AREA OF FOCUS

Our Environment

We are committed to delivering the magic of play to children and families responsibly, to preserve future generations of fun. We continue to focus our attention on understanding our environmental footprint, evaluating ways to minimize the impact of our operations and partnering with external organizations to help us meet our 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

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

Since 2019, we have reduced our Scope 1 and 2 footprint by 65% for Spin Master. In 2024, we acquired Melissa & Doug, which impacted our total operations footprint, adding one retail store, four offices and four distribution centres.

Scope 1 and 2 Emissions

Scope 1 emissions are inclusive of the fuel used to power our vehicles and Scope 2 emissions include the electricity and natural gas we use to power our facilities, which are all leased.

Spin Master’s energy use declined overall between 2023 and 2024 due to the divestment of the owned facility in Calais. In 2024, we had a slight increase in energy within our leased offices primarily in Asia and Canada due to operational changes. While we do have an Office Sustainability Scorecard which assesses energy usage, heat source and building certifications, final decisions on leased locations are based on a number of other factors, for example, location, cost, amenities and proximity to transport. In 2024, we consolidated two Spin Master and Melissa & Doug offices in the U.K.

Scope 3

Spin Master’s 2023 Scope 3 emissions decreased 50% compared to our 2019 baseline, but increased 19% compared to 2023. This can be attributed to an increase in the information collected, and an increase in toys manufactured. Our Scope 3 emissions include the following categories:

  • Category 1 – Purchased Goods and Services – This category includes Scope 1 and 2 emissions for our Tier 1 manufacturers, as well as emissions related to waste. The amount of emissions increased by 18% at Spin Master facilities due to an increased volume of products manufactured and the capture of new data for European and Mexican factories for Spin Master.

  • Category 4 – Upstream Transport and Distribution – This category includes upstream freight and Scope 1 and 2 emissions associated with third-party warehouses. The amount of emissions increased by 32% due to an increased amount of freight data. Some information previously classified as Category 9 - Downstream Transport and Distribution, has also been reclassified as upstream as we gained greater clarity as to how our supply chain is segmented.

  • Category 6 – Business Travel – Business travel is inclusive of all air travel. In 2024, we expanded the coverage of air travel providers in our inventory. The emissions associated with air travel reduced in 2024 by 19% due to the reduction in long-haul air travel. We also restated our 2023 emissions to correct errors related to radiative forcing and mileage.

  • Category 9 – Downstream Transport and Distribution – Downstream transportation reduced by 4% between 2023 and 2024. Some information was reclassified from Category 9 to Category 4 for Spin Master (see description in Category 4 above).

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.