Ingersoll Rand: How a Legacy Company Stretches the Limits of Sustainability

Image: Former U.S. Secretary of Energy Ernest J. Moniz (right) presents Ingersoll Rand CEO Michael W. Lamach with the World Environment Center's Gold Medal Award. 

Ingersoll Rand is the kind of company you’ve probably heard of but aren’t quite sure what they do. The global industrial manufacturing and services company got its start in the 1870s producing industrial drill bits and air compressors. In 1925, it released the first commercially successful diesel electric locomotive engine. And, with its ongoing leadership in heating, cooling and building automation, Ingersoll Rand remains a leader in the industrial sector to this day. 

Most interesting for TriplePundit readers is how an industrial company with its feet firmly planted in the 19th century informs other, much younger companies and sectors on sustainability. 

Old-school sustainability reimagined for today

We recently spoke with Scott Tew, executive director of the Center for Energy Efficiency & Sustainability at Ingersoll Rand. The occasion of our conversation came on the heels of the company receiving multiple recognitions for its sustainability work. In 2018, Ingersoll Rand won the prestigious U.S. Chamber Foundation's Best Environmental Stewardship Award.

But wait, there’s more! Earlier this year, three other organizations called out Ingersoll Rand for its work across all three tiers of triple-bottom-line accounting. Fortune Magazine’s annual report card on corporate reputation named Ingersoll Rand as one of the World’s Most Admired Companies. The criteria for being thusly admired includes investment value, quality of management and products, social responsibility, and the ability to attract value across its leadership and workforce. 

Soon after, Corporate Knights included the company in its list of the 2019 Global 100 Most Sustainable Corporations in the World index. Next came Forbes Magazine, recognizing Ingersoll Rand among America’s Best Employers for Diversity. Finally, in February, the World Environment Center awarded Ingersoll Rand its 2019 Gold Medal Award for International Corporate Achievement in Sustainable Development. 

We asked Tew how all of this rapid-fire recognition reflects Ingersoll Rand’s long-term strategy. He spoke of the need to exceed expectations. “Stretching beyond and delivering more than expected of an industrial company is crucial when you’re working to create measurable change in your sustainability efforts and environmental impact,” he told us. 

But Tew pushes back at the characterization of sustainability and diversity as merely business strategies. “It is our business,” he said firmly. “It touches everything we do—from how we engage our people, to how we innovate around our products, our supply chain, our operations and everything in between. It’s important that we ‘walk the talk’ both environmentally and socially, and we use the same solutions internally that we recommend to our customers. Sustainability is deeply integrated into who we are as a company, and these external recognitions are validation that we are leading.” 

More than just looking good

Sustainability is too often tied with specific actions taken largely out of context. Recycling is commendable behavior, for instance, but is it the best choice among other options, such as reuse or better efficiency? Without authentic motivation, companies and people fall short when their focus is solely on “commendable behavior.” It's too much “how” and not enough “why.”

The “why” for Ingersoll Rand comes from a sense of responsibility to its leadership role and position in the value chain. “As a global, leading manufacturer of products that heat, cool, and automate buildings and transportation, Ingersoll Rand is uniquely positioned to help address some of the world’s most pressing environmental challenges, including climate change," Tew told us. “This is especially true for our customers, who are faced with managing building emissions, which are some of the largest indirect contributors to [global greenhouse gas emissions], and who are also service-oriented and conscious of operational costs.”

The challenges faced by its customers inform the company’s essential business logic of creating shareholder value. That logic coincidentally dovetails with Ingersoll Rand’s commitment to social responsibility—an intersection of short-term practicality and long-term values, evolving organically as markets adapt to changing values across the supply chain. 

As is apparent with less motivated companies, it’s one thing to jump on the marketing bandwagon, another to formalize and announce a commitment, and yet another to have any idea of how to do it. Sometimes you have to make it up as you go along. 

Sustainability goals: The chicken or the egg

Not exactly saying they “made it up,” Tew refers to starting out in 2014 on an as-yet-unseen course toward its sustainability goals—including a pledge to reduce its greenhouse gas footprint by 35 percent by 2020, compared to a 2013 baseline. “We did not have a clear path forward to the product solutions necessary to meet our 2020 targets,” he said, “so the most challenging aspect was to identify and commercialize ... more efficient designs.”

Illuminating that path began by “engaging with key stakeholders,” another amorphous concept that works—when clearly defined. For Ingersoll Rand, the process is framed in its Materiality Assessment, which defines the terms for measuring progress on its 2020 emissions reduction targets.

In pursuit of its emissions goal, the company targeted a 10 percent increase in energy efficiency by 2020, from a 2013 baseline—which it achieved last year. "We put together an aggressive plan to meet our targets, and our employees found creative ways to accelerate the work to help us achieve that goal two years early," Tew said. "They used the target as a motivating force for investment in lighting retrofits, HVAC optimization and other energy-saving investments.”

The company has also pledged to help its customers reduce their own emissions by halving the GHG footprint associated with its refrigerant products. “The research and development commitment has significantly facilitated the path forward," Tew explained, "but it has been challenging because the refrigerant solutions we identify will impact the entire industry from a service perspective." 

Rising expectations from stakeholders and increasing urgency around climate change

With growing awareness about environmental issues across most sectors of business and society, the pressure is on for somebody to do something about it. “The expectations of us and the industrial sector as a whole are rising,” Tew told us. “To jump ahead of those expectations, we are stretching even further than before by setting bigger climate and sustainability goals—pushing ourselves while at the same time hoping to inspire and encourage our peers to do the same.” 

Clearly, dealing with climate change presents no easy path or instantaneous course correction, but the time to get started is now, Tew insisted. “The clock is ticking on climate change,” he said. “As a world, we are facing an unprecedented urgency to bend the curve of climate change acceleration. So, we are working closer with external partners to deliver bigger solutions that coincide with the growth of urbanization and the middle class, for example.”

Climate action can't happen in a vacuum

It may sound counterintuitive, but there is a danger in simply focusing on climate change without considering its interconnected causes. Silos have their place, but rarely in environmental or social policy. This is why understanding and adopting a triple bottom line is crucial. And Tew underscores the comprehensive nature of transforming Ingersoll Rand into a sustainable, triple-bottom-line business.    

“We also don’t just see ‘sustainability’ through the lens of environmental and climate stewardship,” he explained. “Sustainability is for the long-term success of our business, the sustainability [of] our communities, people and society. Increasingly, we are looking at sustainability through the lens of social parity. For example, we are working toward gender parity across the company and working to ensure our sites and facilities mirror the demographic makeup of the areas in which they operate.” 

Measuring what matters: Barometers of success 

It’s nice to receive awards and recognition for important social and environmental causes. The danger is when the honors and praise are the goal. Better to think of these recognitions as a barometer: a way to gauge what works and what doesn’t. With that, others can model what does work. 

Ingersoll Rand’s barometer is rising, as reflected in its recent string of public endorsements and awards. But it doesn’t mean the work is done—it means the company is well on the path that stretches far into the future. Surely the path requires iteration and adjustment. As long as Ingersoll Rand maintains the focus reflected by the leadership of Scott Tew and his colleagues, it is a path for others to follow.

Image courtesy of Ingersoll Rand