To Our Stakeholders:
A generator set powered by methane from landfills. A dual-fuel engine that can burn natural gas, resulting in lower emissions. An autonomous technology solution that substantially improves efficiency, productivity and safety.
These are just a few of the many ways that Caterpillar’s vast range of products and solutions helps our customers build a better world. As our business grows, our potential for positive impact grows — driven by the successful execution of our enterprise strategy which we introduced in 2017. We have already achieved meaningful progress in financial results and in our ability to support the work of our customers around the world.
Our Strategy Supports Sustainability
Our strategy contains three elements: operational excellence, expanded offerings and services, and is underpinned by Caterpillar’s Values in Action. Those Values, including Sustainability, are guidelines for the way we act with each other, our suppliers, and our customers every day.
Positive business outcomes are closely aligned with positive social and environmental impacts. For example, the first element of our strategy, operational excellence, translates into initiatives that improve safety, deliver high-quality products and implement Lean operating principles. The most important result is continuing to have Caterpillar employees return home safe to their families, and in 2019, we saw our best safety performance on record. Operational excellence also offers important environmental sustainability benefits, particularly decreasing the volume of resources needed to manufacture our products.
Expanded offerings, the second element of our strategy, means having the right products and solutions to make our customers more successful. These offerings include products that provide sustainability benefits, including lower emissions profiles and reduced operating costs. We introduced the world’s first high drive Electric Drive dozer this year, the Cat® D6 XE. It offers up to 35% better fuel efficiency compared to previous models, increasing productivity and helping our customers succeed in a more sustainable way.
The services element of our strategy encompasses the many ways Caterpillar helps our customers succeed after they buy a piece of equipment. These include increasingly advanced digital capabilities, such as fleet analytics that help customers complete their jobs more efficiently, as well as remanufacturing and rebuild offerings that extend the life of equipment, reducing operating costs and keeping resources in circulation.
Driving Toward a Sustainable Future
As we continue to execute our enterprise strategy for profitable growth, we are also executing our 2020 sustainability goals. These include goals related to safety, energy and emissions, water, waste, building efficiency, circular economy, jobsite efficiency and sustainability of our products, services and solutions. We are proud to have already achieved or exceeded several of these goals and are setting our sights on the future. You can read more about our progress to date and efforts underway to establish goals beyond 2020 in the Sustainability at Caterpillar section of this report.
”The most important result is continuing to have Caterpillar employees return home safe to their families, and in 2019, we saw our best safety performance on record.”
Working Toward a Better World
Year after year, Caterpillar customers are working to address the demands of a growing global population, an emerging middle class in the developing world, and an increasingly urbanized society. The company supplements that great work with the targeted efforts of the Caterpillar Foundation. Since 1952, the Foundation has donated about $770 million to build resilient communities around the world. We are proud of our Foundation’s ability to contribute to building a better world.
We are pleased to have been named to the Dow Jones Sustainability Indices (DJSI), including both the World and North America indices. Caterpillar was also named to Fortune’s World’s Most Admired Companies List, and we were in the Top 50 of that list for the 19th consecutive year.
As I write this letter, COVID-19 has become a global pandemic, presenting new challenges around the world. Governments responded with guidance to manage the crisis and, in many instances, operations such as Caterpillar's are considered essential activity for support of critical infrastructure. Customers use our products to provide primary and stand-by power for hospitals, grocery stores and data centers; transport food and critical supplies in trucks, ships and locomotives; maintain clean water and sewer systems; mine commodities and extract the fuels essential to satisfy global energy demand. Along with our dealers and suppliers, Caterpillar is working to help ensure uninterrupted access to the products and services that our customers rely upon to support society during these difficult times.
While we are serving this important need, Caterpillar remains dedicated to the safety, health and well-being of our employees. We are leveraging our strong safety culture to manage through this pandemic. Employees who can work from home are doing so. In our facilities that remain open, Caterpillar is taking appropriate precautions and implementing safeguards to protect our team members. We have increased the frequency of cleaning and disinfecting facilities with special attention to common areas; we are following social distancing practices and are implementing other measures consistent with specific regulatory requirements and guidance from health authorities.
In addition, the Caterpillar Foundation has committed $10 million to directly support global COVID-19 response activities and help organizations that have been impacted. These investments are an important expression of our company’s values and will provide support for communities around the world.
Caterpillar imagines a better world – one that we are striving to achieve through our business. As our customers help meet the infrastructure, energy and resource needs of tomorrow, we are dedicated to helping create a future that offers a better life for all.
Chairman & CEO