Environmental, Social and Governance

WE ARE HERE TO MAKE LIFE IN CANADA BETTER

At Canadian Tire Corporation (CTC), this is our Brand Purpose. It guides every decision we make, from the products we sell to the services, support, and shopping options we provide. It informs how we show up for our customers, communities and each other. It serves as our North Star for our Better Connected strategy, through which we are investing $3.4 billion over four years across five Strategic Pillars. We built environmental, social and governance (“ESG”) directly into the pillars of our strategy because we are committed to the work – and not simply because it’s “the right thing to do.” We know our ESG initiatives are critical to fulfilling our Brand Purpose, achieving our financial aspirations, and creating a better, stronger Canada – for today’s generation and generations to come. Our first-ever ESG Report outlines 12 topics that we believe will help us achieve just that.

As we mark Canadian Tire Retail’s centennial, we are embarking on our next 100 years with a steadfast commitment to furthering our ESG initiatives. The concept itself is not new to us: we have a century-long history of supporting community and social programs, starting with our founder A.J. Billes’ belief in “striving always to make things better.” Our founders were known for their spirit of giving, which inspired the inception of the Canadian Tire Child Protection Foundation and continues today through the work of Canadian Tire Jumpstart Charities. What started as a charity dedicated to helping kids in financial need participate in sport and recreation has since expanded its mandate to address accessibility, gender, and other systemic barriers that prevent kids from experiencing the benefits of sport and play. Even throughout the challenges of COVID-19, Jumpstart continued to uphold the Billes brothers’ conviction of building stronger communities, disbursing $24.9 million through the Jumpstart Sport Relief Fund to help more than 1,600 community sport organizations keep their doors open. Now, Jumpstart is shifting its focus from saving sport to building sport back through a recovery phase while, at the same time, making phenomenal progress on its Inclusive Play Project – and CTC is a proud supporter and champion of Jumpstart’s continued efforts. By the end of 2022, Jumpstart is on track to have completed the construction of 33 accessible play spaces, which will provide approximately 500,000 square feet of space where kids of all abilities can play together. Jumpstart’s momentum is set to accelerate – in 2022, Sport Canada announced Jumpstart as one of the first two national recipients of their Community Sport for All Initiative. This $6.8 million grant enables Jumpstart to help an additional 50% more sport organizations rebuild and increase sport participation rates through programs that are affordable, results-oriented, focused on organized sport, green, and accessible.

Jumpstart’s charitable work is an obvious example of making life in Canada better – but it’s not the only example. CTC remains committed to our diversity, inclusion and belonging (“DIB”) journey so we can foster a culture where everyone feels seen, heard, and that they belong. From recruiting, training, and promoting employees to the education and mentorship programs we offer, we are taking a thoughtful, methodical approach to DIB to ensure we create long-term, systemic change that makes life better not only for our CTC team members but also for the customers and communities we serve. Our ESG Report tells the story of the specific steps we’ve taken on this journey – and where we plan to go from here.

We are also making progress on our sustainability initiatives. We are a founding member of the Canada Plastics Pact, which was formed in 2021 to help tackle the plastic waste challenge. Our commitment to climate change also includes our ongoing efforts to reduce our GHG emissions, and moving forward, we are retiring our previous GHG emissions reduction targets and taking a new approach. Starting in 2022, we are setting a new target to reduce our Scope 1 and Scope 2 GHG emissions – which include our Dealer-operated Canadian Tire stores – by 40% by 2030 relative to a 2020 baseline. Although we don’t yet have a roadmap to net zero and believe it would be disingenuous to commit to a hypothetical net zero target before we do, our capabilities give us confidence in our ability to achieve a considerable reduction. We continue to innovate to reduce our GHG emissions; using the hydrogen produced at our Bolton distribution centre, we will begin piloting a hydrogen-fueled truck. The data accumulated throughout the pilot will be key to determining if hydrogen fuel cell vehicles are a viable option to replace diesel fleets in the future.

We understand that our ambition to reduce our GHG emissions must be matched by an unwavering commitment to driving sustainable economic growth. There’s no question we have long been part of the foundation of this nation – from providing jobs and supporting entrepreneurs and other businesses with whom we partner, to benefitting Canadian communities. As recently outlined in Public First’s Economic Impact Assessment of CTC, we, together with our Dealers, generated an estimated $150 billion in economic impact over the last decade. In 2021, our gross value added was $18 billion, which is equivalent to supporting 160,000 jobs. And as we continue to emerge from the pandemic, we know we have a role to play in not only providing jobs for Canadians but also in expanding and aiding the recovery of Canada’s economy. After all, it is economic growth that allows Canadian companies – including ours – to further invest in new and innovative climate solutions that enable a feasible path to net zero by 2050. We recognize that getting this right is critical, and we are doing our part through our Better Connected strategy, which is aimed at driving economic growth. We are focused on sustainable growth that enables us to seek out innovation and new technologies that support a low-carbon economy.

From helping three million kids participate in sport and play through Jumpstart to our progress on our DIB journey and sustainability initiatives, we have achieved significant milestones. But we are committed to being better while embracing progress over perfection. This report doesn’t simply tell the story of how far we’ve come and what we’ve achieved. It’s an honest assessment of our journey ahead, which we know includes setting clear and firm targets. We are committed to holding ourselves accountable to a standardized, reputable framework, as well as preparing for the future of regulatory reporting.

We are approaching ESG not as a box-checking exercise but as an integrated strategy to be embedded into everything we do. That takes time. We are committed to bringing our ESG initiatives together into an integrated strategy that drives shared value and fulfills our Brand Purpose. Achieving this requires a strategic, thoughtful approach and leadership from the top, which at CTC is driven by our Executive ESG Council. It also requires collaboration with, and accountability from, the Board of Directors. And at CTC, this happens through our Board’s Brand and Corporate Responsibility Committee. On behalf of CTC, thank you to our Executive ESG Council and the Board of Directors for championing this critical work.

We are committed to furthering our ESG priorities – because anything less would be contrary to our Brand Purpose. I hope you find our inaugural ESG Report informative and inspiring. We look forward to continuing to share our progress with you: our valued stakeholders.

Best,