Advancing ESG Priorities

2050 Net-Zero GHG Target

At Fortis we are reducing our impact and delivering a cleaner energy future by lowering our GHG emissions and assisting our customers transition to a low-carbon economy. In 2022, we announced a 2050 net-zero direct emissions goal, with interim targets to reduce GHG emissions 50% by 2030 and 75% by 2035. We achieved a 28% reduction in Scope 1 emissions through 2022 compared to 2019 levels, equivalent to taking approximately 760,000 vehicles off the road in one year. This represents meaningful progress on our journey towards net-zero.

In June, TEP retired San Juan Unit 1 removing another 170 megawatts of coal-fired generation from its portfolio, supporting its plan to fully exit coal by 2032. TEP's coal retirements have been the main driver of the 28% reduction in GHG emissions since 2019. Over the same time, the renewable electricity generation capacity increased 15%, and this capacity is expected to increase further with TEP planning to add 3,400 MW of wind, solar and storage between 2022 and 2035. Learn more here.

FortisBC announced a pilot project to produce carbon-neutral hydrogen from natural gas through a partnership between FortisBC, Suncor Energy and Hazer Group, utilizing a new carbon capture and utilization technology that provides a marketable solid carbon byproduct. While still in the early stages, it is innovative technologies and partnerships like this that will be necessary to accelerate the transition to clean energy. Learn more here.

Construction of the 1,800-kilometre Wataynikaneyap transmission line connecting 17 remote First Nations communities to the Ontario power grid is 73% complete and on schedule for construction to be completed in 2024. Three out of 17 remote First Nations communities have now been connected to the Ontario power grid, with North Caribou Lake First Nation and Kingfisher Lake First Nation both connected in 2022. Once complete, this project will result in emissions reductions of 6.6 million tonnes over a 40-year timeframe, as the communities discontinue their reliance on diesel generation for power. We are proud of our role in this unique First Nation-led partnership. Learn more here.

Cleaner Energy Investment - Overall Project Complete Cleaner Energy Investment - Transmission Line Construction Complete Cleaner Energy Investment - Substation Construction Complete

FortisBC serves 58 First Nations communities across 150 traditional territories in the Province of British Columbia. The utility is pursuing a certification in Progressive Aboriginal Relations with the Canadian Council of Aboriginal Business. The certification confirms corporate performance in Indigenous relations and reflects best practices in corporate social responsibility. In 2022, Musqueam Indian Band and FortisBC announced the signing of an agreement which will result in the parties sharing benefits associated with the utility's Tilbury LNG Projects. Learn more here.

Enhancing Our Disclosure

With more frequent and severe weather systems expected in the future, we have increased our focus on climate adaptation and mitigation. Fortis released its first Task Force for Climate-Related Financial Disclosures (“TCFD”) and Climate Assessment Report in March 2022. The report includes an analysis of four climate-related scenarios to identify risks and opportunities. Detail is also provided on our strong governance and oversight of climate matters and how climate-related risks are incorporated into existing risk management, long-term strategy, and financial planning processes. Fortis is well-positioned to mitigate risks and realize opportunities under both lower and higher carbon climate scenarios.

In July 2022, Fortis released its 2022 Sustainability Report highlighting progress made to reduce the Corporation's GHG emissions, and advance diversity, equity and inclusion ("DEI"). The report contains more than 35 new key performance indicators and is fully aligned with the applicable Sustainability Accounting Standards Board standards.

Guided by Good Governance

As part of its annual Board Games report, in 2022 the Globe and Mail ranked Fortis #1 among 226 companies in the S&P/TSX Composite Index for good governance, reflecting our Board's commitment to best-in-class practices.

Fortis is particularly proud of our work in advancing diversity. In 2022, 54% of Fortis Board members were women and 73% of Fortis utilities had women in the position of CEO or board chair. Fortis also had previously targeted to have at least two directors who identify as a visible minority or Indigenous person by 2023 and met this target in 2022.

Our Diverse Board in 2022

*Fortis President and CEO David Hutchens is not considered independent.

Achieving our sustainability objectives on climate, people, safety and reliability is a focus for the Fortis Board of Directors and forms part of Fortis executive compensation. We amended our $1.3 billion revolving credit facility in 2022 to establish a sustainability-linked loan structure, which includes pricing adjustments connected to our achievement of certain targets related to both carbon emissions and board diversity. We also added new measures focused on carbon reduction and DEI in both our annual and long-term incentive plans.

We continue to advance initiatives related to racial equity and workforce diversity for all 9,200 employees. In 2022, we conducted executive and DEI surveys in Canada and the Caribbean to obtain and disclose important data to measure progress and inform future priorities. We continue to cultivate DEI awareness and equip leaders for this work through education. In 2022, 100% of our leaders completed inclusive leadership anti-racism training.

Fortis was named to The Globe and Mail’s Women Lead Here Gender Diversity List for the third consecutive year. We are proud to be one of the 74 companies who earned the Women Lead Here seal as part of an annual editorial benchmark identifying the largest companies on the Toronto Stock Exchange with a significant number of women in leadership positions.

As we execute our sustainable growth plan, we acknowledge the guidance and support from our strong leaders and Board. In 2022, we bid farewell to Nora Duke after a successful 36-year career with Fortis. Upon Nora’s retirement, Jim Reid became Executive Vice President, Sustainability and Chief Legal Officer, assuming oversight of sustainability, human resources, communications, and government relations, in addition to his legal and governance portfolio.

At the end of 2022, Douglas Haughey retired as Chair of the Board of Directors and he will retire from the Board in May 2023. During his tenure as Chair, Mr. Haughey provided exemplary leadership through a period during which Fortis pivoted to a strategic focus on organic growth following its expansion into the U.S. Jo Mark Zurel was appointed as Chair of the Board of Directors effective January 1, 2023 and has served as a Fortis board member since 2016. In 2022, we also welcomed Lisa Crutchfield, Managing Principal of Hudson Strategic Advisers, LLC, to our Board. Ms. Crutchfield has over 30 years of leadership experience in the energy and utility industries.

Supporting Our People and Communities

Fortis continues to deliver strong performance because of the commitment shown by our employees. In 2022, we remained focused on attracting and retaining the best talent, providing training and growth opportunities, rewarding our employees through competitive wages and benefits, and caring for their health and wellness.

More than half of the 9,200 employees across our group of companies are represented by a labour union. If employee relations issues arise, unionized employees have access to grievance procedures for internal dispute resolution, which provides an opportunity for a timely and fair resolution. In 2022 there were no work stoppages and 95% of grievances were resolved without arbitration.

We also continue to invest in the communities where we live and work to empower sustained health and well-being, drive inclusive economic opportunity, and create a sustainable future. Together, our utilities contributed nearly $10 million and countless volunteer hours through community partnerships in 2022.

Learn more about our how we are advancing our ESG priorities here.

More on Our 2022 Performance

Financial Strength A Record Capital Plan Safety & Reliability