Responsible Capital Allocation Community Contributions Good Governance & Shareholder Alignment Diversity, Inclusion & Well-Being Climate Action Transparency & Guiding Principles Appendices 6 Due Diligence Process As a royalty and stream company, we do not • impacts of development and operations on When we evaluate third party royalty acquisition opportunities, we typically have access to limited operate mining or energy projects and do not fauna, flora and biodiversity and no-net-loss data regarding an operation as we are not directly engaged with the operator. Notwithstanding, exercise control over such operations. It follows initiatives and commitments of operators; we review any ESG and other information we can gather in the public domain and from outside that the most critical time for assessing and • review of any environmental incidents consultants, including relating to the aforementioned topics. mitigating risks, including ESG risks, relating relating to the project; to an asset is at the outset, prior to entering • impacts of mining, operations and related We use the following processes to facilitate our ESG-related due diligence: into royalty and stream agreements. activities on surrounding communities, including women, children, employees Franco-Nevada Expertise Formalized Due Diligence Checklists We believe that proper consideration of ESG risks and migrant workers; in connection with the companies, projects and • ethical track record and any history We use a multi-disciplinary approach when We have enhanced our due diligence processes jurisdictions in which we seek to deploy capital of corruption; evaluating potential transactions. Beyond by creating an internal ESG due diligence checklist, will enhance the long-term performance of our • the reputation of the operator, locally Franco-Nevada’s ESG expertise, our team consists which ensures consistency in our due diligence company and in turn generate real value for and internationally; of professionals with experience and expertise processes, help focus our ESG due diligence review our shareholders. With each royalty and stream • workplace standards, protections in the fields of geology, mining, metallurgy, on key issues, and inform our ESG-related document opportunity we conduct a comprehensive and policies; engineering, energy, finance and law. ESG-related and information requests made of operators assessment of ESG factors, which guides our • community initiatives and engagement and issues intersect with all of these disciplines and during all stages of our due diligence and our team members provide valuable insight contract negotiations. investment decisions. prior consultation with indigenous peoples; to properly mitigate ESG risks. • closure plans; Although we have top focuses in our ESG-related • air emissions and dust from the project; Outside Expertise Data Sourcing due diligence (see Key ESG Factors on page 8 • management by the operator of for further detail), and processes vary depending toxic materials; We routinely engage experts (including in We have several data provider subscriptions, on the nature of the opportunity, we will typically • environmental, social and governance the jurisdictions in which a project is located) including McKinsey MineSpans, a data platform assess the following, with no single factor policies, programs and initiatives put to assist in the evaluation of new opportunities, that provides over 1,000 data points per mine, necessarily being determinative: in place by operator; which experts include external legal counsel, including carbon and other greenhouse gas • the commitments by, and track record technical consultants, environmental consultants, emissions generated by projects, for over 3,800 • health, safety and human rights records of, the operator to fundamental freedoms corporate social responsibility consultants and mines across the globe. We use this information governance consultants for the purpose of to better inform our review of ESG-related issues of the project and operator; of individuals (including relating to freedom assessing political, ESG, technical and regulatory for potential opportunities. • climate-related impact of the project, of association, forced labour, human issues in applicable jurisdictions and the operator’s including emission reduction trafficking, child labour, non-discrimination management of these issues. commitments, targets and goals, including and equal opportunity); alignment with net-zero emissions; • external certifications obtained by the “We believe that proper consideration of ESG risks • energy sources and requirements operator or project; and and efficiency of operations; • operator commitments to the Responsible in connection with the companies, projects and • water risk, requirements, sourcing and Gold Mining Principles (RGMPs) or the management plans; principles of the International Council on jurisdictions in which we seek to deploy capital will • tailings facilities and waste rock storage Mining & Metals (ICMM), Canadian Institute at the project and tailings standards of Mining Metallurgy and Petroleum (CIM), enhance the long-term performance of our company adhered to by the operator; Towards Sustainable Mining (TSM) or other relevant standards. and in turn generate real value for our shareholders.”