Environmental Management

Reduce scope 1 and 2 emissions intensity 65% by 2026 from 2021 baseline

As part of our business growth strategy, we set an ambitious, but achievable, emissions reduction goal focused on intensity rather than absolute emissions. We’re making strong progress toward this goal by using 100% renewable electricity across all our facilities, a transition that began in 2022 and has already reduced our market-based Scope 2 emissions by 92%. We’re also working to cut energy use in our manufacturing processes, particularly in reducing electricity and natural gas consumption. Our Scope 1 emissions primarily come from the natural gas-powered kilns used to fire the ceramic cartridges at the heart of our pressure exchangers. To address this, we’re working to optimize kiln cycles and reduce natural gas consumption while maintaining product quality and process integrity.

Altogether, we’ve reduced our Scope 1 and 2 emissions intensity by more than 52% from our 2021 baseline. For a deeper dive, please see our data performance tables and GHG emissions details in the 2024 Sustainability Performance Summary.

Reduce emissions intensity to 10 MT CO2e per million dollars of revenue by 2026 from 2021 baseline

Target:

10

2021 Baseline:

29

2024 Value:

14

Status:

Double emissions reductions from our products by 2025

At Energy Recovery, developing technologies that save energy and help our customers adapt to a changing climate is core to both our business and sustainability strategy. Back in 2020, we set an ambitious goal to double our impact by 2025—through new applications, innovations, and expansion into new markets and industries. We’re proud to share that we met this goal ahead of schedule. In 2024 alone, our technologies helped avoid over 22 million metric tons of CO₂ emissions, saving our customers 47.4 TWh of energy and $7.2 billion in costs. While we will continue to report on this key performance indicator, we won’t be setting a new target, as these metrics are closely tied to our broader revenue growth goals.

Further integrate sustainability into our product development process to understand a product’s lifecycle impact

Innovation is a key part of Energy Recovery’s winning culture and decades of success. It drives our growth, helps us maintain market leadership in desalination, and supports our commitment to excellence as we expand into new markets. As part of our New Product Development process, we’ve always considered the broader implications of a product’s impact on sustainability. In keeping with that philosophy, we’re working to formalize and streamline this evaluation through a sustainability scorecard that assesses both the benefits our products bring to customers and the environmental impacts associated with producing, using, and disposing of them. We’ve made solid progress: after conducting best practice research, including a review of third-party frameworks and peer company approaches, we’re on track to develop the first draft of the scorecard by the end of the year with 2026 targeted for piloting and adoption of the tool.

Reduce waste generated in our operations

In conjunction with our ISO 14001 Environmental Management System certification and our commitment to continuous improvement, we remain focused on reducing resource consumption at our facilities through waste management strategies that emphasize reuse, recovery, and recycling. Building on past efforts, this goal formalizes our commitment with measurable targets to keep us accountable.

We’re proud to share that we’ve achieved a major milestone: over 90% of our alumina powder waste is now recycled, and none of it goes to landfill. One hundred percent of this waste is either internally reused or sent to a trusted external partner for recycling. Internally, we recover excess alumina powder from the manufacturing process, screen it for reuse, and reintegrate it into production. This closed-loop process not only cuts down on waste but also reduces our need for raw materials. We’ve also made progress on broader waste goals, including recycling 100% of our scrap metal, launching recycling and compost streams at all our facilities, and rolling out a pallet collection and recycling program.

We are introducing two new waste targets that represent the next phase of our journey toward minimizing the environmental impact of our manufacturing operations.

Firstly, as part of our continuous improvement efforts, our operations team identified the reduction of non-conforming ceramic parts, or scrap, as a priority. In 2025, we aim to reduce our scrap rate to 2.5%, compared to 3.7% in 2024. This metric reflects the percentage of scrapped ceramic components, such as those that break during processing or fail quality inspections, relative to finished ceramic components. Ceramics typically have higher scrap rates than non-ceramic materials, due to their complex processing requirements. Given that ceramic components are a critical component in our PX® devices, optimizing yield is both a sustainability and operational priority. These efforts not only reduce the volume of non-hazardous waste sent to landfill but also drive cost savings.

Secondly, to enhance transparency and support continuous improvement in our waste management practices, we will begin reporting hazardous waste data annually starting in 2025. The total amount of hazardous waste generated in 2024 is included in our Environmental Performance Data, and we plan to expand the detail and scope of this reporting by 2027.

Commit to setting a hazardous and non-hazardous waste goal by 2025

Recycle over 90% of alumina powder waste

Maintain scrap waste sent to landfill rate below 2.5%

Disclose hazardous waste data annually starting in 2025, with expanded reporting by 2027, to enable continuous improvement

Reduce water used in operations

As a company founded on advancing energy-efficient technologies in the desalination industry, we recognize the growing urgency of global water challenges; challenges that are intensified by climate change and worsening water scarcity. This is especially relevant to our operations, as both of our manufacturing facilities in Northern California are located in areas classified as high to extremely high water risk zones (according to the World Resources Institute’s Aqueduct Water Risk Atlas). These physical risks, including water stress, depletion, and flooding, underscore the importance of proactive water management.

To strengthen our long-term operational resilience, we’ve established Energy Recovery’s first-ever water conservation target: to maintain water withdrawal intensity below 0.06 megaliters per million dollars of revenue. This measurable goal allows us to track progress as we scale and ensures that water efficiency remains a priority across our facilities.

With water meters now installed at all production sites, we can monitor usage by process and make more targeted improvements. For example, several of our production test loops in drought-prone California have been retrofitted to reclaim and recycle water, saving an estimated 75,000 liters per year. These efforts reflect our broader commitment to responsible water stewardship and to leading by example in the water treatment sector.

Commit to setting a water reduction goal by 2025

Maintain water withdrawal intensity below 0.06 megaliters per million dollars of revenue