Climate Change Data

Environmental Metrics

ESG Focus Areas

• Water Solutions
• Corporate Governance
• Social Responsibility
• Environment

Environmental Achievements

• 78% of energy consumed came from renewable sources.
• 3,600,000 kg of recycled materials used in production.
• 50 tons of hazardous waste properly disposed of.

Social Achievements

• Training and certification program for plumbers, women victims of violence, and students (9,810 plumbers trained).
• Installation of more than 300,000 rainwater harvesting systems in Brazil through the Agua para Todos program.
• Installation of more than 15,000 rainwater harvesting systems and outdoor composting bathrooms in Mexico through the National Crusade Against Hunger.

Governance Achievements

• Full year as a public company listed on the Mexican Stock Exchange (BMV).
• Adoption of the Zero-Based Budget methodology.
• Compliance with Mexican Securities Markets Law (LMV) regarding Board member independence (6 of 13 independent directors).

Climate Goals & Targets

Environmental Challenges

• 13% decrease in net sales due to economic and political situation in Brazil (59.5% decrease in Brazil sales).
• Macroeconomic pressures.
• Environmental fine at the Pacific Center Plant.

Mitigation Strategies

• Reduced operation in Brazil, closing four of eight rotomolding plants but preserving production capacity.
• Zero-Based Budget methodology implemented to improve resource management.
• Actions taken to resolve the environmental fine at the Pacific Center Plant (details not specified).

Supply Chain Management

Responsible Procurement

• 60% of suppliers are local.
• Supplier development programs (productive chains program, annual supplier assessment, calls for tender, external surveys).

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters
• Extreme weather conditions

Reporting Standards

Frameworks Used: GRI G4 (Essential option)

Certifications: ISO 9001 (all Mexico plants), ISO 14001 and OHSAS 18001 (Lerma, León, Lima plants), Socially Responsible Company (ESR) award from Cemefi (since 2011)

Sustainable Products & Innovation

• Rainwater harvesting systems
• Outdoor composting bathrooms
• Water fountains
• Water purifying units
• Wastewater treatment plants

Awards & Recognition

• Socially Responsible Company (ESR) award from Cemefi (since 2011)
• Clean Company Environmental Certification at León Plant
• Great Place to Work award at Monterrey Plant
• LACP recognition for 2014 Annual Report
• Superbrands

Environmental Metrics

ESG Focus Areas

• Access to water and sanitation
• Employees’ attraction and retention
• Quality
• Water awareness
• Employees’ development
• Economic performance
• Operational efficiency
• Strategy, business model and trademark
• Risk management
• Innovation
• Relationship with clients

Environmental Achievements

• Implemented environmental management systems according to ISO 14001 in four plants; 86.0% of total electricity used for production comes from renewable wind energy; reduced energy demand by 5% and GHG generation by 12% in rotomolding through redesign of gas-burner systems; reused 26.7% of water from production process; reused plastic waste from rotomolding processes (30% of material in three-layer storage tanks); 100% recycled PET used in biodigesters.

Social Achievements

• Increased employee workforce by 24.5% to 2,829; women represent 25.8% of the workforce, 17.2% in executive positions; decreased number of minor injuries by 23.9% and number of days lost due to injury by 23.0%; increased employee satisfaction by 7 percentage points (66% satisfaction in Great Place to Work survey); provided 35,015.5 hours of training (15.6 average hours per employee); launched initiatives to promote responsible water use (Fan del Agua, La canción más larga, Movimiento In); implemented the Programa Nacional de Bebederos (National Drinking Water Fountains Program), installing 3,193 drinking water fountains.

Governance Achievements

• 7 of 15 Board members are independent (47% of members); implemented a Code of Ethics and Conduct, with mandatory compliance for employees, directors, and shareholders; provided ethics and anti-corruption training to 2,180 employees; established the Confía Rotoplas service for reporting breaches of the Code of Ethics and Conduct; detected and addressed two cases of conflicts of interest.

Climate Goals & Targets

Environmental Challenges

• Economic slowdown in Latin America; lower demand for integrated solutions in Mexico and Brazil due to budget cuts and difficult political and economic environments; increase in raw material prices; changes in consumer preferences; macroeconomic conditions affecting market sectors; difficulties in expanding operations into new markets; regulatory framework affecting foreign trade; unanticipated costs to comply with environmental, labor, and safety laws; extreme weather conditions and natural disasters; stoppage and temporary closure of plants and distribution centers; inability to develop high-quality and innovative products; high workforce rotation; inability to effectively manage company growth.

Mitigation Strategies

• Reconfigured portfolio toward higher-growth solutions; implemented measures to adjust operations to current sales levels and reduce fixed costs; diversified portfolio with individual and integrated solutions and value-added services; developed new business models (e.g., monthly lease schemes for water purifiers); invested in innovation through Rotoplas Labs and partnerships with research centers and universities; implemented proactive risk management with regular updates to the risk map; implemented internal control systems and third-party assessments; addressed detected risks through disciplinary measures and contract rescissions.

Supply Chain Management

Responsible Procurement

• Emphasis on local supply (68.7% of expenditure); quality control of raw materials and components; training programs for suppliers (e.g., Plumbers’ program, Promoting a Profession initiative).

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions and natural disasters

Reporting Standards

Frameworks Used: GRI Standards (Exhaustive Compliance)

Certifications: ISO 9001 (Mexico, Guatemala, Peru), ISO 14001 (four plants), OHSAS 18001 (five plants)

UN Sustainable Development Goals

• SDG 6 (Clean Water and Sanitation)
• SDG 9 (Industry, Innovation, and Infrastructure)
• SDG 3 (Good Health and Well-being)
• SDG 4 (Quality Education)
• SDG 5 (Gender Equality)

Solutions contribute to improved access to water and sanitation, promote innovation in water technologies, improve health outcomes, support education initiatives, and empower women.

Sustainable Products & Innovation

• Rainwater harvesting systems, water purifiers, drinking water fountains, outdoor sustainable bathrooms, wastewater treatment plants

Environmental Metrics

ESG Focus Areas

• Clean Water and Sanitation
• Industry, Innovation, and Infrastructure
• Health
• Education
• Gender Equality

Environmental Achievements

• 6,496,416 m3 of wastewater treated by Sytesa.
• Rainwater harvesting systems provided access to improved water sources for 20,300 people.

Social Achievements

• Improved water access for 346,980 people through water purification systems.
• Improved sanitation and hygiene services for 20,539 people through outdoor toilets with biodigesters.
• Adequate sanitation systems provided to 596,949 people through self-cleaning biodigesters.
• Over 75,000 people reached through hygiene awareness programs.
• 346,560 people benefited from drinking water fountains with purifying systems installed in schools.

Governance Achievements

• Issued the first Sustainable Bond in Latin America, worth $2 billion Mexican pesos, to finance projects fostering basic affordable infrastructure for water and sanitation.

Climate Goals & Targets

Environmental Challenges

• Limited access to clean water and sanitation globally and in Latin America.
• High percentage of untreated wastewater globally and in Latin America.
• Need for increased investment in water and sanitation infrastructure.
• Need for increased R&D investment in water and sanitation technologies.

Mitigation Strategies

• Investment in rainwater harvesting systems, water purification systems, and sanitation solutions.
• Issuance of a Sustainable Bond to finance water and sanitation projects.
• Investment in R&D through the Advanced Innovation Center in Chile (AIC) and Sanzfield centers.
• Collaboration with universities and NGOs on research projects.
• Development of new water and sanitation technologies.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SDG Compass, GRI

UN Sustainable Development Goals

• SDG 6
• SDG 9
• SDG 3
• SDG 4
• SDG 5

Rotoplas's water solutions and infrastructure development contribute directly and indirectly to these goals.

Sustainable Products & Innovation

• Rainwater harvesting systems
• Water purification systems
• Outdoor toilets with biodigesters
• Self-cleaning biodigesters
• Drinking water fountains

Environmental Metrics

ESG Focus Areas

• Water and sanitation availability
• Corporate Governance
• Innovation
• Human Capital
• Sustainability

Environmental Achievements

• Reduced energy consumption by 4% vs. the previous year.
• 83% of electricity used in main processes came from clean energy sources.
• Prevented the emission of 4,657 tons of CO2eq through the supply of renewable energy.
• Recycled 49% of low-density polyethylene and 29% of polypropylene random copolymer.
• Treated 15,368,901 m3 of wastewater; 35% of the water was later reused.
• Installed 1,749 solar panels with a joint power of 1,274 kW.

Social Achievements

• Launched the Agua Vita program for entrepreneurs with innovative water solutions.
• Trained 7,812 plumbers in Mexico, 350 of whom obtained a certificate as “Water solutions advisors”.
• Developed a Social Value Creation Model to gauge the effects of rainwater harvesting systems, outdoor toilet with biodigester, and drinking water fountains.
• Launched a volunteer program for the cleanup of water bodies.
• Awarded 30 scholarships to plumbers to start their own business.
• Offered plumbing training to inmates in social rehabilitation centers.

Governance Achievements

• Updated the Sustainability Policy and the Human Rights Policy.
• Formalized the Sustainability Committee.
• Issued the reopening of the AGUA 17-2X Sustainable Bond for $1,000 million pesos.
• Implemented a self-assessment process for board members.
• Launched an Anticorruption Policy.
• Carried out an internal communication campaign on corporate values and Code of Ethics and Conduct.

Environmental Challenges

• Increase in raw material prices.
• Changes in consumers’ income and preferences.
• Macroeconomic conditions affecting the market.
• Difficulties in entering new markets.
• Effects on foreign trade operations.
• Unforeseen costs of complying with environmental, labor, and security laws.
• Operations affected by extreme weather conditions and/or natural disasters.
• Stoppage and temporary shutdown of plants and/or distribution centers.
• Inability to develop high-quality and innovative products and solutions.
• High turnover and inability to attract talent.
• Inability to manage the Company’s growth efficiently.
• Cybernetic vulnerability.
• Political instability.
• Transition to a low-carbon economy.

Mitigation Strategies

• Annual risk map updates and prevention/mitigation measures.
• Internal control system monitoring.
• Internal and external audit reviews.
• Sustainability Strategy initiatives to transform risks into opportunities.
• Assessment of climate change risk management maturity (TCFD-aligned).

Supply Chain Management

Responsible Procurement

• Supplier selection and development program for high-quality virgin and recycled resins.
• 76% of expenses destined to local suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions and/or natural disasters

Transition Risks

• Transition to a low-carbon economy

Reporting Standards

Frameworks Used: GRI Standards (Comprehensive option)

Certifications: ISO 9001 (12 plants), ISO 14001 (4 plants), OHSAS 18001 (plants in Lerma and Leon (Mexico), Lima (Peru))

Third-party Assurance: Redes Sociales en Línea Timberlan (limited assurance)

UN Sustainable Development Goals

• SDG 3
• SDG 4
• SDG 5
• SDG 6
• SDG 9

Contribution to SDGs through water solutions, innovation, and community development initiatives.

Sustainable Products & Innovation

• Rainwater harvesting systems
• Outdoor toilet with biodigester
• Drinking water fountains
• Water treatment plants

Awards & Recognition

• Discovery Ambassador 2018
• Superbrands (5th consecutive year)
• Greenbrands (2nd consecutive year)

Environmental Metrics

ESG Focus Areas

• Corporate governance and ethics
• Access to solutions
• Circularity and climate change
• Availability of water
• User’s quality of life
• Talent promotion

Environmental Achievements

• Reduced water consumption by 80% in a new blow molding process for tanks (844 tons produced)
• Used 10% recycled resin in products, saving over $15 million pesos
• Incorporated between 35% and 100% recycled material into some tank models
• Launched Merida WWTP (Mexico) with capacity to treat 18m3 per day

Social Achievements

• Launched AprendeR digital learning platform, providing 28,311 training hours (8.5 hours per employee)
• Launched Plomerísimo, a digital platform connecting residential customers with Rotoplas-endorsed plumbers
• Expanded Gana Más con Rotoplas loyalty program to Central America, with 10,606 members
• Donated over 5,000 products, enabling storage of over 1 million liters of water in vulnerable communities
• Installed over 1,000 hand-washing stations in public spaces
• Provided free drinking water service for one year and donated purifiers to hospitals in Mexico

Governance Achievements

• Increased ROIC to 12.4%, 240 basis points above the cost of capital
• Improved cash conversion cycle by 17 days
• Strengthened balance sheet by improving leverage
• Launched INNWAI - Water Innovation Hub, a collaborative innovation platform
• Created Organizational Transformation Vice-Presidency to support Flow program implementation
• Updated materiality analysis under GRI and SASB frameworks

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting operations and stakeholders
• Supply chain disruptions
• Economic uncertainty limiting new contracts
• Increased cost of raw materials
• Shortages of materials
• Vendor difficulties complying with regulations
• Climate change risks (extreme weather, regulatory changes, market shifts)
• Cybersecurity vulnerabilities
• Political instability

Mitigation Strategies

• Adapted work protocols with strict hygiene measures
• Offered remote medicine services and COVID-19 insurance
• Redefined distribution routes and adjusted RTMS
• Developed alternative sourcing strategies
• Implemented technological optimizations (SMART)
• Incorporated environmental practices of excellence
• Monitored emerging legislation
• Developed more eco-efficient product versions
• Implemented Cybersecurity Framework
• Actively evaluated suppliers based on innovation proposals

Supply Chain Management

Supplier Audits: All suppliers signed Code of Ethics and Conduct

Responsible Procurement

• Code of Ethics and Conduct
• Sustainable Procurement Policy
• 76% of expenditure allocated to domestic suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Exposure of facilities to hydrometeorological events

Transition Risks

• Regulatory changes
• Market shifts
• Increased cost of raw materials

Opportunities

• Development of eco-efficient products and services
• Access to emerging markets
• Resource efficiency

Reporting Standards

Frameworks Used: GRI Standards, SASB Standards (Building Products, Chemicals, Water Utilities Services), TCFD Recommendations, UN Global Compact

Certifications: ISO 9001:2015 (88% of plants), ISO 14001:2015 (4 plants), ISO 45001 (4 plants)

Third-party Assurance: Redes Sociales en Línea Timberlan S.A. de C.V. (limited assurance)

UN Sustainable Development Goals

• SDG 3
• SDG 6
• SDG 9
• SDG 12
• SDG 13

Initiatives contribute to these goals through improved access to water and sanitation, reduced environmental impact, and sustainable innovation

Sustainable Products & Innovation

• Products with recycled resins
• Water treatment and recycling plants
• Rainwater harvesting systems

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Access to water and sanitation
• Social development
• Environmental protection

Environmental Achievements

• 52,030 tons of CO2 emissions avoided compared to PET bottled water

Social Achievements

• Provided access to clean water to 1,153,956 students through drinking fountains (Note: Drinking fountains were not in operation in 2021 due to school closures)
• Provided access to clean water to 241,764 people through dispensers and purifiers

Governance Achievements

• Independent third-party validation of compliance with Green and Social Bond Principles and ICMA guidelines by Sustainalytics

Climate Goals & Targets

Environmental Challenges

• Economic uncertainty due to COVID-19 limited new treatment plant contracts and caused a standstill in drinking fountain operation.
• Workplace purifiers had limited operation at the beginning of the year due to people working from home.

Mitigation Strategies

• Applied daily consumption rates obtained from IoT devices for household purified water consumption indicators.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Green Bond Principles, Social Bond Principles, ICMA Sustainable Bond Guidelines, TCFD, SASB

Third-party Assurance: Sustainalytics

UN Sustainable Development Goals

• SDG 6: Clean Water and Sanitation

Projects contribute to improved access to clean water and sanitation.

Environmental Metrics

ESG Focus Areas

• Circularity and Climate Change
• Water Availability
• Access to Solutions
• Corporate Governance and Ethics
• User's Quality of Life
• Talent Empowerment

Environmental Achievements

• Reduced scopes 1 and 2 emissions by 1.2% compared to 2021
• Achieved a 16% reduction in emissions from product delivery transportation
• Increased by 34% the tons of recycled resins incorporated into products, reaching 16% of total resins used.
• Recycled 48% of waste

Social Achievements

• Increased women's participation in the workforce to 24.2% in 2022 (goal of 30% by 2025)
• Provided access to sanitation for 223,000 people
• Provided 13,400 hours of training to plumbers and installers
• 5,916 plumbers offered training in Mexico and Central America

Governance Achievements

• Strengthened the Sustainability Strategy implementation by giving joint responsibility to the Vice-Presidency of Sustainability and Human Capital, and the Vice-Presidency of Administration and Finance.
• Evaluated more than 700 suppliers on ESG topics
• Increased Bloomberg GEI Score by 8 points in 2022
• Renewed the Market Shaper contract with BTG Pactual
• Recognized by HSBC with the Leading Companies in Sustainable Innovation Award in the Governance category

Climate Goals & Targets

Environmental Challenges

• Global impacts to supply chains
• Inflation
• Exchange rates
• Droughts
• Increased costs
• Supply chain limitations
• Variations in consumers' income and changes in their preferences
• Macroeconomic conditions affecting the market
• Changes in foreign trade rules
• Extreme weather conditions and natural disasters
• Inability to manage company growth effectively
• Water availability and quality for operations
• Cybernetic vulnerability
• Political instability
• Transition to low-carbon economies

Mitigation Strategies

• Increased productive capacity in northern Mexico due to drought
• Investment in technological upgrading of storage plants
• Improved omnichannel strategy
• Development of the septic solutions business
• Diversification of supplier base
• Implementation of a new Financial Forecast for optimized planning
• Implementation of Oracle Transportation Management (OTM)
• Acquisition of insurance policies
• Employee cybersecurity training
• New security schemes with two-factor authentication
• Pentest and vulnerability analyses
• Contingency plan updates
• Monitoring of macroeconomic situations
• Contingency and business continuity plans
• Inventory calculation of Scope 1, 2, and 3 GHG emissions
• Development of local suppliers of recycled resin
• Technological replacement of machinery for water-efficient products
• Water recirculation and recycling initiatives
• Installation of rainwater harvesting systems
• Construction of water treatment and recycling plants

Supply Chain Management

Supplier Audits: 700+ suppliers evaluated on ESG topics in 2022; 26 suppliers certified through audits

Responsible Procurement

• Sustainable Procurement Policy
• ESG requirements for suppliers
• Code of Ethics and Conduct applicable to the entire value chain
• Incorporation of recycled resins
• Development of products with lower energy consumption

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions and natural disasters
• Exposure of facilities to hydrometeorological events

Transition Risks

• Increased cost of raw materials
• Changes in environmental regulations
• Inability to meet consumer socio-environmental expectations

Opportunities

• Development of new products and services with lower-impact components
• Access to emerging markets with increased demand for water solutions
• Resource efficiency in production processes

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC, CEO Water Mandate, Stakeholder Capitalism (WEF)

Certifications: ISO 9001, ISO 14001, ISO 45001, ISO 38500:2015

Third-party Assurance: Redes Sociales en Línea Timberlan

UN Sustainable Development Goals

• 3
• 4
• 5
• 6
• 8
• 9
• 10
• 11
• 12
• 13
• 16

The company's initiatives contribute to these goals through various programs and operations, as detailed in Appendix III.

Sustainable Products & Innovation

• Products incorporating recycled resins
• Rainwater harvesting systems
• Water treatment and recycling plants
• bebbia drinking water service

Awards & Recognition

• Leading Companies in Sustainable Innovation Award by HSBC
• Inclusion in S&P Global Sustainability Yearbook

Environmental Metrics

ESG Focus Areas

• Sustainable Growth
• New Business Development
• Digitalization of the Water Ecosystem
• Water access and sanitation

Environmental Achievements

• Improved energy efficiency of operations through investments in fuel efficiency, equipment substitution (SMART Project), renewable electricity procurement (solar panels, 100% renewable electricity for León plants), and manufacturing efficiency improvements. Reduced Scope 1 GHG emissions from 22,098 tCO2e in 2022 to a target of 12,817 tCO2e by 2030. Reduced Scope 2 GHG emissions from 22,856 tCO2e in 2022 to a target of 13,256 tCO2e by 2030. Reduced Scope 3 GHG emissions from 376,286 tCO2e in 2022 to a target of 282,215 tCO2e by 2030. Increased recycled resin usage from 23.8% in 2023 to a target of 25% in 2025.
• Increased volume of recycled water delivered to customers from 20.4 million m3 in 2022 to a target of 23 million m3 in 2025.

Social Achievements

• Increased the number of households and institutional clients served by Rotoplas (Bebbia) solutions from 111,000 in 2023 to a target of 145,000 in 2025. Increased the number of people with access to sanitation from 553,000 in 2022 to a target of 1,000,000 in 2025. Increased the percentage of women in the workforce from 24% in 2023 to a target of 30% in 2025. Implemented Product UX Committees to enhance customer service experience.
• Improved water-use efficiency and conservation through manufacturing substitution (Tinaco Plus+), rainwater harvesting, and water treatment and recycling plants.

Governance Achievements

• Diversity and inclusion initiatives through a Sustainability Committee with three dedicated work groups promoting communication, sensitization, policy updates, employee benefits, and alignment with best practices in equal remuneration, non-discrimination, and gender inclusion.

Climate Goals & Targets

Environmental Challenges

• Improving access to safe drinking water in Mexico (43% access in 2022 vs. peer country median of 56%).
• Improving water-use efficiency and conservation in Mexico (water use efficiency above peer country median in 2021).
• Improving environmental footprint of products (municipal solid waste generation per capita above peer country median in 2023).
• Promoting equitable access to sanitation services in Mexico (62.5% access in 2022 vs. fourth quartile average of 80% for peer countries).

Mitigation Strategies

• Technological improvements to water filters, enhanced customer service, SMART Reverse Osmosis system investment ($9.5 million MXN), Product UX Committees, AI solutions for customer engagement, new biodigester models, rainwater harvesting systems, water treatment and recycling plants, increased recycled resin suppliers, material reformulation with higher recycled resin percentage.

Supply Chain Management

Supplier Audits: 20% of direct suppliers assessed with ESG criteria (2023)

Responsible Procurement

• Sustainable Procurement Policy

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, GHG Protocol

UN Sustainable Development Goals

• #6
• #8
• #12
• #13

Rotoplas' operations and growth intentions are expected to contribute to UN Sustainable Development Goals #6 (Clean Water and Sanitation), #8 (Decent Work and Economic Growth), #12 (Responsible Consumption and Production), and #13 (Climate Action).

Sustainable Products & Innovation

• SMART Reverse Osmosis system
• Tinaco Plus+
• New biodigester models