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2017 SUSTAINABILITY UPDATE Algoma Central Corporation

Contents

  1. Introduction
  2. Governance
  3. Our People
  4. Safety
  5. Environment
  6. Economic Contributions
  7. Giving Back
  8. Connect With Us

introduction

Gregg Ruhl, Chief Operating Officer

Welcome to our 2017 Sustainability Update. This short report is intended to provide you with a snapshot of sustainability activities at Algoma. While we remain actively engaged in all areas of sustainability, we especially highlight three items in this update: our recent safety performance, our carbon reduction progress, and a description of the actions that we are pursuing to address the current Great Lakes marine industry recruitment challenge.

We are pleased to report that 2017 marked our best safety performance ever. Safety has always been a top priority at Algoma and we continue to maintain a strong safety culture – our most recent annual statistics in 2017 bear this out, with the lowest number of lost-time injuries at the company since we started tracking this item.

We are also progressing well towards meeting our greenhouse gas reduction target of 25% by 2025, in part due to the reduced environmental footprint of our new vessels. We've invested heavily in renewal of our Great Lakes fleet and are benefitting from the greatly improved efficiency of these new ships. Seven vessels have been received to date and several more will join the fleet soon.

Lastly, we want to raise awareness of one of the biggest challenges facing the Canadian marine industry in the Great Lakes and St. Lawrence region, being the shortage of skilled mariners available to crew our fleets. We are taking immediate actions to address this issue and also laying the groundwork for future improvements in an effort to ensure a sustainable Canadian shipping industry for many years to come.

We report on these and other items in this presentation and hope that you find it informative. Please have a look through this update and our website, and look for our full report on goals and progress soon.

"Algoma is committed to providing sustainable and environmentally responsible marine transportation" Gregg ruhl, Chief Operating Officer

About Us

Short Sea Shipping is OUR BUSINESS

Algoma Central Corporation owns and operates the largest fleet of dry and liquid bulk carriers operating on the Great Lakes – St. Lawrence waterway, including self-unloading dry-bulk carriers, gearless dry-bulk carriers and product tankers. These vessels carry raw materials such as iron ore, grain, salt, aggregates and petroleum products throughout the region. This update focuses on this segment of our operations.

Algoma also owns ocean self-unloading dry-bulk vessels operating in international markets and has expanded into global short sea markets through its 50% interests in NovaAlgoma Cement Carriers ("NACC") and NovaAlgoma Short Sea Carriers ("NASC"), focusing on niche markets featuring specialized equipment or services.

Governance

Sustainability is a key focus of the Environmental, Health and safety committee of the Algoma Board of directors

Economic, environmental and social responsibility is managed by Algoma's Executive Committee, comprised of senior management of the company. Sustainability principles are embedded within our company policies and procedures and also throughout our Code of Conduct addressing the following themes:

  • Company Values
  • Compliance with Laws, Regulations, and Company Policies
  • Confidentiality of Information
  • Conflicts of Interest
  • Company Assets
  • Respect in the Workplace
  • Fair Dealing
  • Duty to Report

Each employee, officer and director of the company is required to confirm their commitment to the Code annually and is expected to act in a manner reflecting Algoma’s commitment to our core values of Teamwork, Integrity, Leadership, Responsibility and Respect.

Algoma has qualified as one of Canada's Best Managed Companies for the sixth consecutive year in a row, at gold level status since 2015. This was only made possible by our hard working and dedicated employees. Canada's Best Managed Companies is the country's leading business awards program, recognizing excellence in Canadian companies with revenues over $10 million.

our people

At Algoma we recognize that our success is directly tied to the dedication, health and well being of our skilled and experienced employees. We are committed to providing a safe, inclusive and engaging work environment in which the talents of all employees can be fully utilized in support of successful company operations.

Inclusion, diversity and respect are important values at Algoma, and are reflected in our Employment Equity and Respect in the Workplace policies.

We understand that a comprehensive compensation package is key to attracting and retaining qualified individuals. Algoma’s competitive total compensation package allows us to recognize and reward our employees for their contributions. In addition to traditional compensation such as salary, pension and benefits, Algoma also offers additional support to our employees. Examples include our Scholarship Program for children of employees pursuing post-secondary education, and our confidential Employee and Family Assistance Program, offering solutions for work, life and health, including services such as counseling, legal advice, child care and elder resources. These programs are well utilized by our employees and ensure that additional supports are in place when needed.

training and development

In addition to on-going core training and skills development programs, recent new initiatives include:

  • Leadership Training - In 2016 shore-side office employees took part in a three day program to improve on existing leadership skills and to provide new tools for employees to help strengthen and maintain a positive team culture.
  • Management Trainee Program - Algoma introduced this program in 2017 and has since hired four trainees with recruitment ongoing. The purpose of the program is to mentor each trainee in a wide range of professional positions within the Company in order to provide them with the tools to be future leaders at Algoma. The program provides an unparalleled opportunity for candidates to learn all aspects of the marine transportation industry.

Service Awards & Scholarships

in the last two years 254 Service Awards were given to employees ranging from 10-40 years of service
23 SCHOLARSHIPS for post-secondary studies were awarded to Children of Algoma employees in 2016/17

The Recruitment Challenge

One of the biggest challenges facing the marine industry in the Great Lakes region is the shortage of skilled seafarers coupled with an aging work force. Our goal at Algoma is to have the best officers and crews in the industry and to be the employer of choice for Canadian mariners. Recruitment and retention of shipboard employees is critical to our success.

Solutions

Algoma has partnered with SIU Canada and the Seafarers' Training Institute on a Canada-wide recruitment initiative. This initiative will provide young adults and skilled tradespeople accepted to the program the opportunity to receive training free of charge to become a seafarer.

Algoma also participates in a new Chamber of Marine Commerce Work Force Development Committee dedicated to identifying actions that can be taken immediately to address the current urgent labour shortage and to ensuring skilled labour will be available to crew the region's vessels in the long-term.

Throughout the year we also take part in many career fairs across the country to help raise awareness about exciting career opportunities available at Algoma.

2017 safety highlights

best safety stats on record

ohsas 18001 certification

In 2017 Algoma achieved certification to the OHSAS 18001 global standard for health and safety management, enhancing our already strong ISM certified safety management practices and procedures.

proactive safety initiatives

We are always looking for ways to build on and improve our safety programs. One of our more recent initiatives, increasing the use of 'Points Cards' (Plan, Observe, Inform, Note and Track) to identify and manage hazards before they become an issue, has resulted in a doubling of Hazard IDs in 2017 compared to 2014.

Environment

Algoma is committed to operating and growing in a responsible manner while minimizing our impacts to water, air and land from our operations. Management of environmental issues is guided by our ISO 14001 certified management system and our fundamental commitments to environmental protection, compliance and continual improvement.

We've been a very active participant in the Green Marine voluntary environmental improvement program since it began over 10 years ago. Participation assists in advancing our sustainability strategy and challenges us to continually improve our environmental management programs and performance. Algoma’s scores have steadily increased since joining the program in 2008 as one of the co-founders.

Investing in technology for a sustainable future

Environmental leadership is one of the cornerstones of our strategic plan and we are investing hundreds of millions of dollars in new ships and technologies to achieve this goal.

Our new vessels are on average 40% more fuel efficient than their predecessors, enabling us to reduce our overall fleet emissions as we work towards meeting the greenhouse gas reduction target announced by Algoma in 2016.

(GHGs/tonne-km, 2008 baseline)

We have also installed closed-loop exhaust gas scrubbers, on seven vessels to date, to remove the sulphur emissions generated from fuel combustion. Emissions testing has confirmed a reduction in sulphur oxide emissions of over 98% and also demonstrated a reduction in particulate matter of approximately 43%. Further testing in collaboration with Environment and Climate Change Canada is planned for 2018.

Marine Ecosystem

Algoma has joined the Marine Mammal Observation Network (ROMM, Réseau D'observation de Mammifères Marins) to provide observation data on whales encountered during trips in the lower St. Lawrence River and the Gulf of St. Lawrence. The data collection, led by ROMM and supported by Green Marine, will assist in conservation efforts to protect these marine mammals, including the endangered right whale and beluga populations.

Economic Contributions

Algoma, 2017

For the year ended December 31, 2017

great lakes industry

Maritime commerce is critical to the economies of both Canada and the United States. The recent study Economic Impacts of Maritime Shipping in the Great Lakes - St. Lawrence Region found that cargo shipments to ports on the Great Lakes-St. Lawrence River waterway in 2017 generated CDN$60 billion worth of economic activity and 328,500 jobs in Canada and the U.S., including 106,000 direct jobs supporting CDN$6.5 billion in wages. The full report can be found at the link below.

Giving back

United Way - $81,700 contributed in 2017

Pathstone Mental Health Foundation - $250,000 pledged over 5 years to the Mending Children's Minds Campaign. We have contributed $200,000 to date.

First Ontario Performing Arts Centre - $250,000 pledged over 6 years to the First Ontario Performing Art's Centre Capital Campaign. We have contributed $200,000 to date.

Georgian College - $1,000,000 pledged over 10 years to the Algoma Central Corporation Marine Emergency Duties (MED) Centre. We have contributed $300,000 to date.

Connect With Us

63 Church Street, Suite 600 St. Catharines ON L2R 3C4 +1 (905)687-7888

Social media

@ALGOMACENTRAL

Credits:

Created with images by Brandon Matich - "untitled image" • Michael Fenton - "Lost at Sea" • AlainAudet - "black ducks ducklings bird" • Ferdinand Stöhr - "While whale watching"

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