2025 SUSTAINABILITY REPORT
INTRODUCTION
PRODUCTS
ENVIRONMENT
PEOPLE
LEADERSHIP
SUPPLEMENT
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ONE COLOR SPRUCE
ONE COLOR BLACK
ONE COLOR
Sustainability Risks
Risks to supplies of the waste materials we reclaim and recycle to manufacture Trex decking.
Labor shortages or increases in labor costs could adversely impact our business and results of operations.
Climate change and the associated legal or regulatory responses may have a long-term adverse impact on our business energy and fuel sourcing strategy and cost. Impact: There is concern that a gradual increase in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases in the atmosphere could cause significant changes in weather patterns and an increase in the frequency, duration and severity of natural disasters. Compliance with newly enacted laws and regulations could impact operational and compliance burdens, which may negatively impact our financial condition and results of operations. Mitigation: We operate a continuous improvement approach to environmental management, aligning our manufacturing practices with ISO 14001, which includes our energy use and associated carbon footprint. When we invest in new facilities and upgrade existing sites, we take the opportunity to install the best available technology designed to maximize energy and water efficiency. Trex is committed to complying with all relevant climate regulations and does not incur additional costs through voluntary purchase of “green” power or certificates.
Cyberattacks and other security breaches could compromise our proprietary and confidential information which could harm our business and reputation. Impact: While we have certain safeguards in place to reduce the risk of and detect cyberattacks, our information technology networks and infrastructure may be vulnerable to unpermitted access by hackers or other breaches, or employee error or malfeasance. Any such compromise of our data security and access to, or public disclosure or loss of, confidential business or proprietary information could disrupt our operations, damage our reputation, provide our competitors with valuable information and subject us to additional costs, which could adversely affect our business. Mitigation: Our proactive measures to reduce the risk of a cybersecurity incident include engaging a third party to monitor information systems security events and test our systems to identify gaps. We conduct system-vulnerability scanning and deploy critical patches where needed. We assess risks from third-party partner organizations to identify and mitigate risks from vendors, suppliers and other business partners. We provide training for our employees annually on information security best practices and compliance requirements and test employees’ awareness through phishing campaigns. Our incident response preparation involves tabletop exercises to assess the company’s preparedness and identify areas for improvement. We maintain cybersecurity insurance to mitigate exposure related to cyberattacks and other security breaches.
Impact: Our business could suffer from the termination of significant sources of raw materials, the payment of higher prices for raw materials, reduction in quality of available raw materials, or from the failure to obtain sufficient additional raw materials to meet planned increases in production. LOGO USAGE
Impact: We rely heavily on our employees, and any shortage of qualified labor could adversely affect our business by impairing our ability to function optimally and meet our production targets. A labor shortage may also require us to pay higher wages for employees and incur a corresponding reduction in our profitability.
Mitigation: We continually diversify supply and develop new sources of wood fiber and waste PE to meet our growing raw materials needs. Innovation in our processes enables Trex to use novel waste materials with varying specifications that were not previously suited to our needs. Our Little Rock, Arkansas site expands our PE processing capacity to meet foreseeable future demand.
Mitigation: Our employee training and development programs available at all levels in our workforce are designed to foster long and rewarding career progression in Trex, minimizing voluntary leavers. Extensive employee engagement, including surveys and robust communication channels, encourage loyalty and shared vision between our employees and our company. We benchmark and review our pay and benefits against industry standards and update our compensation structure periodically to remain competitive in the market. Our equal opportunity recruitment and workplace practices help ensure we have access to a wide talent pool.
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