5.11® Climate Related Financial Risk Report
Last Updated: March 19, 2026
Introduction
5.11, Inc. recognizes that climate change presents material risks to its business operations, supply chains, and long-term financial performance. This report identifies key climate-related financial risks, both physical and transition related, and outlines our current and planned mitigation and adaptation strategies.
CARB has issued guidance in the form of a checklist, and this report reflects a good faith qualitative approach aligned to TCFD as we continue to monitor CARB updates and any additional implementing requirements. This disclosure is prepared in alignment with the Task Force on Climate-related Financial Disclosures (TCFD) framework and is intended to satisfy the requirements of the California Climate-Related Financial Risk Act (SB 261). Unless otherwise noted, this disclosure covers the Company’s consolidated operations and key elements of its value chain.
Governance
Management considers climate related financial risks within the Company’s existing risk management processes. Climate related risks are discussed with senior management when they are relevant to business decisions or could become material. The Board oversees material risks through its normal governance and risk oversight processes, which include climate-related risks, when applicable.
Strategy
Physical Climate Risks
The Company has identified the following physical climate-related risks that could have financial implications:
Temperature Increases and Heat Stress
Rising average temperatures and more frequent heat events could affect labor productivity, workplace safety, and facility operations, which could reduce operational efficiency and increase costs over time.
Water Stress and Availability
Certain manufacturing processes are water intensive. Increased water scarcity, drought conditions, or regulatory restrictions in supplier regions could disrupt manufacturing processes, increase operating costs, or constrain production capacity.
Sea Level Rise
Facilities, warehouses, or distribution locations in coastal or flood prone areas could be exposed to long-term sea level rise, which could increase asset impairment risk, insurance costs, or the need for adaptation investments over time.
Extreme Weather Events
Increased frequency and severity of hurricanes, floods, wildfires, and other extreme weather events could disrupt supplier operations, logistics networks, and retail activities, leading to delays, increased costs, or inventory impacts.
Transition Climate Risks
The Company has identified the following transition risks associated with the global shift toward a lower carbon economy:
Policy and Regulatory Risks
Evolving climate-related regulations, including emissions disclosure and compliance requirements in California and other jurisdictions, may increase administrative, reporting, and compliance costs.
Carbon Pricing and Energy Costs
The adoption of carbon pricing mechanisms, such as carbon taxes or cap and trade systems, could increase energy, manufacturing, and transportation costs across the Company’s operations and supply chain.
Technology Risks
Advancements in lower emission manufacturing technologies, materials, and energy systems may require capital investment and operational changes. Delays in adopting such technologies could impact cost competitiveness or operational efficiency.
Market and Demand Risk
Shifts in customer preferences toward lower impact products and materials may affect demand for certain product categories or require accelerated product innovation and sourcing changes.
Reputational Risk
Evolving stakeholder expectations regarding climate performance and supply chain transparency could affect brand reputation and customer loyalty. Failure to meet stated sustainability commitments or stakeholder expectations may adversely impact brand perception, customer demand, and revenue.
Financial Impact Considerations
Climate-related physical and transition risks could impact the Company through:
- Increased operating, sourcing, logistics, or compliance costs
- Supply chain disruptions or delays
- Capital expenditures related to facility adaptation or process changes
These risks may impact operations, supply chains, or costs over time depending on the nature, severity, and duration of climate-related events or transition dynamics.
Risk Management
Climate related risks may be identified through existing operational, supply chain, health and safety, and compliance activities conducted across the organization. These considerations may arise in the context of supplier oversight, facility operations, or broader risk reviews. When climate related risks are relevant to business decisions or potential material risk considerations, they may be discussed with management.
Potential response actions may be evaluated at the executive level depending on the nature and significance of the risk. Where actions are approved, implementation is managed through existing business functions and processes, including the use of third-party service providers, as appropriate.
In this context, the Company may consider a range of measures, such as sourcing diversification, supplier risk considerations, business continuity planning, operational efficiency opportunities, or product related initiatives, when relevant. Climate related risks are considered alongside other strategic and operational risks within the Company’s existing enterprise risk management framework, rather than through a standalone climate risk program
Metrics and Targets
The Company tracks energy use and Scope 1 and Scope 2 greenhouse gas emissions for internal management and reporting. The Company does not currently use formal climate related financial risk metrics or targets. Climate related financial risk is considered qualitatively through existing risk management and business planning processes. The Company expects to refine its approach to metrics and targets over time as internal practices and regulatory guidance evolve.
Forward Looking Statements and Limitations
This disclosure contains forward-looking statements based on current assumptions, expectations, and available information. The assessment is subject to limitations, including incomplete greenhouse gas emissions data across the value chain, limited site-specific climate hazard data for certain supplier locations, and the absence of quantitative climate scenario analysis. Climate-related risk assessment methodologies and data continue to evolve, and actual outcomes may differ from those anticipated. 5.11 expects to refine and enhance its climate-related disclosures over time.