Environmental, Socialand Governance Report2022

P R O V E N Q U A L I T Y. L E A D I N G T E C H N O L O G Y.

CONTENTS

1 I GRACO ESG REPORTA Message From Mark Sheahan2

About Graco

3

Our Mission
The Graco Promise
Our Commitment to ESG
About This Report
Material Topics

3
3
4
5
5

Making Products That Matter

6

Designing Products to Drive Sustainability
Moving Toward Electrification
Improving Precision Dispense

67
8

Protecting the Environment

9Managing Energy and Greenhouse Gas Emissions
Recycling

9
10

Putting People First

11

Valuing Employees
Prioritizing Health and Wellbeing
Inclusion and Diversity at Graco
Caring for Our Communities

11
13
15
16

Operating With Integrity

17

Governance and Ethics
Sourcing Responsibly
Cybersecurity and Data Privacy

17
19
19

2022 SASB Index

20

A MESSAGE FROMMARK SHEAHAN
Dear Stakeholders,
Graco is pleased to present our 2022 environmental, social and governance (ESG) report, which provides an
update on our inaugural 2021 ESG report. Our team is committed to designing and manufacturing best-in-classproducts for our customers, being an employer of choice and having a meaningful impact in our communities.
These priorities are built into everything we do and have been core to our culture for nearly a century.
We are well positioned to have an even greater impact as we continue to make progress in managing, measuring
and reporting on ESG topics. We are focused on delivering the same continuous improvement in ESG that we doin all facets of our business. This report provides transparency for our stakeholders and keeps us accountable.
Key 2022 achievements include:•

Publishing the Sustainability Accounting Standards Board (SASB) index for Industrial Machineryand Goods.

•

Expanding our emissions data collection to include the entirety of our fully owned global operations.

•

Installing a 1.4-megawatt solar array on our new facility in Dayton, Minnesota, that will supply
20% of that facility’s electricity needs.

•

Donating $1.2 million to community nonprofits through the Graco Foundation as well as nearly$250,000 in matching gifts that help multiply our employees’ generosity.

•

Achieving 26% of total sales from products powered by electricity in 2022.

Our ESG progress is made possible by the hard work and enterprise of the people that power our business —our employees. They are the reason we have once again been proudly recognized among Fortune magazine’s
Best Workplaces in Manufacturing and Production. Working together, we will thrive for years to come.
Regards,
Mark Sheahan
President and Chief Executive Officer

GRACO ESG REPORT I 2

ABOUT GRACOFounded in 1926, Graco manufactures and markets premium equipment to move, measure, control, dispense and spray a wide variety
of fluid and powder materials. We employ approximately 4,000 people worldwide and serve end users in over 100 countries.
Our success is based on Graco’s unwavering commitment to technical excellence, world-class manufacturing and customer service.
To that end, we work closely with specialized distributors and offer products that set high quality standards in a broad range of fluid
handling applications including: spray finishing and paint circulation, lubrication, sealants and adhesives, sanitary processing and power
application equipment. Additionally, Graco’s ongoing investments in fluid management and controls continue to provide innovative
solutions to a diverse global market. In 2022, our net sales were more than $2.1 billion.

OUR MISSIONTHE GRACO PROMISE

Our mission is to generate sustained profitable growththat benefits our customers, employees, shareholders andcommunities. We will be the world’s leading supplier of
fluid management equipment and systems in the markets
where we participate. To accomplish this mission,
Graco’s long-term growth strategies are to:

Graco’s core values directly benefit our customers,
employees, shareholders and communities. These include:•

Invest in New Products•

Target New Markets•

Expand Globally•

Pursue Acquisitions•

Quality•

Continuous Improvement•

Fact-Based Decision-Making•

Results Driven•

Customer Focus

Abiding by these values reinforces our
promise to customers: We are committed todelivering innovation, quality and service.

FINANCIAL RETURNS FORFISCAL YEAR 2022
Record sales of$2.14 billion

3 I GRACO ESG REPORT

Record diluted earnings
per share of $2.66

Record level of capital
investment of $201 million

Increase in dividends paid
per share of 12%

OUR COMMITMENT TO ESG
Graco is dedicated to doing the right thing by all of our stakeholders. We use our resources wisely to reduce our impact and our customers'
impact on the environment. Our business contributes to the well-being of our employees and our communities. And, we are deeply committed
to operating with integrity and in compliance with all relevant laws and regulations.
We recognize that our business impacts a broad range of stakeholders, each of whom we depend upon and also depend upon us. Graco does
well when our customers, our employees and our communities do well.

OUR APPROACH
MAKING DECISIONSSUPPORTING OUR CUSTOMERS•

We focus on decision-making that is long-term
and fact based.

•

We’re committed to making ethical decisions andfollowing applicable environmental laws.

DESIGNING PRODUCTS AND
PROCESSES TOGETHER

We design products that help our end users reduce
their environmental footprint.

•

We serve industries that are investing in alternative
energy, electric power and environmental management.

DOING THE RIGHT THING•

We value innovation and efficiency.

•

We improve our environmental practices as a team.

FOCUSING ON SUSTAINABLE OPERATIONS•••

We strive to do the right thing for our partners,
employees and the communities where we workand live.

•

We aim to conduct our business for the
benefit of all of our stakeholders.

We continuously improve our manufacturing
operations with long-term sustainability in mind.

2022 BY THE NUMBERS
4,000

EMPLOYEES

80%

PRODUCTION
BASED INTHE U.S.

100+

COUNTRIESSERVED

30,000OUTLETS OR
DISTRIBUTORSGRACO ESG REPORT I 4

ABOUT THIS REPORT
Graco has a long track record of operating with a focus on efficiency, resource conservation, care of our employees and communities,
and ethical management. In recent years, we have begun to formalize the process of evaluating and transparently reporting on how we
operate and our impact on society and the world. In 2018, we established a cross-functional ESG Steering Committee to coordinate acompanywide approach to managing these efforts. Our first ESG report, published in 2022, included 2021 data. This is our second ESG
report, and we continue to make progress on expanding our reporting, including the addition of a SASB index for the first time (see page 20).
Additionally, while developing the content we considered a number of established ESG frameworks, including the Task Force on Climaterelated Financial Disclosures, the United Nations Sustainable Development Goals and the Global Reporting Initiative. Given the rapidly
evolving state of these frameworks and overall stakeholder expectations, we will routinely evaluate how best to integrate new standards into
our operations and reporting. The baseline data in this report reflects Graco’s fully owned global operations, unless otherwise noted, during
calendar year 2022. This report represents our commitment to continued transparency in disclosing key ESG data.

5 I GRACO ESG REPORT

SocialThe first step of the materiality assessment involved
narrowing the universe of ESG issues to a streamlined
list of topics. We did this in consultation with a range ofinternal experts and based on industry standards andframeworks, existing practices and benchmarking peer
companies. Once the topics were narrowed, we conducteda series of interviews and benchmarking analyses toevaluate the importance of those topics for key groups ofstakeholders including investors, employees, Graco’s Boardof Directors, customers, suppliers, peers and community
members where we live and work. This report includes
information on each of these priority topics, as shown.

Governance

Graco’s success for nearly a hundred years can be attributedin part to our focus on recognizing and responding to theunique needs of our customers, investors, employees
and communities. As an extension of this approach, weundertook an ESG-focused materiality assessment to
identify the most significant issues for our stakeholders
and our business overall. The findings are helping us toprioritize both our reporting and disclosure on ESG topics
and to identify opportunities to address stakeholder needs.

Environmental

MATERIAL TOPICS

Topic

Report Section

Energy Efficiency

Protecting the Environment

Climate Change

Protecting the Environment

Recycling

Protecting the Environment

Product Quality and Safety

Making Products That Matter

Workplace Health and Safety

Putting People First

Customer Relationship and Retention

Making Products That Matter

Employee Engagement and Well-Being

Putting People First

Diversity and Inclusion

Putting People First

Data and Cybersecurity

Operating with Integrity

Corporate GovernanceOperating With Integrity

Responsible Sourcing

Operating With Integrity

Cybersecurity and Data Privacy

Operating With Integrity

Business Ethics and Integrity

Operating With Integrity

MAKING PRODUCTS
THAT MATTERDESIGNING PRODUCTS TO DRIVE SUSTAINABILITY
Throughout our long history, Graco has been innovating, improving and expanding our product lines to serve our customers in more
efficient and effective ways. Many of the product advancements that drive our reputation for excellence and keep our customers comingback also align with increased sustainability. When we design products that improve energy and material efficiency, we help our customers
and their end users conserve natural resources throughout the entire product life cycle. We demonstrate our commitment to innovationand continuous improvement through consistent and robust investment in research and development. In 2022, we invested 4% of our
net sales in research and development to support a continued focus on designing and offering products that are durable and repairable,
which also helps our customers save energy and materials. When we build products that are long lasting, modular and easy to repair,
we also help make progress toward a more circular economy in which material use and resource intensity are minimized and waste isrecaptured for use. A key metric we use to evaluate product quality is what we refer to as the cost of quality, which includes warranty
costs. Over the past five years, we have consistently met our goal of keeping warranty costs well below 1% of our net sales.

WARRANTY EXPENSERESEARCH AND DEVELOPMENT SPENDING

As a percentage of net sales

As a percentage of net sales

3.8%

.54%

.63%

.50%

4.1%

4.4%

2019

2020

4.0%

3.7%

.54%
.42%

2018

2019

2020

2021

2022

2018

2021

2022

GRACO ESG REPORT I 6

MOVING TOWARD ELECTRIFICATION
Increased use of electricity as a power source is a global trend that decreases energy costs and emissions. Graco’s product development teams arefocused on helping our customers benefit from this trend by designing more products powered by electricity. In 2022, approximately 26% of Graco's
global sales were from electrified products. This approach has many benefits. In addition to contributing to the transition to a lower carbon futureand lower overall energy consumption, the drive toward electric-powered equipment offers opportunities to improve the efficiency, noise levels,
performance, production, control and flexibility of our products. As energy shifts to lower-carbon sources, Graco is also increasing the use of direct
current (DC) power, mostly through batteries that can be recharged. Offering products powered by rechargeable batteries allows Graco to give ourcustomers increased portability that supports flexibility and operational efficiencies along with improved noise levels for workers and communities.

QUANTM™ PUMPELECTRIC UNIDRUM™

Graco’s revolutionary QUANTM pump features a new electric motor
design that is up to eight times more energy efficient than a standard
pneumatic pump. QUANTM works for a wide range of materials to
support multiple industrial and hygienic applications, including foodand beverage, pharmaceutical, water treatment, chemical processing,paint manufacturing and more. Customers benefit from reduced energy
costs while supporting compliance and environmental stewardshipefforts, including a decrease in their own Scope 1 emissions.

Graco’s electric UniDrum is the only electric-pump-poweredbulk-drum supply for industrial and automotive applications. The
system supports factory electrification and transfers sealants,
adhesives and other medium- to high-viscosity materials
more efficiently and more quietly than pneumatic motors.

ESG BENEFITS OF GRACO PRODUCTS
ENERGY EFFICIENT
Using less energy
reduces costs and helps
decrease GHG emissions.

7 I GRACO ESG REPORTPROVIDE MORE CONTROLOVER MATERIALS
Precisely controlling theapplication of fluids conserves
resources and prevents spills.

BOOST QUALITY

EASY TO REPAIR

Building quality into every
product ensures longevity,
reliability and performance.

The repairability of our
products helps to savevaluable resources involved inour customers' operations andreduces life cycle impacts.

IMPROVING PRECISION DISPENSE
Graco products help our customers’ environmental performance across a variety of product lines by improving the precision of fluid application.
The more precisely the material — whether peanut butter, oil or paint — is dispensed by Graco products in our customers' facilities, the more
efficiently materials are being used in the process. Our products help conserve resources by creating less waste and using less energy inthe application process. Using less material also helps decrease the amount of volatile organic compounds emitted and using lessenergy results in lower emissions.

PULSE® FLUID MANAGEMENTINVISIPAC®

The wireless Pulse fluid management system provides forward-thinking
service operations with the insight, control and analytics needed tosimplify decisions and drive efficiency in the age of the seamlessly
connected shop. The Pulse systems are vital in supporting auto repair
shops to quickly service vehicles, while tracking oil, coolant andantifreeze to monitor bulk fluid usage and maintain accurate inventory.

Graco’s InvisiPac systems dispense glue used to hold cardboard
packaging together and give it shape. The melt-on-demandadhesive dispense for case and carton sealing makes end-of-line
packaging more cost effective, faster and safer. The Tank-Free™
melt-on-demand technology is designed to lower adhesive usage
by at least 30% and end unplanned downtime due to adhesive
charring, nozzle plugging and hose issues. The consistency ofadhesive application helps prevent pop-opens and waste resulting
from damages that may occur in transit. These features combine
to help our customers save money while conserving resources.

INCREASING PRODUCT LONGEVITY
Our focus on service has the end user in mind, embedding efficient maintenance and repairability sothat our products have significant longevity in the field. For example, Graco’s Fusion® ProConnect®
gun removes all the tedious labor and parts required to clean and maintain spray foam guns. The
single cartridge allows the gun to be completely rebuilt in seconds with factory-new performance.
This helps to extend the product life span while helping our customers operate more efficiently.
GRACO ESG REPORT I 8

PROTECTING THE ENVIRONMENTWE IMPROVE OUR ENVIRONMENTAL PRACTICES AS A TEAMMANAGING ENERGY AND GREENHOUSE GAS EMISSIONS
Graco’s fact-based and long-term approach to decision-making drives our focus on conserving natural resources and protecting theenvironment. Managing our operations efficiently has been a key driver of our success, and continually working to minimize energy
usage — and the related greenhouse gas (GHG) emissions — has been part of this.
Our efforts to minimize our environmental impact through energy efficiency begins with reducing electricity usage, which is the primarysource of power in our facilities. We continue to identify opportunities for improvement, from updating our lighting to more energyefficient bulbs to replacing older equipment with newer, more energy-efficient machines.
Graco has instituted environmental management processes and procedures to help manage our impact. As we expand our facilities, including
over $200 million in capital investments in 2022, we look to install equipment that is more efficient and reduces our environmental impact.
Two of Graco’s largest manufacturing locations in the U.S., in Minneapolis and Anoka, Minnesota, are ISO 14001 certified. This third-party
certification program is focused on continuous improvement of our environmental management system. In addition, more than 20 of our 38
facilities are ISO 9001 certified for quality management systems.
We established baseline Scope 1 and Scope 2 GHG emissions in our inaugural 2021 report. We are using this data to inform our long-term
decision-making, and we are committed to measuring and reporting our performance annually.
Energy and Emissions*

EnergyEmissions

2020

2021

2022

Energy Intensity (MWh/$MM revenue)

61.81

54.94

56.87

Direct Energy (MWh)38,89838,641

44,621

Indirect Energy (MWh)63,101

70,55877,274

Total Energy (MWh)101,999

109,199

121,895

Natural Gas (therms)

1,327,567

1,318,788

1,522,908

Scope 1 (metric tons CO2e)12,51012,894

14,718

Scope 2 (metric tons CO2e — location based)

29,95133,44233,565

Total Scope 1 and 2 (metric tons CO2e)42,461

46,33648,283Emissions Intensity (metric tons CO2e/$MM)

25.73

23.31

22.53

*Approximate unaudited data for calendar years 2020, 2021 and 2022, with data compiled as of October 2023. Prior year information has
been restated to conform with the current year due to the inclusion of Graco’s global facility footprint in 2022.
*Calculations included GHGs as applicable by variable per the U.S. Environmental Protection Agency for locations in the U.S. Where data wasunavailable, estimates were made using similar operational characteristics shared between our manufacturing facilities.

9 I GRACO ESG REPORTNEW GRACO FACILITY FEATURES SOLAR
In 2022, Graco opened a new 538,000-square-foot building in Dayton, Minnesota, which houses both office and manufacturing spacefor our Process and Contractor segments. The new building features a 1.4-megawatt solar array, consisting of over 3,100 rooftop solar
panels. Over the next 30 years, the solar array is expected to provide 20% of the facility’s electricity needs and offset over 23,000
tons of carbon dioxide. In recognition of this project, American Forests planted 1,400 trees, one for each kilowatt of solar installed.

RECYCLING
Recycling is another way that we work to minimize our impact on the environment. In 2022, Graco recycled:
Nearly ten thousand gallons of anti-freeze and used oil

12.7 million pounds of metal resulting in 20
million kilowatt hours of electricity saved

Approximately 1.5 million pounds of cardboard— the equivalent of 12,000 trees

2.7 million pounds of pallets and wood

G R A C O E S G R E P O R T I 10

PUTTING PEOPLE FIRSTGRACO EMPLOYEES ARE AT THE HEART OF EVERYTHING WE DO

VALUING EMPLOYEESGraco’s employees bring their ingenuity and commitment to work
every day to deliver high-quality, industry-leading products andservices to our customers. Our success as a company is linked
directly to attracting and retaining talented people. We do thisby offering a place and a culture that employees appreciate.
We strive to ensure the value proposition for our employees including total rewards, a safe and ethical work environment anda collaborative culture - is compelling and sustains in the years
ahead. We set high standards and expectations for ourselves andeach other within a nimble and highly collaborative culture.

2022 FORTUNE BEST WORKPLACES INMANUFACTURING AND PRODUCTION™

“Great people, great facilities,
great leadership, sense offamily and pride.
— Graco employee”

LEADERSHIP ENGAGEMENT
Our leadership team values the contributions madeby each employee and provides direct support for our
workplace culture and ongoing career development. We
seek out employee feedback through our CEO all-employee
meetings, employee surveys, global leadership meetingsand video communications. We also have an Ask the
CEO platform where employees can ask questions andthe CEO's answers are posted internally each month.

A GREAT PLACE TO WORK
Graco has consistently been recognized among Fortune
magazine’s Best Workplaces in Manufacturing and Production.
This designation is based on the Great Place to Work® Trust
Index™ Survey, in which 90% of employees said Graco is a greatplace to work. By comparison, only 57% of employees at a typical
U.S.-based company report the same of their employers.

EMPLOYEE OWNERSHIP
Graco grants every employee an opportunity to become anowner of the Company through a mass employee stock options
grant program (or related international stock-based cash
program) and an employee stock purchase plan, where available.
We believe these programs allow employees at every level tohave a financial stake in the Company's future and the potential
to benefit from our collective success. Over the past 10 years,
our employees have helped contribute to a total shareholder
return of approximately 351% on the Company's stock price.

“
11 I G R A C O E S G R E P O R T

The way that Graco treats its employees, customers
and distributors inspires loyalty and pride.
— Graco employee”

EMPLOYEE STOCK PROGRAM HIGHLIGHTS FOR 2022 INCLUDE:•

In the U.S. and Canada, more than 2,500 employees were awarded share options at a total value worth more than $10 million.

•

With our Stock Appreciation Performance Cash Plan, designed to reward employees of non-U.S. Graco group businesses, more than 1,200
employees were awarded the equivalent of nearly 275,000 equivalent shares. Cash payouts will be based on the appreciation in the price of ashare of Graco Inc. common stock over three years.

COMPANY PRIDEOur employees overwhelmingly report being proud to work at Graco. What’s more, this is true whether they are male or female and whether
they have less than two years with the Company or more than 20. Across all employee categories globally, Company pride is an
overwhelming response to the annual engagement survey question, “What makes this organization a great place to work?”
What makes this organization a great place to work? Employees that cited “Company pride” included:

88%

90%

86%

87%

of those
employed<2 yearsof those
employed>20 yearsof femalesof malesG R A C O E S G R E P O R T I 12

PRIORITIZING HEALTH AND WELL-BEING
Graco values our employees’ and their families’ well-being both on and off the job. Our culture and our programs, championed
in word and action from executive leadership on down, are designed to support the health, wellness, satisfaction and safetyof our people.

HEALTHWELLNESS

Graco provides our U.S. employees and their dependents withaccessible tools that support a healthy lifestyle, including:

Graco invests in a range of programs that support our U.S.
employees' physical, mental and financial wellness, including:•On-site flu shot clinics and biometric screenings•

Free nutrition counseling•

A personalized plan to help manage diabetes, high blood pressure
and/or prediabetes•

Support for physical health and exercise through Companysponsored activities and sports leagues, as well as on-site fitness
centers at some locations and physical therapy•

Parental leave•

Professional counseling services

Physical: Graco offers financial rewards to our employees
for healthy outcomes based on a biometric screening throughour annual U.S. Wellness Program. In 2022, nearly 2,000
participants, including employees and their spouses,
underwent biometric screening. While this approach is now
commonplace in corporate America, Graco was an early
adopter in 2010. We have more than a decade of results to
support the benefits of this investment in our employees’
health, with lower-than-market health insurance premiumincreases since implementation.
Mental: We partner with an online therapy program toprovide free support to employees and their dependents
who struggle with mental health issues including stress,
anxiety, depression, insomnia or substance abuse.
Financial: Graco offers a range of benefits to employees
including one-on-one financial advice, tuition reimbursement
and retirement readiness. In 2022, we invested approximately$350,000 in tuition reimbursement. Our U.S. 401(k)retirement savings plan has a 99% participation rate andmore than 60% of our employees participate in the Employee
Stock Purchase Program.

13 I G R A C O E S G R E P O R T

SAFETY
Graco’s dedication to continuous safety improvement extends across all our operations. Our Health, Wellness and Safety team conducts
audits of all U.S. facilities. The team also provides safety compliance training.
In 2022, Graco’s Ohio factory and all the Ohio facility employees celebrated three years with zero recordable accidents. The Ohio facility’s
outstanding commitment to following safety policies and proactively identifying safety concerns is fundamental to its leading safety record.

Safety — U.S. Employees

2020

2021

2022

Total Recordable Incident Rate (TRIR) (number of OSHA recordable incidents) X 200,000 / Total
Number of Hours Worked

2.6

3.4

3.2

Days Away, Restricted or Transferred Rate (DART) number of OSHA Recordable injuries andillnesses that resulted in days away, restricted or transferred X 200,000 / Employee Hours Worked

1.5

2.3

2.0

0

0

0

2,458

3,072

3,120

Fatality Rate
Hours of Safety Training

G R A C O E S G R E P O R T I 14

INCLUSION AND DIVERSITY AT GRACOINVESTING IN THE NEXT GENERATION

At Graco, we value the uniqueness and dignity of each employee
and understand that our employees bring unique perspectives
to work and different ways of thinking that support diverse
and innovative teams. We are committed to trusting andrespecting each person’s background, life experiences, ethnicity,
personal style, gender identity, age, sexual orientation, veteranstatus and other factors contributing to their individuality.

Each summer, college students from nearly 60 schools acrossthe U.S. join the Graco team as part of the Company’s paidinternship program. Graco provides these students with theopportunity to gain real-world experience and networking
opportunities to kick-start their careers. Internships are available
for a wide range of professional skill sets and departments
across manufacturing, engineering and corporate services.
The program has grown significantly from 85 students in 2015
to nearly 145 in 2022. In 2022, a total of 42 interns stayed
on to become full-time Graco employees — a Company
record. For more information, see our Internships page.

One area of focus has been recruiting female engineers. Beginningin 2019, Graco has partnered with schools by way of our female
engineers who serve as ambassadors, giving presentations toSociety of Women Engineer groups and at other events. Since
the beginning of the program, nearly 20% of Graco's Associate
Engineering roles in the U.S. have been filled by women.

E M P LO Y E E S BY T H E N U M B E R S I N 2 0 2 2
4,000
EMPLOYEES

1,400

EMPLOYEESOUTSIDE THE U.S.

10-YR
AVERAGE TENURE
FOR EMPLOYEES

21-YR

AVERAGE TENURE FOR
GLOBAL EXECUTIVE
MANAGEMENT~70

EMPLOYEES HIRED
THROUGH INTERNALREFERRALSGENDER DIVERSITY

27%

15 I G R A C O E S G R E P O R T

FemaleBoardof Directors

25%

FemaleExecutive
Management

23%

FemaleGlobalEmployees

CARING FOR OUR COMMUNITIESGRACO GIVES

In partnership with our employees, Graco is committed tocontributing to the communities where we live and work. Throughthe Graco Foundation, which was established in 1956, we
provide grants to fund projects in our communities. Because
we believe strongly in the importance of education to expand
opportunities, and as an investment in our future workforce,
we have focused our giving on certain priorities. These include
educational programs, such as science, technology, engineeringand math (STEM) programs; human service programs
promoting workforce development; and youth development
programs, particularly those close to our U.S. facilities. We
also fund capital projects related to accociated nonprofits.

The Graco Foundation supports the causes that are importantto our employees by matching their charitable donations
dollar for dollar through Graco Gives. We match total
donations up to $2,500 per employee each calendar year,with a two-for-one match on the first $500 per year.

In 2022, the Graco Foundation’s contributions
totaled nearly $1.2 million.

DOLLARS FOR DOERS
Graco employees are invested in helping their communities
thrive, volunteering many hours each year to support worthwhile
nonprofit organizations. To amplify this impact, the Company
donates $20 per volunteer hour spent helping nonprofit
organizations through our Dollars for Doers program. These
donations are available to any eligible nonprofit based onvolunteer hours contributed not only by our employees, butalso their spouses and dependents. The maximum donation
per employee, per organization, is $1,000 each year.

In 2022, we donated approximately $250,000 of matching
gifts to 439 nonprofit organizations through the program.

GRACO SCHOLARSHIPS
Graco supports the future workforce through the Graco Scholarship
Program, which is available for students with majors in STEM andthose training in technology with a focus on manufacturing. Eligible
schools include Alexandria Technical & Community College, Universityof Minnesota and University of Wisconsin, among many others.
In 2022, Graco provided $373,000 in scholarships
at 19 different schools.
For more information, please visit the Graco Foundation page.

Graco employees contributed 3,735 hours to 83 organizations
through 169 events in 2022. Donations through the Dollars
for Doers Program in 2022 totaled over $75,000.

GRACO SPONSORED TEAM AT FIRST® ROBOTICS REGIONAL COMPETITION
For more than 10 years, Graco has sponsored the robotics team at Thomas Edison HighSchool in Minneapolis by providing financial support and mentorship. Graco mentors
worked directly with the students to plan, prototype and build a competition-readyrobot. The team competed in the 10,000 Lakes Regional FIRST Robotics Competitionin spring 2022 at Williams Arena at the University of Minnesota campus.

G R A C O E S G R E P O R T I 16

OPERATING WITH INTEGRITYWE BELIEVE THAT GOOD ETHICS ARE GOOD FOR OUR BUSINESSGOVERNANCE AND ETHICS
Graco’s established approach to governance, focused on high standards of ethics and integrity, underpins the Company’s success.
Deeply embedded within our culture, these values benefit all of our stakeholders. We are committed to consistently operating incompliance with all applicable local, national and international laws governing our business operations. Our Code of Ethics andBusiness Conduct spells out the standards for ethical behavior and accountability for our employees. This Code applies to all of theofficers, directors and employees throughout our organization worldwide. We introduce these important principles to our employees
through training during the onboarding process when they are hired. Each year, this training is reinforced with further education on
select topics within the Code. All employees with Graco-issued devices are called upon to complete this training annually.

BOARD OF DIRECTORS
Oversight of Graco’s business strategy and governance is provided
by an independent Board of Directors. Board members are capable
leaders with relevant business experience across a range ofindustries, providing a diversity of expertise and perspectives.
Our Board is intentionally structured to support independence — itis led by an independent Chair, ten out of eleven Board members
are independent and each Board committee is entirely independent.
The Board typically meets five times per year, and is supportedby the three standing committees: Audit, Governance, andManagement Organization and Compensation. The Board
has adopted Corporate Governance Guidelines. Together with
the Articles of Incorporation and Bylaws of the Company, theguidelines and committee charters articulate Graco’s principles
for carrying out our system of corporate governance.

Graco’s Board of Directors takes an active role in overseeing theCompany’s risk profile and risk mitigation. The Board assesses
risks inherent in the Company’s decisions and key strategies on an
ongoing and regular basis. The Audit Committee actively oversees
the Company’s cybersecurity risks and strategy. Management
provides regular reports on cybersecurity risks facing the Company
and the systems that management has put in place to identify,
mitigate and manage those risks. The Audit Committee also
oversees the Company’s enterprise risk management process, which
consists of periodic risk assessments performed by each division,
region and functional group throughout the year, including an annual
assessment of the Company’s executive compensation program.
The Board of Directors also provides oversight of theCompany’s strategies and initiatives related to corporate social
responsibility and sustainability, including ESG matters, withmanagement providing regular reports to the Board or one ofits committees on various topics related to these matters.

REPORTING CONCERNS
Graco employees are encouraged to promptly report any suspected violation of the law, the Code of Ethics and Business Conduct, or Company
policies. Options for anonymous reporting are available in all countries except where this is prohibited. Methods for reporting include:•

Discuss with supervisor•

Email ethics@graco.com•

Call, write or email the Legal Department••

Email gracoauditcommittee@graco.com

Call the confidential 24-hour Graco Ethics Hotline:
1-877-846-8913

17 I G R A C O E S G R E P O R T

HEATHER L.
ANFANG

ARCHIEBLACK

BRETT C.
CARTERERIC P.
ETCHART

JODY H.
FERAGEN

J. KEVINGILLIGANLEE R.
MITAU*MARTHA A.
MORFITTMARK W.
SHEAHAN

R. WILLIAM
VAN SANTKEVIN J.
WHEELER* Chair of the Board.

BOARD OF DIRECTORS HIGHLIGHTS•

Independent Chair•

55% of directors have CEO experience•

All directors other than our CEO are independent•

Diligent Climate Leadership Certification completed by one director•

75% or greater attendance at Board and committee meetingsby each director•

Board oversight of corporate social responsibility and sustainability,
including ESG matters, established in 2021•

Average age is 65 years (range = 51-85)••

Four independent directors appointed since 2018

Hedging and pledging of Company stock by directors andexecutive officers is prohibited
G R A C O E S G R E P O R T I 18

SOURCING RESPONSIBLY
Graco partners with world-class suppliers to successfully provide high-quality, reliable and competitively priced products. We select andsupport suppliers that share our focus on quality, reliability and pricing. Every Graco supplier is required to adhere to the Supplier Code of
Conduct, which is included in the contracting process.
Our supplier code covers labor and human rights, health and safety, environmental protection, ethics and management systems. When we add new
suppliers, Graco has the ability to conduct a site audit to verify compliance with each of these factors. The Supplier Code of Conduct is available
on our Suppliers page.
As integral members of our local economies, Graco supports suppliers in our own communities. In 2022, 44% of eligible expenditures werewith businesses in Minnesota, where our headquarters and several key manufacturing sites are located. We also work with many small,woman-owned and minority-owned businesses and have supported the growth of these companies over the years. In 2022, 36% of our
supplier spend went to these businesses.

MINERAL SOURCING
Graco’s fair and ethical business practices include operating with respect for human rights and in compliance with all applicable laws andregulations. This includes responsible sourcing of minerals within our supply chain and complying with the Securities and Exchange Commission’srule on conflict minerals. We closely engage with our supply chain partners to identify the origin of any conflict minerals within the items that
we purchase. We continue to gather that information with the goal of providing greater supply chain transparency and responsible sourcing.
For more information, please visit Graco Conflict Minerals.

CYBERSECURITY AND DATA PRIVACY
Protecting the information that powers our operations and ties us to our customers, our employees and our suppliers is critical. Graco is committed
to building a strong cybersecurity and data privacy culture to serve these key stakeholders.
Our cybersecurity program includes investments aimed at helping to protect data and manage and improve privacy controls. The Board’s Audit
Committee oversees our cybersecurity risks and strategy, with management providing regular reports to the Committee on cybersecurity risksfacing the Company and the systems management has in place to mitigate and manage those risks. Management seeks to identify, assess andmonitor Graco’s cybersecurity and other information technology risks and threats, as well as the measures implemented to help mitigate andprevent cyberattacks.
Our cybersecurity program is aligned with the Center for Internet Security framework and includes policies, procedures, standards and controls that
help manage our cybersecurity risk. On a regular basis, we conduct cybersecurity maturity assessments with the assistance of an external advisor.
The results from these assessments inform our investment decisions around cybersecurity as we continue to address any gaps that emerge.
We enlist outside experts annually to conduct tests and simulation exercises, the results of which are used to continuously improve ourcybersecurity program. In 2022, we held a cybersecurity awareness month for all our employees, trained employees in our incident
response procedures and conducted practice exercises to help ensure employees were prepared to follow the procedures.
Our data privacy program is built to meet the requirements of global privacy laws and regulations and the privacy expectations of vendors,
customers, employees and third parties as described in our Privacy Notice.

19 I G R A C O E S G R E P O R T

2022 SASB INDEXThe SASB Standards overseen by the Value Reporting Foundation guide the disclosure of financially material sustainability information bycompanies to their investors. Our reporting uses the standard for Industrial Machinery and Goods as defined by SASB’s Sustainable Industry
Classification System®. All data is for Graco’s fully owned global operations for the year ended Dec. 31, 2022, unless otherwise noted.
Topic

Accounting Metric

Energy Management(1) Operational energy consumed,(2) percentage grid electricity, and(3) percentage renewable

Code

Response(1) 438,788 GJ

RT-IG-130a.1(2) 63%(3) Not available(1) 3.19 TRIR

Employee Healthand Safety(1) Total recordable incident rate (TRIR), (2) fatality rate and(3) near miss frequency rate (NMFR)(2) 0
RT-IG-320a.1(3) Not currently reported
For more information on
safety, see page 14

Sales-weighted fleet fuel efficiency formedium- and heavy-duty vehicles

RT-IG-410a.1

Not applicable

Sales-weighted fuel efficiency for nonroad equipment

RT-IG-410a.2

Not applicable

Sales-weighted fuel efficiency for stationary generators

RT-IG-410a.3

Not applicable

Sales-weighted emissions of (1) nitrogen oxides (NOx) and(2) particulate matter (PM) for (a) marine diesel engines,(b) locomotive diesel engines, (c) on-road medium- andheavy-duty engines and (d) other nonroad diesel engines

RT-IG-410a.4

Not applicable

Minerals Sourcing

Description of the management of risks
associated with the use of critical materials

RT-IG-440a.1

Remanufacturing
Design and Services

Revenue from remanufactured products
and remanufacturing services

RT-IG-440b.1

Not applicable

Activity Metric

Code

Response

Number of units produced by product category

RT-IG-000.A

Not available for disclosure

Number of employees

RT-IG-000.B

4,000 employees

Fuel Economy andEmissions in Use-Phase

Conflict Minerals Policy
Mineral Sourcing, see page 19

G R A C O E S G R E P O R T I 20

FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements generally use words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,”“estimate,” “will,” and similar expressions, and reflect our Company’s expectations concerning the future. All statements,
other than statements of historical fact, are forward-looking statements. Forward-looking statements in this report may
include, but are not limited to, statements regarding the Company’s mission, commitment to ESG, approach to ESG reporting,material ESG topics, product design, environmental benefits of certain products, energy consumption and GHG emissions,culture, employee health, wellness and safety, community engagement, governance and ethics, sourcing, cybersecurity anddata privacy. Forward-looking statements are based upon currently available information, but various risks and uncertainties
may cause our Company’s actual results to differ materially from those expressed in these statements. The Company
undertakes no obligation to update these statements in light of new information or future events. The inclusion of informationin this report should not be construed as a characterization regarding the materiality of that information to our business,financial condition or results of operations.
Future results could differ materially from those expressed due to the impact of changes in various factors. These risk factors
include, but are not limited to, those identified in our filings with the Securities and Exchange Commission, including in Item
1A of our most recent Annual Report on Form 10-K and in our most recent Quarterly Report on Form 10-Q. These reports areavailable on the Company’s website at www.graco.com and the Securities and Exchange Commission’s website atwww.sec.gov. Shareholders, potential investors and other readers are urged to consider these factors in evaluating
forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.
Shareholders, potential investors and other readers should realize that factors other than those identified in our filings
with the Securities and Exchange Commission might prove important to the Company’s future results. It is not possible
for management to identify each and every factor that may have an impact on the Company’s operations in the
future as new factors can develop from time to time.

Graco Inc.
88 – 11th Avenue Northeast
Minneapolis, MN 55413
612-623-6000
graco.com©2023 Graco Inc.