2023
Environmental, Social and
Governance
Report
Table of Contents
Message from
the CEO-Founder
Environmental
Social
Governance
Appendix
Table of
Contents
Table of Contents
Message from
the CEO-Founder
Message from our CEO-Founder . .3. | Governance . . | . . . . . . . . . | . . | . .14 | |||
ESG Strategy | . . . . . . . . 4. . . . Board. . Composition. . . | and Competencies . | . . . . . 15. | ||||
Environmental | ESG and Climate Risk Management | . . . 16. . . | Environmental | ||||
. . . . . . 5 | . . . | ||||||
GHG Emissions . . . | Appendix | . . . . . . . . . | . .17 | ||||
. . . . . . . . . 6 | |||||||
Waste Management and Recycling Data . . . . . .9. | Standard Indices-SASB | . . . . | . . 18 | ||||
Social | Caution Regarding | ||||||
. . . . .10 | . .20 | ||||||
Employees | Forward-Looking Statements . . | . . . . . . | Social | ||||
. . . . . . . . 11 | |||||||
Health and Safety | . . . . . . . .13 |
Governance
Report Scope
This is The Lion Electric Company (NYSE: LEV) (TSX: LEV) ("Lion" or the "Company")'s third Environmental, Social and Governance ("ESG") report (the "report").. Unless otherwise noted or the context otherwise requires, the report relates to our activities for the 2023 calendar year (January 1, 2023 - December 31, 2023 or the "report- ing period") and all information is given as of the date of publication of this report.. This report encompasses all of Lion's operations and activities during the reporting period. . References to "Lion," "we", "our", "us", "the Company" or similar terms refer to The Lion Electric Company and its subsidiaries, on a consolidated basis..
External Assurance
The operational greenhouse gas ("GHG") emissions data were quantified in collaboration with Quinn+Partners using the Greenhouse Gas Protocol Corporate Standard, and in alignment
with ISO 14064-2:2019: Greenhouse gases - Part 2: SpecificationAppendix with guidance at the project level for quantification, monitoring
and reporting of greenhouse gas emission reductions or removal enhancements. . Lion's 2023 avoided GHG emissions were calculated in collaboration with Tetra Tech.. These data have not been independently verified..
Reporting Framework
This report contains disclosures recommended in the Industrial Machinery and Goods and Automobiles standards developed by the Sustainability Accounting Standards Board ("SASB")..
Contact us
We appreciate any feedback on our report and initiatives.. Feel free to reach out to us either by phone at 450-432-5466 or via email atir..lion@thelionelectric..com..
Introduction | 2023 Environmental, Social and Governance Report | 2 | |
Message from our
CEO-Founder
Table of Contents
Message from
"The greatest threat to our planet is the belief that someone else will save it.." This powerful message from English historian and explorer, Robert Swan, emphasizes the importance of everyone's actions in the fight against climate change and the decarbonization of the planet..
At Lion Electric, we back up these words with concrete actions.. Lion was founded over 15 years ago with the aim of playing a role in decarbonizing the planet.. We set out to help change the world, one vehicle at a time..
Today, Lion stands as a leader in transportation electrification in North America. . Our 100% electric, zero-emission school buses and urban commercial trucks are turning heads, and our technology is widely acknowledged. . Over 2,000 Lion vehicles have driven more than 25 million miles in Canada and the United States..
At the core of our DNA lies a strong commitment to ESG values..
Our dedication to transportation electrification goes far beyond the mere shift to zero-emission vehicles. . We are also implementing measures to reduce our carbon footprint.. Furthermore, our innovative electric vehicles actively contribute to the reduction of GHG, playing an essential role in the fight against climate change.. By contributing to the preservation of air quality, we play a vital part in the collective efforts to mitigate climate change for the benefit of our children and communities..
Our commitment is evident in our approach to employees, customers, partners, and the communities we serve..
This annual ESG report is not just an overview of our ac- tions; it serves as a roadmap, inspiring us to reach even greater heights. . It is through collaborative action that we can improve our planet and build a more sustainable future for our children and future generations. . Let's keep up the good work!
the CEO-Founder
Environmental
Social
Governance
Appendix
Marc Bedard
CEO-Founder
Introduction | 2023 Environmental, Social and Governance Report | 3 | |
ESG
Strategy
Environmental
The core objective of our ESG strategy is to effectively address the most significant issues for both Lion and its stakeholders, including employees, communities, customers, suppliers, investors, and partners. This strategic framework delineates our goals in tackling these pertinent matters, shaping a foundational approach that underscores our commitment to ESG principles.
Table of Contents
Message from
the CEO-Founder
Environmental
Climate
-
GOAL 1: Reduce GHG
We actively undertake initiatives aimed at reducing greenhouse gas (GHG) emissions..
Product innovation
• GOAL 2..1: Eco-efficient lifecycle |
We are dedicated to innovation, actively |
seeking new technologies, and continually |
enhancing the design of our products |
throughout their lifecycle.. |
• GOAL 2..2: Responsible sourcing |
We prioritize the procurement of low-carbon |
materials whenever feasible and manage |
ESG risks and opportunities across our entire |
supply chain.. |
For more information,
download ourESG ESG PolicyHERE..
Social
-
GOAL 3..1: Healthy, fair work environment
We cultivate a healthy and safe work environment for all employees, contractors, customers, and visitors.. Additionally, we foster an inclusive work culture that embraces diverse perspectives.. - GOAL 3..2: Industry leadership
Governance
-
GOAL 4..1: Board competence
We are guided by a capable and diverse Board of Directors in shaping our strategic direction and decision-making processes.. - GOAL 4..2: Ethics and values
We embrace high ethical standards and apply our values in all aspects of our work.. - GOAL 4..3: Cybersecurity
We protect the data privacy of our employees, investors, customers, suppliers and contractors from cyberthreats..
Social
Governance
Appendix
• GOAL 2..3: Safe vehicle design |
We design our vehicles with the most stringent |
health and safety features to protect drivers, |
passengers and other road users.. |
We actively educate stakeholders about the advantages of electric vehicles and engage with industry and regulators to drive the clean electrification of the transportation sector..
Introduction | 2023 Environmental, Social and Governance Report | 4 | |
Environmental
We help our clients achieve their climate change ambitions by facilitating the decarbonization of fleets through the adoption of high-performing,reliable zero-emissionvehicles.
Table of Contents
Message from
the CEO-Founder
Environmental
Social
Governance
Appendix
GHG Emissions
2023 Avoided
GHG Emissions
In collaboration with Tetra Tech, the calculation of GHG emissions avoided in 2023 involved assessing actual miles covered by Lion trucks and buses on the road. Data was collected using LionBeat, our purpose-designed EV telematics.. The calculation assumed that these vehicles replaced conventional diesel-fueled counterparts within a similar vehicle class..
Total avoided GHG emissions in 2023 by Lion vehicles on the road
Table of Contents
Message from
the CEO-Founder
Environmental
Social
Although Lion trucks and buses do not emit direct tailpipe emissions, there are indirect GHG emissions associated with operations, manufacturing, and charging.. These indirect emissions were factored into the avoided emissions calculation. . It is essential to note that the total avoided GHG emissions in 2023 by Lion electric vehicles are dependent on the carbon intensity of the local grid electricity.. Emissions are lower if the electricity is derived from renewable energy sources compared to fossil fuel-derived source..
In 2023, 137 Lion trucks and 1,486 Lion buses for which we collected data avoided 9,070 tCO e of GHG emis-
and
and
Number of Lion electric vehicles | Annual reduction of tCO2e for |
for which actual data was | |
which actual data was collected1 | |
collected1 in 2023 | |
137 | 358 |
1,486 | 8,712 |
Governance
Appendix
2
sions while being driven on the road in Canada and in the United States..
TOTAL | 1,623 | 9,070 |
1 Estimate calculated by using the standardized approach of ISO 14064-2:2019 standard (Specifications with guidance at the project level for quantification, monitoring and reporting or greenhouse gas emission reductions or removal enhancements) and by comparing (1) the emissions generated by the manufacturing, the energy production and distribution and the combustion of the Lion6, Lion8 and LionC and LionD vehicles (excluding emissions generated by vehicle maintenance and recycling of used batteries at the end of its lifespan), and (2) the emissions generated by the manufacturing and combustion conventional diesel fueled vehicles of a similar vehicle class (excluding emissions generated by vehicle maintenance and vehicle end of life)..
Environmental | 2023 Environmental, Social and Governance Report | 6 | |
GHG Emissions
Scope 1 and 2 Emissions
To optimize our efforts in addressing climate change, we enlisted the expertise of Quinn+Partners to assess the scope 1 and scope 21 GHG emissions linked to our operations2.. In 2023, our total emissions amounted to 3,140 tCO2e, marking an increase compared to 1,898 tCO2e in 2022 and 712 tCO2e in 2021..
Significant emission rises were notable at our manufacturing facilities in Joliet, IL, and Mirabel, QC.. This uptick was primarily due to the commencement of operations in 2022 and subsequent scaling efforts in 2023, collectively constituting 87% of the overall emissions surge..
The primary sources of our emissions stem from natural gas and electricity consumption across our facilities. . While Lion's Canadian operations predominantly utilize renewable energy sources, resulting in lower GHG emissions, our U..S..-based operations rely on grids with higher emission levels for electricity. . The heightened activities at U..S.. sites in 2023 led to increased emissions from electricity consumption..
Furthermore, Quinn+Partners conducted an analysis of GHG intensity per vehicle produced, revealing a decline from 6..2 tCO2e to 3 tCO2e per vehicle between 2020 and 2023.. We anticipate this trend to persist as vehicle production continues to ramp up..
Table of Contents
Message from
the CEO-Founder
Environmental
Social
3,500 | 3,140 | 7 | produced) | |||
2 | 2,500 | 5 | ||||
6.2 | 6 | |||||
3,000 | ||||||
e) | 2,000 | 4 | vehicle | |||
(tCO | 1,898 | |||||
Totalemissions | 498 | 4.0 | 1 | intensity(tCO | ||
2 | ||||||
3.6 | e/ | |||||
1,500 | 3.0 | 3 | ||||
1,000 | 712 | 2 | ||||
500 | GHG | |||||
0 | 0 | |||||
2020 | 2021 | 2022 | 2023 |
Scope 1 - Mobile equipment | Scope 1 - Stationary combustion | Scope 2 - Electricity | Emissions per vehicle produced |
- Scope 1 emissions are direct emissions from owned or controlled sources.. Scope 2 emissions are indirect emissions from the generation of purchased energy..
- Lion's operational GHG inventory was prepared using the GHG Protocol Corporate Accounting and Reporting Standard and the protocol's location-based approach for purchased electricity..Emissions of carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) are represented in units of CO2 equivalents (CO2e) using Global Warming Potentials from the Intergovernmental Panel on Climate Change's Fourth Assessment Report.. Emissions are calculated using emission factors and conversions provided by the Government of Canada and U..S.. Environmental Protection Agency..
Governance
Appendix
Environmental | 2023 Environmental, Social and Governance Report | 7 | |
GHG Emissions
Scope 3 Emissions
To ensure we maximize the greenhouse gas (GHG) reduction potential of our electric vehicles, we acknowledge the importance of addressing scope 3 emissions generated throughout the entire vehicle lifecycle. . In this regard, we enlisted the expertise of Quinn+Partners to help quantify scope 3 emissions,
• Purchased Goods and Services (Category 1): This |
category encompasses all materials and batteries |
utilized in Lion vehicles' production in 2023, third- |
party warehouse usage, and various services such |
as accounting, insurance, fleet management, and IT.. |
• Capital Goods (Category 2): These emissions |
Table of Contents | |
Scope 3 Cat. 1 | Scope 3 Cat. 2 |
Purchased goods | |
Capital goods | |
and services | |
68% | Message from |
the CEO-Founder |
Share of Lion's
2023 scope
3 emissions 17% per category
which encompass all indirect emissions occurring in the Company's value chain, including those upstream and downstream of our operations, and not accounted for in scope 2 emissions..
The findings revealed that our scope 3 emissions con-
are associated with the development of our new |
facilities and production lines.. |
Looking ahead, we anticipate a decrease in emissions from Capital Goods as we progress towards full-scale
4%
Environmental
11%
stitute 84% of our total emissions, a common scenario in manufacturing companies.. The most significant contributors to our scope 3 emissions include:
production. . This strategic approach underscores our commitment to minimizing emissions across the entirety of our operations and supply chain..
Scope 1 + | Scope 3 | Social |
Scope 2 | Other |
Energy Use
and Management
Energy, encompassing purchased electricity, natural gas, and fuels, serves as a vital input in our industrial manufacturing process.. Recognizing the significance of resource efficiency, we try to prioritize the use of clean and dependable energy sources in our operations..
In 2023, our total energy consumption amounted to 19,300 equivalent megawatt-hours (eMWh), marking an increase from 10,800 eMWh in 2022 and 6,000 eMWh in 2021.. The proportion of our electricity-related emissions is on the rise, driven by the operational commencement and ramp-up of our U..S.. facilities..
The energy intensity per square foot exhibited a decline from 18..2 to 7..5 eMWh between 2021 and 2022.. However, in 2023, this metric increased to 9..8 eMWh.. This shift can be mainly attributed to increased energy use at the Joliet plant, the Mirabel battery plant and the Mirabel Innovation Centre facilities..
20,000 | 20 | ||||||
1,321 | |||||||
Facility energy intensity (ekWh/sqft) | |||||||
Total energy use (eMWh) | 15,000 | 15 | |||||
7,961 | |||||||
10,000 | 1,121 | 10 | |||||
261 | 4,927 | ||||||
9,993 | 5 | ||||||
5,000 | 261 | ||||||
3,051 | |||||||
2,224 | |||||||
4,761 | |||||||
2,726 | |||||||
1,913 | |||||||
0 | 2020 | 2021 | 2022 | 2023 | |||
Electricity | Natural gas | Fleet fuel | Energy intensity (ekWh/sqft) |
Governance
Appendix
Environmental | 2023 Environmental, Social and Governance Report | 8 | |
Waste Management
and
Recycling Data
Waste management holds a crucial role in upholding environmental principles, a cornerstone of sustainable business practices. . By managing waste effectively, companies can minimize their ecolo gical footprint, conserve resources, and safeguard local ecosystems.. Tackling waste generation and disposal not only mitigates environmental pollution but also reflects a commitment to social responsibility, ensuring the health and well-being of communities..
Efficient waste management showcases a company's dedication to responsible operations, fostering trust among stakeholders and contributing to a greener, more sustainable future. . In 2023, we enhanced our waste management practices by introducing recycling initiatives at our Saint-Jérôme facility, optimizing landfill stockage practices, and refining our processes and communications related to waste management..
2022
227..7 m3 | 215..7 m3 |
/week | /week |
Other recycling | 8..6 m3
(11 small containers & 1 x 6-yard container/week)
Recycled metal | 13..9 m3
(1 X 20-foot container/week)
Recycled carton | 15..4 m3
(10 bales/week)
Recycled wood | 67..4 m3
(420 pallets/week)
Garbage | 122..4 m3
(not recycled)
(4 X 8-yard container/week)
2023
Recycled plastic
Low density | 0..6 m3 (2 bales/month) Bubbles | 4..5 m3
Rigid | 4..5 m3
Other recycling | 2..8 m3
(1 x 4-yard container/week)
Recycled metal | 7..5 m3
(1 X 20-foot container/month)
Recycled carton | 15..4 m3
(10 bales/week)
Recycled wood | 159 m3
(3 x 53'/week)
Garbage | 21..4 m3
(not recycled)
(3 X 8-yard container/week)
Table of Contents
Message from
the CEO-Founder
Environmental
Social
Governance
Appendix
Waste Management Weekly volume (m3)
Environmental | 2023 Environmental, Social and Governance Report | 9 | |
Social
We firmly believe that electric transportation serves as a significant catalyst for enhancing our society, environment, and, most importantly, our quality of life. Together, we drive progress.
Table of Contents
Message from
the CEO-Founder
Environmental
Social
Governance
Appendix
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Disclaimer
The Lion Electric Company published this content on 14 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 May 2024 20:33:22 UTC.