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