I am pleased to present the Techtronic Industries (TTI) Environmental, Social, and Governance (ESG) Report for 2025. This year reflects meaningful progress in our long-term sustainability journey and the continued integration of ESG goals into the way we operate, innovate, and deliver value. Our commitment to responsible growth remains central to our mission, guiding how we design our products, manage our resources, support our people, and uphold strong governance across our global operations.
In 2025, we made significant strides in elevating our disclosure practices and overall transparency. This year, we aligned our ESG reporting with the new Hong Kong Exchanges and Clearing Limited (HKEX) requirements and completed a comprehensive “double materiality” assessment that evaluates sustainability issues through a financial lens in addition to our impact materiality perspective. This enhanced methodology enabled us to more precisely link the topics that matter most to our stakeholders to the long-term success of our business. The assessment enables us to prioritize the most business-critical emerging trends, regulatory developments, and sustainability considerations. Our goal is to provide clear, decision-useful information for our stakeholders.
Sustainable Products
Innovation is a core element of TTI’s identity. Our products are engineered to meet end user requirements through advanced cordless technology, durable design, and user-centered safety features. In 2025, we expanded our portfolio with new solutions across our brands, reinforcing our leadership in high-performance cordless platforms. We made progress in sustainable product design, integrating considerations such as material efficiency, recyclability, reduced vibration, noise mitigation, and improved ergonomics. These advancements contribute to a more sustainable product lifecycle and empower users to adopt safer, cleaner, and more efficient alternatives to traditional fuel-powered, pneumatic, and hydraulic tools. As the expectations of users evolve, we continue to prioritize innovations that reduce environmental impact while supporting productivity, reliability, and safety.
One example is the rapid expansion of data center infrastructure in the United States, which reflects the broader demand for advanced construction and electrical work. In an environment where skilled labor is in short supply, safety and productivity are critical on the jobsite. Milwaukee Tool designs products with advanced safety features such as intelligent kickback control that detects binding situations and stops the motor to help prevent injuries, as well as ergonomic innovations that reduce repetitive strain and help trades professionals work more efficiently.
Environment
Environmental stewardship remains integral to our strategy. In 2025, we continued to drive progress toward our long-term decarbonization and resource management goals. We strengthened our emissions management performance by achieving further reductions in our absolute Scope 1 and Scope 2 baseline emissions and making strides in our year-over-year intensity-based targets for Scope 3 Categories 1 and 4. Given our steady growth relative to direct peers and our expansion into vertical manufacturing integration, we believe prioritizing a decrease in emission intensity is the best way to balance shareholder value creation and sustainability. Furthermore, we completed the mapping of the remaining Scope 3 categories to deepen our understanding of our broader emissions profile and support more comprehensive planning in the years ahead.
Our circular economy and waste management initiatives also advanced this year. We made steady progress toward our 90% waste-diverted- from-landfill target through improved recycling processes, responsible materials selection, and enhanced operational practices across key facilities. We also finalized a new plastics reduction pledge tied to our Scope 3 performance to help reduce the environmental impact of raw material use and packaging. These efforts reflect our broader intention to conserve resources, extend product lifecycles, and minimize waste generation across operations, product design, and our global supply chain.
Social
Our commitment to social responsibility remains a core pillar of our long-term sustainability strategy. We continue to invest in employee development across the organization, building on the success of programs that have helped shape our workforce. From our Leadership Development Program to employee benefits, Employee Resource Groups (ERGs), and educational sponsorship initiatives, we are cultivating an environment conducive to growth for our employees. Our people are the foundation of our culture, and we remain focused on maintaining a safe, inclusive, and engaging workplace.
In 2025, we reduced work-related injuries and continued to strengthen our culture of occupational health and safety. Our community programs continued to grow globally, emphasizing tool donations, volunteerism, and initiatives that enhance the resilience and well-being of the communities where we operate.
Governance
Strong governance continues to guide our responsible business practices, ensuring that accountability, transparency, and ethical conduct remain embedded throughout the organization. The Board of Directors receives regular updates on key ESG issues. Oversight of ESG related matters is supported by the Sustainability Sub-Committee, which draws on cross-functional expertise and defined competencies to inform key decisions and guide management actions. This year, we focused on enhancing our cybersecurity and data protection oversight, strengthening supplier risk management frameworks, and continued integration of ESG considerations into enterprise risk management.
Oversight is reinforced through the formalization of an internal ESG policy that defines our sustainability priorities, accountability mechanisms, and expectations for responsible conduct across the business. Alignment with international reporting standards was further enhanced, supported by ESG training at the Sustainability Sub-Committee level to strengthen decision-making competence.
TTI’s achievements this year reflect the dedication, innovation, and collaboration of our global teams. As we look ahead, we remain focused on driving sustainable value creation through strategic investments in technology, operational excellence, and responsible resource management. We recognize that the ESG landscape is rapidly evolving, yet we remain confident in our ability to navigate it, through innovation, discipline, and strong execution.
I would like to thank our associates, customers, partners, and stakeholders for their continued trust and collaboration. Together, we will continue to advance our sustainability journey with purpose, accountability, and an unwavering focus on delivering long-term value for all.
Stephan Horst Pudwill
Executive Vice Chairman
March 3, 2026