technology and product »» The combination of glass and clay leveraging their talent to bring 2,500 engineers and is expected to development, verification and tiles for the external façade, which about accelerated growth while become fully operational in 2016. validation work. insulates the building from external improving productivity, profitability heat. Reflective surface for flat roofs and maximizing customer to reduce heat gain. responsiveness.

»» Use of recycled material (e.g. bricks With a vision to be a globally integrated made of fly ash) and use of solar technical organization that serves the energy for hot water at cafeteria, needs of all business, both in India street lights, etc. and worldwide, the CTCI will be an extension of the Company’s One Cummins approach.

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EMPLOYEES TAKE CORPORATE RESPONSIBILITY VALUE TO HEART

Cummins employees continued to leverage engagement to build stronger communities in many ways in 2014, from

CORPORATE RESPONSIBILITY recycling tires in Mexico to empowering students to speak out on environmental policy in Dubai, to helping women Cummins employees clean a beach in Callao, Peru, as part of an Environmental Challenge project that also develop technical skills in Turkey. included an educational campaign on the importance of clean beaches and healthy ocean ecosystems.

Cummins’ Corporate Responsibility The Company believes building In 2014, more than 50,000 Company The Company is keeping its EEEC value calls on the Company and its stronger communities ultimately builds employees, joint-venture employees 2015 goal at 70 percent participation employees to “serve and improve stronger markets for its products. This and Cummins contractors reported so it can put more focus on improving the communities in which we live.” philosophy dates back to visionary devoting some 364,000 hours to the quality of that engagement. CEO J. Irwin Miller, who helped community involvement work as Cummins has more than 200 The Environmental Challenge was organize Dr. Martin Luther King Jr.’s part of the EEEC program. employee-led Community Involvement created in 2009 as part of the 1963 March on Washington, D.C. (see Teams (CITs) around the world that Participation in the EEEC program celebration of the Company’s 90th Cummins history timeline, page 17). organize most of the Company’s increased from 68 percent of eligible birthday. The Challenge is a friendly, community service work. Cummins The Every Employee Every Community employees and contractors in 2013 global competition among community encourages employees to focus on (EEEC) program provides employees to 73 percent in 2014. Meanwhile, service projects with an environmental three global priority areas where they with at least four hours of Company engagement in another of the component. Project teams can win can add knowledge, skills and passion: time to engage in community service Company’s major community up to $10,000 from the Cummins work. Established in 2005, EEEC involvement programs, the Foundation for the charitable entity »» Education continues to serve as a foundational Environmental Challenge, or non-governmental organization »» Environment building block for Cummins to increased by 18 percent in 2014 of their choice. »» Social justice / equality achieve community impact. compared to the previous year. of opportunity

74 Education efforts connected to Cummins’ Environmental Challenge THE POWER projects in 2014 reached OF CUMMINS 250,000 adults and children.

GROWING IMPACT In addition to the increases in Although Cummins’ current metrics development, coalition building and Cummins’ Environmental Challenge has participation, the amount of greenhouse focus on employee engagement mobilizing their teams to address removed an increasing amount of greenhouse gas (GHG) removed as a result of the through EEEC, the Company has tough community issues.” gases (GHGs). Here’s a look at the estimated amount in thousands of metric tons. Environmental Challenge also rose challenged its leaders to establish Overall, Levett said 2014 was a very Year GHGs removed from an estimated 19,000 metric tons more impactful goals and metrics by successful year. in 2013, the previous record, to about region that will both help focus and 2009 0.5 23,700 metric tons in 2014 (page 77). achieve greater impact from Cummins’ “I think these (participation) numbers 2010 0.7 community involvement efforts. illustrate the value we put on growing “Community service initiatives, like 2011 3.6 employee engagement to help solve the Environmental Challenge, create “At Cummins, leaders can be one of problems in our communities,” Levett 2012 4.3 a global footprint that allows Cummins the strongest enablers for encouraging said. “Our employees take our core 2013 19.0 employees to use their skills to achieve employee engagement and driving value very seriously and understand 2014 22.4 impact and results,” said Gwen impact in our communities,” said Mark that their work is never truly done.” Langley, Cummins Director of Global Levett, Vice President of Corporate

Community Engagement. “These Responsibility and CEO of the GROWING ENGAGEMENT programs help us build stronger Cummins Foundation. “In 2014, Cummins College of Engineering for Women in communities, and attract and retain we saw an increase in leaders who Cummins’ Environmental Challenge has seen India serves an underrepresented demographic a growing level of employee engagement the kind of employees we need to were meaningfully engaged in policy in the engineering field. since it was initiated in 2009. Here’s a look at the number of employees participating succeed as a company.” measured in thousands.

Year Participating employees

2009 3.2

2010 6.7

2011 10.0

2012 12.0

2013 11.5

2014 13.6

75 ENVIRONMENTAL CHALLENGE BY THE NUMBERS

Here’s a look at some of the numbers generated UNITED WAY SIGNIFICANT PARTNERSHIPS by Cummins’ Environmental Challenge program. Donations from Cummins Cummins continued financial support employees to the United Way in for several significant partnerships in North America also increased from 2014-2015, addressing a range of 250,000 10,000 about $2.8 million in 2013 to nearly community needs. Number of adults or children reached Maximum amount in dollars awarded $3.12 million in 2014. by an education component of the by the Cummins Foundation to each The Company, for example, supports 2014 Environmental Challenge projects. of the 19 Environmental Challenge The United Way’s mission is to improve the Cummins College of Engineering winners for use by the charitable lives by mobilizing communities to for Women in Pune and Nagpur, India, or non-governmental group of the address their key concerns. The which serves women who have long winners’ choice. organization raises money to support been underrepresented in the field of 82,700 community organizations and launches engineering. Cummins also continues Trees planted as part of 2014 its own initiatives in areas such as to support EARTH University in Environmental Challenge projects. education and social services. Costa Rica, which teaches sustainable 8,000 agriculture to students from around Because Cummins matches the gifts Estimated tons of garbage diverted the world. made by its employees to the United from landfills as part of 2014 Way, more than $6 million was donated To see a list of organizations that 63,466 Environmental Challenge projects. to help communities in North America. receive major grants from the Hours devoted to 2014 Environmental Nearly 6,000 of the 12,000 eligible Company or its foundations, Challenge projects at Cummins. employees participated. Employees in please go to page 89. Clovis, New Mexico; Elkhart, Indiana; 5,500 Looking ahead, Levett says while he and Miramar, Florida, had 100 percent Olympic-sized swimming pools was pleased with 2014, Cummins will participation rates. 22,370 of water conserved or made fit for continue to challenge its leaders and Estimated metric tons of greenhouse use as part of 2014 Environmental Cummins has also launched matching- employees in 2015. gas reduced by Environmental Challenge projects. gift programs over the past five years in “Last year (2014) was a very good year Challenge projects. China, India and parts of Asia-Pacific. for helping our Cummins communities These initiatives allow employees grow stronger,” Levett said. “We feel outside North America to also support that our continued focus on defining local non-profits whose causes are impact and related metrics will improve meaningful to them. our communities that much more.” 76 SUSTAINABILITY PROGRESS REPORT // CORPORATE RESPONSIBILITY

PROJECTS BY REGION In 2014, 62 teams from 17 countries developed projects to improve the environment in their communities, including first-time entries from new participating locations, including Singapore and Dubai. Here’s a look at a ENVIRONMENTAL CHALLENGE breakdown of the projects by region. ENJOYS ANOTHER SUCCESSFUL YEAR

Cummins employees included an education component in their cook stove project in China to warn people about the dangers of indoor air pollution from inefficient cook stoves.

About 16 percent of the 2014 Challenge projects involved water conservation or protection. Projects in the Challenge conserved or made fit for use about 3.6 billion gallons of water, enough to fill 5,500 Olympic- size swimming pools. REGION

China 29 percent The Environmental Challenge is a friendly, global competition where Europe 19 percent Cummins employees take their United States 18 percent For the sixth year in a row, Cummins employees skills into the community to address demonstrated their passion for the environment through the environmental problems. Community India 14 percent service projects are evaluated based Company’s Environmental Challenge. The numbers say it all. South America 8 percent on their level of employee engagement, More than 13,600 employees Employees donated more than environmental impact and ingenuity. Mexico 8 percent working on 62 teams in 17 countries 63,000 hours, planted more than The winning projects, selected by a panel Middle East 2 percent removed an estimated 22,370 tons 82,000 trees and diverted more than of experts, receive up to $10,000 each of greenhouse gases (GHGs), a 8,000 tons of garbage from landfills. South Pacific 2 percent for the charitable or non-governmental record amount equivalent to taking About 55 percent of the Challenge organization of their choice. But the 4,709 vehicles off the road each year projects had at least some educational real winner is the environment. or planting or saving 573,584 trees. component, reaching more than

250,000 children and adults. 77 The Cummins team takes a break from their efforts to help La Pila, Mexico, better manage its waste.

educational model called The “Zero Waste Management” “Green Schools” in six schools in team has lofty goals for the program. La Pila. Shop-floor employees taught In 2015, it hopes to increase the more than 2,000 students about the number of families involved in the environment and helped them develop Green Schools program from 688 a system for separating waste into to 860 and spread the program from recycling stations at their school. La Pila to surrounding communities.

Next, employees held an environmental Here’s a closer look at three of the to raise awareness about the benefits fair and neighborhood cleanup to WATER: 19 global project winners, each with of waste management and recycling promote recycling in the community. a different focus either on waste, in nearby La Pila. EVERY DROP water or energy. Finally, employees helped set up a COUNTS IN CGT’s project, “Zero Waste Management,” recycling program to reduce trash in established a framework for a public NANDAL VILLAGE WASTE: La Pila. When the system is entirely in waste collection service and promoted Water is fundamental for health, place, an estimated 74.7 tons of waste BECOMING waste responsibility through a public sanitation, agriculture and economic will be recycled each year. Because RESPONSIBLE campaign called “I am responsible prosperity, but just a few years ago, recycling reduces the demand for for my waste.” the people of Nandal village near the FOR THEIR TRASH raw materials, the project will also Cummins’ Megasite in Phaltan, India, In La Pila, Mexico, it’s not uncommon “Many of La Pila’s residents weren’t save an estimated 54,000 gallons did not have a reliable supply to live to find trash littering the street, committed to maintaining the health of water and 130 metric tons of healthy, productive lives. sidewalks and parks. On average, of their community, which is why our carbon dioxide (CO2 ) per year. That’s each resident of La Pila generates public campaign centered on individual the equivalent of removing 28 cars “Nandal is a drought-prone area and 800 grams of waste per day, of which responsibility,” said Cristina Nava, from the road or planting 3,367 trees. its people faced severe water scarcity,” at least 500 grams could be recycled. Corporate Responsibility Leader for The project’s community partner, A new reservoir is helping India’s Nandal Mexico and Cummins’ Central America village address its water scarcities. The Community Involvement SEGAM, the Department of Ecology Area Business Organization (ABO). Team (CIT) at Cummins Generator and Environmental Management in Technologies (CGT) in San Luis Potosí, The project used a phased approach San Luis Potosí, will maintain the Mexico, decided to use the 2014 to address La Pila’s trash problem. recycling process to ensure the Environmental Challenge as a way First, an employee team established an initiative is sustainable.

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A woman uses one of the new cook stoves in China provided as part of a Cummins Environmental Challenge project. said Soujanya Veguru, Corporate organizations, the project conserved Responsibility Senior Specialist more than 21 million gallons of water, at Cummins India. “Villagers were the equivalent of nearly 32 Olympic- dependent on regular water deliveries size pools. Tankers are no longer to meet day-to-day water needs.” needed to supply water, reducing fuel and greenhouse gas emissions The dire community problem required from the weekly truck deliveries. an ambitious response. Three years later, a team of Cummins employees For villagers, these improvements installing cleaner, more efficient of Cummins employees and multiple succeeded not only in improving mean their basic drinking water cook stoves in 200 homes. community partners. The Global access to water for the village, but also and sanitation needs are now being Environmental Institute (GEI), the in completely off-setting the amount addressed and water is available to “A cook stove not only improves the China Alliance for Clean Stoves of water used by the Company’s own support agriculture and livestock. livelihoods of villagers, it also reduces (CACS) and the Beijing University operations in the area (page 54). carbon dioxide (CO ) and particulate 2 School of Chemical Technology The Megasite is home to several matter emissions that result from ENERGY: have been critical to ensuring the Cummins plants. traditional cooking methods,” said project’s success and sustainability. THE PERILS Queenie Wang, the Project Leader More than 800 Cummins employees OF INDOOR for this Environmental Challenge The 120 Cummins Emission Solutions went to work installing rain harvesting winning project. Community Involvement Team (CIT) systems, fixing leaks, implementing AIR POLLUTION members who worked on this effort drip irrigation and building two dams Some 500,000 people die every year Modern cook stoves produce don’t plan to stop. In 2015, Wang and to manage water for nine villages in rural China as a result of indoor air environmental benefits and families can her team have already initiated steps to surrounding the Megasite. pollution. Many Chinese families burn save money, too. By using cornstalks install an additional 2,000 cook stoves coal inside their homes while cooking. instead of coal for cooking fuel in new, More than 30,000 students were in the neighboring county of Ruicheng. The lack of ventilation has a significant more efficient stoves, two metric tons educated about water pollution impact on the air quality inside and of CO2 are saved per family each year. Along with this planned expansion, and water conservation practices, outside of their kitchens. Each family can also expect to save CIT members are adding environmental creating a ripple effect moving around 400 Renminbi (about $64). education classes in 10 schools to beyond the classroom into homes Cummins employees leading an the cook stove project. More than and neighborhoods. Environmental Challenge project in This project began in 2012 and 500 students have already Yangquan, China, have worked for leverages the technical knowledge In partnership with community schools, participated in these classes. two years to alleviate this problem by local leaders and non-governmental

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ENVIRONMENTAL BEACH CLEANUP ECOWATER Employees cleaned beaches SCHOOL IN CHALLENGE WINNERS in Callao, Peru, and initiated MAGANG an education campaign on the This employee project included digging In the 2014 Environmental Challenge, there were nine importance of clean beaches a new well for a school in Xiangyang, and healthy ocean ecosystems. winning projects from China, six from India, two from China, establishing a rain water the United States and one each from Mexico and Peru. GREEN MACHINE harvesting system and teaching students Here’s a brief look at each project: the importance of using water wisely. Cummins’ Distribution Business in North America organized a competition SUSTAINING ZERO WASTE EAGLE among distributors to see who could KOTHRUD MANAGEMENT – CREEK PARK have the biggest waste cleanup. Eight teams participated, stretching PLANT WATER FIRST PHASE This project reopened a cove in a from Fredericton, New Brunswick, NEUTRALITY reservoir in Indianapolis, Indiana This project is establishing a “waste Canada, to Honolulu, Hawaii (U.S.A.). (U.S.A.), which provides the city This initiative in Pune, India, took a separation culture” in the La Pila drinking water. Employees removed three-pronged approach to improving suburb near Cummins operations in TOWARDS A invasive species and planted native water supplies in the area, helping to San Luis Potosí, Mexico, to increase WATER NEUTRAL plants and trees. maintain bodies of water, conserving recycling and waste management. MEGASITE water within Cummins facilities and This initiative focused on creating facilitating education about water and maintaining water resources in conservation in surrounding and around Cummins’ Megasite in communities. Phaltan, India. Employees educated villages and schools on the importance TETRA PAK of water conservation. RECYCLE Cummins employees in Guangzhou, Cummins employees in Indianapolis, Indiana China, developed a recycling program (U.S.A.) removed invasive species to open up a cove at Eagle Creek Reservoir. for beverage cartons, working with primary and middle school students.

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EMPOWERING PROTECTING THE UNDER- THE HAN RIVER

PRIVILEGED This project in Xiangyang, China,

Cummins employees worked established a biogas plant at Cummins employees help farmers reuse wasted straw in Shanghai, China. with low-income individuals to a livestock farm near the Han help them save energy and make River, providing cooking gas for IMPROVING TOWARDS WATER other environmental improvements 240 families and a cleaner alternative in Pune and Phaltan, India. to discharging waste into the river. THE LUOJIAGOU NEUTRALITY STREAM Cummins employees in Dewas, India, implemented a multi-faceted water COACH NATURE ANGEL This initiative in Chongqing, China, conservation project, including the THEM YOUNG PROJECT worked with families along the Luojiagou construction of soak pits to improve Stream to conserve water and reduce This project involved various sites This initiative by Cummins water harvesting and ensure the waste discharged into the stream. in India and was a continuation employees in Shanghai, China, availability of potable water of an effort to spread education built a campus garden and taught throughout the year. about environmental conservation more than 500 migrant children CLEAN STOVE to 300,000 school children about the importance of protecting PROJECT RIVER across the country. the environment. Based in Beijing, China, this initiative ECOSYSTEM distributed 200 clean cook stoves GREEN HOPE GOLDEN STRAW to primarily rural residents subjected RESTORATION ENVIRONMENTAL Employees in Shanghai, China, to pollutants from inefficient stoves. PROJECT continued a project to reduce Eventually, another 2,000 stoves EDUCATION Employees in Shanghai, China, used the burning of straw and other will be distributed. ecological technology to treat water This initiative in Beijing, China, agricultural waste by helping farmers drained from a polluted river so it could established an environmental reuse straw to plant mushrooms SOLID WASTE be used safely for street cleaning and education program in a school and make handicrafts, bringing the irrigation of nearby parks. for migrant children who MANAGEMENT them additional income. normally wouldn’t have access This initiative by Cummins employees to environmental curriculum. seeks to promote waste reduction and recycling in Pune, India.

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TECHNICAL EDUCATION PROGRAM INCREASES OPPORTUNITIES FOR WOMEN IN TURKEY

There’s a growing gap between the increasingly technical among employers that need a “Pairing students with experts working skilled workforce,” said Mary Titsworth in their field of study makes the end jobs available at companies like Cummins and the number Chandler, who leads Global Strategic result of this program more tangible,” of people who have the skills to succeed in those jobs. Corporate Responsibility Programs Chandler said. Schools across the globe simply aren’t teaching the for Cummins. The global TEC initiative has skills employers need. “Education that addresses the skills roots in Indiana (U.S.A.), where gap certainly helps employers, but also Cummins is headquartered. That’s why Cummins and the In 2014, a new TEC program improves the quality of life in Cummins Cummins Foundation are investing focused on mechatronics launched “Cummins has invested for many years communities because more people in communities around the world in Izmir, Turkey. Mechatronics is a in community education programs can access quality jobs with good through TEC: Technical Education multidisciplinary field that includes where our employees live and work, wages,” Chandler said. “Ultimately, we for Communities, which targets the mechanical engineering, electrical including in Indiana, working on high- are helping build stronger communities technical skills gap through local engineering, telecommunications quality early childhood education, by building a locally capable and vocational education programs. engineering, control engineering improved high school graduation knowledgeable workforce.” and computer engineering. rates and education leading to jobs,” TEC is built on a five-point educational At each TEC school, students are Chandler said. “Education creates framework. The standardized In TEC, Cummins seeks to partner taught skills that are needed in the opportunity and that is really education program includes resources, in each school location with business, local labor market. There are also important to Cummins.” processes and tools to help schools government and community opportunities for workplace learning identify and supplement gaps in organizations to increase access The work that Cummins has done such as apprenticeships, internships their existing programs, ensuring a to good jobs and build a stronger close to home has allowed the and job shadowing. The TEC program global approach and allowing the and growing employment base in Company to expand education uses Cummins and local employer implementation of TEC at any site. communities across the globe. programs to its communities talent to teach classes, train teachers There are multiple successful pathways around the world. One important “The key to this program is on new technology and mentor from technical education to good jobs. part of the Turkey TEC program collaboration at local schools students during their studies. has been recruiting women students.

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Students and leaders of Ege University in Turkey join Cummins employees in celebrating the start of a mechatronics program.

“Global companies and organizations who understand that need have a key role to play in finding solutions – it helps our communities and our businesses to be successful.”

In addition to Turkey, TEC has school programs around the world. The coalition in Nigeria, which began in 2013, marked the first agreement between Cummins and other organizations to support the program, a model that has gained momentum at other global sites, including in China and most recently in Turkey.

TEC also has programs in India, Morocco and Saudi Arabia with plans to expand in 2015 into Australia and “The number of female students government stating that 50 percent of In Turkey, Cummins, Schneider parts of South America. in technical education is very low,” its students must be qualified females, Electric and local Turkish business said Semih Gunes, the Higher the first of its kind in Turkey. partners support Ege University with “Industry, government and civil society Education Vocational School Manager scholarships for students, curriculum, have a stake in global education,” “TEC holds great importance in at Ege University, a program partner teacher training, guidance counseling said Mark Levett, Vice President training female students in Turkey and one of the oldest colleges in and equipment purchases. of Corporate Responsibility and to become qualified technical staff,” Turkey. “Through TEC, we can CEO of the Cummins Foundation. said Dr. Candeger Yilmaz, Ege “It’s great to see a coalition like this support the development and “The coalition in Turkey provides skills University Rector. “Development of come together to address a critical employment of female students.” training and access to good jobs for such cooperation is very important need,” said Gilles Vermot Desroches, students, including underrepresented With Cummins’ assistance, the Ege to improve the collaboration between Senior VP Sustainability, Schneider groups such as women.” University TEC Mechatronics program the university and industry.” Electric, and General Delegate of was awarded a quota from the the Schneider Electric Foundation.

83 SUSTAINABILITY PROGRESS REPORT // CORPORATE RESPONSIBILITY A Cummins India program promoting waste reduction has reached more than THE POWER 14,500 households, resulting in a 66 percent OF CUMMINS increase in waste segregation at the source.

CUMMINS HELPS CITY GET WISE ABOUT WASTE

Civic authorities in Pune, India, are looking to a Cummins Corporate Responsibility The Company has been working on waste management issues in Pune initiative for help as they work to get the city’s trash problems under control. since 2011. Employees won Cummins’ A rapidly growing industrial and Until mid-2014, Pune collected and from households. That would leave Environmental Challenge competition educational hub that includes disposed garbage in a landfill close to Pune residents with no option but to for extension of their Zero Garbage several Cummins facilities, Pune the city. Then, with garbage volumes segregate their waste and build pits Project in 2013. has a population of more than growing quickly, producing alarming to convert wet garbage into compost. The Company has been partnering 3 million people that is straining levels of environmental pollution, With over 1,600 tons of solid waste with the NGO (non-governmental the city’s infrastructure. Among its residents near the landfill began generated each day, the city has to organization) Janwani, the Pune many challenges, the city is finding to protest. do something. Municipal Corporation (PMC) and it difficult to keep pace with the Civic authorities are taking another Cummins India’s “Zero Garbage a cooperative (SWaCH) made up increasing volume of trash. look at their waste management Project” is one model being Cummins employees raise awareness model, evaluating the possibility considered for reducing the about the need to reduce the amount of no longer collecting wet garbage amount of trash in the city. of waste sent to a landfill outside Pune.

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Cummins employees have worked with trash collectors who gather waste looking for recyclable items in the wards where the Company program has been implemented. of low-income residents of the city as organic material. The initiative also who collect trash (wet and dry) from provides training to the society staff on doorsteps for recycling. operating compost pits and converting wet waste into organic matter. The Zero Garbage Project converts biodegradable waste into energy Having gauged that the weakest and facilitates the recycling of non- link in the solid waste management biodegradable material. With the process was unreliable push carts successful implementation of the used by trash collectors, Cummins project in the Katraj Ward and then engineers designed a cost-effective, of wet waste in local composting pits With the success of the Katraj and the Baner-Balewadi Ward, which is durable, user-friendly push cart has increased by 400 percent to over Baner-Balewadi models, Cummins is near the Company’s India campus, through a Community Impact Six 2.5 tons per day in the two wards. now ready with a holistically developed civic authorities believe Cummins Sigma project. Six Sigma is the Meanwhile, 6.5 tons per day model that can be replicated across has a sustainable model that can data-based business problem- of garbage are being processed at different demographics within the city. be replicated across the remaining solving tool popular at Cummins. a local biogas plant, which can then During 2014, 980 Cummins employees 46 wards of the city. be converted into electricity using a logged 4,388 hours completing this They developed a low-cost push- Cummins generator set. The electricity project, using their skills and passion The model has worked regardless cart using analysis led design, the is being used to power street lights. to make their communities better of a ward’s demographics. The same tool that product designers places to live. composition of income groups in the work with at Cummins. The cart Additionally, Cummins has sponsored Katraj and Baner-Balewadi wards, for is better ergonomically, improving the Nirmalya project, which uses an “In addressing a significant challenge example, are diametrically opposed. conditions for the waste-collectors annual festival as a key opportunity plaguing the city of Pune, that of waste and simplifying the process. to promote recycling. In continuation management, it is a tremendously The program engages Cummins The design has been shared with of the project in 2014, Cummins rewarding experience to see how employees in organized rallies and officials at the PMC for replication employees successfully prevented the skills of our employees can be door-to-door campaigns to create across various wards in the city. river pollution from the traditional leveraged in developing a change a basic awareness about waste immersion of idols and other offerings model for different demographics segregation. It also sets up meetings The program has reached out to such as flowers, fruits, spices, of the city,” said S. Ravichandran, with various housing societies, over 14,500 households, leading honey, coconuts, etc. By immersing Head of Corporate Responsibility encouraging households to restart to a 66 percent increase in waste these offerings into tanks instead, for Cummins India. existing pits available for decomposing segregation (separating dry and wet the material was collected and wet waste so it can be safely used waste at the source). The treatment converted into 156 tons of compost.

85 SUSTAINABILITY PROGRESS REPORT // CORPORATE RESPONSIBILITY A project by two Cummins engineers found a way to modify school bus THE POWER powertrain specifications to improve OF CUMMINS fuel efficiency by more than 10 percent. BUS PROJECT LOOKS TO HELP SCHOOLS LOWER COSTS

Editor’s Note: Some of the best Corporate Responsibility projects come about when Cummins employees put their job skills to work to address a need. Here are two examples:

A community service project by two Corporation (BCSC) and potentially Cummins engineers to reduce an many other school systems throughout Indiana school district’s fuel costs the country to decide if establishing and software changes on bus In Columbus, Indiana (U.S.A.), Cummins’ Steven Bellinger, second from left, and Mark could potentially help schools across a new bus spec or upfitting existing powertrains. Six Sigma is a data- Slaton, center, led a Six Sigma project to help the United States save money on buses is right for them,” said Steve based business problem-solving school districts save money on transportation. They are joined by Jim Parker, Dixie Harris transportation. Bellinger, a Vehicle Integration Engineer tool widely used at Cummins. and Karen Wetherald with the Bartholomew at the Columbus Engine Plant (CEP) Consolidated School Corporation. The project involved finding cost- The project included changes in who worked on the initiative. effective ways to modify the powertrain the transmission shift schedule, the Slaton and Bellinger also worked in buses operated by the school In buses, and most other vehicles, number of forward speeds and the with Allison Transmission and system in Columbus, Indiana (U.S.A.), engine torque is transferred through the rear axle ratio, which taken together chassis engineers from the school to maximize fuel mileage without transmission and drive axle or axles to enable a bus to operate more bus companies. BCSC officials compromising performance or safety. move the vehicle. Optimization efficiently. The project also reduced have adopted the recommended of these components is critical to the load on the engine when a bus Research conducted at the Company’s changes on all new bus purchases. maximizing the performance and is at a full stop to save fuel. test facilities and under real world fuel efficiency of any vehicle. “Cummins and BCSC have been driving conditions found certain The Six Sigma project was sponsored working for a long time to make things modifications to the powertrain The Community Impact Six Sigma by Jeff Caldwell, who leads Cummins’ better and this is just another example improved bus fuel efficiency by project led by Bellinger and Mark global van and pickup truck business of that,” Steve Forster, BCSC fleet more than 10 percent. Slaton, an Environmental Engineer and also serves as the Bartholomew services manager, told The Columbus at CEP, was some three years in the Consolidated School Corporation’s “Our hope is that this project will allow Republic newspaper. making and ultimately led to hardware Board President. the Bartholomew Consolidated School

86 SUSTAINABILITY PROGRESS REPORT // CORPORATE RESPONSIBILITY INTRODUCTION

SCHOOL CHILDREN IN INDIA BECOME COVER STORY ‘SUPER HEROES’ FOR THE ENVIRONMENT THROUGH EDUCATION PROJECT ENVIRONMENT

To commemorate Cummins India’s 50th anniversary in 2012, The project team worked with iVolunteer, of water and 3.65 million kilowatt a social enterprise that promotes hours (kWh) of electricity. INNOVATION Company employees launched a nationwide environmental India’s social development by bringing Employees not only put their education campaign called “Coach Them Young.” volunteers and organizations together, organizational and time management to coordinate the 1,600 educational Some 75,000 children at 200 schools But this initial impact was not enough. skills to work, but also leveraged sessions at 700 schools. Active in 51 cities watched a video and In fact, it was only the beginning. principles more commonly associated leadership engagement and partnering pledged to be a “True Super Hero” with the business world. “Coach Them Young,” the India Area with joint ventures, dealers, suppliers by protecting their environment

Business Organization and Distribution and customers also led to the project’s RESPONSIBILITY CORPORATE from waste and pollution. “The first step in change management Business Unit used new strategies and expanded outreach. is always to educate,” said Karan In 2013, the team expanded the partners to reach 400,000 students Madan, project leader. “School children In addition to gaining new partners, project and used the vast network in 80 cities with 518 employees are the ideal propagators as they are the program turned in a new direction. of the Distribution Business Unit to contributing 2,400 hours. The project future torchbearers of the world and

The focus in 2014 was on conservation & SAFETY HEALTH reach more than 200,000 students won Cummins’ Environmental have significant capability to learn, of natural resources. Students were in 71 cities. It was an Environmental Challenge again in 2014. adapt and implement.” shown practical ways to do this, such Challenge winner both years. as closing the tap while brushing their The hope is that students will not only teeth. Even if just one in 10 children take personal actions, but become takes these simple steps, it results in brand ambassadors – super heroes – RIGHT ENVIRONMENT an annual savings of 3.65 million liters inspiring their families, friends and neighbors to join them. This is where Cummins Distribution Business is using the project team plans to take the its organizational skills to reach more than project next. They also plan to focus on 400,000 students on the importance of GOVERNANCE environmental conservation. empowering teachers and principals.

87 FINANCIAL SUSTAINABILITY PROGRESS REPORT // CORPORATE RESPONSIBILITY

CUMMINS’ ENGINE FOR GIVING BACK

For Cummins, the fuel for philanthropy is its people. For example, winners of the Company’s 2014 Environmental Challenge each THE POWER Through their skills and passions, they drive the OF CUMMINS received a $10,000 grant to give to Company’s financial support to programs, partners the non-profit or non-governmental and projects in our communities. organization (NGO) of their choice.

Cummins invested about $18.1 million in Corporate Responsibility in 2014 Since 2007, the catalyst for Cummins And employees are acting on In North Carolina (U.S.A.), compared with $15.3 million in 2013. Corporate Responsibility—a Company that opportunity. employees worked to improve third- core value—has been its Every grade reading levels and were granted In 2014, Cummins’ global priority Employee Every Community (EEEC) $245,000 to further that initiative. areas—education, the environment program. By encouraging employees And, in India, more than $39,000 was and social justice/equality of to volunteer four or more of their work devoted to a team-led project with opportunity—received record-setting Cummins employees clean a river bank hours, Cummins enables its teams to an area NGO focused on educating engagement from its employees. along the Luojiagou, a stream running leverage their interests and abilities in underserved tribal women. through Chongqing, China. EEEC reached 73 percent in 2014, their local communities. compared with 67 percent in 2013. Such financial support is made And in response to that growth possible by the Cummins Foundation, came increased financial support one of the oldest corporate from the Company. foundations in the United States. Combined with Cummins employees’ Last year, Cummins invested EEEC engagement, both comprise the some $18.1 million in its Corporate engine that creates lasting impact in Responsibility efforts, compared with communities around the world. $15.3 million in 2013. That support was prompted, and granted, based on Just as Cummins employees dedicate where and how Cummins employees themselves to producing only the chose to engage through EEEC. best for their customers, so, too, do they commit their best to giving back

to their communities. They are the

philanthropic Power of Cummins. 88 SUSTAINABILITY PROGRESS REPORT // CORPORATE RESPONSIBILITY

A list of Cummins’ EEEC-inspired contributions and projects from 2014 is included on the following pages:

GRANT OR CUMMINS COMMUNITY DONATION FOUNDATION CUMMINS INC.

EDUCATION EARTH University Foundation Guácimo, Limón, $1,000,000 Matching grant to establish six endowed scholarships and one endowed professorship Costa Rica

Ege University Partnership for Technical Education for Communities (TEC) Izmir, Turkey $290,000 and Ege University’s mechatronics program in Turkey

Save the Children Disaster relief supporting Save the Children’s Education in Emergencies program Global $250,000 IU Center of Art & Design Columbus, IN (U.S.A.) $250,000 Support for educational initiative at the IU Center of Art and Design in Columbus, IN

Strategic Twin-Counties Educational Partnership Whitakers, NC (U.S.A.) $245,000 Support to improve third grade reading performance in Edgecombe and Nash counties in North Carolina

Ivy Tech Support for the iGrad program to increase student graduation and retention rates in Columbus, IN (U.S.A.) $150,000 Bartholomew County, Indiana

Metanoia Curriculum development for Youth Leader Academy year-round student leadership-building North Charleston, SC (U.S.A.) $125,000 Eko Junior High College Lagos, Nigeria $77,000 Renovation of six classrooms to help improve grades in mathematics and English

International Youth Foundation Casablanca, Morocco $60,470 Support for Phase II educational activities at the Cummins’ TEC site in Morocco

Bartholomew Consolidated School Foundation Columbus, IN (U.S.A.) $50,500 Support for reading training program focused on children with dyslexia

Building Tomorrow Inc. Indianapolis, IN (U.S.A.) $50,000 Education initiative supporting access to quality education for students in East Africa

Chongqing Industry Polytechnic College Partnership for TEC at the Chongqing site Chongqing, China $50,000 King Street Primary School Support to create an outdoor environmental learning area Durham, England $46,800 Dream It Do It Western New York, Inc Support for a community education coalition in Jamestown, NY (U.S.A.) $45,000 Chautauqua County focused on Science, Technology, Engineering and Math (STEM)

Cooperative Housing Foundation (Global Communities) Ghana, Africa $38,660 Support for structural improvements and sanitation behavior program at Laterbiokorshie Cluster Schools

The Library Project Support for development of elementary school libraries in China Throughout China $37,500

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GRANT OR CUMMINS COMMUNITY DONATION FOUNDATION CUMMINS INC.

Billkel Ltd. Support for construction at the Laterbiokorshie Cluster Schools Ghana, Africa $32,850 Association ROI Support for a coalition program preparing high school students for the job market Bucharest, Romania $30,000 Manzini Primary School Gauteng Province, South Africa $28,500 Installation of a biogas system, solar panel system and renovated kitchen at school

Tennessee Technological University Cookeville, TN (U.S.A.) $27,700 Two natural playscape areas at the Child Development Lab for hands-on outdoor learning

Mounds View Schools Education Foundation Environmental science field work equipment Shoreview, MN (U.S.A.) $25,100 and technology to enhance the professional realism of an outdoor environment classroom

Charleston Orphan House, Inc. Charleston, SC (U.S.A.) $25,000 Literacy program for elementary aged children who are in foster care in the Charleston area

Columbus Pro Musica dba Columbus Indiana Philharmonic Columbus, IN (U.S.A.) $25,000 Providing educational music activities to children in Bartholomew County and surrounding counties

Bainian Vocational School English program and curriculum for 120 migrant workers’ children Beijing, China $23,000 Mineral Point Unified School District Mineral Point, WI (U.S.A.) $22,000 Supporting Project Lead the Way launch that encourages elementary students to become problem solvers

Kwabhekilanga Secondary School Support to establish a library Sandton, South Africa $21,000 Lila Poonawalla Foundation Scholarships for disadvantaged female students Pune, India $16,640

Wuhan University of Technology Scholarships for strategic education initiatives in China Wuhan, China $15,200 Huazhong University of Science and Technology Wuhan, China $14,400 Scholarships for strategic education initiatives in China

Community Education Coalition Columbus, IN (U.S.A.) $14,294 Support for Educational Coalition workshop for Rocky Mount, NC and Jamestown, NY

Pre-K 4 All Committee Campaign to support Busy Bees Academy and pre-Kindergarten programs Columbus, IN (U.S.A.) $12,500 Lycee Collegial Bouskoura Funding to support the construction of a student library Bouskoura, Morocco $11,500 John H. Boner Community Center An education program for AmeriCorps members to help improve Indianapolis, IN (U.S.A.) $10,700 education on the Near Eastside of Indianapolis

SAE Foundation Support for development of a STEM curriculum Columbus, IN (U.S.A.) $10,000 Innovation in Science and Technology Minneapolis, MN (U.S.A.) $10,000 Support for hands-on science, engineering and technology programs and events

School on Wheels Corporation Support for project-based tutoring at Brookside Elementary (IPS #54) Indianapolis, IN (U.S.A.) $10,000 through Striving Academic Readiness (STAR) program.

LeMoyne-Owen College Support for a strategic plan for the college’s search for a new president Memphis, TN (U.S.A.) $10,000

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GRANT OR CUMMINS COMMUNITY DONATION FOUNDATION CUMMINS INC.

ENVIRONMENT Beijing Chaoyang Yongxu Global Environmental Institute Beijing, China $98,800 Promoting the use of clean stoves using biomass fuel in rural China

Universidad Autónoma de San Luis Potosí San Luis Potosí, Mexico $75,000 Building a green roof at the University of San Luis Potosí

Tree Plantation Project Pune, India $59,517 Addressing the impacts of rapid urbanization and industrialization on forests

Desilting Project Project to increase the water storage capacity of Khadakwasla dam, Pune, India $39,203 a major source of water for Pune, India

Charyou Youth Volunteer Service Center Shanghai, China $30,500 River recovery project to improve the water quality at Expo Houtan Park

Global Village of Beijing Environment Education Center Beijing, China $25,000 Support to improve the water environment of Luojiagou stream, a tributary of the Yangtze River

Xiangyang City Association of Environment Protection Green Han River Xiangyang, China $25,000 Support to build a biogas site to dispose of sewage from livestock farming

Agricultural Development Trust Baramati, India $23,296 Partnership to teach the latest agricultural techniques to farmers

Nirmalya Project Support for an environmentally friendly solution to the immersion of Nirmalya Pune, India $19,315 in rivers during festival times in India

Xiangyang City Association of Environment Protection Green Han River Xiangyang, China $17,800 Support for a water quality improvement project at Magang Primary school

Proforestal A.C. San Luis Potosí, Mexico $17,100 Support for urban forest infrastructure to promote and control urban reforestation

Shanghai Oasis Ecological Conservation and Communication Center Shanghai, China $16,400 Development of curriculum to promote environmental education and education equality

Columbus Park Foundation Promote, improve and maintain the existing People Trail Columbus, IN (U.S.A.) $15,000 that runs along Haw Creek between Columbus Engine Plant and Cummins Technical Center

Husk Power Project Project to develop an energy system to use the gas from rice husks to produce Tamkuha, India $14,975 electricity for use in rural areas

91 SUSTAINABILITY PROGRESS REPORT // CORPORATE RESPONSIBILITY

GRANT OR CUMMINS COMMUNITY DONATION FOUNDATION CUMMINS INC.

Food Waste Project 2014 Pune, India $14,921 Project to create awareness on solid waste management in schools and residential areas

Dissolution of Plaster of Paris Idols Project Provide an environmentally friendly solution to restrict water pollution caused by Pune, India $13,079 immersion of plaster of Paris idols in rivers during festivals

Zero Garbage Project Engineering design services for a waste collection site and a public campaign Pune, India $11,053 on the importance of separating waste

Centro de Estudios de Promoción Social Cáritas A.C. San Luis Potosí, Mexico $10,000 Environmental Challenge grant recipient

Centro Educativo en Apoyo al Espectro Autista A.C. San Luis Potosí, Mexico $10,000 Environmental Challenge grant recipient

Charyou Youth Volunteer Service Center Shanghai, China $10,000 Environmental Challenge grant recipient

Cheonan Seobu Free Meal Support Center Cheonan, Korea $10,000 Environmental Challenge grant recipient

SIFE China Shanghai, China $10,000 Environmental Challenge grant recipient

Xiangyang City Association of Environment Protection Green Han River Xiangyang, China $10,000 Environmental Challenge grant recipient

Xiangyang Charity Federation Xiangyang, China $10,000 Environmental Challenge grant recipient

Wuhan Women and Children Activity Center Wuhan, China $10,000 Environmental Challenge grant recipient

Aikya Seva Sanstha Throughout India $10,000 Environmental Challenge grant recipient

Cummins India Foundation Maharashtra, India $10,000 Environmental Challenge grant recipient

Green Thumb New Delhi, India $10,000 Environmental Challenge grant recipient

92 SUSTAINABILITY PROGRESS REPORT // CORPORATE RESPONSIBILITY

GRANT OR CUMMINS COMMUNITY DONATION FOUNDATION CUMMINS INC.

SOCIAL JUSTICE / EQUALITY OF OPPORTUNITY United Way Agencies Match for donations made by employees in North America to the United Way North America and Canada $3,115,183 Anchor House Renovation and addition to the Anchor House facility to assist the homeless Seymour, IN (U.S.A.) $375,000 Aeon Addition of a solar thermal unit, water meter and computerized monitoring system for a Minneapolis, MN (U.S.A.) $350,000 mixed-income housing development

John Townsend Trust Support for Creative Adult Project to provide work skills to adults with disabilities Kent, UK $258,000 Pegode Support for an initiative to help people with mobility issues access transportation Niel, Belgium $118,200 Willoughby School Development of an immersive learning environment for students with physical, Lincolnshire, UK $113,000 mental and life limiting disabilities

People Serving People Minneapolis, MN (U.S.A.) $100,000 Project to renovate a kitchen and dining hall at the largest family homeless shelter in Minnesota (U.S.A.)

United Community Ministries Initiative to increase the capacity of the dining and dormitory areas at Rocky Mount, NC (U.S.A.) $99,899 McDonald Street Soup Kitchen and Emergency Shelter

NGO Development Project 2014 Creating a framework to develop NGOs that support the underprivileged by focusing on energy Pune and Phaltan, India $90,105 conservation, health and safety and development initiatives for the inmates

The Heritage Fund Community Foundation of Bartholomew County Support for “Engage Columbus,” an initiative that provides community information to new residents in Columbus, IN (U.S.A.) $90,000 Columbus, Indiana (U.S.A.)

St. Susan Center Jamestown, NY (U.S.A.) $56,500 Project to increase the capacity and efficiency of this food pantry and community kitchen

New Day Charities / New Day Foster Care Beijing, China $54,800 Create an isolation room and new kitchen area at New Day Foster Home

Rise Inc. Spring Park Lake, MN (U.S.A.) $42,821 Support the launch of a low-cost supply chain for micro-switches used by people with disabilities

Maharashtra Arogya Mandal Improve education for tribal girls around Padarwadi Pune, India $39,058 Holistic Village Development Project Holistic transformation of Nandal village by addressing water, Phaltan, India $32,267 agriculture, health and sanitation, education and more

The Trussell Trust Project provides cooking classes and crockpots to 200 families, teaching them Salisbury, UK $32,000 to cook and eat healthy

Human Rights Commission Collaboration project between the Mayors Advisory Council for Disability and Accessibility, Columbus Columbus, IN (U.S.A.) $25,000 Transition Council and Cummins Assistive Technologies to create a “disability awareness video”

93 SUSTAINABILITY PROGRESS REPORT // CORPORATE RESPONSIBILITY

GRANT OR CUMMINS COMMUNITY DONATION FOUNDATION CUMMINS INC.

Food Bank of Central & Eastern North Carolina Establish the Weekend Power Pack of food Raleigh, NC (U.S.A.) $25,000 for needy children in Nash, Edgecombe and Halifax counties in North Carolina

Immigrant Welcome Center Inc. Support to help immigrants connect with people, places and Indianapolis, IN (U.S.A.) $25,000 resources, helping them build successful lives

Developmental Services Inc. Columbus, IN (U.S.A.) $24,700 Support to renovate a kitchen used for cooking classes that instill a healthy lifestyle

Coach Them Young Project Launching a national awareness campaign to create awareness Multiple cities, India $23,260 among children to protect the environment in a sustainable manner

Memphis Cultural Arts Enrichment Center Support to help broaden programming Memphis, TN (U.S.A.) $21,000 Wuxi Hishan Lezhu Social Work Office Wuxi, China $21,000 Support for development courses for children of migrant workers at a community school

Organization for Livelihood Enhancement Services (OLIVES) Ghana, Africa $20,000 Establish a sanitation facility for Abohema Methodist Primary School in Turkey

Gündo du Contemporary Community Volunteers Association ğ Izmir, Turkey $20,000 Support for building a training center to create a better educational environment for children

Sans Souci Assist the community school supply effort to provide a backpack full of the Columbus, IN (U.S.A.) $19,000 school supplies to area children in need

Kids Against Hunger Greenwood, IN (U.S.A.) $15,002 Funding for a warehouse reconfiguration project to improve the efficiency of the organization

Xiangyang Charity Foundation Support for a matching gifts program in China Xiangyang, China $14,361 Hogar del Niño A.C. San Luis Potosí, Mexico $13,550 Support for IT equipment and desks for two classrooms

Putnam County School Winfield, WV (U.S.A.) $12,500 Support for Backpack Buddy food program for disadvantaged students

Centro de Estudios de Promoción Social Cáritas A.C. Support to implement an inventory San Luis Potosí, Mexico $11,000 management system and improve the installation of one of the dispensaries

Growing Places Indy Indianapolis, IN (U.S.A.) $10,000 Support to help Growing Places program cultivate a culture of urban agriculture and healthy lifestyles

Indiana Civil Liberties Union (ICLU) Support to assist the ICLU with general operations Indianapolis, IN (U.S.A.) $10,000 John H. Boner Community Center Support to help the John Boner Community Center improve Indianapolis, IN (U.S.A.) $10,000 the quality of life for the Near Eastside of Indianapolis

Local Initiatives Support Corporation of Indianapolis (LISC) Support to help transform Indianapolis, IN (U.S.A.) $10,000 distressed neighborhoods into healthy and sustainable communities

Teach For America Support for Teach For America’s general operations Indianapolis, IN (U.S.A.) $10,000

94 SUSTAINABILITY PROGRESS REPORT // CORPORATE RESPONSIBILITY

THE CUMMINS FOUNDATION

The Cummins Foundation is governed by these individuals and committees:

BOARD OF Director Anant Talaulicar AUDIT COMMITTEE Vice President – Chairman – Cummins India DIRECTORS Chair Marsha Hunt Director Pat Ward Vice President – Controller, Cummins Chairman Tom Linebarger Vice President – Chief Financial Officer, Cummins Chairman and CEO, Cummins Luther Peters Director Lisa Yoder Vice President – Internal Audit, Cummins Director Rich Freeland Vice President – President and Chief Operating Officer, Cummins Mark Smith Global Supply Chain Manufacturing, Cummins Vice President – Investor Relations & Director Mark Levett Business Planning & Analysis, Cummins Vice President – Corporate Responsibility, Cummins FOUNDATION Director Will Miller OFFICERS INVESTMENT Member of the Cummins Board of Directors Chief Executive Officer Mark Levett COMMITTEE Vice President – Corporate Responsibility, Cummins Director Marya Rose Chair Gloria Griesinger Vice President and Treasurer Aaron Kaluf Executive Director – Global Treasury Chief Administrative Officer, Cummins Corporate Responsibility Finance Controller, Cummins and Pensions, Cummins

Director Tony Satterthwaite Secretary Mary Chandler Adam Schumm Vice President, President – Corporate Responsibility Director of Global Director Engine Business Unit Operations Finance, Cummins Distribution Business Strategic Programs and Planning, Cummins Cummins

Rakesh Gangwani

Director – EMEA Corporate Development, Cummins

95 SUSTAINABILITY PROGRESS REPORT // HEALTH & SAFETY

CUMMINS REDOUBLES ITS HEALTH AND SAFETY EFFORTS IN 2015

Cummins recorded improvements in three key health and safety metrics in 2014, expanded critical programs and won one HEALTH & SAFETY of the world’s most prestigious health, safety and environmental awards.

The Company, though, also recorded an increase in its Major Injuries and Dangerous Occurrences (MIDO) Rate in 2014 and missed aggressive goals in two other focus areas.

“We made real progress in implementing our vision that all employees are responsible for health and safety, not just on the job but in all facets of their lives,” said Stan Woszczynski, Cummins Chief Manufacturing Officer and

Local firefighters demonstrate how they would respond to a crash with victims inside a car at the Driver Safety Expo in Columbus, Indiana (U.S.A.). The expo wrapped up activities during Cummins’ Driver Safety Week in October 2014.

96 Cummins won the National Safety Council’s prestigious Robert W. THE POWER Campbell award in 2014 for its health, OF CUMMINS safety and the environment initiatives.

the Company leader who oversees in preventing injuries and promoting Nevertheless, the 2014 results for KEY INITIATIVES health and safety. “However, we safe behavior.” Incidence Rate and Severity Case Health and Safety leaders expanded know when it comes to health and Rate were better than in 2013. two initiatives in 2014 – the Driver 2014 RESULTS safety, our work is never done.” Safety program and a program In 2014, Cummins saw improvements Meanwhile, the MIDO Rate in Cummins won the prestigious Robert called “Live It. Lead It.” in three key health and safety 2014 was well above Cummins’ W. Campbell Award from the National goal (0.057 compared to 0.020). performance indicators: “Live It. Lead It.” is designed Safety Council in 2014 (page 99). Dangerous occurrences included to strengthen leaders’ personal »» A 5 percent reduction compared to In a video message to Company a technician getting struck by a 2013 in the Company’s Incidence commitment to health and safety by employees, Chairman and CEO Tom wind-blown door, another falling Rate, the relative number of asking them to share their personal Linebarger said he felt tremendous off the top step of a truck and an recordable injuries and illnesses experiences with workplace injuries. pride about winning the award and engine dropping when a lifting sling per 100 employees. Participants shared incidents involving at the same time a sense of urgency broke. The door and fall resulted in people they were supervising, to do even more about safety. »» A 5 percent reduction in Cummins’ fractured wrists. Thankfully, no one family members and former colleagues. Severity Case Rate, which is based was hurt by the falling engine. “I came away thinking to myself since on the number of injuries and Leaders in the “Live It. Lead It.” safety is the primary duty of a leader… “That underscores why you have illnesses resulting in lost work program are asked to consider every (a goal of) zero incidents is really the to think about safety every time,” days per 100 employees. work station in their facilities and only ethically responsible position to said Cummins Occupational Safety whether they would let their mother, »» A 13 percent drop in the Company’s take,” Linebarger said. Director Pramod Palat. “Sometimes Ergonomics Incidence Rate. father, daughter or son work at those the seemingly safest activities are The Company is using the Campbell Ergonomics has been a leading stations. They are also asked to the ones that result in significant Award as a starting point to redouble cause of injury at Cummins. create an action plan detailing how injuries. Safety has to be top of its health and safety efforts. they will personally lead health and mind, all the time.” But while the ergonomic rate of 0.149 safety going forward. “In 2015, Cummins is raising the (ergonomic injuries per 100 employees) There were 279 lost work days in expectations for health and safety,” was significantly under the Company’s The program has been very effective 2014, 162 First Aid Incidents and sadly said Michelle Garner-Janna, Executive goal (0.160), results for the Incidence and safety leaders are working to one work-related fatality at one of the Director – Corporate Health and Safety. Rate (0.610) and Severity Case Rate expand it in 2015 to non-supervisors. Company’s joint ventures in China. “Each of us must be actively engaged (0.190) were over Cummins’ goals Woszczynski, for example, makes it a point to discuss with employees the (0.580 and 0.160, respectively).

97 SUSTAINABILITY PROGRESS REPORT // HEALTH & SAFETY

POSITIVE TREND LINES

Both the Company’s Severity Case Rate and Incidence need to get actively engaged in health A phased-in effort to identify and work rate fell in 2014 compared to 2013. But Cummins did and safety through “Live It. Lead It.” with drivers considered to be most not reach aggressive goals set in those areas. when he speaks before groups at risk of getting injured driving was around the Company. expanded and the Company started driver safety initiatives with several joint Severity Case Rate Indicator “We want everyone to make ventures in South America and Nigeria, 1.2 safety personal,” said Garner-Janna. said Clint Wernimont, Corporate Road “That’s why we believe many of the 1.0 and Safety Project Leader. principles in ‘Live It. Lead It.’ apply 0.8 to every employee.” The health and safety team also continued its successful Ergonomics 0.6 The program has been customized Cup, a competition encouraging 0.4 for all employees and is being employees to identify and fix deployed in 2015. 0.2 ergonomic problems at Cummins sites around the world. And the Company 0.0 The health and safety team also 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 expanded its global driver safety re-introduced Cummins’ toolbox to initiative, sponsoring a special Driver prevent slips, trips and falls, another Safety Expo in addition to Driver leading cause of injury at the Company. Incidence Rate Indicator Safety Week in October 2014. Garner-Janna believes Cummins has The week includes a focus each day 3.0 laid a great foundation for a safe 2015. on key topics such as driver fatigue, 2.5 rural driving, motorcycle driving, safety “We must look out for the safety and 2.0 at intersections and driver attitude. well-being of not only ourselves, but every Cummins employee,” she said. 1.5 The Road Safety Expo was a new “Every injury is preventable, and it’s event held at the end of the week 1.0 up to each of us to lead by example.” in Columbus, Indiana (U.S.A.), 0.5 where attendees safely experienced 0.0 first-hand the dangers inherent in 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 conditions such as distracted driving.

Actual Target SUSTAINABILITY PROGRESS REPORT // HEALTH & SAFETY

CUMMINS WINS PRESTIGIOUS HEALTH AND SAFETY AWARD

Cummins Chairman and CEO Tom Linebarger named for Robert W. Campbell, a accepts the Robert W. Campbell Award at safety pioneer and the first president the National Safety Council’s international Congress and Expo in San Diego. of the National Safety Council.

“The Campbell Award is terrific

recognition for the Cummins The Dow Chemical Co. (2010) and employees who have made Schneider Electric North America (2009). tremendous progress in health, safety According to the Campbell Award’s and the environment at our Company,” executive review committee, two of said Michelle Garner-Janna, Executive the primary reasons Cummins scored Director – Corporate Health & Safety. highly is because its leaders commit Cummins Chairman and Chief to safety through the Company’s Executive Officer Tom Linebarger said “Live It. Lead It.” program and he would like to see the Company use Cummins actively engages employees Health and safety is a job never done, but for a few hours the award as a starting point to raise in meaningful and impactful projects the bar on its initiatives in health, on a September night in San Diego, California (U.S.A.), in the places they live and work. safety and the environment. in 2014, Cummins’ health and safety team took a “Cummins is a true learning “Our work in safety is about caring for moment to celebrate its accomplishments. organization that continues to our people who work every day to help seek opportunities to strengthen its The Company was named the The prestigious honor goes to our Company succeed,” Linebarger outstanding approach to safety, health winner of the 2014 Robert W. companies that have successfully said. “…There is much more to do and and sustainability,” said Deborah A.P. Campbell Award by the U.S.-based integrated environmental, health we will continue to be guided by our Hersman, President and CEO of the National Safety Council. The award and safety management with their Company’s mission to demand that National Safety Council. was presented at the Council’s business operations as a cornerstone everything we do leads to a cleaner, international Congress and Expo, of corporate excellence. Past winners The Campbell Award is underwritten healthier and safer environment.” the world’s largest gathering of include Dupont (2013), Firmenich by the Exxon Mobil Corporation and health and safety professionals. (2012), UTC Fire & Security (2011), 99 SUSTAINABILITY PROGRESS REPORT // HEALTH & SAFETY

SAFETY AT CUMMINS IS PART OF EVERYONE’S JOB

Cummins Director of Global Manufacturing Engineering Jim Schoeberl remembers vividly the day he walked on a shop floor and an employee stopped him, pointing out he was violating safety rules by wearing a ring.

Schoeberl wasn’t embarrassed. In fact, manufacturing leaders have he couldn’t have been more pleased. taken a very active role in safety initiatives within their businesses. “I told him how much I appreciated This is just following their lead.” what he had done,” Schoeberl said. “I had just forgotten to take my ring off. Machine guards are anything that We all have to look out for each other.” protects an employee from a hazard while operating a machine. They When Schoeberl was asked to lead can range from a transparent shield the global roll out of a new toolkit protecting a worker from a lathe to devoted to machine guarding safety, “presence-sensing devices” that he didn’t hesitate. He’s the first automatically shut down machines Cummins leader outside the safety when any part of a worker strays organization to take ownership of a into dangerous space. global safety initiative, but he sees it as a logical extension of his work. Schoeberl was the sponsor of a Six Sigma project led by Guillermo “I’m not doing anything special,” said Castillo, the then Corporate Safety the 28-year veteran of the Company. Project Manager, looking at what Cummins Director of Global Manufacturing “This is all of our jobs. Many of our seemed like a high number of injuries Engineering Jim Schoeberl is leading Cummins’ efforts to improve machine guarding safety.

100 SUSTAINABILITY PROGRESS REPORT // HEALTH & SAFETY

“I’ve taken more than one maintenance technician to the hospital, personally,” Schoeberl said. “It’s very heartrending to see someone get hurt. You become very aware, very related to machine guarding or the the guards were forgotten after conscious of safety. You never look the other way.” lack of adequate guards. Six Sigma maintenance was performed. is the data-driven problem-solving The problem also stemmed from JIM SCHOEBERL DIRECTOR – GLOBAL MANUFACTURING ENGINEERING tool widely used at Cummins. the use of older equipment with inadequate guarding. When Castillo moved to another Schoeberl said some fixes are as designed to strengthen leaders’ position within the Company, Tremendous strides have been made simple as installing some sheet metal personal commitment to health and Schoeberl said it made sense in modern equipment including safety while others are more complicated, safety to help drive employee behavior. for him to take over responsibility features like “presence-sensing” involving movable or fixed barriers “Jim’s role in leading this initiative for the initiative. technology or “light curtains” capable and the presence-sensing technology. globally drives home the message that of shutting a machine down when Most new equipment includes the “When you think about it, machine safety is a value for Cummins at every it determines potentially dangerous latest safety devices but there are guarding safety is something that level of the Company,” Palat said. behavior is taking place. retrofits available, too. my function owns,” he said. Safety is something Schoeberl “It just makes sense.” Cummins had sent out directives The machine guarding toolkit calls takes very personally. He started on machine guarding safety, but for implementing improvements over Schoeberl leads a global team as a maintenance engineer at the leaders decided to go the next step three phases starting in 2015 through of manufacturing engineers with Rocky Mount Engine Plant in Rocky by developing a policy on the topic, installation of new safeguards in 2017. representatives in every business unit Mount, North Carolina (U.S.A.), in drawing on national and international Schoeberl has been pleased that many and sub-business unit. He was ideally 1987. As far as he’s concerned, he’s standards. Then, the Company Cummins locations are implementing positioned to roll out the toolkit and seen too many injuries over his career. developed the toolkit, including: additional safeguards right away after make sure the work got done. determining their risks. “I’ve taken more than one maintenance »» A risk assessment tool Machine guarding safety covers technician to the hospital, personally,” »» A checklist to determine Pramod Palat, Cummins Occupational a very broad area and there wasn’t Schoeberl said. “It’s very heartrending proper machine guarding Safety Director, says Schoeberl’s to see someone get hurt. You become a single factor driving the problem. involvement is consistent with the »» An implementation plan to very aware, very conscious of safety. In a few cases, guards were pushed Company’s “Live It. Lead It.” initiative. improve machine safeguarding You never look the other way.” aside to make work easier; in others, Launched in 2013, the program is »» Training on the topic

101 SUSTAINABILITY PROGRESS REPORT // HEALTH & SAFETY

‘KNIGHT KNUCKLE’ INVENTOR CREATES A SAFER CUMMINS

When Jamestown Engine Plant tool builder Kendrick Knight In the past year, his creation has gone had a “kick” of torque due to their from blueprint to patent-pending use of high-torque tools. Any time a came up with the idea for a device to improve ergonomics reality. Dubbed the “Knight Knuckle,” bolt or screw is tightened, the tool at his workplace, he did not foresee the impact his torque- it has improved ergonomics for engine creates torque once the screw reaches reducing invention would have. assembly workers, earned international full tightness. The torque is then recognition and has garnered interest transferred directly to the operator. from Cummins sites and outside Imagine a hand-held power drill for companies alike. home use. The drill is easy to hold “I can’t believe how well this project when the task begins, but starts to has been received,” said Knight, who push back against the operator’s arm has worked at the Cummins plant in as the screw becomes tighter – or fully Jamestown, New York (U.S.A.), for the torqued – in the wall. High-torque tools past two years. “The level of press and are similar, but on a much larger scale enthusiasm is really exciting, and it’s and with a much larger impact on the great to think of this tool being used at operator’s body. Cummins manufacturing sites all over “We have a lot of applications the world.” with high-torque tools,” Knight said. Knight worked in a manufacturing tool “These tools take a significant amount room for five years prior to joining the of time to use, and the process is Company. He realized the need for a hard on the employee. I saw the new tool when he saw his colleagues idea of the Knuckle as a way to solve at Cummins working on jobs that multiple problems with one new tool.” Cummins tool builder Kendrick Knight displays his invention, the “Knight Knuckle.”

102 The Knight Knuckle took first place in the THE POWER engineering category at the International Ergo Cup OF CUMMINS competition in Nashville, Tennessee (U.S.A.).

Kendrick’s invention replaces a ergonomic risk to the operator during in 2013 and a power generation “Kendrick’s project reinforces that typical torque arm tool and allows high-torque jobs. In addition to hoist improvement from one of the Cummins has incredibly innovative the operator to work from any angle. reduced strain, the Knight Knuckle Company’s joint ventures in China. employees,” said Chris Shieldsmith, In contrast to older torque arm tools shaved eight seconds off the time it the Company’s Corporate Ergonomics Out of a record 90 project submissions that have very limited positioning, takes to complete the job; over the Specialist. “He devised a simple in 2014 – all dedicated to making the possibilities for usage are course of a full day, the tool saves solution to a problem that has plagued ergonomic improvements in the greatly increased. Once positioned, approximately 45 minutes. The tool is manufacturing for decades and we’re workplace – the Knight Knuckle earned the tool locks in place, so when the also durable, having been run through very proud of his accomplishment.” the right to compete in the International “kick” occurs, the Knuckle absorbs thousands of test cycles without Ergo Cup competition at the Applied In the face of so much acclaim, it, virtually eliminating the transfer breaking down or failing. Ergonomics Conference in Nashville, Knight is still focused on one thing: of torque to the employee. The tool The Knight Knuckle won top honors Tennessee (U.S.A.). Other companies the improvements his tool has was conceptualized, designed and in the Company’s third annual Ergo participating in the 2015 International made in the lives of other fabricated in Jamestown. Cup competition. Previous first Ergo Cup competition included manufacturing employees. The implementation of the Knight place honors went to a part installation Volkswagen, Ford, Honda, “This has increased tool mobility, Knuckle has significantly reduced improvement process from Jamestown Gulfstream, Boeing and Caterpillar. improved their level of comfort The Knight Knuckle took first place in and generated a lot of excitement,” “I’m very pleased to see projects that have a the engineering category and garnered he said. “People have started asking real, positive impact on our employees’ lives. interest from outside manufacturing me to think of new solutions to their This innovation from our manufacturing companies. The tool will be deployed work problems. It’s exciting to think of employees deserves to be recognized.” at multiple Cummins sites in 2015. creating more tools and the potential

KELLI SMITH they have to help employees.” CUMMINS OCCUPATIONAL HEALTH DIRECTOR

103 SUSTAINABILITY PROGRESS REPORT // RIGHT ENVIRONMENT

RENEWING OUR COMMITMENT Chairman and Chief Executive Officer Tom Linebarger holds his annual diversity town RIGHT ENVIRONMENT CUMMINS STRENGTHENS Cummins’ commitment to diversity hall meeting at the Columbus Engine Plant in Columbus, Indiana (U.S.A.). DIVERSITY VALUE IN 2014 could be seen in many ways during 2014 and early 2015. The Indiana are perfect at managing diversity. Women’s Affinity Group at the Diversity is a core value at Cummins, which calls for its None of us are perfect at really any Company, for example, sponsored a element of leadership and the first employees to embrace the diverse perspectives of all special session for managers to talk minute we acknowledge that and people, honoring them with dignity and respect. about the Company’s diversity value say we want to get better, we’re and the issue of gender diversity in on the road to greatness.” In 2014, the Company took steps to deepen its commitment to that the workplace (to learn more about value, while at the same time re-examining many of its diversity initiatives Cummins’ efforts on gender diversity, The Company also continued to ensure they remain relevant at a growing company where more than posting personal statements from its go to page 106). 60 percent of its employees live outside the United States. leaders regarding their own diversity The event, which featured many top journeys on the Company’s internal “We really want to see how we can better work with Cummins Area Business leaders in the Company, was streamed website. In 2014, Rich Freeland, Organizations (ABOs) around the world to ensure the power of diversity is live to managers at Cummins facilities Cummins President and Chief part of everything we do,” said Kelley Bertoux Creveling, the Company’s in the United States, Mexico and the Operating Officer; John Wall, the Executive Director of Global Diversity and Right Environment. “In addition United Kingdom. Company’s Vice President – Chief to helping us create innovative products, diversity and inclusion are critical Technical Officer and Mark Osowick, to establishing a solid foundation for future growth and success that will “We’re here to get better,” said the Company’s Vice President – better serve our customers.” Cummins Chairman and CEO Tom Human Resources Operations, Linebarger at the event. “None of us all posted personal statements. 104 SUSTAINABILITY PROGRESS REPORT // RIGHT ENVIRONMENT // DIVERSITY

INVESTIGATING COMPLAINTS

A key part of any company’s efforts to create the right environment for success is the ability to investigate complaints made about employees’ A dozen leaders have now posted collaborative place as Cummins and media and public debate amid treatment of each other. diversity statements since Linebarger get a chance to explore their ideas.” growing tensions in the Middle East. kicked off the initiative in January 2013. Cummins’ diversity value is The Company also continued LOOKING TO THE FUTURE included in the Company’s Code “I can’t think of a single time when developing its employee resource While Cummins took many steps to of Conduct. The Company has diversity didn’t contribute to the groups. Cummins has more than increase its commitment to diversity Master Investigators stationed success of a project I’ve been involved 100 employee groups organized and inclusion, Creveling and her staff around the world to investigate with in my more than 28 years at around diversity. Affinity groups are also spent time in 2014 and early reported abuses of the Code. Cummins,” Wall said in his statement. employee formed and led, organized 2015 looking to the future. Employees can file complaints “Different life experiences and unique around specific demographic traits anonymously where allowed by law. sets of knowledge all add up to team such as women, African-Americans The group wanted to make sure members who can best understand or LGBT (lesbian, gay, bisexual the Company’s five-year-old diversity As a growing Company, Cummins our customers’ experiences and see and transgender). Local Diversity video and its diversity literature still saw an increase in complaints in different angles on how to target our Councils are site-based groups that resonated with employees. The group 2014. The Company investigated innovation more effectively.” are Company formed and leader led, also embarked on a project to update 1,559 reported Code violations, promoting diversity and inclusion in and expand diversity training from its up from 1,367 in 2013. About The Company built on the diversity general and working on diversity- current status as a one-time training at 45 percent of those reports statements by leaders in 2014 by related issues at particular sites. the start of an employee’s career to a came from outside the United also asking for diversity statements layered approach that stretches across States and 32 percent were from employees on their personal Finally, Linebarger held a focus group an employee’s time at Cummins. reported anonymously. diversity journeys at work (see more with Muslim employees early in 2015 on page 109). to better understand their experiences “We recognize the approach to About 48 percent of the and hear their views on how Muslims diversity and inclusion may need to total reports were ultimately “Through diversity, we can succeed are portrayed in the news and change from country to country,” substantiated in 2014, compared and reach the topmost level,” said other public media. Linebarger also Creveling said. “I want to be sure to 50 percent in 2013. Around Sagarika Dash, Account Specialist – reiterated that Cummins is a safe and we’re building strategies and plans 29 percent of the substantiated Telecom, in Pune, India. “Look at welcoming place for all employees around diversity and inclusion in ways reports resulted in terminations your present environment and you in keeping with the Company’s that support our common value but compared to 33 percent in 2013. will definitely find one instance of core values. Linebarger’s discussion allow us to flex around the world and diversity enhancing our path to The average time to close was prompted by his concern over leverage the full, creative power of success. Every employee should a case was 13 work days, growing anti-Muslim rhetoric in the all our employees to the benefit of get a chance to work in such a down one day from 2013. our customers looking for innovative

105 solutions to their power problems.” WORKING FOR A WELCOMING STATE SUSTAINABILITY PROGRESS REPORT // RIGHT ENVIRONMENT // DIVERSITY

For a second consecutive year, Cummins found itself lobbying against legislation that sent a less than welcoming message about its home state of Indiana (U.S.A.).

Senate Bill 101 in the Indiana Legislature was in general and identify diversity-related intended to increase legal protections for those DIVERSITY HELPS issues at particular sites. with strongly held religious beliefs, but several SOLVE HARD PROBLEMS The Women’s Affinity Group of Indiana businesses and advocacy groups were has long offered career development concerned the bill could be used to refuse Opening doors for women begins with an open dialogue programming to its members, such services to lesbians, gays, bisexuals and as mentoring circles, seminars by transgender (LGBT) individuals. and a commitment to workforce inclusion. Cummins leaders and other career Cummins, the Indianapolis Chamber of “When we do something that helps discussion where Linebarger enhancement activities. It is one of Commerce and other businesses opposed the us create the right environment spoke. Joining him on the panel more than 30 women’s affinity groups bill because they said it sent an unwelcoming for women, everybody benefits,” were three senior women leaders: at the Company based at locations message and could expose businesses to Chairman and CEO Tom Linebarger Jill Cook, Cummins Vice President around the world. lawsuits over religious belief claims that existing told more than 1,000 managers at of Human Resources; Tracy Embree, Cummins has also initiated law already protects. The bill was amended to Cummins attending a panel discussion Vice President and President of the recruiting programs, especially in prevent business litigation concerns, but still on gender diversity in October 2014. Components Business Unit and areas like engineering where women did not expressly state it could not be used Kelley Bertoux Creveling, Executive “It’s not an us vs. them thing,” he said. have long been under-represented. to deny services. Director of Global Diversity and “It’s us and us.” For example, the Company has been Right Environment. A media firestorm ensued throughout a major contributor to the Cummins Cummins is making progress in its efforts the United States. Cummins, along with The panel discussion was sponsored College of Engineering for Women to attract and develop women, but several members of the business and LGBT by the Women’s Affinity Group of in Pune and Nagpur, India. Cummins leaders say more can and must be done. communities, worked to include language that Indiana, one of the Company’s more India also sponsors a week of activities expressly disallows the use of the Religious In 2014, women made up about than 100 employee groups organized dedicated to women in recognition Freedom Restoration Act to discriminate on the 26 percent of the Company’s total around different facets of diversity. of International Women’s Day on basis of sexual orientation or gender identity. workforce and about 20 percent of the March 8. This year’s theme was Affinity Groups provide support and Company’s leadership ranks. In 2009, “Make It Happen.” The previous year, Cummins opposed a bill that networking opportunities for their women made up about 24 percent would have banned gay marriage in Indiana’s members in addition to representing In 2014, the Company launched the of the total workforce and about constitution. The Company maintained it would the group’s views to senior leaders Technical Women Initiative to help hire, 16 percent of its leadership ranks. make it harder to recruit the best employees and helping solve business problems. develop and retain women in technical who often look for diverse places to live. Evidence of the Company’s progress Local Diversity Councils are site- fields as part of a broader corporate That bill was not brought up for a final vote. could be seen at that same panel based groups that promote diversity commitment to diversity.

106 Jill Cook (center), Cummins Vice President of Human Resources; Tracy Embree (second from the right), Vice President and President of the Components Business Unit and Kelley Bertoux Creveling (far right), Cummins Executive Director of Global Diversity and Right Environment, join Chairman and CEO Tom Linebarger (far left) for a panel discussion on gender diversity.

As part of the Technical Women’s Jennifer Rumsey, Cummins Vice their area of expertise to both “Participation in and our support of Initiative, Cummins has been active President – Engineering, Engine expand the role of clean energy in our the conference promotes our diversity in the Clean Energy Education & Business, and Joan Wills, the collective future as well as increase core value and helps us create an Empowerment (C3E) initiative. Company’s High-Horsepower Chief the representation of women in the inclusive environment by allowing C3E was launched by the Engineer and Program Leader for field,” Wills said. “As an ambassador, our technical women to share their 23-government Clean Energy Tier 4, represented Cummins at the I’m responsible for leading and knowledge and learn from other Ministerial in 2010. The Initiative inaugural symposium, where Rumsey participating locally, nationally and women in the same field,” he said. was born out of recognition that spoke as part of a panel discussion globally in efforts to increase the Linebarger says a successful the ideas and talents of all members on the topic of “Mobilizing Change in representation of women in the workplace depends on a pipeline of society are essential to meeting the Private Sector.” Hélène Cornils, field of clean energy.” of female leaders who are ready future clean energy challenges. Engineering Director of Global Lab Dr. John Wall, Cummins Vice and encouraged to move up Operations, has also represented Since then, the Massachusetts President and Chief Technical Officer, within the Company. Cummins at C3E events. Institute of Technology (MIT) has said the Technical Women’s Initiative “Diversity, rather than sameness, been the leading institution backing Wills currently serves as one of and groups like C3E are important is what helps us solve complex the group in the United States and 37 international C3E Ambassadors, for several reasons. problems,” Linebarger said. Cummins has been a corporate executive-level leaders who work “Cummins supports and engages “There’s a lot of research about this sponsor. Starting in 2012, annual together to advance women’s in the C3E Symposium because that’s pretty compelling. My personal symposiums at MIT have provided participation and leadership in it’s important to endorse women experience agrees with it. Sameness women working in clean energy the sector. in the area of clean energy and in drives harmony, especially at the front, with a range of perspectives “The group has a variety of educational the technical function,” Wall said. and diversity solves hard problems.” and expertise on clean energy backgrounds but share a common link challenges and opportunities, of being female leaders working in as well as a chance to network. 107 SUSTAINABILITY PROGRESS REPORT // RIGHT ENVIRONMENT // DIVERSITY

DEVELOPING A TRULY GLOBAL WORKFORCE 23.68% WOMEN IN THE 25.91% Diversity at Cummins has long been about more than representation. But as a truly WORKFORCE global company, Cummins wants to develop a workforce that closely resembles the demographics in the countries and markets where it does business. 2008 Company leaders pay special attention to some key metrics of under-represented groups at Cummins, such as women. An employee’s country of birth is another key metric to ensure leadership isn’t limited to one country or group of countries. Here’s a look at what’s been happening in these areas from 2008 to 2014. 2014 COUNTRY OF BIRTH FOR THE WORKFORCE COUNTRY OF BIRTH FOR THE WORKFORCE WOMEN LEADERS 16.42% 40% IN THE WORKFORCE

19.61% 30% 2008 20%

10% 2014 BRAZIL AUSTRALIA CHINA INDIA MEXICO REST OF WORLD* UK UNITED STATES 0% 2008 2014 2008 2014 2008 2014 2008 2014 2008 2014 2008 2014 2008 2014 2008 2014 COUNTRY OF BIRTH FOR MANAGERS COUNTRY OF BIRTH FOR LEADERS 60% WORKFORCE BY LOCATION More than half the Cummins workforce works outside the United States. 50% Here’s a look at where Cummins employees were in 2014. 40%

40% 30% 30%

20% 20% REST OF WORLD*

REST OF WORLD* 10% 10% CHINA AUSTRALIA BRAZIL MEXICO BRAZIL AUSTRALIA CHINA INDIA MEXICO UK UNITED STATES INDIA UK UNITED STATES 0% 2008 2014 2008 2014 2008 2014 2008 2014 2008 2014 2008 2014 2008 2014 2008 2014 0% *Rest of world108 category includes countries with less than 1,000 Cummins employees. SUSTAINABILITY PROGRESS REPORT // RIGHT ENVIRONMENT // DIVERSITY

DIVERSITY AT WORK

To help promote Cummins’ diversity value, the Company collected personal diversity stories from employees around the world. Here are excerpts from three:

“When I was assigned to the Power Electronics “Approximately two years ago, my team and I were “Working for Cummins I had to expand my organization within PGBU-India, my teammates working on the delivery of our first machine to a key knowledge, understand that change was inevitable included people from all over India – North, South customer. We were at risk to deliver late and we had and that I could grow from it rather than fear it. I and West. The more I worked with them, the only one chance to make a good first impression. needed to depend on the strengths and support of co-workers to accomplish the goal. more I came to know their nature, their work I went down to the workshop to see how things were progressing. I witnessed Rauf from Pakistan, approach, the different mindsets of each In 2005, I took a role in the engineering function Tanmay from India and Dhanushka from Sri Lanka person and the diversity in perceptions. where the window was opened even wider. all working together, helping each other to make All of these experiences taught me the Although I haven’t had the opportunity to travel sure we could deliver on time to our customer. quality of the meaning of diversity. It made outside the U.S. for work, I have had the pleasure We were a small team and everybody worked well of working with many people throughout the world – me believe that, through diversity, we can together across functional boundaries – there was through the phone, email and video conferencing. succeed and reach the topmost level. Look at no direct managerial direction. A job had to be Many of my co-workers grew up in other countries, your present environment and you will definitely done and the team just got on and did it. and through conversation and pictures I’m able to find one instance of diversity enhancing our …Looking back in history, their countries have hear about and see their life experiences to better path to success. Every employee should get a been fraught with political and diplomatic issues; understand diverse views and beliefs. chance to work in such a collaborative place as yet, these three individuals put their respective When I think back to my younger days on the farm, Cummins and get a chance to explore their ideas.” strengths together to make sure we, and our my view of the world was so narrow and I felt that customer, were successful.” most of the world lived like me. Today, I have a connection to many parts of the world through my co-workers and I find strength in being part of a global team.”

SAGARIKA DASH NICOLAS BERTRAND KRIS SWENSON Accounts Specialist – Telecom General Manager – Visig & Hybrid Technical Specialist Pune, India Stamford, Lincolnshire,109 United Kingdom Stoughton, Wisconsin (U.S.A.) SUSTAINABILITY PROGRESS REPORT // RIGHT ENVIRONMENT // DIVERSITY PROCUREMENT

DIVERSITY PROCUREMENT CELEBRATES OUTSTANDING YEAR

Cummins’ diversity procurement initiative reached its long-standing goal of $1 billion in spending with diverse suppliers across eight categories in 2014, and laid the foundation for future growth.

Spending with diverse suppliers “Now we need to leverage diverse in 2014 reached $1.2 billion in the suppliers in areas where historically U.S., up about 21 percent over the Cummins has not had diverse supplier $990 million spent in 2013. Looking exposure. This effort will lead to just at minority-owned and women- sustainability within the initiative owned businesses, the Company and further supply chain excellence.” spent about $926 million in 2014. Cummins has long had a robust Meanwhile, Cummins’ efforts continued focus on diversity procurement. to show promise outside the United By working with diverse suppliers, Cummins Chairman and CEO Tom Linebarger States. Diverse spend connected to the Company increases competition COMMUNICATIONS talks to Cathy Langham, President and CEO of Cummins Area Business Organizations for its business, which ultimately The Company made communicating Langham Logistics, at a symposium on diversity procurement sponsored by the Company. (ABOs) reached $291.3 million, decreases costs and improves with diverse suppliers a top priority sending global spend with diverse service. At the same time, diversity in 2014, launching several different suppliers to nearly $1.5 billion. procurement develops economic initiatives to address that over the Cummins Chairman and CEO Tom growth in all of the communities where course of the year. Linebarger discussing Cummins’ desire “We had a very good year in Cummins employees live and work. to promote diversity procurement. terms of raising the visibility of A new website is designed to make diversity procurement at Cummins,” it easier for diverse suppliers to learn “The need for diversity is really a said Michelle Taylor, the Company’s about the opportunities at Cummins. priority at every level of the company,” Diversity Procurement Director. It includes a video featuring Taylor and Linebarger says on the video,

110 Cummins’ spending with THE POWER diverse suppliers has more OF CUMMINS than doubled since 2009.

adding that diversity brings different SYMPOSIUM in Orlando, Florida, and Millwood Spending on diverse suppliers perspectives, which can contribute Cummins in 2014 also sponsored its serves on the Board of the Mid-States in millions of dollars to creative solutions that are good Minority Supplier Development Council first diversity procurement symposium The total amount of money Cummins for the Company and its customers. spent with diverse suppliers since 2009. since 2006. The event drew some (MSDC), which covers Central Illinois, Indiana and Eastern Missouri. Taylor said having Linebarger part 400 participants including many people 1200 in the Company’s purchasing function of the video sends an important ACHIEVEMENTS message, showing suppliers that who got a chance to meet and talk to The diversity procurement team made 1000 the Company’s top leadership is diverse suppliers. progress on its goal of taking diversity serious about diversity procurement. Linebarger spoke at the event as well procurement outside the United States. 800

The website also tells prospective as Lisa Yoder, Vice President – Global In addition to seeing diverse spending diverse businesses how to work with Supply Chain and Manufacturing, and 600 connected with the Area Business Cummins. The Company works with Timothy Millwood, Vice President – Organizations increase to nearly diverse suppliers in eight categories – Purchasing. More than 70 potential $300,000, Cummins was named 400 minority business enterprises, women suppliers who were not doing Minority Supplier Development business enterprises, service disabled business with Cummins then Council for the U.K.’s Corporation of 200 veteran owned small businesses, had booths as part of the event. the Year for its leadership in diversity

lesbian, gay, bisexual, transgender $432.7 million $544.9 million $810.1 million $890 million $990.4 million $1.204 billion “Our leaders talked about the procurement in the United Kingdom. 0 owned businesses; historically under- 2009 2010 2011 2012 2013 2014 importance of supplier diversity and utilized business zone businesses; That was not the only award Cummins then many of our purchasing staff had small disadvantaged businesses won in 2014. The Company was a chance to meet diverse suppliers and philanthropic enterprises. also named 2014 Mid-States MSDC so it was a great day for diversity Corporation of the Year for its diversity The website includes the stories procurement,” Taylor said. procurement efforts in the United behind diverse suppliers Cummins Several Cummins supply chain leaders States. It was the second year in is already working with to give also showed their commitment to a row that Cummins won that honor. visitors examples they can study. diversity procurement by attending the And a newsletter keeps the supplier National Minority Supplier Development diversity community informed about Council’s National Conference in 2014 the latest happenings at the Company.

111 SUSTAINABILITY PROGRESS REPORT // RIGHT ENVIRONMENT // WORKFORCE

EMPLOYMENT BY THE NUMBERS

Here’s a quick look at Cummins’ workforce in 2014.

Most Cummins employees live outside the United States CUMMINS ‘HIRE TO DEVELOP’ Inside the United States PHILOSOPHY 38 percent

Employee development at Cummins starts with Global In addition, Cummins Learning Center offers numerous online Outside the OnBoarding and continues through a host of learning United States learning opportunities in multiple 62 percent opportunities with a special emphasis on leadership. languages both in and out of an employee’s particular area of expertise. The Company believes leadership After that, there are a host of These range from courses within is critical to Cummins’ future and development opportunities for engineering to courses on the About a third have some works to develop leadership skills employees not only so they can kind of background in business problem-solving tool Six at every level of the Company. master their current jobs but look science or technology Sigma and courses in leadership. Cummins believes all employees ahead to their next positions Engineers 16.2 percent provide leadership whether or at the Company. CRITICAL FEEDBACK not they have employees Information These opportunities range from New office and professional Cummins Technology reporting to them. 2.3 percent courses on managing direct reports for employees are introduced to the Engineering This approach to employee a population of 5,000 leaders globally Company’s Performance Management or science development is a key part of to master’s in business administration System during onboarding classes. degrees but not in engineering the Company’s efforts to make (MBA) classes for annual cohorts of The program was created to ensure 12.4 percent Cummins a great place to work. 30 people offered in collaboration employees know their managers’ with the Kelley School of Business at expectations, including both what About a third of A LEARNING ENVIRONMENT Indiana University in the United States. they need to accomplish and how Cummins employees are represented by a union Most employees get a full week of they should accomplish it. Cummins also offers ex-patriate Employees onboarding to learn about Cummins’ It uses a web-based tool to facilitate represented culture and foundational initiatives assignments so high-performing by a union employees can get experience in and document the most important 32 percent such as the Company’s Code of part of performance management – Conduct; Vision, Mission and different countries and rotational assignments so they can gain meaningful one-on-one conversations Non-union Values and key initiatives such between a manager and his or her employees as Customer Support Excellence. experience in different operations 68 percent within the Company. direct reports. Employees also get

112 feedback from a wide range of COMPENSATION / BENEFITS stakeholders including peers, which Providing a competitive becomes increasingly important compensation and benefits as they advance and their work package is important at Cummins. environment becomes more complex. The health and well-being of the With more than half of Cummins’ Company’s employees is a priority employees living outside the United at all global locations and Cummins States, the Company takes a global has developed programs tailored view of workforce development. One of Cummins’ most successful Cummins believes all employees provide to meet the needs of employees The Performance Management leadership whether or not they have programs has been the “Building and their families. system is available in multiple employees reporting to them. Success in Others” initiative. Launched languages for about 25,000 office Compensation, health and in 2011, this multi-component program and professional employees. retirement benefits vary by includes web-based courses, live The 18-month program prepares location and are designed to be webinars and an intensive, three-and- LEADERSHIP DEVELOPMENT about 20 high-potential employees competitive within the local markets a-half day course focused primarily Cummins believes nothing is from within one specific Area and countries where the Company on helping leaders of professional as career limiting as a bad boss Business Organization at the does business. Cummins complies employees better understand the and work that is without meaning. Company for global leadership roles. with the law everywhere and Company’s expectations for them as Leaders and managers learn early establishes market-based wages leaders and how to develop the skills This program plays a major role in on that they must master five skill independent of a person’s gender necessary to fulfill those expectations. developing future leaders from outside areas that Cummins believes are or any other demographic trait. the United States. It wrapped up in essential to great leadership: The program has now been South America and Africa in 2014 Cummins takes an innovative » How to coach and develop implemented in China, India, » and is moving back to India and approach in its benefits programs. Singapore, South Africa, South Korea, »» Fostering open communications China in 2015. In healthcare, the Company has the United Kingdom and the United hired a chief medical officer to help »» Managing diversity States and the Company is looking for In all these ways and others, Cummins Cummins build a culture of health »» Talent management ways to extend its concepts to others. promotes a culture of career-long and well-being (page 127). learning and development so all »» Thinking strategically / The Global Leadership Development employees can achieve satisfaction in Setting the aim Program is another important their work and reach their career goals. leadership development initiative. 113 SUSTAINABILITY PROGRESS REPORT // GOVERNANCE

CUMMINS ENCOURAGES BROADER ADOPTION OF ETHICAL PRINCIPLES

Cummins guides employees and suppliers toward ethical behavior through its codes of conduct and related training. But the Company also strives to hold everyone who does business on Cummins’ behalf to the same high ethical standards. GOVERNANCE The Cummins Code of Business Conduct outlines 10 Ethical Principles that help make Cummins a sustainable company and a great place to work.

01 We follow the law everywhere. 06 We will protect our technology, 02 We will embrace diverse our information and our perspectives and backgrounds, intellectual property. and treat all people with dignity 07 We will demand that our and respect. financial records are accurate 03 We will compete fairly and that our reporting and honestly. processes are clear and understandable. 04 We will avoid conflicts of interest. 08 We will strive to improve our communities. 05 We will demand that everything we do leads 09 We will communicate to a cleaner, healthier honestly and with integrity. and safer environment. 10 We will create a culture Vice President of Ethics and Compliance Mark Sifferlen discusses creating a culture where employees take of ethics with Customer Care Manager responsibility for ethical Marcya Carter in Nashville, Tennessee (U.S.A.). behavior. 114 SUSTAINABILITY PROGRESS REPORT // GOVERNANCE

The Code of Business Conduct concerns can remain anonymous An area of focus has been and the Company plans to share is translated into 16 languages and where allowed by law. working to strengthen compliance additional training with them in 2015. posted globally on the Company’s in the Company’s distribution As a global company, Cummins relies In 2014, Cummins acquired seven internal website and also on cummins. channel, especially in emerging on a number of external companies North American distributors and has com, the Company’s external website. markets. Cummins is working and vendors to sell and service its offered several in-person trainings. The Code of Business Conduct with these partners to implement products, bid on business, obtain includes scenarios regarding each written anti-bribery and export “We’ve been able to visit many of licenses and permits, and interact principle to provide real-world context. control policies. Ethics and the newly acquired North American with officials to move products Compliance staff review policies Distributorships in person to All Cummins employees are held across borders. This group and identify possible gaps. help ensure they understand key to these high standards and have includes independent distributors To date, the Company has helped compliance areas like our Code of an obligation to report suspected and dealers, sales agents, approximately 75 distributors Business Conduct and the Treatment violations. They have multiple ways consultants, customs brokers, or dealers finalize anti-bribery of Each Other at Work policy,” said to report their concerns, including and a number of other people. and export control policies. Mark Sifferlen, Vice President of speaking to a manager, a Human Cummins employees in the Ethics and Compliance. Resources representative or a Cummins is also helping its Company’s Ethics and Compliance member of the Cummins Ethics distributor partners in emerging Cummins’ long-term goal is to organization are actively working to and Compliance team. Employees markets communicate the policies develop a plan to ensure each strengthen compliance in this area can also report concerns on the to their employees and provide them and every entity that works with the by improving due diligence around Company’s ethics website or on the access to the Company’s online Company abides by the 10 Ethical compliance processes, enhancing Cummins Ethics Help Line, a hotline anti-bribery training course. Principles that make up Cummins’ contract language and delivering accessible around the world. Phone More than 500 employees from Code of Business Conduct. compliance training to high-risk numbers are available on the ethics Cummins’ independent distributors third parties who conduct business website. Employees reporting have successfully completed training on the Company’s behalf.

115 SUSTAINABILITY PROGRESS REPORT // GOVERNANCE

SUPPLIER CODE OF CONDUCT TRAINING Almost 25,000 employees received

Cummins’ Supplier Code of Conduct, last updated in 2013, applies to all To ensure Cummins employees these two training courses in 2014. businesses that provide products or services to Cummins and its subsidiaries, understand the Code of Business As of March 1, 2015, completion joint ventures, divisions or affiliates. Available in 15 languages, the Supplier Code Conduct, its underlying Company rates were 91 percent for Careful of Conduct helps Cummins ensure that it’s doing business with other companies policies, and their role in adhering to Communications and 86 percent around the world that share Cummins’ values for sustainable practices. both, Cummins uses a comprehensive for Doing Business Ethically. compliance training program to All new suppliers receive a copy of the Supplier Code of Conduct and Cummins ENFORCEMENT AND target appropriate employee groups. encourages them to adopt it. If the supplier already has another code that meets CERTIFICATION the Company’s minimum requirements, Cummins sometimes agrees to let them In 2014, Cummins released two new The Code of Business Conduct is use their existing code. The Company’s top suppliers, who collectively receive mandatory online training courses – only effective when it is enforced. 80 percent of Cummins’ total spending, are required to certify their intent to Careful Communications at Work Employees understand their comply with the Supplier Code of Conduct. and Doing Business Ethically – on the obligations to report concerns Cummins Learning Center, Cummins’ thanks to regular training and The Supplier Code of Conduct is built around seven principles: in-house learning management an annual certification process 01 Suppliers must follow the law. system. Doing Business Ethically that requires them to certify their combined separate courses on compliance with the Code of Conduct 02 Suppliers must treat all people with dignity and respect. conflicts of interest, export controls and related policies, and report any 03 Suppliers must do business fairly and honestly and and fair competition, while Careful exceptions to Company policy. avoid conflicts of interest. Communications addressed social In 2014, 18,979 employees and 04 Suppliers must protect the environment. media usage for the first time, as well officers, including all members of as document retention policies and 05 Suppliers must provide a safe and healthy working environment. the Board of Directors, completed safe handling of intellectual property. 06 Suppliers must protect Cummins technology, information and the annual Ethics Certification. intellectual property. “This consolidated course on doing That compares to 18,034 completed business ethically gives employees certifications in 2013. Internal Audit 07 Suppliers must assist Cummins in enforcing this Code. exposure to a number of significant and the Cummins legal staff reviewed topic areas and drives home any exceptions to ensure they were important policies in a more documented and investigated. cohesive way,” Sifferlen said. (See page 105 for more on the investigation process.)

116 COMPLYING WITH NEW LAWS COMPLIANCE TRAINING Another important part of the Ethics Thousands of employees receive compliance training every year at Cummins. and Compliance organization’s job These figures are accumulated enrollments for active Cummins employees is to monitor any new compliance laws and determine how those laws going back to when the training courses were first implemented. affect Cummins. In 2014, Cummins The oldest courses extend back to 2005. complied with a U.S. law requiring publicly traded companies to disclose whether or not they use tin, tungsten, PERCENT TRAINING ENROLLED COMPLETE COMPLETE tantalum and gold in their products. Anti-Bribery 25,639 25,090 98% These minerals, also known as conflict minerals, sometimes originate Antitrust and Fair Competition 8,084 8,018 99% from the Democratic Republic of Careful Communications 25,799 25,293 98% Congo or an adjacent country and Code of Business Conduct (online refresher) 22,219 18,529 83% may help fund armed groups that are Conflicts of Interest 20,853 20,337 98% responsible for violence and human Doing Business Ethically 25,258 22,886 91% rights violations in that region. Export Compliance 16,579 16,165 98% A specialized disclosure report is Global Competition Principles and Practices 10,454 10,137 97% available at cummins.com under Information Protection 21,157 20,559 97% Investors and Media > Code of Business Conduct > Conflict Minerals. Intellectual Property 5,518 5,470 99% Lobbying and Political Activity 575 561 98% Cummins developed and implemented Records/Information Management 21,017 20,412 97% a conflict minerals program, including a policy and related processes to Treatment of Each Other At Work (online refresher) 12,902 12,902 100% evaluate the use and source of Fair Labor Standards Act 604 578 96% these minerals in Company products. Managing Within the Law 465 462 99% Cummins’ policy is to strive to ensure Code of Business Conduct (initial classroom) 49,572 46,688 94% that minerals in its products come Treatment of Each Other At Work (initial classroom) 49.572 46,643 94% from conflict-free sources.

117117 SUSTAINABILITY PROGRESS REPORT // GOVERNANCE // BOARD OF DIRECTORS

BOARD LEADS CUMMINS INTO THE FUTURE

Cummins’ Board of Directors oversees the Company’s affairs, while representing and protecting the interests of Students from the Cummins College of Engineering for Women show senior Company leaders and its shareholders. It is responsible for exercising sound and Board members the off-road vehicle they race in the Baja Society of Automotive Engineers (SAE) India competition. The Board visited Cummins India in February 2015. independent judgment regarding significant strategic and operational issues. with a focus on growing business The Board monitors a number in emerging markets. In his current of issues including: role, he is accountable for revenue, The Board also advises senior As Chairman and CEO of TE »» Performance of the Company management and adopts governance Connectivity, Lynch is credited profit and client satisfaction in Japan, »» Performance of senior management principles consistent with Cummins’ with transforming the company Asia Pacific, Latin America, Greater Vision, Mission and Values. as it transitioned from the former China Group, and the Middle East »» Compliance with all applicable electronics segment of Tyco and Africa. laws and regulations Chairman and CEO Tom Linebarger International to a separate and »» Communications and is the only Cummins employee on The Board reflects the Company’s independent public company. relationships with stakeholders the Board. All Cummins directors commitment to diversity including TE Connectivity (NYSE:TEL) is a are elected annually. two women, an African American »» Effectiveness of internal controls $14 billion technology company and two Latino men within its ranks. and risk management practices The board consists of 10 members, and a world leader in connectivity nine from outside the Company. and sensor solutions. Additionally, the Board takes an active COMMITTEES In 2015, shareholders elected two role in fulfilling its responsibilities. Di Leo is a native of Peru who Cummins’ Board of Directors new independent directors to the In February 2015, Board members, has more than 35 years of business has six standing committees: Company’s Board – Thomas J. Lynch, along with the Cummins Leadership leadership experience in multinational »» Audit Committee Chairman and Chief Executive Officer, Team, visited several Cummins environments. During his 40-year TE Connectivity, and Bruno Di Leo, sites in India, stopping in Pune, »» Compensation Committee career at IBM, Di Leo has worked Senior Vice President, Sales & Phaltan and Delhi to see progress, »» Executive Committee in a number of executive positions Distribution, IBM Corporation. meet with employees and visit »» Finance Committee Cummins facilities.

118 »» Governance and Nominating Committee

»» Safety, Environment and Technology Committee CUMMINS ROBERT J. BERNHARD DR. FRANKLIN R. BRUNO DI LEO CHANG DIAZ Cummins complies with all New Vice President for Senior Vice President, Sales York Stock Exchange and regulatory BOARD OF Research and a Professor of Chairman and CEO of Ad & Distribution for the IBM Engineering at the University Astra Rocket Company, a U.S. Corporation. He joined the requirements concerning the DIRECTORS of Notre Dame. He joined spaceflight engineering company Board in 2015. membership of certain committees. the Board in 2008. based in Houston, Texas. He joined the Board in 2009. INTERNAL AUDIT

Cummins Internal Audit function provides board members and senior leaders independent and objective information on the performance of the Company.

The Vice President – Internal Audit reports to the Audit Committee of STEPHEN B. DOBBS ROBERT K. HERDMAN ALEXIS HERMAN N. THOMAS LINEBARGER the Board of Directors. In 2014, Retired Senior Group Managing Director of Chairman and CEO of Chairman and Chief Executive President at Fluor Kalorama Partners, LLC, New Ventures, LLC, a Officer, Cummins Inc. He the Internal Audit group published Corporation, a Fortune a Washington, D.C.-based corporate consulting joined the Board in 2009. 85 audit reports and memos. 500 company that offers consulting firm. He joined company. She joined the engineering, procurement, the Board in 2008. Board in 2001 and currently construction, maintenance, To ensure management has serves as Lead Director. and project management addressed and identified risks services. He joined the Board in 2010. and implemented corrective action, Internal Audit has a formal follow-up process. The responsible business or function leader must present a corrective action plan to the Audit Committee of the Board of Directors when a function or business receives THOMAS J. LYNCH WILLIAM I. MILLER GEORGIA R. NELSON an “unacceptable” audit grade. Chairman and Chief Executive President of the New York- President and CEO of Officer, TE Connectivity, a based Wallace Foundation PTI Resources, LLC, an world leader in connectivity focused on K-12 education independent consulting firm. and sensor solutions. He joined and the arts. He joined the She joined the Board in 2004. 119the Board in 2015. Board in 1989. SUSTAINABILITY PROGRESS REPORT // GOVERNANCE // RISK MANAGEMENT

STRESS TESTS PUT CUMMINS PLANTS IN THE MIDDLE OF SIMULATED DISASTERS

The best way to mitigate risk is to understand it, and plants in the United Kingdom were two teams. One team was responsible put through a stress test simulating for immediate responses such as Cummins Enterprise Risk Management is working hard a critical event at those sites. accounting for employees and with leaders throughout the Company to identify, assess, working with outside emergency Five experts from areas including prioritize and mitigate risks that could harm Cummins. responders, while the other team business continuity, command focused immediately on longer-term In 2014, Enterprise Risk normal operations in case the site is and control, communications, goals such as business continuity, Management refreshed its enterprise impacted by a critical event such as information technology and rerouting incoming shipments and risk assessment process; updated the an information technology or power emergency response simulated rebuilding infrastructure. risk management vision and mission; outage, labor strike, natural disaster a significant event impacting identified collaboration opportunities or other significant event. each site, putting the sites “The stress test is an excellent across multiple risk and assurance through a realistic, high-impact, simulation that puts you in the Last year, as part of Cummins’ groups and continued developing and high-stress situation. Various risk- middle of a real life scenario in a safe efforts to assess the effectiveness rolling out business continuity plans related corporate groups from within environment,” said Gareth Hopkinson, of business continuity plans in a around the world. Cummins also participated in and Plant Manager at the Cummins real-world test, the Cummins Risk observed the stress tests. Generator Technology plant in With hundreds of locations globally, Insurance group identified business Stamford, U.K. “The lessons you learn Cummins wants each of its sites continuity consultants who partnered The consultants played important are extremely valuable as we all look to have a business continuity plan with the Company to do just that. roles throughout the exercise, to build our business resilience.” in place to speed resumption of Leadership at two manufacturing both role-playing the situations and also coaching the site leadership Cummins plans to conduct additional “The stress test is an excellent simulation that puts teams throughout the exercise to stress tests at other facilities globally you in the middle of a real life scenario in a safe strengthen their ability to respond as part of the implementation of environment. The lessons you learn are extremely to these events. a broader long-term strategy to valuable as we all look to build our business resilience.” consistently apply risk management During the exercise, the consultants practices across the global enterprise. GARETH HOPKINSON had the leadership group split into CUMMINS PLANT MANAGER – GENERATOR TECHNOLOGY PLANT, STAMFORD, U.K.

120 SUSTAINABILITY PROGRESS REPORT // GOVERNANCE // GLOBAL SECURITY

CUMMINS FOCUSING ON EMPOWERING EMPLOYEES TO REDUCE CYBER SECURITY THREATS

Data breaches have become major corporate headaches sensitive databases. All of this work said Andrew Lamm, Corporate coincides with a strong partnership Security’s Information Asset and headlines over the past year. with the IT Security team. Protection Program Director. In response to these high-profile “In the past, protecting our data fell Employees who believe fraud or Looking ahead to 2015 and beyond, breaches, Cummins Global Security, mostly to those with cyber security in theft has occurred are urged to the Global Security team will continue working together with Corporate their job descriptions,” said Shelley quickly report their concerns to focusing on educating employees Information Technology (IT), is Stewart, Executive Director of Security the Cummins Response Center, on key security behaviors that best proactively engaging employees to and Facilities at Cummins. “We now a 24/7 virtual operations center, protect the needs of Cummins be on the lookout for potential attacks. realize that we need to support our which also investigates high-risk customers and shareholders. IT Security team by empowering Whether it’s the disclosure of internal fraud attempts and unusual activity. employees to identify and report The team will also continue working communications, personal identifying security threats.” “We are focusing on building a to ensure Company employees and information or customer email security culture so that employees information assets are part of an addresses, Cummins IT Security group Over the past year, Cummins has feel empowered to properly handle environment consistent with its and Global Security are incorporating launched a two-pronged internal information and report concerns,” motto, “Safe. Sure. Secure.” cyber security threats into a broader plan to help employees prevent corporate security strategy. security breaches and ensure a quick “In the past, protecting our data fell mostly to response in the event of an attack. Cummins IT Security group ensures those with cyber security in their job descriptions. that Cummins’ information is protected Prevention efforts include additional We now realize that we need to support our by a strong network and properly training on data classification and IT Security team by empowering employees hosted applications while Cummins handling, ongoing security updates to identify and report security threats.” Global Security team focuses on and refresher courses, moving away SHELLEY STEWART establishing the right behaviors and from the use of USB drives and CD- CUMMINS EXECUTIVE DIRECTOR – SECURITY AND FACILITIES tools for employees to properly handle ROMs and monitoring the use of and store Company information. 121 SUSTAINABILITY PROGRESS REPORT // GOVERNANCE // GOVERNMENT RELATIONS

GOVERNMENT RELATIONS AND POLITICAL ACTIVITY

Cummins’ government relations employees are working The Company is also working to CORPORATE CONTRIBUTIONS improve communities in the U.S. around the world on issues that have a significant impact Cummins bans contributions using and globally by supporting efforts to corporate funds to candidates, on the Company, such as energy policy, environmental expand access to quality education political parties and independent and training as well as opposing standards and enforcement, taxes, trade, transportation, political expenditures, including legislation that threatens Cummins’ education and more. advertisements that support or commitment to diversity and oppose individual candidates. The Company maintains an office greenhouse gas and fuel consumption fair treatment for all employees. in Washington, D.C., but with half standards for commercial vehicles. The Company also will not use Cummins belongs to a number of Cummins’ sales coming from corporate funds to contribute to The Cummins government relations of trade organizations to further outside the United States, the 501 (c) (4) and 527 tax-exempt staff also works to foster greater its business interests. These Company also has government groups in the United States that international cooperation and organizations help the Company relations employees in China, are engaged in political activity or understanding between the various by leveraging Cummins’ resources India, Russia and South America. make payments to influence ballot countries in which the Company with other companies on issues issues unless the contribution or The Cummins government relations operates. Cummins has hosted where they share similar positions. payment advances an issue directly team works to ensure that Cummins’ international visitors at the While Cummins might not agree with tied to the Company’s core values voice is heard by government Company’s headquarters in the positions these associations take and business interests. policymakers across the globe. Columbus, Indiana (U.S.A.), and on every issue, the Company believes For example, the Company works other sites. The Company also hosted In those cases, Cummins is participating in these groups helps extensively in multiple countries U.S. and other government visits at committed to publicly disclosing ensure government officials know and regions to promote and protect its international sites to encourage any payments including recipient where Cummins stands on matters global emissions standards from best practice sharing on issues like names and amounts. critical to the Company. delay or modification and supports emissions enforcement, development In June 2014, the Company government efforts to establish of fuel-economy standards and contributed an additional $22,000 combined heat and power projects. to Freedom Indiana, the principal

122 SUSTAINABILITY PROGRESS REPORT // GOVERNANCE // GOVERNMENT RELATIONS

opposition group to Indiana House »» The Company will not reimburse LOBBYING Joint Resolution 3, a proposed employees directly or indirectly The following is a list of U.S. trade organizations to which Cummins amendment to the Indiana for political contributions. paid dues in excess of $50,000 during calendar year 2014 and the constitution banning gay marriage. »» Employees will not be pressured to U.S. Chamber of Commerce, which fell below the $50,000 threshold. In 2013, Cummins contributed contribute to CIPAC or make any $100,000 to the group, which was Listed with each entity is Cummins’ estimation of the portion of these other personal political contribution. disclosed in the 2013-2014 report. dues used by each organization for lobbying or other political expenditures. »» A decision not to contribute to CIPAC CIPAC shall not disadvantage The American Trucking Association In the United States, political an employee’s career in any way. $13,100.64 contributions are made by the Contributions to political candidates Cummins Inc. Political Action and political organizations are based The Business Roundtable Committee (CIPAC), and the on the following criteria: $26,282.88 committee is funded solely by voluntary employee contributions. »» Public integrity of the candidate The Diesel Technology Forum »» Representation of a Cummins CIPAC makes contributions to federal $127.00 facility or employees and state candidates on a bipartisan The Engine Manufacturers Association basis after review and approval by »» Support for issues of CIPAC’s Executive Committee and importance to Cummins $9,592.00 according to federal and state »» Timely and effective The National Association of Manufacturers election law. constituent service $14,445.42 For a complete list of the political »» Political leadership or organization U.S. Chamber of Commerce action committee’s contributions »» Support for the Company’s values to candidates, go to www.fec.gov. $10,000.00 All of CIPAC’s political activities are CIPAC is governed by corporate disclosed to the Cummins Board policies and bylaws that state: of Directors in an annual political »» All CIPAC contributions are contribution report. strictly voluntary.

123 SUSTAINABILITY PROGRESS REPORT // THE POWER Cummins reported record FINANCIAL & OPERATIONS revenues in 2014 despite weaker OF CUMMINS demand in Brazil and India.

CUMMINS ACHIEVES RECORD FINANCIAL YEAR IN 2014 Cummins reported record financial results in 2014 driven by higher revenues in North America, which more than offset lower

FINANCIAL & OPERATIONS demand in Brazil and Europe.

Revenues over the year increased 11 percent to $19.2 billion. Meanwhile, revenues in North America increased 20 percent over the same time period while international sales went up 2 percent as growth in China offset weaker demand in Brazil and India.

Net income attributable to Cummins for the full year was $1.65 billion ($9.02 per diluted share), or $1.67 billion ($9.13 per diluted share) excluding one-time items, up from $1.48 billion ($7.91 per diluted share) in 2013.

EBIT (Earnings Before Interest and Taxes) was $2.5 billion or 13 percent of sales for 2014. Excluding one-time items, EBIT was $2.53 billion or 13.2 percent compared to $2.16 billion or 12.5 percent of sales in 2013.

Production started in 2014 on the G Series platform in China, a new global heavy-duty engine designed to meet a broad variety of on-highway and off-highway uses in the region.

124 SUSTAINABILITY PROGRESS REPORT // FINANCIAL & OPERATIONS

PUSHING FOR TRADE LEGISLATION

Chairman and CEO Tom Linebarger is working with other business leaders through the U.S.-based “We reported record revenues and Distribution businesses and higher primarily into research and Business Roundtable to push for in 2014 despite weak economic earnings in the Engine Business. development (page 63). Trade Promotion Authority for the conditions in several of our most Full-year sales in Components “We continued to invest in future president of the United States. important international markets,” were up 18 percent compared growth, reflecting our commitment to said Cummins Chairman and CEO The legislation would allow to the year before while overall technology and product leadership, Tom Linebarger. “Revenues grew President Obama to pursue trade sales in Distribution were up while growing EBIT faster than sales,” 11 percent as demand in on-highway agreements that open more markets about 38 percent compared to 2013. Linebarger said. markets in North America improved, for American goods and services. The Engine Business Unit, meanwhile, we continued executing our distributor The Company also increased was up about 9 percent for overall For the better part of 75 years acquisition strategy and we delivered its dividend by 25 percent and sales compared to the year before. until 2007, Congress authorized strong growth in China driven by repurchased 4.8 million shares every president to pursue trade new products.” The Company also benefited from of stock. In addition, Cummins agreements that open markets its decision to acquire the remaining received credit ratings upgrades The 2014 numbers returned the for U.S. goods and services. equity in its North American distributors from Standard & Poor’s and Moody’s. Company to its previous growth history The Obama Administration to leverage their expertise and provide after sales were flat between 2012 and The Company’s financial performance has not had this authority. the best support to customers. 2013. Since 2010, external sales have in 2014 also included some challenges. Acquisitions contributed about 3 “International trade has been the grown about 45 percent. Cummins Power Generation fell short percent to revenue growth in 2014. most important driver of growth of expectations, with external revenues Cummins improvement in profitability and hiring at Cummins for more Cummins also invested a record down about $300 million. The Company was driven in 2014 by record than a decade,” said Linebarger, $754 million back into the Company, is making cost reductions it expects performance in the Components who is Chairman of International will improve earnings going forward. Engagement for the Roundtable. “We are committed to improving the “Cummins exported approximately FINANCIAL PERFORMANCE AT A GLANCE quality and service for our customers, $3 billion in U.S.-made engines, NET INCOME YEAR SALES attributable to Cummins closely managing costs and further generators and related products in 2009 $10.8 billion $428 million improving financial performance in 2014, and nearly half of our sales 2015,” Linebarger said. “The Company were to customers outside the U.S. 2010 $13.2 billion $1.04 billion delivered on its commitment to return …And, like most other companies 2011 $18.0 billion $1.85 billion 50 percent of cash from operations to with international business, as we 2012 $17.3 billion $1.65 billion shareholders in 2014.” grow globally, we add more high- 2013 $17.3 billion $1.48 billion quality jobs at home.”

2014 $19.2 billion $1.65 billion 125 SUSTAINABILITY PROGRESS REPORT // FINANCIAL & OPERATIONS

2014 EXTERNAL SALES BY BUSINESS UNIT

UNIT SALES

Engine $8.44 billion

Components $3.79 billion

Distribution $5.13 billion

Power Generation $1.86 billion

CEO HITS THE ROAD

Chairman and CEO Tom Linebarger and President and 2014 EARNINGS BEFORE INTEREST AND TAXES (EBIT) BY BUSINESS UNIT Chief Operating Officer Rich Freeland took to their bikes in the summer of 2014 to promote a healthy, low-carbon UNIT EBIT lifestyle, leading about 80 employees on a morning ride into work. Engine $1.225 billion

Components $684 million The four-mile bike ride started at a shopping center in Columbus, Indiana (U.S.A.), and concluded at Cummins’ Distribution $491 million Corporate Office Building (COB) in downtown Columbus.

Power Generation $168 million Nine other members of the Company’s leadership team joined Linebarger and Freeland on the ride.

“We have a great opportunity together – not only to ENGINE BUSINESS UNIT SALES BY SEGMENT, 2013 VS. 2014 get some exercise in – but to do our part to reduce emissions in getting to work,” Linebarger, an avid rider, SEGMENT 2013 SALES 2014 SALES told employees before the event. “At Cummins, we

Heavy-duty truck $2.705 billion $3.139 billion promote the health and well-being of all our employees because we care about our employees. We want our Medium-duty truck & bus $2.185 billion $2.530 billion employees to reach their full potential in every way,

Light-duty & RV $1.300 billion $1.436 billion including feeling healthy.”

Industrial $2.996 billion $3.040 billion The ride was hosted by the Cummins Emission Solutions (CES) Bicycle Advocacy committee and Stationary power $827 million $817 million GOAL, the Latino employee affinity group based in Southern Indiana.

126 SUSTAINABILITY PROGRESS REPORT // FINANCIAL & OPERATIONS

CENTER’S GOAL IS A HEALTHIER EMPLOYEE

Cummins is committed to helping its employees live fuller, While employees and their families will health and wellness coaching, not be required to utilize the center, educational seminars and live healthier lives both at home and at work. That’s why the Shurney believes they will want to cooking demonstrations. Company is exploring a different way to deliver health care come to improve their health and Other features and services to its employees and their families. wellbeing. The Company’s goal is to at the center include: give employees and their families the The Cummins LiveWell Center under “The center will be an entirely new tools they need to achieve optimal »» A pediatric care suite with exam construction just north of Cummins’ way to experience healthcare, with health on their own terms. rooms specially designed for children Corporate Office Building in downtown everything focused on the patient,” »» Physical therapy Columbus, Indiana (U.S.A.), is the said Dr. Dexter Shurney, Cummins The center is designed to take a team Company’s first health and well-being Chief Medical Director and Executive approach to a person’s health. Exam »» Radiology/Lab services facility. When it opens in 2016, the Director of Global Health and Wellness. rooms at the center, for example, »» On-staff pharmacist for medication center will be home to a number of “That includes everything from wait are designed to encourage a dialogue consultations and limited dispensing health-related services, ranging from times, to the design of the center, between physicians and their patients »» Visiting specialists in a variety routine health and optometry exams to how patients communicate with about healthy lifestyle choices. of disciplines to acupuncture, chiropractic, and their healthcare team.” Employees and their families then have physical therapy services. access to the services that can help »» A multi-purpose space for health

them maintain that lifestyle including seminars and other events »» Nutritional and exercise advice

»» A teaching kitchen for cooking demonstrations

The LiveWell initiative is starting in Columbus. If successful, the intent is to expand the concept nationally and potentially globally over time.

Cummins’ LiveWell Center is designed to give employees and their families the tools they need to obtain optimal health on their own terms. 127 SUSTAINABILITY PROGRESS REPORT // FINANCIAL & OPERATIONS

CUMMINS’ SOUTHERN INDIANA LOGISTICS CENTER SETS NEW STANDARD FOR CUMMINS’ SUPPLY CHAIN

In years past, it was a logistical reality that Cummins products Cummins began to transform its Chain Principles for suppliers as part supply chain in 2010, focusing on of its transformation: in North America could head north out of Indiana for customer ways to increase efficiency, lower »» Collaborate with Cummins to pickup in Wisconsin, only to be loaded up and transported costs, and reduce its environmental create environmental improvements. back south through Indiana to Kentucky for final delivery. footprint. Developing supply chain »» Reduce the environmental excellence is one of the Company’s The duplication cost both the customer for Cummins and represents the latest impact of all products, Five Growth Accelerators. and the Company extra time and step in the Company’s long-range processes and materials. By working to coordinate the money, and required using additional supply chain transformation strategy. »» Minimize adverse environmental production, shipment, and delivery fuel, as well. impacts on air, land and water. “The Southern Indiana Logistics Center of its goods, Cummins better serves Enter the Southern Indiana Logistics is a game changer for Cummins and »» Minimize the consumption of its customers. Effective supply chain Center (SILC), a new 428,000 square our supply chain,” said Lisa Yoder, Vice natural resources, raw materials management can solve many of foot regional warehouse located next President – Global Supply Chain and and fossil fuel input. the problems encountered by to the Cummins MidRange Engine Manufacturing. “It’s a big, tangible step businesses today. Consider the example of transporting Plant in Walesboro, Indiana (U.S.A.). toward transforming our supply chain goods from Indiana to Wisconsin so we can continue to improve how we A more efficient supply chain is also The facility, which came online in to Kentucky. meet our customers’ needs through better for the environment. Cummins January 2015, is the first of its kind reduced lead times and lower costs.” has established four Green Supply

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SILC, which is owned but not starting equipment. If they Executive Director. “SILC is the CUMMINS SUPPLY operated by Cummins, eliminates aren’t properly trained to use result of Cummins taking a hard look CHAIN HONORED the need to use several Southern it, the equipment won’t start. at our supply chain and determining Cummins was again recognized by Indiana warehouses and consolidates that we could operate much more Gartner in its annual list of the Top 25 SILC operates almost like an airport. materials under one roof, making it efficiently with a regionally based Supply Chain Companies in 2015. Upon arrival, delivery drivers are easier to manage and track inventory. logistics facility.” directed to a specific dock where It also helps improve freight routes In Gartner’s 11th year of ranking warehouse staff are ready to meet SILC BY THE NUMBERS and delivery schedules. company supply chains, Cummins them. Efficiency is a top priority. joined the likes of Apple, Amazon, Inserting SILC into the equation will 428,000 Unilever and Proctor & Gamble for The facility also has state-of-the-art mean Cummins has the capability to supply chain excellence. The ranking lighting designed to improve safety and SQUARE FEET store an order until the customer can is based on financial performance reduce energy consumption. Overall, the size of the warehouse get to Columbus to pick it up rather and an evaluation of supply chain the new facility is expected to reduce than ship it to Wisconsin to make room performance by Gartner analysts carbon dioxide (CO ) emissions by in those smaller Indiana facilities for 2 ¼ MILE 25 percent over previous operations. and industry peers. additional products. the distance from the front The Southern Indiana facility is just corner to the back corner “Our efforts in supply chain continue Eliminating that extra leg of the beginning of a global supply of the warehouse to focus on bringing value to our transportation will mean more chain evolution that puts a focus customers and shareholders, and than $500,000 in annual savings on the synchronized warehousing I am very pleased with our progress,” for Cummins and more than 44 of raw materials to provide scale and said Lisa Yoder, Vice President $425,000 in savings for the customer, number of security improve efficiency. A second regional of Global Supply Chain. “There is not to mention a reduction in time cameras on site warehouse is planned for San Luis outstanding supply chain work being required to transport the materials. Potosí, Mexico, in 2015. done at all levels of our company.” The new warehouse also puts 25 PERCENT “We will be able to better serve Gartner has been researching a premium on ensuring a safe the amount of CO2 emissions our customer by changing the way and writing about demand- and secure work environment. SILC will reduce in Cummins’ we store and transport materials,” driven practices since 2003. For example, forklift operators must Southern Indiana network said Theodosia Rush, Cummins Cummins ranked 23rd on the list. swipe their security badges before Supply Chain Planning and Logistics It was the fourth consecutive year the Company was on the list.

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The generators upon landing in Madagascar CUMMINS TEAMS UP TO DELIVER still faced an eight-hour trip to Toamasina. FOR CUSTOMERS IN MADAGASCAR

Many residents of Toamasina, one of the most densely mid-December. Madauto, in turn, Following in-depth talks on how reached out to Cummins Power best to meet Toamasina’s needs, populated areas of Madagascar, were facing a gloomy Generation in Johannesburg, an order was placed on Nov. 25, holiday, literally, in December of 2014. South Africa. 2014, for a fully-integrated solution consisting of six individual generator The country’s limited power grid (also frequently spelled lychee), the “We were all very excited about trying sets with a target delivery date of couldn’t adequately support the city strawberry-red fruit that provides a lot to do something so quickly,” said mid-December 2014. of 200,000 on the east coast of the of jobs for the residents of Toamasina. Darryn Scheepers, Cummins General island nation and fearing a possible Manager for Dealer Development in Scheepers said the Cummins team The country’s power utility, JIRAMA, blackout, the government was Southern Africa. “Turning around a was fortunate that one unit was already contacted Cummins’ regional dealer looking for an answer, fast. request like this would normally take in Madagascar that was not being in the country, Madagascar Automobile 14 or 15 weeks. We were being asked used. So now it was merely a matter Not only was Christmas just weeks (Madauto), in November of 2014 to do it in less than half that time.” of getting five units into the country away, but so was the harvest for litchi asking for 6 megawatts of power by and then to Toamasina. 130 SUSTAINABILITY PROGRESS REPORT // FINANCIAL & OPERATIONS

CUSTOMER SUPPORT EXCELLENCE AT CUMMINS

Customer Support Excellence (CSE) at Cummins means our customers’ success is the Company’s number one priority. Every facet of the business forms a chain to the customer The five units were immediately After landing in Antananarivo, the and one broken link can be the difference between a great available from the Cummins Dubai cargo was directly loaded onto flatbed customer experience and a terrible one. Distribution facility. But the equipment trucks for the final 500 kilometer leg CSE asks that every employee demonstrate the four CSE needed to be modified so the of the journey. Each of the five behaviors of Safe, Caring, Dependable and Responsive generators could withstand the generator sets was transported to ensure they’re properly supporting the next link: high humidity of Madagascar’s east. on its own truck. It took about eight hours to reach Toamasina. The major modifications were available SAFE from Cummins Power Generation in A competitor had also been invited We value the safety of our customers, employees Kent in the United Kingdom. The plant to bid on the project, but was and their families above all else. met its deadline and the material was unable meet the strict deadlines. soon on its way to Dubai. After the The Cummins team successfully CARING proper alterations were made, the met all the urgent deadlines and Everything we do demonstrates to our customers generators were ready for shipment. product specifications without and co-workers that we are committed to their success. compromising on quality or integrity. Air travel was the only viable way to get the generators to Madagascar on “This project was immensely DEPENDABLE time, but each of the generators had challenging,” Scheepers said. We do what we say we will do, right the first time, a dry weight of over 16 tons each. All “Conference calls were held daily on time, in everything we do. fluids had to be drained and batteries between Cummins South Africa, disconnected to reduce any hazardous Cummins United Kingdom and RESPONSIVE risks related to leakages and sparks. Cummins Dubai in order to ensure We are easily accessible to our customers and co-workers that nothing was lost in translation and and act with the sense of urgency they expect. The generators were eventually packed in that everything ran according to plan. special containers that were transported We couldn’t have done it without a from Dubai to Antananarivo, the capital tremendous amount of cooperation and largest city in Madagascar, by and collaboration among all of the a specialist French aviation charter parties involved.” company, Air Partner. The generators, by the way, started Once again, the team cleared the producing power on Dec. 24 – hurdle and the project remained Christmas Eve. on schedule. 131 SUSTAINABILITY PROGRESS REPORT // FINANCIAL & OPERATIONS To learn more about CAN (Corporate Angel Network) and the services it offers, go to www.corpangelnetwork.org.

The organization can also be CUMMINS HELPS PATIENTS TAKE reached in the United States FLIGHT IN FIGHT AGAINST CANCER by calling (914) 328-1313.

Cummins Director of Corporate Aviation Chris Raskob says CAN awarded Cummins its Corporate 1960s when the Company was led by Angel Network Award for Excellence visionary Chairman and CEO, the late helping cancer patients and their families access the care in 2014, citing the Company’s work J. Irwin Miller. they need can be an emotional experience for his team. ferrying cancer patients and their The Corporate Angel award was merely families. Cummins conducted more “Sometimes we fly the same person the physical and financial burden one highlight in 2014 for Cummins’ than 30 patient flights in the past to and from multiple treatments so on families with a loved one fighting Corporate Aviation team. It was also five years, ranking it among the top you get to know what they are going cancer by arranging for free travel honored for 50 years of safe flying, 5 percent of CAN flight providers. through,” Raskob said. “Helping to health care using empty seats having completed 88,651 hours someone in a difficult situation like on corporate aircraft. “Corporate flight departments like without an accident on Dec. 31, 2013. that can be tremendously rewarding, Cummins are the life blood of CAN’s By working with 560 of America’s The aviation department will but you feel for the patients and their world,” said Dick Koenig, Executive top corporations including Cummins, celebrate its 60th anniversary in families, too.” Director of the network. the White Plains, New York (U.S.A.) 2015. The Company didn’t receive CAN – the Corporate Angel Network – group has coordinated more than Raskob said Cummins has been its safe flying award earlier because reduces the emotional stress and 46,000 flights since CAN was using its aircraft to make humanitarian of a record-keeping gap. 7-14 Cummins ad_Layout 1 7/14/14 1:57 PM Page 1founded in 1981. flights dating back to the 1950s and Today, Cummins has four aircraft, a team of five individuals maintaining those aircraft, two schedulers and 15 pilots. The team, which is based in Columbus, Indiana (U.S.A.), averages 2,000 to 2,500 hours per year in the air flying Company employees to Cummins’ plants and facilities in North America.

In addition to getting Cummins employees to Company facilities in North America, the Corporate Aviation team helps patients fighting cancer.

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CORPORATE ANGEL AWARD HONORS CUMMINS INC. UNLEASHING FLYING POWER FOR CANCER PATIENTS. Congratulations to Cummins Inc. and its Corporate Cummins has flown 35 CAN flights in total – 31 in Aviation Department, the latest recipient of the Corporate the last five years – transporting men, women and Angel Award presented by ConocoPhillips - Phillips 66® children in need to cancer treatment centers across the Aviation, Safe Flight Instrument Corporation and country. Business & Commercial Aviation Magazine. Phillips 66® Aviation, Safe Flight Instrument Cummins, like ConocoPhillips Global Aviation and Corporation and Business & Commercial Aviation are 530 other major corporations, is a participant in proud to honor Cummins for giving cancer patients a liſt Corporate Angel Network (CAN), a national public charity in both body and spirit. that arranges free passage for cancer patients using Become a Corporate Angel empty seats on corporate aircraſt. 914-328-1313 www.CorpAngelNetwork.org CONTRIBUTORS CONTACTS PRODUCTION NOTES

This report relies on the writing, editing, design and Marya Rose Design and writing: technical expertise of many people. Contributors this Vice President – Chief Administrative Officer Cummins Corporate Communications year include: Monica Arroyave, Nebil Awad Baqhum, One American Square, Suite 1800 Cory Brandt, Kevan Browne, Carole Casto, Karen Indianapolis, IN 46282 Printing: The Merrick Printing Company Cecil, Laurie Counsel, Greg Cyr, Mark Dhennin, Mark Levett RESOURCE USAGE Elena Dooley, Stephanie Downs, Joy Fischer, Vice President – Corporate Responsibility Maddie Fogler, Emily Foster, Sheah Hilton, Vaishali COVER & INTERIOR Printed on FSC®-certified Chief Executive Officer – The Cummins Foundation Heblekar, Aaron Kaluf, Shannon Kiely-Heider, Michael paper manufactured with electricity that is made 500 Jackson Street Kondrath, Brijesh Krishnan, Ramona Kudla, Gwen with 100 percent Certified Renewable Energy, Columbus, IN 47201 Langley, Carol Lavengood, Joann Jones, Jerry Liu, from non-polluting wind power projects. Sara McAninch, Nicole McDonald, Paul Miller, Jon Blair Claflin (Editor) The 100 percent post-consumer waste fiber Mills, Alex Miser, Sarah Myers, Michael Nagel, Randy Director – Sustainability Communications used to make this paper is process-chlorine Nelson, Rodney Nicholson, Leslie Nix, Dave O’Brien, One American Square, Suite 1800 free and is Green-Seal certified. Amberly Peterson, Jeffrey Reed, Glen Rees, Megan Indianapolis, IN 46282 Reinbold, Alan Resnik, Bob Rother, Brian Sanders, (317) 610-2542 Meredith Sanders, Steve Sanders, Shawn Shivers, Anna Smith, Ernie Smith, Todd Swingle, Kimberly Trubiro, Jennifer Wagner, Blair West, Mark Wilson, Robert Wilson, Molly Yedinak, Amanda Williams, Kweku Winful and Diana Zhao.

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Cummins Inc. Box 3005 Columbus, Indiana 47202-3005 U.S.A. cummins.com ©2015 Cummins Inc. Printed in U.S.A. 06/15 Bulletin Number 4986132