At ITW, our long-standing commitment to sustainability is rooted in our core values and is fundamental to who we are as a company. ITW’s robust governance practices guide our approach and serve as the Foundation for how we make a difference for the environment, our people and our communities.
Consistent with ITW’s decentralized, entrepreneurial culture, our sustainability strategy provides a framework for each of our 84 divisions to execute the programs and initiatives that provide meaningful impact for their business, prioritized using our 80/20 philosophy. Aligned with ITW’s enterprise strategy, our sustainability strategy supports our goal to be one of the world’s best performing, highest-quality and most respected industrial companies.
In 2022, we made significant progress in reducing our environmental impact. We reduced our combined Scope 1 and Scope 2 greenhouse gas (GHG) emissions per U.S. dollar of operating revenue by 45% from the 2017 baseline, exceeding our goal of a 40% reduction ahead of our 2030 target date. In collaboration with our Board of Directors, in 2022, we also refreshed our sustainability strategy. Our goal was to ensure that our strategy fits our business, reflects a commitment to continuous improvement and is fact-based, realistic and aligned with our “Do What We Say” philosophy. A key aspect of this refresh was to establish a new GHG emissions reduction target: to achieve a 50% absolute reduction of Scope 1 and Scope 2 GHG emissions by 2030, compared with a 2021 baseline. We recognize that setting an absolute reduction target is necessary to drive meaningful progress toward addressing climate change, and our strategy to achieve this goal aligns with known technologies for GHG emissions reduction. While our focus is on operationalizing our new Scope 1 and Scope 2 emissions reduction target, we continue to take a data-driven approach to study our Scope 3 emissions as well as the feasibility, actions and associated costs for a potential path toward carbon neutrality.
Across the enterprise, as an essential element of the ITW Business Model, we leverage Customer-Back Innovation to address some of the world’s most important challenges and opportunities, including those related to the impacts of climate change. We are proud to partner with our customers to help them reduce their environmental impact and provide cleaner, more efficient end-use applications. Our growing portfolio of clean-tech products represents approximately 30% of ITW’s 2022 revenue, an 8-percentage-point increase since 2017.
Our colleagues are critical to achieving ITW’s full potential, and we are dedicated to building the depth and diversity of our talent pipeline. In this regard, we are pleased to report that in 2022, we continued to improve the diversity of our leadership pipeline with female representation at 28% and U.S. racial/ethnic diversity increasing to 19% among our top 1,000 leaders. We also remain focused on cultivating a more inclusive workplace to inspire our colleagues to do their best work. Through 2022, more than 4,900 global managers and supervisors have participated in our inclusive leader training. We are also very encouraged by, and extremely proud of, the inclusion impact made by our six highly effective Employee Resource Groups.
Our aspiration to be a catalyst for economic development and inclusiveness is demonstrated through our strategic partnerships and investments. Aligned with our “Do More” Agenda and in partnership with United Way, our Commit to a Neighborhood initiative includes a commitment by ITW to spend more than $38 million in buildings and property acquisition, capital improvements and workforce development to add manufacturing jobs for some of Chicago’s most economically under-resourced communities. Additionally, in 2022, ITW’s total philanthropic giving was $22 million, which supported various initiatives in local communities. Furthermore, we are strategically focused on meaningfully expanding our commercial relationships with diverse businesses.
In closing, thank you for your continued interest in and support of ITW’s sustainability efforts, and thank you to our dedicated colleagues around the world who support our sustainability journey.
Christopher A. O’Herlihy
Vice Chairman
