Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Management
• Waste & Toxicity
• Health & Safety
• Carbon & Climate
• Natural Resources
• Human Rights
• Labor
• Society
• Board Membership
• Compensation
• Share Owners’ Rights
• Financial Oversight

Environmental Achievements

• 38% Reduction in Waste (2008-2018)
• 59% Reduction in Greenhouse Gas Emissions (2008-2018)
• 31% Reduction in Air Emissions (2008-2018)
• 15% Reduction in Hazardous Waste (2008-2018)
• 96% of waste recycled in 2018 (29% increase over 10 years)

Social Achievements

• Over 90% employee participation in satisfaction surveys; majority would recommend Kimball Electronics as employer
• Various community support initiatives across global locations (e.g., donations, volunteering, employee blood drives)
• First-ever “Diversifest” held in Tampa facility
• International Women’s Day recognized globally

Governance Achievements

• 6 of 7 directors are independent
• 43% female Board composition
• Combined roles of Chairman of the Board and Chief Executive Officer
• Share Owner approval of executive compensation (96%)
• No adverse auditor opinions, financial statement restatements, late filings, or regulatory enforcement actions

Climate Goals & Targets

Supply Chain Management

Responsible Procurement

• Working with customers and suppliers to responsibly source materials and components, adhering to Code of Conduct

Climate-Related Risks & Opportunities

Awards & Recognition

• Indiana Manufacturing Association’s Large-Tier Indiana Manufacturer of the Year Award

Environmental Metrics

ESG Focus Areas

• Environmental Management
• Carbon & Climate
• Natural Resources
• Waste, Toxicity, and Air Emissions
• Health & Safety
• Human Rights
• Labor
• Diversity
• Community Engagement
• Good Corporate Governance
• Financial Integrity

Environmental Achievements

• 71% reduction in greenhouse gas emissions per unit produced from 2014 to 2020
• 24% reduction in water usage per unit produced from 2014 to 2020
• 36% reduction in hazardous waste per unit produced from 2014 to 2020
• 23% reduction in air emissions per unit produced from 2014 to 2020
• 92% of waste recycled or reused in 2020 (15% increase over 7 years)
• ISO 14001 certification across all production facilities

Social Achievements

• Zero forced labor, child labor, human trafficking, bribery, corruption, or anti-competitive acts reported in 2021
• Annual human rights training for all employees
• $5,000 donation to Water To Thrive for water relief project in Ethiopia
• 236 units of blood donated by employees, potentially saving 708 lives
• $100,000 committed to the Southwestern Indiana Child Advocacy Center Coalition
• Various community investment initiatives across global locations
• Leading, the Kimball Way leadership development program
• ISO 27001 certification for information security management systems in US headquarters and Romania facility

Governance Achievements

• All non-executive Board members are independent
• Amendments to By-Laws to clarify intentions under Indiana Classified Board Statute and provide Share Owners the right to amend By-Laws by majority vote
• Adoption of a formal Executive Severance Plan
• Expanded annual supply chain transparency statement
• Additional disclosures in proxy statement regarding incentive compensation programs and management succession planning
• No information security breaches in the last three years

Climate Goals & Targets

Environmental Challenges

• Covid-19 pandemic and its impact on global workforce (four deaths reported)
• Global parts shortage
• Potential human rights concerns in supply chain

Mitigation Strategies

• Following appropriate crisis requirements (social distancing, PPE, temperature scanning, enhanced sanitizing, vaccination encouragement)
• Adjusting production plans to allow employees to work and live on-site in safe environments (Vietnam example)
• Annual audits covering approximately 99% of inventory and 98% of accounts payable
• Thorough due diligence investigations prior to engaging with suppliers or vendors

Supply Chain Management

Supplier Audits: Approximately 99% of inventory and 98% of accounts payable audited in 2021

Responsible Procurement

• Global Supplier Quality Manual and associated Quality Clauses
• Code of Conduct
• Human Rights Policy

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: CDP

Certifications: ISO 14001, ISO 27001 (US headquarters and Romania facility)

Awards & Recognition

• 2020 Excellent Company on Safety Management award (Nanjing, China)

Environmental Metrics

ESG Focus Areas

• Customers
• People
• Citizenship
• Profits

Environmental Achievements

• 36% scope 1+2 emissions reduction since 2019
• Composted nearly 100 pounds of coffee grounds at HQ
• Eliminated single-use plastic bottles from HQ vending machines and common areas
• 90%+ of waste beneficially used (recycling and energy recovery)
• Implemented reverse osmosis water recycling process in Thailand, conserving over two million gallons of water annually

Social Achievements

• India facility received Kerala Best Employer Brand Award
• Romania facility earned first place in the large company category for electronics manufacturing during the annual Top Companies of Timis County Awards event
• Jasper manufacturing facility was named #7 on the “Indiana Best Places to Work in Manufacturing” awards
• Thailand facility awarded Green Star-White Flag Award for environmental management, transparency, and good governance
• Zero workplace fatalities in 2023
• Three fewer recordable work-related incidents in 2023 than in 2022
• Established three Employee Resource Groups (ERGs)

Governance Achievements

• Obtained independent, third-party assurance of data and narrative from Keramida
• Enhanced sustainability efforts by hiring a Director of Sustainability and a Director of Social Responsibility
• Poland and Nanjing facilities obtained ISO 27001 certification
• Poland facility obtained TISAX certification
• CEO and Chief Legal & Compliance Officer compensated in part based on achievement of ESG-linked objectives
• Six ESG disclosure and performance metrics integrated into executive incentives

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to unforeseen events (natural disasters, global events)
• Component shortages due to supply and demand forces and rapid product life cycles
• Water stress in some operating locations
• Customer requirements for freshwater use

Mitigation Strategies

• Close communication with suppliers
• Contractual pricing arrangements and negotiations with customers
• Purchasing material in excess of immediate needs
• Material authorization agreements with customers
• Implementing water recycling practices
• Partnering with customers on innovations in manufacturing to reduce freshwater withdrawals

Supply Chain Management

Supplier Audits: 88.74% of CY2022 direct materials spend screened in 2023 Conflict Minerals campaign

Responsible Procurement

• Global Supplier Quality Manual
• Supplier Code of Conduct (based on RBA Code)
• Responsible Sourcing Policy
• Conflict Minerals Reporting Template (CMRT)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (cyclones, floods)

Transition Risks

• Emerging regulatory risks

Opportunities

• Growth in green and clean industrial applications and electric/hybrid vehicles

Reporting Standards

Frameworks Used: GRI Standards, UN Sustainable Development Goals (SDGs), UN Global Compact (UNGC), SASB Electronic Manufacturing Services & Original Design Manufacturing Standard, TCFD framework

Certifications: ISO 14001, ISO 27001 (HQ, Poland, Romania), TISAX (Poland, Nanjing)

Third-party Assurance: Keramida Inc.

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 13 (Climate Action)

Initiatives contribute to these goals through emissions reduction, renewable energy adoption, and sustainable product development

Sustainable Products & Innovation

• Electronic climate controls and smart energy management systems
• Smart meters and industrial controls
• Green energy, charging, and storage solutions

Awards & Recognition

• MSCI ESG Ratings Leader
• #24 on Newsweek’s Most Trusted Companies
• ISS Corporate Rating: Prime status and 1st Decile rating
• Ranked 1st in Sustainalytics’ ESG
• CDP Climate Change Rating: B
• CDP Water Security Rating: B
• #13 on Forbes’ America’s Most Successful Small-Cap Companies
• Silver medal sustainability ranking by EcoVadis
• Recognized by 50/50 Women on Boards