Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability
• Climate Change
• Energy Efficiency

Environmental Achievements

• Energy savings of 2.2TWh to date from over three million high-efficiency motors installed, leading to a reduction in carbon emissions of 14.5 million metric tonnes
• GEPP, a major customer, reduced its carbon footprint by 369,933 tCO2e and saved NZD$105.8 million on electricity costs after installing ECR 2 motors

Social Achievements

• Appointment of a Chief People Officer to enhance employee experience and talent retention
• Launched new products driven by customer insights (Connect™ Network and Connect™ Monitor)
• Bolstered regional teams to support customers using the Connect IoT ecosystem

Governance Achievements

• Continued commitment to transparency and fairness in dealing with stakeholders
• Adoption of a Code of Business Conduct and Ethics
• Establishment of an email list for shareholder announcements

Climate Goals & Targets

Environmental Challenges

• Global supply chain disruptions leading to component shortages and higher shipping costs
• COVID-19 pandemic impacting operations and customer demand (in 2020)

Mitigation Strategies

• Increased pricing to maintain gross margins
• Actively sourcing alternative components
• Redesigning products to utilize alternative components
• Extending customer order lead times
• Engaging with customers to delay deliveries or vary orders

Supply Chain Management

Responsible Procurement

• Strong relationships with key component suppliers

Climate-Related Risks & Opportunities

Opportunities

• Growing demand for energy-efficient refrigeration solutions

Reporting Standards

Frameworks Used: NZ IFRS, IFRS

Certifications: ISO9001 (manufacturing partners)

Third-party Assurance: Deloitte Limited

UN Sustainable Development Goals

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

Energy-efficient motors and IoT solutions contribute to reducing energy consumption and carbon emissions.

Sustainable Products & Innovation

• ECR 2 motors
• Connect IoT ecosystem

Awards & Recognition

• Silver Medal from EcoVadis

Environmental Metrics

ESG Focus Areas

• Climate change
• Product quality, design and innovation
• Waste and circularity
• Customer privacy and data security
• Health and safety
• Diversity and inclusion
• Engagement and wellbeing
• Board and SLT composition
• Modern slavery and labour practices
• Sustainable sourcing of materials
• GHG emissions (Scope 1, 2 and 3)

Environmental Achievements

• Customers prevented nearly 13 million CO2 emissions by utilizing AoFrio's solutions.

Social Achievements

• Launched a new recognition program, leadership development program, senior leadership forum, and employee assistance program (EAP). Achieved a 75% employee engagement score in November 2022 (up from 68% in March 2022).

Governance Achievements

• Developed a sustainability strategy and adopted a formal framework for ESG reporting. Engaged EY to support ESG journey and completed a materiality study to determine top ten ESG factors.

Climate Goals & Targets

Environmental Challenges

• Significant supply chain disruptions impacting component availability, shipping, and customer orders during the first half of the year. Six-week period of no product manufacturing in Q2. Delays in customers signing off product specifications and securing shipping space until early January for some orders.

Mitigation Strategies

• AoFrio’s engineering team redesigned existing products to use available components. Increased inventory of long lead time components and spot buying. Increased prices on AoFrio SCS and motors. Developed alternative sourcing strategies.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Working with manufacturers that provide positive and safe environments for their employees. Ensuring materials are obtained responsibly and sustainably.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions in Australia

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: NZ CS 1 standard, TCFD Recommendations

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• AoFrio SCS, AoFrio Monitor, AoFrio Click, Network Pro

Awards & Recognition

• Silver award from Ecovadis in 2019

Environmental Metrics

ESG Focus Areas

• Carbon reduction
• Diversity and Inclusion
• Supply Chain Sustainability
• Governance

Environmental Achievements

• From 2008 to June 2023, helped customers save an estimated 7.4 million tonnes of CO2 emissions.

Social Achievements

• Launched a whistleblower policy, a diversity and inclusion policy, and conducted the first annual diversity and inclusion survey, showing 80% of participants felt they belonged and were respected.
• Progressed people and culture workstreams in line with the FY23 plan.

Governance Achievements

• Appointed John Scott as the new Board Chair.
• Implemented governance changes to add new skills and experience with the addition of new directors Melissa Clark-Reynolds and Roz Buick.
• Will be releasing a Sustainability Policy and a new Modern Slavery Policy before the end of FY23.

Climate Goals & Targets

Environmental Challenges

• Softer demand than expected during H1 FY23 due to customer over-purchasing inventory in FY22 and macroeconomic conditions.
• Longer than expected consumption of excess customer inventory.
• Challenging labor market requiring salary increases.
• Global economic uncertainty impacting customers.

Mitigation Strategies

• Focus on maintaining a base level of EBITDA and adequate liquidity.
• Prudent management of AoFrio’s resource levels.
• Cost down initiatives for ECR 2 motor and SCS controller products.
• Focus on reducing inventories held by AoFrio and its suppliers.
• Increased gross margin percentage through reduced costs and pricing increases.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Will be releasing a Modern Slavery Policy before the end of FY23.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Higher power motor (ECR 2+)
• Variable speed compressor solution
• Higher margin software products
• Connected hardware for ice-cream and food service customers
• Connected Network Pro solution

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Team
• Operations
• Products

Environmental Achievements

• Cooler energy consumption reduced by up to 54% with AoFrio INSIDE™
• Review of sustainability practices with core manufacturer, East West Industries, including a solar panel project at their Vietnam factory.
• AoFrio holds a bronze medal from EcoVadis, placing it among the top 35% of rated companies.

Social Achievements

• Trained Auckland team on recycling and waste management.
• Hosted ‘Inspire Inclusion’ event for International Women’s Day.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Pressure on working capital due to changes in customer mix (increased sales to customers with longer payment terms) and higher inventory (longer shipping times due to capacity out of Asia, the Red Sea crisis, and component inventory).

Mitigation Strategies

• AoFrio’s contract manufacturer, East West, agreed to extended payment terms to help manage working capital pressure.

Supply Chain Management

Supplier Audits: Review of sustainability practices with core manufacturer, East West Industries, including a solar panel project at their Vietnam factory. Encouraging East West to become certified by EcoVadis.

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• AoFrio INSIDE™

Awards & Recognition

• Not disclosed