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Responsible gas - an emerging market

As the global conversation regarding net zero has increased, so too have consumer expectations for the energy they consume. This marked evolution provides an opportunity for progressive energy producers to differentiate their commodities through exceptional ESG performance.

Today, consumers are increasingly looking to better understand the footprint of the products they consume across all aspects of the value chain to ensure these products are produced responsibly and ethically. This notable shift has significantly impacted the energy sector, providing energy producers with opportunities to leverage leading ESG performance and demonstrate that profitability and sustainability can go hand-in-hand.

EO100™ Standard for Responsible Energy Development

In 2019, Seven Generations (now ARC) was the first natural gas producer in the world to achieve the EO100™ Standard for Responsible Energy Development. The standard acknowledges the Company’s top-tier environmental, social and governance performance and commitment to continuous improvement of its sustainable development practices related to its Kakwa asset.

The certification was granted by Equitable Origin (EO) following a comprehensive and independent assurance process that included site-level assessments and discussions with key stakeholders and Indigenous communities.

Commercializing responsible gas

This global certification opened the door to commercial supply opportunities with two progressive natural gas distributors in Quebec and Vermont – Énergir s.e.c. and Vermont Gas Systems, respectively.

Both companies saw this as an opportunity to respond to growing customer interest in understanding the product they consume and to ultimately, help each lower their overall carbon footprint. In return for this low-carbon energy measure, their end-customers were willing to pay a modest premium, which was used to catalyze further investment into Seven Generations’ sustainability initiatives.

In 2020, Seven Generations also leveraged its certification to enter in a combined renewable energy certificate (REC) natural gas supply transaction with a local Alberta consumer. The transaction saw a portion of Kakwa’s Alberta-based natural gas sales receive a REC which supported the Company’s Scope 2 emissions reduction initiatives.

“Through our responsible supply transactions, we saw that consumers were willing to pay more for a molecule of hydrocarbon with a lower carbon footprint. This is an evolution in that commodities, are being monetized differently based on how the resource is developed.”

- Ryan Berrett, Vice President, Marketing

Next steps

Our leading ESG performance and certification efforts have had a cascading effect on the energy industry. Since announcing certification in early 2020, additional industry peers have also followed suit supporting enhanced transparency across the sector.

This opportunity provides an even stronger and unique platform for ARC to distinguish its natural gas based on its ESG performance, deliver on its sustainability objectives and create differentiated value for shareholders.

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