Strategies for Life Cycle Thinking and Product at GE

Angela Fisher Sustainability Leader Ecoassessment Center of Excellence GE Global Operations – Resource & Environmental Strategies

National Association of Environmental Managers Denver, Colorado | October 2016

Imagination at work GE Diversity

Power Energy Connections Oil & Gas GE Renewables

Healthcare AviationTransportation Lighting/Current

Digital • Global Operations • Global Research Global Growth Organization • Capital Variety of internal stakeholders & products

Ecoassessment Center of Excellence GE Ecoassessment Center of Excellence Mission:  Position GE for evolving life cycle / product sustainability‐based regulatory / stakeholder expectations and competitor positioning  Protect access to market, support customer engagement, maintain credibility with external stakeholders (customers, investors, NGOs, governments, public, etc.)

Technical credibility & product support Key Roles: • Product LCA + LCM toolkits • Expertise and guidance • Strategic and selective application Life cycle assessment (LCA) Life cycle management (LCM) Drive eco further into product development Carbon, energy, water footprint Sustainability strategies • Customize to business context EcoDesign/Design for environment • Identify opportunities for improvement • Tools and resources Deliver customer value • Education and awareness • Employee Engagement • Strategic engagement • External networks • Environmental and operational savings • Social license to operate Support: Thought leadership • GE businesses • Drive business perspective on sustainability • Strategic customers • Create & maintain momentum toward change Life Cycle Assessment (LCA) Assess overall environmental impact throughout a product or service’s life cycle

More than just carbon footprint

A method to understand the net environmental impact of a product/service across its value chain, how and where to make improvements

‐ Differentiate products Natural Human ‐ Evaluate alternatives quality resources health ‐ Prioritize opportunities for improvement ‐ Mitigate Areas of protection (damage categories)

Ecoassessment Center of Excellence When Should a LCA be Performed?

Customer Competitor Product Environmental Green Marketing

• Customers asking • Competitor using • ”Green” product • Product contains • Prepare for for LCA/carbon LCA/carbon • Primary toxics, ecomagination footprint data as footprint to environmental substances of product review part of their market 'green' impacts are concern, heavy (LCM and sustainability product other than metals, rare screening LCA) programs • Competitor not energy earth minerals, • Product exhibits •Customers using LCA/carbon efficiency during etc. net requiring footprint product use • Product exhibits environmental LCA/carbon (potential • Product environmental benefit, but footprint as part of thought development issues, benefits, benefit may be RFP leadership team plans to or tradeoffs that counterintuitive • Opportunity to opportunity for use Design for may need to be to the consumer exert eco thought GE's advanced Environment quantified • Product involves leadership at the LCA capability) (DfE) tools. LCA • Product environmental customer or can provide the mitigates trade‐offs that industry‐wide level quantitative environmental may need to be through LCA 'roadmap' for issues quantified and DfE efforts. (renewables, communicated shale • Product requires technologies, complex water environmental treatment, etc.). messaging LCA may be • Eco‐labeling or useful to convey Environmental the benefit. Product Ecoassessment Center of Excellence Declaration LCA Tools and Resources Tools & Resources Other Tools & Resources • LCA Community Portal LCM Community Library • GHG Emission Factors • Wind Tool o Support Central Repository • Supply Chain Prioritization • LCA 101 Reference Product LCM Tool o Early awareness and directional guidance

LCA Screening Tool o Quickly assess relative magnitude of life cycle stages

EcoDesign Strategy Wheel (*publicly available) o Ecodesign principles and strategies

Water‐Energy Nexus Tool o Evaluate tradeoffs between energy and water

Value Creation Tool o Identify business value from eco

Ecoassessment Center of Excellence *http://www.okala.net/presentations/10%20chapter2%20Ecodesign%20Strategy%20Wheel.pdf Life Cycle Roadmap: 4 Detailed LCA per ISO 14044 A Tiered Strategy

3 Streamlined LCA

2 Screening LCA Time Investment

1 Product LCM Tool

Level of Detail / Extensiveness

Strategic | Comprehensive | Efficient | Effective

Ecoassessment Center of Excellence • Simple, quick, yet comprehensive 1 • Provides early awareness: Product LCM tool ‐opportunities & issues • Provides directional guidance: ‐when to dig deeper ‐where to seek answers and support

Qualitative inputs organized Customizable Graphical results by life cycle stage business context • Quickly identify opportunities or • Topic areas based on external filters problem areas stakeholder mapping • Calibrate tool responses • Results organized by: • Compare baseline vs. new based on relevancy per • (1) life cycle stage product product category or • (2) impact categories: energy, • Compare product design business application GHGs, water, & emissions, alternatives toxicity, land, natural resources, Ecoassessment Center of Excellence EHS LCM Factsheets Factsheets: •Biodiversity • •Chemical regulatory compliance • •Climate Change •Design for Environment •Ecosystem Services •Energy Efficiency •Environmental Labeling •Green Advertising Guides •Green Buildings •Greenhouse Gases •Green Supply Chain •Hazardous Materials •Hazardous Chemicals •Landfill & Incineration •Material Recovery •Material Scarcity •Nanomaterials Stewardship •Noise, Odor, Vibration, Dust •Ozone Depleting Substances •Packaging •Product Regulatory Compliance •Product Stewardship •Remanufacturing • •Sustainable Harvesting •Toxics, Heavy Metals, Persistent Compounds • Logistics •Water Footprint Reduction •Water Stress

Ecoassessment Center of Excellence 2 GE LCA screening tool

Key design insight • Use broad materials categories to prevent over‐collection of data • Develop average impact factors per materials category

Tool features • Rapidly assess relative magnitude of life cycle stages • Enter % material composition based on broad materials categories • Automatically self‐populates with manufacturing process impacts based on materials type

Tool intended for high‐level screening • 1st entry point into LCA • LCC added in 2016

Ecoassessment Center of Excellence Streamlined and Detailed LCA

3 Streamlined LCA

4 Detailed LCA per ISO 14044

LCA tools infrastructure • Commercial LCA software • Secondary LCI data sets

Trained expertise required • GE Ecoassessment COE • External network

LCA Experts Needed | Commercial LCA Software and Datasets

Ecoassessment Center of Excellence Ecodesign Tools & Strategies

Ecoassessment Center of Excellence LCA case studies GE LCA Efforts

Power Oil & Gas

A‐14 steam turbine / 6‐7 MC7E steam turbine 2.5xl Wind turbine 7FH2 generator Micro LNG 1.6‐100 Wind ZeeWeed 1000‐60 turbine Ultrafiltration CNG in a Box™ Thin film solar Biomass gasification – Unconventional gas LM2500 aeroderivative Jenbacher Waterless fracking 7FA gas turbine + Ammonia SCR vs. DLN 7FH2B generator Energy Connections 9FB gas turbine + Biomass/coal 330H generator gasification Smart Meter

7F.05 gas turbine Nanostructured ferritic Low‐current circuit alloys breakers

Ecoassessment Center of Excellence GE LCA Efforts

Healthcare Transportation GE Lighting

Wave and Durathon™ battery Outdoor LED lighting ReadyToProcess™

+PLUSPAK™ contrast LCA Screening Tool: Indoor LED lighting agent vials • Evolution locomotive • Remanufactured parts ‘Soft Cuff’ blood for Evo loco CFL, LED, pressure cuff incandescent, Hercules X‐ray tube halogen Aviation

LCA Screening Tool: LEAP engine / • Ultrasound composite fan blades • MR • CT Bio‐oils to jet fuel • Digital X‐ray (DARPA) • Nuc (PET) US DoD SLCA/LCC • MR coolants Methodology Pilot • HC IT Additive manufacturing

Ecoassessment Center of Excellence GE 2.5MW Onshore Wind Turbine

Product Overview GE’s 2.5xl onshore wind turbine

Purpose/Driver of LCA WRI / WBCSD* GHG Protocol Initiative’s Product Standard Road Testing • Provide detailed feedback to WRI/WBCSD prior to final release of the standard • Develop life cycle eco profile of wind turbine to support customer requests

Scope of LCA Cradle‐to‐grave, performed to WRI/WBCSD product GHG standard Additional data collected to support multi‐impact category LCA

Value creation = Satisfy customer requests & expectations

*World Resources Institute / World Business Council for Based on site capacity factor of 0.35 for a wind turbine installation in Sweden

Ecoassessment Center of Excellence LED Roadway Luminaire LCA Scope Analyze the life cycle environmental impacts of several innovative LED solutions relative to the incumbent HID technology • design trade‐offs (e.g., materials choices, recycled content) and • end‐of‐life recovery scenarios (e.g., , product takeback, closed loop, etc.)

Cradle‐to‐Grave Cradle‐to‐Gate

*representative results shown above are for the ERL1 LED luminaire; similar results were observed for HID and other LED models

Value Creation = Thought Leadership, Brand Image, Technical Credibility, Market Share Ecoassessment Center of Excellence Preliminary results – 3rd party critical review is underway GE Supply Chain Priority Assessment Big Data Methodology

Goals • Gain high‐level insights and prioritize meaningful opportunities for environmental improvement throughout the supply chain • Pinpoint industry sectors, suppliers, and regions to establish symbiotic partnerships and collaborations Tool features • Based on Environmental Economic Input‐Output Life Cycle Assessment (EIO‐LCA) • Utilizes company‐wide GE spend across more than 130 sectors • Estimates GHGs and water consumption impacts (with potential to easily expand to more environmental impact categories as desired • Filterable by: Direct vs. indirect spend, GE business unit, NAICS sector, country, supplier Results Prioritization • Focus on sectors with largest environmental impacts • Identify strategic supplier relationships • Increase mutual competitiveness and reduce risks

The environmental EIO‐LCA method uses information about industry transactions (purchases) of materials by one industry from other industries, and the information about direct environmental emissions of industries to estimate the

Ecoassessment Center of Excellence environmental emissions throughout the supply chain. Tiered LCA Communication Strategy Brochures: Reach the right audience • customers Convey appropriate level of technical detail Satisfy ISO 14044 requirements • procurement managers White paper: • easily understandable • customers • 2‐pages • procurement managers • other external stakeholders • easily understandable synopsis, but with depth • ~10‐pages • also serves as ‘Executive Summary’ in detailed report Detailed report: • required by ISO 14044 • super technical • may be company internal • >80 pages

Ecoassessment Center of Excellence Strategy & Enabling Principles Enabling Business Success through Sustainability

People Planet Profit Social Environmental Economic

• Addresses customer • Contributes to GE’s • Enhances or validates desires & requirements dedication to product brand image for sustainable products sustainability and its social/environmental • Offers product • Engages stakeholders goals differentiation through that can influence at the environmental attributes industry and/or policy • Conserves resources (and can gain market share level costs) such as water, and/or price premium energy and materials • Stimulates innovation • Avoids risks and costs by and engages employees, • Provides increased staying ahead of especially Millennials* transparency on regulations or resource product’s environmental scarcity impacts

* On average, Millennials believe their organizations underperform on social and environmental benefits by 12% Ecoassessment Center of Excellence and environmental impact/CSR is considered a top value. Source: The Deloitte Millennial Survey 2016 Enabling Principles

•Identify opportunities for meaningful improvement Be strategic and selective •Create and maintain momentum toward real change Focus on value creation •Incentivize game‐changing products, technologies and Customize to business context solutions •Drive resource optimization across the value chain

GE’s view on Life Cycle Management: •We believe the world’s most pressing challenges present an opportunity to do what we do best: imagine and build innovative solutions that benefit our customers and society at large •LCA, applied in a strategic and selective manner, presents an opportunity for us to create even greater value for our customers by considering the impact across the value chain •As such, we tailor our application of LCA & LCM to address the breadth of GE’s solutions and customers as well as evolving stakeholder expectations

Identify Areas for Real Improvement | Create Value | Avoid Distraction

Ecoassessment Center of Excellence Thank You! “I have not failed. I've just found 10,000 ways that

won't work.” – Thomas Edison Herman Miller, Inc. Product Sustainability Strategies

Lauren Zulli Environmental Materials Engineer Corporate Safety & Sustainability Herman Miller Brands

2 Environmental Timeline

1953: “Herman Miller shall be a good steward of the earth’s resources.” 1970: 50% Green space 1981: Energy Center 1991: Zero Landfill Goal 1993: Founding Member USGBC 1995: LEED Pioneer Building 2001: Design for the Environment 2004: Mirra C2C Certified 2005: rePurpose is Born 2010: 100% Renewable electricity 2013: Earthright Strategy & Zero Landfill at 7 Sites 2015: 80% of Suppliers Adopt HMI Goals

3 Mega Trends & Market Drivers

4 EARTHRIGHT

Resource Smart Eco-inspired Design Community Driven

2023 YEAR GOALS

Zero 100% DfE Approved Products Engage 53% of 50% Less Water 100% level 3 Certified Products employees 50% Less Intense Takeback 125,000 tons of Engage 100% of 50% On- product suppliers site/Local Renewables Upstream Engagement Internal Engagement Downstream Engagement Strategies Strategies DfE in Supply Management Process Transparency & Education DfE Supplier Guide DfE Protocol for Development End of Life Solutions DfE Materials Disclosure DfE Materials Database Form LCA Banned Chemical List Bill of Materials Approved Material List Upstream Supplier Engagement Strategies

DfE in Supply Management Process

• Terms & Conditions • Codes of Conduct • Supplier Qualification Process

DfE Supplier Guide

• Guidance on how to meet DfE • Guidance on choosing sustainable materials

Material Disclosure Tools

• Regulatory Compliance • Market Driven Chemicals of Concern • Herman Miller Banned List • Pre-Approved Materials Internal Tools

8 Downstream Product Transparency and EoL Strategies

Transparency Strategies

• Environmental Product Summary • Environmental Product Declarations • Building Standard Conformance • Disassembly Instructions • Material Ingredient Disclosures

End of Life Strategies

• Greenstandards • Goodwill • Supplier Partnerships • Non-Profit Partnerships

https://squareup.com/market/hfap-gift-of-hope Take Aways

Establish long term strategy and key commitments

Evaluate product/service impacts and processes

Set goals and targets

Engage your stakeholders – share vision, understand their strategy, co-create solutions

Look to create tools to support stakeholders and leverage exiting processes

Celebrate incremental improvements and progress

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Ingersoll Rand’s Design for Sustainability

Gretchen Digby – Director, Global Sustainability Programs Debbie Kalish – Program Manager

Ingersoll Rand (NYSE:IR) advances the quality of life by creating comfortable, sustainable and efficient environments. Our people and our family of brands—including Club Car®, Ingersoll Rand®, Thermo King® and Trane®—work together to enhance the quality and comfort of air in homes and buildings; transport and protect food and perishables; and increase industrial productivity and efficiency. We are a $13 billion global business committed to a world of sustainable progress and enduring results.

2 Over 140 Years of Addressing Global Challenges

Air Compressor Rock Drills Jackhammers Commercial & Residencial HVAC Transport Refrigeration s

Responding to Urgent Global Challenges with Sustainable Products and Services Providing Solutions that Address Today’s Global Challenges 3 Sustainability Expectations Rising: Reporting and Regulations

Trends with Implications on Capabilities, Risk and Market Penetration

Raw Materials & Manufacture & Distribution & Market Access Collection, Reuse Sourcing Design Logistics & Recycle

Expanding Requirements Across Product Lifecycle

Anti-idle laws Efficiency & Battery take-back Conflict Minerals REACH + RoHS Refrigerant Regs & packaging

4 Level of Control in Reducing Negative Eco-Impacts

Full Operational Control Site : “All-In” Impacts Strategy

Supplier Impacts Limited Control Strategy: Roll out program and then expand breadth and depth Product Impacts Design Control: Limited Operational Control Strategy: Calculate impacts and influence new product design and development; train our people

Strong Partnership Between Functional and Business Lines Critical

5 Changing the Culture

• Steering a large company toward sustainability is largely a matter of changing behavior. - We encourage all Ingersoll Rand employees to incorporate sustainable practices into their everyday work lives. - The core of this effort is: . a repeatable framework . tools, templates and guides . consistent measurement

Success can only come when people are passionate, educated and engaged in making positive change happen on an individual level.

6 Designing Products Differently

Design for Sustainability is the practice of considering a product’s entire life cycle, from cradle to cradle, and seeking to improve its environmental, usability, and socially responsible use, and ability to address human needs effectively. 7 Competency Building Developing Skill Sets that Build Sustainability Leaders

Advocate for sustainability with Analyze and articulate market- product design teams, specific value of sustainability in customers & markets design

Expand risk and Understand trade- Include sustainability- opportunity offs and related requirements assessments to opportunities during into all product design include sustainability product design

8 Gold Path Silver Path Green Path

Course Introduction

Speaking the Sustainability Language

Sustainability in Making Decisions

An In-depth View into the Sustainable Product Opportunity Assessment

Design that Drives Impact

Sustainability Throughout the Product Lifecycle

Assessing Risks, Costs, and Opportunities for Growth

Green Claims, LCAs, and EPDs

Green Certificate or Silver Certificate or Gold Certificate Assessment Assessment Assessment Realizing Value and Opportunity

“We should talk with LCA Decision Tool New Product Sustainability Checklist Marketing to see if we want to incorporate these benefits.”

“Can we check and see if we can make recycled steel a prerequisite?”

“Wow. We made a design change that is “Do we want to certify?” considerably worse for the environment… no one considered using a different metal.”

Product Footprint Study Tool

Green Claims Decision Tree “Okay – so the use phase is where we need to focus.”

10 11 Summary

Mindset Process Outcomes Competency Rules and Tools Benefits

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