Liberty Tire Recycling | 2023 Environmental, Social and Governance Report 54 OPERATING RESPONSIBLY Climate Resilience Strategies As part of our annual insurance renewal process, catastrophe (CAT) modeling is conducted to assess extreme current weather risks and determine the probability of impact to Liberty sites and operations. This modeling informs the appropriate levels of insurance to purchase, including additional Earthquake or Flood coverage, ensuring property insurance coverage protects the company from financial loss due to weather-related business interruptions and property damage. Climate change and resulting weather events pose physical risks to our operations and employee wellbeing, as well as regulatory risks that could temporarily impact our ability to meet environmental permitting requirements. The impact of these risks includes potential business interruptions, supply chain disruptions, and decreased production. Financial implications before mitigation include repair costs for operating sites and equipment, as well as potential revenue loss from operational delays. To manage these risks, we purchase adequate Property and Business Interruption insurance, conduct annual risk evaluations through modeling and loss analytics reviews, and invest in preventative measures like fire prevention and maintenance. The costs associated with these actions include insurance premiums, service fees for modeling and analytics, and capital expenditures. Additionally, plans are being developed to implement systems to calculate financial implications and make revenue projections, ensuring comprehensive risk management and reporting in alignment with our commitment to safeguarding our employees and maintaining operational resilience. These efforts support our goals of being more sustainable by proactively managing climate-related risks, ensuring business continuity, and maintaining our dedication to environmental stewardship. In 2023 Liberty added a Director of Insurance and Enterprise Risk Management professional to our team. Ben Wolfe joined the company in this newly established role where he is responsible for both overseeing and enhancing the company’s insurance portfolio and guiding and assisting the Company in elevating its risk management strategies to a full enterprise level. His focus is on ensuring that Liberty Tire Recycling continues to operate with good risk mitigation practices to achieve the best results in the insurance market and better protect the company as we work towards our vision of being the leading provider of tire recycling services and recycled rubber products in North America.
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