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2016 SUSTAINABILITY REPORT

Understanding our impact to
enhance operational efficiency
and conserve resources across
our operations.

Environmental Footprint
Understanding and mitigating our impact on the environment is an important part of our sustainability performance. Through our materiality assessment, we identified three main environmental topics of importance to our company and our stakeholders: Energy Consumption & Greenhouse Gas Emissions, Water, and Waste.
Energy Consumption & Greenhouse Gas Emissions

To enhance our company-wide efficiency, we first sought to understand our current energy performance and corresponding greenhouse gas (GHG) emissions. In Fiscal Year 2016 (FY16), we completed a comprehensive analysis of our carbon footprint. The analysis includes facilities with 5,000 square feet of space or more. Collectively, these 21 largest facilities represent over one million square feet across the United States, China, Finland, India and Norway. The data within this report reflects information from Calendar Year 2015 (CY15). Our carbon footprint analysis provided key information regarding electricity consumption, on-site fuel consumption for heating or manufacturing, and vehicle fuels.

By collecting key energy performance data, we determined the greenhouse gas emissions output associated with our operations for CY15. Our work serves as a baseline from which to measure future performance. By establishing this baseline, we can devise strategies to reduce our footprint. We plan to transition our data collection to our Fiscal Year schedule in upcoming reports to align with our financial reporting. We will compare our performance year-over-year to evaluate our progress.


Energy Consumption (MWh) in Calendar Year 2015

In CY15, we consumed approximately 45,000 MWh of energy at our largest facilities. Electricity accounts for more than 50% of this consumption, followed in significance by on-site fuel consumption used for heating and manufacturing purposes (i.e. heating oil, natural gas, and district heating). Due to the nature of our business, we attribute most of our total energy consumption to the energy intensive production processes that occur within our manufacturing facilities.

Electricity 24,918
District Heating 874
Heating Fuels 18,920
Heating Oil 190
Natural Gas 18,684
LPG/Propane 45
Vehicle Fuels 710
Diesel 87
Gasoline 483
LPG/Propane 140
Total Energy Consumption 45,422



Greenhouse Gas Emissions (MtCO2e) in Calendar Year 2015

In CY15, our greenhouse gas (GHG) emissions amounted to approximately 15,000 metric tons of CO2 equivalent (MtCO2e). Nearly 75 percent of these emissions are due to our electricity consumption, with an additional 23.7 percent coming from our on-site fuel consumption for heating and manufacturing purposes.

Direct Greenhouse Gas Emissions (Scope 1)1 3,717
Heating Fuels 3,443
Vehicle Fuels 167
Refrigerants and Process Emissions 107
Indirect Greenhouse Gas Emissions (Scope 2)2 11,571
Electricity3 11,377
District Heating 194
Greenhouse Gas Emissions4 15,288

1Scope 1: direct greenhouse gas emissions from sources owned or controlled by ESCO

2Scope 2: indirect greenhouse gas emissions from sources owned or controlled by another entity, as a consequence of ESCO’s activities

3The greenhouse gas emissions associated with electricity consumption are reported according to the «location-based» approach, as defined in the Greenhouse Gas Protocol Scope 2 Guidance. Value used as an approximation for the «market-based» emissions.

4Greenhouse gas inventory calculated in accordance with the WRI/WBCSD Greenhouse Gas Protocol


With these results in hand, we intend to establish our management approach and set goals for reducing our net impact. Currently, several of our subsidiaries engage in energy reduction initiatives, including efficient lighting and timing electrical usage to avoid peak demand hours. Certain subsidiaries operating in energy-challenged areas such as California also take on additional initiatives. For example, PTI plans to reduce its energy use by leveraging a 950-kilowatt solar power generation system to be installed in its parking area and rooftop. In its first year, this system expects to produce over 1.4 million kilowatt-hours of electricity.

Moving forward, we will explore opportunities to reduce our global footprint by means such as technological developments, improved processes, product management, consumption strategies, carbon offsetting and others.


Water

Water represents another area of environmental impact for which we need additional information to assess our current performance. Once we understand the extent of our water usage, we will determine any appropriate action. For instance, we recognize that several of our subsidiaries operate in the water scarce region of California. We commit to taking necessary steps to mitigate our impact and increase efficiencies across our business.


Waste

We believe sustainability requires continuous improvement. In conjunction with our ongoing work to track energy consumption and corresponding greenhouse gas emissions, we intend to gain a better understanding of our impacts regarding waste.

We will strive to continue evolving our practices to meet and exceed stakeholder expectations. Currently, some of our subsidiaries have initiatives to reduce waste streams. These initiatives include recycling a wide range of materials from office and manufacturing facilities.  Additionally, we are committed to responsible environmental management and prevention and mitigation of spills and releases. We discuss the risk factors of environmental matters within our 2016 Annual Report & Form 10-K.


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