CUMMINS AND SUSTAINABILITY 2018 POWERING A MORE PROSPEROUS WORLD INTRODUCTION // ABOUT
The team has also continued CDP INTRODUCTION moving some data to our GRI Data ENVIRONMENT ABOUT OUR Cummins is committed to sharing its Book, which can be found where SOCIAL CDP (formerly the Carbon Disclosure we post all of our sustainability Community Engagement SUSTAINABILITY related documents. This report Project) water and climate filings. Health and Safety was completed in June 2019 and The 2018 filings will be posted in Diversity and Inclusion REPORTING is Cummins’ 16th edition. Cummins’ sustainability document Workforce repository sometime in July 2019. ECONOMIC CUMMINS GRI The 2017 reports are available now. Financial Cummins’ sustainability reporting Innovation DATA BOOK Supply Chain SUSTAINABILITY Customer Support primarily consists of four postings The company is again producing a OVERVIEW Ethics, Governance and Risk to reach the right people with the separate posting called Cummins’ Government Relations 2018 GRI Data Book. It follows Cummins has also put together right information at the right time. the format of the Global Reporting another eight-panel sustainability Initiative (GRI) established by brochure to give readers a very WORLD the United Nations to develop high-level look at the HEADQUARTERScompany’s POWERING Development Goals to “end INNOVATION WHO WE ARE 500 Jackson St. A MORE PROSPEROUS SUSTAINABILITY a consistent way for companies Cumminssustainability Inc., a global technology efforts. TheColumbus, overview IN 47201 leader, is a corporation of poverty, protect the planet and WORLD Siemens sold more than 100 of PROSPERITYto report STARTSon their environmental, complementaryis posted business segmentswith the company’s its popular low-emission Charger PROGRESS REPORT that designs, manufactures, distributes locomotives in 2018 featuring ensure prosperity for all.” See the and services a broad portfolio of power the QSK95 diesel engine, social and economic performance. EST. the largest Cummins makes. WITH GREAT IDEAS solutions.other The company’s sustainability products related OUR CHALLENGE notations on page 7 of this report range from diesel and natural gas This document is Cummins’ 2018 Building a more prosperous world requires innovation enginesreports to hybrid and and electric documents platforms, in where the company believes its providing customersCummins with the products will theydisclose need to some as well as related technologies, Sustainability Progress Report, succeed in a way that’s better for the environment. includingthe transmissions, document battery repositoryCMI. WHAT SUCCESS systems, fuel systems, controls, air STOCK SYMBOL disclosures most closely align At Cummins, we wantadditional to bring customers dataa in the Cummins handling, filtration, emission solutions RECORD REVENUES which reflects the company’s broad (New York Stock Exchange) MEANS AT Financial success helps ensure broad portfolio of power options – including Cummins in 2018 unveiled and power generation systems. the means to act sustainably. PowerDrive, an advanced with those aspirations. clean diesel, natural2018 gas and electrified GRI powerData – Book that didn’t fit Here’s a look at revenues from view of sustainability reporting, so they can choose what works best for them. suite of plug-in hybrid electric CUMMINS the past five years. powertrain solutions that switch in real time between the construct of the Sustainability Success at Cummins starts with a COMPANY RECORD including the environment, corporate hybrid and electric modes ASSURANCE The sustainability reporting for the best fuel economy. www.cummins.com strong bottom line. Our mission to Progress Report but is still important make lives better by powering a more responsibility, healthy and safety, CUSTOMERS More than 90% of the data prosperous world requires much more. team at Cummins has continued Cummins’ customers are to disclose. TheNEW 2018 HIGH Cummins diversity and inclusion, innovation, located in approximately It means creating a culture of innovation to FOR R&D Cummins reports is 190assured countries and territoriesby that working to make this report shorter 62,600 ensure success in good times and bad, using BILLION $23.8 In its drive to offer customers the company reaches through a GRI Data Book will be posted by fewer of the world’s resources to preserve and financial performance and the a full line of power options, network of more than 600 wholly- Cummins spent a record EMPLOYEESBureau WORLDWIDE Veritas, a world leader in protect the environment, engaging to build
owned and independent distributor BILLION $20.4 and easier to read, moving many amount on research and
locations and approximately stronger communities, embracing the power $19.1 BILLION $19.1 the end of June development2019. in 2018. More than 50 percent of Cummins’ BILLION $19.2 company’s supply chain. 7,600 dealer locations.
287 employeestesting, live outside inspectionthe United States. and certification of diversity and inclusion, and establishing BILLION $17.5 feature stories formerly in the That’s a 20% increase over a global reach to maximize our impact. 2017 264 five years services. Its complete assurance As Cummins celebrates report to The Newsroom on 259 SALES / EARNINGS 249 FORTUNE 500 its 100th anniversary in As a signer of the United Nations’ 2018 In 2018, Cummins earned RANKING (2018) 2019, we’re working to 2016 letter is included$2.1 billion inon revenues the ofCummins
cummins.com. You can find at 2015 make sure the company
2018 2017
Global Compact in 2017, Cummins 2016
2015 2014 217 MILLION $902 GRI Data Book. is powering prosperity least one sustainability related CUMMINS AND for the next 100 years.
$754 MILLION $754 $23.8
supports the U.N.’s 17 Sustainable 2014 $754 MILLION $754 PATENTS MILLION $735 SUSTAINABILITY
MILLION $637 story there every week. For a third year in a row, BILLION 2018-2019
Cummins’ technical staff received
2018 149 2017
2016
2015 156 2014 more than 250 global patents. ©2019 Cummins Inc. BLAIR CLAFLIN Bulletin 5417453 Printed on recycled paper. 2013 Director – CUMMINS AND SUSTAINABILITY Sustainability Communications 2018–2019 Sustainability Brochure
PREV 2 NEXT INTRODUCTION //
INTRODUCTION ABOUT ENVIRONMENT SOCIAL Community Engagement THE Health and Safety Diversity and Inclusion COVER Workforce ECONOMIC Financial This year’s cover of the Innovation Sustainability Progress Supply Chain Customer Support Report is dedicated Ethics, Governance and Risk to faces that made a Government Relations difference in Cummins’ sustainability in 2018.
ABOVE LEFT // Lulu Lopez has been working for more than 20 years in manufacturing, including 12 years at Cummins. She now serves as Director of New and ReCon® Parts Global Manufacturing Operations, where she helps keep tons of used engines and parts in use and out of landfills.
ABOVE RIGHT // Cummins employees Kikelomo Bamidele, Abiola Abioye- Yusuff and Ifeyinwa Alex-Anene joined nonprofit leaders who attended Rise Up’s leadership accelerator program in Nigeria to focus on capacity building, networking and leadership development. Rise Up is one of eight non-profit organizations Cummins is partnering with as part of Cummins Powers Women. The program was launched in 2018 to ABOVE // Mark Dhennin, Director of Energy & ABOVE // Cummins employees in southern Indiana support the advancement and prosperity Environment at Cummins, is interviewed at the (U.S.) turned out in big numbers to support of women and girls around-the world. dedication in 2018 of an Indiana wind farm LGBTQ members of the company’s workforce expansion the company is supporting through at the 2018 PRIDE Parade in Indianapolis. a virtual power purchase agreement. The parade was one of many Cummins The expansion will send about as much power employees supported in keeping with the to the grid as Cummins uses in Indiana (U.S.). company’s diversity and inclusion value.
PREV 3 NEXT INTRODUCTION //
INTRODUCTION TABLE OF CONTENTS ENVIRONMENT SOCIAL Community Engagement INTRODUCTION ENVIRONMENT SOCIAL ECONOMIC Health and Safety Diversity and Inclusion 2 15 27 39 49 Workforce ABOUT OUR CUMMINS IS DRIVEN TO BUILDING MORE INNOVATING TODAY, SOCIALLY COMMITTED, ECONOMIC SUSTAINABILITY REDUCE ITS IMPACT ON PROSPEROUS COMMUNITIES INVESTING IN TOMORROW FOCUSED ON THE FUTURE Financial REPORTING THE ENVIRONMENT AROUND THE WORLD Innovation 40 50 Supply Chain 3 16 29 RECORD YEAR ALLOWS CUSTOMER SUPPORT Customer Support ABOUT THE COVER COMPANY REACHES MEASURING CUMMINS TO INVEST CRITICAL TO CUMMINS’ Ethics, Governance and Risk TWO GOALS, BUT ENGAGEMENT IN ITS NEXT CENTURY PLANS FOR GROWTH 5 Government Relations CHALLENGES REMAIN MATERIALITY 30 42 52 23 PROVIDING THE INNOVATING TO ETHICS AND COMPLIANCE 6 KEY PERFORMANCE ENVIRONMENTAL SKILLS FOR SUCCESS BUILD A MORE PLAYS KEY ROLE IN GOALS UPDATE PROSPEROUS WORLD CUMMINS’ SUSTAINABILITY INDICATORS 31 24 ACCELERATING 43 55 7 THE U.N.’S SUSTAINABLE PARTNERING TO SOLVE GENDER EQUALITY KEY INNOVATION EXERCISING SOUND COMPLEX PROBLEMS METRICS AND INDEPENDENT DEVELOPMENT GOALS 32 JUDGMENT 25 HEALTH AND SAFETY: 44 9 WHO WE ARE BUSINESS COALITIONS CREATING THE RIGHT THE YEAR IN 57 AND COUNCILS CULTURE INNOVATION MANAGING RISK IS 10 KEY TO CUMMINS’ HOW WE DO IT 26 34 46 STRATEGIC ACTIONS DIVERSITY AND INCLUSION PARTNERING SUSTAINABILITY 11 AT A GLANCE PLAYS KEY ROLE IN FOR PROGRESS 58 CUMMINS’ STORY SUSTAINABILITY GOVERNMENT RELATIONS: 47 PARTNERING TO BUILD A 12 37 BUILDING A SUSTAINABLE OUR KEY TOOLS A PLACE EMPLOYEES SUPPLY CHAIN TO BUILD A BETTER WORLD 13 CAN BUILD A CAREER SUSTAINABLE COMPANY 59 LOBBYING AWARDS AND RECOGNITION 48 14 STRIVING FOR MAKING THE ENVIRONMENTAL IMPOSSIBLE POSSIBLE EXCELLENCE
PREV 4 NEXT INTRODUCTION // MATERIALITY
INTRODUCTION MATERIALITY ENVIRONMENT SOCIAL Cummins in 2018 worked with Community Engagement Health and Safety sustainability experts at Deloitte to help TR T IC Diversity and Inclusion us ensure the company was prioritizing O ORTUNITI / Workforce its reporting on the issues where the company has the biggest impact on the ECONOMIC economy, society and the environment. Financial Innovation Working together Cummins and Deloitte identified Supply Chain Customer Support more than 20 key voices in and outside the Ethics, Governance and Risk company including non-governmental organizations Government Relations impacted by Cummins, public officials, company TO T O D R I ORT NC leaders, board members, customers and agencies that rate and rank companies on sustainability. In addition, the partners polled more than 1,000 employees for their opinions. Deloitte compiled the feedback and included its OUND TION own research on key issues facing the company as well as opinions about Cummins from social media and other sources. The X axis includes impacts that are important to Cummins. The Y axis includes impacts that are important to stakeholders outside the company. ONITOR While the results were only available early in 2019, the company is moving quickly to address them, establishing a new section in the Sustainability Progress Report on the company’s supply chain. More changes are expected in future editions of the report. More on the methodology regarding the materiality matrix will be available in the CU IN I CT Cummins 2018 GRI Data Book.
PREV 5 NEXT INTRODUCTION //
2016 2017 2018 INTRODUCTION ECONOMIC KEY ENVIRONMENT Revenue $17.5 billion $20.4 billion $23.8 billion SOCIAL Community Engagement PERFORMANCE Net Income $1.39 billion $999 million* $2.1 billion Health and Safety
* Excluding charges totaling $777 million in connection with tax reform in the United States, full year net income Diversity and Inclusion INDICATORS attributable to Cummins was $1.8 billion ($10.62 per diluted share), with a full year tax rate of 24.5%. Workforce ECONOMIC 2016 2017 2018 Financial Cummins takes a broad view Innovation ENVIRONMENTAL Supply Chain of sustainability, including the Customer Support GHG emissions (thousands of metric tons CO2e) 762 778 808 Ethics, Governance and Risk environment, corporate responsibility, Energy consumption1 (thousands of MMBtu) 12,889 13,656 14,374 Government Relations health and safety, diversity and Water use (millions of gallons) 930 964 949
2 inclusion, employee development Water intensity reduction (2010 baseline) 43% 44% 50% Energy intensity reduction2,3 (2010 baseline) 24% 25% 29% Cummins believes and governance. The company 2,3 GHG intensity reduction (2010 baseline) 30% 33% 37% in transparency. This icon identifies tracks a number of key performance Recycling rate 89% 90% 90% multi-year data that allows for indicators. Here are just a few: comparisons. 2016 2017 2018
SOCIAL
H&S Major Injury Rate 0.042 0.047 0.043
H&S Incidence Rate 0.631 0.692 0.646
Code of Conduct cases 1,772 1,904 2,215
Women leaders in the workforce 21.80% 23.22% 24.36% 1 Primary energy excludes sold electricity and associated fuel usage 2 Intensity defined as adjusted for sales (energy / GHG) or hours worked (water) Every Employee Every Community (EEEC) participation rate 81% 82% 83% 3 Reduction includes consolidated entities only People impacted by EEEC projects n/a 3.3 million** 4.3 million **First year for calculation
PREV 6 NEXT INTRODUCTION // U.N.GOALS
INTRODUCTION THE U.N.’S SUSTAINABLE ENVIRONMENT SOCIAL Community Engagement DEVELOPMENT GOALS Health and Safety Diversity and Inclusion Cummins supports the U.N.’s Sustainable Workforce Development Goals to “end poverty, protect ECONOMIC CUMMINS Financial the planet and ensure prosperity for all.” ALIGNMENT Innovation As a signer of the U.N.’s Global Compact, Supply Chain Here are examples of Cummins’ INDUSTRY, INNOVATION DECENT WORK AND Customer Support AND INFRASTRUCTURE ECONOMIC GROWTH the company wants to do its part to make support for the Sustainability Ethics, Governance and Risk »» Environment, Logistics Goal, »» Community Engagement, Impact Development Goals where the Government Relations the world a better place to live. page 22 by the Numbers, page 29 company has the greatest impact. »» Innovation, Key Innovation »» Community Engagement, Metrics, page 43 Providing the Skills for Success, The company believes its initiatives touch NO POVERTY page 30 17 goals with a special focus on 10 goals: »» Introduction, A Note from the QUALITY EDUCATION »» Financial, Record Year Allows Chairman, page 8 Cummins to Invest in its Next »» Community Engagement, Century, page 40 »» Community Engagement, Impact Measuring Engagement, page 29 by the Numbers, page 29 »» Community Engagement, »» Community Engagement, CLEAN WATER Providing the Skills for Success, AND SANITATION Providing the Skills for Success, page 30 page 30 »» Environment, Water Goals, CLIMATE ACTION page 18 RESPONSIBLE CONSUMPTION »» Community Engagement, »» Introduction, A Note from Measuring Engagement, page 29 »» Introduction, A Note from the Chairman, page 8 the Chairman, page 8 »» Supply Chain, Striving for »» Environment, Products in Use Environmental Excellence, »» Environment, Waste Goals, Goal, page 17 page 21 page 48 »» Supply Chain, Striving for GENDER EQUALITY Environmental Excellence, PARTNERSHIPS page 48 »» Introduction, A Note from FOR THE GOALS the Chairman, page 8 »» Environment, Partnering to Solve AFFORDABLE AND »» Community Engagement, Complex Problems, page 24 Accelerating Gender Equality, CLEAN ENERGY »» Community Engagement, page 31 »» Environment, Greenhouse Accelerating Gender Equality, Gas Goals, page 19 »» Diversity and Inclusion, page 31 Diversity and Inclusion Plays Key »» Innovation, Partnering for Role in Sustainability, page 34 Progress, page 46
PREV 7 NEXT INTRODUCTION // CHAIRMAN LETTER
INTRODUCTION A NOTE FROM LINEBARGER’S ENVIRONMENT CAREER AT SOCIAL CUMMINS Community Engagement THE CHAIRMAN Health and Safety CHAIRMAN AND Diversity and Inclusion optimal levels, delivering efficiencies The company’s new Cummins We have a lot to celebrate at CHIEF EXECUTIVE OFFICER Workforce Jan. 1, 2012, to present Cummins – our 100th anniversary across the entire powertrain. Powers Women initiative works ECONOMIC PRESIDENT AND This success has contributed to an with non-profit groups to improve Financial in 2019, a record-setting 2018, CHIEF OPERATING OFFICER increasing share and greater financial the lives of women and girls in every 2008-2011 Innovation and an almost unmatched history success in many of our key markets. part of the world. Supply Chain EXECUTIVE VICE Customer Support of sustainable corporate behavior. PRESIDENT, PRESIDENT – Cummins also continued reducing I believe these steps create the POWER GENERATION BUSINESS Ethics, Governance and Risk As we honor our past, we must also prepare for a its carbon footprint in 2018 as part foundation for achieving the more 2005-2008 Government Relations future I believe will be more challenging than any of the company’s goal to use less prosperous world described in our VICE PRESIDENT – energy and water while reducing mission. We want our company POWER GENERATION 2003-2005 period in the company’s history. waste. One way we addressed our to be just as successful in the next goal to promote renewable energy 100 years as it was in its first 100. VICE PRESIDENT AND Growing the economy while using and development, a record amount. CHIEF FINANCIAL OFFICER fewer of the world’s resources is The company will continue developing was by entering into an innovative 2000-2003 Thank you for your interest the challenge of our time. I believe our electrification and hybrid power agreement in 2018 to help a VICE PRESIDENT – in Cummins, SUPPLY CHAIN MANAGEMENT companies who become the best capabilities and evaluating other northwest Indiana wind farm 1998-2000 at using less will be the most promising technologies including fuel expand. It will send more renewable
power to the grid than Cummins MANAGING DIRECTOR – successful. Increasingly, customers cells while advancing our diesel and HOLSET ENGINEERING COMPANY are demanding not just dependable natural gas engines. uses at its facilities across our (A DIVISION OF CUMMINS) 1997-1998 power at a fair price, but power headquarters state. Technology is changing more emitting fewer greenhouse gases SENIOR MANAGER – ENGINEERING quickly than any time in my more Finally, Cummins took steps in Tom Linebarger OPERATIONS AND TECHNICAL that contribute to climate change. CENTER LEADER, HOLSET than 25 years at Cummins. Our 2018 to create the right work Chairman and CEO They want supply chains that treat 1996-1997 use of high technology modeling environment for future global Cummins Inc. people fairly and promote justice. ENGINE COMPANY ASSISTANT and optimization tools enables success. Our updated Mission, TO GROUP VICE PRESIDENT Vision and Values focuses on FOR WORLDWIDE OPERATIONS, While these challenges are our company to design lighter and PROGRAM MANAGER – great, I know we can meet them. more efficient products without increasing prosperity around the ADVANCED FUEL SYSTEMS 1994-1996 Record revenues in 2018, for sacrificing power or durability. world, including the well-being of example, enabled Cummins to We are developing software and our environment. Our Human Rights INTERNSHIP – ASSISTANT TO Policy, rolled out in 2018, targets PLANT MANAGER COLUMBUS invest $902 million into research controls to keep vehicles running at MIDRANGE ENGINE PLANT human trafficking and child labor. 1992
PREV 8 NEXT INTRODUCTION // WHO WE ARE
WORLD HEADQUARTERS WHO 500 Jackson St. WE ARE Columbus, IN 47201 EST. Cummins Inc., a global technology leader, is a corporation of complementary business segments designing, manufacturing, www.cummins.com distributing and servicing a broad portfolio of power solutions. The company’s products range from diesel and natural gas engines to hybrid and electric platforms, as well as related EMPLOYEES technologies, including transmissions, battery 62,600 WORLDWIDE systems, fuel systems, controls, air handling, CMI More than 50% of the company’s employees filtration, emission solutions, and power STOCK SYMBOL are located outside the United States. generation systems. (New York Stock Exchange) *Approximate number of employees as of February 2019
FORTUNE 500 CUSTOMERS SALES / EARNINGS RANKING (2018) Cummins serves customers in approximately In 2018, Cummins earned 2.1 billion on revenues of 190 countries and territories through a network of approximately 600 company-owned and independent 149 distributor locations, and over 7,600 dealer locations. $23.8 billion
PREV 9 NEXT INTRODUCTION // HOW WE DO IT
ENGINE DISTRIBUTION INTRODUCTION ENVIRONMENT The Distribution segment sells and SEGMENT SOCIAL services the full range of Cummins The Engine segment manufactures Community Engagement products for over 20 applications and markets diesel and natural gas Health and Safety in more than 190 countries and engines for on- and off-highway use Diversity and Inclusion territories around the world. Workforce around the world. Markets include heavy and medium-duty trucks, ECONOMIC HOW WE Financial buses, light-duty trucks and areas ELECTRIFIED Innovation such as agriculture, construction COMPONENTS POWER Supply Chain DO IT and military equipment. The Components segment Customer Support Cummins established its is organized around the Ethics, Governance and Risk Electrified Power segment in early Government Relations For almost 20 years POWER following businesses: 2018. The segment will provide the full range of electrified power Cummins was organized »» CUMMINS EMISSION SOLUTIONS SYSTEMS solutions as well as some of the designs and builds exhaust into four business segments. In 2016, Cummins reorganized its most critical components that have aftertreatment solutions to Then, in 2018, the company business, combining the company’s the largest impact on performance, reduce engine emissions. established the Electrified Power Generation segment and its quality and power. The segment high-horsepower engine business »» CUMMINS FILTRATION designs posted its results as part of Power segment to develop to create a new Power Systems and builds heavy-duty air, fuel, Cummins’ first quarter earnings electric powertrains and segment. The segment is a global hydraulic and lube filtration, and in 2018. provider of power generation systems, chemical and exhaust system related components. components, and services in standby technology products. Here’s a look at the power, distributed power generation, » CUMMINS FUEL SYSTEMS designs company today. as well as auxiliary power in mobile » applications. The segment also and manufactures fuel systems that designs, manufactures, sells and maximize power and fuel economy supports diesel and natural gas while helping to reduce emissions. high horsepower engines for a »» CUMMINS TURBO TECHNOLOGIES wide variety of uses. designs and builds turbochargers to maximize engine performance and reduce emissions and fuel consumption.
PREV 10 NEXT INTRODUCTION // OUR STORY
CUMMINS’ STORY Cummins updated its mission, vision and values in 2017.
WHY WE EXIST HOW WE WILL DO IT MISSION VALUES LEADERSHIP INTEGRITY CULTURE Making people’s lives Doing what you say you will Inspiring and do and doing what is right encouraging all DIVERSITY & employees to achieve better by powering a INCLUSION their full potential Valuing and including our more prosperous world differences in decision making is our competitive advantage BRAND PROMISE CARING WHAT WE WANT TO ACCOMPLISH Demonstrating awareness Powering and consideration for the our customers VISION wellbeing of others through innovation EXCELLENCE and dependability Always delivering superior results Innovating for our customers STRATEGY TEAMWORK to power their success Collaborating across teams, Delivering value functions, businesses and to all stakeholders borders to deliver the best work
PREV 11 NEXT INTRODUCTION // SIX SIGMA
INTRODUCTION OUR KEY TOOLS ENVIRONMENT CUMMINS OPERATING SYSTEM SOCIAL Community Engagement The purpose of the Cummins Operating System is to continuously SIX SIGMA AND improve the company’s products and services by eliminating Health and Safety waste and reducing variation in processes. The 10 practices are: Diversity and Inclusion CONTINUOUS IMPROVEMENT 1 Workforce The tool’s impact, however, goes ECONOMIC Cummins is a big proponent 1 1 PUT THE CUSTOMER FIRST beyond cost savings and community AND PROVIDE REAL VALUE. Financial of Six Sigma, using the Put the customer first, Innovation engagement. It provides Cummins and provide real value Supply Chain business improvement tool with a common language and SYNCHRONIZE FLOWS (MATERIAL, PHYSICAL AND INFORMATION). Customer Support to save the company and its collective mindset across the Ethics, Governance and Risk Synchronize flows (material, physical globe that can be used to address and information) Government Relations customers billions of dollars. DESIGN QUALITY IN EVERY a problem or challenge almost STEP OF THE PROCESS. Six Sigma uses data-based analysis to anywhere in the world. identify defects and variation in a wide range of manufacturing and INVOLVE PEOPLE AND The most impactful projects are business situations. Cummins employees also use Six Sigma when PROMOTE TEAMWORK. honored as part of the company’s Involve people and working with community partners on Corporate Responsibility projects. promote teamwork Impact Awards. As a continuous Here are some key metrics: ENSURE EQUIPMENT AND TOOLS improvement company, Cummins ARE AVAILABLE AND CAPABLE.
Ensure equipment and tools are »»15,110 current employees have been trained on is committed to providing great available and capable Six Sigma common tools, including 14,554 exempt employees with the tools they CREATE FUNCTIONAL EXCELLENCE.
Create (not represented by a union) employees who are need to solve the most important functional excellence ESTABLISH THE trained to lead Six Sigma projects with common challenges in the business, and to RIGHT ENVIRONMENT. recognize the outstanding work Establish the continuous improvement methodologies. right environment they do. Six Sigma has been widely TREAT PREFERRED »» 3,495 current employees took Six Sigma training in 2018. credited with helping turn Cummins SUPPLIERS AS PARTNERS. into the vibrant and innovative Treat preferred suppliers »»Six Sigma projects have identified an estimated as partners company it is today. FOLLOW COMMON PROBLEM $7.11 billion in Profit Before Interest and Taxes (PBIT) SOLVING TECHNIQUES. Follow common savings since the tool was first implemented in 2000, After 18 years as a key part problem solving techniques including $265.1 million in 2018. of Cummins, Six Sigma has USE SIX SIGMA AS THE PRIMARY established itself as the principal PROCESS IMPROVEMENT METHOD.
Use Six Sigma as the primary »»Cummins customers have saved an estimated problem-solving tool used at process improvement method $1.55 billion through Six Sigma since the tool was first the company. offered to them in 2005, including $104 million in 2018.
PREV 12 NEXT INTRODUCTION // AWARDS
INTRODUCTION AWARDS AND RECOGNITION ENVIRONMENT SOCIAL Cummins received a number of awards and recognition during 2018 and early 2019. Here’s a quick look: Community Engagement Health and Safety Diversity and Inclusion Workforce ENVIRONMENT DIVERSITY ETHICS AND MANAGEMENT ECONOMIC AND »» Cummins received a perfect GOVERNANCE LEADERSHIP Financial Innovation score for a 13th consecutive year »» Cummins was named one of »» Cummins moved up to No. 82 in SUSTAINABILITY Supply Chain in the 2018 CORPORATE EQUALITY »» Cummins was named in 2018 the WORLD’S MOST ETHICAL the WALL STREET JOURNAL’S 2018 Customer Support INDEX from HRC, the largest to the DOW JONES INDICES of the COMPANIES in 2018 and again in MANAGEMENT TOP 250, which Ethics, Governance and Risk U.S. civil rights organization Government Relations MOST SUSTAINABLE COMPANIES 2019 by the Ethisphere Institute, looks at corporate performance for LGBTQ employees. IN NORTH AMERICA. It was the a leader in advancing ethical in employee engagement 13th consecutive year Cummins »» Cummins in 2018 was named one business practices. As of 2019, and development, customer made the list. of AMERICA’S TOP CORPORATIONS the company has been on the satisfaction and innovation. FOR WOMEN’S BUSINESS list for 12 consecutive years. »» Cummins was ranked No. 25 on »» Cummins was named to ENTERPRISES by the Women’s NEWSWEEK’S GREEN RANKINGS »» For a second consecutive FORBES’ 2018 list of AMERICA’S Business Enterprise National for 2017-2018. The rankings year, Cummins was named BEST EMPLOYERS, based on Council. The designation are based on publicly available a member of the JUST 100 a survey of 30,000 Americans recognizes world-class supplier environmental metrics. in 2018, a list of America’s working for businesses with diversity programs. 100 most just companies. at least 1,000 employees. »» Cummins was named to »» Cummins in 2018 was named The list by JUST CAPITAL FOR BARRON’S list of AMERICA’S 100 one of DIVERSITYINC’S TOP 50 FORBES polls Americans on what MOST SUSTAINABLE COMPANIES, COMPANIES FOR DIVERSITY. they want most from businesses. moving from No. 60 in the The company has been part of the magazine’s 2018 ranking to annual list for 12 consecutive years. No. 14 in its 2019 list. »» Cummins was named to FORBES »» Cummins has been named magazine’s list of the 250 BEST to FTSE4GOOD’S INDEX of EMPLOYERS FOR DIVERSITY in companies demonstrating the U.S. both in 2018 and 2019. strong environmental, social and governance practices. »» Cummins finished No. 49 on The company was on the Forbes’ list of AMERICA’S BEST list in 2018 and 2019. EMPLOYERS FOR WOMEN in 2018.
PREV 13 NEXT INTRODUCTION // HISTORY
2011 1972 Cummins introduces the largest high-speed MAKING THE Miller lays out his thinking on Corporate diesel engine it has ever built, the 16-cylinder Responsibility in Cummins’ 1972 Annual Report. QSK95 in Seymour, Indiana (U.S.). Eight-feet tall and 14-feet long, the engine is capable of “While some still argue that business 1962 producing 4,000 horsepower while meeting IMPOSSIBLE has no social responsibility, we believe stringent EPA emission standards. that our survival in the very long run is Cummins begins operations as dependent upon responsible citizenship in India, first as a joint venture POSSIBLE 1937 in our communities and in the society as it with one plant in Pune. is on responsible technological, financial Today, the company owns all or part of Cummins is celebrating Cummins earns and production performance.” its first profit. 20 manufacturing facilities in the country 100 years in business and employs nearly 14,000 people.
during 2019. Here’s a 1934 2015
look at the company’s J. Irwin Miller, great-nephew 1951 Cummins names Jennifer Rumsey its Chief remarkable story. of W.G. Irwin, becomes Technical Officer, the company’s first female CTO. general manager of Miller becomes Chairman Rumsey, who joined Cummins in 2000, replaces Cummins at the age of 24. of the Cummins Board. the retiring CTO Dr. John Wall.
1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Clessie Cummins creates the Cummins takes Irwin for a ride in a used Packard Miller helps Dr. Martin Luther King, Jr. with Cummins purchases President and Chief Operating Officer Cummins celebrates Cummins Engine Company limousine that he equipped with a diesel engine some of the organizing behind the 1963 86% of the Onan Tom Linebarger succeeds Tim Solso 100 years in business. based in Columbus, Indiana (U.S.). on Christmas Day, convincing Irwin of the engine’s March on Washington. Miller was acting as Corporation in suburban as Chairman and CEO on Jan. 1, 2012. William G. Irwin, who employed potential. Irwin invests a much-needed infusion of cash. leader of the National Council of Churches. Minneapolis, Minnesota During Solso’s 10 years leading Cummins Cummins as a driver, supplies (U.S.), which would the company experienced record growth. nearly all of the $50,000 in 1929 1963 become the basis for its startup capital. Power Systems Business. 2012
Miller becomes Executive Cummins barnstorms across the country, 1986 Vice President of Cummins. demonstrating the power and fuel efficiency of the diesel engine in his Cummins adds to its diverse offerings by 2019 1944 unveiling PowerDrive, a suite of hybrid Coast to Coast Cummins Diesel Test Bus. Cummins enters China as part of a Miller retires as Chairman of electric powertrain solutions for light, deal involving heavy construction the Board, although he remains medium and heavy-duty applications. equipment with active with the company until Cummins engines. his death in 2004.
1919 1975 1977
1932 2018
PREV 14 NEXT ENVIRONMENT // ENVIRONMENT
CUMMINS IS DRIVEN TO REDUCE ITS IMPACT ON THE ENVIRONMENT
In 2018, the Cummins plant in Juarez, Mexico, had its first full year of power production from the solar panels installed over part of its parking lot.
PREV 15 NEXT ENVIRONMENT // GOALS UPDATE
INTRODUCTION COMPANY REACHES FUTURE FOCUSED ON ENVIRONMENT SOCIAL ENVIRONMENTAL SUSTAINABILITY Community Engagement TWO GOALS, BUT PURSUING AGGRESSI E Health and Safety RESOURCE EFFICIENC OUR COMMUNITIES Cummins is planning Diversity and Inclusion ARE BETTER BECAUSE WE ARE THERE DOING OUR PART to announce the Workforce TO ADDRESS CHALLENGES REMAIN CLIMATE CHANGE AND AIR EMISSIONS next generation of its ECONOMIC To learn more about Cummins’ work environmental sustainability Financial with the Meadow Lake Wind Farm in plan as part of the company’s Innovation Chalmers, Indiana (U.S.), see page 20. 100th anniversary later in Supply Chain Customer Support 2019, while still working December 2018. It is now producing Ethics, Governance and Risk to achieve its existing as much energy as Cummins uses T IN I IT Government Relations at all of its facilities in its headquarters RIORITIE FOR 2050 2020 goals. state of Indiana. The plan will look out to 2050, setting quantifiable goals Challenges remain, however, for 2030 along a glide path to its longer-term aspirations. especially in mature areas such as Through the new plan, the company wants to: energy, where achieving the last few incremental improvements toward 01 Drive innovative technologies and partnerships to address clean air and climate change in line with Cummins’ 2020 goal has been harder Five years after announcing its first global climate science. to achieve. The company’s recycling environmental sustainability plan, Cummins has 02 Design out waste, ensuring materials are used for the goal, meanwhile, has been hindered longest time possible at their highest value and are surpassed the carbon dioxide (CO2 ) savings it by regulatory barriers in some repurposed for their next use, including end of life. expected to achieve by 2020 through partnering countries and the absence of waste 03 Only use water that is readily available, and continually management suppliers in others. reuse and return clean water to the communities where with customers on fuel economy projects, Cummins does business. Nevertheless, given the ingenuity avoiding 12 million metric tons of CO2. 04 Partner to provide sustainable solutions and drive and hard work of more than outcomes to environmental challenges in Cummins’ The company has also met its Cummins also made a significant 62,000 employees around the communities with a near zero local environmental 2020 water reduction target, step forward in its goal to use and footprint from the company’s operations. world, the company is confident a goal that was increased just a promote renewable sources of 05 Work to integrate the impacts of environmental it will meet its 2020 goals. few years after Cummins’ global energy. A northwest Indiana wind farm challenges into the economy through advocacy and partnerships. environmental sustainability plan expansion the company is supporting In the ensuing pages, please see 06 Connect inspired employees and partners with was announced in 2014. through a virtual power purchase a goal by goal update on Cummins’ meaningful actions. agreement went on line in progress in 2018.
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ENVIRONMENT // GOALS UPDATE // PRODUCTS IN USE ENERGY RAW LOGISTICS MATERIALS INTRODUCTION ENVIRONMENT Cummins fuel teams throughout the Cummins estimates that the lifetime ENVIRONMENT PRODUCTS IN SOCIAL world implemented 76 new products in emissions of its products sold in 2018 BY THE NUMBERS PRODUCTS COMMUNICATIONS USE STRATEGY Community Engagement WATER IN USE &use MARKETING projects in 2018, bringing the total is 809 million metric tons of CO . 2 Greenhouse gas (GHG) Health and Safety number of initiatives with customers The company’s data is modeled emissions from Cummins Diversity and Inclusion since 2014 to close to 300. The using overall volumes by segment products in use are $15 Workforce company surpassed its 2020 goal of and engine model sold in a given SUPPLIER EMPLOYEE the company’s largest ECONOMIC PRODUCTSENGAGEMENT ENGAGEMENTachieving an annual run rate reduction year and by determining the volumes environmental impact and million Financial of 3.5 million metric tons of CO . The in operation each year using the represent an estimated IN USE GOAL 2 Cummins investment in Innovation 2018 rate was 4.3 million metric tons. long-standing Cummins New and 99% of Cummins’ GHG WASTE 140 energy efficiency and Supply Chain ReCon Parts proprietary parts footprint due to fossil fuel use. onsite solar photovoltaic Customer Support PARTNER WITHFACILITIES & Performance in 2018 built on global OPERATIONS consumption model and customer capital projects during 2018. Ethics, Governance and Risk CUSTOMERS TO momentum, with the launching of Cummins’ biggest engineering analysis. Government Relations IMPROVE THE new initiatives, better fuel economy opportunity to expand EFFICIENCY OF improvements and an increase in Yearly miles per gallon or gallons product stewardship beyond 12 the upfront design of its OUR PRODUCTS IN Distribution segment projects. per hour are converted to million products is in working with USE, REACHING BY Global fuel economy teams have been metric tons of carbon dioxide MILLION customers to improve the building functional capability via fuel equivalent (CO e). Metric tons of carbon dioxide 2020 AN ANNUAL 2 efficiency of the company’s economy forums, training and tools. avoided by partnering with RUN-RATE REDUCTION products in use and ensuring Cummins customers on fuel OF 3.5 MILLION METRIC customers have the latest economy projects since 2014. tools to improve fuel efficiency. TONS (MMT) OF 2020 GOAL ACHIEVED CARBON DIOXIDE (CO ). Cummins wants to cut CO 2 4.3 million 2 Baseline year: 2014 PRODUCTS emissions by 23 million metric tons, saving customers up to IN USE 2018 PROGRESS 3.4 million $9 billion through greater fuel 28% efficiency by the end of 2020. Percentage of the company’s global Annual C0 reduction 2.9 million 2 2017 Cummins expects to work electricity use equal to the power run rate in metric tons produced by an Indiana wind farm with about 20% of its 2016 expansion Cummins supports. customer base, touching 1.6 million nearly 2 million engines, as it tailors engine specifications TWENTY- 2015 to customer applications. 0.7 million THREE 2014 Cummins sites at 50% or greater water intensity reduction goal, with all sites collectively saving more than 700 million gallons since 2010.
PREV 17 NEXT Environmental Icons ENGINE FUEL RAW EFFICIENCY MATERIALS Environmental Icons ENGINE FUEL RAW EFFICIENCY MATERIALS ENVIRONMENT // GOALS UPDATE // WATER ENERGY ENERGY RAW LOGISTICS MATERIALS RAW LOGISTICS MATERIALS INTRODUCTION ENVIRONMENT In 2018, Cummins achieved a Since the goal’s baseline year of improvements that either conserve WATER STRATEGY SOCIAL PRODUCTS50% reduction in COMMUNICATIONSwater intensity 2010, direct water use is down by water or make new sources available. WATER IN USE & MARKETING Community Engagement PRODUCTS COMMUNICATIONS The goals of Cummins’ WATER IN USE & MARKETING (water use adjusted for hours worked) 16%, while water use adjusted for Health and Safety A risk analysis and mapping exercise comprehensive water strategy, compared to the company’s baseline hours worked has been reduced to Diversity and Inclusion which addresses both direct SUPPLIER EMPLOYEE of the company’s top 200 suppliers, ENGAGEMENTyear of 2010. A keyENGAGEMENT challenge will the 2020 goal of 50% – all despite Workforce water use and community be maintaining this performance an increase in the number of facilities completed in 2016 by Verisk SUPPLIER EMPLOYEE engagement, are to mitigate ECONOMIC ENGAGEMENTWASTE ENGAGEMENT during that time period. Maplecroft, has helped Cummins WATER GOALS level while continuing to expand, or business risk, to be a good Financial FACILITIES & better understand water risk in its OPERATIONSbalancing any downturn in production. global citizen and to reduce Innovation Cummins’ water neutrality work is supply chain. WASTE costs and compliance risk. Supply Chain REDUCE DIRECT Cummins used 950 million gallons also progressing. Eight sites have Customer Support WATER USEFACILITIES ACROSS & These goals are consistent OPERATIONS of water in 2018, a 14 million gallon been validated as water neutral Ethics, Governance and Risk with the core commitments CUMMINS BY 50% decrease from 2017 and a 22 million toward the company’s 2020 goal of Government Relations of the CEO Water Mandate, BY 2020, ADJUSTED gallon decrease since the company 15. These locations are off-setting the U.N. Global Compact’s initiated its water strategy in 2014. their water use with community FOR HOURS WORKED. commitment platform for business leaders and learners ACHIEVE WATER 2020 GOAL ACHIEVED to advance water stewardship. NEUTRALITY AT 50% To achieve the company’s 50% 15 CUMMINS water intensity reduction goal, MANUFACTURING, Cummins will expand the work 2018 TECHNICAL, AND WATER it does with its sites in a water OTHER LARGER SITES INTENSITY management program, including PROGRESS support of regenerative test LOCATED IN REGIONS cell projects using less water, Percentage reduction of 44% WHERE WATER IS direct water use adjusted intensive engagement with IN SHORT SUPPLY. by hours worked. higher water use locations, 42% 2017 Baseline year: 2010 water balance studies and 41% strategic capital funding for 2016 water reduction projects.
2015 Cummins’ strategy also identifies the critical role water plays in the company’s supply chain. Cummins is beginning to 35% work with suppliers to help
2014 them develop less water intensive techniques.
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INTRODUCTION Environmental Icons ENGINE FUEL RAW EFFICIENCY MATERIALS ENVIRONMENT Cummins invested $15 million in A recovery plan was implemented 5% on an absolute basis while falling ENERGY SOCIAL 140 energy efficiency and onsite solar for 2019, increasing investment by 4.8% adjusted for hours worked ENERGY STRATEGY Community Engagement photovoltaic RAWcapital projects during going forward to $27 million and compared to 2017. LOGISTICS MATERIALS Health and Safety Cummins continues to use 2018, towards achieving its energy implementing low cost/no cost Diversity and Inclusion The company’s Environmental a facility investment plan and greenhouse gas (GHG) goals reduction targets for all global facilities approach, with a focus on Workforce PRODUCTS COMMUNICATIONS Champion program trained WATER IN USE with projected& MARKETING cost savings of to reach the company’s goal. test cell energy recovery 183 employees from all global ECONOMIC ENERGY AND $5.2 million per year. and investments in on-site Financial Over the same 2010 to 2018 regions to look for ways Cummins renewable projects to offset SUPPLIER EMPLOYEE Innovation ENGAGEMENTGlobal campaignsENGAGEMENT were launched time-period, the company’s energy can reduce its impact on the electricity purchased from the GHG GOAL Supply Chain for LED lighting and compressed efficiency and renewable energy environment. This training grid. The testing of engines Customer Support WASTE is a significant energy use ACHIEVE A 32% air efficiency to develop and deploy efforts have reduced Cummins’ ensures that the company’s global Ethics, Governance and Risk FACILITIES & at Cummins. OPERATIONS ENERGY INTENSITY common solutions for common GHG intensity by 37%. environmental and facility leaders Government Relations opportunities. Total energy costs in have the skills, tools, best practices Ongoing site projects include REDUCTION FROM The company’s GHG emissions COMPANY FACILITIES 2018 were approximately $150 million and network connections needed “smart” lighting and or about 7% of Cummins’ net income. increased by about 30,500 tons on to effectively manage energy, improvements to building BY 2020 AND INCREASE exteriors, and heating and an absolute basis in 2018, but fell 6% water and waste. THE PORTION OF At the end of 2018, Cummins’ energy adjusted for hours worked compared cooling systems. Aggregated savings from energy efficiency ELECTRICITY CUMMINS intensity reduction of 29% was slightly to the prior year. Cummins’ primary efforts total about $55 million USES DERIVED off pace of its goal of 32% by 2020. energy consumption increased by per year. FROM RENEWABLE SOURCES. 32% Cummins uses tools and resources available from Baseline year: 2010 ENERGY 2020 programs such as ISO 50001, INTENSITY 29% GOAL the international energy PROGRESS YEAR management system standard, Percentage reduction in and the U.S. Department of 2018 energy intensity compared Energy’s Superior Energy to 2010 baseline year 25% Performance (SEP) program. 24% 24% The company plans to 2017 implement ISO 50001 2015 2016 at 40 sites, or 90% of its carbon footprint, by 2020. Thirty-six sites have been 19% certified through 2018, with nine also certified 2014 to the SEP program.
PREV 19 NEXT 2016 ENVIRONMENT // GOALS UPDATE // ENERGY
ENERGY AND INTRODUCTION GHG GOAL (Cont.) ENVIRONMENT SOCIAL Community Engagement Health and Safety Diversity and Inclusion HARNESSING Workforce WIND POWER ECONOMIC Financial A Cummins employee checks Innovation Cummins’ 2020 energy goal the solar array atop the Jamestown The Meadow Lake Wind Farm is in Engine Plant in Jamestown, Supply Chain includes a commitment to increase a rural area in northwest Indiana. New York (U.S.). Customer Support the amount of energy sourced from Ethics, Governance and Risk renewable power. Construction on Business Renewables Center. Government Relations the Meadow Lake VI wind farm in While the VPPA will reduce northwest Indiana was completed Cummins’ future carbon footprint, WHAT ABOUT and began generating renewable it will not benefit the company’s SOLAR? electricity in December 2018. energy intensity performance. Cummins has installed This is because Cummins uses This wind farm expansion was 13 solar photovoltaic (PV) Huddersfield, UK different reporting protocols for its made possible through Cummins’ systems at facilities around R energy and GHG metrics, and the 15-year virtual power purchase the world, which currently M protocols treat offsite renewable agreement (VPPA) for 75 MW generate 1.4% of the M energy projects differently. capacity, which will generate about company’s global electric load. More than 20 new installations N as much electricity as the company Cummins uses the U.S. Department are planned for 2019, which M uses in Indiana and about 28% of of Energy’s Energy Intensity I will more than double the the company’s global electricity load. Baselining and Tracking Guidance company’s PV capacity. for the Better Buildings, Better The power will go to the grid and Fourteen installations will Plants Program for its energy not directly to any Cummins facility. be in India, where solar metrics, and it follows the GHG intensity is high, and power Nevertheless, it amounts to a Protocol Corporate Standard for from the grid is carbon- 20% reduction in the company’s carbon intensity metrics. intensive and expensive. carbon footprint (approximately
165,000 metric tons carbon A case study documenting the M dioxide equivalent per year). Cummins VPPA was published
by the Rocky Mountain Institute’s *Indicates solar arrays at multiple locations.
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ENERGY RAW LOGISTICS MATERIALS
ENVIRONMENT // GOALS UPDATE // WASTE
PRODUCTS COMMUNICATIONS WATER IN USE & MARKETING INTRODUCTION
SUPPLIER EMPLOYEE ENVIRONMENT ENGAGEMENT ENGAGEMENT WASTE SOCIAL Community Engagement WASTE STRATEGY Cummins in 2018 recycled However, this move negatively for hours worked. Compared FACILITIES & Health and Safety OPERATIONS The company follows a 90% of the total waste the company impacts the recycling rate as most with 2017, Cummins’ total waste Diversity and Inclusion waste management hierarchy generated over the year, equivalent corrugated and wood packaging disposed in 2018 increased by Workforce consistent with current industry to approximately 203,000 metric that is now reduced are easy to 2,981 metric tons or 14.5% standards: avoid the generation ECONOMIC WASTE GOALS tons. The recycling rate has been recycle in most operating regions. on an absolute basis and by of waste, reuse, recycle and Financial flat in the past two years due to 3.6% adjusted for hours worked. recover energy from waste. Innovation Cummins is currently working on Supply Chain INCREASE COMPANY regulatory barriers in regions like high impact projects including Cummins is also committed Reducing packaging is one Customer Support RECYCLING RATE India and China, problematic waste key way Cummins avoids implementation of total waste to avoiding the generation of Ethics, Governance and Risk TO 95% BY 2020. streams such as foundry foamwork the generation of waste. Government Relations management suppliers, contracts hazardous waste and properly and filter media, and an absence Reusing waste might involve with new recycling and recovery handling hazardous materials in REACH “ZERO DISPOSAL” of waste management suppliers reusing pallets or finding an suppliers in North America, Latin the workplace. The definition of STATUS AT 30 SITES in some operating regions such alternative use without any America and Asia Pacific, to boost what constitutes hazardous waste reprocessing. Recovery and WITH 100 OR MORE as Africa. performance significantly to achieve varies widely by country. Cummins reuse of coolants and solvents PEOPLE BY 2020 is still another example. WHERE 100% OF In addition, Cummins has been the 2020 goals. follows all applicable local and reducing packaging waste globally regional regulations. For U.S. sites The company’s ultimate goal is WASTE IS REUSED, Since the company’s baseline year by increasing its use of returnable that generate hazardous waste, “Zero Disposal” at 30 Cummins RECYCLED OR of 2010, Cummins’ total waste and reusable packaging. The the company has a formal supplier facilities by 2020. There are RECOVERED IN A disposal increased by about 5.7% in company knows moving up the pre-qualification process to ensure currently 15 validated Zero USEFUL MANNER. absolute terms, while experiencing a Disposal sites toward this goal. waste hierarchy from recycling to such waste is handled properly. Baseline year: 2010 37.4% reduction in disposal adjusted reduction is the right thing to do. Under Cummins’ definition of Zero Disposal, waste can only be burned as a last resort to RECYCLING create energy and then only RATE 95% if there’s a net energy gain, PROGRESS creating more energy than is needed to sustain combustion. Percentage of waste recycled 90% 90% 90% 2020 90% 89% compared to baseline year of 2010 GOAL YEAR 2014 2015 2017 2018
2016
PREV 21 NEXT Environmental Icons ENVIRONMENT // GOALS UPDATE // LOGISTICS ENGINE FUEL RAW EFFICIENCY MATERIALS INTRODUCTION SCIENCE ENVIRONMENT ENERGY SOCIAL RAW BASED Community Engagement LOGISTICS MATERIALS TARGETS Health and Safety Diversity and Inclusion In 2017, Cummins signed Workforce on to the Science Based Targets Initiative (SBTi), ECONOMIC In mid-2017, Cummins transitioned a way to correlate high and low LOGISTICSPRODUCTS COMMUNICATIONS LOGISTICS which uses environmental Financial WATER IN USE all North& MARKETING American transportation volume months to CO emissions. 2 STRATEGY science to support companies Innovation GOAL management (shipments within with setting GHG reduction Supply Chain The transportation management By meeting the company’s the Cummins network) to one targets consistent with limiting Customer Support logistics goal, Cummins USE THE MOST team focuses on inefficient routes by global warming to 2 degrees Ethics, Governance and Risk third-party logistics company. aims to create and maintain EFFICIENT METHODSUPPLIER AND EMPLOYEE pre-planning loads allowing them to Celsius or lower. Government Relations ENGAGEMENT A proposalENGAGEMENT for a third-party logistics an efficient transportation MODE TO MOVE GOODS combine shipments and reduce the network that reduces CO provider outside the U.S. was 2 Cummins carefully considered number of lightweight loads. ACROSS THE CUMMINS paused during some warehousing emissions by improving the recommendations of the WASTE transport planning to maximize NETWORK TO REDUCE and organizational changes, after October 2018 International So far in 2019, the company has loads, reduce miles when CO2 PER KILOGRAM which the logistics providers will be Panel on Climate Change’s FACILITIES & been able to increase truckload trucks are empty and OPERATIONS report in calculating its OF GOODS MOVED evaluated. Currently, the company is weights by 5%, thus decreasing minimize distance traveled. proposed targets. The BY 10% BY 2020 not evaluating data outside the U.S. CO2 emissions per pound. company’s commitment will against its goal. Baseline year: 2014 While 2018 year-end data shows apply to its next product negative progress, intra-year in use and facility energy/ The logistics team has been working GHG reduction targets to point in time measurements show to better understand the increased be announced in 2019. positive improvement. The logistics amount of detailed data it receives team is working toward making Cummins’ three energy/ from the company’s new vendor and improvements that would smooth GHG reduction goals has launched a Six Sigma project in CO reductions throughout the year. (including the current one early 2019. The project targets the 2 with a goal completion year high CO routes where Cummins of 2020) have used the 2 Also in 2019, a Six Sigma team can make changes to the way it principles and data of science- has begun to concentrate on CO2 ships material and reduce CO . based target setting while not 2 emission reporting in Europe. officially part of the initiative. The company is also looking for
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ENERGY RAW LOGISTICS MATERIALS
Environmental Icons ENGINE FUEL RAW PRODUCTSEFFICIENCY COMMUNICATIONSMATERIALS WATER IN USE & MARKETING ENVIRONMENT // GOALS UPDATE
ENERGY SUPPLIER RAWEMPLOYEE LOGISTICS INCREASE FACILITY RECYCLINGENGAGEMENT RATE MATERIALSENGAGEMENT INTRODUCTION KEY 2020 GOAL 95% WASTE ENVIRONMENT
ENVIRONMENTAL FACILITIES & INDICATORS PRODUCTS COMMUNICATIONS WATER INOPERATIONS2018 USE PROGRESS& MARKETING • 90% SOCIAL Community Engagement GOALS UPDATE Health and Safety SUPPLIER EMPLOYEE Diversity and Inclusion EnvironmentalZERO Icons DISPOSAL ENGAGEMENT ENGAGEMENT ENGINE FUEL RAW Workforce Here’s a look at Cummins’ progress toward its environmental goals. EFFICIENCY2020 GOALMATERIALS 30 SITES WASTE ECONOMIC Environmental performance includes all consolidated operations and joint ventures FACILITIES & OPERATIONS Financial subscribing to Cummins’ Enterprise Environmental Management System. ENERGY RAW 2018 PROGRESS 15 SITESLOGISTICS MATERIALS Innovation Supply Chain ENVIRONMENTAL PERFORMANCE 2015 2016 2017 2018 EnvironmentalREDUCE Icons DIRECT WATER USE INTENSITY Customer Support ENGINE FUEL RAW PRODUCTSEFFICIENCY COMMUNICATIONSMATERIALS Ethics, Governance and Risk 1 WATER IN USE 2020 GOAL& MARKETING 50% Energy consumption (thousands of MMBtu) 12,912 12,889 13,656 14,374 Government Relations 2018 PROGRESS • 50% GHG emissions (thousands of metric tons CO e) 774 762 778 808 ENERGY 2 SUPPLIER RAWEMPLOYEE LOGISTICS ENGAGEMENT MATERIALSENGAGEMENT Generated waste (thousands of metric tons) 186 186 207 227 WATERWASTE NEUTRALITY Disposed waste (thousands of metric tons) 18 21 21 24 PRODUCTSFACILITIES & COMMUNICATIONS WATER INOPERATIONS USE 2020 GOAL& MARKETING 15 SITES Recycled waste (thousands of metric tons) 168 166 186 203
Recycling rate (%) 90 89 90 90 SUPPLIER EMPLOYEE 2018 PROGRESS 8 SITES ENGAGEMENT ENGAGEMENT Environmental Icons ENGINE FUEL RAW Hazardous waste (metric tons) 78 3,098 4,048 5,409 EFFICIENCY MATERIALS REDUCEWASTE ENERGY USE INTENSITY IN FACILITIES
Water use (millions of gallons) 947 930 964 949 FACILITIES & OPERATIONS Environmental Icons ENERGY 2020 GOAL 32% 2 ENGINE FUEL RAW RAW Enterprise ISO 14001 certified entities 112 108 108 109 LOGISTICS MATERIALS EFFICIENCY 2018 PROGRESSMATERIALS • 29% Manufacturing sites certified to ISO 14001 / OHSAS 18001 (%) 92 Environmental96 95 Icons97 ENGINE FUEL RAW
EFFICIENCY PRODUCTS MATERIALS COMMUNICATIONS ISO 50001 Certified sites 7 16 27 36 WATERREDUCE CO PER KG OFIN GOODSUSE SHIPPED & MARKETING ENERGY 2 Net sales (millions U.S. dollars) 19,110 17,509 20,428 23,771 RAW2020 GOAL 10% LOGISTICS SUPPLIER MATERIALSEMPLOYEE Water intensity reduction since 2010 (%) 3 42 43 44 ENERGY50 ENGAGEMENT ENGAGEMENT 2018RAW PROGRESS • -3% LOGISTICS MATERIALS Energy intensity reduction since 2010 (%) 3,4 24 24 25 29 WASTE FACILITIES & OPERATIONS 3,4 GHG intensity reduction since 2010 (%) 29 30 33 37 REDUCE CO FROM PRODUCTS IN USE ANNUALLY PRODUCTS 2 COMMUNICATIONS WATER IN USE & MARKETING PRODUCTSGOAL 3.5 MILLIONCOMMUNICATIONS METRIC TONS (MMT) 1 Primary energy excludes sold electricity and associated fuel usage WATER IN USE & MARKETING 2 Includes global CMI managed facilities and 50:50 JV non-managed facilities 3 Intensity defined as adjusted for hours worked for energy, GHG and water 2018 PROGRESS • 4.3 MMT 4 Reduction includes consolidated entities only
SUPPLIER EMPLOYEE SUPPLIERENGAGEMENT EMPLOYEEENGAGEMENT ENGAGEMENT ENGAGEMENT PREV 23 NEXT
WASTEWASTE
FACILITIESFACILITIES & & OPERATIONSOPERATIONS ENVIRONMENT // PARTNERSHIPS
INTRODUCTION PARTNERING TO SOLVE TRACKING ENVIRONMENT SOCIAL COMPLIANCE Community Engagement COMPLEX PROBLEMS AROUND THE Health and Safety WORLD Diversity and Inclusion Cummins’ partnerships and its policy advocacy play key roles Workforce Cummins’ Product Certification ECONOMIC in the company’s environmental strategy and performance. and Compliance group tracks and reports on emissions compliance Financial Innovation They help Cummins meet product and the new frontier is around contained in the Euro VI and developments in cities, territories and the following major regions: Supply Chain emission goals, use energy more greenhouse gas (GHG) standards EPA 2010 emissions standards Africa, east Asia, greater Europe, Customer Support efficiently and bring environmental and local governments establishing for on-highway products. India, Latin America, the Middle Ethics, Governance and Risk solutions to the marketplace. Four emissions requirements. East, North America, northeast Government Relations This is both a challenge and a of the company’s 10 environmental Asia, southeast Asia, Russia Phase 2 for U.S. GHG/fuel efficiency significant step forward — the and the South Pacific. sustainability principles focus on regulations passed in 2016 include number of people living in markets partnerships with legislative and Over the next five years, Cummins separate engine standards. regulated at these more stringent regulatory entities to develop will adapt to common and regional Cummins continues to support levels will increase from 1 billion variations of on-highway standards sound public policy. They are: this regulation and in 2017 today to more than 3 billion. that will continue to drive emissions »» Help develop responsible reductions in eight of these worked to implement it in 11 regions. regulations. In the U.S., Cummins is company products. The first committed to working with both For facility compliance, Cummins »» Promote technology development. phase goes into effect in 2021. the Environmental Protection in 2018 implemented its global » Advocate for incentives Legal Compliance External Audit » Cummins is also advocating for Agency (EPA) and the California to accelerate progress. Program, which requires each separate engine standards around Air Resources Board (ARB) to region at the company to select »» Support a balanced the world as other regions consider maintain a national, heavy-duty an external vendor to conduct global approach. GHG regulations. And the company NOx and GHG program. compliance audits at its sites.
continues working to achieve lower This program is implemented using Cummins has a long history of In 2018, the company certified levels of oxides of nitrogen (NOx) a common audit methodology to demonstrating its leadership in 144 engine models among and particulate matter (PM) in its drive effective, transparent and developing the technologies needed 15 governing agencies around consistent compliance assessment product emissions globally. to meet tough emissions standards the world to 36 different emissions across regions. In parallel, the company uses legal compliance and improve fuel efficiency. Over the next five years, India, standards for its diesel and natural software to enable full knowledge China, Mexico, Brazil and other gas products for on-highway, of compliance obligations and track Emissions regulations are expected countries are expected to move off-highway, marine and any issues until resolved. to continue getting tighter globally to the very low emissions levels locomotive applications.
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INTRODUCTION ENVIRONMENT SOCIAL BUSINESS Community Engagement Health and Safety Diversity and Inclusion COALITIONS Workforce ECONOMIC AND COUNCILS Financial Innovation Staff members with the Health Effects Supply Chain Cummins is a member of several organizations Institute meet with Cummins employees Customer Support in 2019 to discuss key air quality trends. that promote sustainability and responsible Ethics, Governance and Risk technology, including: Government Relations »» The DIESEL TECHNOLOGY FORUM, »» BSR (formerly Business for Social Responsibility), which works A TRUSTED SOURCE which is dedicated to raising with member companies to develop sustainable business strategies awareness about the importance through research and cross-sector collaboration. OF KNOWLEDGE of clean diesel engines, fuel and »» The ROCKY MOUNTAIN INSTITUTE’S BUSINESS RENEWABLES CENTER, The Health Effects Institute (HEI) provides high-quality, trusted technology. Since its founding in a member-based platform that works to streamline and accelerate science for cleaner air and better health so companies can 2000, the forum has emerged as corporate procurement of off-site, utility-scale wind and solar energy. spend more time innovating and advocating and less time a leading source of information arguing about how research is conducted. »» The INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION (ICCT), on agriculture, economics, whose mission is to improve the environmental performance and energy energy, the environment, Through HEI, Cummins 40 years ago. Government efficiency of road, marine and air transportation to benefit public health transportation and trade issues can have input on the health regulators, along with many and mitigate climate change through research, technical and scientific impacting diesel technology. effects research over the next companies in the motor vehicle analysis. In 2017, Cummins joined ICCT’s soot-free urban bus fleet » The , five years — to frame the industry, including Cummins » HEALTH EFFECTS INSTITUTE initiative to expand deployment of soot-free engines in large cities a non-partisan organization conversation for the next customers and other members in countries without rigorous emissions regulations. The initiative founded by the U.S. Environmental 20 years. of the Truck and Engine brought together companies that manufacture buses and suppliers Protection Agency and industry Manufacturers Association, of commercially available soot-free engines with city officials. Cummins helped found leaders, including Cummins, to are also supporters of HEI. In 2018, Cummins produced 43,802 soot-free engines. HEI through former Cummins provide high quality, impartial, CEO Henry Schacht nearly and relevant science regarding the effects of air pollution on health.
PREV 25 NEXT ENVIRONMENT // STRATEGIC ACTIONS
INTRODUCTION STRATEGIC ACTIONS ENVIRONMENT Here are some actions Cummins is taking at its SOCIAL Community Engagement AT A GLANCE plants to reach its goals in energy, waste and water. Health and Safety Diversity and Inclusion Workforce ECONOMIC Financial Innovation Supply Chain Customer Support Ethics, Governance and Risk Government Relations
The Rocky Mount Engine plant in Whitakers, North Carolina (U.S.), has produced more than 4 million engines since 1979. It’s one of the company’s larger facilities, with 1,800 employees covering 1.2 million square feet. »»
REDUCE REUSE RECOVER RECYCLE REPLENISH The company’s plants and tech Cummins reduced waste Cummins uses more There are 64 sites across the Cummins’ defines water centers are always looking across the company by more than 180 regenerative company with 100 or more neutrality as offsetting the for ways to reduce waste. than 1 million pounds by dynamometers at its plants headcount and a 95% or company’s own water use Cummins Filtration Brazil changing to reusable packaging, and technical centers around better recycling rate. through conservation and/ decreased landfill media benefiting the environment the world to convert engine or restoration of available waste generation at its and the bottom line. power in test cells into water sources. air filter line by 50%. productive energy.
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BUILDING MORE PROSPEROUS COMMUNITIES AROUND THE WORLD
These girls participate in Girls Inc., a program supported by Cummins Powers Women, the company’s most ambitious community initiative ever, focused on the advancement and prosperity of women and girls around the world. To learn more about the program launched in 2018, see page 31. (Photo courtesy of Girls Inc.)
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The mission of Cummins’ PRIORITY KEY NUMBERS community engagement work SOCIAL AREAS IN 2018 Community Engagement is to support its employees as Cummins focuses its Health and Safety employee engagement efforts Diversity and Inclusion they help build more prosperous on three global priority areas Workforce critical to healthy communities: communities around the 83% Financial 01 // Innovation world, partnering to help solve Percentage of Cummins EDUCATION employees participating Supply Chain Customer Support some of the most difficult Improving the quality and in the company’s community alignment of educational Ethics, Governance and Risk engagement program. Government Relations societal problems. Corporate systems to prepare the students of today for the Responsibility at Cummins workforce of tomorrow. means empowering people to 02 // thrive in their day-to-day lives. ENVIRONMENT Ensuring that everything Cummins has a deeply-rooted its mission to build more prosperous Cummins does leads to People served by Cummins’ community commitment to community communities around the world. a cleaner, healthier and engagement programs in 2018. problem-solving, believing that safer environment. Employees at the company are a company is only as healthy as the underpinnings of Cummins’ the communities where it operates. responsibility to communities, 03 // Every successive Cummins leader identifying community needs, EQUALITY OF has reinforced the company’s volunteering time to meet those OPPORTUNITY dedication to responsible citizenship. Increasing opportunity needs, partnering with leading and equity for those The strong foundations of employee- local organizations and helping most in need. led community problem-solving and to make their communities Total Cummins giving in 2018 direct leadership engagement in healthier and stronger. to support communities. community work help Cummins in
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MEASURING CUMMINS GIVING GRANT MAKING SOCIAL Cummins BY PRIORITY AREA Community Engagement ENGAGEMENT financially Here’s a look at Health and Safety supports 2018 grant making 22% Diversity and Inclusion EDUCATION Workforce community at Cummins by priority engagement projects around the area. A key future 9% Financial world. In 2018, the company gave a priority is increasing ENVIRONMENT Innovation record $21.1 million to communities giving and engagement Supply Chain through Community Development 51% to support the Customer Support EMPLOYEE Grants and other strategic community EQUALITY OF environment. OPPORTUNITY Ethics, Governance and Risk PARTICIPATION investments in Cummins’ three global Government Relations priority areas. Giving increased in 2018 18% Cummins shows its commitment to the by more than 12% over 2017. OTHER communities it serves in part through direct engagement. Employees around the globe can volunteer at least four hours on company time IMPACT BY to engagement activities, using their skills to make their communities better 2017 3.3 MILLION THE NUMBERS PEOPLE places to live and work. Given its significance, the company sets an annual SERVED community engagement participation goal of 70%. The company had a Here’s a quick look 2018 4.3 MILLION record year for engagement in 2018, topping its 2017 record: at the impact of Cummins’ community engagement efforts. JOBS SECURED 82 2,429 2,460 81 80 WATER 2017 4.9 MILLION kL 73 CONSERVED 2018 12 MILLION kL
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CUMMINS TEC: TECHNICAL EDUCATION FOR COMMUNITIES SOCIAL Community Engagement Health and Safety PROVIDING Diversity and Inclusion THE SKILLS Workforce Financial Innovation FOR SUCCESS Supply Chain Customer Support Cummins TEC: Technical Education for Ethics, Governance and Risk Communities is the first strategic community Government Relations program built by the company from the ground A student at the company’s up. Launched in 2012, its mission is to train first U.S. Cummins TEC site in disadvantaged youth in employable technical skills and connect Memphis, Tennessee, explains the them to good jobs in their communities through school-based, workings of an engine to visitors from the company. industry-supported skills training. CUMMINS TEC 2018 METRICS
The idea for TEC was born of Cummins developed curriculum, business need: employers around teacher training, guidance the world are having trouble finding counseling manuals, achievement 65% workers to fill good-paying roles as tests, equipment and tool lists, as GRADUATES FIND A RELEVANT JOB service and shop floor technicians. well as methods for engaging local WITHIN 6 MONTHS 13* Hiring pools in many communities industry in curriculum and workplace are suffering from insufficient learning opportunities for students. LOCATIONS fundamental technical skills. There are currently 22 Cummins 88% Employers say TEC SEVEN There are also significant gaps TEC programs around the world. graduates meet their in soft skills, such as problem- Thirteen sites graduated a total of 98% business expectations COUNTRIES Employers recommend solving, analytical ability and the 292 students in 2018, bringing the Two Cummins TEC students from the hiring of TEC proper attitudes and belief systems overall number of graduates in the Chongqing Industry Polytechnic graduates College in China participate in 292 necessary for job success. program globally to more than 800. workplace learning with Cummins GRADUATES Vocational education is an important employees’ guidance. * 13 sites in red have graduated way to elevate standards of living. students; 9 sites in green have not yet graduated students.
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CUMMINS POWERS WOMEN CUMMINS POWERS CUMMINS WOMEN NONPROFIT POWERS PARTNERS SOCIAL GIRLS INC. Supports girls in North Community Engagement ACCELERATING Health and Safety WOMEN BY America with whole girl development THE NUMBERS through after-school programming. Diversity and Inclusion GENDER ROSA FUND Supports grass roots Workforce In its first year, the organizations serving women and program has achieved girls in the U.K. with networking Financial impressive results: and capacity building. EQUALITY Innovation SAVE THE CHILDREN Stabilizes and Supply Chain empowers refugee girls and women Customer Support On International Women’s Day living in German reception centers. in 2018, Cummins launched the 34,000 Ethics, Governance and Risk CHINA WOMEN’S DEVELOPMENT Women and girls served by Government Relations FOUNDATION Promotes the Cummins Powers Women, Cummins Powers Women program, development of women in China up from 1,500 in six months. its $11 million global grant commitment through local entrepreneurial handicrafts. to the advancement and prosperity of women CARE (LATIN AMERICA) Strengthens and girls around the world. It is the company’s 37 the domestic workers’ movement in Latin America. Advocacy grants funded in three most ambitious community initiative ever. countries to help nonprofit partners RISE UP Advances education, equity advocate with local governments and opportunity for girls and women Through the program, Cummins is Cummins Powers Women has for gender equality. in Latin America, Africa, South Asia partnering with a select group of projects in seven regions around the and the U.S. expert nonprofit organizations with world: Latin America, Asia Pacific, CAMFED (GHANA) Supports transition existing, outcome-based programs Europe, India, China, Africa and SEVENTY- programs for girls in rural Ghana going from secondary school to working to advance equality for the U.S. The company’s regional FIVE the workforce. women. Cummins’ investment leadership teams are spearheading CARE AUSTRALIA (CAMBODIA) Supports Cummins leaders engaging directly ABOVE Elisabeth Baasch (right), supports a range of effective this global effort, joined by the girls’ education through teacher with the program’s nonprofit a Human Resources leader at the training, scholarships and school programs, including grassroots numerous employee engagement partners in their region. More than Cummins plant in Marktheidenfeld, materials in Australia and Cambodia. 20 serve as women’s champions, Germany, helps a girl at an immigrant teaching and mentoring, financial efforts taking place throughout offering strategic guidance on local reception center identify her strengths CARE AUSTRALIA (PAPUA NEW GUINEA) stability through entrepreneurship, Cummins communities. projects to nonprofit partners. Improves access to quality elementary and talents as part of a workshop education in remote, disadvantaged developed by Save the Children leadership training and strategic communities in Papua New Guinea. (photo courtesy of Save the Children). guidance for nonprofit leaders. GIRLS ACADEMY BELOW Sandeep Sinha, Vice President 13 Supports mentoring programs for of Cummins’ India Area Business Countries with Cummins Powers Aboriginal and Torres Strait Islander Organization, discusses plans for girls in Queensland, Australia. Cummins Powers Women in his country. Women programs and partners.
PREV 31 NEXT SOCIAL // HEALTH AND SAFETY HEALTH AND SAFETY: There were no employee fatalities SOCIAL in 2018, but a 5% increase in the Community Engagement CREATING THE GOALS Health and Safety Severity Case Rate, the rate of Diversity and Inclusion injuries and illnesses resulting in FOR 2023 Workforce RIGHT CULTURE lost work days per 100 employees, Cummins believes to 0.264. It was the only Cummins progress can be driven The Global Health and Safety team Financial The health and safety of Cummins employees lagging indicator to increase. by setting aggressive, Innovation offers risk-based hazard prevention is fundamental to the company’s sustainability, but achievable goals. Supply Chain and control tools in numerous and 2018 saw several improvements in Here are key 2023 goals Customer Support areas, ranging from driver safety, LOOKING AHEAD for health and safety: Ethics, Governance and Risk important metrics, including: hand safety, and lockout/tag-out In addition to paying special Government Relations procedures, to machine guarding attention to the company’s »» Improve »» A 17% IMPROVEMENT in the THE JOURNEY and working safely at heights. Severity Case Rate, Global Health Cummins’ Contractor Incidence Rate, the For much of the past decade, and Safety will also have a special average Injury/ number of recordable injuries The team also oversees an extensive Illness Rate Cummins has been on a journey to focus on contractor safety in involving contractors, to 0.768. safety training program. In 2018, 2019. While Cummins saw a (Incidence Rate) become world class in health and Cummins employees completed »» A 9% IMPROVEMENT in the 17% improvement for the by 38% safety. The company’s Global Health nearly 1.8 million hours of safety Major Injury Rate for Cummins’ Contractor Incidence Rate, and Safety team has continued training, an 8% increase over 2017. »» Improve the employees, which deals with major injuries suffered by to strengthen a culture ensuring More than 12,000 employees have company’s serious but non-fatal injuries, contractors did not go down. Major Injury employees are fully engaged and now completed “Live It. Lead It.” to 0.043. committed to making Cummins a Rate by 30% leadership training focusing on the Plans include webinars for »» A 7% IMPROVEMENT in the healthier and safer place to work. kind of health and safety culture the Cummins employees on the »» Improve company’s Incidence Rate, company believes is critical to reduce Since 2010, the company’s Incidence importance of health and safety Cummins’ the rate of recordable injuries, and prevent injuries. Lost Day Case and Severity Case Rates have been for contractors and strengthening to 0.646. the pre-qualification process for Rate by 39% significantly below comparable By taking direct action through contractors to ensure a consistent The improvements happened industries (see chart on page 33). training and by establishing the right »» Improve the process that always includes an despite a 12% increase in hours Overall the company has seen a culture, Cummins believes it can best company’s Lost emphasis on safety. worked at Cummins. 50% reduction in injuries between protect its most important asset – Day Rate by 30% 2008 and 2018. its employees.
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SAFETY HOW WE RECORD TEAM SOCIAL PERFORMANCE COMPARE ENTRIES FOR LAUNCHES Community Engagement INDICATORS Here’s Cummins’ Incidence Rate ERGO CUP SURVEY Health and Safety Diversity and Inclusion Here’s a look at key trends in safety at Cummins. compared to other industries. Cummins saw a The Global Health and Workforce 6% improvement in its Safety team in 2018 took US MOTOR & GENERATOR MFG a or In ury ate Ergonomic Incidence Rate steps to measure the US MOTOR VEHICLE MFG MAJOR INJURY RATE in 2018, another sign that company’s progress toward Financial CUMMINS Innovation 0.08 Global Health and Safety’s creating a true safety culture annual Ergo Cup competition by conducting a global Supply Chain 2017 2.1 is encouraging improved health and safety Customer Support 0.06 6.4 ergonomic risk reduction. perception survey. Ethics, Governance and Risk 0.69 Government Relations Two projects were honored in More than 11,000 employees, 0.04 2016 3.2 the 2018 competition which working in more than 6.5 invites project submissions 100 locations, responded 0.63 from across Cummins. In the to the 50-question survey, 0.02 Engineering Category, a team which was done in 2015 3.1 of employees from Cummins conjunction with the National 6.6 Generator Technologies in Safety Council. The survey 0.00 0.59 2011 2012 2013 2014 2015 2016 2017 2018 Stamford, U.K., took top provided benchmarking honors for significantly reducing opportunities against other Incidence ate Indicator 2014 2.9 INCIDENCE RATE 6.9 the ergonomic and safety participating organizations. 0.61 risks from a job that previously 1.6 required strenuous hammering. Cummins scored well in 2013 3.0 management perception, 7.1 In the Judge’s Choice safety support climate and 1.2 0.65 category, a team from the employee participation. Cummins Technical Center 2012 3.8 in Columbus, Indiana (U.S.), 0.8 7.4 addressed a process that 0.69 required employees to lift a heavy coupling with a strap. 0.4 2011 3.9 7.5 0.78 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2010 4.4
NOTE: The company’s Major Injury Rate is the number of major injuries per 100 employees per 8.0 year. The company started tracking it in 2011. Cummins’ Incidence Rate, also known as the average 0.99 Injury/Illness rate, is the relative number of recordable injuries and illnesses per 100 employees.
0 1 2 3 4 5 6 7 8
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Inclusion means truly making an and apply concepts related to network, exchange ideas DIVERSITY AND effort to include, appreciate and to diversity and inclusion. and celebrate the successes value the unique backgrounds and Spectrum closes with creation of Cummins’ Black, Hispanic SOCIAL skills that each employee brings to of a personal action plan. and Latino talent. Community Engagement INCLUSION PLAYS work, which is Cummins at its core. Health and Safety Leaders, including Chairman and That’s when the company is at its Diversity and Inclusion CONFERENCES CEO Tom Linebarger and Alexis Workforce KEY ROLE IN best and can win for its customers, Herman, Lead Director of the powering a more prosperous world. ENCOURAGE DISCUSSION Cummins Board of Directors, and Financial SUSTAINABILITY the former Secretary of the U.S. Innovation TRAINING Cummins hosted a global Women’s Department of Labor, spoke at Supply Chain Customer Support At Cummins, valuing and including differences Conference and its first U.S. the conference. They talked about IS KEY Ethics, Governance and Risk Diversity Conference in 2018. what is happening in the inclusion in decision making is the company’s competitive Cummins leaders understand Government Relations The Women’s Conference brought environment today, what it means advantage. Having diverse employees doesn’t the importance of diversity and together nearly 200 female and to be authentic in your career inclusion to a global company. drive business success alone; it’s how the male leaders from all over the world. journey and lessons learned from In 2018, more than 400 U.S. company uses diversity that makes an impact. being a diverse leader. Through managers received training on The theme for the week, “Powering honest conversations, Cummins unconscious bias and even more Our Inclusion,” allowed for open and leaders openly shared challenges employees across the globe took honest discussion on successes and DISABILITY they face and talked about ways part in the company’s “Inclusion challenges in creating full inclusion INCLUSION to overcome barriers. Initiative - A Facilitated Discussion.” for women at Cummins. The company in 2018 Diversity and inclusion is a key launched a focus on The company continues to At the end of the conference, driver of Cummins’ success. disability inclusion with improve its Spectrum of Diversity attendees were challenged to inspire the goal of increasing Without different perspectives, and Inclusion training, which is commitment in others and use their the employment of the company would lose its provided to all new employees influence to drive gender diversity people with disabilities. ability to innovate and challenge during onboarding. The company’s and inclusion across the company Cummins’ vision is to the impossible. become an employer refreshed Spectrum course and in its communities. of choice for people sets Cummins’ expectations, Cummins’ U.S. Diversity Conference with disabilities and to teaches employees about their work in communities focused on the company’s U.S.- role in creating an inclusive work to reduce barriers to based Black, Hispanic and Latino Cummins believes diverse teams environment and provides new employment for people leveraging the power of their talent. More than 200 employees with disabilities. differences can arrive at more activities for employees to learn met in Indianapolis, Indiana (U.S.), creative solutions for the company’s customers. These employees work at the company’s Commons office building in Columbus, Indiana (U.S.).
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GLOBAL SPENDING ON DIVERSE SUPPLIERS SOCIAL Cummins believes supplier diversity is critical to the DIVERSITY Community Engagement company’s sustainability efforts. Using diverse suppliers* BY THE Health and Safety enables Cummins to tap into the power of diverse thoughts Diversity and Inclusion NUMBERS and approaches, increases competition for Cummins’ Workforce business, and spreads the benefit of economic growth to a wider number of communities. Financial Innovation In 2018, Cummins, for the first time, exceeded $2 billion in global Supply Chain spending with suppliers who self-identify as diverse in their region Customer Support of the world. Two years earlier, Cummins was inducted into the 171 Ethics, Governance and Risk Number of countries Vice President and Chief Billion Dollar Roundtable, a prestigious advocate for best practices Government Relations Cummins employees Administrative Officer in corporate supplier diversity. Members must have exceeded Marya Rose speaks at come from around $1 billion in annual spending with diverse suppliers in the U.S. Cummins’ global Women’s the world. Conference in 2018. $2.06 billion
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EMPLOYEE RESOURCE GROUPS 24% $1.73 billion Employee Resource Groups (ERGs) at Cummins are open CUMMINS 1800 $1.63 billion to all employees and organized by different facets of diversity EMPLOYEES WHO SPEAK TWO OR $1.49 billion such as gender, generation, sexual orientation, racial and MORE LANGUAGES ethnic heritage, and disabilities. 1500 $1.54 billion * The eight categories of diverse suppliers recognized in the The groups are voluntary, employee-led groups that serve as a resource for $1.03 billion U.S. are: Minority Business 1200 Enterprises, Women Business members and the company by helping to foster a diverse, inclusive workplace $943 million Enterprises, Veteran Owned aligned with Cummins’ mission, vision and values. Businesses, Service-Disabled $810 million Veterans; Lesbian, Gay, Bisexual and Transgender 900 (LGBT) Suppliers; SBA Small With more than 150 ERGs worldwide, the groups provide ample opportunities 65 Disadvantaged Businesses; Number of countries HUBZone Small Business for leadership training, cross-cultural learning and professional development. $545 million Concerns and Philanthropic Cummins leaders Suppliers. Cummins’ global In 2018, the company started an initiative to more closely knit together global 600 diverse spending total come from around includes both Tier I and ERGs to amplify the voices they represent and harness their collective power 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tier II diverse suppliers. to effect positive change. the world. 300
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WOMEN AT MAKING GEOGRAPHIC GENERATIONS SOCIAL CUMMINS PROGRESS DIVERSITY Cummins also has diversity in the ages of its employees. Community Engagement Cummins is working to bring Here’s a look at how women Cummins employees They are spread across a broad generational spectrum. Health and Safety more women to the company in leadership positions and and leaders come Diversity and Inclusion Workforce and foster their development as women supervisors has from all over the world. GEN Y leaders. Here’s a look: grown since 2014: Here’s a look: E CENT Financial O EM LOYEES PERCENT OF WOMEN A E UN E Innovation 25.7% GLOBAL Supply Chain WOMEN IN LEADERS AT TOP 24.36% Customer Support CUMMINS SALARY LEVELS* BACKGROUNDS WORKFORCE Ethics, Governance and Risk 2018 2011 23.22% ALL EMPLOYEES Government Relations 26.87% 2017 21.8% WOMEN IN BORN INSIDE GEN 36.9% CUMMINS 21.01% THE U.S. E CENT 2016 O EM LOYEES WORKFORCE A E TO 2018 2015 OUTSIDE 19.6% 63.1% THE U.S. 2014