Alamo : 2023 Sustainability Report

Jeffery A. Leonard

Chief Executive Officer and President

"No matter what we achieve, there is always more we can do."

Dear Stakeholders,

Thank you for dedicating time to review our 2023 Annual Corporate Sustainability Report, marking the fifth edition Alamo Group has released. I trust you will find the statistical insights and concise case studies valuable in comprehending Alamo Group's journey towards achieving its sustainability objectives. As

in prior years, we have experienced successes and advancements in certain areas, alongside setbacks in others. To ensure a comprehensive overview

of our endeavors, we remain fully transparent about both achievements and challenges.

In the critical realm of energy consumption, we once again achieved a reduction in absolute energy usage for 2023, despite heightened production activities. Our specific energy intensity, measured as energy consumption per 1000 hours worked by our employees, has now decreased by over 12% compared to our baseline 2019 dataset.

The report outlines several other significant accomplishments. For instance, our total scope 1 and 2 carbon intensity has decreased by 22% compared to the 2019 baseline. However, we faced challenges in reducing the amount of solid waste sent to landfills, primarily due to excess dunnage resulting from facility consolidations and production rationalization projects. Additionally, we experienced a regression in water usage reduction compared to the previous year. In 2024, we are committed to intensifying our efforts in these areas to achieve greater progress.

On the personnel front, I am delighted to announce a further 9% reduction in our OSHA recordable injury rate for 2023, surpassing our 2025 target ahead of schedule. Furthermore, I am proud to report zero on- the-job fatalities once again. Our Training Academy expanded its professional development course offerings, with over 300 employees graduating from our AGILE Leadership Training Program last year.

Overall, 2023 marked another year of advancement across critical sustainability dimensions. However, there remains ample room for improvement, and we will set higher benchmarks for ourselves in 2024. The accomplishments of 2023 are commendable, and I extend my gratitude to our teams for their dedication to our long-term sustainability objectives. As always, we welcome your feedback on the contents of this report. Please do not hesitate to share your perspective on our progress.

Jeffery A. Leonard

Chief Executive Officer and President

Dan E. Malone

Executive Vice President and Chief Sustainability Officer

In 2023, Alamo Group recorded our best energy and greenhouse gas (GHG) emissions intensity metrics since we began measuring these performance indicators in 2019. Our energy consumption intensity improved 4% from the prior year and was nearly 19% better than our base year level. Our Scope

1 and 2 emissions intensity improved 8% (using location-based Scope 2) compared to 2022 and was down by more than 28% from base year. When we also consider zero emissions power purchase agreements (market-based Scope 2), our 2023 Scope 1 and 2 emissions intensity was nearly 37% improved from base year operational emissions.

Our 2023 real manufacturing activity, measured in hours worked, increased by 1.3% over last year's record levels. Alamo Group continued to invest heavily in energy efficient production machinery, insourced additional operations from third party suppliers, and launched over 40 projects to improve the wintertime heating efficiency of our facilities. We expect to see the benefits from most of the heating efficiency projects in 2024, with full year impact anticipated in 2025. While a summer heatwave offset some of our project-driven electricity reductions, we are not too proud to admit our lower natural gas use received some assistance from Mother Nature. After harsh winter conditions in 2022, we caught a break in 2023 with 10-15% reductions in heating degree- days in some of the regions where our larger facilities operate. That said, our reductions of energy use and operational emissions were, to varying degrees, across-the-board. We improved in both absolute and intensity measurements, from all major energy sources, and in all GHG emissions categories.

In 2023 Alamo Group continued to invest in sustainable new product development, and collaborated with our customers and suppliers to address a variety of sustainability issues, most notably reducing product use phase GHG emissions through the development of zero-emission electric and near-zero-emission hybrid products to address the largest environmental impact of our product life cycles. We have now developed and shown electric or hybrid-electric prototypes or sold production units in most of our major product categories, including: remote control mowers, boom mowers, mowing boats, woodchippers, street sweepers, debris collectors, vacuum trucks, and excavators.

Measured by mass, our upstream GHG footprint is all about steel. Whether it's the steel plate, sheet and structural Alamo Group used for internal fabrication, or the steel used in axles, pumps, gearboxes, drivelines, and other engineered components we purchase,

it is the dominant driver of inbound financial and environmental costs. We have many opportunities to make more efficient use of steel within our span of control. For example, we design steel weight out of our products by using better grades, and we produce less steel scrap through better planning and use of laser cutting technologies. Because nearly all of our steel scrap is recovered and recycled, many of our folks don't fully recognize it as waste. But recycling recovers only the material and we lose all of the value added, including the embedded energy spent by our suppliers to provide the materials in usable

form. There is waste embedded in every ounce of steel we sell back to the scrap vendor. One of our main 2024 sustainability goals is: don't waste steel!

In 2023, there was no shortage of new sustainability- related regulations. Ranging from the finalization

of the European Union's Corporate Sustainability Reporting Directive (CSRD) to the California Air Resource Board's Advanced Clean Fleet regulation, Alamo Group faced several new requirements from how we report on sustainability issues to government mandates accelerating energy transition. We will be prepared to meet these new demands, but there may be some growing pains along the way. Since the CSRD is the first of the new reporting regulations to apply standards of double materiality and require reporting on a broader range of sustainability issues, we have reorganized and added to this report to begin aligning with some of these new requirements and share some of the additional ways our company impacts the world outside of our operations. I hope you find this year's report to be both thought provoking and informative.

Dan E. Malone

Executive Vice President and

Chief Sustainability Officer

AT A GLANCE

Alamo Group is a leading manufacturer of high- quality maintenance equipment for managing natural vegetation, industrial facilities, and public and private sector infrastructure.

Our products are delivered and serviced primarily through an international network of approximately 7,000 independent dealers, distributors

and service agents.

Founded in

1969

Employees

4,300+

Headquartered in

SEGUIN, TX

Publicly traded since

Manufacturing locations

Operating Divisions

INDUSTRIAL EQUIPMENT

The Industrial Equipment Division of Alamo Group is a leading supplier for both public and private sector customers in infrastructure maintenance. Accounting for approximately 40% of the Company's total sales, this division employs about 1,600+ people in 12 manufacturing locations across 3 countries, and primarily sells its equipment through a network of approximately 750 dealers and distributors. This division's specialized equipment focuses on application-based solutions and includes some of the most recognizable brand names in the market. It's products focus on both contractor and municipal infrastructure customers' year-round maintenance requirements.

VACUUM TRUCKS

VEGETATION MANAGEMENT

Alamo Group's Vegetation Management Division is a leading provider of equipment used in both the maintenance and recycling of organic material. This division, which accounts for approximately 60% of Alamo Group's total sales, employs about 2,500+ people, operates 17 manufacturing locations across 7 countries, and primarily sells its equipment through a network of approximately 6,000 independent dealers and distributors. The division's mowing and tree care brands are some of the most recognizable names in their respective markets. From crop preparation to stubble management, to roadside mowing, and forestry management, Alamo Group has the right products to support our customers' needs. With an eye towards innovation, our products deliver industry leading performance.

Empowering Communities through Innovative Solutions

OUR LOCATIONS

Driving progress for communities around the globe.

Alamo Group's global footprint is a testament to its expansive reach and operational scale. With a portfolio of over 40 brands, the Group operates 29 manufacturing locations worldwide, employing over 4,300 individuals. This extensive network enables Alamo Group to deliver its equipment,

parts, and services across six continents, marking its presence in communities globally. The Group's commitment to quality and innovation and sustainability supports its ability to meet a wide range of needs, demonstrating its role as a key player

in the global market.

1

1

United States 16

Canada 3

Brazil 1

France 3

United Kingdom 3

Netherlands 2

Australia 1

China Sourcing Office

OUR APPROACH TO

SUSTAINABILITY

Alamo Groups's approach to sustainability is influenced by two important strategic objectives. First, to provide value to our customers who are responsible for keeping our roadways and power lines clear of encroaching vegetation, clearing debris from our storm sewers, sweeping contaminants from our streets, removing snowfall and ice from our roads, maintaining our forests, and preparing fields for the next planting. Our operations and value chain produce tools and tool carriers required to do those specific jobs. Whether it be lane-miles of snow cleared from roadways, or tons of debris removed from storm sewers, those functional units of output are the only reasons customers buy these products. Infrastructure maintenance

is not optional, and it is our job to provide solutions for our customers to do this necessary work in the most effective and sustainable ways possible, this is what keeps us in business. Second, we are a for-profit business. Consequently, the sustainability investments we have prioritized benefit all three aspects of the triple bottom line: people, planet, and profits. Alamo Group believes that sustainability shouldn't come at the expense of reduced shareholder returns, and we will continue to focus our efforts where all three objectives are met.

All levels of Alamo Group management actively participate in the development and execution of our sustainability strategy. Sustainability goals are integrated into management incentive compensation targets at several levels of the organization, including senior management. Our sustainability strategy is built upon ongoing dialogue with key stakeholders and insights from our annual materiality and risk assessments, that now include a deeper analysis

of climate risks and opportunities. As Alamo Group has gained greater awareness and understanding of potential climate change related impacts, we have begun to consider climate change related issues in our strategic planning and enterprise risk management processes. In this report, we have included climate related disclosures in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Alamo Group will continue to align our sustainability performance reporting with relevant Sustainability Accounting Standards Board (SASB) guidelines.

All quantitative data and information in our report reflects activity in calendar years 2019-2023, as applicable. Previous Alamo

Group Sustainability Reports are also available on our website at https://www.alamo-group.com/reports-and-policies/

Governance

Alamo Group's governance around climate-related risks and opportunities is described in the ESG Governance section of this report (page 16).

Strategy

Disclosure of potentially material climate-related risks and opportunities on Alamo Group's businesses, strategy and planning processes are addressed

in Materiality & Risk Assessment (page 20).

Metrics and Targets

Disclosures of the metrics and targets we use to assess and manage some of our climate-related risks and opportunities are included in the 2023 Sustainability Highlights (page 22), and Environmental Responsibility (pages 26) sections of this report.

Risk Management

Discussion of how Alamo Group identifies, assesses, and manages climate-related risks is included in the Materiality & Risk Assessment section of this report (page 20).

ESG GOVERNANCE

In 2023, the Alamo Group Board of Directors, acting through its Nominating and Governance Committee, maintains ultimate responsibility for overseeing ESG matters. The Company's EVP

• Chief Sustainability Officer, ESG Executive Team, Corporate Sustainability Team, its business unit leadership and Green Teams deployed at every Alamo Group company are responsible for the implementation of ESG policies and strategies, and the reporting of relevant results.

Board ESG Oversight

We Believe

Sound governance practices are fundamental to achieving our long- term sustainable growth objectives. Alamo Group's leadership team, led by our CEO, has responsibility for the day-to-day management

of our business while ultimate oversight of the business rests with our Board of Directors.

• Board of Directors
• Chair, Nominating & Governance
• Chief Executive Officer

The Alamo Group Board of Directors, its Nominating and Governance Committee, and the Chief Executive Officer receive ESG updates at least quarterly, review and approve the publication of ESG goals and reports, and provide strategic oversight and guidance regarding ESG matters, including company sustainability strategy, climate change risks and opportunities,

and the development of ESG goals and reports.