Approach to ESG
Although Standex may be a 60-year-old company, we are in the relatively early years of transitioning from a decentralized holding company to an operating company structure. Prior to 2014, Standex operated as a decentralized portfolio management company opportunistically acquiring businesses that generated cash and later divesting or closing those that no longer met the company’s investment parameters. As a result, the vast majority of the 150 or so businesses we have acquired are no longer part of Standex.
In 2014, we committed ourselves to a strategy of building larger platform businesses as the foundation of the corporation. We are now focused on building lasting businesses with a sustainable business model that can achieve significant scale. In support of this strategy, we created the Standex Value Creation System, an operating model based on the four pillars of growth, talent management, operational excellence and our balanced plan performance system for establishing targets and regularly monitoring performance against such targets. In support of these pillars, every business is now responsible for developing a long-range plan that incorporates critical risks to its business model as well as mitigation plans to minimize the impact of such risks. We also have invested in critical corporate resources including professionals experienced in both organic and inorganic growth, a Vice President of Operational Excellence and Global Supply Chain to drive standard work in our plants and in supply chain, and, most recently, a Chief Information Officer to drive commonality and enhance the security of our IT systems.
We are committed to the principles of ESG as vital elements to assure viable long term healthy businesses. We believe as our external markets and our own businesses evolve, the nature of the risks, opportunities and challenges will also evolve, making this a never ending journey. During the past year, we have taken several steps on this journey. First, we have formalized responsibility for oversight of our ESG program with two of our board level committees. Our Nominating/Corporate Governance Committee charter has been revised to clearly articulate the responsibility of that committee for oversight of the company’s ESG strategy, while the charter of the Audit Committee has been revised to articulate the Audit Committee’s responsibility for oversight of the integrity of those ESG related metrics that we publicly disclose. Secondly, we have formed a management level ESG steering committee that consists of our Vice President/Chief Legal Officer, Vice President/Human Resources Officer, and our Vice President of Operations and Global Supply Chain. Together, this steering committee maintains management level responsibility for implementing the company’s ESG strategy. Finally, we have begun to collect and describe publicly the many positive activities that have already been ingrained in the Standex culture but were not previously called out as being ESG related. For example, we have highlighted our internal efforts with regard to examination and refinement of our corporate culture including matters relating to diversity and inclusion; we have described in greater detail the talent development process that we initially implemented several years ago and which we continue to improve upon today; we also have collected from our worldwide operations information on electricity, natural gas and water usage as well as the level of waste generated by our operations. As we move forward, we will be establishing specific goals for many of these activities and will be reporting our progress against those goals. During the next year, we also will be conducting a formal materiality assessment with the assistance of a third-party consultant. We will use the results of this analysis to further hone our ESG strategy and implementation. We also expect that, through this process, we will be able to determine which of the many ESG reporting frameworks is most pertinent to our company and our stakeholders and to adopt such framework going forward.
Each of the links set forth below will bring you to a page that articulates in greater detail the progress we have made and our expectations going forward with respect to each topic.