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Sustainability
Report 2016
Parker Hannifin is a Fortune 250 global
leader in motion and control technologies.
For 100 years the company has
engineered the success of its customers
in a wide range of diversified industrial and
aerospace markets.
By applying its engineering expertise and
broad range of core technologies, Parker
partners with its customers to improve
their productivity and profitability, while
helping to solve the world’s greatest
engineering challenges.
About Parker
ABOUT THIS
REPORT
The information in this
report addresses how
Parker is applying its
core technologies to
make a positive impact
on the world. All data
corresponds to Parker’s
fiscal year 2016 (July 1,
2015 through June 30,
2016) unless otherwise
noted. The previous
report corresponded to
Parker’s fiscal year 2015.
Parker’s intention is to
report on an annual basis.
REPORT SCOPE
The data provided
in this document
reflects Parker’s global
manufacturing operations
in which Parker has a
50% controlling interest
or majority ownership.
It also includes team
members in those
operations and the
associated headquarters
and distribution centers
under Parker ownership.
The scope does not
include Parker suppliers,
customers, distributors,
contractors or minority-
owned joint ventures.
CONTACT US
Parker welcomes comments and questions
about its sustainability strategy by email:
sustainableparker@parker.com
TABLE OF CONTENTS
Leadership Message ....................................... 2
Sustainability ................................................... 5
Governance, Ethics & Compliance .................. 9
People .......................................................... 13
Planet ........................................................... 19
Product Stewardship..................................... 23
1
THE WIN STRATEGY
In fiscal year 2016, Parker team members implemented the refreshed Win Strategy™
focused on the goals of engaged people, premier customer experience, profitable
growth and financial performance.
Looking ahead, the powerful combination of Parker’s highly engaged people, unique
motion and control capabilities and the Win Strategy will generate positive results for
customers, shareholders and Parker team members.
For the Year Ended June 30 (dollars in thousands, except per share data)
Operating Data
Net sales $11,360,753
Net income 807,216
Net cash provided by operating activities 1,169,843
Per Share Data
Diluted earnings $ 5.89
Dividends 2.52
Financial Highlights
2016
The Win Strategy
Premier Customer
Experience
• Quality Solutions On Time
• eBusiness Leadership
• Ease of Doing Business
Profitable
Growth
• Market-Driven Innovation
• System Solutions
• Strong Distribution
• Grow Share
• Engineering Expertise
Financial
Performance
• Simplification
• Lean Enterprise
• Strategic Supply Chain
• Value Pricing
Organic
Acquisitions Services
Engaged
People
• Environmental, Health
& Safety
• Entrepreneurial
• High Performance
Teams & Leaders
Goals
Our Vision: Engineering Your Success
STRATEGIES STRATEGIES STRATEGIES STRATEGIES
TM
2
Leadership Message
At Parker, our approach
always begins with
the safety of our team
members. Nothing is
more important than
making sure every Parker
team member returns
home safely after each
work day.
While our accident rate
continues to decline
year after year, the goal
is always zero accidents.
It’s an ambitious goal.
Yet, we are confident
we can get there by
reinforcing a safety-first
culture in which all
Parker leaders and team
members are engaged
in keeping our work
environments free
from accidents. We are
implementing best-in-
class safety practices,
including a focus on
how our equipment and
operations can minimize
safety risks. Through
ongoing education,
Parker team members are
being trained to recognize
safety hazards, and are
strongly urged to voice
their concerns if they
witness unsafe behavior
or potentially dangerous
conditions.
Parker is also constantly
adapting to stay ahead
of advancements
in manufacturing
technology. Our focus
is on reducing energy
consumption and water
use, decreasing emissions
and minimizing waste
sent to landfills by reusing
or recycling materials.
Improving manufacturing
efficiency represents a
significant opportunity
to fulfill our commitment
to sustainability, and the
resulting reductions in
operating costs are also
aligned with Parker’s
financial performance
goals.
Today, Parker recycles
85% of the waste
generated from
its manufacturing
operations, and we are on
track to achieve our goal
of reducing water use and
volume of waste sent to
landfills by 20% between
2015 and 2020.
Another key indicator
of Parker’s success is
our ability to make a
positive impact in the
communities which we
call home. The practice
of volunteering and
charitable giving has
always been central
to Parker’s culture.
Through the Parker
Hannifin Foundation’s
three key areas of focus
we are able to support
our communities in
need, contribute to
improving math and
science education and
advance energy and water
conservation efforts.
arker’s
sustainability
strategy is
focused on the
positive impact
we can have on
people and the
planet which we all
share. Through the
responsible design,
manufacture
and disposal of
our products, we
strive to foster the
enduring success
of our company,
customers and
communities.
3
Thomas L. Williams
Chairman and Chief Executive Officer
Lee C. Banks
President and Chief Operating Officer
December 2016
Additionally, Parker team
members generously
donate and volunteer
to get involved with the
many charities and causes
which they are passionate
about supporting.
From workplace
safety and resource
conservation, to
community leadership
and charitable
giving, this report
highlights examples
of local sustainability
initiatives led by our
remarkable Parker
team members. We all
share a commitment to
responsible operations,
and as Parker celebrates
its 100th anniversary
in 2017, we will look
to the future for new
opportunities to make
a positive impact on
the world.
Sincerely,
4
All sustainability
initiatives at
Parker are
aligned
with the
company’s
ambition
to create a
positive impact
in people’s
lives.
5
From creating value for customers and
shareholders, to preserving the environment
and creating a positive impact on team
members and in local communities, the concept
of sustainability is aligned with the goals that
have driven Parker since the company was
founded a century ago.
Regardless of their
role within the
company’s operations,
Parker’s sustainability
commitment is shared by
team members around
the world.
is reflected in efforts to
create a safety-first work
environment in pursuit
of zero accidents, engage
employees in driving
performance, strengthen
local communities and
support organizations
that make the world a
better place.
PLANET
Parker’s commitment to
responsible operation is
rooted in the fact that,
as a global industrial
leader, the company’s
manufacturing practices
can have a significant
and widespread impact
on the world. Parker
is actively minimizing
its environmental
footprint and helping
to protect the planet
for future generations
by using eco-friendly
materials, minimizing
waste and reducing the
consumption of resources
such as energy and water.
PRODUCTS
Innovation at Parker
is focused on helping
customers to be more
efficient and productive.
Doing so not only
improves profitability,
but positions Parker to
leverage its diverse range
of motion and control
technologies to reduce
energy consumption
and emissions around
the world.
Parker engineers analyze
the entire product
lifecycle to identify
opportunities to leverage
sustainable materials in
manufacturing, improve
operating efficiency and
create technologies that
can be reused or recycled
upon disposal, helping
to reduce waste sent
to landfills.
PEOPLE
All sustainability
initiatives at Parker
are aligned with the
company’s ambition to
create a positive impact in
people’s lives. This focus
on making a difference
Sustainability
ustainability
commitment:
To responsibly
solve the world’s
greatest engineering
challenges to foster
enduring success
for the company,
customers and
communities.
6
Earth Day Challenge
In recognition of Earth Day 2016, Parker challenged all team members to
work together to find new ways to conserve energy, water and raw materials
while eliminating by-product waste from production processes. Culminating in
35 unique local projects, this collaborative effort generated ideas that can be
adapted for use at Parker facilities around the world, and helped reduce the
company’s environmental footprint by:
POTENTIAL RISKS
AND BOUNDARIES
Given the diversity of
the markets Parker
serves, the breadth of its
product portfolio and
the size and complexity
of its supply chain,
Parker must address a
number of risks related
to the manufacture, sale
and application of its
technologies. Parker’s
products rely on energy to
function, and a transition
away from a carbon-
based economy could
impact demand for those
products. Scarcity of raw
materials such as metals
and organic compounds
could also interfere with
on-time delivery.
Parker also assumes
the operational risk
of a disruption to
manufacturing due to
the inability of supply
chain partners, or even
the company itself, to
meet environmental or
social standards. Failure
to meet the expectations
of stakeholders related
to environmental and
social accountability also
creates a long-term risk
for the company.
The boundary condition
of these risks varies based
on the area of focus.
For the People initiative
of its sustainability
strategy, Parker’s
boundary condition
encompasses its team
members, partners and
the communities around
the world in which the
company operates. The
boundary condition of
the Planet initiative is
largely the company’s
manufacturing footprint,
with additional focus
on select areas of the
supply chain. Lastly, the
Product initiative focuses
primarily on internal
innovation, but the
boundary condition also
extends to the customer
and target markets.
Reducing energy use by
17 MILLION kWh
Preventing more than
200 TONS OF WASTE
BY-PRODUCT from reaching landfills
7.5million
gallons
Decreasing water
consumption by
7
STAKEHOLDER
ENGAGEMENT
As a result of the
dedication and
meaningful contributions
of its team members,
Parker continues to
make progress towards
its sustainability
objectives each year,
but understands
the importance of
maintaining this
momentum and building
on past progress. The
company engages a
number of stakeholders
to help strengthen its
sustainability efforts and
identify opportunities for
continuous improvement.
Parker receives valuable
input through direct
feedback from: its
marketing and sales
teams; suppliers on
their compliance with
Parker’s sustainability
requirements through the
company’s supply chain
web portal; the Parker
leadership team; and
ratings from the investor
community. Parker also
analyzes information
from benchmarking
efforts within its
diversified industrial
peer group.
SUPPLIER
PARTNERSHIPS
Parker is committed to
partnering with world-
class suppliers focused
not only on premier
customer service and
maintaining the highest
standards for quality and
on-time delivery, but
on reducing resource
consumption and waste.
With an annual supplier
spend exceeding $6
billion, continuing to
improve the supply chain
in these areas of focus
presents a compelling
opportunity for Parker
to reduce its global
footprint and improve the
resilience of its suppliers.
As a supplier itself, Parker
is also responsible for
conserving resources,
optimizing manufacturing
processes, upholding
human rights and
creating highly efficient
and reliable products
and systems which
enable customers to
minimize their own
environmental impact.
8
Parker’s values are
a strong and
unchanging set of
core beliefs which
team members
use to define
ethical behavior.
9
Beyond leveraging a century of motion and
control technology expertise to partner with
customers to improve their productivity and
profitability, Parker’s reputation as a trusted
business partner is critical to the company’s
long-term success.
This legacy of conducting
business with integrity
and respect enables
Parker to create enduring
partnerships with
customers and suppliers,
and attract honest and
inspired team members
aligned with the
company’s vision.
Parker’s values are a
strong and unchanging
set of core beliefs which
team members use to
define ethical behavior.
CORPORATE
GOVERNANCE
The strong values and
culture upon which
Parker has built its
success and reputation
as a trusted partner
begins with its Board of
Directors. The Board has
responsibility to represent
stakeholders in overseeing
the business strategy
and governance matters
of the company. Eleven
of Parker’s 13 directors
are “independent”
based on the applicable
independence standards
of the New York Stock
Exchange and Parker’s
Independence Standards
for Directors. Each
director must stand
for election annually.
Parker’s Board of
Directors is guided by
the company’s Global
Code of Business Conduct,
corporate governance
guidelines and charters
for each board committee,
available at
www.phstock.com/
corporategovernance.
Governance, Ethics
& Compliance
10
WINNING WITH
INTEGRITY
When Art Parker
established the company
in 1917, he laid the
foundation for the
exceptional reputation
Parker has today with a
commitment to achieving
success without ever
compromising his
honesty and integrity.
Even a century later, his
resolve to build a business
that was aligned with his
deeply-held personal
values is reflected clearly
in the company Parker
has become.
Today Parker takes a
strength-based approach
to culture and leadership,
emphasizing the
importance of conducting
business with honesty,
integrity and respect.
All team members
share the responsibility
for preserving Parker’s
reputation and
protecting its financial
strength by maintaining
the highest standards for
ethical behavior.
From building enduring
partnerships with
customers and suppliers
to attracting honest and
engaged team members,
Parker’s way of doing
business will continue
to be a key driver of
sustained value. It is the
Parker culture and values,
more than any strategy
or measure that will
determine the company’s
success in the future.
ur culture
is what
sets us
apart. It has
sustained Parker
for 100 years and
will continue to
drive long-term
growth and
success. Every
day our team
members
exemplify the
Parker culture by
living our values
and conducting
business with
integrity, honesty
and respect.”
– Lee C. Banks,
President and Chief
Operating Officer
“
11
CORPORATE
COMPLIANCE
Parker’s compliance
structure and programs
are aligned with the
company’s values, and
designed to engage
team members in
reinforcing standards for
ethical and responsible
behavior. Through annual
compliance training the
company educates team
members on conflicts
of interest, the giving
and receiving of gifts,
third-party relationships
and other issues which
reflect the modern
challenges of the global
business environment.
Throughout the year
Parker also distributes
printed brochures,
newsletters, video
vignettes and other
compliance-focused
educational materials to
remind team members
of important laws,
regulations and policies,
and to reinforce the
importance of always
doing what is right.
Parker’s Global Code
of Business Conduct
is an integral part of
onboarding education
for those who join
Parker. The Code is
available online at
www.parker.com/
integrityandethics.
Any Parker team member
who observes conduct
that is not aligned with
Parker’s values or policies,
or could potentially
violate applicable laws
or regulations, is urged
to take an active role in
addressing it. Concerns
may be reported to
local leadership or the
Corporate Compliance
Office. The Integrity
Line is also available to
all Parker stakeholders,
and all reports are
investigated lawfully
and confidentially.
12
Safety is the highest
priority on the Win Strategy,
and nothing is more important to
Parker than making sure every team
member returns home safely
after each work day.
13
Parker team members are the foundation
of the company’s success. To compete in an
increasingly challenging global environment,
Parker must attract driven and talented
individuals from around the world and
create a culture in which they can thrive
both personally and professionally.
Parker’s safety
performance is measured
by the Recordable
Incident Rate, which is the
number of work-related
incidents which require
medical attention beyond
first aid normalized to 100
team members per year.
The goal is always zero
accidents, and each year
Parker team members
continue to make
meaningful progress
towards achieving it.
Since 2011, through
the commitment and
diligence of all team
members, Parker has
achieved a 53% reduction
in the Recordable
Incident Rate, including
a 28% reduction in fiscal
year 2016.
Improved safety
performance is a clear
indicator of engagement.
A safety-first environment
requires a high level of
individual ownership and
organizational focus.
This year 214 Parker
facilities were accident
free, an achievement
which can be attributed
to High Performance
Teams at Parker
working diligently to
reinforce safety best
practices and explore
all available options to
optimize equipment and
operations in pursuit of
zero accidents.
High engagement drives
exceptional performance,
and Parker encourages
an ownership mentality
by engaging all team
members in leveraging
their expertise to
improve their portion of
the business.
SAFETY
Safety is the highest
priority on the Win
Strategy, and nothing is
more important to Parker
than making sure every
team member returns
home safely after each
work day. The company
is equally committed
to ensuring the safety
and security of all
contractors, customers
and other guests visiting
its workplaces.
People
Record Safety Performance
Chomerics Division Asia
A High Performance Team at the division implemented
engaging safety training and created a recognition
program to reward team members for their safety
performance. The division has achieved a remarkable
streak of 1,200 days accident free, and will continue
to reinforce a safety-first culture.
14
Recordable Incident Rate
Normalized to 100 employees per year
1.032016
1.432015
2014 1.59
2013 1.76
2012 2.15
2011 2.22
Parker team members
also helped to accelerate
the implementation of
a system to report and
address “near hits” or
incidents which did not
result in an injury, but
could have under slightly
different circumstances.
More than 31,000 “near
hits” were reported during
fiscal year 2016.
Beach Cleanup
and Preservation
domnick hunter Process Filtration
Division - Oxnard, CA, USA
Partnering with the city’s Volunteer Ventura!
program, team members celebrated Earth
Day by participating in a beach cleanup event
at Marina Park. In addition to collecting litter
that is harmful to the environment and local
wildlife, they also supported the California
Coastal Commission’s efforts to determine
whether any marine debris from the 2011
Japanese earthquake and tsunami had
reached the California coast.
1,200
accident free
DAYS
ENGAGED PEOPLE
By selecting Engaged
People as a key Win
Strategy goal, Parker
emphasized the powerful
value team members
offer by leveraging
their expertise to solve
problems, implement
decisions and improve
the company.
Parker strives to create
an ownership mentality
with most team members
participating in High
Performance Teams, a
structured approach to
collaborative decision
making. This aligns with
a principle that those
closest to the product
and customer are the
15
most capable of driving
performance and growing
the business. Highly
engaged Parker team
members continue to
build on progress made
in improving safety,
as well as quality, cost
and delivery.
GLOBAL WELLNESS
PROGRAM
Parker is committed
to equipping all team
members with the tools,
resources and inspiration
to take control of their
personal well-being
and embrace a healthy
lifestyle. At its core,
Parker’s approach to
wellness is built on
enabling and inspiring
each individual to
commit to a balanced
and nutritious diet,
routine exercise and
the conscientious
management of
everyday stress.
Parker's wellness
program is flexible
in nature and is
customized on a
regional basis to address
specific health risks.
The program is designed
to provide educational
resources, establish
group exercise programs
and create a supportive
environment.
INCLUSION
Parker is committed to
building a diverse and
inclusive workforce that
respects and embraces
the unique perspectives
of all people. Creating an
environment in which
every team member can
leverage their creativity
and unique skill sets is
critical to Parker’s
long-term success.
The launch of Peer W, a
business resource group
(BRG) established to
support the attraction,
development and
retention of talented
women at Parker,
reflects the company’s
recent progress in
driving inclusion and
engagement. Throughout
the course of a successful
pilot program in
Northeast Ohio this year,
Peer W has hosted several
events that have provided
participants with
opportunities to learn
from Parker executives,
network with senior
leaders and co-workers
and concentrate on
personal and professional
growth. The pilot program
has been effective in
laying the groundwork for
purposeful engagement
and expanded awareness
across the organization,
each of which are
fundamental to Parker’s
goal of building an
inclusive environment.
16
SOCIAL
RESPONSIBILITY
Through the practice
of volunteering and
charitable giving, Parker
strives to strengthen
communities and help
create a better future
for all. Parker values the
close link between its
manufacturing facilities,
many of which are
located in rural areas, and
local organizations and
community members,
as it is vital to the
company’s success.
Parker team members are
proud to give back and
to support organizations
that make the world a
better place.
Parker recently
established a Disaster
Relief Program to rapidly
distribute funds to
Parker team members
and their families who
have been impacted by a
disaster, providing critical
support in times of need
following a catastrophic
hrough the
practice of
volunteering
and charitable
giving, Parker
strives to strengthen
communities and
help create a better
future for all.
17
The Parker Hannifin
Foundation also donated
more than $6 million
to 250 qualified
charitable organizations.
Approximately half of the
contributions support
the communities in
which Parker operates.
The balance is targeted
at improving education
through the funding of
science, technology,
engineering and
mathematics (STEM)
scholarships, as well
as matching gift
contributions to more
than 200 educational
institutions.
Make-A-Wish
Foundation
Parker has been
recognized as a
$100,000 lifetime donor
to the Make-A-Wish
Foundation, and is grateful
for the opportunity to help
make dreams come true for
children with life-threatening
medical conditions.
lifetime
$100,000
donor
event. To strengthen
the recovery process
throughout the affected
region, Parker has
also established a
collaborative program
with the American Red
Cross through which
every dollar donated by a
Parker team member will
be matched by the Parker
Hannifin Foundation.
This year through the
matching gift program
Parker team members
raised $10,000 to support
families impacted by
flooding throughout
North Carolina, South
Carolina and the greater
Houston, Texas area.
his year
the Parker
Hannifin
Foundation
donated more than
$6 million to 250
qualified charitable
organizations.
Parker team members
around the world also
generously contribute
thousands of volunteer
hours annually by
serving on the Board of
Directors at non-profit
organizations, setting
up food drives, working
in soup kitchens and
finding other meaningful
ways to support their
communities.
18
Today
Parker recycles
85% of the waste
generated from
its manufacturing
operations.
19
Parker’s commitment to responsible operations
is shared across all areas of the company. Team
members are constantly looking for new ways
to optimize manufacturing operations, expand
recycling efforts and create solutions that enable
customers to increase their productivity and
efficiency, because solving these challenges will
help to create a better future for all.
Progress in these areas
contributes to achieving
Parker’s goal of reducing
water use and volume
of waste sent to landfills
by 20% between 2015
and 2020.
ENVIRONMENTAL
STEWARDSHIP
Parker’s global network
of Environmental,
Health and Safety
experts are focused
on implementing the
company’s sustainability
strategy, identifying
and addressing key
areas of opportunity
to improve the
company’s sustainability
performance.
Today Parker recycles 85%
of the waste generated
from its manufacturing
operations. In calendar
year 2015 the company
reduced the amount of
waste sent to landfills
by 3% and reduced the
amount of water used in
operations by 4%.
Planet
“Cool” Water Reduction Solution
Fluid Systems Division - Irvine, CA, USA
Recognizing that key
facility upgrades would
significantly reduce
environmental impact, 
the division installed a
new high-capacity water
cooling tower to minimize
energy use. An advanced
filtration system also helped
to eliminate nearly all water
treatment chemicals
and reduce wastewater
production. These systems
have decreased annual
water use by approximately 450,000
gallons and energy use by 23,000 kW, while
reducing operating costs by $8,000 per year.
Decreased water use by
450,000
approximately
gallons
Decreased energy use by
23,000kW
operating costs by
$8,000
Reduced
per
year
Hazardous Materials
Across all of its
manufacturing operations
Parker strives to avoid
using materials which
are harmful to the
environment. The
collective effort of
operations experts at
all Parker locations
has enabled a 90%
reduction in the use of
chlorinated solvents and
eliminated over 80% of
other U.S. Environmental
Protection Agency (EPA)
target chemicals.
Parker also has largely
eliminated highly
hazardous substances
such as cadmium
and hexavalent
chromium from its
products and processes.
Remediation
Parker is helping to rectify
past environmental
impact by actively
investing and engaging
in the remediation of
properties affected
by pollution or poor
chemical management
practices. Many of
the sites undergoing
treatment were acquired,
and the pollution
occurred prior to
Parker’s ownership.
Parker’s strategy is to
implement remediation
technologies that,
whenever feasible,
reduce total energy
use, waste generation,
greenhouse gas emissions
and conserve natural
resources throughout the
remediation process.
During fiscal year 2016
Parker successfully
completed remedial
20
activities on eight
properties, resulting
in compliance with
applicable environmental
cleanup regulations as
recognized by the relevant
governing authority. As
a result, these impacted
properties can continue
to provide a beneficial use
for their intended purpose
while ensuring safety to
both human health and
the local environment.
As of June 30, 2016,
Parker had an accrual
of $15.2 million for
environmental matters.
Simplified Packaging
Tube Fittings Division Europe
Bielefeld, Germany
The shipping and receiving
dock at the division is a central
hub of activity, with about
2,300 orders packed and
shipped to customers each
day. By simply eliminating the
packing list attached to each
order, the division reduced
their paper use by more than
760,000 pages per year and, including toner,
decreased annual operating costs by $18,000.
Reduced paper use by
760,000
pages per year
operating costs by
$18,000
Decreased
21
ENERGY
MANAGEMENT
At Parker manufacturing
facilities around the
world, team members are
continuing to research
and implement creative
solutions to reduce
energy consumption and
emissions by optimizing
Recycling for Good
Hose Products Division
Davenport, IA, USA
Team members established recycling
programs for manufacturing materials such
as hose, metal, foam, aluminum and plastic,
in addition to aluminum cans and plastic
bottles, and donated the proceeds to local
schools. To date, approximately 100,000
pounds of hose has been recycled instead
of sent to the landfill, a creative solution
to both reduce environmental impact and
support the local community.
Parker’s Energy Use and Emissions Reduction Results
MWh/USD
Parker’s Energy Index = Total Energy
Used (MWh Equivalent)/Total Net Sales
(Millions of Dollars)
Greenhouse Gas Emissions
Measured in Thousand Metric Tons
96 576,0312015 2015
116 697,5862011 2011
105 672,2232012 2012
99 619,5252013 2013
96 603,0432014 2014
manufacturing processes
and modernizing
equipment. Given
the scope of Parker’s
manufacturing
operations, increasing
energy efficiency
represents a significant
opportunity to reduce
environmental impact.
While Parker reduced
absolute energy
consumption by 4.5% and
decreased greenhouse
gas emissions by 4.6%
in calendar year 2015,
energy use indexed to
sales essentially remained
flat year-over-year due to
a decrease in total sales.
22
Parker engineers
are discovering new
ways to reduce weight,
improve performance and
increase the efficiency of
the products and systems
the company manufactures.
23
Improving efficiency throughout the product
lifecycle offers a significant opportunity to create
customer value, minimize environmental impact
and drive financial performance. At Parker,
progress is made toward each of these goals
by integrating the company’s commitment to
sustainability into the design and manufacture
of new and existing technologies.
Among the many
solutions designed
through the application
of Parker’s broad range
of motion and control
technologies, each
year Parker proudly
counts an increasing
number of projects that
incorporate principles of
sustainable engineering.
Parker’s unique
approach to new product
development is known
as Winovation, and
establishes specific
deliverables at each
stage of the process
to apply structure
to the research and
development of products,
systems and services.
Along with direct
feedback and engagement
from customers and end
users, the Winovation
process enables
Parker to create new
solutions which provide
both industrial and
environmental value.
Guided by this process,
Parker engineers are
discovering new ways to
reduce weight, improve
performance and increase
the efficiency of the
products and systems the
company manufactures.
Product Stewardship
Aligned with the
company’s commitment
to sustainability,
Parker will continue
to explore new
methods of advancing
and quantifying the
environmental benefits
of its product innovation
process, and partner with
its customers to help
solve the world’s greatest
engineering challenges.
24
INNOVATION-DRIVEN SUSTAINABILITY
IN AEROSPACE
As a development partner
to world-class aircraft and
engine manufacturers,
Parker is leveraging
decades of engineering
and industry expertise to
help create cleaner, more
efficient aircraft.
Technological innovation
in the aerospace
industry can often take
years to progress from
conceptualization to
commercialization,
as all who design,
manufacture and service
aircraft share a deep
commitment to ensuring
aircraft reliability and
protecting passenger
safety. To address
this challenge Parker
aligns its technology
roadmap with those of
airframe and engine
OEMs, collaborating
on the research and
development of new
components and systems
years before they are
scheduled to enter
service.
Today a number of Parker
technologies contributing
to improved efficiency
and sustainability can
be found on aircraft
operating around the
world. Fly-by-wire
flight control systems
integrate cockpit controls,
electronics and actuation
to provide longer range
with minimal drag,
reduce weight, improve
aircraft efficiency and
decrease emissions.
Parker provides fuel
nozzles to support
combustion technology
that significantly reduces
engine emissions while
increasing fuel efficiency,
and is evaluating the
performance of engine
components with
alternative fuels for
potential future use.
Replacing processes such
as chrome plating with
improved surface coating
also enables Parker to
reduce the environmental
impact of manufacturing
its products and
systems for aerospace
applications.
These innovations
contribute to delivering
aircraft that are more
reliable for airlines,
safe for passengers and
efficient to improve
environmental
sustainability for all.
25
ADDITIVE MANUFACTURING IS SHAPING
THE INDUSTRIAL LANDSCAPE
The subtractive
manufacturing process,
by which pieces of a
solid block of material
such as metal, plastic or
rubber are cut away to
gradually form a pump,
seal, valve or other
product, is also referred
to as machining and has
been utilized by virtually
all global manufacturers
for decades.
Fueled by rapid
advancements in
computing and materials
technology, a converse
approach known as
additive manufacturing
has emerged in recent
years. In short, a digital
design file is sliced thinly
like a deck of cards, and
a computer-controlled
machine produces and
stacks many layers of
material one-by-one to
create a final product.
At its core, additive
manufacturing
technology is relatively
new and is not yet ideal
for producing large
volumes of commercial
products. However,
with the ability to create
multiple configurations
of a single component
without developing
additional molds or
customized tooling,
additive manufacturing
has proved to be a quick
and inexpensive solution
for creating prototypes
to test throughout
the research and
development process.
This provides engineers
the freedom to thoroughly
test design concepts and
material selections to
optimize a product before
commercialization.
Additive manufacturing
is also capable of
producing objects with
highly complex design
characteristics, making it
useful for creating tooling,
fixtures, gauges and other
instruments industrial
manufacturers rely upon
every day.
Parker is constructing an
additive manufacturing
lab near its headquarters
in Northeast Ohio to
serve as a learning and
development center.
This facility will provide
an environment to
educate team members
and build Parker’s
additive manufacturing
capabilities as the
company explores
potential applications
across its global
operations.
Rather than viewing
the technology as a
replacement, Parker is
approaching additive
manufacturing as
complementary to
traditional machining,
an advanced solution to
create highly complex
and customized products
and systems. The
immense value of additive
manufacturing, which
will strengthen Parker’s
product development
and manufacturing
capabilities, will only
continue to grow as the
technology advances.
PS-2045 January 2017© 2017 Parker Hannifin Corporation
Parker Hannifin Corporation
6035 Parkland Boulevard
Cleveland, OH 44124
Tel: 216-896-3000
sustainableparker@parker.com
www.parker.com
The data and information presented is a compilation of information reported into the corporate office
from more than 100 business units worldwide. Data is not independently validated but is internally
checked for significant deviation from expected results.

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Parker Hannifin 2016 Sustainability Report

  • 2. Parker Hannifin is a Fortune 250 global leader in motion and control technologies. For 100 years the company has engineered the success of its customers in a wide range of diversified industrial and aerospace markets. By applying its engineering expertise and broad range of core technologies, Parker partners with its customers to improve their productivity and profitability, while helping to solve the world’s greatest engineering challenges. About Parker ABOUT THIS REPORT The information in this report addresses how Parker is applying its core technologies to make a positive impact on the world. All data corresponds to Parker’s fiscal year 2016 (July 1, 2015 through June 30, 2016) unless otherwise noted. The previous report corresponded to Parker’s fiscal year 2015. Parker’s intention is to report on an annual basis. REPORT SCOPE The data provided in this document reflects Parker’s global manufacturing operations in which Parker has a 50% controlling interest or majority ownership. It also includes team members in those operations and the associated headquarters and distribution centers under Parker ownership. The scope does not include Parker suppliers, customers, distributors, contractors or minority- owned joint ventures. CONTACT US Parker welcomes comments and questions about its sustainability strategy by email: sustainableparker@parker.com TABLE OF CONTENTS Leadership Message ....................................... 2 Sustainability ................................................... 5 Governance, Ethics & Compliance .................. 9 People .......................................................... 13 Planet ........................................................... 19 Product Stewardship..................................... 23
  • 3. 1 THE WIN STRATEGY In fiscal year 2016, Parker team members implemented the refreshed Win Strategy™ focused on the goals of engaged people, premier customer experience, profitable growth and financial performance. Looking ahead, the powerful combination of Parker’s highly engaged people, unique motion and control capabilities and the Win Strategy will generate positive results for customers, shareholders and Parker team members. For the Year Ended June 30 (dollars in thousands, except per share data) Operating Data Net sales $11,360,753 Net income 807,216 Net cash provided by operating activities 1,169,843 Per Share Data Diluted earnings $ 5.89 Dividends 2.52 Financial Highlights 2016 The Win Strategy Premier Customer Experience • Quality Solutions On Time • eBusiness Leadership • Ease of Doing Business Profitable Growth • Market-Driven Innovation • System Solutions • Strong Distribution • Grow Share • Engineering Expertise Financial Performance • Simplification • Lean Enterprise • Strategic Supply Chain • Value Pricing Organic Acquisitions Services Engaged People • Environmental, Health & Safety • Entrepreneurial • High Performance Teams & Leaders Goals Our Vision: Engineering Your Success STRATEGIES STRATEGIES STRATEGIES STRATEGIES TM
  • 4. 2 Leadership Message At Parker, our approach always begins with the safety of our team members. Nothing is more important than making sure every Parker team member returns home safely after each work day. While our accident rate continues to decline year after year, the goal is always zero accidents. It’s an ambitious goal. Yet, we are confident we can get there by reinforcing a safety-first culture in which all Parker leaders and team members are engaged in keeping our work environments free from accidents. We are implementing best-in- class safety practices, including a focus on how our equipment and operations can minimize safety risks. Through ongoing education, Parker team members are being trained to recognize safety hazards, and are strongly urged to voice their concerns if they witness unsafe behavior or potentially dangerous conditions. Parker is also constantly adapting to stay ahead of advancements in manufacturing technology. Our focus is on reducing energy consumption and water use, decreasing emissions and minimizing waste sent to landfills by reusing or recycling materials. Improving manufacturing efficiency represents a significant opportunity to fulfill our commitment to sustainability, and the resulting reductions in operating costs are also aligned with Parker’s financial performance goals. Today, Parker recycles 85% of the waste generated from its manufacturing operations, and we are on track to achieve our goal of reducing water use and volume of waste sent to landfills by 20% between 2015 and 2020. Another key indicator of Parker’s success is our ability to make a positive impact in the communities which we call home. The practice of volunteering and charitable giving has always been central to Parker’s culture. Through the Parker Hannifin Foundation’s three key areas of focus we are able to support our communities in need, contribute to improving math and science education and advance energy and water conservation efforts. arker’s sustainability strategy is focused on the positive impact we can have on people and the planet which we all share. Through the responsible design, manufacture and disposal of our products, we strive to foster the enduring success of our company, customers and communities.
  • 5. 3 Thomas L. Williams Chairman and Chief Executive Officer Lee C. Banks President and Chief Operating Officer December 2016 Additionally, Parker team members generously donate and volunteer to get involved with the many charities and causes which they are passionate about supporting. From workplace safety and resource conservation, to community leadership and charitable giving, this report highlights examples of local sustainability initiatives led by our remarkable Parker team members. We all share a commitment to responsible operations, and as Parker celebrates its 100th anniversary in 2017, we will look to the future for new opportunities to make a positive impact on the world. Sincerely,
  • 6. 4 All sustainability initiatives at Parker are aligned with the company’s ambition to create a positive impact in people’s lives.
  • 7. 5 From creating value for customers and shareholders, to preserving the environment and creating a positive impact on team members and in local communities, the concept of sustainability is aligned with the goals that have driven Parker since the company was founded a century ago. Regardless of their role within the company’s operations, Parker’s sustainability commitment is shared by team members around the world. is reflected in efforts to create a safety-first work environment in pursuit of zero accidents, engage employees in driving performance, strengthen local communities and support organizations that make the world a better place. PLANET Parker’s commitment to responsible operation is rooted in the fact that, as a global industrial leader, the company’s manufacturing practices can have a significant and widespread impact on the world. Parker is actively minimizing its environmental footprint and helping to protect the planet for future generations by using eco-friendly materials, minimizing waste and reducing the consumption of resources such as energy and water. PRODUCTS Innovation at Parker is focused on helping customers to be more efficient and productive. Doing so not only improves profitability, but positions Parker to leverage its diverse range of motion and control technologies to reduce energy consumption and emissions around the world. Parker engineers analyze the entire product lifecycle to identify opportunities to leverage sustainable materials in manufacturing, improve operating efficiency and create technologies that can be reused or recycled upon disposal, helping to reduce waste sent to landfills. PEOPLE All sustainability initiatives at Parker are aligned with the company’s ambition to create a positive impact in people’s lives. This focus on making a difference Sustainability ustainability commitment: To responsibly solve the world’s greatest engineering challenges to foster enduring success for the company, customers and communities.
  • 8. 6 Earth Day Challenge In recognition of Earth Day 2016, Parker challenged all team members to work together to find new ways to conserve energy, water and raw materials while eliminating by-product waste from production processes. Culminating in 35 unique local projects, this collaborative effort generated ideas that can be adapted for use at Parker facilities around the world, and helped reduce the company’s environmental footprint by: POTENTIAL RISKS AND BOUNDARIES Given the diversity of the markets Parker serves, the breadth of its product portfolio and the size and complexity of its supply chain, Parker must address a number of risks related to the manufacture, sale and application of its technologies. Parker’s products rely on energy to function, and a transition away from a carbon- based economy could impact demand for those products. Scarcity of raw materials such as metals and organic compounds could also interfere with on-time delivery. Parker also assumes the operational risk of a disruption to manufacturing due to the inability of supply chain partners, or even the company itself, to meet environmental or social standards. Failure to meet the expectations of stakeholders related to environmental and social accountability also creates a long-term risk for the company. The boundary condition of these risks varies based on the area of focus. For the People initiative of its sustainability strategy, Parker’s boundary condition encompasses its team members, partners and the communities around the world in which the company operates. The boundary condition of the Planet initiative is largely the company’s manufacturing footprint, with additional focus on select areas of the supply chain. Lastly, the Product initiative focuses primarily on internal innovation, but the boundary condition also extends to the customer and target markets. Reducing energy use by 17 MILLION kWh Preventing more than 200 TONS OF WASTE BY-PRODUCT from reaching landfills 7.5million gallons Decreasing water consumption by
  • 9. 7 STAKEHOLDER ENGAGEMENT As a result of the dedication and meaningful contributions of its team members, Parker continues to make progress towards its sustainability objectives each year, but understands the importance of maintaining this momentum and building on past progress. The company engages a number of stakeholders to help strengthen its sustainability efforts and identify opportunities for continuous improvement. Parker receives valuable input through direct feedback from: its marketing and sales teams; suppliers on their compliance with Parker’s sustainability requirements through the company’s supply chain web portal; the Parker leadership team; and ratings from the investor community. Parker also analyzes information from benchmarking efforts within its diversified industrial peer group. SUPPLIER PARTNERSHIPS Parker is committed to partnering with world- class suppliers focused not only on premier customer service and maintaining the highest standards for quality and on-time delivery, but on reducing resource consumption and waste. With an annual supplier spend exceeding $6 billion, continuing to improve the supply chain in these areas of focus presents a compelling opportunity for Parker to reduce its global footprint and improve the resilience of its suppliers. As a supplier itself, Parker is also responsible for conserving resources, optimizing manufacturing processes, upholding human rights and creating highly efficient and reliable products and systems which enable customers to minimize their own environmental impact.
  • 10. 8 Parker’s values are a strong and unchanging set of core beliefs which team members use to define ethical behavior.
  • 11. 9 Beyond leveraging a century of motion and control technology expertise to partner with customers to improve their productivity and profitability, Parker’s reputation as a trusted business partner is critical to the company’s long-term success. This legacy of conducting business with integrity and respect enables Parker to create enduring partnerships with customers and suppliers, and attract honest and inspired team members aligned with the company’s vision. Parker’s values are a strong and unchanging set of core beliefs which team members use to define ethical behavior. CORPORATE GOVERNANCE The strong values and culture upon which Parker has built its success and reputation as a trusted partner begins with its Board of Directors. The Board has responsibility to represent stakeholders in overseeing the business strategy and governance matters of the company. Eleven of Parker’s 13 directors are “independent” based on the applicable independence standards of the New York Stock Exchange and Parker’s Independence Standards for Directors. Each director must stand for election annually. Parker’s Board of Directors is guided by the company’s Global Code of Business Conduct, corporate governance guidelines and charters for each board committee, available at www.phstock.com/ corporategovernance. Governance, Ethics & Compliance
  • 12. 10 WINNING WITH INTEGRITY When Art Parker established the company in 1917, he laid the foundation for the exceptional reputation Parker has today with a commitment to achieving success without ever compromising his honesty and integrity. Even a century later, his resolve to build a business that was aligned with his deeply-held personal values is reflected clearly in the company Parker has become. Today Parker takes a strength-based approach to culture and leadership, emphasizing the importance of conducting business with honesty, integrity and respect. All team members share the responsibility for preserving Parker’s reputation and protecting its financial strength by maintaining the highest standards for ethical behavior. From building enduring partnerships with customers and suppliers to attracting honest and engaged team members, Parker’s way of doing business will continue to be a key driver of sustained value. It is the Parker culture and values, more than any strategy or measure that will determine the company’s success in the future. ur culture is what sets us apart. It has sustained Parker for 100 years and will continue to drive long-term growth and success. Every day our team members exemplify the Parker culture by living our values and conducting business with integrity, honesty and respect.” – Lee C. Banks, President and Chief Operating Officer “
  • 13. 11 CORPORATE COMPLIANCE Parker’s compliance structure and programs are aligned with the company’s values, and designed to engage team members in reinforcing standards for ethical and responsible behavior. Through annual compliance training the company educates team members on conflicts of interest, the giving and receiving of gifts, third-party relationships and other issues which reflect the modern challenges of the global business environment. Throughout the year Parker also distributes printed brochures, newsletters, video vignettes and other compliance-focused educational materials to remind team members of important laws, regulations and policies, and to reinforce the importance of always doing what is right. Parker’s Global Code of Business Conduct is an integral part of onboarding education for those who join Parker. The Code is available online at www.parker.com/ integrityandethics. Any Parker team member who observes conduct that is not aligned with Parker’s values or policies, or could potentially violate applicable laws or regulations, is urged to take an active role in addressing it. Concerns may be reported to local leadership or the Corporate Compliance Office. The Integrity Line is also available to all Parker stakeholders, and all reports are investigated lawfully and confidentially.
  • 14. 12 Safety is the highest priority on the Win Strategy, and nothing is more important to Parker than making sure every team member returns home safely after each work day.
  • 15. 13 Parker team members are the foundation of the company’s success. To compete in an increasingly challenging global environment, Parker must attract driven and talented individuals from around the world and create a culture in which they can thrive both personally and professionally. Parker’s safety performance is measured by the Recordable Incident Rate, which is the number of work-related incidents which require medical attention beyond first aid normalized to 100 team members per year. The goal is always zero accidents, and each year Parker team members continue to make meaningful progress towards achieving it. Since 2011, through the commitment and diligence of all team members, Parker has achieved a 53% reduction in the Recordable Incident Rate, including a 28% reduction in fiscal year 2016. Improved safety performance is a clear indicator of engagement. A safety-first environment requires a high level of individual ownership and organizational focus. This year 214 Parker facilities were accident free, an achievement which can be attributed to High Performance Teams at Parker working diligently to reinforce safety best practices and explore all available options to optimize equipment and operations in pursuit of zero accidents. High engagement drives exceptional performance, and Parker encourages an ownership mentality by engaging all team members in leveraging their expertise to improve their portion of the business. SAFETY Safety is the highest priority on the Win Strategy, and nothing is more important to Parker than making sure every team member returns home safely after each work day. The company is equally committed to ensuring the safety and security of all contractors, customers and other guests visiting its workplaces. People
  • 16. Record Safety Performance Chomerics Division Asia A High Performance Team at the division implemented engaging safety training and created a recognition program to reward team members for their safety performance. The division has achieved a remarkable streak of 1,200 days accident free, and will continue to reinforce a safety-first culture. 14 Recordable Incident Rate Normalized to 100 employees per year 1.032016 1.432015 2014 1.59 2013 1.76 2012 2.15 2011 2.22 Parker team members also helped to accelerate the implementation of a system to report and address “near hits” or incidents which did not result in an injury, but could have under slightly different circumstances. More than 31,000 “near hits” were reported during fiscal year 2016. Beach Cleanup and Preservation domnick hunter Process Filtration Division - Oxnard, CA, USA Partnering with the city’s Volunteer Ventura! program, team members celebrated Earth Day by participating in a beach cleanup event at Marina Park. In addition to collecting litter that is harmful to the environment and local wildlife, they also supported the California Coastal Commission’s efforts to determine whether any marine debris from the 2011 Japanese earthquake and tsunami had reached the California coast. 1,200 accident free DAYS
  • 17. ENGAGED PEOPLE By selecting Engaged People as a key Win Strategy goal, Parker emphasized the powerful value team members offer by leveraging their expertise to solve problems, implement decisions and improve the company. Parker strives to create an ownership mentality with most team members participating in High Performance Teams, a structured approach to collaborative decision making. This aligns with a principle that those closest to the product and customer are the 15 most capable of driving performance and growing the business. Highly engaged Parker team members continue to build on progress made in improving safety, as well as quality, cost and delivery. GLOBAL WELLNESS PROGRAM Parker is committed to equipping all team members with the tools, resources and inspiration to take control of their personal well-being and embrace a healthy lifestyle. At its core, Parker’s approach to wellness is built on enabling and inspiring each individual to commit to a balanced and nutritious diet, routine exercise and the conscientious management of everyday stress. Parker's wellness program is flexible in nature and is customized on a regional basis to address specific health risks. The program is designed to provide educational resources, establish group exercise programs and create a supportive environment.
  • 18. INCLUSION Parker is committed to building a diverse and inclusive workforce that respects and embraces the unique perspectives of all people. Creating an environment in which every team member can leverage their creativity and unique skill sets is critical to Parker’s long-term success. The launch of Peer W, a business resource group (BRG) established to support the attraction, development and retention of talented women at Parker, reflects the company’s recent progress in driving inclusion and engagement. Throughout the course of a successful pilot program in Northeast Ohio this year, Peer W has hosted several events that have provided participants with opportunities to learn from Parker executives, network with senior leaders and co-workers and concentrate on personal and professional growth. The pilot program has been effective in laying the groundwork for purposeful engagement and expanded awareness across the organization, each of which are fundamental to Parker’s goal of building an inclusive environment. 16 SOCIAL RESPONSIBILITY Through the practice of volunteering and charitable giving, Parker strives to strengthen communities and help create a better future for all. Parker values the close link between its manufacturing facilities, many of which are located in rural areas, and local organizations and community members, as it is vital to the company’s success. Parker team members are proud to give back and to support organizations that make the world a better place. Parker recently established a Disaster Relief Program to rapidly distribute funds to Parker team members and their families who have been impacted by a disaster, providing critical support in times of need following a catastrophic hrough the practice of volunteering and charitable giving, Parker strives to strengthen communities and help create a better future for all.
  • 19. 17 The Parker Hannifin Foundation also donated more than $6 million to 250 qualified charitable organizations. Approximately half of the contributions support the communities in which Parker operates. The balance is targeted at improving education through the funding of science, technology, engineering and mathematics (STEM) scholarships, as well as matching gift contributions to more than 200 educational institutions. Make-A-Wish Foundation Parker has been recognized as a $100,000 lifetime donor to the Make-A-Wish Foundation, and is grateful for the opportunity to help make dreams come true for children with life-threatening medical conditions. lifetime $100,000 donor event. To strengthen the recovery process throughout the affected region, Parker has also established a collaborative program with the American Red Cross through which every dollar donated by a Parker team member will be matched by the Parker Hannifin Foundation. This year through the matching gift program Parker team members raised $10,000 to support families impacted by flooding throughout North Carolina, South Carolina and the greater Houston, Texas area. his year the Parker Hannifin Foundation donated more than $6 million to 250 qualified charitable organizations. Parker team members around the world also generously contribute thousands of volunteer hours annually by serving on the Board of Directors at non-profit organizations, setting up food drives, working in soup kitchens and finding other meaningful ways to support their communities.
  • 20. 18 Today Parker recycles 85% of the waste generated from its manufacturing operations.
  • 21. 19 Parker’s commitment to responsible operations is shared across all areas of the company. Team members are constantly looking for new ways to optimize manufacturing operations, expand recycling efforts and create solutions that enable customers to increase their productivity and efficiency, because solving these challenges will help to create a better future for all. Progress in these areas contributes to achieving Parker’s goal of reducing water use and volume of waste sent to landfills by 20% between 2015 and 2020. ENVIRONMENTAL STEWARDSHIP Parker’s global network of Environmental, Health and Safety experts are focused on implementing the company’s sustainability strategy, identifying and addressing key areas of opportunity to improve the company’s sustainability performance. Today Parker recycles 85% of the waste generated from its manufacturing operations. In calendar year 2015 the company reduced the amount of waste sent to landfills by 3% and reduced the amount of water used in operations by 4%. Planet “Cool” Water Reduction Solution Fluid Systems Division - Irvine, CA, USA Recognizing that key facility upgrades would significantly reduce environmental impact,  the division installed a new high-capacity water cooling tower to minimize energy use. An advanced filtration system also helped to eliminate nearly all water treatment chemicals and reduce wastewater production. These systems have decreased annual water use by approximately 450,000 gallons and energy use by 23,000 kW, while reducing operating costs by $8,000 per year. Decreased water use by 450,000 approximately gallons Decreased energy use by 23,000kW operating costs by $8,000 Reduced per year
  • 22. Hazardous Materials Across all of its manufacturing operations Parker strives to avoid using materials which are harmful to the environment. The collective effort of operations experts at all Parker locations has enabled a 90% reduction in the use of chlorinated solvents and eliminated over 80% of other U.S. Environmental Protection Agency (EPA) target chemicals. Parker also has largely eliminated highly hazardous substances such as cadmium and hexavalent chromium from its products and processes. Remediation Parker is helping to rectify past environmental impact by actively investing and engaging in the remediation of properties affected by pollution or poor chemical management practices. Many of the sites undergoing treatment were acquired, and the pollution occurred prior to Parker’s ownership. Parker’s strategy is to implement remediation technologies that, whenever feasible, reduce total energy use, waste generation, greenhouse gas emissions and conserve natural resources throughout the remediation process. During fiscal year 2016 Parker successfully completed remedial 20 activities on eight properties, resulting in compliance with applicable environmental cleanup regulations as recognized by the relevant governing authority. As a result, these impacted properties can continue to provide a beneficial use for their intended purpose while ensuring safety to both human health and the local environment. As of June 30, 2016, Parker had an accrual of $15.2 million for environmental matters. Simplified Packaging Tube Fittings Division Europe Bielefeld, Germany The shipping and receiving dock at the division is a central hub of activity, with about 2,300 orders packed and shipped to customers each day. By simply eliminating the packing list attached to each order, the division reduced their paper use by more than 760,000 pages per year and, including toner, decreased annual operating costs by $18,000. Reduced paper use by 760,000 pages per year operating costs by $18,000 Decreased
  • 23. 21 ENERGY MANAGEMENT At Parker manufacturing facilities around the world, team members are continuing to research and implement creative solutions to reduce energy consumption and emissions by optimizing Recycling for Good Hose Products Division Davenport, IA, USA Team members established recycling programs for manufacturing materials such as hose, metal, foam, aluminum and plastic, in addition to aluminum cans and plastic bottles, and donated the proceeds to local schools. To date, approximately 100,000 pounds of hose has been recycled instead of sent to the landfill, a creative solution to both reduce environmental impact and support the local community. Parker’s Energy Use and Emissions Reduction Results MWh/USD Parker’s Energy Index = Total Energy Used (MWh Equivalent)/Total Net Sales (Millions of Dollars) Greenhouse Gas Emissions Measured in Thousand Metric Tons 96 576,0312015 2015 116 697,5862011 2011 105 672,2232012 2012 99 619,5252013 2013 96 603,0432014 2014 manufacturing processes and modernizing equipment. Given the scope of Parker’s manufacturing operations, increasing energy efficiency represents a significant opportunity to reduce environmental impact. While Parker reduced absolute energy consumption by 4.5% and decreased greenhouse gas emissions by 4.6% in calendar year 2015, energy use indexed to sales essentially remained flat year-over-year due to a decrease in total sales.
  • 24. 22 Parker engineers are discovering new ways to reduce weight, improve performance and increase the efficiency of the products and systems the company manufactures.
  • 25. 23 Improving efficiency throughout the product lifecycle offers a significant opportunity to create customer value, minimize environmental impact and drive financial performance. At Parker, progress is made toward each of these goals by integrating the company’s commitment to sustainability into the design and manufacture of new and existing technologies. Among the many solutions designed through the application of Parker’s broad range of motion and control technologies, each year Parker proudly counts an increasing number of projects that incorporate principles of sustainable engineering. Parker’s unique approach to new product development is known as Winovation, and establishes specific deliverables at each stage of the process to apply structure to the research and development of products, systems and services. Along with direct feedback and engagement from customers and end users, the Winovation process enables Parker to create new solutions which provide both industrial and environmental value. Guided by this process, Parker engineers are discovering new ways to reduce weight, improve performance and increase the efficiency of the products and systems the company manufactures. Product Stewardship Aligned with the company’s commitment to sustainability, Parker will continue to explore new methods of advancing and quantifying the environmental benefits of its product innovation process, and partner with its customers to help solve the world’s greatest engineering challenges.
  • 26. 24 INNOVATION-DRIVEN SUSTAINABILITY IN AEROSPACE As a development partner to world-class aircraft and engine manufacturers, Parker is leveraging decades of engineering and industry expertise to help create cleaner, more efficient aircraft. Technological innovation in the aerospace industry can often take years to progress from conceptualization to commercialization, as all who design, manufacture and service aircraft share a deep commitment to ensuring aircraft reliability and protecting passenger safety. To address this challenge Parker aligns its technology roadmap with those of airframe and engine OEMs, collaborating on the research and development of new components and systems years before they are scheduled to enter service. Today a number of Parker technologies contributing to improved efficiency and sustainability can be found on aircraft operating around the world. Fly-by-wire flight control systems integrate cockpit controls, electronics and actuation to provide longer range with minimal drag, reduce weight, improve aircraft efficiency and decrease emissions. Parker provides fuel nozzles to support combustion technology that significantly reduces engine emissions while increasing fuel efficiency, and is evaluating the performance of engine components with alternative fuels for potential future use. Replacing processes such as chrome plating with improved surface coating also enables Parker to reduce the environmental impact of manufacturing its products and systems for aerospace applications. These innovations contribute to delivering aircraft that are more reliable for airlines, safe for passengers and efficient to improve environmental sustainability for all.
  • 27. 25 ADDITIVE MANUFACTURING IS SHAPING THE INDUSTRIAL LANDSCAPE The subtractive manufacturing process, by which pieces of a solid block of material such as metal, plastic or rubber are cut away to gradually form a pump, seal, valve or other product, is also referred to as machining and has been utilized by virtually all global manufacturers for decades. Fueled by rapid advancements in computing and materials technology, a converse approach known as additive manufacturing has emerged in recent years. In short, a digital design file is sliced thinly like a deck of cards, and a computer-controlled machine produces and stacks many layers of material one-by-one to create a final product. At its core, additive manufacturing technology is relatively new and is not yet ideal for producing large volumes of commercial products. However, with the ability to create multiple configurations of a single component without developing additional molds or customized tooling, additive manufacturing has proved to be a quick and inexpensive solution for creating prototypes to test throughout the research and development process. This provides engineers the freedom to thoroughly test design concepts and material selections to optimize a product before commercialization. Additive manufacturing is also capable of producing objects with highly complex design characteristics, making it useful for creating tooling, fixtures, gauges and other instruments industrial manufacturers rely upon every day. Parker is constructing an additive manufacturing lab near its headquarters in Northeast Ohio to serve as a learning and development center. This facility will provide an environment to educate team members and build Parker’s additive manufacturing capabilities as the company explores potential applications across its global operations. Rather than viewing the technology as a replacement, Parker is approaching additive manufacturing as complementary to traditional machining, an advanced solution to create highly complex and customized products and systems. The immense value of additive manufacturing, which will strengthen Parker’s product development and manufacturing capabilities, will only continue to grow as the technology advances.
  • 28. PS-2045 January 2017© 2017 Parker Hannifin Corporation Parker Hannifin Corporation 6035 Parkland Boulevard Cleveland, OH 44124 Tel: 216-896-3000 sustainableparker@parker.com www.parker.com The data and information presented is a compilation of information reported into the corporate office from more than 100 business units worldwide. Data is not independently validated but is internally checked for significant deviation from expected results.