8-K: Kimball Electronics Publishes 2023 Guiding Principles Report, Showcasing Sustainability Achievements

Kimball Electronics released its 2023 Guiding Principles Report, highlighting significant progress in sustainability and ESG performance.

Summary

• Kimball Electronics has published its 2023 Guiding Principles Report, formerly known as the ESG Report, detailing its sustainability efforts and achievements.
• The report is based on the company's sustainability activities, performance, and results in calendar year 2023.
• The company assessed its progress on material economic, environmental, and social impacts using the Global Reporting Initiative (GRI) Index standards.
• Kimball Electronics obtained third-party assurance from Keramida, a company certified on the GRI framework, to ensure transparency and foster trust.
• The report highlights the company's commitment to its four Guiding Principles pillars: Customers, People, Citizenship, and Profits.
• The report also aligns with the Sustainability Accounting Standards Board's Electronic Manufacturing Services & Original Design Manufacturing Standard, and the Task Force on Climate-Related Financial Disclosures.
• Kimball Electronics' sustainability priorities support the United Nations Global Compact's Ten Principles and the UN Sustainable Development Goals.

Sentiment

Score: 9

Explanation: The document presents a very positive outlook with significant achievements in sustainability and ESG performance, indicating strong management and a commitment to responsible practices. The company's high rankings and significant reductions in emissions and safety incidents are very encouraging.

Positives

• Kimball Electronics has demonstrated strong performance in ESG risk management, achieving top rankings in the electronics industry.
• The company has made significant strides in reducing its carbon footprint, exceeding its 2019 baseline by 36%.
• The company has improved workplace safety, reducing safety incidents by 27% year-over-year.
• Kimball Electronics has shown a commitment to diversity and inclusion by establishing Employee Resource Groups.
• The company has contributed significantly to community causes through donations of time and money.

Future Outlook

Kimball Electronics will continue to embrace sustainable, responsible manufacturing practices and strive to meet the needs of the present without compromising the needs of future generations.

Management Comments

• Ric Phillips, CEO, stated that the report reflects sustainability's deep roots in the company's Guiding Principles.
• Ric Phillips added that the report helps communicate and remain accountable for controlling ESG risks and developing ESG opportunities.
• Doug Hass, Chief Legal & Compliance Officer and Secretary, said that sustainability is part of the company's Guiding Principles.

Industry Context

The report demonstrates Kimball Electronics' commitment to sustainability, aligning with increasing industry focus on ESG factors and responsible manufacturing practices. The company's high rankings and achievements position it as a leader in the electronics manufacturing sector.

Comparison to Industry Standards

• Kimball Electronics' #1 ranking among electronics manufacturers for ESG risk by Morningstar Sustainalytics indicates a leading position compared to its peers.
• The Prime rating from ISS ESG places Kimball Electronics in the top 10% of the electronics industry, suggesting superior performance compared to the majority of its competitors.
• The company's 36% reduction in scope 1+2 greenhouse gas emissions from a 2019 baseline is a significant achievement, potentially exceeding the average reduction seen in the electronics manufacturing sector.
• The 27% reduction in safety incident rate year-over-year, with an overall rate remaining well below industry averages, demonstrates a strong commitment to workplace safety compared to industry benchmarks.
• The company's alignment with the GRI framework, SASB standards, and TCFD recommendations demonstrates a commitment to transparency and best practices in sustainability reporting, which is not always consistent across the industry.

Stakeholder Impact

• Shareholders will likely view the report positively due to the company's strong ESG performance and commitment to sustainability.
• Employees will benefit from the company's focus on safety, diversity, and inclusion.
• Customers will appreciate the company's commitment to sustainable manufacturing practices.
• The community will benefit from the company's donations and support of worthy causes.

Next Steps

• Kimball Electronics will continue to embrace sustainable, responsible manufacturing practices.
• The company will continue to strive to meet the needs of the present without compromising the needs of future generations.

Key Dates

Keywords

sustainability, ESG, environmental, social, governance, greenhouse gas emissions, safety, employee resource groups, low carbon products, manufacturing, electronics