Paccar : SASB-ESG Report (IFRS SASB ESG Combined Report April 2025)

Published: 2025-04-24 19:21:13 ET PCAR

PACCAR IFRS-SASB-ESG Report

2025

SASB Standards Disclosure Table

Industrial Machinery & Goods Sustainability Accounting Standard Version 2023-12

Topic

Energy Management

See TCFD-CDP Report: 7.30.1

Employee Health &

Safety

Fuel Economy &

Emissions in Use

Phase

Metric

Total energy consumed

Percent grid electricity

Percent renewables

Total recordable incident rate

Fatality rate

Near miss frequency rate

Sales weighted fleet fuel

efficiency for medium and heavyduty vehicles (Gallons/1,000 ton- miles)

Sales-weighted fuel efficiency fornon road equipment (Gallons/hour)

Sales weighted fuel efficiency forstationary generators (Watts/gallon)

Sales weighted emissions of NOxfor Marine diesel engines, locomotive diesel engines, on- road medium- and heavy duty engines, and other non road

Disclosure

953,385 MWh

45.2%

12%

This document: p. 18

This document: p. 18 Consistent with Total Recordable Incident rate. The latest models of Kenworth, Peterbilt, and DAFtrucks have improved fuel efficiency by up to 7% compared to previous models(This document: p. 10-15). Kenworth and Peterbilt trucks will improve fuel efficiency by at least 19% by 2024, and 25%by 2027 when compared to 2017 levels. DAF trucks will improve fuel efficiency by at least 15% by 2025 and 30% by 2030 when compared to 2020levels.

Not applicable to PACCAR's business.

PACCAR products are low NOxand compliant with all NOx emissions regulations in all itsmarkets.

Materials Sourcing

Remanufacture Design

diesel engines

Sales weighted emissions of particulate matter for Marine diesel engines, locomotive dieselengines, on road medium- and heavy duty engines, and other non-road diesel engines

Description of the management

of risks associated with the use ofcritical materials

Revenue from remanufactured

products and remanufacturing services

Number of units produced by

product category

Number of employees

PACCAR products are low PMand compliant with all PM emissions regulations in all itsmarkets.

This document: p. 8, 23-29

PACCAR's aftermarket parts

division sells remanufacturedengines and many other remanufactured components.PACCAR delivered 185,300

new trucks in 2024

30,100 as of December 2024

The sustainability disclosures in this report and at Investors.PACCAR.com are consistent with the IFRS SASB Industrial Machinery & Goods Sustainability Accounting Standard v2023-12.

Forward Looking / Cautionary Statements

This report may contain statements that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially. A summary of risks and uncertainties is described in more detail in our periodic reports filed with the Securities and Exchange Commission (SEC). We undertake no duty to update or revise this presentation, whether as a result of new information, future events or otherwise. For the most recent financial, risk and other information about PACCAR, please see our SEC filings and the most recent earnings release available on the Investor Relations page of Investors.PACCAR.com.

Contents

PACCAR IFRS-SASB-ESG Report

SASB Standards Disclosure Table

Forward Looking / Cautionary Statements

PACCAR Environmental, Social and Governance (ESG) Report

Environmental Leadership

Environmental Policy

Operations

Environmental Management System

IS0 14001, Air Emissions, Water Conservation, Zero Waste to Landfill

Energy Management & Efficiency

Climate Strategy

Climate Transition Plan

Governance

Strategy

Risk Management

Metrics and Targets

GHG Emissions

Science Based Targets

Products Innovation & Stewardship

Customer Engagement

Pathway Towards Zero Emissions

Battery Manufacturing

Zero Emission Trucks

Low Carbon and Renewable Fuels

Advanced Vehicles

Remanufacturing

Connected Trucks and Driver Training

Social Responsibility and Ethical Business Conduct

Global Code of Business Conduct

Commitment to Integrity

Commitment to Human Rights

Commitment to Environment, Health, and Safety

Honest and Ethical Business Practice

Financial Integrity

Interaction with PACCAR Partners

Global Trade Compliance

Responsibility to Investors and Shareholders

PACCAR Resources for Reporting Concerns

Talent Training & Development

Workplace Safety

Employee Well-Being

Cybersecurity and Systems Availability

Management and Training

Oversight and Governance

Philanthropy & Community

Government Relations & Public Policy

Government Relations Oversight

Company Contributions

Proactive Climate Engagement

Supplier Sustainability Engagement

Supplier Code of Conduct

Ethical Business Conduct

Labor and Human Rights

Health and Safety

Responsible Sourcing

Environment

Data Management

Sustainable Purchasing

Feedback and Violations

State of California Transparency in Supply Chains Act

Conflict Minerals and Critical Materials

Corporate Governance

Sustainability

Board of Directors

Executive Compensation

Shareholder Rights

Audit and Risk Oversight

PACCAR Environmental, Social and Governance (ESG) Report

PACCAR is a global technology leader in the design, manufacturing and customer support of premium medium- and heavy-duty trucks under the Kenworth, Peterbilt and DAF nameplates. PACCAR also designs and manufactures advanced powertrains, provides financial services and information technology, and distributes aftermarket parts related to its principal business.

PACCAR conducts business to achieve above-average market returns for stockholders, reflect the highest ethical standards, fulfill our legal obligations, and meet our social responsibilities. We strive to gain the favorable regard of customers, shareholders, employees, regulatory authorities, and the general public through superior performance and effective communications.

PACCAR's Sustainability approach that enhances shareholder value is focused on:

Environmental Leadership

Reducing the environmental impact of our activities and products is an integral part of our process of continuous improvement. Our commitment to the environment is demonstrated in our energy efficient operations and technologically advanced products.

PACCAR's global industrial leadership includes addressing the environmental challenges facing our own and future generations. PACCAR's environmental management system and policy are designed to focus on the reduction of the environmental impact of the company's activities, products and services. A key premise of PACCAR's environmental policy can be stated simply: It is more environmentally prudent and cost effective to identify a problem before it occurs, than to correct or clean it up afterwards.

Environmental Policy

The following principles are used to implement PACCAR's environmental policy:

Operations

PACCAR has focused on responsible environmental stewardship since its founding in 1905. The Company is committed to environmental responsibility in the vehicle production process. Finding ways to reduce waste, reuse materials, conserve energy and reduce the environmental impact of our activities occurs daily in both small and significant ways across the Company. PACCAR is driving smart manufacturing into every aspect of its business because it helps the environment and makes good long-term business sense.

Environmental Management System

PACCAR's manufacturing locations are ISO 14001 certified providing assurance to management, employees, and shareholders that the environmental impact is being measured and managed. ISO 14001 certified management system measures, monitors and maintains compliance at each manufacturing site including:

standards and maintaining compliance.

The table below contains environmental metrics monitored on an annual basis by PACCAR across the manufacturing sites.

IS0 14001, Air Emissions, Water Conservation, Zero Waste to Landfill

Manufacturing Sites (%)

2023

2022

2021

ISO 14001 Management Certified

100%

Meeting Air Emissions Standard

100%

Meeting Water Conservation Standard

100%

Zero Waste-to-Landfill

87%

93%

87%

Energy Management & Efficiency

Energy use is measured and monitored across PACCAR manufacturing and non-manufacturing sites. The chart below contains the total energy usage across PACCAR locations.

Energy (MWh)

2023

2022

2021

Manufacturing & Non-Manufacturing Locations

953,385

975,978

978,124

From 2013 to 2023, PACCAR reduced its energy usage by 43% on a per revenue basis as shown below.

Climate Strategy

In 2024, PACCAR achieved an A- score from CDP on the Company's Task Force for Climate Related Financial Disclosures (TCFD) aligned climate transition plan, placing it in the leadership tier of over 27,000 companies reporting and demonstrating a robust approach to reducing greenhouse gas emissions in Kenworth, Peterbilt and DAF vehicles and from our global facilities. PACCAR has earned an "A" or "A-" rating for ten consecutive years.

Climate & Energy Transition Plan

The Company's IFRS S2 (TCFD) CDP Climate & Energy Transition Plan provides details including governance, strategy, risk management and metrics & targets consistent with the TCFD framework as outlined below:

Governance

Strategy

Risk Management

Metrics and Targets

PACCAR's complete 173 pages CDP report is publicly available on the CDP website and IFRS S2- TCFD-CDP Report at Investors.PACCAR.com

GHG Emissions

Scope 1 and 2 emissions at PACCAR locations include both purchased electricity, stationary and

mobile sources of greenhouse gas emissions while performing business activities. Scope 3 emissions are upstream and downstream in PACCAR's value chain as the Scope 1 and 2 emissions of suppliers, customers, partners etc. PACCAR regularly evaluates and updates its current and historical Scope 1, 2, and 3 emissions based on emerging science, feedback from stakeholders and market needs for greater environmental transparency. The chart below is scope 1, 2, and consolidated Scope 3 greenhouse gas emissions. For more information, visit PACCAR's full annual IFRS-TCFD-CDP Climate Report.

Tonnes C02e (000's)

2023

2022

2021

Scope 1 & 2 (location based)

245

271

279

Scope 3

122,676

114,542

99,312

PACCAR monitors both absolute greenhouse gas emissions and greenhouse gas emissions inventory per unit of revenue, which normalizes the data for fluctuations in our business that occur due to industry cyclicality. From 2013 to 2023, PACCAR reduced scope 1 and 2 greenhouse gas emissions by 55% on a per revenue basis as shown below.

Science Based Targets

In 2021, PACCAR established greenhouse emissions reduction targets approved by the Science Based Targets Initiative (SBTi). SBTi works with over 7,480 companies worldwide to create a clearly defined path to reduce greenhouse gas emissions, with the goal of helping limit global warming to well below 2 degrees Celsius compared to pre-industrial levels. PACCAR's targets are publicly disclosed at https://sciencebasedtargets.org/.

The Scope 1 and 2 science based target (SBT) is a 35% absolute reduction of CO2 emissions from PACCAR's global facilities between a baseline year of 2018 and a target year of 2030 and is based on SBTi's other industry sectoral decarbonization approach (SDA) using the absolute contraction method for well below 2°C.

Scope 3 SBT is a 25% reduction in product use greenhouse gas emissions in grams of CO2e emissions per vehicle kilometer, well to wheel, from the heavy-duty vehicles PACCAR sells in the US, Canada and Europe, and the medium duty vehicles PACCAR sells in the US and Canada between a baseline year of 2018 and a target year of 2030. This SBT is a medium-term target for product use emissions based on the SDA Transport Tool for well below two degrees Celsius.

SBT Progress

2018

2021

2022

2023

2030

Baseline

Target

Scope 1 & 2

293

279

271

245

190

tonnes CO2e (000's)

Scope 3, Category 11

1006

1081

1059

1066

754

(g CO2e/vkm WTW)

In 2022, the Science Based Target Initiative (SBTi) paused target validations & updates recognizing there is currently not a viable SDA for transport sector allowing companies like PACCAR to align their use-phase emissions targets of new road medium and heavy duty vehicles with 1.5°C pathways. PACCAR's well-below 2°C trajectory approved science based targets are granted extensions until an SDA is developed and approved at a later date.

For operational scope 1 and 2 emissions at PACCAR locations, the three main levers for decoupling greenhouse gas emissions from energy consumption are ISO 14001 aligned demand side energy efficiency projects, purchasing renewable power from local utilities, and electrifying equipment.

Product use phase, scope 3 category 11, emissions reductions are through continued technology investment and manufacturing of efficient diesel engines while transitioning, with customer demand, towards manufacturing zero emission battery electric and hydrogen fueled vehicles. Peterbilt, Kenworth and DAF lead the industry with eight battery electric vehicle models available for customers. Kenworth T680 and Peterbilt 579 models featuring Toyota's hydrogen fuel cell powertrain kit. DAF's XF Hydrogen - a prototype of a hydrogen fueled heavy-duty truck with an internal combustion engine - won the European 2022 Truck Innovation Award.

Products Innovation & Stewardship

A key element of PACCAR's environmental strategy is to offer our customers commercial vehicles that reduce environmental impacts. PACCAR invests in technologies that reduce greenhouse gas emissions such as fuel-efficient diesel engines, natural gas and biofuel engines, and next- generation battery- electric, hybrid, hydrogen combustion, and hydrogen fuel cell powertrains. To develop and manufacture leading products and technologies in the industry, the Company makes significant investments in capital expenditures and R&D each year.

($ in millions)

2024

2023

2022

Capital Investment

$795.8

$698.3

$505.0

R&D

$452.9

$410.9

$341.2

Disclaimer

Paccar Inc. published this content on April 24, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 24, 2025 at 23:20 UTC.