ITT Inc. (ITT): PESTLE Analysis [Nov-2025 Updated]

You're trying to figure out if ITT Inc. is positioned to outperform in the next 12-18 months, and honestly, that means looking past the quarterly earnings to the big, macro forces at play. As a diversified manufacturer, ITT is a defintely good barometer for global industrial health, so we've mapped the six critical PESTLE factors-Political, Economic, Sociological, Technological, Legal, and Environmental-to their three core segments: Motion Technologies, Industrial Process, and Connect and Control Technologies. This breakdown cuts through the noise to show you exactly where the near-term risks (like inflation on raw materials) and opportunities (like infrastructure spending) are, so you can make a sharp, informed decision.

ITT Inc. (ITT) - PESTLE Analysis: Political factors

You're looking at ITT Inc.'s external environment, and honestly, the political landscape is less about direct government contracts and more about how global policy shifts the demand curve and supply chain costs. It's a game of risk-mitigation and seizing the opportunities created by massive government spending programs, both in the US and abroad.

The direct takeaway is that while global trade tariffs remain a financial risk, ITT's strategic positioning in US infrastructure and defense, combined with its ability to innovate for new European regulations, is creating a net positive tailwind. You need to watch the Industrial Process segment's large project backlog, as that's where geopolitical risk hits hardest.

Global trade tariffs impact Motion Technologies supply chain costs

Tariffs continue to be a structural cost pressure, particularly for the Motion Technologies (MT) segment, which relies on a global supply chain for raw materials like steel and aluminum used in brake pads and shock absorbers. The US government's imposition of new tariffs in early 2025 created ripples of uncertainty across international trade policies, prompting retaliatory actions from countries like China.

However, ITT's management has been proactive in mitigating this exposure. For the 2025 fiscal year, the company updated its total estimated tariff exposure to approximately $25 million. The good news is that management expects this to have a '0 impact when it comes to income' due to successful mitigation strategies, which include strategic pricing actions and productivity enhancements across its global manufacturing footprint.

US government infrastructure spending creates demand for pumps and valves

The massive US federal investment in infrastructure is a clear, multi-year opportunity for the Industrial Process (IP) segment. The Infrastructure Investment and Jobs Act (IIJA), a generational investment, is driving demand for ITT's industrial pumps and valves used in water, power, and chemical processing.

The key funding areas that directly translate to demand for ITT's flow control products include:

• Clean Water: Over $55 billion is allocated for water infrastructure, including eliminating lead service lines.
• Power Grid: Approximately $65 billion is designated for upgrading power infrastructure and deploying clean energy technology.
• Ports and Waterways: A $17 billion investment is targeted at port infrastructure and waterways, requiring fluid handling solutions.

This macro-level spending has already translated into a strong project backlog for the Industrial Process segment, which saw Q3 2025 revenue of $383.9 million, representing a 15% increase year-over-year.

Regulatory stability in key European automotive markets is essential

The European Union's regulatory framework, specifically the new Euro 7 regulation, is fundamentally reshaping the automotive supply chain, which is critical for Motion Technologies. While the regulation's full implementation for all new vehicles is set for November 2027, the development pressure is immediate.

The new law is the first to regulate non-exhaust emissions, setting limits on brake particulate matter (PM) for light-duty vehicles. This is a huge shift. The limits are strict: 3 mg per kilometer for pure electric vehicles (EVs) and 7 mg per kilometer for internal combustion engine (ICE) and hybrid vehicles. This forces manufacturers, including ITT, to rapidly innovate low-particulate brake friction materials. This regulatory pressure is actually an opportunity for ITT to gain market share by being a first-mover in compliant materials, but it requires significant R&D investment right now.

Geopolitical tensions affect project timing for Industrial Process in energy

Geopolitical instability, particularly in the Middle East, creates a high-stakes environment for large-scale energy projects that drive the Industrial Process segment's pump and valve orders. The Israel-Iran conflict in 2025, for instance, fueled significant price volatility, with European TTF natural gas prices surging by 18% in June 2025.

This uncertainty can delay project Final Investment Decisions (FIDs) in volatile regions. However, it simultaneously accelerates investment in politically stable regions like the Gulf Cooperation Council (GCC) states. ITT has responded by strategically expanding its Industrial Process capacity in Saudi Arabia, aiming to capture this stable growth. This Dammam facility expansion is targeting over $300 million in annual orders by 2030, a clear pivot toward geopolitical stability as a core business strategy.

Increased scrutiny on defense-related exports for Connect and Control

The Connect and Control Technologies (CCT) segment, which reported Q3 2025 revenue of $259.2 million, benefits from strong demand in the aerospace and defense markets. However, this segment operates under intense scrutiny from US export control agencies, primarily governed by the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR).

The political climate in 2025 shows a clear trend of vigorous enforcement, exemplified by the US Department of State's statutory debarment of 17 persons in August 2025 for violating or conspiring to violate the Arms Export Control Act. The risk here is two-fold:

• Compliance Cost: Maintaining the necessary licenses and internal compliance programs for mission-critical components (like the rugged connectors and motion control systems ITT showcases at events like AUSA 2025) is expensive and complex.
• Reputational/Financial Risk: A compliance failure can lead to massive fines and debarment from government contracting, a critical revenue source for CCT.

Here's the quick math on the segment's performance and key political drivers:

ITT Inc. (ITT) - PESTLE Analysis: Economic factors

Inflationary pressure on raw materials like copper and steel remains a factor

You've seen this story before: raw material costs are still a major headwind, even as global inflation moderates. For ITT Inc., which relies heavily on metals for its flow control and motion components, the volatility in commodities like steel and copper continues to pressure margins. The company's Q2 2025 results explicitly noted that higher material and labor costs partially offset the benefits from pricing and productivity actions.

This cost pressure is real and quantifiable. For instance, market analysis projected that copper prices would average $8,300 per metric ton ($8,300/mt) in the second quarter of 2025. Plus, there's an ongoing risk of a minimum 10% tariff being applied to U.S. copper imports, which would directly increase input costs for the Connect & Control Technologies and Industrial Process segments. The business is managing this by implementing strategic pricing actions and operational efficiencies, but you should expect this to remain a constant battle.

US Federal Reserve interest rate policy affects industrial capital expenditure (CapEx)

The Federal Reserve's monetary policy is a double-edged sword for ITT. On one hand, the company's Q2 2025 financial statements showed that it incurred higher interest expense, which eats directly into net earnings. On the other hand, the Fed's rate cuts are meant to stimulate the broader economy, which is good for industrial demand.

The Fed lowered the federal funds rate by a cumulative 100 basis points (1%) from its peak, reaching a range of 4.00% to 4.25% by September 2025, with expectations for further cuts. Lower borrowing costs generally encourage industrial CapEx (capital expenditures), which is the lifeblood of ITT's pump and valve business. The annual U.S. CapEx investment sits at roughly $3.4 trillion, and new tax rules allowing for the full expensing of CapEx from 2025 to 2028 are expected to lessen corporate tax burdens, freeing up cash for companies to invest in new equipment and facilities. That's a clear tailwind for ITT's Industrial Process segment.

Strong US dollar creates currency translation headwind for international sales

ITT is a global company, with a large portion of its revenue originating outside the U.S. So, when the U.S. dollar strengthens, those international sales translate back into fewer U.S. dollars, creating a currency translation headwind.

The initial 2025 guidance reflected this risk, with the company expecting to absorb a $0.09 per share foreign currency headwind to its adjusted EPS (Earnings Per Share). While the U.S. Dollar Index (DXY) saw significant volatility in 2025, trading near 107.771 in early Q1 before softening later in the year, the general strength relative to other major currencies has been a drag on reported revenue and operating margin. The Q1 2025 adjusted operating margin was specifically impacted by unfavorable foreign currency.

Demand growth tied to global infrastructure and energy transition spending

The biggest opportunity for ITT in 2025 is clearly tied to large-scale, long-cycle projects in infrastructure and the energy transition (the global shift to sustainable energy). This demand directly fuels the Industrial Process segment.

The company's strong performance is underpinned by a robust backlog of nearly $2 billion as of Q3 2025, which gives them excellent revenue visibility. A key growth driver is the expansion in the Middle East, where ITT is investing ~$25 million to double capacity at its Saudi Arabia manufacturing facility. This strategic move is designed to capture a larger share of the energy transition market, with the regional site targeting over $300 million in annual orders by 2030. This is a long-term play that's already paying off in near-term orders.

• Industrial Process Backlog: Approximately $2 billion (Q3 2025).
• Saudi Arabia Investment: ~$25 million expansion to double capacity.
• Targeted Regional Orders: Over $300 million annually by 2030 in the Middle East.

Automotive production volumes directly influence Motion Technologies revenue

The Motion Technologies (MT) segment, which makes brake components and shock absorbers, is directly tied to global automotive production volumes. The good news is that ITT is outperforming the market, which is the whole point of a strong product portfolio.

Global light vehicle production forecasts for 2025 are mixed, ranging from a slight decline of 0.4% (S&P Global Mobility) to modest growth of 3.4% (GlobalData). The consensus leans toward a low-growth environment, with sales volumes expected to increase by only about 1.6% globally. Despite this sluggish market, ITT's MT segment is projected to outperform global automotive production in all regions for the full year 2025. This outperformance is driven by significant automotive share gains, particularly in China with major OEMs like BYD and Geely.

ITT Inc. (ITT) - PESTLE Analysis: Social factors

You're looking at ITT Inc.'s social landscape, and the core takeaway is that the company operates at the intersection of a severe, persistent talent crunch and rapidly escalating environmental, social, and governance (ESG) demands from customers and investors. This isn't just about optics; these factors directly impact operational capacity, supply chain costs, and the cost of capital.

Talent shortage for skilled engineers and manufacturing roles is a persistent challenge

The shortage of skilled labor in manufacturing is a critical headwind for ITT's global operations, especially in the U.S. The latest figures show over 400,000 manufacturing roles remain vacant across the United States, which directly constrains production capacity for engineered components. This problem is structural, not cyclical, with projections indicating a potential gap of 2.1 million unfilled manufacturing jobs by 2030, a deficit that could cost the U.S. economy up to $1 trillion annually. For ITT, which employs approximately 11,700 people globally as of early 2025, competition for technical talent-from fluid dynamics engineers to precision machinists-is fierce. You can't run a high-margin, complex manufacturing business without the right people. This forces higher labor costs and significant investment in automation and internal training programs to mitigate the risk.

Growing focus on corporate social responsibility (CSR) in customer procurement

Customer procurement is no longer solely focused on price and quality; social and environmental performance is now a non-negotiable part of the supplier qualification process. ITT's major customers in aerospace, defense, and automotive are integrating Corporate Social Responsibility (CSR) and sustainability performance into their vendor scorecards. In 2025, ITT responded by launching a standardized supplier sustainability survey across its raw materials supply chain. This is a direct action to meet customer transparency demands and foster joint efforts in areas like emissions reduction. If your supplier's ESG performance is weak, it becomes a risk to your own supply chain, so this trend makes ITT's sustainability performance a competitive advantage or a significant barrier to entry.

Shift to electric vehicles (EVs) changes demand for brake pad materials and fluid management

The global shift to Electric Vehicles (EVs) is fundamentally reshaping the Motion Technologies segment, requiring a pivot in material science and product design. EVs are heavier and accelerate faster than internal combustion engine (ICE) vehicles, demanding higher-performance brake pads and more resilient thermal and fluid management systems. ITT is addressing this with an investment of €50 million (with a potential to grow to ~€70 million) to expand its capacity for high-performance brake pad applications, targeting a total addressable market of nearly 11 million brake pads annually by 2026. Also, new regulations like the Euro 7 standard, which takes effect in 2026, impose limits on particulate matter (PM) emissions from brakes, forcing ITT to innovate in low-emission friction materials. This social pressure for cleaner transportation is a clear opportunity for ITT to leverage its material science expertise.

Employee health and safety standards are under constant scrutiny globally

A safe workplace is a basic expectation, but in heavy industrial and manufacturing environments, it's a constant operational challenge. High safety standards are a prerequisite for attracting talent and maintaining a positive reputation with regulators and customers. ITT emphasizes its 'Accept Only Zero' safety accountability system, aiming for best-in-class safety performance. While the specific 2025 Total Recordable Incident Rate (TRIR) is not yet public, the average TRIR for the U.S. manufacturing industry in 2023 was 2.8 cases per 100 full-time employees. A TRIR significantly above the industry average of 2.8 would trigger higher insurance premiums, increased regulatory scrutiny from OSHA, and a definite barrier to recruiting top-tier talent. It's a key operational metric that directly impacts the bottom line and reputation.

Diversity and inclusion metrics influence institutional investor sentiment

Institutional investors, particularly large asset managers, increasingly use Diversity and Inclusion (D&I) metrics as a proxy for strong governance and risk management. Companies with diverse leadership are often seen as more innovative and resilient. ITT has established clear 2026 D&I goals that are closely monitored by the market. You can see the focus areas in their targets:

Honestly, these targets are the minimum expectation now. Research shows that diverse teams are 70% more likely to capture new markets, and inclusive workplaces are 2.6x more likely to achieve financial targets, so this is a financial imperative, not just a social one. Failing to meet these goals, or even worse, failing to report progress transparently, can lead to negative proxy votes and a higher cost of capital from ESG-focused funds.

ITT Inc. (ITT) - PESTLE Analysis: Technological factors

You're looking at ITT Inc.'s technological landscape, and the clear takeaway is that the company is moving aggressively into digital and advanced materials to drive margin expansion and secure future growth. This isn't just about incremental improvements; it's a strategic pivot toward smart manufacturing and high-speed data components.

Investment in smart manufacturing (Industry 4.0) to boost operational efficiency

ITT is making concrete capital investments to implement smart manufacturing (Industry 4.0) principles, focusing on capacity and efficiency gains. For example, the Industrial Process (IP) segment completed the second phase of a planned ~$25 million expansion at its Dammam, Saudi Arabia, facility in November 2025. This expansion effectively doubles ITT's capacity at the site, increasing the total land area to approximately 30,000 m². The goal is to leverage automation and process controls to maintain the site's strong operational track record, which includes an average of 96% on-time delivery since 2019. This kind of investment directly supports the company's full-year 2025 guidance for adjusted operating margin of 18.1% to 18.7%.

R&D focus on lightweighting materials for aerospace and automotive components

The company is strategically positioned in the high-growth lightweight materials market, especially through its Connect & Control Technologies (CCT) segment. ITT holds a significant stake in CRP Technology Srl and a majority ownership of 51% in CRP USA LLC as of late 2024. This partnership focuses on manufacturing reinforced composite materials for 3D printing, which is critical for reducing weight in aerospace, defense, and premium automotive applications. The use of materials like CRP's Windform® enables the development of complex, durable, and exceptionally lightweight components. This R&D focus is essential, considering the global aerospace lightweight materials market size was approximately $48,045 million in 2025. That's a massive addressable market.

Digital twin technology used for Industrial Process pump optimization and predictive maintenance

ITT is utilizing advanced digital tools, which are the building blocks of a digital twin (a virtual replica of a physical asset), within its Industrial Process segment's PRO Services. This approach is all about moving from reactive to predictive maintenance. The launch of the VIDAR high-efficiency industrial motor is a key step, as it embeds variable-speed intelligence directly into the component. This allows for real-time performance monitoring and optimization, which translates into:

• Reduced energy consumption by precisely matching pump speed to process demand.
• Increased equipment uptime through condition monitoring.
• Lower maintenance costs by enabling proactive repairs.

The PRO Services team uses this data, alongside tools like Variable Frequency Drives (VFDs) and wireless vibration monitoring, to help customers lower their maintenance costs and extend equipment life, directly impacting their bottom line.

Cybersecurity threats require continuous investment in IT infrastructure and supply chain defense

Honestly, cybersecurity is a cost of doing business today, not an option. ITT's Board of Directors receives annual reports and strategic updates on the company's cybersecurity and IT risks, which shows this is a governance priority. The biggest risk now is the supply chain attack, where hackers target a smaller, less-defended vendor to breach a large company. Breaches are up, and the average cost of a breach for a U.S. business is around $4.88 million. So, ITT must continuously invest in two areas: hardening its own IT infrastructure and establishing stringent security standards for its vast network of suppliers, which is the only way to defintely protect the $1.8 billion backlog reported in Q1 2025.

Developing next-generation, high-speed connectors for 5G and aerospace applications

The Connect & Control Technologies (CCT) segment is a powerhouse for high-speed data transmission, a non-negotiable requirement for 5G infrastructure, defense, and next-generation aircraft. The segment is actively launching products to meet these demands, including:

• Ultra-High-Density C5 Warrior: A rugged, small-form-factor connector delivering data rates exceeding 10 Gbps for soldier-worn and defense applications.
• KJAM Multi-Port RF Expansion: New RF termini supporting extremely high data rates up to 65 GHz, critical for advanced radar and satellite communication systems.

This focus on high-reliability, high-speed connectivity is a key driver for the segment's growth, which saw strong demand in Q2 2025. The acquisition of kSARIA in September 2024 further bolstered this capability with mission-critical connectivity solutions.

Next step: CCT leadership should draft a 12-month product roadmap detailing the path from the current 10 Gbps connectors to the next 20 Gbps standard by the end of Q1 2026.

ITT Inc. (ITT) - PESTLE Analysis: Legal factors

Compliance with the Foreign Corrupt Practices Act (FCPA) is paramount for global operations

The global nature of ITT Inc.'s business, with operations spanning approximately 39 countries and sales in over 125 countries, makes strict compliance with the U.S. Foreign Corrupt Practices Act (FCPA) a foundational legal requirement. Any failure to comply with the FCPA's anti-bribery and accounting provisions is a stated risk factor in the company's 2025 SEC filings. This isn't just a theoretical risk; the company has historical precedent, such as the 2009 settlement with the SEC where a former subsidiary paid over $1.5 million in disgorgement, interest, and civil penalties for violations related to its Chinese operations.

In 2025, the enforcement landscape is shifting, with new U.S. Department of Justice (DOJ) guidelines encouraging American companies to proactively report corrupt practices by foreign competitors. This means ITT must not only maintain its internal controls but also be vigilant about the competitive practices of rivals, especially in key sectors like defense, where its Connect & Control Technologies segment is active. The risk is less about internal misconduct and more about protecting market share from competitors who don't play by the rules.

Strict adherence to environmental permits for manufacturing waste and air emissions

As a diversified manufacturer, ITT faces significant legal risk from evolving environmental laws and regulations, particularly concerning manufacturing waste and air emissions. The company explicitly lists changes in environmental laws and the discovery of previously unknown contamination as factors that could materially affect its results. The legal pressure is intensifying in 2025, driven heavily by European mandates.

A key compliance challenge in the Motion Technologies segment is the transition to meet new, more demanding environmental regulations in Europe. This has necessitated a shift to copper-free brake pads, a process the company expects to complete for nearly 100% of its Original Equipment (OE) production in North America by the end of 2025. Furthermore, ITT is preparing for the European Union's Corporate Sustainability Reporting Directive (CSRD), with reporting requirements beginning in fiscal year 2025.

• Reduce Scope 1 and 2 GHG emissions by 10% by the end of 2026 (vs. 2021 baseline).
• Implement CSRD compliance framework in fiscal year 2025.
• Achieve near 100% copper-free brake pad OE production in North America by 2025.

Product liability and safety standards for critical components are extremely high

The legal exposure from product liability is inherently high because ITT manufactures highly engineered, critical components for applications where reliability is non-negotiable. Think of components in aerospace, defense platforms like the Columbia Class submarine, or industrial pumps in chemical plants-the cost of failure, whether due to a manufacturing defect or a design flaw, can be catastrophic.

The risk isn't just financial, but reputational, as a single product recall could severely damage the brand's standing as a supplier of critical components. The company's legal department must continually assess the risk of product liability claims and litigation, which is a persistent risk factor. They manage this through a robust product safety program that integrates safety considerations early in the design process.

Evolving international tax laws affect repatriation of foreign earnings and tax strategy

International tax law volatility is a major legal factor, directly impacting ITT's effective tax rate and cash flow. The company's expected effective tax rate for the first quarter of 2025 was 22%. A primary concern is the ongoing global implementation of the OECD's Base Erosion and Profit Shifting (BEPS) Pillar Two initiative, which mandates a global minimum corporate tax rate of 15% for large multinational corporations.

While ITT noted that Pillar Two taxes had not had a significant impact on its financial statements as of December 31, 2024, the full effect of global adoption in 2025 and beyond is still being modeled. Furthermore, the U.S. is facing a significant tax policy cliff in 2025 with the expiration of key provisions of the Tax Cuts and Jobs Act (TCJA), which could alter the tax treatment of foreign earnings repatriation. This uncertainty requires a defintely proactive tax strategy.

Labor laws and collective bargaining agreements vary significantly across global sites

Managing a workforce of approximately 11,700 employees across 39 countries means navigating a complex web of local labor laws, from working hours to termination rights. Unions represent roughly 20% of the U.S. workforce, plus there are unionized employees in key global manufacturing sites like Italy, Mexico, and Germany.

Collective bargaining agreements (CBAs) are a continuous legal and operational factor. For example, in 2025, ITT successfully completed negotiations for a successor CBA at its Goulds Pumps manufacturing campus in Seneca Falls, New York. These negotiations have concrete financial implications, such as the total immediate wage increase (equity plus General Wage Increase) of 4.84% for the average employee under a recent 2025 agreement, with a cumulative General Wage Increase of 15.5% over the life of the contract.

The immediate next step is for the Chief Legal Officer and the Chief Financial Officer to map the projected compliance costs for the CSRD and the potential tax rate impact of the Pillar Two minimum tax on 2026 earnings projections by year-end.

ITT Inc. (ITT) - PESTLE Analysis: Environmental factors

You're looking for the hard numbers on environmental risk and opportunity, and the data from ITT Inc.'s 2025 Sustainability Update gives us a clear picture: the company is making measurable progress on emissions but must still navigate the critical, localized risks of water scarcity, especially within its Industrial Process segment.

Environmental factors are no longer a side project; they are a core driver of capital allocation and product strategy, particularly for a diversified manufacturer like ITT.

Reducing carbon footprint across global manufacturing sites is a key sustainability goal

ITT has set a clear, near-term target for operational emissions reduction. The goal is a 10% decrease in Scope 1 and Scope 2 Greenhouse Gas (GHG) emissions by the end of 2026, using a 2021 baseline. This isn't just a promise; they are already well on their way.

As of the end of 2024, the company reported an 8% absolute reduction in Scope 1 and 2 emissions from the 2021 baseline. More impressively, when adjusted for production volume, the emissions intensity-a truer measure of efficiency-decreased by a remarkable 28% on a revenue-weighted basis. This progress is fueled by strategic investments in energy efficiency and a shift to renewables, including a significant move in the Motion Technologies segment.

• Scope 1 & 2 GHG Target: 10% absolute reduction by EOY 2026 (2021 baseline).
• 2024 Progress: 8% absolute reduction vs. 2021 baseline.
• Motion Technologies Renewable Energy Coverage: 42% of energy consumed is now from renewable sources.

Water usage regulations impact Industrial Process segment operations in water-scarce regions

The Industrial Process (IP) segment, which includes pump and valve manufacturing and testing, is inherently exposed to water risk. While ITT's total water consumption is not generally considered high for a global industrial, the risk is localized and regulatory. For instance, total water consumed in 2023 was 109,392 thousand gallons.

The company is mitigating this through efficiency projects, like the closed-loop water chiller at the Orchard Park, New York facility, which is designed to reduce water consumption by an estimated 7.5 million gallons annually. Still, the nature of IP's operations, particularly the pump test facilities, makes it vulnerable to increasing water-use restrictions in high-stress regions like India, China, and parts of the U.S. and Europe, which are expected to face high or medium-high water stress by 2050.

Developing sustainable, non-asbestos brake friction materials for the automotive market

ITT's Motion Technologies segment, specifically the Friction brake pad business, has positioned itself as a leader in the shift to environmentally compliant materials. The transition to non-asbestos and, more recently, copper-free brake pads is a major regulatory driver. California's law, for example, is prohibiting friction materials containing more than 0.5% copper in new vehicles starting at the beginning of 2025.

The company anticipated this move and is heavily invested in R&D for low-emission braking technology, including new formulations for electric vehicles (EVs) and hybrid platforms. This focus is a clear growth opportunity, evidenced by a key investment:

• Strategic Investment: Initial €50 million investment (with a potential to grow to ~€70 million) to expand the Termoli, Italy Friction facility for high-performance brake pads, with new production lines starting in Q4 2024.

Here's the quick math: ITT's revenue from electric and emissions-reducing products rose to approximately 15% of total revenue in 2023, representing about $500 million on a pro forma basis, a 300 basis point increase from 2022. That's a clear signal that green products are a significant revenue stream now.

Increased stakeholder pressure for transparent Environmental, Social, and Governance (ESG) reporting

Stakeholder pressure-from institutional investors like BlackRock, customers, and regulators-is driving ITT's commitment to enhanced transparency. The company's ESG framework is explicitly informed by the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosure (TCFD), which are the gold standards for financial materiality.

In 2025, ITT took concrete steps to improve the quality and scope of its reporting:

• Scope Expansion: Extended Corporate Carbon Footprint accounting to include the KONI and Axtone businesses and aligned with the ISO 14064 standard.
• Supply Chain Transparency: Introduced a standardized supplier sustainability survey for all raw materials to improve data quality for joint emissions reduction efforts.

Honestly, this move to align with SASB and TCFD is defintely a smart way to manage investor relations and preempt future regulatory mandates.

Managing the full lifecycle impact of products, from material sourcing to disposal

A complete environmental strategy requires looking beyond the factory gate to the full product lifecycle, which includes Scope 3 emissions (value chain emissions). ITT is actively advancing its collection and analysis of these indirect emissions.

The focus began with the most energy-intensive part of the value chain: the Friction brake pad business, which launched a Scope 3 pilot in 2021 across five of its sites. This initial effort is now being scaled up to better understand the true environmental cost of their materials and end-user vehicle use.

Operational waste management also shows continuous improvement, which is crucial for a global manufacturer:

The next concrete step is for the Industrial Process Segment Head to draft a water-risk mitigation plan for all facilities in high-water-stress regions by the end of Q1 2026, mapping anticipated regulatory costs to the 2025 financial model.