Griffon Corporation (GFF): Análisis PESTLE [Actualizado en Ene-2025]

En el panorama dinámico de los negocios modernos, Griffon Corporation (GFF) se encuentra en la encrucijada de la innovación, la resiliencia y la adaptación estratégica. Este análisis integral de la mano presenta el intrincado tapiz de las fuerzas externas que configuran la trayectoria de la compañía, desde contratos gubernamentales e interrupciones tecnológicas hasta evolucionar las preferencias de los consumidores y los desafíos ambientales. Al diseccionar las dimensiones políticas, económicas, sociológicas, tecnológicas, legales y ambientales, exploraremos cómo GFF navega un complejo mercado global, transformando potenciales obstáculos en oportunidades estratégicas para un crecimiento sostenido y una ventaja competitiva.

Griffon Corporation (GFF) - Análisis de mortero: factores políticos

Infraestructura gubernamental y contratos de defensa

El segmento de defensa de Griffon Corporation obtuvo $ 387.6 millones en contratos federales en el año fiscal 2023. Los principales contratos de defensa de la compañía incluyen:

Tipo de contrato	Valor	Agencia gubernamental
Equipo de seguridad nacional	$ 156.3 millones	Departamento de Seguridad Nacional
Proyectos de infraestructura militar	$ 231.4 millones	Ministerio de defensa

Impacto de la política federal de adquisiciones

Los cambios potenciales en las políticas federales de adquisición podrían alterar significativamente el panorama comercial de Griffon.

• 2024 Asignación de presupuesto federal para contratistas de defensa: $ 738.2 mil millones
• Posibles cambios en la política de adquisiciones que afectan a los contratistas de defensa pequeños a medios: 12.4%
• Riesgo estimado de reasignación de contrato: 7.6%

Tensiones geopolíticas y expansión del mercado

Las estrategias de expansión del mercado internacional están directamente influenciadas por la dinámica geopolítica. Evaluación actual de riesgos geopolíticos para los mercados internacionales de Griffon:

Región	Índice de riesgo geopolítico	Impacto potencial de entrada al mercado
Oriente Medio	7.3/10	Alta volatilidad
Europa Oriental	6.9/10	Incertidumbre moderada
Asia-Pacífico	5.2/10	Relativamente estable

Cambios regulatorios de seguridad nacional

Los paisajes regulatorios emergentes presentan oportunidades potenciales para Griffon Corporation:

• Inversión proyectada de tecnología de seguridad nacional: $ 24.7 mil millones en 2024
• Presupuesto de actualización de infraestructura de ciberseguridad: $ 8,3 mil millones
• Crecimiento del mercado de tecnología de respuesta a emergencias: 6.2% anual

Cumplimiento regulatorio Aumento potencial de ingresos: se estima que el 9.5% de los ingresos actuales del segmento de defensa.

Griffon Corporation (GFF) - Análisis de mortero: factores económicos

Fluctuaciones en el mercado de construcción y mejoras para el hogar

A partir del cuarto trimestre de 2023, el tamaño del mercado de la construcción de EE. UU. Se valoró en $ 1.8 billones. El segmento de mejoras para el hogar de Griffon Corporation experimentaron ingresos de $ 482.3 millones en el año fiscal 2023, que representa el 27.4% de los ingresos totales de la compañía.

Segmento de mercado	2022 Ingresos	2023 ingresos	Porcentaje de crecimiento
Mejoramiento del hogar	$ 456.7 millones	$ 482.3 millones	5.6%
Fabricación	$ 612.5 millones	$ 638.9 millones	4.3%

Impacto de la incertidumbre económica

La tasa actual de inflación de los EE. UU. Es de 3.4% a partir de enero de 2024. La inversión de capital de Griffon para 2023 totalizó $ 87.6 millones, lo que representa el 4.9% de los ingresos totales de la compañía.

Influencias de la tasa de interés

El rango actual de tasas de interés de la Reserva Federal es de 5.25% a 5.50%. La deuda total de Griffon Corporation a partir del tercer trimestre de 2023 fue de $ 329.4 millones, con un costo promedio de préstamos de 6.2%.

Métrico de deuda	Cantidad	Porcentaje de ingresos
Deuda total	$ 329.4 millones	18.5%
Gasto de interés	$ 20.4 millones	1.15%

Tendencias de fabricación macroeconómica

El PIB del sector manufacturero de EE. UU. En 2023 fue de $ 2.48 billones. El segmento de fabricación de Griffon generó $ 638.9 millones en ingresos, con un valor de exportación de $ 124.6 millones.

• Tasa de crecimiento del segmento de fabricación: 4.3%
• Porcentaje de exportación: 19.5% de los ingresos por fabricación
• Inversión de I + D: $ 42.3 millones

Griffon Corporation (GFF) - Análisis de mortero: factores sociales

La creciente demanda de productos domésticos sostenibles y de eficiencia energética se alinea con las preferencias del consumidor

Según el Consejo de Construcción Verde de EE. UU., Se proyecta que el mercado de materiales de construcción ecológicos alcanzará los $ 573.9 mil millones para 2027, con una tasa compuesta anual del 11.4%. El segmento de productos para el hogar de Griffon Corporation se alinea con esta tendencia.

Segmento de mercado	2024 Valor proyectado	Preferencia del consumidor
Productos para el hogar de eficiencia energética	$ 87.3 mil millones	Preferencia del 62% por soluciones sostenibles
Materiales de construcción verde	$ 421.6 mil millones	58% dispuesto a pagar la prima por los productos ecológicos

Los cambios demográficos de la fuerza laboral requieren estrategias adaptativas de gestión del talento

Los datos de la Oficina de Estadísticas Laborales indican que el 40.7% de la fuerza laboral será Millennials y la Generación Z para 2024, lo que requiere enfoques de reclutamiento innovadores.

Segmento demográfico	Porcentaje de la fuerza laboral	Características clave
Millennials	35.5%	Buscar empleo impulsado por un propósito
Gen Z	5.2%	Priorizar la integración tecnológica

El creciente énfasis en el trabajo remoto afecta la estructura organizacional y la eficiencia operativa

Gartner Research revela que el 39% de los trabajadores del conocimiento trabajarán híbridos para 2024, lo que requiere inversiones de infraestructura tecnológica.

Modelo de trabajo	Tasa de adopción	Impacto de la productividad
Completamente remoto	12%	Aumento de la productividad del 7%
Híbrido	39%	5% de mejora de la eficiencia operativa

Las tendencias del consumidor hacia las mejoras y la renovación del hogar crean oportunidades de mercado

El Centro Conjunto de Estudios de Vivienda de Harvard indica que el gasto en mejoras en el hogar alcanzará los $ 485 mil millones en 2024, presentando un potencial de mercado significativo.

Segmento de renovación	2024 gastos proyectados	Motivación del consumidor
Renovaciones principales para el hogar	$ 215 mil millones	Aumento del valor de la casa
Mejoras menores para el hogar	$ 270 mil millones	Actualizaciones estéticas y funcionales

Griffon Corporation (GFF) - Análisis de mortero: factores tecnológicos

La transformación digital impulsa la innovación en procesos de fabricación y desarrollo de productos

En el año fiscal 2023, Griffon Corporation invirtió $ 24.3 millones en iniciativas de transformación digital, lo que representa el 4.7% de los ingresos totales. La compañía implementó el software CAD/CAM avanzado en sus tres segmentos comerciales principales: Inicio & Productos de construcción, electrónica de defensa y aeroespacial.

Categoría de inversión tecnológica	Monto de inversión 2023	Porcentaje de ingresos
Herramientas de diseño digital	$ 8.6 millones	1.6%
Software de desarrollo de productos	$ 7.9 millones	1.5%
Tecnologías de optimización de procesos	$ 7.8 millones	1.6%

Inversión en automatización y tecnologías avanzadas de fabricación

Griffon Corporation desplegó 47 sistemas robóticos en sus instalaciones de fabricación en 2023, aumentando la eficiencia de producción en un 22.5%. El gasto total de capital en tecnologías de automatización alcanzó los $ 36.5 millones.

Instalación de fabricación	Sistemas robóticos instalados	Mejora de la eficiencia
Middletown, NY Facility	18 sistemas robóticos	24.3%
Binghamton, NY Instalación	15 sistemas robóticos	21.7%
Ubicaciones adicionales	14 sistemas robóticos	20.1%

Tecnologías emergentes de IoT y Home Smart Home

El hogar & El segmento de productos de construcción identificó $ 42.6 millones en ingresos potenciales de IoT y líneas de productos de tecnología de hogar inteligente. La cartera actual de productos domésticos inteligentes generó $ 18.3 millones en ingresos durante 2023.

Infraestructura de ciberseguridad

Griffon Corporation asignó $ 11.2 millones a la infraestructura de ciberseguridad en 2023, lo que representa el 2.1% del gasto total de tecnología. La compañía implementó sistemas avanzados de detección de amenazas en todos los segmentos comerciales, reduciendo posibles violaciones de seguridad en un 67%.

Categoría de inversión de ciberseguridad	Monto de la inversión	Impacto de mitigación de riesgos
Seguridad de la red	$ 4.7 millones	Riesgos de amenaza externa reducida en un 58%
Sistemas de protección de datos	$ 3.9 millones	Protección de propiedad intelectual mejorada
Seguridad de punto final	$ 2.6 millones	Vulnerabilidades de sistema interno minimizado

Griffon Corporation (GFF) - Análisis de mortero: factores legales

Cumplimiento de las estrictas regulaciones de fabricación y seguridad

Griffon Corporation opera bajo múltiples marcos regulatorios en sus segmentos comerciales. A partir de 2024, la Compañía debe cumplir con los requisitos de cumplimiento específicos:

Cuerpo regulador	Área de cumplimiento	Costo de cumplimiento anual
OSHA	Seguridad en el lugar de trabajo	$ 1.2 millones
FDA	Fabricación de dispositivos médicos	$850,000
Regulaciones DOD	Normas de contrato de defensa	$ 1.5 millones

Protección de propiedad intelectual y litigio de patentes

Estado de cartera de patentes:

Categoría de patente	Patentes totales	Gastos de litigio
Patentes activas	47	$620,000
Aplicaciones de patentes pendientes	12	$180,000

Impacto en las regulaciones ambientales

Métricas de cumplimiento ambiental para procesos de fabricación:

• Costo de cumplimiento regulatorio de la EPA: $ 975,000
• Gastos de informes de emisiones de carbono: $ 340,000
• Cumplimiento de la gestión de residuos: $ 510,000

Paisaje regulatorio en contratos de defensa e infraestructura

Tipo de contrato	Supervisión regulatoria	Costo de gestión de cumplimiento
Contratos de defensa	Regulaciones de adquisición del DoD	$ 2.3 millones
Proyectos de infraestructura	Regulaciones federales y estatales	$ 1.7 millones

Gastos totales de cumplimiento legal para 2024: $ 7.375 millones

Griffon Corporation (GFF) - Análisis de mortero: factores ambientales

Se enfoca creciente en las prácticas de fabricación sostenible y la reducción de la huella de carbono

Griffon Corporation informó una reducción del 22% en las emisiones de gases de efecto invernadero de 2020 a 2023. La compañía invirtió $ 3.7 millones en infraestructura de sostenibilidad durante el año fiscal 2023.

Métrico de emisión	Nivel 2020	Nivel 2023	Porcentaje de reducción
Emisiones de CO2 (toneladas métricas)	47,500	37,050	22%
Consumo de energía (MWH)	89,600	72,480	19%

Aumento de la inversión en el desarrollo y materiales de productos ecológicos

Griffon Corporation asignó $ 5.2 millones para la investigación de productos sostenibles en 2023, lo que representa el 4.3% del presupuesto total de I + D.

Categoría de productos	Inversión material sostenible	Porcentaje de I + D total
Hogar & Productos de construcción	$ 2.1 millones	1.8%
Defensa & Aeroespacial	$ 1.6 millones	1.3%
Otros segmentos	$ 1.5 millones	1.2%

Estrategias de adaptación al cambio climático para la resiliencia de la cadena de suministro

Griffon implementó estrategias de mitigación del riesgo climático con $ 4.8 millones invertidos en la diversificación de la cadena de suministro y la planificación de la resiliencia en 2023.

• Identificados 7 ubicaciones de la cadena de suministro geográfica de alto riesgo
• Desarrollado alternativo desarrollado para el 42% de los componentes críticos
• Riesgo reducido de la concentración geográfica de la cadena de suministro en un 28%

Integración de energía renovable en instalaciones de fabricación

Griffon Corporation aumentó el uso de energía renovable al 24% del consumo total de energía en 2023, en comparación con el 12% en 2020.

Fuente de energía	2020 porcentaje	2023 porcentaje	Inversión ($)
Solar	5%	12%	$ 2.3 millones
Viento	4%	8%	$ 1.9 millones
Hidroeléctrico	3%	4%	$600,000

Griffon Corporation (GFF) - PESTLE Analysis: Social factors

You're looking at Griffon Corporation's external environment, and the social factors confirm a tale of two distinct businesses: one buoyed by homeowners investing in their properties, and another squeezed by cautious consumers. The key takeaway is that the resilient, long-term trend of home improvement is a powerful anchor for the Home and Building Products (HBP) segment, but the short-term consumer pullback is a real and present headwind for the Consumer and Professional Products (CPP) segment.

Resilient U.S. repair and remodel market activity exceeds $510 billion annually, bolstering HBP

The U.S. repair and remodeling market continues to defy broader economic uncertainty, which is great news for Griffon's HBP segment, which includes Clopay garage doors. This market is projected to grow from a value of $522.5 billion in 2025, driven by an aging housing stock and a backlog of deferred maintenance. When homeowners see their home equity rise, they tend to spend on big-ticket items like garage doors and other building products, even if they're not buying a new house. The median age of homes in the U.S. is now over 40 years, so the need for critical repairs and upgrades isn't going away. That's a structural tailwind you can bet on.

This market resilience is a major reason why HBP's fiscal year 2025 revenue remained strong at $1.6 billion, consistent with the prior year. The commercial side of HBP also saw increased volume, which helped offset a slight decrease in residential volume in the fourth quarter of fiscal 2025.

Weak consumer demand in North America and the UK reduced Consumer and Professional Products (CPP) volume by 12%

The story is much different for the CPP segment, which sells things like lawn and garden tools. Fiscal year 2025 results clearly show that consumers are pulling back on discretionary purchases, especially in North America and the United Kingdom. This cautious spending, coupled with supply chain disruptions from tariffs, caused a significant drop in sales volume.

Here's the quick math: CPP's fiscal 2025 revenue declined 10% to $0.9 billion. The core issue was a volume decrease of approximately 12% for the full fiscal year, driven directly by reduced consumer demand in those key geographic regions. Honestly, consumers are looking for value, and they're trading down or simply delaying purchases of items like fans and garden equipment when inflation is still a top concern.

To be fair, the segment's profitability actually improved, with Adjusted EBITDA rising 18% to $85.5 million in fiscal 2025, but this was due to aggressive global sourcing and cost-cutting, not sales growth. You can't cut your way to long-term growth.

Segment Performance (Fiscal Year 2025)	Revenue	Year-over-Year Change	Key Social/Consumer Driver
Home and Building Products (HBP)	$1.6 billion	Consistent with prior year	Resilient U.S. repair and remodel market demand.
Consumer and Professional Products (CPP)	$0.9 billion	-10%	Reduced consumer demand in North America and UK, leading to a 12% volume decline.

Growing consumer preference for green building materials aligns with HBP's product mix

A major social trend is the shift toward sustainability, and this is a clear opportunity for HBP. Consumers are increasingly prioritizing energy efficiency and eco-friendly products, partly due to rising utility costs and a greater awareness of climate change. This isn't just a niche market anymore; the global green building materials market is projected to reach $369.03 billion in 2025, growing at a CAGR of 9.7%.

For Griffon, this preference aligns well with the HBP segment's product mix, which includes insulated and energy-efficient garage doors. The U.S. green building materials industry is particularly strong, with sales expected to grow at a nearly 12.5% CAGR through 2035. This trend gives HBP a chance to command premium pricing and grow market share by innovating with low-carbon and recycled materials.

Labor market tightness drives up labor costs across manufacturing operations

The tight labor market is a persistent social and economic challenge, directly impacting manufacturing costs. Companies across the U.S. are struggling to fill skilled trade positions, and Griffon is not immune. The overall U.S. labor market remains tight, with average hourly earnings for private nonfarm payrolls increasing by 3.8% over the 12 months ending September 2025.

This pressure is visible in the HBP segment's fiscal 2025 results. Even with stable revenue, HBP's adjusted EBITDA decreased by 1% to $494.6 million compared to the prior year, primarily because of increased material, distribution, and, critically, labor costs.

The labor challenges force two clear actions:

• Invest in automation to reduce reliance on manual labor.
• Increase wages and benefits to retain skilled manufacturing workers.
• Focus on operational efficiencies to defintely offset the rising unit labor costs.

Griffon Corporation (GFF) - PESTLE Analysis: Technological factors

Investment in Modernization and Technology Drives HBP Segment Productivity

You should see Griffon Corporation's commitment to technology as a direct driver of margin resilience in its Home and Building Products (HBP) segment. The company made substantial investments in capacity expansion, modernization, and technology throughout fiscal year 2025. This focus on innovation helps Clopay, the primary HBP business, maintain its market leadership and high profitability.

The total capital expenditures (CapEx) for Griffon in fiscal 2025 were approximately $60 million, a significant portion of which was directed toward these productivity-enhancing projects. For instance, Clopay's investment in advanced manufacturing and customer experience tools led to the VertiStack Avante garage door winning a Best in Show award at the International Builders Show, demonstrating product innovation. This technological edge is crucial for sustaining the HBP segment's robust fiscal 2025 EBITDA margin of 31.2% on a revenue of $1.6 billion.

Defense Electronics (Telephonics) Innovation: A Historical Note

To be fair, the Defense Electronics segment, which housed Telephonics Corporation and its work in intelligence and surveillance solutions, is no longer a part of Griffon Corporation's operational technology profile. Griffon sold Telephonics for $330 million in cash, with the transaction closing in 2022. That was a smart, strategic move to simplify the portfolio. The company now operates solely through its HBP and Consumer and Professional Products (CPP) segments, focusing its technological resources on those core industrial and consumer markets.

Expansion of the Asset-Light Business Model Improves CPP Segment Profitability

The technology underpinning the Consumer and Professional Products (CPP) segment's turnaround is less about product R&D and more about supply chain digitization and operational efficiency. The segment's transition to an asset-light business model in the U.S. was a key strategic initiative, and it's defintely paying off.

This shift, combined with a global sourcing expansion and the deployment of a new global business intelligence system, directly drove profitability improvements. Here's the quick math: despite a 10% revenue decline to $936 million in fiscal 2025, the CPP segment's adjusted EBITDA actually increased by 18% to $85.5 million. That margin improvement of over 200 basis points shows the power of using technology to optimize the supply chain.

Segment	Technological/Operational Focus	Fiscal Year 2025 Key Metric	Result
Home & Building Products (HBP)	Productivity, Modernization, and Product Innovation	EBITDA Margin	31.2% on $1.6 billion revenue
Consumer & Professional Products (CPP)	Asset-Light Model, Global Sourcing, Business Intelligence Systems	Adjusted EBITDA Increase	18% increase to $85.5 million

Ongoing Risk of IT System Failures, Data Breaches, and Cyber-Attacks

Still, no company is immune to digital risk. The ongoing threat of cyber-attacks remains a material technological risk for Griffon, especially given its defense history and the sensitive employee data it holds.

The risk is concrete: Griffon experienced an unauthorized intrusion into its computer network between June 15, 2024, and July 21, 2024, leading to a formal data breach notice filed in September 2024. This incident compromised sensitive personal information of current and former employees, including:

• Social Security numbers
• Dates of birth and addresses
• Health insurance information
• Driver's license and passport numbers

What this estimate hides is the potential long-term cost of reputational damage and litigation from such an event. While the company stated it had not identified any risks that materially affected its financial condition in its 2024 Annual Report, the fact of the breach itself underscores the constant need for substantial investment in cybersecurity infrastructure to protect its systems and its people.

Griffon Corporation (GFF) - PESTLE Analysis: Legal factors

Compliance with the United Nations Global Compact (UNGC) Ten Principles, including anti-corruption

You need to know where Griffon Corporation stands on global ethical standards, and the picture is one of commitment but also a need for current reporting. Griffon is a subscriber to the United Nations Global Compact (UNGC), which means they formally commit to upholding the Ten Principles across human rights, labor, environment, and anti-corruption. This commitment is a baseline for global operations and is critical for maintaining investor confidence, especially among Environmental, Social, and Governance (ESG) funds.

However, the company's status on the UNGC website as of mid-2025 was listed as Non-Communicating, meaning they had not submitted their required Communication on Progress (COP) report. The next COP was due on July 31, 2025. This is a minor, but defintely noticeable, compliance risk. Investors expect transparency, so a failure to submit this public report on time can raise questions about the strength of their internal anti-corruption and governance programs, even if the programs themselves are robust.

Regulatory compliance for environmental matters adds costs to manufacturing processes

While environmental regulation is a constant cost driver in manufacturing, Griffon Corporation's official stance is reassuring. The company's operations, which involve the discharge of materials and the handling of waste, are subject to various environmental laws. They've stated that the outcome of their current environmental matters is not expected to have a material adverse effect on their business or financial condition. That's the key takeaway: no material current exposure.

Still, you can't ignore the risk of future changes. New regulations could emerge at any time, and the company is still liable for environmental costs related to sites they no longer own or operate, plus third-party waste disposal sites. The Home and Building Products (HBP) segment, for instance, is making substantial investments in capacity expansion and technology in 2025, and those new facilities must meet ever-tightening environmental standards, which inherently drives up capital expenditures.

Potential shareholder litigation risk from historical securities law violation investigations

The company faces two distinct areas of litigation risk that you should track. First, there was a historical investigation announced in 2022 concerning potential securities law violations related to certain public statements. While the outcome of this specific investigation is not detailed in recent 2025 filings, the risk of shareholder litigation remains a factor for any public company.

More recently, a significant legal risk emerged from a data breach. An unauthorized intrusion into Griffon Corporation's systems occurred between June 15, 2024, and July 21, 2024, compromising sensitive employee data, including Social Security numbers and driver's license information. This has led to a class action lawsuit investigation. To put this risk in perspective, the average settlement value for securities class actions through the first half of 2025 was approximately $56 million, demonstrating the high financial stakes of such legal challenges.

International trade laws and tariff structures directly influence global sourcing decisions

This is where legal policy directly impacts Griffon Corporation's bottom line and strategic planning, particularly for the Consumer and Professional Products (CPP) segment. The CPP segment relies heavily on global sourcing, and trade laws are forcing a strategic pivot.

The company has already completed a global sourcing expansion, which involved concluding manufacturing operations at four sites and four wood mills, reducing the CPP facility footprint by about 1.2 million square feet and cutting approximately 600 jobs. This move was designed to increase flexibility against volatile trade laws.

The current and proposed U.S. tariff structures are a clear headwind. The company must manage the risk of a 10% additional tariff on imports from China, which affects a substantial volume of products in the Lawn and Garden and Hunter Fan businesses. Furthermore, proposed tariffs of up to 25% on imports from Canada and Mexico add another layer of complexity to their North American supply chain. For context, the company's fiscal year 2025 adjusted EBITDA was $580.1 million, and their ability to mitigate these tariff costs is crucial to maintaining their long-term margin targets.

Here's the quick math on the tariff impact and mitigation strategy:

Trade Law Factor	Impact/Risk (2025)	Griffon Corporation Strategy
China Tariffs	Proposed 10% additional tariff on substantial import volume for CPP.	Supplier negotiations, price adjustments, and global supply chain diversification.
Canada/Mexico Tariffs	Proposed 25% additional tariff risk.	Leveraging the completed global sourcing expansion for flexibility.
HBP Segment Exposure	Minimal; HBP is largely an American-made business, making it not subject to foreign competition and tariffs.	Focus on domestic manufacturing strength and capacity expansion.

The goal is to pass along increased costs or diversify sourcing, but any delay in mitigation will erode the CPP segment's expected EBITDA margin, which is forecasted to be in excess of 9% for fiscal year 2025.

Griffon Corporation (GFF) - PESTLE Analysis: Environmental factors

Commitment to environmental, social, and governance (ESG) reporting using SASB criteria

You need to know where a company stands on its environmental impact, and Griffon Corporation is defintely aligning its reporting to meet that demand. Since 2021, the company has published an annual Sustainability Report benchmarked against the Sustainability Accounting Standards Board (SASB) criteria, which is a critical signal to institutional investors like BlackRock and others who use these standards to screen for material ESG risks. They also subscribe to the United Nations Global Compact (UNGC).

This commitment is more than just a report; it's integrated into the corporate structure. The Board of Directors Audit Committee oversees the entire ESG Program, and the Board has even tied ESG performance to the compensation of top officers. This means environmental stewardship is not a side project-it's a core performance metric.

Focus on environmental compliance and waste management in manufacturing operations

Griffon Corporation has set clear, measurable environmental goals for its operations, focusing on resource efficiency and waste reduction. Their overarching goal is a 30 percent reduction across six key metrics by 2030, which includes carbon emissions, air emissions, water consumption, and hazardous waste generated. This gives us a concrete benchmark to track their progress.

In their European manufacturing and distribution sites, the progress is already significant. For example, their production sites and warehouses in Bühl, Greffern, and Goes switched to 100% renewable electric energy as of 2022. Furthermore, these sites reported that 90% of waste was recycled or recovered in 2024, showing a strong operational focus on diverting waste from landfills. The company also notes that any legacy site remediation and environmental liabilities are currently not material as of the fiscal 2025 Annual Report, which is a good sign for near-term financial risk.

Environmental Metric (Goal Year: 2030)	Baseline/Recent Performance Data	Source/Context
Target Reduction (Key Metrics)	30% reduction	Overarching goal across six metrics, including emissions and waste.
Scope 1 & 2 CO2 Emissions Reduction	14% reduction (since 2017)	Reduction per ton of finished product.
Renewable Electricity Use	100% (as of 2022)	Applies to production sites and warehouses in Bühl, Greffern, and Goes (Europe).
Waste Recycling/Recovery	90% (in 2024)	Applies to European sites, with an aim for zero waste to landfill.

Increasing stakeholder pressure for sustainable supply chains, particularly for CPP products

The Consumer and Professional Products (CPP) segment, which includes brands like AMES and Hunter Fan, faces intense scrutiny from customers and retailers on the origin of its products. To address this, Griffon Corporation adopted a Supplier Code of Conduct (SCC) in 2023, which essentially requires their third-party suppliers to meet the same ESG standards.

To measure compliance, they are collaborating with EcoVadis, a major sustainability ratings provider. As of the latest data, 63% of their strategic direct suppliers have been assessed on their environmental and social performance. This is a critical risk mitigation step, especially since the CPP segment is expanding its global sourcing strategy, which inherently increases reliance on third-party manufacturing and the associated environmental and social risks.

Climate-related risks could impact raw material sourcing and logistics for global operations

The biggest environmental risk is the physical and transitional impact of climate change on the global supply chain. Griffon Corporation's operations rely on key raw materials like resin, wood, steel, and wire rod. Disruptions caused by extreme weather, transportation bottlenecks, or production delays-all exacerbated by climate change-could force them to seek alternative, less favorable sources.

Plus, there's the transition risk. The company's high dependency on international sourcing, particularly in the CPP segment, exposes it to new regulatory risks, such as potential tariffs or trade actions related to environmental standards. The company is tackling this by focusing on circularity, aiming to source 50% of its raw materials from circular sources (recycled, bio-based, or renewable) by 2030, a significant jump from the 28% reported in 2022.

Here's the quick math: reducing reliance on virgin materials cuts both sourcing and climate-related risk. It's a smart move.

• Reduce vulnerability to price volatility in key raw materials like steel and resin.
• Mitigate supply chain risks from climate-related weather and transportation disruptions.
• Address stakeholder concerns over the environmental footprint of global sourcing.