W W Grainger : 2024 ESG Report

Focusing on what matters--We KeepThe World Working®

2024 Environmental, Social and Governance Report

Contents

3 Chairman and CEO message

4 2023 Highlights: Grainger at a Glance

6 Our Approach

8 The Grainger Team: Life at Grainger

8 - Recruitment and Hiring

9 - Team Member Development

10 - Total Rewards-Pay and Benefits

11 - Unwavering Ethics

12 - Speaking Up and Being Heard

13 - Working Securely

14 - Operating Sustainably

16 - Making an Impact Where We Work and Live

16 - Supporting Disaster Resilience and Relief

16 - Advancing the Emerging Workforce

17 - Empowering Our Communities

18 ESG Program Focus Areas

18 - Customer Sustainability Solutions

20 - Diversity Solutions

22 - Energy and Emissions

24 - Diversity, Equity and Inclusion

27 - Workplace Safety

29 Appendix

For important disclosures about this report, see page 31.

	Chairman &	2023	Our	The Grainger	Customer	Diversity	Energy and	Diversity, Equity	Workplace
	Team: Life	Sustainability	Appendix
	CEO message	Highlights	Approach	Solutions	Emissions	and Inclusion	Safety
	at Grainger	Solutions

Chairman and CEO message

At Grainger, doing the right thing is critical to our ability to be good stewards for our people, our customers, our shareholders, and the environment.

Whether supporting fulfilling careers and strengthening our inclusive culture for our team members, helping our customers achieve their sustainability goals or partnering in our communities to build a better future, we take our responsibility seriously to make the things that matter better.

As environmental, social and governance (ESG) issues and sentiments evolve, Grainger remains steadfast, ensuring that operating sustainably influences decisions throughout the company. We will continue to focus on things that matter to our customers, team members and stakeholders.

Last year, our Board of Directors approved an updated 2030 emissions target that seeks to reduce Grainger's global absolute Scope 1 & Scope 2 emissions by 50% from a 2018 baseline, up from the previous 30% target. This new goal

You will see in the following pages how our culture-one that has received numerous recognitions in 2023, including being named one of the Fortune 100 Best Companies to Work For®-is guided by these focus areas to better Grainger and the world at large. We believe in creating an environment where all team members can thrive. Grainger has been recognized for this environment in numerous ways, including as a Best Workplace for Women, a Military Times' Best for Veterans, inclusion in the Fair360 (DiversityInc), and a top ranking in the American Opportunity Index for our ability to offer fulfilling careers to team members at all levels of the company.

I'm proud of all the Grainger team has achieved over the last year and look forward to all we'll accomplish as we remain steadfast in fulfilling our purpose-We Keep The World Working.®

D.G. MACPHERSON

CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER

aligns Scope 1 & Scope 2 emissions reductions with the level required to limit global temperature rise to 1.5 degrees Celsius.

This report details some of the ways that we will deliver for our stakeholders over the long term as well as provides insights on our five current ESG program focus areas where we believe we can have the greatest impact:

• Customer Sustainability Solutions
• Diversity Solutions
• Energy and Emissions
• Diversity, Equity and Inclusion
• Workplace Safety

Our final priority, Workplace Safety, was added this year, reflecting our commitment to provide a safe environment for all team members and support our customers with safety.

The Grainger Edge

Our Purpose

SM

Our Aspiration

We relentlessly expand our leadership position by being the go-topartner for people who build and run safe, sustainable and productive operations.

Our Principles

The following principles are at the heart of how we work - with one another, our customers, suppliers and communities.

Start with	Act with	Win as	Embrace
the customer	intent	one team	curiosity

Compete with	Invest in our	Do the
urgency	success	right thing

W.W. GRAINGER, INC. AND SUBSIDIARIES | 2024 ESG REPORT

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	Chairman &	2023	Our	The Grainger	Customer	Diversity	Energy and	Diversity, Equity	Workplace
	Team: Life	Sustainability	Appendix
	CEO message	Highlights	Approach	Solutions	Emissions	and Inclusion	Safety
	at Grainger	Solutions

2023 Highlights

The Grainger Team: Life at Grainger

11	Average training hours per team member
in North America

69%	Workforce receiving career or skill-based
training in North America

100%	Global team members completed
Business Conduct Guidelines training

16,000 U.S. team member volunteer hours

W.W. GRAINGER, INC. AND SUBSIDIARIES | 2024 ESG REPORT	4

	Chairman &	2023	Our	The Grainger	Customer	Diversity	Energy and	Diversity, Equity	Workplace
	Team: Life	Sustainability	Appendix
	CEO message	Highlights	Approach	Solutions	Emissions	and Inclusion	Safety
	at Grainger	Solutions

ESG Program Focus Areas

Customer Sustainability Solutions

$2B	High-Touch Solutions U.S. Sustainability
Solutions revenue
Diversity Solutions	High-Touch Solutions U.S. spend with
$2B
all small businesses, including diverse-
	owned businesses1

Energy and Emissions

31%

61%

Reduction of Scope 1 & Scope 2 emissions since 2018

Progress towards achieving our new 50% Scope 1 & Scope 2 emissions reduction target for 2030, based on 2023 results

Diversity, Equity and Inclusion

42%

33%

37%

27%

Women team members globally

Women on global executive leadership team

Racially and ethnically diverse U.S. team members

Racially and ethnically diverse members on U.S. executive leadership team

U.S. Workplace Safety	0.4
	Lost Time Injury Rate
	1.3	Total Recordable Incident Rate

1. Federal government's fiscal year ended September 30, 2023. All other data included on the page based on fiscal year ended December 31, 2023.

W.W. GRAINGER, INC. AND SUBSIDIARIES | 2024 ESG REPORT

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	Chairman &	2023	Our	The Grainger	Customer	Diversity	Energy and	Diversity, Equity	Workplace
	Team: Life	Sustainability	Appendix
	CEO message	Highlights	Approach	Solutions	Emissions	and Inclusion	Safety
	at Grainger	Solutions

Our Approach

• Embracing Grainger's purpose, We Keep The World Working, I'm energized by partnering with talented teams across the business to find solutions and create lasting, positive impact for our customers, team members, communities and future generations."
  - MIKAELA SAUGSTAD, SR. MANAGER, ESG

At Grainger, we build our ESG goals into our business.

At Grainger, we build our ESG goals into our business. Grainger's Board of Directors, executive leadership team and senior leaders take an active role in our overall ESG strategy, from oversight and strategic direction to implementation. Our more than 26,000 team members are responsible for executing our priorities and following the behaviors outlined in our Grainger Edge principles.

In 2024, we refreshed our materiality assessment, available on page 32. The results validated

our continued focus and understanding of the ESG topics most critical to our business and stakeholders. Because of this, our ESG program focus areas continue to be Customer Sustainability Solutions, Diversity Solutions, Energy and Emissions, and Diversity, Equity and Inclusion (DEI). We've also opted to add Workplace Safety as a focus area to reflect our ongoing commitment to provide a thriving and safe environment for all team members.

Through our ESG governance structure, the Grainger Board of Director's Board Affairs and Nominating Committee (BANC) and the ESG Leadership Council (composed of our Grainger Leadership Team) receive regular updates on the progress of all material ESG topics and provide strategic direction to our ESG Working Groups. As a testament to Grainger's commitment, the U.S.-based Grainger Leadership Team's annual incentive program includes an ESG modifier capable of increasing or decreasing payouts determined by financial performance up to +/- 10 percentage points based on two quantitative metrics: total absolute Scope 1 & Scope 2 emissions and diverse leadership representation.

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	Chairman &	2023	Our	The Grainger	Customer	Diversity	Energy and	Diversity, Equity	Workplace
	Team: Life	Sustainability	Appendix
	CEO message	Highlights	Approach	Solutions	Emissions	and Inclusion	Safety
	at Grainger	Solutions

Best

Workplaces

Most

Inclusive

Workplaces

2023: seventh consecutive year

ESG

Leadership

2024 Newsweek:

America's Most

Responsible Companies

2024 Sustainalytics

ESG Industry

Top-Rated Company

A- rating

As of 2023, Grainger received an MSCI ESG Rating of AAA

Industry

Leadership

From Fortune. ©2023 and ©2024 Fortune Media IP Limited All rights reserved. Used under license. Fortune and Fortune 100 Best Companies to Work For® are registered trademarks of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse products or services of, W.W. Grainger, Inc.

The use by W.W. Grainger of any MSCI ESG Research LLC or its affiliates ("MSCI") data, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of W.W. Grainger by MSCI. MSCI Services and data are the property of MSCI or its information providers, and are provided 'As-Is' and without warranty. MSCI names and logos are trademarks or service marks of MSCI.

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	Chairman &	2023	Our	The Grainger	Customer	Diversity	Energy and	Diversity, Equity	Workplace
	Team: Life	Sustainability	Appendix
	CEO message	Highlights	Approach	Solutions	Emissions	and Inclusion	Safety
	at Grainger	Solutions

The Grainger Team: Life at Grainger

At Grainger, we benefit from nearly a century of experience as an MRO industry leader, a trusted employer and a community partner. We know we have a unique responsibility to use that expertise to do good by achieving our purpose - We Keep The World Working.® Grainger team members understand what matters to our customers, fellow team members, partners and communities and how to meet the needs of today with a relentless focus on long-term sustainability. We understand the value of a stable workforce and invest in our team so that ours is an inclusive and fulfilling place to work, including a commitment to DEI, as detailed on page 24.

Interested in joining the team? Here's what you can expect:

We have active relationships with vetted organizations to widen our diverse talent pools, including Ascend, DisabilityIN, Out & Equal, National Sales Network, National Black MBA Association, HACE, Recruit Military and Hire Heroes USA, as well as Historically Black Colleges and Universities (HBCU) and Hispanic-serving institutions across the U.S.

Recruitment and Hiring

We are intentional about having an inclusive workforce that represents the diverse customers and communities we serve today and in the future. What does this look like? It's leadership and diversity training to ensure our job postings and hiring processes are inclusive, including for those with varying accessibility needs and people who identify as neurodiverse. From providing additional time for interviews and tools in support of candidates with hearing and vision impairments to accommodating service animals, our dedicated accessibility team

is focused on ensuring we have a welcoming workplace from the start.

Our inclusive behaviors also show up in our recruitment professionals, who work to create diverse pipelines of qualified candidates and mitigate bias throughout our hiring process.

Once hired, team members can expect to engage in a comprehensive, function-specific onboarding process that introduces them to our purpose and principles, as well as the opportunities available to make an impact, develop key skills and grow their careers.

In 2023, the American Opportunity Index recognized Grainger for having a welcoming workplace that fosters learning, development and career success for everyone, including those without college degrees. Grainger ranked third among the Fortune 400.

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	Chairman &	2023	Our	The Grainger	Customer	Diversity	Energy and	Diversity, Equity	Workplace
	Team: Life	Sustainability	Appendix
	CEO message	Highlights	Approach	Solutions	Emissions	and Inclusion	Safety
	at Grainger	Solutions

• One of Grainger's principles is 'Invest in Our Success,' where we proclaim,
  'We Consistently Learn and Grow.' In support of this principle, Grainger provides operational training, leadership development, business acumen training and career development resources for every level of the organization."
  - DON STANLEY, DIRECTOR, LEARNING & LEADERSHIP DEVELOPMENT

Team Member Development

To support a stable workforce with deep functional, product and customer knowledge, we invest in a robust learning and development culture so our team members can have a fulfilling career at our company. We offer opportunities to help everyone be their best while creating the industry's next generation of leaders. From job-specific skills and end-to-end leadership training to an educational assistance program for team members looking

to achieve a certificate or degree, we're here to help each member of team Grainger achieve their development goals.

Leaders hold twice-yearly performance reviews that include feedback from multiple stakeholders and also provide the opportunity for upward feedback. In addition, our leaders have regular discussions regarding their team members' individual development plans. Those conversations level up to department-wide discussions to identify both departmental and cross-functional opportunities. Company executives form committees to support additional growth opportunities for team members who are interested in senior leadership roles and demonstrate enterprise leadership abilities.

In 2023, our North American team members completed a total of more than 361,000 training hours, with an average of 11 hours per team member. Sixty-nine percent of our North American workforce has received career or skill-based training. For more details on Grainger's training, see page 47.

W.W. GRAINGER, INC. AND SUBSIDIARIES | 2024 ESG REPORT

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	Chairman &	2023	Our	The Grainger	Customer	Diversity	Energy and	Diversity, Equity	Workplace
	Team: Life	Sustainability	Appendix
	CEO message	Highlights	Approach	Solutions	Emissions	and Inclusion	Safety
	at Grainger	Solutions

• Grainger is unique in that we truly value team member feedback and make updates to our benefits as a result. I'm proud to work for a company that listens to team members and takes action to ensure that we meet them where they are."
  - EDDIE J. FRENCH III, MANAGER, HEALTH & WELFARE BENEFITS

Total Rewards-Pay and Benefits

Grainger has a pay-for-performance culture where both individual contributions as well as company performance are rewarded. In addition to our commitment to fair and equitable pay practices and complying with relevant country- and state- level mandatory analyses and disclosures, we also continue to engage a third-party expert for a pay equity analysis of U.S. team member compensation.

We regularly seek team member feedback and conduct external compensation and benefits-related benchmarking to remain competitive in each of the markets where we operate.

Our benefits are focused on offering flexibility, choice and the opportunity for team members to actively participate in programs that matter most to them and their families. Team member feedback has helped make our benefits more relevant, such as the recent expansion of our Family and Medical Leave (FMLA) policy to accommodate caring for domestic partners, grandparents and grandchildren, as well as benefits related to gender identity, including transition resources. We also offer flexible work arrangements including remote and part-time work to accommodate individual situations.

In addition, team members have access to a wide range of health plan resources, including disease management, tobacco cessation, parental support, stress management, 24-hour virtual health services and many other channels to receive timely health-related advice. All team members receive paid holidays and time off, income protection benefits, as well as a variety of other benefits designed to meet the evolving needs of team members and their families.

Our benefits are focused on offering flexibility, choice and the opportunity for team members to actively participate in programs that matter most to them and their families.

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