I was recently asked to describe what the world will need from Ingersoll Rand. The answer is clear: it is the combination of our people, technology, science and products and service capabilities, unleashed to reduce energy demand in buildings, transport and industrial systems in a reliable manner. Our core strengths – energy efficiency and reliability – help control the world’s carbon footprint and enhance productivity.

With the population expected to expand by 2.4 billion people, or nearly 33 percent, by 2050, the pressure to cut energy demand and greenhouse gas emissions will only increase. Cities will grow even faster, absorbing an additional 3 billion people. It is estimated that, around the globe, 75 percent of the building inventory and public infrastructure that will exist in 2050 has not yet been constructed.

Urbanization at this scale will radically disrupt the planet if it is not sustainable for the economy and the environment. Bridging successfully to the mid-21st century will depend in large part on society’s ability to rise to the challenges of climate change and resource depletion.

As a company that provides solutions for energy efficiency, economic productivity and greenhouse gas mitigation, Ingersoll Rand is positioned to help meet these challenges.

“More than 90 percent of our product portfolio directly addresses demands for greater energy efficiency with lower greenhouse gas emissions in buildings, homes, industrial spaces and transport markets around the world. ”

The Ingersoll Rand Climate Commitment is our public pledge to significantly increase energy efficiency and reduce environmental impacts from our operations and product portfolio by 2030, with key milestones specified for 2020. These 2020 targets keep us focused on continuous improvement in the areas of environmental impact and social responsibility.

We’re strengthening our capacity for customer-centric, environmentally responsible innovation in order to deliver on our sustainability pledge. Our engineering teams have developed new digitally connected software solutions and refrigerants. We’re integrating these innovations across the business, transforming them into high-performance, low-global warming potential (GWP) solutions for our customers. At the same time, operational innovations throughout the company are reducing the carbon footprint of our facilities and fleet.

The Ingersoll Rand Climate Commitment has led to the avoidance of approximately 2 million metric tons of CO2e to date − equivalent to the CO2 emissions from burning more than 2.1 billion pounds of coal and the electricity used by more than 270,000 homes for one year. By 2030, we expect to reduce our carbon footprint by 50 million metric tons.

“Over just the past two years we have decreased greenhouse gas emissions from the company’s operations by 78,000 metric tons of CO2e, or 17 percent. Our total energy use, normalized by net revenue, has declined 5 percent.”

Marking a milestone in achieving our Climate Commitment, in 2015 we launched the Ingersoll Rand EcoWise™ portfolio of products. The EcoWise endorsement is given to products with next-generation, low-GWP refrigerants and high efficiency operation. The first products to earn this endorsement were the Trane Sintesis™ air-cooled chiller and Series E™ CenTraVac™ centrifugal chiller, as well as our Thermo King truck and SLXe™ trailer refrigeration products sold in Europe and global marine refrigeration units.

These initiatives are a testament to the impact of our business operating system, which enables us to execute with discipline and precision in pursuit of continuous improvement. They also demonstrate the power of the distinct culture we’ve created at Ingersoll Rand – one that embodies employee engagement, diversity and a passion for helping our customers succeed.

Our focus on people is why we value the quality of our culture so highly. Customers prefer doing business with people who are engaged in the mission of meeting their needs and exceeding their expectations. Employee engagement is the essence of our winning culture and we achieved top-quartile scores in overall engagement again in 2015. We introduced sustainability-specific questions in 2011 and continue to see rising scores each year. Our people view Ingersoll Rand as a great place to work, which in turn leads to a better customer experience which ultimately delivers shareholder value.

We encourage our employees to match their engagement in the workplace with involvement in the communities in which we live and do business. Contributing both time and financial support to local philanthropies and community organizations, the people of Ingersoll Rand volunteered more than 19,000 hours in 2015, a 23 percent increase from 2014. Their passion for making the world a better place is the driving force as we work to develop innovative solutions that deliver greater value for our customers and society.

Going forward, we will continue to focus on our growth opportunities, operating system, financial strategy and culture to serve our customers, create value for our shareholders and contribute to a more sustainable global economy. We are committed to delivering enduring results, and I look forward to keeping you apprised of our progress.

img

Michael W. Lamach
Chairman and Chief Executive Officer