Techtronic Industries : ESG Report (Interactive PDF Report)

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2021

UNMATCHED PERFORMANCE.

UNRIVALED INNOVATION.

Intuitive one-hand joystick steering for optimum precision and control

Technology

5 Brushless Motors, Advanced Electronics, and Lithium Batteries deliver performance equivalent to a 42 Horsepower gas mower

80V HP BRUSHLESS 54" LITHIUM ELECTRIC ZERO TURN RIDING MOWER

MODEL: #RYRM8034

Contents

• 2 Vice Chairman's Message

• 4 About this Report

• 6 About our Business

• 8 Strategy

• 8 TTI's ESG Approach and Strategic Framework

• 10 Materiality Assessment

• 11 Stakeholder Engagement

• 14 Risks and Opportunities

• 18 Our Goals, Progress and UNSDGs

• 22 Governance

• 30 Ethics and Integrity

• 36 Supply Chain Accountability

• 44 Environment

• 52 Climate Change

• 60 Resources, Materials and Waste

• 66 Sustainable Products

• 74 Social and Community

• 80 Empowering People

• 86 Health, Safety and Wellbeing

• 92 Community Investment and Engagement

• 100 Performance

• 100 Performance Metrics

• 118 HKEX ESG Guide Content Index

• 124 GRI Standards Content Index

• 140 SASB Content Index

Vice Chairman's Message

Vice Chairman's Message

We have made important strides throughout the year to build our sustainability values into the culture at TTI, and we are progressing well on our ESG journey. We are examining how we design, source, manufacture, distribute and recycle our products to reduce our carbon footprint and ensure the long-term sustainability of our governance and business model.

TTI's determination to be a leader in sustainability is not just because it is a requirement, but because it is our responsibility and the right thing to do. Two areas we would like to highlight this year are the continued improvement in our corporate governance and the establishment of environmental targets. Sustainability is woven into our culture from the ground level of our operations all the way up to the Board. In doing so, we plan to continue to heavily invest in our people and clean technology. As a leader in our industry, we have set ambitious goals for our future performance and the standard for what it means to be an exceptional global organization.

Target Setting: Our team is focused more than ever on our organization's environmental impact and potential opportunities to reduce future emissions. As a result, we are proud to announce our decarbonization plan.

• • By 2030, we plan to reduce absolute Scope 1 and 2 Greenhouse Gas (GHG) emissions by 60% from our 2021 baseline, while aggressively growing the business.

• • Our employees across the globe have contributed to this new target through prioritizing energy efficiency initiatives, onsite renewable energy, offsite renewable energy procurement, and the conversion of our fleet to hybrid and electric vehicles.

• • We are very pleased to have recently signed our Green Energy deal in the state of Wisconsin, supplying us with 100% green energy in our Wisconsin sites. This is a brand-new program, and we are one of the first companies to commit.

• • We continue to map, measure and target reductions for Scope 3 emissions throughout our value chain and product life cycle.

"At TTI, we are fully committed to doing business in a way that creates a more just, diverse, safe, and environmentally-responsible world."

Governance: In 2021, we simultaneously improved the gender diversity of our board and augmented its sustainability expertise with the addition of a new Independent Non-Executive Board Director, Ms. Virginia Davis Wilmerding. We are also pleased to welcome Ms. Caroline Christina Kracht as another Independent Non-Executive Director effective March 7th, 2022. The addition of these two highly qualified female directors to our Board will bolster the strength and diversity of our governance structure.

• • TTI has actively engaged in sustainability oversight at the Board level while at the same time investing in dedicated sustainability functions at the Group and business unit levels.

• • We continue our multi-pronged effort to further integrate environmental, social, and governance strategies into our business unit and Board level decision-making. These strategies will continue to be communicated to investors, customers, employees, and other stakeholders throughout 2022.

Sustainable Products: TTI has remained focused on clean tech innovation as a core strategy. This is reflected in our cordless lithium-ion battery technology and state-of-the-art acoustic engineering capabilities. Our commitment to developing battery platforms that are 100% backward and forward compatible is a prime example of our sustainable circular economy leadership.

• • We convert users from traditional power sources including corded, pneumatic, hydraulic, and petrol tools to our advanced, demonstrably better, and technologically superior lithium cordless battery products.

• • In addition, we developed the RYOBI WHISPER SERIES of outdoor products with our state-of-the-art acoustic engineering capabilities. Our mission is to eliminate harmful noise pollution from neighborhoods, and we are excited about the application of our advanced acoustic R&D within our new product pipeline.

• • We are relentlessly focused on the quality, safety, repairability, and longevity of our products. This commitment to circular economy principles in our design and engineering processes is paired with a focus on end-user behaviors. These behaviors facilitate servicing, repairing, and refurbishing tools for more sustainable product life cycles.

Not only are we focused on leadership in sustainable products, but also on building out a sustainable global footprint. Our commitment to decarbonizing our manufacturing operations is exemplified by the current construction of LEED Certified state-of-the-art manufacturing sites in Vietnam and the USA. In addition, solar panels are being installed across our facilities to better manage energy consumption.

The sustained commitment among all levels of employees to play pivotal roles in our ESG journey has been extremely encouraging.

We are a leading global technology company that depends on recruiting the best and brightest talent worldwide. There is a direct correlation from our tangible measures of ESG success and our ability to attract and retain talent. Stakeholders of all kinds are excited to work with us to build a more sustainable future.

At TTI, we are fully committed to doing business in a way that creates a more just, diverse, safe, and environmentally-responsible world. TTI's mission remains to improve the lives of homeowners and tradespeople around the world. I am proud of the incredible team we have established to build a more sustainable future and am confident we will exceed our targets, continue to assess the financial risk associated with ESG and further establish TTI as a leader across the globe.

Stephan Horst Pudwill Vice Chairman

March 2, 2022

About this Report

We are delighted to present Techtronic Industries Company Limited's (the "Company's", the "Group's" or "TTI's") Environmental, Social and Governance (ESG) Report for the 2021 calendar year. Our approach, initiatives and performance regarding ESG are shared in a separate report this year, as a testament to the growing importance of sustainability efforts in our business operations and across our value chain.

This Report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards: Core option and also addresses the "comply or explain" provisions outlined in the Environmental, Social and Governance Reporting Guide under Appendix 27 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

In addition, this year we are reporting against the Sustainability Accounting Standards Board (SASB) Standards. We also commenced our climate risk analysis in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. A comprehensive set of content indexes, specifying how we fulfill these standards and recommendations is available on p.118-147 of this report. TTI's previous Report was endorsed by the Board of Directors (the "Board") on March 3, 2021, as was this Report on March 2, 2022.

The data in this Report, unless otherwise stated, covers our operations in Asia, Australia and New Zealand (ANZ), Central, North and South America (Americas), and Europe and the Middle East (EMEA). Environmental information and data from TTI business units (BUs) are presented by region, with data from TTI AIP Dongguan highlighted separately to show progress from previous years. This Report contains a number of restatements, which are explained in the Performance Metrics section on p.100. For a full list of TTI BUs covered under each region and abbreviations used in this Report, refer to p.116. We welcome your feedback and questions, please contact us through our Investor Relations Department [e-mail].

* 42% of hires are female.

Governance

Two Independent Female Directors added to the Board

Strengthened Internal Sustainability Functions

Joined Better Mining as a Founding Member

Environment

60% GHG Emission (Scope 1 & 2) Reduction Target Set for 2030

Undertook Formal Physical Climate Risk Assessment

Expanded

Tool Repair/ Refurbishment Program

Social and Community

Hired over 2,000 graduates* through our Leadership Development Program

Kicked Off Quarterly Global D&I Calls

Habitat for Humanity Global Parternship

About our Business

About TTI

TTI is a fast-growing world leader in Power Tools, Accessories, Storage, Hand Tools, Outdoor Power Equipment, and Floorcare and Cleaning for do-it-yourself (DIY), professional and industrial users in the home improvement, repair, maintenance, construction and infrastructure industries. The Company is committed to accelerating the transformation of these industries through cordless technology. TTI brands like MILWAUKEE, RYOBI and HOOVER are recognized worldwide for their deep heritage and cordless product platforms of high quality, outstanding performance, safety, productivity and compelling innovation.

Founded in 1985 and listed on the Stock Exchange of Hong Kong ("SEHK") in 1990, TTI is included in the Hang Seng Index as one of their constituent stocks. The Company maintains a powerful brand portfolio, global manufacturing and product development footprint, healthy financial position with record 2021 worldwide sales of US$13.2 billion and over 51,000 employees.

Floorcare & Cleaning

Sales by Region

NORTH AMERICA 77.4% 33.7% growth in 2021

EUROPE ROW 14.8% 7.8% 41.1% growth in 2021 31.8% growth in 2021

Sales by Business

90.6%

Power Equipment

US$13.2 billion

TOTAL SALES

9.4%

Floorcare and Cleaning