PowerPoint Presentation

[Audio] Welcome to the Parker climate action general orientation video..

[Audio] In 2021, Parker Hannifin announced it's 2030 and 2040 climate reduction ambitions. By 2030 , Parker intends to reduce its scope one and scope two emissions from operations by fifty percent and intends to reduce its scope three carbon emissions from logistics and supply chain by 15%. Parker's long-term 2040 climate ambition is to be carbon neutral for scope one and two emissions and reduce our scope three footprint by twenty five percent. All of Parker's science-based climate goals are based on emission totals from fiscal year 2019...

[Audio] You can see Parker's Climate Goals represented here in table format along with an additional goal to produce more products that enable our customers to reduce their carbon emissions from their products or services..

[Audio] Parker's climate strategy will require commitments from many functions at parker including: Operations for facility emissions reductions by improving energy efficiency and installing on-site renewables. Supply chain emission reductions through supplier engagement, logistics emissions reductions from transport of our products. Engineering for new market opportunities to create more sustainable products. Parker clean tech products will help our customers meet their carbon reduction goals. Business strategy for engaging in new low carbon markets through future mergers and acquisitions. Employee engagement for site level community projects that lead to improved environmental outcomes..

[Audio] Parker is switching from using an intensity carbon target to an absolute reduction target. An Intensity target is a number that is normalized by dividing Parker's carbon emissions by business metrics like net sales or parts shipped. This is how Parker has always measured our carbon emissions because it compensates for growth of the business. Now Parker is using absolute targets to measure our carbon reduction progress. An absolute target is direct measurement of our carbon emissions without normalization. This means Parker will report the actual emissions by three hundred and fifty thousand metric tons by the year 2030 regardless of our manufacturing output. To achieve this reduction target, Parker will reduce roughly two hundred and ten thousand metric tons or 30% of the target by making efficiency improvements to our operations An additional 20% or approximately one hundred forty thousand metric tons will come from renewable solutions and renewable energy credits..

[Audio] The term carbon neutral means that any carbon dioxide released into the atmosphere from Parker's operations is balanced by an equivalent amount being removed. This can be achieved by an actual reduction in carbon emissions or by purchasing Renewable Energy Certificates or RECs from renewable energy generation projects. We will have more discussion about Renewable Energy Certificates during this orientation. Parker's operations create emissions of greenhouse gases ( GHGs) that accumulate in the atmosphere. These emissions need to be offset or balanced using renewable energy or renewable energy credits..

[Audio] Parker will shrink its carbon footprint through efficiency efforts at each manufacturing location. Then use renewable energy and renewable energy certificates to off set the remainder of our footprint. Parker will be considered carbon neutral once we obtain this balance of our carbon footprint..

[Audio] Carbon dioxide is Earth's most important greenhouse gas or GHG. Unlike oxygen or nitrogen (which make up most of our atmosphere), greenhouse gases absorb heat radiating from the Earth's surface and re-release it in all directions—including back toward Earth's surface. Without carbon dioxide, Earth's natural greenhouse effect would be too weak to keep the average global surface temperature above freezing. By adding more carbon dioxide to the atmosphere, we are supercharging the natural greenhouse effect, causing global temperature to rise. Carbon dioxide accounts for about seventy nine percent of all greenhouse gas emissions from human activities and CO2 remains in the climate system for thousands of years. Thus, CO2 has become to poster child for global climate change and as such, we represent all other greenhouse gases by converting them to carbon dioxide equivalents or C O 2 E..

[Audio] Scope one emissions are emissions from fuel burned onsite in assets controlled by Parker. All fuels used on- site that produce greenhouse gas emissions must be included in scope one totals. Scope two emissions are emissions generated offsite from purchased energy including electricity, steam, heating, and cooling. Scope three emissions are all other emissions – not included in scopes one and two – that occur at Parker, including both upstream and downstream emissions. Upstream emission include everything required to produce our products. The most significant of these upstream activities are related to purchased supplies or the supply chain. Downstream emissions are emitted after a product or service leaves the company's control/ ownership. The most significant of these downstream activities are emissions from our products and logistics for transporting our products. Scope three emissions are 80% of Parker's total emissions.

[Audio] The next section will cover mechanisms Parker will use to reduce its carbon footprint..

[Audio] Energy efficiency is simply the use of less energy to perform the same task or produce the same result. Efficiency is the number one way for Parker to lower its carbon emissions and operational costs. Some of the mechanisms Parker will use to achieve energy efficient operations include, lean kaizen, Energy or Climate Efficiency Assessments, energy treasure hunts, Life Cycle Approach to Capital Purchases, Digital Transformation and Design for the Environment or Simplification. Some of the key equipment includes Chilled Water, Lighting, Compressed Air, Motors, Steam, HVAC, Fans and Pumps..

[Audio] Parker has developed a toolbox to help our divisions obtain their carbon reduction goals. This toolbox is available on the companies SharePoint site under the EHS page. The toolbox contains useful guidance on many different energy and carbon reduction topics. The toolbox also contains training resources, Climate & Energy Reduction Tools, best practices and guidance documents to help identify reduction opportunities..

[Audio] Parker can also reduce emissions by placing solar systems on our sites. These systems produce clean power to run Parker's manufacturing processes. The panels are made of silicon, a semi-conductive element that generates electricity when sunlight touches the panels. These solar systems can be purchased directly with Parker capital or contracted through a third party that will own and maintain the systems as sell Parker the power at an agreed upon price. This contracted arrangement is called a power purchase agreement. A Power Purchase Agreement, or PPA is an agreement between a solar project developer and Parker where the buyer pays the developer an agreed upon price for each unit of energy the system produces. Parker has published guidance on solar equipment and power purchase agreements. This material is available in the Parker Climate Action SharePoint site..

[Audio] A virtual power purchase agreement is another mechanism that Parker can use to leverage renewable energy to reduce our carbon footprint. A virtual power purchase agreements or VPPA is a purely financial contract that provides Renewable Energy Credits or Certificates ( RECs) from a specific renewable energy project located off Parker's property and is not owned by Parker. The contract is "virtual" because it is not tied to any specific facility consuming physical electricity, which provides enormous flexibility. Physical electricity is not delivered to Parker under a virtual power purchase agreement. Rather, the electricity from the renewable generation facility is delivered to the grid and not to Parker. However, Parker receives renewable energy certificates or RECs, and can claim credit for the use of renewable energy to offset our carbon footprint. The purchase of VPPAs and renewable energy certificates will be done as a center led process by Parker's Corporate team..

[Audio] Carbon Offsets are used to address and GHG emissions such as scope one and scope two emissions. A carbon offset broadly refers to a reduction in GHG emissions or an increase in carbon storage through land restoration or the planting of trees that is used to compensate for emissions that occur elsewhere. Remember! One Carbon Offset equals one metric ton of carbon.

[Audio] A renewable energy certificate is a market-based instrument that represents the property rights to the environmental, social, and other non-power attributes of renewable electricity generation. Renewable energy certificates are issued when one megawatt-hour of electricity is generated and delivered to the energy grid from a renewable energy resource. Renewable energy certificates, or RECs play an important role in accounting, tracking, and assigning ownership to renewable electricity generation and use. Remember! One renewable energy certificate equals 1 Megawatt hour of electrical power.

[Audio] Energy Attribute Certificates or EAC Standards are available for many different markets and countries around the world. Renewable Energy Certificate or REC issues under the Green-e standard is the most common EAC in North America. In Continental Europe, Guarantees of Origin are like Renewable Energy Certificates in North America. All European member states use the Guarantees of Origin scheme. In Great Britain, Renewable Energy Guarantees of Origin are the main evidence for licensed electricity suppliers to prove the proportion of renewable electricity supplied to their customers. Both Guarantees of Origin and Renewable Energy Guarantees of Origin are used to verify that one MWh of renewable electricity was generated by a clean power facility and added to the grid. The International Renewable Energy Certificate scheme or I-REC is used in other parts of the world along with Tradable Instrument for Global Renewables or TIGR..

[Audio] The next section will cover Parker's plan to operationalize the carbon reduction AIP..

[Audio] Parker Strategy Deployment Matrix Parker has added climate action to the top level strategic Deployment matrix for fiscal year 2023. Strategy Deployment is Parker's management process that aligns all of parker's functions and activities with Parker's strategic objectives. The annual plan is a top down and bottom up process involving a dialogue between senior managers and project teams about the resources and time both available and needed to achieve the targets..

[Audio] Parker's Carbon Action Plan for Operations Includes: An Action Planning Process Includes: Ownership and accountability at each level of the organization. Assigning clear roles and responsibilities. Setting of annual short-term targets calibrated to meet Parker's long-term reduction. The Action Plan execution includes: Participating in energy climate action training. Performing energy slash climate assessments, or treasure hunts designed to identify reduction opportunities Each division should identify energy slash carbon reduction opportunities. Having a list of shovel ready projects that can be chosen to meet the annual reduction goals. Data and Performance management will include visual tools that are available for the team improvement boards that will track your annual progress toward your reduction goal. This data should be reported to your staff and reviewed on a normal cadence and corrective actions should be issued if the division gets off target. The Process should be reviewed annually or more often if needed, the division should review the entire climate process for strengths and weaknesses and take corrective actions when appropriate. Climate BARNS should be created to communicate a successful completion of a reduction opportunity. Division success should be celebrated..

[Audio] Site Climate Leader Accountability Each division should have an annual reduction goal and enough projects to achieve this goal. The Division Carbon Reduction Target should be at least 3% annually but can be adjusted based on the group and division plan. This reduction goal should be tied to efficiency projects that meet the reduction goal and have been planed for completion in the current fiscal year. A Climate leaders' task should be linked to achieving the Divisions carbon reduction goals and should include but are not limited to managing site team improvement board and activities tracking, Identifying and submit reduction opportunities into the project tracking system. Making sure the projects assigned to the division are being completed, overseeing the utility data collection and submittal into the Parker tools and executing corrective actions and or celebrate division successes. The team members should Include EHS Leaders, Facility Managers Environmental HPT or Green Team Members..

[Audio] Parker has developed a toolbox to help parker divisions obtain their carbon reduction goals. This toolbox is available on the companies SharePoint site under the EHS page. The toolbox has useful guidance on many different energy and carbon reduction topics. The toolbox contains training resources, Climate & Energy Reduction Tools, best practices and guidance documents to help identify reduction opportunities..

[Audio] Climate Action Training and Awareness Parker currently has orientation training for all employees. The objective of the employee orientation is to make all Parker team members aware of Parker's climate action ambitions and actions that are being implemented. Parker also has a leadership training module that is geared towards Parker carbon and energy leaders as well as Parker's business leaders. This would include Group Staff, Division Staff, EHS Leaders and Energy Leaders. The most comprehensive training resource is our Climate slash Energy Bootcamp. This Bootcamp is a recorded course that can be accessed anytime but is also scheduled for two annual live sessions. One in the fall and another in the spring. The content of the bootcamp is geared towards the team members working on the division carbon reductions. This would include Facility Managers, EHS Leaders, Environmental HPT members and others directly involved with the division's carbon and energy reduction..

[Audio] Carbon reduction tracking has been added as an Environmental Metric to the Site Tracking Center. The chart tracks carbon reduction from completed efficiency projects vs the annual reduction goal..

[Audio] Parker measures climate reduction progress at the enterprise level by using a rolling 12-month total. This Scorecard is updated every quarter Data lags one quarter to give us time to collect the utility invoices..

[Audio] All Climate & Energy projects should be entered into the tracker as soon as they have been identified. Each climate project will be tracked until the project is completed..

[Audio] The next section will cover what you can do to help Parker reduce its carbon footprint..

[Audio] Join a climate HPT and help your site and division reduce their carbon footprint through collaboration with other Parker team members..

[Audio] Turn Out the Lights Make use of natural light from windows and skylights. Don't rely on artificial light when it's bright outside – save it for gloomy days and dark evenings. Don't leave lights on in unoccupied rooms. It should go without saying but remind fellow team members to do their part. Alternatively, ask your maintenance teams to install occupancy monitoring sensors and automate lighting controls in conference rooms, offices and common areas..

[Audio] Switch OFF Equipment When Not in Use Just like with lights, make sure that you switch off and un- plug all equipment when not in use..

[Audio] Report Compressor Air Leaks to Maintenance Leaks can be a significant source of wasted energy in an industrial compressed air system, sometimes wasting 20- 30% of a compressor's output. A typical plant that has not been well maintained will likely have a leak rate equal to 20% of total compressed air production capacity..

[Audio] Choose Laptops Over Desktops Laptops typically consume less energy compared to desktops, so keep this in mind when choosing your workplace equipment. Opt for laptops whenever possible..

[Audio] Advise everyone to put their computers in hibernation mode if they take a break or go to a meeting. This applies to any situation when a team member won't be using it for a long period of time. The hibernation feature in computers allows users to save existing work as it is and continue working at the exact same point upon return..

[Audio] Print Only When Necessary Avoid printing files that can be sent via email. There are many ways you can share or store important files today. Modern technology gives you a ton of options, including cloud storage, email clients and even ped drives if you insist. Aside from reducing paper wastage, this also helps cut the total amount of energy consumed by the printer..

[Audio] Control your Heating and Cooling Meet with staff to set acceptable temperature set points for your thermostats and enforce its use. Simple things like keeping doors and windows closed while heating is on also helps prevent wasting energy because open doors and windows allow heated air to escape and cold air to come in. Also, make sure that your ventilation ducts are not being blocked as this affects the device efficiency. There is no need to heat or cool down corridors and storerooms since they are not being used all day. Focus on the areas that are frequented by Parker team members and areas where they spend the most of their time..

[Audio] This is the end of the presentation. Thank you.