2019

Sustainability Report
Caterpillar’s Environmental,
Social and Governance ApproachOUR SOLUTIONS HELP OUR CUSTOMERSBUILD A BETTER WORLD.

3

TABLE OFCONTENTS

CEO MESSAGE

5	SUSTAINABILITY AT CATERPILLAR

20

REMANUFACTURING

22

PEOPLE
22 Employee Health & Safety
24 Talent Development
26 Diversity & Inclusion
26 Human Rights
27 Philanthropy8	
ESG DATA
12CORPORATE GOVERNANCE
13 Risk Management
13 Political Contributions

ENERGY & EMISSIONS

28

DATA ASSURANCE STATEMENT

17	
FUEL ECONOMY & EMISSIONS

29

SASB INDEX

30

ENDNOTES

14
19

MATERIALS

Visit caterpillar.com/sustainability to read stories about how
Caterpillar puts sustainability into action.

TO OURSTAKEHOLDERS:
Caterpillar imagines a better world— one that we are striving toachieve through our business.

A generator set powered by methane from landfills. A dual-fuelengine that can burn natural gas, resulting in lower emissions.
An autonomous technology solution that substantially
improves efficiency, productivity and safety.

best safety performance on record. Operational excellencealso offers important environmental sustainability benefits,particularly decreasing the volume of resources needed to
manufacture our products.

These are just a few of the many ways that Caterpillar’s vast
range of products and solutions helps our customers build abetter world. As our business grows, our potential for positive
impact grows — driven by the successful execution of ourenterprise strategy which we introduced in 2017. We havealready achieved meaningful progress in financial results
and in our ability to support the work of our customers
around the world.

Expanded offerings, the second element of our strategy,means having the right products and solutions to make ourcustomers more successful. These offerings include productsthat provide sustainability benefits, including lower emissions
profiles and reduced operating costs. We introduced theworld’s first high drive Electric Drive dozer this year, the Cat®
D6 XE. It offers up to 35% better fuel efficiency compared toprevious models, increasing productivity and helping ourcustomers succeed in a more sustainable way.

OUR STRATEGY SUPPORTS SUSTAINABILITY

Our strategy contains three elements: operational excellence,
expanded offerings and services, and is underpinned byCaterpillar’s Values in Action. Those Values, including
Sustainability, are guidelines for the way we act witheach other, our suppliers, and our customers every day.
Positive business outcomes are closely aligned with positivesocial and environmental impacts. For example, the firstelement of our strategy, operational excellence, translates
into initiatives that improve safety, deliver high-quality
products and implement Lean operating principles. The mostimportant result is continuing to have Caterpillar employees
return home safe to their families, and in 2019, we saw our/ 3 /The services element of our strategy encompasses the many
ways Caterpillar helps our customers succeed after they buy
a piece of equipment. These include increasingly advanced
digital capabilities, such as fleet analytics that help customers
complete their jobs more efficiently, as well as remanufacturing
and rebuild offerings that extend the life of equipment, reducing
operating costs and keeping resources in circulation.

DRIVING TOWARD A SUSTAINABLE FUTURE

As we continue to execute our enterprise strategy for profitable
growth, we are also executing our 2020 sustainability goals.
These include goals related to safety, energy and emissions,water, waste, building efficiency, circular economy, jobsite

2019 SUSTAINABILITY REPORT

”The most important result is continuing
to have Caterpillar employees returnhome safe to their families, and in 2019,
we saw our best safety performanceon record.”

efficiency and sustainability of our products, services andsolutions. We are proud to have already achieved or exceeded
several of these goals and are setting our sights on the future.
You can read more about our progress to date and efforts
underway to establish goals beyond 2020 on Pages 5-6 ofthis report.

WORKING TOWARD A BETTER WORLDYear after year, Caterpillar customers are working to address
the demands of a growing global population, an emerging
middle class in the developing world, and an increasingly
urbanized society. The company supplements that great workwith the targeted efforts of the Caterpillar Foundation. Since
1952, the Foundation has donated about $770 million to build
resilient communities around the world. We are proud of ourFoundation’s ability to contribute to building a better world.
We are pleased to have been named to the Dow Jones
Sustainability Indices (DJSI), including both the Worldand North America indices. Caterpillar was also named to
Fortune’s World’s Most Admired Companies List, and wewere in the Top 50 of that list for the 19th consecutive year.
As I write this letter, COVID-19 has become a global pandemic,presenting new challenges around the world. Governments
responded with guidance to manage the crisis and, in many
instances, operations such as Caterpillar's are consideredessential activity for support of critical infrastructure. Customers
use our products to provide primary and stand-by power for
hospitals, grocery stores and data centers; transport food andcritical supplies in trucks, ships and locomotives; maintainclean water and sewer systems; mine commodities and extract
the fuels essential to satisfy global energy demand. Alongwith our dealers and suppliers, Caterpillar is working to help

/ 4 /ensure uninterrupted access to the products and services
that our customers rely upon to support society during these
difficult times.
While we are serving this important need, Caterpillar remains
dedicated to the safety, health and well-being of our employees.
We are leveraging our strong safety culture to manage throughthis pandemic. Employees who can work from home are doing
so. In our facilities that remain open, Caterpillar is taking
appropriate precautions and implementing safeguards toprotect our team members. We have increased the frequencyof cleaning and disinfecting facilities with special attention tocommon areas; we are following social distancing practices
and are implementing other measures consistent with specificregulatory requirements and guidance from health authorities.
In addition, the Caterpillar Foundation has committed$10 million to directly support global COVID-19 response
activities and help organizations that have been impacted.
These investments are an important expression of our company’svalues and will provide support for communities aroundthe world.
Caterpillar imagines a better world – one that we are striving
to achieve through our business. As our customers help meetthe infrastructure, energy and resource needs of tomorrow,
we are dedicated to helping create a future that offers a better
life for all.

Jim Umpleby
Chairman and CEO

2019 SUSTAINABILITY REPORTSUSTAINABILITY AT CATERPILLAR
Caterpillar’s enterprise strategy focuses on solutions
to help our customers build a better world and enables
us to deliver long-term profitable growth for our
employees and shareholders. The enterprise strategy
also helps further our sustainability journey,
providing new opportunities for customers,
employees and communities.
We have identified a set of focus areas that are relevant
to our business and that guide environmental, socialand governance (ESG) initiatives and decision-making
throughout our global operations, as well as the content
of this report. These focus areas are closely alignedwith topics covered by the Sustainability AccountingStandards Board (SASB) Sustainable Industry
Classification System (SICS), Resource Transformation
sector and Industrial Machinery & Goods industry.
As part of our goal-setting efforts, we are reevaluating
ESG focus areas for Caterpillar beyond 2020. Our
existing focus areas will be amended to include
recommendations from SASB and outcomes of theongoing assessment process.

OUR VISIONOUR MISSION

A world in which all people’s
basic needs – such as shelter,clean water, sanitation, foodand reliable power – arefulfilled in a sustainable way
and a company that improves
the quality of the environment
and the communities
where we live a nd work.

Enable economic growththrough infrastructureand energy development
and provide solutions that
support communities
and protect the planet.

SUSTAINABILITY
PRINCIPLESPrevent waste
safety, efficiency
and productivity
Improve quality
team, community,
operations and environment
Develop better systems
innovate

SUSTAINABILITY STRATEGY
We are executing our strategy by working to meet our aspirational sustainability goals.
We provide work
environments, products,
services and solutions thatmake safe, productive andefficient use of resources as we
strive to achieve our vision.

We apply innovation andtechnology to improve thesustainability performance ofCaterpillar’s products, services,
solutions and operations.

/ 5 /2019 SUSTAINABILITY REPORT

We believe sustainable progress
is made possible by developing
better systems that maximize
life cycle benefits, while also
minimizing the economic, socialand environmental costs ofownership, as reflected in oursustainability principles.

SUSTAINABILITY GOALS
Caterpillar sets aspirational, long-term ESG goals for its operations and product stewardship initiatives. We announced our
first set of goals in 2006, and in 2013 we refreshed the goals with new targets. As we approach the conclusion of these goals
at the end of 2020, we are progressing well toward many, and are proud of our progress to date. We have already achieved
several of them, including achieving a recordable injury frequency below 0.60, reaching a lost-time case frequency rate of 0.15,
achieving a greenhouse gas emissions intensity reduction of more than 50% from 2006, increasing managed fleet hours bymore than 100% from 2013 and sourcing more than 20% of our energy needs with alternative and renewable sources.
While our work continues in 2020, we have already begun the process of establishing new goals that will enhance ourcompany’s performance and impact. We are working with both external parties and leaders throughout our organization
to ensure we choose appropriate metrics that support our progress within our sustainability focus areas. We look forward
to continued progress as we enter this next phase of our sustainability journey.

2020 GOALS FOR OPERATIONS Reduce recordable workplace injury rates to0.60 and lost-time case rate due to injury to 0.15
 Reduce energy intensity by 50% from 2006
 Reduce greenhouse gas emissions intensity
by 50% from 2006
 Use alternative/renewable sources to meet
20% of our energy needs Reduce water consumption intensity by 50%
from 2006 Reduce by-product materials intensity by 50%
from 2006 Design all new facility construction to meet
Leadership in Energy and Environmental Design(LEED) or comparable green building criteria

2020 GOALS FOR PRODUCT STEWARDSHIP Provide leadership in the safety of people
in, on and around our productsL everage technology and innovation to
improve sustainability of our products,
services and solutions for our customers Increase managed fleet hours by 100%from 2013 Increase remanufactured and rebuild
business sales by 20% from 2013/ 6 /2019 SUSTAINABILITY REPORTLOOKING AHEAD
Our sustainability efforts do not exist in isolation.
Caterpillar’s stakeholders are increasingly interested
in how we are confronting opportunities and risks
related to a variety of ESG issues. We understandthat true sustainability requires cooperation among
governments, companies and their stakeholders –and we have an important role to play.
To this end, Caterpillar is setting future goals that will
support our sustainability efforts (learn more on Page 6).
In doing so, we listen to stakeholders and incorporate
feedback across our business functions. For example,
we consider ESG topics in interactions with investors
coordinated through our investor relations team;with suppliers through our procurement teams;
and with customers through our customer services
team. In addition, our Caterpillar Sustainability Steering
Committee provides internal guidance, expertise andsupport for our sustainability initiatives. All of these serve
as key inputs for the work of our sustainability team.

/ 7 /To provide further transparency to investors, our 2019
Sustainability Report has been prepared, for the first time,in alignment with Sustainability Accounting Standards
Board (SASB) criteria. SASB publishes sector-specificreporting standards that are based on expert input
and designed to allow businesses to identify thesustainability issues of highest importance to investors
and most relevant in their industry.
Finally, we are working toward a common global purpose
with contributions to the U.N. Sustainable Development
Goals (UN SDGs). Given the breadth of our products,
services and solutions, our advocacy on behalf ofpolicies that enable sustainable development, andthe efforts of the Caterpillar Foundation to build resilient
communities, Caterpillar and our customers are helping
to build a more sustainable future.

2019 SUSTAINABILITY REPORTESG DATABASELINE
2006

2016

2017

2018

2019

GOAL
2020

Total number of employees

N/A

95,40098,400104,000

102,300

N/A

Number of employees outsideof the United States

N/A

54,50056,20059,40058,700

N/A

Women in enterprise

N/A

20%

20%

20%

20%

29%
(2022)

Women in leadership

N/A

19%

19%

19%

20%

25%
(2022)PERSPECTIVEPEOPLE DATA

Collective bargaining% of employees covered

N/A

34%

41%

40%

41%

Our Women in Leadership initiative
is an intentional, focused step on acontinuous journey toward a globally
diverse team. We have set an aspirational
goal of 29% women in the enterprise and
25% women in leadership by 2022.

N/A

We respect the right of our employees
to form, join or not to join any lawfulorganization of their choice without fearof reprisal, interference, intimidation orharassment. We believe it is importantfor individuals to exercise that right withthe benefit of available information.

0.15

We have improved our lost-time casefrequency rate (LTCFR) by 95% from our2003 base year. We are encouraged that
our LTCFR declined by approximately 6%
from 2018 to 2019.

0.60

We have improved our recordable
injury frequency (RIF) rate by 93%
from our 2003 base year. Our RIF
decreased by 19% from 2018 to 2019.

SAFETY
Lost-time casefrequency rate (LTCFR)/A/
worker-related injuries
resulting in lost time per
200,000 hours worked

2.97(2003)

Recordable injury frequency(RIF)/A/
recordable injuries per 200,000
hours worked

6.22(2003)

0.19

0.50

0.17

0.49

0.16

0.53

0.15

0.43

N/A = Not Applicable /A/ Data assured by ERM CVS. Please see Page 28 for the data assurance statement.

/ 8 /2019 SUSTAINABILITY REPORTESG DATABASELINE
2006

2016

2017

2018

2019

GOAL
2020

Employee fatalities

N/A

2

0

1

0

N/A

Contractor fatalities

N/A

0

0

1

1

N/A

Total energy use/A/
gigajoules1

28,720,000

23,050,000

23,690,000

25,540,000

25,330,000

N/A

Total electricity/A/
million MWh

N/A

2.37

2.45

2.55

2.38

N/A

PERSPECTIVE
Our vision of everyone returning homesafely, every day has not waivered.
We are saddened to report one of ourcontractors suffered a fatal workplace
injury in one of our facilities in 2019. We
are dedicated to the safety of everyone
working at Caterpillar. We encourage
our extended team of contractors,
dealers, suppliers and customers tofocus on safety for their operations
and employees.

ENERGY – OPERATIONS
We're making strides to lower our energy
use and improve energy efficiency.

N/A

In 2019, Caterpillar began reporting
grid electricity data based on SASB
recommendations. Data for years
prior is not available.

20

In 2019, 35.5% of our electrical energy
was obtained from renewable oralternative sources, exceeding our2020 goal.

471

346

In 2019 we reduced our energy intensity
by 32% from our 2006 baseline.

2.207

1.774

N/A

0.927

0.905

N/A

Grid electricity
%

N/A

N/A

N/A

N/A

83.8

Renewable energy2
%

N/A

17.8

16.9

17.4

21.2

Alternative energy3
%

N/A

10.1

14.3

15.1

14.3

Energy intensity/A/
absolute gigajoules energy
use/million dollars of sales
and revenues

692

598

521

467

Absolute greenhouse gas/A/(GHG) emissions
million metric tons CO2e

2.990

2.128

2.119

Scope 1/A/
Direct emissions
million metric tons

N/A

0.863

0.863

EMISSIONS – OPERATIONS

Scope 2/A/
Market-based
indirect emissions frompurchased electricity,heat or steam
million metric tons

N/A

1.265

1.256

1.280

0.869

N/A

Scope 2/A/
Location-based4
million metric tons

N/A

1.314

1.291

1.322

0.926

N/A

GHG intensity5 /A/
absolute metric tonsof CO2e/million dollarsof sales and revenues

72.1

54.2

46.4

40.4

33.0

36.0

N/A = Not Applicable /A/ Data assured by ERM CVS. Please see Page 28 for the data assurance statement.

/ 9 /2019 SUSTAINABILITY REPORTOur absolute GHG emissions decreased
by 20% from 2018 to 2019 and decreased
by 41% from 2006 to 2019.

In 2019 we reduced our GHG emissions
intensity by 54% from our 2006 baseline,
achieving our 2020 goal.

ESG DATABASELINE
2006

2016

2017

2018

2019

GOAL
2020

Total water/A/billion gallons

5.91

3.87

4.04

3.85

3.74

N/A

Noncontact cooling water/A/billion gallons

2.74

1.37

1.40

1.26

1.31

N/A

Non-contact cooling water/A/

N/A

35.0%

34.7%

32.8%

35.2%

N/A

Municipal water/A/

N/A

28.0%

28.7%

30.6%

30.8%

N/A

Surface water/A/

N/A

15.0%

16.8%

18.3%

18.0%

N/A

Other water/A/

N/A

0.0%

0.2%

0.4%

0.7%

N/A

Groundwater/A/

N/A

22.0%

19.5%

17.9%

15.4%

N/A

PERSPECTIVE

WATER – OPERATIONS

Total water consumption
by source6
In 2019 we reduced our absolute water
consumption by 37% from our baseline
year of 2006 and 3% from 2018 to 2019.

76.3

66.0

58.1

47.3

45.0

38.2

Through 2019, we have reduced water
consumption intensity at our facilities
by a total of 41% from 2006, and 5%
from 2018 to 2019.

574,000

560,000

599,000

635,000

587,000

N/A

Our generation of total absolute by-productmaterials increased 2% from 2006 to 2019
but decreased 8% from 2018 to 2019.

Waste intensity
absolute metrics tons of byproduct materials/million dollarsof sales and revenues

13.8

14.5

13.2

11.6

10.9

6.9

Waste recycled
%

84.1

82.8

83.5

86.8

87.1

N/A

Water consumption intensity7 /A/
absolute thousand gallons ofwater/million dollars of sales
and revenues

WASTE – OPERATIONS
Total waste
metric tons

In 2019, we reduced our waste intensity
by 21% from our 2006 baseline anddecreased 6% from the previous year.
Also, we are pleased to see the percent
of our waste recycled continue toincrease year-over-year.

PRODUCTS
Reported sales and revenues8
derived from products, services
and solutions that demonstrate
an improved sustainability benefit
over prior offerings

N/A

21%

21%

22%

27%

N/A

Fleet hours9
increase in fleet hours managed
by Job Site Solutions since 2013

N/A

98%

124%

280%

510%

100%

Service agreements
increase in machines covered byservice agreements with Job Site
Solutions since 2013

N/A

126%

151%

321%

501%

N/A

Caterpillar has a long history of anda strong process for innovation in the
research and development of products
and solutions.
Caterpillar Job Site Solutions (JSS)
helps customers realize savings
through reduced operator and repair
needs, as well as decreased fuel use
and associated emissions. Demand
from our customers continues to growfor solutions provided by our JSS teamworking together with our Cat® dealers.

MATERIALS

Supplier Code of Conduct
self-assessments

N/A

13%

39%

39%

67%

N/A = Not Applicable /A/ Data assured by ERM CVS. Please see Page 28 for the data assurance statement.

/ 10 /

2019 SUSTAINABILITY REPORT

95%

Since 2016, Caterpillar has proactively
surveyed our priority supply baseto confirm alignment to Caterpillar’spublished Supplier Code of Conduct.
Caterpillar uses assessment response
data to address supply chain risk througha collaborative approach with responding
suppliers. The 2020 target reflects
continued focus on this initiative.

ESG DATABASELINE
2006

2016

2017

2018

2019

GOAL
2020

Growth in remanufacturingbusiness10% business sales growth since 2013

N/A

-13%

2%

7%

3%

Growth in rebuild business10% business sales growth since 2013

N/A

-10%

14%

17%

14%

Product take-back by weight10,11
millions of pounds of end-of-lifematerial received

N/A

125

130

155

153

N/A

Product take-back by %10,11% of actual end-of-life returns/
eligible returns

N/A

91%

92%

92%

91%

N/A

PERSPECTIVE

REMANUFACTURING

20%
Our remanufacturing and rebuild
businesses provide customers withimmediate cost savings, help extend
product life cycles and use materials
more efficiently. We seek to continue
to grow these businesses.

SUSTAINABLE CONSTRUCTION

Buildings designedin accordance with the U.S.
Green Building Council’s LEED
BD+C (Building Design andConstruction) certification
process of comparable criteria

N/A

100%

100%

100%

100%

100%

Facilities designed to the LEED criteria
are more energy- and resource-efficientthan traditional construction. In 2019,
we completed construction of our new
Surface Mining & Technology officein Tucson, Arizona. The new building
met the requirements of certificationin accordance with the U.S. Green
Building Council’s LEED BD+C (Building
Design and Construction) process.

N/A

Since 1952, the Caterpillar Foundation
has contributed about $770 million
to help make sustainable progresspossible around the world by building
resilient communities that thrive
in a rapidly changing world.

PHILANTHROPY

Community investments
millions of dollars

N/A

$36.8

$33

$27

$28.6

People impacted (cumulative)
millions

N/A

38.6

46.5

48.1

50.1

50

In 2013, the Caterpillar Foundation set out
to place 50 million people on the pathto prosperity by 2020. Together with
our nonprofit partners, we are proudof the impact we’ve had on individuals
and in communities around the world.

Matching gifts9,12
millions of dollars

N/A

$3.2

$6.0

$4.1

$3.5

N/A

The Caterpillar Foundation is proud
to match our U.S. employees, retirees
and board of directors’ contributions
to eligible organizations.

N/A

Caterpillar has supported the United
Way for more than 60 years throughour annual campaign. The Foundation
matches employee and retiree gifts
during the campaign, amplifying
our impact on the communities
where we live and work.

United Way13
millions of dollars

N/A

$11.5

$11.4

$11.8

$12.2

N/A = Not Applicable /A/ Data assured by ERM CVS. Please see Page 28 for the data assurance statement.

/ 11 /

2019 SUSTAINABILITY REPORTCORPORATE
GOVERNANCE

We believe that a strong governance framework creates long-term value for our shareholders,strengthens board and management accountability and builds trust in the company and our brand.
Our governance framework includes the following highlights:

2019
Size of Board

11

Number of Independent Directors

10

Average Age of Directors

64

Average Director Tenure (in years)

11

Annual Election of Directors

Yes

Mandatory Retirement Age

74

Gender and Diversity

45%

Majority Voting in Director Elections

Yes

Independent Presiding Director

Yes

Code of Conduct for Directors, Officers and Employees

Yes

Supermajority Voting Threshold for Mergers

No

Proxy Access

Yes

Shareholder Action by Written Consent

No

Shareholder Ability to Call Special Meetings

Yes

Poison Pill

No

Stock Ownership Guidelines for Directors and Executive Officers

Yes

Anti-Hedging and Pledging Policies

Yes

Clawback Policy

Yes/ 12 /

2019 SUSTAINABILITY REPORTCORPORATE GOVERNANCE

The Public Policy and Governance Committee of our boardof directors oversees the company's sustainability efforts
as well as efforts on environmental, health and safety activities,
including Caterpillar's products and services that support
sustainable development of global resources. This committee
also reviews Caterpillar’s annual political contributions
and recommends the amount the company should contributeto the Caterpillar Foundation. The committee provides regular
updates to the board and may retain advisors and consultants
as needed to assist it in fulfilling its responsibilities.
In addition, all Caterpillar employees are annually required
to complete training on our Code of Conduct. As part of thistraining, employees must certify that they have read,understand and will comply with the Code of Conduct.

Caterpillar's products and services alone are not enoughto ensure our success. The actions taken by governments
around the world can have significant impact – both
positive and negative – on Caterpillar, our employees,
dealers, suppliers and customers. We advocate for policies,
agreements, legislation and regulations that enable us tohelp our customers build a better world. Our global teams
advocate on appropriate issues in a manner consistent
with all governing laws and Our Values in Action.

C orporate Governance initiatives andboard composition in Caterpillar’s
Proxy Statement Board Committees
 Caterpillar Code of Conduct
RISK MANAGEMENT

Risk is an inherent part of conducting global business.
Caterpillar regularly identifies and monitors business risks
through a robust internal management system and engages
in constructive regulation and public policy discussions that
benefit employees, customers and shareholders. We manage
operational, strategic, financial and legal compliance risks
in several ways, including Caterpillar’s Enterprise Risk
Management (ERM) program and Compliance program.
Each year, we conduct a comprehensive enterprise risk
assessment by reviewing risk information from multiple
sources, including business units. To better inform ourdecision-making, Caterpillar evaluates risks at the business
unit and enterprise levels on three dimensions: Likelihood

 Risk Trend

The results of this ERM risk assessment are incorporated
into action plans to mitigate the identified risks. The importanceof following the corporate ERM process is communicatedthroughout the organization from the CEO down. As a result,
we have seen strong engagement among senior leaders.
Operationally, our risk culture is embedded within the businessthrough performance scorecards. The company’s officers shareaccountability for business risks, and the board has oversightof the enterprise process. The board implements its risk
oversight function both as a board and through delegation
to board committees, which meet regularly and report backto the board. The board has delegated the oversight of specificrisks to board committees that align with their functional
responsibilities. We integrate enterprise and business unit
risk mitigation plans into individual performance goals of
the Executive Office members. We compensate senior
executives in part according to their ability to mitigate
the risks as described in their performance goals.

/ 13 /The Compliance program establishes enterprise-levelcompliance expectations. Business unit personnel andcompliance professionals implement controls and processes
to meet those requirements with the support of complianceprofessionals, legal personnel and subject matter advisors
with specific expertise. These efforts are enhanced byregular communications, training and annual assessment
processes. Through these programs, Caterpillar can better
manage risk and gauge the potential impact of various
outcomes on our ability to achieve strategic goals.

POLITICAL CONTRIBUTIONS

Learn more about our governanceframework at the following: Impact

We also review compliance risks as part of the ERM risk
assessment process and manage them as part of Caterpillar’sCompliance program. These risks cover a broad range
of issues, including legal and regulatory compliance.

Where allowable by law, Caterpillar may make corporate
contributions to campaigns, individual candidates or politicalcommittees in order to support public policies we believe will
promote our business interests. All political and advocacy
activities at the state, federal and international levels aremanaged by the vice president of Global Government &Corporate Affairs, who coordinates and reviews with senior
management the legislative and regulatory priorities thatare significant to the company’s business as well as related
advocacy activities. In addition, the board’s Public Policy
and Governance Committee reviews Caterpillar’s significant
legislative and regulatory priorities, policy on political activities
and contributions, corporate political contributions, tradeassociation participation and the political contribution activitiesof the Caterpillar Political Action Committee (CATPAC).
CATPAC contributions are made only in federal and stateelections. CATPAC is funded through voluntary contributions
by eligible individuals, who primarily are U.S.-based employees.
A steering committee comprised of Caterpillar non-officer
employees who represent a diverse mix of U.S. locations andbusiness units oversees all CATPAC disbursements to ensure
they promote the company’s business interests.
Caterpillar also maintains memberships in trade associations
and business groups that may engage in advocacy on behalfof segments of the business community. We are committed
to supporting these organizations, which champion public
policies that contribute to the success and growth of thebusiness community.
Additional information regarding Caterpillar’s corporate
contributions, CATPAC contributions and trade association
memberships is available on our political engagement website.

2019 SUSTAINABILITY REPORTENERGY& EMISSIONS

Global demand for energy is expected to increase significantly over the next 25 years according to theInternational Energy Agency, and Caterpillar will continue to play a key role by providing products andservices to industries that enable access to reliable energy. As a global energy consumer and industrial
manufacturer, as well as a major manufacturer of energy conversion and power generation products,
Caterpillar has a fundamental interest in, and understanding of, energy needs around the world.
We provide products with leading integrated technology
to various energy customers and leverage our technology
and innovation to meet the world’s growing energy needs.
In our own operations, we’re making strides to lower ourenergy use and environmental impact. Read more in ourenergy and climate policy.

ENERGY MANAGEMENT

Caterpillar manages hundreds of facilities around the worldthat require energy to power our operations. As a manufacturerof heavy equipment, Caterpillar has some operations that areenergy-intensive. To mitigate our impact, we have set energy
efficiency targets in our operations since 1998 and greenhousegas emission (GHG) reduction targets since 2003. In addition,
our 2020 sustainability goals include targets for energy,
greenhouse gas emissions, water and waste in our operations.
We are making progress toward these goals by improving
energy efficiency, investing in alternative and renewable
power generation sources, implementing water conservation
projects and managing waste through remanufacturing,rebuilding, reuse and recycling. Continuous improvement
is an important part of this approach, with new manufacturing
technologies and best practices quickly creating newopportunities for greater efficiency.

SASB Code: RT-IG-130a.1/ 14 /

Our high-performance standards for environmental, healthand safety (EHS) require compliance with, and at times
extend beyond, laws and regulations. Our EHS assurance
manual outlines Caterpillar’s EHS Management Systemand establishes fundamental requirements that apply at all
workplaces globally, including majority-owned subsidiaries
and majority-owned joint ventures. Our facilities assess
compliance with our requirements annually, and our EHS
assessment team reviews those assessments while also
conducting deeper reviews of certain facilities each year.
The EHS assessment team is responsible for the following
activities related to assessments:
 Planning, scheduling and conducting assessments Maintaining oversight, accountability, consistency
and good performance Monitoring and recording assessment issues andcompleting action plan items
 Providing one source for EHS auditor tools, standards
and specifications, assessment schedules, training/
opening presentations and associated data Reporting assessment results to corporate EHS
senior management

2019 SUSTAINABILITY REPORTENERGY & EMISSIONS

Beyond meeting standard expectations, we encourage facilities
to implement their own initiatives to improve safety, decreaseenergy use and increase productivity. Facilities evaluate
potential initiatives based on the total annual investment
required, total anticipated cost savings and average pay-backperiod. We also invite facilities to report emission reduction
activities through internal awards and recognition processes.
Energy management is an important component of EHS
management. Our enterprise energy management teamis instrumental in building awareness, encouraging action
and developing solutions in the areas of energy efficiency
and alternative/renewable power generation. These solutions
include purchasing renewable energy certificates and installing
renewable energy sources, such as photovoltaics (PV) or a
microgrid installation that combines PV with battery storage
to supplement and offset electricity generated with diesel fuelat an off-grid location. Our largest contribution to alternative
energy consumption is the operation of combined heat andpower (CHP) systems to power several manufacturing facilities.
In 2019, 35.5% of our electrical energy was from renewable
or alternative sources. The energy management team isevaluating additional opportunities for replication of CHP,
PV and microgrids at other locations. We also continue toassess new ways to upgrade systems and make facilities
more energy-efficient.

/ 15 /

2019 SUSTAINABILITY REPORTENERGY & EMISSIONS

Energy Goal

GHG Emissions Goal

Reduce energy intensity by 50% from2006 to 2020.

Reduce greenhouse gas emissions
intensity by 50% from 2006 to 2020.5

32%

54%

Operational energy intensity
decreased 32% from 2006 to 2019, and increased 1%
from 2018 to 2019. While absolute energy decreasedslightly from 2018 to 2019, it decreased by 12% overall
from 2006 to 2019. These results reflect our increased
productivity and efficiency.

Our GHG emissions intensity decreased
54% from 2006 to 2019, achieving our 2020 target.
In addition, our absolute GHG emissions decreased
by 20% from 2018 to 2019, and decreased by 41%
from 2006 to 2019. Increases in productivity andefficiency have helped us to achieve our 2020 GHG
emissions goal.

Energy Intensity

GHG Emissions Intensity

Absolute gigajoules energy use/million
dollars of sales and revenues

692

‘06

598

‘16

Total Energy
Consumption

Absolute million
gigajoules energy use1

23.0 23.7

25.5 25.3

Absolute metric tons of CO2e/million
dollars of sales and revenues

72.1
521 467 471

‘17

‘18

‘19

54.2
346

‘20
Goal

‘06

Total Electricity
Consumption

‘17

‘17

‘18

‘19

‘16

‘17

‘18

‘19

‘20
Goal

• 0.905 million metric tons –2.55 2.38‘18

33.0 36.0

Million metric tons

Scope 1 (direct emissions)0.905• 0.869 million metric tons –
1.774

‘16

40.4

2019 Total Absolute
GHG Emissions

Sum of purchased
and self-generated electricity
in million MWh

2.37 2.45

‘16

46.4

0.869

Scope 2 market-based (indirectemissions from purchased
electricity, heat or steam)

0.926 million metric tons –Scope 2 location-based‘19(not included in the visual pictured here)

Alternative/Renewable Goal

Alternative/Renewable Energy

Use alternative/renewable sources to meet 20%
of our energy needs by 2020.2,3Sum of alternative and renewableelectrical energy use/total electrical
use x 10035.5%

of our electrical energy was from renewable oralternative sources in 2019. In addition, our use of renewable energy
increased from 2018 to 2019.

27.9

2019 SUSTAINABILITY REPORT

32.5 35.5
20.0

‘16

/ 16 /

31.2

‘17

‘18

‘19

‘20
Goal

FUEL ECONOMY& EMISSIONS

Caterpillar is focused on energy and emissions reduction in our own business, and helping customers
decrease their carbon footprints through machinery and power solutions that contribute to loweringgreenhouse gas emissions. Supported by our Enterprise Technology Strategy, research and development
focus areas include high-efficiency energy conversion and electrification, working to increase power
density, expand the use of alternative fuels, maximize efficiency of power systems and introduce more
electrification into our product lines.
We are developing a range of equipment that includes
internal combustion engines, hybrids and fully electric
systems that help customers around the world meet theirbusiness goals for power utilization and owning andoperating costs.
We provide U.S. EPA Tier 4/EU Stage IV, EU Stage V orequivalent products in North American, European andJapanese markets. U.S. EPA Tier 4 emissions standards (as27%well as EU Stage IIIB & Stage IV emissions regulations)provide a 90% reduction in emissions (NOx and particulatematter) when compared to Tier 3 standards. Customers inall segments express increased interest in cost-saving
benefits of more fuel-efficient and fuel-flexible products.
Modular offerings within our product lines allow customizationof equipment to provide the optimal mix of technology,
emissions profile and cost that best suit customer needs.

of our sales from products, services and solutions
demonstrated an improved sustainability benefit overprior offerings, including enabling our customers to
reduce their greenhouse gas emissions8

SASB Code: RT-IG-410a.1 through 4/ 17 /

2019 SUSTAINABILITY REPORTFUEL ECONOMY & EMISSIONSWe regularly engage
in research withand provide data
to regulators to
help them makeinformed decisions

Caterpillar Job Site Solutions (JSS) helps customers realize
savings through reduced operator and repair needs, as well as
decreased fuel use and associated emissions. We collaborate
with dealers and customers to deliver customized solutions
that help optimize energy use and provide training for
operators on how to use our equipment more efficiently.
Other advanced technologies, such as autonomous andautomation capabilities, connectivity and power conversion
systems, further increase efficiency and lower customers’
total cost of ownership.
As a large company in the heavy equipment industry, we havethe potential to drive improvements in machine emissions
and safety. Caterpillar participates in industry organizations
to educate and inform regulatory bodies, policymakers, NGOs
and the general public. Along with other manufacturers, weregularly engage in research with and provide data toregulators to help them make informed decisions.

Systems Optimization Goal

Fleet Hours

Increase managed fleet hours by 100% from2013 to 2020.9

510%

Caterpillar Job Site Solutions (JSS) helps customers
realize savings through reduced operator and repair needs, as well
as decreased fuel use and associated emissions. Demand from ourcustomers continues to grow for solutions provided by our JSS teamworking together with our Cat ® dealers.

/ 18 /

2019 SUSTAINABILITY REPORT

510%
280%
98% 124%
‘16

‘17

100%
‘18

‘19

‘20
Goal

MATERIALS

Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel andnatural gas engines, industrial gas turbines and diesel-electric locomotives. Across the world today,
1.8 million Caterpillar construction machines are active, and more than 20 million engines have been
built. What goes into these machines matters. Caterpillar responsibly sources the raw materials
used to build our products. And we keep those materials in circulation for as long as possible
through remanufacturing and rebuild programs that reduce waste, extend equipment life and savecustomers money.
Equipment powerful enough to move and mine the earth
must be built with durable materials. Caterpillar sources
these materials from a network of more than 28,000 suppliers
who ship more than 800,000 parts and components toCaterpillar every year. These purchases include a variety of
unformed steel products, which are cut or formed to shapeand machined in our facilities; steel and iron castings andforgings, which we machine to final specification levels; andfinished components, which are made either to Caterpillar
specifications or to supplier-developed specifications.
A key consideration is responsible sourcing of minerals
used in our products. Tin, tungsten, tantalum and gold
(3TG), collectively known as “conflict minerals,” have been
associated with human rights violations in the Democratic
Republic of the Congo and adjoining countries. With regard
to the extraction and trade of conflict minerals, we will notknowingly provide support to, contribute to, assist with or
facilitate armed conflict in the DRC. Our Conflict Minerals
Position Statement contains clear expectations for our
suppliers regarding their sourcing of these materials.
We have established a process that identifies areasof risk on an ongoing basis and corrective action plans

SASB Code: RT-IG-440a.1/ 19 /

to mitigate or remediate such risks relating to conflictminerals. A supplier’s failure to take corrective actions
when required may lead to additional actions, up to andincluding the termination of our business relationship.
Caterpillar supports the Responsible Minerals Initiative (RMI)
to help influence smelters’ engagement to support supply
chain transparency and leverage industry collaboration
toward greater business intelligence. Year over year, we strive
for an increased supplier response rate with an additional
emphasis on 3TG priority suppliers. In 2018, we received a
100% response rate from these high-priority suppliers. We
leverage industry standards for benchmarking and explore
efficiencies and cost improvements on an ongoing basis.
Caterpillar also publicly discloses the results of our Reasonable
Country of Origin process and any necessary due diligence in
our Form SD and Conflict Minerals Report as required by the
SEC. This report discloses metrics and results relative to thenumber of inquiries we execute within our first-tier suppliers.
In these reports, we describe our due diligence efforts,
including risk mitigation, along with expectations relative
to process improvements for the subsequent year.

2019 SUSTAINABILITY REPORTREMANUFACTURING

For more than 45 years, Caterpillar’s remanufacturing and rebuild businesses have provided customers
with quality equipment that delivers the best economic proposition for their business. Our engineeringand manufacturing expertise, field population and dealer organization make it possible for us to offer
remanufactured products and components through Cat® Reman, Progress Rail Services and Solar
Turbines, and rebuild options through our dealers.
Remanufacturing and rebuild options deliver multiple
sustainability benefits and help Caterpillar contribute to thecircular economy. Through these businesses, we recycle
millions of pounds of end-of-life iron annually. Because weare in the business of returning end-of-life components tosame-as-when-new condition, we reduce waste and minimize
the need for raw material, energy and water to produce newparts. Through remanufacturing, we make a significant
contribution to sustainable development — extending thevalue of the energy and water consumed in a component’s

91%

Given the significant role that remanufacturing and rebuild
operations play in our sustainability initiatives, we set a
goal to grow remanufacturing and rebuild business sales
by 20% from 2013 to 2020. With the company’s enterprisestrategy focused heavily on expansion of services, weare experiencing a steady demand for remanufactured
products and components.

REMAN & REBUILD GOAL:

eligible end-of-life returns
collected in 2019, totaling

153
millionoriginal manufacture and keeping high-value nonrenewable
resources in circulation for multiple lifetimes.

Increase remanufactured andrebuild business sales by

20%

from 2013 to 2020

rebuild sales growth
2013-201910

3%

remanufacturing
sales growth
2013–201910

pounds of material

SASB Code: RT-IG-440b.1

14%

10,11

/ 20 /

2019 SUSTAINABILITY REPORTREMANUFACTURING

REMANUFACTURING AND REBUILD

Engineers use
design guidelines tobuild key productswith remanufacturingin mind.

When a component
reaches the end of its initialserviceable life, dealers
return the used component,
referred to as core,
to Caterpillar.

Remanufacturing and rebuild businesses take a systems viewof product life cycles. For example, the Cat® Reman process
begins with new product design. Engineers use design
guidelines to build key products with remanufacturingin
mind, ensuring they are highly durable even under heavyuse conditions. When a component reaches the end of its
initial serviceable life, dealers return the used component,
referred to as core, to Caterpillar where it is cleaned,inspected, salvaged and remanufactured to original
factory specifications, including any engineering updates.
The company uses state-of-the-art salvage techniques,
strict reuse guidelines, and advanced remanufacturing
processes and quality controls to ensure reman products
provide same-as-when-new performance, coupled witha same-as-new warranty.
Cat Reman products are supplied to dealers, who sell themto customers at a significantly reduced price compared tothe cost of an equivalent new product. Cat Reman’s modelis an exchange business. To encourage use of reman product,
we charge a deposit along with the purchase of each reman

SASB Code: RT-IG-440b.1/ 21 /

Caterpillar cleans,inspects, salvages
and remanufacturesto original factory
specifications.

product. When customers return their used components,
we refund their deposit. Caterpillar uses a proprietary coremanagement system to globally manage core returns fromdealers and Caterpillar inspection facilities and determine thecore credit amounts that will be refunded. Off-the-shelfavailability of nearly 8,000 parts gives customers more
options at repair and overhaul time.
A rebuild is typically performed by trained dealer service
professionals using genuine equipment and parts that literally“rebuild” a customer’s machine. A complete Cat ® Certified
Rebuild includes more than 350 tests and inspections,
automatic replacement of approximately 7,000 parts
and a like-new machine warranty. Caterpillar provides
information, data, training and service tools to help dealers
make the most appropriate decisions about which parts
to reuse in order to achieve expected longevity of rebuilt
components. Our remanufacturing and rebuild services
greatly increase the amount of materials that remain inproductive use.

2019 SUSTAINABILITY REPORTPEOPLEOur employees — more than 102,300 of them worldwide as of year-end 2019 — are the backbone ofCaterpillar’s success. They’re helping build a better world, from supporting customers to innovating
new technologies to giving back to communities. In turn, Caterpillar provides a positive work
environment by promoting an uncompromising safety culture; offering challenging roles where
employees can learn, contribute and grow; and prioritizing diversity and inclusion.
EMPLOYEE HEALTH & SAFETY

The health and safety of our employees is our top priority.
We manage safety at the highest levels, using the same
tools we employ to measure and improve other aspectsof business performance, such as continuous improvement
processes, metrics, scorecards and performance management.
Our enterprise strategy embeds safety in the strategic pillarof operational excellence. By putting safety front and centerand linking it to our strategic goals, we never lose sight of thiscritically important issue.
Enterprise metrics and targets, as well as goals developed
within each business unit, keep us on track for continuous
improvements. Common enterprise targets create structure
and accountability, while business unit process improvements
create opportunities for innovative safety efforts, which canbe shared across the enterprise.
Our EHS assurance manual establishes baseline expectations
for safety, and Caterpillar’s health and safety professionals
provide expertise and support to operations around the world.
Within our facilities, we use a variety of processes, tools,
training and continuous improvement teams to manage risks
and create an engaging culture with relentless focus on safety.
At the same time, Caterpillar Safety Services provides solutions
and expertise to support dealers, suppliers and customers

SASB Code: RT-IG-000.B
SASB Code: RT-IG-320a.1/ 22 /by leveraging cultural assessment tools, guiding continuous
improvement processes, providing technology to identify andmitigate risk, and sharing a wealth of industry-specific safety
resources. Our safety website provides access to a wide range
of interactive online training courses for safety, health andthe environment.
In the spirit of continuous improvement, we look for new
ways to strengthen our safety approach. We’ve modified ourrisk evaluation and assessment process to better identify
which facilities may benefit most from assessments andrecommendations for improvement. At facilities worldwide,
we attempt to use localized resources who have specificknowledge of regulations and requirements in a local region.
We continue to refine our standard processes with embedded
safety procedures for the work that we do. From time to time,
non-routine tasks may be identified. In 2019, we developed
pre-task assessment tools to focus on these activities to
identify and manage potential risks before beginning thework. As Caterpillar’s business — including our expanded
offerings for customers — grows, we continue to refine our
focus on creating safe working environments, and ultimately,
keeping people safe.

2019 SUSTAINABILITY REPORTPEOPLE

Safety Goals
Reduce recordable workplace injury rate
to 0.60 and lost-time injury case rate to
0.15 by 2020.

In 2019, we saw
our best safety
performanceon record.

Our relentless focus on safety has enabled us to meet our 2020
safety goals for operations. Our vision has always been andcontinues to be zero injuries. Our safety goals represent
expected progress on our path to zero. We strive for all teammembers to go home safely, every day.
Despite our progress, we are saddened to report one of ourcontractors suffered a fatal workplace injury in one of ourfacilities in 2019. We are dedicated to the safety of everyone
working at Caterpillar. We encourage our extended teamof contractors, dealers, suppliers and customers to focus
on safety for their operations and employees.

0.43

Recordable Injury Frequency(RIF)
Recordable injuries per
200,000 hours worked

6.22

We have improved our recordable injury frequency rate by
93% from our 2003 base year, and by 19% from 2018 to 2019.
We have improved our lost-time case frequency rate by 95%
from our 2003 base year, and by 6% from 2018 to 2019.

0.50 0.49 0.53 0.43 0.60
‘03

‘16

‘17

‘18

‘19

‘20
Goal

0.15

Lost-Time Case Frequency Rate
(LTCFR)
Work-related injuries resulting in losttime per 200,000 hours worked

2.97

0.19 0.17 0.16 0.15 0.15
‘03

‘16

‘17

‘18

‘19

2019 Fatalities

0

Employees

1

Contractor

SASB Code: RT-IG-320a.1/ 23 /

2019 SUSTAINABILITY REPORT

‘20
Goal

PEOPLETALENT DEVELOPMENTAt Caterpillar, we are committed to attracting, hiring,developing, engaging and retaining talented employees.
Our people are the foundation for high-performing teams
required to deliver our enterprise strategy. Our recruiting,learning and performance management programs aredesigned to ensure productive, highly engaged employees
focused on both individual and organizational performance.
Growing employee capabilities is central to the company’s
ability to deliver results and engage employees. According
to our annual employee insights survey, Caterpillar employees
rate “Challenging Work and Impact” as our greatest strengthand most important driver of their engagement. We provide
a variety of opportunities for employees to grow theircapabilities while doing meaningful work.

and military and diversity hiring engagements. This enables
us to prepare our workforce to do work that matters andmeets the needs of our current business and the future
demands of the market.

Recruitment
We are continuing to grow our capability to attract top
talent. We are doing this by moving our recruiting teams
closer to the business and communities we serve. In 2019,
Caterpillar, through relationships with global partners,
actively engaged in events that targeted a broad scopeof diverse talent to drive awareness. We continued ourcommitment to workforce development programs such as
hackathons, robotics competitions, skilled-trades funding,

Our newest suite of leadership development programs,
launched in 2019, is designed to build competencies
supporting our leadership attributes within a five-level
framework. The framework requires greater capability
as leaders progress in their careers. Leadership levels
include initial training focused on emerging and future
leaders, progressing to first-line, mid-level, department
and, ultimately, executive leaders.

/ 24 /

Professional Development
Caterpillar’s talent development strategy helps our
employees grow their careers by providing a toolbox ofdiverse experiences that allow them to forge unique paths.
In 2019, we created success profiles, which allow managers
to help employees consider work experiences needed toprepare them for roles critical to the success of the strategy.
This approach aligns with the feedback we receive from
employees about how they want to grow their careers.

2019 SUSTAINABILITY REPORTPEOPLEAt Caterpillar, we are focused on driving a culture ofcontinuous improvement through Lean. It is important that
all employees have a deep understanding of Lean — what itis, how to apply it and how it ultimately impacts our success.
Our Lean Center of Excellence focuses on integrated andcontinuous learning for both leaders and employees, so thateveryone grows in their ability to support the Operational
Excellence pillar of our enterprise strategy.
Caterpillar provides technical and market leadershipdevelopment programs that enhance capabilities andperformance in specific functions or countries. For example,
the Engineering Rotational Development Program provides
onboarding support for new college graduate hires into
engineering functions. The program includes orientation,
tours, learning, networking, product experiences, mentoring/coaching, leadership opportunities on program committees,
and rotational development experiences provided in an
employee’s first one to three years at Caterpillar.
Finally, we offer informal learning experiences for all
employees through learning and technology-enabled
systems for ease of access and enterprise collaboration.
Coaching and feedback reinforce this experiential learning.
Across all of these professional development programs,
we realize business benefits, including higher-performing
individuals and teams, lower employee turnover, better
decision-making, decreased corporate risk and more effective
resource allocation.

Key to our performanceand reward strategy
are ongoing coaching
conversations between
leaders and employees.

Performance & Rewards
In recent years, we have updated our performance
management process to make it more meaningful and betteraligned with our Operating & Execution (O&E) Model.
We are committed to a strong pay-for-performance philosophy
that aligns individual performance, behaviors and businessresults with individual rewards. Differentiating performanceand rewards helps us achieve the critical elements of ourenterprise strategy, including profitable growth, and strengthens
our high-performing Caterpillar team. Key to our performanceand reward strategy are: setting ambitious, yet achievable
individual and team goals; ongoing coaching conversations
between leaders and employees about progress toward thosegoals and how they were achieved; increased differentiationof rewards; and a meaningful year-end discussion regarding
contributions made and value created.
To further encourage adoption of these practices, we haveintroduced new training and resources for managers about
how to conduct reviews and provide constructive feedback
to employees.

/ 25 /

2019 SUSTAINABILITY REPORTPEOPLE

DIVERSITY & INCLUSION

We believe each person is unique and valued, and are committed
to ensuring our workplace is diverse and representative of
the many customers we serve around the globe. Different
perspectives help us achieve our best work and improve ourcommunities — that's the Power of Everyone. When weleverage our diversity in an inclusive environment, we create
the best solutions to meet our customers' needs in current
and future markets.
Employee Resource Groups
One way we drive inclusion is through our 14 employee
resource groups (ERGs). Open to all employees, our ERGs
focus on harnessing the power of diverse thinking to better
influence business decisions. Caterpillar’s ERGs help create
positive impact on our business. One example involved theCaterpillar Chinese Resource Group (CCRG), which assisted
on a project focused on growing our expanded offerings in
China. The CCRG members provided business value throughtheir culture, language and subject matter expertise, as wellas their leadership skills and network in China. As a result, theygained valuable development experience. The Caterpillar LatinoConnection ERG helped provide vital support for an important
software update needed to prevent downtime for our customers
by collaborating on translations for critical job aides within
24 hours of the initial request.
Community OutreachCaterpillar employees give generously of their time and talent
to support activities that promote a diverse and capable pipelineof talent from within their local communities. With facilities inmore than 500 locations worldwide, employee outreach efforts
focus on education, gender equity and skill building. Advocacy
is an important complement; through engagement withprofessional associations like Society of Women Engineers(SWE), Caterpillar employees participate in critical conversations
at the national, state and local level about access to STEM
opportunities for underrepresented populations.
Breakthrough Leadership
Breakthrough Leadership is a development program that helps
men and women develop inclusive leadership strategies
and sharpen awareness of organizational culture and genderbiases. More than 3,000 women have completed the course
since its inception in 2014; while 4,100 men have completed
the Men as Allies program, focused on growing a moregender-inclusive culture.
Awards
We were honored to receive the following awards in recognitionof our workforce inclusion and diversity efforts: Best of the Best Top Veteran-Friendly Companies U.S.
Veteran’s Magazine
 America’s Best Employers for Diversity Forbes
 Top 50 Employers Careers & the disABLED Magazine Best Employers for Women Forbes
 Best Employers for New Grads Forbes
 Top Great Company to Work for in Brazil,
Great Place to Work Institute Excellence Award for Talent Development,
Happy Companies, China/ 26 /

14

Employee
Resource Groups (ERGs)
Africa Business Resource Group
Active Caterpillar Team
Abled and Disabled Employees
Partnering Together
Armed Forces Support Network
Caterpillar African American Network
Caterpillar Asian Indian Community
Caterpillar Chinese Resource Group
Caterpillar Latino Connection
Experienced Professionals
Korean Resource Group
Caterpillar Lambda Network
Middle Eastern Resource Group
Women's Initiative Network
Young Professionals of Caterpillar

HUMAN RIGHTSOur Human Rights policy is informed by the international humanrights principles described in the United Nations Guiding
Principles (UNGP) on Business and Human Rights, Universal
Declaration of Human Rights (UDHR) and the International
Labour Organization's (ILO) Declaration on Fundamental
Principles and Rights at Work. We are committed to respecting
recognized human rights principles aimed at promoting andprotecting human rights in the countries in which we operate.
We recognize that governments are ultimately responsible forestablishing the legal framework to protect human rights within
their jurisdictions.
We encourage any party to report situations in which they
have a good faith belief that the entities or individuals covered
under our policy have taken actions that are inconsistent withthe principles set forth in the policy. We have dedicated a
confidential and anonymous means to encourage reportingby any party, maintained by our Office of Business Practices.

2019 SUSTAINABILITY REPORTPEOPLEPHILANTHROPY

Our success contributes to the social stability of regions aroundthe world. Caterpillar and our customers support economic
growth both in developed and developing countries, whereaging networks need improvement, and in emerging regions,where new infrastructure is required. Our products help ensure
investments in transportation, energy, telecommunications,waste and water infrastructure produce maximum benefits. By
employing more than 100,000 people worldwide – and indirectly
supporting countless other jobs – we help provide opportunities
and grow economies in countries around the world.
Caterpillar Foundation
As Caterpillar and our customers work to build infrastructure,
the Caterpillar Foundation, the philanthropic arm of Caterpillar
Inc., has been on a mission to improve the lives of people
around the world since its founding in 1952. In more recent
years, the Foundation’s Together.Stronger.™ platform has
worked to align, inspire and activate cross-sector stakeholders
to tackle the root causes of poverty. Through a collaborative
effort of businesses, nonprofits, governments and citizens,
the Foundation set out to help 50 million people rise outof poverty by 2020. Together, we have made tremendous
progress and are proud to have reached this goal.

Since 1952, the Caterpillar Foundation
has invested about$770 million
in global communities.

Over the past year, as we approached this exciting milestone,
the Foundation evaluated how it can make the most significant
impact moving forward. With that in mind, the Foundation has
refreshed its strategy with a more focused mission of building
resilient communities that thrive in a rapidly changing world.
Resilient communities play a pivotal role in global development.
They are strong, resourceful and better prepared to withstand,manage and recover from unexpected challenges of the future,whether those challenges are social, environmental, economic
or political. This refreshed strategy reflects who Caterpillar
and the Foundation are and provides the opportunity to leverage
our expertise and experience to improve the communities
in which we live and work.

Caterpillar Foundation Strategy
WHAT

HOW

Empower the workforceof the 21st century

Workforce readiness and
STEM education programs

Build strong, resilientand sustainableinfrastructure

Building natural infrastructureand supporting accessto basic services like waterand energy

Give back, harnessing
the passions of our teamMatching gifts, volunteerism,
United Way giving anddisaster relief

Caterpillar Foundation andthe United Nations Sustainable Development Goals (UN SDGs)
The Caterpillar Foundation’s investments alignwith several of the UN SDGs. The Caterpillar
Foundation works to build resilient communities
in the places where we live and work, and where
there is need. The UN SDGs that are most closely
associated with the Foundation’s work include:/ 27 /

2019 SUSTAINABILITY REPORT

Independent Assurance Statement to Caterpillar Inc.
ERM Certification and Verification Services (ERM CVS) was engaged by Caterpillar Inc. (Caterpillar) to provide limited
assurance in relation to specified 2019 data in the Caterpillar 2019 Sustainability Report as set out below.
Engagement summary

Scope of ourengagement

Reportingcriteria

Whether the Caterpillar 2019 data for the following indicators are fairly presented, in all material
respects, with the reporting criteria:
Energy & Greenhouse gas emissions data
Water data Scope 1 GHG emissions [million metric tons
 Non-contact cooling water [billion gallons];
CO2e] Water sources (non-contact cooling water Scope 2 GHG emissions – location andfrom foundry operations, municipal water,
market based methodology [million metricgroundwater, surface water) [%];
tons CO2e]
 Total water consumption [billion gallons] Total GHG emissions [combined Scope 1
and intensity [thousands of gallons by
and 2 market based in million metric tons
million dollars of Sales and revenues]
CO2e] and intensity [metric tons by million
Safety data
dollars of Sales and revenues];
 Lost Time Case Frequency Rate (LTCIR);
 Energy consumption and intensity
 Recordable Injury Frequency Rate (RIF) –[GJ/million dollars of Sales and revenue];per 200,000 hours worked.
 Total electricity [MWh];
The WBCSD/WRI GHG Protocol (2004, as revised January 2015) for the Scope 1 and 2 GHG
emissions and Caterpillar internal reporting criteria and definitions for the other indicators.

Assurance
standard

ERM CVS’ assurance methodology, based on the International Standard on Assurance Engagements
ISAE 3000 (Revised).

Assurance level

Limited assurance.

Respective
responsibilities

Caterpillar is responsible for preparing the data and for its correct presentation in reporting to third
parties, including disclosure of the reporting criteria and boundary.
ERM CVS’s responsibility is to provide conclusions on the agreed scope based on the assurance
activities performed and exercising our professional judgement.

Our conclusions
Based on our activities, nothing has come to our attention to indicate that the Caterpillar 2019 data for the indicators listed
above under ‘Scope of our Engagement’ are not fairly presented, in all material respects, with the reporting criteria.
Our assurance activities
Our objective was to assess whether the selected data are presented in accordance with the principles of completeness,comparability (across the organization) and accuracy (including calculations, use of appropriate conversion factors andconsolidation). We planned and performed our work to obtain all the information and explanations that we believe werenecessary to provide a basis for our assurance conclusions.
A multi-disciplinary team of EHS and assurance specialists performed the following activities:
 Interviews with relevant staff to understand and evaluate the data management systems and processes (including awalkthrough of the new Environmental Management Information System) used for collecting and reporting the selecteddata; A review of the internal indicator definitions and conversion factors;
 An analytical review of the data from all sites and a check on the completeness and accuracy of the corporate data
consolidation;
 Virtual visits to two sites – EMD LaGrange (USA) and Technical Center (USA) to review local reporting processes andconsistency of reported annual data with selected underlying source data for each indicator. We interviewed relevant staff,
reviewed site data capture and reporting methods, checked calculations and assessed the local internal quality andassurance processes;
 Year-end assurance activities during a visit to Caterpillar sustainability team offices in Peoria, Illinois including reviewing
the results of internal control procedures, checking completeness of locations in the consolidation as well as the accuracyof the consolidation of the data for the selected indicators from the site data.
The limitations of our engagement
The reliability of the assured data is subject to inherent uncertainties, given the available methods for determining, calculating or
estimating the underlying information. It is important to understand our assurance conclusions in this context.

ERM CVS is a member of the ERM Group. The work that ERM CVS
conducts for clients is solely related to independent assurance activities andauditor training. Our processes are designed and implemented to ensurethat the work we undertake with clients is free from bias and conflict ofinterest. ERM CVS staff that have undertaken this engagement haveprovided no consultancy related services to Caterpillar in any respect.

Jennifer Iansen-Rogers
Head of Corporate Assurance
9 April 2020
ERM Certification and Verification Services, London
www.ermcvs.com; email: post@ermcvs.com/ 28 /

2019 SUSTAINABILITY REPORTSASB INDEXTOPICSASB CODEMETRICUNIT OF MEASURERESPONSE/COMMENT

RT-IG-000.A

Number of units produced byproduct category

NumberSales data is provided in Caterpillar'sannual report to shareholders on
Form 10-K.

RT-IG-000.B

Number of employees

Number102,300(1) total energy consumed

Gigajoules (GJ)

25,330,000(2) percentage grid electricity

%

83.8%

(3) percentage renewable

%

21.2%

(1) total recordable incident rate (TRIR)

Rate

0.4314(2) fatality rate

Number0 employees, 1 contractor(3) near miss frequency rate (NMFR)

Rate

Caterpillar emphasizes the importance ofreviewing all work-related environmental,
health and safety incidents, including nearmisses. Near misses are communicatedand managed locally.

RT-IG-410a.1

Sales-weighted fleet fuel efficiency formedium- and heavy-duty vehicles

Gallons per
1,000 ton-miles

Not applicable to Caterpillar.

RT-IG-410a.2

Sales-weighted fuel efficiency for
non-road equipment

Gallons per hour

RT-IG-410a.3

Sales-weighted fuel efficiency forstationary generators

Watts per hour

RT-IG-410a.4

Sales-weighted emissions of:(1) nitrogen oxides (NOx) and(2) particulate matter (PM) for:(a) marine diesel engines, (b) locomotive
diesel engines, (c) on-road mediumand heavy-duty engines, and (d) othernon-road diesel engines

Grams per kilowatt-hour

Materials
Sourcing

RT-IG-440a.1

Description of the managementof risks associated with the use ofcritical materials

N/A

Caterpillar responsibly sources the raw
materials used to build our products.
Please see Page 19 for more information.

Remanufacturing
Design &Services

RT-IG-440b.1

Revenue from remanufactured products
and remanufacturing services

Reporting currency

Our remanufacturing and rebuild businesses
have grown 3% and 14%, respectively,
since 2013.10

Accounting
Metrics

EnergyManagement

Employee Healthand Safety

Fuel Economy &Emissions in UsePhase

RT-IG-130a.1

RT-IG-320a.1/ 29 /

2019 SUSTAINABILITY REPORT

We continue to invest in research anddevelopment aimed at products thatgenerate fewer direct emissions. Read
more about our focus on fuel economy
and emissions on Pages 17-18 of thisreport. Given the diversity of our products
and applications in which our products
are used, as well as the lack of industry
standards to estimate on a per unit ofwork basis, Caterpillar does not calculate
sales-weighted fuel efficiency oremissions in this manner.

ENDNOTES
1. Total includes purchased and on-site generated alternativeand renewable energy, as well as calculating the percentageof renewable energy from grid-purchased electricity using
data obtained from the International Energy Agency.

6. Percentages may not add to 100% due to rounding.

2. Renewable Energy: Caterpillar defines renewable energy
as energy resources that are naturally replenishing overa short period of time and virtually inexhaustible. Powergeneration examples include wind, solar, hydro, geothermal,
tidal, wave, biomass and biogas from anaerobic digestion.

8. This includes remanufacturing, component overhauls at
Cat dealers, power generation using alternative energy
sources, customer job site optimization and innovative
new products. The components are evaluated each year
to adjust for acquisitions, divestitures, offerings that
become standard and improvements to data accuracy.

3. Alternative Energy: Caterpillar defines alternative energy
as any source of usable energy that offers substantial
environmental benefits compared to the conventionalsources of energy that it replaces. Power generation
examples include landfill gas, coal mine and abandoned
mine methane, combined heat and power, coal withcarbon sequestration and localized power generation.
4. Location-based Scope 2 GHG emissions are provided
in accordance with the GHG Protocol Scope 2 guidance(2015). Our market-based Scope 2 emissions are calculatedusing the Scope 2 Quality Criteria. The following
instruments were used in calculating our market-based
Scope 2 emissions: Renewable Energy Guarantees ofOrigin, energy contracts, supplier-specific emission rates,
Caterpillar-owned power generation facilities and, for theremainder of our facilities, grid average emission factors
from USEPA’s eGRID (2016) and the International Energy
Agency’s data (2018). For 2019 calculations, Caterpillar
did not use residual mix factors.

7. Water consumption intensity does not include
noncontact cooling water from foundry operations.

9. Data for 2018 has been revised for improved accuracy.
10. Data does not include Progress Rail or Solar Turbines.
11. Product returned for remanufacture (called “core”) is notalways returned within the same calendar year as sold.
12. This represents employee and retiree donations made in
the calendar year 2018, and the Caterpillar Foundation’smatch made in the calendar year 2019.
13. This includes employee and retiree contributions, and theFoundation match, for campaigns in the United States,
Canada, Mexico and Panama.
14. Data includes Caterpillar and agency employees. Data does
not include contractor employees.

5. GHG emissions intensity reduction goal is based on our
combined Scope 1 (direct) and Scope 2 (indirect, marketbased) GHG emissions using a 2006 baseline year. Likewise,
total absolute GHG emissions are a sum of Scope 1 andScope 2 (market-based) emissions.

/ 30 /

2019 SUSTAINABILITY REPORTABOUT THIS REPORTThe reporting period is the 2019 calendar year, which is also Caterpillar’s fiscal year. Caterpillar is headquartered in Deerfield,
Illinois, USA. Contact us.
This report has been prepared in accordance with the Sustainability Accounting Standards Board (SASB) Standards.
Report content represents 100% of the products and operations of Caterpillar Inc. and its subsidiaries where we have a controlling
financial interest. Where noted, Caterpillar’s independent dealer network and supplier network are also represented. Caterpillar
and subsidiary brands are listed on our website. Caterpillar’s environmental and safety metrics for operations are consolidated
based on the Greenhouse Gas Protocol “operational control” approach. Environmental data includes all manufacturing and officefacilities with more than 500 employees. Safety data includes employees in all workplaces within Caterpillar’s reporting boundary.
ERM Certification and Verification Services (ERM CVS) has conducted independent assurance of selected 2019 environmental
and safety data. To understand the scope, activities and conclusions of the assurance process, please see the ERM CVS
Assurance Statement.

FORWARD-LOOKING STATEMENTS
Certain statements in this presentation relate to future events and expectations and are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,”“would,” “expect,” “anticipate,” “plan,” “forecast,” “target,” “guide,” “project,” “intend,” “could,” “should” or other similar words
or expressions often identify forward-looking statements. All statements other than statements of historical fact are forwardlooking statements, including, without limitation, statements regarding our outlook, projections, forecasts or trend descriptions.
These statements do not guarantee future performance and speak only as of the date they are made, and we do not undertake
to update our forward-looking statements.
Caterpillar’s actual results may differ materially from those described or implied in our forward-looking statements basedon a number of factors, including, but not limited to: (i) global and regional economic conditions and economic conditionsin the industries we serve; (ii) commodity price changes, material price increases, fluctuations in demand for our products
or significant shortages of material; (iii) government monetary or fiscal policies; (iv) political and economic risks, commercial
instability and events beyond our control in the countries in which we operate; (v) international trade policies and their impact
on demand for our products and our competitive position, including the imposition of new tariffs or changes in existing tariff
rates; (vi) our ability to develop, produce and market quality products that meet our customers’ needs; (vii) the impact of the highly
competitive environment in which we operate on our sales and pricing; (viii) information technology security threats and computer
crime; (ix) inventory management decisions and sourcing practices of our dealers and our OEM customers; (x) a failure to realize,
or a delay in realizing, all of the anticipated benefits of our acquisitions, joint ventures or divestitures; (xi) union disputes or other
employee relations issues; (xii) adverse effects of unexpected events; (xiii) disruptions or volatility in global financial markets
limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers; (xiv) failure to maintain our credit ratingsand potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive position
and access to capital markets; (xv) our Financial Products segment’s risks associated with the financial services industry;(xvi) changes in interest rates or market liquidity conditions; (xvii) an increase in delinquencies, repossessions or net lossesof Cat Financial’s customers; (xviii) currency fluctuations; (xix) our or Cat Financial’s compliance with financial and otherrestrictive covenants in debt agreements; (xx) increased pension plan funding obligations; (xxi) alleged or actual violationsof trade or anti-corruption laws and regulations; (xxii) additional tax expense or exposure, including the impact of U.S. tax
reform; (xxiii) significant legal proceedings, claims, lawsuits or government investigations; (xxiv) new regulations or changes
in financial services regulations; (xxv) compliance with environmental laws and regulations; (xxvi) the duration and geographic
spread of, business disruptions caused by, and the overall global economic impact of, the COVID-19 pandemic; and (xxvii) otherfactors described in more detail in Caterpillar’s Forms 10-Q, 10-K and other filings with the Securities and Exchange Commission.

/ 31 /

2019 SUSTAINABILITY REPORT

Visit caterpillar.com/sustainability for stories about
how Caterpillar puts sustainability into action, including: the safety of our employees around the world improvements in our manufacturing operations
 new products, services and solutions supporting our customers remanufacturing offerings and more

At Caterpillar, sustainability is our commitment
to building a better world.
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