Bank of Nova Scotia/The

## How We Engage in Advocacy and the Public Policy Process

As a financial institution operating in a highly regulated industry, Scotiabank complies with laws and regulations in the more than 30 international markets where we operate, reporting to hundreds of regulators across our footprint. This means that Scotiabank, our customers, employees, shareholders, and communities can be deeply impacted by changes in financial sector regulations. For this reason, we take interest in being an active and informed participant in public policy discussions affecting our sector. In doing so, we are committed to conducting public policy advocacy transparently, ethically and in accordance with the law.

Scotiabank engages in the public policy process in the following ways:

* Monitor government, legislative and regulatory activity in Canada and in other jurisdictions where we operate to keep informed of upcoming developments in the financial services sector;
* Engage in direct dialogue with policymakers, regulators, and government officials on issues of priority to the bank and financial services industry;
* Provide public submissions to government consultations on key issues to our sector;
* Engage technical expertise from Scotiabank's diverse teams to inform and educate in the policymaking process;
* Participate in public policy discussions through financial sector and business associations; and,
* Provide support to non-governmental organizations that foster public policy discussions and raise awareness of key issues that align with stated public policy priorities.

## Lobbying and Advocacy in Canada

At the federal level in Canada, Scotiabank is required to report on its communications with Public Office Holders as outlined in the Lobbying Act*.*There are also similar regulations and legislation at some provincial and municipal levels. Internally, we have a Policy for Communicating with Canadian Government Officials and Conducting Political Activities which outlines our expectations and requirements for employees who communicate with government officials.

## Relevant Policies and Related Reports:

In addition to the Policy for Communicating with Canadian Government Officials and Conducting Political Activities, Scotiabank employees are also subject to other policies such as:

* Scotiabank Code of Conduct
* Scotiabank Anti- Bribery and Anti-Corruption Policy

Further, in communicating with government officials, Scotiabank employees must be mindful of other publicly released documents by the Bank and being consistent with that disclosure. Employees are reminded to speak with Government Affairs and Global Communications, as appropriate, prior to any such engagements that may involve discussions on issues that the Bank has already publicly addressed.

## Public Policy and Political Contributions

##### Political Contributions

To avoid conflict of interests with political officials, Scotiabank acts in accordance with the Policy for Communicating with Canadian Government Officials and Conducting Political Activities and the Anti-Bribery & Anti-Corruption Policy and will not make corporate contributions to any political party.

##### Memberships and Associations

Scotiabank is a member of various industry and business associations, in Canada and globally, that may have interactions with government officials regarding public policy and financial sector policy. We engage with these organizations in a variety of ways such as through active participation in subject-matter or governance committees, through executive representation in leadership positions, through membership fees and/or sponsorship.

While Scotiabank's affiliation does not imply an endorsement of positions or public statements, we frequently review these engagements to ensure consistency with Bank held public policy positions.

Oversight of the Bank's Climate Commitments is provided by senior management and the Board of Directors. We are committed to transparency on climate-related risks and will continue to align climate-related disclosures with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We disclose climate-related information in our Annual Report, Sustainable Business Report and annual CDP submission. Our commitment to transparency extends to continually reviewing our disclosures with a view to enhancements that meet evolving expectations and requirements.

#### Governance, Management and Oversight

Enacting our net-zero ambition will require strong leadership and governance, a key strength of our Bank. In 2021, Scotiabank was awarded the highest available score in Corporate Governance by the Dow Jones Sustainability Index, placing it in the top 1% among global financial institutions.

Scotiabank has instituted various management and governance processes to ensure effective climate risk management, oversight, and reporting. Climate-related risks are identified using the Bank's environmental risk management process, guided by Scotiabank's Environmental Risk Management Framework.

Climate-related risks are reported quarterly to the Board of Directors and various committees, including: the Risk Committee which provides oversight of key climate-related risks; the Corporate Governance Committee, which oversees the Bank's Environmental and Social Governance (ESG) strategy and annual report (of which climate-related issues are included); and the Audit and Conduct Review Committee which has oversight of climate-related disclosures in the Bank's financial reporting. For more information, see Scotiabank's 2020 Annual Report.

In 2021, we established a Corporate ESG Committee to provide strategic guidance and advice on the management and reporting of Scotiabank's environmental, social and governance priorities. In early 2021, we launched our Net-Zero Pathways Project, led by our Global Corporate Sustainability group, and supported by the Net-Zero Working Group. The Project is guided by the Net-Zero Project Steering Committee made up of senior executives from business lines and functional units who report to the CEO and Executive Operating Committee.

**OVERSIGHT**

**EXECUTIVE OPERATING COMMITTEE**

**GUIDANCE** **CORPORATE ESG COMMITTEE**

**STRATEGY AND**

**NET-ZERO PATHWAYS PROJECT TEAM AND STEERCO** **MANAGEMENT**

**PROJECT DELIVERY**

**AND ADVISORY**

**Figure U. Board oversight of Scotiabank's net-zero pathways and progress**

Scotiabank launched the Climate Change Centre of Excellence within the Bank's 2019 Climate Commitments. Its purpose is to support partnerships, resources and knowledge contributing to the global dialogue mobilize internal and external collaboration, dialogue and information sharing and contribute to the global conversation on climate change. The Bank collaborates extensively with sector and non-governmental organizations that include, but are not limited to, the Environment Program Finance Initiative (UNEP FI), Institute of International Finance's (IIF) Sustainable Finance Working Group, Canadian Business for Social Responsibility (CBSR) Net-Zero Working Group, and Canadian Transition Finance Set of Principles and Transition Taxonomy. We are building upon and expanding Scotiabank's Climate Change Centre of Excellence to support Partnerships & Collaborations, Information & Knowledge and Resources & Publications to contribute to global leadership and dialogue on climate change through hosting conferences, workshops and roundtable events, and publishing research and white papers. See our website for further information.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]Scotiabank launched the Climate Change Centre of Excellence within the Bank's 2019 Climate Commitments. Its purpose is to support partnerships, resources and knowledge contributing to the global dialogue mobilize internal and external collaboration, dialogue and information sharing and contribute to the global conversation on climate change. The Bank collaborates extensively with sector and non-governmental organizations that include, but are not limited to, the Environment Program Finance Initiative (UNEP FI), Institute of International Finance's (IIF) Sustainable Finance Working Group, Canadian Business for Social Responsibility (CBSR) Net-Zero Working Group, and Canadian Transition Finance Set of Principles and Transition Taxonomy. We are building upon and expanding Scotiabank's Climate Change Centre of Excellence to support Partnerships & Collaborations, Information & Knowledge and Resources & Publications to contribute to global leadership and dialogue on climate change through hosting conferences, workshops and roundtable events, and publishing research and white papers. See our website for further information.

Does your organization have a public commitment or position statement to conduct your engagement activities in line with the goals of the Paris Agreement?[…]No, and we do not plan to have one in the next two years

Describe the process(es) your organization has in place to ensure that your external engagement activities are consistent with your climate commitments and/or climate transition plan?[…]Scotiabank collaborates on climate-related issues with industry and non-governmental organizations. We participate in the Environment Program Finance Initiative, in the Institute of International Finance's Sustainable Finance Policy Expert Group and the Canadian Business for Social Responsibility's Net-Zero Working Group, as well as in three separate working groups coordinated and supported by the Glasgow Financial Alliance for Net Zero, including the Net Zero Public Policy Workstream, which seeks to engage strategically on climate-related policy and regulation. We comment, where desirable and appropriate, on climate-related policy and regulatory matters impacting the Canadian banking sector through the Canadian Banking Association, and participate in the Sustainable Financial Action Council, which provides recommendations to the Canadian federal government on sustainable finance related matters. Scotiabank engages with financial sector regulators on climate-related risks and taxonomy; climate disclosures and sustainable finance to encourage consistency and comparability on widely accepted standards. Our involvement, both as Bank and as a sector, is helping to inform the uniquely Canadian perspectives. At the federal level in Canada, Scotiabank is required by law to report on its communications with Public Office Holders as outlined in the Lobbying Act. Employees who lobby on behalf of Scotiabank also must abide by the Lobbyists' Code of Conduct, which sets standards of behaviour for individuals who must be listed in a registration as required by the Lobbying Act. There are also similar regulations and legislation at some provincial and municipal levels that Scotiabank adheres to.