Message from our CEO 68 Report Highlights CLIMATE SCENARIO ANALYSIS About Franco-Nevada A scenario analysis is an important tool for We have chosen to apply a 2°C scenario, To guide our 2°C scenario analysis, we have scenario and its extended time horizon (prior Responsible our company and our stakeholders to better focusing particularly on the implications and also incorporated certain data and assumptions IEA scenarios stopped at 2040) aligns with Capital Allocation understand our strategy for climate-related outcomes for our existing gold and energy from the International Energy Agency’s (“IEA”) the increasing commitments of our mining risks and opportunities and to assess how assets that generated approximately 80% of 2020 Sustainable Development Scenario and energy operators to achieve “net-zero” this strategy positions our company in a our 2022 revenues, and the climate-related (the “SDS”)*, which are summarized in the emissions by 2050. It also applies the most Community low-carbon future. The TCFD recommends risks and investment opportunities relating Highlights and Assumptions table on this stringent assessment of the resilience of Contributions that organizations conduct at least one climate to these commodities. The scenario analysis page. The SDS demonstrates a plausible our company’s business model and strategy scenario analysis at 2°C (i.e. average global assumes that our strategy will be focused path until 2050 to concurrently achieve in the face of climate-related risk. Good Governance and temperatures of 2°C above pre-industrial levels) upon growing our exposure to gold and other universal energy access, set a path towards Shareholder Alignment or lower to evaluate the potential resiliencies precious metals, but also with investments meeting the objectives of the Paris Agreement of strategic plans and to identify options for in other metals when good opportunities on climate change and significantly reduce air increasing business resiliency to plausible become available. pollution. Although ambitious, demanding a Diversity, Inclusion climate-related risks and opportunities through set of dramatic new actions from governments, and Well-Being adjustments to strategic and financial plans. companies, investors and citizens, this Climate Action 2°C Scenario: Highlights and Assumptions Transparency and Energy Efficiency and Availability Fossil Fuels Emissions Guiding Principles • By 2030, rapid progress is made in innovation and the deployment • The proportion of fossil fuels in the primary energy mix, which • Global output of CO rebounds from pre-COVID levels but peaks 2 About this ESG Report of low-carbon fuels and energy technologies. has remained above 80% since the 1950s, falls to 70% in 2030. in the mid-2020s. Concentrations of the major air pollutants drop • The proportion of renewables in global electricity generation grows • Demand for oil peaks pre-COVID in 2019. Reductions in oil use through to 2030. from just over 25% in 2019 to more than 50% in 2030. over the period to 2030 mean that global oil demand never returns • CO pricing is established in nearly all advanced economies. Appendices 2 • By 2030, low-carbon sources of electricity accounts for almost to 2019 highs. Although demand for oil is more resilient in sectors In addition, several developing economies are assumed to put such as petrochemicals, total oil demand in 2030 is 12% lower in place schemes to limit CO emissions. A: ESG Performance Table two-thirds of total generation worldwide. The emissions intensity 2 of industrial activity is reduced 40% from 2019 intensities. than in 2019. • The CO emissions reduction trends that were visible prior to B: Operators’ Emissions 2 Electric vehicles comprise 40% of new vehicle sales. • Global natural gas demand exceeds 2019 levels throughout the 2030 (e.g. efficiency, electrification and move away from fossil C: TCFD Disclosure • Supported by government policy and the non-profit sector and mid-2020s. It peaks soon after with demand returning to 2019 fuels) continue to 2050. the increase in decentralized energy solutions, universal access levels by 2030. • Emissions outputs and trends through 2030 are consistent with D: SASB Disclosure to energy is achieved by 2030. • Lower demand for fossil fuels leads to modestly reduced prices achieving net-zero energy sector CO emissions globally by 2070. 2 E: GRI Index through 2030. There is less need to produce fossil fuels from A number of industries, sub-sectors and countries achieve net-zero resources higher up the supply cost curve. by 2050 or in advance of 2070. F: Sustainable • There are widespread and successful efforts to reduce the emissions • Carbon capture, utilisation and storage processes and technologies Development Goals intensity of oil and gas production, and sources with lower emissions play a large role in continuing the pace of emissions reduction G: KPMG: Independent intensities are increasingly preferred for development. after 2030. Limited Assurance Report H: Carbon Neutral Initiative