Purpose

This policy affirms Topaz Energy Corp. ("Topaz" or the "Corporation") and its board of directors’ intention and  corporate responsibility to protect the environment, prevent, reduce and mitigate harmful effects on the environment and natural resources, respect human rights from a race, gender, nationality, ethnicity, language, or other status deemed relevant and ensure the health and safety of the Corporation’s employees, contractors, directors and officers by providing and maintaining a respectful workplace, business environment and  relationships with stakeholders. 

Although Topaz does not directly operate any oil and gas properties, facilities or related assets, nor is Topaz responsible for abandonment or reclamation obligations attributed to its royalty assets, Topaz’s strategy is to partner with operators demonstrating industry leading environmental stewardship and responsibility.  Topaz’s investments and partnerships are guided by an ESG-integrated framework whereby Topaz conducts due diligence and evaluation procedures to ensure our investments and partnerships meet our strategic objectives.  Our goal is to conduct our business in a manner that visibly demonstrates our commitment to health, safety and environmental leadership throughout our business activities and strategic investments, while minimizing both adverse environmental and health and safety effects and consequences of loss or harm.

Scope

This Environment, Human Rights and Health & Safety Policy (this “Policy”) applies to Topaz’s business activities and business relationships including all employees, contractors and to the directors and officers of Topaz.  Topaz expects its partners, vendors and suppliers to uphold similar practices and has a zero-tolerance policy for non-conformance with laws, regulations and protection of the environment and human rights.

Accountability

The executive team is accountable to the governance, compensation and sustainability committee as well as the board of directors to establish, maintain and implement this policy.

Executives and managers are responsible to monitor and ensure compliance, mentor and train workers whom they supervise, on matters related to the Corporation’s policies. 

Topaz’s corporate policies are readily available on its website and are provided in conjunction with onboarding training to new employees, contractors, directors and officers.

All Topaz employees, consultants, directors, officers, partners, vendors and suppliers are required to comply with this policy as a condition of their relationship with Topaz.  This policy is included by reference in Topaz’s Code of Business Conduct and Ethics, which is required to be reviewed, understood and attested to by all employees, consultants, directors and officers on an annual basis.

Definitions

Stakeholders, as defined by amendments to the Canada Business and Corporations Act (“CBCA”) includes the interests of shareholders, employees, retirees and pensioners, creditors, consumers, governments, the environment and the long-term interests of the Corporation.

Topaz Commits to:

Risk Management and Compliance

1.    Identifying, managing and/or mitigating Topaz’s environment and climate change risks and/or opportunities through oversight by the governance, compensation & sustainability committee; including evaluation of environmental and climate change impacts in conjunction with all investment evaluations.  Topaz’s CEO or CFO will report on these matters on a regular basis. 

2.    Complying with applicable environmental, climate change and health and safety laws and regulations and demonstrating a commitment to sound and ethical business practices.  Topaz’s partners, vendors and suppliers are expected to comply with applicable environmental, climate change and health and safety laws and regulations including maintaining and following all required environmental permits, approvals, registrations and operational and reporting requirements.  Topaz reserves the right to conduct audits over its affiliates’ compliance with laws and regulations and prohibit business activities in the event of non-compliance.

 3.    Understanding and monitoring, where practical, the operators of our assets’ environmental, health and safety initiatives.  Topaz maintains a corporate health and safety management system whereby health and safety incidents are reported to the human resources manager (or equivalent) who is responsible for incident response, communicating health and safety incidents to senior management, acting as a liaison with worker’s compensation, insurance and health benefits providers, and tracking safety incidents and fatality statistics in order to report through Topaz public disclosure(s), on an annual basis.  Topaz targets zero incidents or fatalities.

Environment and Climate Change Responsibility

4.    Promoting environmental awareness, stewardship and responsibility, through our direct business activities and our investments with partners (operators), where practical, encouraging Topaz employees, contractors, directors, officers, partners, vendors and suppliers to reduce or manage:  natural resources, greenhouse gas emissions (absolute levels and intensity metrics), waste, pollution, emissions and releases; protect water sources, biodiversity and ecosystems; encourage the investment and deployment of new technology focused on environmental stewardship; consult with stakeholders when undertaking new or existing projects; and take an active role in identifying and managing environmental and climate change risks.

5.    Continuously consulting with stakeholders, including communities in which we conduct business (directly and indirectly through our investments), regarding environmental stewardship and protection, human rights, indigenous rights and other social issues, monitoring, evaluating and systematically amending the Corporation's policies and procedures, as required.

Environment and Health and Safety Management System

6.    Executives are responsible for oversight of an environmental and health and safety risk management system in order to: identify workplace hazards and risks; maintain procedures to provide a safe work environment free of recognized hazards, workplace violence and harassment, occupational injuries and illness, discrimination and harassment; establish emergency response procedures; maintain an anonymous, third party whistleblower hotline to enable reporting of incidents or concerns; manage compliance/incident information and disclose results on an annual basis through Topaz’s public disclosure(s); and ensure prompt and effective preparation, response and follow up to workplace hazards, emergency situations, incidents and/or non-compliance.  Topaz expects its partners, vendors and suppliers to maintain comparable environmental and health and safety risk management systems and prohibits any business activities with partners, vendors or suppliers following any alleged or known infraction of proactive, ethical business practices.  Topaz reserves the right to complete audits in the context of business dealings which involve Topaz.

7.    Performing internal audits of environmental and health and safety information to evaluate compliance/incident information, and to implement corrective action to mitigate future environmental and health and safety risks.

Human Rights

8.    Protecting the human rights (including minority groups’ and womens’ rights) of its employees, contractors, directors and officers and conducting business with partners, vendors and suppliers which share the same values.  This is built upon complying with, and holding partners, vendors and suppliers accountable, to all applicable employment and labour laws and regulations, including: prohibiting child labour, forced, involuntary, compulsory or slave labour, or modern slavery practices;  respecting the fundamental freedoms of all individuals, including the freedom of thought, belief, opinion and expression, the freedom of peaceful assembly, the freedom of association and collective bargaining, together all without fear of discrimination, retaliation, intimidation or harassment; recognition of free, prior and informed consent;  compliance with regulations regarding minimum wage, working hours, overtime, days of rest or vacation, payment of compensation, and mandated benefits; and other rights and freedoms enshrined in the UN Universal Declaration of Human Rights, the UN Guiding Principles on Business and Human Rights, the International Labour Organization (ILO) and the Canadian Charter of Rights and Freedoms.  Topaz prohibits any business activities with partners, vendors or suppliers following any alleged or known infraction of these core values.

9.    Respecting the cultures, customs, indigenous rights and values of and consulting with the communities in which we carry on business, and ensuring that we make our best efforts to conduct business with partners, vendors and suppliers who share our same core values. We believe our business activities should contribute to the economic well-being and quality of life where we do business directly and together with our partners, vendors and suppliers.

10.  Prohibiting discrimination and harassment at Topaz and providing equal opportunity from a race, gender, nationality, ethnicity, age, language, or other status deemed relevant in all aspects of employment, including the Corporation’s hiring and advancement practices.   This includes accommodations, where applicable, for staff to work remotely if family or health situations place additional strain on working in the office.  This commitment including providing adequate computer systems and security to maintain Topaz’s computer security requirements from remote locations.

11.  Prohibiting discrimination and harassment at Topaz and providing equal opportunity from a race, gender, nationality, ethnicity, language, or other status deemed relevant in all aspects of employment including Topaz’s hiring and advancement practices. 

Human Capital Management

12.  Providing onboarding training and supporting and encouraging continuing education aligned with employees’ short and long-term professional development objectives as well as pursuant to its Code of Business Conduct and Ethics (onboarding and continuing education).  Topaz commits to reimbursing employees’ out of pocket expenses incurred in regard to professional designation annual dues, course fees attributed to annual minimum professional education requirements and in addition, course fees attributed to education which is subject to review and approval by executive officers (for employees or other executives) or the governance, compensation and sustainability committee (for directors or for executive officers’ education exceeding $5,000 per annum).

13.  Identifying risks and opportunities in regard to talent recruitment, retention, development, including internal succession, and implementing strategies, together with the GCS Committee, to ensure critical tasks and responsibilities can be covered by overlapping employees in the event of sudden, unplanned employee departures.

14.  Communicating with employees to establish short and long-term professional development objectives, including mentorship and support of continuing professional development initiatives. 

15.  Providing annual performance reviews in combination with review of short and long-term professional development objectives to guide career progression.

16.  Executives and managers are also responsible for communicating feedback to employees on a regular basis and encouraging an open feedback culture.  On an annual basis, executives will administer an anonymous employee engagement survey to evaluate employee satisfaction and engagement.  Executives will be responsible for developing initiatives to improve employee engagement, as required.

17.  Supporting and providing education and training to enhance employees’ understanding of environmental and climate change policy developments, stakeholders’ views on environmental issues and environmental and climate change risks and opportunities.

18. The GC&S Committee conducts an assessment of succession and resourcing planning risks facing the Corporation and identifies ways in which to mitigate any such risks to provide for timely and effective continuity of leadership for the Corporation.  The GC&S Committee has an evolving succession planning strategy for the Corporation’s executive team.  This strategy takes into account the relatively unique elements of Topaz, which includes the Corporation’s relative youth as an entity, in addition to the low headcount.  During the annual assessment of the succession plan, the GC&S Committee considers planning for short-term, sudden impact risk alongside the longer-term development of internal talent, while being mindful of potential external candidates as the Corporation continues to grow.

Diversity & Inclusion

19.  In furtherance of the framework to promote diversity on the board of directors and within Topaz’s workforce set out in Topaz’s Board Diversity Policy, management commits to:

a.    Supporting and attending social initiatives focused on diversity and inclusion;

b.    Introducing or connecting Topaz’s workforce with individuals from outside the organization to expand or build networking groups;

c.     Providing summer or co-op student employment opportunities;

d.    Ensuring hiring practices are broad to target disadvantaged or minority groups in order to capture a diverse population of candidates having regard to factors such as skills, business and other experience, education, race, gender, nationality, age, ethnicity language, geographic location or other status deemed relevant;

e.    Auditing diversity metrics on an annual basis and disclosing the metrics through Topaz’s public disclosure(s); 

f.      Soliciting input from Topaz staff to guide social or volunteer initiatives that Topaz can support as a group which are pertinent and resonate strongly with staff; and

g.    Supporting education and training in regard to diversity and inclusion.

General

20.  Promoting the concepts of careful planning, good judgement, risk mitigation and management, and the implementation of Corporation procedures and monitoring of Corporation activities.

21.  Continuously monitoring, evaluating and systematically amending the Corporation's policies and procedures, as required.

22.  All staff play a vital role in achieving excellence in environmental, health and safety performance. This is best achieved through communication, support and active participation of everyone involved.

23.  Topaz will respond promptly and effectively to emergency situations and concerns raised and reported through its Whistleblower Policy.  The overriding principle which Topaz will have in mind is the best interests of Topaz and its stakeholders.

April 2022