2021 SUSTAINABILITY PROGRESS REPORT | Cummins Inc. 61 TRACKING FUTURE RISKS The Executive Risk Council and the Board of Directors re-evaluated in 2020 how the company traditionally tracks risks, seeking to also track longer-term issues with the potential to significantly alter the way the company works. The company decided it was important to begin tracking a new category of risk in addition to the current enterprise risks. These “emerging risks” did not necessarily present an immediate or large threat to the company but have been identified as potentially important in the future. By continually taking steps to identify emerging risks, Cummins’ leaders and board keep an eye on the future while addressing the most material risks facing the company today. This process ensures leaders are always thinking about the company’s long-term sustainability. The Cummins Board of Directors oversees the most significant risks. The board or its committees receive briefings at every regular meeting on one or more relevant risks and once a year the full board reviews the entire Enterprise Risk Management program and the results of the last enterprise risk assessment. COORDINATION IS KEY Cummins’ Enterprise Risk Management team also works with other assurance groups that play an important role in managing risk throughout the company, including Risk Insurance and Global Security, which oversees the Business Continuity Plans established by every Cummins location to manage through an emergency. These plans are regularly tested and improved as part of Global Security’s holistic approach to emergency management. Key sites undergo tabletop exercises to ensure they are ready if an emergency occurs. The Risk Management team also works with the company’s Area Business Organizations on the risk management programs in their regions to track and mitigate key risks. A company’s ability to anticipate and manage potential business interruptions can be the difference between success and failure, whether the risk involves a supply chain disruption, an emissions compliance issue, or a cybersecurity concern—three of nearly two-dozen areas actively tracked by Cummins’ senior leadership. LEADERS PLAY MAJOR ROLE The Cummins Executive Risk Council is comprised of the company’s President and Chief Operating Officer, Vice Chairman, Chief Financial Officer, General Counsel, and Chief Administrative Officer. The Vice President – Corporate Strategy, Corporate Controller and the Vice President of Internal Audit also attend these meetings. The council meets at least quarterly to review and update material risks facing the company. Senior leaders are assigned responsibility for managing key risks. At every meeting a few of these risk “owners” present an in-depth briefing on their particular risk. Council members ask questions and debate the risk to ensure it gets the appropriate amount of attention. RISK MANAGEMENT FOUNDATIONAL TO CUMMINS’ SUSTAINABILITY Cummins’ Enterprise Risk Management team works with the company’s top leaders to establish a culture where key risks are identified and responded to appropriately, with guidance and oversight from Cummins’ Board of Directors. Company leaders believe managing risk is critical to Cummins’ long-term sustainability, and that effective risk management starts with enterprise resiliency. RISK MANAGEMENT //