2017 SUSTAINABILITY REPORTOUR
SOLUTIONSHELP OURCUSTOMERSBUILD A
BETTER WORLDCORPORATE PROFILECATERPILLAR
AT-A-GLANCE

171
Global Cat®
Dealers

IN THIS REPORTCEO Message

02

Strategy

04

Solutions

06

Goals & Progress

20

600K+

59%

2017 Sales and Revenues
Outside U.S.

Connected
Assets$45.5B

98,4002017 Sales andRevenues

Employees

PRODUCTS

3M+

18-Year Member

Construction Equipment
Mining Equipment

Products at Work
Around the World

Diesel & Natural Gas Engines
Diesel-Electric Locomotives
Industrial Gas Turbines

ForbesAmerica’s Best
Corporate Citizens 2017#38

As of December 31, 2017

InterbrandBest Global Brands
2017

#89

Caterpillar provides the talent, technology andsolutions that protect our natural resources,
support thriving communities and help build
a world in which all people’s basic needs are
met in sustainable ways. That’s our vision ofa better world.

01

CATERPILLAR 2017 SUSTAINABILITY REPORTSUSTAINABILITY AT CATERPILLAR

To Our Stakeholders
Caterpillar had an outstanding year in 2017, with achievements inmany areas. Our ever-stronger sustainability record and our contributions to the circular economy were among our most importantachievements this year.

Jim Umpleby
Chief Executive Officer

By 2040, worldenergy consumption
is projected to

INCREASE

28%
IEA World Energy Outlook 2017

As a leading global manufacturer of heavy equipment, we provide
the solutions – the engines, locomotives, machines and services –our customers use to build a better world.
For more than 90 years, our customers have been using Caterpillar
equipment to help improve living standards across the globe. Theirwork moves us closer to our vision of being a company that improves
the communities where we live and work, and improves environmental
quality. It also moves us closer to a world in which all people’s basic
needs – such as shelter, clean water, sanitation, food and reliable
power – are fulfilled in a sustainable way.
With this vision in mind, we help enable economic growth and provide
solutions that support communities and protect the planet. Global
economic growth helps put people on a path to prosperity and isimportant to Caterpillar’s future.
We provide work environments, products, services and solutions
that make safe, productive and efficient use of resources. We know
sustainable progress is possible through better systems that maximize life cycle benefits, systems that also minimize economic, socialand environmental costs of ownership. Our operations are guided
by our sustainability principles of preventing waste, improving quality
and pursuing innovation to develop better systems.
In 2017, we also developed and began implementing a new enterprisestrategy; the primary goal of the strategy is long-term profitable
growth. Our Values in Action – Integrity, Excellence, Teamwork,
Commitment, and Sustainability – are the foundation of that strategy
and all we do.

02

CATERPILLAR 2017 SUSTAINABILITY REPORT

2050

What Our World
Will Look Like

2028

2030

GlobalPopulation2017

7.6 8.6 9.8

BILLIONBILLION BILLION(UN Estimates)

GlobalMiddle Class

2022

4.2
BILLION

5.2
BILLION(Brookings Institute Estimates)

We have long been a company based on values. And, formore than thirty years, we have dedicated resources toremanufacturing and rebuilding products and components that meet multiple sustainability goals. Just as
importantly, remanufacturing and rebuilding deliver economic value to our customers, by extending product life
cycles and through more efficient use of resources. We
are dedicated to remanufacturing and rebuilding opportunities across our company – from components toengines to turbines to rail.

Caterpillar invests in innovation that both improves
business opportunities and contributes to our sustainability goals. We have examples of this in high-efficiency
energy conversion and electrification, the expanding useof alternative fuels, and the use of distributed power generation systems that help improve energy access while
emitting fewer greenhouse gas emissions. We have theworld’s largest single autonomous fleet, which is moving
hundreds of millions of tons of material for our mining
customers, improving productivity, efficiency and safety.

In addition to extending product life, we look at the
totality of our processes to manufacture our products as
responsibly as possible. Our facilities focus on energy
and water conservation, and reducing waste and greenhouse gas emissions to minimize environmental impacts.
In many cases, the ingenuity of our employees brings
some of the most innovative solutions, like the Focus
Forward program in Athens, Georgia and the ZeroIncident Performance (ZIP™) Process developed byCaterpillar Safety Services.

We value diversity and inclusion, and welcome thediverse contributions every individual can make to ourcompany. We are committed to fostering an environment
where all employees know that their unique skills, abilities, experience and cultural background are respected.

We constantly look for ways to work smarter on the job,
to reduce waste and conserve natural resources. Thisis also part of our commitment to our customers whowant to improve their operations and competitivenessand realize the full value of their assets on job sites.

We are also committed to investing time and resourcesin the communities where we work and live. Since
1952, the Caterpillar Foundation has been investing totransform lives across the globe through programs that
support education, the environment and basic humanneeds. The Foundation is investing strategically, and incollaboration with partners, toward its goal of helping
50 million people rise out of poverty by 2020.
Collaboration is a watch-word for Caterpillar Foundation
investments and our sustainability efforts worldwide.
We know collaboration among our employees and withour customers, suppliers and dealers is necessary toachieve our vision of improved environmental quality
and stronger communities around the world. We know
working together we can make greater progress
towards our sustainability goals and greater strides
toward building a better world.

Jim Umpleby
Chief Executive Officer

03

CATERPILLAR 2017 SUSTAINABILITY REPORTSUSTAINABILITY AT CATERPILLAR

VisionOPERATIONAL
EXCELLENCE

A world in which all people’s basic
needs – such as shelter, clean water,
sanitation, food and reliable power –are fulfilled in a sustainable way anda company that improves the quality ofthe environment and the communities
where we live and work.

EXPANDED
OFFERINGSSERVICES

MissionStrategy
We provide work environments, products, services
and solutions that make safe, productive andefficient use of resources as we strive to achieve
our vision.

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

We apply innovation and technology to improve thesustainability performance of Caterpillar’s products,
services, solutions and operations.
We believe sustainable progress is made possible
by developing better systems that maximize life
cycle benefits, while also minimizing the economic,
social and environmental costs of ownership, as
reflected in our sustainability principles.
 e are executing our strategy by working to meetW
our aspirational sustainability goals.

Sustainability
Principles

1 Prevent Waste(Improve Safety, Efficiency
and Productivity)

2 Improve Quality(Team, Community, Environment
and Operations)

OPERATIONAL
EXCELLENCE

3 Develop Better Systems(Innovate)

EXPANDEDHOW CATERPILLARHELPS OUR CUSTOMERSBUILD A BETTER WORLDA better world is within our reach. Caterpillar’s new enterprise strategy
allows us to grow profitably so we can continue to innovate solutions that help
customers build critical infrastructure and meet people’s basic needs. Though
our strategy evolves with a changing marketplace, sustainability remains oneof our foundational values, defining not only what we do, but how we do it.

OPERATIONAL
EXCELLENCE

EXPANDED
OFFERINGSSERVICES

05

CATERPILLAR 2017 SUSTAINABILITY REPORTINNOVATIONINNOVATING EFFICIENTTECHNOLOGIES
Caterpillar aims to help customers use lessfuel and generate fewer greenhouse gas(GHG) emissions. These customer needs
provide business opportunities for Caterpillar.
We continue to develop products withfewer direct emissions. In addition, we’re
increasing our investment in high-efficiency
energy conversion and electrification –working to increase power density, expand
the use of alternative fuels, maximize
efficiency of power systems, and introduce
electrification into our product lines while
significantly decreasing owning andoperating costs. In doing so, we help ourcustomers improve their own operations,while also driving our industry to improve.
A significant part of our business is committed
to the supply of energy through efficient
power-generation solutions. With distributed
generation solutions using diesel and natural

gas engines, as well as alternative fuels, wehelp get power where our customers need
it. Caterpillar has implemented hundreds of
distributed power generation systems allover the world, which contribute to improving
energy access while emitting fewer GHG
emissions compared with traditional power
grid systems. We provide combined heatand power systems and combined-cycle
power systems that can double the efficiencyof power generation when compared withthe efficiency of conventional power grids.
In addition, our power systems use
fuels from diverse sources suchas gas from landfills, livestock
operations, wastewater treatment
operations, mine methane, flaregas, syngas and biofuels. Thesesystems provide energy diversity
from plentiful (and in many cases,
renewable) energy sources.

Largestsingleautonomous
fleet in theworld
Autonomous
solutions for trucks,
drills, large tractors,
underground loadersand longwall
systems

700
MILLION

metric tonnes
moved safely byautonomous trucks
through 201706

CATERPILLAR 2017 SUSTAINABILITY REPORTAutonomous Fleets in Action
Nowhere is Caterpillar’s autonomous technology making a bigger impact than at mine sites in Western
Australia. In addition to safety benefits, the autonomous fleets have enabled significant cost and productivity
improvements. Located in the Pilbara region, Fortescue Metals Group’s Solomon mine, with 60 autonomous
trucks connected across more than 100 square miles, has seen productivity gains of up to 30 percent.

07

CATERPILLAR 2017 SUSTAINABILITY REPORTREMANUFACTURING

EXTENDINGPRODUCT LIFE
Caterpillar strives to provide customers withquality equipment that delivers the best
economic proposition for their business. We
remanufacture (reman) and rebuild products
and components that provide customers not
only with immediate cost savings, but also
help extend life cycles and use materials
more efficiently. Rebuild programs increase
the lifespan of equipment by providing
customers with a restored product for lesscost than buying new.
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.
In addition, trained dealer service professionals
perform this work using genuine equipment
and parts. Caterpillar provides information,

data, training and service tools to help dealers
make the most appropriate decisions on
which parts to reuse in order to achieve
expected longevity of rebuilt components.
Reuse of components helps us use materials
and energy more efficiently.
Caterpillar takes a systems view of the life of
our products. We design and manufacture
them for multiple lives, our dealers supportand service them to maximize their value tothe customer, and we remanufacture themat the end of their useful life to deliver the
next generation of value. Our engineering andmanufacturing expertise, field population anddealer organization make this possible. This
total life cycle approach allows us to provide
sustainable solutions that help customers
build a better world.

MATURATIONREPLACE
BEFOREFAILURE

RE-ENTERSSUPPLYCHAINTESTASSEMBLE
REGULAR
MAINTENANCE

Product
Life Cycle

Reman
ProcessAL
GIN
ORI CTURE
FA
NU

MA

SALVAGE

CORE
RETURNSTO CATPERFORMPRODUCT BEGINS
LIFE CYCLEDISASSEMBLE& CLEANREMAN & REBUILD OPPORTUNITIES

08

Components

Engines

CATERPILLAR 2017 SUSTAINABILITY REPORT

TurbinesRailA More Efficient Assembly Process
Through a collaborative effort involving team members from manufacturing, salvage, marketing and engineering,
Caterpillar has developed a new engine prechamber assembly for the Cat® 3600 engine. The assembly uses
state-of-the-art machining and laser weld technology. The process reuses over 25 tons of metal annually, reducing
new raw material used and providing customers with savings in owning and operating costs.

09

CATERPILLAR 2017 SUSTAINABILITY REPORTEFFICIENCYWORKING SMARTER
ON THE JOBReducing waste and conserving natural
resources on job sites are increasingly
important goals of many of Caterpillar’scustomers as they seek to realize the fullvalue of their assets on the job site. Our Job
Site Solutions team works in partnership withCat® dealers to help customers find innovative
ways to improve their operations and be morecompetitive in the marketplace – solutions

that often deliver additional sustainability
benefits. For instance, optimizing fleet
efficiency not only reduces costs, but
can also improve the maintenance andcomponent replacement cycles of individualmachines. Better maintenance execution can
extend the life of a machine, which in turn
reduces raw material consumption.

CAT® COMPACTCAT PAYLOADCAT DETECT

Meets compaction targets faster,

Provides on-the-go load weighing toGives visibility into site conditions

saving fuel and reducing rework andhelp operators hit precise load targets.

and assets, alleviating safety hazards

material costs.

for operators.

CAT COMMAND

CAT GRADE

CAT LINK

Enables remote control, semi-autonomous or

Combines digital design data, in-cab

Uses a web interface to provide visibility

fully autonomous mining equipment systems.

guidance and automatic controls to

into an entire fleet’s performance.

enhance grading accuracy.

10

CATERPILLAR 2017 SUSTAINABILITY REPORTHelping Customers
Reduce Their Impact
Enhanced Safety

Lower Emissions

Innovating technologies and training

Combining productivity and efficiency

that protect operators and otherto yield a lower GHG footprint.

workers onsite.

Fuel Efficiency
Developing products that use lessfuel or are powered by alternative
energy sources.

Increased Productivity

Resource Conservation

Helping customers work smarter, reducing

Creating a circular flow of materials,

the emissions they would otherwise

maximizing our products’ life cycle

generate with less efficient solutions.

value and conserving energy and water.

11

CATERPILLAR 2017 SUSTAINABILITY REPORTSAFETY

ENABLING
SAFER WORK
We are dedicated to the safety of everyone
at Caterpillar, including that of the extended
team of contractors, dealers, suppliers andcustomers. Our commitment to safety begins
with the engineering of our products andmanufacturing processes, and extends tooperator training, job site solutions andpromoting a culture of safety that guides
the way we work.
In Caterpillar facilities, our Environment,
Health & Safety (EHS) Assurance Manual
establishes fundamental EHS requirementsthat apply globally, and Caterpillar’s safety
and health risk assessment processbrings a global focus to the identification,measurement and reduction of safety andergonomic risk. In addition to these global
expectations, our facilities implement

innovative, local initiatives to positively
impact our safety results. Caterpillar’s EHS
professionals play a key role in providing
expertise and support to Caterpillar
operations around the world.
Caterpillar Safety Services has helped
promote a culture of safety in our customer
organizations through the Caterpillar ZeroIncident Performance (ZIP™) Process. Our
global EHS team leads the deployment of
the process in our own facilities. The ZIP
Process guides organizations in achieving theengagement and accountability required forworld-class safety performance. The ZIP
Process combines leadership buy-in,
accountability, continuous improvement
and evaluation to transform culture.

ENGAGE

Helping Customers Get to Zero
The ZIP Process provides a formula for continuous

E
ASS SS

improvement by enabling organizations to achieve
the engagement and accountability needed for

CHE

BU

CK

safety improvements.

IL D

ZIP

™

PROCESSEN
T

D

2. Assess the Culture
3. Build the Plan

P

L
P
IM

E
M

1. Engage Leadership

LO
E
EV

4. Develop the Processes
5. Implement the Processes
6. Check the Processes

12

CATERPILLAR 2017 SUSTAINABILITY REPORTA Forward-Focused Approach to Safety
Our facility in Athens, Georgia, developed a predictive safety model called Focus Forward that uses a scorecard
to provide visibility into safety performance. Scorecards track incidents by value stream, shift, day of the week, timeof day and other factors. In the event of an incident, managers may use “plays” on the back of a Focus Forward card
to walk through proven courses of action and steer their teams back to safety.

13

CATERPILLAR 2017 SUSTAINABILITY REPORTMANUFACTURING

MANUFACTURING
PRODUCTSRESPONSIBLY
At our facilities, we work to minimize ourenvironmental impact by focusing on energy
conservation, GHG emission reduction, water
conservation and waste reduction. We haveset energy-efficiency targets in our operations
since 1998 and have set GHG emissionreduction targets since 2003. We currently
have operational targets for an increased
reliance on alternative and renewable energy
and a reduction in energy intensity and GHG
emissions intensity.

With respect to water, we recognize
the far-reaching economic, social andenvironmental implications that water
scarcity may have in the future, and havetaken steps to reduce our consumption.

As a manufacturer of heavy equipment,
some of Caterpillar’s operations are energyintensive. But even in our most energy-dense
environments, Caterpillar employees havefound ways to implement innovative energy
solutions that reduce our energy costs aswell as our environmental impacts.

By taking a critical look at every phase of ouroperations, teams have been able to uncoverunexpected methods to reduce our footprint
while maintaining or improving performanceand customer satisfaction.

Finally, we are minimizing waste in our
processes not only to reduce costs, but also
to reduce our use of materials, energy, waterand land. We ultimately aim to reduce all
waste generated by our production processes.

Improving Our Manufacturing Footprint
Caterpillar continued to make progress in reducing environmental impacts from our own operations.

Absolute
GHG Emissions

Absolute
Energy Consumption

Waste Generation
Intensity

29%È

17%È

4%È

2006-2017

2006-2017

2006-2017

Alternative/Renewable
Energy Use

Absolute
Water Consumption

Waste Recycled

31.2%

32%È

83.5%

2017

2006-2017

2017

14

CATERPILLAR 2017 SUSTAINABILITY REPORTMaking Better Useof Process Water
Our Seguin Engine Center in Texas
manufactures, tests and paints diesel
engines for Caterpillar customers, a
process that requires large volumesof water. A micro-filtration systemallows us to reuse water, reducing
wastewater from the engine testingprocess by 90 percent.

A Space-Age Solution
for Acid Etching
Our Advanced Materials Technology teamborrowed a technique from the aerospaceindustry to perform acid etch checks without
methanol, improving the safety of theprocess while reducing hazardous waste
and hazardous air pollutants. A new facility
in Cienega de Flores, Mexico, was able toreplicate the technique and was designed
to use this process from the start.

Yellow Paint With
Less Water
Painting processes typically require a significant
amount of highly treated process water. In our
Xuzhou, China, facility, we were obtaining waterfrom the city and treating it for use in the paintline. Now, we are collecting condensate waterfor reuse, reducing the fresh water needed forthe paint line. Implemented in November 2016,
this process is saving about 40,000 gallons ofwater per year.

Bright Ideas forEnergy Savings
The Material Handling & Underground
Division at our Thiruvallur, India, facility
leveraged its location’s average of
2,700 hours of sun per year by installinga 285 kW Cat® microgrid – helping
reduce GHG emissions 32 percent
in two years.

15

CATERPILLAR 2017 SUSTAINABILITY REPORTWORKPLACECULTIVATINGWORK THAT MATTERS
Our employees are the backbone ofCaterpillar’s success. They provide theinnovative and diverse thinking we need toserve our customers. We are committed
to fostering a diverse, inclusive and safe
environment where all employees can not
only be successful, but also are actively
encouraged to share their ideas. Byleveraging each individual’s skills, abilities,
experiences and cultural background,Caterpillar people can achieve superiorbusiness and personal results.
As a company with hundreds of global
locations that serve diverse industries suchas transportation, construction, oil andgas, mining, marine and forestry, we arein a unique position to offer training anddevelopment opportunities for all employees.

This includes learning both inside andoutside of Caterpillar, targeted leadershipdevelopment, and building functional andmarket capabilities. We support a continuous
learning environment and recognize theimportance of multi-faceted experiences
through a variety of formal and informal
solutions for employees to grow skills,
knowledge and capabilities.
Our formal leadership development programs
provide high-potential leaders an opportunity
for global exposure in diverse markets andgo beyond classroom learning throughparticipation in projects that address criticalbusiness challenges. We foster informal
learning for all employees through technologyenabled systems that offer ease of accessand enterprise collaboration.

Diversity & Inclusion Recognition
MOGUL

Top 100 Innovators

CAREERS & DISABLED MAGAZINE

#34

#2

in Diversity and Inclusion

Top 50 Employers

MINORITY ENGINEER MAGAZINEWOMAN ENGINEER MAGAZINETop 50 Employers

Top 50 Employers

#37

#38

MILITARY FRIENDLY

Employers

Silver Award

16

CATERPILLAR 2017 SUSTAINABILITY REPORTEmpowering
Women to Lead
Inclusion drives business results, andCaterpillar knows that when it focuses on
having the best talent – including a moregender-balanced workforce – everyone
benefits. The more diverse our global team,
the better positioned we are to meet theneeds of our customers. Our Women in
Leadership initiative is an intentional,
focused step on a continuous journey
toward a globally diverse team, helping us
meet our aspirational goals of 29 percent
female employees and 25 percent female
leaders by 2022.

17

CATERPILLAR 2017 SUSTAINABILITY REPORTPHILANTHROPY & SOCIAL INNOVATIONSHARING GENEROUSLYAROUND THE WORLD
Our success contributes to the social
stability of regions around the world inmany ways. Caterpillar’s products help build
infrastructure for transportation, energy,
telecommunications, waste and water.
Our company and employees focus oncontributing time and resources to promote
the health and welfare of communities inwhich we work and live. We are committed
to conducting our business in a mannerthat respects human rights individually,and employees are encouraged to actively
engage in activities that contribute to thebetterment of society through volunteering
time and talents or investing monetary
resources in worthwhile community
projects and initiatives.

Caterpillar also supports the Caterpillar
Foundation, which has been dedicated totransforming lives in communities around theworld since 1952. The Foundation champions
programs that support education, environmentand basic human needs, investing strategicallyto alleviate poverty and making sustainable,scalable progress possible for all. The
Caterpillar Foundation is on a mission to
help 50 million people rise out of poverty
by 2020. We believe no one individual
or organization can do this work alone –collaboration is key to creating sustainablechange. Through our collaborative impact
platform known as Together.Stronger.™, wework through our partners to bring together
businesses, non-profits, governments andcitizens to alleviate poverty for millions ofpeople worldwide.

How We Make a Difference – The Caterpillar Foundation
INVESTMENTSPEOPLE IMPACTED

2017 Community Investments

Direct (Cumulative)
Number of people in millions$33M
2017 Caterpillar Foundation

46.5

PEOPLECATERPILLAR 2017 SUSTAINABILITY REPORT

2020

2017

2016

2015

Total Donations2

PEOPLE

10.5
2014$11.4M
2017 United Way

50M

20.9

46.5M

18

Place

30.6

2013

$6M

GOAL

38.6

Community Investments

Caterpillar Foundation
Matching Gifts Program1

50.0

on the path to prosperityby 2020.

The Caterpillar Foundation impacts
people through our non-profit partners’
work on the ground to directly address
the root causes of poverty. Since 2013,
we have helped put more than 46.5 million
people on the path to prosperity.

Cat® Dealers Offer Helping Hands
for Hurricane Relief
The 2017 hurricane season, as well as historic flooding in Peru, Sierra Leone and Bangladesh, and the earthquake
in Mexico City, caused devastating and costly damage. As affected areas began the recovery process, Caterpillar
and Cat® dealers were there each step of the way with equipment, hands-on support and donations that helped
those affected get back on track. Teams across continents helped meet emergency customer requests, provided
rental machines and worked with local authorities to offer relief. In addition, the Caterpillar Foundation donated$300,000 to the American Red Cross for immediate relief efforts after Hurricane Harvey.

19

CATERPILLAR 2017 SUSTAINABILITY REPORTGOALS & PROGRESSGOALS & PROGRESS

3

Caterpillar has set aspirational, long-term goals for its operations and product stewardship. We believethese standards affirm our determination to lead our industry to a more sustainable future.
We focus on efficiency improvements, and these efforts contributed to year-over-year performancegains in most areas in 2017. Improved sales and revenue, in addition to efficiency gains made in thelast several years, are reflected in the improved performance toward our 2020 intensity targets.

2020 Operational Goals
Zero

SAFETY GOAL

2017 FATALITIESReduce our recordable workplace injury rate to 0.6 and lost-time injury case rate to 0.15 by 2020.

Recordable Injury Frequency (RIF)

Lost-Time Case Frequency Rate

Recordable Injury Frequency (RIF)4

Lost-Time Case Frequency Rate (LTCFR)4

92%

94%

Work-related injuries resulting in lost time per 200,000 hours worked

Energy Intensity

Sum of purchased and self-generated electricity in million MWh

2.50 2.37 2.45

523

CATERPILLAR 2017 SUSTAINABILITY REPORT

2020

2017

2016

2015

2014

346

2013

2020

2017

2016

2015

2014

346

2006

20

2.72 2.72
496 5252020

Total Electricity Consumption

Absolute gigajoules energy use/million dollars of revenue

Operational energy
intensity decreased
24 percent from2006 to 2017.

2017

Total Electricity Consumption

Energy Intensity

598

2016

2020

Reduce energy intensity by 50 percent from 2006 to 2020.

692

0.15

ENERGY
17% ABSOLUTE
REDUCTION 2006-2017

ENERGY GOAL524%

0.23 0.20 0.19 0.17
2003

2016

2017

0.50 0.49 0.60

2015

0.71 0.59
2014

We have improved
our Lost-Time Case
Frequency Rate by
94 percent from our2003 base year.

2015

6.22

2003

We have improved
our Recordable Injury
Frequency rate by
92 percent from our2003 base year.

2.97

2014

Recordable injuries per 2 00,000 hours worked

OPERATIONAL GOALSALTERNATIVE/RENEWABLE
ENERGY GOAL
Use alternative/renewable sources to meet 20 percent of our energy needs by 2020.

Alternative/Renewable Energy6,7,8

Alternative/Renewable Energy

Sum of alternative and renewable electrical energy use/total electrical use x 100
Alternative

Renewable

31.2%
In 2017, 31.2 percent of our electricalenergy was from renewable oralternative sources.

28.0%

27.4%

27.1%

27.9%

18.6

17.6

17.2

17.8

9.4

9.8

9.9

10.1

31.2%
16.9

2017

2016

2015

2014

2013

14.3

GHG EMISSIONS GOAL
Reduce greenhouse gas emissions intensity by 50 percent from 2006 to 2020.

72.1

GHG emissions intensity
decreased 35 percent
from 2006 to 2017. In
addition, our absolute
GHG emissions decreasedby 29 percent from 2006
to 2017.

44.7 48.6

54.2

46.6
36.0
2020

2.12
2.13

35%

2017

0.86

2016

 1 .26 million metric tons –Scope 2 market-based(indirect emissions frompurchased electricity,heat or steam)

1.26

Absolute metric tons of CO2e/million dollars of revenue

2015 0 .86 million metric tons –Scope 1 (direct emissions)

GHG Emissions Intensity9

2014

Million metric tons

2006

9Energy Consumption
2017 Total Absolute GHG Emissions

Total Absolute GHG Emissions

1.29 million metric tons – Scope 2 location-based10

21

CATERPILLAR 2017 SUSTAINABILITY REPORTGOALS & PROGRESSOPERATIONAL GOALSWATER GOAL
Reduce water consumption intensity by 50 percent from 2006 to 2020.

Water Consumption Intensity

Water Consumption Intensity5,11 2017
Absolute
WaterTotalTotal
Absolute
Water Consumption
Absolute thousand gallons ofConsumption
water/million dollars of revenue

2017 WaterWater
Sources
Sources
Percent

Billion gallons

0.20%

76.3
51.8

58.9

66.0

4.04

19.53%

2020

2017

2016

2015

2014

24%
Through 2017, we have reduced our water
consumption intensity at our facilities bya total of 24 percent from 2006. In addition,
our absolute water consumption decreased
by 32 percent from 2006 to 2017.

28.73%

 1.40 billion gallons – non-contact
cooling water 2 .64 billion gallons – enterprise water
consumption excluding non-contact
cooling water

BY-PRODUCT MATERIALS GOAL
By-Product Materials Intensity

By-Product Materials Intensity
Absolute metric tons of by-productmaterials/million dollars of revenue

13.8 14.0 14.3 14.5 13.2

2017 By-Product Materials
ThousandBy-Productmetric tons Materials

16.5%

2020

2017

2016

2015

2014

2006

83.5%

599

6.9

4%
Our by-product materials intensity decreased
4 percent from 2006 to 2017, and decreased
9 percent from the previous year. Our generation of total absolute by-product materials
increased 4.4 percent from 2006 to 2017.
Streamlining of production capacity has
negatively impacted waste generation.

CATERPILLAR 2017 SUSTAINABILITY REPORT Recycled Disposed (sent to landfil
or incinerated) Non-contact cooling water Municipal water Groundwater Surface water Other water

SUSTAINABLE
CONSTRUCTION
GOAL

Reduce by-product materials intensity by 50 percent from 2006 to 2020.

22

34.74%

58.0
38.2

2006

1.40

2.64

16.80%

Design all new facility construction
to meet Leadership in Energy andEnvironmental Design (LEED) or
comparable green building criteria.
Facilities designed to the LEED criteria are
more energy- and resource-efficient than
traditional construction. LEED facilities arealso designed to create a healthier indoor
environment for employees.
In 2017, the following Caterpillar facilities
received certification in accordance with
the U.S. Green Building Council’s LEED BD+C
(Building Design and Construction) certification process or comparable criteria:
LEED Gold: Monterrey, Mexico
Certifiable: Gauteng, South Africa

100%
Facilities that completed construction
in 2017 met LEED or comparable green
building criteria.

STEWARDSHIP GOALS

2020 Product Stewardship Goals
SAFETY GOALSYSTEMS OPTIMIZATION GOAL

Provide leadership in the safetyof people in, on and aroundour products.

Increase managed fleet hours by 100 percent from 2013 to 2020.

Fleet Hours

Service Agreements

Percent increase from 2013

Percent increase from 2013

151

124

126

100

98

91

68

2017

2016

2015

2014

2020

2017

2016

46
2015

2014

47

124%

151%

Increase in fleet hours managed
by Job Site Solutions (2013 to 2017)

Increase in number of machines coveredby service agreements with Job Site Solutions(2013 to 2017)

REMAN & REBUILD GOAL
Increase remanufactured and rebuild business sales by 20 percent from 2013 to 2020.

14%

2%

Rebuild

Reman

Reman End-of-Life“Take-Back” by Weight12

Reman End-of-Life“Take-Back” Percent12

174

93% 94% 93% 91% 92%

Percent Business Sales Growth
Since 2013

Millions of pounds of end-of-lifematerial received

166

154
125

Percent Business Sales Growth
Since 2013

Actual end-of-life returns/eligible
returns x 100

130

PRODUCT,SERVICES& SOLUTIONS
GOAL
Leverage technology and innovation to
improve sustainability of our products,
services and solutions for our customers.

2017

2016

2015

2014

2013

2017

2016

2015

2014

2013

21%
2017 reported sales and revenues derived
from products, services and solutions that
demonstrate an improved sustainability
benefit over existing offerings.13

23

CATERPILLAR 2017 SUSTAINABILITY REPORT

Endnotes
1 	This represents employee and retiree donations made in the calendar year 2016, and the Caterpillar Foundation’s match made in the calendar year 2017.
2 This includes employee and retiree contributions, and the Foundation match, for campaigns in the United States, Mexico and Panama.
3 Information regarding reporting boundaries and data assurance are provided here.
4	Caterpillar provides guidance that actual hours worked be used wherever possible. Where necessary, Management and Salaried employee hours shouldbe estimated as 9 hours per day (may use another value with appropriate documentation). In some cases, vacation hours have not been subtracted
from Management and Salaried employee estimates of hours worked.
5 Data prior to 2017 has been restated due to data updates realized from improved accuracy.
6	Total includes purchased and on-site generated alternative and renewable energy, as well as calculating the percentage of renewable energy fromgrid-purchased electricity using data obtained from the International Energy Agency.
7	Renewable Energy: Caterpillar defines renewable energy as energy resources that are naturally replenishing over a short period of time and virtuallyinexhaustible. Power generation examples include wind, solar, hydro, geothermal, tidal, wave, biomass and biogas from anaerobic digestion.
8	Alternative Energy: Caterpillar defines alternative energy as any source of usable energy that offers substantial environmental benefits compared tothe conventional sources of energy that it replaces. Power generation examples include landfill gas, coal mine and abandoned mine methane, combined
heat and power (cogen, trigen and quadgen), coal with carbon sequestration and localized power generation. Transportation fuel examples include puremethanol, ethanol blends of 85 percent or more with gasoline, pure natural gas, natural gas blends of 85 percent or more with diesel fuel, liquid fuels
domestically produced from natural gas (compressed natural gas, liquefied natural gas and gas to liquid fuels), propane, coal-derived liquid fuels,hydrogen and electricity.
9	GHG emissions intensity reduction goal is based on our combined Scope 1 (direct) and Scope 2 (indirect, market-based) GHG emissions using a
2006 baseline year. Likewise, total absolute GHG emissions are a sum of Scope 1 and Scope 2 (market-based) emissions.
10	Location-based Scope 2 GHG emissions are provided in accordance with the GHG Protocol updated Scope 2 guidance. In 2015, the GHG Protocol provided
updated Scope 2 calculation guidance. Our market-based Scope 2 emissions are calculated using the updated Scope 2 Quality Criteria. The following
instruments were used in calculating our market-based Scope 2 emissions: Renewable Energy Guarantees of Origin, energy contracts, supplier specificemission rates, Caterpillar owned combined heat and power cogeneration facilities, and, for the remainder of our facilities, grid average emission factors
from USEPA’s eGRID and the International Energy Agency’s data. For 2017 calculations, Caterpillar did not use residual mix factors.
11 Water consumption intensity does not include non-contact cooling water.
12	Data does not include Progress Rail or Solar Turbines. Product returned for remanufacture (called ‘core’) is not always returned within the same calendar
year as sold.
13	This includes remanufacturing, component overhauls at Cat® dealers, power generation using alternative energy sources, customer job site optimizationand innovative new products. The components are evaluated each year to adjust for acquisitions, divestitures, offerings that become standard andimprovements to data accuracy.

Legal Statements
Certain statements in this 2017 Sustainability Report relate to future events and expectations and are forward-looking statements within the meaning of thePrivate Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expect,” “anticipate,” “plan,” “project,” “intend,”“could,” “should” or other similar words or expressions often identify forward-looking statements. All statements other than statements of historical fact are
forward-looking 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 based on a number of factors, including,but not limited to: (i) global and regional economic conditions and economic conditions in the industries we serve; (ii) commodity price changes, material priceincreases, 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) our ability to develop, produce and market quality productsthat meet our customers’ needs; (vi) the impact of the highly competitive environment in which we operate on our sales and pricing; (vii) information technology
security threats and computer crime; (viii) additional restructuring costs or a failure to realize anticipated savings or benefits from past or future cost reduction
actions; (ix) failure to realize all of the anticipated benefits from initiatives to increase our productivity, efficiency and cash flow and to reduce costs; (x) inventory
management decisions and sourcing practices of our dealers and our OEM customers; (xi) a failure to realize, or a delay in realizing, all of the anticipated benefitsof our acquisitions, joint ventures or divestitures; (xii) union disputes or other employee relations issues; (xiii) adverse effects of unexpected events including
natural disasters; (xiv) disruptions or volatility in global financial markets limiting our sources of liquidity or the liquidity of our customers, dealers and suppliers;(xv) failure to maintain our credit ratings and potential resulting increases to our cost of borrowing and adverse effects on our cost of funds, liquidity, competitive
position and access to capital markets; (xvi) our Financial Products segment’s risks associated with the financial services industry; (xvii) changes in interest
rates or market liquidity conditions; (xviii) an increase in delinquencies, repossessions or net losses of Cat Financial’s customers; (xix) currency fluctuations;(xx) our or Cat Financial’s compliance with financial and other restrictive covenants in debt agreements; (xxi) increased pension plan funding obligations;(xxii) alleged or actual violations of trade or anti-corruption laws and regulations; (xxiii) international trade policies and their impact on demand for our products
and our competitive position; (xxiv) additional tax expense or exposure; (xxv) significant legal proceedings, claims, lawsuits or government investigations;(xxvi) new regulations or changes in financial services regulations; (xxvii) compliance with environmental laws and regulations; and (xxviii) other factors
described in more detail in Caterpillar’s Forms 10-Q, 10-K and other filings with the Securities and Exchange Commission.

24

CATERPILLAR 2017 SUSTAINABILITY REPORTLEARN MORE.
More information about Caterpillar’s
2017 sustainability initiatives, including
stories of progress in our focus areas
and a Global Reporting Initiative (GRI)
content index, can be found atreports.caterpillar.com/sr/.