Protecting Our Planet

Climate Change, Energy, and Emissions

We see mitigating and adapting to climate change as a business and societal imperative. From wildfires to droughts, the effects of climate change impact the health of our communities and our operations. While we continue to identify and mitigate the risks of climate change on our business, we also recognize an opportunity to reduce our contributions to climate change, and prepare for resilience in the face of it. Our climate strategy focuses on mitigation and adaptation across our value chain—in sourcing, treatment and distribution, and community engagement. Some of the ways we are executing on this strategy include protecting the reliability and resilience of essential water resources, maximizing the efficiency of our water system, helping our customers conserve water, and minimizing our carbon footprint.

We have also publicly committed to a number of climate change-related objectives, including setting absolute, science-based Scope 1 and Scope 2 greenhouse gas emissions reduction targets by the end of the third quarter of 2024 and setting intensity targets for energy- or GHG-intensity of water produced and/or delivered to customers by 2025. We will base our forthcoming reduction targets on a newly updated inventory of Scope 1 and Scope 2 GHG emissions, which we completed in early 2023 with an independent third party in accordance with the Greenhouse Gas Protocol, the global standard for measuring and managing organizational GHG emissions.

We also inventoried three of what we believe to be its most relevant and significant Scope 3 emissions categories: Purchased Goods and Services, Capital Goods, and Waste Generated in Operations. In the coming years, we intend to continue to mature and expand our Scope 3 emissions assessments, as well as conduct an exercise to identify the areas where we can have the greatest influence and impact. We believe these foundational activities are a critical step in considering Scope 3 emissions reduction strategies. For more details on our climate-related strategy, risk management, governance, and metrics and objectives, see our annual ESG Report and ESG Analyst Download.

Climate Change Risk Assessment & Adaptation Framework

To understand the impact of climate change on our supply reliability, operations, and assets, California Water Service (Cal Water) recently collaborated with ICF to develop a comprehensive Climate Change Risk Assessment & Adaptation Framework. The report identifies and prioritizes climate-driven risks to Cal Water facilities, operations, and water supply portfolio. It also projects and assesses changes to the water supply and demand for Cal Water resources. This has allowed Cal Water to more effectively:

• Develop adaptation strategies that help reduce the impact of climate change on our operations
• Prioritize infrastructure investments that increase resiliency
• Monitor and address risks to disadvantaged and vulnerable communities

Our company's core directive is to supply high-quality water, now and in the future. We do this by proactively managing both supply reliability, which relates to availability of water sources, as well as operational reliability, which includes the capabilities of our infrastructure and distribution network to deliver water to our customers. Through our water reliability plans and studies, we identify existing and future supplies, project demand over time, and address any gaps between supply and demand. For example, we implement 30-year Water Supply and Facilities Master Plans for each California district, which assess existing infrastructure and identify potential needs, improving our long-term operational reliability. To help secure long-term water supply, we strive to purchase and produce recycled water and incorporate projects that enhance treatment, increase supplies, and replenish groundwater aquifers.

We consider it our responsibility to preserve and improve water quality while helping to restore the natural environment. Our annual goal of zero environmental violations and penalties from non-compliance with regulations is our guiding target for our environmental management program. If any issues occur, we have processes designed to promptly report them to the appropriate regulatory entity, examine the causes of the violations, and implement steps to avoid future violations. Our compliance and permitting programs also aim to proactively protect biodiversity and support healthier habitats. For example, we have implemented projects to protect local species while installing infrastructure, and we continue to follow regulatory guidance to restore our natural environments. Additionally, we strive to minimize our material footprint by reducing waste generation, pursuing recycling programs, and repurposing materials, while balancing affordability and feasibility.