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Environmental, Social and Governance

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Overview

At Altra Industrial Motion, we are committed to aligning our policies and practices with the needs of our key stakeholders. We believe that our business must support our environment, provide a safe and healthy workplace for our employees and play a positive role in the markets and communities that we serve.

We are guided by our Core Values, which set forth shared principles and beliefs that direct and motivate the Altra Business System. We use these Core Values to frame and understand our obligations to our business partners, employees, shareholders and communities around the world.

Core Value Icons

Environmental

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We are committed to providing a safe and healthy work environment for our employees, contractors and visitors and to managing our global organization in an environmentally sensitive and responsible manner. We further recognize an obligation to demonstrate our commitment to safety and to the environment by continuously striving to improve our performance in these areas.

At Altra, we strive to achieve the following objectives:

  • Developing and improving programs and procedures to ensure compliance with all applicable environmental, health and safety laws and regulations
  • Ensuring that our associates are properly trained and provided with appropriate safety and emergency equipment
  • Taking appropriate action to minimize hazards or to change conditions that endanger health, safety or the environment
  • Integrating sound health, safety and environmental practice in applicable operating decisions and functional areas
  • Developing and improving reuse and recycling practices and exploring opportunities to use energy efficiently throughout our operations
  • Reinforcing the expectation that Altra employees understand the health, safety and environmental concerns associated with their jobs and act in an environmentally responsible, sustainable and safe manner
  • Setting the expectation that every employee, contractor and visitor on company premises follow our Environmental, Health & Safety Policy and report any environmental, health or safety concern to company management
  • Monitoring our compliance through periodic reviews and evaluations

Environmental and Energy Management

Altra is actively working to reduce its environmental impact through the implementation of processes to help manage and reduce consumption and waste. Altra requires that its facilities implement environmental management systems. Approximately 33%, or 20, of our facilities have fully implemented environmental management systems and 13 facilities are certified or attested to ISO 14001. Additionally, 3 Altra facilities maintain energy management systems which are certified or attested to ISO 50001, these include fixed targets and objectives to meet the implemented policy and maintain the standard.

With increasing environmental sensitivity, approximately 93% of Altra facilities have adopted more climate-conscious practices. These initiatives include, among other things, readily achievable actions like the switch to high efficiency LED lighting. At the same time, Altra has accomplished more complex process driven changes like utilization of reusable shipping containers, implementation of recycling programs, and installation of on-site solar panels.

For example, Warner Electric Europe in France and Bauer Gear Motor in Slovakia, are reusing the heat generated and emitted from compressors on the factory floor to supplement heating in the facilities. Renewable energy sources including, wind, solar, biomass, and hydroelectric are being utilized at 13 Altra facilities. This includes our Bauer Gear Motor facility in Germany, which has contracted with a supplier to ensure it derives approximately 55% of its energy from a renewable energy source thereby reducing its non-renewable energy consumption by 45%.

Altra’s approach to reducing energy consumption is multifaceted with a focus on reuse and recycling to enhance efficiency. While these efforts span all levels of the organization, Altra promotes collective accountability. Our employees are encouraged to actively engage and innovate to identify new opportunities that reduce environmental impact. Altra leadership is committed to ensuring a safe and healthy work environment. Using the Altra Business System, with a focus on continuous improvement, these goals are achieved through monitoring, periodic reviews and evaluation to identify prospective improvements.

Water and Wastewater Discharge

Recognizing water is a valuable resource, several Altra facilities have taken steps to reduce water consumption, including the installation of automatic water stops, dual flush toilettes and sensor operated sinks. Similarly, Altra understands the impact of wastewater discharge. Of those facilities with the capability to measure wastewater discharge, approximately 82% closely monitor and track wastewater discharge. For example, our Stromag facility in France has consistently reported an annualized reduction in wastewater discharge in excess of 100 cubic meters between 2017 and 2019. In addition, 9 Altra facilities have implemented wastewater recycling programs. For example, the wastewater at our Portescap India facility is processed at a government-approved sewage treatment plant and recycled for agricultural use. Wastewater from TB Wood’s and Ameridrives in Texas is mitigated through a water evaporation system that also recycles lubricants.

Waste

All of Altra’s facilities maintain a waste management and recycling program. Several facilities’ waste management programs set targets for reducing hazardous and non-hazardous waste. For example, our Portescap India facility has consistently met targets to reduce hazardous and non-hazardous waste, reducing overall waste generation by approximately 40% since 2017. Similarly, our Formsprag Clutch facility in Michigan maintains low hazardous waste generation and qualifies as a “Small Quantity Generator" in accordance with Environmental Protection Agency (“EPA”) standards.

While Altra facilities are engaging in environmentally conscious practices, there remains opportunity for progress and continuous improvement. Guided by our Core Values, Altra is committed to applying the Altra Business System to increase our environmental sensitivity, reduce our impact and strengthen our processes going forward.

In connection with our efforts in this area, we have adopted the following:

Social

Global Ethics

We are committed to respecting human rights in our own operations and to complying with the applicable laws and regulations of the countries in which we do business. As part of this, we expect our suppliers and other business partners to act in accordance with the applicable laws and regulations of the countries in which they do business.

Our commitment applies to all Altra locations and business operations worldwide. As a global organization, we regard this as representing a social and ethical commitment, as well as a key requirement for sustainably developing our business. We recognize that the diversity, health and safety of our employees is critical to our success.

Employee Engagement

At Altra, we recognize that our employees are among the most valuable of our assets. To ensure that employees are heard, Altra has initiated an annual engagement survey which solicits candid feedback from Altra’s team. Each employee is strongly encouraged to participate in the survey which is administered by a third-party to ensure complete anonymity. On average, approximately 78% of Altra team members have responded to the surveys.

Through the engagement surveys, Altra has learned that the vast majority of employees feel supported by leadership, have a clear understanding of expectations, and feel they are part of a team. We have also received valuable and targeted input about potential opportunities for improvement that the company has and will continue to act upon. In addition to the engagement survey, our businesses conduct periodic reviews and pulse surveys to gauge employee satisfaction and identify shortfalls. These localized efforts help to address a variety of topics that may arise within the individual businesses.

We believe that a foundation of understanding and commitment to change is what supports lean growth and continuous improvement. As always, our focus remains with our employees and our customers. Altra continues to strive for improved flow of value to our customers by leveraging a work environment that stimulates and fully develops the capabilities of our employees.

Education and Training

Further, in an effort to optimize business practices, reduce risk, and provide our employees with the tools they need to drive success, Altra conducts periodic Anti-Corruption/Anti-Bribery Training during which employees receiving training to certify compliance with those policies. Altra’s General Counsel serves as the executive primarily responsible for the Anti-Corruption/Anti-Bribery training program and makes periodic reports to the Chief Executive Officer.

In connection with our efforts in this area, we have adopted the following:

Governance

Primary responsibility for our corporate governance practices rests with the Nominating and Corporate Governance Committee (Governance Committee) of our Board of Directors (Board). The Governance Committee is responsible for, among other things:

Overseeing Altra’s policies and procedures for our Board’s nomination of persons to stand for election to serve on our Board by stockholders and consideration of any stockholder nominations of persons to stand for election to our Board

Identifying, screening and reviewing individuals qualified to serve as directors and recommending candidates for nomination for election or to fill vacancies

Reviewing annually the composition and size of our Board

Aiding our Board and our Board’s committees in their annual self-evaluations

Developing, recommending and overseeing implementation of our corporate governance guidelines and principles

Reviewing, monitoring and addressing conflicts of interest of directors and executive officers

Reviewing on a regular basis the overall corporate governance of Altra and recommending improvements when necessary

Some of the significant corporate governance practices that have been instituted by our Board at the recommendation of the Governance Committee are described and disclosed in our public filings with the U.S. Securities and Exchange Commission. Those filings can be accessed via the “Financials” tab within the “Investor Relations” section of our website.

In addition, and in connection with our efforts in this area, we have adopted the following: