2021 HARMAN TCFD Disclosure

Task Force on Climate-Related
Financial Disclosures (TCFD)
Governance:

Managing Climate-Related Risks:Disclose the company’s governance around climaterelated risks and opportunities.

Disclose how the company identifies, assesses, andmanages climate-related risks.

HARMAN integrates sustainability governance mechanisms
at the highest levels of organizational leadership andperformance. Our President and CEO is responsible foroversight of our overall corporate sustainability performance,and our ESG Committee, which consists of relevant senior
executives and technical experts. HARMAN’s Sustainability
Program Office supports the ESG Committee throughdeployment of governance and performance mechanisms toensure greater transparency, communication, collaboration,

HARMAN has developed its physical risk screening as
a complement to existing processes that identify andmanage ongoing climate-related transition risks. Overtime, HARMAN will integrate physical risk screening andmanagement of acute physical risks into these pre-existingprocesses. HARMAN’s Enterprise Risk Management (ERM)
is another tool that enables the organization to identify,
assess and manage climate and environmental related risk
as part of our business operations governance. Additionally,
HARMAN developed a sustainability vision, including
goals, and objectives that are tied to annual performance
expectations, with a structured governance model to drive

and accountability.

Strategy:
Disclose the actual and potential impacts of climaterelated risks and opportunities on the company’sbusinesses, strategy, and financial planning.

and measure progress.

Metrics And Targets:
Disclose the metrics and targets used to assess andmanage relevant climate-related risks and opportunities.

Acute Physical• 3 facilities exposed to extreme weather• 1 facility exposed to inland flood risk

Chronic Physical• 7 facilities exposed to drought

Monitoring and tracking our environmental performance isa critical part of our business strategy. By quantifying theimpacts of our operations, we are better equipped to identify
improvements. In 2019, HARMAN set an absolute target to
reduce Scope 1, 2 (location-based) and 3 emissions by 40%
by 2025, using a baseline year of 2019. Additionally, HARMAN
has a longer-term goal to achieve carbon neutrality by 2040.
In 2020, HARMAN set an absolute target to have zero waste
generation by 2025, using a baseline year of 2019.

Regulatory Transition• All facilities exposed to increasing local
and national GHG regulations

Market Transition• 7 facilities in locations with limited
climate adaptation capacity12021 HARMAN TCFD Disclosure2021 HARMAN TCFD DisclosureThis disclosure has been prepared according to recommendations from the Task Force on Climate-Related
Financial Disclosures (TCFD). TCFD is the most widely recognized framework for consistent, decisionuseful, and forward-looking information on the material financial impacts of climate-related risks andopportunities. This disclosure is structured around TCFD’s four thematic areas that represent core elementsof how organizations operate: governance, strategy, risk management, and metrics and targets.

Governance
Disclose the company’s governance around climate-related risks and opportunities.
a) Describe theboard’s oversightof climaterelated risks andopportunities.

HARMAN integrates sustainability governance mechanisms at the highest levels of organizational
leadership and performance to ensure action and accountability against our corporate sustainability
strategy, goals, and objectives. To ensure executive commitment and oversight, HARMAN’s President
and CEO is responsible for overall corporate sustainability performance. The President and CEO
cascades sustainability targets to the Senior Leadership Committee, comprised of the HARMAN C-Suite,
in alignment with organizational goals and objectives. Our CEO has overall responsibility for performanceof HARMAN’s corporate environmental and climate-related sustainability goals and objectives. In
2020, the CEO signed off on HARMAN’s commitment to achieve carbon neutrality by 2040. The CFO
is responsible for financial approval of climate-related budgetary needs related to rollout of the carbon
neutrality by 2040 initiative, as well as climate-related financial risk assessment and monthly reportingto the organization. Supply Chain, Quality, and Global Operations leaders are responsible for assessment
and reporting on climate-related operational risks, as well as the approval of climate-related resources
associated with the implementation of the carbon neutrality by 2040. In 2020, our Supply Chain leadershipapproved our HARMAN’s Scope 3 assessment initiative and the investment in a digital platform to assess,monitor, and mitigate supply chain sustainability risks. Additionally, the Senior Leadership Committee
supports decision-making and oversight of our environmental strategy, in collaboration with the ESG
Committee and Sustainability Program Office. The executives and experts serving on these committees
were selected because they represent critical points of intersection between sustainability performanceand business operation.

b) Describe
management’s
role in assessing
and managing
climate-relatedrisks andopportunities.

Our ESG Committee, comprised of relevant senior executives and technical experts, meets on a quarterly
basis, and is responsible for approval and oversight of ESG-related operational planning, risk mitigation,budgetary review, financial impact, and performance management. ESG Committee leadership has driven
initiatives including our goal to achieve carbon neutrality by 2040, and our efforts to continually improvesustainable product and packaging through enhanced circularity, reduced toxicity, and increased carbon
efficiency. In 2021, the ESG Committee approved a Scope 1, 2, and 3 company-wide carbon footprint
analysis to identify carbon emission priority areas, which are the basis of our 2025 emissions reduction
goals for our 2040 roadmap. HARMAN’s ESG Committee, supported by the Sustainability Program Office,reports on performance progress against sustainability goals and targets to the CEO on a quarterly basis.
Additionally, this committee tracks and reports on market trends, government regulation and customer/
partner expectations and other related ESG matters to the President and CEO and Senior Leadership
Committee. Supporting the ESG Committee is HARMAN’s Sustainability Program Office, which deploys
governance and performance mechanisms, including the establishment of task forces, working groups,
and strategic external engagements. These collaborative engagements aim to encourage greatertransparency, communication, and accountability across the organization.
2

2021 HARMAN TCFD Disclosure

Strategy
Disclose the actual and potential impacts of climate-related risks and opportunities on the company’s businesses, strategy,
and financial planning where such information is material.
a) Describe theclimate-relatedrisks andopportunities
the company
has identified
over the short,medium, andlong term.

HARMAN defines short-term from 0 to 1 year. On a monthly basis, business leaders with direct
accountability for managing our sustainability targets use operational reviews to assess progress vs.
targets, analyze information, and take relevant actions. Business division-level time horizons may vary
due to the nature of our businesses. For example, automotive infotainment products have a longer time
horizon than consumer audio products due to the multi-year development and build lifecycles associatedwith automotive programs. Consumer audio business units (such as headphones) operate within a shortertime horizon given the shorter development and build lifecycles. HARMAN conducts an annual refresh ofits short- and long-term strategic priorities and financial plans, which includes a review of sustainability
targets. An example of a short-term goals may include identifying alternative packaging solutions within thecurrent consumer audio product generation to reduce plastic packing materials.
Over the next year, we will work to characterize and more precisely define physical risks for our facilities, as wehave uncovered potential exposure to inland flood risk, wildfires, and drought at various facilities.
We define medium-term from 1 to 3 years. Managers and leaders of functions and divisions set andreview goals semi-annually and annually. Based on the annual strategy refresh and planning update, goals
get reset annually as well. Progress against targets is reviewed during monthly operations meetings, ona quarterly basis, as well as semi-annually to the leadership team on progress to goals. Our consumer
audio team’s initiative to develop sustainable design guidelines for product packaging is an example ofa recent medium-term goal. We are also working to identify operational measures for physical risks
management at climate-vulnerable facilities within the medium-term.
Long-term is defined as 3 to 7 years. Every 5 years, our vision and mission are evaluated based on
external trends, business priorities, and operational goals. An aspirational long-term target may entail
end-to-end carbon footprinting of HARMAN products, with the aim of later integrating less carbonintensive materials into HARMAN designs, and strengthening collaborative partnerships with sustainably
innovative suppliers. Other long-term targets could include capital investments to reduce potential facility
impacts from climate-related shocks such as hurricanes or wildfires.
PHYSICAL AND TRANSITIONAL RISKS
HARMAN conducted a risk assessment of our 12 key manufacturing sites in Brazil, China, Hungary,
India, and Mexico to identify potential physical and transitional risks that could impact these facilities.
The following risks were identified as having potential to impact these facilities over short-, medium-, andlong-term time horizons:
Acute Physical Risks are extreme weather or natural disasters causing short-term business impacts,
supply chain disruptions, and recovery or adaptation costs. Heavy precipitation and dangerous storm
activity can produce inland flooding in the short to medium term, and were found to have higher
potential impact on four sites located in Suzhou, China; Juárez, Mexico; and Tijuana, Mexico. These
extreme weather events are expected to increase in severity and frequency according to climatechange projections. There is potential risk to HARMAN of property and facilities destruction, workforce
health and safety, and operational disruptions in production and service in this region. Additionally,
earthquakes could have a greater impact on three HARMAN facilities located in Hungary and Mexico.
From a supplier perspective, certain components are only available from a limited supplier pool, and an
extreme weather event could result in a production disruption for our manufacturing operations, which
would reduce our customers’ operational capacity and ultimately may affect demand for our products.
Finally, our suppliers in East Asia may be exposed to extreme weather disruptions and earthquakes,
which highlights a need for supply chain resiliency in key supply regions.
3

2021 HARMAN TCFD Disclosure

Strategy (Cont.)
PHYSICAL AND TRANSITIONAL RISKS (CONT.)
Chronic Physical Risks are risks related to prolonged impacts from climate shifts such as heatwaves, drought, water stress, wildfires, or other extreme weather events that may impact ouroperations, supplier operations, and the operations of our customers’ manufacturing sites. Seven
facilities located in China, Hungary, India, and Mexico have a higher risk of drought, water stress and/or heat; three facilities located in China and India have a higher risk of extreme weather; and four
facilities located in Mexico have a higher risk of wildfires. These chronic physical risks could impact
our suppliers and direct operations, resulting in decreased revenue from decreased production
capacity over the short-term time horizon. Our suppliers in Hong Kong may be exposed to theimpacts of stronger coastal storms and sea level rise on coastal communities, making it necessary
to ensure the resiliency of supply chains along the coastline in the future.
Regulatory Transition Risks are business-related risks related to new, more stringent, and emerging
climate-related regulations, requirements, and/or taxes. Of our 12 manufacturing facilities, 11 havea higher risk of being impacted by increasing regulatory requirements associated with GHG pricing
and emissions reporting in the medium term. Additionally, not specific to the 12 manufacturing
facilities, the following regulatory risks could impact HARMAN’s business:
1) C ertain products will require submission of energy-use profiles in accordance with the EU Energy
Using Products Directive. We are modifying the design and energy-use profiles of our products
to comply with applicable laws and regulations. For example, at a product level, we may also
be subject to climate-related regulations associated with EU Ecodesign Directive 2030 energyefficiency targets. This legislation may require our product teams to further invest in R&D tomeet environmental performance obligations. Additionally, the U.S. Department of Energy has
promulgated a regulation pertaining to external power supplies and compliance with the energy
efficiency standards that were established under the Energy Independence and Security Act of2007. We will address these requirements as necessary.
2) H ARMAN has manufacturing and office locations in India, specifically, Bangalore and Pune.
India has introduced new regulations (i.e. green tariffs) that reduce barriers to access renewableenergy. The improved access and availability to renewable sources could support additional
HARMAN India sites as they aim to rely more on green energy in alignment with our carbon
neutral by 2040 ambition. Any risk to or change in this regulation or future regulations that hinderaccess to renewables could result in increased cost to HARMAN associated with the installationof on-site renewable energy generation such as solar panels.
3) H ARMAN has committed to being carbon neutral by 2040 and has made this commitment publicwith stakeholders and customers. The target was communicated publicly with positive feedback
from both internal and external stakeholders. A failure to accomplish this goal could negatively
impact HARMAN’s reputation and customer relationships. This could also negatively impact
revenues and our ability to attract next generation talent.

42021 HARMAN TCFD Disclosure

Strategy (Cont.)
PHYSICAL AND TRANSITIONAL RISKS (CONT.)
Market Transition Risks are risks related to changes in market and brand value due to perceptionsof our company being a higher investment risk. These risks have been evaluated across thebroader HARMAN organization. The following market transition risks could impact HARMAN’sbusiness:1) HARMAN’s climate-related exposure spans across its business divisions. For example, theautomotive business has identified significant market risks as the industry shifts to electrification
and advanced mobility. The change creates opportunities for more energy efficient products
and services but also involves risks associated with lower or delayed product demand from
customers and consumers in light of changing requirements, higher prices, and evolving
consumer preferences. HARMAN develops technologies to respond to and mitigate risks
related to these evolving trends and market demands. For example, HARMAN has released EV
Plus+ Solutions; audio and communications solutions tailored specifically for electric vehicles.
which require lower power consumption while at the same time delivering a premium audio
and communications experience. The revolutionary electric vehicle system design solution
ensures powerful audio performance with fewer parts, reduced weight, complexity and power
consumption when compared to a traditional system. HARMAN’s aspires to be at the forefront
in the development of new and innovative solutions that both enhance the customer driving
experience and help automakers improve energy efficiency and reduce overall emissions.
2) C limate change may raise the cost of automobile ownership due to increased (carbon) taxes, fuelor energy taxes, and vehicle registration fees. Additionally, greater awareness of the environmental
and social impacts of climate change may impact consumer preferences associated with vehicle
ownership, and in turn reduce overall demand for personal vehicles.
Technology Transition Risks are risks related to climate-related technological shifts, and may
include upgrades to new technology, or the unsuccessful investment in technology. HARMAN teams
must innovate to ensure that products meet sustainability-related demands related to market shifts
to electric vehicles, and evolving consumer sentiment on climate change issues. HARMAN has adominant market share in key markets that heavily prioritize brands that focus on climate change
and environmental sustainability, like China, the EU and India. A major failed investment or failure toinvest in these regions could disrupt market share and impact brand reputation and revenue in themedium-to-long-term.
Legal Transition Risks are risks associated with climate-related litigation claims that could impact
the company. HARMAN periodically leverages financial institutions for capital loans to enable a hostof investments necessary to maintain and advance business operations and meet global demand.
Increasingly, credit and capital agencies like S&P or Moody’s assess lending potential based on
ESG and climate-related factors. Unfavorable performance or perceived performance in these areas
could impact HARMAN’s ability to secure capital and impact necessary investments.

52021 HARMAN TCFD Disclosure

Strategy (Cont.)
OPPORTUNITIESHARMAN has identified the following opportunities that could have an impact on our business:
Products & Services:
1) Professional sound systems like those used in performance venues such as stadiums,
theaters, cinemas and night clubs need power to amplify sound to their audiences. With theaim of reducing the environmental footprint of the products, HARMAN developed its GreenEdge
designation and offers audio solutions that are reducing energy use and heat dissipation,
while continuing to provide best-in-class acoustical experiences. HARMAN products with
the GreenEdge designation such as its CROWN DriveCore based products are produced withrecycled metals and are lighter in weight, leading to less freight and reduced emissions, moreenergy efficient, and conform to lead-free RoHS standards. CROWN DriveCore products also
feature a powder coat that requires 33% less energy than conventional coatings, and provide
consumers with energy saving modes during product use.
2) 
HARMAN invests in identifying new business opportunities and developing technologies
that support electrified and autonomous vehicles. Product decisions take into accountconsumer preferences, customer requirements, and include environmental impact and climate
considerations. For example, HARMAN has released EV Plus+ Solutions that are audio andcommunications solutions tailored specifically for electric vehicles. These EVPlus+ Solutions,feature high-efficiency speakers made from sustainable materials, which require lower power
consumption while at the same time delivering a premium audio and communications
experience. The revolutionary electric vehicle system design solution ensures powerful audio
performance with fewer parts, reduced weight, complexity and power consumption whencompared to a traditional system.
3) Consumer preferences increasingly include factors such as environmental impact and fuelefficiency in vehicles which may shift the market demand, requiring automotive companies
to address these new preferences. This may lead to increased opportunity for integrated
information systems inside the car that allow for more efficient operation of the vehicle(e.g., digital cockpit, cloud services, over-the-air software updates). HARMAN provides theseproducts to automotive companies and may find opportunities to increase sales.

b) Describe theimpact ofclimate-relatedrisks andopportunities on
the company’sbusinesses,
strategy,
and financial
planning.

HARMAN addresses climate related risks through a “One HARMAN” strategy: 1) leveraging a holistic
mix of product innovation, 2) fostering facility and process efficiencies, and 3) focusing on supply
chain stewardship, all of which influence our financial planning. These strategic initiatives span our
entire business from automotive innovation to consumer electronics, enabling the organization tocontinuously evolve and improve how it addresses critical climate issues.
1) From a product innovation perspective, there is focus on quality excellence and innovation.
HARMAN product lines such as EV Plus+, JBL Flip 5 Eco, and Infinity Lab directly impact
environmental sustainability through a mix of high efficiency, low energy use technologies,
and sustainable materials and packaging. Our proactive approach to implementing more
efficient technologies has positioned us to help our customers further avoid increased carbon
footprint and has opened the door for additional opportunities in this space. As customer
preferences shift toward more eco-friendly products and solutions, HARMAN has invested
in R&D to develop new and innovative technology solutions. We base R&D budget on prior
6

2021 HARMAN TCFD Disclosure

Strategy (Cont.)
OPPORTUNITIES (CONT.)year experience and requirements to invest in key areas such as system and technology
expertise, platform standardization, design and materials innovation and energy efficiency. In
the Automotive industry, for example, the global electric vehicle market is expected to be worth$2.5T by 2027 growing at an average rate of 33.6% year over year. As a key technology partner
to global automakers, HARMAN must innovate to address this market trajectory and evolving
consumer sentiment.
2) The strategy for reducing energy and emissions across our global sites, including offices, data
centers, manufacturing locations etc., is a combination of investing and leveraging renewableenergies, energy reducing employee behaviors, and high efficiency technologies like digitalbuilding management systems and LED lighting etc. HARMAN’s global facilities have annual
energy and emissions reduction targets. These targets align to and reflect our commitment
to achieving carbon neutrality by 2040. The following examples demonstrate HARMAN’scommitment to efficient operations:•O ur recent Scope 1 and 2 analysis identified that just 11 sites worldwide were responsiblefor 60% of our carbon footprint. As a result, HARMAN invested in renewable energy solutions
over a 24-month period to help reduce the site emissions and align to a goal of 40% reduction
by 2025.
•O ur regulatory risk analysis revealed that 100% of HARMAN’s 100+ global locations fall undersome form of country or regional-specific, actual or proposed carbon reduction targets. To
that end, our internal milestone is to reduce our Scope 1, 2, and 3 emissions by more than
55% by 2030.
3) Our facilities in Karlsbad and Garching, Germany are certified Energy Management System under
ISO 50001 and our Hungarian facilities undergo energy audits. HARMAN recognizes that someof the biggest climate risks and opportunities exist within our supply chain. We communicate
and cascade our climate performance goals and objectives to suppliers through a robust
corporate supply chain sustainability policy and supplier code of conduct. We also set clear
expectations for our suppliers in the areas of energy and emissions reduction and employee
health and safety. Our supplier engagement efforts also include supplier sustainability selfassessment, launched in 2020, which helps HARMAN to better assess supply chain climate
risks for our top 200 suppliers, representing 90% of our supply chain spend. We have started
a process to screen key suppliers for physical risks for better understanding of the potential
disruptions in our supply chain during periods of climate shocks and stress.
During the financial planning process, business unit and product teams evaluate new productopportunities and innovations which have a direct and indirect impact on future revenues, costs andrelated capital expenditures. With the increasing focus on sustainability, (i.e., consumer electronics)
these decisions factor in considerations for reducing the environmental impact of products andpackaging. As we move forward on our journey to reduce our environmental footprint, we continue toevaluate opportunities throughout our extended enterprise.

7

2021 HARMAN TCFD Disclosure

Strategy (Cont.)
OPPORTUNITIES (CONT.)c) Describe theresilience ofthe company’s
strategy,taking into
considerationdifferent
climate-related
scenarios,
including a
2°C or lower
scenario.

HARMAN believes that as an organization, they have taken on a prudent approach to managing
climate-related physical and transition risks. HARMAN is conducting global climate risk analysis with
two assumptions:
1) Physical risks are largely locked in over the next 15-20 years regardless of policy decisions
that will lead to differing climate scenarios. Therefore, HARMAN has used datasets that best
allow for a comparison of physical risks across its facilities. This produces the most decisionuseful information for HARMAN, allowing the company to prioritize short- and medium-termrisk mitigation actions at vulnerable locations.
2) Conversely, transition risks are highly exposed to policy decisions that will take place in thenear to medium term. HARMAN must prepare for a range of outcomes given the global scopeof the organization, operating in jurisdictions with a wide range of possible regulatory regimes
around climate.
HARMAN uses scenario analysis to guide decisions on emissions reduction activities, and uses apresent day comparison of physical risk to gauge physical risk across its portfolio. For transition risk,
HARMAN relies on the Network of Central Banks and Supervisors for Greening the Financial System(NGFS) to define scenarios to benchmark emissions reduction activities. The following NGFS scenarios
have been selected for this benchmarking:1) Nationally Determined Contributions (NDCs): includes all pledged national policies to reduce
emissions, which are insufficient to limit global warming to 2 degrees Celsius2) Net Zero 2050: a highly ambitious scenario that limits global warming to 1.5 degrees Celsius.
This scenario requires immediate and ambitious global action to begin emissions reduction
activities.
HARMAN is committed to the achievement of global emissions reduction objectives, regardless ofclimate scenario. HARMAN’s 2025 milestone and broader 2040 ambitions are based on three key
emissions reductions:•O perational energy reduction for priority factories and offices: audits, CAPEX projects, and bestpractices (40% reduction by 2025);•1
 00% renewable electricity implementation for factories and priority offices.
Our renewable strategy has driven our facility teams to identify opportunities to increase their relianceon renewable energy. In November of 2021, HARMAN installed its first 170 kWh capacity solar
system on the rooftop of our manufacturing facility in Pune, India. HARMAN facilities teams continue
to investigate further opportunities to shift towards renewable electricity and anticipate substantial
progress in coming years.
HARMAN’s existing strategy satisfies the NDC scenario but not the Net Zero 2050 scenario, which
would require significantly deeper and more costly emissions reductions. HARMAN is exploring thefollowing actions to manage transition risks such as:•E stablishing Science Based Targets for our own emissions (Scope 1 and 2) combined with arobust supplier engagement program to manage emissions.
• Identifying alternative raw materials with lower emissions impact for our products.

82021 HARMAN TCFD DisclosureManaging Climate Change Risk
Disclose how the company identifies, assesses, and manages climate-related risks.
a) Describe thecompany’s
processes for
identifying
and assessing
climate-relatedrisks.
b) Describe thecompany’s
processes
for managing
climate-relatedrisks.
c) Describe how
processes for
identifying,assessing,and managing
climate-relatedrisks areintegrated into
the company’s
overall risk
management.

HARMAN has developed its physical risk screening as a complement to existing processes that identify
and manage ongoing climate-related transition risks. Over time, HARMAN will integrate physical risk
screening and management of acute physical risks into these pre-existing processes. HARMAN’s
Enterprise Risk Management (ERM) process enables the organization to identify, assess and manage
climate and environmental related risk as part of our business operations governance. The purposeof the ERM is to help HARMAN identify pertinent climate and low-carbon transitional related short-,
medium- and long-term strategic, operating, financial, regulatory and technology risks, assess impact
and develop mitigation and management strategies in a continual process. The ERM working groupconsists of key financial, operational, strategic, digital and regulatory leadership, and in coordination
with the ESG Committee, assemble to integrate climate risk management into our business operations
and governance. Climate risks have an opportunity to be evaluated on a quarterly basis including risk
identification, assessment and prioritization, action planning and deployment. Risks are assessed byeach function and considered for escalation as part of our recurring risk review with the ESG Committee
and SLC. Climate risks are identified through internal company assessment and external influenceassessment. Any HARMAN employee can identify a risk for consideration. Typical sources of risk include:1) business reviews, 2) customer meetings, 3) market reports, and 4) modeling or external sources.
HARMAN defines climate risk as the effect of environmental uncertainty on business or operational
objectives. The risk identifier has the responsibility to bring the risk to a risk owner through an establishedmeeting in the business governance model or another communication method. In the absence ofa risk owner, the risk identifier shall communicate the risk to a business unit leader, Sustainability
Program Office or ESG Committee member. The risk identifier may provide as much of the below
information as possible in any written format: potential impact; assessment of likelihood; and ideas
for avoiding the risk or minimizing potential impact or likelihood. Climate risks are classified in 5 major
categories. Each category has a lead owner through ERM: 1) strategic risks can have an impact on
our strategic objectives arising from internal or external factors (Division Leader), 2) financial risks cancause unexpected variability or volatility in our revenue or returns (CFO), 3) operating risks may affector compromise execution (Division Leader), 4) regulatory risks are government actions that can have amaterial impact on market access or adverse impact on our reputation or sustainability (Legal Counsel/
Government Affairs), and 5) digital risks can interrupt our operations, impact our reputation, and affectour associates (CIO). Each risk category contains a climate risk area to be managed. Each risk area
is managed through use of the Risk Area Management Tool. The Tool is an application template thatprovides a structured method to identify, assess, mitigate, monitor and manage identified risks within
a risk area. The Risk Communication Template is the standard method to communicate the impact
status of a particular risk. High material and persistent risks would entail further review of the businessstrategy outside of the ongoing strategy and planning process.
Additionally, HARMAN developed a sustainability vision, goals, and objectives that are tied to annual
performance expectations, with a structured governance model to drive and measure progress. The
leadership team’s incentives are tied to compensation. Their bonuses are impacted based on whether
or not annual targets are met. All employees are entitled to receive benefits from participating inenvironmental focused initiatives. Top management of certain manufacturing sites routinely publicly
recognize employees who have participated or improved processes impacting environmental
sustainability such as air emissions, energy and water consumption, and waste reduction. Some examplesof employee recognition include HARMAN’s Be Brilliant Rewards program and platform (internal trackingof recognition and monetary or product rewards), LinkedIn and/or social media mentions.

92021 HARMAN TCFD Disclosure

Metrics and Targets
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where suchinformation is material.
a) Disclose themetrics used by
the company toassess climaterelated risks andopportunities
in line with its
strategy and risk
management
process.
b) Disclose Scope
1, Scope 2 and,if appropriate,
Scope 3greenhouse gas(GHG) emissions
and the relatedrisks.
c) Describe thetargets used by
the company tomanage climaterelated risks andopportunities
and performanceagainst targets.

Our business strategies rely on consistent monitoring and accurate tracking of environmental
performance metrics. By quantifying the impacts of our operations, we are better equipped to identify
opportunities for improvement. At HARMAN, we monitor our energy usage, greenhouse gas emissions,waste production, water. We strive to align with our customers around sustainability goals through ourparticipation and annual CDP reporting and supplier responses in the Drive Sustainability initiative, acollaborative partnership that drives sustainability in the automotive industry supply chain.
In line with TCFD recommendations, we will refresh our physical and transition risk analysis periodically,
and revisit whether emerging data on climate scenarios may affect our operations in the future.
HARMAN discloses the following climate-related metrics:
Metric

2019

2020

2021

Scope 1

8,567.65

7,271.47

9,951.84

Scope 2 (Market-based)

74,891.92

61,233.39

59,406.71

Total Scope 1 & 2 (Market-based)

83,459.57

68,504.86

69,358.54

Scope 2 (Location-based)

66,859.89

55,160.04

55,352.32

Total Scope 1 & 2 (Location-based)

75,427.54

62,431.52

65,304.16

Greenhouse Gas Emissions (Metric Tonnes CO2e)

In 2021, HARMAN performed a Scope 3 screening based on 2019 financial data and estimated emissions
to be 6,162,264 MT CO2e.
In 2019, HARMAN set an absolute target to reduce Scope 1, 2, and 3 emissions by 30% by 2025, using abaseline year of 2019. Additionally, HARMAN has a longer-term goal to achieve carbon neutrality by 2040.
In 2020, HARMAN set an absolute target to have zero waste generation by 2025, using a baseline year of
2019. This target was established as part of a 2019 sustainability initiative for all HARMAN manufacturing
sites. The manufacturing plant directors review these targets on a monthly basis in meetings with
HARMAN’s Senior Manufacturing Operations Leadership.
We remain committed to our goals of reduced electricity consumption and a shift to renewable electricity
use at our manufacturing facilities and throughout our supply chain. Moving forward, in alignment withthese goals, we aspire to set a science-based target for approval by the Science Based Target initiativeby the year 2025.

10