ENVIRONMENTAL, SOCIAL & GOVERNANCE FOCUS AREAS - JUNE 2021 - Enerplus
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ENVIRONMENTAL, SOCIAL & GOVERNANCE
FOCUS AREAS
JUNE 2021
Forward looking information and statements
This document contains certain forward-looking statements and forward-looking information (collectively referred to as “forward-looking information”) within the meaning of applicable securities legislation regarding current expectations,
estimates and projections about the future, based on certain assumptions made by Enerplus in light of its experience and perception of historical trends. Although Enerplus believes the expectations represented by such forward-looking
information are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking information as actual results may differ materially from those
expressed or implied.
Forward-looking information in this document includes statements about pursuing and achieving targets, commitments and ambitions for Enerplus’ ESG focus areas and, in particular and without limiting the generality of the foregoing,
Enerplus' progress towards its 2021 GHG emissions target, 2022 methane emissions target and 2030 GHG emissions intensity reduction target, Enerplus' expectation regarding its 2021 and 2025 target for reduction in freshwater use in
Enerplus' well completion operations in North Dakota, its 2023 targets regarding LTIF, and Enerplus' ability to achieve its targets, goals and objectives.
The forward-looking information contained in this presentation reflects several material factors and expectations and assumptions of Enerplus including, without limitation: in respect of Enerplus' emissions intensity reduction target and
reduction in freshwater use in its North Dakota operations, Enerplus' ability to conduct its operations and achieve results of operations as anticipated, including in respect of effectiveness of its operational planning pertaining to its flaring; the
successful implementation of Enerplus' proposed or potential strategies and plans to reduce GHG emissions and freshwater use; projected capital investment levels, the flexibility of Enerplus' capital spending plans and the associated source
of funding; Enerplus' ability to otherwise access and implement all technology necessary to achieve its current and future GHG and methane emissions and freshwater usage reduction targets, the development and performance of technology
and technological innovations and the future use and development of technology and associated expected future results; current commodity price and cost assumptions; the general continuance of current or, where applicable, assumed
industry conditions; the continuation of assumed tax, royalty and regulatory regimes; Enerplus' ability to otherwise access and implement all technology necessary to achieve its targets, commitments and initiatives, continuing collaboration
with certain regulatory and environmental groups; the accuracy of the estimates of Enerplus' reserves and resources volumes; the continued availability of adequate debt and/or equity financing, cash flow and other sources to fund Enerplus'
capital and operating requirements; availability of third party services; and the extent of its liabilities.
The forward-looking information included in this presentation involves known and unknown risks, uncertainties and other factors including, without limitation: Enerplus' ability to develop, access or implement some or all of the technology
necessary to efficiently and effectively operate assets and achieve expected future results, including in respect of GHG and methane emissions reduction targets, freshwater use reduction and health and safety targets; the development and
execution of implementing strategies to meet Enerplus' targets; impediments generally to Enerplus' operations in respect of Enerplus meeting its targets and commitments as they relate to its ESG focus areas; changes, including future
decline, in commodity prices; changes in realized prices for Enerplus’ products; changes in the demand for or supply of Enerplus' products; unanticipated operating results, results from Enerplus' capital spending activities or production
declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans by Enerplus or by third party operators of Enerplus' properties; increased debt levels or debt service requirements;
changes in estimates of Enerplus' oil and gas reserves and resources volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; reliance on industry
partners; failure to complete any anticipated acquisitions or divestitures; and certain other risks detailed from time to time in Enerplus' public disclosure documents (including, without limitation, those risks identified in the 2021 ESG Report, its
most recent quarterly management's discussion and analysis and its annual information form, management’s discussion and analysis, and Form 40-F at December 31, 2020).
Readers are cautioned that the foregoing lists are not exhaustive and are made as at the date hereof. Enerplus disclaims any intention or obligation to update or revise any forward-looking statements in this document as a result of new
information or future events, except as may be required under applicable U.S. federal securities laws or applicable Canadian securities legislation.
All amounts are stated in Canadian dollars unless otherwise specified.
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ENVIRONMENTAL, SOCIAL & GOVERNANCE
Enerplus’ approach to ESG
Why is ESG important? Enerplus’ ESG integration Oversight
Enerplus’ core values
Long-term company value Identify focus areas that Senior leadership team is
include a commitment to can be materially impacted could materially impact deeply involved in the
develop its resources by ESG factors company value identification of material
focus areas and, in
responsibly and profitably, conjunction with the Board
Enerplus believes the Establish objectives and
while making a positive integration of key ESG targets relative to each of Directors, in setting
contribution to society factors into its strategy will material focus area objectives and targets
reduce risk and enhance Focus areas are integrated
Integrate objectives and
long-term business resilience into enterprise risk
DISCLOSURE & REPORTING
targets throughout the management
FRAMEWORK(1) Clear, consistent disclosure organization
of ESG information allows Each focus area has
CDP
GRI stakeholders to make oversight from the Board of
SASB informed decisions Directors with management
TCFD ensuring the Board has a
IPIECA comprehensive
understanding of the issues
1) Enerplus’ 2021 ESG Report has been prepared in accordance with the Sustainability Accounting Standards Board (SASB) and Global Reporting Initiatives (GRI) disclosure frameworks and the Task Force on Climate-related
3
Financial Disclosures (TCFD). In addition, the report was prepared in alignment with the International Petroleum Industry Environmental Conservation Association’s (IPIECA) Oil and gas industry guidance on voluntary
sustainability reporting. Recommended disclosures from the Task Force on Climate Related Financial Disclosure (“TCFD”) are being reviewed for future reporting periods.
ENVIRONMENTAL, SOCIAL & GOVERNANCE
Material focus areas
Water Management
Deploying technology to reduce freshwater
dependence limits our impact on the
Greenhouse Gas Emissions environment and improves our profitability. Culture
Reducing our emissions intensity supports
Our culture is an integral differentiator which
responsible resource development while
drives organizational value. Continuing to
ensuring we stay ahead of the strict regulatory
foster inclusivity will benefit our employees
regimes under which we operate.
and our organization.
ESG
MATERIAL
FOCUS
Board Constitution & Culture AREAS Community Engagement
Strong corporate governance is integral to the Our ability to license, conduct and maintain
management of our organization. It instills our operations is closely tied to continuing to
investor confidence, encourages shareholder build genuine, respectful relationships in the
engagement and promotes accountability. communities where we operate.
Health & Safety
Keeping our employees, contractors and
communities safe is fundamental to our corporate
responsibility. It’s the most important thing we do.
1) Enerplus’ GHG emissions reduction target addresses scope 1 and 2 emissions. Scope 1 emissions are direct emissions from owned and operated facilities. Scope 2 emissions are indirect emissions from the generation of purchased energy for the 4
Company’s owned and operated facilities.
BOARD CONSTITUTION & CULTURE
Strong corporate governance supports the creation of superior long-term value
BOARD CONSTITUTION BOARD CULTURE
BROAD MIX OF SKILLS & EXPERIENCE HIGH LEVELS OF ENGAGEMENT
Essential skills matrix: 13 key areas of expertise identified & assessed Codified review processes in the CGNC’s(1) charter and work plan
Balanced approach to board renewal: 30% director renewal in the last 3 Annual board effectiveness evaluations are conducted by the full board
years, regular committee chair rotations Board chair leads peer-to-peer review discussions with each director
Average director tenure is 7.2 years Strong board meeting attendance and participation
Average number of public boards/directorships: 2.3 Annual site visits, employee and shareholder outreach
Focus on director continuing education
INDEPENDENCE CHAMPIONS OF DIVERSITY & INCLUSION
Board chair and committee chairs are independent Oversight of Diversity Policy
Non-executive director independence confirmed annually Regular review and monitoring of human capital management
Use of in camera sessions dashboard with diversity and inclusion initiatives, metrics and progress
Role model cultural tenets: “One Enerplus, Be Inclusive”
DIVERSITY OF THOUGHT EFFECTIVE DECISION-MAKING
44% female directors, including board chair Early delivery of fulsome board meeting materials encourages reflection
Ages 51 – 69, average 62 and deliberation
Regional representation mix (Canadian/U.S.): 70/30 Board meeting format that favours discussion and respectful debate
draws out insights and informed views
Broad representation of executive experience
Board has unfettered access to executives, employees
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1) Corporate Governance & Nominating Committee.
HEALTH & SAFETY
Keeping people safe is the most important thing we do
Safety Performance – LTIF & TRIF (2)(3) Serious Injury or Fatality Potential (SIFp) Events
67% DECREASE IN
LTIF IN 2020
Employees and contractors
1.2 LTIF TRIF 30 As of Q1 2021, there were no SIFp events
25% LTIF REDUCTION
TARGET 1.0
(On average 2020-2023)(1)
0.8 20
0.6
0.4 10
0.2
0.0 0
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
1) Relative to 2019 baseline.
2) TRIF: Total Recordable Injury Frequency, an industry standard safety metric. The number of recordable injuries (medical treatment, restricted work, lost time incidents) x 200,000 hours divided by total person hours. 6
3) LTIF: Lost Time Injury Frequency, an industry standard safety metric. The number of lost time injuries (fatalities + lost work day cases) x 200,000 hours divided by total person hours.
GHG EMISSIONS
Reducing emissions through innovation and operational efficiency
REDUCED 2020 GHG EMISSIONS INTENSITY BY 24% 2030 REDUCTION TARGET OF 50%
GHG Emissions Intensity Short-Term Reduction Target GHG Emissions Intensity Long-Term Reduction Target
Company CO2e / BOE(1)(2) Company CO2e / BOE(1)(2)
METHANE REDUCTION TARGET
In connection with our long-term GHG
reduction target of 50% by 2030, we’re
targeting a 20% reduction in methane
emissions intensity by the end of 2022
24% 2030 GOAL:
REDUCTION IN
EMISSIONS 50%
INTENSITY EMISSIONS
INTENSITY
REDUCTION
2019 2020 2019 2030e
Scope 1 Scope 2 Scope 1 Scope 2
1) Enerplus’ GHG emissions reduction target addresses scope 1 and 2 emissions. Scope 1 emissions are direct emissions from owned and operated facilities. Scope 2 emissions are indirect emissions from the generation of
purchased energy for the Company’s owned and operated facilities. 7
2) Relative to 2019 baseline.WATER MANAGEMENT
Reducing freshwater use through increased water recycling
Water Use by Source (1)(2) Proportion of Water Reused(1) 2021 REDUCTION TARGET(3)
Produced water Reused
2021 Target Results at Q1 2021 (3)
Freshwater Non-reused
89% 81% 25% >30%
of water used is of water volumes are reused
produced water corporately. In Canada, 99% of Reduction in freshwater use per well completion in our
water is reused FBIR operations by reusing produced water
2025 REDUCTION TARGET ESTABLISHED (3)
11%
of water used is
19%
of water volumes are not
freshwater reused
50% Reduction in freshwater use per
well completion corporately
1) Based on 2020.
2) Produced water is water (brine) obtained from the hydrocarbon bearing formation strata during the extraction of oil and gas. 8
3) Relative to 2019 baseline.CULTURE
Our culture drives organizational value
CULTURAL BELIEFS WORKFORCE AT A GLANCE
58% Canada
One Enerplus.
2021 employee engagement
I collaborate across the organization.
Area 83% score. Up from 81% in 2019
Be Inclusive.
42% US
I welcome diverse people and perspectives.
Communicate Effectively. 30% 50+
I communicate honestly, respectfully, and in a
timely manner. OBJECTIVES
Age Maintain strong employee engagement
Show Courage. 7% Under 30
I offer my opinions and ideas, even it feels risky. Improve employee sentiment with
63% 30-50
respect to health & wellness
Be Curious.
I ask “What if?” and “Why not?”, always pursuing
improvements in our business. 64% Male
Live Well.
I look after work and life, health and wellness, Gender
and support those around me.
36% Female
9COMMUNITY ENGAGEMENT
Being a trusted partner in our communities is central to our business
Our pillars of giving focus our support where it can have the greatest impact
COMMUNITY AWARDS
MHA(1) Community Service Award
recipient in 2015, 2017 and 2019
MHA (Mandan, Hidatsa and Education Safety Health
Arikara Nation) Best Management
Practices Award recipient in 2018
Radville Community STARS Air Ambulance Food Bank of the Rockies
North Dakota Petroleum Council Daycare
Big Brothers Big Sisters – Kids Cancer Care
(NDPC) Excellence in Safety
Oscar Adolphson Medicine Hat
Award recipient 2017 Respite Care
Primary School
Calgary Drop-In Centre Calgary
Breakfast Program Brain Aneurysm Research
Emergency Women’s Shelter
Denver Scholarship
Foundation Habitat for Humanity
We contributed $346,000 in support of our communities in 2020
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1) MHA is the Mandan, Hidatsa, and Arikara Nation located on the Fort Berthold Indian Reservation in North Dakota.MATERIAL ESG FOCUS AREAS
Summary of goals, targets & strategic objectives
Focus area Goals, targets & strategic objectives
Goals:
1 - leverage employee emissions reduction ideas to drive down emissions intensity.
2 - develop a corporate climate strategy by 2023 by taking a phased approach that delivers key components in 2021 and 2022
GHG
Emissions 2022 Target: reduce our corporate methane emissions by 20%, based on our 2019 baseline.
Update: first half of 2021 we were able to eliminate high-bleed pneumatic instruments in our operations.
Environment 2030 Target: by 2030 we will achieve a 50% reduction in Scope 1 and Scope 2 emissions intensity, based on our 2019 baseline.
Goal: we will continue to reduce our environmental footprint through active engagement and technological advancement.
Water 2021 Target: we are targeting a 25% reduction in freshwater use per well completion, on average compared to 2019, in our Fort Berthold operations
Management Update: In the first quarter of 2021, we achieved more than a 30% reduction on average, per well completion in North Dakota.
2025 Target: by 2025 we will achieve a 50% reduction in freshwater use per well within our completions corporately, based on our 2019 baseline.
Goals:
1 - we commit to evolving our serious incident management process through consistent investigations, effective corrective actions and shared learnings.
Health
2 - we commit to peer-to-peer collaboration and transparency in our safety data to promote learnings and reduce incidents across industry.
& Safety
2023 Target: to reduce our LTIF by 25%, on average, from 2020-2023, relative to our 2019 baseline. In 2020, we achieved a 67% decrease in LTIF, relative to 2019.
Social Community Goals:
1 - we will expand our energy education initiatives and continue to promote energy literacy.
Engagement 2 - we will advance company initiatives and investment that include the interests and identified priorities of the communities we operate in.
Goals:
Culture 1 - we will maintain strong employee engagement.
2 - we will improve employee sentiment with respect to health and wellbeing.
Board
Our strategic objective is to support and protect the creation of superior long-term business value through active board oversight of corporate strategy, enterprise risk management and human
Governance Constitution & capital management. 11
CultureSUPPLEMENTAL INFORMATION
12ESG - Board oversight
Greenhouse Gas Water Health & Community Culture Board Constitution
Emissions Management Safety Engagement & Culture
ESG oversight by the Board of Directors with material focus areas mapped to the applicable committee
Safety & Social Audit & Risk Reserves Compensation & Corporate
Responsibility Management Committee Human Resources Governance &
Committee Committee Committee Nominating
Committee
Board Committees 13The Board of Directors
Hilary A. Foulkes (Director since February 2014) Susan M. MacKenzie (Director since July 2011)
Compensation & Human Resources Committee (Chair)
Board Chair Reserves, Safety & Social Responsibility Committee
Judith D. Buie (Director since January 2020) Elliott Pew (Director since September 2010)
Audit & Risk Management Committee Previous Board Chair
Corporate Governance & Nominating Committee
Reserves, Safety & Social Responsibility Committee
Karen E. Clarke-Whistler (Director since December 2018) Jeffrey W. Sheets (Director since December 2017)
Compensation & Human Resources Committee Audit & Risk Management Committee (Chair)
Corporate Governance & Nominating Committee Compensation & Human Resources Committee
Reserves, Safety & Social Responsibility Committee
Ian C. Dundas Sheldon B. Steeves (Director since June 2012)
Audit & Risk Management Committee
President and CEO Reserves, Safety & Social Responsibility Committee (Chair)
Robert B. Hodgins (Director since November 2007)
Compensation & Human Resources Committee
Corporate Governance & Nominating Committee (Chair)
14ESG & Sustainability reporting
7 YEARS
OF ESG &
SUSTAINABILITY
REPORTING
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