CITIZENS OF THE WORLD 2019 CORPORATE SUSTAINABILITY REPORT BEGIN > About our report CSR2019 This 2019 Citizens of the World reports on Air Canada’s company-wide economic, About our report safety, social and environmental performance from January 1 to December 31, 2019. The report further Corporate sustainability discusses some of the organization’s at Air Canada 2020 updates, including multi-year data trends where possible. We have been REPORTING FRAMEWORK Materiality Matrix committed to reporting on our corporate This report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards: Core option. sustainability activities since 2012. All Internationally recognized as a leader in sustainability reporting standards, the GRI helps maintain transparency prior reports and data trends can be in corporate reporting related to economic, environmental, and social performance. Certain of our environmental Stakeholder Engagement found here. achievements are also detailed through the Carbon Disclosure Project (CDP) report. The CDP questionnaire aligns Unless stated otherwise, the 2019 with the Task Force on Climate-related Financial Disclosures (TCFD) framework. To access the CDP, please visit: United Nations Sustainable Citizens of the World is inclusive of the www.cdp.net Development Goals sustainability efforts and activities of Since the release of our 2018 Citizens of the World, we have become an official signatory of the United Nations A Message from Air Canada and its subsidiaries, namely, Global Compact (UNGC). Therefore, in addition to our commitment to the GRI, new this year, we also outline Calin Rovinescu Air Canada Rouge, Air Canada Vacations, our progress promoting the United Nations Sustainable Development Goals throughout this report, and also and Aeroplan Inc. A more fulsome and share our Communication on Progress to the UNGC. complete overview of our financial Achievements performance and description of business In 2019, we also participated in various sustainability assessments, including the EcoVadis assessment, for which are available in our 2019 Annual Report. we were in the 87th percentile and awarded a silver medal in category 511: Passenger Air Transport. The EcoVadis analysis covers four general themes: environment, labor and human rights, ethics, and sustainable procurement. OUR BUSINESS THIRD-PARTY ASSURANCE ON MANY STANDARDS OUR PEOPLE Continuously maintaining transparency and accountability, we have engaged Ernst & Young LLP to perform an independent, limited assurance on seven performance indicators. For information regarding the scope of the assurance and statement, please read the limited assurance statement. OUR PLANET GRI Content Index / UNGC Communication Citizens of the World 2019 2 on Progress Corporate Sustainability Report Corporate sustainability at Air Canada CSR2019 Continuous sustainability improvement is critical to our business strategy, and this is integrated throughout the organization. At Air Canada, we coordinate corporate sustainability initiatives through a Corporate Sustainability Working Group and a Corporate Sustainability Steering Committee. The Corporate Sustainability Working About our report Group, comprised of senior management subject-matter experts from diverse functions, is tasked with the oversight and monitoring of Air Canada’s corporate sustainability initiatives. This Working Group reports on the progress of such initiatives to the Steering Committee, which includes several executives. Ultimately, corporate Corporate sustainability sustainability initiatives are reported to, and are under the oversight of the Board of Directors of Air Canada, at Air Canada including through the Governance and Nominating Committee. Materiality Matrix Stakeholder Engagement Corporate Sustainability Governance and Working Group Nominating Committee United Nations Sustainable Development Goals A Message from Calin Rovinescu Achievements OUR BUSINESS Corporate Sustainability Air Canada OUR PEOPLE Steering Committee Board of Directors OUR PLANET GRI Content Index / UNGC Communication Citizens of the World 2019 3 on Progress Corporate Sustainability Report Materiality Matrix CSR2019 In 2018, we undertook a materiality assessment to identify the main sustainability areas of focus of our key stakeholders. Rankings were based on input from stakeholders which have been collected through interviews, workshops, and surveys. Relevant sustainability topics for Air Canada were then matched with material topics from the GRI and prioritized using the About our report Principles of Materiality and Stakeholder Inclusiveness. The results are identified in our materiality matrix and we reviewed and used the results from this materiality assessment for our 2019 report. Corporate sustainability Materiality, in the sustainability context used for this report, refers to the relative significance of environmental, social, at Air Canada governance and economic priorities and their impacts (both positive and negative) to our business and our stakeholders. Materiality Matrix TOP 5 ISSUES Stakeholder Engagement GOVERNANCE ECONOMIC Safety United Nations Sustainable Ethical business practices and policies SOCIAL Development Goals Human rights Data protection and privacy ENVIRONMENTAL A Message from Employee health and wellness Fleet management Transparency and disclosure Economic 1 Safety Calin Rovinescu Energy consumption Customer performance 2 Economic performance of Air Canada engagement Waste management Corporate citizenship of Air Canada 3 Data protection and privacy Water management Diversity and equal opportunity Sustainable governance 4 Ethical business practices and policies Labour relations and employee engagement 5 Customer engagement Achievements Greenhouse gas (GHG) emissions Employee training & development 6 Transparency and disclosure Noise Management of climate-related 7 Fleet management Socio-economic risks and opportunities 8 Sustainable governance 9 Energy consumption impact in Canada Sustainable procurement practices OUR BUSINESS 10 Labour relations and employee engagement Biodiversity Community involvement TOP 10 ISSUES OUR PEOPLE IMPORTANCE TO STAKEHOLDERS TO IMPORTANCE OUR PLANET IMPORTANCE TO AIR CANADA’S BUSINESS GRI Content Index / UNGC Communication Citizens of the World 2019 4 on Progress Corporate Sustainability Report Stakeholder Engagement CSR2019 In 2019, we regularly engaged with our stakeholders through IN S dialogue, meetings, surveys, correspondence, focus groups, social VESTOR NGO media, and conferences. About our report Our employees provided feedback and engaged in dialogue through various platforms in addition to regular surveys conducted by the Corporate sustainability Company to measure our safety culture and employee engagement. at Air Canada We continued to conduct customer satisfaction monitoring monthly C with all customer segments. In 2019, we updated the survey to O S R R P E provide a better respondent experience and data insight. The O M Materiality Matrix R O S highest positive responses were from our business travellers. ATE CUST UPPLIERS We also made use of online panels to collect customer feedback on Stakeholder Engagement product, services, and new concepts. The online panels consisted of a group of Air Canada customers recruited annually on a voluntary United Nations Sustainable basis, as well as a group of Aeroplan members recruited on an Development Goals on-going voluntary basis. We also conducted focus groups and customer interviews working towards the design of new loyalty A A Message from E S products and concepts. R R E C O B Calin Rovinescu US RS PL M We measured the health of our brands with a survey of Canadian TOME AN ME travellers. In 2019, 2,700 Canadian travellers provided feedback and Achievements we observed positive improvement in emotional connection with EM S Air Canada, associated as one of Canada’s most iconic brands that PLOYEE OUR BUSINESS represents Canadian values. We continue to be active with traditional media and monitor all major social media sites and strive to continually enhance the OUR PEOPLE level of service that we provide our customers, some of whom prefer to provide feedback via those channels. We are dedicated To keep financial stakeholders informed, since 2013, we have held bi-annual investor to serving our customers by providing them with up-to-date travel conferences and regularly participate in conferences, including fireside chats and we OUR PLANET information, information about the Company and assistance with maintained dialogue with our investors. Annual conferences and regular discussions were also general inquiries. regularly held with our corporate customers. GRI Content Index / UNGC Communication Citizens of the World 2019 5 on Progress Corporate Sustainability Report United Nations CSR2019 Sustainable Development Goals Y IT P R E About our report E O P P S L Corporate sustainability E O at Air Canada R P In 2019, we joined the United Nations Global Materiality Matrix Compact (UNGC), a voluntary initiative with a principle-based framework for businesses, comprised of ten principles in the areas of Stakeholder Engagement human rights, labour rights, the environment and working against corruption in all its forms. United Nations Sustainable Development Goals A Message from Calin Rovinescu Achievements We support all 17 Sustainable Development Goals and we are particularly focused on 7 goals being : OUR BUSINESS Goal 3: Good Health and Well-being, Goals 5: Gender Equality and 10: Reduced