Fortive Corporation Annual Sustainability Report

Accelerating Progress Toward
A Sustainable Future
Fortive Corporation Annual Sustainability Report | 2022 Reporting Year|

Introduction1Fortive Corporation Annual Sustainability Report|

Introduction

2

Materiality and Forward-Looking Statements
The disclosures included in this report are being provided to the
public in an effort to provide transparency into our environmental,social and governance (ESG) initiatives to respond to investor andother stakeholder requests, and to further enhance our collective
understanding of ESG issues. Our approaches to the disclosures
included in this report differ in significant ways from thoseincluded in mandatory regulatory reporting, including under U.S.
federal securities laws and regulations. Thus, while certain matters
discussed in this report may be significant, any significance should
not be read as necessarily rising to the level of materiality used forthe purposes of complying with the U.S. federal securities laws andregulations, even if we use the word “material” or “materiality” inthis report.

Certain statements included or incorporated by reference in thisreport are “forward-looking statements” within the meaning of the
U.S. federal securities laws. All statements other than historical
factual information are forward-looking statements. Forwardlooking statements are based on assumptions and assessments
made by our management in light of their experience andperceptions of historical trends, current conditions, expected
future developments and other factors. Forward-looking
statements are not guarantees of future performance and actual
results may differ materially from the results, developments
and business decisions contemplated by our forward-looking
statements. Accordingly, you should not place undue relianceon any such forward-looking statements. Important factors that insome cases have affected us in the past and that in the future could
cause actual results to differ materially from those envisaged in ourforward-looking statements are described in Fortive’s filings with the
U.S. Securities and Exchange Commission (SEC). The forward-looking
statements included in this report speak only as of the date of thisreport, and except to the extent required by applicable law, we do
not assume any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events anddevelopments or otherwise.

Fortive Corporation Annual Sustainability Report|

Introduction

3

Introduction

2

A Letter from Our CEO

42022 Sustainability Achievements

6

About Fortive

7

Our Commitment to Sustainability

9

Our Culture

16

How we Work17

Empower Inclusive and Diverse Teams21

Our Commitment to Cultivating An Inclusive Growth Culture

22

Invest In Our Communities

28

Community Engagement and Support

29

Protect the Planet

32

Climate Change and Greenhouse Gas Emissions

33

Water

36

Work and Source Responsibly37

Our Commitment to Health and Safety in Our Operations and Supply Chain

38

Environmental, Health, and Safety

39

Responsible Sourcing

40

Operate with Principle

43

Ethics and Compliance44

Business Resiliency

46

Data Privacy and Security

47

Fortive Corporation Annual Sustainability Report|

Introduction

4

A Letter from Our CEO
Dear Fortive Stakeholders,Since our founding in 2016, we have been committed to
Sustainability. Delivering long-term value and impact are
inextricably linked with our shared purpose and values and arereflected in our business strategy.
Our commitment to Sustainability is grounded in our cultureof kaizen, or continuous improvement, the cornerstone of our
Fortive Business System (FBS). FBS powers our innovation andgrowth to deliver industry-leading solutions for our customers.
Our dedication to FBS also enables us to advance and scale ourSustainability strategy and performance.
Kaizen and FBS fuel our steadfast optimism – our belief that
we can always do better – and our commitment to delivering
breakthroughs for all our stakeholders, including customers,
employees, shareholders, communities, and the planet.

Fortive’s shared purpose – essential technology for the people
who accelerate progress – makes us an indispensable partner
for customers seeking sustainable solutions.
The work we do, and how we do it, centers around impact. Everyday, Fortive’s products, services, and people are making an impact
behind the scenes to:
n

n

n

n

n

n

JAMES A. LICOPRESIDENT AND CHIEF EXECUTIVE OFFICER

ensure safe operating conditions for workers in high-risk
environments;
provide software solutions that manage critical metrics forworker health and safety as well as sustainability performance;
safeguard the operational capacity of critical infrastructure andphysical assets;
enable operational and process efficiencies that reduce
environmental impacts;
advance automated, tailored perioperative care for patients andtheir procedures; andenable quick and accurate results from medical testing.

Over 60% of our revenue is generated from products and services that enable sustainabilityrelated outcomes and are aligned with the United Nations Sustainable Development Goals.

Fortive Corporation Annual Sustainability Report

Advancing Performance and Transparency

Accelerating Progress Toward a
Sustainable Future

As a force for good, we believe in prioritizing trust, transparency,
Sustainability, and positive impact to deliver long-term value.
Our Sustainability Report is aligned to the top environmental,social, and governance (ESG) reporting frameworks:

Our powerful combination of global companies, specialties, andskills means that when we see a promising new opportunity toadvance our sustainability goals, we are uniquely positioned toinvest in it.

n

GRI (Global Reporting Initiative)n

SASB (Sustainability Accounting Standards Board)n

TCFD (Task Force on Climate-related Financial Disclosure)This report also includes our Communication of Progress as a
United Nations Global Compact (UNGC) signatory and alignment
to the UN Sustainable Development Goals (SDGs).
Our Sustainability ratings continue to increase, including a “B”
for our 2022 CDP Climate Change disclosure and a rating of“AA” (leader) from MSCI. In addition, we successfully completed
third-party assurance of our greenhouse gas (GHG) accounting,achieving Limited Assurance. These improvements are atestament to the rigor and integrity of our management systems
and processes.

In addition to the industry leading companies that are thebedrock of our portfolio, we have made strategic investments incompanies with leading positions in industrial and construction
technology, precision measurement, life safety, and patient carein healthcare. Each of these businesses contributes to a safer,smarter, and more sustainable world – today and tomorrow.
The potential impacts and risks associated with ESG issues are
increasingly top of mind, but at Fortive, ESG issues have always
been business issues. We have long recognized the benefitsof strong governance, impactful environmental goals andprograms, and meaningful people-focused goals and initiatives
for our stakeholders.

[1] GRI: Global Reporting Initiative, SASB: Sustainability Accounting Standards Board; TCFD: Task Force on Climate-related Financial Disclosures

Introduction

In 2022, we invested in Datamaran, an AI-based software analytics
platform that helps companies identify and monitor ESG risks
and opportunities in real-time. We believe in the work Datamaran
is doing to make ESG risk and opportunity analysis accessible toorganizations seeking to create and sustain long-term value.
I am proud of our successes, and I am excited about our future.
We have the right formula to continue making an impact in theworld: strong and diverse teams, industry-leading companies, thepower of FBS, and the grit and tenacity to solve hard problems.
Our Sustainability vision - accelerating progress toward asustainable future - inspires us every day.
Thank you for joining us on this bold journey, and for putting yourtrust in us.

JAMES A. LICOPRESIDENT AND CHIEF EXECUTIVE OFFICER

Our organization is built on integrity – when we say we will do something, we do it. This high“say-do ratio” also applies to our Sustainability goals. For example, we established the 2029
absolute GHG emissions reduction goal after achieving our prior goal three years early. And from2021-2022 we reduced Scope 1 and 2 emissions 1.5% while our business grew at almost 11%.

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Fortive Corporation Annual Sustainability Report|

Introduction

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INTRODUCTION

2022 Sustainability Achievements
We are proud to share the breadth of our Sustainability progress, as well as two new goals.

4thconsecutive year
on Newsweek’s
Most Responsible
Companies

78%

Employee
Engagement score100%

on Human Rights
Campaign Corporate
Equality Index,
for the sixth
consecutive year82%

Employee
Inclusion &Belonging score60%

revenue generated
from sustainabilityenabling products
and services

25,000+hours dedicated tocommunity service

B

on CDP’s Climate
Change disclosure,up from C

75%

of operatingcompanies in top
quartile fortotal recordable
incident rate (TRIR)

22.4%

absolute reductionin Scope 1 and 2
GHG emissions
from 201938

day average
SpeakUp! caseclosure rate,
exceeding goal of
45-day average

NEW GOAL

10%

goal to reducewater use at major
operations by 2029

NEW GOAL$100M

spend goal withdiverse suppliersby 2025

Fortive Corporation Annual Sustainability Report|

Introduction

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INTRODUCTION

About Fortive
We are a global technology innovator withgenerosity and optimism in our DNA.
Fortive delivers essential technology andconnected workflow solutions across a rangeof attractive end markets. Our businesses andstrategic segments—Intelligent Operating
Solutions, Precision Technologies, andAdvanced Healthcare Solutions—are built on
leading brands, innovative technologies, andestablished market positions.
Making a positive impact on the world iscore to who we are, what we do, and how
we do it. Our culture is deeply grounded incontinuous improvement, and we’re equippedwith the tools and the drive to accelerate
progress for people-centric fields like industrial
manufacturing, engineering labs, workplacesafety, facility and asset management, productdevelopment, and healthcare.

Who We Are
Our global team is united by a powerful shared purpose: essential
technologies for the people who accelerate progress. With 17 operatingcompanies, our teams operate across a broad range of industries
and geographies. The work together to propel us towards our goal ofa sustainable future through development of critical hardware- andsoftware-enabled workflow solutions, applied intelligence, advanced
analytics, and other rapidly advancing technologies. We are energizedby our vision of a stronger, safer, and sustainable world and boldly
pursue the solutions to get us there.
Our products and services enable our customers to reduce
environmental impacts, advance community and patient health,and ensure safe workplaces and operational continuity of criticalinfrastructure. Our growth mindset and culture of curiosity are powerfulforces that drive the ideation and experimentation necessary to develop
the products and services that accelerate progress for all.

FORTIVE AT A GLANCE

17

operating companies

18K+

employees

50+

countries$5.8B

2022 revenue

Fortive Corporation Annual Sustainability Report|

Introduction

Our Business Segments

Intelligent Operating Solutions –Optimizing Performance

Precision Technologies –Accelerating Innovation

Advanced Healthcare Solutions –Improving CareAt the forefront of accelerating progress for our tens of
thousands of customers in mission-critical workflows, Fortive’sIntelligent Operating Solutions use advanced instrumentation,
software and services to keep much of the world running safely,
efficiently, and more sustainably. We have leading positions
in electrical test and measurement, facility and asset lifecycle
software applications, and connected worker safety. We
connect workflows, real-time data, and powerful analytics tokeep customers and critical infrastructure maintained, minimize
downtime, and supercharge productivity.

Turning the spark of an idea into a world-changing productrequires bold vision, a rigorously customer-centric approach,and specialized expertise in materials, methods, andmeasurement. Fortive’s Precision Technologies help solve
tough technical challenges to speed breakthroughs in a wide
range of applications, from food and beverage production andmanufacturing to next-generation electric vehicles and clean
energy, as our customers seek new test solutions to enable
the electrification and connectivity of everything. From deep
sea to deep space, engineers and product developers dependon Fortive’s advanced technologies for safety, precision, andreliability, even in the most demanding and dynamic conditions.

As patient care delivery evolves globally, Fortive’s Advanced
Healthcare Solutions are enabling health care providers todeliver exceptional patient care more efficiently withindustry-leading instrument sterilization solutions, instrument
tracking, cell therapy equipment design and manufacturing,biomedical test tools, radiation safety monitoring, andend-to-end clinical productivity solutions. Hospitals, ambulatory
surgical centers, and laboratories need these intelligent
technologies to help ensure critical safety standards aremet, instruments and operating rooms are working at peak
performance, and complex procedures are followed accurately
in these mission-critical healthcare environments.

8Fortive Corporation Annual Sustainability Report|

Introduction

9

INTRODUCTION

Our Commitment
to Sustainability
We’re boldly pursuing our vision ofaccelerating a sustainable future for all by
investing in our people, our operations, andbreakthrough innovations that directly addressenvironmental and societal challenges.
Sustainability is inextricably linked with ourshared purpose—essential technologies forthe people who accelerate progress—and ourvalues. Developing products that create apositive impact on the world is what drives us,
and what inspires us.

Our Sustainability Value Proposition
The work we do, and how we do it, centers around impact.
Every day, Fortive’s products, services, and people are working
behind the scenes to:
n

n

n

n

n

n

ensure safe operating conditions for workers in high-risk
workplaces;
provide software solutions that manage critical metrics forworker health and safety as well as environmental performance;
enable operational and process efficiencies that reduce
environmental impacts;
safeguard the operational capacity of critical infrastructure
and physical assets;advance automated, tailored perioperative care for patientsand their procedures;
enable quick and accurate results from medical testing.

Sustainability is central to Fortive’s business strategy andour progress is accelerated through FBS. We have a portfolioof operating companies with strategic connections to
Sustainability through their products and services. This
combination of our strategy and portfolio enables us to scale
our impact and capitalize on the secular drivers in our current
markets, driving growth and long-term value in new markets.
ESG issues are business issues. We identify and manage
these issues because we understand their importance inmaintaining and enhancing the long-term sustainment andvalue of the company.

Fortive Corporation Annual Sustainability Report|

Introduction

Aligning Our Disclosureswith Leading ESG Frameworks
This report provides an update on Fortive’s progress toward ourgoals in calendar year 2022 and is prepared in alignment with thefollowing frameworks:nn

the Sustainability Accounting Standard Board (SASB)
standard for Electrical & Electronic Equipment(RT-EE version 2018-10)

MATERIALITY MATRIXHighnthe Global Reporting Initiative (GRI) standards: Core
(2021 standard)

the Task Force on Climate-Related Financial Disclosure(TCFD) framework
the United Nations Global Compact and the United Nations
Sustainable Development Goals (UN SDGs)

In addition, we report our complete greenhouse gas (GHG)
profile and performance via the CDP Climate Change disclosure
each year. Click here to access our most recent CDP Climate
Change disclosure.

Human Rights

Climate Change & Greenhouse Gas (GHG) Emissions

Digital Privacy & Security
Ethics & Compliance

Water Use

External Issue Relevancen

Employee Well-Being, Safety, & Health

Waste Management

Inclusion & Diversity

Energy Management

Talent Acquisition, Retention, & Development
Political, Societal, Physical Risks
Product Lifecycle Responsibility

Community Engagement & Support
Organizational Culture & Management
Employee Rights

Air Emissions
Responsible Supply Chain & Procurement
Governance

Stakeholder Engagement

Transparency

Innovation & Technology

Market Competition

Hazardous Materials
Sustainable Building &Infrastructure Management

Low

Customer Satisfaction

Financial Management
Business Resilience

Internal Issue Relevance

High

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Fortive Corporation Annual Sustainability Report|

Introduction

Sustainability Pillars
The Sustainability Pillars serve as the blueprint for our Sustainability strategy, and we define goals in each to drive progress. We dedicate our resources to prioritize
continuous improvement in these areas, because we understand the value they offer to the business, as well as the risks of inaction. The Sustainability Pillars,
and our alignment with the UN SDGs, provide the organizing framework to focus on the ESG issues that are relevant and material to our business due to the roleeach has in delivering near- and long-term value for the company and our stakeholders.

Empower Inclusive
and Diverse Teams

Invest in Our
Communities

Protect the Planet

Work and Source
Responsibly

Operate with Principle

Advance an equitable andinclusive culture that enables
everyone to be authentic and dotheir best work.

Create and advocate for positive
impacts in the communities inwhich we work, live, and serve.

Protect the environment andresources across the value chain.

Raise and reinforce expectations
to ensure people, safety, andquality are priority #1.

Establish and enforce boundaries
to protect critical assets.

nnnInclusion and Diversity
Organizational Cultureand Management
Talent Acquisition, Retention,
and DevelopmentnCommunity Engagement
and SupportnnnClimate Change and
GHG EmissionsnWater Use
Waste Managementnn

Employee Well-Being, Safety,
and HealthResponsible Supply Chain
and Procurement
Human RightsnEthics and CompliancenBusiness ResiliencenDigital Privacy and Security

11Fortive Corporation Annual Sustainability Report|

Introduction

OPTIMIZING ENERGY GENERATION AND TRANSMISSION FOR THE CLEAN ENERGY TRANSITION

Gems Sensors pressure
switches and transducers
control the blade pitch and yaw
on wind turbines to maximize
the amount of power generated
under any wind condition.

Intelex software allows
customers to conduct
greenhouse gas (GHG)
emissions accounting
and reporting, including
the proportion offset byrenewable energy.​

Hengstler-Dynapar smart
solar tracker encoders
help solar panels track the
sun’s movement across thesky, maximizing available
energy generation.​

Fluke provides industry-leading
solar maintenance tools, whichenable technicians to test andconfirm the performance ofeach cell on solar panels.

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Introduction

13

ENSURING SAFE MANAGEMENT AND SUSTAINED OPERABILITY OF CRITICAL INFRASTRUCTURE

Tektronix signal generators
enable power conversion ofrenewable energy into electricity.​

Qualitrol’s digital gas 
analyzers provide real-time
detection of gas leaks inelectrical substations, including
sulfur hexafluoride (SF6), a potent greenhouse gas.​

ServiceChannel’s
preventive maintenancesoftware visualizes
real-time data to keep
assets operating in peakcondition, reducing risks ofperformance degradation orcatastrophic failure.

Industrial Scientific’s
iNet® Now equips technicianswith real-time analysis of gas
concentrations in hazardous
environments and alerts
when conditions are not safefor entry.

Fortive Corporation Annual Sustainability Report|

Introduction

14

ENABLING EFFICIENT OPERATIONS IN OUR TOWNS AND CITIESAnderson-Negele’s
intelligent sensors enable
food and beveragecompanies to achieveprecise fill rates, avoiding
production downtime andfood waste.

Setra’s Networked Multi-load
Power Meters simplify energy
management by identifying
energy use patterns andinefficiencies and tracking
energy savings resulting fromongoing improvements.​

Gordian’s Green Building
Costs Book with RSMeansdata helps construction
professionals plan, budget, andbuild commercial buildings to
LEED standards.

Accruent vxObserve software
provides energy management
visibility, allowing facilities
teams to optimize theirbuilding systems, understandreal-time energy consumption,and prevent system failures.

Fortive Corporation Annual Sustainability Report|

Introduction

PROMOTING PATIENT AND PROVIDER SAFETY WITH REAL-TIME MEASUREMENTS AND CLEAN TECHNOLOGY

ASP’s STERRAD® systems
sterilize instruments usinghydrogen peroxide, keeping
technicians, patients, andthe environment safe fromchemical exposure.

Censis’ CensiTrac® software
tailors the instrument tray list
for procedures and tracks
instrument usage to identify
unused instruments, which
reduces costs, energy, 
and water use associatedwith sterilization.

ProVation’s perioperative
clinical documentation andproductivity software solutions
enables physicians to focus onsafe and efficient patient care.

Invetech’s is a market leading
partner for developing andscaling best-in-class medical
diagnostic devices andprocess automation solutions
for cell and gene therapies.

Landauer dosimeters
measure radiation exposurefor technicians, providing arecord and real-time readingof exposure levels to prompt
behavior changes andinstantly reduce exposure.

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Fortive Corporation Annual Sustainability Report

INTRODUCTION

Our Culture
Our purpose – Essential technology for thepeople who accelerate progress – is ourreason for being. We bring that purpose
to life every day, guided by a unique set ofvalues, behaviors, and systems. Together,
these elements define our culture.

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Introduction

16

ValuesWe build extraordinary teams
for extraordinary results.

Customer success inspires
our innovation.

We are more together, and we all
have something unique to offer.
Using FBS, along with our strong,
inclusive culture, enables us tocome together to solve problems
no one could solve alone.

Our culture of continuous
improvement enables us to drive
innovation and deliver transformativetechnologies that break down
barriers and forge new paths for ourcustomers and the world.

We compete for shareholders.

Kaizen is our way of life.

Our values encapsulate the teamwork,
customer focus, growth mindset, and drivethat enable us to develop breakthroughSustainability solutions.

We are a force for good. We believethat prioritizing trust, Sustainability,and positive impact creates long-termvalue for all our stakeholders - ourcustomers, employees, shareholders,and communities.

FBS is core to who we are. It is afoundational philosophy that shapes
what we do and how we approach
challenges. Our commitment tocontinuous improvement inspires us
to keep growing and learning.

Fortive Corporation Annual Sustainability Report

INTRODUCTION

How We WorkThe Fortive Business System (FBS)
FBS is how we work and what differentiates us from othercompanies. Through kaizen, or continuous improvement,
we constantly challenge ourselves to be better – make better
products, provide better services, and exceed customer
expectations. We instill that ethos in everything we do.​In a company that is 18,000 strong and spans more than
50 countries and multiple industries, FBS is our common
language and our superpower.
We intentionally create kaizen teams that bring different skills,
backgrounds, and experiences together to solve problems
more effectively than any individual could alone.

“We begin each kaizen by ‘checking titles atthe door’ to empower each participant tocontribute with an equal voice.”
				
			

JIM LICOPRESIDENT AND CHIEF EXECUTIVE OFFICER|

Introduction17Fortive Corporation Annual Sustainability Report

Unleashing Growth and Innovation
Through FBS
Our culture is deeply grounded in the FBS operating model.
FBS encompasses a powerful set of tools and methods we
employ across our operating companies and a mindset thatdrives continuous improvement.
This shared mindset and belief in better is how we run ourbusiness to deliver results and evolve for the benefit of all of our
stakeholders. We’re a learning organization at heart, and our focus
on innovation and growth keeps us a step ahead of what ourcustomers need next.

“FBS is much more than a set of tools - it’s
the glue that connects all of our separatebusinesses through our singular commitment
to continuous improvement, or kaizen. We truly
believe in bringing all levels of the business
together in an environment where everyone’s
voice is heard and matters.”
				
			
			

KIRSTEN PAUSTSENIOR VICE PRESIDENT,FORTIVE BUSINESS SYSTEM OFFICE|

Introduction

18

FBS—OUR MINDSET AND TOOLKIT FOR
CONTINUOUS IMPROVEMENT
We have achieved our goals and committed to more ambitious
goals through the use of FBS tools. The rigorous applicationof FBS has enabled us to establish processes and controls
to improve data quality, communicate clearly with operatingcompanies and stakeholders, and quantify the impact we’reenabling through our efforts.
Our continuous improvement culture drives us to always evaluate
opportunities to streamline processes, improve visibility, andexecute efficiently.

Fuels experimentation andknowledge sharing. We learn
from each other and fromour customers
Enables our people to growby creating the conditions andsupport to maximize teamwork,
problem-solving, and results
Aligns with sustainability
principles by optimizing for
efficiency and productivity whileeliminating inefficiencies andphysical waste
Captures proven methods, whileproviding the flexibility to adapt
tools to specific situations
Provides the framework andtools to test and iterate tohelp continually improve andaccelerate progressFortive Corporation Annual Sustainability Report|

Introduction

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Leveraging FBS to Advance Sustainability
FBS is fundamental to who we are and how we work. We use FBS to set and achieve our Sustainability goals and embedSustainability in all that we do. We’re particularly proud to share some of our 2022 accomplishments:

Empower People andInclusive Teams:nn

82%: Achieved all-time high on
our Employee Inclusion andBelonging score​
Improved our People
strategy using:​

Invest in
Our Communities:nnProtect the Planet:

3x: increase in Fortive Foundation
gifts since 2020​n

Improved gift execution
process using:​

n50%: our 2029 target to
reduce absolute Scope 1 and 2
greenhouse gas (GHG) emissions​
Achieved Limited Assurance
for GHG accounting using:​– Voice of the employee ​– Value stream mapping​– Intelex GHG software​– Kaizen ​– Standard work​– Value stream mapping​– Problem solving– 5S – Simplify, Straighten, 			
Scrub, Stabilize, and Sustain– Problem solving​– Transactional process
improvement

Work and Source
Responsibly:nn

63%: average improvementof Environmental, Health, andSafety (EHS) Risk Score acrossmajor operations​
Systematically reduced
risk using:​– Intelex EHS Software ​– Daily visual management​– Standard work​– Voice of the customer

Operate with Principle:n38-day average: case closure rate
through our SpeakUp! program​​n Exceeded our 45-day average
goal using:​– Value stream mapping​– Kaizen​– Daily visual management​– Standard workFortive Corporation Annual Sustainability Report|

Introduction 20

The Fort
The Fort is our hub for innovation, where we go deep on data,
analytics, artificial intelligence, and other emerging technologies
to drive continuous improvement and breakthroughs. The Fort
specializes in developing simple, elegant solutions to address thedeep and complex challenges many of our customers face.
Using FBS to prototype, measure, learn, and iterate, The Fortdevelops solutions that can be shared across operating companies
to enable impact at scale:nnn

PRODUCT HIGHLIGHT

Business segment-aligned teams are comprised of data
scientists who work closely with the Segment operatingcompanies to better utilize their data, voice of the customer,
and develop customer use cases.

Accruent: Refrigerator failure prediction
for grocery retailer

The Armory is a database of reusable code, businesssolutions, and standard work that engineers across all of theoperating companies can leverage.
The Data Leaders Program identifies data scientists, trainsthem, and deploys them to help other operating company
teams, building capacity and capabilities across theoperating companies.

The Fort provides a nimble approach toproblem solving and a faster time-to-projectlaunch. On average, operating companies
that partner with The Fort see a net gain ofover three months compared to traditional
project development.

Accruent’s vxObserve product enables customers
to manage the maintenance of large fleets ofequipment, including heating and air conditioning(HVAC) systems and large refrigeration units. The
Fort worked with the vxObserve team to develop an
advanced deep-learning solution to improve criticalasset failure prediction rates.
Through a pilot program with a major grocery retailer
in the United Kingdom, the solution enabled thecustomer to:nachieve 99.8% asset uptimengenerate more than $3M in cost savingsnavoid the release of more than 1,700 MTCO2ein emssions, through enhanced refrigerant
management

Fortive Corporation Annual Sustainability Report

Empower Inclusive
and Diverse Teams
We are more together. Inclusion, diversity, and equity is a key cultural
enabler to bring out our best, drive our success, and build a promising
future for our teams, communities, and the world around us.

|

Empower Inclusive and Diverse Teams

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Fortive Corporation Annual Sustainability Report|

Empower Inclusive and Diverse Teams

22

EMPOWER INCLUSIVE AND DIVERSE TEAMSOur Commitment
to Cultivating
An Inclusive
Growth Culture
Organizational culture is all about people, andwe believe we are more together. People are at
the heart of who we are, what we do, and how
we work.
Fortive is a global team, 18,000 strong, energized
by a shared purpose. Our People strategy centerson empowering strong, inclusive teams working
together to solve problems no one could solve
alone. We intentionally seek out different skills,
backgrounds, and voices to deliver results forour customers and fulfill our employee promise –For you. For us. For growth.
Our People strategy is defined by our inclusive
growth culture, advanced through FBS andtalent and reward systems, and measured byour employee experience processes. These key
elements enable us to accelerate progress for ourcustomers, our teams, and the world around us.

HIGHLIGHTS

100%

on HumanRights Campaign
Corporate Equality
Index, for the sixth
consecutive year

2022

Newsweek’s
Most Responsible
Company

78%

Employee
Engagement scoreon the 2022 Employee
Experience Index

82%

Employee Inclusion& Belonging scoreon the 2022 Employee
Experience Index

Fortive Corporation Annual Sustainability Report“Our culture is grounded in our shared purpose and values,
and our success reflects our relentless pursuit of better.
Across operating companies, we are collaborative andsupportive – we have a culture of curiosity and seek tolearn from one another. We are builders, innovators, andentrepreneurs, which creates richness through our diversityof skills and experiences.“
STACEY WALKER
CHIEF HUMAN RESOURCES OFFICER|

Empower Inclusive and Diverse Teams

23

Inclusion, Diversity, and Equity (IDE)
Enables our Culture
We all have a role in building a culture and community where
everyone can thrive. We are committed to cultivating an inclusiveand diverse culture where everyone feels respected, valued,
and empowered.
Eliminating bias and striving for equity and fairness is a naturalextension of our values. In 2022, we formally added equity to our
inclusion and diversity journey.
Together with FBS, IDE is a key cultural enabler.
nnnInclusion - Develop our teams to build a Fortive where you canbe yourself and do your best work.
Diversity - Build a diverse Fortive through hiring, developing,and retaining a strong and diverse team.
Equity - Build a culture of equity that enables greater innovationand performance for customers and for the world.

Fortive Corporation Annual Sustainability Report|

Empower Inclusive and Diverse Teams

PROGRESS TOWARD OUR ASPIRATIONAL 2025 IDE GOALS

Talent and Rewards Systems​Advance
our Culture
Our culture inspires us to keep experimenting, growing, and learning.
Our robust talent and reward systems advance our people strategies
by attracting, growing, and retaining the talent we need now andin the future. Together, these systems strengthen our employee
value proposition and build our employer brand while delivering newexperiences to our employees and results for our customers.
In 2022, we further integrated IDE into our core talent processes
and programs by:nnn

Enhancing inclusive leader experience: our training andtoolset to equip senior leaders to lead inclusive and diverse highperforming teams.

Transparency and accountability help us create an inclusive, diverse, and equitable culture. We set aspirational goals of
85% achievement on our Inclusion and Belonging Index, and 50% women and 37% Black, Indigenous, People of Color(BIPOC) representation by 2025 across Fortive. We have made steady gains in each of these metrics year-over-year,
despite challenging global labor markets.
Annual Metrics1

50%

36%

36%

are BIPOC

are women

50%

50%

50%

40%
30%

50%
40%

36%

37%

38%

30%

20%

20%

10%

10%

2020

2021

2022

50%
40%

48%

48%

48%

31%

32%

33%

2020

2021

2022

Professional and Management
BIPOC

BIPOC

30%

NEW
EXECUTIVESWHO JOINEDFORTIVE IN 2022

Professional and Management
Women

Women

Diversifying hiring sources: to include Historically Black
Colleges and Universities (HBCUs) and other institutions withgreater student diversity.
Continuing support for our employee and friends resourcegroups (EFRGs): to increase inclusion and belonging within andfor our underrepresented employee communities. In 2022,
we had over 3,000 employee members across over 30 EFRGs.

2025 Aspirational Goals

50%
37%

37%

37%

34%

34%

36%

40%
30%

20%

20%

10%

10%

2020

2021

2022

[1] Based on internal data as of the end of the respective calendar year.

36%

36%

36%

26%

27%

28%

2020

2021

2022

24

Fortive Corporation Annual Sustainability Report

Talent Growth and Development
We expanded our learning programs to provide continued
growth experiences for our people.

One third of operating company presidents
participated in GMDP, which helps us recruitand grow our leadership bench.

People Leader Experience (PLE)

General Management Development Program (GMDP)

Designed for mid- to senior-level leaders, PLE supports employees
moving into team leader roles.

As a pipeline program for high potential, early- and mid-career
leaders, GMDP provides the opportunity to learn and grow throughformal development, visibility to senior executives, and mentorship.
GMDP prepares graduates to become senior level leaders at Fortiveand our operating companies.

A deep, experiential learning for both new and experienced
team leaders, PLE harnesses interactive learning that provides
critical tools to prepare our employees for greater people
leadership responsibilities.

Accelerated Leadership Experience (ALE)
With an emphasis on FBS skills and leadership development, ALE
teams work on real-time business challenges for two months,
culminating in a presentation of their solution and recommendations
to an executive panel and their sponsor organization.

Fortive Leadership Summit (FLS)FLS is a quarterly summit for operating company presidents
that focuses on strengthening capabilities, building new skills,
networking, and benchmarking leading practices to effectively
run their businesses.

|

Empower Inclusive and Diverse TeamsFBS Ignite
A professional development opportunity that accelerates career
growth through an immersive, supportive experience.
FBS “Igniters” engage in:nintensive instruction in the FBS toolkit;nexecutive career coaching;na discrete business challenge to address over three months; andnexposure to other parts of the business and their culture
and customers.

FBS Ignite is a perfect example of our focus on long-term value
creation: while outcomes are critical to the near-term businessneeds, the Ignite program is as much about the learning as it isabout the outcomes.

“The one-on-one career coaching has been
incredibly helpful, and having an advisor
that looks and sounds like me makes all thedifference in the world.“
				
			
			

TIFFONIA NOUSSIHUMAN RESOURCES BUSINESS PARTNER,
FLUKE RELIABILITY SYSTEMS

25

\

Fortive Corporation Annual Sustainability Report|

Empower Inclusive and Diverse Teams

26

Total Rewards Programs

Employee Experience Reflects our Culture

IDE extends to every aspect of our business, including our reward
systems and compensation practices. Our Total Rewards programs
attract and retain talented, curious people with a growth mindset
and a passion for innovation, collaboration, and continuous
improvement. We offer leading programs that inspire and reward
superior performance, are equitable, and foster an inclusive,
diverse, and healthy global workforce.

Our promise to employees is – For you. For us. For growth.
To achieve this promise, leaders at all levels actively seek
feedback from employees and other stakeholders to strengthen
our culture.

We’re committed to offering equal pay for equal work. Not only is it
the right thing to do, but this commitment also allows us to attract
and retain talented people, strengthens our inclusive culture,and results in a higher-performing company. We regularly review
our pay levels, which are defined for each job based on market
data including geography, and we proactively adjust if needed toachieve equal pay for equal work.

“We all play a role in building a culture thatcelebrates diverse perspectives, where
everyone can speak their mind, be authentic,
and know they are supported.”				ANDREA MULHALL
			 VICE PRESIDENT,			INCLUSION, DIVERSITY AND EQUITYOur Employee Experience Index (EEI) is one of the many ways weactively solicit input. Overall EEI results have improved 5% from2019 to 2022, with a steady increase over the period, including
all-time high scores for:n

Employee engagement: 78%n

Employee inclusion and belonging: 82%nCareer growth and development: top quartilen

Leader effectiveness: top quartile

We have moved to quarterly pulse surveys to get a more
frequent picture of health and satisfaction across the workplace.
The higher frequency of feedback tells employees that their
voices are valued and wanted; and the feedback received tells us
how we’re doing against our goals for a motivated, engaged, andenergized workforce.
We are proud of the progress we’re making to cultivate an inclusive,
diverse, and equitable culture. Our continued improvement is evenmore significant given the dynamic workforce movement andglobal competition for talent over the last few years.

Fortive Corporation Annual Sustainability Report

Partnering for Equity
We amplify our IDE work through intentional partnerships.

CEO Action for Racial Equity
CEO Action for Racial Equity is the first business-led fellowship witha focus of advancing racial equity through corporate engagement
tools and public policy. Fortive is proud to be an active member
and drive progress on the Business Diversity Initiative that supports
the growth and scale of Black-owned businesses by increasing
equity and access to capital, networks, and opportunities across all
business services.

Empower Inclusive and Diverse Teams

27

CASE STUDY: EMPLOYEE AND FRIENDSRESOURCE GROUP (EFRG) EVENTS

Forté Foundation
The Forté Foundation gives women equal access to an infrastructure,including business education, role models, professional networks, andleadership training that empowers them to rethink what’s possible.
Through its efforts, the Forté Foundation has a strong track record ofhelping to launch women into fulfilling business careers.
Fortive partners with Forté to accelerate and advance our talentstrategy for women, recognizing that women face distinct challenges
in their career journeys. Through this partnership, we have created athree-pronged approach to identify top female talent:nstrategic sourcing efforts through alumni channels,ntalent attraction through events, andnprofessional development, such as, preparing mid-career
women for executive roles.

Washington Employers for Racial Equity
The Washington Employers for Racial Equity is a coalition of
employers across Washington state to support racial equity.
Aligned with our internal IDE strategy, our signatory status
includes setting measurable targets, assessing progress,
and publicly reporting results. Further, the coalition commits
to advocating for policies that advance equity in ourheadquarters home state of Washington.

|“It meant the world to be selected to join thisprogram. I feel seen by Fortive, and the fact they
are investing in my growth is really motivating.”
				
			

SELU GUPTA
HARDWARE ENGINEERING MANAGER, TEKTRONIXThe Viva! EFRG is dedicated to empowering
members to achieve full professional andsocial potential and to encourage inclusion,
representation, and growth for the Latinx
community across Fortive.
In September 2022, Viva! hosted more than
10 virtual events in honor of Hispanic Heritage
Month. Over 500 employees worldwide
attended and participated in the events, helping
to promote and raise community awarenessof the cultural richness the diverse Latinx
communities represent across Fortive.

Fortive Corporation Annual Sustainability Report

Invest in Our
Communities
We make a meaningful impact in the communities
around the world where we live and work.

|

Invest In Our Communities

28

Fortive Corporation Annual Sustainability Report

INVEST IN OUR COMMUNITIES|Invest In Our Communities

HIGHLIGHTS

Community
Engagement
and Support
In addition to the high-quality, high-impact
products and services we deliver every
day to customers, we are committed
to being engaged, responsible neighbors
and citizens.
Across Fortive, our teams contribute to andhave a positive impact in the communities
around the world where we live and work.

Day of Caring:

Fortive Foundation:

100%

~$2M

25K+

15

operating company participation

volunteer hours

150+

communities

16

countries

donated since 2020

non-profit organization recipients
Fortive Scholarship Program:20

new students and 29 renewing students
awarded scholarships to support theirpost-secondary education29

Fortive Corporation Annual Sustainability Report

Day of Caring
We recognize the power of giving back. Our annual Day of Caring
is a Fortive tradition that reflects our spirit of generosity andoptimism. Acts of service connect us to the communities where
we live and work, enhance our sense of well-being, and provide
opportunities to engage in activities or with organizations that are
fulfilling on a personal level.
As an employee-led initiative, Day of Caring empowers ourteams to come together, identify causes they care about, andprovide meaningful support to community partners. Across thecompany, we offer each employee a full, paid day off to serve
their community.

|

Invest In Our Communities 30

FORTIVE RECOGNIZED AT 12TH CHINA
PHILANTHROPY FESTIVAL
Fortive won the 2022 Sustainable Development Award at the 12th
China Philanthropy Festival held in Shanghai. This is the second
year Fortive was recognized at the festival. In 2021, Fortive won
the “Public Welfare Driving Force Award” for the community
impacts our teams had through the Day of Caring.
Founded in 2011, the China Philanthropy Festival is hosted bymainstream media outlets in China and designed to promote theimportance of community engagement and philanthropy.

In 2022, many of our teams returned to in-person Day of Caring
events, providing a greater platform for service and impact.

Since 2016, our teams havededicated more than 150,000
hours of service to our local
communities worldwide

VIDEO: Hear from our employees about what Day of Caring means to themFortive Corporation Annual Sustainability Report

The Fortive Foundation

Social justicen

Strengthening communitiesnEnvironmental stewardship

In 2022, we invited our employees and our EFRGs to identify
organizations that align with their missions. The Fortive
Foundation allocated 30% of its social justice-focusedcharitable contributions to the organizations designatedby our EFRGs.
The Fortive Foundation has established partnerships with selectnon-profit organizations to further amplify our philanthropic efforts.
Through both the American Red Cross and GlobalGiving,
employees are able to donate directly to support communities inneed and have their contributions matched by theFortive Foundation.

31

STEM education
Code.org
AnitaB.org

STEM educationn

Invest In Our Communities

2022 FORTIVE FOUNDATION CHARITABLECONTRIBUTION RECIPIENTS

We established the Fortive Foundation to direct and scale ourphilanthropic efforts. Since its first year of operation in 2020, theFortive Foundation has increased its annual charitable contribution
more than three-fold by supporting non-profit organizations
worldwide whose missions and impact align with the Fortive
Foundation’s giving areas:n|Social justiceFortive Scholarship Program
To support and invest in the next generation of innovators, theFortive Scholarship Program provides scholarship awards to thechildren of employees across Fortive to support their pursuitof post-secondary education. Scholarships are available toemployees’ dependent children planning to attend a two- or
four-year college, university, or vocational school.
Each year, we grant 20 new scholarships, along with renewal
awards. In 2022, we increased our investment in our scholarshipprogram, raising all scholarship awards to a consistent, higher
level. The rising costs of higher education create near- andlong-term challenges for students and their families anddisproportionately affect students from underrepresented
populations. Enhancing our awards enables us to extend support
to our employees where it can make a meaningful difference andadvance equity and access to post-secondary education.

Equal Justice Initiative
Human Rights Campaign Foundation
Girls E-Mentorship
Stonewall Community Foundation
Team Red, White & Blue

Strengthening communities
Feeding America
American Red Cross
Doctors Without Borders
GlobalGiving

Environmental stewardship
Engineers Without Borders
One Tree Planted
The Nature Conservancy

Fortive Corporation Annual Sustainability Report

Protect the Planet
We harness our culture of innovation and continuous
improvement to protect the environment and advance
Sustainability across our value chain.

|

Protect the Planet

32Fortive Corporation Annual Sustainability Report

PROTECT THE PLANET

Climate Change
and Greenhouse
Gas (GHG)
Emissions
The job of protecting the planet belongs
to all of us, and at Fortive, we take that
responsibility seriously.
Climate change demands bold action toadapt to changing conditions and protect
the health of communities worldwide, andwe are accelerating our efforts to reduce
our impact on our planet and protect its
natural resources.

HIGHLIGHTS

22.4%

reduction in Scope 1 and Scope 2
GHG emissions from 2019-2022

revolving credit facility structured
as a Sustainability-linked facility,with improved pricing based onachievement of 2029 GHG target

3

years of GHG inventories achieved
Limited Assurance via third-party
assurance

10%

water use reduction by 2029 at our
major operations, from 2022 levels

Protect the Planet

33

GHG Emissions (metric tons of CO2e)

Scope 1

Scope 2 market-based

80,000Total
65,830*60,000$2.0B|

Scope 244,759Total
59,686
Scope 240,05540,00020,000

Scope 1
21,071

2019

Scope 1
19,631

2020

Total
51,920Total
51,120

Scope 2
38,102

Scope 235,692

Scope 1
13,818

Scope 1
15,4282021

2022

In 2022, we announced a new absolute GHG emissions
reduction goal – to reduce absolute Scope 1 and 2
emissions 50% by 2029 from 2019 levels.
We reduced absolute GHG Scope 1 and 2 emissions
22.4% despite unprecedented and unpredictablebusiness conditions in 2020 through 2022.
From 2021 to 2022, we reduced Scope 1 and 2 GHG
emissions 1.5% while our business grew at almost
11%. We are proud of this performance and remain
dedicated to continued progress toward our 2029 goal.
* Refer to Endnote for accounting updates, page 50

Fortive Corporation Annual Sustainability Report|

Protect the Planet34“To ensure a sustainable future for all, we have aligned
our Sustainability strategy and climate-related
disclosures with the Task Force on Climate-Related
Financial Disclosures (TCFD) to fully reflect thestrength of our climate-related governance, strategy,
and risk managementmetrics and targets.”
				
PETER UNDERWOOD			 SENIOR VICE PRESIDENT, GENERAL COUNSEL

Scope 1 and 2 GHG Emissions – ​Roadmap to 2029
Our 2029 target – to reduce absolute Scope 1 and 2 GHG
emissions 50% from 2022 levels - is our most ambitious goal
yet, and is aligned to the Science Based Targets Initiative(SBTi)1 and the Paris Agreement.
The strategies we’re using to achieve the goal include:	​
GHG targets for operating companies: To drive continuous
improvement and attention to efficiency across the business,each operating company has an annual GHG reduction target.​n​n Sustainability kaizens: Across our major operations, our teams
evaluate and identify opportunities to reduce energy, sources of
GHG emissions, water, and waste.
Renewable energy: We are developing a multi-faceted renewableenergy strategy, including utility contract procurements, on-site
renewable energy systems, and large-scale, clean-energy projects.

Capital investments: We support additional capital funding for
projects that deliver meaningful GHG emissions reductions.​​ Third-party assurance: By having our GHG inventories andaccounting processes reviewed via third-party assurance, we
ensure our protocols align with The GHG Protocol standards.

nn[1] In accordance with SBTi guidance, determination of materiality requires a complete Scope 3 profile.
We are committed to finalizing our assessment of downstream emissions categories this year.

nFortive Corporation Annual Sustainability Report

Renewable Energy

Scope 3 GHG Emissions

To support our decarbonization goals, Fortive intends to invest
in on-site renewable energy and large-scale, off-site renewableenergy installations. In 2022, we joined the Clean Energy Buyers
Association (CEBA) to gain insights about renewable energy
and clean technology instruments and formulate our renewableenergy strategy.

In 2022, we began our analysis of Scope 3 emissions – theemissions generated through indirect activities upstream anddownstream of our operations. We completed our Scope 3
emissions baseline for the eight upstream categories anddetermined the following are most relevant:In addition, we are examining opportunities for on-site renewableenergy across our major operations and clean energy options
with our utility providers worldwide.

nfuel- and energy-related activities,​nwaste generated in operations​, andnbusiness travel​.

We disclosed the emissions for these categories in our 2022
CDP Climate Change disclosure and continue to evaluate thedownstream Scope 3 categories to determine relevance. Oncecomplete, we will determine which categories are material toinform a Scope 3 reduction goal.

|

Protect the Planet

35

PRODUCT HIGHLIGHT

Supporting Electric Vehicle (EV) Charging

We purchased renewable energy
certificates (RECs) generated
in regions where we operate,
including North America, Poland,
France, India, and China.​

The Fluke FEV100 EVSE verifies EV charging voltage
and maximum available current at EV charging
stations, in combination with a multimeter oroscilloscope, to ensure customers receive an optimal
electricity draw when charging. This functionality is
critical to enable EV owners to charge with confidence.

​ he RECs purchased in the United
T
States are Green-e® certified andgenerated by renewable energy
sources that support pollinatorhabitats in their design.

The Inverter, Motor, and Drive Analysis (IMDA)
software on the Tektronix 5 Series B Mixed signal
oscilloscope enables rapid analysis of energy flowfrom EV battery packs to the motor, identifying whereto troubleshoot if flow is less than optimal.

Fortive Corporation Annual Sustainability Report|

Protect the Planet

36

PROTECT THE PLANET

Water
Clean, sustainable water supplies are vital​
for human health, industry, agriculture,and energy production. Water access andavailability are persistent challenges forcommunities across the world, and water
scarcity is amplified by climate change.​
We recognize the importance of water​
stewardship for the safety and health of ouroperations, employees, and communities.​
We are committing to reduce water use​
10% by 2029, from 2022 levels at our major
operations worldwide.

Water stewardship in regions that are at highest risk forwater scarcity is critically important, and we are committed
to evaluating and reducing our usage, particularly in thehighest risk regions for water scarcity.
In 2022, we analyzed water use across our sites to evaluate
the relative level of risk to our major operations.1 After
mapping our major operations in the World Resources
Institute (WRI) Aqueduct 3.0 Water Risk Atlas,2 wedetermined that 11 (16%) of our major operations are inhigh-risk locations3 for water scarcity.
[1] EHS Significant Sites are any Fortive location with 50 or more employees, or that is
engaged in any of the following activities other than as a de minimis activity at the site:
Manufacturing, Assembly, Engineering (other than software engineering), Research andDevelopment (other than software R&D), Warehousing (but not simple storage) or Service.
[2] The WRI Water Risk Atlas is a tool that uses open-source, peer-reviewed data to categorize
exposure to water risk based on physical and regulatory risks.
[3] High-risk includes those sites categorized as “high” or “extreme” risk according to the
WRI Aqueduct Risk Atlas Tool.

FBS IN ACTION
In 2022, we deployed a methodology to qualify products andservices that enable Sustainability-related outcomes directly or
through customer applications. The methodology was informed
through a culmination of efforts by two Accelerated Learning
Experience (ALE) teams over an 18-month period. The outcome isa standardized process across Fortive, which includes quarterly
financial updates and an annual review of product portfolios withthe operating companies.
In 2022, approximately 60% of Fortive’s revenue was
generated from sustainability-enabling products and services.
Specifically, these products and services align with the following
United Nations Sustainable Development Goals (UN SDGs):

The ALE program was an ideal proving ground for this projectdue its combined focus on FBS and the diverse nature of theteams. The teams applied their enhanced knowledge of FBS,
their companies, and industries to develop, iterate, and pilot theirsolution(s) with a representative sample of business teams acrossFortive, advancing the ideation process rapidly and efficiently.
Through ALE, we were able to accomplish six months of work in
10-12 weeks.

Fortive Corporation Annual Sustainability Report

Work and Source
Responsibly
We believe in walking the walk. From the manufacturing
floor to confined spaces, to hospitals, we make products
designed to keep people safe.

|

Work and Source Responsibly37Fortive Corporation Annual Sustainability Report

WORK AND SOURCE RESPONSIBLY

Our Commitment
to Health and
Safety in Our
Operations andSupply Chain
We have an unwavering commitment tosafety and hold our teams and suppliers to
the highest standard of responsibility. We
put integrity, safety, and quality first.
Beyond complying with all applicable laws
and regulations, we are committed tocultivating a culture of respect, integrity, andfairness. This applies to our employees aswell as the suppliers, business partners, andother third parties we partner with to serve
our customers on time, within budget, and at
the highest standard of quality.

|

Work and Source Responsibly

38

HIGHLIGHTS

75%

of operating companies achieved
top industry quartile scores for total
recordable injury rate (TRIR)

56%

of operating companies achieved top
industry quartile scores for days away,
restricted or transferred (DART)

6.2%

increase in diverse supplier spend
in 2022, from 2020 levels

100%

supplier audits completed within
the 12-month cycle

Fortive Corporation Annual Sustainability Report|

Work and Source Responsibly

39

WORK & SOURCE RESPONSIBLY

Environmental,
Health, andSafety (EHS)
We are committed to the health, safety, andwell-being of our employees. To keep our
employees safe, we have proactive EHS
programs that prioritize identifying risks
and mitigating hazards to avoid injury or
incidents. This mindset applies to how wemanage our operations and as we develop
products and innovate for customers.
Our EHS teams use the Intelex EHS software
platform for management of EHS data andmetrics tracking. In 2022, we expanded use ofIntelex EHS applications to manage:nnInjury and Illness rates: safety reporting
FM Global property risk and insurance:risk managementn

EHS Audits: compliancen

EHS Risk Score: site EHS management

Our operating companies continuously improve their EHS practices
and programs to keep employees healthy and safe. Through ourannual EHS Summit, we bring EHS professionals from across thecompany together to learn and share EHS practices and programs
that foster innovation, ideation, and collective problem solving.

EHS Risk Score​
The EHS Risk Score is an internal tool used by all our operatingcompanies to assess risks, define leading EHS practices, and drive
continuous improvement. ​Across Fortive, sites review and assess their EHS risk profile
twice annually, and scores are reported to leadership. In 2022,
we updated the EHS Risk Score to include a Sustainability
category and added criteria to all categories to improve EHS risk
management for our software-focused businesses.

EHS Leadership Council (EHSLC)​
Our operating companies manage EHS on a day-to-day basis toensure policies and practices are clear and reflect the nature of sitespecific work. The EHSLC develops Fortive-wide​policies and serves
as a support network for the over 300 sites across the globe. ​In 2022, we evolved our EHS policy into an EHS and Sustainability
policy to reflect the interrelationship between EHS and
Sustainability in our operations.

FBS IN ACTION
Our Qualitrol Fairport (NY) manufacturing
operation wanted to shift to a proactive EHS
management model to prevent injuries andincidents by eliminating hazards. The site
conducted an Ergonomics, Energetics, Exposures,and Environment (4E) kaizen event to accelerate
the deployment best across the 4E spectrum.
Through the 4E kaizen, the Qualitrol teamcompleted 69 EHS risk assessments, evaluating
the risk of 428 individual manufacturing
processes steps.
Of these steps, 32 tasks (7%) were identified
as high risk, and 56 tasks (13%) were identified
as medium risk. The team developed acorrective action plan to mitigate the risks,
using standard 30-, 60-, and 90-day tollgatesto track progress toward completion.
The kaizen team accomplished in one week what
would have taken an EHS leader months or evenyears to achieve. Now, the Qualitrol Fairport site
has visibility to EHS risk and preventive actions
across their manufacturing operations.

Fortive Corporation Annual Sustainability Report

WORK & SOURCE RESPONSIBLY

Responsible
Sourcing
Our high standards for integrity andcompliance are contained in the Fortive
Code and extend to everyone. The Fortive
Supplier Code, provided to every supplier,articulates our expectations and standards
for conduct and transparency.

THE FORTIVE SUPPLIER CODE TENETS:

Clearly articulate our values,
standards, and expectations.
Ensure all partners operatein accordance with ourpriorities for safe and fairworking conditions.
Follow production practices
that ensure quality andprotect the environment,
safety, and rights of all people.

Guided by the Fortive Supplier Code, we workwith suppliers that follow production practices that
ensure quality, safety, environmental protection, andthe rights of all people. We proactively engage with
suppliers to provide our Supplier Code and ensure
they understand our standards and expectations.

|

Work and Source Responsibly 40

Fortive Corporation Annual Sustainability Report|

Work and Source Responsibly

Supplier Diversity
We believe diverse perspectives fuel innovation, within ouroperations and with our partners. Supporting Minority-owned,
Women-owned, Veteran-owned, certified small businesses, Federal
Historically Underutilized Businesses (HUB), and disadvantaged
businesses is a crucial component of our responsible sourcing
initiatives. Our goal is to influence the supply chain by investing in
suppliers that share our values.

“I anticipate that we will see
an increase in the number of[governmental] agencies where
supplier diversity is establishedupfront in the contract.”

To drive our progress, we are committed to spend at
least $100M annually with diverse suppliers by the endof 2025.

				
KRIS GORRIARAN			PRESIDENT, GORDIANThis represents approximately 10% of our current spend in North
America and an increase of roughly 25% from when we launched
the program in 2020.
In 2022, we focused on building out our supplier diversity to drive
performance and progress by establishing the following:nnn

A Supplier Diversity Program: We invested additional
corporate resources to build capacity and capabilities to launchand sustain our Supplier Diversity Program.
An LGBTQ+ supplier classification: The classification supports
and recognizes lesbian, gay, bisexual, transgender, and queer
business owners.
A partnership with the National Minority Supplier
Development Council (NMSDC): To foster connections withminority business enterprises (MBEs), NMSDC helps corporations
and MBEs create mutually beneficial relationships and advanceeconomic equality.

PRODUCT HIGHLIGHT

Gordian: Facilitating Supplier Diversity
Gordian, a Fortive operating company that specializes in pre-construction activities such as planning, estimating,and procurement, has been focused on job order contracting (JOC), a process that helps public agencies
complete a series of construction projects under one, master contract by assembling a catalogue of preset pricing.
Increasingly, JOC contracts contain goals related to inclusion, diversity, and equity, including diverse suppliers.

41

Fortive Corporation Annual Sustainability Report

Sourcing Locally

Human Rights

We continue our focus on identifying suppliers that are
geographically closer to both our sites and our customers’
locations. This strategy reduces our carbon footprint bydecreasing distances between suppliers and our operations,promotes business resilience, and brings value to local
communities. Sourcing locally also decreases risk of supply
chain disruptions, improving our resilience in the face ofcontinued supply chain challenges.

We uphold fair labor standards for all employees across ouroperating companies and value chain by cultivating a culture ofrespect, integrity, and fairness. We are committed to conducting
our operations in an ethical and responsible manner.
Threats to human rights are are constantly evolving and growing.
We take seriously the need to understand labor and human rights
practices across our suppliers. We are engaging more deeply with
our suppliers to ensure they support international efforts to protect
human rights and abolish forced labor, child labor, and humantrafficking and address any issues.

In 2022, we expanded the coverage of our
Sourcing Responsibly initiative to include humanrights, completing 100% of the reviews withoutmajor concerns.
We use a systematic approach to continuously evaluate the humanrights risks with our suppliers, leveraging independent data sources
to assess the potential for corruption and forced labor to create
consistency among our suppliers.
In addition, the Fortive Supplier Code is aligned with the International
Labour Organization (ILO) and includes specific language on humanrights and combating modern slavery. Through our Human Rights
Risk Assessment and Supplier Audit Program, we also educate
suppliers on our expectations outlined in the Fortive Supplier Code.

|Work and Source Responsibly

42

FBS IN ACTION
Each year, Fortive recognizes individual operatingcompanies that have made great strides in
productivity, highlighting efficacy in the areasof direct materials savings, indirect and logistics
savings, and other important supply chainrelated drivers.
In 2022, Industrial Scientific was recognized as
the Most Improved Procurement Organization.
Throughout the year, Industrial Scientificutilized FBS as a foundation for their work, as
demonstrated through commitment to the FBS
Champion process, by investing in FBS officesponsored bootcamps, regularly scheduled
kaizens, and ongoing engagement with Fortive
subject matter experts.
Industrial Scientific achieved this recognition
through Value Analysis/Value Engineering(VAVE) performance of 1.3%, an indirectsavings performance of 4.4%, and Days
Payable Outstanding (DPO) performance of
110.6 days.

Fortive Corporation Annual Sustainability Report

Operate with Principle
We know that how we do things matters as much as what
we do. We are firmly committed to acting with integrity; it’spart of our value proposition to our employees, customers,
business partners, and shareholders.

|Operate with Principle

43Fortive Corporation Annual Sustainability Report|

Operate with Principle 44

OPERATE WITH PRINCIPLE

Ethics andCompliance
We uphold a simple but powerfulconcept: Your Integrity/Our Success,which continues to inform and guide all
aspects of our Compliance Program.
We believe that ethical business conduct
is foundational to our growth andsuccess. We are committed to operatingwith integrity and set these same highexpectations for those who do businesson our behalf.
The Fortive Code of Conduct, available
in 22 languages and signed by every
employee, is a clear guide to act withintegrity in everything we do. Our industryleading compliance program includes aconfidential channel, called SpeakUp!, foremployees or partners to raise issues andconcerns at any time.

HIGHLIGHTS

38 day – average case closure rate throughour “SpeakUp!” program, our open reporting
portal for reporting potential ethics orcompliance breaches

Risk Assessment Process – expanded
Sustainability criteria in the annual process
to include talent management, physical andtransition-related climate change-related risks,and supplier diversity and resiliency

PRINGO – a data privacy shared service model
established to support operating companies
with requirements and strategy at scale

86th percentile – our year-end 2022 IT
security score from BitSight, the leading
security ratings organization

Fortive Corporation Annual Sustainability Report|

Operate with Principle

45

Our commitment to integrity and compliance is clearly
articulated in the Fortive Code, our code of business conduct,
and we strive to ensure employees feel empowered to speak
up and take action toward continuous improvement.
In 2022, Fortive launched MyPolicies, a central repositoryof company-wide policies, based on the FBS tool voiceof the employee. Employees reported locating specificpolicies and ensuring that they were up to date drained
productivity. MyPolicies is a centralized resource that houses
all company policies, is easily searchable, and is maintained
so employees, managers, and compliance leaders areequipped with resources to decide to do what is right.

“Operating in a compliant and ethicalmanner is our expectation for ourselves,because we know that how we achieve
success is as important as delivering
the results.”
				
			

JENNIFER ZERMCHIEF COMPLIANCE OFFICER

SpeakUp!
Our SpeakUp! program exemplifies our open-door policy andcommitment to transparency. We want our employees to havemultiple avenues to have their concerns heard, to know and trustthat their concerns will be investigated, and to feel confident that
we will drive accountability or improvement as appropriate.
SpeakUp! includes a hotline and web reporting tool available toanyone who interacts with Fortive, including customers, suppliers,and partners, and enables a reporting party to provide the current
status of their case.
To hold ourselves accountable and demonstrate our commitment
to timely investigations, we set a goal in 2022 to achieve an
average case closure rate of less than 45 days.

We reached an average rate of 38 days, exceeding our goalby 15%. To achieve this, we emphasized:nnTransparency: Deploying a bespoke tool that enables theCompliance teams to see the active stage of the process and theapplicable goals and tollgates to move the process forward.
Training: Conducting 2.5-day trainings with the functions
involved in the internal investigations process (e.g., humanresources, compliance, internal audit) to equip our teams andensure everyone involved in the investigation understood theprocess, their role(s) in it, and the resources to guide them.

Fortive Corporation Annual Sustainability Report|

Operate with Principle 46

OPERATE WITH PRINCIPLE

Business
Resiliency
We’re tapping into powerful new systems
and standards to monitor, manage, andmitigate risks in real time and respondquickly to emerging trends and topics.
Agility is always top of mind in our business
operations. The last several years haveunderscored the importance of having strong,secure systems in place, as well as a nimble andproactive culture. While Fortive is composedof nascent and seasoned companies, weare united in our relentless commitment tocuriosity, innovation, and our customers.
Fortive’s commitment to Sustainability also
contributes directly to business resilience.
Diversifying our energy and supply sources
reduces the risk of disruption and positions
our teams to be vigilant and nimble while
ensuring compliance with new and emerging
regulatory requirements.

Risk Assessment Process
Our Enterprise Risk Management (ERM) model provides continuity ofcore business operations, including better understanding ESG risks
and opportunities. Our integrated approach to risk management
enables a swift and effective response to unexpected events,
ensuring we continue providing for our customers and employees.
n

n

n

n

Carbon Emissions: Decreasing carbon emissions is good forbusiness and good for the planet. Lower energy use means
cost savings and greater operational efficiency. Diversifying
our power sources reduces energy volatility and reduces
regulatory exposure.
Supplier Risk Management: Our updated Supplier Risk
Assessment process projects the impact of various events andimprovements that account for the risk management strategies
to ensure a consistent response and focus on impact-oriented
actions. The Fortive Supplier Risk Management process seeks to
inform input for the broader Risk Assessment Process.
Human Rights: We continue to engage more deeply with our
suppliers through our Supplier Audit Program to better ensure
our supply chain is free from human rights abuses, such as
forced labor or human trafficking.
Ethics and Compliance: A comprehensive Ethics andCompliance program and mindset enables a better, stronger
business through these practices.

Our Risk Assessment Process (RAP) is a core tool we use to
identify and manage risks on an ongoing basis. Fortive requires all
operating companies to participate in the RAP annually, to ensurethat we are effectively identifying risk, mitigating where necessary,and driving to opportunity where applicable. The process looks
at risks across a variety of categories that are updated annually tocapture new and evolving areas.
The RAP is conducted at an operating company basis, which
is rolled up to a Segment level, and ultimately to a Fortive-widelevel. This ensures and provides an appropriate view of the risklandscape across the portfolio, globally and at multiple levels of
the organization up to the Board of Directors. We track progress on
Risk Countermeasures regularly throughout the year.
RISK ASSESSMENT PROCESS

3

Fortive-wide level2

Segment level1

Operating company

Fortive Corporation Annual Sustainability Report|

Operate with Principle

47

OPERATE WITH PRINCIPLE

Data Privacy
and Security
Data is a modern currency as valuable
as money, sometimes more so. It is afundamental necessity for our businessand our customers, and we strive tomaintain best-in-class data privacy andsecurity programs and safeguards.

“Digital transformation is disrupting
traditional data management
systems, particularly in the healthcare
sector. As a company whose software
supports medical providers and theiruse of patient information, we arekeenly aware of our obligation tohave data privacy controls andprocedures to ensure protection ofindividuals’ privacy.”

Our commitment to being an employer and partner of choice makes
digital privacy and security a top priority. We protect critical assets
by establishing and enforcing clear boundaries.
Transparency is needed surrounding the data we collect, how it’sused, and importantly, how it’s protected. We deeply value the trust
we’ve built with our customers and employees and understand our
responsibility to apply trusted technologies and best practices to ourdata safekeeping.

Privacy and Information GovernanceFortive’s legal department leveraged theAccelerated Leadership Experience (ALE)to develop new materials to test the resultsof bringing our customers new levels oftransparency about how we use and safeguard
personal data in our products and services.

In 2022, Fortive announced the creation of a new standaloneorganization within the legal department called Privacy andInformation Governance (PRINGO), which operates as a global,
shared service enabling operating companies to perform theirprivacy requirements with consistency, increased reliability, anddedicated resourcing and expertise.

ALE is designed to provide participants with a safe
space to apply FBS tools to a real problem, and weworked to develop low-fidelity prototypes (saving
time and money compared to creating a polishedproduct at an early stage) for customer-facing
materials related to product privacy.

The PRINGO office is guided by three principles:

The group then tested and re-tested thematerials to determine whether they could
achieve measurable improvement on two
metrics: improving sales cycle time andreducing churn. The materials were then sharedwith actual customers, showing the level ofcommitment Fortive has to its partners as weseek to improve transparency.

n

n

n

				
BILL KARAZSIA			VICE PRESIDENT, PRIVACY & 						INFORMATION GOVERNANCEFBS IN ACTION

Do Better – by having relevant accountabilities performed bya specialist shared service, reducing administrative burden on
operating companies​
Do More – by automating the performance of legal
requirements and raising the attainment bar to reduce Fortive’s
risk profile globallyLess external spend – by reducing unplanned spend andcreating predictability in expenses, while delivering insight andresults to operating companies in virtual real timeFortive Corporation Annual Sustainability Report|

Operate with Principle 48

Cybersecurity
In concert with data privacy efforts, cybersecurity is critical to
Fortive as the world, and our operating companies, lean into
digital and software capabilities and cloud-based services.
These bring increased value for our customers and additional
vulnerabilities that require careful management. Fortive’s teamcreates policies and standards that serve as a baseline across all
operating companies.
In 2022, we continued implementation of the multi-levelsecurity strategy we launched in 2021, aimed at centralizing andstandardizing security process and tools across our operatingcompanies. This included implementing monthly metrics todrive consistency, formalizing an approach to third-party risk
assessment, and conducting tabletop exercises with leadership.

Our Cybersecurity team’s strategy and annual performance targets
align with the National Institute of Standards and Technology(NIST) Cyber Security Framework. NIST’s maturity rating is thebest-in-class industry standard, the one against which our security
programs are measured.
We are regularly invited to participate in industry-leading security
products customer advisory boards – these help us maintain an
informed vision and influence on product roadmaps to ensure thatthey continue to meet our security requirements. Our participationin these advisory boards provides us with valuable insights andbest practices from other highly-respected corporations.

As a metric, we measure our cybersecurity
performance with the BitSight Security
rating, a widely-used benchmark thatlooks at 20 major risk categories, including
botnet infections, spam propagation, andpatching cadence. Our current overall
score is 780, putting us ahead of 80% of ourpeers in the manufacturing category.

Fortive Corporation Annual Sustainability Report|

Operate with Principle 49

In Summary

We are more
together.

We valuecommunity.

We are stewardsof the planet.

We prioritize
health and safety.

We believe
in integrity.

We know that inclusion, diversity
and equity is a key cultural enabler
to bring out our best, drive our
success, and build a promising
future for our teams, communities,
and the world around us.

We make a meaningful impact in
the communities around the world,
where we live and work.

We harness our culture ofinnovation and continuous
improvement to protect theenvironment and advance
Sustainability across ourvalue chain.

We are committed to safety andwell-being – in our supply chain; forour own operations and teams; andin the products we design to keep
their workplaces and customers
healthy, safe, and productive.

We know that how we do things
matters as much as what we do.
We are firmly committed to actingwith integrity; it’s part of our value
proposition to our stakeholders.

Fortive Corporation Annual Sustainability Report

ENDNOTEGHG Accounting Updates
As part of our standard third-party assurance process, we made the following updates to Fortive’s GHG accounting and reporting
controls processes, resulting in revised calculation for our 2019 base year GHG emission measure. The updates were made consistent
with The GHG Protocol and best practices in GHG accounting, and include (in order of impact):nnnEmissions factor corrections: with the release of updated EPA and EIA emissions factors, the emissions factors were updated inIntelex (system of record), which resulted in significant reductions in Scope 2 emissions.
Site status: review of site active/inactive status confirmed that prior years included emissions data from sites that were not active,
and in a majority of cases, sites had been closed.
Estimation corrections: Where actual data is not available, Fortive uses estimations to calculate emissions. The estimations were
updated to reflect more accurate estimations, which resulted in a notable decrease in emissions. Indirectly, the estimates reflect thegreening of the electricity grid.

|Endnote 50

Fortive Corporation Annual Sustainability Report

GENERAL CORRESPONDENCEFORTIVE INVESTOR RELATIONS

If you would like to contact a member ofFortive’s Sustainability team, you may do
so by email or mail:If you would like to contact a memberof Fortive’s Investor Relations team, you
may do so by email, telephone, or mail:Fortive Corporation
6920 Seaway BoulevardEverett, Washington 98203

Fortive Investor Relations
6920 Seaway BoulevardEverett, Washington 98203

Email: sustainability@fortive.com

Email: investors@fortive.com

www.fortive.com

Tel: (425) 446-5000|

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