GE's 2021 Sustainability Report

Dear Fellow Stakeholders,

Throughout our 130-year history, GE has demonstrated a larger purpose of lifting up the quality of life for people around the globe. Our approximately 168,000[1] employees work with customers, partners, communities, and governments in over 175 countries to deploy and innovate technology to solve the world’s most pressing sustainability challenges across energy, health, and flight. Every day, our people rise to the challenge of building a world that works, in service of a more connected, healthier, and more sustainable future.

In year three of the COVID-19 pandemic, it is clear that global recovery – both economic and societal – remains uneven. Supply chain constraints continue to challenge businesses, government budget shortfalls hinder efforts to provide essential services, and millions of people around the world have faced significant disruption to their education and employment. Throughout 2021, our GE teams continued to assist healthcare providers, partners, communities, and patients around the world to address the ongoing health crisis, and we worked with local organizations in some of the hardest-hit communities to respond to humanitarian challenges.

The devastating war in Ukraine is no different, and the GE team stands proudly with the people of Ukraine. Our number one priority has been the safety of our people in the region, and we have acted diligently both to relocate those in harm’s way and support our Ukrainian employees working elsewhere in Europe. We have donated $4 million in medical equipment to those affected along with $500,000 for international aid groups to support refugees. I’m especially inspired by the GE employees who have opened their homes to Ukrainian refugees and volunteered their time to help with other refugee efforts. In addition, we have suspended all operations in Russia with the exception of providing essential medical equipment and supporting existing power services to people in the region.

The shape of things to come

We are taking steps today to further strengthen GE’s ability to lead on some of the defining trends of our time—driving decarbonization through the energy transition, enabling precision health, and creating a smarter and more efficient future of flight. In November 2021, we announced plans to form three independent, investment-grade companies that will be better positioned for long-term growth and improved service to customers, employees, and communities. We plan to spin off Healthcare first in early 2023, combine Renewable Energy, Power, and Digital into one business to launch as an independent public company a year later, thus creating our third company focused on Aviation.

As we look ahead to forming three industry leaders with sustainability at their core, these strong independent businesses will better leverage our innovation muscles, technology expertise, leadership, and global reach to build a world that works for everyone.

ENERGY TRANSITION

As a company whose equipment helps generate one-third of the world’s electricity, we have a responsibility to lead the industry’s decarbonization efforts while solving the energy “trilemma” of affordable, reliable, and sustainable electricity, particularly for the more than 750 million people without access. Our energy businesses provide powerful, integrated solutions with some of the most innovative onshore and offshore wind turbines, most efficient gas turbines, as well as advanced technology to modernize and digitize electrical grids. For example, our powerful Haliade-X offshore wind turbine prototype in Rotterdam began operating at 14 MW. One Haliade-X 14 MW turbine can generate up to 74 GWh of gross annual energy production, saving up to 52,000 metric tons of CO2, which is the equivalent of the emissions generated by 11,000 vehicles[2] in one year. We have over 7 GW of Haliade-X commitments worldwide.

We believe in the important role of building the breakthrough technologies the world will need in the future, including low- and zero-carbon fuels like hydrogen for new and existing gas plants, carbon capture, utilization, and sequestration (CCUS), offshore wind superconducting generators, and small modular nuclear reactors (SMRs). For example, we are working with customers to construct and update power plants in the U.S., Australia, and China to run on blends of hydrogen and natural gas, and to develop front-end engineering design studies for CCUS solutions in the U.S. and U.K., which can significantly reduce CO2 emissions from power generation.

PRECISION HEALTH

Enabling precision health will require integrated, efficient, and highly personalized care while improving access, particularly to the half of the world’s population that is underserved. In Healthcare, we are developing innovative new technology that will further personalize and streamline the entire healthcare experience, from diagnosis to treatment and through recovery. For example, Healthcare launched the Vscan Air handheld wireless color ultrasound scanner that increases access to innovative care – including rural areas where such technology may not otherwise exist. With 30,000 units impacting the care of more than 50 million patients worldwide, our Vscan Family technologies help doctors deliver better care to more people. To strengthen the healthcare system’s ability to manage the COVID-19 pandemic, we established a statewide system in Oregon powered by artificial intelligence that gives clinicians near real-time information about intensive care unit (ICU) capacity, acute hospital beds, and emergency department wait times. As a result, we are reducing administrative burdens on hospital resources and helping improve both patient care and prevent staff burnout. To date, 95% of the state’s beds are live in the system.

FUTURE OF FLIGHT

Innovations that improve fuel efficiency are defining the future of flight, and Aviation is helping the industry make meaningful progress toward its goal of net zero carbon emissions by 2050. GE Aviation is unique in the industry for the scale and ambition it is bringing to confront this problem, as we pursue solutions across Sustainable Aviation Fuel (SAF) as well as hybrid electric and hydrogen-powered flight. Today, all GE and partner engines are able to operate on approved SAF, which could lower lifecycle carbon emissions by up to 80 percent compared to petroleum-based fuels. GE Aviation, together with GE Research, is advancing commercial hybrid electric propulsion systems through key partnerships with ARPA-E and NASA. Additionally, Airbus and CFM International[3] are collaborating on tests of a modified GE Passport engine fueled by hydrogen. We are also innovating the next generation of aircraft engines. CFM launched the Revolutionary Innovation for Sustainable Engines (RISE) program to demonstrate advanced technologies, with ground and flight tests expected in the middle of this decade. This program could ultimately lead to engines that would use 20 percent less fuel and reduce CO2 emissions by 20 percent more than the most efficient jet engines built today.

Driving progress on climate

In 2020, we set a new goal to achieve carbon neutrality within our own operations (Scope 1 and 2 emissions) by 2030. As described in this report, to achieve this goal, our businesses are making operational investments in energy efficiency, reducing emissions from the grid through smart power sourcing, and using lean practices to eliminate energy waste. For example, our Gas Power team held a “Carbon and Energy Savings Kaizen Week” earlier this year across 21 sites focused on reducing energy consumption that identified an average savings of seven percent energy usage per site.?

In 2021, we articulated GE’s ambition to be a net zero company by 2050, including not just GE’s own operations, but also the Scope 3 emissions associated with the use of our sold products. In this report, we provide more details about the path we see to achieving this ambition and connect the dots between our historic progress to reduce emissions, delivering state of the art technology this decade, and innovating the breakthrough technologies for tomorrow with our net zero ambition for energy and aviation. We know our employees, customers, suppliers, policymakers, and other stakeholders are counting on GE not only to reduce emissions, but to innovate the technology the world needs to achieve its goals. We are optimistic our efforts can drive both sustainability and business success.

Our Board of Directors oversees the execution of GE’s sustainability priorities and initiatives as an integrated part of the Company’s overall strategy and risk management. The Board discussed and helped shape the actions above and oversees the Company’s decarbonization strategy highlighted throughout this report.

Fostering a diverse & inclusive workplace

The only way we are going to achieve our goals at GE is to ensure that we are able to recruit, retain, and promote the best talent. Teams that include diverse backgrounds and perspectives are absolutely critical to driving the lean mindset and innovative approach that we will need to shape the energy transition, precision health, and future of flight. This is why we are proud of the progress we have made in the last year to improve GE’s diversity, equity, and inclusion (DE&I), and we are excited about the opportunities ahead to launch three independent companies that will maintain our dedication.

We continued to focus our DE&I efforts on transparency. This means clearly reporting our employment diversity in new and more detailed ways so that all interested parties can easily understand where we are and hold us accountable as we progress toward where we want to be. This data has been informing the areas where we need to invest greater time and resources. Since 2020, we saw growth at the leadership level for both women globally (+1.2%) and for total U.S. race and ethnic minority (+1.7%). While men and women performing similar work are paid within one percent of each other across each GE business, we are committed to achieving 100 percent pay equity.

Finally, we were thrilled this year to appoint Brandi Thomas as our new Chief Diversity Officer (CDO), who is reporting directly to me and building on Mike Barber’s work following his retirement. Brandi’s leadership experience—inside and outside of GE—combined with her history of building diverse teams and deployment of lean make her the right CDO for GE. I look forward to partnering with her to accelerate our progress.

Building a world that works

During a recent visit to our GE Renewable Energy facility in Pensacola, Florida, I had the chance to meet with employees, hear about their lean journey over the past few years, and witness how deeply we have embedded lean within our culture. Lean in its simplest terms is about focusing on the customer, eliminating waste and prioritizing relentlessly. Our lean mindset is giving us the tools and instincts to make the right decisions and necessary trade-offs.

In 2021, employees at the Pensacola facility held more than a dozen kaizen exercises seeking to find ways to make production more flexible and resilient. The work has been paying off. Just last year, lean helped the plant significantly reduce the amount of time it takes to build a turbine, decreasing the number of build hours by six percent and shortening the time spent on the production line by 12 percent. Importantly, in this example, lean is helping us deliver on our sustainability strategy while enabling customers to meet their decarbonization goals.

As we prepare for a new and defining chapter in GE’s history, sustainability is deeply rooted in all of our plans and priorities. I’m incredibly proud of the ownership and initiative that our employees have displayed in this area, as well as the shared appreciation they have for doing things the right way. With this collective mindset in place, I know we can continue to expand on our 2021 accomplishments in the years ahead to build a world that works—for everyone.

Larry

[1] Based on full-time equivalent, active employees as of December 31, 2021.

[2] According to wind conditions on a typical German North Sea site.

[3] CFM International is a 50-50 joint company between GE and Safran Aircraft Engines.