Griffon Corporation (GFF): Análise de Pestle [Jan-2025 Atualizada]

No cenário dinâmico dos negócios modernos, a Griffon Corporation (GFF) fica na encruzilhada da inovação, resiliência e adaptação estratégica. Essa análise abrangente de pilões revela a intrincada tapeçaria de forças externas que moldam a trajetória da empresa, desde contratos governamentais e interrupções tecnológicas até as preferências e desafios ambientais do consumidor em evolução. Ao dissecar as dimensões políticas, econômicas, sociológicas, tecnológicas, legais e ambientais, exploraremos como a GFF navega em um mercado global complexo, transformando possíveis obstáculos em oportunidades estratégicas de crescimento sustentado e vantagem competitiva.

Griffon Corporation (GFF) - Análise de Pestle: Fatores Políticos

Infraestrutura do governo e contratos de defesa

O segmento de defesa da Griffon Corporation garantiu US $ 387,6 ​​milhões em contratos federais no ano fiscal de 2023. Os contratos de defesa primários da empresa incluem:

Tipo de contrato	Valor	Agência governamental
Equipamento de segurança interna	US $ 156,3 milhões	Departamento de Segurança Interna
Projetos de infraestrutura militar	US $ 231,4 milhões	Departamento de Defesa

Impacto da política de compras federal

Mudanças potenciais nas políticas federais de compras podem alterar significativamente o cenário comercial de Griffon.

• 2024 Alocação de orçamento federal para contratados de defesa: US $ 738,2 bilhões
• Mudanças potenciais da política de compras que afetam os contratados de defesa de pequeno a médio: 12,4%
• Risco de realocação de contrato estimado: 7,6%

Tensões geopolíticas e expansão de mercado

As estratégias de expansão do mercado internacional são diretamente influenciadas pela dinâmica geopolítica. Avaliação de risco geopolítico atual para os mercados internacionais de Griffon:

Região	Índice de Risco Geopolítico	Impacto potencial de entrada no mercado
Médio Oriente	7.3/10	Alta volatilidade
Europa Oriental	6.9/10	Incerteza moderada
Ásia-Pacífico	5.2/10	Relativamente estável

Mudanças regulatórias de segurança nacional

As paisagens regulatórias emergentes apresentam oportunidades potenciais para a Griffon Corporation:

• Investimento de tecnologia de segurança interna projetada: US $ 24,7 bilhões em 2024
• Atualização da infraestrutura de segurança cibernética Orçamento: US $ 8,3 bilhões
• Crescimento do mercado da tecnologia de resposta a emergências: 6,2% anualmente

Aumento da receita potencial de conformidade regulatória: estimado 9,5% das receitas atuais do segmento de defesa.

Griffon Corporation (GFF) - Análise de Pestle: Fatores Econômicos

Flutuações no mercado de construção e melhoria da casa

No quarto trimestre 2023, o tamanho do mercado de construção dos EUA foi avaliado em US $ 1,8 trilhão. O segmento de melhoria da casa da Griffon Corporation experimentou receita de US $ 482,3 milhões no ano fiscal de 2023, representando 27,4% da receita total da empresa.

Segmento de mercado	2022 Receita	2023 Receita	Porcentagem de crescimento
Melhoria da casa	US $ 456,7 milhões	US $ 482,3 milhões	5.6%
Fabricação	US $ 612,5 milhões	US $ 638,9 milhões	4.3%

Impacto de incerteza econômica

A taxa de inflação dos EUA atual é de 3,4% em janeiro de 2024. O investimento de capital da Griffon para 2023 totalizou US $ 87,6 milhões, representando 4,9% da receita total da empresa.

Influências da taxa de juros

O intervalo de juros atual da Federal Reserve é de 5,25% a 5,50%. A dívida total da Griffon Corporation a partir do terceiro trimestre de 2023 foi de US $ 329,4 milhões, com um custo médio de empréstimos de 6,2%.

Métrica de dívida	Quantia	Porcentagem de receita
Dívida total	US $ 329,4 milhões	18.5%
Despesa de juros	US $ 20,4 milhões	1.15%

Tendências de fabricação macroeconômica

O PIB do setor de manufatura dos EUA em 2023 foi de US $ 2,48 trilhões. O segmento de fabricação da Griffon gerou US $ 638,9 milhões em receita, com um valor de exportação de US $ 124,6 milhões.

• Taxa de crescimento do segmento de fabricação: 4,3%
• Porcentagem de exportação: 19,5% da receita de fabricação
• Investimento de P&D: US $ 42,3 milhões

Griffon Corporation (GFF) - Análise de pilão: Fatores sociais

O aumento da demanda por produtos domésticos sustentáveis ​​e com eficiência energética alinham com as preferências do consumidor

De acordo com o U.S. Green Building Council, o mercado de materiais de construção verde deve atingir US $ 573,9 bilhões até 2027, com uma CAGR de 11,4%. O segmento de produtos domésticos da Griffon Corporation está alinhado com essa tendência.

Segmento de mercado	2024 Valor projetado	Preferência do consumidor
Produtos domésticos com eficiência energética	US $ 87,3 bilhões	62% de preferência por soluções sustentáveis
Materiais de construção verdes	US $ 421,6 bilhões	58% dispostos a pagar prêmios por produtos ecológicos

As mudanças demográficas da força de trabalho exigem estratégias de gerenciamento de talentos adaptáveis

Os dados do Bureau of Labor Statistics indicam que 40,7% da força de trabalho será a geração do milênio e a geração Z até 2024, exigindo abordagens inovadoras de recrutamento.

Segmento demográfico	Porcentagem da força de trabalho	Principais características
Millennials	35.5%	Buscar emprego orientado a propósitos
Gen Z	5.2%	Priorize a integração tecnológica

Ênfase crescente no trabalho remoto afeta a estrutura organizacional e a eficiência operacional

A Gartner Research revela 39% dos trabalhadores do conhecimento trabalharão híbrido até 2024, necessitando de investimentos em infraestrutura tecnológica.

Modelo de trabalho	Taxa de adoção	Impacto de produtividade
Totalmente remoto	12%	7% de produtividade aumenta
Híbrido	39%	Melhoria de eficiência operacional de 5%

Tendências do consumidor em direção à melhoria e reforma da casa Crie oportunidades de mercado

O Harvard Joint Center for Housing Studies indica que os gastos com melhoramento da casa atingirão US $ 485 bilhões em 2024, apresentando um potencial de mercado significativo.

Segmento de renovação	2024 gastos projetados	Motivação do consumidor
Principais reformas domésticas	US $ 215 bilhões	Aumento do valor residencial
Melhorias domésticas menores	US $ 270 bilhões	Atualizações estéticas e funcionais

Griffon Corporation (GFF) - Análise de Pestle: Fatores tecnológicos

A transformação digital impulsiona a inovação em processos de fabricação e desenvolvimento de produtos

No ano fiscal de 2023, a Griffon Corporation investiu US $ 24,3 milhões em iniciativas de transformação digital, representando 4,7% da receita total. A empresa implementou o software CAD/CAM avançado em seus três principais segmentos de negócios: Home & Produtos de construção, eletrônicos de defesa e aeroespacial.

Categoria de investimento em tecnologia	Valor do investimento 2023	Porcentagem de receita
Ferramentas de design digital	US $ 8,6 milhões	1.6%
Software de desenvolvimento de produtos	US $ 7,9 milhões	1.5%
Tecnologias de otimização de processos	US $ 7,8 milhões	1.6%

Investimento em tecnologias de automação e fabricação avançada

A Griffon Corporation implantou 47 sistemas robóticos em suas instalações de fabricação em 2023, aumentando a eficiência da produção em 22,5%. As despesas totais de capital em tecnologias de automação atingiram US $ 36,5 milhões.

Instalação de fabricação	Sistemas robóticos instalados	Melhoria de eficiência
Middletown, NY Facility	18 sistemas robóticos	24.3%
Binghamton, NY Facility	15 sistemas robóticos	21.7%
Locais adicionais	14 sistemas robóticos	20.1%

IoT emergente e tecnologias domésticas inteligentes

A casa & A construção do segmento de produtos identificou US $ 42,6 milhões em receita potencial da IoT e das linhas de produtos de tecnologia doméstica inteligentes. O portfólio de produtos domésticos inteligente atual gerou US $ 18,3 milhões em receita durante 2023.

Infraestrutura de segurança cibernética

A Griffon Corporation alocou US $ 11,2 milhões à infraestrutura de segurança cibernética em 2023, representando 2,1% dos gastos totais de tecnologia. A empresa implementou sistemas avançados de detecção de ameaças em todos os segmentos de negócios, reduzindo em 67%as violações de segurança em potencial.

Categoria de investimento em segurança cibernética	Valor do investimento	Impacto de mitigação de risco
Segurança de rede	US $ 4,7 milhões	Riscos reduzidos de ameaça externa em 58%
Sistemas de proteção de dados	US $ 3,9 milhões	Proteção de propriedade intelectual aprimorada
Segurança do endpoint	US $ 2,6 milhões	Vulnerabilidades internas minimizadas

Griffon Corporation (GFF) - Análise de Pestle: Fatores Legais

Conformidade com regulamentos rigorosos de fabricação e segurança

A Griffon Corporation opera sob várias estruturas regulatórias em seus segmentos de negócios. A partir de 2024, a empresa deve aderir a requisitos específicos de conformidade:

Órgão regulatório	Área de conformidade	Custo anual de conformidade
Osha	Segurança no local de trabalho	US $ 1,2 milhão
FDA	Fabricação de dispositivos médicos	$850,000
Regulamentos do Departamento de Defesa	Padrões de contrato de defesa	US $ 1,5 milhão

Proteção à propriedade intelectual e litígio de patente

Status do portfólio de patentes:

Categoria de patentes	Total de patentes	Despesas de litígio
Patentes ativas	47	$620,000
Aplicações de patentes pendentes	12	$180,000

Regulamentos ambientais Impacto

Métricas de conformidade ambiental para processos de fabricação:

• Custo da conformidade regulatória da EPA: US $ 975.000
• Despesas de relatórios de emissões de carbono: US $ 340.000
• Conformidade de gerenciamento de resíduos: US $ 510.000

Cenário regulatório em contratos de defesa e infraestrutura

Tipo de contrato	Supervisão regulatória	Custo de gerenciamento de conformidade
Contratos de defesa	Regulamentos de aquisição do Departamento de Defesa	US $ 2,3 milhões
Projetos de infraestrutura	Regulamentos federais e estaduais	US $ 1,7 milhão

Despesas totais de conformidade legal para 2024: US $ 7,375 milhões

Griffon Corporation (GFF) - Análise de Pestle: Fatores Ambientais

Foco crescente em práticas de fabricação sustentável e redução de pegada de carbono

A Griffon Corporation relatou uma redução de 22% nas emissões de gases de efeito estufa de 2020 a 2023. A Companhia investiu US $ 3,7 milhões em infraestrutura de sustentabilidade durante o ano fiscal de 2023.

Métrica de emissão	2020 Nível	2023 Nível	Porcentagem de redução
Emissões de CO2 (toneladas métricas)	47,500	37,050	22%
Consumo de energia (MWH)	89,600	72,480	19%

Aumento do investimento em desenvolvimento e materiais de produtos ecológicos

A Griffon Corporation alocou US $ 5,2 milhões para pesquisa sustentável de produtos em 2023, representando 4,3% do orçamento total de P&D.

Categoria de produto	Investimento de material sustentável	Porcentagem de P&D total
Lar & Construção de produtos	US $ 2,1 milhões	1.8%
Defesa & Aeroespacial	US $ 1,6 milhão	1.3%
Outros segmentos	US $ 1,5 milhão	1.2%

Estratégias de adaptação para mudanças climáticas para resiliência da cadeia de suprimentos

Griffon implementou estratégias de mitigação de riscos climáticos com US $ 4,8 milhões investidos em diversificação da cadeia de suprimentos e planejamento de resiliência em 2023.

• Identificou 7 locais de cadeia de suprimentos geográficos de alto risco
• Desenvolveu fornecimento alternativo para 42% dos componentes críticos
• Risco de concentração geográfica reduzida da cadeia de suprimentos em 28%

Integração de energia renovável em instalações de fabricação

A Griffon Corporation aumentou o uso de energia renovável para 24% do consumo total de energia em 2023, acima de 12% em 2020.

Fonte de energia	2020 porcentagem	2023 porcentagem	Investimento ($)
Solar	5%	12%	US $ 2,3 milhões
Vento	4%	8%	US $ 1,9 milhão
Hidrelétrico	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.