Cummins CEO signs Roundtable’s statement expanding corporations’ commitment

Cummins Chairman  and CEO Tom Linebarger speaks at the company’s annual meeting in May 2019, promoting action on the environment and Cummins Powers Women initiative to help address global inequities facing women and girls around the world.
Cummins Chairman and CEO Tom Linebarger speaks at the company’s annual meeting in May 2019, promoting action on the environment and Cummins Powers Women initiative to help address global inequities facing women and girls around the world.

Cummins Chairman and CEO Tom Linebarger has joined 180 other CEOs signing a new statement issued by the Business Roundtable that commits them to leading their companies for the benefit of all stakeholders.

The stakeholders in the new “Statement on the Purpose of a Corporation” include customers, employees, suppliers, communities and shareholders. The statement reaffirms a practice followed by Cummins for more than 50 years, but it marks a significant change for the Roundtable.

WHY IT’S IMPORTANT

The Roundtable has periodically issued Principles of Corporate Governance since 1978, but each version has endorsed shareholder primacy, maintaining corporations exist mainly to serve shareholders. The statement released Monday by the Roundtable outlines a broader standard for corporate responsibility that supersedes previous statements.

“Businesses play a vital role in the economy by creating jobs, fostering innovation and providing essential goods and services,” the new statement says. “…While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders.”

The statement concludes saying:

“Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”

Other CEOs signing the new statement include Tim Cook, CEO of Apple; Mary Barra, CEO of General Motors; James Hackett, CEO of Ford Motor Co. and Jeffrey Bezos, CEO of Amazon.

CUMMINS’ STAKEHOLDER MODEL

Cummins has been following the stakeholder model of business dating back to longtime CEO J. Irwin Miller and embraced by every company chief executive since. Miller laid out his philosophy in Cummins’ 1972 Annual Report.

“We can in the long run be a healthy company only in so far as we exist and serve within an economically and socially healthy society,” Miller said in that report. “We, therefore, support the involvement of company personnel in both public and private social programs, with funds set aside for general philanthropy.”

Shareholders are still an important stakeholder, under the Cummins’ model. Financial success is critical for companies to have an impact on other areas of society. But shareholders are not the only stakeholder.

Linebarger is an active member of the Roundtable, serving as Chair of the Business Roundtable International Engagement Committee. He has continued the stakeholder model of leadership since becoming Cummins’ CEO in 2012.

Under his leadership, for example, the company started the Cummins Powers Women initiative to help address global inequities facing women and girls around the world. Cummins has also established goals to reduce the energy and greenhouse gases it produces, the water it uses, and increase the amount of waste it recycles. The company regularly reports on its progress in Cummins’ Sustainability Progress Report.

“I think all of us know that in order to continue, in order to thrive a hundred years from now, there will be significant challenges to all industrial companies and certainly a company in the power business, about what impact we’re having on the environment,” Linebarger said at Cummins’ Annual Meeting in May. “We will have to produce wealth for all stakeholders while using less, and it’s just that simple.”
 

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]

 

Treating water for a second act

Cummins employees at the Rocky Mount Engine Plant tour the new system's greenhouse at a ribbon cutting earlier this year.
Cummins employees at the Rocky Mount Engine Plant tour the new system's greenhouse at a ribbon cutting earlier this year.

No, the greenhouse at Cummins’ Rocky Mount Engine Plant (RMEP) doesn’t mean the company is diversifying into fruits and vegetables.

It’s part of Cummins’ commitment to reduce water use in the North Carolina (U.S.) community where the plant is located. RMEP has a new system employing multiple technologies including hydroponics – using plants as a filter –  to treat millions of gallons of water annually so it can be returned to the facility for non-potable use.

A similar system – minus the greenhouse – is conserving millions of gallons annually at Cummins’ Jamestown Engine Plant in western New York (U.S.). Both plants expect to cut city water use by about a third – collectively saving more than 25 million gallons annually.

Rocky Mount Engine Plant Water Hub
The new system at the Rocky Mount Engine Plant is capable of treating about 75,000 gallons per day, returning it to the plant for non-potable use.

The projects will likely play an important role in reaching the goals established in PLANET 2050, Cummins’ environmental sustainability strategy to reduce the company’s impact on the climate and other environmental challenges.

The strategy calls for reducing absolute water consumption in facilities and operations companywide 30% by 2030 or more than 200 million gallons annually. The strategy calls for reusing water and returning it clean to communities as a 2050 aspiration.

In 2019, the company used 895 million gallons of water, down from 949 million gallons the previous year, about a 6% reduction.

“What we learn at these locations could be applied elsewhere when we update facilities in the future,” said Nichole Morris, Cummins’ Manager for Water and the Environment. “Each site has unique characteristics that will help us as we move forward.”

Unfortunately, replacing every Cummins treatment system with the latest technology is cost prohibitive. These new systems, however, could provide lessons for other locations when investing in new systems makes sense.

THE POWER OF THE PLANTS

Rocky Mount earlier this quarter held a ribbon cutting to celebrate what it calls its WaterHub. The multi-faceted system includes anaerobic and aerobic treatment, allowing micro-organisms to break down organic materials.

Hydroponics provide additional microbiological treatment coupled with membrane filtration to remove fine solids. A final stage uses a reverse osmosis process to address any remaining undesirable constituents.

The hydroponic plants are critical to the functionality of the WaterHub. Root surfaces provide supplemental aeration and catalyze an ecology of grazing micro-organisms (protozoa and micro-crustaceans) to help reduce sludge and increase overall efficiency.

“These technologies have been around for many, many years,” said Gary Keffer, Director of Health, Safety and Environment at the plant. “What makes this innovative is it puts all of these technologies together to produce the ultra-clean water we need for our manufacturing processes.”

Working with four different outside contractors, the system took nearly four years to complete and has a treatment capacity of about 75,000 gallons per day. Most of the water is returned to the plant’s cooling tower, which is used to cool various machinery such as air compressors. The water must be ultra clean to prevent degradation within the tower, which includes several sensitive metals.

The old system had been updated several times but essentially went back some 40 years. Plant leaders hope the greenhouse will host school tours, providing hands-on learning opportunities on the importance of clean water.

“This project has not been without its challenges,” said Tim Millwood, Vice President of Manufacturing at Cummins, speaking remotely at the ribbon cutting because of COVID-19. “Probably the pandemic was the ultimate challenge. But, thanks to your commitment, this team got the WaterHub over the finish line. I’m really, really proud of you all.” 

PLANT WITHOUT PLANTS

The three pillars of Cummins' water strategy.
The three pillars of Cummins' water strategy.

The Jamestown plant's new system has been around a little longer, and lacks a greenhouse, but it, too, could provide important lessons for other Cummins sites.

Over the past 18 months, the plant has been working to upgrade the treatment system, which was largely original to the more than 40-year-old plant.

While there’s no hydroponics, the Jamestown system also includes a reverse osmosis and filtration process to polish wastewater so it can be re-used in the plant’s manufacturing processes, said David Burlee, Health, Safety and Environment Leader at the plant.

“We are finding the high quality of the reclaimed wastewater is dramatically reducing the number of regeneration cycles required on our deionized water system and increasing the efficiency of our cooling towers,” Burlee said.

Jamestown is significantly north of Rocky Mount and the low temperatures it gets most winters would likely not be as conducive to a greenhouse as the warmer climate in North Carolina.

The system looks a little more industrial, which might be fine in many settings while a system with a greenhouse could be more visually pleasing for plants close to residential areas.
 
THE PATH FORWARD

Given the company has around 125 major manufacturing sites in various locations and climates around the world, Morris is happy to have multiple examples to share moving forward. She says a one-size-fits-all approach isn’t likely to work.

While 10 years might seem like a long time, she often feels those 2030 goals are lurking just around the corner.

“The reductions from these systems are significant,” she said of the Jamestown and Rocky Mount projects. “But we still have a long way to go to reach our 2030 goals and beyond. It will take many different approaches to get there.”
 

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 named to 2021 most responsible companies list

Cummins' Corporate Office Building in Columbus, Indiana (U.S.).
Cummins' Corporate Office Building in Columbus, Indiana (U.S.).

Cummins is ranked No. 24 on Newsweek’s list of America’s Most Responsible Companies for 2021.

The list is based on publicly reported data for economic, social and governance performance. In 2020, the company was No. 17 on the magazine’s list of 400 companies.

“Neighbors, family, friends, first responders: we depend on, appreciate, and hope to be helpful to each other,” said Nancy Cooper, Global Editor in Chief. “Many corporations also step up. They care about being good citizens and give back to the communities they operate in.”

NO. 2 IN ITS INDUSTRY

Newsweek’s rankings, released online Dec. 2, are done in partnership with Statista, a leading provider of market and consumer research and data. The analysis was carried out in a four-step process starting with a pool of over 2,000 companies. The research also included an independent survey of more than 7,500 U.S. residents regarding what they expect of responsible companies.

The final list recognizes the top 400 most responsible companies in the U.S. across 14 industries: automotive and components; capital goods; consumer goods; energy and utilities; entertainment; leisure and dining; financial; health care and life sciences; materials; professional services; real estate and housing; retail; software and telecommunications; technology hardware; and travel; transport and logistics.

Cummins ranked No. 2 in the automotive and components category behind General Motors, which finished No. 12 in the overall rankings. Technology and software companies dominated the top five places on the magazine’s list, led by HP. The list will be included in the magazine’s print edition on Dec. 6. 

OTHER RECENT RANKINGS

Newsweek's Most Responsible Companies designation is the second major ranking Cummins has received recently. 

Earlier the company was named to the S&P Dow Jones Sustainability Indices for North America for a 15th consecutive year. S&P Dow Jones is based on an exhaustive survey looking at environmental, social and governance performance and strategy.


 

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 named to prestigious sustainability index for 15th consecutive year

An employee works at the Cummins Mississauga Fuel Cell & Hydrogen Technologies facility in Ontario, Canada. The facility builds low-carbon fuel cells for multiple applications and electrolyzers that produce hydrogen.
An employee works at the Cummins Mississauga Fuel Cell & Hydrogen Technologies facility in Ontario, Canada. The facility builds low-carbon fuel cells for multiple applications and electrolyzers that produce hydrogen.

Cummins has been named to the S&P Dow Jones Sustainability Indices for North America, one of the premier measures of corporate sustainability, for a 15th consecutive year.

Launched in 1999, the indices are one of the oldest measures of corporate sustainability. In 2020, only 142 companies made the North American index over nearly two-dozen categories, ranging from automobiles to utilities. Cummins is one of only 10 included from the capital goods sector.

The indices are based on an exhaustive survey covering company performance and strategy in 2019 on environmental, social and governance issues. The index evaluated more than 7,000 companies from around the world in 2020.

2020 Dow Jones LogoIMPROVING SCORES

"A (Dow Jones Sustainability Indices) designation is a reflection of being a sustainability leader in your industry,” said Manjit Jus, Global Head of ESG Research and Data for S&P Global.

“With a record number of companies participating in the 2020 Corporate Sustainability Assessment and more stringent rules for inclusion this year, this sets your company apart and rewards for your continued commitment to people and the planet,” Jus said.

Once again, Cummins narrowly missed the minimum score for inclusion on the world indices. The company, nevertheless, equaled or improved its score in 20 of 22 categories compared to 2019, including significant increases for environmental, social, and occupational health and safety reporting.

A SUSTAINABLE TRADITION

Cummins has a rich history in sustainability, producing a corporate sustainability report since 2003, one of the oldest in the U.S. The company has been especially active in the past 18 months.

In 2019, Cummins adopted a new environmental sustainability strategy called PLANET 2050 to address climate and other environmental issues. Just last week, the company announced an aggressive plan for commercializing low carbon power systems fueled by hydrogen. 

On social issues, Cummins is in the midst of a ground-breaking social initiative called Cummins Powers Women to improve the lives of women and girls around the world, impacting more than 100,000 people since its start in 2018. Late last month, the company launched Cummins Advocating for Racial Equity (CARE), another step in Cummins’ intent to take a leading role in undoing systemic discrimination against people of color in the United States.

Cummins has been developing strategies for the company to play a role in four key areas: police reform, criminal justice reform, economic empowerment and social justice in healthcare, housing, workforce development and civil rights.

In governance, the company’s Board of Directors recently added a fourth woman to the 12-member board. Five members of the company's nine-member Executive Leadership Team are women.

Cummins has also taken a leading role in the response to the COVID-19 pandemic, partnering with two other companies to help produce personal protective equipment. The company also developed a playbook based on lessons it learned during the crisis and shared it with other companies via Cummins’ external website, cummins.com.

The company has an extensive report on its work in sustainability on Cummins’ sustainability website.
 

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 seizes the day to lead on hydrogen technology

Cummins Hydrogen Day - Event Roundup

Cummins laid out an aggressive strategy for hydrogen today, addressing both production of the low-carbon energy source as well as the fuel cell technology to convert it into power for customers.

 

Speaking at the company’s Hydrogen Day, leaders said Cummins has the technical expertise and the manufacturing and customer support capabilities to successfully bring to market a range of hydrogen-related products at a scale for widespread adoption.

“Hydrogen technologies, particularly electrolyzers, will be a fast-growing and increasingly important part of our business over the next few years,” said Cummins Chairman and CEO Tom Linebarger at the virtual event, which drew a registered audience of more than 3,000 analysts, media members, environmental advocates and others.

“As momentum increases worldwide for the use of hydrogen solutions, we will continue to leverage our industry-leading hydrogen technologies, our deep customer relationships and our extensive service network to enable adoption,” said Linebarger, who serves on the board of the global Hydrogen Council.

Amy Davis, Vice President and President of the New Power business segment, which oversees Cummins’ work on battery-electric and hydrogen-related products, said customers can count on Cummins as they tackle the enormous challenges presented by moving to the carbon neutral future envisioned by the Paris climate accords.

“Our goal is to have the right products to meet customers’ needs at every point of the transition, which is why we have invested in multiple solutions upfront,” she said.

Cummins leaders cautioned, however, that carbon neutrality can’t be achieved without private investment and government support.

“I am encouraged to see government interest in this space increasing in order to support new and less carbon intensive technology,” Davis said.

Germany, for example, plans to spend $9 billion on hydrogen infrastructure this decade, with 5 Gigawatts of electrolyzer capacity by 2030. China and South Korea are developing fuel cell and hydrogen production targets. In the U.S., California expects to have spent about $230 million on hydrogen projects by the end of 2023.

Fuel  cell truck for the California Energy Commission
Cummins' PEM fuel cells can be found in a class 8 truck for the California Energy Commission that not only includes the fuel cell composition, but also the hydrogen storage, battery system and electric drivetrain. You can learn more about Cummins' plans for hydrogen at the company's Hydrogen Day web page.

TURNING GREY TO GREEN

Almost all of the approximately 70 million tons of hydrogen produced today is considered “grey hydrogen,” made using significant amounts of power generated through the use of natural gas.

Cummins expects the world’s initial attention will be given to replacing this “grey hydrogen” with “green hydrogen,” produced primarily through the electrolysis of water using renewable power from wind, solar and hydro-electric sources.

Cummins is already producing a range of electrolyzers to generate green hydrogen, including a nearly complete 20-megawatt electrolyzer system in Bécancour, Canada, that will be the largest in the world.

The company’s electrolyzers employ both Proton Exchange Membrane (PEM) and alkaline technologies, and it could be adding to its portfolio soon. Cummins recently received a $2 million U.S. Department of Energy grant to demonstrate the cost, performance and reliability of a reversible fuel cell or R-SOFC.

It can run as a solid oxide electrolyzer cell that can split steam to separate hydrogen and oxygen. In total, Cummins has already delivered electrolyzers for more than 50 hydrogen fueling stations across the globe.

Linebarger said the company’s projections show Cummins’ electrolyzer business alone will have annual revenues of approximately $400 million in 2025, with “demand driven by the transition from grey to green hydrogen.” 

Over time, Cummins expects the price of electrolyzers to decline, leading to widely available green hydrogen at a lower cost. The increased availability of low-cost green hydrogen is projected to drive demand for hydrogen powered fuel cells to convert green hydrogen into low-carbon power for everything from trains to on-highway trucks and buses, to off-highway construction equipment and stationary power applications.

Cummins fuel cells powered the world’s first hydrogen fuel cell passenger train called Coradia iLint in Germany. By 2025, the company expects to have shipped fuel cell systems for at least 100 trains, primarily in Europe.
Cummins' fuel cells powered the world’s first hydrogen fuel cell passenger train called Coradia iLint in Germany. By 2025, the company expects to have shipped fuel cell systems for at least 100 trains, primarily in Europe.

PUTTING HYDROGEN TO WORK

Cummins isn’t waiting to get started on fuel cells. The company already has more than 2,000 fuel cell installations across a variety of on-and off-highway applications.

Cummins’ fuel cells, for example, are powering the world’s first hydrogen fuel cell passenger trains through Alstom, a French rail manufacturer. The company supplied fuel cells for FAUN, a leader in waste collection vehicles and sweepers in Europe, for its electric refuse truck program. 

Cummins is also working with ASKO, Norway’s largest grocery wholesaler, to supply fuel cells integrated into four Scania electric trucks as part of ASKO’s plan to bring more alternative fuel vehicles into its fleet. And the company’s fuel cells are being integrated into more than 60 buses in Zhangjiakou, China, a co-host for the 2022 winter games.

Just last week, Cummins announced it will work with longtime customer Navistar on the development of a class 8 truck powered by hydrogen fuel cells. The truck will be integrated into Werner Enterprises’ fleet of more than 7,700 tractors for local and regional service on a year-long trial basis out of Fontana, California.

“Cummins is unique in that our portfolio has both hydrogen production from electrolysis as well as fuel cells,” said Amy Adams, Vice President – Fuel Cells and Hydrogen Technologies. “This enables us to offer a full, differentiated hydrogen solution from start to finish, seamlessly integrated for customers.”

LOOKING AHEAD

How quickly all this happens depends on a number of factors, including government leadership to help make hydrogen products an attractive alternative to less expensive internal combustion technology. But Cummins is moving today to seize the opportunity that awaits. 

“While we know the widespread adoption of carbon neutral fuel cell solutions will take time, Cummins is already leaning into the opportunity now,” Linebarger said. “Our company’s financial strength provides us with the ability to invest in and develop a broad portfolio of technologies across advanced diesel, natural gas, mild and heavy hybrid, battery electric and fuel cells that will move the world towards a carbon neutral future.”

Cummins' Virtual Hydrogen Day Event: Event Recap
 

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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