CORPORATE GOVERNANCE RISK MANAGEMENT Risk is an inherent part of conducting global business, and As risk management is fundamental to our culture, there managing risk is fundamental to the way we work. Through is strong engagement in risk management from the CEO, robust programs including Enterprise Risk Management, executives, and senior leaders. The company’s officers share Compliance and Audit, we engage across the enterprise to accountability for business risks, and the board has oversight of identify, prioritize and manage risks. the enterprise process. The board and its committees oversee Enterprise Risk Management and our enterprise strategy are risk and have regular updates on topics that are identified linked: To better inform our decision-making, we evaluate risks through the risk management process. Outputs from risk at both the business unit and enterprise levels, considering management drive strategic initiatives and disclosures. the likelihood and potential impact of each risk. These Our risk management culture enables us to critically evaluate evaluations guide our approach for risk management, allow risks to our business and identify opportunities to create us to understand the challenges these risks bring and position value for our employees, customers and shareholders. our business for the opportunities they present. Our commitment to sustainability is reflected in our risk We consider risks across many categories, including strategic, management practices as we strive to build a better world. operational, financial, compliance and hazard risks. We embed ESG risks into each risk category as part of our commitment to sustainability. We treat these ESG risks with the same priority and rigor as other risks across the business. POLITICAL CONTRIBUTIONS We advocate for policies, agreements, legislation and regulations CATPAC contributions are made only in U.S. federal and state that enable us to help our customers build a better, more elections. CATPAC is funded through voluntary contributions by sustainable world. eligible individuals. A steering committee comprised of Caterpillar Where allowable by law, Caterpillar may make corporate non-officer employees representing a diverse mix of U.S. contributions to campaigns, individual candidates or political locations and business units oversees all CATPAC disbursements committees to support public policies we believe will promote to ensure they promote the company’s business interests. our business interests. Any political contributions by Caterpillar Caterpillar also maintains memberships in trade associations must be approved by our vice president of Global Government and business groups that may advocate on behalf of business & Corporate Affairs. In addition, the board annually reviews the community segments. We are committed to supporting these company’s political spending policy and its political activities organizations, as they champion public policies that contribute including corporate political contributions, political contribution to the business community’s growth and success. activities of the Caterpillar Political Action Committee (CATPAC), trade association participation and Caterpillar’s significant Additional information regarding Caterpillar’s lobbying priorities. corporate contributions, CATPAC contributions and trade association memberships is available on our political engagement website. 14CATERPILLAR 2021 SUSTAINABILITY REPORT