Eaton

No leading practices were identified for this company.

No leading practices were identified for this company.

No leading practices were identified for this company.

No leading practices were identified for this company.

Eaton has set a target to reduce its scope 1 and 2 emissions by 50% by 2030, compared to 2018 levels. The company has also committed to reducing its scope 3 emissions by 15% in the same period; however, this is not ambitious enough to align with its 1.5°C pathway. Between 2017 and 2022, the company’s scope 1 and 2 emissions have decreased by 27%, and its scope 3 emissions have decreased by 23%. The company attributes part of the decrease in its scope 3 emissions to lower sales as a consequence of the pandemic.

Eaton shows some elements of a low-carbon transition plan. The company should, however, establish a time-bound action plan that outlines how it will transition to a low-carbon economy. This should include medium- and long-term targets, verifiable and quantifiable key performance indicators and financial commitments. Eaton is investing heavily in its electrical business and expects a significant growth, with this area currently already bringing in 70% of its overall revenue.

The company does not disclose its capital expenditure (CapEx) on low-carbon technologies. Between 2019 and 2022, Eaton has invested USD 528 million in research and development (R&D) in alignment with its Positive Impact Framework, and it commits to invest a further USD 3 billion up to 2030. However, these investments could not be assessed in the benchmark due to the lack of detailed information regarding the technologies the company intends to direct these funds towards and a mapping of these technologies against a recognised taxonomy for low-carbon activities.

Eaton engages with both its suppliers and clients in order to lower its emissions from its value chain. In 2022, Eaton included its top suppliers, representing 50% of its procurement spending, in the CDP Supply Chain Programme. This allows for a better understanding of the company’s upstream scope 3 emissions linked to its purchased goods and services. Eaton’s supplier engagement strategy, however, does not include quantified emissions reduction requirements or other supplier expectations related to the low-carbon transition.

Eaton has set 2030 targets for its scope 1 and 2 emissions reduction as well as for its scope 3 emissions. However, the ambition of its scope 3 target does not align with its 1.5°C pathway.

Eaton lacks a formal transition plan, but the company has addressed various aspects of the low-carbon transition. Nevertheless, it can strengthen its efforts by detailing a plan that lays out its short-term and long-term actions alongside its financial commitments to support its transition.

Eaton is on track to meet its target to reduce emissions from its own operations, mainly due to declining energy consumption and increase in the low-carbon energy supply. The company is engaged in various collaborative projects with other stakeholders and in innovative product design to contribute to the global low-carbon transition.

The company reported a decrease in its scope 1 and 2 emissions from 2017 to 2022 at a faster rate than required by its 1.5°C pathway. The same trend was observed for Eaton’s scope 3 emissions. However, it is unclear how this emissions decline will persist in the future since it was partly driven by external factors and not only by dedicated action by the company.

Eaton has a clear understanding of the emissions linked to its activities. Nevertheless, its ambition for the reduction of its scope 3 emissions does not correlate with their relative importance in the company’s overall emissions.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

The company discloses the measures it takes to ensure that these jobs embed equality of opportunity for women and vulnerable groups. In particular, it creates job opportunities for individuals with prior criminal records, for disabled people with IT skills, and for underrepresented lawyers. However, no evidence was found of the company committing to create and support access to green and decent jobs as part of the low-carbon transition. Furthermore, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company discloses the actions it takes to provide training opportunities to embed equality of opportunity for women and vulnerable groups. It does this through a dedicated virtual leadership program for ethnic minority talent. However, no evidence was found of the company having a process for identifying skills gaps for workers and stakeholders affected by the low-carbon transition or a public commitment to help workers displaced by the transition to reskill or upskill.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights. However, no evidence that the company commits to respecting the ILO fundamental rights at work, nor does it expect its business relationships to respect the same commitment. No evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and supply chain. Moreover, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. However, no evidence was found of a time-bound target for paying all workers a living wage. Moreover, no evidence was found that the company discloses the proportion of its direct workforce covered by collective bargaining agreements and the company’s required working hours. The company discloses some indicators of workforce diversity, including the age, gender and race/ethnicity of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. The company commits to gender equality and women’s empowerment.

No evidence was found that the company commits to protecting personal data and that it has a privacy statement regarding the collection, sharing and access to personal data. Moreover, no relevant disclosure was found of the company’s global tax strategy and the corporate income tax paid for each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. While the company specifies that it does not make political contributions, no evidence that it has a lobbying and political engagement policy. No relevant disclosure was found of the company’s expenditure on lobbying activities.