Accelerating Industrial Sustainability

Our company is dedicated to accelerating the environmental sustainability of customers’ operations in multiple industries. We understand the importance of being a responsible corporate citizen and believe our Environmental, Social and Governance (ESG) program provides us with a strategic roadmap to become a more sustainable and resilient business.

2020 Highlights

Watch our ESG webinar on-demand

Our ESG Goals

Employees

Goal: Develop workforce to deliver sustainable, diversified growth
Goal: Protect the lives and livelihoods of our employees by providing a safe and healthy workplace

As we diversify and grow into a multi-industry company, a focus on the talent and culture that brought us this far is critical. We recognize that our human resource strategies and processes must evolve to support this growth. 

Retention targets will hold us accountable for ensuring that our recruitment, training, and overall employee engagement strategies are meeting the needs and expectations of our employees. Additionally, to further integrate sustainability and ESG into our company, we are committed to providing orientation on these topics to all employees. 

It has always been our objective to provide our employees with a safe and healthy work environment. With the growth our company has experienced, and the future growth we anticipate, it is ever more important that we continue to focus on safety. To this end, we reviewed our safety program and identified key focal points on which we can build. Our focus is on developing and implementing consistent procedures and processes to identify issues, investigate them, and eliminate the possibility of recurrence, as well as preventing new ones from happening. 

In 2020, we embarked on an effort to certify our safety program to the ISO 45001 occupational health and safety standard (ISO 45001), an internationally recognized safety management system. In 2021, we successfully completed a third-party audit of all manufacturing locations and have been recommended for certification.

We have also continued to develop our processes around employee safety training. After conducting a job function analysis, we segmented employees into the following groups: Production, Research & Development (includes production support roles and field operations), Office, and Facility (includes Shipping and Receiving). Each group will have a tailored training plan with the goal of completion of 95% of the annual plan. 

We are pleased to have achieved a 43% reduction in our TRIR from 2019 to 2020. We also finalized implementation for tracking of near miss incidents. We are actively engaged in encouraged reporting and as participation in near miss reporting grows, we anticipate that our NMFR may increase for a period of time.

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Environmental & Climate Change Risks

Goal: Report climate-related risk strategy and management aligned with TCFD by end of 2024
Goal: Certification to ISO 14001 Environmental Management Standard by end of 2022

Energy Recovery is committed to making continued progress on our climate-change related disclosures, as well enhancing our internal management of environmental risks. 

The Task Force on Climate-related Disclosure (TCFD) recommendations provide a structured approach to evaluating and communicating the potential impact climate change may have on our company. We believe alignment with this framework represents the best path for Energy Recovery to make progress in our climate-change risk management strategy over the next few years. Furthermore, the TCFD aligns with and complements our current disclosure approach under SASB and GRI. 

Additionally, we have committed to International Organization for Standardization (ISO) 14001 certification of our Environmental Management System as another critical component to successful management of our environmental and climate change risks. 

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Innovation & Opportunity

Goal: Double emissions reductions from our products by end of 2025 vs. 2019 baseline

Developing technologies that drive efficiencies and reduce emissions for our customers is at the heart of Energy Recovery’s value proposition and sustainability strategy. 

We have set an ambitious goal to double this impact by 2025 through the growth of our core desalination business, as well as through the introduction of new pressure exchanger-based products in other industries. 

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Products

Goal: Deliver products and solutions customers can trust

Trust and reliability have long been synonymous with our PX Pressure Exchanger, the desalination industry’s leading energy recovery device. 

We have a track of record of minimal to zero financial impact from warranty events and legal proceedings related to product incidents. 

As we expand our product offerings, particularly to new industries, we recognize this introduces unknown risk and potential increase in these metrics. Because we are committed to maintaining the highest quality standards, we have set a target to maintain warranty costs below 1% of product revenue. This target ensures we stay within the top quartile of reliability and performance for our industry, according to benchmark data from the American Productivity & Quality Center.

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Our Focus on Sustainability

Building community partnerships for a more sustainable future

Just as our company is dedicated to delivering efficient and sustainable products to our customers, we are committed to supporting the local and global communities where our employees live and work with that same spirit. Our aim is to lead by example and empower our partners who share this purpose.

Ensuring accountability and transparency

As a publicly traded company (NASDAQ: ERII), our corporate governance efforts are focused on effectively managing risk and preserving long-term, sustainable value for the benefit of our shareholders, our employees, and the broader ecosystem in which we operate.

Awards & Ratings

MSCI ESG Rating “A”

Sustainalytics ESG Risk Rating: Top quartile of the machinery industry as of June 2021

2nd Runner Up for “Best First Time Report”

MSCI ESG Small Cap Leaders Index

Sustainability Reports

View 2019 ESG Report

View 2020 ESG Report

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