NFI : 2023 Environmental, Social and Governance Report

Environmental, Social + Governance Report for 2023

Introduction

Governance

A Better Product

A Better Workplace

A Better World

Appendix

Table of Contents

Letter to Stakeholders

Report Highlights

Land Acknowledgement

About this Report

About NFI

People

Communities

Awards

Sustainability

Table of contents

Introduction

03 Letter to Stakeholders

04 Report Highlights

05 Land Acknowledgement

06 About this Report

08 About NFI

1. Our Family of Brands
2. Mission, Vision + Values
3. Our People
4. Our Communities

1. Our Mobility Solutions Ecosystem
2. Our Awards + Accolades
3. Sustainability Pledge
4. Advancing Sustainability
5. Sustainable Value

Governance

1. Board of Directors
2. Director Skills Matrix
3. Sustainability Governance
4. Stakeholder Engagement
5. Key ESG Topics
6. Enterprise Risk Management
7. Leading with Integrity
8. Data + Cyber Security
9. Sustainable Supply Chains

A Better Product

1. Highlights
2. Supporting Our Customers
3. APTA EXPO
4. Celebrating Our Customers
5. Innovative and Sustainable Mobility Solutions

1. Product Safety + Quality
2. Vehicle Innovation Center
3. Zero-EmissionIndustry Partnerships

1. Zero-EmissionVehicle Deliveries
2. Alexander Dennis Next-Generation Launch

A Better Workplace

1. Highlights
2. Workplace Culture
3. Human Rights Statement
4. Occupational Health + Safety
5. Talent Acquisition
6. Workforce Development

1. Mind over Metal™ Youth Camp
2. NFI Learning Institute

1. Employee Compensation
2. Respectful Workplace
3. Labour Relations
4. Freedom of Association
5. Employee Well-Being
6. Team Spirit

61 Xpressline

A Better World

1. Highlights
2. Diversity, Equity + Inclusion

1. Truth + Reconciliation
2. Environmental Performance

1. Support for Education
2. Community + Charitable Support

74 Community Engagement

Appendix

76 ESG Data Tables

78 SASB Table

80 TCFD Table

82 Board Skills + Experience Descriptions

NFI ESG Report 2023

2

Introduction

Introduction

Governance

A Better Product

A Better Workplace

A Better World

Appendix

Table of Contents

Letter to Stakeholders

Report Highlights

Land Acknowledgement

About this Report

About NFI

People

Communities

Awards

Sustainability

Letter to stakeholders

Fiscal 2023 was a period of resiliency for NFI as we saw increases in vehicle production rates and improvements in financial results, while we continued to face turbulence from supply, inflation, and labour challenges. We navigated through this period of disruption by applying new approaches and working closely with customers, suppliers, and other partners. We remain committed to driving long-term sustainable value for all our stakeholders by investing in our products, people, and communities.

Reflecting on NFI's journey to recovery, we are reminded that the challenges we have faced also created opportunities and strengthened our approach to sustainability across the organization. It is with great pride that we share our vision of

1. zero-emissionfuture through innovation and responsibility in our sixth annual ESG Report.

This report outlines milestones we achieved in 2023; of critical importance was the execution of a comprehensive refinancing plan that strengthened our balance sheet and provided us with financial flexibility, supporting our operational recovery and longer-term strategy.

As we worked through periods of significant challenge, we did not lose sight of our purpose: We Move People, which is simply the world's most precious cargo. Our teams continue to be relentless in their pursuit of deploying leading technology, seeking operational excellence, ensuring safety, and delivering reliable products and the best value for our customers.

As a leader in zero-emission transportation and mobility solutions, we understand the importance of aligning our product and service roadmaps with market demand. We are proud to have made great strides to support our customers in their zero- emission journeys, from initial assessments to full deployment. From 2015 to 2023, we delivered 3,603 zero-emission buses ("ZEBs")that have travelled more than 150 million zero-emission service miles and reduced emissions in six countries. In 2023, NFI saw a 27% increase in ZEB deliveries, with ZEBs accounting for 22% of total deliveries. We anticipate that ZEBs will account for 30% to 35% of our overall deliveries in 2024, increasing to around 40% in 20251. More than 150 cities around the world have an NFI ZEB in service or on order, and our backlog continues to hit record highs.

While our products (battery-electric, fuel cell- electric, trolley-electric,clean-diesel, compressed natural gas or hybrid-electric) and services have tremendous environmental benefit, the work we do also has a positive social and environmental impact on all our stakeholders, including our team members, partners, and our communities. These initiatives and associated metrics are detailed in the Report, but we would like to highlight a few key points here.

In 2023:

• We focused on significant talent acquisition, recruitment, talent pipeline, and workforce developments efforts to meet higher expected production levels, with concentrated efforts in electrical skills training and partnering with industry trade associations to address labour shortages;
• We launched all new zero-emission buses for the UK and Asia Pacific markets through Alexander Dennis; and
• We improved our Supplier Code of Conduct to include enhanced sections on human rights, health and safety, and conflict and critical minerals.

In 2024, we plan to continue to expand our industry partnerships and collaboration across our value chains to support innovation towards shaping a future where mobility meets sustainability. Building on 2023, fostering employee engagement and teamwork while prioritizing a respectful and inclusive workplace will continue to provide opportunities for growth and development while maintaining a positive and supportive culture across our businesses. Investing in our people is crucial to our long-term business success and we are proud to have over 8,750 team members world-wide today. Additionally, we are working

to strengthen the positive environmental and climate impacts of our operations by enhancing program measurements and actions. We look forward to continuing to create sustainable value through responsible and transparent management and delivering on our pledge to provide a better product, a better workplace, and a better world.

With increasing global temperatures, rising inflation, and deepening geopolitical tensions, we are focused on building business resilience to be sustainable for the long-term in an evolving environment of global emerging issues. In 2023, we were proud to establish an Executive Sustainability Council to provide strategic leadership of our sustainability and ESG efforts-now, and into the future.

We acknowledge that we are not on this journey alone, and to be successful in reaching a more sustainable future we need continued support and engagement from our team members, customers, suppliers, government partners, investors, creditors, community, and other partners. We are thankful to all stakeholders for their continued support and their commitment to our vision of leading the evolution of sustainable on-road mass transportation and mobility.

Wendy Kei	Paul Soubry
Chair of the Board	President and Chief
Executive Officer

1 Please review the Company's February 29, 2024, press release and the 2023 Q4 and Fiscal Year MD&A for details on the assumptions that drive Fiscal 2024 guidance, Fiscal 2025 targets, as well as certain applicable risks.

NFI ESG Report 2023

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Introduction

Introduction

Governance

A Better Product

A Better Workplace

A Better World

Appendix

Table of Contents

Letter to Stakeholders

Report Highlights

Land Acknowledgement

About this Report

About NFI

People

Communities

Awards

Sustainability

Report highlights

Electric service miles travelled by NFI ZEBs from 2015 - 2023

Best 50

NFI named Corporate Knights' Best 50 Corporate Citizens in Canada - second year in a row

Enhanced

Supplier Code

of Conduct

Developing our Workforce

Building diverse and talented candidate pipelines for a more inclusive and equitable workplace

Sustainable

Leadership

Established NFI Sustainability Council to advance sustainable growth and climate action

Favorable response rate in our 2023 Employee Engagement

Pulse Check Survey Video: Introducing the ESG Report for 2023.

measuring NFI team member commitment and overall satisfaction1

DEI

Diversity, equity, and
inclusion strategic framework	Invested in NFI team member
implemented across NFI	career development

1 From NFI's 2023 Employee Engagement Pulse Check Survey with 65% team member participation rate.

NFI ESG Report 2023

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Introduction

Introduction

Governance

A Better Product

A Better Workplace

A Better World

Appendix

Table of Contents

Letter to Stakeholders

Report Highlights

Land Acknowledgement

About this Report

About NFI

People

Communities

Awards

Sustainability

Land acknowledgement

NFI's global headquarters is located on Treaty One Territory, the original lands of the Anishinaabe, Cree, Oji-Cree, Dakota, Lakota, and Dene peoples, and the birth place and homeland of the Métis Nation.

We acknowledge that our water is sourced from Shoal Lake 40 First Nation. We respect and give honour to the Indigenous peoples' history on this land and recognize First Nations, Métis, and Inuit peoples' ongoing contribution in our neighborhoods and communities today.

Video: NFI Land acknowledgement by President and Chief Executive Officer, Paul Soubry

NFI ESG Report 2023

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Introduction

Introduction

Governance

A Better Product

A Better Workplace

A Better World

Appendix

Table of Contents

Letter to Stakeholders

Report Highlights

Land Acknowledgement

About this Report

About NFI

People

Communities

Awards

Sustainability

About this

Report

NFI Group is committed to publicly reporting on sustainability- related topics affecting its business on an annual basis, with this being our sixth annual ESG Report (the "Report").

This Report includes ESG metrics and discussions that are focused on areas NFI Group and its subsidiaries (collectively, "NFI" or the "Company") believe are most relevant to our Company and our stakeholders, and are guided by the principles of accuracy, responsibility, and transparency.

We encourage stakeholder feedback on the topics described in this Report. Our sustainability team can be reached at [e-mail].

Reporting Scope and Boundaries

This Report covers the operational activities of NFI globally for "Fiscal 2023", the 52-week period from January 2, 2023 to December 31, 2023, unless otherwise indicated herein.

To develop this Report, NFI consulted with a broad range of internal and external stakeholders on regional and global levels, including key internal departments, customers, suppliers, investors, creditors, and community partners. All data presented in this report has been calculated according to industry standards and is explained in chart footnotes where appropriate. As a result of data coverage and quality improvements, a limited number of past performance figures have been restated as noted in footnotes, to better facilitate accurate comparisons of past performance.

Definitions

In this Report, we use the term ESG to describe the ESG risks and opportunities to NFI, and sustainability as a broader term that includes NFI's impact on the world. Zero-emission buses ("ZEBs") consist of trolley-electric, hydrogen fuel cell- electric, and battery-electric buses and motor coaches. One equivalent unit ("EU") represents one production "slot", being one 30-foot, 35-

foot, 40-foot,45-footheavy-duty transit bus, one double deck bus, one medium-duty bus, one cutaway bus or one motor coach, whereas one articulated transit bus represents two EUs. An articulated transit bus is an extra-long transit bus (approximately 60 feet in length), composed of two passenger compartments connected by a joint mechanism. In this Report, where ZEB deliveries are referenced, the reference refers to EUs of ZEBs delivered.

Assurance and Approval

This ESG report has been reviewed and published with the approval of NFI's senior executives and the Board of Directors. The performance data within has been validated by management, and

it is reported to various jurisdictional regulatory authorities as required. Third party assurance was not completed for this Report.

Other

Some of the photos, images, and videos included in this Report were taken in previous years. All references to $ in this document refer to U.S. dollars unless otherwise noted.

NFI ESG Report 2023

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Introduction

Introduction

Governance

A Better Product

A Better Workplace

A Better World

Appendix

Table of Contents

Letter to Stakeholders

Report Highlights

Land Acknowledgement

About this Report

About NFI

People

Communities

Awards

Sustainability

Forward-Looking Statements

This Report contains "forward-looking information" and "forward-looking statements", within the meaning of applicable Canadian securities laws, which reflect the expectations of management regarding the Company's future growth, financial and operational performance and objectives and the Company's vision, strategic initiatives, plans, business prospects and opportunities, including the Company's social, economic, environmental, and governance-related impacts and objectives. The forward-looking information in this Report is included to assist the Company's stakeholders in understanding these matters. This information may not be appropriate for other purposes. The words "believes", "views", "anticipates", "plans", "expects", "intends", "projects", "forecasts", "estimates", "guidance", "goals", "objectives", "targets" and similar expressions such as "may", "will", "should", "could", "would" are intended to identify forward- looking statements. These forward-looking statements reflect management's current expectations regarding future events and speak only as of the date of this Report (or as otherwise indicated).

By their very nature, forward-looking statements require management to make assumptions

and involve significant risks and uncertainties, should not be read as guarantees of future events, performance or results, and give rise to the possibility that management's predictions, forecasts, projections, expectations, or conclusions will not prove to be accurate, that the assumptions may not be correct and that the Company's future growth, financial and operational performance and objectives and the Company's vision, strategic initiatives, plans, business prospects and opportunities, including the Company's social, economic, environmental, and governance-related impacts and objectives, will not occur or be achieved.

The Company cautions readers and investors not to place undue reliance on these forward- looking statements and information as a number of risk factors could cause the Company's actual results to differ materially from the expectations expressed in such forward-looking statements. These factors - many of which are beyond the Company's and management's control and

the effects of which are difficult to predict - include risks related to general economic and market factors; risks related to the Company's business environment; risks related to the Company's operations, strategy, financing, capital structure, tax, regulatory compliance,

reputation, environmental and social risk; and the risks discussed in the "Risk Factors" section of the Company's Annual Information Form and other disclosure documents filed with the Canadian securities regulatory authorities and available on SEDAR at www.sedarplus.ca. The Company cautions that the foregoing list of risk factors is not exhaustive and other factors could materially adversely affect the Company's future growth, financial and operational performance and objectives and the Company's vision, strategic initiatives, plans, business prospects and opportunities, including the Company's social, economic, environmental, and governance-related impacts, and objectives. Except as required by law, the Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by the Company or on its behalf. The Company provides no assurance that forward-looking statements and information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

NFI ESG Report 2023

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Introduction

Introduction

Governance

A Better Product

A Better Workplace

A Better World

Appendix

Table of Contents

Letter to Stakeholders

Report Highlights

Land Acknowledgement

About this Report

About NFI

People

Communities

Awards

Sustainability

About NFI

NFI is leading the evolution to global zero- emission mobility.

With over 100,000 buses and coaches in service around the world, NFI continues to build upon our legacy of innovation to deliver transit technology that meets

the complex environmental and social demands of communities today and into the future.

		62%	Transit			79%	North America
Revenue		21%	Aftermarket	Revenue		19%	United Kingdom
by Product1						+ Europe
	15%	Motor Coach	by Geography1
						2%	Asia Pacific
		2%	Low-Floor Cutaway
			+ Medium Duty				("APAC")

1 All metrics as of Dec 31, 2023

Stakeholder Wheel

NFI is committed to ensuring the interests of all our stakeholders are considered within our decision making. Our Stakeholder Wheel, adopted in 2009, incorporates the vision to deliver long-term sustainable value, and is underpinned by our purpose.

NFI ESG Report 2023

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Introduction

Introduction

Governance

A Better Product

A Better Workplace

A Better World

Appendix

Table of Contents

Letter to Stakeholders

Report Highlights

Land Acknowledgement

About this Report

About NFI

People

Communities

Awards

Sustainability

Our family of brands

Single and double deck	Low-floor cutaway	Fiber-reinforced plastics
bus manufacturer	and medium-duty bus	("FRP") and composite
alexander-dennis.com	manufacturing	technologies
	arbocsv.com	carfaircomposites.com

Part fabrication	Motor coach	Heavy-duty transit bus
	manufacturing	manufacturing
	mcicoach.com	newflyer.com

Comprehensive parts	Motor coach
organization	manufacturing
nfiparts.com	Plaxton coaches

NFI ESG Report 2023

9

Introduction

Introduction

Governance

A Better Product

A Better Workplace

A Better World

Appendix

Table of Contents

Letter to Stakeholders

Report Highlights

Land Acknowledgement

About this Report

About NFI

People

Communities

Awards

Sustainability

NFI's mission, vision, and values ("MVV") all tie back to our overarching purpose: We Move People. The world's most precious cargo. Our vision represents the path we're on and where we want to go. Our mission is a representation of the work we do every day. Our values are core to our operations, reflecting our culture and how we work as a team, while also being aspirational goals that we strive to achieve.

Mission	Vision
To design, deliver, and support	To lead the evolution of
market-leading bus and motor	sustainable on-road mass
coach solutions that are safe,	transportation and mobility.
accessible, efficient, and reliable.

Our core values

Safety

The health and well-being of our team members and the safety of our products are our top priorities.

Accountability

We take responsibility for our actions, seeking to build trust and earn a reputation for excellence and reliability.

Quality

We strive for excellence in our products, services, and all that we do.

Teamwork

We work with our team members, our supplier partners, and our customers to pursue mutual benefits.

Integrity

We act with honesty, transparency, and integrity, treating each other with respect in a diverse, equitable, and inclusive workplace.

Sustainability

We seek long-term success for our business, our communities, and the environment through responsible sourcing, lean manufacturing, and sustainable operations.

NFI ESG Report 2023

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Introduction