Transforming Future for a Sustainable Tomorrow

Morgan Stanley Virtual Asia ESG Seminar

19th January 2021 Table of contents

1. The Global ESG Context

2. Tata Power’s ESG Footprint

3. Redrawing our Strategy with Sustainability at the core

4. Our journey towards a Sustainable Tomorrow

5. TATA POWER 2.0 - Lead Utility Sector ESG practices …Message Box ( Arial, Font size 18 Bold) Global Movement to achieve Net Zero Emissions

Carbon neutrality targets now cover 60% of the world’s emissions

~BNEF report

EU ministers to agree to make climate neutrality by 2050 binding

4 India leading the climate change agenda

Accounts for: • 17.7% of the world’s population INDIA • 7% of the world’s greenhouse gas emissions.

Nationally Determined Contribution (NDCs) ▪ India, only country among G20 nations on track to achieve targets under the Paris Agreement - achieved through largescale adoption of renewable electricity. ▪ An apex panel is set up to oversee India’s climate change goals, 13 ministries involved. ▪ India has 3 quantitative goals for 2030; ➢ reducing emission intensity of GDP by 33-35%; ➢ achieving 40% cumulative electric power installed capacity from non-fossil fuel-based resources; ➢ creating carbon sink of 2.5 to 3 billion tonnes of

CO2 equivalent through forest and tree cover. 5 Globally power utilities are high on ESG risk exposure

The Power generation (coal based) ranks third highest on the ESG risk exposure.

The chart shows sector's exposure to ESG risks on a scale of 1 -6.

Score closer to 1 represents a relatively low exposure, while 6 indicates a high-risk exposure

-ESG Sector Risk Atlas, S&P Global ratings, 2019

6 Investors now increasingly focused on ESG strategy of their investments

Increased public scrutiny of environmentally damaging practices and products across sectors

Banks and Investors are actively focusing on “Clean, Green” investments Out of USD 85 trillion of Asset Managed Funds, USD 35 trillion is ESG focused

New methodologies are being Science Based targets and methodologies for carbon. established or proposed for nature/ SBT for freshwater, biodiversity- under development climate- focused target setting and disclosure Task Force on Climate-related Financial Disclosures (TCFD)

7

Tata Power’s improving ESG ratings

CDP disclosure 2020 2019 ▪ Sustainability report for 2019 was not Climate Change C D issued and was rolled into an Integrated Water Security C F (non- disclosure) Report issued in late June 2020 covering Rating done on A to F basis with A being best and F being worst holistic sustainability disclosures. ▪ While FTSE & MSCI rating reports pre-date MSCI Apr 2020 Dec 2018 the Integrated Report, Tata Power has been MSCI Rating BB BB working on increased disclosures on areas MSCI has updated its rating methodology and weightages pursuant to which identified by these agencies. the underlying scores for individual elements have changed ▪ Looking beyond emissions, the Company is FTSE Russell Jun 2020 Jun 2019 also focusing on waste and water ESG Rating 3.6 3.5 management. Environment 3.1 3.4 ▪ Pursuant to this a detailed disclosure on Social 3.7 3.3 water was made to CDP leading to a rating Governance 4.3 4.0 of “C” on water security. Rating done on score of 1 to 5 with 5 being best

9 Tata Power competitively placed in ESG Ratings

ESG Score-Reuters ESG Score-Bloomberg 70 60 57 62 52 55 56 60 54 50 47 47 45 51 51 44 44 48 48 49 43 50 44 40 42 40 35 40 32 31 30 30 25 30 21 21 20 20 10 10 0 0 Tata Power NTPC Powergrid Tata Power NTPC JSW Energy Ltd (JSW Adani Power Ltd. Power Grid Corp of IN) India Ltd (PWGR IN) 2017 2018 2019 2020 2017 2018 2019 2020

FTSE Global Comparison • Tata Power ESG scores are better than domestic peers 5.0 4.3 ✓ Environment: Total Energy consumption, NOx emissions, 3.7 4.0 3.6 3.5 3.4 3.1 SO2 emissions lower among peers 3.0 2.6 2.5 2.3 ✓ Social: Workforce results/Human rights practices 2.2 2.0 2.2 2.0 ✓ Governance: Stakeholder management / CSR strategy 1.0 • While Tata Power’s global ESG rating ranks are above the - average of utilities’ universe, we are striving for ESG Rating Env Social Gov

Tata Power Industry Avg: Utilities Sub Sector: Conventional Elec excellence benchmarking ourselves with the leaders

Re-visited key material issues focusing on a “Sustainable Future” Material & Stakeholder Engagement Study for Tata Power - 2020

Increase in Resource Availability Waste Management Renewable portfolio (Coal & Water)

Carbon emission Operational Sustainable management Biodiversity Efficiency investment

Impact on business due to change in Coal tax or coal pricing Strategy review Compliance 12 And benchmarking Climate Strategy with the leaders

27 GW 50 GW 83 GW 104 GW 51 GW 23 GW

13% 2% 5% 13% 6% 5% 7% 18% 6% 35% 34% 14% 27% 48% 52% 42% 33% 43%

Present Present 62% 73%

generation 46% 16%

+700 MW 15 coal & oil based -7 GW of thermal, Growth thru Innovation, new SBTi endorsed renewable till 2020 power stations +11.6 GW Renewables, low technologies and a Carbon targets closed Renewable carbon energy; mix of clean (2015) for GHG

Focus on Focus Growth thru Green Bonds sources of energy reduction renewables Renewables

75% reduction by 50% reduction by 100% de- 100% low carbon Net Zero Carbon 90% reduction in 2030 and Carbon 2030 and Carbon carbonization of gas by 2050 by 2050 GHG, Net Zero

Carbon Neutral by 2050 Neutral by 2050 energy mix by Emissions Targets on Targets 2050 13 Aim for Sustainability leadership through UNSDGs

SDG Prioritization & SDG Roadmap SDG Mapping Classification FY25

Business SDG

CSR SDG

Business-wise targets have been set for the prioritized SDGs to create a Roadmap for Strategy horizon 2025 14 To re-draw Tata Power’s Sustainability Aspirations

Vision- To empower a billion lives through sustainable, affordable and innovative energy solutions.

Decarbonization Thought Leadership Circular Economy

Move towards WATER To become Become a GLOBAL NEUTRALITY/POSITIVITY & ZERO CARBON NEUTRAL by 2050 SUSTAINABILITY BENCHMARK WASTE TO LANDFILL

15

ENVIRONMENT PILLAR Mission FY25 - To be a Global leader on Sustainability practices in Utility sector

Low Carbon Business Smaller Environmental Carbon Management Innovative solutions Portfolio footprint 33% reduction in GHG 15 GW capacity addition Utility Scale Storage solutions 40% Reduction of Specific water consumption, ZLD emission intensity over through renewables to support renewables baseline (2015)

10,000 microgrids Benchmark reduction in SHR, 100% compliance to SOx, NOx and PM 0.67 Mn citizens sensitized APC AT&C losses through Club Enerji Green Power Supply and Zero Waste to Landfill VAS for Customers Large scale EV Charging Large scale afforestation- Infrastructure deployment 3.5 Mn Trees planted Renewable energy share To be the benchmark on ~60% Low carbon Innovative water management in the Power Industry Carbon Intensity solutions for customers reduction through avoidance and offsetting 18 Tata Power’s Carbon Neutrality horizons

Leader in achieving Carbon Neutrality Global Benchmark among Large Utility and pioneer in clean energy • Leader in Climate Strategy Leader in adopting implementation Climate Strategy • Global best-practice levels of • Emerging position in clean specific emissions energy through aggressive clean growth • Technology interventions • Rapid growth in Solar based capacity (Utility scale, • Clean technology solutions to Microgrids, Rooftop) decrease carbon intensity in • Compensatory Afforestation addition to compensatory afforestation % Renewable 31% 100% Thermal Phase-out + Carbon Intensity 681 Renewable growth 0 tCO2e FY20 FY50

Aspire to reduce Thermal & Coal Mine Revenue contribution from around 50% to less than 30% and Profit contribution from around 30% to less than 5% (FY 20 Actual to FY 25 Estimate) 19 Tata Power’s Climate Commitment

Tata Power Lower Carbon footprint by 33% by 2025 Decarbonization Aspiration and move towards Carbon Neutrality by 2050 Involving stakeholders in the Carbon Mitigation journey

SUPPLIERS BUSINESS EMPLOYEES CUSTOMERS COMMUNITY

SCOPE 1 SCOPE 2 SCOPE 3 • Responsible • Business • Digital forums • Demand Side • Thought Supply Chain Portfolio shift to replace Management leadership management • Efficiency travel optimally • ESCO interventions • Initiatives improvement • Introduction of • Responsible • Volunteering around climate • Technology led EV for in- businesses – • Club Enerji – opportunities – – storage campus travel Rooftop solar, reverse energy savings, capacity etc. • Paperless office EV charging parenting transportation • Afforestation • Energy saving infrastructure, • Afforestation alternatives etc. • Carbon initiatives home • Campaigns • Encourage ESG Mitigation • Afforestation automation, Switchoff2switc disclosure Microgrids hon; Fight Climate Change

21 Customer centric climate initiatives

Demand Side Management (DSM) & Digitalization – Green Power solutions Energy efficiency programs Towards 100% paperless processes

70% customers use digital mode of payment Developing 225 MW hybrid renewables

16554 MWH saved through DSM in 3 years; ~25000 appliances exchanged

45000+ NACH consumers making e-payment Solar Powered call centre at Powai!

Energy efficiency programs for industries, commercial complexes and large societies World’s largest solar powered cricket stadium 50 tonnes of CO2 avoided per annum at Brabourne Stadium, Mumbai 22 Focus on Low Carbon Business offerings for Consumers Data as of 30th Sept 2020 EV Charging Rooftop Solar Microgrids Installed 203 EV charging Installed 421 MW of Rooftop capacity touching TP Renewable Microgrid Ltd. points in 23 cities 30,000+ customersacross 100 cities launched on 4th Nov 19

Tata Power Solar being ranked # 1 Solar Roof Tata Power has already installed 71 Presence in cities like Mumbai, Delhi, player for last six years by Bridge to India Micro-grid sites in UP & Bihar Pune, Kolkata, Hyderabad, Bengaluru, Chennai, Ahmedabad and Lucknow. Recorded highest ever order input of Rs Another 60 sites for microgrid are 860 Crores+ (~239MWp) in FY20 in pipeline. 1 lakh Rs 5000 Cr revenue from 10,000 EV charging stations by FY25 Rooftop Solar by FY25 Microgrids by FY27 23 Tata Power’s Circular Economy horizons FY20-FY50

Enablers Leadership Oversight Standards & Technology Benchmarking

Leader in achieving Water Positivity! Global Benchmark among Large Utility and pioneer in water management Benchmark Leader in water • With thermal phase out, management within Tata significant reduction in sea & WATER freshwater consumption MANAGEMENT Grp and Indian sector peers • Aggressive efforts to convert all thermal and WHR • Only water usage Renewables- operations to Zero Liquid solar panel cleaning & domestic • ISO 14046 compliant with discharge purposes water footprinting

• Periodic Water balance audits • 100% efficient STPs for • PGWM scale up for maximum Participatory ground water enabling circularity of water, coverage and ground water management (PGWM) through reducing load on fresh water recharge CSR outreach • 100% RWH structures • CDP water listing

FY20 FY25 FY30 FY50 24 Tata Power’s Circular Economy horizons FY20-FY50

Enablers Advocacy New Technology Benchmarking

Indian Benchmark with Zero Waste company! market-linked waste Benchmark leader with revenue generating business model best gainful flyash • Zero flyash generation utilization practices within sector WASTE • Tata Power only produces by- MANAGEMENT • Evaluate technology for products which has a market value conversion of waste to value and set business revenue models

• Minimize Waste to Landfill • Scale biogas plants • PV panel- technology adoption for recycling old panels/ • Gainful utilization of flyash + refurbishment bottom ash & accounting as • 100% responsible disposal of per global standards hazardous waste, battery, e- waste • Extended producer responsibility • 100% mobilization of food approach for customer centricity waste for Vermicomposting • Maximize utilization non- hazardous waste in internal processes

FY20 FY25 FY30 FY50 25 SOCIAL PILLAR CSR thrust areas & alignment to UNSDGs

Financial Inclusivity Livelihood & Skill Health & Sanitation Education Water Building

• 312.85 Cr resources • 18000+ women • 100% Villages open • 100% Enrolment • 100% access to mobilized under SHG members defecation free with and Zero safe drinking access to basic various Govt Schemes covered under Dropout up to water Micro Enterprise sanitation Secondary level • 32.68 Lakhs cu • 100% coverage of • Empowered 1.75 • 100% Immunization • 80% academic mtrs water marginalized & lakhs women, and institutional recharged deprived communities youth & farmers delivery performance to access Government entitlements Schemes • 70000 youth skilled • Sensitized 6 lakhs • Educated nearly • Water security with 70% Placement people 2.70 lakhs provided 13.35 children Lakhs people “To make Tata Power the Neighbor of Choice of communities and earning the right to co-exist and co-create by working jointly for social well-being and improvement in quality of life” CSR Flagship Initiatives empowering communities

Community Welfare Enabling 3.15 lakh beneficiaries to Education | Health & Nutrition access Govt. schemes Financial Inclusivity Dhaaga micro enterprise for garmenting, Community Empowerment a supplier to national brands with 16 locations & 1170 members Skills | Livelihoods | Income Generation Benefitting 14000+ SHG members & generated Rs. 4+ Cr. Order value. Water Security Water Conservation and Accessibility Dairy microenterprise covering 1475 women members Livelihood & skill building catering to 0.7 lakh youth today. Integrated health care for 6 lakh women & children Males : 19.51 lakhs Livelihood for women with avg. income Females : 7.58 lakhs of INR 8000-10,000 per person over 1341 Abhas Water resource management for 11.3 28 % Women's Covered lakh beneficiaries Covering 2 lakhs children 28 GOVERNANCE PILLAR Robust Governance Structure in place

Shareholders

Board of Directors

Nomination and Stakeholders Risk Management Audit Committee Relationship CSR Committee Remuneration Committee Committee Committee GOVERNANCE POLICIES ❑ Tata Code of Conduct ❑ Risk Management Policy – ISO certified process ❑ Policy for determining Materiality for Disclosures ❑ Code of Conduct for Independent Directors ❑ CSR Policy ❑ Remuneration Policy for Directors, Key ❑ Code of Conduct for Non-Executive Directors ❑ Tata Code of Conduct for Insider Trading and Managerial Personnel and Other Employees Corporate Disclosure Policy ❑ Related Party Transactions Policy, Framework ❑ Charters of various Board appointed & Guidelines ❑ Dividend Policy Committees

❑ Whistle Blower Policy & Vigil Mechanism ❑ Policy for Determining Material Subsidiaries 30 Best in class Risk Management Process

ISO 22301 :2012 Tata Power has been awarded ISO 22301:2012 for Societal Security and Business Continuity Management System from 2015 till date from British Standards Institution (BSI). 31 Copyrights

Tata Power has received copyright for it’s Risk Quantification Process as well as for the online Risk Management System.

32 Recognition - CNBC TV18 Award

FY-18 FY-19 FY-20

• Best Risk Management • Best Risk Management • Best Risk Management Framework & Systems – Framework & Systems – Power Framework & Systems – Power Power • Risk Governance • Business Continuity

33 World’s Most Ethical Company Awards

Tata Power has been recognised amongst “World’s Most Ethical Companies” for three years in succession, 2014, 2015 & 2016 by the Ethisphere Institute, USA. 2015 2014 2016

After winning for 3 consecutive years we have taken a voluntary break from participating in the process. 34

ESG at core of Tata Power 2.0

• No new coal-based capacity to be developed by Tata Power; Resurgent not to participate in any further coal based stressed assets • Achieve Carbon Neutrality by 2050 with Phase out of coal-based generation completely, upon their end of life or expiry of existing PPAs. • Selective waste heat based thermal generation through Group companies to be pursued

• Capacity growth driven by Renewable Energy – Solar as well as Hybrid assets to be the focus growth area • Clean & Green Capacity to grow to ~ 60% by FY 2025 and 80% by FY 2030

• Benchmark in water management in Indian utility sector and move towards water positivity • Scale Participatory Ground Water Management Program to Increase recharge of ground water level to ensure water availability for communities • Benchmark in Waste Management and fly ash utilization in Indian Utility Sector and aim towards achieving Zero Waste to Landfill

• CSR Vision 2025- Impact 5.33 Million lives positively across 353 villages, 10000 Microgrid locations and 220 clusters across 16 states • Customer focused New & Service led business models, focused on EV charging, Solar Rooftops, Solar pumps, Microgrids & Home Automation

Enter Dow Jones Sustainability Index Emerging Market List by FY 2025 36 Thank You! Website: www.tatapower.com Email Id: [email protected] Contact: +91 (0) 22 6717 1305

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