2018 CUMMINS PRODUCT STEWARDSHIP CUMMINS SUSTAINABILITY // PRODUCT STEWARDSHIP PRODUCT STEWARDSHIP IS KEY TO SUSTAINABILITY AT CUMMINS Cummins powers the interconnected world we live Cummins uses a comprehensive lens though which we view in today with an eye on what’s ahead tomorrow. environmental sustainability, from design to manufacture to end of life. Our environmental sustainability plan is the way we carry From trucks delivering needed goods, to trains out our priorities and goals and initiatives in our action areas. carrying passengers and freight, to generators powering hospitals, schools and data centers, 70% Cummins works to make people’s lives better of the ENVIRONMENTAL IMPACTS of a product are N with the least environmental impact possible. IO T SOURCE determined in the design phase C A E E Y O The company’s product stewardship goal means L P M E DESIGN working with an environmental mindset about 88% product design, use, remanufacture and end of life. of Cummins WATER USE MANUFACTURE Envolve Cummins (right) is the comprehensive lens is from raw material extraction through which the company views environmental sustainability. Cummins Environmental Sustainability Plan (see page 16 in the 74% 2013-14 Sustainability Report) guides Cummins of Cummins WASTE comes from raw the company as it strives to meet goals Making people’s lives better. materials and processing in three action areas: TRANSPORT » Reducing Cummins’ carbon footprint 99% » Using fewer natural resources of Cummins GHG FOOTPRINT » Partnering to solve complex problems. from products in use REUSE USE 85% less ENERGY used by remanufacturing 02 PREV 2 NEXT CUMMINS SUSTAINABILITY // PRODUCT STEWARDSHIP PRODUCTS IN USE EFFICIENCY Greenhouse gas (GHG) emissions from Cummins products in use are the company’s largest environmental impact and represent an estimated 99 percent of Cummins’ GHG footprint due to fossil fuel use. Cummins’ biggest opportunity to expand its product stewardship beyond the upfront design of its products is in working with customers to improve the efficiency of the company’s products in use. One of Cummins’ sustainability plan goals is to partner with its customers to improve the fuel efficiency of the company’s products in use, and by extension reduce carbon dioxide (CO2). The company wants to cut CO2 emissions by nearly 24 million metric tons, saving customers up to $7 billion through greater fuel efficiency, by the end of 2020. By 2020, Cummins expects to work with 20 percent of its customer base, touching nearly 2 million engines as it tailors engine specifications to customer applications. The company wants to ensure customers have the latest tools to improve fuel efficiency. Cummins has its own supercomputer, Clessie 2.0, which powers sophisticated design programs. It plays a key role in Cummins’ efforts to reduce the amount of material it uses in its products without affecting robustness. PREV 3 NEXT CUMMINS SUSTAINABILITY // PRODUCT STEWARDSHIP PARTNERING WITH CUSTOMERS FOR BETTER FUEL EFFICIENCY Cummins provides a complete set of collaborative solutions to help customers maximize their fuel efficiency and reduce greenhouse gas emissions. From the development of products that are optimized for specific market segments, to the use of software to assist in the truck specification process, to the ability to customize electronic engine settings and parameters. Cummins helps customers reduce their carbon footprint throughout the life of the product. Click red circles in the photo for more detail. PREV 4 NEXT CUMMINS SUSTAINABILITY // PRODUCT STEWARDSHIP PRODUCTS IN USE PRODUCTS IN USE FUEL ECONOMY INITIATIVES FUEL ECONOMY INITIATIVES 27% CUSTOMER-SPECIFIC PROJECTS 16% CUMMINS PRODUCT SPEC OPTIMIZATION CO2 EMISSIONS COMPOSITION 17% OEM INSTALLATION compared with global CO2 emissions Nearly half of Cummins CO2 emissions come from heavy- and mid-range engines. 16% DRIVETRAIN 13% 50 ENGINE IMPROVEMENTS 11% NEW FEATURES 40 30 BY THE NUMBERS HEAVY- AND MEDIUM-DUTY VEHICLE HEAVY- Cumulative number 20 VEHICLES LIGHT-DUTY 300 of projects (approximate) MANUFACTURING & CONSTRUCTION MANUFACTURING NON-ROAD TRANSPORT 10 20% customers reached by 2020 OTHER NON-TRANSPORT ELECTRICITY GENERATION & HEATING ELECTRICITY GENERATION 809 MILLION Lifetime emissions of the 0 Non-road transport includes locomotive and marine; 1.5 million engines sold in 43Global 10 CO emissions12 by sector23 11Cummins 15 CO emissions18 3by sector 23 44 5 9 2 2 other non-transport includes defense and agriculture. METRIC TONS 2018 (including joint ventures) PREV 5 NEXT CUMMINS SUSTAINABILITY // PRODUCT STEWARDSHIP THE IMPACT OF OUR GOAL Carbon sequestered by 14.3 MILLION ACRES Partner with customers to improve of forests efficiency of our products in use, resulting in an annual reduction of 3.5 MMT of CO2 by 2020, saving 350 million gallons of fuel 30 BILLION MILES of driving eliminated Since 2014, Cummins fuel economy projects: REDUCED fuel by 1.2 billion gallons Removal of 2.6 MILLION CARS from the road for one year SAVED customers $3.6 billion (U.S.) AVOIDED 12.2 million metric tons of CO2 PREV 6 NEXT CUMMINS SUSTAINABILITY // PRODUCT STEWARDSHIP PRODUCT EMISSIONS AND REGULATIONS Cummins works collaboratively and proactively The company’s ability to comply with See pages 13-14 in our regulations bringing cleaner air with emission regulators globally to ensure these and future emission standards Annual Report on Form 10-K through lower emissions of NOx is an essential element in maintaining for more information about how and particulate matter to several emission standards are clear, appropriately Cummins’ leadership position in Cummins is meeting current more billion people globally. stringent and enforceable, in an effort to ensure regulated markets. The company regulatory requirements for NOx, Cummins has been active in has made, and will continue to particulate matter and greenhouse our products deliver on our commitments to advocating for GHG/fuel efficiency make, significant capital and gas emissions. standards in the U.S. (see page 21 our customers and the environment in real research expenditures to comply of 2018 Sustainability Progress world use every day. with these standards. EPA 2010 and Euro VI regulations set more stringent emissions levels Report). Several regions around the Cummins engines are subject to The company’s Product Certification for on-highway engines. Over the world have already implemented extensive statutory and regulatory & Compliance group tracks and next five years, we see similar on-highway GHG or fuel efficiency requirements that directly or reports on emissions compliance standards or are developing them. indirectly impose standards developments in cities, territories, governing emissions and noise. and the following major regions: The company has substantially Africa, East Asia, Greater Europe, increased its global environmental India, Latin America, Middle East, compliance presence and expertise North America, NE Asia, SE Asia, 2017 AND EARLIER 2018 - 2023 UNDER DISCUSSION to understand and meet Russia/CIS, and the South Pacific emerging product environmental Over the next five years, Cummins Brazil, India, regulations around the world. EPA 2010 / U.S., Canada, will adapt to common and regional China, Mexico, In 2018, Cummins certified variations of on-highway standards Euro VI European Union Australia 144 engine models among that will continue to drive emissions 15 governing agencies around reductions in 8 of 11 regions being the world to 36 different emissions monitored. U.S. , Canada, European Union, Mexico, Brazil, standards for its diesel and natural GHG / FE gas products for on-highway, China, Japan India Korea nonroad, marine and locomotive applications. PREV 7 NEXT CUMMINS SUSTAINABILITY // PRODUCT STEWARDSHIP USING RESOURCES RESPONSIBLY As the largest independent diesel engine manufacturer in the world, Cummins has the means and the commitment to reduce both the resources it uses to build products and the fuel burned to operate them. Seventy percent of a product’s Many of the concepts of the “circular Packaging leaders at Cummins environmental footprint is economy” and its emphasis on re- are working to better understand CIRCULAR ECONOMY determined during the earliest use and recycling are not new, but what metrics and actions will drive PRINCIPLES phases of the design process. The this team is connecting with the consistentWHAT IS andTHE CIRCULAR environmentally ECONOMY? Cummins' work and vision for responsible earlier the company can incorporate various functions in charge of sound packaging decisions. Their consumption and production follows widely innovative design for the efficient use materials work at Cummins to goals for sustainable packaging accepted circular economy principles. of fuel and raw materials, the greater elevate their importance. solutionsFigure are 2: to reduce packaging Addressing risks and opportunities Source: World Business Council its ability to reduce the environmental waste and increase reusable for Sustainable Development The goal is to use the right footprint of Cummins products both solutions as well as the use of amount of material in everything in their design and use. recyclable material. Opportunities the company makes to avoid Reduce operating costs A Cummins team for material unnecessary use of water and Improve competitiveness efficiency is working now on ways to energy throughout a product’s Strengthen relationships: Circular economy • Customers make the company’s products more lifecycle.