Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Licensed an environmental data management system to collect and consolidate utility consumption data.
• Implemented Digital Galvanizing System (DGS) across a growing number of facilities, enhancing efficiency and reducing zinc usage.

Social Achievements

• Formed a Sustainability Council to integrate sustainability into operations and corporate culture.
• Implemented a Global Ethics Alertline for anonymous reporting of concerns.
• Adopted a Human Rights Policy, an Environmental Health and Safety Policy, and a Vendor Code of Business Conduct.
• Achieved zero work-related employee fatalities at 60 locations worldwide.

Governance Achievements

• Amended the Nominating and Corporate Governance Committee Charter to provide oversight of ESG policies and sustainability practices.
• Amended the Company’s Code of Conduct and Corporate Governance Guidelines.
• Increased shareholder engagement communications.

Climate Goals & Targets

Environmental Challenges

• Collecting and tracking various sustainability performance metrics across numerous facilities.
• Tracing the origin and chain of custody of minerals through a global supply chain.

Mitigation Strategies

• Licensed an environmental data management system.
• Implemented supplier audits and a Vendor Code of Business Conduct.
• Engaged in good faith with suppliers to exercise reasonable due diligence to evaluate their supply chains.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Vendor Code of Business Conduct, Conflict Minerals Policy

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI, SASB

Certifications: Null

Third-party Assurance: Third-party assurance on FY2021 baseline environmental data (electricity, natural gas, water).

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Digital Galvanizing System (DGS)

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental Stewardship
• Social Responsibility
• Corporate Governance

Environmental Achievements

• Licensed an environmental data management system to collect and consolidate utility consumption data.
• Implemented Digital Galvanizing System (DGS) across a growing number of facilities, minimizing zinc usage and improving efficiency.
• Partnered with Texas A&M to research extending the life cycle of galvanizing process tools.

Social Achievements

• Launched a Winter Clothing Campaign in Brazil, collecting warm clothes and blankets for the community.
• Organized a School Supply Scavenger Hunt across 12 locations, providing supplies for 13 schools.
• Established two fellowships at Texas A&M University to support faculty and students in materials science and engineering.

Governance Achievements

• Formed a Sustainability Council led by the Chief Legal Officer.
• Amended the Nominating and Corporate Governance Committee Charter to include oversight of ESG policies.
• Amended the Code of Conduct and Corporate Governance Guidelines and adopted a Human Rights Policy, an Environmental Health and Safety Policy, and a Vendor Code of Business Conduct.

Climate Goals & Targets

Environmental Challenges

• Collecting and tracking various sustainability performance metrics across numerous facilities.
• Tracing the origin and chain of custody of minerals through a global supply chain.

Mitigation Strategies

• Implemented an environmental data management system.
• Engaged suppliers to exercise reasonable due diligence to evaluate their supply chains and reduce the risk of sourcing conflict minerals.

Supply Chain Management

Responsible Procurement

• Vendor Code of Business Conduct
• Conflict Minerals Policy

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, SASB

Third-party Assurance: Third-party assurance on FY2021 baseline environmental data (electricity, natural gas, water).

Sustainable Products & Innovation

• Digital Galvanizing System (DGS)

Environmental Metrics

ESG Focus Areas

• Environmental Stewardship
• Social Responsibility
• Corporate Governance

Environmental Achievements

• Enhanced environmental, social, and governance policies and practices
• Formed a Sustainability Council with Board oversight
• Disclosed ESG and sustainability principles on the company website
• Amended Nominating and Corporate Governance Committee Charter to oversee ESG policies
• Amended Code of Conduct, Corporate Governance Guidelines, and adopted a Human Rights Policy, an Environmental Health and Safety Policy, and a Vendor Code of Business Conduct to reflect commitment to sustainability, diversity, equity, and inclusion
• Aligned ESG reporting with GRI and SASB frameworks

Social Achievements

• Continued commitment to employee safety, development, and diversity
• Approximately 46% of employees are diverse (reported to the EEOC)
• Established AZZ Cares Foundation to assist employees and families in emergencies
• AZZ Alertline available 24/7 in six languages to address concerns

Governance Achievements

• Experienced Board from a range of relevant backgrounds
• Independent Board (8 of 9 directors)
• Implemented a Compensation Recovery Policy
• Robust stock ownership guidelines for directors and executive officers
• Annual Board and committee self-evaluations
• Annual election of all directors
• Ongoing commitment to Board refreshment and diversity
• Majority voting for directors
• Shareholder engagement program with feedback incorporated into Board deliberations
• Orientation program for new directors and continuing education for all directors

Climate Goals & Targets

Environmental Challenges

• Ongoing COVID-19 pandemic impacting customers and operations
• Fluctuations in raw material costs (zinc and natural gas)
• Supply chain vendor delays
• Customer-requested delays
• Currency exchange rates
• Adequacy of financing
• Availability of experienced management and employees
• Downturn in market conditions
• Economic volatility or changes in political stability
• Acts of war or terrorism

Mitigation Strategies

• Driving cost and margin improvement
• Exiting low-performing businesses
• Focusing on profitable growth in Metal Coatings
• Completing comprehensive review in Infrastructure Solutions
• Deploying balance sheet targeting a net leverage ratio of 2.5x
• Maintaining competitive position
• Prioritizing coatings acquisitions
• Strengthened Management Team (appointed CFO and SVP of Investor Relations)
• Filled Segment Chief Operating Officer roles with internal promotions

Supply Chain Management

Responsible Procurement

• Vendor Code of Business Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, SASB

Environmental Metrics

ESG Focus Areas

• Environmental Stewardship
• Social Responsibility
• Corporate Governance

Environmental Achievements

• Developed and deployed fume suppressant additives for galvanizing process tanks, reducing potential emissions by 95%
• Expanded geographic scope of environmental data collection to include international locations

Social Achievements

• Added Mr. David Kaden to the Board of Directors, increasing board diversity
• Achieved zero work-related employee fatalities at over 60 locations worldwide
• 47% reduction in TRIR, 47% reduction in LTIR and 51% reduction in DART in Metal Coatings Segment from FY2020 to FY2022
• 57% reduction in TRIR, 65% reduction in LTIR and 59% reduction in DART in Infrastructure Solutions Segment from FY2020 to FY2022

Governance Achievements

• Established three standing board committees: Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee (NCGC)
• Implemented a Global Ethics Alertline for anonymous reporting of concerns
• Announced the acquisition of Precoat Metals businesses and the divestiture of the majority interest in the Infrastructure Solutions segment

Climate Goals & Targets

Environmental Challenges

• Labor shortages
• Supply chain disruptions
• Inflationary pressures
• Accurately making year-to-year comparisons due to fluctuating number of active sites from acquisitions and divestitures

Mitigation Strategies

• Engaged a strategic ESG consultant to help create and capture maximum value for stakeholders
• Working to integrate Precoat Metals into sustainability initiatives
• Engaged a third-party vendor to assist with improving supply chain sustainability and developing Scope 3 emissions reporting

Supply Chain Management

Responsible Procurement

• Vendor Code of Business Conduct
• Conflict Minerals Policy

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, SASB

Sustainable Products & Innovation

• Digital Galvanizing System (DGS)

Environmental Metrics

ESG Focus Areas

• Environmental Stewardship
• Social Responsibility
• Corporate Governance

Environmental Achievements

• Metal Coatings segment reduced Scope 1 emissions intensity by 23% and Scope 2 emissions intensity by 20% over the last three years.
• Metal Coatings segment reduced total energy intensity by 23% over the last three years.
• Metal Coatings segment reduced overall water usage by 7% and wastewater by 8% from FY2022 to FY2023. Water intensity also declined by 23%.
• Precoat Metals segment recycled 44,000 tons of steel and aluminum in FY2023.
• Precoat Metals Birmingham facility upgraded VOC capture system to 100% capture.

Social Achievements

• AZZ was named as One of America’s Most Responsible Companies in 2023 by Newsweek.
• AZZ Galvanizing – Winsted received a CEO Cup Award for FY2023 for financial performance, safety, and adherence to AZZ’s TRAITS.
• 730 professional development courses were completed in FY2023.
• Average Health and Safety Training Hours Completed in FY2023: 35.6 hours
• Metal Coatings Segment 33% reduction in TRIR, 28% reduction in LTIR and 34% reduction in DART from FY2020 to FY2023.
• Zero work-related employee fatalities at both its Precoat Metals and Metal Coatings segments throughout 60 locations in the U.S. and Canada in FY2023.

Governance Achievements

• Established ESG targets for Metal Coatings and Precoat Metals segments.
• Engaged a third-party consultant to assist with Scope 3 emissions data collection and analytics.
• Developed methodologies to identify and track sales into low-carbon economy markets.

Climate Goals & Targets

Environmental Challenges

• Increased regulation in response to climate change (requiring increased capital investments and compliance costs).
• Physical risks from climate change (disrupting operations or supply chains).
• Challenges in accurately making year-to-year comparisons due to business acquisitions and divestitures.
• Tracing the origin and chain of custody of minerals through a global supply chain.

Mitigation Strategies

• Regular evaluation of potential climate-related risks.
• Robust internal processes and controls for identifying and managing risk.
• Developing Scope 3 reporting capabilities.
• Due diligence program to address human rights issues and responsible practices across its supply chain.

Supply Chain Management

Responsible Procurement

• Vendor Code of Business Conduct
• Conflict Minerals Policy

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Natural resource shortages

Transition Risks

• Increased regulation
• Changes in market factors and industry dynamics

Reporting Standards

Frameworks Used: GRI, SASB

Certifications: ISO 14001 (more than 50% of Precoat Metals facilities)

Sustainable Products & Innovation

• Cool metal roofing systems
• Self-cleaning, smog-eating coatings
• Solar panel coatings
• Color-changing coatings

Awards & Recognition

• One of America’s Most Responsible Companies in 2023 by Newsweek

Environmental Metrics

ESG Focus Areas

• Environmental Stewardship
• Social Responsibility
• Corporate Governance

Environmental Achievements

• Reduced total energy intensity in the Metal Coatings segment by 23% over the last three years.
• Reduced Scope 1 emissions intensity by 23% and Scope 2 emissions intensity by 20% in the Metal Coatings segment over the last three years.
• Reduced overall water usage by 7% and wastewater by 8% in the Metal Coatings segment in FY2023 despite increased production.
• Precoat Metals recycled 44,000 tons of steel and aluminum in FY2023.
• Precoat Metals Birmingham facility upgraded its VOC capture and control system to 100% capture.

Social Achievements

• AZZ Galvanizing – Winsted received a CEO Cup Award for FY2023 for financial performance, safety, and adherence to AZZ's TRAITS values.
• AZZ had zero work-related fatalities in its business operations during FY2020 through FY2023.
• Metal Coatings Segment saw a 33% reduction in TRIR, 28% reduction in LTIR, and 34% reduction in DART from FY2020 to FY2023.
• 730 professional development courses were completed in FY2023.

Governance Achievements

• AZZ was named as One of America’s Most Responsible Companies in 2023 by Newsweek.
• Established ESG targets for Metal Coatings and Precoat Metals segments.
• Engaged a third-party consultant to assist with Scope 3 emissions data collection and analytics.

Climate Goals & Targets

Environmental Challenges

• Increased regulation in response to climate change, potentially impacting operations and requiring increased capital investments.
• Physical risks from climate change, such as extreme weather, could disrupt operations or impact supply chains.
• Challenges in accurately making year-to-year comparisons due to business acquisitions and divestitures.

Mitigation Strategies

• Ongoing focus on driving efficiency and reducing energy consumption.
• Implementation of a closed loop recirculation system in AZZ’s Garland, Texas facility to reduce water usage and wastewater.
• Robust internal processes and controls for identifying and managing risk, including comprehensive internal and external audit processes.

Supply Chain Management

Responsible Procurement

• Compliance with Vendor Code of Business Conduct and Environmental Health and Safety Policy.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather and natural resource shortages.

Transition Risks

• Increased regulation, carbon emission taxing, and heightened environmental monitoring and disclosures.

Reporting Standards

Frameworks Used: GRI, SASB

Certifications: ISO 14001 (Precoat Metals - >50% of facilities)

Sustainable Products & Innovation

• Cool metal roofing systems
• Self-cleaning, smog-eating coatings
• Solar panel coatings
• Color-changing coatings

Awards & Recognition

• One of America’s Most Responsible Companies in 2023 by Newsweek