Environmental, Social & Governance

ESCO’s Approach to ESG

At ESCO, we recognize our responsibilities to mitigate our environmental impact, protect our workers, improve our supply chain, and enhance our communities. We understand that we must take into account the needs of a broader group of stakeholders – our employees, business partners, shareholders and the communities in which we operate. In 2016, we identified key areas of focus for our ESG and corporate responsibility efforts. In this portion of our corporate website, you will find information on our ongoing commitment to these important environmental, social and governance topics.


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A Message from Our CEO

At ESCO, our success is rooted in our commitment to innovation and the development of technologies and solutions for our diverse customers. As we strive to meet the needs of our customers, we recognize the importance of our ongoing commitment to Environmental, Social and Governance (ESG) matters. We also recognize the impact our actions have on key stakeholders, such as our customers, employees, suppliers and the communities in which we operate.

ESCO has a duty to inform our stakeholders about company practices and strategies that impact sustainability. In a prior year, we identified the most important ESG topics for our company and we have continued to report on those topics in an annual Sustainability Report. As the next step in our journey of sharing and improving our sustainability performance, we now present the information about our ESG topics on our corporate website.

In this portion of our corporate website, we have highlighted each topic and commit to periodically updating the information. We hope you find that the information presented here demonstrates our continuing commitment to diversity and human rights, the health and safety of our workforce, and the integration of sustainability into our business model.

With best regards on behalf of our team,

Vic Richey

Chairman, Chief Executive Officer and President

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Governance and Approach

Responsible and sustainable governance at ESCO Technologies is the foundation of our commitment to the creation of long-term value for our shareholders.  Our Board of Directors and our Sustainability Council illustrate a strong governance structure that is vital to our ESG efforts.

Our Board and Board Diversity

ESCO has demonstrated a commitment to a strong governance structure and related company-wide policies. The Board of Directors currently consists of nine directors, divided into three classes as nearly equal in size as practicable, with one class elected each year.

Our Nominating and Corporate Governance Committee identifies individuals qualified to serve on our Board of Directors. Although the Committee does not have a formal policy on diversity, it seeks the most qualified candidates without regard to race, color, national origin, gender, religion, disability or sexual orientation. The Committee appreciates the benefits that diversity, including gender diversity, can bring to a board of directors.

In 2019, Gloria Valdez joined the Board of Directors as the company’s first female director.  Ms. Valdez retired in April 2018 after 32 years of civilian service with the Department of the Navy and the Department of Homeland Security. Prior to her retirement, she served as the Deputy Assistant Secretary of the Navy within the Office of the Assistant Secretary of the Navy (ASN) for Research, Development and Acquisition.

Sustainability Council

The ESCO Sustainability Council provides high-level leadership and strategic focus for our corporate-wide sustainability efforts.  The Council includes representatives from our corporate headquarters and each of our operating subsidiaries.  First formed in 2017, the Council is strategic in leading efforts to promote sustainability.  Members of the sustainability council are instrumental in collecting data and information for our ESG efforts.

Additional resources about our corporate governance structure and approach can be found on our corporate website in our Investor Center, as well as in our Governance Guidelines, Proxy Statement, Past Sustainability Reports and our Annual Report on Form 10-K, each available at the adjacent links.

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Ethics and Compliance

At ESCO, we believe it is essential that we conduct ourselves at all times with integrity and in full compliance with the laws and regulations that govern our global business activities. The confidence of our shareholders, customers and the public at large depends on the ethical conduct of our employees. All employees of ESCO and our subsidiaries must comply with our ethical standards, which, among other things, prohibit conflicts of interest, require the protection and proper use of our company assets, and create a duty to act with integrity and in compliance with laws and our employment and safety policies.

We require all of our employees to take ethics training, and review our Code of Business Conduct and Ethics on an annual basis. In 2018, we introduced an ethics video which includes interviews with our CEO, General Counsel and the Vice President of Human Resources. In addition, certain of our employees are required to submit a Conflict of Interest questionnaire.

The ESCO Technologies Ethics Committee meets quarterly to review any ethics cases with the Ombudsman, Ethics Officer and General Counsel, and Committee reports are summarized and submitted to our Board of Directors.

Our commitment to ethics and integrity are embodied in our Code of Ethics for Senior Financial Officers, our Code of Business Conduct and Ethics, and the Message on Ethics from Our CEO, each available at the adjacent links.

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Human Capital Management

We are committed to fostering diverse and inclusive workplaces in which our employees are free from harassment and discrimination. We recognize our responsibility to conduct our business in a manner that respects the rights and dignity of all people without the use of involuntary or forced labor.

Additional information about our approach to Human Capital Management can be found in our Human Anti-Trafficking Policy, our Human Rights Policy, our Anti-Harassment Policy and our Code of Business Conduct and Ethics, each available at the adjacent links.

Key highlights from our Human Rights and Anti-Trafficking Policies:

Diversity and Inclusion. We value the diversity and inclusion of the people with whom we work, and are committed to equal opportunity and intolerance of discrimination and harassment.

Freedom of Association. We respect our employees’ right to join a work council without fear of harassment.

Privacy. We will properly protect the gathering and use of an employee’s personal data that is used for employee administrative purposes.

Wage, Hours and Benefits. We compensate employees competitively, relative to the industry and local market, and are committed to full compliance regarding wages, work hours, and legally required benefits.

Safe and Healthy Workplace. We are committed to providing our employees with a safe and healthy workplace, while complying with applicable safety and health laws and regulations.

Workplace Security. We are committed to maintaining a workplace that is free from violence, harassment and intimidation or other unsafe conditions.

Child Labor. We will not use child labor.

Anti-Human TraffickingAll ESCO employees, agents and subcontractors are prohibited from trafficking persons or conducting trafficking related activities.

 

Commitment to Community – The ESCO Foundation

In addition to our efforts to support the rights and well-being of our workforce, we also recognize that we are part of the communities within which we operate. We respect the human rights of our neighbors in those areas where we have facilities.

Our commitment to community is long-standing. The ESCO Foundation, established in 2005, is dedicated to providing financial support to a core group of charities focused on helping children and families in the communities where ESCO Technologies has operations. The Foundation’s goal is to make a meaningful contribution to each charity and respective community.

Our employees are engaged in volunteer efforts to support many of the organizations selected to receive grants. The Foundation also offers programs that award college scholarships to the children of ESCO employees and grants to support employees facing extreme hardship.

Additional information about The ESCO Foundation and its activities is available here.

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Workplace Health and Safety

The safety and health of our employees is of key importance. We foster safe and healthy workplaces at our facilities through our formalized safety programs, employee safety training, issue monitoring, incident reporting and employee wellness programs.

Our corporate headquarters has a designated person tasked with oversight and monitoring of appropriate safety programs for all subsidiaries. Each ESCO subsidiary also has a designated person who is responsible for safety at each facility.

Our health and safety programs must comply with applicable local, state and federal safety laws and regulations. Our corporate EHS director periodically performs environmental, health and safety compliance audits at our subsidiaries. In many instances, these reviews are more stringent than audits we have been subjected to by regulatory agencies.

We insist that all employees receive appropriate and ongoing training. We have equipment and procedures to protect employees in their work and we train employees on proper safety protocols.

ESCO believes that when our employees are healthy, our employees and our businesses thrive. For this reason, we have a well-developed corporate wellness program at each of our facilities to offer employees the opportunity to follow a healthy lifestyle. The programs are tailored to the interests of the employees at each location and therefore activities vary by subsidiary.

We maintain ongoing communications with our insurance carrier as an active partner in helping us keep our facilities safe. Our workers compensation carrier visits our sites for comprehensive reviews.

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Supply Chain Practices

We expect the vendors in our supply chain to reflect our corporate values, which means conducting their business activities with integrity and in accordance with the highest standards of business conduct.  We also expect that they will share our commitment to diversity, inclusion and respect for human rights.

We support efforts to end the human suffering and environmental harm that has been associated with certain mining of conflict minerals in the Democratic Republic of Congo and adjoining countries, and are committed to meeting all legislative and regulatory requirements that seek to eradicate this suffering. We expect our suppliers to cooperate with us in the conflict minerals compliance process, and to assist us in identifying the sources of the conflict minerals in products and components supplied to us.

Our expectations and requirements for the vendors in our supply chain are embodied in our Vendor Code of Conduct, Transparency in Supply Chains, Conflicts Minerals Policy and Conflict Minerals Reports, each available at the adjacent links.

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Innovation & Technology

Innovation is central to ESCO Technologies’ continued ability to serve as a market leader. Through our three technology segments, Aerospace & Defense, RF Shielding and Test, and Utility Solutions Group, we develop innovative solutions that advance efficiency, safety and productivity for our customers.

Our subsidiaries bring this quest for innovation to projects that support environmental sustainability. Each ESCO subsidiary is responsible for identifying and carrying out initiatives to improve energy management and efficiency throughout their facilities and manufacturing processes. Many of our subsidiaries have adopted energy efficiency strategies, including energy efficient lighting, installation and automation of heating/cooling controls, equipment and process optimization, assessments of new equipment purchases and manufacturing changes, site wide solar feasibility studies and installations, and other facility enhancements. We strive to integrate environmental factors into our decision-making when we upgrade or retrofit existing facilities or consider leasing or purchasing new facilities.

In our 2020 ESG Report, available at the adjacent link, we spotlight a few projects at our subsidiaries that contributed to sustainability and energy efficiency.

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Environmental Footprint and ESG Reports

We recognize that sustainability benefits our stakeholders in multiple ways. Our efforts to use resources more efficiently allows us to reduce our environmental impact, while also enhancing our financial performance by lowering costs of inputs like energy and water.

We seek to decrease our environmental footprint by pursuing strategies to reduce our electricity usage, fuel usage and water consumption and by measuring our progress. We track our environmental impact in several ways, including measuring greenhouse gas emissions, energy use and water consumption.

Our ESG Report provides information about our Environmental Footprint for the prior year.  Information about our environmental footprint in prior years is available in our prior Sustainability Reports.  Each of these are available at the adjacent links.

Vendor Code of Conduct

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Human Rights Policy

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Anti-Harassment Policy

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Hyman Anti-Trafficking Policy

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Code of Business Conduct and Ethics

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