Cummins Leader Takes Public Role in Battling Corruption

Fernanda Beraldi presents a paper on the need for transparency in purchase agreements with governments at the Organization for Economic Cooperation and Development’s Integrity Forum in Paris in March.

AS TRANSACTIONS BETWEEN GLOBAL BUSINESSES AND GOVERNMENTS AROUND THE WORLD BECOME INCREASINGLY COMPLEX, CUMMINS DIRECTOR FOR INTERNATIONAL ETHICS AND COMPLIANCE FERNANDA BERALDI SAYS TRANSPARENCY IS MORE IMPORTANT THAN EVER.

“Transparency in government bids and industrial compensation is critical to improving international anti-corruption regulations,” said Fernanda Beraldi, whose paper on the topic was one of only 24 selected for presentation at the Organization for Economic Cooperation and Development’s (OECD) Integrity Forum in Paris. “The growing practice of including offsets or side agreements that might have little to do with the main elements of a purchase agreement creates the potential for ethical problems.”

Government ministers, business leaders and others from more than 40 countries that are part of the OECD gathered in Paris March 30-31 to discuss the significant integrity and trust challenges facing the world today. The Integrity Forum is increasingly recognized as one of the few places tackling global policy concerns in the ethics and compliance arena from a multidisciplinary perspective.

Offsets, the subject of Beraldi’s paper, are becoming more common in government contracts. They can range from side agreements where a company selling a product agrees to help a government with credit assistance or technology transfers as part of the deal to one instance where investing in a shrimp farm was part of a defense contract.

Beraldi, who is also a Corporate Counsel at the company, said the potential for abuse grows significantly in smaller countries where governments may not have enough people to adequately discourage or discover unethical behavior. She hopes her paper will spur additional conversation and ultimately action on the issue.

“It was an honor to be selected to present,” Beraldi said. “I think Cummins’ presence at the forum demonstrates that we are at the forefront of finding solutions for corruption and integrity issues world- wide.”

Fighting corruption is not the only ethics issue Cummins and Beraldi are engaged in outside the company. Beraldi also co-authored a paper on fighting human trafficking titled “No Good Deed Goes Unpunished? Possible Unintended Consequences of Supply Chain Transparency.”

Her paper, which deals with human trafficking in supply chains and how companies can still get into trouble if they merely follow existing regulations, was presented at the Winter Conference of the American Society of International Law, an institution that promotes the use of international law as a cornerstone of a just and peaceful world.

Mark Sifferlen, Vice President – Ethics and Compliance at Cummins, said the company applauds Beraldi’s work both inside and outside Cummins.

“Both Our Code of Business Conduct and our Supplier Code of Conduct  take a strong stand against corruption and human trafficking,” Sifferlen said. “Fernanda’s work demonstrates the depth of our commitment in these important areas.”

blair claflin director of sustainability communications

Blair Claflin

Blair Claflin is the Director of Sustainability Communications for Cummins Inc. Blair joined the Company in 2008 as the Diversity Communications Director. Blair comes from a newspaper background. He worked previously for the Indianapolis Star (2002-2008) and for the Des Moines Register (1997-2002) prior to that. [email protected]

 

Cummins Supported Wind Farm Begins Producing Low Carbon Energy

Cummins has as part of its energy goal a commitment to promote low-carbon forms of energy. The tallest turbines at Meadow Lake are more than 50-stories high.
Cummins has as part of its energy goal a commitment to promote low-carbon forms of energy. The tallest turbines at Meadow Lake are more than 50-stories high.

Meadow Lake VI, the wind farm expansion in northwest Indiana that Cummins is supporting through an innovative financial agreement, began sending power to the grid this week.

The power, which officially started flowing Wednesday (Dec. 19), won’t go to Cummins. But the company’s share of the energy generated by the expansion’s 61 wind turbines is more than Cummins uses at all of its Indiana facilities. Essentially, the expansion is replacing the power the company uses in its home state with low-carbon, renewable energy.

“We’ve been working toward this day for a long time,” said Mark Dhennin, Cummins’ Director of Energy and the Environment. “I’m proud we were able to help make this expansion happen. It’s good for our company, good for our partners at Meadow Lake and good for the world.”

The expansion comes just after the United Nation’s climate conference concluded in Katowice, Poland. Participants discussed ways the world can increase low-carbon energy sources like wind and solar to replace power produced by fossil fuels such as coal and natural gas.

“We believe wind farms like Meadow Lake are part of the solution,” said Blair Matocha, spokesperson for EDP Renewables of North America, Meadow Lake’s owner. “It’s great to see companies like Cummins helping us take a great idea like capturing energy from the wind and turning it into a reality.” 

THE AGREEMENT

Cummins has entered into a 15-year Virtual Power Purchase Agreement more commonly known in the industry as a VPPA. It guarantees the wind farm a fixed price for the power Meadow Lake VI generates, providing some certainty to the expansion that helped it move forward.

The VPPA provides Cummins with a hedge of sorts against rising energy prices. The company pays or receives the difference between the contract price and the market price of the energy the expansion produces. Cummins also receives something called renewable energy certificates, or RECs, to demonstrate its greenhouse gas reduction efforts. One of the company’s energy related goals is to promote the development of low carbon energy.

VPPAs provide the opportunity for companies to drive development of new, large-scale renewable power where it is the windiest or sunniest. While Cummins is also installing solar systems at many of its facilities, it is impossible to generate the magnitude of power onsite that’s possible at the Meadow Lake expansion, which is located along a windy stretch of northwest Indiana between Lafayette and Chicago.

KEY FEATURES

Meadow Lake VI will produce about 200 megawatts (MW) of energy annually, enough to power 52,000 homes in Indiana. The expansion represents a capital investment of about $340 million, according to U.S. Department of Energy’s Wind Technologies Market Report.

Nestle and the Wabash Valley Power Association are supporting the project with Cummins. The expansion is compatible with farming, which will continue to take place around the wind turbines.

The expansion area is approximately 10,000 acres in Benton County and will use some of the tallest wind turbines in the world, stretching up about 173 meters or nearly 567 feet into the sky – taller than a 50-story building.

The addition of phase VI brings total production at Meadow Lake to just over 800 MW of power.
 

blair claflin director of sustainability communications

Blair Claflin

Blair Claflin is the Director of Sustainability Communications for Cummins Inc. Blair joined the Company in 2008 as the Diversity Communications Director. Blair comes from a newspaper background. He worked previously for the Indianapolis Star (2002-2008) and for the Des Moines Register (1997-2002) prior to that. [email protected]

 

Cummins Employees Pledge Record Amount to United Way

Cummins employees work on a cleanup day sponsored by the United Way.
Cummins employees in Columbus, Indiana (U.S.A.), work on a cleanup day sponsored by the United Way.

Cummins employees in 2018 set a record for giving to the United Way in North America, pledging more than $3 million.

The pledged amount represents about a 7 percent increase over pledges in 2017 and will be matched dollar for dollar by the Cummins Foundation, creating twice the impact for local communities.

The more than $6 million from Cummins and its employees will go towards initiatives addressing everything from homelessness and hunger to school readiness and programs promoting safe, healthy relationships.

“I can’t think of a better example of how our Cummins employees demonstrate our values both inside and outside of work, and are fully committed to powering a more prosperous world, than this record-setting campaign,” Cummins President and Chief Operating Officer Rich Freeland said in a blog post on the company’s internal website Monday (Dec. 17).

The United Way is a more than 125-year-old nonprofit organization dedicated to helping individuals and families in North America achieve their potential through education, financial stability and healthy lifestyles.

Cummins has long partnered with the organization in the company’s efforts to build stronger communities and in keeping with its mission of “making people’s lives better by powering a more prosperous world.”

The partnership is something Cummins leaders take seriously. Just last week, Chairman and CEO Tom Linebarger joined Toyota Material Handling North America President and CEO Brett Wood in presenting $2,500 from each of their respective companies to four community organizations in Columbus, Indiana (U.S.A), including the United Way.

Both companies have their headquarters in Columbus and share a common belief that they have an obligation to improve the quality of life in the communities where they do business.

The Salvation Army, Lincoln-Central Family Neighborhood Center and the Columbus Firemen’s Cheer Fund received a total of $5,000 each in addition to the United Way’s 2-1-1 initiative, an effort to connect people in need with the appropriate service provider.

Linebarger said while Cummins is focused on innovation, building the best products and offering outstanding customer service, it is also dedicated to lending a helping hand in the communities where it does business.

“There is nothing more important that we do than help the people in our community,” Linebarger said.

blair claflin director of sustainability communications

Blair Claflin

Blair Claflin is the Director of Sustainability Communications for Cummins Inc. Blair joined the Company in 2008 as the Diversity Communications Director. Blair comes from a newspaper background. He worked previously for the Indianapolis Star (2002-2008) and for the Des Moines Register (1997-2002) prior to that. [email protected]

 

Cummins Officer Calls on State to be More Inclusive

Chief Administrative Officer Marya Rose participates in a panel discussion on ways business can be a force for good (photos courtesy of the Indianapolis Business Journal).
Chief Administrative Officer Marya Rose participates in a panel discussion on ways business can be a force for good (photo courtesy of the Indianapolis Business Journal).

Cummins Chief Administrative Officer Marya Rose called for comprehensive hate crimes legislation in the company’s home state of Indiana during a forum on how business can be a force for good.

 

Indiana is one of five states that does not have a statewide law that specifically addresses hate crimes. Such legislation can enable prosecutors to seek higher penalties for criminal acts motivated by hate.

“We can talk about inclusion, but there’s still just some basic things we need to do as a state to make Indiana welcoming, and passing a comprehensive hate crimes bill is table stakes for our state,” Rose said while participating today (Dec. 14) in a panel discussion at Engage Indiana in Indianapolis. 

“So many people in this community have already gotten together, with not for profits and the United Way and we intend to make this happen,” Rose added. “This is going to happen this year. This is our time and we need to make it happen right now.”

The Indiana Legislature has considered hate crimes legislation for years but proponents have never managed to get the necessary support to pass a bill.

Rose maintains hate crimes legislation is needed to make Indiana a truly welcoming and inclusive place. Even the appearance that Indiana tolerates crimes of hate can send an unwelcoming message to people from diverse groups.

That can make it harder for companies to recruit the diverse talent they need to develop the most creative answers to their customers’ business challenges. Rose’s comments got an enthusiastic reaction from the audience of business leaders in attendance at the event sponsored by the Indianapolis Business Journal and the Indiana Economic Development Corporation.

Cummins has a long history of taking a leadership role on issues involving diversity. Company leaders, for example, have spoken out against legislation banning gay marriage around the U.S.

Creating an inclusive environment can be challenging, Rose said. And it’s something Cummins is focusing on as it moves forward in its diversity journey.

“You can have a diverse employee population, and by that I mean all facets of diversity not just visible facets but invisible facets, and yet we can struggle with inclusion,” Rose said. “If someone doesn’t feel like they can bring their whole self to work, in a sexual orientation way, in a religious way, however it is, then we aren’t getting the best out of that employee.”

Passing hate crimes legislation is a step Indiana can take so diverse people can bring their whole selves to the state. Rose maintains that, in turn, will make Indiana more attractive for everyone. 
 

blair claflin director of sustainability communications

Blair Claflin

Blair Claflin is the Director of Sustainability Communications for Cummins Inc. Blair joined the Company in 2008 as the Diversity Communications Director. Blair comes from a newspaper background. He worked previously for the Indianapolis Star (2002-2008) and for the Des Moines Register (1997-2002) prior to that. [email protected]

 

Cummins Places High in Management, Sustainability Rankings

Cummins Chairman and CEO Tom Linebarger attends a meeting of the Women's Affinity Group in 2017.
Cummins Chairman and CEO Tom Linebarger attends a meeting of the Women's Affinity Group in 2017.

Cummins has been named to two lists released this month reflecting the company’s strong management and sustainability initiatives.

 

The company finished No. 82 in the 2018 Wall Street Journal’s "Management Top 250"  released last week (Dec. 3), and No. 80 in the 2019 JUST 100, a list of America's most just companies released today (Dec. 10).

THE MANAGEMENT TOP 250

The Wall Street Journal’s rankings were prepared by the Drucker Institute, named for the late professor, author and longtime Wall Street Journal Columnist Peter Drucker. “To be a manager requires more than a title, big office and other outward symbols of rank,” he once wrote. “It requires competence and performance of high order.”

Cummins’ ranking is up from No. 94 in the 2017 Management Top 250 and includes five out of five possible stars for the company’s social responsibility performance. That’s up from four stars in 2017.

The social performance ranking is based on multiple indicators of community involvement, environmental stewardship, governance performance and whether “a company has put a social purpose at the core of its business strategy.” Cummins corporate mission is: “Making people’s lives better by powering a more prosperous world.”

The company received four-star rankings for customer satisfaction, employee engagement and development and financial strength. Cummins was the third highest ranked company in its sector – automotive/vehicles, preceded only by General Motors (No. 37) and Ford (No. 42). 

Three technology companies topped the list – Apple (No. 1), Amazon (No. 2) and Microsoft (No. 3).

AMERICA’S JUST 100

Cummins has made the JUST 100 every year since it was initiated in 2016. The list is produced by a partnership between Forbes magazine and JUST Capital, which measures company performance against the American public’s definition of just corporate behavior based on public polling.

Last year, Cummins finished No. 45 in the JUST 100,  and No. 3 in the commercial vehicles and machinery category behind Rockwell Automation (No. 13) and Caterpillar (No. 38).

Cummins finished No. 80 in this year's survey and No. 3 again in the commercial vehicles and machinery category behind Caterpillar (No. 49) and Rockwell (No. 73). Tech companies also finished a top the JUST 100 led by Microsoft (No. 1), Intel (No. 2) and Alphabet (Google) (No. 3).

The JUST Capital poll of 81,000 Americans found several interesting findings, including:

  • 76 percent of working Americans said they would opt to work at a more just company even if the pay was less.
  • 78 percent of those polled said they had taken action to show their support for a corporation’s positive behavior.
  • 63 percent said they think CEOs have a responsibility to take a stand on important social issues.

Cummins CEO Tom Linebarger has been a proponent of environmental sustainability, maintaining protecting the environment while growing the economy is the challenge of our time.
 

blair claflin director of sustainability communications

Blair Claflin

Blair Claflin is the Director of Sustainability Communications for Cummins Inc. Blair joined the Company in 2008 as the Diversity Communications Director. Blair comes from a newspaper background. He worked previously for the Indianapolis Star (2002-2008) and for the Des Moines Register (1997-2002) prior to that. [email protected]

 

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