Message from our CEO 70 Our processes used to identify, assess, Report Highlights RISK MANAGEMENT | and manage climate-related risks About Franco-Nevada Responsible Our company does not operate mines, develop specific opportunity will vary considerably regular updates. If any ESG or climate-related As discussed in the Governance section above Capital Allocation projects or conduct exploration. Rather, our depending on the commodity-type, jurisdiction, event or occurrence transpires at an operation, in this Appendix C, the Board and its Committees business model is focused on growing and operator, operation, etc. but, by way of example, we offer to provide assistance to the operator. frequently meet with senior management to managing our portfolio of royalty and streams these may include water scarcity, power supply We also monitor the performance, including discuss our company’s ESG and climate-related Community with the view to holding onto these perpetual and environmental permitting considerations. the carbon footprint and the climate-related risks and exposures. This collaborative effort Contributions or long-life interests for extended time horizons. For an in-depth discussion of our due diligence commitments, plans, targets and initiatives is aimed at defining our ESG and climate Since our IPO in 2007, we have not made process, please refer to page 6 in this of certain of our producing assets. For further strategy going forward, particularly in respect Good Governance and any material divestment of the assets in ESG Report. information regarding the climate-related of our capital allocation. Management, the Shareholder Alignment our portfolio. performance of our top revenue generating Board and its Committees also apply a If ESG risks, including climate-related risks, mining assets, please refer to page 10 of “look-back” in the event of an ESG or climate- It follows that the crucial period for the identified in our due diligence processes are this ESG Report. Finally, we also regularly related event or issue arising at an existing Diversity, Inclusion identification and assessment of ESG risks, assessed and deemed to be material or adverse engage with our own stakeholders to provide asset to determine if such issue was (or and Well-Being including climate-related risks, is at the outset, to the prospects of the operator or project what transparency we can of ESG and should have been) accurately identified and prior to acquiring royalty and stream assets. We or to our royalty or stream interest, this may climate-related risks impacting our assets assessed in due diligence. This approach Climate Action have adopted a comprehensive due diligence result in our decision not to proceed with an and to respond to any significant concerns. is intended to identify any gaps in our process when selecting opportunities and opportunity. We have passed on a number of This helps identify, assess and mitigate due diligence and to strengthen our risk Transparency and potential operating partners. This due diligence otherwise prospective opportunities because reputational risks. identification and management processes. Guiding Principles review involves utilizing the extensive experience the ESG risks were too substantial. If we elect of our multi-disciplinary management team to proceed with an opportunity, we endeavour and Board of Directors to evaluate ESG and to include in our contractual arrangements Capital Allocation Asset Management About this ESG Report climate risks specific to a mining or energy provisions including reporting obligations, audit operation and the plans adopted by the and inspection rights, operating covenants, Risk Appendices operator to manage such risks. Since early transfer restrictions and remedies, which Management 2022, we have subscribed to McKinsey help manage and mitigate climate-related Risk Pass on Identication, Due diligence process Opportunity Risk identication and A: ESG Performance Table MineSpans, a data platform providing more risks. For an in-depth discussion of these Assessment leveraging experience of: OR assessment through: & Management • Board of Directors • Monitoring assets and operators B: Operators’ Emissions than 1,000 cost and supply points per mine contractual protections, please refer to Provide for for over 3,800 mines globally. Access to this page 7 in this ESG Report. • Management Contractual • Engagement with operators C: TCFD Disclosure • External consultants Protections • Stakeholder engagement service will facilitate the institutionalization D: SASB Disclosure of the review of climate and other ESG data Once we have acquired an asset, the process E: GRI Index prior to making acquisitions. of identifying and assessing ESG risks, including climate-related risks, involves Integration How did we do? What will we do? F: Sustainable We also routinely engage external experts to regular engagement with our operating into Retrospective look back Collaboration between management, Development Goals assess risks, including climate-related physical, partners, leveraging the aforementioned Overall Risk to strengthen risk identication the Board and its committees to regulatory, market and reputational risks. The contractual reporting obligations and our Management and assessment processes dene ESG and climate strategy G: KPMG: Independent climate-related considerations relating to a audit and inspection rights, in order receive Limited Assurance Report H: Carbon Neutral Initiative