Cummins Health, Safety, Environmental and Energy Management Systems

Alan ResnikDirector, Global Facilities and Operations

Environmental Management, Cummins Inc.

October 27, 2016

NAEM EHS & Sustainability

Management Forum

Agenda

Cummins Inc.

“Enterprise” HSEMS

– Common Global Standards

– Lead Auditor Certification Program

– Implementation Tools

– Data Analysis

– HSEMS/EnMS

HSEMS and Sustainability

2Public

3Public

“…we believe that our survival in the very long run is as

dependent upon responsible citizenship in our

communities and in the society, as it is in responsible

technological, financial and production performance.”- - J. Irwin Miller

Former Chairman and CEO

Cummins Legacy and Core Values

4

Cummins’ Enterprise HSEMS

371 Integrated HSEMS Certified Sites

• One, common set of global

standards

• Pre-assessment process

• Growth of safety and energy

systems enabled

• 3rd party audits by sample

approach

– √ No. Sites * .6

– Cost avoidance $6.1M

Public 5

Common Global StandardsEvaluation Process and Example

6

Identify the Issue

BenchmarkEvaluate

Environmental Considerations

Analysis Implementation

• Treated Wastewater

Discharges to Land

Surface

• Varying standards

and levels of rigor

by country

EXAMPLE• Explore issue with

other global

manufacturing

environmental

leaders

• Environmental

quality standards for

discharges

• CMI discharge

quality baseline

• Soil background

conditions

• “Uptake” capacity

• Sensitive receptors

• Treatment system

upgrade

considerations

• Cost/Benefit

• Consideration of

global standard

(Decision Point

Governance)

• Application of

standard locally

• Possible actions

include discharge

“ceiling” limits,

process reformulation,

treat for process

reuse, etc.

• Monitoring and

measurementPublic

Lead Auditor Certification Program

Audit reciprocity approach to fill registrar audit

sample gaps

Training, audit participation, graded lead audit =

Lead Auditor Certification

– Annual audit to maintain status

Benefits: consulting, best practice sharing, employee

development

7Public

Implementation Tool Kits

Model site procedures

Audit tool/IT application

HIRA (piloting new aspect/impact assessment tool for

revised 14001 Standard)

50001 Energy Review tool

Site 14001 transition toolkit

Corp level/sustainability group implementation toolkit

8Public

Enterprise HSEMS Data Analysis

Lead Auditor Development by Region

Non-conformances:

Internal Audit

Non-conformances:

External Audit

Public

9

ISO 50001 Business Case

10

Enterprise approach allows

EnMS implementation payback:

- 18.4 months for first 3 Pilot

sites in 2013

- 8.4 months for the six 2015

sites

Total costs for our nine EnMS certified SitesPublic

Cummins’ Experience

11

HSEMS/EnMS AttributeMaintains 3rd party Certification Administrative Burden

Saves $Millions Single, global registrar

Corporate documentation/tools facilitate implementation Translation

Common Global Approach Identifying global normalization factors

Common Standards Requirements Safety heavy lifting

Shared People and Common Forums Engagement of other functions is imperative

Common Audit Approach Can reduce auditor discretion

Enables Auditor Capability Magnitude = resources X time

Yields Meaningful Audit Score

Cummins' Energy Review Requires Energy Balance & Deep Dive Identification of relevant normalization factors

Engagement of People/Practitioners for Low Cost - No Cost Projects Develop and sustain Env Champion Program

Employee Engagement Cultural Shift Raise awareness on energy efficiency

Leadership Engagement Integration of HSE Management Into Business practicesEngagement to be driven from organization's

Top Management

Energy Performance Improvement

Audit Tool Application

Benefits/Challenges

Health, Safety and Energy Integration

Enterprise Approach

Public

Setting the Bar Higher

12

Comprehensive environmental sustainability plan

Prioritizes our actions to make the most impact

Continuously improve environmental performance and stewardship, accelerating

the biggest environmental opportunities beyond regulatory compliance

Looking across our entire product lifecycle

Gather data to understand Cummins relative impacts

Establish visions, benchmark others, consult experts

Set public, quantitative goals to focus the organization and be accountable

12

Restricted ConfidentialPublic 13

Value Chain Life Cycle

Analysis

Communications

& Marketing

Support

EMS Future Required Scope

14

Employees

Communities

Regulators

Customers

Products in Use

Environmental Performance Improvement

Environmental Data Monitoring & Reliability

Suppliers

Interested

Parties

Compliance

Procurement

Employees

Communities

Suppliers

ProcurementInterested

Parties

Products

in-Use

Facilities &

Operations

Design for

EnvironmentLogistics Supplier

Engagement

Employee and

Community

Engagement

Business Strategy

Interested Parties

Suppliers

Compliance

Technology

Life Cycle Analysis

Design

Interested

Parties

Suppliers

Public