Tractor Supply : 2021 Task-Force on Climate-Related Financial Disclosures Report

Stewards of Life Out Here

Task Force on Climate-Related Financial Disclosures Report 2021

Introduction

In our nearly 85 years of business, Tractor Supply has been driven by our commitment to our Company's Mission and Values every day and by embedding sustainability in every aspect of our business. We remain focused on our purpose-driven efforts by evaluating and implementing policies, programs and projects that benefit all stakeholders. We know that we must remain stewards of all our resources so that we can continue to do the right thing for our Company, our customers and

our communities.

Tractor Supply shares the common belief with our customers that we must be good stewards of the land and our natural resources so that future generations can enjoy the same benefits from these resources that we enjoy today. This desire to protect our natural resources for our children and grandchildren is what drives our commitment to mitigating our contribution to climate change and reducing our carbon footprint.

In September 2021, we announced new, robust goals to further reduce our carbon footprint as part of the Company's longstanding commitment to sustainability and stewardship. We adopted new absolute carbon reduction goals to further reduce emissions from our operations by 20% by 2025 and by 50% by 2030 from a 2020 baseline. We also committed to achieving net zero emissions across all operations by 2040. Additionally, in April 2022, we announced an ambitious 3-year water conservation goal to conserve 25 million gallons of water by 2025. These commitments to the climate and society reinforce Tractor Supply's vision that a healthy environment, properly managed resources and vibrant communities are keys to a secure and prosperous future.

In this next phase of our sustainability journey, Tractor Supply will increase efforts to procure renewable energy, continue investments in energy efficiency and cleaner technologies, avoid future emissions through better design of both stores and distribution centers and refine our Scope 3 emissions through our new supplier engagement program with the intent to reduce value chain emissions. As sustainability becomes even more imbedded in Tractor Supply's operations and strategy, we look forward to establishing further commitments and reporting on our progress.

Forward-looking Information

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" to encourage companies to provide prospective information, so long as those informational statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. The Company desires to take advantage of these provisions. This document contains cautionary statements identifying important factors that could cause actual results to differ materially from those projected herein and in any other statements made by company officials in communications with the financial community and contained in documents filed with the Securities and Exchange Commission (SEC). Forward-looking statements are not based on historical information and relate to future operations, strategies, financial results or other developments. Furthermore, forward-looking information

is subject to numerous assumptions, risks and uncertainties. In particular, statements containing words such as "expect," "anticipate," "believe," "goal," "objective," "may," "should," "estimate," "intends," "projects," "will," "assumes," "potential," "target," "outlook" or similar words as well as specific projections of future results generally qualify as forward-looking. Tractor Supply undertakes no obligation to update such forward-looking statements. For a discussion of assumptions, risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed in the forward-looking statements, see our most recent reports on Form 10-K and Form 10-Q filed with the SEC.

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About Us

Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retailer in the United States, has been passionate about serving its unique niche, targeting the needs of recreational farmers, ranchers and all those who enjoy living the rural lifestyle, for more than 80 years.

Tractor Supply offers an extensive mix of products necessary to care for home, land, pets and animals with a focus on product localization, exclusive brands and legendary customer service for the Out Here lifestyle. With more than 46,000 Team Members, the Company's physical store assets, combined with its digital capabilities, offer customers the convenience of purchasing products they need anytime, anywhere and any way they choose at the everyday low prices they deserve. As of December 25, 2021, the Company operated 2,003 Tractor Supply stores in 49 states, a consumer mobile app, and an e-commerce website at www.TractorSupply.com.

Tractor Supply Company also owns and operates Petsense, a small-box pet specialty supply retailer focused on meeting the needs of pet owners, primarily in small and mid-size communities, and offering a variety of pet products and services. As of December 25, 2021, the Company operated 178 Petsense stores in 25 states. For more information on Petsense, visit www.Petsense.com.

About this Report

In this report, we discuss our approach to evaluating and managing climate change risks and opportunities and following the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). This report includes financial and nonfinancial information about the Company's activities and metrics related to environmental sustainability for the fiscal year 2021, unless otherwise noted.

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2021 Financial

Performance

Highlights:

Net Sales

$12.73B (+19.9%)

Comparable Store Sales

+$16.9%

Adjusted EPS Growth*

+25.3%

Neighbors Club Members

23.6M

Team Members

46,000+

*Adjusted to exclude non-cash impairment charge - see non-GAAP reconciliation at IR.TractorSupply.com

Governance

Board Oversight

Full Board of Directors

Corporate Governance and Nominating Committee

Oversight responsibility for ESG matters, including the Company's environmental

initiatives and progress in meeting environmental goals

Management Oversight

Executive Committee

The highest policy making body in the Company. The Committee monitors risks to the Company, including climate-related risks, through regular reporting from several functional areas and plays a critical role in the Company's enterprise risk management process

ESG Committee

Responsible for developing and implementing ESG

initiatives, monitoring results and reporting

on those results

SVP, General Counsel and				EVP, Chief Supply		EVP, Chief Technology,
	EVP, Chief Stores Officer			Digital Commerce and
Corporate Secretary			Chain Officer
				Strategy Officer

Board Oversight

Board-level oversight of climate-related issues sits with members of the Corporate Governance and Nominating Committee (the Corporate Governance Committee) of the Board of Directors. In 2021, climate-related topics were discussed during select full board meetings. Climate topics will be placed on the committee and board meeting agendas in 2022 to provide relevant updates on emerging climate-related issues and/or progress on our decarbonization strategy.

The Corporate Governance and Nominating Committee of the Board of Directors has within their charter direct responsibility for Environmental, Social and Governance (ESG) matters. The Company's Senior Vice President, General Counsel and Corporate Secretary (General Counsel) has direct oversight for the Company's environmental sustainability efforts which includes initiatives to reduce our carbon footprint. Reporting to the General Counsel is our Director of Sustainability who has direct responsibility for the development of the Company's sustainability strategy and platform implementation. The General Counsel directly reports to the CEO on all ESG matters.

The Board of Directors approves the Company's annual operating and capital budgets, which include operating expenses and capital investments related to climate change. In preparing our budgets, we make assumptions regarding the impact of weather on the business and then discuss with the Board on a quarterly basis the actual results compared with the budget. In recent years, the annual capital budget has included capital expenditures for projects designed to mitigate the impact of climate change on the business, such as our LED lighting conversion project for our stores, which significantly reduced energy consumption by the Company. The budget also includes expenses related to the impact of severe weather on our stores, including capital costs to repair stores damaged by severe weather events.

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The Board of Directors and senior management consider the impacts of climate change in determining the strategy for the Company and in determining Risk Management policies and budgets. See the Strategy and Risk Managementsection below for a description of how climate change impacts the Company's strategy and risk management policies.

Senior Management

The Executive Committee (EC) is comprised of the most senior business unit leaders across the organization and has responsibility for the execution of the company's strategic direction, known as Life Out Here. It is comprised of the Executive Vice President and Chief Financial Officer; Executive Vice President, Chief Human Resources Officer; Executive Vice President, Chief Merchandising Officer; Executive Vice President, Chief Stores Officer; Executive Vice President, Chief Supply Chain Officer; Executive Vice President, Chief Technology, Digital Commerce and Strategy Officer; Senior Vice President and General Manager of Petsense; Senior Vice President, Marketing; Senior Vice President, General Counsel and Corporate Secretary. The EC reports to our Chief Executive Officer (CEO) and interacts daily to fulfill our business objectives including climate-related goals, i.e., reducing carbon emissions in our operational footprint. As a member of the EC, the General Counsel has oversight over the functional areas of Legal, Sustainability, and Compliance which includes Risk Management. Reporting to the General Counsel is our Director of Sustainability who has direct responsibility for the development of the Company's sustainability strategy and platform implementation.

Climate related risks and opportunities are shared with the EC and CEO annually by the General Counsel and the Director of Sustainability. The General Counsel is provided a focused update on climate-related risks and opportunities on a semi-annual basis by the Director of Sustainability who also provides regular progress reports on the Company's sustainability platform. In addition, the Company has an Environmental, Social and Governance (ESG) Committee, and several other committees critical to the implementation and success of the sustainability platform. The ESG committee is a cross-functional committee composed of representatives from key areas of the company including energy management, Quality Assurance, Information Technology, Human Resources, Government Relations, Investor Relations, Internal Audit, Transportation, Supply Chain, Risk Management, Environmental and Safety, Merchandising and Product Sourcing. The ESG committee members provide valuable insight on ESG.

The Executive Vice President, Chief Stores Officer, has responsibility for energy management and recycling programs in stores, and the Executive Vice President, Chief Supply Chain Officer, has responsibility for these areas in the distribution centers as well as disruptions in logistics and ensuring efficient distribution and transportation of goods. The Executive Vice President, Chief Technology, Digital Commerce and Strategy Officer has responsibility for business continuity and supply chain disruptions.

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