Allison Transmission : 2021 ESG Report

Improving the Way the World Works

2021 Environmental, Social and Governance Report

What's Inside this Report

01

Chief Executive Officer Letter

02

About Allison

04

Innovation

10

The Allison Team

13

Communities

16

Health and Safety

19

Environment

21

Supply Chain

23

Governance

26

SASB Table

Providing the most reliable and valued propulsion solutions in the world

OUR VISION

Be the global leader in commercial-duty propulsion solutions that improve the way the world works.

OUR PROMISE

Provide the most reliable and valued propulsion solutions in the world to enable our customers to work more efficiently.

OUR VALUES

Quality - We are driven by a total commitment to excellence in everything we do.

Customer Focus - We believe each customer is unique, and our success is tied to their success.

Integrity - We hold ourselves to the highest ethical standards in everything we do.

Innovation - We seek ways to improve products and processes in an effort to add value and create solutions for our customers.

Teamwork - We develop better solutions by working together toward a common goal.

Contents

CEO Letter

About Allison

Innovation

The Allison Team

Chief Executive Officer Letter

Communities

Health and Safety

Environment

Supply Chain

Governance

SASB

Dear Stakeholders,

We are delighted to present the 2021 Allison Transmission Environmental, Social and Governance (ESG) Report, where we provide data regarding our environmental performance, our social impacts and our discussions on how we govern these issues. The report is aligned with the guidelines of the Sustainability Accounting Standards Board (SASB) for the Industrial Machinery and Goods sector and addresses topics of interest to the United Nations (UN) Global Compact and the Universal Declaration of Human Rights (UDHR) thus allowing us to highlight our commitment to the ideals of corporate citizenship.

2021 brought a year of challenges, opportunities and successes in the ever-evolving commercial vehicle industry. The world continued to face a global pandemic that has affected many lives, disrupted advancements in innovation and challenged the global supply chain. While Allison has not been immune to these impacts, our team worked diligently to progress company initiatives and deliver on commitments to customers. We're grateful for our valued employees, customers, suppliers and communities who helped us achieve these milestones.

The world is undergoing extraordinary change, which impacts how we communicate and do business with each other, how we transport people and goods around the globe, and how we will meet the world's growing energy demands in a sustainable way while minimizing any impacts on the environment. Though the commercial vehicle industry is evolving, Allison's mission remains clear. We are committed to Improving the Way the World Works with fuel efficient, reliable and innovative propulsion solutions that deliver the performance, quality and differentiated value proposition our customers have come to expect from the Allison brand.

Whether it is new products, new technology or new manufacturing processes, change, adaptability and innovation have always been part of our DNA. Innovation continues to be the driving force behind our commitment to developing new products. In 2021, we introduced several propulsion systems, from the Allison eGen PowerTM family of fully electric axles to more sustainable versions of our conventional transmissions. We've also invested in a cutting-edge Innovation Center and completed upgrades to our state-of-the-art Vehicle Electrification and Environmental Test Center at our global headquarters in Indianapolis, Indiana, that enable Allison and our partners to expand testing and validation capabilities for battery electric and hydrogen fuel cell electric vehicles. These investments individually and collectively confirm our commitment to reducing the carbon footprint of the commercial vehicle industry.

We continued our productive output this past year and are innovating more now than ever before in our history. I believe Allison is well-positioned to capitalize on growth opportunities across all of our end markets and drive the next generation of propulsion solutions that will help our customers and the world reduce emissions, protect our planet and meet the substantial challenges that lie ahead.

So, let me again take this opportunity to thank the Allison Team and our customers, suppliers and communities as we continue Improving the Way the World Works.

Sincerely,

David S. Graziosi

Chairman and Chief Executive Officer

We are committed to Improving the Way the World Works with fuel efficient, reliable and innovative propulsion solutions.

1 / A L L I S O N

Contents

CEO Letter

About Allison

Innovation

The Allison Team

Communities

Health and Safety

Environment

Supply Chain

Governance

SASB

About Allison

Allison is a leading designer and manufacturer of vehicle propulsion solutions for commercial and defense vehicles, the largest global manufacturer of medium- and heavy- duty fully automatic transmissions, and a leader in electrified propulsion systems that Improve the Way the World Works. Allison products are used in a wide variety of applications, including on-highway trucks (distribution, refuse, construction, fire and emergency), buses (school, transit and coach), motorhomes, off-highway vehicles and equipment (energy, mining and construction applications) and defense vehicles (tactical wheeled and tracked).

Founded in 1915, the company has been headquartered in Indianapolis, Indiana, since its inception. Approximately 76% of revenues were generated in North America in 2021. Allison is traded on the New York Stock Exchange under the symbol "ALSN."

With a presence in more than 150 countries, Allison has regional headquarters in the Netherlands, China and Brazil, manufacturing facilities in the USA, Hungary and India, as well as global engineering resources, (including electrification engineering centers), in Indianapolis, Indiana, Auburn Hills, Michigan, and London in the United Kingdom. Allison supports customers through more than 1,400 independent distributor and dealer locations worldwide.

5	6
2
1
3	8
	7

4

Key Facilities

	1. Indianapolis, USA	5. Sliedrecht, the Netherlands
	Global HQ	Regional HQ
	Sales Office	Sales Office
	Manufacturing Facility	Parts Distribution Center
	Parts Distribution Center	6. Szentgotthárd, Hungary
	Vehicle Electrification + Environmental Test Center
	Manufacturing Facility
	Innovation Center
	Customization Center
	2. Auburn Hills, Michigan
	7. Chennai, India
	Manufacturing Facility
	Sales Office
	3. Lewisburg, Tennessee
~76	Manufacturing Facility
Walker Die Casting Manufacturing Facility	Customization Center
%
4. São Paulo, Brazil	Parts Distribution Center
8. Shanghai, China
Regional HQ
Sales Office	Regional HQ
Customization Center	Sales Office
Parts Distribution Center	Customization Center
		Parts Distribution Center

of revenues were generated in North America in 2021

2 / A L L I S O N

Contents

CEO Letter

About Allison

Innovation

The Allison Team

Communities

Health and Safety

Environment

Supply Chain

Governance

SASB

2021 At-A-Glance

FinancialEnvironmental

$2.4B	Emissions
	GHG
REVENUE	2021

SafetyPeopleCommunity

1.94	3,400	TYPES OF
RECORDABLE CASE RATE	GLOBAL EMPLOYEES	GIVING:
PER 100 EMPLOYEES

$442M

NET INCOME

150+

COUNTRIES WHERE WE OPERATE

DIRECT (SCOPE 1)	INDIRECT (SCOPE 2)	4	46%	- DONATIONS: 68%
36,133	102,876
		- SUPPORT OF
		MANUFACTURING SITES	OF U.S. EMPLOYEES	ORGANIZATIONS
		CERTIFIED TO ISO 14001	REPRESENTED BY THE UAW
Energy		SERVING WOMEN
Usage		ENVIRONMENTAL
		AND RACIALLY/
2021
	MANAGEMENT	2021
		ETHNICALLY DIVERSE
		STANDARDS
DIRECT ENERGY	INDIRECT ENERGY	POPULATIONS: 21%
671,670	842,473		DIVERSITY COMPOSITION	- SPONSORSHIPS: 6%
			U.S. WORKFORCE
			- SCHOLARSHIPS: 5%
460 Tons		Women
			18%
PRODUCTION WASTE AT
OUR INDIANAPOLIS		Gender
MANUFACTURING		82%
	Men
OPERATIONS
30,621,000		Racially/
			25%
GALLONS OF CITY WATER		Minorities
	Ethnically
AND 115,435,928 GALLONS		Diverse
	75%
OF WELL WATER USED AT		Non-Minorities
OUR INDIANAPOLIS
HEADQUARTERS AND
MANUFACTURING
OPERATIONS

3 / A L L I S O N