Materiality and
Stakeholder Engagement

In 2023, Mohawk completed a thorough and data-driven Double Materiality Assessment (DMA) to establish its material sustainability topics and to prepare for upcoming Environmental, Social and Governance (ESG) reporting requirements under the EU Corporate Sustainability Reporting Directive (CSRD).

Guided by the European Sustainability Reporting Standards, this assessment involved three key steps:

1. Defining the sustainability topics to be assessed
2. Evaluating and scoring these topics with key internal and external stakeholders
3. Validating and communicating results

Under the double materiality approach as prescribed by the CSRD, the DMA assessed Mohawk’s impacts on people and the environment across the Company’s operations and supply chain (impact materiality), and the potential financial effect of sustainability matters to our business (financial materiality). The DMA provides an essential step in identifying and managing material impacts, risks and opportunities (IROs) related to sustainability matters across our value chain. The DMA enables Mohawk to:

• Identify ESG IROs based on the double materiality principle prescribed by the CSRD
• Further inform our sustainability strategy, risk management approach and resource allocation
• Continue to strengthen and build relationships with our key stakeholders
• Expand our impact reporting to meet new requirements outlined in the CSRD

Our methodology included the assessment of 39 ESG topics, with each topic scored on its IROs, based on Mohawk-determined thresholds for impact materiality and financial materiality. We engaged our key stakeholders—including Mohawk employees, customers, suppliers, investors, our board of directors and subject matter experts—through interviews, workshops and surveys. We also incorporated additional input from desktop research, including peer benchmarking, industry detail and other market-based sources.

Upon completing the assessment, we identified eight material topics, including six environmental and two social topics. Among these, Climate Change: Mitigation; Climate Change: Energy; and Own Workforce: Working Conditions were deemed most significant, as illustrated in the diagram below.

Completing the DMA reinforces the sustainability foundation of our business strategy moving forward, and we are integrating the findings from the DMA into our ESG strategy, risk management and reporting.