WHEREAS: The Intergovernmental Panel on Climate Change has advised that greenhouse gas (GHG) emissions must be halved by 2030 and reach net zero by 2050 to limit global warming to 1.5°C. 
Every incremental increase in temperature above the Paris Agreement’s goal of holding warming to 1.5°C will entail increasingly severe physical, transition, and systemic risks for companies and investors alike.
In its 2022 10-K, Illinois Tool Works Inc. (“ITW” or “the Company”) highlighted its climate risk, noting, “Uncertainty related to environmental regulation and industry standards, as well as physical risks of climate change, could impact the Company's results of operations and financial position.” Despite acknowledging its climate risk, ITW’s mitigation strategy falls short of what is needed to shield the Company and investors from climate-related risks. The Company’s Scope 1 and 2 reduction goals are modest and not aligned with holding warming to 1.5°C. Further, the Company does not publicly report or have a goal covering its material Scope 3 emissions.
ITW trails its competitors in setting holistic GHG reduction targets and managing climate risks. ITW peer companies Cummins, Deere & Company, Eaton Corporation, Ecolab, Emerson Electric, Honeywell International, Johnson Controls, Parker-Hannifin Corporation, PPG Industries, Stanley Black & Decker, and Trane Technologies, have adopted, or committed to adopt science-based GHG reduction targets (SBTis). Many of these goals are inclusive of scope 3 emissions and are supported by transition plans.
There is growing interest from investors for increased disclosure of how companies are addressing the climate crisis and plan to transition their business models to ones that align with limiting warming to 1.5°C. To assist companies in developing viable transition plans, groups including We Mean Business, CDP, State Street Global Advisors, and the Task Force on Climate-Related Disclosures have provided guidance.
Ramping up its climate-related initiatives may unlock growth opportunities for ITW by preparing the Company for future climate-related regulations that would affect its operations. The Company can also become a sustainable solution for customers and potential customers decarbonizing their supply chains.

SUPPORTING STATEMENT: In assessing targets, we recommend, at board and management discretion:
Taking into consideration approaches used by advisory groups like SBTi;Developing a transition plan that shows how the company plans to meet its goals, taking into consideration criteria used by advisory groups; and,Consideration of supporting targets for renewable energy, energy efficiency, low-carbon material procurement, and other measures deemed appropriate by management.