Regal Rexnord - 1792 Exchange

Rating Overview

Regal Rexnord is Medium Risk.

Regal Rexnord is Medium Risk. The company often yields to political activism in shaping corporate governance, potentially alienating consumers, dividing employees, and harming shareholders. The company implements race and identity-based policies that replace merit, excellence, and integrity with preferential treatment and outcomes. The company occasionally embraces corporate initiatives that redirect its central focus from business goals to partisan policies and divisive issues at times. This approach fails to safeguard free exercise, free speech, and free enterprise.

Rating Criteria

Corporate Weaponization Risk Levels
Criteria	Risk Level
Cancellations	Medium Risk
Discriminatory Philanthropy	High Risk
Employment Protection	High Risk

Corporate Weaponization ⓘ

Corporate Governance and Public Policy Risk Levels
Criteria	Risk Level
Advocacy Bias	High Risk
Funding	Lower Risk
Political Actions	Lower Risk

Corporate Governance and Public Policy ⓘ

Rating Criteria Detail

Criteria Risk Level Rationale

Corporate Weaponization

Criteria:

Has canceled customers, suppliers, or vendors due to their political views or religious beliefs OR corporately boycotts, divests, or sanctions regions, people groups, or industries.

Risk Level:

Medium

Rationale:

Regal Rexnord integrates ESG into its business practices. From its 2023 Sustainability Report: “Regal Rexnord integrates ESG initiatives into its strategy and daily operations” (1). “As part of our sustainability strategy, we have implemented an evaluation process that prioritizes vendor relationships based on their ESG performance” (2). From its 2024 Annual Report: “In 2022, we announced our commitment to achieving carbon emission neutrality in our operations across scopes 1 and 2 by 2032, and net-zero across scopes 1, 2, and 3 by 2050” (3). Regal Rexnord promotes divisive sex and gender policies. Its Supplier Code of Conduct requires international vendors to include sexual orientation and gender identity in their nondiscrimination policy (4). However, Regal Rexnord has not canceled customers, suppliers, or vendors based on political views or religious beliefs (5).

Criteria:

Charitable giving (including employee matching programs) policies or practices discriminate against charitable organizations based on views or religious beliefs.

Risk Level:

High

Rationale:

Regal Rexnord will not support “religious organizations” (1).

Criteria:

Employment policies fail to protect against viewpoint or other discrimination and/or are ideological in nature.

Risk Level:

High

Rationale:

Regal Rexnord offers DEI training to its employees (1). Regal Rexnord requires its management to take unconscious bias training (2). However, in 2023, the company removed unconscious bias from its sustainability report. To date, the company has not publicly addressed this change, leaving shareholders without clarity regarding the company’s reasoning or future direction (3). Regal Rexnord appears to prioritize diversity over merit in its leadership composition and supply chain. From its Corporate Governance Guidelines: “Consideration shall be given to candidates without regard to race, color, religion, gender, or national origin. The Board seeks qualified candidates possessing the relevant experience and skills the Company needs, from a variety of backgrounds, including but not limited to, candidates of gender, age and racial and/or ethnic diversity. In any retained search for Board candidates, the Board is seeking candidates with gender and racial and/or ethnic diversity and will only consider slates that include gender and racially and/or ethnically diverse candidates” (4). The company operates a supplier diversity program: “As we continue to advance our DEI objectives as an organization, we have increased our focus on several areas, including supplier diversity. Our objective is to raise our diverse supplier spend. Additionally, we aim to increase the number of certified Minority Supplier Development Council (MSDC) businesses for tender opportunities” (5). The company is an affirmative action employer, “Regal Rexnord is an Equal Opportunity and Affirmative Action Employer” (6) (7)(8). The company does not provide viewpoint protections for its employees (9).

Corporate Governance and Public Policy

Criteria:

Uses corporate reputation to support causes, organizations, or policies hostile to freedom of expression.

Risk Level:

High

Rationale:

Regal Rexnord’s CEO Louis V. Pinkham signed the CEO Action for Diversity & Inclusion pledge, which includes a commitment to promote DEI through bias education training in the workplace, strategize on DEI programs/initiatives with other signatories, and engage boards of directors when developing and evaluating DEI strategies (1)(2). The company is aligned with the Paris Agreement, which entails a commitment to net zero carbon emissions by 2050 (3). Regal Rexnord is committed to net zero emissions by 2050 (4). The company supports DEI within its business practices, employing a DEI Director (5). Regal Rexnord supports DEI within its business practices. From its 2023 Sustainability Report: “At Regal Rexnord, we remain on a journey to create a more diverse and inclusive work environment where every associate is seen, valued, and heard” (6). The company supports ESG within its business practices. From its 2023 Sustainability Report: “Regal Rexnord integrates ESG initiatives into its strategy and daily operations. This begins with the Board of Directors, which is responsible for the overall stewardship and strategic direction of Regal Rexnord, and reviews the Company’s ESG strategy annually” (7).

Criteria:

Uses corporate funds to advance ideological causes, organizations, or policies hostile to freedom of expression.

Risk Level:

Lower

Rationale:

Regal Rexnord has not used corporate funds to advance ideological causes, organizations, or policies (1).

Criteria:

Uses corporate political actions and/or financial contributions for ideological, non-business purposes.

Risk Level:

Lower

Rationale:

Regal Rexnord does not operate a PAC at this time and has not used its lobbying for ideological purposes (1)(2)(3).