Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental, Health, Safety, and Sustainability

Environmental Achievements

• 6% year-over-year reduction in greenhouse gas emissions
• 4% year-over-year reduction in water usage
• 2% year-over-year reduction in waste to landfill

Social Achievements

• Improved employee engagement from 11th percentile to 55th percentile among peer manufacturers in five years
• Investing in upskilling and reskilling manufacturing workforce
• No environmental or safety violations in 2019
• 21% year-over-year reduction in Total Recordable Incident Rate (TRIR)
• 46% improvement in the number of lost-time days

Governance Achievements

• Established a new chief customer and digital officer role
• Established a chief innovation and design officer role

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental, Health, Safety and Sustainability
• Social
• Governance

Environmental Achievements

• Received the Robert W. Campbell Award from the National Safety Council for excellence in integrating EHS management into business operations.
• Set goals to reduce GHG emissions intensity, water usage, and total waste to landfill.

Social Achievements

• Maintained a cross-functional, global COVID-19 response team to protect employees, customers, and suppliers.
• Supported global communities through employee donations, engagement, and volunteerism.
• Named winner of the Jackson Lewis Diversity, Equity and Inclusion Champion Award.

Governance Achievements

• Established a materiality matrix of ESG priorities based on stakeholder surveys.
• ESG initiatives generally align with the SASB framework and TCFD recommendations.
• Continued to provide transparency and visibility throughout the ongoing global COVID-19 pandemic.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to shortages of materials, COVID-19 outbreaks, labor shortages for suppliers, and logistical/shipping challenges.

Mitigation Strategies

• Product redesigns, alternative sourcing, close monitoring of supply management, dual sourcing, alternate shipping methods, and inventory strategies.

Supply Chain Management

Responsible Procurement

• Expect our suppliers to source conflict minerals responsibly and to provide sufficient data, including supporting due diligence records.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB, TCFD

Certifications: ISO 27001 (Interflex brand)

UN Sustainable Development Goals

• Goal 13

Support the United Nations Sustainable Development Goal to take urgent action on climate change.

Awards & Recognition

• Robert W. Campbell Award
• Jackson Lewis Diversity, Equity and Inclusion Champion Award

Environmental Metrics

ESG Focus Areas

• environmental stewardship
• diversity, equity, and inclusion (DEI)
• good corporate governance
• workplace conduct
• support for local communities
• climate change
• sustainability

Environmental Achievements

• Received the Robert W. Campbell Award from the National Safety Council in 2021 in recognition of our efforts to integrate sound environmental, health and safety (“EHS”) management with our business operations.
• Honored with a SEAL Business Sustainability Award in 2022 for a proactive water reduction project implemented across two production facilities in Baja, Mexico.

Social Achievements

• Maintained a generally positive relationship with its workforce in both unionized and non-unionized settings.
• Updated its strategic action priorities for DEI, centering on building equitable policies and practices, creating an inclusive culture, and elevating the approach to DEI in its industry and communities.
• Provided multi-faceted support for communities through philanthropic pillars: safety and security; wellness; and addressing unique community needs.

Governance Achievements

• Board of Directors oversees the Company’s ESG strategies, goals and performance.
• Leadership and employees have a responsibility to uphold excellence in ESG matters.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions and delays, including logistical challenges; shortages in parts and materials (particularly shortages of electronic components); and increased material and other inflation.
• Increased competition, including from technological developments.
• Global climate change or other unexpected events, including global health crises.

Mitigation Strategies

• Product redesigns, carrying increased levels of safety stock and working with its supplier base, including establishing new and diverse supplier relationships, to increase part and component availability and overall supply chain agility.
• Investing in research and development capabilities with a focus on innovations that will deliver growth through the introduction of new products and solutions.
• Implementing a series of pricing initiatives across its global businesses to mitigate inflationary pressures.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions and natural disasters.

Transition Risks

• Changes in laws and regulations or imposition of currency restrictions and other restraints in various jurisdictions.
• Climate change legislation or other environmental mandates.

Awards & Recognition

• Robert W. Campbell Award (2021)
• SEAL Business Sustainability Award (2022)

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Achieved 14% carbon-free electricity by the end of 2022 (goal is 100% by 2030)
• Four sites fully transitioned to carbon-free electricity by end of 2022 (Veenendaal, Netherlands; Birmingham, England; Perrysburg, Ohio; Snoqualmie, Washington)
• Three additional sites transitioned to 100% carbon-free electricity in 2023 (McKenzie, Tennessee; Cincinnati, Ohio; Allegion New Zealand)
• Received a 2022 SEAL Business Sustainability Award for a water reduction project in Mexico

Social Achievements

• All-time high employee engagement, making steady progress toward top-quartile goal
• Actively working to build a pipeline of diverse talent for leadership opportunities

Governance Achievements

• Split the roles of CEO and Chair of the Board in 2023
• Updated annual incentive plan to include an ESG scorecard for executive officers in 2023
• Refreshed the Board by adding six new directors since 2020, with 60% diversity on the Board

Climate Goals & Targets

Environmental Challenges

• Fully capturing Scope 3 emissions relies on broad-based community, regulatory and industry efforts
• Utilities providers need time to develop needed energy infrastructure for carbon neutrality

Mitigation Strategies

• Setting interim targets for 2030 and 2035 to drive focus
• Broad-based change initiatives throughout the company
• Partnering with local energy utilities to advocate for access to carbon-free electricity
• Fleet services supporting the transition to hybrid and electric vehicles

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier diversity program
• Ethics and compliance program extended to suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: SASB, TCFD

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• 2022 SEAL Business Sustainability Award