Climate Change Data

Environmental Metrics

ESG Focus Areas

• Responsibility to Shareholders
• Responsibility to the Environment
• Responsibility to Employees
• Responsibility to Communities and Society

Environmental Achievements

• Moved into First Canadian Centre in 2015, a building committed to environmental leadership and achieved BOMA Best Certified Platinum status.
• 64% waste diversion rate in the building.
• 30 percent of PrairieSky employees walk, car-share or bike to work and approximately 50 percent take public transit.
• Terminated leases issued to a third party that failed to adhere to good oilfield practices and applicable regulations.

Social Achievements

• Low voluntary turnover rate (4.4 percent in 2016 and 7.6 percent in 2017).
• 50 percent female executive team.
• $238,093 in sponsorship and donations to community organizations.
• 660 trees planted through employee volunteer efforts.

Governance Achievements

• 98 per cent of votes cast in favour of the “Say on Pay” resolution at the 2017 AGM.
• Four out of five Board members, including the Chair of the Board, are considered independent.
• Adopted a written Business Code of Conduct.
• No complaints or reports received through the anonymous whistleblower line or under the investigations policy in 2017.

Climate Goals & Targets

Environmental Challenges

• Operator receivership in the oil and gas industry.
• Managing environmental impacts of lessees' operations despite having no direct control.
• Ensuring responsible development of oil and natural gas resources while preserving land integrity for future generations.

Mitigation Strategies

• Careful selection of operators based on financial capacity, regulatory due diligence, and reputation.
• Contractual obligations requiring operators to adhere to environmental laws and good industry practices.
• Weekly operations meetings, lease and royalty compliance department, site visits, and audits to monitor operator behavior.
• Proactive approach to compliance and early resolution discussions with operators.

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: GRI Standards and principles

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

• Diversity
• Community Investment
• Waste Management
• Greenhouse Gas Emissions

Environmental Achievements

• Reduced Scope 1 GHG emissions by 5% (location-based), Reduced Scope 2 GHG emissions by 18% (location-based), Achieved 79% diversion rate for recovered waste

Social Achievements

• Total Community Investment of $400,100

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

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: Greenhouse Gas Protocol

Certifications: Null

Third-party Assurance: PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced Scope 2 emissions by 11% compared to 2019 (location-based approach)

Social Achievements

• Community investment of $298,300

Governance Achievements

• Zero Code of Business Conduct breaches

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, SASB, GHG Protocol

Third-party Assurance: PricewaterhouseCoopers LLP

Environmental Metrics

ESG Focus Areas

• Governance
• Environment
• Social

Environmental Achievements

• Reduced Scope 1 and Scope 2 emissions; purchased green natural gas and electricity certificates to offset remaining emissions.
• Waste was down 46% in our building, with 52% of waste diverted from the landfill.
• Water usage decreased to 494 cubic meters, a decrease of 38%.

Social Achievements

• Achieved 93% employee satisfaction score.
• 71% of workforce are women, including 83% of managers and 33% of the executive team.
• Increased female representation on the Board to 33% (38% of independent directors).

Governance Achievements

• Incorporated sustainability-linked performance criteria into our third-party credit facility.
• Aligned ESG performance criteria to executive compensation.
• No controversies, incidents or breaches related to our business, governance or pay practices.

Climate Goals & Targets

Environmental Challenges

• Climate change risks (both physical and transition) identified as principal risks.
• Understanding full cycle and third-party downstream Scope 3 emissions.

Mitigation Strategies

• Undertook climate scenario analysis to assess risks and opportunities.
• Initiated work to create an inventory of Scope 3 emissions.
• Continuously updated disclosures to align with TCFD, SASB, ISSB, WEF and GRI reporting.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct aligned with UN Global Compact principles.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather, heatwaves, droughts, extreme precipitation

Transition Risks

• Regulatory changes, market shifts, reduced demand for hydrocarbons

Opportunities

• Participation in energy transition projects (CCUS, hydrogen, resource gasification).

Reporting Standards

Frameworks Used: GRI, SASB, WEF, TCFD, UNGC

Third-party Assurance: PricewaterhouseCoopers LLP (PwC)

UN Sustainable Development Goals

• SDG 3.8
• SDG 4.3
• SDG 5.5
• SDG 5.c
• SDG 8.1
• SDG 13.2

Initiatives contributing to these goals are described throughout the report.

Awards & Recognition

• Included in The Sustainability Yearbook 2022

Environmental Metrics

ESG Focus Areas

• Governance
• Environment
• Social

Environmental Achievements

• Received an “A-” score in the 2022 CDP Climate Change survey, significantly above the North American and global average.
• Achieved carbon neutrality for Scope 1 and 2 emissions.
• Set an absolute target to reduce Scope 1 and Scope 2 emissions by no less than 50% by 2025 (using 2017 as our base year).

Social Achievements

• Workforce is predominantly women (69%).
• Initiated blind recruiting to remove unconscious bias from the hiring process.
• Achieved 91% employee satisfaction score.
• Invested $535,500 in community initiatives.

Governance Achievements

• Received an “AAA” rating from MSCI in 2022.
• Increased S&P Global CSA score to 70/100.
• Sustainalytics ranked PrairieSky as #1 out of 271 global oil and gas producers.
• ESG performance criteria aligned to executive compensation.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events (indirectly through operators)
• Evolving climate change policies and regulations increasing operating costs for third-party operators.
• Potential reputational risks related to climate change.
• Potential legal action related to climate-related legislation.

Mitigation Strategies

• Geographically and geologically diverse portfolio of Royalty Properties mitigates some risks.
• Strategies in place to mitigate market risks, including diversity in products and investment in low-cost plays.
• Closely monitoring regulatory changes and their impact.
• Transparent and consistent disclosure of ESG performance to manage reputational risks.
• Working with industry participants and forming partnerships to support the advancement of emerging technologies.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting third-party operations.
• Long-term shifts in weather patterns impacting operations and costs.

Transition Risks

• Shifts in supply and demand for oil and natural gas.
• Evolving climate change policies and regulations.
• Technological improvements reducing demand for hydrocarbons.

Opportunities

• Participation in energy transition projects (CCUS, hydrogen, lithium).
• Development of minerals such as lithium and helium.

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC

Certifications: Null

Third-party Assurance: PricewaterhouseCoopers LLP (PwC)

UN Sustainable Development Goals

• Goal 1
• Goal 3
• Goal 4
• Goal 5
• Goal 6
• Goal 8
• Goal 13

PrairieSky's initiatives contribute to these goals through community investment, employee well-being programs, education support, diversity and inclusion initiatives, water conservation support, economic contributions, and climate change mitigation efforts.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water
• Biodiversity

Environmental Achievements

• Reduced water consumption by 70% from 2017 to 2023 at the Calgary office.
• Reduced waste to landfills by 78% between 2019 and 2023 at the Calgary office.
• Reduced paper consumption by 56% between 2019 and 2023 at the Calgary office.

Social Achievements

• Launched employee well-being program including shower facilities to promote alternative transportation.

Governance Achievements

• Established a Board Diversity Policy.
• Incorporated ESG criteria into short and long-term incentive plans (25% weighting).

Climate Goals & Targets

Environmental Challenges

• Climate change transition risks impacting royalty revenues due to reduced demand for fossil fuels and increased regulatory costs for third-party operators.
• Limited internal resources for value chain mapping and biodiversity impact assessment.

Mitigation Strategies

• Diversification of revenue streams through investments in low-cost oil plays, natural gas production, and energy transition opportunities (CCUS, lithium).
• Climate scenario analysis to assess long-term risks and opportunities.
• Planning to map value chain and assess biodiversity impacts within the next two years.

Supply Chain Management

Supplier Audits: 25% of suppliers (by procurement spend) covered under Supplier Code of Conduct as of December 31, 2023.

Responsible Procurement

• Supplier Code of Conduct requiring compliance with environmental laws and responsible resource management.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting third-party operators' activities.

Transition Risks

• Reduced demand for fossil fuels, increased regulatory costs.

Opportunities

• Development of low-carbon energy projects (CCUS, lithium, resource gasification).

Reporting Standards

Frameworks Used: GRI, TCFD, UNGC

Certifications: BOMA BEST Platinum Certification (Calgary office building)

Third-party Assurance: PwC

UN Sustainable Development Goals

• SDG 6 (Clean Water and Sanitation)
• SDG 7 (Affordable and Clean Energy)
• SDG 13 (Climate Action)

Initiatives contribute to these goals through water conservation, renewable energy procurement, and emissions reduction.

Sustainable Products & Innovation

• CO2-enhanced oil recovery projects
• Lithium leasing
• Resource gasification with CCUS

Awards & Recognition

• Not disclosed