Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Changes in fuel prices and/or other cruise operating costs
• Adverse incidents involving cruise ships and our ability to obtain adequate insurance coverage
• Breaches in data security or other disturbances to our information technology and other networks
• Amendments to the collective bargaining agreements for crew members of our fleet and other employee relation issues
• Unavailability of ports of call
• Litigation, enforcement actions, fines or penalties
• Future changes in applicable tax laws, or our inability to take advantage of favorable tax regimes
• Increasingly stringent federal, state, local and international laws and regulations on environmental protection and health and safety of workers

Mitigation Strategies

• We hedge fuel purchases in order to provide greater visibility of fuel expense
• We maintain insurance on the hull and machinery of our ships
• We have implemented rigorous onboard training programs, with a focus on career development
• We have developed Safety Management Systems (“SMS”), which establish policies, procedures, training, qualification, quality, compliance, audit and self-improvement standards for all employees, both shipboard and shoreside
• We have implemented safeguards and policies to prevent violations of various anti-corruption laws
• We have taken the position that our income that is considered to be derived from the international operation of ships as well as certain income that is considered to be incidental to such income (“shipping income”), is exempt from U.S. federal income taxes under Section 883 of the Code
• Compliance with such laws and regulations may entail significant expenses for ship modification and changes in operating procedures

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Europe’s Leading Cruise Line (seven years in a row)
• Caribbean’s Leading Cruise Line
• World’s Leading Large Ship Cruise Line
• Best New Ship (Norwegian Breakaway)
• Best Rookie Cruise Ship (Norwegian Breakaway)
• Best New Ship (Norwegian Getaway)
• Best New Ship (Norwegian Getaway)
• Best Cruise Ship, Contemporary (Norwegian Getaway)

Environmental Metrics

ESG Focus Areas

• Environmental

Environmental Achievements

• Released 2016 Environmental Report and unveiled its global environmental program, ‘Sail & Sustain’, highlighting progress on global environmental initiatives and objectives including increasing sustainable sourcing, minimizing landfill waste, investing in emerging technologies, and reducing CO2 emissions.

Social Achievements

• Launched partnership with Alibaba Group to leverage Norwegian’s expertise in providing exceptional vacation experiences and Alibaba’s insights into the wants and needs of the Chinese consumer to deliver customized products for the local Chinese market.

Governance Achievements

• Extended its three-year, $500 million share repurchase program through April 29, 2020, focusing on strengthening its balance sheet by deleveraging.

Climate Goals & Targets

Environmental Challenges

• Recent uncertainties in Norwegian Joy’s Chinese source market caused by the South Korea travel restriction.

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: 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
• Social
• Governance

Environmental Achievements

• In 2020, Norwegian Cruise Line became the first major global cruise company to become plastic water bottle free with its partnership with JUST Goods, Inc.
• Joined industry commitment of 40% target reduction in rate of carbon emissions by 2030
• Improvement in CDP climate change score to “B” above the Marine Transport Sector, North America and Global average

Social Achievements

• Launched unconscious bias, microaggressions and diversity and inclusion training in 2020
• Supplier diversity program resulted in 2019 spending increasing 36% YoY with diverse vendors in the US
• Named on Forbes’ America’s Best Employers 2021 list, ranking in the top 75 in the Large Employer category and in the top 10 in the Travel & Leisure sector
• Offering paid volunteer day for US shoreside team beginning in 2021 to support community involvement

Governance Achievements

• Dedicated ESG department to enhance overall ESG strategy and coordinate across the organization
• ESG oversight by executive team and TESS Committee of the Board of Directors
• Established partnerships with several leading environmental organizations

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impact on travel, operations, and financial results
• Compliance with CDC regulations and health protocols
• Debt management and securing additional financing
• Maintaining liquidity and managing cash flow
• Uncertainty around the resumption of cruising and booking trends

Mitigation Strategies

• Raised ~$7.5 billion from various sources
• Significantly reduced operating expenses and capital expenditures
• Developed enhanced health and safety protocols with the Healthy Sail Panel
• Implemented cost mitigation and cash conservation efforts
• Improved debt maturity profile through refinancing and debt modifications

Supply Chain Management

Responsible Procurement

• Supplier diversity program

Climate-Related Risks & Opportunities

Awards & Recognition

• Forbes’ America’s Best Employers 2021 list

Environmental Metrics

ESG Focus Areas

• Environmental Stewardship
• Reducing Environmental Impact
• Sailing Safely
• Empowering People
• Strengthening Communities
• Operating with Integrity and Accountability

Environmental Achievements

• Announced commitment to pursue net zero greenhouse gas emissions by 2050
• Modification of the final two Prima Class ships to accommodate the use of green methanol
• Signed a Memorandum of Understanding with MAN Energy Solutions to assess the feasibility of retrofitting a MAN engine to operate with dual-fuels, diesel and methanol
• Successfully completed tests on several ships using biofuel blends

Social Achievements

• Pledged $100,000 to Save the Children’s Ukraine Crisis Relief Fund
• Contributed over $100,000 to the American Red Cross for Hurricane Ian relief
• Contributed $100,000 to Belize for Hurricane Lisa relief efforts
• Launched first-ever Military Appreciation Program at Norwegian Cruise Line
• Rewarded hardworking educators with Norwegian’s Giving Joy program
• Offered all U.S. shoreside team members a Paid Volunteer Day

Governance Achievements

• Enhanced disclosures within ESG Report and inaugural Task Force on Climate-Related Financial Disclosures (TCFD) Report
• Included an ESG metric tied to progress on setting greenhouse gas reduction targets as part of 2022 short-term management incentive compensation plan

Climate Goals & Targets

Environmental Challenges

• Supply chain constraints
• Conflict in Ukraine
• Rising inflation
• Fears about an impending recession
• Russia's invasion of Ukraine resulted in cancellation or modification of approximately 60 sailings in 2022
• Impact of COVID-19 pandemic
• Increased fuel prices
• Inflation
• Fluctuations in the euro exchange rate for certain portions of ship construction contracts

Mitigation Strategies

• Demonstrated resilience and ability to adapt and find solutions
• Various planned initiatives both shoreside and shipboard to improve operating efficiencies and mitigate the impact of inflation and supply chain disruptions
• Redeployed three ships as a result of the conflict in Ukraine
• Removed all calls to ports in Russia from itineraries in 2023 and 2024
• Used and may continue to use derivative instruments to mitigate the risk of adverse changes in fuel prices and interest expense
• Negotiated contracts with varying terms to take advantage of cost declines and diversified sourcing options

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Hurricanes
• Floods
• Typhoons
• Earthquakes

Transition Risks

• Regulatory changes aimed at reducing greenhouse gas emissions
• Increased fuel efficiency requirements
• Requirements for shore power while in port
• E.U. Emissions Trading System

Reporting Standards

Frameworks Used: SASB, TCFD

Certifications: ISO 14001

Sustainable Products & Innovation

• Green methanol for ships

Awards & Recognition

• 2022 Healthiest Employer Awards Honoree

Environmental Metrics

ESG Focus Areas

• Climate Change
• Community Investment
• Workforce Diversity and Inclusion

Environmental Achievements

• Set short- and near-term targets towards achieving net zero greenhouse gas (GHG) emissions by 2050, aiming for a 10% reduction of GHG intensity by 2026 and 25% by 2030 from a 2019 baseline.
• Purchased verified carbon credits to offset three million metric tons of CO2 equivalent over a three-year period.

Social Achievements

• Contributed $1 million and raised more through its network to global communities, including donations to the Hawaii Community Foundation and the Maui United Way.
• Launched Military Appreciation Program providing discounts to active and retired U.S. military members and their spouses (220,000 registered since launch).
• Supported 3,400 teachers in the U.S. and Canada through the Giving Joy® program.

Governance Achievements

• Board of Directors is 50% diverse with three female directors and one director from an under-represented minority community.

Climate Goals & Targets

Environmental Challenges

• Inflation and supply chain disruptions.
• Climate change and related regulations.
• Global macroeconomic events impacting costs (inflation, fuel prices, foreign currencies, interest rates).

Mitigation Strategies

• Broad and ongoing effort to improve operating efficiencies, including cost minimization initiatives.
• Use of derivative instruments to mitigate risk of volatility in fuel prices and interest rates.
• Negotiated contracts with varying terms and diversified sourcing options to mitigate inflation risks.
• Implementing solutions for efficiency, innovation and collaboration in climate action strategy (HVAC upgrades, Waste Heat Recovery systems, increasing shore power capability, exploring biofuel blends and green methanol).

Supply Chain Management

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Hurricanes, floods, typhoons

Transition Risks

• Regulatory changes, market shifts to alternative fuels

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: SASB, TCFD

Certifications: ISO 14001

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Forbes 2023 World’s Best Employers
• Newsweek 2024 America’s Greatest Workplaces for Diversity