Executive Summary

Ingersoll Rand is a world leader in creating comfortable, sustainable and efficient environments. Our people and our family of brands—Club Car®, Ingersoll Rand®, Thermo King® and Trane®—work together to enhance the quality and comfort of air in homes and buildings; transport and protect food and perishables; and increase industrial productivity and efficiency. Linking our strategy and business opportunities to important global trends creates long-term value for our people, customers and the world. Whether the challenge is climate change, urbanization or natural resources constraints, our expertise enables us to reduce energy demand and improve efficiency.

2017 was defined by real, measurable progress toward our sustainability commitments. From providing innovative products and services solutions for our customers to reducing our operational footprint, we continued to find ways to embed sustainability throughout our business and culture. For the seventh straight year, Ingersoll Rand was named to the Dow Jones Sustainability World and North America Indices. 2017 was also the fourth consecutive year that we were recognized on Corporate Responsibility Magazine’s list of the 100 Best Corporate Citizens and the third consecutive year that we were included on FTSE4Good’s prestigious index series for meeting stringent environmental, social and governance criteria. This ongoing recognition of our actions showcases Ingersoll Rand’s position as an economic, social and environmental leader.

The progress and data reported in our 2017 Sustainability Supplement are evidence that by thinking bigger to help customers around the world solve challenges, we are doing the right thing for our communities, our environment and our business.

“Ingersoll Rand has played a leading role in several aspects of the energy transition already, especially over the past decade. Their innovation in creating high-efficiency products and services for the marketplace has been really critical.”

Daniel Vermeer, Executive Director, Center for Energy, Development and the Global Environment at Duke University’s Fuqua School of Business, and Ingersoll Rand Sustainability Advisory Council Member

Taking Action to Address Climate Change

In 2017 we joined the We Are Still In coalition

and committed to stand by the Paris Agreement

As a global provider of products that heat, cool and automate homes and buildings, Ingersoll Rand has an important role in reducing global emissions. That is why, in 2017, we joined the We Are Still In coalition and committed to stand by the Paris Agreement. Working together with other stakeholders, we are continuing on the path to widespread renewable energy adoption, breakthrough technology development, innovative corporate sustainability strategies and strong employee engagement.

Our global Climate Commitment outlines goals to significantly reduce greenhouse gas (GHG) emissions from our operations and product portfolio by 2020, and incorporate alternatives with lower-global warming potential (GWP) refrigerants across the company’s product portfolio by 2030. Executing on this pledge over the last four years, Ingersoll Rand avoided 11 million metric tons of CO2e globally from our products and reduced the GHG intensity of our operations by 37% compared to a 2013 baseline.

In early 2018—two years ahead of schedule—we achieved our 2020 target of a 10% increase in energy efficiency. In reaching this significant milestone, we reduced energy use by approximately 102,000 million (MM) British Thermal Units (BTUs) and electricity consumption by approximately 22,000 megawatt hours (MWh), which is the equivalent of powering 1,700 homes for one year. We also announced major investments in renewable energy technologies. We commissioned on-site solar installations at three large manufacturing sites in the U.S. and China to address approximately 15% of the energy loads at these locations. This is equivalent to saving 400,000 gallons of gasoline and taking 800 cars off the road. Additionally, we signed a power purchase agreement that will replace 32% of our company’s U.S. electricity use with green energy, and reduce U.S. Scope 2 GHG emissions from electricity by 32%.

As part of our commitment to reducing GHG emissions from Ingersoll Rand products, in 2017, we doubled the size of our EcoWise portfolio of products designed to lower environmental impact with next-generation, low-global warming potential refrigerants and high-efficiency operations. Additionally, we strengthened our digital capabilities and pursued opportunities at the nexus between energy efficiency and climate change. Trane, a brand of Ingersoll Rand, led the industry in Connected Building Solutions by partnering with building owners and operators to create exceptional energy-efficient buildings and maximum return on investment.

15.6% increase in energy efficiency

from a 2013 baseline, two years ahead of our target for 2020

32% of our company’s U.S. electricity use

will be replaced with green energy

The ever-increasing demand on our energy system is a huge challenge and a huge opportunity. As we continue to look around the corner, anticipate trends and discontinuities and embrace system thinking, Ingersoll Rand is uniquely positioned to grow and to positively transform everyday life.

In 2017, we made several strategic acquisitions to enhance our leadership in solving environmental challenges. Sustainability was, and will continue to be, a key factor in how we make our business decisions. For example, our strategic acquisition of CALMAC expanded our thermal energy storage portfolio. When integrated with Trane’s leading building control platform, CALMAC takes pressure off the energy grid, reduces strain on public utilities, reduces operating costs for building owners and allows for better use of renewable forms of energy. We also strengthened our telematics portfolio through the acquisition of GPSi, a provider of cloud-based technology solutions for fleet management in various transportation markets, including education, golf and resorts. We expect the climate and industrial segments to continue building on this growth momentum in 2018.

22,000 MWh reduction in electricity consumption from a 2013 baseline, which is the equivalent of powering 1,700 homes for one year

102,000 MM BTUs reduction in energy use from a 2013 baseline, which is the equivalent of powering 1,700 homes for one year

Working with Suppliers

54.3% of direct spend was with preferred suppliers

putting us on track to meet our target of 80% of early sourcing by 2020

From our position as a global provider of energy-efficient technology solutions, Ingersoll Rand works systematically to ensure that our suppliers share our values and adhere to our standards of business ethics, health and safety, environmental and social responsibility as specified in our Business Partner Code of Conduct.

The Ingersoll Rand Preferred Supplier Program gives first choice for early engagement to suppliers that best align with our high expectations regarding customer and business standards for quality, service, value and risk. Preferred suppliers also have priority opportunity to extend their product and service offerings to all Ingersoll Rand locations. At the end of 2017, 54.3% of direct spend was with preferred suppliers, putting us on track to meet our target of 80% of early sourcing by 2020.

Our supplier diversity program embraces suppliers who are minority-, women-, veteran-, disabled-, gay-, lesbian- and transgender-owned businesses. Using a seven-step strategic sourcing process that includes a Supplier Diversity Matrix has enabled us to avoid using price as the primary driver for supplier selection. In 2017, we purchased $411 million in goods and services from diverse-owned businesses.

$411 million of purchased goods and services were from diverse-owned businesses

Cultivating Workplace Diversity and Inclusion

At Ingersoll Rand, we believe that a corporate culture of mutual respect, cross-functional collaboration, and inclusion drives growth and innovation.

“The nature of industrial companies is changing. Ingersoll Rand is moving away from being a company that just makes a lot of products to a company that provides integrated services."

Katherine Sierra, Senior Fellow, The Brookings Institution, and Ingersoll Rand Sustainability Advisory Council Member

This transition requires a broader base of skills, fresh ideas, expertise and dialogue. Our company is continuously working to integrate diversity and inclusion into the core of our business.

In 2017, Ingersoll Rand increased our commitment to creating a progressive, diverse and inclusive workplace. We became the first in our industry to enter the Paradigm for Parity Coalition, a pledge to bring gender parity to our corporate leadership structure by 2030. We also joined 150 of America’s leading CEOs in a pledge to cultivate diversity and inclusion in the workplace through the CEO Action for Diversity & Inclusion.

In 2017—and again in early 2018—the Human Rights Campaign Foundation awarded us a perfect score of 100% in workplace equality on its Corporate Equality Index (CEI). This sustained leadership on the CEI recognizes our winning culture and commitment to empowering people.

Creating Lasting Value

Sustainability in all its forms—business, social and environmental—is central to our strategy. Our 2017 Sustainability Supplement provides milestone updates on our continuing progress toward building a more sustainable and thriving enterprise. We are well on our way toward achieving our 2020 goals, and every day we continue to think bigger and bolder to do more for our customers, create long-term value for our shareholders and contribute to a more sustainable world.

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