Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Stewardship
• Social Commitment
• Corporate Responsibility

Environmental Achievements

• Reduced coolant usage intensity from every 3 months to every 6+ months by switching to a higher grade coolant.
• Implemented waste reduction, reuse, and recycling practices, including regrinding and reusing plastic scraps, recycling e-waste and corrugated packaging, and recycling scrap materials.
• Installed energy-efficient LED lighting and motion sensors at production facilities and offices.
• Replaced aging HVAC units with Energy Star certified models.

Social Achievements

• Launched Total Rewards strategy encompassing career pathing, competitive compensation, benefits, recognition, and compliance with wage and hour laws.
• Established baseline HR analytics for recruitment, retention, and total rewards practices.
• Held first company-wide town hall meetings for salaried employees.
• Increased HR team by 150%.

Governance Achievements

• Updated corporate governance documents to reflect transition to a non-emerging growth company.
• Refreshed the Board of Directors with new independent directors.
• Implemented a robust enterprise-wide risk management approach overseen by the Board.

Climate Goals & Targets

Environmental Challenges

• Greenhouse gas emissions monitoring and reporting.
• Developing DEI programs.
• Expanding data privacy and security analytics.

Mitigation Strategies

• Reviewing ways to account for and report on energy consumption and sources.
• Partnering with organizations and developing programs to enhance diverse recruitment and retention.
• Expanding IT analytics to enhance oversight capabilities.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Third-Party Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: SASB Standards for Solar Technology and Project Developers, UN SDGs

Certifications: ISO 9001:2015 (Alabama facility), UL Standards (Fuel Power Center, Big Lead Assembly, raceways, and quick-connect bases)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 11 (Sustainable Cities and Communities)
• Goal 13 (Climate Action)

Shoals' products and operations contribute to these goals through clean energy solutions, sustainable manufacturing practices, and workforce development.

Sustainable Products & Innovation

• Combine-as-you-go system
• EV charging solutions

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change & GHG Emissions
• Supply Chain Management
• Employee Health & Safety
• Product Quality & Safety
• Human Capital Management & DEI
• Community Impact
• Waste & Recycling
• Product Design & Lifecycle Management
• Corporate Governance
• Data Privacy & Security

Environmental Achievements

• Conducted first inventory of Scope 1 and 2 GHG emissions, reporting aligned with TCFD recommendations.
• Partnered with local recycling company to recycle ~100% of wooden spools.
• Regrinding and reusing plastic scraps from manufacturing process.
• Recycling scrap material (wires, metals).
• Compacting and recycling cardboard.
• Engaging waste management third parties for sustainable recovery of materials from lithium-ion batteries and waste fluid.
• Upgrading to higher-grade coolant for CNC machines.
• Installing a closed-loop cooling system that reuses water.

Social Achievements

• Appointed first Director of Sustainability.
• Implemented new software to systematically collect and track key ESG metrics.
• Developed a new company-wide EHS manual.
• Made 199 safety improvements during the year.
• Implemented new EHS- and HR-based trainings for all floor supervisors.
• Conducted first employee engagement survey (83% participation rate).
• Created "Shoals Speak" communication platform.
• Increased cadence of employee town hall meetings to monthly.

Governance Achievements

• Formalized a management-level sustainability committee.
• Transitioning to annual election of directors.
• Strengthened IP program by adding IP Counsel.
• Conducted quarterly IP Committee meetings.
• Added a Security Engineer to the IT team.
• Implemented a detection and response system for anomalous network activity.

Climate Goals & Targets

Environmental Challenges

• Increase in absolute emissions and energy consumption due to a new facility being operational for a full reporting year.
• Physical risks to facilities from extreme weather events.

Mitigation Strategies

• Focus on operational efficiency and strategic sourcing of renewable energy to reduce direct emissions intensity.
• Further evaluation of physical risks and development of mitigation strategies and plans in 2024.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: SASB, TCFD, UN SDGs

Certifications: ISO 9001:2015

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Snapshot I-V Solar PV Health Monitoring Solutions
• Combine-as-you-go EBOS architecture
• Shoals Big Lead Assembly (BLA)

Awards & Recognition

• Not disclosed