Managing climate-related risks and opportunities

Cheniere Energy, Inc., including its subsidiaries and operated joint ventures, face certain business and operational risks associated with physical impacts from climate change, such as exposure to severe weather events or changes in weather patterns, in addition to transition risks. We regularly assess these risks and opportunities through our enterprise risk assessment (ERA), climate-specific scenario analysis and other processes and are committed to managing the risks and opportunities we identify. We integrate climate-related risks and opportunities into our business strategy and financial planning. We have also conducted a series of engagements with key external stakeholders, including our largest investors and lenders, to better understand their perspectives on the most important risks and opportunities for our business.

We consider both transition and physical climate-related risks and opportunities. Transition risks are those that stem from regulatory, economic, market, technological and other societal changes associated with the transition to a lower-carbon economy. Physical risks are those associated with physical impacts from climate change, such as increases in severe weather events or changes in weather patterns. We consider these risks over the short, medium and long term, including potential financial impacts.

To identify policy-related risks and opportunities, we review international and domestic climate policies and regulations and assess how they may affect our business. To manage these risks, we conduct ongoing engagements with policymakers and think tanks in the United States and key international markets.

To assess market risks, we actively engage with our customers to understand changing market sentiment. Our efforts to enhance transparency around GHG emissions across the LNG supply chain can inform and support our suppliers’ and customers’ own decarbonization efforts, and thereby help to responsibly manage the GHG footprint of our product and the broader industry. We are addressing technology risks and opportunities by controlling the carbon footprint of our product.

We periodically analyze our climate-related physical risks. We have identified hurricanes, flooding and other extreme weather events as key physical risks for our business. Based on our analysis, we design 100% of our facilities to account for a variety of extreme weather conditions and implement appropriate risk mitigation and management measures. We install redundant capacity for key equipment to help us maintain or quickly reinitiate operations if equipment is damaged, and we purchase property and casualty and business-interruption insurance to protect ourselves from loss. In addition, we employ a full-time meteorologist to help us predict and plan for potential weather-related risks.