Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Employees
• Society
• Governance

Environmental Achievements

• Reduced spill volumes by 41 percent from 2010 to 2012
• Peace River gas gathering project substantially reduced greenhouse gas emissions (equivalent to avoiding approximately 410,000 tonnes of carbon dioxide emissions)
• More than 200 Baytex well sites were undergoing active reclamation in 2012
• Successful phytoremediation testing at Red Earth operations

Social Achievements

• Employee turnover rate declined significantly from 2010 to 2012
• Recordable injury rate for employees continually declined
• Distributed more than $1 billion in economic value in 2012
• Purchases from aboriginal suppliers exceeded $2 million in 2012
• Purchases from local suppliers exceeded $200 million in 2012

Governance Achievements

• Developed key governance elements, including an updated HSE policy and an HSE Management Committee
• Seven of nine board directors are considered independent
• Statement on Reporting Ethical Violations encourages reporting of misconduct

Climate Goals & Targets

Environmental Challenges

• Increasing GHG emissions intensity due to production growth in areas where gas gathering systems are not fully developed
• Concerns from local residents about air quality in the Reno oil field
• Need to continually investigate and employ water use reduction and recycling techniques as use of steam for thermal heavy oil extraction increases

Mitigation Strategies

• Participation in a $16-million natural gas capture and conservation project in Peace River
• Agreement to capture previously flared natural gas in North Dakota
• Commercial arrangement to collect previously flared or vented gas in Peace River for power generation
• Suspended drilling program in Reno, initiated independent air quality study, developed plans to further reduce emissions, and increased gas transmission capabilities
• Installation of equipment to reduce natural gas venting in Seal operations

Supply Chain Management

Responsible Procurement

• Purchases from local and aboriginal suppliers

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G3.1

Environmental Metrics

ESG Focus Areas

• Environment
• Workplace
• Communities and Stakeholders

Environmental Achievements

• Launched HSE Management System
• Began a gas gathering project in the Peace River region that substantially reduces greenhouse gas emissions
• Reduced spill volumes by 14 percent from 2010 to 2014
• Installed vapour recovery units on every significant piece of equipment in our Peace River operations. A new tank farm in Saskatchewan now also has vapour recovery units.
• In 2013, previously flared solution gas from 70 of the U.S. facilities associated with our North Dakota operations was tied into a gas gathering system.
• In our Peace River operating region, we made a business decision to participate in an estimated $15-million natural gas capture and conservation project. By capturing gas that was previously flared into the atmosphere, we are able to prevent more than 29,000 tonnes of carbon dioxide equivalent (CO2e) emissions.

Social Achievements

• Enhanced our Competency Management and Development System to ensure employees can safely conduct their work
• No employee recordable injuries in 2014
• Increased investment in training and learning
• Launched Good Neighbour Program
• Collaborated on road improvements
• Established a Donations Committee

Governance Achievements

• Added HSE performance to the measures used for determining the payout of performance-based awards granted under our long-term incentive plan to our employees and other service providers

Climate Goals & Targets

Environmental Challenges

• Managing the long-term increase in the number of reportable spills
• Maintaining or reducing total greenhouse gas emissions while increasing production
• Rising contractor safety incident rates
• Staff variability due to asset sales and purchases
• Understanding local labour dynamics as we expand into new areas
• Addressing stakeholder expectations in a transparent world
• Managing operational odours

Mitigation Strategies

• Extensive asset integrity activities to help prevent spills and process safety incidents
• Enhanced inspection program on fluid hauling equipment to ensure greater compliance and to minimize spills
• Addressing all of our stationary assets
• Developing and funding an alternative industrial transportation corridor
• Participating in multi-stakeholder “synergy” groups
• Actively investigating each resident concern by physically checking our locations and reporting back to the resident with our findings.

Supply Chain Management

Responsible Procurement

• Require that all contract service providers supply pertinent safety data about their company to a third-party registry
• Utilize master service agreements to ensure contract service providers are aware of our corporate policies and procedures and that they agree to comply with them

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4

Environmental Metrics

ESG Focus Areas

• Employee and Contractor Safety
• Air Emissions
• Spills
• Indigenous Relations
• Stakeholder Engagement

Environmental Achievements

• Significant reductions in spill numbers and volumes for operations and trucking
• Reduced flaring by using more solution gas for operating purposes, storing it or finding markets to sell it
• Increased burner efficiency to lower greenhouse gas (GHG) emissions
• Reduced water use intensity by 30 percent in the past five years

Social Achievements

• Launched Good Neighbour program
• Established a local community advisory board in Peace River
• Developed a scholarship program for Peace River and Canadian operations
• Launched the Baytex Good Neighbour Information Network

Governance Achievements

• Adopted a Board and Management Diversity Policy in March 2015
• Improved regulatory compliance performance

Climate Goals & Targets

Environmental Challenges

• Experienced a tank fire and explosion in Reno, Alberta operations
• Meeting community expectations for investment and development throughout all economic cycles
• Maintaining full compliance on a widely dispersed asset base in a low commodity price environment
• Understanding the impact of the Alberta carbon levy on our company and our business partners
• Responding to stricter regulations on methane emissions and venting

Mitigation Strategies

• Implementing initiatives that resulted in a significant reduction of contractor injury rates
• Stronger safety requirements for contractors, including onsite monitoring, inspections and audits
• Implementing our multi-faceted gas conservation strategy in our Peace River operations
• Significant investment to update trailer fleet with improvements such as overfill alarms
• Increased monitoring of driving performance through GPS systems
• Improved communication with truck drivers
• Established a safety incentive program for truck owners
• Developed a more comprehensive fleet preventive maintenance program
• Increased awareness and attention to spills by including management in regular incident reviews
• Established internal targets for spill numbers and volumes
• Established a No Spill bonus for trucking service providers
• Investment of $5.9 million to purchase 44 new trailers
• Proactively addressing inactive wells and asset retirement obligations
• Developing a company-wide community investment strategy, linked to stakeholder engagement and operational priorities
• Developing a management succession plan
• Understanding compliance status of recently acquired assets and identifying any gaps

Supply Chain Management

Responsible Procurement

• Preference for local employees and contractors
• Requirement for contractors to register with ComplyWorks and have a COR

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4 Sustainability Reporting Guidelines

Environmental Metrics

ESG Focus Areas

• Safety
• GHG Emissions
• Water Use
• Board Diversity
• Community Relations
• Indigenous Relations
• Regulatory Compliance

Environmental Achievements

• 76% reduction in corporate spill volumes over 5 years
• 99.1% routine gas conservation in Peace River
• $100 million invested in gas conservation activities in Peace River in the last 5 years
• Commissioned a gas processing plant in Peace River

Social Achievements

• 55% reduction in employee + contractor LTIF in 5 years
• $32 million awarded in contracts to Indigenous contractors/companies in 2017-2018
• Agreement signed with Woodland Cree First Nation for on-reserve development

Governance Achievements

• Reduced the number of Directors from eleven to eight
• Exceeded 20% diversity target on the Board one year early (25% women)

Climate Goals & Targets

Environmental Challenges

• Challenging economic conditions resulting in staff reductions
• Balancing preventive maintenance with budget constraints
• Increased freshwater use due to fracking
• Increased venting associated with Saskatchewan properties
• Meeting the needs of diverse communities
• Fully integrating Raging River’s assets into compliance processes

Mitigation Strategies

• Incorporating positive safety observations into hazard observation system
• Understanding and tracking potential severity of events
• Installing equipment to prevent trucking incidents
• Working towards emissions reduction target
• Installing automated leak detection systems for pipelines
• Initiating area-based abandonment/reclamation pilot projects in Saskatchewan
• Exploring conventional and unconventional technologies to reduce GHGs in Saskatchewan
• Building new relationships and addressing concerns in new areas of operations
• Engaging with investors on executive compensation

Supply Chain Management

Supplier Audits: 10% of trucking contractors audited annually

Responsible Procurement

• Contractor registry with ComplyWorks
• Requirement for COR certification for contractors

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Wildfires
• Lightning
• Tornadoes
• Heavy precipitation
• Temperature extremes

Transition Risks

• Canadian Federal Carbon Pricing
• Methane Regulations (Alberta, Saskatchewan, Federal)

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Awards & Recognition

• Corporate Knights Future 40 Responsible Corporate Leaders in 2018

Environmental Metrics

ESG Focus Areas

• GHG Emissions Intensity Reduction
• Health, Safety, and Environment (HSE)
• Indigenous Relations
• Sustainability

Environmental Achievements

• 46% reduction in GHG Emissions intensity achieved at year-end 2020 (compared to 2018 baseline), exceeding the initial target of 30% reduction by 2021.

Social Achievements

• Effective response to COVID-19 with no workplace transmission and a successful transition to work from home.
• Maintained strong leadership and workforce connection throughout the year.
• Leading HSE indicators now applied across all operations, driving continued HSE performance.
• Recent community development agreements with the Woodland Cree First Nation and the Peavine Métis Settlement

Governance Achievements

• Added a new board member, Mr. Steve Reynish.
• Updated committee composition and rotated committee chairs.
• Adopted a majority voting policy for directors.
• Significant Board refreshment in last 3 years
• Regular Sustainability Reporting cross-referenced to recognized standards (GRI, SASB and TCFD)

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic and its impacts.
• Remarkable commodity price collapse.
• Reduced capital spending and production due to shut-ins.

Mitigation Strategies

• Refinanced and extended the maturity of long-term notes and credit facilities.
• Adjusted capital plans dramatically and reduced costs.
• Delivered positive free cash flow.
• Effective COVID-19 response

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Environmental Metrics

ESG Focus Areas

• Health, safety, environment, climate, sustainability
• GHG emissions intensity reduction
• Abandonment and reclamation (ARO)
• Indigenous Relations
• Fresh water use

Environmental Achievements

• GHG emissions intensity reduction target of 65% reduction by 2025 (compared to 2018 baseline)
• Significant ARO reduction target of 4,500 wells by 2040
• Exceeded emission reduction targets set in early 2021
• Developed system to track fresh water usage
• Advanced recycling of Kerrobert thermal waste water - after Q2, 50% of Viking completions used this water

Social Achievements

• Significant community development agreements with the Peavine Métis Settlement
• Increased focus on measurable leading HSE indicators including hazard IDs, formal inspections, management site visits and ERP drills
• Increased connectivity with the implementation of collaborative software and upgraded field connectivity along with enhanced leadership visibility and pandemic compliant staff events
• Completed a staff survey to gather diversity data beyond gender

Governance Achievements

• Updated the composition of board committees and rotated the committee chairs
• Updated board diversity policy with a commitment to at least 30% women directors by the 2023 AGM
• Updated risk oversight responsibilities to recognize the increased importance of information technology security
• Regular in-camera Sessions at Board Meetings
• Annual Board, Committee and Director Evaluations
• Annual Assessment of Board Skills

Climate Goals & Targets

Environmental Challenges

• Contractor fatality on a Baytex worksite

Mitigation Strategies

• Undertook a significant investigation and implemented enhanced training and communication for workforce, supervisors and contractors

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Environmental Metrics

ESG Focus Areas

• GHG emissions
• Abandonment and reclamation
• Indigenous relations
• Safety
• Climate risk management

Environmental Achievements

• Reduced GHG emissions intensity by 59% from 2018 levels and 15% below 2021 levels
• Achieved an 84% absolute reduction of methane emissions from our 2018 baseline
• Spent $22.4 million on abandonment and reclamation activities, completing 397 well abandonments
• Reduced fresh water intensity 17% from 2020 baseline
• Re-used approximately 67% of produced water

Social Achievements

• Achieved a 14% decrease in combined lost time injury rate compared to 2018
• Completed 23 emergency response drills
• Voluntary turnover rate of 1% in 2022
• 44% of employees and 38% of supervisors are women
• Focused on increasing awareness and understanding of Indigenous history and culture through executive and Board education

Governance Achievements

• Reserves and Sustainability Board Committee meets at least twice per year
• 10% of the annual bonus pool for management and all employees linked to safety, spills, abandonment and reclamation, and GHG emissions reduction

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB, GRI, TCFD

Third-party Assurance: Independent third-party verification of 2022 reported GHG emissions data