AREA OF FOCUS

Our Environment

We are committed to delivering the magic ofplay to children and families responsibly, preserving the joy of play forfuture generations. We continue to deepen our understanding of ourenvironmental footprint, identify opportunities to minimize operational impactsand collaborate with external partners to advance our sustainability goals.

Our Climate Action Highlights

70%

reduction in Scope 1 + 2 emissions by 2030

Net-zero

commitment for Scope 1 + 2 emissions by 2050

85%

reduction in waste in owned and leased facilities by 2025
(already achieved)  

Zero waste

in owned and leased facilities by 2035

Climate Action Plan

Our Climate Action Plan and the targets within are aligned with our commitment to act as a responsible custodian of the world children will one day inherit. We continue to make progress in reducing emissions in several areas across our footprint.

Carbon

We recognize our role to act as a responsible custodian of the world that children will one day inherit and continue to take action to reduce emissions across our business.

Scope 1 and 2 Emissions

In 2022, we set a goal to reduce our Scope 1 and 2 carbon emissions by 70% by 2030 and net zero by 2050, using a baseline year of 2019. Since 2019, we have reduced our Scope 1 and 2 footprint by 65% for Spin Master.

Scope 3

In 2025, Spin Master’s Scope 3 emissions decreased 6% compared to 2024 and 48% compared to 2019. The major drivers of the decline were a reduction in units shipped as well as a change in the trade environment.

  • Category 1 – Purchased Goods and Services – Purchased goods and services related emissions declined due to a reduction in units manufactured. Due to the new tariff policy implementation in the U.S., we diversified our production further, redirecting a significant volume of manufacturing from China to locations in Vietnam, which has a slightly higher grid emissions factor. We also started including estimates for our North American and European manufacturers, which represent approximately 5% of manufacturing volume.

  • Category 4 – Upstream Transport and Distribution – The volume of toys shipped in 2025 decreased from the previous year, and our upstream transportation and distribution also decreased Proportionately.

  • Category 5 – Waste Generated in Operations – We have reduced waste-related emissions compared to our baseline in 2019. With the acquisition of Melissa & Doug, we conducted a waste audit to refine our new baseline informationat a new office and three distribution centres.The closure of our Los Angeles office was a significant contributor to total waste volumesfor the reporting period, as the relocation generated a one-off disposal of office materialsand equipment.

  • Category 6 – Business Travel – Overall, the volume of air travel increased in Asia due to activity related to sourcing and manufacturing in new factories in the region. We also enhanced our calculation capabilities for travel historically booked outside of travel agencies.

  • Category 9 – Downstream Transport and Distribution – Downstream transportation and distribution increased as a result of tariff implementation, with more U.S. customers opting for domestic replenishment rather than FOB (freight-onboard) shipments.

Carbon Data Emission

Carbon emission data was verified independently by DNV Business Assurance USA, INC. Their conclusion, along with their methodology, can be found here for 2022, 2023 and 2024.

Packaging

While packaging is an important component of protecting a product and maintaining presence on shelf, materials used in packaging have an environmental footprint that must be managed. We have set a number of goals to help in this effort.


We continue to look for ways to reduce plastic use and introduce sustainability into our packaging practices.

Sustainable Product Materials

We are committed to moving towards more sustainable product materials within our toys and games while also maintain the highest quality that our consumers have come to expect from Spin Master. Our approach includes the following:

  • Reducing the amount of plastic used in products

  • Investigating biodegradable/compostable or recycled materials in our products

  • Simplifying product manufacturing so products can be recovered, dismantled and recycled into new products.

Our Partnership with TerraCycle

We have partnered with TerraCycle to provide toy recycling in the United States. TerraCycle is an innovative recycling company that has become a global leader in recycling hard-to-recycle materials, with the mission of “Eliminating the Idea of Waste®.”

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Our Areas of Focus

Disclaimer
This document contains certain statements, other than statements of historical fact, which constitute “forward-looking information” within the meaning of applicable securities laws, including the Securities Act (Ontario). Such statements may concern the Company’s objectives, plans, goals, aspirations, strategies, prospects and opportunities and are based on expectations, estimates and projections as of the date on which the statements are made in this document. The words “plans”, “expects”, “projected”, “estimated”, “anticipates”, “indicative”, “intend”, “potential”, “prospects”, “seek”, “strategy”, “targets” or “believes”, or variations of such words and phrases or statements that certain future conditions, actions, events or results “will”, “may”, “could”, “would”, “should”, “might” or “can”, or negative versions thereof, “be taken”, “occur”, “continue” or “be achieved”, and other similar expressions, identify forward-looking statements. Specific forward-looking statements in this document include, without limitation, statements with respect to the Company’s sustainability, environmental and climate change goals and targets.



Forward-looking statements are necessarily based upon management’s perceptions of historical trends, current conditions and expected future developments, as well as a number of specific factors and assumptions that, while considered reasonable by management as of the date on which the statements are made in this document, are inherently subject to significant business, economic and competitive uncertainties and contingencies which could result in the forward-looking statements ultimately being incorrect. By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. Known and unknown risk factors, many of which are beyond the control of the Company, could cause actual results to differ materially from the forward-looking information in this document.



Such risks and uncertainties and the material factors and assumptions used to develop the forward-looking information herein include, without limitation, those discussed in the Company’s disclosure materials, including its most recent annual and any subsequent interim Management Discussion & Analysis and its most recent Annual Information Form, filed with the securities regulatory authorities in Canada and available under the Company’s profile on SEDAR+, including those listed with any forward-looking statement safe harbour therein. The risk factors are not intended to represent a complete list of the factors that could affect the Company and investors are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements.



There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided as of the date of this document (being April 3, 2024) for the purpose of providing information about management’s expectations and plans relating to the future. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.