Valmont Industries, Inc. (VMI) Earnings Call Transcript & Summary

Greetings, and welcome to the Valmont ESG conference call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Renee Campbell, Senior Vice President, Investor Relations and Treasurer. Please go ahead.

Thank you, and welcome to Valmont's first Sustainability and ESG Conference Call. Our 2022 sustainability report was released last week on March 24, and you'll find the link to the report in the Sustainability section of our website at valmont.com. Presentation materials for this webcast are also available on our Investors page. My name is Renee Campbell, I'm the Senior Vice President, Investor Relations and Treasurer at Valmont. And joining me to co-present today is Steve Kaniewski, our President and Chief Executive Officer. So after our presentation, we'll have some time for Q&A during which Steve and I will be joined by a few other Valmont leaders, who are helping to drive our journey forward -- ESG journey forward. So turning to Slide 2. Today's call is subject to our disclosure on forward-looking statements, which applies to today's discussion and presentation. So moving to Slide 3. So Steve and I are going to go back and forth today. I'm going to start us off with introducing Valmont and our sustainability highlights over the past year. Steve will show you how our business and sustainability strategies are really inseparable using some very exciting customer stories and how sustainability is operationalized and supported inside of Valmont. And in between, I'll talk about how our sustainability principles extend to how our own operations are managed and how our most valuable assets, our people, play an integral part in fulfilling our corporate purpose. So turning to Slide 5. Our tagline is conserving resources, improving life. And that's been around long before ESG became what it is today. So we really didn't have to build a brand-new sustainability story when stakeholders started to increasingly look at ESG factors to evaluate companies. As the impacts of climate change become more frequent and more challenging, we're finding that our businesses at Valmont are a natural part of the solution. Since our company was founded more than 75 years ago, we've been helping growers do more with less in the agricultural space. And that experience and that mindset has now extended to the infrastructure space, as we are working to protect vital infrastructure and provide reliable power and connectivity, because we've always viewed our work through its positive impact on people everywhere. And it's inspiring for our teams to be able to positively impact both customers and society. So turning to Slide 6. As I mentioned, at Valmont, we've been embedding sustainability in our business since 1946. And this has translated to similar benefits across the company. We've highlighted a few of our more recent accomplishments on this slide. One important highlight is our goals and outcomes around carbon emissions. Addressing climate change is a strategic priority across our business. And over the past few years, we've set specific goals to reduce energy usage and fossil fuels across our operations, as part of our overall climate and carbon strategy. The needs of our customers to adapt to the effects of climate change and mitigate their carbon emissions will make the products and services that we provide that much more important. We're working to measure and report, and cost effectively reduce the carbon intensity of our operations and ensure that our facilities are prepared to manage climate-related risks. And as you can see from some of the outcomes on this slide, we're already making solid progress. While we focus on greater measurement and disclosure of our carbon emissions and put in place goals and programs to reduce carbon intensity of our operations. We will also differentiate our products and services. We're highlighting how, what we do helps communities adapt to the challenges caused by climate change impacts and also how we are helping to bridge the digital divide by providing ways to help connect our world. Our innovative teams will continue working to develop new products and services that will help our customers. And not only does this tie to the elevation of our ESG commitments, it's also just the right thing to do. And importantly, our employees are highly engaged in our purpose and our tagline, and are really central to our sustainability strategy. So later in the presentation, I'm going to talk a little bit more about some of the highlights that you see on the right side of this slide, specifically around our employee resource groups, our Global Green Teams, and our goals around diversity, equity and inclusion. So now I'm going to turn it over to Steve to talk about how sustainability across our businesses is helping to drive and fulfill our company purpose.

Thank you, Renee. And turning to Slide 8. I want to start by talking about the business that has been the most enduring in Valmont's history, and that's our irrigation business, which serves the agricultural markets. For over 75 years, we have been increasing yields and saving water. We have always been at the forefront of this conservation story. This has now taken an elevated role, both geopolitically as well as to serve the long-standing market driver of a growing population with an improved diet. And in order to produce more and more food without taking more and more land into production, we have to focus on how much crop per drop can be derived from a field, how much we can increase the yield of that field, and also how we can make the land more productive with less inputs. Think of it this way, can we have produced 275 bushels of corn per acre? Today, that seems like a stretch except for some remote places in the world. Tomorrow, that will become commonplace and it's our technology that will help drive us there. Additionally, a new factor, which is the preservation of CO2 and not producing too much of it, you can see that 61 million pounds of CO2 is saved annually by just a simple technology change of being able to operate our pivots remotely. This precludes having to drive out start-up generators, having generators run longer, having the machine run longer than necessary. Additionally, we're also at the forefront of a very growing part of the economy, which is carbon sequestration and corresponding carbon credits. Next slide. As you can see, Valmont supplies innovative products and solutions throughout the growing process, whether that is forecasting what will be needed on the field, to predictive scheduling, to getting insights while the growing season is occurring, both from our Valley Insights product as well as our Irriger scheduling services, as well as then following both the harvest and through market delivery. Next slide. A case in point, and this really embodies our overall sustainability in agricultural theme. As you can see, Sudan is trying to diversify away from both the petroleum-based economy and to feed a growing population. Access to foreign capital and excess budgets are not something that Sudan is accustomed to. So how can we help them to grow more efficiently to feed their people and help them do it in such a way that allows for the minimum impact on both the ecology and economy? So what we've done is taken an all-in approach. We have brought Sudan locals back to the University of Nebraska via scholarships to learn the latest in farming techniques, both for agricultural agronomy as well as water conservation manage. These students then can earn a master's degree in agricultural sciences with an emphasis in pivot technology. They take this back to Sudan, which then they can apply in a real life circumstance. And they combine that with our solar irrigation options, so that they don't need to run $1 million a mile of grid power in order to power the pivots and the pumps. So it brings into production land that otherwise would never be able to be put to use. If not, the Sudanese would have to import this food from a long distance, it would be sold at a much higher price and ultimately, they would be less independent in their own food production. Next slide. In our Infrastructure group, Sustainability is also a key component of the purpose of that business. If you think about recent climate change type of issues, the resiliency of an electrical grid is at the foremost, whether that's California fires, hurricanes in the Southeast, or other types of activities, which cause electric to be interrupted. As we know, these interruptions caused real-world problems, potentially riots. But at the minimum, it impacts the quality of life for the people that are dealing with this power. Cleaner Transportation is also a very important theme globally. And whether you're on EV, hybrid or petroleum-based types of cars, the efficient movement of the traffic through given areas is of utmost importance. And our solutions keep both people safe and moving traffic effectively through those areas. I mention safe, because usually it's taken for granted in a country like the United States, but in developing parts of the world where we also have a very robust highway safety systems, it allows us to really decrease death rates. And so it helps society, it helps individuals and countries as they get more and more safety of our products. Even in this picture, you can see lights, something we take for granted. While lighting, particularly at key points of intersections and interchanges can make or break how accidents occur. And so we feel very good about our products and services, which we offer in this space. In our Telecom business, we help to build smart cities. And as you know, the 5G deployment is rapidly moving throughout the developed world, but every city will have to expand upon that infrastructure in order to accommodate EV, driverless trucking, autonomous driving machines and any other type of modern mode of transportation as we move forward. Our technology, which is embedded in poles to monitor and to report back to traffic departments to developers, who are developing smart city applications will be vital as we move forward. At the end of the day, our Infrastructure group really helps to create a more resilient, safe and network society. Next slide. Case in point, providing connectivity that can work for everyone. So recently, we completed a smart city technology project along with various other partners, in Espoo, Finland, both to enhance sustainability and to reduce carbon emissions. We worked with our partners to develop LuxTurrim5G and it was spearheaded by several of industry leaders that you would know in the space. We help to have the key capabilities of this infrastructure. We were part of designing what the data privacy would look like, how the design would work, and understanding the different landscapes and operational models that, that smart city had to encounter. Ultimately, LuxTurrim was awarded for heightening the visibility of 5G and how it can integrate effectively with the smart city and accomplish both the sustainability piece as well as the connectivity piece. And we look forward to many other projects like this as we move forward. Next slide. In Solar, as you know, we acquired a business in 2018 that made solar trackers. These trackers are vital for following the sun on a single axis from morning until evening, thereby generating 25% more power for only 10% more cost of the overall project. This example here, we worked with Enel Green Power, which produced the largest solar plant in all of Chile in South America. As you may know, Chile is a leading clean energy provider based on environmental factors that favor us. So we supplied nearly 35,000 of our own solar trackers that were tailor-made for this project. And while these projects can look very similar, oftentimes topography, the angle of the sun, factors like dust and other types of issues environmentally can play into the design of the project itself. In this case, a remote high desert that challenged the transmission, distribution of the energy itself. So again our product can track the angle and remain flexible through the software that we have applied to it. So if there is a buildup condition, whether it's clouds, dust or in other cases, in other environments, snow, our products have the ability to then angle itself for properly for cleaning or to dump the snow. Again, something we take for granted every day, but something very important for the generator of the solar power and the payback on that project. Next slide. Another case study and one we've heard very recently through the COVID crisis about closing the digital divide. As we know, when people had to work from home, school from home, there was definitely a difference between those that had communications and those that did not. And as you can see globally, 40% of rural homes do not even yet have access to the Internet. And while we would like to think we could run fiber to every home, practical reasons, like in this picture, could be a remote island, it could be very hard terrain. And so our wireless products allow us to get that last mile. So we can work with providers, the utility companies or telecom companies and go from the last point where there is fiber and then use wireless to jump through and get ultimately high-speed broadband connections to rural areas. This will continue to grow as a big part of our business, but it will take coordination amongst, not just ourselves with partners, but also government. But as it's more well funded and more well understood, I think this is something you will see continue to keep people connected and allow for equity and equality across the digital divide. Next slide. Another area that our infrastructure is able to be very much enduring is to stand up to a hurricane. In August of 2020, Hurricane Laura, Louisiana, resulting in 81 deaths and over 600,000 people without power, with more than $19 billion in damage. Our PyraMAX structure, pictured here crossed inlet river area that provided a vital link in the state backbone of Louisiana. If this structure had gone down, unlike the structures that cover the land area, it would have taken a significant amount of time to get it back up and running. Our PyraMax structure, which is unique to Valmont, was designed to withstand very high winds and achieve incredible resistance at very high heights. As you can imagine, this is crossing a river inlet that has ships that go underneath so therefore, must be up very tall. So we collaborated with our customer Entergy and this now has become a vital part of the hardening the grid story, not just for Entergy, but in other critical areas around the U.S. and international. Next slide. We turn it back to Renee.

Thanks, Steve. Okay. So as I mentioned earlier, our tagline and our company purpose is conserving resources, improving life, and that's really embedded into everything that we do, including how we manage our operations and how we're taking care of our people. As Steve just talked about, we really strive to link together the economic and the environmental benefits into the value that we deliver to our customers. We take a similar approach in how we manage our own operations. So I'll share a couple of examples of this. First, the increased use of renewable energy saves money and reduces CO2 that we would have otherwise emitted from our factories. So as part of our ongoing carbon mitigation strategy, we're expanding our global solar footprint by installing solar arrays at several of our facilities across the globe using our own single access tracker products. Another example is through both our 90/90 LED lighting program and our electrical -- excuse me, electric vehicle project. So with 90/90, we've committed to lighting at least 90% of our manufacturing facilities with 90% LED lighting by the end of 2023. Not only will this reduce cost and carbon emissions, but it also provides a safer working environment for our employees. And I'm excited to say that at the end of 2021, 50% of our sites had already met that goal and that's nearly double from where we were in 2020. And we're actually on track for 75% of our sites to reach the goal by the end of this year. With the EV project, last year, we replaced 100 gas or diesel-powered vehicles with electric vehicles at our Valley, Nebraska campus, which is the largest facility in our footprint. We estimate that these vehicles reduce that site's CO2 emissions by 131 metric tons each year. We've also conducted life cycle assessments or LCAs on some of our key products like center pivots and solar trackers to give us visibility into the environmental impact from the raw materials used to the end of life, which then helps us learn and modify our processes as we work toward a lower carbon footprint. To build upon that, circularity refers to a product that is designed with the end of its useful life in mind. So one example of that is with our steel lighting structures and our facility in the Netherlands, who did a pilot project to collect and clean poles and then use them again with a new powder coating for a new life. And now they're working on a similar pilot project with several other cities. And just like across our businesses, we're using technology to closely monitor the impact of our supply chain as we can reduce emissions, waste and other resources by doing more sustainable sourcing. And to that point, last year, we implemented a supplier relationship management system to help drive responsible management across the supply chain. So moving to the next slide. A lot of our success in delivering on our tagline is really the result of how engaged and energized our teams are around the world. Our most recent employee engagement survey this last year was sent out to all of our 11,000 employees in 24 languages, and we had a response rate of 86%. That's not only a record for us, but it is also well above the benchmark of just under 81% for the manufacturing sector. And how our employees engage is equally impressive. For the past few years, we've been conducting an annual green team competition, which is a way for us to celebrate and recognize the creativity of those who are delivering real sustainable outcomes. And you can see some examples of this on the right side of this slide. This is really just a fantastic example of how conservation is embedded at Valmont. So moving to the next slide. The engagement and the impact that we talked about in the previous slide is really tied to our emphasis on employee safety and our employees' feeling of belonging and inclusion. So starting with safety. Once again, you'll see here that we're using technology and innovation to improve outcomes. We've deployed the Valmont Safety Index across our businesses. This is a leading indicator metric that gives us a way to look at activities that drive involvement, minimize risk in our operations and increase safety knowledge across our workforce. In a similar way, we're using predictive analytics and leveraging machine learning and artificial intelligence to shape our EHS data into a predictive model, 1 that can help proactively identify potential safety incidents and provide actionable outcomes to help accident prevention at our sites. Importantly, at Valmont, we celebrate diversity with the spirit of inclusion and support. We firmly believe that diversity is absolutely essential for the best ideas to emerge. And as a global company, we see diversity, equity and inclusion as necessary components of our innovation and future success. We know that creating a more diverse workplace requires both strategy and action. And this last year, we accelerated this journey by committing to increasing people of color within our company by 50% by 2025 and doubling that by 2030. And we now have 7 active employee resource groups across the company. These ERGs not only strengthen our culture and provide support to employees, they also cultivate diverse and unique perspective and really are a key component of our talent acquisition strategy. So I'm going to turn it back over to Steve now to talk about how we are operationalizing sustainability across the company.

Thank you, Renee, and turning to Slide 21. It is important for our culture to continue thriving by having a solid structure around ESG. Starting with our Board, we've recently created an ESG committee, which is responsible for providing oversight on all environmental, health and safety, social risks as well as reporting back to the officers and other groups about our progress and how we've moved. There is a task force that is led by me, which includes senior corporate leaders and other stakeholders to discuss our ESG strategy across all different functions of our business, whether it is marketing and how we talk about our ESG story and our products, to our environmental manager, to our safety managers or to our business leaders. This is something that I push that we have been working on for well over 18 months now to be in a state of progress that I believe is a testament to the team. Our key stakeholders, we talk with and incentivize all of our stakeholders to work on ESG principles within the business. And there is a representative from different plants, different parts of the commercial organizations, as well as the product and R&D functions. And then day-to-day management. Renee and her team in IR and Treasury are responsible for monitoring the progress and day-to-day issues, including data collection and advising the other decision makers of tactical adjustments throughout the year. There is also a full-time ESG manager and analyst that work for the company. Next slide. Our Board does embody our commitment to conserving resources and improving life. And as you can see on the slide here, we have a good mixture of both ethnic, gender and operational expertise diversity around our Board. Our Board cares about our tagline. And they have the pertinent experience to give us the leadership and the guidance as necessary, as we embark further and further into our ESG journey. With that, I will turn the call back over to Renee, who will talk about our ongoing commitment to elevate ESG at Valmont.

Thanks, Steve. So turning to Slide 24. Aligning with the framework is an important part of how we effectively tell our ESG story to various stakeholders. Our business and our purpose naturally align closely with 4 of the United Nations' Sustainable Development Goals that you see listed on this slide to show how we positively impact the world. And you'll see this alignment highlighted in both the case studies that Steve walked us through today, and many other areas throughout our sustainability report. SASB is the ESG reporting standard that is widely considered as the most financially material and relevant to investors. And we're happy to share that our 2021 disclosure was recently published on our sustainability website as well. And also, this past year, we upgraded our GRI alignment from G4 standards to GRI standards. Also, I'm sure that many of you are familiar with the recent [indiscernible] proposal on climate change, which specifically calls out the TCFD framework as 1 that can help fulfill potential regulatory requirements. So I'm excited to say that later this year, we will be moving forward with TCFD alignment in coordination with our carbon disclosure project updates. Over time, we know that there will be different frameworks and different metrics, but we will always strive to lead. Our goal is and always has been to become purpose-driven, and to completely tie, who we are as a company, together with our products and services that help the world. And at the end of the day, it really is just how we do business. So moving to our final slide. You can see we have a very busy and exciting journey ahead of us, as we continue to challenge ourselves on how we can deliver greater economic and environmental value. A few years ago, we were mainly focused on compliance, but we are now moving into resource optimization, which means that we're setting goals and developing action plans to further our ESG initiatives. And you've heard many of those discussed today between Steve and I. Ultimately, these will build upon each other and we'll be moving into market differentiation, which is when we truly will be becoming a purpose-driven company. So I want to close today by saying that at Valmont, we firmly believe the world can be a better place. So we're working on it every day through our products, our services and other solutions that improve life for everyone and conserve resources for the future. That's the value we add, and we're excited for you to join us as we continue on our journey of conserving resources and improving life. So moving to the next slide. That concludes our prepared remarks. And now I'm going to be moderating a Q&A session. So I'm going to briefly turn it back over to the operator for those instructions.

[Operator Instructions]

Thank you. Okay. So first, I want to say a big thank you in advance to our panelists, who are featured on today's call. So Steve and I are joined today by Mitchell Parnell, Senior Vice President of Human Resources; Kari O’Neill Potts, Vice President, Deputy General Counsel and Chair of Inclusion and Diversity, and Cliff Fleener, Director of Environmental Responsibility. So our first question today comes from Jon [ Braatz ]. And Steve, I'm going to direct this question over to you. [ Jon ] is asking how critical is government support, i.e., funding and advancing some of the infrastructure, sustainable projects or green projects.

Thank you, Jon, for the question. I believe there are 2 different ways to answer this. In the agricultural side of the business, sustainability is kind of embedded to the makeup and the DNA of a farmer, because they need to try to maximize profit by increasing yields and reducing input costs. And I think, particularly right now with heightened inflation and issues with supply chains and grains and other things around the world, I think it's just providing more fuel or adrenalin to the growers to follow that sustainability story. On the infrastructure side of the business, while government funding is kind of important as the -- at a nascent birth level around renewables, I think that most of them are well underway and economically viable in and of themselves. And so further government support really just helps to accelerate the move which is already taking place in solar, in wind, and really the decarbonization of our grid, and power generation around the world. I think it's -- when it comes to the digital divide, that's where government support still has a pretty outsized role to play, just like we saw with the universal connection of telephones early on. I think you're starting to see more of an effort to say, it's the right of government or the responsibility of government to provide these basic connectivity services. So it varies across the business. It helps, but I think the move towards a green and renewable strategy around the world is pretty well embedded now.

Great. Thanks, Steve. Appreciate it. So we got some questions submitted in advance. I'm going to move to one of those next. And this one, I will direct over to you, Mitch. What hiring practices have you implemented to ensure that diversity in new hires meets your goal, our stated goal of 50% increase in people of color by 2025 and doubling by 2030?

Okay, Rene. I think the first thing that we put in place with the concept around balance candidate slates. So the part of the HR organization's responsibility is to make sure that we're putting in front of hiring managers a representative group of candidates that are reflective of the population that we're operating with it. I would say that prior to that, we did take a look at our company and make sure that we have the correct ecosystem, if you will, to welcome in this diverse talent that we are targeting. And what I mean by that is, we spent time with our leadership teams focused on unconscious bias and how decision-making really drives our outcomes. The second piece that we spent time with was understanding what it would look like if we were a destination employer. And so with that, we look at pay equity. We made sure that from a gender standpoint, that our pay was equitable, and at the same time, we tapped into our employees, and you'll hear a little bit later about our employee resource groups. They are the ones that are helping us identify the target candidate pools that we can actively go out and try to attract into our company.

Great. I'm going to use that as a segue to ask a question that we got about employee resource groups and Kari, this one's for you. Tell us more about the employee resource groups at Valmont and if there's any new groups that are on your radar going forward.

Thanks, Renee. Valmont's Employee Resource Groups are really a standardization of doing the right things, driving inclusivity in our workplace, and eliciting feedback from our employees. As Mitch mentioned, our ERGs are part of a larger ecosystem, whereby we are ensuring that our current employees feel, valued, feel heard, and also feel energized and excited about going out into their communities and reaching those talent pools that identify with our ERGs. An essential component of our ERG is a continuous feedback loop with management. As a DEI lead, I am grateful that Steve, our CEO, has attended, participated in, and presented at several employee resource group events and we have had 3 Board members also give us their time present to and share with our employee resource groups. This not only shows the ERG members that there is support from the highest levels of the organization, it also cultivates that trust that's essential to that feedback loop. And that feedback loop has resulted in tangible initiatives for the company, such as our dual language mentorship program and has provided unique insights and perspectives for our executive leadership team from our employee resource group members. As outlined in the slides, we currently have 7 employee resource groups, and on this horizon, we are forming a Valmont Legacy Group, which is for long-tenured employees to create a community for them and also provide mentorship to the existing employee resource groups. We're always open to ideas and suggestions for new employee resource groups from our employees.

Excellent. Thank you very much, Kari. So a question related to our environmental goals that I'm going to kind of combine with one of the questions we received in advance. So Cliff, I'm going to start with you on this one. Can you provide more detail on how you intend to reach your 2025 environmental goals? And do you feel like progress is being made and on track to reach the goals by the end of 2025?

Thank you very much, Renee. Well, in addition to many of the initiatives that Rene mentioned and the great work of our 85 odd green teams across the footprint, we're launching a number of new initiatives on an enterprise-wide basis to help us get to the goal. We're slightly ahead of goal right now, but as time progresses to hit 2025, we're going to have to take some additional concrete steps as well as going forward for more aggressive goals in the future. Some of these initiatives include the undertaking of a global combustion fuel vehicle feasibility study, which essentially looks at our entire vehicle fleet, both on plant and all over the road, so that we can determine the most efficient fuel mix, vehicle type, maintenance model, and ownership model. So that we can ensure that we'll be as carbon efficient as we can and at the same time, lowering costs. We're looking at something we're calling the [indiscernible] initiative, which is working with third-party partners to assess the insulation, roofing, HVAC, ventilation and compressors at our sites, so that we can selectively upgrade to improve the energy efficiency of our sites as well as improving the comfort and working environment for our employees. We're looking at various purchasing standards that will be set up to ensure that as we renew and improve equipment over time that we purchase the most efficient equipment possible when we're ready to upgrade. So that we don't waste time going back and having to retrograde other equipment. And thirdly, as Renee mentioned, solar installations where they make sense and perhaps other alternative energy as well where it's suitable.

Steve, you want to add something?

Yes, I'd like to add that what you heard Cliff talk about are things that also operationally we care about, because at the end of the day, they save us money. So doing the right thing doesn't have to clash with us financially performing well. And so all of these things really help to reduce the inputs into our own business for us to save money. I'll add that the addition of an ESG Committee at a Board level, which few companies have done thus far, really also provides an impetus for us to consistently track and standardize report our progress throughout. So we're not throwing goals in saying 2025, 2030, and then we hope by -- hope that we get there. We're reviewing concrete plans in each of the areas, whether it's ES or G with the ESG Committee, so that we can attain those goals.

Great. Thank you. So we've got a question that came in from Chris McDonald at Kennedy Capital. Chris -- I'm going to direct this to you, Steve. Chris asked, could you please expand on how Valmont's thoughtful focus on sustainability is a competitive differentiator with certain markets or maybe certain products?

Okay. Thanks for the question, Chris. We believe it will become a very significant differentiator in terms of the overall value proposition that we bring to our customers. Many of our customers are also trying to figure out the ESG landscape themselves. And by at least having a partner, more than just a vendor or just a supplier of product, we are in a position to help lead them through that journey. So as an example, as people think about Scope 3 emissions and what are the downstream effects, because we're so far advanced with our analytics and the ability to show where our carbon usage is and the safety of our products, et cetera, it helps build their own stories. And as you think about that, that gives you pricing power in the marketplace, because people are willing to pay a spread for all of that extra value creation instead of just buying the product itself. And so we think, whether it's in our Agriculture or Infrastructure space, we fit in very quickly with the whole movement of ESG across the landscape. And as I mentioned, because it also helps save money, it can help make us extremely competitive, when there is a competitive pricing situation and still make money, because we've been able to reduce our own costs in order to provide the value to the customer. So it has many facets of making us stand out in a marketplace that sometimes can be.

Thank you very much, Steve. Mitch, I'm going to turn it back over to you for this next one. It's kind of a 2-part question. So the first part is how has the great resignation impacted Valmont, if at all? And kind of secondly, how are we leveraging our sustainability story in attracting and retaining talent?

Okay? So in terms of the great resignation, I think that we've been fortunate. We're still kind of battling away every day to make sure that the value proposition is there for our employees. And so we have not to date seen an exodus of talent. I will tell you that I think the pandemic helped us in that regard and that it created the need for continuous feedback. And so during the past 2 years, we took advantage of that and really focused on career management and career dialogues, and making sure that we clearly understood what people's career aspirations were, and we went to work in it. And so I think that, that in itself has helped kind of maintain that value proposition. In terms of how we see sustainability plan apart in recruiting and attracting people to our company. I've seen an increasing number of candidates, one of their first question or second, is something that they would have seen on our website and related to ESG, and want specific examples of how that is actually playing out. And more times than not, they've offered up their own experiences in their current companies in the same space. So it really has created a good conversation topic and going both ways in terms of what are we doing and what does the talent that we're talking to, what may they bring to our efforts as well.

So we have time for one more question. So I'll take this one. Question is, your ESG report highlights a new revolving credit facility that will have adjustments to the borrowing rates based on achievement in carbon intensity electricity usage. What are these targets? Could we expect further financing agreements tied to goals in the future? So yes, we're very excited actually this past October when our facility was up for renewal. We had the opportunity to add some specific targets. And so those are tied to carbon intensity ratio metric tons of CO2 per, I think, $1 million of revenue per year. And then on electricity usage, megawatt hours per $1 million of revenue for each year. And then that -- the rate adjustments are based on achieving against certain goals and parameters around those metrics and those are evaluated on an annual basis. So in terms of the go forward, yes, I mean, I think for us, as you heard, hopefully, today and took away from what Steve and I shared and the others around the room, ESG is very much a part of who we are. It's kind of a natural extension of what we do and our purpose as a company. And so where and when it makes sense for us to be able to, our goals and metrics into additional KPIs related to agreements or credit facilities or how we work across the supply chain and with our customers, we're absolutely open to doing that and want to be a part of that. Okay. Well, that is -- that's as much time as we have for Q&A today and that brings us to the end of the Q&A part of today's call. So I just want to say thank you to everyone who participated today. Thank you for joining us in our first-ever ESG-focused call. We really appreciate your interest in Valmont and also in our ESG journey. So with that, thank you again and have a great day.

Included in this discussion are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions that management has made in light of experience in the industries in which Valmont operates, as well as management's perceptions of historical trends, current conditions, expected future developments and other factors believed to be appropriate under the circumstances. As you listen to and consider these comments, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties, some of which are beyond Valmont's control and assumptions. Although management believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect Valmont's actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. These factors include, among other things, the continuing and developing effects of COVID-19, including the effects of the outbreak on the general economy and the specific economic effects on the company's business and that of its customers and suppliers, risk factors described from time to time in Valmont's reports to the Securities and Exchange Commission as well as future economic and market circumstances, industry conditions, company performance and financial results, operating efficiencies, availability and price of raw material, availability and market acceptance of new products, product pricing, domestic and international competitive environments, and actions and policy changes of domestic and foreign governments. The company cautions that any forward-looking statement included in this discussion is made as of the date of this discussion, and the company does not undertake to update any forward-looking statement.