Our First Full Sustainability Report
In July 2021, we published an initial Sustainability Update to highlight our policy initiatives and progress. Since then, we have made tremendous strides to gather the data and additional information needed to create our first full-length Sustainability Report. We understand that robust sustainability disclosure is a crucial step in ensuring accountability and maintaining and reinforcing our corporate reputation. This report showcases our current and past and current progress and provides insight into our baseline sustainability performance, the progress we have achieved, our goals for the future and the steps we plan to take to achieve them.
STAKEHOLDER EXPECTATIONS AND ENGAGEMENT
Our customers and partners are stepping up their sustainability commitments and voicing their expectations to see their suppliers do the same. These expectations stem from the increasing pressure from customers, investors, employees, regulators and other stakeholders, as well as the recognition that companies have an obligation to operate responsibly. We know our products and services help our customers meet their sustainability goals, and we want to ensure that our own operations align with these goals as well. Our efforts include accurately disclosing our impacts, implementing ongoing measures to mitigate them and positioning EnerSys® as a sustainability partner for all with whom we do business.
Investors also increasingly see companies that perform well on Environmental, Social and Governance (ESG) metrics as well-managed and better prepared for future operational, financial and regulatory developments, as well as the short and long-term challenges related to climate change and the global transition to a low-carbon economy.
Regulators around the world are also looking at new corporate requirements around ESG. As an NYSE-listed company, EnerSys complies with all corresponding requirements of the U.S. Securities and Exchange Commission (SEC). The SEC announced plans to propose rules in 2022 for mandatory climate change and human capital management disclosure for public companies. EnerSys understands the importance of these issues and is preparing accordingly.
We also recognize that employees care deeply about the practices of their employers. Our ability to attract and retain top talent means aligning with their values and listening to their concerns around ESG issues. We must do the same for the families, friends and neighbors of the communities where we live and work.
EnerSys will remain proactive and disclose our progress and performance in the ESG areas most material to our business. This reinforces our firm commitment to sustainability to our stakeholders and ensures we have robust processes in place prior to any regulatory reporting requirements.
Preparing EnerSys for these challenges is critical to meeting stakeholder expectations and ensuring that we can continue to provide essential climate technology for decades to come.
“While a commitment to responsible business practices has always been a hallmark of the way EnerSys does business, our investors, customers and other stakeholders are paying increasing attention to important ESG topics. We believe ESG can and should be a strategic opportunity for EnerSys, and we, therefore, aim to meet and exceed these expectations. EnerSys clearly understands that improving ESG performance is good for business performance.”
Arthur T. Katsaros
“We know that strong ESG performance underpins strong financial performance. The financial community is increasingly looking to these metrics. EnerSys is committed to keeping pace. What gets measured gets managed, and we are tracking key performance indicators to drive our continuous improvement.”
Andrea J. Funk
Sustainability reporting is only valuable when it is accurate, consistent and comparable for the relevant stakeholders. To facilitate this, we informed this disclosure using the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) standards and recommendations.1 As two of the most commonly used sustainability reporting frameworks, our stakeholders will be able to compare our performance disclosed in this report across our industry and beyond. This report also identifies how EnerSys supports and impacts the United Nations Sustainable Development Goals.
We will also be publishing a report aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations later in 2022 to demonstrate our climate risk evaluation, strategies and preparedness.
Our Sustainability Legacy
Goal Setting and Materiality
Because we understand that what gets measured gets managed, we are working to align our operations with investor, customer and other stakeholder sustainability expectations. We view this as our Core Values in action, as it is the right thing to do for our business our environment, people and communities. In 2021, we conducted a materiality analysis and began developing forward-looking sustainability goals. We continue to analyze our operations, governance, customer expectations, and supply chain performance to better understand our sustainability impacts and opportunities.
We engaged internal and external stakeholders to understand the specific sustainability issues that are both important and most manageable for EnerSys. We strengthened our internal governance and sustainability management team across our enterprise, as described in the Sustainability Oversight section of this report. We created an executive steering committee to oversee the integration of sustainability throughout our business and are leveraging this committee to ensure senior executive support, alignment and ongoing strategic direction.
Sustainability Materiality Assessment
Earlier in 2021, we assessed our most salient ESG risks and opportunities. Using SASB and other internationally recognized sustainability reporting frameworks, we identified the most important sustainability topics to EnerSys from that point of view. We also conducted multiple interviews to understand and integrate key stakeholder perspectives. Based on these risk identification processes, we have confirmed nine topics that currently constitute the highest sustainability priorities for EnerSys.2
1. CLIMATE CHANGE
Climate change has the potential to disrupt the global economy. We work to address the potential negative impacts of climate change on our business while providing products that can help mitigate the effects associated with climate change.
2. CUSTOMER USE OF PRODUCTS
Our customers demand reliable products that address their sustainability goals and enhance resiliency. They rely on EnerSys to provide efficient, effective and innovative products to meet their needs in addressing important challenges in motive, medical, scientific exploration, and energy distribution applications.
3. DIVERSITY, EQUITY & INCLUSION (DEI)
Building an inclusive, diverse, and equitable workforce is a priority for our business. By enhancing our focus on DEI, we improve our workforce engagement and ultimately the products and services we provide to our customers.
4. ENERGY MANAGEMENT
Energy management is the core of our business. We seek to use energy efficiently and to decarbonize our operational energy use to deliver the best energy solutions to our customers.
5. MATERIALS SOURCING
Manufacturing our products requires a supply of critical materials. Limited supply of these materials, as well as their concentration in countries that are subject to geopolitical risk, exposes us to supply chain disruptions, price volatility and possible human rights or environmental risks. Global events, like the COVID-19 pandemic, impact supply chains as well. EnerSys has policies in place to manage these impacts throughout our supply chain.
6. PRODUCT EFFICIENCY
Our customers seek energy solutions to ensure reliable, consistent, low-carbon solutions for their operations. With growing customer demand for better energy storage solutions as well as increasing competition in the energy storage market, we must strive to achieve technological advances to make our products the most efficient in the market.
7. PRODUCT END-OF-LIFE (USE) MANAGEMENT
As battery use increases and more products reach the end of their lifecycle, we recognize that the environmental impact of their disposal could be substantial. Lead batteries are one of the best examples of a circular economy with more than 99% of batteries being recycled – frequently into batteries again. EnerSys battery recycling programs and consumer education efforts aim to reduce our products’ end-of-use impacts. We continue to look for wasy s to enchance and implement circular economy principles for all battery chemistries.
8. TALENT ATTRACTION & RETENTION
Maintaining a workforce of talented, diverse, driven employees dedicated to our mission drives the success of our business. We aim to provide our employees with competitive pay and benefits, equitable development opportunities, and a safe, engaging workplace to maintain our high-quality outputs.
9. WORKFORCE HEALTH & SAFETY
Ensuring the safety of our employees is critical to our ability to deliver reliable, quality products to our customers. We meet or exceed all applicable safety and health requirements.
In 2021, we set material, measurable goals to advance our progress and reduce our environmental footprint. These goals communicate our commitment to sustainability and empower our employees to develop innovative projects to achieve these goals. We are actively working on expanding these goals to other key ESG issues in 2022.
U.S. DEPARTMENT OF ENERGY BETTER PLANTS PROGRAM
The U.S. Department of Energy’s (DOE) Better Plants Program helps leading manufacturers boost their resilience and economic competitiveness by supporting improvements in energy efficiency.
As part of the BPP, EnerSys has committed to reducing our energy intensity by 25% over the next 10 years with 2020 as our base-line year.3
ALLIANCE TO SAVE ENERGY
Founded in 1977 by two U.S. senators who recognized the enormous opportunity of energy efficiency, the Alliance to Save Energy is a bipartisan, nonprofit coalition of business, government, environmental and consumer leaders advocating to advance federal energy efficiency policy.
As part of the Alliance to Save Energy, EnerSys is committed to advocating for federal policies that accelerate energy efficiency across industries and sectors.
U.N. GLOBAL COMPACT CEO WATER MANDATE
U.N. CEO Water Mandate is a CEO-led commitment platform for business leaders and learners to advance water stewardship and reduce water stress worldwide by 2050.
Committed companies identify and reduce critical water risks to their businesses, seize water-re-lated opportunities and contribute to water security and the U.N. Sustainable Development Goals. As of 2022, the Mandate has been endorsed by more than 200 companies from various industry sectors and regions worldwide.
Endorsing companies commit to action across six key elements and report annually on progress:
- Direct Operations
- Supply Chain and Watershed Management
- Collective Action
- Public Policy
- Community Engagement
CEO ACTION FOR DIVERSITY & INCLUSION
EnerSys is proud to be a part of the CEO Action for Diversity & Inclusion, a collaborative of nearly 2,000 CEOs from the world’s leading companies and organizations committed to advancing diversity and inclusion within the workforce. The organization was founded on the belief that diversity, equity and inclusion is a societal issue, not a competitive one, and that CEOs and the business community need to collaborate to drive change.
Member companies agree to take action to create workplace environments where diverse experiences and perspectives are welcomed and where employees feel safe, comfortable and empowered to discuss diversity and inclusion. All signatories are leaders of their companies who agree to implement the pledge and support other companies in doing the same.
Our sustainability policies govern our commitment to excellence in managing ESG issues both in our own operations and our supply chain. Each employee and operating unit across the organization, as well as our vendors and suppliers, is held to these standards, and compliance is overseen by the Board of Directors and senior executive team. These policies guide our strategy and programs for continuously monitoring and improving our performance. Policies are reviewed at least annually by the responsible subject matter experts and updated as needed.