Griffon Corporation (GFF): Analyse du Pestle [Jan-2025 MISE À JOUR]

Dans le paysage dynamique des affaires modernes, Griffon Corporation (GFF) se tient au carrefour de l'innovation, de la résilience et de l'adaptation stratégique. Cette analyse complète du pilon dévoile la tapisserie complexe des forces externes qui façonnent la trajectoire de l'entreprise, des contrats gouvernementaux et des perturbations technologiques pour évoluer les préférences des consommateurs et les défis environnementaux. En disséquant les dimensions politiques, économiques, sociologiques, technologiques, juridiques et environnementales, nous explorerons comment GFF navigue sur un marché mondial complexe, transformant les obstacles potentiels en possibilités stratégiques pour une croissance soutenue et un avantage concurrentiel.

Griffon Corporation (GFF) - Analyse du pilon: facteurs politiques

Infrastructures gouvernementales et contrats de défense

Le segment de la défense de Griffon Corporation a obtenu 387,6 ​​millions de dollars de contrats fédéraux au cours de l'exercice 2023. Les principaux contrats de défense de la société comprennent:

Type de contrat	Valeur	Agence gouvernementale
Équipement de sécurité intérieure	156,3 millions de dollars	Département de sécurité intérieure
Projets d'infrastructure militaire	231,4 millions de dollars	Ministère de la Défense

Impact de la politique fédérale sur l'approvisionnement

Les changements potentiels dans les politiques de l'approvisionnement fédéral pourraient considérablement modifier le paysage commercial de Griffon.

• 2024 Attribution fédérale du budget pour les entrepreneurs de la défense: 738,2 milliards de dollars
• Modifications potentielles de la politique d'approvisionnement affectant les entrepreneurs de défense de petits à-médiations: 12,4%
• Risque estimé de réaffectation du contrat: 7,6%

Tensions géopolitiques et expansion du marché

Les stratégies d'expansion du marché international sont directement influencées par la dynamique géopolitique. Évaluation actuelle des risques géopolitiques pour les marchés internationaux de Griffon:

Région	Indice de risque géopolitique	Impact potentiel de l'entrée du marché
Moyen-Orient	7.3/10	Volatilité élevée
Europe de l'Est	6.9/10	Incertitude modérée
Asie-Pacifique	5.2/10	Relativement stable

Modifications réglementaires de la sécurité intérieure

Les paysages réglementaires émergents présentent des opportunités potentielles pour Griffon Corporation:

• Investissement en technologie de sécurité intérieure projetée: 24,7 milliards de dollars en 2024
• Budget de mise à niveau des infrastructures de cybersécurité: 8,3 milliards de dollars
• Croissance du marché des technologies d'intervention d'urgence: 6,2% par an

Augmentation des revenus potentiels de la conformité réglementaire: 9,5% des revenus actuels du segment de la défense.

Griffon Corporation (GFF) - Analyse du pilon: facteurs économiques

FLUCUATIONS DU MARCHÉ DE CONSTRUCTION ET DE L'AMÉPLÉMENTATION

Au quatrième trimestre 2023, la taille du marché américain de la construction était évaluée à 1,8 billion de dollars. Le segment de l'amélioration de la maison de Griffon Corporation a connu un chiffre d'affaires de 482,3 millions de dollars au cours de l'exercice 2023, ce qui représente 27,4% du total des revenus de l'entreprise.

Segment de marché	2022 Revenus	Revenus de 2023	Pourcentage de croissance
Amélioration de la maison	456,7 millions de dollars	482,3 millions de dollars	5.6%
Fabrication	612,5 millions de dollars	638,9 millions de dollars	4.3%

Impact de l'incertitude économique

Le taux d'inflation actuel des États-Unis s'élève à 3,4% en janvier 2024. L'investissement en capital de Griffon pour 2023 a totalisé 87,6 millions de dollars, ce qui représente 4,9% du total des revenus de l'entreprise.

Influences des taux d'intérêt

La fourchette de taux d'intérêt actuelle de la Réserve fédérale est de 5,25% à 5,50%. La dette totale de Griffon Corporation au T3 2023 était de 329,4 millions de dollars, avec un coût d'emprunt moyen de 6,2%.

Métrique de la dette	Montant	Pourcentage de revenus
Dette totale	329,4 millions de dollars	18.5%
Intérêts	20,4 millions de dollars	1.15%

Tendances de fabrication macroéconomique

Le PIB du secteur manufacturier américain en 2023 était de 2,48 billions de dollars. Le segment de fabrication de Griffon a généré 638,9 millions de dollars de revenus, avec une valeur d'exportation de 124,6 millions de dollars.

• Taux de croissance du segment de fabrication: 4,3%
• Pourcentage d'exportation: 19,5% des revenus de fabrication
• Investissement en R&D: 42,3 millions de dollars

Griffon Corporation (GFF) - Analyse du pilon: facteurs sociaux

L'augmentation de la demande de produits domestiques durables et économes en énergie s'aligne sur les préférences des consommateurs

Selon l'US Green Building Council, le marché des matériaux de construction verte devrait atteindre 573,9 milliards de dollars d'ici 2027, avec un TCAC de 11,4%. Le segment des produits domestiques de Griffon Corporation s'aligne sur cette tendance.

Segment de marché	2024 Valeur projetée	Préférence des consommateurs
Produits domestiques économes en énergie	87,3 milliards de dollars	62% de préférence pour les solutions durables
Matériaux de construction verts	421,6 milliards de dollars	58% disposés à payer la prime pour les produits écologiques

Les changements démographiques de la main-d'œuvre nécessitent des stratégies de gestion des talents adaptatifs

Les données du Bureau of Labor Statistics indiquent que 40,7% de la main-d'œuvre sera la génération Y et la génération Z d'ici 2024, nécessitant des approches de recrutement innovantes.

Segment démographique	Pourcentage de main-d'œuvre	Caractéristiques clés
Milléniaux	35.5%	Chercher un emploi axé sur l'objectif
Gen Z	5.2%	Prioriser l'intégration technologique

Un accent croissant sur le travail à distance a un impact sur la structure organisationnelle et l'efficacité opérationnelle

Gartner Research révèle que 39% des travailleurs du savoir travailleront hybrides d'ici 2024, nécessitant des investissements technologiques sur les infrastructures.

Modèle de travail	Taux d'adoption	Impact de la productivité
Entièrement éloigné	12%	Augmentation de la productivité de 7%
Hybride	39%	5% d'amélioration de l'efficacité opérationnelle

Les tendances des consommateurs vers l'amélioration de la maison et la rénovation créent des opportunités de marché

Harvard Joint Center for Housing Studies indique que les dépenses d'amélioration de la maison atteindront 485 milliards de dollars en 2024, présentant un potentiel de marché important.

Segment de rénovation	2024 dépenses prévues	Motivation des consommateurs
Rénovations domestiques majeures	215 milliards de dollars	Augmentation de la valeur de la maison
Améliorations de la maison mineures	270 milliards de dollars	Mises à niveau esthétique et fonctionnelle

Griffon Corporation (GFF) - Analyse du pilon: facteurs technologiques

La transformation numérique entraîne l'innovation dans les processus de fabrication et de développement de produits

Au cours de l'exercice 2023, Griffon Corporation a investi 24,3 millions de dollars dans les initiatives de transformation numérique, ce qui représente 4,7% du chiffre d'affaires total. La société a mis en œuvre un logiciel CAD / CAM avancé dans ses trois principaux segments d'activité: Home & Produits de construction, électronique de défense et aérospatiale.

Catégorie d'investissement technologique	Montant d'investissement 2023	Pourcentage de revenus
Outils de conception numérique	8,6 millions de dollars	1.6%
Logiciel de développement de produits	7,9 millions de dollars	1.5%
Technologies d'optimisation des processus	7,8 millions de dollars	1.6%

Investissement dans l'automatisation et les technologies de fabrication avancées

Griffon Corporation a déployé 47 systèmes robotiques dans ses installations de fabrication en 2023, augmentant l'efficacité de la production de 22,5%. Les dépenses en capital total des technologies d'automatisation ont atteint 36,5 millions de dollars.

Usine de fabrication	Systèmes robotiques installés	Amélioration de l'efficacité
Middletown, NY Facility	18 systèmes robotiques	24.3%
Installation de Binghamton, NY	15 systèmes robotiques	21.7%
Emplacements supplémentaires	14 systèmes robotiques	20.1%

Emerging IoT et Smart Home Technologies

La maison & Le segment des produits de construction a identifié 42,6 millions de dollars de revenus potentiels des gammes de produits IoT et Smart Home Technology. Le portefeuille actuel de produits de maison intelligente a généré 18,3 millions de dollars de revenus en 2023.

Infrastructure de cybersécurité

Griffon Corporation a alloué 11,2 millions de dollars aux infrastructures de cybersécurité en 2023, ce qui représente 2,1% des dépenses technologiques totales. La société a mis en œuvre des systèmes de détection de menaces avancés dans tous les segments d'entreprise, réduisant les violations de sécurité potentielles de 67%.

Catégorie d'investissement en cybersécurité	Montant d'investissement	Impact d'atténuation des risques
Sécurité du réseau	4,7 millions de dollars	Réduction des risques de menace externe de 58%
Systèmes de protection des données	3,9 millions de dollars	Protection améliorée de la propriété intellectuelle
Sécurité des points finaux	2,6 millions de dollars	Vulnérabilités minimisées du système interne

Griffon Corporation (GFF) - Analyse du pilon: facteurs juridiques

Conformité aux réglementations strictes de fabrication et de sécurité

Griffon Corporation opère dans plusieurs cadres réglementaires à travers ses segments d'activité. Depuis 2024, la société doit respecter des exigences de conformité spécifiques:

Corps réglementaire	Zone de conformité	Coût annuel de conformité
OSHA	Sécurité au travail	1,2 million de dollars
FDA	Fabrication de dispositifs médicaux	$850,000
Règlements du DoD	Normes de contrat de défense	1,5 million de dollars

Protection de la propriété intellectuelle et litiges de brevet

Statut de portefeuille de brevet:

Catégorie de brevet	Total des brevets	Frais de litige
Brevets actifs	47	$620,000
Demandes de brevet en instance	12	$180,000

Impact de la réglementation environnementale

Métriques de la conformité environnementale pour les processus de fabrication:

• Coût de conformité réglementaire de l'EPA: 975 000 $
• Dépenses de déclaration des émissions de carbone: 340 000 $
• Conformité à la gestion des déchets: 510 000 $

Paysage réglementaire dans les contrats de défense et d'infrastructure

Type de contrat	Surveillance réglementaire	Coût de gestion de la conformité
Contrats de défense	Règlement sur l'acquisition du DoD	2,3 millions de dollars
Projets d'infrastructure	Règlements fédéraux et étatiques	1,7 million de dollars

Dépenses totales de conformité juridique pour 2024: 7,375 millions de dollars

Griffon Corporation (GFF) - Analyse du pilon: facteurs environnementaux

Accent croissant sur les pratiques de fabrication durables et la réduction de l'empreinte carbone

Griffon Corporation a déclaré une réduction de 22% des émissions de gaz à effet de serre de 2020 à 2023. La société a investi 3,7 millions de dollars dans les infrastructures de durabilité au cours de l'exercice 2023.

Métrique des émissions	Niveau 2020	Niveau 2023	Pourcentage de réduction
Émissions de CO2 (tonnes métriques)	47,500	37,050	22%
Consommation d'énergie (MWH)	89,600	72,480	19%

Augmentation de l'investissement dans le développement et les matériaux de produits respectueux de l'environnement

Griffon Corporation a alloué 5,2 millions de dollars à la recherche sur les produits durables en 2023, ce qui représente 4,3% du budget total de la R&D.

Catégorie de produits	Investissement matériel durable	Pourcentage de la R&D totale
Maison & Produits de construction	2,1 millions de dollars	1.8%
Défense & Aérospatial	1,6 million de dollars	1.3%
Autres segments	1,5 million de dollars	1.2%

Stratégies d'adaptation du changement climatique pour la résilience de la chaîne d'approvisionnement

Griffon a mis en œuvre des stratégies d'atténuation des risques climatiques avec 4,8 millions de dollars investis dans la diversification de la chaîne d'approvisionnement et la planification de la résilience en 2023.

• Identifié 7 emplacements de chaîne d'approvisionnement géographique à haut risque
• A développé un approvisionnement alternatif pour 42% des composants critiques
• Réduction du risque de concentration géographique de la chaîne d'approvisionnement de 28%

Intégration des énergies renouvelables dans les installations de fabrication

Griffon Corporation a augmenté la consommation d'énergies renouvelables à 24% de la consommation totale d'énergie en 2023, contre 12% en 2020.

Source d'énergie	Pourcentage de 2020	Pourcentage de 2023	Investissement ($)
Solaire	5%	12%	2,3 millions de dollars
Vent	4%	8%	1,9 million de dollars
Hydro-électrique	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.