Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability
• Environmental, Social, and Governance (ESG)

Environmental Achievements

• Launched a formal sustainability and ESG program
• Designing and building energy-efficient products

Social Achievements

• Expanded and launched new training and development programs across the organization
• Improved communication down and across the Company
• Implemented a new and full cloud-based upgrade to our ERP system in all twenty-two locations worldwide
• Implemented the final parts of our human resource information system

Governance Achievements

• Formalized sustainability initiative with standardized reporting through an established framework

Climate Goals & Targets

Environmental Challenges

• Significant unexpected supply chain and economic volatility
• Shortages of many materials and components
• Russia's invasion of Ukraine creating greater stress and uncertainty around product build
• Rolling barrage of cost increases on all materials
• Growth opportunities in existing and new markets exploded
• Capacity constraints in some facilities due to organic growth and supply chain disruptions
• Rising material costs and supply chain interruptions

Mitigation Strategies

• Expanded global supply base for core steel from European and Asian producers
• Increased prices multiple times through the year to cover constantly rising material costs
• Building a more resilient supply chain
• Adding capacity where feasible in a short period of time
• Implemented several price increases during 2021 and 2022
• Heightened focus on ensuring that materials required for production are received on a timely basis and when needed
• Widened its distributor footprint in North America
• Expanded its Indian market presence
• Implemented engineering and material cost reduction initiatives
• Invested in new product development
• Broadened manufacturing capabilities
• Increased investment in new equipment to expand capacities at existing plants

Supply Chain Management

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Energy-efficient products

Environmental Metrics

ESG Focus Areas

• Economics
• People
• Community
• Environment
• Continuous Improvement

Environmental Achievements

• Improved energy efficiency by 4.1%
• Reduced wood waste by 25% through a pallet initiative
• Granby facility received the "ICI on recycle" waste management certification
• 25% improvement in efficient use of materials in production

Social Achievements

• Reduced frequency of safety incidents from 2.7 to 1.6
• Reduced severity of safety incidents from 31.1 to 6.8
• Donated $104,137 and 1,043 employee volunteer hours to community initiatives
• Improved women in leadership by 1.3%

Governance Achievements

• Implemented a new Northeast warehouse, reducing truck emissions by an estimated 18.2 MT of CO2
• Engaged a 3rd party partner to assist with supplier risk analysis for compliance with Bill S-211 (Canada)

Climate Goals & Targets

Environmental Challenges

• Increased total GHG footprint by 11.8% due to increased production and facility growth
• Increased employee turnover due to significant hiring

Mitigation Strategies

• Modified candidate screening, onboarding, and training programs to improve new hire retention
• Exploring the viability of solar applications within 2 production sites
• Continuing to install LED lighting during workplace renovations

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• ESG compliance requirements in new supplier agreements

Climate-Related Risks & Opportunities

Physical Risks

• Supply chain disruptions due to extreme weather events

Opportunities

• Growth in the clean energy sector

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UN SDGs

Certifications: ISO 9001, ICI on recycle

UN Sustainable Development Goals

• Goal 2 (Zero Hunger)
• Goal 11 (Sustainable Cities and Communities)
• Goal 4 (Quality Education)
• Goal 3 (Good Health and Well-being)
• Goal 13 (Climate Action)

Sustainable Products & Innovation

• Active Harmonic Filter (AHF) products
• High-efficiency transformers

Environmental Metrics

ESG Focus Areas

• Sustainability

Social Achievements

• CertifiedTM by Great Place To Work® at all Canadian, USA and Indian locations

Environmental Challenges

• Competition for skilled engineering talent
• Compliance with the Fighting Against Forced Labour and Child Labour in Supply Chains Act
• Geopolitical risks and political uncertainty
• Risk of cyber attack
• Potential harms of natural disasters, pandemics, acts of war, terrorism, international conflicts
• High competition in the industry
• Sensitivity to global and regional economic conditions
• Unpredictable weather impacting sales
• Risk of uncollectability of accounts receivable

Mitigation Strategies

• Proactive and creative recruitment strategies, competitive compensation packages and intentional retention strategies
• Engaged a consulting firm to assist with supply chain due diligence
• Global footprint to mitigate impact of political changes
• Transition to cloud-based applications, periodic risk assessments, robust employee training and awareness, system updates
• Diversification of core business, market channel expansion, breadth of product offering, geographic diversity of operations and business hedging strategies
• Focus on projects to increase market reach, advance cost competitiveness, expand capacity and improve manufacturing flexibility
• Management’s credit policy, individual customer creditworthiness analysis, sales limits, quarterly review, executive management approval

Supply Chain Management

Climate-Related Risks & Opportunities