Amanda Cimaglia - Vice President, ESG and Corporate Affairs - AZEK
Amanda Cimaglia is currently serving as our Vice President, ESG and Corporate Affairs. Prior to joining us in January 2021, Ms. Cimaglia served as the Managing Director of Solebury Trout’s ESG 360 platform, where she advised private and public companies on the development and communication of ESG strategies, including investor relations and corporate communications initiatives. Prior to that, Amanda served as the head of investor relations and ESG at Hannon Armstrong (NYSE: HASI), the first U.S. public company solely dedicated to investments in climate solutions, providing capital to leading companies in energy efficiency, renewable energy, and other sustainable infrastructure markets. During her seven-year tenure at Hannon Armstrong, Amanda built an award-winning investor relations program, garnering the Best Overall Investor Relations (Small Cap) Award by IR Magazine, as well as being named a finalist for both Best ESG Reporting and Rising Star of investor relations. She has served as a member of the ESG working groups for both the American Council on Renewable Energy (ACORE) and the New York Stock Exchange (NYSE).
Amanda Joins Sustainable Nation to Discuss:
How a background in investor relations helps with managing ESG
The history of sustainability as AZEK
Creating recycled material and sourcing at AZEK
Advice on zero waste events including the TimberTech Championship
AZEK’s process of widening emission accounting
The importance of leadership in integrating ESG into the business strategy at AZEK
Amanda's Responses:
Good to have you on, Amanda. Looking forward to the discussion. I gave our listeners a little background on your professional life, but tell us a little bit about your personal life and what led you to be doing the work you're doing today.
Absolutely, I live in Annapolis, Maryland.
I got married earlier this year to an active-duty naval officer who is stationed at the academy. He's a permanent military professor teaching cybersecurity. But I was born and raised here in Annapolis, Maryland, and have loved growing up here. There's so much history here. Part of my journey into ESG and wanting to work for companies that really are making a difference in the world.
Annapolis is at sea level, or in some cases, below sea level. Flooding is a huge risk here, and it happens really frequently. Witnessing the increasing severity of weather events and the subsequent flooding of our beautiful downtown has been a constant reminder for me. It's always made me ponder what contributions I can make in my professional life to address these pressing sustainability and environmental issues. What difference can I make in my career to help create a more sustainable future?
That's always been something that's guided me. When I started my career, I was really in marketing and communications, and about ten years ago I had the opportunity to join a company that was preparing for its IPO. It's a company called Hannon Armstrong. It was a really fascinating company.
They were basically and still are today a specialty finance company that provides debt and equity investments to renewable energy projects, green building energy efficiency projects, stormwater management, and stormwater remediation. So they were the capital provider to several projects primarily based here in the US.
As I started from a communications perspective, my role expanded into investor relations. Given the focus of the company addressing climate change and being a climate solutions investor, obviously, ESG became a really big part of our investor relations and corporate communications strategy. I spent about seven years there at Hannon Armstrong and loved every minute of it. I really focused on cultivating those relationships with ESG investors whose values were similarly aligned to the companies, and we're not necessarily investing for quarter-to-quarter impact but rather long-term impact both from a positive financial standpoint and also from an ESG and sustainability standpoint.
After I was there for about seven years, it was a really hard decision for me to leave, and I'm still an investor in the company today. I am still a public shareholder. I did want to expand my horizons and see how other companies were navigating this ESG landscape and the risks and opportunities that other companies were facing with respect to ESG, which is increasingly being integrated into business strategies. So I had the opportunity to set up an ESG practice at a company called Solberry Communications and got to work with a lot of pre-IPO companies or companies that were newly public, helping them formalize their ESG strategy.
AZEK was one of my clients and as you are well aware, now that I work for the AZEK company, I'm a full-time employee here. They were my favorite clients, and it didn't take long before I realized the impact that this company was making on the world and I knew that I wanted to be a part of this company's future. So, that's a brief overview of my personal life and the path that led me to where I am in my career today. I look forward to diving deeper into why I chose AZEK as the next chapter in my professional journey.
Great. Always so interesting to hear about different journeys people take to get to becoming a sustainability or ESG professional and I've met a couple that started in the investor relations field. I'm wondering if you can share how that's been valuable having that investor relations background and what sort of things maybe did you take from that career that are helping you managing ESG?
I would argue that the roles of corporate communications, investor relations, and ESG (Environmental, Social, and Governance) are increasingly becoming intertwined. Of course, the extent of this integration varies depending on the company's structure and management. However, even if these roles aren't explicitly connected, there's often a significant level of implicit interconnectivity within organizations.
When considering ESG, it's crucial to recognize the variety of stakeholders a company aims to engage and inspire. This includes not just current employees, customers, suppliers, and investors, but also potential investors, future employees, and other stakeholders across your value chain. Companies that acknowledge this interconnectivity and formalize these roles often find that their narrative and strategy become far more impactful.
It's not just about internal impact; especially for publicly traded companies, external communication is vital. Engaging with stakeholders whose values align with your company's is essential for both financial and ESG impact.
One additional point worth mentioning is the continued rise of ESG investing. More investors are incorporating ESG considerations into their fundamental financial analyses. This trend shows no signs of abating, especially with proposed SEC rules on the horizon. So, it's safe to say that ESG will remain a focal point for all your stakeholders.
So are you saying that even though some politicians might think that ESG is not a good thing, investors are actually continuing to do it?
That's right. There are many investors who have a long history in investing with ESG principles in mind, and I think that will continue. We've seen the European markets, the European investors have probably been a little bit further along in their journey and how they're incorporating ESG values and ESG principles into their investment analysis. But we're absolutely seeing that here, more and more in the US. All of this political noise aside, I personally don't think that this is going away. In my opinion, it's just simply the right thing to do.
We're saying that a little sarcastically, but it is baffling seeing what's happening right now. But at the same time, not surprising.
Everybody has an opinion.
Yeah, exactly. We'd love to dive into the work you're doing here. Can you start by giving our listeners a little high level overview of what sort of company AZEK is your role there and maybe the history of sustainability at the company?
Sure would love to. A little bit about the AZEK Company.
We make sustainable outdoor living and home exterior products that primarily replace wood on the outside of homes. So you can think of our products as including building products such as composite decking and railing within our Timber Tech brand. High performance, low maintenance PVC trim products, column wraps, specialty siding, again, all wood replacements that's underneath of our AZEK exteriors brand. Most recently we acquired a company called Struxure and they make smart Pergola systems, out of recycled aluminum.
The most compelling thing about the AZEK Company is that products across our portfolio are made from up to 90% recycled material and the majority of them are also recyclable at the end of life. So we are on this journey to incorporate more and more recycled material.
Oftentimes it's the type of material that other companies can't or don't want to recycle. So just to give you a sense in the scale of how much we are recycling here internally, through our vertically integrated recycling facilities, last year we used about 500 million pounds of waste and scrap to manufacture our products. We have made a public commitment to use 1 billion pounds of waste and scrap material by the end of 2026.
Couple of other stats about the company is, that last year we generated over a billion dollars of revenue. We have approximately 2000 employees, we manufacture all of our products right here in the US. We've essentially doubled our business over the last four years through both organic and inorganic growth. Today we have the industry leading portfolio of products in the outdoor living space with the number one and number two brands in outdoor living.
I would add to that that one of the things that really makes us most unique is how intertwined our business and sustainability goals are. That's really where I sit within the organization is increasingly finding those intersections of how we can positively impact our products, our people and the planet. So for us, the most material impact that we can have is using more and more recycled material. Not only is that better for the planet and keeping hundreds of millions of waste and scrap out of landfills, but it's also positively impacting our profitability.
For every pound of recycled material we use, it can represent up to a 50% cost savings as well as a carbon footprint that is 75% to 80% lower than a virgin pound of material. So it's a really compelling business and it's what I like to describe as a company of the future that is acting with both purpose and ambition today.
Great. So it looks like you made progress of about 100 million pounds year over year from about 400 million to 500 million the past year and then you are shooting to get up to a billion by 2026. Can you speak to what has helped you make that growth over the past year, some of those challenges you face from now until 2026. Is it working with suppliers? The availability of recycled content material just kind of paint the picture for our listeners on the challenge ahead and how you plan to address it.
Absolutely. We formally began our recycling journey back in 2018 and that's when we identified our CEO. This was really his vision.
He identified the huge amount of virgin material we were using and recognized that we believed that there was more recycled material that we could be sourcing. So we were able to first identify the sources from where we could obtain more recycled material. But then we also had to reformulate our products to be able to incorporate more recycled material and retool our machinery to be able to process that recycled material. So that certainly has been a journey.
We continue to innovate new products and reformulate existing products that can incorporate more and more recycled material. But when we think about the sourcing and the supply chain to get more directly to your question, we are able to source material from many different outlets. Some of it is direct, some of it is indirect.
One of the most compelling things again, about AZEK and the types of material that we can use. Not to get too wonky on the types of plastics, the type of recycled plastics that we use, but I'll just share a little bit of that information for the listeners, just to help kind of frame up our sourcing capabilities.
I think they like getting wonky. This is an audience, I think, that doesn't mind technical. Yeah.
Okay, good. We source polyethylene plastic material, both high density forms and low density forms. High density polyethylene, you can think about milk jugs and laundry detergent bottles. Low density polyethylene, you can think about plastic films, grocery bags, shrink wrap, dry cleaner bags, newspaper bags, things like that. That's the one type of plastic material that we source and use. Then the other one is recycled PVC material.
So PVC, you can think of pipes, old vinyl siding, vinyl flooring, sometimes it's post industrial, sometimes it's post consumer. On the PVC side we innovated a really boots on the ground first of its kind recycling program that we have branded our full circle PVC recycling program whereby we have been able to place collection bins directly on site. At job sites where contractors, as they're tearing off that old vinyl siding or ripping out vinyl floors or even installing a new Timber tech deck and have scrap cutoffs, they can put all of that PVC scrap into our collection bins.
Then we will pick those up, transfer them back to our vertically integrated recycling facility in Ashland, Ohio. That is where it gets processed and turned into a usable raw material input for us to make our decking and siding products. So anything as long lasting as PVC should not end up in a landfill. It takes hundreds and hundreds of years for it to decompose. Our goal is to create, and we are creating this new end market for materials like PVC, like grocery bags that otherwise could end up in a landfill and maybe are not always collected at curbside recycling programs.
We are unique in the composite decking industry in our ability to be able to use that type of material that, as I mentioned earlier, most companies can't or don't want to use. It's too hard, it's variable. We have the processing expertise, the material science expertise and the scale to be able to source and utilize that material, put it into our products, into the core of our deck boards or into some of our exterior trim products that last upwards of 2030 or 50 years and then are recyclable at the end of life. We think about keeping all of that waste and scrap out of landfills, but then our ability to design products with circularity in mind, so we're not just focused on their use today, but their end of life use as well.
Yeah, I love that because those are some hard to recycle items, those bags and shrink wrap and those types of things that a lot of companies have problems with. If more companies like AZEK are utilizing these materials, then there's going to be more of a market for them, easier for everyone else to recycle and keep out of the landfill. So hopefully more companies can start. Where do you source products like that? Like these recycled shrink wrap and bags? Because they're not recycled at very many places. How do you get those materials?
Some of it is directly from brokers, some of it is from other recycling partners, some of it is through direct relationships.
Like we have previously announced a relationship with Barry Global, to be able to take their scrap plastic film that they're not able to reprocess into their own products. We are an offtaker of that. So that's one example on the polyethylene side and then on the PVC side.
We announced a partnership with one of the largest construction and demolition recyclers in the Pacific Northwest to be able to expand our full circle recyclingprogram.
Creating a new end market for post industrial, or really, in this case, post construction C and D PVC scrap that otherwise wasn't in existence. Lot of times construction and demolition recyclers will turn away PVC materials and then contractors or builders have to take that to a landfill and pay hundreds of dollars in disposal fees.
We are creating our Full Circle program where we can directly source some of these types of materials, we are on a full on blitz from a marketing perspective to drive awareness.
One of the biggest challenges is that once we communicate to people the types of material that we can recycle, process and use ourselves, it's like the light bulbs go off.
That's where some of these partnerships have been developed and we're looking to execute more of that. So if any of your listeners have a meaningful amount of film plastics or PVC plastics that they otherwise don't know what to do with, reach out to us. We're always looking to expand partnerships with, again, like minded companies.
We are on this path to recycle a billion pounds and we're not going to get there by ourselves. Our team is doing a lot of incredible and innovative things to create and market these recycling programs. But it will take even more partnerships and alliances with others to advance a sustainable and circular economy. There's a lot of wonderful momentum that can come when companies large and small come together to create these sustainability focused partnerships.
Absolutely. A question on zero waste. I think a lot of people have become familiar with the Waste Management Open, the PGA event, and their work on zero waste. But I heard that you folks also have a golf event, the Timber Tech Championship, that has been working towards zero waste. More people in general are looking towards zero waste events and asking how do we reduce the impact of events. Can you speak to the Timber Tech Championship and anything maybe that you all have learned or advice you would give on zero waste events?
Absolutely. This is an initiative that's really near and dear to my heart and one of the things that has really been a fun part of my professional journey. As you mentioned, the Timber Tech Championship is part of the PGA Tour Champions schedule. We are the title sponsor for the third year in a row. We have the event upcoming in the first week in November in Boca Raton. Last year we were the first event in the PGA Tour Champions schedule to commit to and achieve zero waste to landfill certification.
We have learned a lot from the Waste Management Open, which is on the regular PGA Tour. We've learned a lot from other sustainable events, sporting events, and so wanting to communicate and walk the talk, if you will.
When we talk about sustainability, we believe that it's important to show those commitments to sustainability not only inside the walls of our organization, but outside of the walls of our organization.
For this event in particular, we engaged a third party, a company called Sustainable Solutions Corp. They've been an excellent partner and have set us up for success. We spent months ahead of last year's event designing waste, identifying all of the potential waste streams that could come out of the event. Then identifying ways in which we can recycle, repurpose, reuse, donate or compost nearly every bit of waste coming out of that event. GreenCircle Certified actually certified that that we executed our sustainable event management plan as intended and none of the waste generated out of our event was sent to any local area landfills.
We recycled almost 50% of what we collected and generated during the event last year. So for this year's event, we want to recycle more. We've been looking for innovative ways to eliminate waste and find new outlets to be able to recycle some of those materials.
It's just been such an incredible point of engagement for our team. In conjunction with this event, we host many of our distributor partners, our dealer partners and the contractors that are using our products. We host a series of educational events and hands on experiences with them and our products and then also invite them to partake in the golf event.
They become part of our sustainability journey and it has reinforced the messaging. Our commitment to creating a more sustainable future is reinforced with them. Our customers are a really important stakeholder in this journey. We're really proud to be making history with the PGA Tour champions. They also have learned a lot from our approach and they too are equally committed to sustainability.
I would say whether it's for an event or even in your own organization, sustainability and ESG, more broadly speaking, it's a journey, it's not a destination. It's also something that's really easy to think. There's so many different things that we can pursue, so many different initiatives. There's a lot of things that can be impactful, but don't let perfection be the enemy of the good and don't think that we don't have to boil the ocean to have good, positive ESG impacts.
Every little bit can help. Prioritizing the ways in which you can make the most impact, whether that's inside your organization or in the community or with your employees or with your customers, I think prioritizing your approach to ESG and the different initiatives that you can pursue will help to drive the momentum forward, create positive impacts. It's really exciting to see the different ways that this can manifest for companies like ourselves and many other companies that are doing great things across the US and across the world.
Love it. Congrats on that. Great work.
Thank you.
I also saw in your sustainability report you are or had worked to expand on your Greenhouse Gas accounting to include scope 3. I think a lot of companies now are every year trying to get more granular, trying to get better data, try to include more of their scope 3 emissions. Especially those companies looking to shoot for Science Based Targets, climate pledge, those types of things. Can you speak to this process. I've done a couple greenhouse gas inventories in the construction industry where we included a number of scope 3, it's not easy. There's a lot of things to consider and a lot of data to collect. But can you speak to that process of widening your approach to emission accounting and what you learned and maybe what the value was in doing so?
Absolutely. When I first joined AZEK as a consultant, understanding that it was a manufacturing and an industrial entity, the very first thing that I knew we needed to do was calculate our carbon footprint. Doing that for the first time, was a big undertaking. It was uncomfortable. It required many people to get together and provide many data sets. It was incredible that we were able to quantify and learn coming out of that. We did hire an external company- an external partner, to educate us, and to help us calculate the carbon footprint and gather all of the activity and spend data for the different scopes of emissions.
They had access to all of the emissions factors to be able to calculate the carbon footprint. We hired EcoAct. They did a great job for us. This is what they do day in and day out. They are carbon accounting experts. I used to joke, I knew just enough about carbon accounting to be dangerous.
It was really important to us to ensure that we were following the World Resources Institute greenhouse gas protocol for corporate accounting standards. They helped us calculate two years of our carbon footprint data so that we could have comparative analysis from 2019 to 2020. We published both sets of those numbers in our very first 2020 ESG report. So in that exercise, we calculated, our scope 1 emissions, our scope 2 emissions, which are much easier than calculating scope 3. That's where it tends to get a little bit more complicated and complex.
Understanding the importance of the carbon footprint impact when using recycled material over virgin material, we decided to calculate our purchased goods and services within the Scope 3 emissions category. This allowed us to quantify the carbon intensity of using more recycled materials in our manufacturing processes. Building on this, our third-year carbon footprint assessment in 2021 revealed a 23% decrease in carbon intensity from fiscal 2019 to fiscal 2021. This significant reduction was primarily due to our increased use of recycled materials, which went from approximately 290 million pounds in 2019 to about 500 million pounds in 2021.
That's the area where we can make the most significant impact. In fact, 70% of AZEK's carbon footprint originates from the purchased goods and services category. This is precisely why we're honing in on our energy roadmap, aiming for greater efficiency in our manufacturing facilities, which are notably energy-intensive. We are looking at ways to be better there, but we continue to focus on our purchased goods and services category. As I said, that's where 70% of our carbon footprint has come from.
Now that we've have that analysis, we have publicly stated that we intend to set science based targets that we will submit to the Science Based Targets initiative (SBTi). We're in the process of conducting our feasibility analysis in terms of what we need to achieve across our value chain, our business, and engaging with our suppliers. What do we need to achieve between now and 2030, in 2050 even?
To achieve those goals that are aligned with climate science, it's going to require a portfolio of actions from every single business unit across the organization. This responsibility extends to everyone, not just for this carbon footprint assessment but also for ESG initiatives at large. It's not just my job, it's part of everybody's job, and it's part of how we hold ourselves accountable from a compensation perspective as well. The carbon emissions footprint has been quite a journey.
To your point, Josh, it's not easy. It can become complex and complicated. But I think it's important to know where you're at and where you're going to be able to really make meaningful changes in your corporate behavior, your purchasing decisions to really yield positive impact over time. Oftentimes, especially with the energy efficiency improvements and other types of initiatives that you can pursue, oftentimes that leads to cost savings as well. So it's great when you have the ability to quantify your performance because then you can also tie it back to the business case. And it's not just a feel good thing like, yes, it's the right thing to do, but also when there's a business case for it, it becomes a no brainer.
Speaking of business value, so I see you guys have won a number of awards, like top places to work, best led companies, best places to work. And I see all this great stuff around governance, diversity. You know, you have. I think 50% female or or minority board members as well as over 50% for executive leaders. What what do you think it is about, you know, the governance structure or the leadership at your company that really allows for all of this great ESG work to advance?
It absolutely stems from the commitment of our CEO and the commitment of our board, the success that we've had with respect to our ESG strategy and our ESG performance and how that's manifested in employee engagement and in stakeholder engagement, even and investor engagement and all of these awards, it really stems from the top. It is absolutely without a question.
Our leadership team, our executive team and our board are fully bought into the value around integrating ESG into the business strategy. And so, again, they really set the tone for this, for us as a company. And as I think about my own role and I started this as I started in our conversation earlier, and I think we all live by this here at the ASAC company is how can we engage and inspire others to be part of this journey? When I was interviewing with the company, it was the authenticity of the board and our CEO and our extended senior leadership team that really got me excited about the impact and the difference that this company was making and the magnitude of the impact that we can have as a company. It's refreshing. As I said, it's authentic and it's something that really is defining for us as a company.
Excellent. Amanda, we're going to jump into our final five questions. What is one piece of advice you would give other sustainability professionals that might help them in their careers?
I would again say ESG is a journey and not a destination. Focus on what's impactful and prioritize your ESG initiatives accordingly. We will always have the opportunity to evolve. Don't let perfection be the enemy of the good.
What are you most excited about right now in the world of sustainability?
Having been in this space for the last decade of my career, the momentum that we've experienced over the last two years alone is remarkable. ESG and ESG stewardship is no longer optional. It's table stakes for everyone. I would add to that, that I am constantly encouraged and inspired by what innovations are being brought to the market, what partnerships are being created to drive circularity, drive sustainability, and the conversations that are being had across companies from the senior level of the organization to the manager level, to other employees and even hourly employees across the organization. It is a point of empowerment and a point of conversation and a point of inspiration for all of us.
What is one book you would recommend sustainability professionals read?
I just finished a brand new book written by the Harvard Business School professor and ESG rockstar I like to call him, George Serafeim, who I had the opportunity to host for a fireside chat a couple of years ago. The book is called Purpose and Profit: How Business Can Lift Up the World, and it offers a roadmap really for people at any stage of their career who seek to align their professional aspirations with their personal values. It's relatable no matter where you are in the organization, and no matter what level you are in the organization, it's relevant to both corporates and investors alike. George really discusses how the purpose of business has changed over time, how we can implement more purpose-driven strategies, and how companies can capture value. I think my favorite part of the book is how he highlights that we all have choices on what we buy, how we invest, and where we work.
What are some of your favorite resources or tools that really help you in your work?
I like to keep up to date on ESG issues by reading the many newsletters that are published in the ESG space such as Bloomberg Green and Harvard Law School's Forum on Corporate Governance and ESG. I would also say, being an NYSE listed company, the ESG team at the New York Stock Exchange, they do a great job on ESG programming and best practices. And finally, LinkedIn. I find a lot of inspiration from LinkedIn and I seem to wake up every day to find out something new and exciting that is happening in the field of sustainability.
Where can our listeners go to learn more about you and your work?
I'm on LinkedIn, so your listeners are welcome to find me and follow me there. Then, of course, our website, azekco.com. We have our full circle ESG report on there and a lot of additional resources to learn more about the AZEK company and how we are revolutionizing outdoor living to create a more sustainable future.