Journey to Energy Efficiency and Sustainability

Venkatesh ValluriChairman and PresidentIngersoll Rand India

Green Building CongressOctober 30, 2012

Ingersoll Rand Overview

• A $14 billion diversified industrial company

• Publicly-held; NYSE:IR

• More than 52,000 employees worldwide in 54 countries

• Operations in every major geographic region

• Strategic brands are #1 or #2 in their markets

• Products and services for commercial, industrial and residential markets

Address the Mega trends by leveraging our core competencies & technologies

By making environments safe, comfortable and

efficient, we enable our customers to achieve

real progress and create a positive impact in their

world

By making environments safe, comfortable and

efficient, we enable our customers to achieve

real progress and create a positive impact in their

world

Unifying Strategy — Guides Our Actions and Leads Our Growth

Growing Urbanization

Feed Growing

Population Comfortable, Safe, Efficient Environments

Drive for Competitiveness

Resource Conservation

Unlocking the benefits of energy efficiency:

An executive dilemma

Survey Conclusions

Sustainability at Ingersoll Rand

Sustainability at Ingersoll Rand

Risk Mitigation

Aspiration:ADAPT

Aspiration: BEST IN CLASS

Aspiration:DIFFERENTIATE

12

3

Do old things in new ways

Do new things in new ways and grow

core business

New business model creation and

differentiation

Breakthrough Growth

Compliance + Advance Transformation

Center for Energy Efficiency & Sustainability Dedicated Team of Experts

Develop and shape new green standards & seek

incentives for leverage and

speed

Develop and shape new green standards & seek

incentives for leverage and

speed

AdvocacyAdvocacy

Showcase projects,

expanded KPIs, leverage supply

chain for industry-leading position

Showcase projects,

expanded KPIs, leverage supply

chain for industry-leading position

OperationsOperations

Engaging Employees

Building Reputation

Engaging Employees

Building Reputation

CommunicationsCommunications

Embed innovation process towards wide greening of existing products

Embed innovation process towards wide greening of existing products

InnovationInnovation

Developing skill sets that build

sustainability leaders

Developing skill sets that build

sustainability leaders

EducationEducation

Dedicated to integrating best practices for the lo ng-term use of energy and other resources –for ourselves, our customers and the communities in which we operate and serve

Dedicated to integrating best practices for the lo ng-term use of energy and other resources –for ourselves, our customers and the communities in which we operate and serve

Established an Outside Advisory Council to Guide Us…learned from progressive leaders

1. Helping articulate the sustainability story and purpose (what, why, how)

2. Advising/shaping the company’s strategy through the lens of sustainability

3. Actively engaging the company around its innovation and R&D portfolio

4. Working on long term goals/metrics (e.g. energy, carbon footprint, green products)

5. Helping build external relationships and alliance partners

6. Advocating for the company’s programs with external stakeholders

7. Acting as a general sounding board for senior management on sustainability issues

Key: Heavily involved Modestly involved Not involved

Areas where companies have focused their Advisory B oard’s attention:

Forging the sustainability story and advising on strategy are common tasks for these boards’ focus

Forging the sustainability story and advising on strategy are common tasks for these boards’ focus

Key Environmental, Health & Safety ProgressLost Time Incident RateTotal Recordable Incident Rate

Non-Hazardous

Energy Consumption

consumptionover 3x better than goal of 5% reduction

17.6%

Waste Disposal

Hazardous

disposal amountover 7x better than goal

of 5% reduction

disposal amountover 5x better than goal of

5% reduction

36.3% 26.6%

Product Stewardship

• Company actions vary but most have green product portfolio focusing on 1-2 dimensions

• Most companies’ environmental product claims are either vague or related to external standards

• Most claims are focused on use-phase, but some are considering full life-cycle (LCA)

Companies Are at Early Stage of Defining “Green”

DefineDefineDefine BreakawayBreakawayBreakaway

Co-optCoCo--optopt AdoptAdoptAdopt

HIGH

LOW Industry Standards

Com

pany

Cap

abili

ties

Design for Sustainability

Identify New “Green”Business

Opportunities

Identify New “Green”Business

Opportunities

Define ‘World-Class’ Thresholds

Define ‘World-Class’ Thresholds

Identify Project Add-on Opportunities

Identify Project Add-on Opportunities

Define Premium Green Product and

Service Criteria

Define Premium Green Product and

Service Criteria

Identify Strengths and Gaps

Identify Strengths and Gaps

Define Competitive Benchmarks

Define Competitive Benchmarks

Ensure Continuous

Improvement

Ensure Continuous

Improvement

Ensure Product Compliance

Ensure Product Compliance

Measure Against Competition

Measure Against Competition

Move Beyond Compliance and Make Sustainability a Co mpetitive Advantage

Anticipate Potential Issues

Anticipate Potential Issues

Understand Unmet “Green” Customer Needs

Understand Unmet “Green” Customer Needs

Sustainability Examples at Ingersoll Rand India

Innovation key for Emerging economies….

Phase I:

Innovation through Value creation:

-Cost Take outs-Value Engineering-Productivity

Phase 2:

Innovation through Convergence:

-Lateral Co-creation-Multiple Technologies-Driving Value for

identified needs

Phase 3:

Open Innovation:

-Market Creation-Value Generation

Create Value thru Convergence – Sustainability at th e Core

Leverage Technologies and Reverse Globalize

Partnership with IBM for Remote Monitoring and Asset Management

•Buildings in India account for 30% of energy consumption. Of this consumption, the major usage is due to HVAC and lighting. As the Indian economy develops and commercial infrastructure gets built, it becomes essential to drive robust initiatives to improve energy efficiency and sustainability. •Partnership with IBM to drive greater energy efficiencies for organizations who are engaged in infrastructure creation or maintenance for high growth sectors (Commercial, Hospitality, Health, Pharma & others). •Solution leverages IBM’s Intelligent Building Management (IIBM) system (a combination of monitoring, asset management and advanced analytics) along with Ingersoll Rand’s Energy optimisation technologies, to help trigger preventive and predictive maintenance to create Smarter Buildings.

Developing Solutions for Local Markets

Developing Solutions for Local Markets

Thermo King B100

•Re-engineered and localized specifically for India •B100 unit fitted in with a container can be modeled on small reefer trucks to negotiate narrow lanes for ‘first and last mile’ delivery of temperature controlled and refrigerated products•The B100 with its battery operated unit is an ideal innovation for India where small trucks typically run on low horse power engines and do not have the capacity to run a compressor directly. •Unique technology and a great fuel saver – first solution of its kind in the country•Delivering Value at the best Price

Transparency Enables Thought Leadership

Reporting & Ratings

Key Points of the Journey

1. Customer value2. Enterprise-wide impact3. Lifecycle thinking4. Embedding sustainability:

capture heart & mind