INTRODUCTION STRATEGY RESULTS Environmental Approach Social Approach Governance Approach OUR ENVIRONMENTAL APPROACH North Antelope Rochelle Mine Our environmental approach is two-fold with a focus on responsible coal mining and advanced coal use. Responsible Coal Mining Advanced Coal Use We begin with a deep appreciation Our commitment to the environment and understanding for the land and does not end with our operations. communities where we operate. Before Society has a growing need for energy any mining activity starts, we complete and a desire to reduce emissions, and comprehensive baseline studies of we believe both goals can be achieved — local ecosystems and land uses and not by moving away from coal — but by incorporate our findings into detailed embracing technology. mine plans aimed at reducing potential As outlined in our Statement on Climate impacts from our operations. Change, Peabody recognizes that climate As safe mining commences, we use change is occurring and that human industry leading practices to make the activity, including the use of fossil fuels, most efficient use of natural resources, contributes to greenhouse gas emissions. while minimizing our environmental We also recognize that coal is essential footprint. This includes a focus on to affordable, reliable energy and will reducing greenhouse gas intensity, continue to play a significant role in the conserving water, advancing recycling global energy mix for the foreseeable and waste management programs, future. Peabody views technology as and applying contemporaneous land vital to advancing global climate change reclamation to lessen surface disturbance. solutions, and the company supports advanced coal technologies to drive Our governing principles for all sites are continuous improvement toward the outlined in our Environmental Policy, ultimate goal of near-zero emissions which applies to employees, contractors, from coal. visitors and vendors at all our sites. Peabody’s continuing actions to address climate change include funding research and participating in key initiatives in low-emissions projects and partnerships such as those already advancing in the U.S., Australia and China. In addition, we Target #1 engage with governments, academia, communities and other stakeholders Reclaim at least one to support constructive dialogue and graded acre for each acre encourage a true “all of the above” of land disturbed due to energy strategy that recognizes the mining activity. benefits and limitations of each fuel to meet society’s growing demand. 16 2018 ESG Report 2018 ESG Report 17 INTRODUCTION STRATEGY RESULTS Environmental Approach Social Approach Governance Approach Land Restoration Environmental Accomplishments Peabody views land restoration as a vital part of the Peabody’s leading environmental and land reclamation mining life cycle and aims to commence restoration practices have been awarded more than 130 honors of the landscape as soon as land becomes available, since 2000. to create a safe, stable and sustainable landform In 2018, Peabody was recognized with the Communitas that benefits generations to follow. Reclamation is Award for our stewardship of the environment, undertaken on a progressive basis with consultation specifically highlighting our work with the U.S. Fish and between the environmental, technical services and Wildlife Service and Indiana Department of Natural production teams. In any given year, land reclamation Resources to protect the endangered Interior Least activities can vary due to production, weather Tern bird species and our ongoing reclamation of the conditions and other unforeseen factors. Big Creek watershed at our Wild Boar Mine. In 2018, Peabody continued to advance our restoration activities, reclaiming 1.4 acres of land for every acre disturbed. In total, we restored 5,344 acres of mined During the year, Peabody received land, which now serve as wildlife habitat, rangeland, hardwood forests, prime farmland, pastoral land three of four U.S. Office of Surface and wetlands. In addition, the company established Mining Reclamation and Enforcement 13 miles of high-quality streams and planted (OSMRE) awards. 555,445 trees. Our Bear Run Mine in Indiana earned the Good Neighbor Land and Bond Release Award for successfully working with surrounding landowners and the community while completing Peabody remains focused on restoring the land mining and reclamation. Recognition was also given and providing assurance for future obligations. The for reclamation completed at our former Big Sky company fully accounts for the projected financial Cattle graze at the former Wilkie Creek Mine where Peabody worked to incorporate local needs into post-mine land use. Mine in Montana, which features stream channels and impact of our final coal mine reclamation requirements wetlands, a sustainable supply of water for livestock through our asset retirement obligation on our and wildlife, and nesting areas for habitat and wildlife. balance sheet in accordance with Generally Accepted Accounting Principles. In addition to funding every Also in Indiana, OSMRE honored our Wild Boar LANDMARK ENVIRONMENTAL ACHIEVEMENT dollar of our coal mine restoration, Peabody pays tens Mine for achieving the most exemplary mining and of millions of dollars each year to the Abandoned Mine reclamation in the country. Wild Boar was also FOR FORMER WILKIE CREEK MINE Land (AML) Reclamation Program for the reclamation recognized by the Interstate Mining Compact of lands mined before the U.S. Surface Mining and Commission for reclamation work at the Barren Fork In early 2019, Peabody achieved a major environmental milestone at its former Wilkie Creek Mine in Control Reclamation Act of 1977. As the largest U.S. Pit. Reclamation activities extended over 480 acres Australia with the Department of Environment and Science formally certifying almost 90 hectares of coal producer, we contribute more annually to the of land and included the elimination of more than a mile the former mine site as fully rehabilitated. Mining at Wilkie Creek ended in late 2013, and Peabody has AML fund than any other coal producer. of highwall, the planting of more than 260,000 trees, rehabilitated 612 hectares of former mined land at the site. The decision recognizes the first section of the restoration of eight streams among the reclaimed In the U.S. and Australia, Peabody provides third- that area to be certified as safe, stable, self-sustaining and non-polluting. forest and the creation of natural habitat for wildlife party bonding facilities to meet reclamation liabilities. within the forested areas. Peabody understands that mining plays an important, but temporary, role in the life of a region and Reclamation liabilities are calculated based on each that the mined land must remain a community and economic asset long after final coal production. mine’s maximum disturbance area for a specified Recognition also extended to our workforce, As responsible custodians of the land and good neighbors, Peabody implements a progressive period. Our practice of contemporaneous reclamation with Peabody’s Monty Parke, Senior Manager — rehabilitation approach that starts land rehabilitation well before mine closure. At Wilkie Creek, team supports timely reduction of reclamation liabilities. Reclamation, recognized with the 2018 Vance members involved in the rehabilitation were not only locals, but also farmers who have worked the land “Pat” Wiram Award for Innovation in Reclamation and know what the soil and conditions respond to best. Technology by the Indiana Society of Mining and Reclamation. Monty’s contributions include uses To date, only a few areas within Queensland have been progressively certified. of cover crops and fertility management for water quality and safe and efficient methods to reclaim coal refuse sites. 18 2018 ESG Report 2018 ESG Report 19 INTRODUCTION STRATEGY RESULTS Environmental Approach Social Approach Governance Approach Percent Water Recycled of Total Recycled/Reused/Energy Recovery vs. Pounds of GHG Emitted per Withdrawn Globally Landfilled/Incinerated/Landfarmed Unit Produced (Includes mine methane emissions) 14.0 14.7 Water Consumed, Recycled/Reused/ Discharged and Energy Recovery Stored from Total 52% 48% Water Withdrawn 61% 39% Landfilled/ Incinerated/ Water Recycled from Landfarmed Total Withdrawn 2017 2018 *Does not include Middlemount JV or Shoal Creek. *Does not include Middlemount JV or Shoal Creek. CMJV included at 100%. CMJV included at 100%. Changes in Water and Waste Reporting closed loop water circuits at our coal prep plants, with the Greenhouse Gas Intensity and average plant achieving recycling rates of 73 percent. Energy Efficiency In 2015, Peabody began reporting on six indicators for Each of our mines aligns its water management strategy Peabody’s Group Executive and Chief Marketing Officer Bryan water and waste in reference to the Global Reporting In order to extract the fuel needed for energy, Galli and Director of Sales and Marketing Dan Appelbaum visit with the specific challenges of its region. Our operations in Initiative (GRI) framework. Since that time, GRI has released we must use energy, and we are committed site of Arq Technology in Corbin, Kentucky. more arid environments focus on conservation, while mines new reporting standards for these indicators, which to doing so in a responsible manner. in humid climates routinely manage surplus water from require additional disclosures. We believe it is important storms or groundwater and mitigate