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 well-conceived path.
About this Report
This Specialty Building Products, Inc. (SBP) 2024 Corporate Sustainability Report demonstrates our commitment to keep internal and external stakeholders informed and provides an overview of policies, programs and progress around our 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 2024.
Topics in this report align with 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. The
Live with Intentionality. Make Sure Your Progress is on a WellConceived Path.
Always Do the Right Thing – Even When it is Hard.
inclusion of information in this report should not be construed as a characterization regarding the financial materiality or financial impact of that information. Further, in this report, we are not using terms such as “material” or “materiality” as they are used under the securities or other laws of the United States or any other jurisdiction, or as they are used in the context of financial statements and financial reporting. Materiality, for the purposes of this document should not, therefore, be read as equating to any use of the word in our other reporting or statements.
Forward-looking Statement
The matters discussed in this Report include forwardlooking 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,”
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.
“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 forward-looking statements. Forwardlooking statements speak only as of the date they are made, and we do not undertake to update any forward-looking 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
It is my pleasure to present Specialty Building Products’ (SBP) annual Corporate Sustainability Report highlighting our programs focused on our people, governance and environmental stewardship in 2024.
At SBP, we believe that we are stewards of our company and its resources, and we are focused on building a sustainable business that positions stakeholders for success today and into the future. I am proud of the public disclosures in this report, which are the result of progressing sustainability initiatives over many years in service of this stewardship mindset.
As a vital link in the chain between manufacturers of specialty building products and our customers, SBP is committed to being best-in-class in this business. What really drives us, however, 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 that living our Core Values and being financially and operationally successful are not in tension – they work together, as our history of growth demonstrates.
In 2024, our Core Values were active in programs that support the wellbeing, career development, engagement, community service work and safety of our employees. We invested in additional safety equipment for employees who unload railcars at all 20 SBP facilities with railcar unloading operations. As part of our commitment to employee engagement, we conducted companywide virtual quarterly town hall meetings and introduced our first companywide employee handbook. SBP also continued to identify scalable solutions to reduce our carbon footprint. These include projects to cut emissions from our facility operations, fleet of forklifts and delivery trucks, as well as the implementation of an energy management software to facilitate collecting and analyzing energy consumption data. In addition to addressing environmental impact, many of these projects are designed to reduce our costs and improve employee safety and wellbeing. 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 integral to our culture and good for our business.
The SBP management team and our Board of Directors have a multi-decade, holistic view of our business. Our strategy, decisions and investments are intended to build a business that is sustainable over time. I would like to thank our directors for their leadership and for sharing their valuable knowledge and experiences with SBP. In addition, I am grateful to SBP employees for giving everything they have every day and striving to make progress for the right reasons. 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 the actions we are taking at SBP to build a sustainable business.
Sincerely,
Jeff McLendon President and CEO
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, 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 operates a national distribution platform serving 41 states in the U.S. and all provinces in Canada from 49 locations. At year-end 2024, SBP had 4,338 employees in North America.
Our Brands
U.S. Lumber
Alexandra Moulding
REEB
DW Distribution
Millwork Sales
Amerhart
A History of Strategic Growth
1987
Founded in Georgia as the Atlantic Trading Company & expanded into South Carolina and Alabama
2016
Acquired Boston Cedar: expanding into New England
2018
Acquired Midwest Lumber Company: significantly expanding presence
2020
Acquired Mid-State Lumber: expanding presence in the Mid-Atlantic and New England
2021
Acquired Reeb: expanding presence across the East Coast and specialty doors
1998
Merged with Bestwood to form US. LUMBER: expanding to the Southeast & MidAtlantic
2017
Acquired NILCO: expanding into the Midwest and OEM Services
2021
Acquired Dallas Wholesale: expanding into Texas and Oklahoma
2021
Acquired Millwork Sales: expanding presence across Florida
2023
Acquired Amerhart: expanding presence across the Midwest
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 hand-in-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.
Ethos
What We Believe
Community
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.
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 WellConceived Path.
Don’t Finish Fresh. Give Everything You Have Every Day.
Our Core Values in Action in 2024
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 2024 included the following:
Positively Impact 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 person as an individual with their own personal story, potential and development needs. In 2024, we supported the wellbeing, career development, engagement, community service work and safety of our employees, and broadened leadership opportunities and programming in our Women in the Industry group. We initiated companywide virtual quarterly town hall meetings to engage employees and reinforce our values, released our first companywide employee handbook and conducted our second employee engagement survey. In addition, SBP employees reported a total of 2,245 service hours in support of community organizations.
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, provide training, implement initiatives to prevent injuries and conduct facility inspections and audits. In 2024, SBP made significant additional investments in providing safety equipment for employees who unload railcars at all 20 of our facilities with railcar unloading operations. We also began offering monthly personal health and safety training for topics such as heart health awareness, stress management and the dangers of texting while driving and drinking while driving.
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, a variety of opinions and experiences and insightful feedback to our Board. Additionally, our Core Values, Code of Business 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. In 2024, SBP formalized our Supplier Code of Conduct (Supplier Code) and communicated it to our suppliers and vendors to reinforce our standards and expectations. In addition, we conducted an executive response tabletop exercise relating to our cybersecurity incident response plan.
Environmental Stewardship
We take our responsibility to steward natural resources seriously. In 2024, we implemented initiatives focused on GHG emission reduction relating to our production and distribution facilities and our fleet of delivery trucks and forklifts. We plan to continue to develop initiatives for 2025 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.
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 various perspectives and backgrounds that we strongly believe can enhance the company’s performance, as well as employee experience. SBP actively seeks to maintain positive relationships with all our employees. Our ongoing dialogue with employees about workplace concerns includes town hall meetings, 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
Our Code of Business Conduct and Ethics (Ethics Code) 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. In 2024, we provided additional quarterly training and materials aimed at preventing hand, foot, back and shoulder injuries. Also in 2024, as part of our commitment to serve the whole person, we offered monthly personal health and safety training for topics such as heart health awareness, stress management, fireworks safety, and the dangers of texting while driving and drinking while driving.
At our Alexandria Moulding brand, we implemented ergonomic reviews and assessments of certain facility tasks and activities, which included reviewing orderpicking processes for bins above shoulder height to reduce injuries. As a result of this review, Alexandria Moulding established weight thresholds and optimized the layout for frequently accessed heavy items. Additionally, to prevent repetitive motion strain
Investing in employee safety
In 2024, SBP made a significant investment in safety equipment for our employees who unload railcars. We equipped our facilities with cable dominators that allow employees to release cables using a forklift instead of climbing on the railcar, increasing both safety and efficiency. Cable dominators have been provided to all 20 of our facilities that unload railcars.
and shoulder injuries at the brand’s production facility, we installed an automated machine for material handling that prevents workers from lifting heavy pieces of lumber frequently.
We have also implemented initiatives to incentivize and foster safe driving from our fleet vehicle drivers. Our commercial drivers receive job-specific training and are eligible for quarterly safety incentive rewards. SBP recognizes drivers with outstanding safety records in a Hall of Fame and offers cash bonuses which increase based on the length of record.
To foster employee engagement in safety at our facilities, we seek broad participation in local safety committees and monthly safety meetings. The goal of this engagement is to gather different perspectives
Our Safety Program focuses on sending people home safely every day and includes:
• Updated safety manual released annually
• Tracking leading and lagging safety indicators
• Safety goals, initiatives and incentives to reduce safety incidents
• Monthly safety training requirements for production and distribution facility employees
• Commercial driver safety training and incentive program
and proactively identify and remediate potential safety issues. Outside of the safety meetings, we encourage and facilitate safety-related reporting by providing a QR code that employees can scan to anonymously report safety and environmental concerns and near misses. We also established a “Safety Alert” communication group to assist in distributing safety-related information, such as incident details, inspection results and best practices, to our operations leadership.
SBP’s targeted facility inspection and audit program is designed to be efficient and to effectively address risks. Local managers conduct periodic safety inspections at our facilities, as well as facility audits encompassing a review of documentation, general practices and policies to reinforce our safety
• Facility safety inspection and audit program
• Facility safety committees and monthly safety meetings
• Designated “Safety Alert” communication group
• Tool for anonymously reporting safety concerns and near misses
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 the full year 2024, our TRIR improved to 4.50 compared to 4.89 in 2023. Our DART in 2024 improved to 2.83 compared to 3.51 in 2023. We also track leading indicators, including near misses, training and new certifications for safety skills such as cardiopulmonary resuscitation (CPR) and forklift operation. SBP incentivizes and rewards safe behavior through an annual best branch award.
Delivery Drivers and Their Safety are Critical to SBP’s Success
SBP’s driver incentive program for 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
Kenny Moser – Safe Driver Hall of Fame recipient for 2024
Kenny Moser has logged over 1.5 million miles delivering products to SBP customers. For 25 consecutive years, he safely and timely transported and delivered our products without a disqualifying event, while also building relationships and trust with our customers. When Kenny is not dedicating his time to his job, he loves traveling with his family, spending time with his grandchildren, hunting and fishing. SBP’s driver incentive program promotes safe driving behaviors and accident prevention with Hall of Fame recognition, as well as financial bonuses.
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, our culture, 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, our annual Battle of the Brands activity challenge encourages employees to get moving. Employees in each of our operating brands track their progress with walking, weightlifting and other physical activities in a friendly competition won by our REEB brand in 2024.
Each November, we hold a Thrive service month during which we encourage and promote service initiatives by our branches and employees. Branch support for a wide variety of service projects increased from 2023 to 2024. As part of a Thrive service project during Cancer Awareness Month in 2024, we sold Thrive t-shirts and donated proceeds to five nonprofit cancer organizations. For Cancer Awareness Month in 2025, our employee Thrive Champions (who promote Thrive across SBP) selected five cancer organizations to support and we expanded the types of items we sold to raise funds.
Employees earn Thrive points for a wide variety of actions, from getting preventive health screenings to exercising. Thrive is integrated 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 increase participation across all SBP brands. We are excited to watch it evolve and enrich our employees’ lives.
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 organization’s board of directors provides oversight of Impact program administration and selects grant recipients from a pool of anonymized applications. The Impact program is funded primarily by SBP’s senior management, and other SBP employees can also donate directly to it.
In 2024, Impact raised $72,688.13 and provided 52 grants totaling over $159,482.82 benefiting 47 employees. Of these grants in 2024, 15 grants were given due to the death of an employee or immediate family member, 16 grants were given due to a medical event experienced by an employee or family member, one grant was given for emergency travel experienced by an employee or immediate family member, two grants were given for victims of violence and 18 grants were given due to a major loss or damage to an employee or immediate family member’s residence.
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 enhanced our employee development efforts in 2024 by launching a learning management system (LMS), known as the Hub, that gives employees access to online training and development courses related to safety and wellbeing 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 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 2024, 42 employees from across SBP attended Camp Highland.
Kickoff Classic: At our companywide Kickoff Classic conference, we 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 1,200 employees attended the 2024 Kickoff Classic conference and participated in a service project benefitting incarcerated youth through the One Heart organization. SBP raised over $115,000 in 2024 in monetary and supply donations for hygiene kits for One Heart youth.
ASPIRE: We are piloting this new development program in our Atlanta branch. ASPIRE provides training for operations employees on foundational skills such as financial wellness and technology safety.
Tuition reimbursement: Employees in all SBP branches are eligible to apply for tuition reimbursement for classes that benefit their current or future role in the company.
In 2024, we contributed more than $140,000 in charitable donations, including approximately $25,000 in employee donation matching.
Employee Engagement
Engaging employees at SBP fosters informed teams and strengthens internal connections. In 2024, we initiated companywide virtual quarterly town hall meetings to engage employees and reinforce our values. Employees had the opportunity to submit questions in advance and provide feedback in a follow-up survey. SBP leaders also began making more frequent visits to field locations and branches to engage in an intentional way with the local teams. In addition, we launched Leadership Connections, which pairs small groups with leaders they might not otherwise meet for one year of one-on-one interaction focused on the employee’s future growth and development.
We released the first US-wide employee handbook at SBP, our Employee Resource Guide, in 2024. The Canadian version will be launched in 2025. The guide
is a convenient reference for our company culture, operating brands, beliefs, history, employment topics, policies, practices and other information.
SBP conducted our second employee engagement survey in 2024. Employees who responded reported higher engagement than in the 2023 survey. We also piloted a new hire survey with our Alexandria Field Services team to gather feedback and gauge early job satisfaction. We intend to conduct engagement surveys annually to help us enhance the employee experience at SBP.
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. SBP employees reported a total of 2,245 service hours in 2024. 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 82 organizations such as Camp Prime Time, Duluth Co-Op, Toys for Tots, Kidz2Leaders, WalkMS, the Alzheimer’s Association, One Heart and Habitat for Humanity in 2024.
Governance
Doing Business in an Honest and Ethical Manner
The SBP governance philosophy aligns with our 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 Ethics Code, together with our Core Values and other corporate policies, is 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 variety 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 periodically reports our progress on our sustainability initiatives to this committee.
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 and the Audit Committee of our Board oversee our cybersecurity strategy. Our Board oversees cybersecurity risk as part of our enterprise risk management process. Our Audit Committee receives periodic reports from our management on our risk management strategy, including with respect to cybersecurity systems, tools, risk profile, security assessments and initiatives.
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. In 2024, we conducted an executive response tabletop exercise designed to test our incident response plan and enterprise level decision-making process in a simulated ransomware event. SBP executive management and certain members of SBP’s Legal and IT departments participated in the exercise.
As a growth-oriented company, we have developed migration and integration processes designed to efficiently and securely integrate acquired companies into our enterprise systems. The goal of this process is to help ensure that our acquired companies meet SBP’s cybersecurity standards. As part of the migration process, we undertook a network hardware revitalization project in 2024, including standardizing best practices for hardware configuration and deployment.
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, as well as recurring refresher training. We also test employee security practices and awareness by conducting random phishing simulation exercises. We expanded the audience of employees who took the training in 2024 and refreshed the training content to touch on new cybersecurity events.
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 Chief Legal Officer and our 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. Our Chief Legal Officer and CHRO periodically report on our whistleblower program and Ethics Code to the Board.
Ethics Code Compliance
Our Ethics Code is the embodiment of our Core Value to always do the right thing, even when it is hard. 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.
All employees are expected to know and understand the policies and guidelines in the Ethics Code. We conduct employee training on our Ethics Code, which includes employees reviewing and acknowledging the Ethics Code when they join SBP.
Ethics Compliance in our Supply Chain
We finalized our Supplier Code of Conduct (Supplier Code) in 2024 and communicated it to our suppliers and vendors. The Supplier Code explains SBP’s high standards and expectations around topics such as human rights, ethics, environmental and legal compliance, health and safety, and security. Suppliers must be able to demonstrate compliance with the principles set forth in the Supplier Code upon request, and SBP reserves the right to terminate any agreement with any supplier that cannot demonstrate that it is upholding these principles.
In addition, SBP issued an annual report in 2024 outlining the steps our Alexandria Moulding brand has taken to prevent and reduce the risk of forced child labor occurring in its supply chain. The report was prepared in adherence to Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act. SBP does not tolerate child labor, forced labor or any
other form of slavery. We expect that our suppliers share our commitment to ethical and responsible business practices and support our values.
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; and
• Our confidential 24-hour Ethics Hotline at 1-844-9120186 or online at https://www.sbp.ethicspoint.com, where employees can choose to report anonymously.
In 2024, we enhanced our employee reporting by adding an online reporting form, separate from the Ethics Hotline mechanism, for our HR team. The form provides greater enterprise-wide visibility, tracking and consolidation of employee concerns.
The SBP Code of Business 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 Minimize 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 Business Conduct and Ethics (Ethics Code). 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).
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 James Hardie, that have established initiatives focused on conservation, diverting waste from landfills and reducing their carbon footprint as they develop certain 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, LP and other suppliers that report engaging in best practices.
To further demonstrate our commitment to environmental stewardship, SBP holds regular regional meetings with our operations leadership where environmental sustainability is a dedicated agenda item. The aim is to increase awareness, encourage the sharing of best practices, and identify scalable solutions that enhance environmental performance and drive progress toward achieving our goals.
SBP is committed to reducing costs as well as our carbon footprint by reducing GHG emissions from our facility operations, our fleet of delivery trucks and our fleet of forklifts. For example, we have:
Improved energy efficiency at certain facilities by using energy-efficient equipment, such as LED lighting, motion-sensing lighting and high-efficiency heating, ventilation and air conditioning (HVAC).
Converted approximately 50 forklifts from propane gas to electricity. After studying the total opportunity cost of converting more of our forklifts to electric-powered, we have a goal to replace approximately 15% of combustion forklifts that reach their end of service each year with electric forklifts.
Used route optimization software to identify fuel-efficient routes and reduce idle time for our delivery trucks, while encouraging safe driving and reducing costs. U.S. Lumber has reduced its overall truck mileage by implementing route optimization software. We plan to continue to roll out this software to additional brands and branches and will monitor key indicators to gauge the benefits of reducing our truck mileage.
Purchased two forklifts with lithium-ion batteries for our Alexandria Moulding brand that require less maintenance and improve safety.
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
We operate our business from 49 facilities, and have additional office and product storage locations, in the United States and Canada.
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. We are considering expanding the pilot to a second facility. 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.
Energy Savings and Lower Costs
Our Alexandria Moulding brand has realized significant energy efficiency gains and cost reductions by replacing fluorescent lighting with LED lighting at three facilities in Ontario, Canada. From 2021-2024, the brand retrofitted one production facility and one distribution center with a total of 1,500 LED and LEDequivalent light fixtures. It started replacing tube lights with LED equivalents at a third facility in late 2023. The brand also installed motion detectors that reduce brightness, which further reduces costs, at two of the
facilities. We have developed operating standards that seek to require LED lighting and motion sensors when we move into newly leased or newly built facilities.
In addition, Alexandria Moulding in Canada participates in a resource conservation program intended to reduce pressure on the local electricity grid. When the hydroelectric provider is approaching peak demand, the facility is notified, enabling it to turn off certain equipment and implement other energysaving measures to reduce energy consumption.
Building our Baseline
SBP has engaged a third-party vendor to assist in managing and implementing initiatives on energy procurement, energy management and energy use tracking. In 2024, we implemented the vendor’s energy management software platform to facilitate collecting and analyzing energy consumption data. We anticipate that working with this vendor and its resources will assist us with:
• Tracking annual energy purchasing and use in our facilities to enhance our energy management capabilities and to gain better visibility to our energy costs and use; and
• Measuring our Scope 1 and Scope 2 GHG emissions.
Managing GHG Emissions
SBP understands the importance of stewarding our natural resources. We began measuring our Scope 1 and Scope 2 greenhouse gas emissions in 2022. We expect that tracking our GHG emissions will help us better understand the environmental impact of our business and sustainability initiatives, such as our initiatives related to energy efficiency projects at our facilities, delivery truck route optimization and forklift electrification.
SBP is committed to continue reducing GHG emissions from our facilities and fleet to reduce 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 the 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, report that they have implemented sustainable forestry management practices and maintain forestry management certifications.
