MAKE IT MATTER
2023 Sustainability Report
ABOUT
HILLENBRAND
GOVERNANCE
OUR PEOPLE
ENVIRONMENT, HEALTH,
AND SAFETY
INNOVATION
SUPPLY CHAIN
SERVING OUR STAKEHOLDERS
INDICES
TABLE OF CONTENTS
Welcome Message From Our President and CEO | 3 |
ABOUT HILLENBRAND | |
Who We Are | 5 |
Our Purpose | 5 |
Our Core Values | 5 |
Our Business, Operating Segments, and End Markets | 6 |
Awards and Recognition | 8 |
GOVERNANCE | |
How We Think About Sustainability | 10 |
Hillenbrand's Approach to Ethics and Anti-Corruption | 15 |
Cybersecurity and Data Privacy | 16 |
Executive Compensation | 17 |
Human Rights | 18 |
OUR PEOPLE | |
Purpose and Core Values | 20 |
People Management | 21 |
Diversity, Equity, and Inclusion | 22 |
Compensation and Benefits: Choose Well, Live Well | 25 |
ENVIRONMENT, HEALTH, AND SAFETY | |
Energy and Emissions | 29 |
Water, Waste, and Biodiversity | 33 |
Building a Safety Culture | 36 |
Supporting our Customers' Safety Goals | 38 |
INNOVATION | |
Technology Solutions Supporting Sustainability | 41 |
End Market Focus | 44 |
SUPPLY CHAIN | |
Supplier Standards | 51 |
Supplier Diversity | 53 |
SERVING OUR STAKEHOLDERS | |
Customers | 55 |
Shareholders | 55 |
Suppliers | 55 |
Communities | 56 |
INDICES | |
Approach to Reporting | 61 |
Policies | 61 |
Global Reporting Initiative (GRI) and UN Sustainable Development Goals | 62 |
Sustainability Accounting Standards Board (SASB) | 67 |
Reconciliation Table | 68 |
Cautionary Note Regarding Forward-Looking Statements | 69 |
2023 SUSTAINABILITY REPORT | 2 |
ABOUT
HILLENBRAND
GOVERNANCE
OUR PEOPLE
ENVIRONMENT, HEALTH,
AND SAFETY
INNOVATION
SUPPLY CHAIN
SERVING OUR STAKEHOLDERS
INDICES
WELCOME MESSAGE FROM OUR PRESIDENT AND CEO
Dear Stakeholders,
I am pleased to share Hillenbrand's 2023 Sustainability Report highlighting the year's accomplishments in our sustainability journey. This was a historic year for Hillenbrand, as we transformed into
a pure-play industrial company more keenly focused on making industrial products that positively impact the world around us. This is how we live our Purpose to Shape What Matters For Tomorrow™.
This year, we continued to focus on and execute our sustainability strategy because what matters to our customers, suppliers, and associates matters to us. We are determined to face challenges head- on, support the circular economy, and help our customers meet their critical needs in the areas of durable plastics, food, and recycling.
In 2023, we concentrated our investments in key end markets and ramped up efforts to fully integrate recently acquired companies into our business. Last fall's acquisition of the Schenck Process Food and Performance Materials (FPM) business further positioned us to address food insecurity around the world.
We highlight that progress in this year's Sustainability Report and demonstrate key elements of Hillenbrand's commitment to support the Ten Principles of the United Nations Global Compact (UNGC) in the areas of Human Rights, Labor, Environment, and Anti-Corruption. We also disclose our continuous effort to integrate the Ten Principles and U.N. Sustainable Development Goals (SDGs) into our business strategy, culture, and daily operations. These goals and principles are at the heart of the commitments we make, the partnerships we develop, and the policies and Code of Ethical Business Conduct (the "Code") to which we hold ourselves, and others, accountable.
We continue to enhance our understanding of our data and automate its collection, analysis, and reporting. This keeps us positioned to provide easier access to data and transparency about our operations to our many stakeholders and, through governance and technology, comply with forthcoming regulations and reporting standards.
Advances in artificial intelligence (AI) technology prepare us for these changes and allow us to do more to serve our customers with less. Our business is built on speed and innovation, and AI boosts our efficiency and helps us make data-driven decisions, safeguard sensitive information and adhere to data protection regulations.
Our stakeholders also expect this same swiftness in the execution of our climate strategy. We have established governance, process, and capability to increase our proactive data disclosures to include Scope 3 emissions.
This was a year of celebrations and progress, which was recognized on a global scale by our nomination as a finalist in the Reuters Responsible Business Awards for our work to communicate our Purpose and by the increase in our MSCI environmental, social, and governance (ESG) rating from A to AA, which puts us in a leadership category in our industry.
Our progress is a testament to our associates around the world who live our Purpose and commitment to strengthen the communities in which we operate. Transforming as the world transforms, innovating our process capabilities, and using lean and green practices with
common benefits for our stakeholders and the environment are at the core of sustainability, and this report is a visual display of our team's accomplishments.
I continuously encourage the team to think big and think of what we are doing for tomorrow, and I am confident in our ability to continue to drive positive results for all stakeholders. Thank you for your interest in this year's report and for being a part of our journey to become world class.
Sincerely,
Kim Ryan
President and Chief Executive Officer
2023 SUSTAINABILITY REPORT | 3 |
01 | ABOUT | GOVERNANCE | OUR PEOPLE | ||||
HILLENBRAND | |||||||
ABOUT HILLENBRAND |
ENVIRONMENT, HEALTH,
AND SAFETY
INNOVATION
SUPPLY CHAIN | SERVING OUR | INDICES | ||
STAKEHOLDERS | ||||
NOTE FROM OUR CHIEF SUSTAINABILITY OFFICER
When I speak to our stakeholders, there is no doubt that climate change has taken center stage. As governments set targets for emissions reductions and drive changes through regulation, industrial manufacturing companies are looking for new ways to deliver value to the customer across the supply chain and lifespan of their products.
I have had the privilege of building and leading our sustainability efforts since we formally started our program in 2021, and have enjoyed watching our associates transform how we look at our products, our business, and our world. Together, we have come to recognize that finding new ways to work and using lean and green practices with common benefits for the environment and stakeholders alike are at the core of sustainability. When we put the customer and stakeholder first, sustainability truly becomes a way of doing business.
2023 was the first year we had visibility into all three scopes of our emissions. We gained new insights into the emissions from our equipment and the impact of those emissions on our customers' operations-and with insight comes opportunity. In 2024, our team is exploring the use of innovative technologies, preparing for a rapidly changing regulatory environment, and partnering with
customers and suppliers to help them think
and drive our positive impact far across the value
Sustainability is a team sport, and this report each of us, all of us, come together to Make It am incredibly grateful for the work of our people such meaningful impacts and truly Shape What For Tomorrow.
Sincerely,
Tory Flynn
Chief Sustainability Officer,
VP Corporate Affairs
2023 SUSTAINABILITY REPORT | 4 |
ABOUT | GOVERNANCE | |
HILLENBRAND | ||
WHO WE ARE
We are the engineers, the manufacturers, the makers, and the shapers whose work impacts how people live, work, play, travel, eat, and heal. Hillenbrand is a global industrial company that provides highly-engineered,mission-critical processing equipment and solutions to customers in over 100 countries around the world. Because we make what matters, it matters how we make it. Sustainability is an interwoven and integral part of our business strategy, and we lead our industries by delivering innovative products and solutions that help address today's challenges and tomorrow's needs.
We remain committed to delivering on our strategy to grow, enhance, and optimize our business through three key steps:
1. | Deliver world-class products, |
solutions, and service to our | |
customers. | |
2. | Focus on continuous |
improvement through the | |
deployment of the Hillenbrand | |
Operating Model (HOM). | |
3. | Drive long-term shareholder |
value through disciplined capital allocation.
OUR PEOPLE | ENVIRONMENT, HEALTH, | INNOVATION | ||
AND SAFETY | ||||
HILLENBRAND AT A GLANCE1
GLOBAL LEADER IN HIGHLY-
ENGINEERED INDUSTRIAL
PROCESSING EQUIPMENT
AND SOLUTIONS
Listed NYSE: "HI"
~10,000 associates
60+ global locations
$3.3B combined net revenue2
- All figures as of 9/30/23.
-
Including pre-ownership period results for Peerless and FPM and
Hillenbrand's 9/30/23 as reported results on a continuing operations basis. Combined net revenue is a non-GAAP measure. See appendix for GAAP reconciliation.
SUPPLY CHAIN | SERVING OUR | INDICES | ||
STAKEHOLDERS | ||||
OUR PURPOSE
Hillenbrand associates around the world are united by a shared Purpose - to Shape What Matters For Tomorrow. Each of our Core Values helps activate our Purpose, guides our decision-making, and continually challenges us to be better.
OUR CORE VALUES
WIN AS ONE To Win As One, we collaborate with care and respect. We embrace the individuality and diverse knowledge of our global teams and hold each other accountable to the highest standards.
PARTNER WITH POSSIBILITY We are problem solvers and work with our customers to develop solutions. We use our technical expertise to overcome challenges and find breakthrough solutions.
MAKE IT MATTER Hillenbrand makes things that matter, so it matters how we make them. We operate with integrity and work with one another, our customers, and our suppliers to safely manufacture mission-critical products that keep our world moving.
DRIVE TO DELIVER We are a performance-driven organization. Our growth mindset drives us to be leaders within our industries. Through the HOM, we understand, focus, execute, and grow, continuously evolving from each experience.
2023 SUSTAINABILITY REPORT | 5 |
ABOUT
HILLENBRAND
GOVERNANCE
OUR PEOPLE
ENVIRONMENT, HEALTH,
AND SAFETY
INNOVATION
SUPPLY CHAIN
SERVING OUR STAKEHOLDERS
INDICES
OUR BUSINESS, OPERATING SEGMENTS, AND END MARKETS
The 2023 calendar year marked Hillenbrand's transformation into a pure-play global industrial company. A series of strategic acquisitions in the past two years built upon our strength and expertise in process technology and engineering and positioned us to deliver greater service and value in key end markets that are vital to the world around us, including durable plastics, food and pharmaceuticals, and recycling.
END MARKETS BY
OPERATING SEGMENTS
Global macro trends, including an expanding global middle class, a more urgent push for sustainability, and future supply chain needs continue to drive demand for our products and solutions.
Plastics & Recycling
Food & Pharmaceuticals
Chemicals
Minerals
Other Industrial
ADVANCED PROCESS
SOLUTIONS
A global leader in highly- engineered process and material handling equipment and systems for a wide variety of industries, including the durable plastics, food, and recycling industries.
Automotive
Consumer Goods
Custom Molders
Other Industrial
Packaging
Construction
Medical
Electronics
MOLDING TECHNOLOGY SOLUTIONS
A global leader in highly- engineered processing equipment, systems, and aftermarket parts and services for the plastic technology processing industry.
2023 SUSTAINABILITY REPORT | 6 |
ABOUT
HILLENBRAND
GOVERNANCE
OUR PEOPLE
ENVIRONMENT, HEALTH,
AND SAFETY
INNOVATION
SUPPLY CHAIN
SERVING OUR STAKEHOLDERS
INDICES
LOCATION OF HILLENBRAND AND MAJOR OPERATIONS
Batavia, Ohio | Georgetown, Canada | |||||||||||||
Kansas City, Missouri | ||||||||||||||
Salina, Kansas | Mount Orab, Ohio | |||||||||||||
McPherson, Kansas | Wytheville, Virginia | |||||||||||||
Sabetha, Kansas | ||||||||||||||
Cincinnati, Ohio | ||||||||||||||
Batesville, Indiana | ||||||||||||||
Sydney, Ohio | ||||||||||||||
Headquartered in Batesville, Indiana, USA
Our Corporate headquarters is in Batesville, Indiana, in a facility that we lease. We own or lease several manufacturing and assembly plants, warehouse distribution centers, service centers, and sales offices located all over the world. The map (above) shows our major operations.
Advanced Process Solutions (APS) Major Operations Excluding warehouse distribution centers, service centers, and sales offices.
Molding Technology Solutions (MTS) Major Operations Excluding warehouse distribution centers, service centers, and sales offices.
Osnabrück, Germany | ||||||
Peterborough, UK | Stuttgart, Germany | |||||
Baden-Baden, Germany | Baienfurt, Germany | |||||
Montaigu, France | Sasovice, Czech Republic | |||||
Niederlenz, Switzerland | ||||||
Nanjing, China Kunshan City, China
Ahmedabad, India
Coimbatore, India
2023 SUSTAINABILITY REPORT | 7 |
ABOUT | GOVERNANCE | OUR PEOPLE | ENVIRONMENT, HEALTH, | INNOVATION | SUPPLY CHAIN | |||||
HILLENBRAND | AND SAFETY | |||||||||
AWARDS AND | Hillenbrand and its Operating Companies (the "Company") prioritize collaboration to Win As |
RECOGNITION | We are proud to share the accomplishments of both our teams and leaders. |
One. We see our diverse, global teams achieving more together than they could individually. |
SERVING OUR STAKEHOLDERS
INDICES
In 2023, Hillenbrand improved its MSCI ESG Rating to AA from A. This rating places us among the top performers in environmental, social, and governance practices in the industry.
Since February 2022, Hillenbrand has received a "1" (the highest score) on ISS' Governance QualityScore.
Kim Ryan, President & CEO, Hillenbrand- Recognized as one of the region's most influential business leaders on Cincinnati Magazine's Cincinnati 300 list.
She was also named to the Indianapolis Business Journal's inaugural Indiana 250, a list of the state's most influential and impactful business and community leaders.
Hillenbrand is a signatory of the Women's Empowerment Principles and United Nations Convention against Corruption, UNCAC.
Hillenbrand was named as a finalist in the 2023 Reuters Responsible Business Awards in the category of Purpose- Driven Consumer Communications for our work to integrate our Purpose to
Shape What Matters For Tomorrow throughout our organization.
Readers of Kunststoff Magazin, a leading German-language trade journal for the plastics industry, recognized the ZS-B MEGAfeed side feeder as one of the best products of 2023, selecting the innovative development from 40 nominations, and awarding it 3rd place in the Peripherals category. Coperion also won the Stuttgart Innovation Award 2023 for the side feeder. See more on page 41.
Mold-Masters received an award of distinction from Targi Kielce during PLASTPOL, the 27th International Fair of Plastics and Rubber Processing for the innovative M3 Temperature Controller, a full-featured controller platform with wireless and other revolutionary technologies.
Pam Manis, IT Director at Mold-Masters and DME, received the LGBTQ+ Leadership Award from the Ohio Diversity Council for her leadership in fostering a more inclusive workplace for our LGBTQ+ associates and allies. Pam founded the HI Pride Business Resource Group (BRG).
Associates at Baker Perkins, a FPM company, recently earned five finalist nominations and two wins in the Peterborough Telegraph Apprenticeship Awards 2023. Rhys Ockwell won Engineering Apprentice of the Year, and Nigel Wilkinson won Mentor of the Year.
2023 SUSTAINABILITY REPORT | 8 |
02 | ABOUT | GOVERNANCE | ||
HILLENBRAND | ||||
GOVERNANCE |
OUR PEOPLE
ENVIRONMENT, HEALTH,
AND SAFETY
INNOVATION
SUPPLY CHAIN | SERVING OUR | INDICES | ||
STAKEHOLDERS | ||||
NOTE FROM OUR GENERAL COUNSEL AND SECRETARY
Governance is at the foundation of our Sustainability program. The strong rules and ethical standards that guide our performance and decision-making are critical enablers for maintaining trust with our stakeholders. Within our Governance working group, we have cross-functional teams that align compliance, risk, and stakeholder engagement. In addition, our sustainability strategy is reviewed quarterly with our Board of Directors ("Board") and aligns with our commitment to delivering value to our shareholders.
We believe our progress is possible only because of our unwavering dedication to conducting business with the highest standards of integrity and transparency, protecting data and information, ensuring human rights, fighting corruption, and maintaining our commitment to continuous improvement. While the Board works to ensure that Hillenbrand remains a sustainable, ethical, and
profitable enterprise, it is the daily actions of our associates in offices and manufacturing facilities around the world that make it possible. I appreciate the continued support of our organization and its steadfast commitment to our stakeholders as we work to positively impact the world around us.
Sincerely,
Nicholas R. Farrell
Senior Vice President, General
Counsel and Secretary
2023 SUSTAINABILITY REPORT | 9 |
ABOUT | GOVERNANCE | OUR PEOPLE | ||
HILLENBRAND | ||||
HOW WE THINK ABOUT SUSTAINABILITY
ENVIRONMENT, HEALTH,
AND SAFETY
INNOVATION | SUPPLY CHAIN | SERVING OUR | INDICES | |||
STAKEHOLDERS | ||||||
Environment | Our People | Governance | |
5 | |||
"high" "very | |||
Since the inception of our Sustainability program, Hillenbrand has been committed to positively impacting the environments in which we operate through
our people, products, and partnerships. Following our commitment to the UNGC in 2019, we formally established our program with the publication of our 2020 Sustainability Report and have released a new report every year since.
Each report further emphasizes our commitment to heightened transparency, showcasing our progress around key metrics and the evolution of our sustainability strategy. Our strategy is a combination of best practices from our Operating Companies and key functions, paired with valuable insights we have gathered from stakeholder feedback and comparisons with peers, industry, and regulatory trends. We aim to build sustainability in our business decisions, as we believe this approach not only benefits our stakeholders but also boosts long-term shareholder value.
DOUBLE MATERIALITY ASSESSMENT1
To ensure our strategy aligns with our stakeholders' expectations, we engage with key stakeholders to identify the significant topics that should be our primary focus.
While we formally engaged our stakeholders in 2019 through a materiality assessment, we believe it is best practice to continue to assess key parties every few years to ensure our focus is providing value to our stakeholders. In 2023, we recognized that the evolving geopolitical landscape and significant changes to our portfolio would require us to reassess these material topics. We also became aware of the growing need to address the requirements set by the European Commission's Corporate Sustainability Reporting Directive and other regulations and engaged an independent consultant to conduct our first "double materiality" assessment. Conducting this type of assessment also meets or exceeds the standards required for the International Sustainability Standards Board, the Sustainability Accounting Standards Board (SASB), and the Global Reporting Initiative (GRI).
A traditional materiality assessment evaluates the materiality of sustainability topics from a single perspective, asking only which topics are most material to Hillenbrand. In contrast, a double-materiality assessment also evaluates the Company's impact on the world. This is done from two perspectives, the impacts of people, the economy, and the environment on the value of the Company, and the Company's impact on people, the economy, and the environment, including impacts on human rights. Using this dual lens has allowed us to collect new insights into key sustainability topics, and the results have enabled the continued evolution of our Sustainability strategy.
to high" | |||||||||||||||||||||
Environment | 4 | Business Ethics | Employee | ||||||||||||||||||
Cybersecurity | |||||||||||||||||||||
Health & | |||||||||||||||||||||
Supply Chain Management | |||||||||||||||||||||
Safety | |||||||||||||||||||||
Waste | Product | ||||||||||||||||||||
Innovation | |||||||||||||||||||||
People, | 3 | ||||||||||||||||||||
Diversity. Equity, Inclusion | |||||||||||||||||||||
Economy, | Community Engagement | ||||||||||||||||||||
Climate Change | |||||||||||||||||||||
2 | Energy | ||||||||||||||||||||
Impact on | |||||||||||||||||||||
1 | |||||||||||||||||||||
"high" to
"very high"
0
1 | 2 | 3 | 4 | 5 |
Impact on Hillenbrand
- The use of "material" or "materiality" in this report is not related to, or intended to convey, matters or facts that could be deemed "material" to a reasonable investor as referred to under U.S. securities laws or similar requirements of other jurisdictions.
2023 SUSTAINABILITY REPORT | 10 |
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Hillenbrand Inc. published this content on 23 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 May 2024 10:17:14 UTC.