IF-RE-140a.4,RR-BI-140a.2,RT-CH-140a.3 - Water Management Risks

Our approach to determining our impacts, risks, and opportunities is described in our General Disclosures. Our assessment indicates that waste reduction and prevention, increased recycling, and minimizing the negative impacts of end-of-life processes are key focus areas for Milliken. Milliken has a significant need for high-quality water. Our business divisions require water to meet the needs of our customers. Textile and flooring plants use freshwater in dyeing and finishing, and our chemical and healthcare plants use water for a wide range of other purposes. In our plants, water quality and availability are crucial as they can affect the quality, performance, and delivery of our goods. Additionally, availability to discharge water is critical, whether to third party treatment facilities or to nature after we self-treat the water.

Milliken uses an enterprise risk management process to identify, prioritize and manage risks within our direct operations, supply chain, and external value chain and prepare our mitigation programs. In 2024, Milliken engaged an external consultant to assess potential water-related risks and opportunities using the WWF Water Risk Filter. The assessment included short-, medium- and long-term time horizons along the company's value chain for both transitional and physical risks. Indicators for financial impact, velocity and probability aligned with those used in our enterprise risk management process. This allowed us to put the results in the context of what we have traditionally evaluated in our enterprise risk management.

To reduce negative impacts from water-related risks, we set water withdrawal reduction targets. We empower our teams to develop initiatives to reduce water use through training, cross-functional committees, and rewards for exceptional achievement. Milliken utilizes several methods to ideate, develop, and execute projects that positively impact water reduction commitments. Our Planet Goal committees meet to review projects and drive investment into water-reducing projects.

Our water management strategies for both short-and long-term management are informed by both site-specific regulatory requirements and site-specific risk assessments. For example, water discharges at our locations are held to site-specific regulatory requirements. Each site owns and follows the procedures for reporting this information to applicable regulators. Milliken's corporate environmental team hosts routine meetings and systems to review these parameters and to facilitate sharing of learnings and best practices among sites. Parameters measured include, but are not limited to, flow, pH, total suspended solids, chemical oxygen demand, and color.

We also evaluate our facilities to identify those that rely on water-stressed watersheds. Currently, 99% of our water use is from non-stressed watersheds. We use the WWF Water Risk Filter to identify where basin conditions can cause water risk at our facilities. We continue to explore best practices for long-term water management in areas of water-stressed watersheds.

Thirty-four Milliken sites are ISO 14001 or RC 14001 certified, helping us align on our environmental objectives and key performance indicators with an enterprise environmental management system. We maintain procedures to monitor, measure, analyze, and evaluate the environmental performance of our operations and activities that can have a significant impact on our environment. Local water resources are measured for quality and quantity to inform our actions and responses

Progress on commitments and targets for water managemetn are tracked annually, reported annually in our sustainability report, and available to Milliken associates.

Milliken evaluates many tradeoffs in our water management goals. For example, substantially decreasing water withdrawal may require increased energy usage for operating treatment systems. We include these tradeoffs in the management of our water goals and committments. We also continue to explore AI-driven life cycle assessment tools for our products that include comparitive information on water-related impacts and opportunities.