Navistar International : 2020 Navistar Sustainability Report PDF

2020 SUSTAINABILITYREPORT

NAVISTAR SUSTAINABILITY REPORT 2020	I N T R O D U C T I O N		PEOPLE		P L A N E T		R E S P O N S I B I L I T Y		I M PAC T

FROM THE CEO

The year 2020 will forever be associated in my mind with the dual realities of extreme challenges, in the throes of a worldwide pandemic, and resilience, as we fulfilled the promises of an essential business. Navistar's ability to adapt quickly in times of uncertainty was in no small part due to our shared commitment to delivering what matters - to all whose lives and businesses we touch. That same commitment guides Navistar's journey toward making a sustainable, positive impact on both people and the planet. And it reminds us all that we are part of something with unlimited potential for good.

Of note, in the midst of all of this, we completed a merger agreement with TRATON SE that, when approved, will make Navistar part of the world's second largest manufacturer of commercial vehicles. The combination will give us advantages of scale and access to the newest technologies, products and services. And an even greater ability to deliver what matters.

It is within this context that we offer a snapshot of

Navistar's progress toward sustainability in 2020.

People

We accelerated our commitment to diversity, equity and inclusion in 2020, developing a broad-based program with the overarching aim of increasing opportunities for everyone and ensuring we have the best possible workforce. We also increased our emphasis on our supplier diversity program.

We continued our investments in STEM education through scholarships, competitions and in-kind donations of truck engines and equipment to technical schools - helping to bring along the next generation of engineers and technicians.

2

As caring members of the communities where we live and work, we also continued our financial support for a wide range of community development organizations, while many of our employees donated time and money locally to help those most affected by the pandemic.

Planet

Navistar supports the goals of the Paris Agreement, including the effort to maintain global temperatures to well below 2°C above pre-industrial levels. Of particular relevance to Navistar is the U.S. commitment to heavy- duty vehicle greenhouse gas emission standards. Industry-wide, the EPA expects the second phase of those rules, which began in 2021, to reduce greenhouse gas emissions by 24% from the 2017 emission levels. In 2020, we continued to develop advanced solutions for our customers, setting the stage for further emissions reductions as we move into phase 2 of the greenhouse gas regulations that began in 2021.

We moved rapidly to develop solutions in electric, autonomous and alternative power vehicles in 2020. Some highlights:

• We will produce and deliver our first electric trucks and buses in 2021.
• We worked on a partnership with GM and J.B. Hunt, announced in 2021, to develop a comprehensive hydrogen fuel cell solution for class 8 vehicles, targeted for delivery in 2024.
• Our NEXT eMobility Solutions group worked to offer electric vehicles configured to specific customer needs, along with consulting, charging and connectivity solutions. We will begin to deliver vehicles in 2021.
• We made a strategic investment in a partnership with TuSimple, a global self-driving technology company, to co-develop SAE Level 4 self-driving trucks with delivery targeted by 2024.

Our facilities continued a focus on efficiency. We met our goal of a 25% reduction in energy intensity in 2019. That reduction saw an accompanying 50% reduction of absolute greenhouse gas emissions from energy use and operations from 2008 to 2018. This year, we are adopting a new goal of a 20% energy intensity reduction by 2030 from a 2018 baseline. We are also working on developing additional goals and initiatives this year, including exploring new ways to add renewable energy to run our facilities and a focus on reducing absolute CO2 emissions.

Responsibility

One of our fundamental principles is that we will conduct our business in an ethical and compliant manner, and we have the governance structure in place to ensure that happens. We have established mechanisms to monitor compliance and provide several ways to communicate ethics or compliance concerns to the appropriate channels.

We learned a lot from the experiences of 2020 and, as you will read on the following pages, we accomplished a lot too. I am proud to share these details of the good work of our people who helped Navistar make a meaningful difference in 2020. We go forward now with new energy for dreaming bigger, thinking bolder and getting better every day.

Persio Lisboa

President and Chief Executive Officer

NAVISTAR SUSTAINABILITY REPORT 2020	INTRODUCTION		PEOPLE		P L A N E T		R E S P O N S I B I L I T Y		I M PAC T

WHAT'S INSIDE

Who We Are

A Purpose-Driven Company

Driving a Sustainable Future

INTRODUCTION

3

NAVISTAR SUSTAINABILITY REPORT 2020	I N T R O D U C T I O N		P E O P L E		P L A N E T		R E S P O N S I B I L I T Y		I M PAC T

Who We Are

Navistar is reimagining how to deliver what matters as a leading North American commercial truck, school bus and proprietary engine manufacturer, as well as complete commercial vehicle solutions provider

History of Innovation

since 1831 More than

12,000

employees worldwide

BUSINESS

OPERATIONS IN FOUR PRIMARY COUNTRIES

U.S.

CANADA MEXICO BRAZIL

Headquartered in	Largest dealer
network in North
Lisle, Illinois
	America, including
	service partnership
	with Love's Travel Stops

$7.5 Consolidated 2020

Net Revenue

Billion

Core business:

U.S. AND CANADA TRUCK AND PARTS MARKETS

NEARLY ONE IN FIVE	NEARLY HALF OF ALL SCHOOL
Class 6 through 8 vehicles	buses on the road today are
on the road today is an	our IC Bus® brand
International® truck

4

NAVISTAR SUSTAINABILITY REPORT 2020	I N T R O D U C T I O N		P E O P L E		P L A N E T		R E S P O N S I B I L I T Y		I M PAC T

A PURPOSE-DRIVEN COMPANY

By capturing in just a few words why we exist and Navistar's impact on the world, we align our people - both within and outside of the company - around something bigger than ourselves.

We transform our teams to be more effective, cohesive and higher performing, able to adapt quickly in times of uncertainty because they know the right things to do.

We elevate our relationships with dealers, customers, suppliers and partners to be about more than a transaction, but instead about the things that matter most to them.

Having refined our purpose in these ways, we have enabled greater rewards and satisfaction for everyone dedicated to delivering what matters.

LEARN ABOUT our purpose.

5