Caterpillar’s GHG Journey
Gary Conner, Corporate Environmental Affairs Mgr
Page 1 | CATERPILLAR CONFIDENTIAL: Green
Who We Are
• Holt and Best tractor companies
merged into Caterpillar in 1925
• First diesel tractor model built in
October 1931 in East Peoria, Illinois
• Global Enterprise with locations in
nearly 50 countries
• Fortune 50 Company / Fortune 500
Global Company
• Three principal lines of business:
– Machinery, Engines, and Services
(logistics, financial products,
remanufacturing, rail-related)
Page 2 | CATERPILLAR CONFIDENTIAL: Green
Diversity of Products
Articulated Trucks
Backhoe Loaders
Compactors
Forest Machines
Hydraulic Excavators
Material Handlers
Motor Graders
Off-Highway Trucks
Paving Equipment
Pipelayers
Scrapers
Skid Steer Loaders
Track Loaders
Track-Type Tractors
Underground Mining
Wheel Dozers
Wheel Excavators
Wheel Loaders
Engines
Generator Sets
Turbines
Electric Power
Page 3 | CATERPILLAR CONFIDENTIAL: Green
More than
500 products
Diversity of Facilities
• 28 Divisions, comprised of
– 125+ Manufacturing and Remanufacturing facilities
– 80+ Cat Logistics Service facilities
– 15+ Office Locations
– 9+ Dealer sites
– 5+ Research and Design Centers
– 3+ Training and Demo facilities
– 3+ Proving Grounds
Page 4 | CATERPILLAR CONFIDENTIAL: Green
Focus on GHG
• Climate Leaders
• Caterpillar Vision 2020
• External Reporting
Page 5 | CATERPILLAR CONFIDENTIAL: Green
Climate Leaders Journey
Page 6 | CATERPILLAR CONFIDENTIAL: Green
Climate Leaders: History
• Began collecting energy data in 1998
– Set Internal Energy Efficiency Targets
– Targets were met in 2002
• Shifted our focus to GHG in 2001 / 2002
• Joined Climate Leaders in 2003
• First GHG Reduction Commitment set in 2005:
– Goal of 20% Intensity Reduction by 2010, Base year 2002
Assumptions in setting intensity goal:
– Meet $30 B revenue in 2006 and continued growth at rate of
inflation through 2010
– 5 to 10% energy efficiency from 6 Sigma projects
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Climate Leaders: Current Goal
• Met our 2010 Climate Leaders Intensity Target in 2006!
Intensity reduction driven by:
– Controlling GHG emissions growth
– Strong revenue growth
• New Climate Leaders Goal: 3% Reduction in absolute
GHG Emissions
– 2006 is Base Year
– 2015 is Target Year
– Target Covers Global Enterprise
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Climate Leaders: Benefits
• Assistance with developing an inventory management
plan and methodology
• Data credibility
– Third party review
• Nationally Recognized Program
• Preparation for regulatory reporting (GHG reporting rule)
• Data for planning
– Calculate cost benefit of operational improvements
– Impact of various prices on carbon
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Climate Leaders: Challenges
• Cost to collect data
• Risk in transparency
• Drives Acquisitions vs. Organic Growth
• May not get credit for early action due to pending
legislation
• Requirements of Climate Leaders continue to become
more challenging
Page 10 | CATERPILLAR CONFIDENTIAL: Green
Vision 2020 GHG Journey
Page 11 | CATERPILLAR CONFIDENTIAL: Green
Vision 2020: Setting the Goal
• Established a SME Team
– Identified opportunities (lighting, pumps and motors,
HVAC, manufacturing processes, renewable energy,
etc.)
– Reviewed GHG and Renewable Energy Regulations
• Current and Anticipated
• State, Federal, and International
– Considered Enterprise Growth Strategy
– Established 2020 Goal and 2010 and 2015 targets
• Sponsored by Executive Office
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Vision 2020: Goal and Strategy
• Aspirational 2020 GHG Goal: 25% reduction in absolute
GHG Emissions from existing facilities
– 2006 is Base Year
– 2020 is Target Year
– Target Covers Global Enterprise
• GHG Strategy
– Enterprise Targets Cascaded to Facility Level
– Integrate Energy / CO2 into Existing Strategies:
• Use 6 Sigma Methodology To Drive Projects
• Integrating into Caterpillar Production System (CPS)
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Vision 2020: Support
• Teams
– Executive Energy & Sustainability Council
• Energy Strategic Improvement Project for 2010
– Corporate Energy Management Steering Team
– Corporate Facilities Management
• Green Building Policy (LEED)
– Corporate Environmental Affairs
– Regional Environmental Support Teams
– Facility Energy Teams
Page 14 | CATERPILLAR CONFIDENTIAL: Green
External Reporting
Page 15 | CATERPILLAR CONFIDENTIAL: Green
External Reporting: Initiatives
• Caterpillar SD Report
– 2006, 2007, 2008, and
2009
• Dow Jones Sustainability
Indexes (DJSI)
– Participated nine years
– Sector Leader for three
years
• Carbon Disclosure Project
Page 16 | CATERPILLAR CONFIDENTIAL: Green