Climate Change Data

Environmental Metrics

ESG Focus Areas

• Health, Safety and the Environment
• Corporate Governance
• Eco-Innovation
• Employee and Community Well-being
• Diversity and Inclusion
• Doing Business Right

Environmental Achievements

• Reduced recordable injuries by 40% across global operations over the past five years.
• Reduced total GHG emissions.
• Reduced total energy consumption.
• Reduced water withdrawal.
• Increased waste diversion from landfills.
• 22% waste reduction at Changzhou, China site.
• Reduced energy consumption by 33% with finishing testers by optimizing compressed air usage at Changzhou, China site.

Social Achievements

• Recognized World Mental Health Day globally with various employee engagement activities.
• Gates Industrial Corporation Foundation matched U.S. employee donations dollar-for-dollar, supporting over 150 non-profit organizations.
• Provided college scholarships to 6 dependent children of Gates employees.
• Organized various community initiatives globally (bike build event, Christmas solidarity campaign, beehive installation, etc.).
• Implemented a corporate policy encouraging the voluntary identification of pronouns in email signature blocks.

Governance Achievements

• Board of Directors consisted of a majority of directors meeting NYSE independence standards (starting 2020).
• Board oversees environmental, social, and governance issues, integrating these principles into the company's long-term strategic vision.
• Regular training for employees on corporate policies (Code of Business Conduct and Ethics, Human Rights Policy, etc.).

Climate Goals & Targets

Environmental Challenges

• Unpredictable and ever-evolving impact of the global COVID-19 pandemic.

Mitigation Strategies

• Working harder to ensure the sustainability of our business, products, and services to continue support of essential industries.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Strict supplier code of conduct

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 14001, ISO 45001, ISO 50001 (15% of manufacturing sites)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 3
• Goal 6
• Goal 7
• Goal 9
• Goal 12
• Goal 13
• Goal 14
• Goal 15

The report details how Gates' initiatives contribute to these goals.

Sustainable Products & Innovation

• Gates MEGASysTM MXT™ hydraulic hose
• Gates Micro-V® belts

Awards & Recognition

• Gates Internal HSE Awards

Environmental Metrics

ESG Focus Areas

• Governance
• Technology
• Environment
• Stewardship

Environmental Achievements

• 11% reduction in water consumption from 2018 to 2020
• 71% of waste directed to recycling and incineration (11% improvement over 2019)
• 280% increase in composting efforts in 2020 compared to 2019, composting 173 tons of biomaterials

Social Achievements

• Decreased recordable injuries across global operations
• Charitable contributions totaling $1,088,861 USD from the Gates Industrial Corporation Foundation
• More than $535,000 USD donated in support of organizations responding to the COVID-19 pandemic
• Over 1,000 face shields delivered to frontline workers through 3D printing
• Six dependent children of Gates employees awarded college scholarships

Governance Achievements

• Enhanced disclosure metrics to align with global reporting initiatives and standards boards
• Created a sustainability dashboard to increase visibility into metrics and reporting
• Majority of directors meeting NYSE independence standards

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic and associated governmental measures
• Social unrest in the U.S.

Mitigation Strategies

• Adapting quickly and flexibly to the changing pandemic landscape
• Donating to organizations responding to the pandemic and social unrest
• Supporting employees' well-being through various initiatives

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Conflict minerals policy
• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: ISO 14001, ISO 45001, ISO 50001, ISO 14064-3:2006

Certifications: ISO 14001, ISO 45001, ISO 50001

Third-party Assurance: Ruby Canyon Environmental, Inc.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Gates MXG™ 4K Hydraulic Hose
• Gates PowerGrip® GT® 4 and PowerGrip GT Extend™ Synchronous Belt
• Gates GC20™ Hydraulic Crimper

Awards & Recognition

• HSE awards program for facilities achieving exceptional performance

Environmental Metrics

ESG Focus Areas

• Governance
• Technology
• Environment
• Stewardship

Environmental Achievements

• Initiated a global energy conservation program for all manufacturing sites.
• 30% of Gates manufacturing sites have ISO 50001 certifications for energy management.
• Switched to digital format for Gates catalogues and magazines in Mexico to reduce waste.

Social Achievements

• Established a DEI Council for its North America workforce.
• Formed three Business Resource Groups (Pan-Asian Leaders; LGBTQ+; and Veterans and Veterans' Families) for its North American workforce.
• Pune, India facility achieved more than 3,000 workdays without an incident, zero severe and recordable injuries, and 100% compliance with Gates Global HSE Standards.

Governance Achievements

• Created and staffed a new role of dedicated leader for Environmental, Social, and Governance (ESG).
• Board of Directors has newly defined oversight of all ESG matters, led by the Nominating and Governance Committee.
• 100% of global team members completed certification of reading and acknowledging compliance with the Code of Business Conduct and Ethics in 2022.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Tight labor markets
• Exceptionally high energy costs

Mitigation Strategies

• Recalibrating targets to address outcomes that reflect ambition, regulatory developments, advances in technologies, and market expectations.
• Investing in both renewable and traditional energy supplies.
• Working to improve energy efficiency and facilitate the transition to cleaner energy.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Human Rights Policy
• Modern Slavery Act Statement

Climate-Related Risks & Opportunities

Physical Risks

• Chronic and severe weather-related events

Transition Risks

• Regulatory changes
• Changing consumer behaviors
• Trend towards lower carbon energy and fuel sources

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: SASB, TCFD, GRI, UN SDGs

Certifications: ISO 14001, ISO 50001, ISO 45001, ISO/TS 16949

Third-party Assurance: LRQA

UN Sustainable Development Goals

• Goal 3
• Goal 4
• Goal 5
• Goal 6
• Goal 7
• Goal 9
• Goal 12
• Goal 13
• Goal 15
• Goal 16
• Goal 17

The UN SDGs and targets are the most directly aligned to Gates' core business and impacts.

Sustainable Products & Innovation

• Gates Carbon Drive
• Moto X5 belt
• ThermalPro electric water pumps, electric coolant valves, and thermal management hoses

Environmental Metrics

ESG Focus Areas

• Corporate Governance and Business Ethics
• Greenhouse Gases and Air Emissions
• Energy Efficiency and Clean Energy Utilization
• Waste Management and Product Stewardship
• Environmental Policy and Management Systems
• Workforce Health and Safety
• Human Capital Management

Environmental Achievements

• Reduced total operational GHG emissions by 4.8% compared to 2022.
• Reduced Scope 1+2 GHG emissions indexed to net sales by 5.3% compared to 2022.
• Achieved 10% greater energy efficiency measured on a MWh/$ revenue basis.
• Reduced water consumption compared to 2022.
• Reduced total waste volume.
• Increased renewable energy generated by 8.5% of total GWh.
• Dumfries, UK site achieved zero inert waste to landfill.
• Legnica, Poland site repurposed waste from cardboard boxes as carton filler, reducing waste and demand for new paper.

Social Achievements

• Achieved a global zero injury rate for the month of December 2023, with multiple facilities reporting both a zero-injury rate and a zero-incident rate for the entire year.
• Revamped training programs and energized facilities’ workforce around a shared goal of achieving best-in-class safety ratings.
• Launched a new supplier portal to support communication with suppliers.
• Launched new outreach initiatives to increase awareness of the Code of Business Conduct and Ethics.
• Improved response times for customer inquiries.
• Implemented robust management system with auditability to capture environmental and social impact data.

Governance Achievements

• Established formal sustainability oversight committee structure.
• Improved processes for evaluating the performance of the highest governance body.
• 100% of suppliers signed contracts requiring adherence to environmental, labor and human rights practices.
• 100% of required global team members completed certification acknowledging compliance with the Code of Business Conduct and Ethics in 2023.

Climate Goals & Targets

Environmental Challenges

• Increased energy consumption due to corporate growth.
• Supply chain disruptions (implied).

Mitigation Strategies

• Investing in resources, systems, and technologies to support sustainability ambitions.
• Improved energy efficiency.
• Implementing robust management system with auditability to capture environmental and social impact data.
• Co-locating packaging suppliers to reduce transportation miles.

Supply Chain Management

Supplier Audits: 71% of top-tier suppliers by spend are measuring and publicly reporting certain categories of their emissions.

Responsible Procurement

• Supplier Code of Conduct
• Human Rights Policy
• Modern Slavery Act Statement
• Due diligence processes to prevent labor and human rights risks.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB, GRI, UN SDGs

Certifications: ISO 14001, ISO 45001, API, IATF 16949, ISO 9001

Third-party Assurance: ERM Certification & Verification Services Incorporated

UN Sustainable Development Goals

• Goal 6
• Goal 7
• Goal 9
• Goal 12
• Goal 13
• Goal 15
• Goal 16
• Goal 17
• Goal 3
• Goal 4
• Goal 5
• Goal 10

The report details how various initiatives contribute to these goals.

Sustainable Products & Innovation

• Enhanced wire technology hoses (ProXT™, ProV™, ProFlex™, MXT™, MXT-XTP™, MXG™ 4K/5K, Clean Master™)
• Poly Chain® belts

Awards & Recognition

• LEAP Award (Design Power Mobile App)
• Gold 4-Star trophy and certificate from the World Safety Organization (Chennai, India facility)