Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Added large amounts of renewable power from 2005 to 2021.
• Significantly decreased carbon emissions from 2005 to 2021 (projected over 50% reduction for Minnesota Power).
• Dramatically reduced airborne pollutants (SO2, NOx, mercury) at Minnesota Power's Boswell, Laskin, and Taconite Harbor facilities since 2005.
• Sharply decreased water usage and discharge since 2005 (90% reduction for Minnesota Power).
• ALLETE Clean Energy added over 700 megawatts of renewable wind power to the ALLETE portfolio in the past seven years.

Social Achievements

• Decreased recordable incident, lost time-case, and DART rates at ALLETE and Minnesota Power.
• Quadrupled capital expenditures on energy efficiency and smart meters from 2005 to 2019, resulting in increased annual energy savings.
• Increased the percentage of customers with smart meters from 0% in 2005 to over 80% in 2021.
• ALLETE businesses contributed $287,468 in grants and donations in 2019, and the Minnesota Power Foundation donated an additional $558,950.

Governance Achievements

• Strong governance structure with committees overseeing compliance, executive compensation, audit, and corporate governance.
• Executive Compensation Committee sets targets and measures performance for sustainability-related objectives.
• Sustained strong shareholder returns while keeping residential rates the lowest in Minnesota.

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Edison Electric Institute (EEI) Environmental, Social, and Governance (ESG) reporting template

Awards & Recognition

• 2020 Women on Boards Winning “W” Company (seven times)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Efficiency
• Security and Reliability
• Workforce Culture and Engagement
• Diversity, Equity and Inclusion
• Community Engagement
• Corporate Governance

Environmental Achievements

• Minnesota Power delivered 50% renewable energy to customers in late 2020 (first Minnesota utility to achieve this milestone).
• Minnesota Power announced a vision to deliver 100% carbon-free energy by 2050.
• ALLETE Clean Energy added two new wind projects in 2020, increasing its wind facility portfolio to more than 1,000 megawatts (MWs).

Social Achievements

• ALLETE raised $25,000 for veterans organizations in 2020.
• ALLETE employees gave $238,280 to 15 United Ways in six states during the United Way fall payroll pledge campaign.
• ALLETE and its family of businesses and the Minnesota Power Foundation contributed $853,588 in 2020 to support communities.

Governance Achievements

• ALLETE established a multidimensional framework of companywide focus areas for Diversity, Equity & Inclusion in 2020.
• Moody’s Investors Service recognized ALLETE as having the most gender diverse board among 45 publicly traded utilities (March 26, 2021).

Climate Goals & Targets

Environmental Challenges

• Increased frequency, intensity, and duration of severe weather events impacting operations and reliability.
• Lack of water availability for thermal and hydroelectric generation.
• Wildfire risks due to changing precipitation and temperature patterns.
• Transitional risks from potential more stringent carbon reduction requirements.
• Economic risks related to access to capital, credit ratings, and market disruptions.
• State-level regulatory risks (e.g., potential for more aggressive carbon goals in Minnesota).
• National-level regulatory risks (e.g., future EPA rulemaking on CO2 emissions).
• International-level risks (e.g., impacts of the Paris Agreement and Biden administration policies).

Mitigation Strategies

• Strong planning, preparedness, and mutual assistance arrangements for extreme weather.
• More durable and resilient energy delivery infrastructure.
• Reduced reliance on consumptive and non-consumptive water usage.
• Proactive vegetation management and forest management (Rajala Woods initiative).
• Multipronged strategy for climate-related risks and opportunities (expand renewables, reduce emissions, strengthen grid, adopt innovative solutions).
• Environmental Strategy Group (ESG) and Climate Risks/Opportunities (CRO) working group for risk assessment and management.
• COSO-based Enterprise Risk Management (ERM) program.
• Minnesota Power's plan to reduce carbon emissions by 80% by 2035 and achieve 100% carbon-free generation by 2050.

Supply Chain Management

Responsible Procurement

• Code of Business Conduct
• Supplier sustainability requirements
• Focus on diverse suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency, intensity, and duration of storms
• Water availability
• Wildfire risks

Transition Risks

• Carbon regulations
• Renewable generation requirements
• Economic risks

Opportunities

• Expanding renewable generation
• Investments in transmission infrastructure
• Carbon capture and sequestration technology

Reporting Standards

Frameworks Used: TCFD, SASB, EEI ESG

Awards & Recognition

• 2020 Women on Boards winning company

Environmental Metrics

ESG Focus Areas

• Climate Change
• Community Investment
• Workforce Diversity
• Renewable Energy

Environmental Achievements

• Reached goal of supplying 50% of Minnesota Power's energy from renewable sources in 2023.
• Closed or converted seven of nine coal-fired units since 2013, adding nearly 900 MW of renewable energy sources.
• Surpassed state's conservation goals each year for the past decade.

Social Achievements

• Minnesota Power is striving to maximize the economic and community benefits of clean energy development by including preferences for diverse bidders and domestically sourced materials, as well as requirements to use local prevailing wages and local labor for construction and permanent staffing and to develop apprenticeship programs to help train the energy workforce of tomorrow.
• ALLETE increased its dividends again in early 2024.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Unusually low wind resources at ALLETE Clean Energy and warmer winter weather impacting Regulated Operations in 2023.
• Increased competition and lower forward price curves in the renewable energy market.
• Customer concentration risk due to reliance on a limited number of large industrial customers.
• Potential impacts of new environmental regulations and requirements.
• Implementation of Minnesota's new carbon-free energy legislation.

Mitigation Strategies

• Investing in transmission projects to enhance grid reliability and resilience.
• Actively evaluating additional growth opportunities to deliver more comprehensive clean energy solutions.
• Proactively selling power in wholesale markets to optimize the value of generating facilities.
• Monitoring and reviewing proposed environmental regulations and challenging those with limited environmental benefit.
• Working with various stakeholders and participating in the regulatory process to implement Minnesota's carbon-free energy legislation.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Preferences for diverse bidders and domestically sourced materials in renewable energy projects.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products and services; growth in renewable energy market.

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Ranked first among U.S.-based investor-owned utilities for investment in wind and solar generation capacity as a percentage of market cap for three consecutive years.