CLIMATE CHANGE REPORT CARBON DISCLOSURE PROJECT 2016 2016

CONTENTS

Preface ...... 3 Module: GHG Emissions Accounting, Energy and Fuel Use, and Trading .. 22 Module: Introduction ...... 4 Page: CC7. Emissions Methodology ...... 22 Page: Introduction...... 4 Page: CC8. Emissions Data - (1 Jan 2015 - 31 Dec 2015)...... 23 Page: CC9. Scope 1 Emission Breakdown - (1 Jan 2015 - 31 Dec 2015)...... 26 Module: Management...... 6 Page: CC10. Scope 2 Emission Breakdown - (1 Jan 2015 - 31 Dec 2015)...... 28 Page: CC1. Governance...... 6 Page: CC11. Energy...... 31 Page: CC2. Strategy ...... 8 Page: CC12. Performance...... 32 Page: CC3. Targets and Initiatives...... 12 Page: CC13. ...... 33 Module: Risks & Opportunities ...... 16 Page: CC14. Scope 3 Emissions...... 34 Page: CC5. Climate Change Risks ...... 16 Module: Sign Off...... 37 Page: CC6. Climate Change Opportunities ...... 19 Page: CC15. Sign Off...... 37

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PREFACE

The Carbon Disclosure Project (CDP) is a charity that runs the global CDP provides a disclosure platform and a well-established rating mechanism. CDP disclosure system for investors, companies, countries, cities, and scoring drives corporate transparency and helps to guide, incentivize and assess environmental action. regions, and manages their environmental impacts. CDP is the industry standard in GHG Emissions reporting; it has the richest and most Reporting companies now represent over 50% of global market capitalization. By scoring companies from A to D-, CDP takes each organization on a journey of continuous comprehensive dataset on corporate and city actions, having been in improvement; from disclosure to awareness, through to management, and finally to place for 20 years. CDP believes that improving corporate awareness leadership. Its scoring measures the comprehensiveness of disclosure, awareness and of GHG Emissions through measurement and disclosure is essential management of environmental risks and best practices associated with environmental to the effective management of carbon and climate change risk. leadership, such as setting ambitious and meaningful targets. CDP is constantly evolving its disclosure and scoring system in response to market CDP requests information on climate risks and low carbon opportunities from the world’s needs and the rising urgency of global environmental challenges. Its annual A List largest companies on behalf of over 515 institutional investor signatories with US$106 includes the most pioneering companies leading the way on environmental transparency trillion in combined assets and 150+ major purchasers with over US$4 trillion in and performance. procurement spend.

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MODULE: INTRODUCTION

Page: Introduction

CC0.1 Introduction *reference anywhere in this document to “SNC-Lavalin” We request data for more than one reporting means, as the specific context may require, either period for some emission accounting questions. Please give a general description and SNC-Lavalin Group Inc. and all, or one or more, of Please provide data for the three years prior to the introduction to your organization. its affiliated companies, subsidiaries, divisions or current reporting year if you have not provided this branches, or SNC-Lavalin Group Inc. or one or more Founded in 1911, SNC-Lavalin* is one of the leading information before, or if this is the first time you have of its affiliated companies, subsidiaries or divisions. engineering and construction groups in the world answered a CDP information request. (This does and a major player in the ownership of infrastructure. not apply if you have been offered and selected the From offices in over 50 countries, SNC-Lavalin’s CC0.2 Reporting Year option of answering the shorter questionnaire). If you approximately 37,000 employees provide EPC and are going to provide additional years of data, please EPCM services to clients in a variety of industry Please state the start and end date of the year for give the dates of those reporting periods here. Work sectors, including oil and gas, mining and metallurgy, which you are reporting data. backwards from the most recent reporting year. environment and water, infrastructure and power. SNC-Lavalin can also combine these services with its The current reporting year is the latest/most Enter Periods that will be disclosed financing and operations and maintenance capabilities recent 12-month period for which data is to provide complete end-to-end project solutions. reported. Enter the dates of this year first. Thu 01 Jan 2015 - Thu 31 Dec 2015 SNC-Lavalin maintains exceptionally high standards for health and safety, ethics and compliance and environmental protection, and is committed to delivering quality projects on budget and on schedule to the complete satisfaction of its clients.

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CC0.3 Country list configuration CC0.4 Currency selection Please select the countries for which you will be Please select the currency in which you would like supplying data. If you are responding to the Electric to submit your response. All financial information Utilities module, this selection will be carried forward contained in the response should be in this currency. to assist you in completing your response. Currency Select country CAD ($) Algeria Australia Brazil CC0.6 Modules Canada Chile Colombia As part of the request for information on behalf of investors, electric utilities, companies with electric France India Ireland utility activities or assets, companies in the automobile or auto component manufacture sub-industries, Kuwait Morocco Mozambique companies in the oil and gas sub-industries, companies in the information technology and telecommunications sectors and companies in the food, beverage and Norway Peru Qatar tobacco industry group should complete supplementary questions in addition to the main questionnaire. Romania Russia Saudi Arabia If you are in these sector groupings (according to the Global Industry Classification Standard (GICS)), the South Africa Trinidad and United corresponding sector modules will not appear below Tobago Arab Emirates but will automatically appear in the navigation bar United Kingdom United States - when you save this page. If you want to query your of America classification, please email [email protected]. If you have not been presented with a sector module that you consider would be appropriate for your company to answer, please select the module below. If you wish to view the questions first, please see httgs://www.cdg.net/ en-US/ Programmes/Pages/More-guestionnaires.asgx.

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MODULE: MANAGEMENT

Page: CC1. Governance

CC1.1 Where is the highest level of direct He liaises with a network of senior managers in the CC1.2 Do you provide incentives for the management responsibility for climate change within Company’s different Sectors, who are responsible for of climate change issues, including the attainment your organization? environmental and sustainable development issues, of targets? including climate change, within their sector. Senior Manager/Officer Yes He also liaises with the corporate team which oversees the CC1.1a Please identify the position of the individual management of the lease agreements for about 400 offices or name of the committee with this responsibility leased by the corporation, around the world. (i) Job title The Vice President, Environment & Sustainability, is a Corporate Vice President, Environment & direct report to the Executive Vice President, Integrated Sustainability (CVPES) Management Systems, who reports to the CEO and sits on the Corporation’s Executive Committee. The CVPES (ii) Description of his position in the corporate structure also prepares, on a quarterly basis, Management’s The CVPES is responsible for managing the Company’s environmental and sustainability report to the Safety, response to climate change issues. He is a member of the Workplace and Project Risk Committee (SWPRC) of the Corporation’s Senior Management Team. He is responsible Board of Directors of the SNC-Lavalin Group. for the Company’s annual submission to the CDP. The mandate of the SWPRC does not specifically refer to climate change issues, but broadly covers “environment issues” which are deemed by Management to include climate change.

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CC1.2a Please provide further details on the incentives provided for the management of climate change issues

Who is entitled to Incentivized benefit from these The type of incentives Performance Comment incentives? Indicator

Other: Corp. CVPES Monetary reward Emissions reduction Accurate measurement, and proper filing of the CDP target Other: annual report is one of the CVPES’ clearly established Accurate reporting annual objectives.

Business unit managers Monetary reward Other: Market The SNC-Lavalin Power Sector has a strategic focus on growth in “Green clean and renewable power. We specifically developed our Energy” projects Green and initiatives for the objectives of, among others: Expanding and marketing Power’s Green and renewable energy product lines and services, and pursuing strategic projects in the area of .

Corporate Monetary reward Other: Management The Executive Vice President, Integrated Management executive team of Climate change Systems is incentivised in part based on the achievement of the various environmental objectives, which include management of climate change issues.

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Page: CC2. Strategy

CC2.1 Please select the option that best describes CC2.1a Please provide further details on your risk management procedures with regard to climate change your risk management procedures with regard risks and opportunities to climate change risks and opportunities How far into the Frequency of To whom are Geographical future are risks Comment Integrated into multi-disciplinary company wide risk monitoring results reported? areas considered management processes. considered? Annually Board or individual/ All regions where 3 to 6 years SNC-Lavalin has a corporate Risk Evaluation sub-set of the SNC-Lavalin does Committee (REC) to assess risk associated with Board or committee business. In 2014, significant projects for which the corporation appointed by SNC-Laval in is about to submit a bid. This Committee is the Board divided its projects composed of members of the various corporate between the departments involved in assessing commercial following continents and technical risk related to proposals. This or sub-region: includes the CVPES. The Corporation also assesses risk at a corporate level. Enterprise › North America; risk management includes environmental and › Latin America & climate change risk. The CVPES is the “owner” the Caribbean; of climate change risk. › Europe; › Africa & Middle East; › Asia & Pacific

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CC2.1b Please describe how your risk and CC2.1c How do you prioritize the risks and CC2.2 Is climate change integrated into your opportunity identification processes are applied opportunities identified? business strategy? at both company and asset level The Enterprise Risk Management system uses a corporate Yes At the company level, policies and procedures are risk register which identifies potential risks or opportunities established and implemented to ensure that the application and assigns owners to each one. Risk owners are of the specific response to the risks identified aligns with responsible for assessing the risk using a predetermined the values and strategies of SNC-Lavalin. set of criteria, determining the appropriate mitigation measures and developing and implementing action plans At the asset level, SNC-Lavalin uses “Stature”, a risk to manage the risk. Risk identification, assessment and management and life cycle tool, to identify and assess mitigation are reviewed in committee and the results are risks. This tool allows sharing risks, various activities reported annually to the CEO and the Board of Directors. related to management, lessons learned and best practices across the enterprise. This web tool was specifically Risks are assessed and prioritized based on health & safety; configured to implement the corporate risk management environment & climate change; regulatory; reputation; process. Starting in 2015, all sectors had to register all business continuity and financial potential consequences, their projects and the associated significant environmental as well as the probability of the risk occurring and impacts in Stature. Stature is also used to manage its manageability. enterprise risk, which specifically includes climate change.

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CC2.2a Please describe the process of how climate iii. The most important components of the short term v. How this is gaining you strategic advantage over change is integrated into your business strategy and strategy that have been influenced by climate change your competitors; any outcomes of this process (e.g. changes in operational practices, changing the way SNC-Lavalin wants to be recognized as a world leader in business is communicated, etc.). Short term can mean i. How the business strategy has been influenced, i.e. the sustainability. Thus, the strategic objective is to position current. If climate change has only affected the long term internal process for collecting and reporting information SNC-Lavalin in emerging fields as well as develop more strategy, this should be stated; to influence the strategy; experience in fields with growing potential (e.g. energy, In 2015, SNC-Lavalin’s Board of Directors adopted a operation and maintenance of green buildings, environment Business development teams have to communicate their sustainability strategy applicable to all its activities. As and water, water desalination, responsible and sustainable analysis to the VP corporate strategy and to the Executive part of its strategy, the company proposes to identify resource development, etc.). SNC-Lavalin will continue team on a yearly basis. Climate change is one of many potential improvements to its clients’ projects to reduce to expand its service capacity related to climate change, issues addressed through the strategic planning process, the environmental impact, and make them more efficient based on its assessment of opportunities. the results of which are ultimately approved at the Board on a life-cycle analysis basis; and to reduce its energy level. More broadly, internal communications about vi. What have been the most substantial business consumption, resource use, and carbon emissions, thus SNC-Lavalin’s values, the environmental policy and the decisions made during the reporting year that have improving overall efficiencies. These goals can only be sustainability report assures that all employees are aware been influenced by the climate change driven aspects achieved through efficient internal communication and of the company’s policies, objectives and achievements of the strategy (e.g. investment, location, procurement, training emphasizing that employees have to consider that regarding sustainable development, including M&A, R&D). Both the business decision and the aspect sustainability is an integral part of daily operations and climate change. of climate change that has influenced the business decision making. decision must be made clear in the answer. If there are ii. What aspects of climate change have influenced the iv. The most important components of the long term none to report, this should be stated. strategy, e.g. need for adaptation, regulatory changes or strategy that have been influenced by climate change opportunities to develop green business? There were no significant business decisions made (e.g. changing core business focus, development and during 2015 that have been directly influenced by climate SNC-Lavalin sees climate change as bringing mostly incorporation of new technologies, etc.). In the less likely change aspects. opportunities: decisions are mainly related to those event that climate change has only affected the short opportunities. SNC-Lavalin’s strategy includes the will to be term strategy, this should be stated; recognized as a world leader in sectors such as planning, The main long term strategy influenced by climate change design and development of light rail; design, construction has been the portfolio of business acquisitions. Past and maintenance of green buildings (BOMA, LEED, BREAM, acquisitions included firms specialized in water distribution, HQE, etc.); water distribution, including filtration and light rail, transportation planning services, etc. Future desalination plant; climate change adaptation for acquisitions should integrate similar services and expertise. industries and municipalities, etc.

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CC2.2c Does your company use an internal price CC2.3c Please enter the details of those trade associations that are likely to take a position on climate of carbon? change legislation No, and we currently don’t anticipate doing so in the next Is your position on How have you, or are 2 years. Trade climate change Please explain the trade association’s position you attempting to Association consistent with theirs? influence the position?

CC2.3 Do you engage in activities that could either Conseil Consistent The CPEQ recognizes that efforts should be made to reduce SNC-Lavalin has a directly or indirectly influence public policy on patronal de emissions and thus contribute to the fight representative on the climate change through any of the following? l’environnement against climate change. In reaction to the provincial government Board of Directors du Quebec announcement regarding its 2020 objective to lower global of the organization (tick all that apply) (CPEQ) emission by 20% (compared to 1990), accompanied by a budget to help finance energy efficiency projects, process optimization and > Trade associations energy-efficient equipment, the CPEQ has petitioned the provincial government to obtain more subsidies and project recognition. Those requests include: •Support for industries to devise creative CC2.3b Are you on the Board of any trade solutions to improve their processes’ efficiency; •Recognition associations or provide funding beyond membership? of all energy substitutions (such as the substitution of natural gas by high energy potential process gases) when attributing Yes subsidies; •Specific aid to allow conversion of mining equipment that currently run on diesel to liquefied natural gas; •Extend the recognition of carbon offsets to more projects; •Not limiting boiler conversion to forestry biomass and include agricultural biomass and biomass waste. The CPEQ has also stated that it wishes that a bigger focus be directed towards advancing imputability and accountability on climate change and sustainable development.

Global Compact Consistent The GCNC represents Canadian companies who have adhered SNC-Lavalin is Network Canada to the UN Global Compact. It supports the achievement of represented on the objectives and targets set by the international community via working group which is the CoP process, most recently at the Paris Conference. developing tools to help Canadian companies meet climate change management objectives and which interacts with government in this regard.

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CC2.3f What processes do you have in place to Page: CC3. Targets and Initiatives ensure that all of your direct and indirect activities that influence policy are consistent with your overall CC3.1 Did you have an emissions reduction target that was active (ongoing or reached completion) climate change strategy? in the reporting year? SNC-Lavalin’s CVPES participates in the writing of Absolute target the Health, Safety, Security and Environment (HSSE) Policy and elaborates environmental standards for the CC3.1a Please provide details of your absolute target corporation. He also reports environmental performance Base year Is this a metrics to demonstrate environmental compliance and to % of % reduction Base emissions science- continuously improve environmental performance to the ID Scope emissions from base Comment year (metric based in scope year Office of the President and the HSSE Committee of the tonnes CO₂e) target? Board of Directors of the Corporation. Scope 1+2 29.87% 2014 16,382 No.and In late 2014, it was evaluated that about 14% In turn, SNC-Lavalin’s representative on the board of (location we do not of the office area could potentially be closed or directors of the CPEQ communicates regularly with based) +3 anticipate merged in optimization efforts. Although this (upstream) setting target was setting theoretical, SNC-Lavalin the CVPES to let him know of any initiatives that would one in was able to optimize its occupied office space influence climate change policy. the next significantly and the associated GHG emissions 2 years went down by 30% in less than a year.

CC3.1e For all of your targets, please provide details on the progress made in the reporting year

% % ID complete complete Comment (time) (emissions)

Abs1 100% 100% We not only reached our target but exceeded it twofold.

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CC3.2 Please provide details of your products and/or services that you classify as low carbon products or that CC3.3 Did you have emissions reduction initiatives enable a third party to avoid GHG emissions that were active within the reporting year (this can include those in the planning and/or Taxonomy, project or implementation phases) methodology % R&D % revenue used to in low Yes Are you reporting from low classify carbon Level of Description of product/ low carbon product/s carbon product/s product/s Comment aggregation Group of products or avoided product/s in as low in the emissions? the reporting carbon or reporting year to calculate year avoided emissions

Group of Our O&M Business Unit helps 29.87% 2014 1% Less than products various clients located throughout or equal Canada to operate and maintain their to 10% installations. These services include the conduct of energy audits in which recommendations for Energy Conservation Measures (ECM) are made. For instance, SNC-Lavalin O&M has been managing facilities for Canadian clients since 2006. During that period (2006-2015), 2,660 ECMs were issued. It is estimated that those measures have the potential to reduce the GHG emissions of our clients by 45,688 tonnes of carbon dioxide equivalent annually. Of those ECMs, 48 have been issued in 2015.

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CC3.3a Please identify the total number of projects at each stage of development, and for those in the implementation stages, the estimated C0₂e savings

Stage of development Number of projects Total estimated annual C0₂e savings in metric tonnes C02e (only for rows marked *)

Under investigation - -

To be implemented* - -

Implementation commenced* - -

Implemented* 1 4,893.83

Not to be implemented - -

CC3.3b For those initiatives implemented in the reporting year, please provide details in the table below

Estimated annual Annual monetary savings Investment required Activity Description Voluntary/ Estimated lifetime CO₂e savings Scope (unit currency - as (unit currency - as Payback period Comment type of activity Mandatory of the initiative (metric tonnes CO₂e) specified in CC0.4) specified in CC0.4)

Office space Other 1,229.15 Scope 1 Voluntary - - <1 year Ongoing - optimization.

Office space Scope 2 Other 3,664.03 Voluntary - - <1 year Ongoing - optimization. (location-based)

CC3.3c What methods do you use to drive investment in emissions reduction activities?

Method Comment

Financial optimization calculations -

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Page: CC4. Communication

CC4.1 Have you published information about your organization’s response to climate change and GHG emissions performance for this reporting year in places other than in your CDP response? If so, please attach the publication(s)

Publication Status Page/Section reference Attach the document Comment

The complete sustainability report can be found at: In voluntary communications Underway - previous year attached Environment section and GRI index gri-2014 en.gdf http://www.snclavalin.com/en/sustainability/

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MODULE: RISKS & OPPORTUNITIES

Page: CC5. Climate Change Risks

CC5.1 Have you identified any inherent climate CC5.1a Please describe your inherent risks that are driven by changes in regulation change risks that have the potential to generate a substantive change in your business operations, Risk driver Carbon Taxes revenue or expenditure? Tick all that apply SNC-Lavalin has a significant business selling engineering and construction services for the construction of power plants as well as contracts with companies extracting petroleum. We also have contracts with industrial Description > Risks driven by changes in regulation customers to build large industrial infrastructure such as smelters, gas and acid plants. Such projects may be affected > Risks driven by changes in physical climate parameters should carbon be priced by means of taxes or cap and trade schemes. > Risks driven by changes in other Potential impact Reduced demand for goods/services climate-related developments Timeframe 3 to 6 years

Direct/Indirect Indirect (Client)

Likelihood Very likely

Magnitude of impact Low

In 2015, SNC-Lavalin’s combined services for the Mining & Metallurgy, Oil & Gas and Power sectors totaled 68% of Estimated financial the company’s products - about 6.5 billion dollars. A global reduction of 1% of the demand for those types of services Implications could signify a loss of earnings of 65 million dollars. SNC-Lavalin also offers services related to eco-design, energy optimization, retrofitting and carbon capture adapted Management to power plants, the extractive industry and industrial sites. It is estimated that the increased demand for those method types of services might compensate for some of the losses resulting in the postponing or cancellation of carbon intensive projects.

Cost of Management The cost of management would either be insignificant and/or absorbed in general management costs.

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CC5.1b Please describe your inherent risks that are driven by change in physical climate parameters

Risk driver Change in precipitation extremes and

According to the Centre for Research on the Epidemiology of Disasters, since 2000, the average number of climaterelated disasters each year has been 44 per cent higher than between 1994 and 2000 and well over twice the level during the 1980s. Extreme weather and natural disasters have already had direct impact on SNC-Lavalin’s operations. In 2014, the downtown area of Calgary, Alberta, was closed for 4 days due to severe flooding. In May 2015, Description state of emergency was declared after flooding affected Houston’s greater area where SNC-Lavalin operates from three offices. And in may 2016, Fort McMurray in Canada lost 2400 buildings due to wild fires. Even less dramatic weather events can have an impact on SNC-Lavalin’s capacity to deliver its project on time as work on project sites can be stopped or slowed down for safety reasons.

Potential impact Reduction/disruption in production capacity

Timeframe Up to 1 year

Direct/Indirect Direct

Likelihood Virtually certain

Magnitude of impact Medium-high

It was estimated that 5.1 million hours of work were lost due to the flooding in Calgary, resulting in $485 million of lost Estimated financial economic output by the private sector. More specifically SNC-Lavalin, more than 1000 persons were affected by the Implications evacuation downtown area Although, most workers were able to work from home, 32,000 hours could have been lost during that time. It is too early to evaluate the financial consequences of the 2016 wild fires in Alberta. The cost of SNC-Lavalin has a global security team which constantly assesses security risks confronting employees, Management property. This team establishes appropriate control measures identify and evaluate risk, as well as to mitigate the risk method to an acceptable level according to our duty of care. Business resiliency is a core element of the corporate security program and this covers physical climate events such as flooding and wildfires.

Cost of Management The cost of managing business resiliency associated with physical climate change risk is considered to be marginal.

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CC5.1c Please describe your inherent risks that are driven by changes in other climate-related developments

Risk driver Changing consumer behaviour

Clients who implement leading edge corporate business sustainability programs may impose additional requirements Description on doing business with them, over and beyond regulatory compliance - including sharing information about energy consumption/ GHG emissions or setting targets to lower the latter.

Potential impact Inability to do business

Timeframe Up to 1 year

Direct/Indirect Direct

Likelihood Unlikely

Magnitude of impact Medium-high

For the first time in 2015, clients have asked SNC-Lavalin to submit a supply chain report via the CDP. Although, Estimated financial SNC-Lavalin’s emissions are low and minimally contribute client’s emissions, not complying with this request might Implications hinder to company’s ability to do business with some clients. Active contracts with the two companies that have asked this information are in excess of $400 million. SNC-Lavalin has a strategy to maintain a good relationship with key clients in all sectors. In doing so, SNC-Lavalin Management hopes to get a better portrait of the ever evolving situation from direct account from those involved in investment method and partnership decisions. Implementing a proactive sustainability program will be a key management tool.

Cost of Management The costs of management methods are absorbed in the business development budget.

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Page: CC6. Climate Change Opportunities

CC6.1 Have you identified any inherent climate CC6.1a Please describe your inherent opportunities that are driven by changes in regulation change opportunities that have the potential to generate a substantive change in your business Opportunity driver Renewable energy regulation operations, revenue or expenditure? Renewable energy regulations will promote the development of energy sources such as geothermal, hydro, biomass and solar in which SNC-Lavalin Global Power has expertise. The demand will also be fuelled by the oil and gas Tick all that apply Description sectoran important part of SNC-Lavalin’s clients- as 20 % of North American renewable investment in the 2000s came > Opportunities driven by changes in regulation from these companies. > Opportunities driven by changes in physical Potential impact Increased demand for existing products/services climate parameters > Opportunities driven by changes in other Timeframe Up to 1 year climate-related developments Direct/Indirect Direct

Likelihood More likely than not

Magnitude of impact Medium-high

In 2015, four of the top 20 most important active projects (in terms of revenue) were related to renewable energy. Estimated financial Those projects included new power plants, as well as the refurbishing and/or Networks expansion of (KN). Existing Implications facilities. Those projects (mainly largescale hydropower) represented 1.773 Billion $ in revenues over the course of their realisation. Winning one more project of that type would represent several hundred millions$ in revenues. Management SNC-Lavalin makes sure has in renewable energy fields such as geothermal, wind, hydro evaluated. (including The KN method costs run-of-river). The company invests in expertise development through training and Knowledge Networks (KN). The cost associated with training specific to renewable energy has not been evaluated. Cost of Management The KN costs are absorbed into SNC-Lavalin’s operating costs.

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CC6.1b Please describe the inherent opportunities that are driven by changes in physical climate parameters

Opportunity driver Other physical climate opportunities

SNC-Lavalin has a line of services in order to help clients - from the private and public sectors - prepare adaptation Description plan to climate change.

Potential impact Increased demand for existing products/services

Timeframe 3 to 6 years

Direct/Indirect Direct

Likelihood More likely than not

Magnitude of impact Low

It is expected that, with the increase of extreme weather events and changing weather patterns, more industries Estimated financial and municipalities will require consulting services in order to prepare and adapt to climate change. The financial Implications implication might however be modest as this line of services doesn’t generate a substantial proportion of SNC-Lavalin’s revenues. Management The air and acoustic team is closely monitoring opportunities to promote their consulting services in these areas. method

Cost of Management The cost of management is absorbed into marketing costs.

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CC6.1c Please describe the inherent opportunities that are driven by changes in other climate-related developments

Opportunity driver Changing consumer behaviour

As awareness of Climate Change spreads, demands for eco-friendly products and services increases as well, in particular when said products are associated with well known labels. In the construction field such services can be the Description design, construction operation and maintenance of certified buildings and infrastructure: LEED, BREEAM, BOMA, HQE, Envision, etc.

Potential impact Increased demand for existing products/services

Timeframe Up to 1 year

Direct/Indirect Direct

Likelihood Likely

Magnitude of impact Medium

In 2014, the active projects that included buildings seeking LEED certification show total revenues of more than 3 Estimated financial billion dollars, including three major Canadian hospitals. SNC-Lavalin has recently won a major, multi billion dollar Implications infrastructure project which will achieve Envision certification. Various business units within the corporation are owners of expertise related to sustainability certification and Management ensure that the appropriate expertise is maintained in-house. More than 80 LEED-certified experts were working at method SNC-Lavalin at the time of writing this report. In 2015, no specific costs were associated with the management of opportunities driven by changing Cost of Management consumer behaviour.

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MODULE: GHG EMISSIONS ACCOUNTING, ENERGY AND FUEL USE, AND TRADING

Page: CC7. Emissions Methodology

CC7.1 Please provide your base year and base year emissions (Scopes 1 and 2) CC7.2a If you have selected “Other” in CC7.2 please provide details of the standard, protocol or methodology you have used to collect activity data and Scope Base year Base year emissions (metric tonnes C0 e) 2 calculate Scope 1 and Scope 2 emissions Scope 1 - - CC7.3 Please give the source for the global warming potentials you have used Scope 2 (location-based) - - Gas Reference Scope 2 (market-based) - -

CO₂ IPCC Second Assessment Report (SAR - 100 year)

CC7.2 Please give the name of the standard, protocol or methodology you have CH4 IPCC Second Assessment Report (SAR - 100 year) used to collect activity data and calculate Scope 1 and Scope 2 emissions N2O IPCC Second Assessment Report (SAR - 100 year) Please select the published methodologies that you use

The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition)

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CC7.4 Please give the emissions factors you have applied and their origin; Page: CC8. Emissions Data - (1 Jan 2015 - 31 Dec 2015) alternatively, please attach an Excel spreadsheet with this data at the bottom of this page CC8.1 Please select the boundary you are using for your Scope 1 and 2 Fuel / Material Emission greenhouse gas inventory Unit Reference /Energy Factor Operational control Natural gas 2.033 Other: Source: DEFRA: kg CO₂e per m3 http://www.ukconversionfactorscarbonsmart.co.uk/ CC8.2 Please provide your gross global Scope 1 emissions figures in metric Diesel/ 2.676 kg CO₂e per litre Source: DEFRA: tonnes C02e Gas oil http://www.ukconversionfactorscarbonsmart.co.uk/ 55,969.02 Liquefied Natural 1.234 kg CO₂e per m3 Source: DEFRA: Gas (LNG) http://www.ukconversionfactorscarbonsmart.co.uk/ CC8.3 Does your company have any operations in markets providing Propane 1.509 kg CO₂e per litre Source: DEFRA: http://www.ukconversionfactorscarbonsmart.co.uk/ product or supplier specific data in the form of contractual instruments?

Other: 2,466.274 kg CO₂e per liter Source: DEFRA: No Coal (industrial) http://www.ukconversionfactorscarbonsmart.co.uk/

Other: CNG 0.477 Other: Source: DEFRA: CC8.3a Please provide your gross global Scope 2 emissions figures in metric kg CO₂e per m3 http://www.ukconversionfactorscarbonsmart.co.uk/ tonnes C02e Other: Petrol 2.194 kg CO₂e per m3 Source: DEFRA: (biofuel blend) http://www.ukconversionfactorscarbonsmart.co.uk/ Scope 2, location-based Scope 2, market-based (if applicable) Comment

Other: Diesel 2.584 kg CO₂e per m3 Source: DEFRA: 17,614.92 0 - (biofuel blend) http://www.ukconversionfactorscarbonsmart.co.uk/ Other: Petrol 2.300 kg CO₂e per m3 Source: DEFRA: CC8.4 Are there are any sources (e.g. facilities, specific GHGs, activities, http://www.ukconversionfactorscarbonsmart.co.uk/ geographies, etc.) of Scope 1 and Scope 2 emissions that are within your selected reporting boundary which are not included in your disclosure? Yes

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CC8.4a Please provide details of the sources of Scope 1 and Scope 2 emissions that are within your selected reporting boundary which are not included in your disclosure

Relevance of Scope 1 Relevance of Scope 2 Source Explain why the Source is excluded emissions from this source emissions from this source

Vehicle fleet No emissions from No emissions from Only vehicle fleets associated with the Oil & Gas Sector’s this source this source projects and field activities are included in the present report. Other Sectors (Infrastructure, Mining & Metallurgy and Power) were unable to accurately track these metrics in 2015.

Field activities Emissions are relevant Emissions are relevant Only the field activities of SNC-Lavalin’s Oil & Gas Sector but not yet calculated but yet calculated are included in the present report. Other Sectors were unable to accurately track these metrics in 2015.

Refrigerant No emissions from No Emissions from Only the field activities of SNC-Lavalin’s Oil & Gas Sector gases (HFC, this source this source are included in the present report. Other Sectors were PFC and SF6) unable to accurately track these metrics in 2015.

Infrastructure Emissions are relevant Emissions are relevant Only the field activities of SNC-Lavalin’s Oil & Gas Sector Concession but not yet calculated but not yet calculated are included in the present report. Other Sectors were Investments unable to accurately track these metrics in 2015.

Infrastructure Emissions are relevant Emissions excluded due Only the field activities of SNC-Lavalin’s Oil & Gas Sector Concession but not yet calculated to a recent acquisition are included in the present report. Other Sectors were Investments unable to accurately track these metrics in 2015.

24 Climate Change 2016

CC8.5 Please estimate the level of uncertainty of the total gross global CC8.6 Please indicate the verification/assurance status that applies to your Scope 1 and 2 emissions figures that you have supplied and specify the reported Scope 1 emissions sources of uncertainty in your data gathering, handling and calculations No third party verification or assurance Uncertainty Main sources Scope Please expand on the uncertainty in your data range of uncertainty CC8.7 Please indicate the verification/assurance status that applies to your Scope 1 More than 40% Data gaps We obtained direct data from offices representing 87% reported Scope 2 emissions but less than or of the surface occupied by SNC-Lavalin worldwide. It equal to 50% has been decided not to extrapolate the data on the No third party verification or assurance missing 13% of office space as every office differs from the other : climate, thermal qualities, energy efficiency, occupation configuration, etc. SNC-Lavalin considers CC8.8 Please identify is any data points have been verified as part of the third it has captured the majority of its Oil & Gas Sectors’ party verification work undertaken, other than the verification of emissions field activities-related emission, which represents figures reported in CC8.6, CC8.7 and CC14.2 about 41 % of the annual revenue of the company.

Scope 2 More than 40% Data gaps We obtained direct data from offices representing 87% Additional data points verified Comment (location but less than or of the surface occupied by SNC-Lavalin worldwide. It -Based) equal to 50% has been decided not to extrapolate the data on the No additional data verified - missing 13% of office space as every office differs from the other : climate, thermal qualities, energy efficiency, occupation configuration, etc. SNC-Lavalin considers CC8.9 Are carbon dioxide emission from biological sequestrated carbon it has captured the majority of its Oil & Gas Sectors’ field activities-related emission, which represents relevant to you organisation? about 41 % of the annual revenue of the company. No Scope 2 - - - (market -Based)

25 Climate Change 2016

Page: CC9. Scope 1 Emission Breakdown - (1 Jan 2015 - 31 Dec 2015)

CC9.1 Do you have Scope 1 emissions sources in more than one country? CC9.2 Please indicate which other Scope 1 emissions breakdowns you are Yes able to provide > By business division CC9.1a Please break down your total gross global Scope 1 emissions > By facility by country/region > By GHG type > By activity Country/Region Scope 1 metric tonnes CO₂e

Algeria 252.43 CC9.2a Please break down your total gross global Scope 1 emissions Australia 31,920.15 by business division Canada 1,057.63 Business division Scope 1 Emissions (metric tonnes CO₂e) Colombia 219.82 Mining & Metallurgy 55.41 France 23.50 Infrastucture 806.95 Ireland 36.75 Oil & Gas 55,036.29 Kuwait 642.87

Mozambique 754.08 Power 0

Qatar 6514.1 Other 70.37

Romania 20.20

Russia 842.41

Saudi Arabia 7,091.89

South Africa 5,058.66

Trinidad and Tobago 50.95

United Arab Emirates 153.89

United Kingdom 160.89

United States of America 1,168.81

26 Climate Change 2016

CC9.2b Please break down your total gross global Scope 1 emissions by facility CC9.2c Please break down your total gross global Scope 1 emissions by GHG type

Scope 1 emissions Facility Latitude Longitude (metric tonnes C02e) GHG type Scope 1 emissions (metric tonnes CO₂e)

USA, Texas, Bay city, Fabrication plant 919.80 - - CO₂ 55,549.36

ALGERIA, Alger, Permanent office 252.43 - - CH4 24.12

SAUDI ARABIA, Al Khobar, Auto Moto 170.70 - - N2O 395.54 building, Permanent office

Canada, Alberta, Nisku, Fabrication Plant 137.29 - - CC9.2d Please break down your total gross global Scope 1 emissions by activity USA, Texas, Victoria, Fabrication Plant 125.84 - - Activity Scope 1 emissions (metric tonnes CO₂e) UK, Derby, lnterfleet house, Permanent office 115.77 - - Office and other permanent locations 1,550.84 CANADA, Ontario, Vaughan, Permanent office 113.82 - - Production Facilities 1,289.44 CANADA, Alberta, Edmonton, Oxford 113.63 - - Tower, Permanent office O&G Project site and field activities 53,128.73

CANADA, British Columbia, Burnaby, Permanent Office 86.45 - -

Other permanent facilities 704.27 -

27 Climate Change 2016

Page: CC10. Scope 2 Emission Breakdown - (1 Jan 2015 - 31 Dec 2015)

CC10.1 Do you have Scope 2 emissions sources in CC10.1a Please break down your total gross global Scope 2 emissions and energy consumption more than one country? by country/region

Yes Purchased and Purchased and consumed low Scope 2 Purchased and consumed low carbon consumed electricity, carbon electricity, heat, steam Country/Region metric electricity, heat, steam or cooling heat, steam or or cooling accounted in market tonnes CO₂e accounted for in the CC8.1 (MWh) cooling (MWh) based approach (MWh)

Algeria 2,093.32 - 3,811.57 -

Australia 434.80 - 544.24 -

Brazil 69.62 - 709.13 -

Canada 1,452.43 - 11,507.39 12,562

Chile 177.88 - 368.30 -

Colombia 56.91 - 463.58 -

France 35.65 - 5 14.79 -

India 584.36 - 630.99 -

Ireland 77.76 - 170.30 -

Kuwait 363.48 - 487.92 -

Morocco 17.48 - 25.09 -

Mozambique 0.00 - 3.02 -

Norway 0.17 - 21.40 -

Peru 87.98 - 308.10 -

Qatar 1,001.31 - 2,031.26 -

Romania 195.47 - 406.71 -

28 Climate Change 2016

Purchased and Purchased and consumed low Scope 2 Purchased and consumed low carbon consumed electricity, carbon electricity, heat, steam Country/Region metric electricity, heat, steam or cooling heat, steam or or cooling accounted in market tonnes CO₂e accounted for in the CC8.1 (MWh) cooling (MWh) based approach (MWh)

Russia 25.05 - 58.43 -

Saudi Arabia 3,901.18 - 5,284.61 -

South Africa 311.90 - 341.43 -

Trinidad and Tobago 33.07 - 48.89 -

United Arab Emirates 284.39 - 476.14 -

United Kingdom 478.30 - 997.54 -

United States 3,502.64 - 6,671.01 - of America

CC10.2 Please indicate which other Scope 2 emissions breakdowns you are able to provide > By business division > By facility > By activity

CC10.2a Please break down your total gross global Scope 2 emissions by business division

Scope 2 emissions, location based Scope 2 emissions, market based Business division (metric tonnes CO₂e) (metric tonnes CO₂e)

Mining & Metallurgy 393.38 -

Infrastructure 2,736.50 -

Oil & Gas 4,858.62 -

Power 733.68 -

Multiple sectors (shared locations) 596.14 -

29 Climate Change 2016

CC10.2b Please break down your total gross global Scope 2 emissions by facility

Scope 2 emissions, location based Scope 2 emissions, market based Facility (metric tonnes CO₂e) (metric tonnes CO₂e)

ALGERIA, Alger, Permanent office 2,093.32 -

USA, Texas, Houston 919 Milam st, Permanent office 1,240.73 -

USA, Texas, Bay city, Fabrication Plant 778.75 -

SAUDI ARABIA, Al Khobar, NSH G old Tower,Permanent office 743.21 -

UNITED STATES, Texas, Victoria, Fabrication Plant 696.59 -

QATAR, Doha, KBH Building, Permanent office 653.39 -

SAUDI ARABIA, Al Khobar, Auto Moto Building, Permanent office 643.83 -

CANADA, Alberta, Edmonton, Oxford Tower, Permanent office 548.74 -

UNITED STATES, Louisiana, New Iberia, Fabrication Plant 365.66 -

INDIA, Andheri (East), Mumbai, Permanent Office 353.39 -

Other permanent facilities 4,015.08 -

CC10.2c Please break down your total gross global Scope 2 emissions by activity

Scope 2 emissions, location based Scope 2 emissions, market based Activity (metric tonnes CO₂e) (metric tonnes CO₂e)

Office and other permanent locations 9,938.31 -

Production Facilities 2,194.38 -

O&G Project site and field activities 3,052.48 -

30 Climate Change 2016

Page: CC11. Energy

CC11.1 What percentage of your total operational spend in the reporting CC11.4 Please provide details of the electricity, heat, steam, or cooling amounts years was on Energy? that were accounted ata low carbon emission factor in the Scope 2 figure More than 0% but less than or equal to 5% reported in CC8.3 MWh consumed associated with Basis for applying a low low carbon electricity, heat, Comment CC11.2 Please state how much fuel, electricity, heat, steam, and cooling in carbon emission factor steam or cooling MWh your organization has purchased and consumed during the report year Contract with suppliers 12,562 Corresponds to electricity Energy type Energy purchased and consumed (MWh) or utilities, with a supplier purchased from Hydro-Quebec, -specific emission rate, who produces electricity Heat 0 not backed by electricity almost exclusively (99%) from attribute certificates low-carbon hydro-power. Steam 0 CC11.5 Please report how much electricity you produce in Cooling 0 MWh, and how much electricity you consume in MWh

Consumed CC11.3 Please complete the table by breaking downthe total “Fuel” figure Consumed Total Total electricity Total renewable renewable electricity that electricity entered above by fuel type consumed electricity electricity that Comment is purchased produced (MWh) produced (MWh) is produced by (MWh) (MWh) Fuels MWh company (MWh)

Other: CNG 3,444.71 48,443.86 48,443.86 0 0 0 -

Other: Coal (industrial) 17.12

Diesel/Gas oil 142,238.02

Other: Diesel (biofuel blend) 38,449.91

Propane 1,136.74

Natural gas 6,166.95

Other: Petrol 20,293.66

Other: Petrol (biofuel blend) 2,057.38

Distillate fuel oil No 2 367.15

31 Climate Change 2016

Page: CC12. Performance

CC12.1 How do your gross global emissions(Scope CC12.1a Please identify the reasons for any change in your gross global emissions (Scope 1 and 2 combined) 1 and 2 combined) for the reporting year compare and for each of them specify how your emission compare to the previous year to the previous year? Emissions value Direction Reason Comment Increased (percentage) of change Emissions - - - reduction activities

Divestment 11.12 Decrease Reorganization and optimization has continued in 2015. Where Kentz and SNC-Lavalin had offices close to one another, those where merged.

Acquisitions 7.92 Increase Kentz acquired Valerus in 2014, not long before being acquired itself by SNC-Lavalin. It is the first time emissions from Valerus’ production facilities are included in SNC-Lavalins’s report.

Mergers - - -

Change in output 22.45 Increase Kentz (Oil & gas Sector) field activities intensified in 2015 on many major projects.

Change - - - in methodology

Change in boundary - - -

Change in physical - - - operating conditions

Unidentified - - -

Other 42.45 Increase A calculation mistake in Kentz’ 2014 report caused an omission of 18 680 t CO₂ eq. The mistake was due to a major project entering its fuel consumption in mega liters rather than in liters in its 2014 fuel consuption registry.

12.1b Is your emissions performance calculations in CC12.1 and CC12.1a based on a location-based Scope 2 emissions figure or a market-based Scope 2 emissions figure? Location-based

32 Climate Change 2016

CC12.2 Please describe your gross global combined Scope 1 and 2 emissionsfor the reporting year in metric tonnes C0₂e per unit currency total revenue

Metric numerator (Gross global Metric denominator: % change from Direction of change Intensity figure = Scope 2 figure used Reason for change combined Scope 1 and 2 emissions) Unit total revenue previous year from previous year

0.000007 Metric tonnes CO₂e 9.587.000.000 Location ­ based 540 Increase Change in boundary

CC12.3 Please describe your gross global combined Scope 1 and 2 emissions for the reporting year in metric tonnes C0₂e per full time equivalent (FTE) employee

Metric numerator Metric denominator: % change from Direction of change Intensity figure = Metric denominator Scope 2 figure used Reason for change (Gross global combined Scope 1 and 2) Unit total previous year from previous year

1.93 Metric tonnes CO₂e Other: Employees 36,783 Location-based 501 Increase Change in boundary

0.21 Metric tonnes CO₂e square meter 342,541 Location-based 907 Increase Change in boundary

Page: CC13. Emissions Trading

CC13.1 Do you participate in any emissions trading schemes? No, and we do not currently anticipate doing so in the next 2 years

CC13.2 Has your organization originated any project-based carbon credits or purchased any within the reporting period? No

33 Climate Change 2016

Page: CC14. Scope 3 Emissions

CC14.1 Please account for your organization’s Scope 3 emissions, disclosing and explaining any exclusions

Percentage of emissions calculated Sources of scope Metric tonnes Evaluation status Emissions calculation methodology using data obtained from suppliers Explanation 3 emissions CO₂e or value chain partners

Purchased goods Not evaluated - - - - and services

Capital goods Not evaluated - - - -

Fuel-and-energy Not evaluated - - - - related activities (not included in Scope 1 and 2)

Upstream Not evaluated - - - - transportation and distribution

Waste generated Not evaluated - - - - in operation

Business travel Relevant 5.762.86 Car rental, rail and air travel companies provide 100.00% Includes long-term car leases, car rentals (for projects), calculated SNC-Lavalin with calculated GHG emissions flights and rail travel booked through SNC-Lavalin’s via our in-house travel agent. They each have a in-house travel agent. We estimate that about 50% of all different methodology. flights are captured.

Employee Not evaluated - - - - commuting

Upstream leased Relevant, 8.518.66 SNC-Lavalin applies the same methodology for its 100.00% Includes all rented office space where the utilities are assets calculated scope 3 emissions associated with rented office spaces paid by the landlord and charged to SNC-Lavalin on than with the buildings that it owns. Landlords provide a surface-based ratio or other evaluation specified in information on energy consumption, but SNC-Lavalin the lease. does not verify it.

Downstream Not evaluated - - - - transportation and distribution

Processing of Not evaluated - - - - sold products

34 Climate Change 2016

Percentage of emissions calculated Sources of scope Metric tonnes Evaluation status Emissions calculation methodology using data obtained from suppliers Explanation 3 emissions CO₂e or value chain partners

Use of Not evaluated - - - - sold products

End of life Not evaluated - - - - treatment of sold products

Downstream Not relevant, - - - SNC-Lavalin owns a very small portion of the buildings leased assets explanation provided it occupies. In a very few instances, we rent or sublease spaces.

Franchises Not relevant, - - - SNC-Lavalin does not sell any franchises. explanation provided

Investments Not evaluated - - - -

Other (upstream) Not evaluated - - - -

Other Not evaluated - - - - (downstream)

35 Climate Change 2016

C14.2 Please indicate the verification/assurance status that applies to your CC14.4 Do you engage with any of the elements of your value chain on GHG reported Scope 3 emissions emissions and climate change strategies? (Tick all that apply) No third party verification or assurance No, we do not engage

CC14.3 Are you able to compare your Scope 3 emissions for the reporting year CC14.4d Please explain why you do not engage with any elements of your value with those for the previous year for any sources? chain on GHG emissions and climate change strategies, and any plans you have Yes to develop an engagement strategy in the future At this stage, SNC-Lavalin wishes to focus on including more Scope 1 and scope 2 emission CC14.3a Please identify the reasons for any change in your Scope 3 emissions sources to its inventory before including more sources to its scope 3. and for each of them specify how your emissions compare to the previous year

Sources of Reason for Emissions Direction Scope 3 Comment change value (%) of change emissions

Business Change in 79.87 Decrease Part of the decrease can be travel boundary explained by renewed promotion of technologies such as video conferences. But the biggest change might be due to the fact that travel emissions are collected through our in-house travel agency, to which Kentz was not fully integrated in 2015. Kentz activities represented about 40% of all SNC-Lavalin’s revenue in 2015.

Upstream Change in 11.12 Decrease SNC-Lavalin has an ongoing leased assets physical operating program aiming at the optimization conditions of all rented office locations.

36 Climate Change 2016

MODULE: SIGN OFF

Page: CC15. Sign Off

CC15.1 Please provide the following information for the person that has signed off (approved) your CDP climate change response

Name Job title Corresponding job category

Mark Osterman VP, Environment & Sustainability Environment/Sustainability manager

37