Diversified Royalty Corp.

Climate Impact & Sustainability Data (2022, 2023)

Vancouver office located in a LEED Platinum and BOMA BEST Gold certified building
Mr. Lube recycled 100% of used oil, oil filters, bottles, cardboard packaging, and coolant; 100% of used tires; and 70% of oil used in bulk tanks.
Mr. Lube uses environmentally friendly soaps and has interceptor systems to prevent fluids from entering freshwater systems.
Stratus Building Solutions uses Green Seal® Certified cleaning products in approximately 80% of its services.

Zero complaints through the Code of Business Conduct or Whistleblower Policy
$11,000 in community support to two charitable organizations
Strengthened commitment to ethical business practices with quarterly training programs for CPA-designated employees.
Maintained whistleblower hotline – no known violations reported in 2022.
Launched an employee donation matching program in 2023.
Sponsored the International Franchise Association, Restaurant Finance & Development Conference, and Franchise Unconference in 2023.

Formalized ESG governance structure in March 2023, updating Board committee charters to include ESG oversight.
Zero losses as a result of legal proceedings associated with fraud, insider trading, anti-competitive behavior, market manipulation, malpractice, or other related financial industry laws or regulations.
Zero incidents related to data privacy and security breach.
Board announced commitment to add a second female director by the 2024 annual general meeting.
Amended Audit Committee Whistleblower Policy and GNC Committee Charter in March 2023 to improve anonymous reporting.

Increased dividend despite challenges.
Integrating ESG into investment due diligence process for new acquisitions.
Planning to formalize ESG component in due diligence for potential future Royalty Partners.
Planning to align existing Royalty Partner communication to include more ESG discussion.
Monitoring ESG risks and opportunities of Royalty Partners as part of investment monitoring and engagement.

Frameworks Used: GRI, SASB

Supporting low-carbon transition through engagement with Royalty Partners.

Mr. Lube listed as one of Canada’s Best Managed Companies in 2022.
Oxford Learning franchisee received bronze in the 2022 Canadian Franchise Association Franchisee of the Year Award.
Oxford Learning received silver in the 2022 CFA Award of Excellence for Traditional Franchises.
Oxford Learning was one of the recipients of the CFA’s 2022 Franchisees’ Choice Designation.

Implementation of Board Diversity Policy
Monitoring of Code of Business Conduct and Ethics
Oversight of management's implementation of ESG policy in acquisitions and dispositions
Facilitates reporting of potential violations through its Audit Committee – Whistleblower policy

Indirect exposure to ESG issues arising from Royalty Partners' businesses
Limited to no control over Royalty Partners' day-to-day operations and associated ESG risks

Thorough investigation and evaluation of ESG risk factors during due diligence for potential royalty acquisitions
Diversified portfolio of royalties to mitigate ESG risk
Ongoing monitoring of ESG performance and risks of Royalty Partners
Engagement with third-party experts for due diligence
Discussions with Royalty Partners to identify material ESG risks and develop reporting/monitoring processes
Long-term integration of ESG metrics into license and royalty agreements