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Water conservation and quality in our communities.
The Nature Conservancy (TNC) 3M granted a total of $250,000 in 2019 to TNC for projects that TNC has implemented to improve river systems health in California, Alabama and the Mississippi River Basin through efforts such as development of natural infrastructure to absorb and filter rain and urban runoff, tree planting, and restoration efforts.
Packaging in our communities.
Sustainable Packaging Coalition®
The Sustainable Packaging Coalition (SPC) is a membership-based collaborative led by an independent nonprofit organization that believes in the power of industry to make packaging more sustainable. 3M’s commitment to the SPC mission includes representation on the executive committee. The executive committee provides perspective and expertise on industry trends, acts as ambassadors for the SPC, and provides strategic guidance on issues related to SPC goals and activities.
curbside recycling carts to more than 1,300 communities. 600k to The Nature Conservancy for projects TNC has implemented to improve river systems health.
3M granted a total of $250k provided.
How we work 156 157 3M 2020 Sustainability Report #improvinglives Circular materials
We will continue applying our scientific expertise to improve the lives of our employees, our customers, and everyone on the planet. Our Strategic Sustainability Framework directs our efforts to areas where we can make the biggest impact.
Within the Science for Circular pillar of this framework, we will continue to focus on initiatives that will create a more circular economy, driving solutions in our operations, in our products, and in communities around the world.
In our operations, 3M will continue to mitigate waste to landfill through reduction, reuse, and recycling of our surplus materials; actively manage and work toward reducing our water usage; and work with suppliers to reduce or reuse surplus materials from packaging of our raw materials.
For our customers, we will develop and launch products to help them reach their Sustainability goals by increasing our use of recycled raw materials; creating reusable, renewable, and/or recyclable products and packaging; and we will reduce both their water usage and waste through the use of our products. We will also be updating our packaging Sustainability roadmap to include a continued focus on plastics.
Within our communities, we will continue to focus on advocacy, support, and partnerships in our efforts to fuel a global circular economy.
Get updates and learn more about our ongoing work aligning to the 3M Strategic Sustainability Framework.
Collaboration has many forms, and one of the forms is advocacy.
Advocacy.
Collaboration has many forms, and one of the forms is advocacy. Our packaging team is committed to sharing its knowledge with the external community to create a collaborative network that will accelerate packaging circularity. This is demonstrated by engaging and participating in industry panels as well as guest lectures at universities and colleges.
Waste reduction in our communities 3M Impact 3M Impact is a skills-based service program where employees lend their business skills, experience, and energy to make a difference in global communities, while also developing leadership, problem-solving, and interpersonal communication skills.
One 3M Impact project was with ANCON — an environmental non-governmental organization in Panama. Waste management is in its early stages in Panama. ANCON recently began implementing a project called “Integrated Waste Management Project for the Taboga Island.” The essential objective of the assignment is to design a roadmap for a waste management system on Taboga Island. The island did not have a strong environmental focus but recent investments from Taboga’s government in tourism have made them more aware of the need to participate in ANCON’s project to keep the island clean for tourists. Tourists that visit the island are mainly backpackers or Panamanians with limited resources who spend the day on the island and consume large numbers of plastic bottles and aluminum cans. If this project is successfully managed, it will help Taboga become a more sustainable tourist destination, supporting one of the few economic activities of the island. It will also help prevent inhabitants from having to migrate to Panama City, as well as set a standard to be replicated in similar areas of Panama.
To learn more about 3M Impact, see the Communities section.
Looking forward.
How we work 158 159 3M 2020 Sustainability Report #improvinglives Circular materials
Our commitment.
Through the years, 3M has led industry in addressing both the challenges and opportunities presented by climate change and energy conservation.
Our proactive leadership is best defined by five areas of action: • Executive-level commitment to these important topics and our related principles, commitments, and riskmitigation planning efforts • Industry-leading efforts to measure and reduce our own greenhouse gas (GHG) emissions • Extensive public policy engagement on both climate change and energy conservation • A decades-long track record of improving energy efficiency at our sites • Serving our customers through a wide range of innovative products that help them improve energy efficiency and reduce their greenhouse gas emissions.
Executive-level commitment.
We are committed to innovate to decarbonize industry, accelerate climate solutions and improve our environmental footprint. This commitment is part of the Science for Climate pillar of our Strategic Sustainability Framework. In 2019, 3M CEO Mike Roman announced a new commitment to renewable electricity by joining RE100.
As a science-based company, 3M uses the World Resources Institute (WRI)/World Business Council for Sustainable Development (WBCSD) GHG Protocol Corporate Accounting and Reporting Standard to set GHG emission reduction targets.
For this reason, we are incorporating the findings of the Special Report on Global Warming of 1.5°C, published by the Intergovernmental Panel on Climate Change (IPCC), in setting our goals and actions.1 This report, prepared by 91 authors from 40 countries and based on over 6,000 scientific references, finds that limiting global warming to 1.5°C (2.7°F) above pre-industrial temperatures would require “deep emissions reductions” and “rapid, far-reaching and unprecedented changes in all aspects of society.” Achieving this goal also would “reduce challenging impacts on ecosystems, human health and well-being.” 1 Special Report on Global Warming of 1.5ºC (Report). Incheon, South Korea: Intergovernmental Panel on Climate Change (IPCC). 7 October 2018.
Climate and energy Science-based innovation for decarbonization.
Public policy engagement 3M is in alignment with the Task Force on Climate-related Financial Disclosures’ (TCFD) recommendations for helping businesses disclose climaterelated financial information. We understand the need for increased focus and transparency of financial risks related to climate change. Our climate risk process, as described in the proceeding section, includes disclosures recommended by TCFD.
3M endorses voluntary approaches to GHG emissions management. Any mandatory GHG emission reductions should be developed through international negotiations and follow these policy principles: • Apply broadly to countries or groups of countries and GHG emission sources • Be guided by science-based decision-making • Utilize a consistent, market-based approach • Encourage investment and protect intellectual property to facilitate technology breakthroughs • Include provisions for carbon emissions trading and/or alternative investment and compliance programs • Provide full credit for early reductions in GHG emissions • Balance multiple country-level priorities, including energy reliability and independence, national security, and economic growth and employment • Include provisions that promote the efficient allocation of emissions reductions and assure all sectors contribute to reduction targets, with the effect of allowing fair competition and avoiding market distortions within industrial sectors or across national boundaries 3M is actively engaged in public policy development to address climate change concerns. In addition, we’ve been involved with the Intergovernmental Panel on Climate Change (IPCC) since 2005.
Risk-mitigation planning.
Severe weather and long-term trends could affect 3M’s operations and supply chain. To address these and other risks, 3M maintains a formal Enterprise Risk Management Analysis to review enterprise-level risk. Additionally, 3M has a Business Continuity and Planning Process as well as a Crisis Management Program to coordinate the efforts of local crisis management teams maintained at each 3M site and international subsidiary.
Corporate and local plans consider the risk of natural disasters, infectious disease, employee safety, protection of assets, customer service, and other business continuity requirements. See 3M’s Annual Report on Form 10-K, Item 1A for risk factors applicable to the company. Additional details on our climate risk process can be found in the following table: Through the years, 3M has led industry in addressing both challenges and opportunities presented by climate change and energy conservation.
How we work 160 161 3M 2020 Sustainability Report #improvinglives Climate and energy
Climate risk process.
Governance The highest level of climate risk governance is the responsibility of the 3M Science, Technology & Sustainability Committee of the Board of Directors, formed in 2019 as one of four committees of the Board of Directors. The committee will oversee the twin demands of developing products to meet the ever-changing needs of our customers while doing so in an environmentally responsible way. One of the committee’s roles and responsibilities is to review the company’s policies and programs on Sustainability, identifying and analyzing significant Sustainability, materials vulnerability, and geopolitical issues that may impact our overall business strategy, global business continuity, and financial results.
Specific to enterprise risk, the 3M Audit Committee of the Board of Directors has responsibility to discuss policies and procedures with respect to risk assessment and risk management, the company’s major risk exposures, and the steps management has taken to monitor and mitigate such exposures. For the purposes of discussing climate-related risks, “substantive financial impact” means an event or circumstance that would individually or in the aggregate have a material adverse effect on the consolidated financial condition or operations of 3M and its subsidiaries and affiliates taken as a whole.
Integration into enterprise risk 3M operates in more than 70 countries and derives approximately 60% of its revenues from outside the United States. Our company results are impacted by the effects of, and changes in, worldwide economic, political, regulatory, capital markets, and other external conditions.
In addition, natural occurrences and human activities are increasingly releasing greenhouse gases into the atmosphere, contributing to changes in the earth’s climate. Climate change, as well as related environmental and social regulations, may negatively impact 3M or its customers and suppliers, in terms of availability and cost of natural resources, sources and supply of energy, product demand and manufacturing, and the health and well-being of individuals and communities in which we operate.
Additional details on our enterprise risk assessments can be found in the Enterprise risk section of this report and in our Annual Report on Form 10-K, Item 1A.
Timeframes Short-term, 0-1 years Medium-term, 1-5 years Long-term, 5+ years.
Board oversight 3M’s Science, Technology & Sustainability Committee of the Board of Directors assesses and advances strategic growth areas, long-term investments, and inspired innovation opportunities.
The 3M Audit Committee of the Board of Directors discusses policies and procedures with respect to risk assessment and risk management, the company’s major risk exposures, and the steps management has taken to monitor and mitigate such exposures.
Frequency on Board’s agenda As of November 2019, 3M’s Science, Technology & Sustainability Committee of the Board of Directors will meet with the frequency, and at intervals, it determines necessary to carry out its duties and responsibilities, but in any case, not less than three times a year.
The Audit Committee will meet with the frequency, and at intervals, it determines necessary to carry out its duties and responsibilities, but in any case, not less than four times a year.
Corporate officer’s oversight In addition to the members of 3M’s Science, Technology & Sustainability Committee of the Board of Directors, the 3M CEO has the highest level of direct responsibility for assessing and managing climate-related issues. The CEO will carry on the company’s history of proactive leadership in addressing both the challenges and the opportunities presented by climate change and energy conservation.
Climate risk process.
Identification and assessment Managing risk requires integrating a multidisciplinary, company-wide risk identification, assessment, and management process. The Vice President and General Auditor, Corporate Auditing, whose appointment and performance is reviewed and evaluated by the Audit Committee, is responsible for leading the formal risk assessment and management process within the company.
Climate-related risk is also assessed as part of our analysis of physical risk to our manufacturing sites. For example, our analysis of physical risk to our manufacturing sites from sea level rise is based on modeling for 1.5o, 2o, and 4oC temperature increases. Based on our analysis of physical risks to individual 3M manufacturing sites, none are deemed to create overall enterprise risk due in part to the diversity of 3M’s global capabilities and our robust business continuity plan.
Frequency of monitoring.
Risk factors Regulatory 3M continually evaluates aspects of regulatory risk during regular business through new product development and continuous business improvement. 3M’s operations are affected by national, state, and local laws around the world. 3M has made, and plans to continue making, necessary expenditures for compliance with applicable laws. 3M is also involved in remediation actions relating to environmental matters from past operations at certain sites.
Technology 3M’s four business groups bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources. We have operations in over 70 countries, bringing together a combination of our 51 unique Technology Platforms to produce over 55,000 products in nearly every country. Any risks from technology would be identified and mitigated through our New Technology Introduction (NTI) process, New Product Introduction (NPI) process, and continuous improvement program.
This product diversity enables 3M to identify unique solutions to help solve our customers’ challenges. In 2019, 3M invested $1.91 billion in research and development to build upon our existing technologies to find innovative solutions to our customers’ challenges. This unique combination of diversity and investment enables 3M to remain on the cutting edge of science while supporting our customers’ future needs as the climate changes. In 2019, we introduced the requirement for each product entering our NPI process to have a Sustainability Value Commitment demonstrating how it drives impact for the greater good.
How we work 162 163 3M 2020 Sustainability Report #improvinglives Climate and energy our executive-level Innovation Steering Committee and our Science for Climate Leadership Team. In addition to our Board of Directors’ Committees, climate risk is reviewed throughout the year within meet not less than three times a year. In addition, the 3M Science, Technology & Sustainability Committee of the Board of Directors will the Company’s physical operations and supply chains. Programs are reviewed at least annually. planning process and our Corporate Crisis Management Program review help manage risks facing as climate modeling advances and as acquisitions or divestitures require. 3M’s business continuity 3M will assess climate-related risks as a part of our analysis of physical risk to our manufacturing mitigate those risks. The Audit Committee meets not less than four times a year. Committee the major risks facing the company and the steps management has taken to monitor and responsible for managing each specific risk. The General Auditor periodically reviews with the Audit management, annually assesses the major risks facing the company and works with those executives 3M continually evaluates aspects of risk. The General Auditor, consulting with the company’s senior
Climate risk process.
Risk factors (cont.) Legal The company’s future results may be affected by various legal and regulatory proceedings and legal compliance risks, including those involving product liability, antitrust, intellectual property, environmental, the U.S. Foreign Corrupt Practices Act and other anti-bribery and anti-corruption laws, and other matters. The outcome of these legal proceedings is often difficult to reliably predict. For a more detailed review of this topic, see the discussion in Note 16 “Commitments and Contingencies” within the Notes to Consolidated Financial Statements in the company’s Annual Report on Form 10-K.
Market Results are impacted by the effects of, and changes in, worldwide economic, political, and capital markets conditions. 3M operates in more than 70 countries and derives approximately 60% of its revenues from outside the United States. The company’s business is subject to global competition and geopolitical risks and may be adversely affected by factors that are beyond our control, such as slower economic growth, disruptions in financial markets, economic downturns, inflation, elevated unemployment levels, sluggish or uneven recovery, government deficit reduction, natural disasters, and other factors in specific countries or regions, or in the various industries in which 3M operates.
Reputation Around the world, customers rely on 3M to provide innovative solutions to advance companies, enhance homes, and improve lives. We are defined by more than just what we make — we are defined by how we do business: the 3M Way, always striving to make the right choices for our company and our customers and protecting our reputation in all we do.
Physical (acute and chronic)
Every year, local crisis management teams at every 3M site and international subsidiary must review and update their Business Resilience Plan to reflect current conditions. They also perform a tabletop or actual crisis response exercise. 3M Corporate Auditing and Corporate Security monitor site compliance with the Corporate Crisis Management Program. For more information, see the Enterprise risk section.
Upstream 3M depends on various components, compounds, raw materials, and energy (including oil and natural gas and their derivatives) supplied by others for the manufacturing of its products. It is possible that any of its supplier relationships could be interrupted due to natural and other disasters and other events or be terminated in the future. Risks from upstream suppliers are identified at the product level through the New Product Introduction (NPI) and continuous improvement processes at 3M. An on-site assessment may be conducted by 3M or a third party, and any deficiencies are ultimately corrected through an SRC Corrective Action Preventive Action (CAPA) process.
3M mitigates supply chain risks through a variety of management practices, including multisourcing raw materials, prequalifying potential outsource manufacturers, and maintaining appropriate stocks of raw materials and contingency plans with key suppliers to assure allocation to 3M in the event of supply disruption.
Downstream Risks from downstream product use are identified at the product level through the life cycle management (LCM) process at 3M, which evaluates the planned use and disposal of 3M products and identifies hazards and risks associated with the use and disposal of 3M products. Mitigation of these risks is highly diverse and product-specific.
Climate risk process.
Financial risks At 3M, we continually evaluate our approach to opportunity and risk. We believe the whole concept of risk appetite and tolerance is an essential component of strategic planning. This includes broad risk oversight by the Board and its committees, with committee-level risk analyses reported to the full Board and executive-level internal General Auditor and Chief Ethics & Compliance Officer appointed by and reporting directly to the Audit Committee.
3M has operations in over 70 countries, with regionalized supply chains that enable more localized and diversified production of our products. This helps reduce our risk from local climate impacts on our operations. 3M’s four business groups bring together common or related 3M technologies, enhancing the development of innovative products and services and providing for efficient sharing of business resources. Our operations bring together a combination of our 51 unique Technology Platforms to produce over 55,000 products, which are sold in nearly every country.
We believe this governance of risks by Board committees, who share information with the full Board, is appropriate for a diversified technology and manufacturing company like 3M. 3M’s Annual Report on Form 10-K, Item 1A outlines risk factors applicable to the company.
Financial opportunities Financial opportunities include products and services, and resource efficiency. Access to dependable energy supplies and energy efficiency directly affects all businesses and communities. Energy usage and climate concerns require systemic change. 3M is a diversified technology company providing innovative solutions to address these and other physical climate opportunities.
Metrics We have established key Sustainability metrics to measure and manage climate risk that go beyond compliance to thinking holistically about our operations and products. We report on historical periods to allow for trend analysis with a clear description of the methodologies we use to calculate or estimate limitations and assumptions.
Principles Science for Climate goals.
Relevance Clearly define boundaries.
Completeness Strive to calculate and report data coverage to 99% of inventory for Scope 1 and Scope 2 GHG emissions. We will continue to develop and support advances in Scope 3 calculation methodology.
Consistency Base our data on approved methodology.
Accuracy Develop corporate systems and auditing procedures.
Transparency Report on emissions and activities in a way that is relevant to stakeholders.
How we work 164 165 3M 2020 Sustainability Report #improvinglives Climate and energy
Energy-efficiency improvements help reduce energy use, energy-associated costs, and GHG emissions. 3M energy management goes beyond energyefficiency efforts in factories and buildings. It is a team effort guided by the global 3M Corporate Energy Policy and coordinated by the Corporate Energy Management Team, with oversight by 3M’s Corporate Energy Leader and Engineering Director, and active support from the CEO.
3M has taken a broad approach to managing our energy footprint, which includes evaluating the impact of our products, manufacturing processes, equipment, and sites as well as by reducing the energy footprint of our existing manufacturing and administrative sites. In addition, we actively share information about our energy management program with external stakeholders, such as suppliers, customers, and other interested organizations.
In 2019, we raised the bar as part of our strategic focus on empowering Science for Climate. We increased our interim target from 25% to 50% renewable electricity by 2025, toward our ultimate goal of 100% renewable electricity by 2050.
Goal: Improve energy efficiency, indexed to net sales, by 30% by 2025.
Science for Climate.
Goal: Increase renewable energy to 50% of total electricity use by 2025.
Science for Climate 3M is in a leadership position due to our early actions to reduce our GHG emissions, which started in 2000. We are committed to continuing that leadership even as we grow the company in order to help our customers address the issue of climate change.
By improving energy efficiency and processes, reformulating products, switching to renewable electricity, and prioritizing opportunities, 3M has been able to achieve industry-leading GHG emission reductions. Other companies are setting goals to move closer to the achievements we have already realized.
Goal: Ensure GHG emissions at least 50% below our 2002 baseline, while growing our business, by 2025.
Science for Climate.
Joining RE100 with a commitment to 100% renewable energy by 2050.
In 2019, we joined RE100. RE100 is a global renewable electricity leadership initiative, led by The Climate Group in partnership with CDP (formerly the Carbon Disclosure Project), that brings together influential businesses committed to sourcing 100% renewable electricity for their worldwide operations by 2050. For more information on this effort, see our feature story “Flipping the switch on renewable energy.”