Energy Recovery : 2022 Report

Sustainability Report

Trusted Solutions

for a Sustainable Future

1 Introduction

About This Report

We are pleased to present Energy Recovery's ("we," "our," "Energy Recovery," or "the company") fourth annual Sustainability Report, which describes our efforts and performance for our fiscal year 2022 from January 1, 2022, to December 31, 2022, and includes all company operations worldwide, unless otherwise noted. We have also incorporated select examples of our initiatives to date in 2023. This report outlines our multipronged approach to enhance the sustainability of Energy Recovery and our customers' operations. Included throughout this report are disclosures containing relevant, industry- specific data and information aligned with the Sustainability Accounting Standards Board (SASB) framework. We have also included select disclosures aligned with the Global Reporting Initiative (GRI) framework and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. We are proud members of the International Financial Reporting Standards (IFRS) Sustainability Alliance. Content within this report should not be considered a substitute for the financial and other material information provided in Energy Recovery's periodic filings with the Securities and Exchange Commission (SEC). Detailed footnotes regarding data presented throughout this report are located in the Content Index and Performance Tables starting on page 63. The term "materiality" or "material" used herein is not defined per the Supreme Court's definition and that enforced by the SEC. For questions about this report, please contact sustainability@energyrecovery.com.

Forward-Looking Statements

The statements included in this report are made in an effort to share our views on our sustainability initiatives with our key stakeholders, and to further enhance our collective understanding of ESG issues. Certain matters discussed in this report are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on information currently available to us and on management's beliefs, assumptions, estimates, or projections and are not guarantees of future events or results. Because such forward-looking statements involve risks and uncertainties, changes in circumstances, and assumptions that are difficult to predict and are often beyond our control, our actual results may differ materially from the predictions in these forward-looking statements. All forward-looking statements are made as of today, and we assume no obligation to update such statements, whether as a result of new information, future events, or otherwise. You should not place undue reliance on any forward-looking statement. Factors that could cause actual results to differ materially from those described in forward-looking statements can be found in this report, in the company's filings with the SEC, and disclosures available on our corporate website. The company does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.

Energy Recovery Sustainability Report 2022

Letter from Our CEO

Dear Fellow Stakeholders,

This year marks our fourth Sustainability Report, and we are seeing clear signs of success and maturation. As we navigate a rapidly evolving landscape, I am proud to share the strides that we have made over the past year towards achieving our environmental, social, and governance objectives.

In 2023, MSCI upgraded our ESG rating from "AA" to its highest rating of "AAA." This latest update from July 4 also placed Energy Recovery as the highest performing company in MSCI's Industrial Machinery industry. Three years ago, we received a "BBB" rating, and our ratings have improved every year since. This independent recognition of our work is welcome and demonstrates our commitment to consistent, measurable improvement.

As a company, we deliver energy efficiency and operational profitability to our customers. We anticipate that our pressure exchanger technology will act as

a key enabler in the transition to more sustainable forms of refrigeration and wastewater treatment, just as it accelerated the adoption of reverse osmosis solutions in desalination. Today, we help our customers across water and refrigeration prevent 17.2 million metric tons of carbon emissions from entering the atmosphere every year, while saving $5.9 billion in energy expenses.

Applying those same principles of sustainability and operational profitability to our own operations is vital to achieving our company's growth goals by 2026.