Carrier Global (CARR)

Company website 2020 Financial Report Stock Analysis 2020 ESG Report

381752

Metric Tons

of GHG emissions avoided in 2020

17^%

Reduction

from Carrier's own operations since 2015

255

Million Gallons

of water consumption reduced in 2020

View Our Analysis

The Path to Drawdown: High-Efficiency Heat Pumps

Buildings and construction account for about 38% of global CO2 emissions and 35% of total energy-use. More than one-third of that is for heating and cooling, which could cut energy use by 30-40% with maximum efficiency.

Heat pumps are the technology that can increase heating and cooling efficiency most effectively. Heat pumps extract heat from the air and transfer it from indoors to the outside for cooling, and from outdoors in for heating. The ground, air, or water can act as the source of or outlet for that heat.

Heat pumps are easy to adopt, well understood, and already in use around the world. They can supply indoor heating, cooling, and hot water, all from one integrated unit. With high efficiency, they can dramatically reduce building energy use. When paired with renewable energy sources, they could eliminate almost all emissions from heating and cooling.

According to Project Drawdown, high-efficiency heat pumps need to continue growing mildly between now and mid-century to help achieve decarbonization:

<::marker> In 2018, high-efficiency heat pumps accounted for 3% of the market for delivered heat globally
<::marker> To stay below 1.5°C of global warming, high-efficiency heat pumps need to grow enough to account for 4.3% of that market by 2060
<::marker> That’s 0.86% growth annually between 2018 and 2060

If this scaling can be achieved, heat pumps can help avoid up to 9.3 gigatons of GHG emissions.

About

Carrier Global Corporation (stock ticker: CARR) is a home appliances corporation. They manufacture and distribute heating, ventilating and air conditioning systems, as well as commercial refrigeration and foodservice equipment, and fire and security technologies.Headquartered in Palm Beach Gardens, Florida, they serve customers in over 160 countries.

CARR's Role in Drawdown

Carrier’s HVAC segment provides products, controls, services and solutions to meet the heating and cooling needs of residential and commercial customers, while enhancing building performance, energy efficiency and sustainability. Products include air conditioners, heating systems, controls and aftermarket components, as well as aftermarket repair and maintenance services and building automation solutions. They offer these solutions through their subsidiaries (Automated Logic, BlueEdge, Bryant, Carrier, CIAT, Day & Night, Heil, NORESCO, Riello and Tempstar).

Their HVAC segment also offers a wide range of heat pumps. Most recently, their subsidiary Carrier Residential HVAC launched (p. 6) two new flagship products in 2020 - the Carrier infinity 26 air conditioner and the Carrier Infinity 24 heat pump, which offers both heating and cooling capabilities. They help maintain consistent temperature and humidity, achieving the highest energy efficiency ratings among all ducted systems and offer ultra-quiet operation.

Carrier’s AquaSnap heat pumps (p. 6) use a refrigerant with a low global warming potential that improves performance and reduces direct GHG emissions by up to 77% compared to the previous range.

CARR: What We Like

Carrier has a track record of setting and achieving sustainability targets:

<::marker> Since 2015, Carrier has reduced their operational GHG emissions in absolute terms by over 78,000 metric tons (p. 33)
<::marker> They reduced water consumption by 44% compared to 2015 baseline (p. 13), or almost 255 million gallons
<::marker> By 2030, Carrier aims to reduce customers’ carbon footprint by more than 1 gigaton (p. 14) through their energy efficiency products and services

Also by 2030, they’re committing to becoming carbon neutral (p. 14) in their operations.

What We Want to See Improve

Switch to Zero-Emission Fuel

Carrier relies overwhelmingly (p. 66) on fossil fuels for their operation and transportation. And what’s more, their use of natural gas, butane and fleet vehicle gasoline has gone up in the last three years. As part of their mission to reach carbon neutrality by 2030 (p. 14), we urge Carrier to transition to clean energy sources like electric or green hydrogen vehicles for their fleet and renewable energy for their operations.

Track Scope 3 Emissions

We applaud Carrier’s reporting of their scope 1 and 2 emissions (p. 69). To go a step further, we want them to track the indirect emissions from their entire supply chain as well.

Expand Faster

The COVID-19 pandemic understandable dealt a blow to Carrier’s revenue. But even before 2020, the net sales of all of their business segments were either flat or declining compared to 2018. We are eager for them to bounce back from the pandemic-induced lull and begin expanding their sales as soon as possible.

Related Heat Pump Stocks in the Climate Index

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Allocated	Company	Description
2.88%	Carrier Global (CARR)	Carrier equips buildings with high-efficiency HVAC systems to improve energy efficiency - key to cutting emissions in the building sector
2.74%	Trane Technologies (TT)	Trane makes and sells AC, building management, heat pumps, and refrigeration systems, helping buildings achieve energy efficiency and emission cuts
0.69%	Lennox International (LII)	Lennox makes high-efficiency heating, ventilation, air conditioning and refrigeration products, helping building managers cut energy use and emissions