Supplier Conduct

We believe that Caterpillar’s strength is based, in part, on our ability to develop and sustain long-lasting, mutually rewarding relationships with our suppliers. In accordance with Our Values in Action, we seek out suppliers who demonstrate strong values and ethical principles. We avoid those who violate the law or fail to comply with the sound business practices we embrace.

Caterpillar’s standard purchase order terms require our suppliers to represent that they have complied and will continue to comply with all applicable laws and regulations that could result in liability to Caterpillar. These include product regulatory standards, environmental requirements, the U.S. Fair Labor Standards Act, the U.S. Foreign Corrupt Practices Act and export regulations.

We are asked from time to time about our commitment to various international human rights, including initiatives to counter human trafficking and slavery. We believe that our Code of Conduct, Our Values in Action, effectively articulates our long-standing support for, and commitment to, human rights and the dignity of all people. Our employees and management receive regular training and participate in annual assessments to ensure that they are aware of and able to apply the principles contained in Our Values in Action. We also maintain internal reporting mechanisms to hold employees and management accountable for any failure to comply with Our Values in Action.

A recent California law, the Transparency in Supply Chains Act of 2010, requires certain disclosures regarding human trafficking and slavery, in particular. As described above, we select suppliers who support our values and expect them to comply with all applicable laws and regulations. We do not currently verify our product supply chain or audit suppliers specifically to evaluate risks of human trafficking and slavery or require our direct suppliers to certify that materials incorporated into products comply with laws regarding slavery and human trafficking in the countries in which they are doing business. We also do not currently maintain internal standards for employees and contractors regarding slavery and human trafficking specifically or provide training to employees and management on these specific matters. Caterpillar employees and management do receive regular training on Our Values in Action and are expected to respect the human rights and dignity of all people.