Message from our CEO 62 Report Highlights MARKET RISKS About Franco-Nevada Potential Financial Impact for: Description of Market Risks Our Operating Partners Our Company Responsible SUMMARY Capital Allocation Shifts in supply and demand for certain commodities based on their real Reductions in commodity prices may impact the applicable operator’s bottom • Corresponding direct impact to Revenues (e.g. our sales) and potential Community or perceived impact on the climate. line and in serious cases may ultimately render a project uneconomic, which long-term delay (deferral) of Revenues if project placed on care and Contributions may lead to projects being abandoned or placed on care and maintenance maintenance until commodity prices recover. Good Governance and BY COMMODITY Shareholder Alignment Commodities at highest risk: Energy (oil, gas, NGLs) Changing customer behaviour: Diversity, Inclusion Demand for certain commodities is expected to reduce as a result of the Energy producers may encounter reduced demand for their products due to • Potential reduction of Revenues if demand for carbon-intensive commodities energy transition, which may impact prices. While this trend could be the changing customer behaviour in the energy transition. The level of risk and or assets are reduced due to changing customer behaviour and Well-Being same across a single commodity, in some cases the significance of this timeframe will vary depending on the carbon production intensity of assets • Potential impact to valuation of Assets on balance sheet (e.g. impairment or risk will vary depending on the carbon intensity of specific assets. – for instance, low-carbon gas is projected to be competitive in many write-off of assets) if decrease in demand causes uneconomic assets to In the latter case, it is possible that the market will start to fragment jurisdictions for longer than high-carbon intensity oil. Other non-energy become stranded Climate Action between low-carbon and high carbon products, with some customers willing producers may be impacted but this shift is more likely to be specific to the to pay a premium for low-carbon products. carbon intensity of a given asset than a blanket trend witnessed across the Transparency and commodity group. Guiding Principles About this ESG Report Appendices A: ESG Performance Table B: Operators’ Emissions C: TCFD Disclosure D: SASB Disclosure E: GRI Index F: Sustainable Development Goals G: KPMG: Independent Limited Assurance Report H: Carbon Neutral Initiative