For nearly 90 years, Caterpillar Inc. has been making sustainable progress possible and driving positive change on every continent. With 2013 sales and revenues of $55.656 billion, Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company principally operates through its three product segments – Resource Industries, Construction Industries and Power Systems – and also provides financing and related services through its Financial Products segment.

Caterpillar is a global leader, a worldwide enabler of sustainable progress. Caterpillar operates hundreds of offices and facilities around the world and has more than 118,000 employees. We serve customers in more than 180 countries. Caterpillar’s global presence, product breadth and financial strength enable us to win in today’s competitive marketplaces.

The world’s resources support seven billion people today, and will need to support nine billion by 2050. As the world’s population increases, demand for resources and infrastructure will increase, too. Sustainable progress to meet these needs and support economic growth will remain absolutely necessary.

Caterpillar is uniquely positioned to be a leader in making this sustainable progress possible. Our commitment is longstanding because we know we can be profitable while also best serving our planet and its people by promoting the common good.

This is not something we discovered recently; it can be traced back to the Caterpillar Worldwide Code of Conduct first published in 1974. For 40 years, our Code has provided a common ground for our business life values. Since 2005, these have been Our
Values in Action:

• Integrity: The Power of Honesty
• Excellence: The Power of Quality
• Teamwork: The Power of Working Together
• Commitment: The Power of Responsibility

I’m proud that in early 2014 we honoured our longstanding commitment and recognized sustainability as another value:
• Sustainability: The Power of Endurance.
Sustainability has been included for years as a part of our value of Commitment, clearly stating our responsibility to produce sustainable solutions. Raising sustainability to a stand-alone value acknowledges both what we have done in the past and will do in the future.

For Caterpillar, sustainability is an enterprise-wide approach we apply to our own operations, as well as a guide for our suppliers, dealers and customers.

We make sustainable progress possible by:

• Leveraging innovation and technology,
• Increasing productivity,
• Using resources more efficiently,
• Reducing environmental impacts and
• Contributing to the communities where we live and work.

We know that to endure, our company and operations must operate in a sustainable manner. What does this mean to our stakeholders?

To our customers, it means enduring products, services and solutions. Our brands represent long-lasting quality, and our products and solutions help our customers operate more efficiently. Through innovation, we focus on providing products that are more fuel-efficient and require less oil and fluids to operate. Our customers build the infrastructure, supply the power and transport the goods that support economic growth in developing and developed nations alike, and support Caterpillar’s efforts to help make that growth sustainable.

To our stockholders, it means sustainable development strategies and leading-edge products that promote customer loyalty and ensure Caterpillar prospers for another 90 years, and longer.
To our people, it means working for a company they can be proud of, for many reasons. We have a robust risk management process that includes anti-bribery, anti-corruption and other programs and training designed to support Our Values in Action.
We’ve reduced our Recordable Injury Frequency to a world class 0.78 level in 2013. We have strong employee training and development programs, intentional efforts to find and retain the most qualified and diverse employees, and are dedicated to diversity and inclusion.

We also invest in and support the communities where we live and work through the United Way, and generous non-profit gift matching and volunteer programs at our facilities worldwide.
We support the Caterpillar Foundation, which has invested more than $550 million since 1952 to boost economic growth and quality of life around the world.

Vision 2020 paints a clear picture of the Caterpillar we want to be tomorrow — a company that sets the “gold standard” for performance in safety, quality and velocity. The Caterpillar Production System is helping us achieve these goals by enabling Team Caterpillar to produce the highest quality products as efficiently and safely as possible.

Within Caterpillar, leaders and business units in many areas of the globe have implemented 5S – a method for workplace organization and effectiveness based on lean principles – in their office spaces during the past year and have seen value in the results. In the Peoria, Illinois area buildings alone, we’ve:

• Removed 385,000 pounds of waste paper,
• Collected 3457 boxes of usable excess supplies,
• Recovered 4977 square feet of floor space,
• Implemented 1084 safety and ergonomic improvements, and
• Saved about $1.3 M since we began in June of 2012.

These savings are small compared to all that can be gained when applying “lean” to office processes. Beau Keyte and Drew Locher, authors of “The Complete Lean Enterprise,” tell us that 90 percent of waste eliminating opportunities in even manufacturing firms is found outside of direct manufacturing operations, away from the plant floor. Other authors of lean in the office put that number at 75%
Caterpillar Inc. is pleased to be included in the Interbrand Best Global Green Brands 2014. Sustainable Development for Caterpillar means leveraging technology and innovation to increase efficiency and productivity with less impact on the environment and helping our customers do the same – enabling their businesses to become more productive by providing products, services and solutions that use resources more efficiently. Of course, it starts with our own operations, with our customers in mind.

Here are some highlights from the Interbrand page for Caterpillar:

From the U.S. Green Building Council to the World Food Programme and The Nature Conservancy, Caterpillar works with a wide range of individuals and organizations to promote sustainability globally. By partnering with like-minded organizations, the brand is exploring how its core businesses can provide solutions to the world’s challenges and help achieve sustainable development.

As Caterpillar continues to lead as the world’s largest manufacturer of construction and mining equipment, operating in more than 180 countries, the challenges associated with sustainability remain a strategic focus of the company. The three sustainability principles (preventing waste, improving quality, developing better systems) launched in 2012 remain the cornerstone of its efforts reported in 2013.

As part of our work in sustainable development, we have identified a set of focus areas that intersect with our business on a daily basis and that guide our thinking as we make day-to-day business decisions. Many of these areas are associated with our 2020 aspirational, operational and product stewardship goals, while others represent areas impacting our business long-term and which are important to our various stakeholders.

These areas include:

• Workforce
• Energy & Climate
• Water Management
• By-Product Materials
• Product Stewardship
• Supply Chain & Dealer Network
• Governance & Ethics
• Economic Development
• Human Rights
• Philanthropy

·
Energy & Climate

Energy is a key requirement for sustainable progress and development around the world. Energy consumption is rising rapidly, driven by worldwide population growth, swiftly developing economies, improving global living standards and the rapidly increasing use of ever more energy-dependent technologies. Global demand for energy is expected to increase significantly over the next 20 years.

As a global energy consumer and industrial manufacturer, and a major manufacturer of energy conversion and power-generation products, Caterpillar has a fundamental interest in, and understanding of, energy needs. We are one of the world’s leading technology suppliers to various energy markets and leverage our technology and innovation to meet the world’s growing energy needs.

Greenhouse gas (GHG) accumulation in the atmosphere is a major concern for many in both the public and private sectors because of the potential for these gases to affect climate patterns. As a result, many governmental and intergovernmental organizations are implementing mechanisms in an attempt to reduce GHG emissions. We support intelligent, responsible public policies addressing climate and energy issues.

Additionally, we support the reduction of GHG accumulation through improved GHG management practices. Atmospheric GHG accumulation can occur as a result of inefficient or excessive fossil fuel combustion, poor waste-management practices or poor land-management practices. Caterpillar is a leader in the development and deployment of innovations and technologies that, through our machines, assist in the prevention and mitigation of all three of these sources.

Caterpillar has established aggressive energy efficiency and GHG-reduction goals for our facilities — goals which we are exceeding. For our customers, job site fuel efficiency is strongly considered in our new-product development efforts, which contributes to reductions of GHG emissions. As a result, breakthroughs have been achieved in the development and implementation of innovations such as combined diesel and electric drives, hybrid systems, continuously variable transmissions, job site optimization technologies and services and alternative fuel utilization.

Water Management
The scarcity of water resources is an issue that crosses cultures, geographies and industries. Today, water scarcity affects around 700 million people, and current trends indicate the problem will escalate. By 2025, water security could be an issue for two-thirds of the world’s population. The implications are so significant that leaders attending the 2013 World Economic Forum in Davos, Switzerland, cited water scarcity as one of the top two risks currently facing the global population. While our manufacturing operations are not as water-intensive as those of other industries, we nonetheless recognize the far-reaching economic, social and environmental implications that water scarcity may have in the future — and have taken steps to mitigate our own consumption.
As we move closer to 2020, we continue to implement conservation strategies that reduce water use, explore water-treatment technologies, introduce water-recycling processes at new and existing facilities and train employees about water resources to raise their awareness of the issue. Through 2013, these types of efforts have reduced water consumption intensity at our facilities by a total of 36 percent from our 2006 baseline intensity. Our 2013 absolute water consumption, including noncontact cooling water from foundry operations, is 4.14 billion gallons of water. While our water intensity increased from 2012 to 2013, our absolute water consumption decreased in that time.
Several 2013 projects demonstrate this ongoing commitment to water management. At the Prentiss Remanufacturing Facility in Booneville, Miss., for example, the chemical operations team identified an opportunity to decrease water usage by using a “cascading” washing system. Remanufactured products must be thoroughly cleaned before work can begin, and the team discovered that a washing process that splashed water over the parts in multiple waves consumed less water and required fewer chemical cleaners. By implementing this process, the facility was able to cut its annual water usage by 86,300 gallons.
At the Caterpillar Logistics Distribution Centre in Grimbergen, Belgium, a new wastewater treatment process was installed using common reed plants for on-site sanitary wastewater treatment, rather than discharging to the city sewer system directly. The reed plants serve as a natural filtration system to dewater solids in a small, confined area. Evaporation and the underground filtration system allow the sanitary wastewater to be treated without the addition of chemicals. Similar to constructed wetlands, water trickling through the reed bed is cleaned by microorganisms living on the root system. Construction of the reed bed was completed in December 2012. Since then, the treated wastewater has met permitted discharge limits, while enabling the facility to use an efficient method of on-site wastewater treatment.
Water conservation initiatives were considered in the earliest stages of construction planning for our new Caterpillar facility in Athens, Ga. One of the most difficult challenges facing development of the Athens site was the quantity of water required for manufacturing operations. Caterpillar worked closely with local county governments to form a solution to the facility’s water and wastewater needs. As a result, an extensive wastewater treatment system was installed to treat and recycle water from the paint system wash line, the assembly wash bays and the product distribution centre wash bays. This system was designed and built specifically for the new facility to treat and recycle or reuse the process water used to wash parts. In addition, water-consumption reduction initiatives — such as water-efficient landscaping and low-flow toilets in facility lavatories — have led to an increased environmental awareness among the Athens employees.
Caterpillar Brasil Ltd. in Piracicaba, Brazil, has implemented several projects that contributed to better water-management results. Flow-controller devices were installed for taps; reused water is now utilized for fire protection systems and the cooling tower; the machine-washing process has been restructured for water-management efficiencies; and sector metering was installed for monitoring water consumption associated with specific processes. In addition, the facility implemented a new, dry process for cleaning acrylic covers of kit boxes in the logistics process that saves more than 50 thousand gallons of water per month, generates zero effluents and reduces cleaning time by 68 percent. The facility is continuing to look for opportunities to replace consumption of potable water with reused water sources. The water reuse program has increased eightfold from introduction in 2010 through 2013.

The Caterpillar Foundation Announces $11 Million in Investments for Africa’s Future Through Water, Energy and Women
Foundation’s focus on corporate social innovation helps put people on the path to prosperity

WASHINGTON, D.C. – The Caterpillar Foundation, supported by Caterpillar Inc. (NYSE: CAT), continues working to alleviate poverty worldwide, including on the African continent, through a series of investments. Since 2010 alone, corporate social innovation has driven the Caterpillar Foundation to invest $30 million in African programs that address access to clean water, energy, empowering girls and women and microfinance, as well as food and shelter. The Foundation targets investments to organizations working in areas of policy that will enable sustainable growth and development across the continent.

“The Caterpillar Foundation is committed to finding ways to spur vibrant growth in Africa,” said Doug Oberhelman, Caterpillar Chairman & CEO. “Just as it has in other parts of the world, the Foundation is investing to help millions of Africans become economically self-sufficient. The investments announced today will provide essentials – water, energy and opportunity – to help families and communities build and grow.”

ONE Campaign – Advocacy and Public Policy
The Caterpillar Foundation is making an initial investment of $5 million with the ONE Campaign to address advocacy and public policy needs and the lack of access to power, which is a key factor in making it more difficult for Africa to lift itself out of poverty. The Caterpillar Foundation plans to announce an additional grant with ONE later this year.

“ONE is incredibly grateful for the Caterpillar Foundation’s investment in our work to help bring reliable supplies of energy to the nearly 600 million people across Africa who presently lack it,” said Michael Elliot, ONE Campaign CEO. “We’re also excited about continuing our partnership with the Foundation to enhance global advocacy and campaigning around the world that inspires citizens to use their voices and take action to end extreme poverty by 2030.”

charity: water – Water Distribution Pipeline Extension
The Caterpillar Foundation is investing nearly $5 million to bring clean water to two countries in Africa through charity: water, whose mission is to bring clean and safe drinking water to every person in the world.

The investment will help fund an extension of a current water distribution pipeline into two underserved countries in Africa: Tanzania and Ethiopia. An extension of this pipeline and the addition of water access points are expected to benefit more than 126,000 Tanzanians and Ethiopians who currently travel long distances to collect water from unsanitary sources.

“Since 2010, charity: water, with the help of the Caterpillar Foundation, has worked to bring clean water to almost 100,000 people throughout Africa and beyond,” said Scott Harrison, charity: water CEO. “charity: water is honoured to work with Caterpillar Foundation in such a significant way and looks forward to putting thousands more people on the path to prosperity together.”

United Nations Foundation – Clean Cookstove Initiative
As cooking and fuel collection largely remain a woman’s responsibility in many African countries, the health and economic effects of household air pollution from traditional cookstoves disproportionately impact girls and women. The Caterpillar Foundation is investing more than $1 million in energy and cookstoves programs to help address this deadly issue in Ghana, Kenya, Nigeria and Uganda.

Through a United Nations Foundation program, the money will help teach them about the dangers of traditional cooking and the benefits of adopting clean cooking solutions.

“By involving women and girls in the design and sale of clean cookstoves and fuels, we can increase project effectiveness and help scale the adoption of clean cooking products and services around the world,” said Radha Muthiah, executive director of the Global Alliance for Clean Cookstoves. “With the Caterpillar Foundation’s support, we can better integrate women into the value chain and, in doing so, improve the health and well-being of women across Africa.”

A common thread of all three programs is the fact they target the root causes of poverty, which is key to Caterpillar’s corporate social innovation strategy. Moving forward, the Caterpillar Foundation will increase its focus on similar programs throughout the countries of Africa.

Chairman & Chief Executive Officer Doug Oberhelman offers his thoughts on Caterpillar’s sustainability commitment and its relationship to Our Values in Action.

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