Sustainable InvestingArticle
Why External Accountability Matters
November 07, 2023
A shared understanding of measurements and reporting mechanisms provides the foundation for trust with employees, investors, customers and communities.
In 2022, we made significant progress toward our targets for our 2030 Sustainability Commitments. In our 2022 ESG Report, we shared a first glance at our Net-Zero Roadmap to offer insight into exactly what actions we are taking in the near-term to advance our ambition with a positive and lasting impact. We also shared that our actions have been broadly recognized by trusted voices in the sustainability community. Why is that important?
As we move forward through a decade that demands action and collaboration, it will be even more important to maintain the trust of our employees and our stakeholders and continue to build trust with new communities. Operating with a shared understanding of measurements, reporting mechanisms, and frameworks provides the foundation of that trust.
Recognized for our approach - and results
Our investors, our customers and our communities appreciate the value of third-party validation—for transparency, credibility and accountability. In their 2023 “Rate the Raters” Survey, The SustainABILITY Institute cited growing investor demand for ESG ratings, with 57% of companies citing it as their top motivation for engaging with ESG raters.
- For example, we were named to the Dow Jones Sustainability Index (DJSI) Index for the twelfth consecutive year. We performed in the 97th percentile in the Capital Goods industry in the S&P Corporate Sustainability Assessment, with perfect scores of 100 in both the environmental reporting and social reporting categories. The DJSI World Index represents the top 10 percent of the 2,500 largest companies in the S&P Global Broad Market Index based on long-term economic, environmental and social criteria.
- We were also recognized for corporate environmental transparency by the Climate Disclosure Project (CDP), securing a place on their annual “A List.” Trane Technologies is one of 283 companies that achieved an “A” – out of the more than 15,000 companies scored. CDP’s scoring process is based on the comprehensiveness of disclosure, awareness and management of environmental risks and demonstration of best practices associated with environmental leadership, such as setting ambitious and meaningful targets.
- We have also been recognized by InfluenceMap as a 2023 Corporate Climate Policy Engagement Leader. Trane Technologies was one of only five U.S. companies to meet InfluenceMap’s criteria, which include positive and active climate policy engagement aligned with science-based pathways for delivering on the goals of the Paris Agreement.
- Trane Technologies was one of only six companies to receive a grade of A in the 2023 Road to Zero Emissions Report published by As You Sow. The report evaluates companies’ greenhouse gas emissions disclosure, GHG target setting and GHG reductions. While many companies are setting 2050 goals, few are making clear progress in reducing and disclosing those emissions, and we are proud to be one of them.
As we move forward through a decade that demands action and collaboration, it will be even more important to maintain the trust of our employees and our stakeholders and continue to build trust with new communities. Operating with a shared understanding of measurements, reporting mechanisms, and frameworks provides the foundation of that trust.
Our secret ingredient: culture
Our strong sustainability performance is the result of a deliberate choice we’ve made to embed sustainability into our operating system, but most importantly, it’s an outcome of our culture, which continues to drive our competitive advantage. Our purpose to boldly challenge what’s possible for a sustainable world starts with our people. We are committed to creating an inclusive, engaging and uplifting culture where our team members can thrive and make a meaningful impact through our sustainability commitments.
External recognition is also important for validation in this area.
- In 2023 Trane Technologies was named to Fortune Magazine’s World’s Most Admired Companies List for the 11th consecutive year, and we were named to the list of America’s Best Large Employers by Forbes. The list is based on employees’ survey responses on their willingness to recommend their employers to family and friends, in addition to their ratings of other companies in their industry on factors like working conditions, salary and development opportunities.
- In June, Trane Technologies was certified as U.S. Great Place to Work for the third year in a row. The certification is based entirely on feedback from employees. This year, 87% of Trane Technologies employees say it’s a great place to work compared to 57% at a typical U.S.-based company. Great Place to Work® evaluates organizations on workplace culture, employee experience, and the leadership behaviors proven to deliver market-leading revenue, employee retention and increased innovation.
- In July, we were named to Fast Company’s Best Places to Work for Innovators, a ranking of 100 global companies that empower employees to create new products, invent new ways of doing business or improve processes. Fast Company also recognized Trane Technologies’ passive cooling cart for street vendors as one of its 2023 World Changing Ideas. The result of Operation Possible, an employee-powered social innovation program, innovations like the cooling cart are accelerating the potential for positive change for both people and the planet.
Why it matters
External recognition matters for the same reason our ESG Report matters—the report allows key stakeholders the opportunity to give us feedback and to hold us accountable as we demonstrate actions we are taking to achieve our bold commitments.
We can be accountable to our external stakeholders because we are accountable to ourselves. Our executive and senior leader incentive plans are linked to ESG metrics, and all salaried employee performance plans include at least one goal tied to our 2030 sustainability commitments.
We're also accountable to each other. We are guided by our Leadership Principles, and take a continuous improvement approach to our culture, focusing on our employee experience for all roles across the company.
Rankings, ratings and recognition provide external perspective of our impact and a shared framework for evaluating progress in sustainability. They signal to our investors, customers and communities that we are doing what it takes to deliver measurable results, and they show our employees that our investments set us apart from other workplace experiences.
We will continue to hold these measures up as a mirror to ensure that we maintain and evolve our foundation of trust and lead by example.
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