Page 28 - Martin Marietta - 2024 Sustainability Report

COMPANY OVERVIEW

Market Risks

The nature of the Company’s competition varies among its products due to the differing amounts of capital necessary to
build and maintain production facilities and can be influenced by sustainability risks and opportunities particularly with
respect to the Company’s small-but-strategic heritage cement business. Most domestic cement producers are owned by
large non-U.S. companies operating in multiple international markets that report their results (including sustainability and
emissions-related metrics) on a world-wide consolidated basis. The Company is subject to U.S. environmental regulations
and there are critical regulatory differences between the U.S. and the European Union and differing calculation
methodologies for carbon intensity calculations, blending and fuel choice that result in meaningful differences in the
makeup of corresponding end-products and reported emissions metrics. Those differences, in turn, make like-for-like
comparisons of the emissions performance of non-U.S. companies with the performance of the Company’s heritage
cement business challenging. To the extent that investors or consumers decide to use world-wide comparisons of these
metrics in making investment and purchase decisions, the Company could be at a competitive disadvantage. Geography is
critically important when assessing market attractiveness and growth opportunities for the Company. Attractive
geographies generally exhibit (a) population growth and/or high population density, both of which are drivers of heavy-
side building materials consumption; (b) business and employment diversity, drivers of greater economic stability, and (c) a
superior state financial position, a driver of public infrastructure investment. All of these factors can be and are influenced
by weather patterns and physical risk and opportunities.

Reputation

Any failure or perceived failure to achieve or accurately report on the Company’s current or future sustainability
commitments, including its GHG reduction and net zero ambition and targets, and any differences between its
commitments and those of any companies to which the Company is compared, could harm the Company’s reputation,
adversely affect its ability to effectively compete (including as a result of disclosure of proprietary information regarding its
plants or changes in its ability to raise capital), adversely affect its recruitment and retention efforts or expose the
Company to potential legal liability. In addition, while the Company is committed to pursuing its sustainability objectives,
there is no assurance that it will achieve any of its sustainability goals or commitments, that low- or non-carbon-based
energy sources and technologies required to meet long-term emissions reductions in some of the sectors in which it
operates will be available at scale in the United States on an economically feasible basis or that its suppliers can meet
sustainability, emissions reduction and other standards that are required by current or future laws or established by its
investors and other stakeholders. Failure to meet these commitments could result in reputational harm to the Company
and changes regarding sustainability risk management and practices may result in higher regulatory and compliance risks
and costs. Any violations of law (including environmental law) or improper conduct could damage the Company’s
reputation.

Physical Impacts

In addition to impacts from increased regulation, changing weather patterns may result in physical impacts that could have
adverse effects on the Company’s operations or financial condition. Physical impacts may include disruptions in production
and/or regional supply or product distribution networks due to major storm events and shifts in regional rainfall and
temperature patterns and intensities, as well as flooding from sea level changes. In addition, production and shipment levels
for the Building Materials business correlate with general construction activity, which occurs outdoors and, as a result, is
affected by erratic weather patterns, seasonal changes and other unusual or unexpected weather-related conditions, which
can significantly affect that business. In the Company’s cement and downstream operations, the physical impacts of weather
may result in disruptions to its operations or its customers’ transportation activities, including impacts on production
capabilities and capacities, supply chain interruptions and project delays that can impact the Company’s reputation and result
in additional costs to the Company. Excessive rainfall and other severe weather jeopardize production, shipments and

26 2024 SUSTAINABILITY REPORT