Fastenal Co. (FAST) 2024年CSR报告「NASDAQ」.pdf

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1、Empowering people,preserving our world,and serving as a trusted partner.R E P O R T2 024Published March 2024GovernanceEmpoweringPeoplePreserving Our WorldServing as a Trusted PartnerAppendixA Letter From Our President and CEOWho We AreESG Strategy&VisionFastenal at a GlanceBoard of DirectorsESG Mana

2、gementResponsible SourcingCybersecurity&Data PrivacyEthics&ComplianceEmpowering PeopleHuman Rights&Diversity,Equity,and InclusionEmploymentTraining&DevelopmentWorkplace Health&SafetyCommunity EngagementOur Strategic FocusTransportationFacilities&OperationsReducing,Reusing,&RecyclingCautionary Note:F

3、orward Looking Statements/DisclaimersAbout This ReportGRI IndexSASB IndexTCFD IndexSDG IndexPreventionGreen and Energy-Efficient Products ProgramCategory ManagementMetalworking ProgramEngineering ProgramConsumption ReductionTotal Cost of Ownership(TCO)AnalysisFMI TechnologyProduct Life ExtensionTool

4、 Repair ServiceTool&Cutter Grinding ServiceRecycling&RecoveryRecycling Vendor ProgramsA Partner for Positive ChangeSupplier Diversity ProgramSafety Specialist ProgrameCommerce ToolsA Final Word on Supply Chain ResiliencyPreserving Our World29-38Serving as a Trusted Partner39-55Appendix56-67Empowerin

5、g People14-28Governance6-13Our ESG Journey1-5Sustainability SolutionsWhats InsideThis report is interactive.You can scroll from page to page or use the navigation tools at the top.Will return you to the table of contents.Unless noted,goals and other data in this report reflect our global operations.

6、1/2024 ESG ReportOur ESG JourneyGovernanceEmpoweringPeoplePreserving Our WorldServing as a Trusted PartnerAppendixIn last years report,we spoke about the completion of a materiality assessment to define and prioritize our key ESG issues.During 2023,we took the next step to define our ESG vision,pill

7、ars,and strategic objectives.The following two pages provide an overview of how we define ourselves in the marketplace and how we define our vision:empowering people,preserving our world,and serving as a trusted partner.The rest of the document takes a deeper dive with these themes.The language and

8、metrics surrounding ESG havent always felt intuitive for us.To help us bridge gaps and become more comfortable in telling our story,we searched inward and sought expertise from outside our organization.As our understanding improved,we realized many activities and priorities that fall under the broad

9、 umbrella of“ESG”naturally align with who we are,how we operate,and what weve always believed in as an organization.For example,it is very natural for us to operate with,and talk about,a belief in people,a belief in people development,and a desire to achieve growth through customer service.We also b

10、elieve a frugal operating style(a defining characteristic of Fastenal for 55-plus years)is the natural place from which to prioritize the environment.This helps us share a story around a deeply-rooted tendency to preserve resources,reduce consumption,and help our customers do the same.As you read th

11、rough the document,we hope our sincerity regarding these and other topics shines through.As mentioned in the closing of our last two ESG report introduction letters,the Blue Team at Fastenal is working hard to be a force for positive change in our operations,in our communities,for our customers,and

12、across global supply chains.We are proud to share our story.Thank you for taking the time to read Fastenals 2024 Environmental,Social,and Governance(ESG)Report.This is our third ESG report,and it covers our progress and performance in 2023.Welcome!2A Letter from our President and CEOWho We AreESG St

13、rategy and VisionFastenal at a Glance/2024 ESG ReportOur ESG JourneyGovernanceEmpoweringPeoplePreserving Our WorldServing as a Trusted PartnerAppendixWho We AreOrganizations partner with Fastenal*to reduce cost,waste,risk,and growth constraints in the supply chain for a broad range of industrial and

14、 construction supplies.By helping our customers operate more efficiently and productively,our role is elevated from“supplier of products”to“strategic supply chain partner.”Our strategic supply model requires end-to-end capabilities,including:Robust global sourcing and quality operations A geographic

15、ally-diverse and closely-managed supplier base A network of regional distribution centers,vehicles,and in-market servicing locations Tens of thousands of inventory management solutions embedded within customer sites And at the heart of it all,a great local team to support and serve our customersIn s

16、hort,we are able to impact and improve the supply chain because,to a large extent,we own it from the source,to the last mile,to the point of use.This presents an exciting challenge for our Blue Team to pioneer more sustainable ways to procure,transport,and use products;to help hundreds of thousands

17、of organizations operate more efficiently and responsibly;and to make a positive impact that extends well beyond our own operations.Where Industry Meets InnovationSustainability is an intrinsic feature of this strategic supply model.When organizations partner with Fastenal to avoid over-consumption,

18、obsolete inventory,redundant purchases,expedited ordering,and overlapping deliveries from multiple vendors,theyre taking waste out of their business and the environment.Our technology solutions create a new level of visibility and understanding what products the customer has readily available,where

19、theyre located,and how theyre used in the business.This insight illuminates trends and opportunities for the customer to operate more efficiently.It also allows our teams to be more strategic and efficient in how we manage the upstream supply chain.Today,were building upon our core service model and

20、 technology platform to provide customers with a suite of Sustainability Solutions designed to help them reduce environmental impacts across four broad areas:prevention,consumption reduction,product life extension,and recycling and recovery.(Learn more on pg.43.)Go to Investor RelationsGo to About U

21、sGo to ESG*Fastenal,together with our subsidiaries,are herein referred to as Fastenal or by terms such as we,our,or us.3A Letter from our President and CEOWho We AreESG Strategy and VisionFastenal at a Glance/2024 ESG ReportOur ESG JourneyGovernanceEmpoweringPeoplePreserving Our WorldServing as a Tr

22、usted PartnerAppendixESG Strategy and VisionOur ESG VisionAs a catalyst for innovation and positive change,we strive to provide exceptional value to our customers by empowering people,preserving our world,and serving as a trusted supply chain partner.Empowering PeoplePreserving Our WorldServing as a

23、 Trusted PartnerWe foster a safe and welcoming workplace for all,prioritize employee development,and empower our Blue Team to achieve positive outcomes for themselves,our customers,and the community.We work to reduce consumption and environmental impacts throughout our operations and provide solutio

24、ns to help our customers do the same.As a vital part of our customers operations,we are committed to providing a supply chain that is efficient,resilient,and responsible.Employee safety/wellbeing Diversity,equity,and inclusion Energy efficiency GHG emissions Sustainable products/materials Waste mana

25、gement Business ethics Product quality and safety Supply chain resilience Responsible supply chainStrategic ObjectivesRelevant Topics4A Letter from our President and CEOWho We AreESG Strategy and VisionFastenal at a Glance/2024 ESG ReportOur ESG JourneyGovernanceEmpoweringPeoplePreserving Our WorldS

26、erving as a Trusted PartnerAppendixService through our traditional branches and Onsite operations is enhanced by a variety of technology solutions.56.1%of our total revenue flows through this Digital Footprint.(1)This core model is supported by a range of high-touch services and high-tech solutions

27、to help customers solve problems and gain efficiencies.Mobile apps simplifying ordering and other processesFAST360 tools to visualize inventory locations and status Trajectory tracking how vended products are used in the business FASTCribSM software to manage requisitions,inventory,and assets eProcu

28、rement Integration automating processes while improving accuracy and visibility620+supply chain professionals(3)including 130+on the ground in AsiaRoughly 90%of the product tonnage moved between our DCs and in-market locations is transported via Fastenal-owned trucks420M products made,modified,or ma

29、intained by our manufacturing and industrial services teams580+subject matter specialists(e.g.,Lean Solutions,safety,engineering,metalworking)employees.71%directly serve our customersFastenal School of Business trainings completed(1)Our Digital Footprint is a combination of our sales through FMI Tec

30、hnology(FASTStock,FASTBin,and FASTVend)plus that portion of our eCommerce sales that do not represent billings of FMI services.(2)Machine Equivalent Units(MEUs).(3)Includes individuals specializing in the following:sourcing,quoting,purchasing,supplier development and operations,compliance,and logist

31、ics.Fastenal at a Glance:Key Stats Regarding Our Global Business in 2023113,138 weighted FASTBin/FASTVend installations(MEUs(2)High-Tech SolutionsHigh-Touch Services Our strategic supply model starts starts with a simple premise:great people,close to the customer,with a passion for learning and grow

32、th.eCommerceImproves the efficiency of procurement/purchasing processes.FASTVendProviding secure access and usage tracking close to the point of use in a customers facility.FASTBinPoint-of-use devices with embedded technology providing a 24/7 sightline to the customers current inventory state.FASTSt

33、ockSMUsing mobile technology to illuminate inventory and simplify replenishment.Our local team operates in 3,419 in-market operating units across 25 countries.64%of our$1.5B in inventory is staged locally or within customer sites for same-day access.23,201874,000+traditional branches1,597Onsite oper

34、ations1,822These Fastenal Managed Inventory(FMI)programs represented 40.3%of total sales in 2023.5A Letter from our President and CEOWho We AreESG Strategy and VisionFastenal at a Glance/2024 ESG ReportOur ESG Journey/2024 ESG ReportGovernanceOur ESG JourneyGovernancePreserving Our WorldServing as a

35、 Trusted PartnerAppendixEmpowering People6/2024 ESG Report7Our ESG JourneyEmpoweringPeoplePreserving Our WorldServing as a Trusted PartnerAppendix“G”is the last letter in“ESG,”but responsible governance is where ESG begins.Even in a decentralized organization like Fastenal,employees look to leadersh

36、ip to define goals,set standards,provide resources,and prioritize areas of focus.This section will focus on the personnel,procedures,and guidelines weve put in place to promote ESG success and guide ethical actions across the organization.Board of DirectorsFastenals board of directors is composed of

37、 a diverse group of individuals with varying backgrounds and experiences.This group is responsible for the oversight of enterprise risk,including ESG matters,and receives leadership and guidance on these topics from the committees of the board.Eight of the eleven directors,including the chair of the

38、 board,are independent,which helps to broaden our perspective and deepen our understanding of ESG issues.The full board has assigned the nominating and corporate governance committee the primary duty to oversee corporate governance matters subject to board oversight and sets high standards for the c

39、ompanys employees,officers,and directors.Among its priorities are corporate responsibility,human capital management,and sustainability.The topic of ESG,including climate-related issues,is on the full-board meeting agenda a minimum of twice per year and is on the committee agenda quarterly.On matters

40、 of enterprise risk,including ESG matters,the full board has oversight responsibility and receives leadership and guidance from three standing committees composed exclusively of independent members.These committees,and the board as a whole,help to maintain Fastenals strong commitment to ethical and

41、responsible business practices,fostering an environment in which we act with integrity and respect for each other,our customers and suppliers,our communities,and the environment.Learn more about our board of directors in the 2024 proxy statement on our investor resources site.Nominating and Corporat

42、e Governance Committee Compensation CommitteeAudit CommitteeAssists the board in maintaining appropriate candidates to serve as directors of the organization.As part of its oversight of the companys ESG initiatives,this group receives quarterly updates from the ESG team and proposes relevant topics

43、to be included in the quarterly board meeting agenda.Assists the board by overseeing the accounting and financial reporting process of the company and audits of the financial statements of the company.The committee also has oversight of the independent auditors qualifications,independence,and perfor

44、mance;the performance of the companys internal audit functions;managements process to monitor,control,and report on significant corporate risk exposures(including those related to ESG);and the companys compliance with legal and regulatory requirements.Assists with the structure and approval of execu

45、tive compensation plans.Responsibilities include a duty to assess the impact of the companys compensation programs on risk and recommend policies deemed necessary or advisable in order to mitigate risks related to compensation and human capital management.7GovernanceBoard of DirectorsESG ManagementR

46、esponsible SourcingCybersecurity&Data PrivacyEthics&Compliance/2024 ESG Report8Our ESG JourneyEmpoweringPeoplePreserving Our WorldServing as a Trusted PartnerAppendixNominating and Corporate Governance CommitteeThis committee serves as a liaison between the full board of directors and the ESG team,p

47、roviding oversight to help integrate ESG initiatives into our overall growth strategy.It consists of five directors,each of whom qualifies as an independent director.Community of PracticeOur ESG Community of Practice is made up of leaders and subject matter experts from various areas of the business

48、 that are essential to the success of our goals.This group is responsible for continuous improvement to core aspects of our ESG program,including roadmap execution,reporting and disclosure,and continued development of our customer-facing solutions.The ESG Community of Practice is designed to facilit

49、ate structured and consistent communication,allowing ESG champions from across the organization to work collectively.In 2023,the group launched the Learning Loops series,which allows members to share stories,experiences,and knowledge on a regular basis.The goal is to learn from one another and broad

50、en our knowledge base as we work toward Fastenals ESG vision.Materiality Assessment,ESG Vision and StrategyAs mentioned in our previous report,in 2022 we engaged with leading third-party consulting firms to help us clarify our ESG priorities,vision,and strategy.The first phase of the project,complet

51、ed in late 2022,was a materiality assessment*to define and prioritize key ESG issues impacting our company and our stakeholders.Working with our outside advisors,we referenced external reporting frameworks(including GRI,SASB and TCFD),considered material issues identified by various raters and ranke

52、rs,and conducted a benchmarking analysis regarding ESG risk in our industry.We also conducted interviews with key stakeholders,including customers,employees,investors,and suppliers.From this assessment process,we identified a priority list of our most significant ESG topics.(We intend to revisit and

53、 update our materiality assessment at least every five years.)The second phase,completed in April 2023,centered on defining our ESG vision,pillars(see below),and strategic objectives based on those topics we identified as most significant.Throughout the year,our Community of Practice worked to solid

54、ify short-term goals(1 to 3 years),medium-term goals(3 to 5 years),and long-term goals(5 to 10 years),creating a roadmap to work toward our strategic objectives over a multi-year time horizon.ESG Management*In conducting this prioritization exercise as part of our effort to clarify our ESG prioritie

55、s,vision and strategy,we have made use of GRI and SASB guidance for“materiality”assessments.This guidance for seeking stakeholder impact and determining priorities refers to“material”topics to reflect the issues of importance to us and our stakeholders.Used in this context,these terms are distinct f

56、rom,and should not be confused with,the terms“material”and“materiality”as defined by or construed in accordance with securities law or as used in the context of financial statements and reporting.Empowering PeoplePreserving Our WorldServing as a Trusted Partner8GovernanceBoard of DirectorsESG Manage

57、mentResponsible SourcingCybersecurity&Data PrivacyEthics&Compliance/2024 ESG Report9Our ESG JourneyEmpoweringPeoplePreserving Our WorldServing as a Trusted PartnerAppendixResponsible SourcingAs a strategic supplier,we believe Fastenal has a responsibility to stay in sync with an ever-changing landsc

58、ape of global regulations,supply chain risks,and industry demands.To that end,we maintain multiple teams of compliance specialists around the world with the expertise to ensure the products we supply meet or exceed applicable standards and regulations across global supply chains.Our processes are re

59、gularly updated in response to new and changing regulations,business needs,and customer expectations;however,we maintain a consistent focus on the following areas to mitigate risk for ourselves,our customers,and other stakeholders.Supplier ComplianceThrough our supplier terms and code of conduct,we

60、require our suppliers to comply with all applicable regulations.We conduct risk analyses of suppliers who want to do business with us,which as a baseline includes obtaining supporting documentation regarding quality,capacity,and labor practices.We are committed to building relationships with well-qu

61、alified suppliers that meet our standards for quality,ethics,sustainability,and reliability.Conformance to our supplier code of conduct is required to become,and maintain good standing as,a supplier to Fastenal of any supplied material or service.(This expectation is reinforced in each Fastenal purc

62、hase order,which references our supplier code of conduct and purchase order terms and conditions.)We evaluate suppliers compliance with these standards in determining whether to grant or continue preferred status.Suppliers that do not comply with this code of conduct may be disqualified from preferr

63、ed status and/or have their business relationship with Fastenal terminated.To learn more about our supplier terms and code of conduct,visit Fastenals Legal Information page.Import Control PolicyTo establish visibility and control early in the supply chain,we operate a global sourcing division known

64、as FASTCO(Fastenal Asia Sourcing and Trading Company).This resource is made up of more than 200 Asia-based personnel,including factory auditors,engineers,procurement professionals,quality specialists,and logistics specialists,allowing us to closely monitor risks and opportunities and maintain a high

65、 level of control over product quality.It also includes five international A2LA-accredited quality labs(in addition to the four A2LA-accredited labs we operate in the United States),which provide comprehensive mechanical and chemical fastener analysis.Product testing is conducted to internationally

66、recognized standards as well as customer specifications.Product TransparencyIn addition to the controls and processes described above,Fastenals compliance team works to provide visibility to the product attributes we believe are most important to our customers.This includes using the following icons

67、 on our eCommerce platform,other marketing channels,and point of sale system to help customers make informed purchasing decisions.Learn more about the customer support and documentation we provide regarding material declarations,conflict minerals,REACH,and RoHS.Restricted ProductREACHSafety Data She

68、ets(SDS)RoHSCA Proposition 65Conflict Minerals9GovernanceBoard of DirectorsESG ManagementResponsible SourcingCybersecurity&Data PrivacyEthics&Compliance/2024 ESG Report10Our ESG JourneyEmpoweringPeoplePreserving Our WorldServing as a Trusted PartnerAppendixForced Labor PolicyFastenal maintains a str

69、ong stance against the use of forced labor within any tier of our supply chain and actively works with our suppliers to monitor,educate,and address any potential compliance concerns.Forced labor prevention expectations are written into our supplier code of conduct.In addition,our teams execute suppl

70、ier documentation reviews,on-site audits,internal and external trainings,risk assessments,and material origin reviews.Selection and Monitoring of Corporate Suppliers This involves multiple stages and teams.First,our supplier intel group does background research on the potential corporate supplier.If

71、 they meet basic requirements,our field auditors conduct a pre-audit to collect additional data and samples for lab testing,while our purchasing team verifies whether the pricing is competitive.If the supplier passes the pre-audit,we then perform a full audit of their quality process.(Based on an in

72、ternal risk analysis,certain suppliers are also subject to a full audit of their social compliance.)If approved,the supplier can be issued a vendor number and activated in our system.All corporate suppliers are evaluated monthly with quality performance scorecards.Supply Chain Security PolicyAs both

73、 an importer and exporter,Fastenal has been a member of the United States Customs and Border Protection Agencys Customs Trade Partnership Against Terrorism(CTPAT)program since 2009.This supply chain security partnership program is designed to secure and facilitate the movement of legitimate internat

74、ional trade and improve security throughout the supply chain,from the point of cargo origin to the final import destination.The program provides a foundation for Fastenals risk-based approach to supply chain security.It guides our employee training curriculums,internal facility audits,vendor securit

75、y campaigns,warehouse security measures,and freight tracking procedures;and it is the controlling policy document that outlines Fastenals internal expectation regarding forced labor controls.Quality ControlOur current quality management system is registered to ISO 9001:2015 and certified by TUV Rhei

76、nland of North America.This certification covers 73 locations,including all distribution centers,industrial services centers,internal manufacturing locations,FASTCO,and select in-market servicing locations.In addition to controlling our internal quality system,Fastenal operates nine product testing

77、labs as part of our supply chain quality control process.The labs,which are accredited by the American Association for Laboratory Accreditation(A2LA),provide mechanical and chemical analysis to meet internationally recognized standards as well as customer specifications.These internal mechanical tes

78、ting resources and our access to external accredited labs give us the ability to test products across our scope of supply.10GovernanceBoard of DirectorsESG ManagementResponsible SourcingCybersecurity&Data PrivacyEthics&Compliance/2024 ESG Report11Our ESG JourneyEmpoweringPeoplePreserving Our WorldSe

79、rving as a Trusted PartnerAppendixProduct Alerts and RecallsOur quality management system includes well-defined processes for product alerts and recalls.These can be initiated either internally by Fastenal(based on product testing in our A2LA-accredited labs)or externally by our supply chain partner

80、s.Recalls and alerts are classified into four levels:Level A is an alert only,prompting us to remove the product from our distribution centers.Level B is also an alert only,but in this case the product is removed from both our distribution centers and our in-market servicing locations(branches and O

81、nsites).Level C is an internally-initiated recall whereupon we remove the product from all Fastenal locations and notify customers of the product failure.Level D is a vendor-initiated recall.The supplier recalls a specific product,and we communicate the recall requirements to our end-user customers

82、globally.In a recall or alert situation,Fastenal is able to lock down the product on a corporate level so that it cannot be sold through our point of sale system.Conflict Minerals PolicyFastenals conflict minerals policy provides a framework for compliance with Section 1502 of the Dodd Frank Wall St

83、reet Reform and Consumer Protection Act of 2010(“Dodd Frank Act”).This section pertains to 3TG minerals(tin,tantalum,tungsten,and gold,which are derivatives of cassiterite,columbite-tantalite,and wolframite)regardless of where they are sourced,processed,or sold.As a United States issuer of securitie

84、s governed by the Securities and Exchange Commission,Fastenal and its subsidiaries use this policy to guide the implementation and maintenance of our conflict minerals program.Fastenal expects manufacturers of Fastenal-branded products,custom-engineered products,or other products over which we exert

85、 influence through product development or design to have policies and due diligence measures in place that will assure knowledge and notification of products and components that contain conflict minerals.We have partnered with a third-party organization to assist in the collection and validation of

86、information from our suppliers and to help us improve the overall quality of our reporting.More broadly,we expect suppliers to conduct their business in alignment with Fastenals supply chain responsibility expectations.In support of this policy,Fastenal will:Exercise due diligence with suppliers con

87、sistent with the Organization for Economic Cooperation and Development(OECD)Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas(and encourage our suppliers to do the same with their upstream suppliers).Provide due diligence information to custo

88、mers confirming the applicability and/or compliance of products supplied by Fastenal.Continue our involvement with relevant industry groups,such as the Twin Cities Conflict Mineral Task Force,to stay on top of developments,changes,and future requirements.View Fastenals most recent Conflict Mineral R

89、eport.11GovernanceBoard of DirectorsESG ManagementResponsible SourcingCybersecurity&Data PrivacyEthics&Compliance/2024 ESG Report12Our ESG JourneyEmpoweringPeoplePreserving Our WorldServing as a Trusted PartnerAppendixFastenal has received certification to the ISO 27001:2013 information security man

90、agement system.This certification was achieved through a formal audit process conducted by A-LIGN,an independent and accredited certification body in the United States.ISO 27001 is an international standard to manage information security published by the International Organization for Standardizatio

91、n(ISO),the worlds largest developer of voluntary international standards,and the International Electrotechnical Commission(IEC).Achieving certification to ISO 27001 demonstrates that Fastenal has met rigorous international standards for ensuring the confidentiality,integrity,and availability of data

92、.It reflects our commitment to ensure that security of data and information has been addressed and that proper controls have been implemented in all areas of the organization.Our information technology(IT)security department is tasked with monitoring cybersecurity and operational risks related to in

93、formation security and system disruption.The team employs measures designed to protect against,detect,and respond to cybersecurity threats,and has implemented processes and procedures aligned with our information security management system to support and promote resilient programs.This includes:Fast

94、enals board of directors and audit committee are actively engaged in the oversight of our information security program.The audit committee receives quarterly reports on information security from our senior vice president of information technology infrastructure and security.Additionally,our executiv

95、e leadership team is briefed on information security at least once a quarter by members of our IT security,compliance,governance,and audit teams.Any identified risks are included in Fastenals overall risk management program,and internal and external auditors validate its IT controls on a regular bas

96、is.Fastenal conducts organization-wide cybersecurity training and compliance exercises in connection with our information security program.This training consists of educational material and compliance testing administered annually to all Fastenal employees,which is tracked and recorded throughout th

97、e year.Results and progress are shared with executive leadership and the audit committee each quarter.In our continued commitment to maintaining a strong internal control environment,Fastenal underwent a System and Organization Controls(SOC)2 examination from an independent auditor(risk3sixty Compli

98、ance,LLC)and received a SOC 2 Type 2 attestation report.The SOC 2 Type 2 report covers the suitability of the design and operating effectiveness of controls over a period of time.The scope of the report covers Fastenals service commitments and system requirements based on the Trust Services Criteria

99、 relevant to security and availability(AICPA,Trust Services Criteria).Cybersecurity&Data PrivacyEnterprise security framework and cybersecurity standardsCybersecurity awareness and training plansSecurity assessments and monitoringRestricted physical access to critical areas,servers,and network equip

100、mentIncident response,crisis management,business continuity,and disaster recovery plans12GovernanceBoard of DirectorsESG ManagementResponsible SourcingCybersecurity&Data PrivacyEthics&Compliance/2024 ESG Report13Our ESG JourneyEmpoweringPeoplePreserving Our WorldServing as a Trusted PartnerAppendixB

101、usiness ConductAt Fastenal,we are committed to operational excellence,ethical and responsible conduct,fair and respectful treatment of all individuals,and practices that promote safety,health,and environmental protection.Although we have not joined the UN Global Compact,we endeavor to incorporate th

102、e Ten Principles of the UN Global Compact in our operations,including our supplier code of conduct.We conduct risk analyses of suppliers who want to do business with us,which includes obtaining supporting documentation regarding quality,capacity,and labor practices.We are committed to building relat

103、ionships with well-qualified suppliers that meet our standards for quality,ethics,and reliability.Conformance to our supplier code of conduct is required to become,and maintain good standing as,a supplier to Fastenal of any supplied material or service.We evaluate suppliers compliance with these sta

104、ndards in determining whether to grant or continue preferred status.Suppliers that do not comply with our code of conduct may be disqualified from preferred status and/or have their business relationship with Fastenal terminated.To learn about our supplier terms and code of conduct,visit Fastenals L

105、egal Information page.Policies and TrainingsNew employee orientation involves a review and acceptance of our policies and procedures guide and our standards of conduct,which include applicable policies and expectations regarding human rights,business ethics,anti-bribery,anti-corruption,cybersecurity

106、,workplace harassment,unconscious bias,and employee health and safety.The standards of conduct and applicable policies are reinforced for hiring managers through additional trainings within our Leadership Training Plan,a manager-focused curriculum developed by our internal training department,the Fa

107、stenal School of Business.Managers are automatically enrolled in this curriculum,which includes trainings on coaching,business ethics,recruiting,and other topics related to fair and effective leadership.Compliance TrainingsAs part of our people-centered culture,Fastenal invests in comprehensive,care

108、er-long employee training and development through the Fastenal School of Business,including training focused on the environment,ethics,and labor and human rights.Below is a summary of employee participation in trainings related to these topics in 2023,2022,and 2021.Ethics&ComplianceEnvironmentEthics

109、Labor&Human RightsCompletionsSum of Total Hours Completions Sum of Total Hours CompletionsSum of Total Hours202339,49930,095 Hours182,88364,518 Hours118,13258,854 Hours202250,95436,916 Hours138,39345,718 Hours114,46457,991 Hours202128,41024,659 Hours125,44447,252 Hours106,24650,725 Hours13Governance

110、Board of DirectorsESG ManagementResponsible SourcingCybersecurity&Data PrivacyEthics&Compliance/2024 ESG ReportEmpowering PeopleOur ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixEmpowering People14/2024 ESG Report15Our ESG JourneyGovernancePreserving Our WorldServing a

111、s a Trusted PartnerAppendixThe quote above speaks to Fastenals foundational belief in people and serves as a fitting lead-in to the social aspects of our ESG program.Because we value people(as unique human beings,not just human capital),we prioritize safety,we foster a culture of equity and respect,

112、and we strive to improve our communities.Because we believe in human potential(versus fixed talents),we invest in career-long learning resources for every employee.We empower employees to make local decisions and to think big for our customers.And we remain strongly committed to promotion from withi

113、n,creating pathways for employees to branch out,build rewarding careers,and become leaders in our organization.Bob Kierlin,Fastenal FounderOur people-centered strategy can be summarized with some simple thoughts:The greatest resource in the world is the human individual,with each individual having e

114、normous potential to do wonderful things.123456Find great peopleInvite them to joinChallenge them to teach,learn,and be willing to changeRemind everyone that no single group of people has a monopoly on talent,ambition,or abilityGive them a reason to stayPromote from within15Empowering PeopleHuman Ri

115、ghts and DEIEmploymentTraining and DevelopmentWorkplace Health and SafetyCommunity EngagementEmpowering People/2024 ESG Report16Our ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixDiversity,Equity,and InclusionThe approach described on the preceding page fosters a workfo

116、rce that is not only talented and empowered but also increasingly diverse.As of December 31,2023,we had 23,201 employees worldwide.18,539 of those employees were located within the United States,3,038 employees were located in Canada and Mexico,and 1,624 were located in 24 other countries around the

117、 world.Non-DiscriminationIt is Fastenals policy to provide equal employment opportunity for all employees and applicants for employment in accordance with all applicable federal,provincial,state,and local executive orders,regulations,and laws.We will not engage in any form of prohibited employment d

118、iscrimination.This includes discrimination on the basis of race,color,creed,gender,religion,national origin or citizenship status,disability,age,genetic information,marital status,status with regard to public assistance,sexual orientation,gender identity,familial status,veteran status,or any other p

119、rotected classifications.View our Equal Employment Opportunity/Affirmative Action Policy Statement.Human RightsFastenal is committed to complying with all applicable labor and employment laws and regulations in every country and jurisdiction in which we operate.These include but are not limited to:a

120、ntiharassment and discrimination in all aspects of employment;employees freedom of association and the right to collectively bargain;prohibitions on child labor,forced labor,or any form of human trafficking;and fair wage and hours requirements.Fastenal also expects its suppliers and vendors to compl

121、y with all applicable laws and regulations.Human Rights and DEI16Empowering PeopleHuman Rights and DEIEmploymentTraining and DevelopmentWorkplace Health and SafetyCommunity EngagementEmpowering People/2024 ESG Report17Our ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixD

122、iversity Data&Reporting As indicated in the EEO-1 data below,women and minorities constituted 24.0%and 23.6%,respectively,of our United States workforce at year-end 2023.Based on U.S.Bureau of Labor Statistics data,our mix of female and minority employees is generally consistent with that of the man

123、ufacturing and construction industries,which,as our primary end markets,provide useful context for our workforce recruiting pool,composition,and trends.In reviewing the table,a few trends stand out.First,following a steady rise from 2013 to 2019,the proportion of women in our workforce has declined

124、slightly in each of the past four years(starting in 2020,a year of sweeping social disruption).It has been a frustrating trend,but were taking steps to regain our momentum.For example,weve made family-friendly improvements to our U.S.employee benefits program,including a hybrid work option for certa

125、in roles,a paid family and medical leave benefit,and increased flexibility for paid time off.(The latter two policies were effective January 1,2024.)Weve also focused our recruiting and retention efforts,which includes an expansion of our recruiting team to engage with a larger talent pool on the lo

126、cal level.Second,and on a more positive note,we saw another significant improvement in our minority workforce composition in 2023.And third,viewed over time,there is a clear trend toward greater diversity in our business.Our female and minority workforces have grown 2.2x and 3.8x faster,respectively

127、,than our overall U.S.workforce over the last ten years.This progress reflects a few core trends in our business.One is our concerted effort to standardize and improve our hiring practices(more on this to follow).Another is our ongoing geographic expansion,which has made our footprint much less Midw

128、est-centric over time,in turn making our U.S.workforce more reflective of the country as a whole.A third trend is our evolution from a fastener-centric distribution company to a technology-driven supply chain solutions provider,which may appeal to a more diverse applicant pool.In light of these long

129、-term dynamics,we expect the trend toward greater diversity in our workforce to continue over time.U.S.Data(20132023)YearMalesWhiteMinorityFemalesWhiteMinorityMinority Total202376.0%58.8%17.2%24.0%17.6%6.4%23.6%202275.9%59.6%16.2%24.1%17.8%6.3%22.5%202175.8%60.6%15.2%24.2%18.4%5.8%21.0%202075.5%60.6

130、%14.8%24.4%18.7%5.6%20.4%201975.4%60.3%15.1%24.5%18.8%5.7%20.8%201876.1%61.2%14.8%23.8%18.6%5.2%20.0%201777.2%63.1%14.1%22.7%18.0%4.6%18.7%201678.0%64.4%13.5%21.9%17.6%4.2%17.7%201578.9%66.3%12.6%21.0%17.2%3.8%16.4%201480.1%68.6%11.5%19.8%16.4%3.4%14.9%201381.2%70.4%10.8%18.7%15.9%2.8%13.6%17Empower

131、ing PeopleHuman Rights and DEIEmploymentTraining and DevelopmentWorkplace Health and SafetyCommunity EngagementEmpowering People/2024 ESG Report18Our ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixRecruitmentOur cultural values Ambition,Integrity,Innovation,and Teamwork

132、 are woven into the fabric of our human resources processes and protocols,starting with our employment process.These values serve as guideposts for leaders throughout the organization as they administer and adhere to the system and processes.The ultimate goal is straightforward:make the candidate po

133、ol as expansive and inclusive as possible,and hire the candidate who is the best match for the position based on their skills and abilities.In light of our cultural priority to promote from within,we know we are welcoming a potential future leader with every new hire.And in the spirit of decentraliz

134、ed decision-making,all hiring managers complete their own interviews and make local hiring decisions.EmploymentBy thinking big and working hard,we create value for our customers,growth for our organization,and opportunities for ourselves and others on the Blue Team.AmbitionInnovationTeamworkThis isn

135、t limited to technical or leadership roles.In general,we believe the best ideas come from the people closest to the customer,problem,or process.Our decentralized culture,including a commitment to local decision-making,wouldnt be possible without personal integrity at every level of the organization.

136、We succeed by surrounding ourselves with talent,supporting those around us,and challenging each other to become better every day.IntegrityOur Cultural Values18Empowering PeopleHuman Rights and DEIEmploymentTraining and DevelopmentWorkplace Health and SafetyCommunity EngagementEmpowering People/2024

137、ESG Report19Our ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixHiringThe cornerstone of the hiring process is our Applicant Tracking System,which was designed internally by our diversity and compliance team.This system facilitates data collection and storage while also

138、streamlining a multi-step process.The diversity and compliance team reviews and approves the job openings for posting via our intranet site,our external websites,and the many post-secondary schools we work with across the country.To further diversify our outreach efforts,we partner with Circa,which

139、each day shares the job postings from the F Careers page with more than 600 diversity-focused employment and local job boards within the Circa network.After job openings are posted,the diversity and compliance team completes all initial application screening and phone interviews for interested candi

140、dates.The qualified candidate pool is then sent to the hiring manager for first and second interviews,during which candidates are asked standardized questions based on the requirements of the position.The candidates responses are noted by the hiring manager,and all interview questions and responses

141、are sent to the diversity and compliance team when interviews have been completed.All records are reviewed by the team,and dispositions for the candidate pool are entered and finalized.Its a thorough process this team reviews the results of each pool and is responsible for managing all record-keepin

142、g.In keeping with our decentralized culture,we believe the person best suited to make a hiring decision is the leader who is trying to fill the opening.While the process described above may appear rigid,it is designed to ensure consistency and fairness while still allowing hiring decisions to be mad

143、e locally.This process is followed for all new hires as well as any internal transfers and promotions.Promoting From WithinWe have always believed that promoting from within is the best way to reward our employees hard work,excellent performance,and modeling of our values.We are committed to develop

144、ing leaders who embrace our values,have a deep understanding of the business and a proven record of success,and in turn merit the respect of the team.This commitment is reflected in the experience required to advance to a leadership role.Advancement within the organization is based on hard work and

145、execution of performance expectations.The promotion pathway is challenging,but it offers a powerful incentive for those with the determination and motivation to be successful,to develop and mentor co-workers,and to model our cultural values.Go to Careers19Empowering PeopleHuman Rights and DEIEmploym

146、entTraining and DevelopmentWorkplace Health and SafetyCommunity EngagementEmpowering People/2024 ESG Report20Our ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixTraining&DevelopmentFastenal School of BusinessFastenal continues to invest in employee training and developme

147、nt through our corporate university,the Fastenal School of Business(FSB).FSBs professional staff focuses on course research,design,instruction,and employee advising to continually develop,maintain,and deliver Fastenal-specific training.Course offerings are available to all employees in areas such as

148、 sales,leadership,products,distribution,human resources,and safety.We also encourage employees to participate in additional training for specialized or technical areas outside of what FSB offers.In 2023,employees completed more than 874,000 FSB trainings(in addition to outside trainings).This involv

149、ed,on average,25 hours of training per full-time employee and 23 hours of training per part-time employee during the year.Creating Pathways for SuccessTo meet the needs of employees across the planet,FSB provides training through various delivery methods and strives to accommodate all styles of lear

150、ning.That said,there is a globally consistent goal:continually enhance the knowledge and skills of our workforce,thus improving customer satisfaction and empowering employees to move forward in their careers.Our training culture reflects Fastenals core belief in people and longstanding commitment to

151、 provide opportunities for promotion from within.By making role-specific training plans available to everyone in the organization,FSB provides clear pathways for employees to be successful in their current roles and to prepare for future roles.Developing Great LeadersManagers(i.e.,those positionally

152、 responsible for leading others)are automatically enrolled in our Leadership Training Plan,providing trainings on coaching,business ethics,recruiting,and other topics related to fair and effective leadership.It includes our flagship LDR450:Leadership Enhancement Program(which covers topics like dile

153、mma management,leader influence,and emotional intelligence)as well as our long-standing leadership course titled LDR210:Coaching.In the third quarter of 2023,two new leadership courses were introduced.The first course is LDR410:Leading Talent Planning and Development,which focuses on talent planning

154、,assessing future potential,succession planning,collaborating on individual development plans,and having development conversations to build a strong future.The second course,LDR209:Mentoring Practices for Shared Growth and Success,focuses on mentoring skills,relationships,and consolidating learning

155、from mentoring.Measuring Training EffectivenessAs we strive to consistently develop and deliver effective,efficient,and engaging training,its important that we methodically assess our training to determine if were meeting that goal and uncover opportunities for improvement.For each training,we use s

156、everal methods to gauge employee knowledge and skill progression.These methods include(but are not limited to)knowledge checks,simulations,role plays,quizzes,tests,and business plans.Many of our classroom trainings are followed by on-the-job assignments,which allow employees to apply learned skills

157、in their daily business and submit responses to their instructor for feedback and assessment.We also collect responses from employees via course evaluations,providing students with an opportunity to share their perspectives on the overall effectiveness of the course,the materials provided in the cou

158、rse,and their instructors.All of these measures help us continuously assess,update,and improve courses to keep the training relevant and valuable to our employees.20Empowering PeopleHuman Rights and DEIEmploymentTraining and DevelopmentWorkplace Health and SafetyCommunity EngagementEmpowering People

159、/2024 ESG Report21Our ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixWorkplace Health&SafetyOur employees continue to distinguish Fastenal as a leader in workplace health and safety.We continually encourage safety participation through new-employee trainings and ongoing

160、 coaching,audits,inspections,risk assessments,safety committee meetings,and first-responder programs.In 2023,we completed nearly 214,000 health and safety activities,an increase of 7%compared to 2022.In addition to engaging 23,000-plus employees across the organization,our environmental health and s

161、afety(EHS)&sustainability team continually strives to reduce risk by improving facility conditions and operational processes.The high-level goal is to reduce our total recordable incident rate(TRIR)by 5%annually.Branch&Onsite ProgramsOur network of more than 3,400 in-market operating units continues

162、 to be a key focus of our safety programs.Employee onboarding,a 90-day new hire program,leadership development,and facility condition assessments all play a role in instituting safe standards and practices.Through our onsite employee safety program,we strive to meet customer expectations and vetting

163、 requirements,which can include working with third-party verifiers to develop individual risk site assessments and site safety plans to minimize safety risks related to our employees.Operations&Manufacturing Programs Proactive employee engagement is the key to Fastenals safety culture.Programs such

164、as job safety observations,near-miss reporting,toolbox talks,and trainings promote employee engagement and participation.A prime example:Our near-miss program incentivizes employees to report potential hazards to management before they lead to injury-related incidents.In 2023,employees in our North

165、American distribution centers and manufacturing facilities participated in 5,813 more near-miss activities compared to 2022,reflecting their commitment to workplace safety.More generally,ideas and feedback from employees are playing a vital role in driving continuous improvement to our EHS programs.

166、Fleet&Transportation Programs With nearly 10,000 vehicles in operation,Fastenal continues to make fleet safety a priority.Employees participate in a variety of internal activities such as defensive driving,safe work practices,regular vehicle inspections,and load securement trainings just a few of th

167、e many programs that help us reduce risk and improve safety for employees(and others)on the road.In 2023,employees completed a total of 21,897 transportation safety trainings,defensive driver trainings,and job safety observations,a 33.5%increase versus 2022.View Our 2024 EHS Report21Empowering Peopl

168、eHuman Rights and DEIEmploymentTraining and DevelopmentWorkplace Health and SafetyCommunity EngagementEmpowering People/2024 ESG Report22Our ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixOur focus on employee engagement is producing excellent results.A widely accepted

169、measure of organizational health and safety is the Experience Modification Rate(EMR).An organizations EMR is determined by the National Council on Compensation Insurance(NCCI)based on a comparison of its past and expected losses incurred through workplace injuries versus other organizations in its i

170、ndustry.The NCCI factors in variables such as the number of employees and the mix of job classifications to group organizations with similar characteristics into industries.Industry averages are benchmarked at an EMR of 1.00.A reduction from this rate reflects an organizations ability to implement s

171、uperior safety procedures and protocols,resulting in a safer environment(with reduced personal and financial risk).Health and Safety Impact 0.40.60.811.21.41.61.82201220132014201520162017201820192020202120222023Fastenal EMR(Experience Modifcation Rate)Industry Avg.EMR20232022202120202019201820172016

172、2015201420132012Fastenal EMR(Experience Modification Rate)0.490.520.450.470.480.480.550.721.241.321.631.75Industry Average EMR1.001.001.001.001.001.001.001.001.001.001.001.00Delta(Fastenal vs.Industry)-51%-48%-55%-53%-52%-52%-45%-28%24%32%63%75%Awards and ProgramsIn 2023,Fastenal had an EMR of 0.49,

173、which is 51%better than the average performance rate for our industry group.22Empowering PeopleHuman Rights and DEIEmploymentTraining and DevelopmentWorkplace Health and SafetyCommunity EngagementEmpowering People/2024 ESG Report23Our ESG JourneyGovernancePreserving Our WorldServing as a Trusted Par

174、tnerAppendix2023 Angel Giving Tree EventWinona,MN2023 Granite School District Food DriveSalt Lake Valley,UT2023 Oncology Hospital of Panama Panama City,PanamaCommunity EngagementPillars of Community EngagementSince our start in 1967,Fastenals founders have always believed in giving generously while

175、staying out of the spotlight.They also believed in decentralized decision-making,which included empowering local employees to take the lead in company-sponsored community efforts.Today,this spirit shines through in local markets across the planet where our employees contribute to their communities t

176、hrough volunteering and donations.To provide resources and structure for these efforts,were working to build a sustainable community strategy focused on the following areas.In 2023,Fastenal gave monetary donations of$2.1 million to various organizations supporting these pillars.We also made in-kind

177、donations(through our local branches and distribution centers)to various organizations and disaster relief efforts.Youth DevelopmentWorkforce DevelopmentWellnessVeterans&First RespondersCommunity Development23Empowering PeopleHuman Rights and DEIEmploymentTraining and DevelopmentWorkplace Health and

178、 SafetyCommunity EngagementEmpowering People/2024 ESG Report24Our ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixIn the fourth quarter of 2022,we launched our Blue Team Blood drive in partnership with the American Red Cross and other blood supply organizations throughou

179、t North America and also in India(home to many of our IT employees).With this program,were committed to hosting in-person blood drives for employees at large Fastenal facilities one to four times per year.We also created a virtual blood drive program,which allows employees,friends,and customers to p

180、articipate at local community sites around the world.In 2023,we hosted 38 in-person blood drive events at large Fastenal facilities.Through these events and the virtual blood drive program,more than 1,350 units of blood were donated to help patients and save lives.As part of the program,we offer pai

181、d time for employees to donate(if they are able)and to assist in organizing and administering the blood drive events.In 2023,employees used this paid-time option to contribute more than 1,900 volunteer hours to this life-saving cause.Bangalore,IndiaModesto,CaliforniaWinona,MinnesotaEdwardsville,Kans

182、asSalt Lake City,UtahAkron,Ohio24Empowering PeopleHuman Rights and DEIEmploymentTraining and DevelopmentWorkplace Health and SafetyCommunity EngagementEmpowering People/2024 ESG Report25Our ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixHelping to Close the Industrial S

183、kills GapAs an organization with deep roots in manufacturing and engineering,we are particularly focused on helping to address the deficit of skilled industrial labor in the United States.We believe a renaissance in the trade professions is needed to power future innovation,productivity,and prosperi

184、ty.We also believe technical training offers a relatively affordable and attainable pathway for students and families in all walks of life to advance economically.By working to close the industrial skills gap,we believe we can create immediate opportunities while contributing to long-term economic s

185、ecurity.In 2023,we continued our ongoing support of Wells Academy,a 501(c)(3)education program that provides manufacturing machinist training and jobs for Native Americans in economically disadvantaged areas of northern Minnesota.Since 2016,we have awarded$320,000 in scholarship funds for Wells Acad

186、emy,providing significant financial support for the ongoing operation of this one-year program.Wells Academy was founded by Andy Wells,CEO and founder of Wells Technology,a high-precision fastener manufacturer in Bemidji,Minnesota.Connecting Students With IndustryFastenals workforce development effo

187、rts including supporting school programs and events that provide opportunities for students to experience the world of industry.For example,in December 2023,we helped fund a field trip for students of Rock Ridge Public Schools in Virginia,Eveleth,and Gilbert,Minnesota to visit Wells Technology in Be

188、midji(a roughly 2.5-hour drive).The day included a tour of the Wells Technology manufacturing floor and a firsthand look at different jobs and processes.Students heard a presentation from a Minnesota state representative about the North Star Promise Program(providing a tuition-free pathway to higher

189、 education for eligible Minnesota residents).They also heard from Andy Wells,founder of Wells Technology,who provided tips on how to start inventing products and emphasized the demand for skilled workers in the manufacturing industry.Transportation for the trip was funded through a grant from Fasten

190、al.Workforce DevelopmentTo support communities and engage with potential future employees,our local teams partner with a variety of educational institutions,from high schools to technical colleges and universities.Local employees lend their expertise to bring educational value to these programs,whet

191、her its teaching courses through programs like Junior Achievement or leading seminars in college business departments.With Fastenals financial backing,they also contribute to scholarships,classroom equipment,and learning activities.In 2023,we supported more than 50 programs/organizations by providin

192、g over$860,000 in monetary donations(41%of our total monetary donations as a company)in addition to providing in-kind donations such as storage fixtures and tools for technical education classes.25Empowering PeopleHuman Rights and DEIEmploymentTraining and DevelopmentWorkplace Health and SafetyCommu

193、nity EngagementEmpowering People/2024 ESG Report26Our ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixMaking Learning Part of the JobWorkforce development also includes investing in our current workforce.Fastenal leadership encourages employees to set aside time during w

194、orking hours to participate in training through the Fastenal School of Business and other learning programs relevant to their current roles or career aspirations.The training goal is clearly communicated to everyone on the Blue Team:30 hours per year for full-time employees and 15 hours per year for

195、 part-time employees.In recent years,our Fastenal Manufacturing division has partnered with several high schools and technical colleges to provide equipment(including lathes and robotic arms),scholarships,tuition and book reimbursement,training,sponsorships,and employment opportunities.What do these

196、 programs look like in action?Click here to watch a video about our employer partnership with Minnesota State College Southeast(MSCS).In 2023,Fastenal became part of a core group of companies and individuals to invest in a three-year pilot of the College Opportunity Program.This program allows gradu

197、ates of Winona,Minnesota area high schools to attend MSCS without any out-of-pocket tuition costs.Students must first apply for admission to MSCS and also complete the Free Application for Federal Student Aid(FAFSA).The program funds tuition expenses not covered by state or federal grants and also p

198、rovides additional funds for books and other supplies.By making post-secondary education affordable for all students,the program removes the most common barrier to attending college.It reflects our belief in people,our focus on education,and our commitment to create opportunities for others.Todays S

199、tudents May Be Tomorrows Company LeadersThe regional operation managers at our distribution centers continue to build workforce development partnerships with technical colleges in their communities.A great example is our distribution center in Atlanta,Georgia,which has developed a longstanding relat

200、ionship with West Georgia Technical College.In 2023,we donated$10,000 to support the expansion of its Commercial Drivers License(CDL)program.Fastenal proudly employs several graduates of the program,including employees who have grown into leadership positions within our organization.26Empowering Peo

201、pleHuman Rights and DEIEmploymentTraining and DevelopmentWorkplace Health and SafetyCommunity EngagementEmpowering People/2024 ESG Report27Our ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixDisaster Response and RecoveryWhen disasters strike,Fastenal employees are able

202、to work together across locations and departments to help our customers,employees,and communities.Our Blue Team Responds program facilitates cross-departmental collaboration to expedite emergency needs,and our in-house trucking fleet allows us to move supplies into disaster zones without having to r

203、ely on third-party carriers.A key advantage:having local“feet on the street”supported by layers of regional and nationwide resources.This allows us to proactively plan with strategic customers and government agencies,to react quickly in disaster situations,and to physically distribute urgently neede

204、d products in the community.Together we make a difference!Our donation campaign to help those affected by the hurricane in Guerrero is paving the way for humanitarian aid.Thanks to everyone who has contributed,were helping to rebuild lives and provide hope.Lets continue to work together to support t

205、hose who need it most.Many thanks to the MRCUA(Cuernavaca,Morelos)branch for serving as our collection center,managing the receipt of donations from all branches,assembling 120 packages,and delivering them directly to Acapulco.The team made the delivery last Tuesday,December 12th,in one of the most

206、remote neighborhoods of the city an area the government is scarcely reaching.A special thanks to District Manager Mariano Galindo for initiating the idea and making us all part of this noble work.We invite you to stay tuned for our campaigns.Our solidarity transcends borders and shows the strength o

207、f the Fastenal Blue Team.-Miguel ngel Avalos,EHS&Sustainability ManagerHello,Blue Team!The letter below was sent to our local Blue Team after Hurricane Otis hit the Acapulco area in late 2023.Helping OthersWeather the StormAs an industry,we are uniting in the cause for Guerrero,collecting first aid

208、supplies to assist with the aid coming to affected zones.27Empowering PeopleHuman Rights and DEIEmploymentTraining and DevelopmentWorkplace Health and SafetyCommunity EngagementEmpowering People/2024 ESG Report28Our ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixBK5K Ro

209、ad RaceThrough our BK5K Road Race program,Fastenal employees organize 5K walk/run events(and free 1K kids races)in multiple communities.All proceeds,including contributions from event sponsors,are provided to 501(c)(3)non-profit youth organizations through a grant process.Since its initial run in 20

210、00,the BK5K has funded 521 grants totaling over$3 million.These proceeds support wide-ranging community requests,from equipment and supplies for sports and educational programs to life needs such as hygiene kits and weekend food boxes for school kids.In 2023,BK5K events were held in 10 cities,and$35

211、2,000 was distributed to fund 81 grants.Behind the scenes,Fastenal employees volunteered an estimated 1,400 hours of their time for event planning,fundraising,grant reviews,and race-day coordination to help make the BK5K successful and impactful in their communities.Our Blue Team Sport program suppo

212、rts community wellness by providing free athletic apparel for employees(and their family members)who participate in local sports leagues or programs.Since the programs introduction in 2012,more than 5,900 teams and nearly 60,000 individuals across North America have received Blue Team Sports apparel

213、.In 2023 alone,we outfitted 530 local teams,providing apparel for 5,544 people to participate in a wide range of activities,including baseball,basketball,biking,bowling,cheer,cricket,curling,football,golf,gymnastics,hockey,kickball,lacrosse,powerlifting,rowing,rugby,running,skiing,soccer(football),s

214、oftball,swimming,tennis,ultimate frisbee,disc golf,volleyball,wrestling,and(the latest addition)pickleball.Blue Team GivingIn 2023,we introduced the Blue Team Giving program,through which Fastenal matches monetary donations made by employees to fund the causes they care about most.The only stipulati

215、on:It must be a 501(c)(3)public charity that falls under our community engagement pillars.This crowd-sourced approach to giving reflects our culture of decentralized decision-making i.e.,our belief that the best solutions come from those closest to the problem.Rather than limiting our community focu

216、s to corporate-led initiatives,were excited to empower and support an“army of givers”who are attuned to the needs and priorities of their local communities.28Empowering PeopleHuman Rights and DEIEmploymentTraining and DevelopmentWorkplace Health and SafetyCommunity EngagementEmpowering People/2024 E

217、SG ReportPreserving Our WorldOur ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixEmpowering People29/2024 ESG Report30Our ESG JourneyGovernanceAppendixServing as a Trusted PartnerEmpoweringPeopleRaising the Bar for Efficient OperationsFastenals value proposition centers

218、on helping organizations become more resource-efficient across the supply chain.It starts by driving efficiencies within the span we directly control the vehicles,large facilities,and in-market locations we operate to serve customers across the country and around the world.The following section prov

219、ides statements pertaining to our scope 1 emissions related to fuel combustion in our furnaces,boilers,and vehicles;scope 2 purchased electricity emissions;and waste diversion related to our own key facilities.2023 Highlights Awards&CertificationsWe were selected by Newsweek as one of Americas Green

220、est Companies(something only 300 companies in the United States can claim).The rankings reflect an analysis of organizations in the U.S.that have a minimum market capitalization of$5 billion and adhere to the European Union sustainably standard guidelines.Evaluations are based on the companies green

221、house gas emissions,water usage,water generation,waste generation,and sustainability data disclosure and commitments.The Business Intelligence Group credited Fastenal for the Sustainability Initiative of the Year within our industry for our program with Trex Company,Inc.to create a circular economy

222、for plastic waste(see pg.38).In addition,one of our corporate sustainability managers was asked to join the Business Intelligence Groups judges panel to help advise the business community on tactics for sustainable operations.We received a silver medal from EcoVadis,signifying that the quality of ou

223、r sustainability management system ranked in the top 25%of all companies in all industries rated by EcoVadis.We earned our first EcoVadis medal,a bronze,in December 2022.Prior to that,our sustainability programs and reporting did not merit a medal designation.This rapid improvement(from receiving no

224、 medal recognition to earning a silver medal within a two-year period)reflects a heightened and long-term commitment to invest in and continuously improve our core processes,systems,and reporting around sustainability.Our Strategic FocusIn 2022,we announced our intention to work toward a plan to rea

225、ch net zero emissions by 2050,including an expectation to establish science-based targets in the coming years.As we progress in our journey,we continue to expand the information we gather and report to CDP(formally known as the Carbon Disclosure Project)in accordance with the Greenhouse Gas(GHG)Prot

226、ocol.As mentioned in our previous ESG report,we have broadened our reporting to cover the entirety of our scope 1 and 2 emissions from all global business operations.As covered on pg.31,we recently completed a scope 3 materiality assessment,an important step to further broaden our carbon inventory a

227、nd establish baselines for science-based targets.We have received third-party certification to the ISO 14001 environmental management standard.ISO 14001 provides a framework for us to design and implement an effective environmental management system.We are an ENERGY STAR Partner,demonstrating a comm

228、itment to measure,track,and improve our energy performance.We use the ENERGY STAR Portfolio Manager to benchmark our energy use in individual buildings.We are proud to be a certified EPA SmartWay Partner.This program provides us with tools and best practices to measure,benchmark,and improve our frei

229、ght transportation efficiency.Key Systems and Programs30Preserving Our WorldOur Strategic FocusTransportationFacilities&OperationsReducing,Reusing and Recycling/2024 ESG Report31Our ESG JourneyGovernanceAppendixServing as a Trusted PartnerEmpoweringPeopleGHG Management This year-over-year comparison

230、 of our scope 1 and 2 emissions reflects our ongoing efforts to reduce fuel consumption in our fleet operation and energy consumption in our facilities.Beginning Our Scope 3 Journey In the second half of 2023,we conducted a scope 3 materiality assessment with a leading third-party consultant to gain

231、 insight into our scope 3 emissions(i.e.,emissions created upstream and downstream in our value chain).At this early stage of the journey,we are not yet able to provide meaningful scope 3 reporting.However,we plan to apply the output of this exercise to gain a more complete understanding of the carb

232、on inventory related to our business and develop strategies to further reduce our environmental impact.Scope2023(Metric ton CO2e)2022(Metric ton CO2e)Scope 1*130,852132,879Scope 2*39,07740,074Total*169,929172,953Scope 1Business Division2023 Scope 1 Emissions(Metric ton CO2e)2022 Scope 1 Emissions(Me

233、tric ton CO2e)Transportation113,034113,453Manufacturing3,1873,494Distribution Centers1,9251,376Branch Locations12,70614,556Support-Scope 1 Total130,852132,879Scope 2Business Division2023 Scope 2 Emissions(Metric ton CO2e)Market-based2022 Scope 2 Emissions(Metric ton CO2e)Market-basedTransportation-M

234、anufacturing7,0777,273Distribution Centers11,97611,776Branch Locations19,01421,025Support1,010-Scope 2 Total39,07740,074*Scope 1 emissions are the result of direct fuel consumption by sources we control or own,such as vehicles or boilers.Scope 2 emissions are the result of purchased grid electricity

235、.The data applies to all global business activities.*Scope 2 data is market-based,not location-based.(Market-based data is considered more accurate and is preferred by reporting frameworks.)*We refined our methodology while calculating our 2023 Scope 1 and Scope 2 emissions to more accurately reflec

236、t our branch consumption.Accordingly,we have restated our 2022 data to reflect alignment with this methodology,resulting in an overall decrease to our 2022 emissions from what was in included in Fastenals 2023 ESG Report by 7.8%.31Preserving Our WorldOur Strategic FocusTransportationFacilities&Opera

237、tionsReducing,Reusing and Recycling/2024 ESG Report32Our ESG JourneyGovernanceAppendixServing as a Trusted PartnerEmpoweringPeopleDriving Toward a Greener FutureA key(and differentiating)feature of Fastenals service model is our in-house transportation network,which allows us to control the movement

238、 of materials across much of the supply chain.Our North American fleet includes more than 800 commercial motor vehicles(CMVs)as well as nearly 8,300 RAM pickup trucks used by our local teams to provide final-mile delivery service.On a technical level,operating such a large fleet makes our scope 1 re

239、porting higher than it would be if we relied more heavily on third-party carriers,as is standard in our industry.(Outsourcing transportation means a larger share of emissions falling under scope 3 vs.scope 1.)However,in the bigger picture,it challenges us to be a leader in transportation efficiency.

240、We embrace this stewardship by investing in the latest vehicle technology and by working to optimize routes,loads,and efficiency at every mile from supplier pick-ups,to transfers for secondary operations,to final-mile delivery,all streamlined by a deep and direct understanding of our customers needs

241、.TransportationExtending the“Last Mile”to the“Last Yard”In addition to picking up shipments from suppliers and transferring products across our distribution center network,our CMV fleet transports approximately 90%of the product tonnage moved from our regional distribution centers to our in-market o

242、perating units(a core aspect of our local service model).Roughly two-thirds of our North American branches receive their product deliveries via our CMV fleet during the night(low-traffic hours associated with better overall fuel efficiency).The RAM pickup fleet is used by our local branch personnel

243、to execute final-mile delivery to the customer,and in many cases the destination is a point-of-use device within their facilities a unique capability made possible by our investment in final-mile transportation and high-touch service.32Preserving Our WorldOur Strategic FocusTransportationFacilities&

244、OperationsReducing,Reusing and Recycling/2024 ESG Report33Our ESG JourneyGovernanceAppendixServing as a Trusted PartnerEmpoweringPeopleFuel Efficiency StrategiesBecause we sell and replace a large portion of our fleet annually,we are regularly reviewing the latest fuel efficiency and safety options.

245、In 2023,we replaced roughly 1,820 vehicles to capture the newest technology.This included ordering 713 vehicles equipped with embedded telematics,which will provide local managers with visibility to the vehicles fuel consumption and related data such as idling time,speed,and acceleration a valuable

246、tool to improve the efficiency of the units.A Proud SmartWay PartnerSince mid-2019,Fastenal has participated in the United States Environmental Protection Agencys SmartWay program,which helps partnering carriers learn best practices,demonstrate their efficiency achievements,and pursue continuous imp

247、rovement.Were working to positively impact fuel efficiency in a variety of ways:Testing and Implementing New TechnologiesOur drive for efficiency includes an ongoing commitment to test and,when feasible,adopt alternative fuel vehicles.In 2020 and 2021,through a fleet-electrification collaboration pr

248、ogram with Penske Leasing and Daimler Trucks North America,we conducted a short-term pilot of a fully-electric Freightliner eCascadia semi-truck in the Los Angeles metro area.After running the truck on a regular route for one month,we provided real-world feedback to guide future improvements to the

249、technology.As part of the program,we also conducted a longer-term pilot with two fully-electric Freightliner eM2 straight trucks,which we ran on daily routes within the Los Angeles metro area in 2020 and 2021.It proved to be a good fit for certain use cases,and in late 2023 we signed a lease agreeme

250、nt for two of these vehicles,which we plan to start running in the Modesto,California area in fall 2024.In fall 2021,we conducted a test of a demo Orange EV fully-electric yard tractor at our Indianapolis,Indiana distribution center.(Yard tractors are used to move trailers and containers within the

251、cargo yard.)Based on the success of the test,we subsequently purchased a new Orange EV fully-electric yard tractor for the facility,and the vehicle went into operation in July 2023.Using geographic information systems(GIS)to map the most efficient truck routesUsing telematics to monitor driving acti

252、vities and identify opportunities to improve fuel efficiency Back-hauling freight from suppliers and also customers(through our third-party logistics service)to minimize one-way or deadhead loadsOptimizing load configuration to minimize non-utilized capacityAnalyzing departure and arrival schedules

253、to minimize delays caused by traffic in metro areas33Preserving Our WorldOur Strategic FocusTransportationFacilities&OperationsReducing,Reusing and Recycling/2024 ESG Report34Our ESG JourneyGovernanceAppendixServing as a Trusted PartnerEmpoweringPeopleFacilities&OperationsIn 2023,we continued our pu

254、sh for operational efficiency by completing 111 environmental projects in our facilities,including waste reduction,recycling,and energy reduction projects.This involved a total investment of$372,400,a projected annual cost savings of$844,700,and an estimated annual reduction of 3,040 metric tons of

255、CO2.Energy Use and ConsumptionFrom technology investments to behavioral changes,were taking a holistic approach to reduce energy consumption throughout our brick-and-mortar footprint.Here are some recent and in-progress highlights:Warehouse Automation:Maximizing Sales Per Square FootOver the past de

256、cade-plus,one of our key metrics has been increasing our product sales per square foot in our distribution centers.High-density automated storage and retrieval systems(ASRS)equipped with conveyors and robotic cranes have positively impacted this ratio by increasing throughput while optimizing space.

257、For example,the ASRS installation in our Winona,Minnesota distribution center required a 42,000 square-foot facility expansion.If we had opted for traditional shelving instead of ASRS technology,the expansion would have had to be nearly four times larger to provide the same warehousing capacity.Toda

258、y,11 of our 15 North American distribution centers are equipped with ASRS systems,and another installation is planned for 2025.These investments are allowing us to support our growing business with a more compact warehousing footprint and,in turn,less energy consumption.We continue to operate in BRE

259、EAM-certified facilities in Dordrecht,Netherlands and Brno,Czech Republic;and we currently operate in two large buildings equipped with solar power technology:one leased(Dordrecht,Netherlands)and one owned(Winona,Minnesota).Through Puget Sound Energys Sustainability Leadership Partners program,our L

260、acey,Washington distribution center used 100%wind energy in 2023.Our downtown office building in Winona,Minnesota and our distribution facilities in Lacey,Washington,Salt Lake City,Utah,and Madison,Mississippi achieved ENERGY STAR certification in 2023.We are working to have additional buildings cer

261、tified in 2024.In 2024,we expect to participate in the EPAs Green Power Partnership to purchase and use solar and wind energy within our distribution centers and manufacturing locations.We recently broke ground on a new building in Salt Lake City,Utah that will serve as our distribution center for t

262、he region.This building has been designed with energy-efficient features and is slated to be completed in 2025.34Preserving Our WorldOur Strategic FocusTransportationFacilities&OperationsReducing,Reusing and Recycling/2024 ESG Report35Our ESG JourneyGovernanceAppendixServing as a Trusted PartnerEmpo

263、weringPeopleEvolving Our Branch InfrastructureOver the last several years,weve been restructuring our United States branch model to be more customer-focused and space-efficient.This includes removing standardized(non-market-specific)inventory,reducing or removing walk-in shopping space,and using tha

264、t square-footage to install high-density vertical shelving to support customer inventory needs.In select locations,were also implementing pick modules to create a second floor of warehousing space,supporting thousands of additional products within the existing building.As a result of these strategie

265、s,were gaining significant capacity across our branch network room to grow the business and improve customer service without expanding our brick-and-mortar footprint and associated energy consumption.Completed Resets/Installs2023202220212020Pick Modules Installed202180Total#of Install Projects645966

266、152Space Optimization ProjectsIn 2023,we completed space optimization projects at 64 branch locations,which included installing 20 pick modules.Moving forward,we expect to increase the number of projects we complete each year,including pick module investments.As part of our brick-and-mortar evolutio

267、n,we have also optimized our branch footprint in many markets across the country,in some cases by bringing multiple in-market teams together to operate out of a single building another driver of energy efficiency in our branch network.35Preserving Our WorldOur Strategic FocusTransportationFacilities

268、&OperationsReducing,Reusing and Recycling/2024 ESG Report36Our ESG JourneyGovernanceAppendixServing as a Trusted PartnerEmpoweringPeopleOnsite:Sharing Space,Saving EnergyPerhaps the biggest driver of change to our local footprint has been the rapid adoption of our Onsite model.With this approach,we

269、typically use available space within the customers facility to provide dedicated staff and inventory for their operation.The environmental benefit is direct:By sharing space rather than operating out of a separate in-market location,were consuming minimal additional energy and producing fewer additi

270、onal emissions.We believe the model also allows us to play a more active and impactful role in helping the customer reduce supply chain waste for example,by reducing emergency deliveries,wasteful consumption,and excess inventory.As illustrated below,while our total number of in-market operating unit

271、s has increased gradually in recent years,the ratio of Onsite operations to branch locations has increased dramatically.This structural shift,coupled with our branch space optimization efforts,is making our local footprint increasingly space-and energy-efficient.We believe our traditional branch cou

272、nt will stabilize moving forward;however,we plan to continue to focus on adding Onsite operations as a primary growth strategy.ENERGY STAR ProgramInitiated in early 2021,our partnership with ENERGY STAR provides us with tools to benchmark our electricity and natural gas usage in all of our United St

273、ates and Canada locations.In 2023,we completed more than 1,000 ENERGY STAR assessments for Fastenal locations larger than 5,000 square feet.In late 2022,our distribution centers in Salt Lake City,Utah and Lacy,Washington became our first facilities to be certified as ENERGY STAR buildings.In 2023,th

274、ose distribution centers were recertified,and they were joined by two newly-certified facilities our distribution facility in Madison,Mississippi and our downtown office building in Winona,Minnesota.In 2023,we began an ENERGY STAR Treasure Hunt program with all of our North American distribution cen

275、ters and manufacturing facilities.The purpose was to assess where(and how much)energy is being used in each facility and to pursue energy savings opportunities through behavioral,operational,and maintenance actions.Our goal:a 1015%reduction in energy use at each location in the first year of the pro

276、gram.In 2023,we made improvements in more than 15%of our U.S.and Canada traditional branches based on ENERGY STAR recommendations.These improvements include programmable thermostats,more efficient thresholds on exterior doors,LED lighting,and energy management programs for HVAC optimization.In 2023,

277、our EHS and sustainability team worked with our branch teams to complete a total of 3,770 assessments,audits,and projects.2023202220212020201920182017201620152014Onsites 1,8221,6231,4161,2651,114894605401264214Branches1,5971,6831,7932,0032,1142,2272,3832,5032,6222,637Total3,4193,3063,2093,2683,2283,

278、1212,9882,9042,8862,851*Global NumbersView Our 2024 EHS Report36Preserving Our WorldOur Strategic FocusTransportationFacilities&OperationsReducing,Reusing and Recycling/2024 ESG Report37Our ESG JourneyGovernanceAppendixServing as a Trusted PartnerEmpoweringPeopleSustainable Procurement&Material Cons

279、umptionIn 2023,we created a waste management program aimed at reducing our waste-to-landfill impact while generating direct cost savings.By profiling and tracking waste streams,we are able to identify opportunities to improve our carbon footprint through waste reduction activities.The objective of t

280、he program is to improve our waste diversion rate 10%annually compared to the baseline year of 2021.Creating a Less Packaging-Intensive Distribution SystemAs part of our automated storage and retrieval systems(see pg.34),our distribution centers utilize an estimated 115,000 reusable composite bulk b

281、ins and totes to store inventory and make deliveries to our in-market servicing locations,reducing the use of cardboard,wood,plastic,and other shipping/packaging materials.Its part of a larger trend in our business.Products supplied through Fastenal Managed Inventory(FMI)programs,which today represe

282、nt a large and fast-growing share of our total sales,generally require less packaging than products provided through a traditional retail or direct-ship model.As our distribution system becomes increasingly“FMI-centric,”were working internally and with our manufacturing partners to reduce unnecessar

283、y packaging.Waste&RecyclingAs an organization,we recycled roughly 16.4 million pounds of material in 2023.Our waste diversion rate increased from 70%in 2022 to 78%in 2023.The top performers in both years were our manufacturing facilities in Wallingford,Connecticut and Winona,Minnesota,which in 2023

284、had waste diversion rates of 98%and 94%,respectively.(This was achieved in part by recycling oily wastewater and selling scrap metal that would otherwise end up in a landfill.)In late 2023,we began the journey toward zero waste certification for these facilities and we have a goal to achieve this ce

285、rtification in 2024.Reducing,Reusing,and RecyclingDistribution Center and Manufacturing Waste Diversion%Chg2023 vs.20222023(lbs)Tonnes2022(lbs)Tonnes2021(lbs)TonnesRecycled and Reused Wood Pallets2.5%3,931,0321,966 3,834,010 1,917 3,013,154 1,507 Recycled and Reused Cardboard12.0%1,798,314899 1,582,

286、550 791 1,397,690 699 Recycled Metals4.6%5,400,4632,700 5,151,601 2,576 3,509,198 1,755 Recycled Composite Pallets24.1%134,80867 102,262 51 117,000 59 Recycled Plastic Wrap15.9%98,98949 83,274 42 60,354 30 Hazardous and Universal Waste1.0%9,1505 9,062 5 158,592 79 Non-Hazardous Waste9.0%21,134,16310

287、,56719,239,748 9,620 13,253,040 6,627 In 2023,we joined the Sustainable Packaging Coalition(SPC).The SPC brings together businesses,educational institutions,and government agencies in a collaborative environment where they can access tools(such as technical guides and reports)and share ideas with ot

288、hers within similar supply chain positions.37Preserving Our WorldOur Strategic FocusTransportationFacilities&OperationsReducing,Reusing and Recycling/2024 ESG Report38Our ESG JourneyGovernanceAppendixServing as a Trusted PartnerEmpoweringPeopleWater Consumption&Natural ResourcesAlthough we believe o

289、ur water consumption and risk exposure are low,were taking steps to properly manage this critical resource.We comply with the United States Clean Water Act and relevant regulations in other countries where they apply to our operations for example,in our management of storm water run-off,water permit

290、ting,and industrial waste water.In addition,we constantly work to reduce wasteful consumption of clean water.With regard to new location builds,we follow guidelines set by the World Wildlife Fund and Federal Emergency Management Agency to minimize our impact on areas with high water stress levels.Th

291、e table below indicates the percentages of our North American distribution and manufacturing locations situated in high water stress areas,medium water stress areas,and low water stress areas based on a water stress risk assessment tool provided by the World Wildlife Fund(WWF Water Risk Filter).Envi

292、ronmental Risks&OpportunitiesOur North American distribution centers and manufacturing facilities have received third-party certification to the ISO 14001 standard.ISO 14001 specifies requirements for an environmental management system an organization can use to enhance its environmental performance

293、 through more efficient use of resources and reduction of waste and energy.To help us continue to perform at a high level and meet ISO 14001 requirements,weve partnered with two third-party firms,U.S.Compliance and EMI,which provide a variety of consulting and auditing services.We use risk assessmen

294、ts from these partners to identify areas of opportunity and consistently improve sustainability within our business operations.These assessments help us sustain environmental regulatory compliance in areas like air quality,the Clean Water Act,and the EPAs Resource Conservation and Recovery Act all h

295、elping Fastenal maintain a low level of risk for the environment.Turning Pallet Wrap Into Patio DecksPlastic wrap(aka polyethylene film)presents a vexing waste stream challenge for a distribution company like Fastenal.We need it to secure palleted shipments,and we receive tons of it into our distrib

296、ution centers each month.But there is no use for it once the pallets are unwrapped,and local recyclers often dont have programs to divert the material from landfills.In 2023,we found a creative solution to turn this waste stream into a value stream by launching a large-scale recycling partnership wi

297、th Trex Company,Inc.Trex produces composite outdoor decking made from 95%recycled and reclaimed materials,so our plastic waste becomes their raw material.To support this circular economy,Fastenal invested more than$300,000 in equipment in our distribution centers to bale and prep the material for sh

298、ipment to the nearest Trex warehouses.The environmental impact:Were on track to keep more than 600,000 pounds of Grade A plastic out of landfills in year one of the program,and were looking to divert even more material in years to come as we leverage our transportation network to backhaul plastic fr

299、om our in-market operating units and potentially offer a take-back service for customers.Water Stress LevelsDistribution and Manufacturing LocationsHigh10%Medium35%Low55%38Preserving Our WorldOur Strategic FocusTransportationFacilities&OperationsReducing,Reusing and Recycling/2024 ESG ReportServing

300、as a Trusted PartnerOur ESG JourneyGovernancePreserving Our WorldServing as a Trusted PartnerAppendixEmpowering People39/2024 ESG ReportOur ESG JourneyGovernanceEmpoweringPeoplePreserving Our WorldAppendixWe serve as a point of connection between organizations looking to increase their diversity spe

301、nd and a network of well-qualified small and/or diverse suppliers striving to grow their businesses and create opportunities in their communities.It is our policy to advocate for these businesses by working to match their capabilities with the needs of our customer base.As part of this effort,we sup

302、port organizations with customized reporting,helping them benchmark and measure progress toward their diversity spend goals.Below are some key metrics reflecting the scope of our supplier diversity program in 2023.Fastenal is a proud member of the National Minority Supplier Development Council(NMSDC

303、),which works to create connections between 16,000-plus minority business enterprises(MBEs)and more than 1,700 corporate NMSDC members.This resource provides tools for us to identify and build relationships with MBEs that enhance our product offering and supplier diversity program.We also offer a Ti

304、er 1(authorized reseller)program,which consists solely of small and/or diverse businesses.Through this program,the customer is able to transact with diverse businesses that serve as authorized channels of distribution for Fastenals product offering and pany purchases with small and/or diverse suppli

305、erssmall and/or diverse suppliersof Fastenals purchases are from small and/or diverse suppliers$1.1B6,39929%Go to Supplier DiversityA Partner for Positive ChangeBecause Fastenal is part of so many organizations supply chains,when we improve our ESG practices,it can be amplified on a global scale.The

306、 impact isnt isolated to our internal operations.We also provide programs to help customers operationalize,enhance,and measure their own ESG initiatives.The following section centers on these customer-facing offerings,including our environmentally-focused Sustainability Solutions as well as addition

307、al solutions to assist customers with supplier diversity,workplace safety,and eProcurement(i.e.,tools to procure products aligned with their ESG priorities).Supplier Diversity Program40Serving as a Trusted PartnerGreen Products ProgramOur Sustainability SolutionsCategory ManagementMetalworkingProgra

308、mEngineering ProgramTotal Cost of Ownership AnalysisFMI TechnologyTool RepairTool&Cutter GrindingRecycling&Recovery ProgramseCommerce ToolsSupply Chain ResiliencySupplier DiversitySafety Specialist Program/2024 ESG ReportOur ESG JourneyGovernanceEmpoweringPeoplePreserving Our WorldAppendixFastenals

309、safety specialists work with our customers environmental health and safety(EHS)teams to help them:Safety Specialist ProgramThe journey often begins by performing hazard and risk assessments at the customers site to identify potential workplace hazards and opportunities for improvement.With a solid u

310、nderstanding of the workplace,our specialists guide stakeholders to the correct PPE for specific applications and risks.As part of the risk reduction process,safety specialists work with other teams in our business to secure the customers supply chain for PPE.This includes tailoring FMI Technology s

311、olutions for their safety product needs and dedicating inventory to those customers that commit to Fastenal as their safety distributor of choice.FMI Technology offers an additional set of benefits in the context of a PPE program.The devices make compliant PPE visible and accessible 24/7,offer contr

312、ols to help prevent employees from using non-compliant PPE for their specific roles,and provide visibility to how safety and first-aid products are used in the workplace(a tool to monitor program compliance and detect workplace hazards).As a direct resource for EHS professionals around the world,our

313、 safety specialists have helped make PPE the most common type of product supported by FMI Technology.In turn,theyve helped make PPE supply chains more efficient,transparent,and secure on a global scale.Eliminate potential serious injuries and fatalities in the workplace Improve transparency and cont

314、rol around their personal protective equipment(PPE)programs,which can have a significant impact on the waste streamReduce regulatory,financial,and operational risk by improving compliance with governing bodies such as the Occupational Safety and Health Administration(OSHA)41Serving as a Trusted Part

315、nerGreen Products ProgramOur Sustainability SolutionsCategory ManagementMetalworkingProgramEngineering ProgramTotal Cost of Ownership AnalysisFMI TechnologyTool RepairTool&Cutter GrindingRecycling&Recovery ProgramseCommerce ToolsSupply Chain ResiliencySupplier DiversitySafety Specialist Program/2024

316、 ESG ReportOur ESG JourneyGovernanceEmpoweringPeoplePreserving Our WorldAppendixeCommerce ToolsOur eCommerce platform offers tools to help customers dial in on products that meet their application and compliance needs.This includes a range of“sustainability”and“special interest”filters that allow us

317、ers to narrow their search results based on very specific criteria(for example,products with certain green certifications,supported by specific recycling/sustainability programs,or sourced from a targeted category of diverse suppliers).Green productsProducts compliant with green building/project cer

318、tifications(e.g.,LEED)Products sourced from small and/or diverse suppliersProducts supported by our recycling programs or other sustainability programsProducts that can be vended to control consumptionTo help customers identify compliant solutions when researching and shopping,we display the followi

319、ng logos in conjunction with relevant products throughout our eCommerce platform.How to Use eCommerce Tools42Serving as a Trusted PartnerGreen Products ProgramOur Sustainability SolutionsCategory ManagementMetalworkingProgramEngineering ProgramTotal Cost of Ownership AnalysisFMI TechnologyTool Repai

320、rTool&Cutter GrindingRecycling&Recovery ProgramseCommerce ToolsSupply Chain ResiliencySupplier DiversitySafety Specialist Program/2024 ESG ReportOur ESG JourneyGovernanceEmpoweringPeoplePreserving Our WorldAppendixOur customers recognize that sustainability is a grassroots effort,and that every memb

321、er of the organization from senior leadership to new employees can affect the outcome.It starts with changes in behavior and a desire to implement process improvements for a healthier environment and sustainable future.To help organizations turn grassroots energy into reportable results,Fastenal par

322、tners with suppliers,manufacturers,and industry-leading service providers to offer turnkey sustainability solutions.These solutions are part of a continuous improvement plan to(1)develop and implement strategic initiatives,(2)drive innovation in environmental practices,and(3)work cross-functionally

323、to achieve long-term sustainability improvements.Our supplier/third-party programs are complemented by many of the core services and solutions we offer to help customers become more resource-efficient across the value chain.A Total Lifecycle ApproachRecycling is often the first topic that comes up i

324、n discussions about sustainability,but its really the last step in a comprehensive program.Fastenal is helping our customers understand the full picture the upstream impacts(suppliers)and downstream impacts(waste generation)that can be attributed to products in environmental product declarations(EPD

325、s).Reflecting this cradle-to-grave perspective,our Sustainability Solutions span four broad areas:prevention,consumption reduction,product life extension,and recycling&recovery.It starts by consulting with the customer,understanding their unique needs and goals,and presenting a set of solutions to h

326、elp them operate more efficiently and sustainably.Read on for an overview of the various programs,services,and technologies that can be part of a sustainability solution.PREVENTIONCONSUMPTION REDUCTIONPRODUCT LIFE EXTENSIONRECYCLING&RECOVERYDISPOSAL/INCINERATIONMinimize EffortsMaximize EffortsSustai

327、nability Solutions43Serving as a Trusted PartnerGreen Products ProgramOur Sustainability SolutionsCategory ManagementMetalworkingProgramEngineering ProgramTotal Cost of Ownership AnalysisFMI TechnologyTool RepairTool&Cutter GrindingRecycling&Recovery ProgramseCommerce ToolsSupply Chain ResiliencySup

328、plier DiversitySafety Specialist Program/2024 ESG ReportOur ESG JourneyGovernanceEmpoweringPeoplePreserving Our WorldAppendixPreventionConsumption ReductionProduct Life ExtensionRecycling&RecoveryTo meet a broad range of our customers application needs,Fastenal offers approximately 52,700 green prod

329、ucts,including certified green products as well as environmentally preferable products(see definition below)within our standard eCommerce catalog.We have identified that these products(1)reduce negative effects on human health and the environment compared to competing products and/or(2)promote susta

330、inability through resource conservation,end-of-life waste management,and life-cycle analysis.In addition to managing our green product program,Fastenals compliance specialists assist customers with goal creation,sourcing,and custom reporting in support of their sustainable procurement initiatives.Su

331、pporting sustainable procurement,energy efficiency projects,and process efficiencies in manufacturing and metalworkingGreen and Energy-Efficient Products ProgramCertified Green ProductsGuided by international standards,our global compliance teams work with third-party agencies around the world to ve

332、t products and confirm the accuracy of green benefit claims.These team members are located in the United States,Canada,Mexico,Brazil,the United Kingdom,Continental Europe(in several countries),and China,providing local expertise and advocacy across global supply chains.Click here to view the list of

333、 third-party entities weve aligned with to assist us with confirming the integrity of our certified green product program.Environmentally Preferable Products(Applies to Non-European Locations Only)Environmentally preferable products have a lesser or reduced effect on the environment when compared with competing products or services that serve the same purpose.We offer this designation because thir