Climate Change Data

Environmental Metrics

ESG Focus Areas

• Emissions Reduction
• Services & Fuels Management
• Workforce Diversity & Inclusion
• Business Ethics & Payments Transparency
• Energy Management in Retail & Distribution
• Workforce Health & Safety
• Supply Chain Stewardship
• Opportunities for Enabling Customer Sustainability
• Delivering Value That Advances Sustainable Growth for Our Customers
• Data Security
• Management of the Legal & Regulatory Environment

Environmental Achievements

• Achieved 100% carbon-neutral shipping for over 250K parcel shipments, mitigating more than 854 MT CO2e.
• Global GHG emissions totaled approximately 30,550 MT CO2e, which represents a 12% reduction from 2020 and a 40% reduction from 2019.

Social Achievements

• Launched Technical Sales Development (TSD) Program.
• Rolled out a company-wide DEI training course completed by 96% of DNOW employees.
• Hosted annual Charity Golf Tournament benefiting The Boys and Girls Club of Greater Houston and The American Cancer Society, donating over $60,000.

Governance Achievements

• Restructured the Environmental, Social, Governance, and Nominating Committee in 2021 to give more oversight at the board level to the Company’s ESG initiatives.
• Added a new director, Ms. Sonya Reed, in August 2021, providing additional diversity in gender, race and ethnicity to the Board.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic.
• Transitional risks related to the shift towards a low-carbon energy transition economy.
• Physical risks from adverse weather conditions or natural disasters.
• Regulatory risks from climate-related laws and regulations.

Mitigation Strategies

• Implemented remote work solutions and other measures to minimize COVID-19 exposure.
• Developed strategies to expand into renewable energy markets and provide solutions for customers' energy transition needs.
• Identified and monitored areas susceptible to adverse weather and developed response plans.
• Regularly monitored climate-related laws and regulations.

Supply Chain Management

Responsible Procurement

• Triple Impact Supplier Management Program (TISMP)
• Supplier Code of Conduct (in development)

Climate-Related Risks & Opportunities

Physical Risks

• Adverse weather conditions
• Natural disasters

Transition Risks

• Shift towards low-carbon economy
• Changing market forces and consumer preferences

Opportunities

• Renewable energy markets
• CCUS projects

Reporting Standards

Frameworks Used: SASB, TCFD, UN SDGs

Certifications: ISO 14001 (UK and Perth, Australia)

UN Sustainable Development Goals

• SDG 3
• SDG 4
• SDG 5
• SDG 7
• SDG 8
• SDG 9
• SDG 12
• SDG 13
• SDG 16
• SDG 17

DNOW's initiatives contribute to these goals through various programs and strategies outlined in the report.

Sustainable Products & Innovation

• Instrument air skids
• Low-E rated valves
• API 5L steel pipe (recycled steel)

Awards & Recognition

• #3 Top PVF Distributors (July 2022)
• #10 Wholesaling 100 (July 2022)
• #10 Supply House Times Premier 150 (May 2022)
• #70 The Chronicle 100 (June 2022)
• #13 Industrial Distribution Big 50 (Sept 2021)
• #15 Top 40 Industrial Distributors (July 2021)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced Scope 1 & 2 GHG emissions intensity by >32% from 2021
• 11% decrease in total Scope 1 & 2 GHG emissions from 2021
• Acquired EcoVapor and its ZerO2™ technology, which enables operators to reduce up to 16,000 annual metric tons of CO2e emissions through the continual use of one E300 oxygen elimination unit
• 100% carbon-neutral parcel shipments for two consecutive years

Social Achievements

• Employee fatalities and total recordable incident rate (“TRIR”) lower than Bureau of Labor Statistics (“BLS”) industry averages
• Higher communications employee engagement survey score compared to industry benchmark
• Higher team dynamics employee engagement survey score compared to industry benchmark
• Contributed over 1,650 volunteer hours and $179K to organizations

Governance Achievements

• Increased board gender diversity from 2021
• 0 data security breaches

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Climate change and energy transition impacts
• Evolving legal and regulatory landscape
• Increased focus on emissions

Mitigation Strategies

• Regularly monitor laws and regulations related to climate change and energy transition
• Educate customers on lower-emission solutions
• Expand product and service offerings into emerging energy markets
• Actively monitor developments within the legal and regulatory environment
• Voluntarily pursue efforts to reduce GHG emissions
• Diversify suppliers and geographical areas
• Robust emergency preparedness plans

Supply Chain Management

Supplier Audits: 22 manufacturing sites and 41 desk reassessments of key suppliers in 2022

Responsible Procurement

• Triple Impact Supplier Management Program (TISMP)
• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Adverse weather events or natural disasters

Transition Risks

• Increasing consumer focus on lower-emission solutions

Opportunities

• Expanding into emerging energy evolution markets

Reporting Standards

Frameworks Used: TCFD, SASB

Certifications: ISO 14001 (UK and Perth, Australia)

UN Sustainable Development Goals

• Goal 3
• Goal 4
• Goal 5
• Goal 7
• Goal 8
• Goal 9
• Goal 12
• Goal 13
• Goal 16
• Goal 17

DNOW has aligned with the UN SDGs most relevant to our priority issues and are continuously identifying opportunities to contribute to the advancement of the UN SDGs.

Sustainable Products & Innovation

• EcoVapor's ZerO2™ technology
• TS&M Fiberglass GRE piping systems

Awards & Recognition

• 2022 Industrial Distribution Big 50
• 2022 Wholesaling 100
• 2022 PVF Distributor Wholesaling 100
• Ecovadis 2022 Bronze Medal