Strategy B - Business, Strategy and Financial Planning

Climate-related risks and opportunities have influenced Milliken's businesses and strategy, including:

(1) Products and services

Carbon pricing pressures placed on finished goods due to potential regulatory or market-based drivers remains a relevant transitional risk. Available GHG emission data was applied to estimate the potential impact of carbon pricing. Milliken continues to increase product-level data availability to better assess and manage this risk. Risks and opportunities related to the growing demand from customers for low-carbon products have influenced our product-related strategy. Results of

the climate risk assessment informed a strategic decision to scale a multi-year plan to advance life cycle assessment data for critical products within the portfolio, and to inform our Scope 3 mitigation strategy. The expansion of life cycle assessment data within our businesses remains a priority. Scaling our LCA data provides a tool to identify hot spots and increase efficiencies, which is a mitigation activity that aligns with Milliken's Net-Zero transition plan. The time horizon for the implementation of this action is in the medium-term.

(2) Supply chain and/or value chain

Milliken's Scope 3 emissions far outweigh Scopes 1 and 2 (Scope 3 represents more than two-thirds of the total GHG inventory), however, Scope 3 has the lowest data quality, as the majority of the categories rely on industry - or globally - averaged data, primarily informed by estimates based on spend. Milliken recognizes the crucial role advancing data plays in improving our Scope 3 reduction strategy and creating a path forward towards a 30% absolute reduction in our Scope 3 emissions by 2030 (2018 being the base year). We created a strategy to improve data collection efforts through enhanced LCA software and LCA modeling in the first phase of Milliken's decarbonization roadmap. Additionally, Scope 3 improvement efforts were completd in 2023 in order to create a model that accurately and efficienty tracks the outcomes of sustainability-related initiatives. Increasing Scope 3 transparency, communicating Milliken's climate goals to suppliers, and pursuing collaborative initiatives to reduce emissions will allow for better alignment between Milliken's climate goals and its growth strategy. The time horizon for the implementation of this action is in the short-term.

(3) Investment in research and development (R&D)

R&D investment is influenced by climate-related risks and opportunities. We are evaluating new metrics and organizational structures to advance sustainability, including climate-related opportunities. In 2024, we worked with an external consultant to develop an internal sustainability product portfolio assessment to better evaluate potential investment opportunities and technologies that will support Milliken and the transition to a net-zero future. These climate-related investments in R&D will continue to be implemented in the short-term time horizon.

(4) Operations

The use of lower emission sources of energy is an opportunity to mitigate the risk of increased cost burden due to the potential of carbon pricing pressures on energy consumption. Milliken made it a top priority to reduce or eliminate the use of the highest carbon-emitting fuels used in operations, which includes coal. Milliken officially eliminated coal as a primary fuel source by implementing cogeneration at the Company's Blacksburg, South Carolina site. $25 million was invested

into cogeneration, which combines steam and power generation, thereby eliminating coal as a primary fuel source and reducing overall costs, emissions, and waste. The projected savings resulting from this project is $4 million per year. The time horizon for the continued implementation of this action is in the short-term.

Climate-related risks and opportunities have influenced Milliken's financial planning, including:

(1) Revenues, Direct costs, Capital Expenditures, Acquisitions and Divestments

As an impact on direct costs, Milliken models energy impact costs for Scope 1 and Scope 2, including impacts of various renewable energy procurement strategies. In addition, Milliken

performed our fourth annual climate risk assessment. As part of our climate risk assessment, we quantitatively assessed the potential impact of external carbon pricing on our products and raw materials. We continue to build models to understand external carbon pricing regulations and market demands to 2030 and 2050 with modeling potential financial impact mapped based on geographic and key businesses. Informed by this risk assessment, we launched a Carbon Pricing Council, Shadow Carbon Price Policy and internal shadow carbon price in 2023. We also are working on how to further integrate climate-related risks and opportunities into our capital expenditures. We currently include sustainability as a factor in our capital expenditures, as well as additional quantitative and qualitative guidance for climate related impacts in our models for funding capital expenditures that further reduce emissions (and/or remove emissions).

Another example, is the analysis of the carbon pricing landscape revealed a potential pressure in the short-term within the Chemical business related to the EU's proposed Carbon Border Adjustment

Mechanism (CBAM). We continute to monitor the proposed regulation and assess levers to lower potential cost burden. The potential cost burden could be mitigated by increasing efficiency in operations (lowering emissions) and increasing the availability of quality product carbon footprint data related to certain product offerings through life cycle assessment. Setting an internal carbon price could incentivize emission reduction, lowering cost burden. Avoiding the potential assignment of a general tax rate based on generic product emissions information is expected to reduce potential future cost burden related to CBAM and other potential forthcoming carbon regulations.