Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Financial Performance
• Governance
• Ethics and Compliance
• Supply Chain Sustainability
• Innovation
• Research and Development
• Delivering Value to Customers
• Employee Health, Safety, and Wellness
• Learning and Development
• Equal Opportunity and Non-Discrimination
• Environment
• Energy, Emissions, and Climate Change
• Effluents, Waste, and Recycling
• Materials Used
• Environmental Compliance

Environmental Achievements

• Recycled over 500 tons of steel in 2019
• Composted over 70 tons of material in 2019
• Recycled over 150 tons of material in 2019
• Diverted approximately 150,000 tons of sludge from landfill disposal every year
• One installation of Dryer Management System reduced steam consumption by 4,500 pounds per hour, equivalent to more than 10,000 gallons of water savings per day, resulting in $360,000 in annual energy cost savings.

Social Achievements

• Zero fatalities and a low level of recordable injuries across six continents and 19 major manufacturing locations in 2019 (with approximately four million employee hours worked). TRIR of 3.1 (nearly 10% below the industry average of 3.4)
• No judgments of discrimination in 2019
• Established the Linwood G. (Woody) Tyler Memorial Scholarship at Miami (Ohio) University's College of Engineering and Computing.

Governance Achievements

• No corruption incidents and no material fines or monetary sanctions for noncompliance with laws in 2019
• No material fines or monetary sanctions for noncompliance with environmental laws or regulations in 2019

Climate Goals & Targets

Environmental Challenges

• Spread of mountain pine beetle and increase in wildfires in Western North America impacting wood processing business.
• Assumptions about Kadant's operations in the forest products industry that are not accurate.

Mitigation Strategies

• Developing products that meet customer needs while minimizing contributions to global climate change.
• Improving communication of Kadant's sustainability story.

Supply Chain Management

Responsible Procurement

• Global Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Spread of mountain pine beetle
• Increase in wildfires

Reporting Standards

Frameworks Used: GRI Standards: Core option

Sustainable Products & Innovation

• Biodac® Granules
• Hydraflow™ continuous detrashing system
• Dryer Management System® (DMS)
• Kadant Eco (Solar) line of trash compactors
• Award-winning compact pulping system (Vitry-le-François, France)

Awards & Recognition

• Award-winning compact pulping system (Vitry-le-François, France)

Environmental Metrics

ESG Focus Areas

• Governance
• Environmental
• Social

Environmental Achievements

• Reduced Scope 2 GHG emissions by an unspecified amount in 2021 from 2020 levels (goal set, not yet achieved in 2020)
• Recycled over 620 metric tons of metal
• Recycled over 400 cubic meters of corrugated packaging and cartonboard

Social Achievements

• Implemented enhanced safety measures and practices across facilities to protect employee health and safety during the COVID-19 pandemic
• Provided additional training on crane and forklift safety at several divisions
• Continued focus on employee diversity, capability development, and succession planning

Governance Achievements

• Became a signatory to the United Nations Global Compact (UNGC)
• Developed and implemented a supplier code of conduct
• Implemented a Human Rights Policy and an Environmental, Health and Safety (EHS) Policy

Climate Goals & Targets

Environmental Challenges

• Global pandemic (COVID-19) impacting operations and employee safety
• Increased natural gas usage leading to slightly increased total energy consumption

Mitigation Strategies

• Adopted enhanced safety measures and practices across facilities
• Implemented energy reduction initiatives, including LED lighting retrofits and station capacitor banks
• Gradually replacing fossil-fuel powered vehicles with electric or hybrid vehicles
• Analyzing raw material usage and adjusting processes and purchasing to minimize scrap

Supply Chain Management

Responsible Procurement

• Global Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core option (2016), Sustainability Accounting Standards Board (SASB) framework

Sustainable Products & Innovation

• ARGUS-FMS™, ARGUS-LFO™, ARGUS-LPO™, ThermoMax system

Awards & Recognition

• Newsweek’s 2021 list of America’s Most Responsible Companies
• Fortune’s 2020 list of the 100 fastest-growing companies
• 2020 AIM Sustainability Award

Environmental Metrics

ESG Focus Areas

• Governance
• Ethics and Compliance
• Supply Chain Sustainability
• Innovation
• Health, Safety, and Wellness
• Training and Education
• Equal Opportunity and Non-Discrimination
• Energy and Emissions
• Materials Used
• Effluents and Waste
• Environmental Compliance

Environmental Achievements

• Achieved net-zero Scope 2 emissions through sourcing renewable energy and the use of renewable energy credits, reducing the global GHG footprint by 30 percent.

Social Achievements

• Launched numerous workforce development and apprenticeship programs to attract and develop underrepresented populations in the industry.
• Kadant US operations achieved an Experience Modification Rating Score of 0.92, indicating lower than industry average Workers Compensation claims.
• From 2019 to 2021, our location in Three Rivers, Michigan operated without a single lost-time injury for 857 days.

Governance Achievements

• Introduced an online compliance training platform for managers to assign and track training videos on topics ranging from sexual harassment and diversity and inclusion to anti-corruption.
• Signed the United Nations Global Compact.

Climate Goals & Targets

Environmental Challenges

• Supply chain issues, labor shortages, and raw materials inflation.

Mitigation Strategies

• Strong focus on operational excellence and decentralized business structure.

Supply Chain Management

Supplier Audits: 80% of supply chain spending screened for ESG-related risk in 2021.

Responsible Procurement

• Global Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI, SASB, UNGC

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• M-Clean ULTRA (reduced water usage), Repel Technology blade (extended lifespan, reduced waste), nForce blade (extended lifespan, reduced waste), solar swivel joint (reduced energy use).

Awards & Recognition

• 2021 SEAL Business Sustainability Award, Newsweek’s America’s Most Responsible Companies (2 consecutive years)

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Supply Chain Sustainability
• Financial Performance
• Stakeholder Engagement
• Health and Safety
• Innovation
• Environment
• Climate Change
• Energy
• Emissions
• Materials
• Waste and Recycling

Environmental Achievements

• Achieved net-zero Scope 2 emissions through sourcing renewable energy and the use of renewable energy credits
• Initiated collection and reporting of Scope 3 emissions data
• Guadalajara, Mexico location added 80,000 square feet of roofing insulation and replaced ~130 fluorescent office lighting fixtures with LED lighting fixtures
• Bury, UK location employed efficiency measures, including motion detector sensors in communal areas to reduce electricity usage
• Surrey, British Columbia location completely eliminated wastewater production

Social Achievements

• Named by Newsweek as one of America’s Most Responsible Companies and America’s Greatest Workplaces for Diversity
• Implemented wellness programs across US locations
• 2022 TRIR is 39% lower than the average TRIR of 3.05 over the past three years (2019-2021), even with a 7.1% increase in work hours
• Introduced a sustainable bio-composite doctor blade

Governance Achievements

• Established a task force to identify climate-related risks and opportunities and a general overview of ESG risk management
• Engaged with suppliers assessed as higher ESG risk to strengthen their ESG programs
• Annual review and certification of compliance with Code of Business Conduct and Ethics, Global Export Control Policy, Insider Trading Policy, Anti-Harassment Policy, and Foreign Corrupt Practices Act Policy

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Climate-related risks (lack of input material availability, excessive energy demand, adverse weather events, increased forest fires and degradation)
• Transition risks (investor ESG priorities, increased customer focus on sustainable services and products, increased investment costs)

Mitigation Strategies

• Engaged with top suppliers on sustainability efforts
• Consolidated shipments to reduce deliveries and carbon footprint
• Conducted climate-related risk assessment, including scenario analysis
• Developed crisis response and business continuity plans
• Implemented energy efficiency measures
• Purchased renewable energy certificates
• Exploring onsite renewable energy generation
• Quantified Scope 3 emissions to identify opportunities for reduction
• Diversifying material sources and increasing local sourcing
• Improving communications with customers on sustainability
• Implementing new sustainability measures aligned with customer expectations
• Monitoring weather patterns and updating infrastructure

Supply Chain Management

Supplier Audits: Assessed over 400 suppliers (80% of supply chain spend)

Responsible Procurement

• Global Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Lack of input material availability
• Excessive energy demand
• Increase in adverse weather events
• Increase in the frequency of forest fires and degradation

Transition Risks

• Investor ESG priorities
• Increased customer focus on sustainable services and products
• Increased investment costs

Opportunities

• Resource efficiency
• Talent acquisition
• Cost savings
• Expanded customer base

Reporting Standards

Frameworks Used: GRI Standards, SASB Industrial Machinery and Product Standards, UN Global Compact, TCFD

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Bio-composite doctor blade
• Smart connected grapple hoist

Awards & Recognition

• Newsweek’s America’s Most Responsible Companies
• Newsweek’s America’s Greatest Workplaces for Diversity

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Efficiency
• Waste Reduction
• Supply Chain Sustainability
• Employee Well-being
• Corporate Governance
• Diversity & Inclusion

Environmental Achievements

• Sourcing 100% of electricity from renewable sources.
• Reduced overall energy usage by 13% despite a 6% revenue increase.
• Recycled approximately 5,000 cardboard cores at Bury, UK location.
• Reuses all pallets received at Bury, UK and Valinhos, Brazil locations.
• Launched comprehensive upcycling reject handling technologies.

Social Achievements

• Named by Newsweek as one of America’s Greatest Workplaces for Job Starters.
• Named by Newsweek as one of America’s Most Responsible Companies for the fourth consecutive year.
• Named by Investor's Business Daily as one of 100 Best ESG Companies.
• Implemented employee recognition program in Saltillo, Mississippi.
• Implemented “Clouth Experts” employee development program in Hückeswagen, Germany.
• Collaborated with Ohio’s TechCred program, reimbursing employees over $14,000 in training.

Governance Achievements

• Majority of Board of Directors comprised of independent directors.
• Board consists of two women and five independent directors.
• Annual self-evaluation of the Board to assess effectiveness.
• No significant violations regarding environmental compliance.

Climate Goals & Targets

Environmental Challenges

• Scope 3 emissions (primarily from purchased goods and services).
• Supply chain disruptions due to climate events (lack of input material availability, excessive energy demand, adverse weather events).
• Transition risks (investor ESG priorities, increased customer focus on sustainable services and products, increased investment costs).

Mitigation Strategies

• Engaging with top suppliers to encourage science-based emission reduction targets.
• Assessing areas of operations to reduce overall emissions and implementing reduction plans.
• Exploring options for onsite renewable energy generation.
• Diversifying material sources, increasing local sourcing, and anticipating sourcing challenges.
• Implementing energy efficiency measures (smart controls, LED lighting, insulation).
• Monitoring weather patterns, assessing storm response systems, and updating infrastructure.
• Innovating technologies to maximize fiber recovery from recycled paper and utilize lower-quality fibers.
• Expanding communications with customers to understand needs and implement sustainability measures.

Supply Chain Management

Supplier Audits: Robust analysis of approximately 400 suppliers (80% of supply chain spend in 2021); targeted audits and feedback processes at each location.

Responsible Procurement

• Global Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Lack of input material availability
• Excessive energy demand
• Increase in adverse weather events
• Increase in forest fires and degradation

Transition Risks

• Investor ESG priorities
• Increased customer focus on sustainable services and products
• Increased investment costs

Opportunities

• Resource efficiency
• Talent acquisition
• Cost savings
• Expanded customer base

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• SupraTM Screen Rotor
• FibreWall EverSlot™ Screen Cylinder
• X-Tek doctor blade
• SmartRING 32/98 Gen 2 Strander
• CoreMaster Core Shredder
• ThermoZone™ condensate handling station
• Intelligent grapple hoist

Awards & Recognition

• Newsweek’s America’s Greatest Workplaces for Job Starters
• Newsweek’s America’s Most Responsible Companies
• Investor's Business Daily's 100 Best ESG Companies