Sustainability Priorities

Our sustainability objectives are driven by our business strategy and stakeholder feedback, a key element of our materiality assessment process. Our first materiality assessment, completed in 2020, involved four stages: peer identification and benchmarking, material area and topic identification, stakeholder engagement, and analysis and finalization of material topics. We rigorously selected our peer group for benchmarking purposes, reviewing peer materiality assessment outputs and key topics of relevance from the Sustainability Accounting Standards Board (SASB), Global Reporting Initiative (GRI), and Task Force on Climate-related Financial Disclosures (TCFD).

We engaged a wide segment of our stakeholders including internal leaders, investors, our Board of Directors, and a diverse cross section of our employees to survey, which determined 14 key topics on which to focus our strategy. Four of those topics were deemed the most material to delivering long-term value to our stakeholders and became the focus of our first set of corporate sustainability goals.

In 2023, we once again surveyed and interviewed our stakeholders to ensure our sustainability strategy remains aligned with the evolution of our business. The results of this assessment process and any associated adjustments to our sustainability priorities, goals, and roadmap will be published by the end of 2024.

Info graphic of a scatter graph representing the relationship between Environmental, Social, and Governance topics, business success, and ERI stakeholders' urgency to address.

Material Topics Definitions

Physical risks, such as rising sea levels, climate impacts of our business mix, critical material and transition risks related to regulation, technology, and reputation.

Developing diversified solutions across industries to favorably impact energy consumption in addition to associated cost savings for end users.

The operational impact and management of GHG and toxic emissions, waste, biodiversity, and land use, and natural resources such as water.

Energy Recovery’s engagement and impact on the local communities where we operate including topics such as volunteering, investment and contributions with local impact, disaster response, and supporting community rights.

The social impact of Energy Recovery’s products and our customer relationship management and communication channels.

Energy Recovery’s management of our employees, focusing on health and safety, well-being, professional development and talent attraction, diversity and inclusion, compensation, and open feedback channels.

Our product safety, reliability, quality control, and brand perception.

Management of supplier labor conditions and workforce safety, human rights, and proper sourcing practices.

Board structure, diversity, independence, size, expertise, and refreshment.

Stakeholder engagement, ongoing ESG education, and oversight of ESG reporting, sustainability performance, and strategy-setting.

The company’s processes, policies, and oversight structures in place to ensure management of bribery and corruption, conflicts of interest, marketing, tax transparency, and adherence to all applicable regulations.

Energy Recovery’s executive to median pay, long-term incentive ties, long-term incentive vesting structure, and performance incentives tied to ESG metrics.

Energy Recovery’s practices regarding shareholder rights and engagement including proxy access, voting rights, right to appoint directors, right to call a special meeting, and the right to act by written consent.

Energy Recovery’s formal risk oversight structures and policies related to risks such as cybersecurity succession planning, intellectual property, and climate change.

Goal Progress

Double emissions reductions from Energy Recovery products by end of 2025 vs. 2019 baseline

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

Report climate-related risk strategy and management aligned with TCFD by end of 2024

Develop workforce to deliver sustainable, diversified growth

Protect our employees by providing a safe and healthy working environment

Deliver products and solutions customers can trust