Northwest Natural : 2022 ESG Report

2022 Community and

Sustainability Report

Leading with integrity.

Caring for people.

Innovating for the future.

TABLE OF CONTENTS

This report describes NW Natural's progress on significant areas undertaken by our business including sustainability, community, governance issues, and includes disclosures from the SASB and TCFD frameworks. It is divided into the following sections:

To Our Stakeholders

NW Natural Holdings experienced a dynamic year in 2022. Across our growing family of companies, we stepped up to deliver on our commitment to growing more sustainable, serving people and leading the way to a resilient, lower- carbon energy system that benefits everyone in our region.

NW Natural Holdings

CEO David H. Anderson

at Vancouver

Resource Center.

About NW Natural Holdings NW Natural

Safety & Reliability

Environmental Stewardship

Our Communities, Our Customers

People & Culture

NW Natural Water

NW Natural Renewables

Sustainable Financings

Governance

Appendix

Sustainability Accounting Standards Board (SASB) Disclosures

Workforce Statistics

NW Natural Eligible Categories from UN Sustainable Development Goals

NW Natural's Emissions

American Gas Association Template

Forward-Looking Statements

At our natural gas utility, we exceeded our targeted pace for cutting carbon emissions, formed a partnership to generate hydrogen at our facilities, and completed our first project to produce renewable natural gas (RNG) on behalf of customers. Our NW Natural Water subsidiary invested in safety, reliability and environmental improvements while nearly doubling the company's customer base. Construction began on two RNG facilities we invested in through NW Natural Renewables, the competitive business we launched in 2021 to supply lower-carbon fuels

to the utility, commercial, industrial and transportation sectors. And every day, in the face of tumultuous world events and economywide inflation, we continued to provide safe, reliable, and affordable utility services to our customers.

Our core values of integrity, safety, caring, service ethic, and environmental stewardship guided our actions in 2022, as they always have. Integrity is our foundation, and it informs how we serve our customers, operate our business, treat our colleagues, and engage with the community. I am particularly proud that NW Natural Holdings was recognized as one of Ethisphere® Institute's 2022 World's Most Ethical Companies®-an honor we received again in 2023-as the recognition belongs to each of the 1,200 employees responsible for this company's success.

As a key employer and service provider in our region, we put people at the center of everything we do. Safeguarding the health and well-being of our communities and our workforce is paramount, and I am pleased to report that in 2022 we experienced the lowest number of workplace injuries in nearly two decades. We looked for ways to assist our low-income community members, a commitment that led to the creation of our new bill discount program for low-income households in 2022. We also worked to foster a diverse, inclusive company culture where everyone can thrive and grow. We increased the number of employee resource groups that champion underrepresented employees, and we created a Community and Equity Advisory Group of representatives from outside organizations to bring an equity and environmental justice lens to our energy and operational planning.

The energy industry and the world around us are changing at a pace perhaps never experienced before, and we see unprecedented opportunities for growth, innovation and reimagining our role as a trusted provider of essential services. This report provides a view of how we're meeting today's challenges and building on our strengths to continue serving our communities into the future. We've sustained a thriving business for over 160 years by continually evolving, and we're not slowing down. I'm grateful for our dedicated people, whose steadfast focus on service, innovation and environmental stewardship allows us to meet this moment.

David H. Anderson

NW Natural Holdings CEO

2	Not to be used for investment purposes-see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Awards and Certifications

Ethisphere® Institute's 2022 and 2023

World's Most Ethical Companies®

2022 - 2023

2022 Escalent

Environmental Champion

2022 Escalent Most

Trusted Utility Brand

TOP 2 IN THE WEST

in residential customer satisfaction

50/50 Women on Boards - Highest distinction for Gender Balanced board

Gold Shovel Standard* certification for damage prevention safety management

* As of 2023, Gold Shovel Standard is now Damage Prevention Institute

"Ethics matter. Organizations that commit to business integrity through robust programs and practices not only elevate standards and expectations for all, but also have better long-term performance. Congratulations to NW Natural Holdings for earning a place in the World's Most Ethical Companies community."

2022 - 2023

- Ethisphere CEO Erica Salmon Byrne

"World's Most Ethical Companies" and "Ethisphere" names and marks are registered trademarks of Ethisphere LLC

Not to be used for investment purposes-see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

3

2022 Highlights

SUSTAINABILITY

Exceeded our Low Carbon

Pathway target for cutting

carbon emissions 30% by 20351

Led the industry with one of the lowest ratios of leaks per

mile of distribution pipeline

Completed our first renewable natural gas project and deliv-

ered environmental benefits of RNG to our customers

1 This is an emissions savings goal equivalent to 30% of the carbon emissions from our customers' gas use and company operations in 2015.

SAFETY

Continued to operate one of the tightest, most up-to-date systems in the nation

Lowest number of workplace injuries

in nearly two decades for the second year in a row

CUSTOMERS &

COMMUNITIES

Ranked #2 in the West by residen-

tial customers in J.D. Power survey for the 19th year running

Contributed nearly $1 million to organizations supporting youth and family resiliency, environmental stewardship, health and human services, and arts and culture

EMPLOYEES

86% of surveyed employees say they are proud to work for NW Natural

DIVERSITY, EQUITY

& INCLUSION

45% of NW Natural Holdings' board of directors identify as women, including the Chair

of the Board

Launched a new Employee Resource Group, the Neurodiversity Network, that

contributes to an equitable, inclusive workplace culture and provides leaders with important feedback

Created a Community and

Equity Advisory Group to

help bring an equity and environmental justice lens to our energy and operational planning

WATER

Invested in critical infrastructure,

cybersecurity, safety and customer support while nearly doubling our customer base

SUSTAINABLE FINANCING

Contributed to a sustainable economy, allocating an amount equivalent to the $129 million raised through our sustainable financing framework to finance or refinance renewable energy, energy efficiency, green buildings, and supplier diversity initiatives

RENEWABLES	GOVERNANCE
Grew a competitive renewable	Recognized by
energy business to provide	Ethisphere® as one
renewable natural gas to the	of the 2022 and
utility, commercial, industrial	2023 World's Most
and transportation sectors	Ethical Companies®
	"World's Most Ethical
	Companies" and "Ethisphere"
	names and marks are
	registered trademarks of
	Ethisphere LLC

4	Not to be used for investment purposes-see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

About NW Natural Holdings

NW Natural Holdings, based in Portland, Oregon, owns NW Natural Gas Company, NW Natural Water Company, NW Natural Renewables Holdings and other business interests. In 2022 we entered a new stage of growth while leading our industry in environmental stewardship efforts and delivering essential energy and services safely and reliably with great care.

OVER 160 YEARS

doing business as a respected energy provider in the Pacific Northwest

MORE THAN 150,000

people in the Pacific Northwest,

Arizona, and Texas depend on us for clean, safe water and wastewater utility services

APPROXIMATELY 2 MILLION PEOPLE

in more than 140 communities depend on us to deliver the energy and essential services they need to heat their homes, cook their meals and keep their businesses running

795,000 METERS

providing energy in Oregon and Southwest Washington

KEY

INITIATIVES

Aggressively pursuing a

renewable, carbon-neutral future for our gas utility

Expanding and investing in our water and wastewater utility business

Investing in renewable

energy and the transition

1,200 EMPLOYEES

serving customers safely and reliably every day

to a decarbonized future for

a variety of sectors

Not to be used for investment purposes-see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

5

Our Mission

We provide safe, reliable, and affordable utility services and renewable energy in a sustainable way to better the lives of the communities we serve.

Our Vision

Lead in service excellence, innovation and environmental stewardship by harnessing our passion for customers.

Our Values

Since 1859, NW Natural Holdings has been a respected energy provider in the Pacific Northwest. We have maintained this reputation by keeping our five core values at the center of everything we do.

Integrity

We will display integrity in everything we do by being honest, ethical and true to our word. We will always choose to do the right thing, even when it is the harder path.

Safety

Safety is paramount in all aspects of our operations, infrastructure and workplaces. We are committed to superior training and protective, healthy work practices to ensure we all return home safely.

We strive to educate our employees, partners, customers, and our communities about safety.

Caring

We are committed to respecting and caring about each other. We value teamwork, collaboration, and strong individual contributions. We believe a diverse, equitable and inclusive culture, and involvement in the communities we serve, is essential to our collective success.

Service Ethic

We are driven by a desire to serve our customers and each other and go the extra mile to solve problems. We take pride in our service excellence.

Environmental Stewardship

We are committed to a decarbonized and more sustainable future through energy efficiency, water conservation, and expanding the supply of renewable resources we provide.

6	Not to be used for investment purposes-see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

NW NATURAL

Safety & Reliability	responsibility to our customers, our employees, and the
	Safe, reliable delivery of natural gas is our greatest
	communities we serve. Safety guides everything we do.

2022 FEDERAL REPORTS

ZERO

• Reportable pipeline incidents

• Corrective action orders

• Notices of probable violation

Not to be used for investment purposes-see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

7

Safety Highlights

Consistently low damages

• Received Gold Shovel Standard certification in 2022 for the second year running for comprehensive damage-prevention actions
• Continued to drive down our consistently low damage rate to the lowest level in our history

NEARLY

70%

OF TRANSMISSION PIPELINE INSPECTED

• 2.5 times the rate required by regulations
• 86% of inspections performed through inline assessment

OUR MODERN SYSTEM

• No cast iron pipes since 2000, no bare steel pipes since 2015
• Leading the industry with one of the lowest ratios of leaks per 100 miles of pipeline in 2022, a fraction of the industry average

ZERO

reportable information security breaches

LOWEST NUMBER OF WORKPLACE INJURIES SINCE 2004

8	Not to be used for investment purposes-see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Our Tight, Modern System

One of the tightest, most modern natural gas distribution systems in the nation

In the mid-1980s, we worked with our public utility commissions in Oregon and Washington state to proactively create a pipeline replacement program. In 2000 we became one of the first companies in the country to eliminate cast iron pipes, and by 2015 we replaced all cast iron and bare steel pipe. We believe we are the first pure-play local distribution company to completely remove these legacy pipelines. Among U.S. natural gas utilities, NW Natural had one of the lowest ratios of leaks per mile of pipe in 2022.1

Having eliminated vintage materials from our distribution system years ago, we're able to invest more of our resources in the next wave of innovations, including renewable energy and other environmental advances.

Continuous inspection and monitoring

We vigilantly manage our 736 miles of transmission pipelines and approximately 14,300 miles of distribution pipeline. That means proactive monitoring, preventative maintenance, and prompt identification and repair of potential issues. To help prevent safety issues, our employees performed approximately 190,000 proactive field visits in 2022. We operate a 24/7 emergency hotline that enables us to promptly dispatch responders when there's a problem, and our NW Natural safety app connects customers to our 24-hour emergency line with one click. On average, we respond to damage and odor calls across our service territory in about 30 minutes or less.

In 2022, we performed safety inspections on our transmission system at about 2.5 times the rate required by federal and state regulations.

We inspect our transmission system with a combination of direct assessments and technologically advanced inline inspection. At the end of 2022, we had inspected nearly 70% of our transmission system, primarily through inline inspection - a superior method, as it can assess pipeline integrity from inside the pipe.

1 Based on DOT Annual Report data for natural gas operators reporting more than 7,000 miles of distribution main

Cast Iron Pipe Replacement Completed in 2000

250
200
150
100
50
0	1987	1988	1989	1990	1991	1992	1993	1995	1996	1997	1998	1999	2000

MILES OF CAST IRON

Source: Annual Department of

Transportation (DOT) reports

Bare Steel Pipe Replacement Completed in 2015

180
160
140
120
100
80
60
40
20
0	2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
	MILES OF BARE STEEL	CORROSION LEAKS

Source: Annual DOT reports

		Exceeded Transmission			Majority of Transmission Pipeline
		Inspection Requirements			Inspected Using Inline Approach
		MILES INSPECTED VS. REQUIRED			INSPECT USING MULTIPLE APPROACHES
												14%
		206 MILES
						511 MILES					86%
0	100	200	300	400	500	600
		INSPECTION REQUIRED			INSPECTION COMPLETED			DIRECT ASSESSMENT

INLINE INSPECTION

Not to be used for investment purposes-see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

9

Investing in safety improvements

We're continually investing in the safety and reliability of our natural gas infrastructure. In 2022 NW Natural invested $338 million3 to complete a range of projects, including system reinforcements to improve reliability, pipeline retrofitting for inline inspection, and improvements to our underground storage and Liquified Natural Gas (LNG) facilities. We also completed a significant multiyear project to upgrade our enterprise resource planning information system, and we invested heavily in cybersecurity technology to protect our critical systems and customer data. These improvements are designed to enable us to continue providing our customers with safe, dependable energy delivery services and strengthen our foundation for contributing to a renewable energy future.

Total investment in

CAPITAL EXPENDITURES

NW Natural consistently leads the industry in the lowest number of leaks per mile of distribution pipeline

capital expenditures is calculated on an accrual basis and includes cloud-based software.

$350

$300

$250

$200

(in millions)

We strive to perform a leak survey of each gas main at least every five years, and survey 20% of mains every year. We also strive to perform leakage and atmospheric corrosion surveys every three years on residential service lines. Raising the bar on the federal requirement to perform these inspections annually in business districts and high-occupancy buildings, we have greatly expanded our classification of business districts for 2023. We use Supervisory Control and Data Acquisition (SCADA) and telemetry to monitor the system in real time and transmit data from remote sources. This powerful technology makes it possible to quickly detect leaks even in remote locations.

LEAKS PER 100 MILES

8
6
4
2
0	2020	2021	2022
2019

NW NATURAL

INDUSTRY AVERAGE2

$150

$100

$50
$0	2019	2020	2021	2022
2018

CUSTOMER GROWTH		SAFETY AND RELIABILITY
INFORMATION TECHNOLOGY		OTHER		RNG
& FACILITIES

1. Based on DOT Annual Report data for natural gas operators reporting more than 7,000 miles of distribution main
2. Cap-exis on an accrual basis and includes cloud-based software

10	Not to be used for investment purposes-see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.