Pandemic doesn’t stop Cummins from making progress on key ESG priorities

The report includes a number of company firsts and records in 2020, including a record number of global patents, a record recycling rate, a record low health and safety Incidence Rate, the first virtual Hydrogen Day and the company’s key role in the first hydrogen-powered passenger train. While COVID-19 left an indelible mark on the company, it did not define Cummins in 2020.

The pandemic triggered its own set of company records and firsts, including a record drop in revenues followed shortly by a record increase in orders as Cummins' customers performed essential tasks such as the transportation of food and medicine. But it did not keep the company from addressing a host of key sustainability issues, including climate change, the environment, diversity and racial equity, cybersecurity and innovation.

“I am proud of what we achieved in 2020 and am optimistic about the opportunities ahead to continue powering a more prosperous world,” Chairman and CEO Tom Linebarger said looking back on 2020 in the introduction to the report.

When COVID-19 began spreading early in 2020 and communities began shutting down, even the healthiest companies were severely impacted. The pandemic showed, once again, that companies are only as strong as the communities around them.

Here’s a quick look at what Cummins did in 2020 to build a more prosperous world:

ENVIRONMENT

Cummins' 2020 environmental sustainability goals spurred many achievements outlined in the new report, including a record company recycling rate of 93% (page 24 of the report) and a water intensity reduction (water use adjusted by hours worked) of 53% compared to Cummins’ 2010 baseline year (page 22 of the report). The company's goal was a 50% reduction. Cummins also exceeded its 2020 goal for sites achieving company standards for water neutrality and zero disposal.

The company partnered with customers to far exceed Cummins’ goal for reducing the production of carbon dioxide, a key greenhouse gas, by its products in use (see page 25 of the report). That goes directly to the world’s mission to address climate change. But Cummins’ progress didn’t stop there.

On the product side, the report covers the important role Cummins’ New Power business segment is playing not just in the development of low- and no-carbon power platforms but also the technology needed to increase the world’s supply of green hydrogen (page 57). Cummins is also working to improve its diesel and natural gas engines with climate in mind. Finally, the report outlines the company’s vision for an innovation focused path to carbon neutrality (page 61).

SOCIAL

Cummins continued making progress on the social challenges it believes are critical to creating more prosperous communities. The gender equality law and policy changes resulting from Cummins Powers Women and its partners now impact the lives of 17 million women and girls (page 35). Cummins TEC: Technical Education for Communities has more than 1,700 graduates as of 2020 in its bid to transform the lives of disadvantaged youth through employable skills to obtain good jobs (page 34).

In the United States, the company launched Cummins Advocating for Racial Equity in 2020, a community initiative focused on dismantling institutional racism (page 36). Cummins pledged to take a leadership role on the topic both in and out of the company and started reporting on the racial and ethnic makeup of its own U.S. workforce to be as transparent as possible (page 42).

Finally, the company issued a record $22 million in grants to communities, including $2.7 million in emergency grants to partners who could quickly provide key services in the face of the pandemic (page 33).

GOVERNANCE

In governance, the report details how the Cummins Board of Directors demonstrated its commitment to diversity and inclusion, adding a fourth diverse member in 2020 and a fifth member in 2021 (page 47). The 13-member board also now has five women.

Meanwhile, the board and the company’s Executive Risk Council, consisting of top officers at Cummins, added climate change to the company’s list of enterprise risks that are actively managed (page 54). A new section on cybersecurity details the company’s multi-pronged effort to address the seemingly growing list of cyber threats (page 53). And the Ethics and Compliance function created a new website designed to make it easier for employees to learn about the company’s core policies (page 50).

All of these ESG efforts were largely in addition to the company’s incredible collaborative response to COVID-19 (page 63). Taken as a whole, the report shows it is very difficult to get between Cummins and its mission to build a more prosperous world. Not even a pandemic could do it.