## Key Areas of Focus 

In addition to our efforts on human capital management described below, some key areas of focus for us include the critical importance of environmental responsibility, human rights and ethical sourcing. 

• Environmental Responsibility . We recognize the impact our business can have on the environment and are working to reduce our footprint. We view sustainability challenges as opportunities to innovate and to continuously improve our product design and operational efficiencies. The long-term viability and health of our own operations and our supply chain, and the significant potential for environmental improvements, are critical to our business success. 

Climate change and its risks are issues we continue to monitor and manage. In addition to initiatives to reduce our energy consumption and improve energy efficiency, we support projects that increase the generation of renewable energy in the marketplace. We continued to meet our renewable energy goal, reaching virtually 100 percent (99.7%) in our owned and operated facilities. To address the greenhouse gases generated by electricity consumption, Hasbro purchases Renewable Energy Certificates (RECs) which support the production of renewable energy such as wind, solar, thermal and similar renewable sources, at levels equal to what we use from the public grid. These RECs are bought in and applied to the markets where the energy is used by Hasbro facilities across the globe. 

We purchase carbon offsets to address the remaining GHG emissions generated by the use of gas and liquid fuel at our leased and owned facilities, company vehicles, all employee business air travel and the remaining small amount of emissions generated by electricity consumption at our facilities in markets where RECs are not available. 

We have also begun to evaluate the climate impacts of our supply chain. In 2019, we began a comprehensive measurement of our supply chain footprint, with virtually 100% of our suppliers participating. Our next step will be to set reduction goals for our suppliers. Hasbro is also currently evaluating the possibility of setting a net zero emissions goal and incorporating corresponding science-based targets. 

Other key goals and objectives in this area include: 

◦ Eliminating virtually all plastic in packaging for new products by the end of 2022. 

◦ Expanding our industry-first toy recycling program, in partnership with TerraCycle (a leader in product recycling outside of municipal recycling), from the U.S., France, Germany, Brazil, Canada, and the U.K. to additional markets in the European Union. 

◦ Achieving on an annual basis 100% renewable energy use across owned/operated facilities. 

◦ Reducing energy consumption by 25%, greenhouse gas emissions by 20%, waste to landfill by 59%, and water consumption by 15%, by the end of 2025. 

• Human Rights and Ethical Sourcing . Our Human Rights & Ethical Sourcing program, first launched in 1993, is dedicated to ensuring that facilities involved in the production of our toys and games or licensed consumer products comply with Hasbro’s Global Business Ethics Principles. The program is designed to provide fair and safe working conditions; treat all workers with fairness, dignity and respect; and engage with our suppliers to address safety, health and the environmental impacts of our supply chain. While working on these issues with partners, suppliers, third-party factories and licensees is complex, we remain vigilant in our commitment to ensure workers in our supply chain are treated in accordance with applicable laws and our high ethical standards. 

Key goals and objectives in this area include: 

◦ On an annual basis, achieve 100% social compliance audit rate for all third-party vendor and major sub-contractor facilities, as well as 100% follow-up audit rate for all facilities with pending remediation issues. 

◦ Requiring third-party factories to participate and complete the Hasbro Ethical Sourcing Academy, a 30-hour, e-learning social compliance course, which trains and reinforces Hasbro’s rigorous ethical sourcing requirements. This mandatory online training is in addition to monthly in-person vendor workshops that the Hasbro Ethical Sourcing team hosts in our sourcing office locations around the world. 

