Our Board of Directors and the Company’s committees play a key role in oversight of the Company’s Environmental, Social and Governance (ESG) efforts. We believe that as a publicly traded company, the impact of our global business operations on Our Planet, how we care for and manage Our People, and what we stand for in Our Purpose, are critical to the Company’s success. In 2020, we established an ESG Council comprised of various functional and business leaders to ensure continued focus on these important initiatives, and to report out regularly to the Board and its Committees.

Our Planet

We understand that the earth’s resources are limited, and we need to be a good steward of them to make Our Planet a better place for future generations. A focused approach to sustainability is a priority for us and our leadership is accountable for our sustainability efforts to ensure that enough resources are deployed to manage our commitments and maintain appropriate controls. This commitment is documented in our Sustainability Opportunity policy endorsed by our CEO and publicly available on our website.

We communicate with internal and external stakeholders to promote awareness of their responsibilities and how they can contribute to improving sustainability efforts. In our initial year as Resideo, we used calendar year 2019 as a baseline to measure our environmental impact and to establish sustainability targets for the organization, with a core objective of reducing our carbon impact both in terms of our operational footprint and in the product offerings to our customers and the public at large. Our stated goals in 2020 were to reduce our energy usage, water consumption and greenhouse gas emissions by 20% by 2025. We also stated our goal to reduce both hazardous waste and non-hazardous waste by the same 20% target over the same period.

We have made progress and see continuing opportunities to reduce our carbon footprint and minimize greenhouse gas emissions (GHG) in two main areas:

  • Sustainability in our Operations — how we’re optimizing our supply chains, our facilities and reducing non-renewable resources wherever possible;
  • Sustainability Through our Products — many of the products we manufacture help consumers achieve comfort while also reducing their energy use and ensuring their homes are protected from damage;

Sustainability in our Operations

Aligned to Resideo’s commitment to design, build and supply products that help keep our customers comfortable, safe and secure and also support environmental responsibility, we also focus on the environmental impact of our operations. In 2020, all core environmental metrics showed improvement versus our baseline year of 2019 for our manufacturing footprint (figures are normalized by annual revenue):

Measurement Units 2020 Levels YOY Savings (normalized by revenue)
Energy Consumption BBTU 570 9.4%
Equivalent Greenhouse Gas Emissions MT CO2 e 60,000 12.2%
Water Consumption m3 680,000 8.1%
Hazardous Waste Generation Million kg 0.5 28.4%
Non-Hazardous Waste Generation Million kg 8.2 5.2%

Sustainability Through our Products

Resideo’s greatest strength in sustainability is built on a foundation of air, energy, water and security product lines designed to enable our customers to save energy, water, and carbon, with a presence in over 150 million homes worldwide.

Air

Our roots extend over a century to the very first thermostat built with a programmable setpoint schedule to reduce energy use resulting in lower heating and cooling costs for the homeowner. Since then, the features of our Connected and Non-Connected Thermostat lines have evolved to drive better savings without sacrificing comfort by leveraging geofencing, setpoint optimization and other intelligence. For our Connected Thermostats installed in homes and businesses, we estimate that more than 1.2 TWh of electricity and 97M Therms of natural gas were saved last year. In addition to energy savings, our thermostats are involved in most major residential utility Demand Response programs in North America. Resideo’s Energy Management division also controls a fleet of flexible Distributed Energy Resources (DERs) serving at the forefront of the smart electricity grid. These DERs are enabling the proliferation of renewable generation sources lowering both costs and emissions across the country, and as a leader in the industry, Resideo’s contribution will be key to a sustainable future.

Energy

HVAC monitoring is also a growing part of our product portfolio, with energy and cost savings for buildings and the professional contractors who service them:

  • Our Remote Appliance Monitoring products connect data from our Connected Thermostats and additional sensors to professional contractors trained in spotting problems in HVAC equipment before they develop into issues. The contractor is often able to consult with the homeowner to remedy the situation without an unnecessary site visit, saving time and transportation energy;
  • Our new LifeWhere product takes remote monitoring to the next level by injecting machine learning into the equation to detect signs of issues and inefficiencies before a costly failure occurs.

Resideo produces many products that are key components in systems people use every day. Our Atmospheric and Powered Gas Water Heater Valves are found in four million water heater tanks produced each year. Efficiency standards and innovation have recently driven water heater efficiency up by 6% for atmospheric and 3% for tanks with powered valves. Based on the installed base of these water heaters over the last decade, we believe our valves in these more efficient systems contributed to a reduction of an estimated 1T Therms of natural gas savings last year.

In summary, our leading air and energy products contributed to the following direct savings in our customer homes in 2020:

Measurement Units 2020 Savings
Electricity Consumption Billion kWh .2
Natural Gas Consumption Million Therms 140
Equivalent Greenhouse Gas Emissions Million MT CO2 e 1.6

Water

Our Connected and Non-Connected Water Valves & Preventers help enable more efficient management of building hot water. These allow lower temperatures to be used in water systems, saving energy by reducing how much heat is required and improving safety by limiting scalding. Resideo Water Leak and Freeze Detectors (WLDs) are one of our premier connected products that pays dividends for our customers and insurance companies by detecting leaks and freeze-related water breaks in water heater tanks, washers, and sinks before they become catastrophic failures. A recent pilot program concluded that 11% of catastrophic failures were avoided thanks to these innovative products. When extrapolating to all these devices in use this would have saved $1.6M in claims and 2.7M gallons of water in 2020 alone.

Our People

Our human capital management is a critical component of our overall Company strategy. We are committed to creating a diverse, equitable and inclusive workplace, where employees can bring their authentic selves to work each day. We sponsor employee resource groups for Women, LGBTQIA+, Black, Latino, Veterans, and people with Differing Abilities, and strive to attract diverse talent. Ensuring “pay for performance” and aligning our total rewards program with shareholder interests, including the 2020 rollout of an employee stock purchase plan, are key to our vision. Engaging and developing our talent is vital to our business and operating results. This year we launched an improved Employee Voice Survey and created action plans to respond to employee feedback, developed a people manager certification training program, enhanced our global mentor program, and revamped our annual performance planning process to empower managers to provide quarterly feedback to our employees through quarterly “pulse” conversations versus having annual end-of-year development conversations. These initiatives have spawned “continual personnel improvement” where we’re challenging our employees, gauging their satisfaction with Resideo and developing our future leaders.

Additional information regarding our employee programs, including health and safety data, can be found in the Human Capital section of the Company’s recent annual report on Form 10-K, available on our website.

COVID-19 Health and Safety Measures

As with most companies, the COVID-19 pandemic had a substantial impact in 2020 on our workplaces and our employees. Our commitment to providing a safe and healthy workplace for all employees was heightened by the challenges of the pandemic, and we responded aggressively to the constantly changing global landscape of learnings, guidance and directives. In response to the pandemic, we took numerous actions to protect the health and safety of our employees, visitors and customers. These actions included formation of a response team, contact tracing and tracking of exposure and positive cases, enhanced cleaning protocols, moving to work from home where possible, suspension of most business travel and in-person meetings, the purchase of face coverings, gloves, hand sanitizer, and hand held thermometers, installation of thermal scanners at our manufacturing sites, installation of floor demarcations and plastic shields in our ADI branches and on manufacturing lines, weekly internal audits, external audits of select sites, leasing of additional vans to permit distancing where we provide transportation to employees, daily symptom self-assessments, curbside and contactless pickup in many locations, enhanced employee benefits, COVID-19 testing, and policies requiring face coverings and physical distancing.

Our Purpose

Resideo is working to address some of the fundamental global challenges we as citizens face today. We imagine a world where homes and buildings are good for the planet, where technology works to simplify everyday life. In that world, people are healthy, happy and secure. To help create this future, we work every day to simplify the connected world so that people have peace of mind and can focus on what matters most. We are starting at home – with our neighborhoods and communities – and committing to making a difference for our customers and the industries we serve.

As a company, we provide people with products and technologies to manage their homes to help keep them more comfortable, efficient, and secure. We believe that for the communities where we do business and our employees live, the basic needs of safety, security, housing and freedom from hunger must first be met, before people are able to fully thrive and improve the quality of their lives.

We provide support to these local communities through various, global corporate-wide and localized grassroots philanthropic efforts.

Safety and Security

Resideo has been a strong supporter of Mission500, a security industry non-profit that serves the needs of children and communities in crisis in the U.S. Resideo is a financial supporter of the organization and also has employee representation on Mission500’s Advisory Board, participating in monthly board calls to shape the strategy and direction for the organization. Resideo employees have raised funds and been given time to participate in humanitarian trips, most recently to Matlapa, Mexico, to build ecological latrines in the Eastern Mexico rain forest, and on multiple previous trips to Ponce, Puerto Rico, to help rebuild homes and infrastructure following Tropical Storm Karen and Hurricane Maria that left much of the island community destroyed.

Housing

Resideo has recently embarked on a program with Habitat for Humanity, a global nonprofit housing organization working in local communities across all 50 states in the U.S. and in approximately 70 countries. Resideo has identified approximately 25 communities where we have a sizable employee population and will identify work projects and cause marketing that will benefit the elderly, veterans and communities in need. Resideo will also make product donations of security systems, thermostats and other smart home controls to help Habitat homebuyers be safe and comfortable in their new homes. This partnership will have a strong employee engagement and give our employees an opportunity to address local housing issues and better serve the communities in which they live.

Hunger

Our localized, grass-roots philanthropic employee efforts have been focused on engagement with local hunger relief organizations including Feeding America, a U.S.-based non-profit with a nationwide network of more than 200 food banks that feed more than 46 million people through food pantries, soup kitchens, shelters and other community-based agencies. Employees in our Golden Valley, Minnesota, Melville, New York, and several other smaller locations have coordinated food drives and fundraising efforts that supported the local Feeding America organizations.