2023 CORPORATE SUSTAINABILITY REPORT ®
OUR APPROACH TO SUSTAINABILITY
Our Approach
SBP’s approach to sustainability and reporting is designed to be consistent with our Core Values, particularly to always do the right thing, even when it is hard; to give credit where credit is due; to use your influence to have a uniquely positive impact on people; and to live with intentionality, making progress on a wellconceived path.
About this Report
The Specialty Building Products, Inc. (SBP) 2023 Corporate Sustainability Report is our inaugural sustainability report. It demonstrates our commitment to keep internal and external stakeholders informed and provides an overview of policies, programs and progress around relevant social, governance and environmental issues. While we have worked on many of these initiatives for several years, we recognize that we are still in the early stages of building out our sustainability program. We plan to continue building on the initiatives reported this year. Unless otherwise noted, this report covers activities during calendar year 2023.
Topics in this report reflect a materiality assessment completed by SBP in 2023, which considered the Sustainability Accounting Standards Board (SASB) Multiline and Specialty Retailers & Distributors Standard and other leading frameworks.
Live with Intentionality. Make Sure Your Progress is on a Well-Conceived Path.
Always Do the Right Thing – Even When it is Hard.
OUR APPROACH
Use Your Influence To Have a Uniquely Positive Impact on People.
Give Credit Where Credit is Due. Most of the Credit is Not Due to You.
Forward-looking Statement
The matters discussed in this Report include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Statements that do not relate strictly to historical or current facts and use words such as “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should,” “will be,” “will continue,” “will likely result,” “would,” and similar expressions are forward-looking statements. These forward-looking statements may relate to, among other things, our goals and commitments, including those about our sustainability programs, initiatives, plans and projections, as well as our business outlook, priorities, expectations and intentions. Forward-looking statements are based on current management expectations, projections and assumptions that involve substantial risk and uncertainties, which could cause actual results to differ materially from results expressed in, or implied by these forwardlooking statements. Forward-looking statements speak only as of the date they are made, and we do not undertake to update any forwardlooking statements other than as required by law. As a result, readers are cautioned not to place undue reliance on the forward-looking statements.
A MESSAGE FROM OUR PRESIDENT AND CEO
I am proud to present Specialty Building Products’ (SBP) inaugural Corporate Sustainability Report highlighting our programs focused on our people, governance and environmental stewardship in 2023.
At SBP, we have a stewardship mindset: We believe that we are stewards of our company and its resources, and we are focused on building a sustainable business that positions current and future stakeholders for success. The public disclosures in this report are the result of progressing sustainability initiatives over many years in service of this stewardship mindset.
SBP is a critical link in the chain between manufacturers of specialty building products and our customers, and we are committed to being best-in-class in this business. At the same time, what really drives us is living our Core Values and making a positive difference in the lives of the people we interact with every day. This translates into striving for high performance on every project and developing trusting relationships with our coworkers,
customers, suppliers and communities. We believe our history of growth shows that living our Core Values and being financially and operationally successful are not in tension – they work together.
In 2023, our Core Values were active in programs that support the wellbeing, career development, engagement, community service work and safety of our employees. I was especially proud when we launched our Women in the Industry program designed to equip women in SBP to be company and industry leaders. We also implemented programs to reduce our carbon footprint by reducing greenhouse gas emissions from our facility operations and our fleet of delivery trucks. In addition to improving performance, many of these projects reduce our costs. Caring for our employees by serving the whole person, always doing the right thing and taking an intentional approach to reducing our impact on the environment are embedded in our culture and good for our business.
A HISTORY OF STRATEGIC GROWTH
The SBP management team and our Board of Directors take a multi-decade, holistic view of our business. We set strategy, make decisions and invest with the intent to be a sustainable business over time. I am grateful to our directors for their leadership and for sharing their knowledge and experiences with SBP. I am also grateful to SBP employees who give everything they have every day, strive to make progress for the right reasons and do the right thing, even when it is hard. True to our Core Values, I give credit where credit is due: to our highperforming team of SBP employees.
Thank you for taking the time to learn about how SBP is building a sustainable business.
Sincerely,
Jeff McLendon President and CEO
“
At SBP, we have a stewardship mindset: We believe that we are stewards of our company and its resources, and we are focused on building a sustainable business that positions current and future stakeholders for success.
– Jeff McLendon
Founded in Georgia as the Atlantic Trading Company & expanded into South Carolina and Alabama
Merged with Bestwood to form US. LUMBER: expanding to the Southeast & Mid-Atlantic
Acquired NILCO: expanding into the Midwest and OEM Services
Acquired Mid-State Lumber: expanding presence in the Mid-Atlantic and New England
Acquired Amerhart: expanding presence across the Midwest
Acquired Boston Cedar: expanding into New England
Acquired Alexandria Moulding: entering Canada and the Pacific Northwest
Acquired Dallas Wholesale: expanding into Texas and Oklahoma
Acquired Millwork Sales: expanding presence across Florida
Acquired Reeb: expanding presence across the East Coast and specialty doors
Acquired Midwest Lumber Company: significantly expanding presence
WHAT WE BELIEVE
SBP is a values-based organization and we seek to live our Core Values in our relationships with our employees, customers, suppliers and communities. We believe that maintaining this culture contributes to building a high-performance organization. We also believe that corporate sustainability goes handin-hand with our Core Values and overall management approach. We strive to be a responsible corporate citizen and work to leverage our sustainability efforts to develop a more resilient business, strengthen our reputation, reduce risk and drive long-term value creation.
OUR CORE VALUES
Who We Are and What We Believe
ETHOS What We Believe
• Always Do the Right Thing – Even When it is Hard.
• Give Credit Where Credit is Due. Most of the Credit is Not Due to You.
• Use Your Influence To Have a Uniquely Positive Impact on People.
COMMUNITY How We Treat Each Other
• Develop People by Serving the Whole Person.
• Be Consistently Responsive to Customers and Suppliers.
• Lead with Influence; not Position, Title or Tenure.
ATTITUDE How We Play The Game
• Live out Idealism. Don’t Settle.
• Live with Intentionality. Make Sure Your Progress is on a Well-Conceived Path.
• Don’t Finish Fresh. Give Everything You Have Every Day.
OUR CORE VALUES IN ACTION IN 2023
SBP believes that by maintaining a culture based on our Core Values, we are building a high-performance organization that can make a difference in our world one person at a time. Guided by our Core Values, SBP’s actions focused on our people, governance and environmental stewardship in 2023 included the following:
Positively impacting our people
Our employees bring their whole selves to work, and we respect the roles they have outside of the workplace. Our Core Values – to develop people by serving the whole person and to use our influence to have a uniquely positive impact on people – lead us to treat each employee as an individual with their own personal story, potential and development needs. In 2023, we supported the wellbeing, career development, engagement, community service work and safety of our employees, and expanded our Women in the Industry group. Serving the whole person also means that sending people home safely every day is our priority. To keep the focus on safety, we track performance and provide training, implement initiatives to prevent injuries and conduct facility inspections and audits.
High governance and ethics standards
SBP’s governance program incorporates several public company best practices, including having a Board of Directors composed of independent directors other than the CEO. We recruited directors with a breadth of backgrounds, experiences and perspectives to bring healthy discussion, diverse opinions and experiences and insightful feedback to our Board. Additionally, our Core Values, Code of Conduct and Ethics and other policies and procedures form the foundation of our efforts to operate with the highest degree of integrity and do the right thing, even when it is hard.
Environmental stewardship
We take our responsibility to steward natural resources seriously. SBP is committed to reducing greenhouse gas (GHG) emissions from our production and distribution facilities and our fleet of delivery trucks. In 2023, we focused on GHG emission reduction programs and started developing initiatives for 2024 and beyond. We also seek to partner with leading consumer brands of specialty building products that have initiatives focused on conservation, diverting waste from landfills and reducing their carbon footprint.
SBP AT A GLANCE
WHAT WE DO
Specialty Building Products, Inc., through our operating subsidiaries (collectively, “SBP”), is a leading distributor of specialty building products in North America. We are the critical link in the value chain between manufacturers of specialty products and customers. SBP offers sales, marketing and logistics solutions that bring a wide range of specialty building products to dealers serving the repair and remodel and new construction marketplaces.
SBP operates under the brands U.S. Lumber, Alexandria Moulding, REEB, Millwork Sales, DW and Amerhart. We sell best-in-class products from manufacturers such as Trex, James Hardie, Boral, and Louisiana-Pacific Corporation (LP). Our customers include local, regional and national building material dealers and home improvement retailers.
We aspire to be recognized as the most reliable, trusted and knowledgeable professionals in the business. Founded in 1987, SBP is based in Duluth, Georgia, and serves 41 states in the U.S. and all provinces in Canada from over 49 locations. At year-end 2023, SBP had approximately 4,600 employees in North America.
OUR BRANDS
U.S. LUMBER
Alexandria Moulding
DW Distribution
REEB
Millwork Sales
Amerhart
PEOPLE
FOSTERING A CARING CULTURE AND COMMUNITY
At SBP, we aim to serve the whole person and have a positive impact on their life, not just on their job and career. We believe the individual is more important than the job they do, and we treat each employee as an individual with their own story, potential and development needs.
In serving the whole person, our primary mission is to provide a safe workplace for our employees, vendors and customers. Our safety policies and programs are designed to send people home at the end of the day the same way they came to work in the morning.
In addition, SBP implements policies and programs to address our
employees’ needs and alleviate hardships. Our leaders are empowered to do what’s right for employees when appropriate under the circumstances, whether it is extending bereavement leave or providing personal time off if needed. By showing up for our employees, we foster a caring culture and community.
We seek to build a workforce with diverse perspectives and backgrounds that we strongly believe can enhance the company’s performance, as well as the employee experience. SBP actively seeks to maintain positive relationships with all our employees. Our ongoing dialogue with employees about workplace concerns includes employee engagement surveys and formal and informal conversations.
Health and Safety
Keeping our Teammates Safe
SBP strives to serve the health and safety needs of our employees at work and at home through our safety policies, training, and performance monitoring.
Safety Policies
SBP strives to serve the health and safety needs of our employees at work and at home through our safety policies, training, and performance monitoring.
Our Code of Conduct and Ethics details our expectation that managers and employees will abide by safety requirements and regulations and work to eliminate unsafe conditions and minimize related risks. SBP provides extensive resources to help employees prevent incidents and injuries, including a safety manual, which is updated annually. This manual includes our general safety policy and philosophy as well as specific policies around hot work, incident response, working at height and more.
Safety Training and Programs
SBP requires safety training for production facility employees. These trainings increased from two required safety topics per month in 2023 to three topics per month in 2024. Commercial drivers receive job-specific training and are eligible for quarterly safety incentive rewards. For drivers with outstanding safety records, SBP recognizes them in a Hall of Fame and offers cash bonuses which increase based on length of safe driving record.
To foster employee engagement in safety at our facilities, we seek broad participation on local safety committees and in monthly safety meetings. The goal of this engagement is to gather different perspectives and proactively identify and remediate potential issues. These meetings are documented and reported for ongoing monitoring and accountability. Outside of the safety meetings, we encourage reporting by providing a QR code that employees can scan to anonymously report safety and environmental concerns and near misses.
Local managers conduct monthly safety inspections and quarterly inspections at our facilities. Annual facility audits encompass a review of documentation, general practices and policies to reinforce our safety expectations with local managers. Action items that result from inspections and audits are reported and tracked in our Safety Culture application.
Performance
SBP monitors safety performance by tracking the Total Recordable Incident Rate (TRIR) and Days Away, Restricted or Transferred Rate (DART), key Occupational Health and Safety Administration (OSHA)
lagging indicators. For full year 2023, our TRIR was 4.89 and our DART was 3.51. We also track leading indicators, including near misses, training and new certifications for cardiopulmonary resuscitation (CPR), forklift operation and other safety skills. SBP incentivizes and rewards safe behavior through an annual best branch award.
Our 2024 safety initiatives include focusing on preventing falls on icy surfaces and providing high-visibility clothing to facility employees. In addition, we plan to add regional safety directors as needed throughout our operations.
Our Safety Program focuses on sending people home safely every day and includes:
• Updated safety manual released annually
• Track safety indicators
• Safety goals, initiatives and incentives to reduce safety incidents
• Monthly safety training requirements for production facility employees
• Commercial driver safety training and incentive program
• Facility safety inspection and audit program
• Facility safety committees and monthly safety meetings
• Anonymous safety concern and near miss reporting tool
H&S Training Compliance Table
DELIVERY DRIVERS AND THEIR SAFETY
ARE CRITICAL TO SBP’S SUCCESS
SBP’s driver incentive program for its commercial truck drivers is designed to promote safe driving behaviors and prevent accidents. The driver incentive program includes:
• Bi-annual gift recognition
• Hall of Fame recognition
• Bonus of $2,500 for five years and up to $15,000 for 30 years without a disqualifying event
• SBP Kickoff Classic conference invitation for driver and their family
EMPLOYEE SPOTLIGHT
Lee Caven – Hall of Fame recipient for 2023
During a span of 20 years, Lee Cavin logged around 1.8 million miles delivering Alexandria Moulding products to our customers. Lee drove through rain, snow and ice without a disqualifying event, while building deep relationships with customers who have become his extended family. When he is not dedicating his time to community service, Lee loves traveling to Belize with his wife, Debbie, scuba diving and riding his motorcycle.
As part of our driver incentive program, SBP was proud to add Lee to our commercial driver Hall of Fame and recognize his accomplishments at our Kickoff Classic conference in 2023. Our driver incentive program promotes safe driving behaviors and accident prevention with financial bonuses of $2,500 for five years and up to $15,000 for 30 years without a disqualifying event and Hall of Fame recognition.
Employee Programs
Taking Care of our Employees
We demonstrate our Core Value – using influence to have a uniquely positive impact on people – through programs that strengthen connections, empower employees and inspire service within SBP and in our communities. These programs focus on key aspects of professional and personal wellbeing, such as wellness, talent and leadership development, volunteerism and charitable giving. We believe these programs can have a positive impact on our employees’ lives.
Employee Wellness Programs
SBP’s voluntary Thrive program encourages wellness and service for both full-time and part-time employees. We launched Thrive in 2021 to give back to employees in ways that are meaningful to them. Thrive focuses on the eight dimensions of wellness: emotional, environmental, financial, intellectual, social, occupational, physical and spiritual. Each month, employees can access resources, activities and challenges through our Thrive app. They can also participate in branch initiatives centered on one or two wellness dimensions. For example, to encourage employees to get moving, we launched Battle of the Brands in January 2023. Employees in each of our operating brands tracked their progress with walking, weightlifting and other physical activities in a friendly competition won by Alexandria Moulding. The second Battle of the Brands is planned for the summer of 2024.
Also, each year we have a Thrive service month in November during which we encourage and promote service initiatives by our branches and employees. As part of a Thrive service project during cancer awareness month, we sold Thrive t-shirts and donated proceeds to five nonprofit cancer organizations. Employees earn Thrive points for a wide variety of actions, from getting preventive health screenings to exercising. In 2023, we started integrating Thrive with Kudos, our employee recognition program. Employees can transfer their Thrive points into Kudos to redeem gift cards, entertainment tickets and other rewards. We continue to enhance and integrate Thrive based on employee feedback and are excited to watch it evolve and enrich our employees’ lives.
Employee Development
We believe our commitment to serving the whole person and the resources we invest across the organization help us attract and retain talent. We have several programs to support our employees on their development journey:
Leadership Institute: We encourage employees to lead with influence, not based on position, title or tenure. Our annual Leadership Institute brings together about 60 aspiring leaders in facilitated sessions to learn about our culture and foster a sense of responsibility to each other. We are expanding our vision of the Leadership Institute to include a variety of leadership programs, with the goal of reaching more of our employees.
Camp Highland: Employees who are early in their careers have the opportunity to participate in a talent development program that connects them with our leaders at Camp Highland in Ellijay, Georgia. By staying in community cabins and participating in team-building activities, participants learn about our culture and receive mentoring from senior leaders. In 2023, 50 employees from across the company attended Camp Highland.
Kickoff Classic: We hold our companywide Kickoff Classic conference each year to share our culture, connect and hear business updates and inspirational messages from SBP’s senior leaders. In the spirit of giving back, we take time for a Thrive activity to serve our community during the conference.
Over 950 employees – or about one-quarter of SBP’s workforce – attended the 2023 conference.
Top: SBP employees participate in a ropes course with leaders at Camp Highland in Ellijay, Georgia in 2023. This activity provided a fun, interactive day to build community among participants and an opportunity to connect with SBP leaders outside of the office.
Bottom row: Giving back is part of our annual Kickoff Classic conference. In 2023, attendees played games at Turner Field in Atlanta, Georgia, and donated the money they won to the Atlanta Braves Foundation, which donated the money to three separate non-profits: the Youth Baseball and Softball Organization, The Adopt a School Organization, and their Children’s Hospital fund.
WOMEN IN THE INDUSTRY
Amplifying Women’s Voices in our Company and Industry
SBP’s CEO and senior leaders recognize that women may face unique challenges in the building products industry, given the nature of the industry and historical composition of the workforce. In an effort to live up to the value of serving the whole person, SBP committed to shining a light on women in the industry and investing in women working at SBP. After the CEO personally advocated for the creation of a Women In the Industry group in 2022, it grew into a well-recognized company-wide program in 2023.
Participation is voluntary, and participants choose their level of engagement. Through quarterly, primarily virtual meetings and a newsletter, the participants discuss how to navigate the industry and their careers and other topics of their choosing. For instance, the group invited a few of its board members to share their experiences making work and life choices.
In its first year, 110 women were involved in Women in the Industry. In 2023, we piloted a mentoring program for cross-functional collaboration. In 2024, we are creating a committee structure to improve the group’s planning capabilities and to expand its influence through more involvement. We believe that investing in women in our workforce will help us better recognize and serve the needs of our workforce, families, communities, customers, industry and the broader marketplace.
“
A woman who comes into our legacy male-dominated industry has a different journey than a man in this industry. We need to support our potential women leaders differently and give them the skills, encouragement and role models they need. We don’t believe everyone is the same and we want to give individuals what they need to succeed and grow.
– President and CEO Jeff McLendon
Employee Hardship Program
We created Impact in 2021 to support employees who experience financial hardships, such as losing or sustaining damage to a residence, having a death in the immediate family, becoming a victim of violence or incurring emergency travel expenses. Impact operates through a 501(c)(3) organization formed by SBP to administer the program, and SBP pays the administrative costs of the organization. The 501(c)(3) organization’s board of directors provides oversight of Impact program administration and selects grant recipients from among anonymized applications. The Impact program is funded primarily by SBP’s senior management, and other SBP employees can also donate directly to Impact.
In 2023, Impact raised over $75,800 and provided 51 grants totaling over $130,200 (using funds raised in 2023 and prior years) benefiting 45 employees. Of these grants in 2023, 11 grants were given due to death of an employee or immediate family member, 16 grants were given due to a medical event experienced by an employee or family member, seven grants were given for emergency travel experienced by an employee or immediate family member and 17 grants were given due to a major loss or damage to an employee or immediate family member’s residence.
Employee Engagement
SBP conducted our first employee engagement survey in April 2023 to hear the voice of our employees. We received responses from 72% of our employees. We plan to continue to seek feedback from our employees through formal surveys as well as informal conversations.
Community Programs
Being of Service to Others
We strive to make a difference in our world one person at a time. To nurture a spirit of giving, SBP’s Serve program, an initiative of Thrive, provides all employees with 16 hours of paid time off each year to volunteer for nonprofit organizations. The company also matches employee contributions to 501(c) (3) organizations up to $1,000 per year. To further encourage giving back to our communities, our Thrive wellness program and Kickoff Classic conference offer opportunities to donate to charitable organizations. Through volunteerism and the Company match, SBP supported organizations, such as Camp Prime Time, Duluth Co-Op, Toys for Tots, Kidz2Leaders, WalkMS, the Alzheimer’s Association, and Habitat for Humanity.
2023 Serve Program Statistics
$55,100+ RAISED/MATCHED
$130,200 2023 GRANT
TOTAL
45 EMPLOYEES BENEFITTED 51 GRANTS AWARDED
2,300 VOLUNTEER HOURS
GOVERNANCE
DOING BUSINESS IN AN HONEST AND ETHICAL MANNER
The SBP governance philosophy aligns with our Core Value to always do the right thing, even when it is hard. Operating with integrity is core to who we are and our stewardship approach. We expect the conduct of each SBP employee to reflect the company’s values, demonstrate ethical leadership and promote a work environment that fosters integrity, ethical conduct and trust.
Our governance structure, policies and programs are designed to incorporate several requirements and best practices of public company governance, including the composition and function of our Board of Directors (Board) and whistleblower tools. Our Code of Business Conduct and Ethics (Ethics Code), together with our Core Values and other corporate policies, are the foundation for building a high-performance organization that operates with a high degree of integrity.
Board of Directors
Maintaining a Best-in-Class Board of Directors
We invested significant time, effort and intention to identify a group of highly qualified individuals with a diversity of experiences and perspectives to serve on our Board. The SBP Board is composed of independent directors, with the exception of our CEO, and our directors bring a wide range of industry, financial, public company and social leadership experiences to SBP. We believe their mix of backgrounds, talents, experiences and perspectives contributes to our Board functioning at a high level.
The Board’s three standing committees – Audit, Compensation, and Nominating & Governance – are chaired by independent directors. The Nominating & Governance Committee has oversight responsibility for SBP’s sustainability efforts, including our sustainability strategy. Additionally, SBP’s Legal Department reports our progress on our sustainability initiatives to this committee at least twice per year.
Data Privacy and Cybersecurity
Applying Leading Cybersecurity Practices
Safeguarding our information networks, infrastructure, systems, applications and data is a priority for our business. Our Board oversees our risk management program including cybersecurity risks. The Board receives reports on our cybersecurity systems, tools, risk profile, security assessments and initiatives from our management as part of our enterprise risk management program. Our Audit Committee also has oversight of our cybersecurity strategy and receives periodic reports and updates on these cybersecurity topics.
Cybersecurity
SBP implements several industry best practices for managing cybersecurity risks, including recurring third-party assessments of our IT systems, annual penetration testing, and a systems control security assessment of our equipment and machinery. We also maintain an incident response plan with established procedures to immediately respond to and contain cybersecurity incidents.
As a growth-oriented company, we deploy and maintain a migration playbook to efficiently and securely integrate acquired companies into our enterprise systems. The goal of this process is to ensure the acquired company meets SBP’s cybersecurity standards.
Data Protection and Training
SBP explains our expectations for data privacy and confidentiality in both our employee Ethics Code and our Supplier Code of Conduct (Supplier Code). Our corporate employees take security awareness training when they are hired, recurring refresher trainings and additional random phishing simulation exercises. In 2023, the completion rate for our cybersecurity training was approximately 90%.
Business Ethics
Creating a Culture Focused on Ethics and Trust
SBP is committed to doing business with integrity to maintain strong and trusting relationships with our employees, customers, suppliers, community partners and other stakeholders. Our General Counsel and Chief Human Resources Officer (CHRO), who report directly to the CEO, are responsible for our ethics and compliance program, including the Ethics Code, related training and anonymous whistleblower hotline. The General Counsel and CHRO periodically report on our whistleblower program and Ethics Code to the Board.
As one of our Core Values, we believe you should always do the right thing, even when it is hard, and we have adopted our Ethics Code as an embodiment of this Core Value. The Ethics Code guides all SBP officers, employees, directors and suppliers in maintaining a safe and respectful workplace, legal and regulatory compliance, equal opportunity, fair and ethical business practices free of corruption and bribery, environmental responsibility, confidentiality, and integrity in our financial controls and reporting.
Ethics Code Compliance
All employees are expected to know and understand the policies and guidelines in the Ethics Code. Employees review and acknowledge the Ethics Code when they join SBP and take periodic online refresher training. The total completion rate for our Ethics Code training was nearly 98% in 2023. To foster a workplace where differences are embraced and each person feels respected and valued, we plan to introduce anti-harassment and anti-discrimination training for all employees in 2024.
Ethics Hotline
We expect employees to raise ethical concerns and to report potential Ethics Code violations promptly, completely and honestly. SBP prohibits retaliation for reports made in good faith. Depending on the question or concern, employees are encouraged to speak first with their immediate supervisor or manager. Additional options to report issues, concerns or apparent misconduct include the following:
• A Human Resources representative or member of senior leadership
• Our confidential 24-hour Ethics Hotline at 1-844-912-0186 or online at https://www.sbp.ethicspoint.com, where employees can choose to report anonymously
The SBP Code of Conduct and Ethics describes our guiding principles and expectations
• Working Safely
• Keeping Our Workplace Safe
• Drug and Alcohol-Free Workplaces
• Treating Everyone with Respect
• Prohibiting Retaliation
• Respect in the Workplace
• Equal Opportunity
• Protecting Our Assets
• Conflicts of Interest
• Environmental Responsibility
• Ethical Competition
• Corruption and Bribery
• Financial Integrity and Reporting
• Confidentiality, Privacy and Information Protection
• Gifts and Entertainment
• Engaging in Social Media
• Use of Company Supplied Technology
ENVIRONMENTAL STEWARDSHIP
STRIVING TO LIMIT OUR IMPACT ON OUR PLANET
Operating efficiently is good for our business and for environmental sustainability. We take seriously our responsibility to be stewards of our natural resources and affirm our commitment to environmentally sound business practices in our Code of Conduct and Ethics. SBP complies with applicable environmental laws, regulations, standards and guidelines and expects our suppliers to be in compliance as well, as described in our Supplier Code of Conduct (Supplier Code).
One of our focus areas is to reduce GHG emissions from our production and distribution facilities and our fleet of delivery trucks. We measure our carbon footprint and are developing initiatives to reduce GHG emissions from our facilities and fleet.
SBP seeks to work with suppliers who share our commitment to environmental stewardship. We partner with leading consumer brands of specialty building products, such as Trex and Louisiana-Pacific (LP), that have established initiatives focused on conservation, waste diversion from landfills and carbon footprint reduction as they develop durable products primarily from recycled materials. Our sales force works to educate customers about the benefits of sustainable specialty building products. Many of our wood-based products are sourced from ARAUCO, Louisiana-Pacific and other suppliers that report engaging in certified sustainable forestry practices.
SBP is committed to reducing costs as well as our carbon footprint by reducing GHG emissions from our facility operations and our fleet of delivery trucks. For example, we have:
Improved energy efficiency by using energyefficient equipment such as LED lighting, motion-sensing lighting and high-efficiency heating, ventilation and air conditioning (HVAC) systems at new facilities in Wilkes Barre, Pennsylvania, and Winder, Georgia.
Converted approximately 50 forklifts from propane gas to electricity, adding to the fleet of electric forklifts we gained from acquisitions. We are now studying the total opportunity cost of converting more of our forklifts to electricpowered.
Used route optimization software to identify routes that are fuel efficient and reduce idle time for our delivery trucks, while also encouraging safe driving and reducing costs.
U.S. Lumber reduced its overall truck mileage approximately 30% after implementing route optimization software. We plan to roll out this software to three brands in 2024 and will monitor key indicators to gauge the benefits of reducing our truck mileage.
There are benefits and efficiencies captured by these initiatives, in addition to reducing emissions. For example, brighter lighting reduces eye strain for employees; more efficient routes reduce drive times for drivers; and electric forklifts improve indoor air quality in warehouses.
Operations, Facilities and Energy Management
Steward Our Shared Natural Resources
At year-end 2023, SBP owned or leased over approximately 70 warehouses, offices, product storage facilities and other properties in the U.S. and Canada.
In addition, we have active environmental stewardship initiatives to reduce waste and increase environmental transparency. At our facility in Winder we are piloting a process for separating materials such as paper, plastic and wood products from other waste for recycling. This pilot is aimed at identifying environmentally responsible waste management programs that reduce expenses and can be expanded to other SBP facilities. We are also developing an environmental management system (EMS) with simplified reporting and visibility for employees. The EMS is designed to build on the transparency we already provide through our anonymous reporting process for environmental incidents.
LED Conversions Save Energy and Lower Costs
Since 2021, our Alexandria Moulding brand has retrofitted one production facility and one distribution center with over 1,500 LED and LED-equivalent light fixtures across both facilities. Alexandria Moulding started replacing tube lights with LED equivalents at a third facility in late 2023. All three facilities are located in Ontario, Canada.
Building our Baseline
SBP is collecting data to establish the foundation for future environmental objectives by:
• Working to track annual energy purchasing and use in our facilities and integrating new acquisitions into our data collection process to enhance our energy management capabilities and lower our energy costs.
• Measuring our Scope 1 and Scope 2 GHG emissions annually.
Managing GHG Emissions
SBP understands the importance of stewarding our natural resources. We began measuring our Scope 1 and Scope 2 GHG emissions in 2022. We expect that tracking our GHG emissions will help us better understand the impact of our business and sustainability initiatives, such as energy efficiency projects at our facilities, delivery truck route optimization and forklift electrification.
SUPPLIER SPOTLIGHT
LP Building Solutions Sustainability and Resilience
SBP is a leading distributor of engineered lumber products from suppliers such as LP, a building solutions company. LP® products provide builders with a durable alternative to nonrenewable, energy-intensive concrete products. LP has demonstrated that their engineered products, such as LP® SmartSide® Trim & Siding, are carbon negative, which means these products store more carbon than is released during their entire life cycle. LP’s high-quality building products are designed for performance and engineered to be resilient and durable, with additional moisture resistance, bolstered strength and energy saving features.
As an early adopter of Sustainable Forestry Initiative® (SFI®) standards, LP achieved their first certification in 2000. This assures customers that 100% of the wood fiber LP sources in the U.S. and Canada is vetted through the forest certification program. LP won the SFI® President’s Award for 2022, recognizing the company for longstanding leadership in sustainable forestry. In South America, LP’s wood fiber has long been sourced to Programme for the Endorsement of Forest Certification (PEFC®) standards. The SFI and PEFC programs, which require wood fiber to meet stringent criteria, work to help prevent deforestation and promote long-term forest health.
SBP is committed to continuing efforts to reduce emissions from our facilities and fleet to mitigate business risk and position our business for long-term success. We are continuously evaluating opportunities and developing initiatives in support of this goal.
Advancing Product Sustainability and Responsible Forestry in our Supply Chain
We seek to work with suppliers that align with our values. We evaluate and screen suppliers to determine if they adhere to applicable legal requirements and expect them to hold the same ethical standards that we follow. Our Supplier Code, which we communicate to suppliers, details our expectations around compliance with legal and ethical principles, such as business ethics, worker rights, anticorruption, privacy and conflicts of interest.
We have long-standing relationships built on trust with our key suppliers. We regularly review and evaluate performance of our key suppliers to confirm they are meeting our and our customers’ expectations.
Many of our key suppliers of wood products, such as AURACO, LP, Pacific Wood Tech and Sierra Pacific, have implemented forestry management practices and maintain forestry management certifications.
Trex Company, Inc.
Turning Trash Into Treasure
Trex is a leading producer worldwide of low-maintenance, high-performance composite decking and railing products for the residential market. The composite decking material is an innovative blend of 95% recycled polyethylene film and reclaimed wood that combines the look of real wood with superior durability. Once installed, these wood-alternative decks are designed to last for decades without warping, rotting, fading or needing to be resealed.
Trex credits their success to their brand strength, product quality and sustainability credentials. The company continues to look for novel sources of single-use plastic waste to manufacture their expanding range of
eco-friendly decking and outdoor products. They proactively explore new techniques to incorporate more challenging-to-recycle waste materials into the raw material mix, ensuring a steady supply of plastic waste for future operations.
Trex has received industry recognition for product sustainability, consumer trust and other factors over the years, including ranking No. 6 on the Industry Week list of 50 Best U.S. Manufacturers in 2022, their first year of eligibility.
SBP is proud to be a leading distributor of Trex’s composite decking and railing products in the geographic markets where we operate.