Environmental Impact Policy Statement

Environmental Impact Policy Statement

Quanex Building Products Corporation (“Quanex” or the “Company”) is committed in all respects to acting in an environmentally responsible manner and to doing our part to promote sustainability of the Earth and its resources. To this end, we focus not only on continually improving our operational practices and processes to minimize our impact on the environment; we also work continuously to develop or improve our products so that we can provide goods that are energy-efficient and environmentally friendly. Our commitment is evident in a number of areas. See our 2021 corporate responsibility report.

Compliance

We employ a Quanex-wide director of environmental, health and safety (EHS) who is charged with ensuring that our facilities maintain full compliance with all laws, regulations and governmental permits in the countries, states and localities where we operate. Our EHS director in turn works directly with regional and plant-level EHS leaders to manage the Company’s environmental programs and meet our goal of companywide compliance. Any identified compliance issues are given high priority and corrected as quickly as possible.

Our environmental compliance efforts are bolstered by an online task alert system that allows our operators and leadership teams to continually track and monitor the completion of necessary environmental tasks. If a particular task has not been completed, the system elevates the issue by automatically informing someone at a higher level of authority, promoting visibility of environmental compliance matters and assuring accountability for those charged with ensuring compliance.

In addition to our day-to-day compliance work, we annually bring together all of our plant managers and leadership teams for a multiday conference to discuss various issues related to operational excellence and our environmental, health and safety efforts. This conference promotes enhanced contact and communication among our plant leadership teams so that they can share environmental and safety best practices year-round.

Environmental Stewardship and Minimizing our Footprint

We strive to manage our business in a way that minimizes our environmental footprint, and we employ a Quanex-wide director of Environmental, Social and Governance (ESG) to help guide our efforts in this regard. Our PVC extrusion business recycles almost all of its own scrap vinyl and has repurchased and recycled scrap from its customers for many years. Recently, a new outlet also has been secured for turning scrap material into a finished good in the form of PVC fence posts. Likewise, our cabinets business has partnered with several third parties to recycle or repurpose much of the sawdust and wood chip waste that results from our manufacturing process, often as animal bedding. Waste sawdust is also used as a renewable energy biofuel to fire our drying kilns. Throughout the business, we look for similar opportunities to avoid contributing waste to our country’s already-overburdened landfills and waste disposal sites, and we utilize continuous improvement and six-sigma techniques to help improve quality and reduce waste both at our own facilities and those of our customers and suppliers.

We believe that access to safe water and sanitation is a fundamental human right. As such, we take steps to reduce our water usage and waste outflows to minimize the impact of our operations on any water sources or freshwater ecosystems that may be near our facilities, and we expect the same of our suppliers.

Another important avenue to protect our environment is the reduction or elimination of waste, especially hazardous waste. Our locations are committed to continuous improvement in reducing waste through recycling programs, improved manufacturing processes and using waste products as alternative fuels.

Climate Related Risks and Opportunities

Quanex is keenly aware of the financial and operational risks that climate change poses to the overall business and to the world at large. However, we also believe that climate change presents several opportunities for business expansion, reduction of financial risks and improvement in the Company’s overall sustainability.

Below is a list of climate-related metrics that we have recently began to measure on a companywide basis as part of our long-term plan to reduce our climate impact.

• Total energy usage
• Renewable energy usage
• Production scrap, overall waste, and associated recycling efforts
• Scope 1 and scope 2 greenhouse gas emissions

We have not yet developed specific improvement goals for each of these metrics because we believe that any specific goals will be meaningless unless we have first refined our ability to document these metrics accurately and consistently across all our plants. Once these new measurement systems are fully implemented and working appropriately, we will then work to set baselines and begin developing specific improvement goals and implementation plans for those areas where we can make a true impact. While our specific planning process is in its early stages, we understand the effects of climate change and we are beginning to analyze various ways to minimize our carbon footprint and other environmental impacts for the good of all our stakeholders.

While we work to build these new measurement systems and plans for future improvements, our current operational focus is primarily on the reduction of scrap and machine downtime. Improvement in those areas will allow us to reduce our energy consumption while simultaneously providing value and reducing risk for our stakeholders. This reduction in energy consumption will in turn reduce our carbon footprint and overall climate impact.

Climate Risks to the Business

Working with leaders of the various divisions of Quanex, we have identified certain climate risks that are pertinent to each of our divisions.

North American Fenestration (NAF): Some of the raw materials and chemicals used in our PVC extrusions and insulating glass spacers are manufactured at plants located along the U.S. Gulf Coast. These plants have weathered several strong hurricanes over the past few years, and it appears that climate change is resulting in storms that are both more intense and more frequent. We have seen similarly troubling weather patterns in areas where our own plants are located, including the 2021 polar vortex that reached deep into southern United States and the frequent wildfires that seem to threaten California on a yearly basis. As climate change continues to drive more extreme weather, these events will presumably become more common and will increase the risk to our plants and our supply chain.

Quanex Custom Components (QCC): Our cabinet components business maintains a location in Oregon that is also subject to increased wildfire risk in the future as climate change continues to drive extreme drought on the West Coast.

European Fenestration: As with NAF, the European Fenestration business relies heavily on a supply chain that includes raw materials and chemicals manufactured along the US Gulf Coast. Disruptions to that supply chain that result from increasingly severe storms could lead to higher prices or even complete unavailability of certain materials. In addition, Europe and the United Kingdom also continue to see an increase in the severity and frequency of extreme weather events that can threaten our facilities or those of our customers and suppliers. Western Germany, for example, recently experienced an unprecedented flooding event that caused the temporary shutdown of our Heinsberg plant.

Internal Audit Program

Under the leadership of our EHS director and our internal legal team, and with the participation of auditors from many levels of the organization, we maintain a robust internal audit program. We conduct multiple on-site audits every year, with audit locations determined annually by our EHS director in conjunction with the legal team. We use standardized audit protocols that ensure our facilities meet a consistent set of standards regardless of their location. Upon completion of each audit, any required corrective actions are developed in conjunction with the plant’s leadership team. We then utilize our online alert system to ensure that all corrective actions are completed in a timely manner. Finally, our EHS director verifies completion of all tasks within the prescribed time period.

Product Leadership

We strive to develop products that are environmentally friendly. Across our North American and European Fenestration businesses, we develop products that are specifically designed to improve energy efficiency and reduce energy waste associated with window openings. Many of our vinyl extrusions and insulating glass spacer products, for example, exhibit world-class performance in energy efficiency and are used around the world in LEED-certified and other energy-efficient buildings.

Our dedication to sustaining the environment is evident at all levels of our business, and we will continue to strengthen those efforts in the future. Around the world, we will work to seize available opportunities to reduce our environmental impact and to continue our development of products and technologies that are energy-efficient and eco-friendly.