Graham Corporation is a global business that designs, manufactures, and sells critical, highly engineered heat transfer equipment for the defense, energy, chemical/petrochemical industries, aerospace/space, medical, and technology industries. With the acquisition on June 1, 2021, of Barber-Nichols, a designer and manufacturer of turbomachinery products for the defense, aerospace/space, and advanced energy markets, we have pivoted to growth. To help maintain our culture of precise engineering answers, our objective is to provide continued transparency as we further enhance our performance in areas of Environmental, Social, and Governance (“ESG”).
Commitment to Sustainability
In 2021, we enhanced our ESG strategy to align with the broader transformation of our business. Our executive management team recognized the importance of embedding environmental and social priorities within our business operations and approved an enhanced and modernized ESG strategy intended to drive additional progress on initiatives that promote sustainability and increased transparency. Notably, to help ensure our accountability and progress, the Board has appointed Mr. Thoren, Graham’s Chief Executive Officer, as the lead officer with responsibility for overseeing and advancing the Company’s efforts with respect to ESG initiatives. In such a capacity, Mr. Thoren reviews our ESG efforts with the Board and the various Board committees as appropriate.
This year, we also established an ESG working group, which is responsible for leading our ESG strategy and monitoring our corporate social responsibility and environmental sustainability initiatives. This group includes cross-functional subject matter experts from across the firm. Against this backdrop, we have, with the assistance of outside ESG expertise, performed an assessment of key indicators and engaged with our internal and external stakeholders on ESG topics to help further inform our future direction and tenets. This ESG working group oversees Graham’s sustainability strategy and subsequent disclosures, including the production of our 2022 Sustainability Accounting Standards Board (SASB) Factsheet.
We believe that a focus on environmental stewardship is fundamental and integral to the work we do every day to serve our customers, create value for our stockholders, and benefit our global community. We have taken steps at our main operations in Batavia, New York to improve energy efficiencies and air quality that are intended to lessen our impact on the environment. Notably:
- Encouraged environmentally friendly work practices by supporting recycling, reusing, and by continuing to install energy-efficient equipment;
- Increased the use of e-records and e-signing technology resulting in paper waste and carbon emissions reduction;
- Engaged with energy professionals to conduct regular inspections and provide utility and financial savings information to relevant decision-makers;
- Maintained a concerted effort to reduce our reliance on energy, which in turn mitigates the strain we place on the power grid; and,
- Protected biodiversity at our sites and in surrounding habitats.
Graham Corporation lies on 34 acres of green space containing more than 32 species of trees with 12 energy-efficient buildings allowing for more than 415,000 square feet of manufacturing, testing, and R&D facilities with a total of 328 employees located at our global headquarters in Batavia, NY. We have also recently initiated a capital project to recycle production-related wastewater at our Batavia, New York facility. Furthermore, in addition to serving mature fossil-based end markets, we are entrenched in and support the development of emerging and transformative end markets that rely on alternate and renewable energy sources. Graham Corporation also maintains compliance with multiple quality programs including The American Society of Mechanical Engineers (ASME) and the National Board of Boiler & Pressure Vessel Inspectors while maintaining ISO 9001 certification.
We have over 488 employees across our facilities, including our new 43,000 square foot, state-of-the-art manufacturing plant which is part of Barber-Nichols 96,000 square foot facility in Arvada, Colorado. Our commitment is to reduce the waste we generate and utilize our expertise to produce high-quality and sustainable products. Each of our facilities is diligent in controlling hazardous waste and ensuring wastewater and storm sewer discharges are monitored to support greater access to clean water. Additionally, a key aspect of our ESG strategy is climate change. We help minimize our environmental footprint with Adopt A Street activities, water reuse, factory recycling programs, electric car charging stations, and energy-saving initiatives like LED lighting, motion sensors for lighting, smart compressors to manage energy loads, and installing programmable thermostats in our facilities.
At Graham, we believe our most important asset is our people. We are committed to fostering and embracing a Graham community in which employees share a mutual understanding and respect for each other. Our pledge to diversity and equality encompasses our commitment to creating a work environment that embraces inclusion regardless of race, color, religion, gender, sexual orientation, gender identity, national origin, age, genetic information, marital status, amnesty, pregnancy, disability, veteran status, or based on pregnancy, childbirth, or related medical conditions. We continually strive to use our knowledge, talents, and resources to improve the quality of life of our workforce.
Diversity, Equality & Inclusion (“DEI”) is very important to us at Graham. Our commitment starts with our goal of attracting, retaining, and developing a workforce that is diverse in background, knowledge, skill, and experience. As of March 31, 2022, women represented approximately 19% of our total workforce and 33% of our independent Directors.
Our Management recognizes that a diverse workforce and a culture of equity and inclusion help us compete more effectively, sustain success, and build long-term shareholder value. We encourage every one of our team members to form deeper relationships with those around them based on mutual respect, dignity, and understanding. Furthermore, to encourage productive conversations within our organization, we implement employee surveys. Graham has robust non-discrimination and anti-harassment policies as outlined in our employee handbook, as well as a formal Code of Business Conduct and Ethics.
We believe that employee development is vital to our continued success, and we support the development of our employees through programs such as our internal weld school training, our partnerships for external weld training, our tuition assistance program, and leadership and management training classes. Our management is continuously focused on developing an inclusive and respectful work environment where our employees are highly engaged and motivated.
We are dedicated to ensuring the health and safety of our team members by supporting the whole person. Our dedicated global health and safety function ensures that employees are trained on best practices to create a safe and healthy workplace for all. To ensure the health and well-being of our employees, we aim to provide a robust health and wellness package. Some of the various benefits we offer include:
- Competitive medical, dental, and vision benefits.
- Flexible spending and health savings accounts for both healthcare and dependent care.
- Short- and long-term disability insurance.
- Paid maternity and parental leave.
- 401(k) retirement savings program, including company matching contributions.
- Employee Assistance Program providing free counseling services.
- Wellness incentives, including a wellness consultant.
Since the start of the COVID-19 pandemic in 2020 and throughout 2021, the health, safety, and wellness of Graham’s employees and their families have been our highest priority. Currently, all visitors entering any of Graham’s buildings are required to complete the Graham Visitor Health Screening Questionnaire. Our Leadership continues to monitor the health and safety of our employees in accordance with the U.S. Centers for Disease Control and Prevention (CDC) and World Health Organization (WHO) guidelines.
We believe that investing in local communities to create social and economic outcomes is at the heart of generating social impact. We believe that to be successful we need to push ourselves to do our best, for our customers, for our stockholders, for the Company, for ourselves, for those around us, and for the world that we all share. We are committed to supporting the communities in which we do business by leveraging the power of our Company through donations, scholarships, education, and participation with certain charitable organizations. We strive to use our capabilities, reach, and resources to make a lasting difference in the world. Namely:
- We are proud to be a partner with the Leukemia and Lymphoma Society Team in Training because we believe they emulate the same values as our company.
- We participated in the GLOW Corporate Cup. The goal of this event is for local businesses to form racing teams, compete in a fun atmosphere, and crown a winner of the Corporate Cup. The proceeds raised from this event the YMCA is able to fulfill its mission of youth development, healthy living, and social responsibility in the GLOW region.
- We implemented a United Way Day of Giving, the largest community-wide volunteer event across our region serving Genesee, Livingston, Monroe, Ontario, Wayne, and Wyoming counties.
- Donated to a number of charities including The American Cancer Society and Habitat for Humanity.
- Partner with nonprofit organizations to implement elementary school STEM programs, where 30+ volunteers created STEM kits to support educational endeavors; and,
- Spearheaded Women in Manufacturing events to further bolster industry participation.
We believe it is our responsibility to respect human rights in our operations, including, among other things, opposing human trafficking and the exploitation of children. Accordingly, we have adopted a Human Rights Policy Statement to emphasize our strong commitment to human rights. As another part of being a good corporate citizen, we adopted a Conflict Minerals Policy intended to support our commitment to sourcing components and materials from companies that share our values around human rights and ethics.
Graham is committed to achieving excellence in our corporate governance practices. We emphasize a culture of accountability and conduct our business in a manner that is fair, ethical, and responsible to earn the trust of our stakeholders. The Company has comprehensive corporate governance and sustainability policies and structures in place to foster accountability and transparency. These policies reflect our underlying commitment to maintain the highest standards of ethics and integrity and to operate our business in compliance with all applicable anti-corruption, antibribery, and anti-trust laws and regulations.
The Board of Directors is comprised of a majority of independent directors as defined by the NYSE listing standards and the Board’s Corporate Governance Guidelines. All of the Board committees are comprised entirely of independent directors. The Board also believes that director refreshment is an important component of good corporate governance, and therefore, in March of 2022 nominated two new directors.
Graham recognizes that effectively managing enterprise risks is critically important to the long-term success of our business. Management is responsible for our company’s day-to-day risk management activities. Our company relies on a comprehensive risk management process to aggregate, monitor, measure, and manage risks. While we exercise oversight, we do not have full control over our supply chain or the suppliers we do business with; however, we continually seek to partner with suppliers that share common values and a shared commitment to our ESG objectives.
As a global leader in the design and manufacture of critical electronics-enhanced turbomachines and turbomachine-based subsystems as well as vacuum and heat exchangers technologies, Graham is a trusted partner that meets the industry’s high bar for data resiliency and security. We leverage the latest encryption configurations and technologies on our systems, devices, and third-party connections and further vet third-party vendors’ encryption, as required, through our vendor management process.
We routinely engage with our stakeholders to better understand their views on ESG matters, carefully considering the feedback we receive and acting when appropriate.