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Powering a More Prosperous World

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Powering a More Prosperous World INTRODUCTION ENVIRONMENT SOCIAL ECONOMIC CUMMINS SUSTAINABILITY PROGRESS REPORT 2019-2020 POWERING A MORE PROSPEROUS WORLD A NOTE FROM THE CHAIRMAN Rather than discuss the accomplishments detailed in this report for 2019, I want to address the eventful first six months of 2020. The deadliest pandemic since 1918, markets this year. While these actions employees, while still ensuring we immediately followed by the most were independent of the world-changing supported the critical needs of our sweeping protests in a half century, events that followed, they have helped us customers. We also maintained our are forcing businesses to re-examine weather the new reality. investments in promising technologies, their role in society. Cummins has potentially critical to the company’s long believed that we serve each of The company ended the first quarter future success. our stakeholders best by serving all of this year with $2 billion in cash and stakeholders. This simple idea has marketable securities, and access to With seven sites in Wuhan, China, been the power behind our company’s $1.9 billion in committed credit facilities. Cummins was significantly impacted success for more than 100 years. In May, we bolstered our access to by the virus relatively early. By the liquidity by entering into an agreement time COVID-19 was declared a global Of course, businesses must have the for an additional $2 billion revolving pandemic, the company had established financial resources to make that happen, credit facility. processes and procedures to protect especially in difficult times. Cummins our employees and communities while entered 2020 in a position of strength. These steps, along with our strong supporting customers, many carrying out As we do before each economic financial position, enabled the company essential functions during the pandemic. downturn, the company took actions to move quickly to protect the health, in late 2019 to prepare for weaker safety and job security of Cummins 2 Cummins products support the critical » Redesigned exits, entrances and them. The increasing reports of blatant The pandemic and protests needs of our economy and society: production lines to encourage acts of racism and the empowerment have revealed a fundamental social distancing; of those with racist views are deeply truth about sustainability: THE » Our engines power the trucks troubling. Systemic racism is a scourge » Enhanced cleaning protocols companies and institutions delivering food, medicine and other that weakens our nation and is a burden STAKEHOLDER before, during and after shifts; and basic needs; on all of us that we must remove with are only as strong as the MODEL » Expanded healthcare and leave communities, countries » We power the construction equipment urgency and resolve. Cummins has long building emergency medical facilities programs to support employees and the world around them. and their families. One of Cummins’ most important practiced the stakeholder across the globe; To be successful for our leaders, CEO J. Irwin Miller, actively model of corporate » Cummins generators help keep critical We also sought to make a difference in inserted himself and our company into shareholders over the long governance, maintaining facilities such as hospitals and data the communities where Cummins does the civil rights movement in the 1960s. run, we must ensure the the best way to serve any centers running around the clock; and business. The company partnered with We will honor this legacy by being health and prosperity of individual stakeholder is 3M and DuPont to produce PPE for by serving the interests » Our service branches keep all of this active again at this important moment. all of our stakeholders. equipment working, day after day. medical professionals. The Cummins At the time of this writing, we are still of all stakeholders. Foundation made targeted grants to developing the full scope of activities While I’m proud of the accomplishments “We have a responsibility to To support both our customers and support children and families impacted but at a minimum we will: included in this report, there’s much use part of our resources to communities, Cummins made keeping by COVID-19. And the company work to be done. You can count on respond to the needs of the employees safe our top priority. The documented the procedures we used to » Ensure the inclusion of Black people Cummins to strive for a more society which gives us our majority of our employees who can work safely reopen and posted them publicly and other people of color at all levels prosperous and just world. charter,” longtime Cummins from home have been doing so for more in a playbook to help other businesses of the company; Chairman CEO J. Irwin Miller than three months. This allowed us to and to promote a broad recovery. Use our voice and influence to » wrote in the company’s Annual focus resources and investments on our advocate for social justice; None of this would have been possible Report in 1972. “We can in the engineering and production facilities. without the hard work, dedication and Engage with the criminal justice long run be a healthy company In those facilities, we have taken many » innovative spirit of our employees, system to promote change; and only in so far as we exist and steps to protect the health and safety of managers, leaders and our Board of Tom Linebarger serve within an economically our people, including: » Support organizations working in Chairman and CEO Directors. I am deeply grateful for their economic empowerment, education and socially healthy society.” Cummins Inc. » Mandatory health screenings at continuing courage and commitment in and health care in our communities The model has been embraced Cummins plants and facilities; this challenging environment. to promote equity for Black people by Cummins’ leaders ever since. and people of color. » Personal protective equipment (PPE) Now we face another critical challenge. for frontline employees; Like many, I have been horrified by the » Masks required inside open plants killings of Black people in the U.S. at the and facilities; hands of authorities entrusted to protect 3 SPECIAL REPORT // By the time the World Health Organization declared CUMMINS COVID-19 a pandemic on March 11, Cummins was moving AND COVID-19 quickly to support customers while protecting employees and the communities where the company does business. The company was well aware of the virus The Board of Directors moved quickly to operations, supply chain, health and by then. In early 2020, production began reduce costs while ensuring the company safety and more. The Board of Directors Editor’s Note: While this report focuses on Cummins’ environmental, slowing at Cummins’ operations in China, supported critical, frontline workers. also began holding additional “virtual” social and governance performance in 2019, the company feels compelled to briefly report on the unprecedented impact of COVID-19 in 2020. including the company’s seven plants in In early April, the board authorized meetings, and by June 1 had met nine Wuhan, which went into lockdown on temporary pay reductions for itself, the times in 2020 to carry out its oversight Jan. 23 to fight COVID-19. By March, CEO and company Vice Presidents. responsibilities. conditions began stabilizing in China, but The board reduced its pay by 25%, the virus started impacting India, Europe the CEO’s salary by 50% and Vice Employees across Cummins did their and North America. Presidents’ pay by 25%. Cummins part, too, supporting customers while also implemented temporary pay and upholding the company’s tradition of On March 13, just two days after the work-hour reductions for exempt and community engagement. One employee, pandemic was declared, Cummins office employees around the world for example, created modeling to help his offices around-the-world began closing, while preserving pay for many frontline local hospital predict COVID-19 spikes; as employees were asked to work from manufacturing, Distribution and critical another helped a major childcare provider home if possible. The majority of the research and development employees. develop a contingency plan enabling it to company’s manufacturing facilities would safely remain open when a staff member experience shutdowns of four to six Cummins took other steps as well, contracted the virus. weeks. All of Cummins’ operations in establishing a risk assessment team China were back operational by the end to review the latest virus information There’s no question COVID-19 tested of the first quarter, but additional actions and make decisions consistent with Cummins, and the company showed were necessary to keep the company on the company’s values. The team, led its mettle in every possible way. solid financial footing. by the President and Chief Operating Officer, continues meeting regularly on The Cummins Sales and Service branch in Indianapolis, Indiana (U.S.) demonstrates safe behaviors to support customers doing essential work. 4 SPECIAL REPORT // Here’s a quick look at how the company has performed in the key areas MAKING A of the environment, social issues and governance during the pandemic: DIFFERENCE ENVIRONMENT SOCIAL GOVERNANCE » Maintained commitment to implement » Established health screenings and » Increased Board of Directors meetings PLANET 2050 environmental strategy temperature checks at open Cummins to provide oversight and guidance in IN A PANDEMIC (see page 20), including internal plants and facilities to keep frontline risk management, planning for a strong planning roadmaps and functional employees safe. recovery and protecting shareholder engagements. interests. » Mandated face masks inside open » Continued investments in research facilities and provided them without » Established daily senior leadership and development of low-carbon charge to employees. meetings on managing the crisis, technologies through cost savings covering production, supply chain, » Redesigned production lines, in other areas. entrances and exits to allow and health and safety and other issues. » Pursued final year of 2020 encourage social distancing.
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