Climate Change Data

Environmental Metrics

ESG Focus Areas

• Human Rights
• Labor Principles
• Environment
• Anti-Corruption

Environmental Achievements

• Reduced CO2 emissions (partially due to lower production volume)
• Development and introduction of a compressed air leakage reduction program resulted in a CO2-emission reduction of 290 tons in 2020
• New water-cooling process in wheel molds reduced wheel casting cycle times and compressed air consumption, leading to energy savings.
• 100% recycling of aluminum returns (machining chips & scrap)

Social Achievements

• Updated Code of Conduct in Fall 2020
• Annual online Code of Conduct training for salaried employees
• Additional online training on anti-corruption and workplace respect
• In-person Code of Conduct training for hourly workforce
• Launched Diversity & Inclusion Council and developed a diversity action plan
• Vocational training program in European operations
• Structured staff retention program in Europe (employee discounts, sports club memberships, bike leasing, etc.)
• Employee satisfaction survey in Poland and Bad Dürkheim, Germany

Governance Achievements

• Updated global Code of Conduct reflecting principles of transparency, open communication, and fairness
• Regular anti-corruption training
• Ethics Line (whistleblowing mechanism) and other reporting channels
• Structured procedures to deal with incidents
• 21 reports received through the Ethics Line, all investigated and resolved
• Implemented anti-phishing training and internal information security audits in preparation for ISO 27001 certification

Climate Goals & Targets

Environmental Challenges

• Slightly missed energy and gas consumption targets due to production stoppages caused by the COVID-19 pandemic and increased volume of larger, more complex wheels
• High human rights risk in Mexico
• Medium human rights risk in Poland and the US
• Elevated corruption risk in Mexico
• Medium corruption risk in Poland and the US

Mitigation Strategies

• Established goals for energy and gas consumption in North America and Europe for 2021
• Global Code of Conduct outlining stance on human rights issues
• Measures to identify and eliminate slavery and human trafficking from supply chains
• Focus on prevention measures in high-risk areas for corruption
• Regular anti-corruption training, Ethics Line, and structured procedures to deal with incidents

Supply Chain Management

Responsible Procurement

• Transitioning aluminum purchasing volume toward suppliers with lower carbon footprints

Climate-Related Risks & Opportunities

Opportunities

• Developing lighter weight products to reduce fuel consumption and GHG emissions

Reporting Standards

Frameworks Used: UN Global Compact, Greenhouse Gas Protocol, CDP (Climate Change and Water Security)

Certifications: ISO 14001, ISO 50001 (German sites), ISO 45001 (Europe)

Sustainable Products & Innovation

• Alulite™ technology

Environmental Metrics

ESG Focus Areas

• People
• Planet
• Product
• Process

Environmental Achievements

• Reduced total carbon footprint by 9% in 2021 despite a 6% increase in units produced
• Reduced emissions per lb. aluminum shipped by 18%
• All manufacturing facilities implemented robust ISO 14001-certified Environmental Management Systems

Social Achievements

• 70% of recent executive hires and promotions are of diverse backgrounds
• Developed local action plans and a global set of leadership behaviors in response to employee survey results
• Reduced the number of recordable safety incidents by 11% in 2021 compared to 2020
• Employees donated over $85,000 to support Ukrainian refugees, matched by Superior for a total of $170,000

Governance Achievements

• 100% completion of 2021 Code of Conduct training by salaried employees
• 4,800 total hours of Compliance training completed in 2021
• Annual global enterprise risk assessment process conducted

Climate Goals & Targets

Environmental Challenges

• Ongoing impact of the COVID-19 pandemic
• Supply chain disruptions

Mitigation Strategies

• Executed on a Safe Work Playbook to minimize virus spread and ensure operational continuity
• Shifted purchasing volumes to suppliers who use green energy to decrease emissions
• Implemented a continuous improvement organization to address energy consumption

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct guided by international standards including UN human rights policies and environmental focus
• Expectation that strategic suppliers have ISO 14001 certification

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, SASB, UNSDG, UN Global Compact, CDP, EcoVadis

Certifications: ISO 14001, ISO 45001 (partially implemented)

UN Sustainable Development Goals

• SDG 4
• SDG 5
• SDG 6
• SDG 7
• SDG 8
• SDG 9
• SDG 12
• SDG 13
• SDG 16

Appendix A details how initiatives contribute to these goals.

Sustainable Products & Innovation

• R4™ wheels
• R4ZERO™ wheels
• Alulite™ technology
• Superior PVD technology

Awards & Recognition

• 2021 PACE award finalist (Superior PVD technology)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced carbon emissions from purchased aluminum by 21% since 2020
• Sourced aluminum with over 50% less CO2 footprint than the global aluminum industry average
• Reduced carbon footprint by approximately 9% and emissions per pound of aluminum shipped by 18% versus 2020 levels

Social Achievements

• Total Recordable Incident Rate down to 0.62, a decrease of over 50% since 2018

Governance Achievements

• Published 2022 Sustainability Report

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to semiconductor chip shortages and the Ukraine Conflict
• Cost inflation due to high energy rates in Europe and the Ukraine Conflict
• Increased pressure from customers to reduce costs

Mitigation Strategies

• Cost discipline and continuous improvement initiatives
• Collaboration with customers on cost recoveries
• Local-for-local footprint to mitigate risk through shorter supply chains

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Collaboration with customers and suppliers regarding sustainability practices throughout their supply chains

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Climate change legislation or regulations restricting emission of “greenhouse gases” could result in increased operating costs and reduced demand for the vehicles that use our products.

Opportunities

• Development of energy-efficient products
• Light weighting solutions (Alulite™ technology)
• Aerodynamic solutions to reduce customers’ carbon footprint

Reporting Standards

Frameworks Used: Null

Certifications: ISO14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Alulite™ technology

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced total carbon emissions by 12% since 2020
• Emissions per lbs. of aluminum shipped decreased 21% since 2020
• Reduced carbon footprint by 12% from 2020-2022
• Increased post-consumer recycled aluminum usage by 6x
• Expanded use of green electricity in our plants
• Reduced consumption of energy, waste and water per lbs. of aluminum shipped

Social Achievements

• Achieved industry-leading Total Recordable Incident Rate (TRIR) of 0.73, 4th year in a row below 1.0
• Raised and donated funds for charitable causes
• Increased diversity representation and held numerous events to highlight inclusion

Governance Achievements

• Published 2023 Sustainability Report referencing GRI Standards, SASB, and UN Sustainable Development Group frameworks
• Superior is a signatory to the UN Global Compact
• Over 95% of salaried employees completed annual Code of Conduct training
• Superior conducts an annual global risk assessment
• Approved suppliers must agree to abide by our Supplier Code of Conduct
• Implemented international cybersecurity practices

Climate Goals & Targets

Environmental Challenges

• Significant headwinds including cost inflation, unstable OEM production schedules and lower manufacturing volumes
• European restructuring incurred losses from SPG deconsolidation, valuation allowance, advisor fees, and restructuring charges

Mitigation Strategies

• Delivered $159.2 million Adjusted EBITDA despite significant headwinds
• Delivered $80 million of Unlevered Free Cash Flow despite significant investment in the transformation of our business in Europe
• Completed the transformation of our business in Europe resulting in a ‘local-for-local’, low-cost manufacturing footprint
• Lean six sigma initiative delivered $19 million in savings in 2023
• Commercial discipline delivered significant recovery of cost inflation from customers and optimized production portfolio

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, SASB, UN Sustainable Development Group

Sustainable Products & Innovation

• Alulite™ technology

Environmental Metrics

ESG Focus Areas

• Carbon neutrality
• Reduced natural gas, electricity and water consumption
• Solid waste and air emissions reduction
• Low or zero carbon wheels

Environmental Achievements

• Reduced carbon footprint by approximately 12% compared to 2020 levels
• Reduced emissions per pound of aluminum shipped by 21% compared to 2020 levels

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Energy cost inflation (moderated but still higher than pre-pandemic levels)
• Ukraine Conflict impacting production volume and inflationary cost pressures
• Higher interest rates affecting earnings and cash flow
• OEM production volatility potentially increasing inventory levels and negatively impacting cash flows

Mitigation Strategies

• Reduction in global workforce to align cost structure with lower automotive production levels
• Transition of production to lower cost manufacturing facilities in Poland
• Exploration of opportunities to reduce fuel consumption and greenhouse gas emissions
• Development of light weighting and aerodynamic solutions to reduce customers' carbon footprint
• Collaboration with customers and suppliers on sustainability practices

Supply Chain Management

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products

Sustainable Products & Innovation

• Alulite™ technology