Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Using biomass as fuel reduces greenhouse gas (GHG) emissions and landfill waste.
• Impeccable compliance record on water management and air emissions.

Social Achievements

• Consolidated DART rate better than the industry average of 3.2.
• Average 32.5 hours of training per employee per year in H&S.

Governance Achievements

• Established a Governance and Nomination Committee.
• Increased percentage of independent directors from 60% to 78% and percentage of women on the board from 30% to 44%.

Climate Goals & Targets

Environmental Challenges

• High employee turnover rate (18.9%), primarily among entry-level employees.
• Some data was manually compiled and not independently audited.

Mitigation Strategies

• Continuous improvement towards an accident-free workplace through effective administration, education, training and proper maintenance of facilities and equipment.
• Developing ESG goals, targets and more formalized timelines to achieve objectives.

Supply Chain Management

Responsible Procurement

• Long-term cutting licenses and relationships with private woodland owners and suppliers.

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environmental, Health and Safety
• Governance
• Diversity & Inclusion

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Adopted a Board Diversity Policy
• Established a 15-year term limit for service and mandatory retirement at 75 years of age for Board members.
• Established a Governance and Nomination Committee composed entirely of independent directors.

Climate Goals & Targets

Environmental Challenges

• Challenging market conditions

Mitigation Strategies

• Board exercised discretion to grant RSUs despite not meeting ROCE Threshold.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

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

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental Commitment
• Product Stewardship
• People
• Governance Principles

Environmental Achievements

• 1.35 MT CO2e/1000 FT3 of GHG emissions produced.
• ~1.13 million MT CO2e of GHG emissions sequestered through our wood treatment process annually
• 154,480 M3 of wood sustainably harvested through forest tenures in British Columbia and Manitoba
• Over 80% of residential lumber sourced from sustainably certified sources

Social Achievements

• 3.1 lost time injury rate, a 16% reduction since 2019
• 18% employee turnover rate, a 1% decrease from 2019

Governance Achievements

• 9 out of 10 Board members independent from management
• 40% Women Board members and female Chair of the Board and Audit Committee
• Formalized Environmental, Health & Safety Committee Oversight of ESG
• Updated Board Diversity and Composition Policy to include a stated target that at least 30% of Board members be gender diverse

Climate Goals & Targets

Environmental Challenges

• Volatile market prices of lumber
• Fibre supply challenges and increasing costs
• Ongoing COVID-19 pandemic
• Strong demand for hardwoods has reduced the availability of untreated railway ties and has driven costs higher

Mitigation Strategies

• Price adjustment mechanisms pre-negotiated in customer agreements to recoup higher fibre costs
• Relationships with over 1,200 sawmills provided steady raw material inflow
• Introduction of fire-resistant pole wrap
• Transitioning to an alternative preservative solution to pentachlorophenol (DCOI)
• Acquired an untreated railway tie procurement yard in Tennessee to address fibre procurement challenges

Supply Chain Management

Supplier Audits: 99% of railway ties purchased from small and local businesses

Responsible Procurement

• Sustainable sourcing of wood

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters
• Adverse weather

Transition Risks

• Regulatory changes
• Market shifts to low-carbon economy

Reporting Standards

Frameworks Used: Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB)

Sustainable Products & Innovation

• Fire-resistant pole wrap
• DCOI preservative

Environmental Metrics

ESG Focus Areas

• Climate Change & GHG Emissions
• Health and Safety
• Our People
• Indigenous Peoples
• Responsible Supply Chain
• ESG Risk Governance

Environmental Achievements

• Completed boundary assessment for GHG emissions, establishing a 2022 baseline.
• Installed first solar power structure at Clanton, Alabama facility, estimated to reduce Scope 2 emissions by 70%.
• Replaced three gas-fired kilns with electric kilns in Gatineau, Quebec, reducing GHG emissions by 70%.

Social Achievements

• Achieved a total recordable injury rate of 3.6, below the industry average of 4.7.
• 25% of job openings filled by internal promotions.
• Developed and published Indigenous Peoples Policy.

Governance Achievements

• Expanded Audit Committee mandate to include oversight of cybersecurity.
• Established six ESG working groups.
• Added company-wide ESG initiatives to the Short Term Incentive Plan for senior management in 2023.

Climate Goals & Targets

Environmental Challenges

• Increased total GHG emissions (21%) due to inclusion of trucking fleet data and changes in treatment processes.
• Increased SOx and NOx emissions due to inclusion of trucking fleet data.
• Six instances of environmental non-compliance (two resulting in fines).

Mitigation Strategies

• Implementing process and equipment improvements to lower energy consumption and improve fuel efficiency.
• Increasing the share of renewable energy.
• Conducting energy efficiency audits.
• Thoroughly investigating non-compliance incidents and implementing corrective actions.

Supply Chain Management

Responsible Procurement

• Maintain third-party sustainability certification of 80% or higher for lumber purchases.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme heat
• Wildfires
• Extreme weather events

Transition Risks

• Carbon pricing
• Increased energy costs
• New cost structures for alternative energy

Opportunities

• Increased demand for utility poles due to clean energy grid transition.
• Increased demand for products due to more frequent infrastructure maintenance and replacement.

Reporting Standards

Frameworks Used: SASB Building Products and Furnishings Standard, GRI Standards, TCFD

Sustainable Products & Innovation

• Fire-resistant pole wrap

Environmental Metrics

ESG Focus Areas

• Climate Change & GHG Emissions
• Health & Safety
• Responsible Supply Chain
• Our People
• ESG Risk Governance
• Indigenous Peoples

Environmental Achievements

• 36% of total energy consumed came from renewable sources (biomass and solar energy)
• Scope 3 emissions included in the GHG emissions inventory for the first time
• 6 utility pole manufacturing facilities upgraded for enhanced treating capabilities
• 40% increase in end-of-life product re-use and energy recovery
• 82% of residential lumber purchases came from vendors with sustainable certification

Social Achievements

• 8% reduction in total recordable injury frequency rate compared to 2022
• $305M paid in employee salaries and benefits
• 66% participation rate in our first employee engagement survey
• New roles in Employee Engagement, Talent Development, Talent Acquisition and Total Rewards created
• Indigenous Peoples Policy and Human Rights Policy introduced
• ESG initiatives introduced in the Short-Term Incentive Plan for Senior Management
• Completed a human rights risk assessment of our supply chain

Governance Achievements

• Completed our first climate-transition risk assessment aligning with the TCFD
• 40% women on the Board of Directors, exceeding the 30% gender diversity target
• Human Rights and Indigenous Peoples policies inaugurated

Climate Goals & Targets

Environmental Challenges

• 9% increase in Scope 1 and 2 GHG emissions due to exceptional operational performance
• Need to improve end-of-life solutions for products
• Challenges in obtaining third-party sustainability certifications for all lumber purchases

Mitigation Strategies

• Implementing projects within our GHG reduction roadmap to meet emission reduction targets
• Focusing on enhancing equipment and process efficiency
• Engaging with landowners and governments on the importance of active land management and forestry
• Improving the ways we interact with the community

Supply Chain Management

Supplier Audits: 100% of Tier 1 suppliers assessed for social impacts

Responsible Procurement

• Ethical conduct and integrity
• Compliance with applicable labour laws
• Human Rights Due Diligence process

Climate-Related Risks & Opportunities

Physical Risks

• Extreme heat
• Wind
• Wildfire
• Flooding
• Pests & Disease
• Water Stress

Transition Risks

• Carbon pricing on operations
• Changes to fibre costs from shifting land use

Opportunities

• Market demand for products due to increased electrification infrastructure

Reporting Standards

Frameworks Used: SASB, GRI, TCFD

Certifications: ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Non-destructive testing for in-service utility poles
• Cost-effective land remediation approach
• Fluid dynamic modelling for tank mixing

Awards & Recognition

• Not disclosed