ENDURING IMPACT SUSTAINABILITY REPORT ITT CORPORATION 1

Transcription

1 ENDURING IMPACT SUSTAINABILITY REPORT ITT CORPORATION 1

2 Creating Enduring Impact In 2011, ITT completed a separation plan that transformed us into a diversified global industrial company focused on key end markets including energy, transportation and general industrial. While we have undergone significant change with the launch of a new more focused ITT, our long-standing commitment to our people and our fundamental values of respect, responsibility and integrity has remained the same. This commitment is reflected in The ITT Way, our company s sustainable growth strategy for the future. Our people and values are at the center of The ITT Way, which also reflects our DNA as a highly engineered company and our guiding principles of leading with technology, differentiating with customers and optimizing our work. We believe The ITT Way illustrates our essence as a company, with everything pointing toward a common vision the enduring impact we want to create in the world. We know our success in achieving our goals will be enhanced by our ability to operate at their intersection with sustainability: To truly lead with technology, we need to develop innovative products that create less environmental impact and help our customers achieve their sustainability goals. To truly differentiate with customers, we need to engage our employees and partner with our suppliers so they are inspired and motivated to find the safest, most efficient way to deliver what our customers need. To truly optimize our work, we need to implement sustainable practices that enhance efficiency and reduce our global energy, water and waste footprint. With this Sustainability Report, we have captured some of the important ways we are doing all of the above pursuing sustainability and, in the process, advancing The ITT Way. As a more focused company, we are more nimble, responsive and transparent, and we are using these advantages to drive initial progress and gain momentum quickly. Our efforts are reinforced by our Sustainability Steering Committee, which helps shape our sustainability and corporate responsibility initiatives and collaborates to support coordinated activities across the organization. In the days ahead, we will continue to set high expectations for ourselves and seek out new opportunities for sustainable growth that benefit all stakeholders employees, customers, partners, communities and shareholders. We are looking forward to our next chapter and to differentiating ourselves through our technologies, our customer relationships and our operations while helping to create a positive enduring impact for generations to come. The ITT Way differentiates us... Differentiate with customers Our People Optimize our work Lead with technology Denise L. Ramos CEO and President 2 ITT CORPORATION

3 Environment and Operations ITT has more than 135 locations around the world. From the smallest sales office to the largest manufacturing facility, we are taking a variety of approaches to enhancing safety and environmental performance in our daily operations. We know that with fewer accidents, lower energy consumption and reduced emissions and waste generation, we become a more competitive and more sustainable business. In 2012, ITT introduced online tools that help us maintain a safe and healthy workplace and continually improve our environmental performance. When it comes to workplace safety, small mistakes an unflipped switch, a tiny spill, a momentary diversion can have serious consequences. With ITT s new online Accident Incident Management System (AIMS), we now have a tool that helps us better track and address employee incidents. Rolled out to all ITT sites in 2012, AIMS walks users through a series of questions to help them determine the root cause of accidents and near-misses. The user enters details about the incident, as well as the necessary preventive action or fix anything from mopping up a small spill to mapping out a new training strategy. The system sends an to the person responsible for correcting the issue, and the issue stays open until it is fixed, at which time AIMS marks it as complete. All the data entered into AIMS can be viewed at the enterprise level through dashboard graphics and charts, The ITT Way Lead with technology and over time, this tool and appropriate mitigation efforts will support our company s initiatives to control and minimize risk, as well as lower insurance policy premiums. We re using other online capabilities to improve our safety and environmental performance. In 2012, we right-sized the number of Environment, Safety & Health (ESH) metrics we use to measure our progress streamlining 200 metrics down to less than 100 that are most critical to regulatory compliance and our success. At the same time, we standardized and organized our 90-plus ESH policies in a new user-friendly format that helps employees quickly find the policy they need with a simple click. We re making it easier for our sites to determine what s expected of them and identify areas where they need to improve. In the past, ITT had a system for tracking the number of incidents, but our new AIMS tool adds the ability to record details about the type of incident, as well as near misses and root cause analyses. Plus it promotes follow-up on every issue. Mitch Mitgang, Director of Environment, Safety, Health & Security for ITT Making an Impact in Safety and Environmental Performance At ITT, we re in the process of Introducing a new, robust tool to enable ITT sites to conduct more thorough Environment, Safety, Health & Security (ESH&S) self-assessments, which will continue to be cross-checked in periodic reviews by professional ESH auditors. Adding new ESH training courses for employees to augment the 20-plus existing courses on topics ranging from lockout/tagout to handling hazardous materials. Conducting audits of compressors, lighting and electric equipment at ITT sites to look for opportunities to optimize efficiency. Initiating Lean Transformations at our sites to improve their overall efficiency and eliminate waste. And we re making good progress at manufacturing sites around the globe 60 percent reduction in lighting energy use by switching to LED lights at sites in Italy and California. 49 percent reduction in injury frequency as of October 15, 2012, versus percent reduction in hazardous waste through waste segregation in Nogales, Mexico. 10 agreements with high-volume parts suppliers in New York to utilize reusable packaging. 7 percent reduction in water use through redesigning a parts cleaning system in Orchard Park, N.Y. 5 percent reduction in electricity consumption via optimized air compressors in Barge, Italy. 0 pounds of waste sent to landfill and 100 percent reused and recycled in Orchard Park, N.Y. ITT CORPORATION 3

4 Governance At ITT, we are dedicated to the highest standards of corporate governance and our practices reflect this commitment. We continually seek to enhance our controls to further promote fairness, transparency and accountability. The ITT Way Optimize our work Risk management is now an increasingly shared responsibility at ITT. Our company has always performed risk assessments and risk oversight. Being prepared and protected is part of good governance. However, it s taken on a heightened sense of importance for ITT today because we re a smaller company and must have a clear understanding of our risk at lower thresholds than in the past, while managing the complexities of the compliance environment created by increasing regulations and global economic challenges. To strengthen our risk oversight capabilities, we formed the Risk Center of Excellence in Instead of relying primarily on senior leaders and our legal and accounting teams for risk assessments, we now gather input from a broader group that also includes leaders in our corporate responsibility, treasury, investor relations and strategy functions, as well as business unit management. Making an Impact in Governance At ITT, we re in the process of Providing all employees with Code of Conduct training and access to the Code of Conduct manual in multiple languages. Enhancing our Anti-Corruption training program and expanding our due diligence efforts to reach additional third-party agents. Updating business continuity plans across all global sites and planning a global training program in crisis communications protocol. And we re making good progress In the fourth quarter of 2011, we streamlined our board structure by moving from five standing committees to three: audit, compensation and personnel, and nominating and governance. By rolling strategy and finance, as well as corporate responsibility, into the other three areas and having our 10 board members serve on fewer committees, we are involving more directors in our risk oversight efforts and allowing more time for deeper discussions on issues. The group meets regularly to discuss risks, risk mitigation and risk management efforts in areas such as adherence to changing environmental regulations and the state of our information security systems. The ITT Board of Directors is provided with regular status reports. With the Risk Center of Excellence, we are better able to coordinate on a global basis how we deal with risks. By working across our businesses and functions, ITT is improving its risk management process and managing risk more proactively than ever before, and our internal audit team is incorporating these risk assessments in its audit plan to focus on those areas that are potentially most impactful to the business. Philanthrophy We are a more transparent company today. After spinning off two businesses in 2011, we have fewer reporting levels and more direct interaction between our corporate headquarters and our global businesses. We have a presence in towns and cities around the world, and the ITT people who live and work in these communities are finding meaningful ways to assist their hometowns and neighbors. Burt Fealing, Senior Vice President, General Counsel and Secretary for ITT 4 ITT CORPORATION ITT has a long history of corporate citizenship, and we are committed to remaining a trusted partner in the communities where we operate. As we begin our journey as a diversified global industrial company, we are evaluating the types of broader philanthropic initiatives that would best reflect our core values, match our talents to a pressing human need, and engage and excite ITT employees around the globe. Our employees and businesses also continue their ongoing support of food banks, scouting programs, animal rescues, facilities for physically and economically disadvantaged people, and other helping hands programs in their local communities. In 2012, the caring spirit of ITT employees took shape in many meaningful ways. We continued our sponsorship of the National Women s Hall of Fame in Seneca Falls, N.Y., where the women s rights movement and our industrial pump business both started in We raised money to send 175 children to summer camps around the U.S. as part of our 25-year legacy of support for the Muscular Dystrophy Association. (continued on page 5)

5 Employees in the Workplace With people at the center of all we do, we continually work to leverage the talents of all employees and offer them opportunities to realize their full potential. The manner in which we The ITT Way communicated The ITT Way shows our commitment to Our People employee engagement. After our successful spin-off of two large portions of our company in late 2011, we started life as a new company even though we had nearly 100 strong years of history behind us. To complement our new beginning, we introduced The ITT Way our company s sustainable growth strategy for the future using it as the cornerstone to engage our leaders and employees. It begins with a best-in-class communications approach. First, in February 2012, we invited 150 ITT delegates from around the world to a Leadership Summit where we empowered them to be the spokespersons for The ITT Way. Instead of rolling this out as a typical campaign from corporate headquarters, we let these leaders spend a full week developing a deep familiarity with the concepts behind The ITT Way and then entrusted them to share and instill it with their organizations and teams. Since then, we ve kept that conversation going, including quarterly phone calls between CEO and President Denise Ramos and all Summit delegates to talk about progress against The ITT Way differentiators. With these consistent touch points, our leaders and employees are empowered to keep the momentum going. Making an Impact in the ITT Workplace Culture At ITT, we re in the process of Opening our IT systems to enable employees to use their personal smart phones and devices as on-the-go work phones and work stations. Developing strategies to recruit top-tier engineering talent in emerging markets where we are growing our customer base. Planning the creation of job competencies and training programs that outline exactly what it takes to be successful in different ITT functions. Going beyond recruiting to help local colleges build ITT-directed engineering courses into their curriculum. Identifying in-position or in-development successors for every pivotal role at ITT. And we re making good progress Another important initiative is an employee survey that is giving ITT s 8,500 team members the opportunity to let us know the strengths of our current culture and where we need to improve. One way we help employees realize their potential is through a robust talent development process. In our first three months as a new company, we held in-depth discussions with all 100 of our top leaders and created development plans for each of them going forward. Amy Taney, Director of Corporate Human Resources for ITT (Philanthrophy Continued) We wanted to carry forward the spirit of transformation from the corporate environment to our local communities. Kristi Desai, Business Solutions Architect for ITT, explaining why the ITT Information Technology team took a day out of its organizational transformation meetings to help improve the facilities and grounds at a local rescue mission and youth center. In Orchard Park, N.Y., we painted, cleaned and revitalized a Boys and Girls Club as part of an annual initiative to lend a hand in our communities. We continue to support a social assistance center in Barge, Italy, that helps local families in need. ITT CORPORATION 5

6 Supply Chain We are developing processes and tools that allow suppliers to easily understand how we expect them to add sustainable value to our company and our customers around the world. To deliver on our sustainability promises to customers, we re setting high standards for our suppliers. The ITT Way Differentiate with customers At ITT, we are committed to premier performance and continuous improvement. We want our suppliers to share this vision because when customers work with ITT, they are in effect working with our suppliers. To maintain our reputation as a sustainable company, we need our suppliers to obey all laws and industry regulations, treat their workers fairly, provide safe and healthy work environments, protect environmental quality and adhere to purchasing ethics. This is a large task as ITT has thousands of suppliers, including a number of global strategic suppliers who provide services, materials and products that are utilized across the span of our company. To establish that all members of our extended family are supporting our sustainability goals, we put several new initiatives into motion in One important project is the update of our Supplier Expectations Protocols to more directly address sustainability topics. With this document, we are communicating the standards we expect our suppliers to meet in the areas of anti-corruption, diversity and inclusion, environmental responsibility, and ethics and compliance. This document will be shared with all suppliers, along with links to our Code of Conduct and other relevant resources that will help them understand and adhere to our standards. A second project is a new supplier assessment and tracking tool called the Supplier Sustainability Tracker. When it s complete, suppliers will be able to go online to answer questions and enter data related to their sustainability efforts all confidentially. Using this information, we can determine which ones best fit our ethics and sustainability expectations. In this way, we are making well-informed decisions about who we work with based on social and environmental factors and can provide assurance to our customers regarding our supply chain. The updated Supplier Expectations Protocols and the new supplier tracking tool are scheduled for launch by the end of Making an Impact in Supply Chain Management At ITT, we re in the process of Developing a survey for suppliers on numerous sustainability issues, including questions to determine if the products they supply ITT contain conflict minerals tantalum, tin, tungsten or gold sourced from the Democratic Republic of Congo or adjacent conflict areas. Strengthening our aftermarket services, including opening more pump repair shops and offering more replacement parts, to extend the life of our products for our customers. Translating our Code of Conduct into multiple languages so it can be understood by suppliers and third-party vendors around the globe. Consolidating our broker network through our Global Sourcing Council and our Global Trade Programs function to increase our risk mitigation efforts and secure best pricing. Providing training on our principles against slavery and human trafficking to company employees and managers who have direct responsibility for supply chain management. And we re making good progress Approximately 1,000 suppliers of materials, products and services will review our new Supplier Expectations Protocols and provide information regarding their sustainability efforts via the new ITT Supplier Sustainability Tracker in The new Supplier Expectations Protocols is a direct way to send the message to our suppliers and customers that our expectations of ITT employees extend to our contracting agents and that those expectations mirror our Code of Conduct and other policies. John Bonacci, Director of Global Supply Chain 6 ITT CORPORATION

7 What s Next 2011 marked a new beginning for ITT. We reshaped our company and set our course for future success, realizing that achieving our objectives will be enhanced by our ability to operate at their intersection with sustainability. With a solid foundation now in place, we are set to realize a number of important sustainability initiatives that are on the near horizon and will create enduring impact for years to come. For our employees, we re creating a stronger sense of community and enhancing collaboration with a new Human Resources Information System. As a global organization with multiple business units in different industries, we must create a shared sense of community among our employee population. The development of a more robust and up-to-date Human Resources Information System (HRIS) will greatly enhance our efforts in this area. With more in-depth, real-time information about our work force, we can shape career paths, track training needs, hire the best talent and enhance communications. For our customers, we created a Global Technology Council that will help shape our ongoing product stewardship efforts. At ITT, we provide many different kinds of products from pumps and brake pads to actuators and electrical connectors for customers in the energy, transportation and industrial markets. No matter what market segment we are serving, we strive for innovation, operational and environmental efficiency, and sustainable growth. To accelerate and better coordinate this work, we formed a Global Technology Council in The council consists of engineering and product development leaders from all our businesses, and their charge is to pursue strategic collaboration in the name of better products. Product stewardship is one focus area for this group, and they are sharing ideas and challenging one another to use materials that offer environmental benefits, build in durability or add robust aftermarket services that extend the life of products. They are leveraging global expertise to develop innovative products for industries, such as electric vehicles, that will help customers and consumers achieve their sustainability goals. For our communities and the planet, we are building systems that will help us keep our sites in compliance with environmental regulations. In the same spirit as our new AIMS system (see Page 3), which gives ITT sites the ability to better manage workplace safety improvements, we are launching a similar system that will enhance self-assessment responsibilities for sites regarding environmental compliance. The easy-to-use system will link directly to our online Environment, Safety & Health protocols. The new system is an automated monitor, sending out reminder s about the compliance deadlines. The system enters the information into a database so that our Environment, Safety & Health leaders can quickly and accurately see the overall state of compliance across all of ITT. The ITT Way differentiates us... Differentiate with customers Our People Lead with technology Optimize our work We are looking forward to our next chapter and to differentiating ourselves through our technologies, our customer relationships and our operations while helping to create a positive enduring impact for generations to come. Denise L. Ramos, CEO and President ITT CORPORATION 7

8 1133 Westchester Avenue White Plains, NY , ITT Corporation Cover Photo: The Erasmus Bridge in Rotterdam, The Netherlands, is one of the many buildings and bridges around the world that are stabilized by ITT s energy absorption technologies. Scan to learn more. 8 ITT CORPORATION