Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Prevented over 4,230 tons of waste from entering landfills and recycled an additional 18,210 gallons of used oil
• Saved over 100 million kWh of electricity and prevented more than 2,000 tons of material from entering landfills through remanufacturing processes
• Expanded product offerings to promote a greener car parc

Social Achievements

• Reduced safety incidents globally
• Enhanced employee safety training
• Established a Diversity and Inclusion Taskforce and increased diversity hiring and promotions
• Expanded company outreach to our communities and industry, including $70,000 in scholarships to students in need
• Supported employee charitable efforts in our communities
• Implemented a number of operational changes to keep employees safe during the COVID-19 pandemic (enhanced cleaning, screening protocols, protective equipment, remote work arrangements, emergency employee relief fund)

Governance Achievements

• Appointed a Presiding Independent Director; majority of the Board and all members of the Audit Committee, Compensation Committee, and Governance Committee are independent
• Independent directors meet periodically in executive sessions without management
• Board conducts an annual self-evaluation
• Adopted a Corporate Code of Ethics applying to all employees, officers, and directors
• Implemented a Whistleblower Policy with various reporting channels
• Established Stock Ownership Guidelines

Climate Goals & Targets

Environmental Challenges

• Climate-related risks including increased frequency and severity of weather events and natural disasters, and longer-term shifts in climate patterns affecting seasonal demand for products
• COVID-19 pandemic

Mitigation Strategies

• Investments in facility upgrades, changes to operating procedures, plant rationalization programs to improve operating efficiencies and reduce costs
• Expanding product offerings for cleaner-burning fuels or electric/hybrid vehicles
• Implemented COVID-19 policies and practices: PPE, partitions, temperature checks, protocols for positive cases/symptoms/exposure, daily cleaning and sanitization

Supply Chain Management

Responsible Procurement

• Vendor Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency and severity of weather events and natural disasters

Transition Risks

• Longer-term shifts in climate patterns affecting seasonal demand for products

Opportunities

• Investments in facility upgrades, changes to operating procedures, plant rationalization programs to improve operating efficiencies and reduce costs
• Expanding product offerings for cleaner-burning fuels or electric/hybrid vehicles

UN Sustainable Development Goals

• Goal 3
• Goal 4
• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 10
• Goal 12
• Goal 13

The report mentions alignment with several UN SDGs throughout the text, relating initiatives to specific goals.

Sustainable Products & Innovation

• Products for cleaner-burning fuels or electric/hybrid vehicles
• Alternate fuel injectors for CNG, LNG, and hydrogen

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity, Equity, Inclusion & Belonging
• Employee Health and Safety
• Corporate Governance
• Community Engagement
• Supply Chain Sustainability

Environmental Achievements

• Reduced total Scope 1 and Scope 2 GHG emissions intensity by 11% compared to 2021 and 30% compared to 2019.
• Reduced total energy usage intensity by 8% compared to 2021 and 22% compared to 2019.
• Increased the total percentage of waste recycled by 10% compared to 2021 and 18% compared to 2019.
• Reduced total generation of non-recycled waste intensity by 24% compared to 2021 and 41% compared to 2019.
• Reduced total water usage intensity by 9% compared to 2021 and 29% compared to 2019.
• Remanufacturing processes prevented more than 8,095 metric tons of material from entering landfills and avoided more than 154 million kWh of electricity in 2022.

Social Achievements

• Established a DEIB Steering Committee to develop initiatives to promote diversity, equity, inclusion, and belonging.
• Offered enhanced employee benefits including paid parental leave, fertility benefits, and LGBTQ+ inclusive benefits.
• Maintained a low voluntary turnover rate (7%) and an average employee tenure of 12 years for full-time salaried U.S. employees.
• Donated over $135,000 to charitable organizations and sponsored annual scholarship contests.
• Improved safety performance with incident rates lower than national averages.

Governance Achievements

• Linked part of executives’ annual compensation bonus to the accomplishment of ESG initiatives.
• Aligned disclosures with SASB and TCFD standards.
• Implemented a whistleblower process and ethics training for 100% of salaried U.S. employees.
• Developed a comprehensive Human Rights Policy Statement and Vendor Code of Conduct.

Climate Goals & Targets

Environmental Challenges

• Climate-related physical risks (extreme weather events) that could disrupt operations.
• Transition risks associated with the shift to electric and hybrid electric vehicles.
• Data security threats.

Mitigation Strategies

• Facility upgrades to improve energy efficiency and resilience.
• Expansion of product offerings for electric and hybrid vehicles.
• Investments in data security technology and employee training.
• Cyber-liability insurance policy.

Supply Chain Management

Responsible Procurement

• Supplier audits and certifications (ISO or SMP).

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Power grid failures

Transition Risks

• Regulatory changes
• Shift to electric vehicles

Opportunities

• Development of parts for electric and hybrid vehicles
• Growth in powertrain-neutral product categories

Reporting Standards

Frameworks Used: SASB, TCFD

Certifications: ISO 14001:2015 (10 facilities)

Sustainable Products & Innovation

• Remanufactured parts
• Parts for electric and hybrid vehicles
• Emission control products

Awards & Recognition

• Gold Lifetime Trustee from the University of the Aftermarket foundation

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity, Equity, Inclusion & Belonging
• Employee Well-being
• Governance
• Community Engagement
• Supply Chain Sustainability
• Human Rights

Environmental Achievements

• Reduced Scope 1 and Scope 2 GHG emissions intensity by 28% compared to 2019 baseline.
• Recycled 83% of total waste generated.
• Reduced total non-recycled waste intensity by 18% compared to 2022 and 52% compared to 2019 baseline.
• Transitioned 84% of sales fleet vehicles to plug-in hybrid electric vehicles.

Social Achievements

• Enhanced diversity, equity, inclusion, and belonging programs, resulting in a 4% increase in ethnic diversity across the total US workforce.
• Offered competitive benefits package including expanded family-friendly benefits, fertility benefits, and LGBTQ+ inclusive benefits.
• Maintained low voluntary turnover rate (5%) and average employee tenure of 11 years for full-time salaried U.S. employees.
• Achieved a net promoter score of 27.5, significantly higher than the industry benchmark.
• Engaged in community initiatives through SMP Cares®, including donations to disaster relief efforts and partnerships with local organizations.

Governance Achievements

• Linked part of executives’ annual compensation bonus to the accomplishment of sustainability initiatives.
• Aligned disclosures with SASB and TCFD recommendations.
• Maintained ISO 14001:2015 certification at eleven principal manufacturing and distribution facilities.
• Zero product recalls in 2023.

Climate Goals & Targets

Environmental Challenges

• Achieving carbon neutrality by 2050.
• Managing Scope 3 emissions.
• Maintaining data accuracy and completeness.
• Addressing potential water risks in Tijuana, Mexico.

Mitigation Strategies

• Developed a roadmap to achieve carbon neutrality goals.
• Engaged a third-party for auditable Scope 3 inventory calculation and reporting.
• Implemented an environmental scorecard system and partnered with a software provider to track environmental impact.
• Undertook a water risk assessment and plan to conduct annual assessments.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Vendor Code of Conduct
• Conflict Minerals Policy
• Supplier audits for compliance

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Natural disasters
• Power grid failures

Transition Risks

• Regulatory changes
• Shifts in consumer demand for alternative energy vehicles

Opportunities

• Development of parts for electric and hybrid electric vehicles
• Development of parts for more efficient internal combustion engines

Reporting Standards

Frameworks Used: SASB, TCFD

Certifications: ISO 14001:2015 (at 11 facilities)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Electric drive compressors for HVAC and battery cooling
• Fuel injectors for CNG/LNG engines
• Remanufactured parts

Awards & Recognition

• America’s Most Responsible Companies 2024 (Newsweek and Statista)
• USA Today’s America’s Climate Leaders 2023
• Women in Auto Care® 2023 Women in Auto Care Company Ally of the Year