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2016 SUSTAINABILITY REPORT

Ensuring a culture of responsibility,
integrity and accountability across
our organization and promoting
ethical behavior.

Ethics & Compliance
At ESCO Technologies, all of our practices originate from an unwavering commitment to ethics. Our belief in doing the right thing leads to responsible behavior with financial, social and environmental benefits. Our chairman and senior leadership reinforce ethics as an important and constant element of our corporate character.
Creating a Culture of Integrity

ESCO’s expectations for employee ethical behavior are evident at every level of our organization. Each operating subsidiary has a designated ethics officer who oversees adherence to our ethics policies. Additionally, we mandate annual employee training on ethics at both the corporate and subsidiary levels.

If an issue does arise, all ESCO employees have access to multiple reporting channels. These channels include contacting their direct supervisor, individuals in their chain of command, their human resources department, their local and/or corporate ethics officer, and our confidential ethics hotline. Our corporate ethics ombudsman oversees the hotline and ensures all callers to the hotline have the option to report anonymously, to the extent allowed by law. This effectively protects employees from fear of retaliation. Additional resources for reporting ethics concerns are available on p. 10 of our Code of Business Conduct & Ethics.


ESCO Corporate Ethics Committee

At the executive level, our Corporate Ethics Committee is responsible for monitoring and addressing all potential ethics-related risks. The four committee members include:

  • Senior Vice President, Secretary and General Counsel
  • Vice President of Human Resources
  • Vice President of Planning & Development
  • Ethics Ombudsman

The Committee meets quarterly to review ethics complaints and ensure consistent and adequate corrective actions. To educate our employees, ESCO posts a biannual summary of disciplinary actions resulting from ethics issues at all facilities and subsidiaries. We are careful to keep all identifying information private. Every quarter, the Committee also provides ethics reports to ESCO’s Nominating and Corporate Governance Committee, who actively engage in conversations about our disciplinary action program. This program also covers accounting and financial reporting irregularities. 


Ethics Policies & Codes

ESCO’s Code of Business Conduct & Ethics sets the tone for our culture of responsibility. We continually reinforce this commitment through regular internal communications and highlight it in our conversations with investors.

This broad set of standards includes:

  • Prohibition of conflicts of interest
  • Protection and proper use of ESCO assets
  • Duty to act with integrity and deal fairly when representing the company
  • Prohibition of improper political payments
  • Duty to comply with applicable laws including insider trading, antitrust, export controls, trade embargoes
    and anti-boycott
  • Duty to make public disclosures required by securities laws and to maintain accurate financial records
  • Duty to comply with applicable employment and safety policies
  • Duty to report suspected non-compliance

Our Code of Ethics for Senior Financial Officers acts as a supplement to the company code. Its purpose is to promote honest and ethical conduct and compliance by senior persons performing financial duties for the company. We require our leaders to:  

  • Provide full, fair, accurate, timely and understandable disclosure in SEC filings
  • Bring any potentially fraudulent activity to the Audit and Finance Committee
  • Report any deficiencies in internal controls for financial data and reporting
  • Bring to attention any potential violations of securities or other laws

Governance for Compliance & Disclosure

ESCO has a Disclosure Committee comprised of key corporate leaders that review a number of financially material issues on a quarterly basis. The members of this Committee include the General Counsel, Chief Financial Officer, Corporate Controller and two of the Assistant General Counsels. The Corporate Controller sends each operating subsidiary a quarterly checklist where they must identify if any of 35 events have occurred. These events are taken from SEC guidance and constitute disclosure scenarios which if they occur could potentially alter the decisions of a reasonable investor.  The Committee reviews each subsidiary checklist and discusses whether any committee member is aware of any other potential disclosure items. Minutes are kept of each meeting.

Many of our subsidiaries operate within highly regulated industries. We seek to anticipate forthcoming regulations and comply with existing ones. Each quarter our SVP, Secretary and General Counsel meets with our auditors to review all outstanding claims, litigation or ethics issues which could have a financially material impact on our business.


Corporate Resources

Corporate Resources


Code of Ethics for
Senior Financial Officers

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