Western Forest Products Inc.

Climate Impact & Sustainability Data (2019, 2021, 2022)

Reporting Period: 2019

Environmental Metrics

Renewable Energy Share:22% (renewable electricity used by BC manufacturing operations)

Total Energy Consumption:82,041,022 kWh (electricity) and 100,039 GJ (natural gas) for all mills in 2019

ESG Focus Areas

Health and Safety
Workforce
Sustainable Forest Management
Climate Change
Indigenous Relationships
Communities

Environmental Achievements

Continued variable retention harvesting, exceeding legislated standards.
Formalized a Wildlife and Biodiversity Program.
Maintained third-party certifications for sustainable forest management (CSA Z809 and SFI).

Social Achievements

Concluded the sale of an ownership interest in a forest operation to the Huu-ay-aht First Nations.
Appointed an independent Chair of the Board and added two independent women directors.
Increased near miss reporting by 146%, indicating greater employee engagement in proactive safety reporting.

Climate Goals & Targets

Long-term Goals:

Produce the most sustainable building materials on the planet.

Medium-term Goals:

Continue to pursue innovative business relationships with Indigenous groups.

Short-term Goals:

Develop an overall Stewardship and Conservation Plan combining regulatory and voluntary standard management requirements.

Environmental Challenges

Seven-month long strike by United Steelworkers (USW) impacting British Columbia coastal operations.
Changing regulatory environment in British Columbia affecting the forest sector.

Mitigation Strategies

Negotiated settlement reached with USW, resulting in a new 5-year collective agreement.
Active engagement in British Columbia’s Strategic Old Growth Review.

Supply Chain Management

Responsible Procurement

Prioritizes local procurement for engineering, planning, and log delivery; sources fibre from certified forests in the US.

Climate-Related Risks & Opportunities

Physical Risks

More frequent and severe weather events, increased wildfire occurrence and forest pest outbreaks, increased tree mortality.

Transition Risks

Changes in regulations and policies related to climate change.

Opportunities

Increased demand for sustainable building products.

Reporting Standards

Frameworks Used: GRI, SASB

Certifications: CSA Z809 Sustainable Forest Management Standard, Sustainable Forestry Initiative Standard (SFI), ISO 14001

Reporting Period: 2021

Environmental Metrics

Total Carbon Emissions:970,032 tCO2e (2020, net removal)

Scope 1 Emissions:110,597 tCO2e (2020)

Scope 2 Emissions:3,298 tCO2e (2020)

Scope 3 Emissions:1,953,158 tCO2e (2020)

ESG Focus Areas

Health and Safety
Workforce
Sustainable Forest Management
Carbon and Climate
Indigenous Relationships
Communities

Environmental Achievements

970,032 tCO2e was removed as a result of Western’s activities in 2020 (net carbon positive impact)
100% of our managed tenures are third-party certified
685,459 hectares (52%) within our tenures are conserved from harvest activity
100% identified wildlife features retained, including bear dens and bird nests
648 big trees conserved since 2018
Zero-waste manufacturing: 100% of the log used at mills

Social Achievements

Zero work-related COVID-19 transmissions recorded in 2021 for the second year in a row
$2.2M provided in total community investments since 2017
$1.03B in employee wages and benefits paid since 2017
40 active agreements with Indigenous groups or Indigenous organizations
Implemented a company-wide Diversity, Equity, and Inclusion Policy
37.5% percentage of women board directors and executive officers as at December 31, 2021

Governance Achievements

Became the first North American publicly traded forestry company to transition to a sustainability-linked credit facility
Appointment of four new independent directors to the Board in 2021
Board comprised of 37.5% women at December 31, 2021
Adopted a diversity, equity, and inclusion policy in 2020
Top governance score from Institutional Shareholder Services (ISS)

Climate Goals & Targets

Long-term Goals:

Net carbon sink for generations to come; net reduction of 249.1 million tCO2e over the next 100 years

Medium-term Goals:

Achieve further reductions in Severity Rate

Short-term Goals:

Reduce Severity Rate by 10% (2022)

Environmental Challenges

COVID-19 pandemic created workplace challenges
Maintaining a net carbon sink while managing operations

Mitigation Strategies

Implemented COVID-19 Exposure Control Plan, mandatory vaccination policy, Communicable Disease plan, and Flexible Work Arrangement Policy
Expanded the scope of carbon accounting to include Scope 1, 2, and 3 emissions, received third-party assurance on carbon accounting report, and implemented strategies to increase carbon sequestration and reduce emissions

Supply Chain Management

Responsible Procurement

Local procurement practices

Climate-Related Risks & Opportunities

Physical Risks

Adverse weather conditions

Transition Risks

Changes in prices and demand for forest products
Changes in regulatory framework

Opportunities

Providing a natural climate change solution through business activities

Reporting Standards

Frameworks Used: GHG Protocol Corporate Accounting and Reporting Standard

Certifications: Third-party certification for 100% of managed tenures

Third-party Assurance: KPMG

Sustainable Products & Innovation

Long-lived wood products

Reporting Period: 2022

Environmental Metrics

Scope 1 Emissions:156,572 tCO2e/year

Scope 2 Emissions:3,871 tCO2e/year

Scope 3 Emissions:1,531,323 tCO2e/year

ESG Focus Areas

Safety
Sustainable Forest Management
Carbon and Climate
Indigenous Relationships
Communities
Workforce

Environmental Achievements

Expanded carbon accounting to include US operations
Reduced carbon emissions by diverting 60,017 cubic meters of post-harvest residues to Atli Chip
Maintained status as a net carbon sink (-2,453,372 tonnes of CO2e)
Planted 6.3 million trees (more than three trees for every tree harvested)

Social Achievements

Reduced Company severity rate by 41%
Reduced Company medical incident rate by 9%
Multiple Company operations with zero medical incident rate
Extended Musculoskeletal Injury Prevention efforts to US operations
Advanced forest landscape and integrated resource management planning initiatives with Indigenous groups
Supported Indigenous employment through funding for BC First Nations Forestry Council Scholarship Program
Directed $700,000 in contributions towards reconciliation, community, sustainability, and climate initiatives
Delivered over $250,000 in logs to Indigenous groups and communities for cultural and building projects
Refreshed succession management program
Invested in developing leadership competencies
Increased engagement in learning and development initiatives

Governance Achievements

Received a top governance score from Institutional Shareholder Services
100% independent Board committee members
Audit Committee oversees ESG reporting

Climate Goals & Targets

Long-term Goals:

Net reduction of 210.6 million tonnes of CO2e over the next 100 years

Medium-term Goals:

Implement flood indicators to mitigate risks
Explore investment in carbon-positive solutions
Continue to explore greenhouse gas emissions credits and carbon market opportunities
Complete investments and upgrades at Saanich Forestry Centre

Short-term Goals:

10% reduction in Company medical incident rate by 2023
10% reduction in Company total incident rate by 2023
5% reduction in Company severity rate by 2023

Environmental Challenges

Supply chain disruptions (implied)
Climate change impacts (flooding)
Maintaining a zero-incident workplace

Mitigation Strategies

Implementing flood indicators
Exploring carbon-positive solutions and waste reduction opportunities
Investing in energy-efficient heating solutions at Saanich Forestry Centre
Improving road maintenance techniques
Updating Retention Silvicultural System Standard
Continuous improvement of health and safety performance