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2020 Sustainability Report Caterpillar’s Environmental,
Social and Governance Approach

Caterpillar generator sets provide critical backup power for wind installations, such as at Rubart Station in Kansas (as pictured).

Energy, Fuel Economy & Emissions

Caterpillar shares the concerns of governments and the public about the risks of climate change and supports global efforts to mitigate its impact. We are committed to contributing to a reduced-carbon future. We demonstrate this in many ways including through our significant progress in reducing greenhouse gas (GHG) emissions from our operations and our continued investment in new products, technologies and services to help our customers achieve their climate-related objectives as they build a better, more sustainable world.

We are focused on achieving our climate-related goals while also supporting our customers in achieving their climate-related objectives. We have a legacy of providing products and services that continually improve the quality of the environment and our communities by fulfilling society’s basic needs such as shelter, clean water, education and reliable energy—in a sustainable way.

Energy Management

Caterpillar manages hundreds of facilities around the world, all of which require energy. Some of these operations, especially our manufacturing sites, are energy-intensive. To mitigate our impact, we are improving energy efficiency, investing in alternative and renewable power generation sources, and making other environmental improvements to conserve water and manage waste.

Our enterprise energy management team builds awareness, encourages action and develops improvements in energy efficiency and alternative/renewable power generation. These solutions include purchasing renewable energy certificates and installing renewable energy sources, such as photovoltaics (PV) or a microgrid installation that combines PV with battery storage to supplement and offset electricity generated with diesel fuel at an off-grid location. One significant contribution to alternative energy consumption is the operation of combined heat and power (CHP) systems to power several manufacturing facilities. The energy management team evaluates opportunities for replication of CHP, PV and microgrids at other locations. We also continue to assess new ways to upgrade systems and make facilities more efficient.

EHS Management System

Our high-performance standards for environmental, health and safety (EHS) encourage going beyond merely complying with EHS laws and regulations. Our EHS assurance manual outlines Caterpillar’s EHS Management System and establishes fundamental requirements for all workplaces globally, including majority-owned subsidiaries and majority-owned joint ventures. Our facilities assess compliance with our requirements annually, and our EHS assessment team reviews those assessments while also conducting more in-depth reviews of select facilities each year.

Beyond meeting standard expectations, we encourage facilities to implement their own initiatives to improve safety, decrease energy use and increase productivity. Facilities evaluate potential initiatives based on the total annual investment required, total anticipated cost savings and average pay-back period. We also invite facilities to report emissions reduction activities through internal awards and recognition processes.

Continuous improvement is an essential part of this approach, with new manufacturing technologies and best practices quickly creating opportunities for greater efficiency.

Energy and GHG Emission Goals

GHG 2020 GOAL

Reduce greenhouse gas
emissions intensity by 50%
from 2006 to 2020

51% Our GHG emissions intensity decreased 51% from 2006 to 2020, achieving our 2020 target. In addition, our absolute GHG emissions decreased by 51% from 2006 to 2020. Increases in productivity and efficiency have helped us to achieve our 2020 GHG emissions goal.

GHG Emissions Intensity1
Absolute metric tons CO2e/million
dollars of revenue

Bar chart showing Caterpillar’s yearly GHG emissions intensity from 2017 through 2020 with the 2006 baseline and the 2020 goal

Total Absolute GHG Emissions—Scope 1&2
Million Metric Tons (2020)

Pie chart showing Caterpillar’s Total Absolute GHG Emissions-Scope 1&2

New 2030 Goal

We have set a science-based Scope 1 and 2 goal to reduce our absolute greenhouse gas emissions from our operations by 30% from 2018 to 2030.

Energy 2020 Goal

Reduce energy intensity by 50% from 2006 to 2020

33% Operations energy intensity decreased 33% from
2006 to 2020, and increased 4% from 2019 to 2020.

Energy Intensity 3
Absolute gigajoules energy use/million
dollars of sales and revenues

Bar chart showing Caterpillar’s yearly energy intensity from 2017 through 2020 with the 2006 baseline and the 2020 goal

Total Energy Consumption 3
Absolute energy use million
gigajoules

Bar chart showing Caterpillar’s yearly total energy consumption from 2017 through 2020

Total Electricity Consumption
Sum of purchased and self-generated
electricity in million MWh

Bar chart showing Caterpillar’s yearly total electricity consumption from 2017 through 2020

Alternative/Renewable 2020 Goal

Use alternative/renewable
sources to meet 20% of our
energy needs by 2020 4, 5, 6

33% of our electrical energy
was from renewable or alternative
sources in 2020.

Alternative/Renewable Energy
Sum of alternative and renewable electrical
energy use/total electrical use x 100

Bar chart showing Caterpillar’s yearly use of alternative/renewable energy from 2017 through 2020 with the 2020 goal

Solar Turbines provide alternative energy technology that is powering some of the largest industries in the world, including some of our own facilities.

Supporting Our Customers

We are contributing to a reduced-carbon future through our continued investment in new products, technologies and services. We are helping our customers achieve their climate-related goals by providing products that facilitate fuel transition, increased operational efficiency and reduced emissions. Our innovations include a battery-powered, zero-emissions switcher locomotive and underground loader, as well as reciprocating engines and gas turbines that burn hydrogen blends, landfill gas and other biogases. We are also developing a variety of alternative power solutions to support a lower-carbon future, including battery-powered construction machines.

The Evolution of Advanced Power Sources

Clean, efficient reciprocating engines

Making established power sources even more efficient and fuel-flexible (T4 Diesel, Natural Gas, Biodiesel, Biogas, Dynamic Gas Blending, Hydrogen Blends)

Pairing established power sources with new technologies in a hybrid format (Electric Drive, Battery, Photovoltaic, Microgrid)

Advanced technologies

Replacing established power sources with stand-alone new technologies (Energy Storage, Full Electric)

Aftermarket parts and service

Delivering remanufacture, repair, rebuild, retrofit and repower services (Remanufacturing, Rebuild, Repower, Retrofit Kits)

Many of our advanced power offerings are already at work on customer sites in each of our primary business segments, either complementing our existing engines or as stand-alone power delivery systems. Other solutions are in development to meet our customers’ climate-related goals and requirements for performance, durability and economic value:

Hover over an icon to reveal information.

Renewable Fuels

This includes reciprocating engines that run on biodiesel, biogas and hydrogen blends.

Fuel cells

Using renewable hydrogen fuel as a scalable electric power source. And, we are exploring the opportunities within fuel cells powered by renewable hydrogen for stationary and mobile equipment.

Electric & Hybrid Powertrains

Employing an electric drive transmission with power components. Examples of this technology include the D6 XE electric drive dozer and the 988K XE wheel loader, the company’s latest diesel electric drive construction machines, that improve fuel efficiency and productivity.

Batteries

Powering work with stored electrical energy. The EMD™ Joule locomotive is a new battery-powered, zero-emissions switcher locomotive that Progress Rail developed in collaboration with our customer Vale. The locomotive is commercially available in 2021. And, the R1700 Underground Load Haul Dump (LHD) Loader features battery electric power with zero emissions.

Microgrids

Integrating renewable energy sources into electric power systems. At the Otjikoto Mine in Namibia, customer B2Gold Corp. installed over 62,000 Cat solar panels combined with a Cat Microgrid Master Controller that allows consistent power in all weather conditions. The installation delivered $1 million in annual fuel savings.

Cat Microgrid systems enable customers to integrate renewable power utilizing Cat products including: Microgrid Master Controllers, photovoltaic solar modules, energy storage systems and generators. Pictured is a Cat Microgrid system at B2Gold Corp.’s Otjikoto Mine, Namibia.

Whatever our customer’s goals–lower greenhouse gas emissions, energy flexibility, business sustainability–we provide the advanced power that keeps them working.

Producing Power with Byproduct Gas

Solar Turbines has 46 gas turbines in use with customers in China, allowing them to burn coke oven gas to produce electricity instead of releasing this gas into the atmosphere. This gas, called coke oven gas (COG), is a byproduct of the coking process in which coal is heated in the absence of air to drive off volatile compounds. COG is a high hydrogen and medium heating value waste gas containing significant dust and corrosive pollutants. The Solar customer, Liheng Steel, is one of the first companies in China to receive a Certificate of Avoided GHG Emissions from the U.S. Environmental Protection Agency Combined Heat and Power Partnership for its achievement in reducing carbon emissions with its combined heat and power (CHP) system.

Regulatory Standards and Industry Engagement

Caterpillar provides U.S. EPA Tier 4/EU Stage IV, EU Stage V or equivalent products in North American, European and Japanese markets. U.S. EPA Tier 4 emissions standards (as well as EU Stage IIIB & Stage IV emissions regulations) provide a 90% reduction in emissions (NOx and particulate matter) compared to Tier 3 standards. Customers in each segment want the cost-saving benefits of more fuel-efficient and fuel-flexible products. Modular offerings within our product lines allow customization of equipment to provide the optimal blend of technology and emissions profile that helps customers achieve their climate-related goals.

As an industry leader, we have a talented and experienced team that constantly innovates to improve machine emissions and safety. Caterpillar will continue to engage and partner with regulators, industry organizations, governments and nongovernmental organizations (NGOs) around the world to share that expertise, which supports advanced technology and informs decisions.

Supporting Customers in the Field

We collaborate with dealers and customers to deliver customized solutions that help optimize energy use and provide training for operators on how to use our equipment more efficiently. For example, our efficiency experts can help customers evaluate and achieve emissions goals, reduce noise and dust, implement fuel-saving techniques, and optimize idle management practices and fuel and fluid usage.

Systems Optimization
2020 Goal

Increase managed fleet hours
by 100% from 2013 to 2020

Managed Fleet Hours
(% increase)

Bar chart showing Caterpillar’s yearly managed fleet hours from 2017 through 2020 with the 2020 goal

GHG Emissions Intensity1
Absolute metric tons CO2e/million
dollars of revenue

Total Absolute GHG Emissions—Scope 1&2
Million Metric Tons

0.827 million metric tons – Scope 2 location-based2 (not included in the visual pictured here)

Energy Intensity 3
Absolute gigajoules energy use/million
dollars of sales and revenues

Total Energy Consumption 3
Absolute energy use million
gigajoules

Total Electricity Consumption
Sum of purchased and self-generated
electricity in million MWh

Alternative/Renewable Energy
Sum of alternative and renewable electrical
energy use/total electrical use x 100

Managed Fleet Hours
(% increase)

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