Dear Stakeholders,
Welcome to our ESG Report for 2022, a year of transformation for our Company where we focused on our core strengths, our commitment to customers and the industry, and the unique contributions we can make to improve our world.
Transforming and Simplifying Our Business to Drive Value for All Stakeholders
Over the past 12 months, Stanley Black & Decker has undertaken a significant business transformation to strengthen our core business in tools, outdoor products, and industrial solutions, allowing us to focus our portfolio and our business on sustainable growth over the long term. We have made meaningful progress by focusing on meeting the needs of our employees, customers, and end users, optimizing our operations, divesting non-core businesses, reducing complexity to enable speed and agility, and investing in innovation and growth. These changes will streamline our operations, simplify our organization, and increase our responsiveness to geopolitical and macroeconomic volatilities.
Through our transformation, we are optimizing our operations and our relentless pursuit of meeting stakeholders’ needs, starting with our customers and end users to deliver sustainable growth. We will strive to meet their needs through providing critical support to tradespeople, accelerating our electrification journey throughout our product portfolio, and building a more sustainable, agile, and efficient supply chain.
Aligning Our Commercial Strategy and Purpose to Achieve Our Sustainability Goals
Amid these changes, our commitment to ESG remains central to our success. This includes our longstanding commitment to health and safety, integrity, sustainability, and diversity, equity, and inclusion (DE&I). Focusing on ESG matters is not only integral to being a good corporate citizen but is also key to managing risks and supporting long-term value creation for our stakeholders. Our recent portfolio transformation, including the significant Outdoor acquisitions and the divestiture of our Security and Oil & Gas businesses, has prompted our Company to reassess our ESG strategy and goals. We have updated our ESG targets to align with our more focused Company, while maintaining continuity with our original ESG pillars of people, products, and planet. Our ESG goals remain firmly rooted in Stanley Black & Decker’s purpose — For those who make the world™ — as well as our unique industry expertise, the people we serve, and our enduring mission to maintaining a culture of excellence and striving, as always, to be a force for good.
Our purpose, brands, and innovation remain the foundation on which our business transformation and our aligned ESG priorities are built. We believe that with our business and ESG priorities focused on the core of what we do best, we are better able to leverage our great brands, and position our Company for impactful achievements in the years ahead.
Refined Focus Areas
I am pleased to share our refined areas of ESG focus, aligned to both our go-forward business strategy as well as to the UN Sustainable Development Goals (SDGs):
- PEOPLE: DE&I and Growing the Trades;
- PRODUCT: Sustainable Innovation; and
- PLANET: Sustainable Operations
Executing on Our Focus Areas
We continue to promote a culture of excellence, where all our employees can thrive. To that end, we believe investment in our future talent and the diversity of our leaders are critical components of our efforts, whether it is through our early career and next generation leadership programs or additional skilling or upskilling opportunities. We have committed to improve our gender representation at the Vice President level and above, and to achieve our racial equity roadmap by 2027, recognizing that when we have more diverse perspectives, we advance as a company.
Health and safety are foundational to the success of our business strategy. We believe the best way to support employee health and safety is to foster a thriving culture focused on the holistic wellness of each of our over 50,000 employees. We are mindful of the toll that the pace of change in the world around us can take on the physical, mental, and emotional health of our employees and their families. To enable employee resilience, we are creating a comprehensive, cross-company employee well-being strategy that will provide employees specific resources inside and outside the Company to optimize their health, energy, and productivity. We look forward to launching this program in the months ahead.
As we continue to build a strong foundation for our business, we are also supporting the future of our industry by committing $30 million to fund initiatives that help grow skills for tradespeople by 2027. With our end user focus, we will strengthen our support for tradespeople and provide platforms for reskilling and catalyzing well-paying jobs that positively contribute to society through better infrastructure and economic prosperity for communities.
Investing in Sustainable Innovation and Operations
Going forward, through our refreshed and more focused approach to our ESG strategy and goals, we have modified our GHG emissions reduction goals, aligned with the Science Based Targets Initiative (SBTi), to set our Company on a path to create a sustainable supply chain and reduce our GHG emissions. In parallel with reductions of GHG emissions in our internal operations, we are working to reduce our Scope 3 emissions by engaging with our suppliers to reduce their Scope 1 and 2 emissions. These goals will build on progress we have made toward the ESG goals we launched in 2017, as detailed within this report.
Electrification is a powerful secular driver across our businesses, and we are investing to accelerate our efforts in this important area as this technology continues to shift and adoption of electrification increases. Expanding our electrification leadership across our product lines — including to new markets like large-format ride-on mowers and better serving our automotive and aviation customers’ needs for industrial solutions to support electrification — are key drivers of margin growth while also driving GHG emissions reductions across our value chain.
We also remain focused on reducing waste, continuing to work on sustainable packaging improvements and zero waste-to-landfill for our global manufacturing and distribution sites by 2040.
Looking Ahead
Our Executive Leadership Team, our team of ESG experts, and business teams are energized, optimistic, and focused on achieving our updated ESG goals, which will build upon our progress made to date. We look forward to continuing to keep our stakeholders updated as we advance our new plan. And as we evolve and grow, we welcome your interest and thoughts as we, together with our partners, navigate a better shared future.
Don Allan, Jr.
President & Chief Executive Officer