In today's rapidly evolving business landscape, the notion that sustainability and profitability are mutually exclusive is increasingly being debunked.
At Trane Technologies, we are proving that a robust sustainability strategy embedded in a business plan can drive significant value and growth. Our commitment to sustainability has not only enhanced our own operations—it has helped our customers operate more sustainably—and propelled our financial performance and innovation to new heights.
A clear business strategy
Sustainability is about the long game, and so is growth. While Trane Technologies was launched just over five years ago, our sustainability-focused business trajectory was set in motion nearly two decades ago.
When we became Trane Technologies in 2020, investors already valued our focus as a climate innovator and the alignment of our investment and business strategy. We embraced global megatrends, using them as a catalyst for new ideas and focusing our investment on sustainable innovation. Today, 100% of our portfolio is focused on improving energy efficiency for our customers and driving more sustainable outcomes.
This focused strategy and continued customer demand for more sustainable solutions has delivered differentiated financial performance, including a compound annual revenue growth rate of 12% since 2020 and a 286% increase in total shareholder returns over the same period—almost three times the rate of the S&P 500.
A strong business case for sustainability
One common misconception is that sustainability is more expensive. Based on our experience, sustainability pays off when it’s built into the business. According to the U.S. Department of Energy’s Better Buildings Initiative (we are a participating member), every dollar invested in building modernization returns an average of $3 in energy savings over five years. Add to this the fact that energy costs are rising and many buildings waste an average of 30% of energy after the meter due to inefficiency. This convergence of rising operating costs and the need for greater efficiency is the sweet spot for technology and innovation in our business.
Today, thermal management systems in our commercial HVAC portfolio are 70% more energy efficient than they were six years ago, and many offer heat recovery and energy storage to enhance energy optimization.
We see these results in our own operations like our La Crosse, Wisconsin facility—established over 100 years ago—now operating with our Trane® Thermal BatteryTM Storage Source Heat Pump system, a first-of-its-kind solution to advance and integrate electrified, low-carbon heating and cooling and energy storage into a single solution. The new system saved 15 million gallons of water in 2023—a reduction of 85% from the prior year—and is estimated to reduce the overall energy use of the building by 28% compared to the previous system. This same century-old facility, where Trane got its start, manufactures some of the most efficient (and largest) chiller systems we make for high-tech semiconductor and data center industries, pushing us forward as we deliver a new wave of efficiency for a rapidly changing world.
A compelling demand for innovation
It’s estimated that electricity could represent up to 70% of final energy demand by 2050. The falling costs of renewables and increased availability of storage solutions make it possible to achieve the massive expansion of clean power systems this transition will require.
In The Netherlands, we helped Organon, a global pharmaceutical company, optimize their heating and cooling needs of their largest production site while supporting their goal to be carbon neutral by 2035. With the implementation of three high-efficiency heat pumps with energy recovery, they are saving nearly 7,700 gigajoules of energy a year—equivalent to almost 243,000 cubic meters of gas.
As electrified and highly-efficient systems are coupled with AI-enhanced solutions and autonomous controls, they can optimize for numerous variables such as weather, pollution, occupancy and building design. As a result, the ability to optimize energy performance is being supercharged.
Reducing emissions related to the use of our products remains our biggest decarbonization opportunity and is what drives our Gigaton Challenge to reduce one billion metric tons of GHG emissions from our customers’ footprint by 2030 (from a 2019 baseline). In addition to that, reducing the carbon intensity associated with our products’ life cycles is increasingly important to our customers’ sustainability and resiliency goals. That is why we expanded our 2030 Sustainability Commitments with a goal to reduce embodied carbon by 40%. Already, our focus is driving innovation in product development with an eye toward designing products for circularity, and upstream with some of our most significant material suppliers of low-carbon steel, aluminum and copper.
This level of improvement and achievement does not happen overnight; it is the result of a clearly defined strategy, strong demand and consistent commitment to innovation.
A purpose-driven culture
We believe innovation and growth come from everyone, so we actively nurture a distinctive culture. Our employees embrace our sustainability-focused purpose, as shown by our latest Annual Employee Engagement survey score of 82 out of 100, placing us in the top quartile of external benchmarks. Additionally, our sustainability index, reflecting team sentiment on our sustainability efforts, increased by 2 points, making it one of our highest engagement areas.
We embed sustainability into our everyday work and operating model. Our Center for Energy Efficiency and Sustainability (CEES) has been at the heart of our sustainability efforts for 15 years. This dedicated team shapes our sustainability strategy, oversees product stewardship, and drives education and advocacy to elevate sustainability standards both within our company and globally.
Across the company, we encourage salaried team members to set at least one sustainability goal each year, integrating these objectives into their annual plans. And we’ve rapidly grown a global network of almost 1,000 Sustainability Ambassadors who help identify and replicate sustainable business practices across our global footprint.
What may seem like simple steps to engage our workforce in our sustainability strategy has a very real impact on scaling our efforts and empowering our people to own the actions that will help us grow.
A bright future
The combination of what we’ve accomplished—and commitment to the transformative potential of technology and innovation—is why I joined Trane Technologies at the start of 2025. We have a reputation as a strong operator dedicated to continuous improvement. We are known for credible action through climate innovation and advocacy, bold sustainability commitments that are leading our industry, and a highly engaged global workforce that is propelled by our purpose.
This consistency and intentionality translates into growth, demonstrated in our latest Sustainability Report. As one of our external financial analysts put it, "Right place, right time, right culture to capitalize." We couldn’t agree more.
