Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic Responsibility
• Social Responsibility
• Environmental Responsibility

Environmental Achievements

• Increased the share of production from renewable energy portfolio from 4% in 2011 to 16% in 2014
• Reduced overall GHG emissions by just under 18% since 2011
• Reduced mercury emissions by 57% since 2011
• Reclaimed 33% of the Genesee mine and are creating new sustainable forest ecosystems
• Offset 1.7 million tonnes of GHG emissions (17% of total emissions)

Social Achievements

• Achieved best safety performance to date, exceeding Total Recordable Injury Frequency (TRIF) target of 0.77 with an actual TRIF of 0.16
• Donated $1 million to causes improving quality of life in communities
• 40% of employees participated in formal internal or external learning programs
• Recognized with Alberta Venture’s Best Workplace Award for Training and Development

Governance Achievements

• Named one of Canada’s 50 Best Corporate Citizens by Corporate Knights for the fourth year running
• Increased dividend by 7.9%
• Reduced corporate expenditures by 31% ($37 million)

Climate Goals & Targets

Environmental Challenges

• Lower Alberta power prices averaging $49 per MWh compared to forecast of $57/MWh
• Alberta downturn in power prices

Mitigation Strategies

• Reduced corporate expenditures by 31%, or $37 million
• Optimized existing assets and costs
• Accelerated reliability program

Supply Chain Management

Climate-Related Risks & Opportunities

Opportunities

• Development of renewable energy projects

Reporting Standards

Frameworks Used: GRI 3.1

Awards & Recognition

• CEA President’s Award of Excellence for Employee Safety
• CEA Vice-President’s Award of Safety Excellence for Generation
• Award for Innovative Support by a Business in the Arts

Environmental Metrics

ESG Focus Areas

• Climate Change
• Health and Safety
• Community Investment
• Governance
• Renewable Energy

Environmental Achievements

• Reduced overall emissions by just under 9% since 2011
• Increased renewable energy portfolio from 4% in 2011 to 17% in 2015
• Achieved zero fines for environmental non-compliance in 2015
• Invested nearly $10 million in Alberta-based offset projects
• Reclaimed 115 acres at the Genesee Mine in 2015

Social Achievements

• Achieved best health and safety performance to date with a Total Recordable Injury Frequency of 0.10
• Earned the Canadian Electricity Association President’s Award of Excellence for Employee Safety (silver level)
• Launched GENerosity, a matched giving program resulting in $297,150 investment in 134 charities
• Invested $1.2 million in communities through community investment program
• Improved employee turnover results from 6.2% to 4.4% in five years

Governance Achievements

• Added three new Board Directors, expanding Board diversity
• Named to Corporate Knights' Best 50 Corporate Citizens in Canada for the sixth consecutive year
• Maintained a majority independent board (8 out of 9 directors)

Climate Goals & Targets

Environmental Challenges

• Challenging market and economic conditions
• Evolving public policy environment in power generation
• Alberta government's Climate Leadership Plan's impact on existing assets and the Alberta electricity market
• Concerns about incomplete land reclamation work, construction impacts, and other issues at K2 Wind project

Mitigation Strategies

• Optimized operations to improve cost effectiveness and plant availability
• Simplified organizational structure and reduced corporate reporting obligations
• Hedging commercial portfolio in Alberta
• Active engagement with the Alberta government on public policy development
• Addressed complaints at K2 Wind through post-construction reclamation and restoration

Supply Chain Management

Responsible Procurement

• Local spending of $43 million (24%) out of $180 million spent with top 25 suppliers

Climate-Related Risks & Opportunities

Transition Risks

• Changes to environmental and regulatory policy
• Changes to power and natural gas prices
• Accelerated phase-out of coal-fired power

Opportunities

• Development of renewable energy projects
• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI 3.1

Awards & Recognition

• Corporate Knights' Best 50 Corporate Citizens in Canada
• Canadian Electricity Association President’s Award of Excellence for Employee Safety
• Alberta’s Top 70 Employers
• Alberta Venture Best Workplace finalist for Health and Safety
• North Carolina Department of Labor’s Certificate of Safety Achievement

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Responsibility
• Social Responsibility
• Governance
• Community Support
• Workplace Culture
• Safety

Environmental Achievements

• Entered into an agreement with the Province of Alberta to eliminate all emissions from coal at Alberta generation facilities by the end of 2030.
• Launched the Genesee Performance Strategy, committing up to $40 million to reduce carbon emissions at the Genesee Generating Station by 10% or more by 2021.
• Completed a successful biomass co-firing test at Genesee.
• Achieved 94% plant availability average.
• Recycled 44% of fly ash produced from Genesee 1 and 2.

Social Achievements

• Achieved an HSE Performance Index of 1.04.
• Achieved an overall employee engagement score of 71%.
• 96.9% employee retention rate.
• Contributed $1 million through community investment program.
• 130 employees volunteered 13,000 hours.

Governance Achievements

• Reached an agreement with the Government of Alberta related to compensation for the phase-out of emissions from coal-fired generation by the end of 2030.
• Annual performance pay for executives and participating employees linked to funds from operations, individual business targets, and HSE performance.

Climate Goals & Targets

Environmental Challenges

• Navigating the transition to a lower-carbon energy future.
• Uncertainty and change in the global energy landscape.
• Alberta Climate Leadership Plan requiring elimination of coal emissions by 2030.
• Meeting legislated emission regulations.

Mitigation Strategies

• Four-pronged strategy: protect and optimize assets, grow generation fleet, evolve with changing markets, attract and retain workforce.
• Off-Coal Agreement with Alberta Province for compensation for coal asset phase-out.
• Genesee optimization team to explore technical options for Genesee.
• Investing in Alberta-based offsets to meet GHG emission reduction requirements.
• Investing in renewable energy projects.

Supply Chain Management

Responsible Procurement

• Local sourcing

Climate-Related Risks & Opportunities

Transition Risks

• Changes in Alberta's generation mix due to Climate Leadership Plan

Opportunities

• Development of renewable energy projects
• Growth in contracted renewable and thermal generation

Reporting Standards

Frameworks Used: GRI 3.1

Awards & Recognition

• Alberta Top 70 Employer
• Best 50 Corporate Citizen in Canada
• Canadian Electricity Association President’s Award of Excellence for Employee Safety
• Canadian Electricity Association Vice-President’s Award of Safety Excellence for Generation

Environmental Metrics

ESG Focus Areas

• Climate change and carbon footprint
• Innovation

Environmental Achievements

• Reduced CO2 emissions at Genesee by an estimated 3,195,464 GJ through operational changes and conversion/retrofitting of equipment as part of the Genesee Performance Standard.
• Reclaimed 60 hectares at the Genesee Mine, bringing the total reclaimed land to 1,142 hectares.
• Planted 35,000 trees at Genesee as part of land reclamation efforts.
• Acquired 5% equity interest in C2CNT, a technology company transforming CO2 emissions into carbon nanotubes.

Social Achievements

• Launched 'Power Pairs' mentorship program for employees.
• Offered the Community Renewable Energy Benefit program to landowners.
• Received Alberta’s Top 70 Employers Award for the third consecutive year.
• Contributed over $1M to local community organizations, including $171,000 in matched employee charitable contributions.
• Named one of Canada’s 50 Best Corporate Citizens for the eighth consecutive year.

Governance Achievements

• Appointed SVP Kate Chisholm as Chief Legal and Sustainability Officer.
• Management’s remuneration linked to social and environmental targets (worker safety, employee retention, lower GHG emissions at Genesee).

Climate Goals & Targets

Environmental Challenges

• High cost of carbon capture and sequestration projects.
• Need to reduce emissions while maintaining reliable and affordable electricity.
• Managing risks associated with extreme weather events.

Mitigation Strategies

• Investing in $35 million Genesee Performance Standard (GPS) program to improve environmental efficiency.
• Co-firing natural gas at coal units.
• Investing in carbon capture and utilization (CCU) technology.
• Investing in renewable energy projects.
• Developing site-specific emergency plans and maintaining a Crisis Management Team.

Supply Chain Management

Supplier Audits: A small number each year

Responsible Procurement

• Compliance with internal and/or external standards; local sourcing (approximately 63% of spending).

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products and services; investment in renewable energy and CCUS technologies.

Reporting Standards

Frameworks Used: GRI Standards: Core option

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 13 (Climate Action)

Reducing CO2 emissions intensity; investing in renewable energy; advancing CCUS technology.

Sustainable Products & Innovation

• Carbon nanotubes (through investment in C2CNT)

Awards & Recognition

• 2018 Intranet Design Annual Award; Alberta’s Top 70 Employers Award; Canada’s 50 Best Corporate Citizens; World’s Most Ethical Companies® award

Environmental Metrics

ESG Focus Areas

• Greenhouse gas emissions reduction
• Sustainability
• Carbon capture and utilization

Environmental Achievements

• Accelerated plans to increase natural gas capability at the Genesee facility, reducing GHG emissions by 20-33% (assuming 50-100% natural gas operation)
• Increased equity interest in C2CNT, focused on transforming captured carbon into useful products

Social Achievements

• Appointments of Robert Phillips and Jane Peverett to the Board of Directors

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Scheduled maintenance outages at various facilities resulting in 92% average facility availability
• Potential market and operational impacts relating to unplanned facility outages

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

• Carbon nanotubes (CNTs) for use in construction materials

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Stewardship
• Responsible Energy

Environmental Achievements

• Announced plan to be carbon neutral by 2050.
• Announced plan to be off coal by 2023 (six years early).
• Repowering Genesee 1 and 2 with best-in-class natural gas combined cycle technology (hydrogen capable and carbon capture ready).
• Announced five new solar projects in 2020, adding 425 MW of renewable capacity by the end of 2022.
• Reduced Scope 1 CO2 emissions at Genesee by 12% by 2021.
• Investing in C2CNT, a company developing technology to transform carbon emissions into carbon nanotube products. Genesee Carbon Conversion Centre on track to be operational in the first half of 2022.

Social Achievements

• Increased percentage of management incentive pay based on social and environmental targets from 10% to 20% in 2020, increasing to 25% in 2021.
• Cascading sustainability throughout the company, ensuring all employees understand the 2050 roadmap.

Governance Achievements

• Board of Directors oversees sustainability and considers sustainability impact alongside financial impact in every decision.
• Finance and Sustainability teams working to incorporate sustainability factors into investment decision methodology.
• Climate change considerations embedded into strategy and decision-making processes.

Climate Goals & Targets

Environmental Challenges

• Transitional risks to natural gas portfolio due to deep decarbonization initiatives and stricter environmental regulations.
• Uncertainty regarding future climate change-related policies.
• Exposure of current portfolio to carbon pricing.
• Potential for increased operating costs and reduced margins on certain assets due to policy and regulation directed at reducing carbon emissions from thermal assets.
• Increased competitiveness of renewables potentially reducing market share for natural gas generation.
• Potential for disruptions to supply chains due to climate change-related impacts.
• Long-term changes affecting natural gas production potentially reducing supply security and increasing fuel costs.
• Changes to wind regimes and solar resources potentially reducing revenues and competitiveness of existing resources.
• Increased frequency and severity of extreme weather events potentially impacting operations and critical infrastructure.
• Water use and conservation efforts increasingly scrutinized.
• Potential for reputational risks due to climate change exposure.

Mitigation Strategies

• Active participation in industry groups to monitor and engage with government officials on emerging policy development.
• Passing carbon costs through to counterparties on select power purchase agreements.
• Actively managing compliance costs through participation in environmental commodity markets and investments in operational efficiencies.
• Incorporating scenarios and sensitivity analysis relating to carbon prices and regulation into commercial decision-making.
• Investing in mid-life thermal assets that provide critical services to support grid reliability and renewable integration.
• Investing in operational efficiencies and enhancements that lower carbon emissions.
• Actively pursuing decarbonization of fuel through hydrogen production and blending, with targets to achieve net carbon neutrality by 2050.
• Actively pursuing advocacy to ensure policy support and wide-scale adoption of technologies that support decarbonization.
• Regularly assessing assets for physical risks and undertaking physical changes to mitigate those risks.
• Actively monitoring the insurance market for material changes to policies.
• Developing a water strategy (to be in place by the end of 2021).
• Optimizing production from wind assets.
• Managing disruptions to supply chains through contractual provisions, alternative supply routes, and local sourcing.
• Achieving ambitious climate change-related targets.
• Phasing out coal-fired generation and solid fuels.
• Integrating ESG criteria into investment decisions.
• Committing to transparent reporting and disclosure.

Supply Chain Management

Responsible Procurement

• Local sourcing where possible

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Water resource scarcity
• Changes in wind patterns

Transition Risks

• Carbon pricing
• Changes in government policies
• Increased competitiveness of renewables
• Stringent methane regulations
• Disruptions to supply chains

Opportunities

• Increased demand for power
• Expansion of carbon markets
• Opportunities in renewables
• Development of CCUS technologies
• Hydrogen blending
• Demand for flexible natural gas assets

Reporting Standards

Frameworks Used: TCFD

Sustainable Products & Innovation

• Carbon nanotubes from C2CNT technology

Environmental Metrics

ESG Focus Areas

• Climate Change
• Governance
• Environmental Stewardship

Environmental Achievements

• Reduced Scope 1 CO2 emissions at Genesee by 12% by 2021
• Completed phase 2 and 3 expansions of Whitla Wind, making it Alberta’s largest wind facility at 353 MW
• Began construction on Strathmore Solar and Enchant Solar projects
• Announced plans for a 151 MW phase 2 expansion of Halkirk Wind facility
• Acquired a portfolio of 20 solar development sites in the US with up to 1,298 MW of generation capacity

Social Achievements

• Delivered on targets to develop company-wide water management and sustainable sourcing strategies
• Increased accountability for achieving sustainability objectives; 25% of incentive pay for management based on social and environmental targets, including lower GHG emissions; 20% weighting to sustainability-related goals (including a 30% reduction in fleet emissions intensity by 2024) in performance share units for the Executive Team and leadership.

Governance Achievements

• Formalized a corporate purpose: to power a sustainable future for people and planet
• Secured $1 billion of Sustainability-Linked Credit facilities (SLCs) linked to reducing Scope 1 CO2 emission intensity by 65% by 2030 from 2005 levels

Climate Goals & Targets

Environmental Challenges

• Potential impact to natural gas portfolio from deep decarbonization policies and regulations outpacing carbon capture technology
• Transitional risks from accelerated decarbonization of the power sector
• Increasing competitiveness of renewables affecting market share for natural gas generation
• Climate change-related events impacting operations and critical infrastructure
• Water scarcity and stricter regulations on water use
• Disruptions to supply chains due to climate change-related impacts

Mitigation Strategies

• Active participation in industry groups to monitor and engage with government officials
• Passing carbon costs through to counterparties on select power purchase agreements
• Managing compliance costs through participation in environmental commodity markets and investments in operational efficiencies
• Investing in CCUS and hydrogen blending to minimize exposure to carbon pricing
• Investing in mid-life thermal assets with shorter operating lives
• Securing off-take agreements and extensions
• Investing in operational efficiencies and enhancements to lower carbon emissions
• Actively engaging with policymakers to ensure a long-term role for low-emitting natural gas
• Pursuing decarbonization of fuel through hydrogen production and blending
• Actively pursuing advocacy for policy support and wide-scale adoption of decarbonization technologies
• Redirecting capital to non-emitting sources of generation where necessary
• Implementing a water management strategy
• Implementing a sustainable sourcing strategy with alternative supply routes and local sourcing
• Emergency preparedness and response plans, including simulated disasters and continuous improvement processes
• Assessing climate change-related physical risk in due diligence processes for new acquisitions

Supply Chain Management

Responsible Procurement

• Sustainable sourcing strategy

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (tornadoes, hurricanes, floods, droughts, ice storms)
• Water scarcity
• Changes in wind patterns affecting renewable asset capacity

Transition Risks

• Changes in governments creating uncertainty regarding climate policy
• Exposure to carbon pricing
• Accelerated decarbonization of the power sector
• Increased competitiveness of renewables
• Policy limiting the use of natural gas
• Decentralized energy sources reducing growth rates
• New competition from non-emitting resources
• Development of non-emitting technologies outside of current core competencies
• Competition among emission abatement technologies

Opportunities

• Increased margins on assets as carbon prices rise
• Reduced compliance costs through carbon market expertise
• Expanded opportunities in renewables
• Increased demand for flexible natural gas assets
• Long-term declines in the cost of renewables
• Policy support for emission abatement technology
• Opportunities for new revenue from demand-side market participants
• Development of markets for products derived from carbon emissions
• Increased investment by corporate entities in renewable power

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance
• Community Engagement
• Sustainable Sourcing
• Water Management
• Health and Safety

Environmental Achievements

• Achieved 93% fleetwide availability.
• Completed upgrades at Genesee 3 to maximize fuel flexibility in advance of moving to 100% natural gas in 2023.
• Strathmore Solar, our first Canadian solar facility, began commercial operation.
• Clydesdale Solar began commercial operation.
• Reduced Scope 1 CO2 emission intensity by approximately 4% from 2021.
• Released inaugural Green Financing Framework, enabling issuance of green bonds and green loans.
• Advanced Genesee CCS project, receiving a limited notice to proceed.

Social Achievements

• Recognized as one of Canada’s Most Admired Corporate Cultures™ for 2022.
• Achieved an HSE Performance Index of 1.10, exceeding the target of 1.0.
• 40% of Board of Directors are women.
• 43% of Executive Team are women.
• 30% of new hires were women.
• Invested $5.4M in communities, focused on equity and culture, wellbeing, and climate action.
• Published a company-wide Indigenous Relations Policy.

Governance Achievements

• Recognized by Ethisphere® Institute as one of the World’s Most Ethical Companies®.
• Rolled out a new Energy Trading Code of Conduct.
• Percentage of short-term remuneration of management was based on social and environmental targets.
• Completed several major cyber-security assessments.

Climate Goals & Targets

Environmental Challenges

• Political uncertainty in Alberta and the U.S.
• Power price volatility, particularly in Alberta.
• Construction challenges due to weather, price escalations, inflation, and labor/component shortages.
• Increased construction costs for solar projects (Bear Branch, Hornet, Hunter’s Cove) making them uneconomic.
• Supply chain disruptions.
• Cybersecurity threats.
• Potential for labor disruptions due to expiring collective bargaining agreements.

Mitigation Strategies

• Engaging with government and stakeholders on new policies.
• Hedging program for power price and foreign exchange impacts.
• Strong project governance and oversight, including Board committees.
• Sourcing due diligence and Sustainable Sourcing Strategy.
• Labor management strategies.
• Comprehensive insurance policies.
• Cyber Security Leadership Council and robust cybersecurity program.
• Competitive compensation and benefits programs, workforce planning, and succession plans.

Supply Chain Management

Responsible Procurement

• Sustainable Sourcing Policy (focus on emissions mitigation, resource use, EDI, human rights, and community support)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Changes in carbon pricing and policy
• Increased compliance obligations
• Reduced margins for thermal fleet

Opportunities

• Growth in renewables portfolio
• Advancement of CCUS, hydrogen blending, and direct air capture technologies

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Third-party Assurance: KPMG LLP

UN Sustainable Development Goals

• Goal 7: Affordable and Clean Energy
• Goal 9: Industry, Innovation and Infrastructure
• Goal 13: Climate Action

Green Financing Framework aligns with these goals.

Sustainable Products & Innovation

• Carbon nanotubes (CNTs) production facility (Genesee Carbon Conversion Centre)

Awards & Recognition

• Canada’s Most Admired Corporate Cultures™ for 2022
• The Globe & Mail’s 2022 Women Lead Here list

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Health, Safety, Security and Environment
• Community Engagement
• Indigenous Relations

Environmental Achievements

• Completed upgrades to Genesee Unit 3, enabling 100% natural gas use (reducing coal usage)
• Secured 1 GW supply of responsibly produced, ultra-low carbon thin film solar modules from First Solar
• Reduced Scope 1 emission intensity by 0.48 tonnes CO2e/MWh

Social Achievements

• Expanded Executive Team with increased women representation (44%)
• Launched EmpowHER employee community
• Contributed $3.4 million to community organizations
• Supported Indigenous youth through Bears’ Lair Entrepreneurship Camps

Governance Achievements

• Appointed Carolyn Graham to the Board of Directors
• Reinstatement of Dividend Reinvestment Plan
• Annual dividend increase of 6%

Climate Goals & Targets

Environmental Challenges

• Climate risk (changing regulations, market fundamentals, operational disruptions)
• Political and regulatory uncertainties (government net-zero goals, economic uncertainties)
• Market volatility and operational disruption (power and natural gas price volatility, extreme weather)
• Growth execution (acquisitions, developments, investments)
• Supply chain challenges (availability, extended lead times)

Mitigation Strategies

• Strong governance framework and policy
• Relationships with key suppliers and contractors
• Advocating and engaging with government stakeholders
• Hedging through physical and financial derivatives
• Long-term contracts
• Fuel-type and geographical diversification
• Detailed project analyses, risk assessments, and due diligence
• Maintain an inventory of critical spares
• Establish and maintain constructive relationships with key suppliers

Supply Chain Management

Responsible Procurement

• Sustainable Sourcing Policy

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Changing regulations
• Market shifts
• Carbon pricing

Opportunities

• Development of renewable energy projects
• Advancement of decarbonization technologies

Reporting Standards

Frameworks Used: TCFD, GRI, SASB

Third-party Assurance: KPMG LLP