About Pembina Pipeline Corporation

Pembina Pipeline Corporation is a leading energy transportation and midstream service provider that has served North America’s energy industry for more than 65 years.

 

		Purpose We deliver extraordinary energy solutions so the world can thrive   Values

		Strategic priorities
				To be resilient... Sustain, decarbonize, and enhance our businesses						To thrive... Invest in the energy transition to improve the basins in which we operate
				To meet global demand... Transform and export our products						To set ourselves apart... Create a differentiated experience for our stakeholders

 

Value proposition

BBB (high) /      BBB1     credit ratings

$12 billion       in dividends         returned to common shareholders since IPO

Leading provider of essential North American energy services

Track record of sector outperformance

Resilient and diverse set of franchise assets and services along the energy value chain

Established presence and further growth opportunities in the prolific Montney and Dunvernay areas

over $6.8 million invested in our communities   to protect the environment, support Indigenous reconciliation and enhance the safety and inclusivity of local communities2

Accessing global markets and higher value for Canadian products

Focused on delivering leading ESG solutions, including emissions reductions projects; enhanced employee equity, diversity and inclusion; and meaningful Indigenous participation

1  DBRS Morningstar and S&P Global ratings as at March 17, 2023. 2  Direct cash investments. Assets excluded include Alberta Carbon Grid, Aux Sable, Cedar LNG, Chinook Pathways, and Pembina Gas Infrastructure. 3  Individual belongs to one of the four designated groups in the Employment Equity Act (Canada): Indigenous peoples, persons with disabilities, members of visible minorities and women. 4  As of March 17, 2023. Does not include Randall Findlay, who is not standing for re-election at the 2023 meeting of shareholders. 5  As of December 31, 2022. 6  See Non-GAAP and other financial measures on page 103. 7  Relative to baseline 2019 emissions.

Overall diversity3 55% independent directors4 39% executive leadership5

70%   increase in adjusted EBITDA per common share6 over the last five years

30%   targeted reduction in greenhouse gas emissions intensity by 20307

 

Message from the Chair

 

		As Pembina Pipeline Corporation’s new chair of the board, I am delighted to invite you to our 2023 annual meeting of shareholders, to be held on Friday, May 5, 2023 at 2:00 p.m. (Mountain daylight time). We are holding a virtual-only meeting again this year, by live audio webcast. Turn to page 7 of the 2023 Management Information Circular (attached) to read about how you can attend the meeting and vote your shares.   Leadership   On behalf of the board and management, I offer my sincere thanks and gratitude to our outgoing board chair, Randy Findlay, who is retiring and will not stand for re-election at the 2023 annual meeting of shareholders. During Randy’s 16-year board tenure, including nearly nine years as chair, Pembina experienced significant growth, delivered an average annual total shareholder return of approximately 14 percent per year, including dividends of $11 billion, and became a leader in its industry. Randy was also instrumental in ensuring the highest standards of corporate governance while promoting the principles and values critical to Pembina’s success and enduring stakeholder relationships. We have all benefited greatly from Randy’s experience, wisdom, and counsel throughout his service on the board, and we wish him all the best in the future.   In late 2021, the board oversaw a significant transition in Pembina’s leadership, which resulted in a renewed and energized officer team. In 2022, the board continued this process by appointing Scott Burrows as Pembina’s President and Chief Executive Officer. Tasked with leading Pembina into the future, Scott brings the critical capabilities and qualities Pembina needs to build on its
Henry W. Sykes       Chair of the Board     Pembina Pipeline Corporation

more than 65-year history, continue to strengthen relationships with stakeholders and ultimately deliver value for investors. He has the strategic vision and experience to advance our position as a truly differentiated, integrated leader in the energy infrastructure space.

There has also been significant change at the board level with the addition of four new directors since early 2020, including the most recent addition, Andy Mah, who joined in February 2023. We welcome Andy to the board and look forward to working with him. Given his extensive and relevant experience in the industry, he will make a meaningful contribution to the board and support Pembina’s continued success.

 

Strategy   After an extensive process of succession and re-organization amongst the directors and officers of Pembina, the board and management viewed 2022 as an opportune time to review Pembina’s strategy. During this year-long effort, we analyzed our business through a commodity-by-commodity lens, undertook a scenario-based planning exercise grounded in				In December, the board approved a comprehensive strategy that will drive resilience in Pembina’s business and help the company thrive in the next decades
the themes of globalization and decarbonization, and assessed those scenarios in terms of their potential impacts on Pembina’s business.

In December, the board approved a strategy that recognizes that the future is dynamic, the energy industry is rapidly evolving, and scenarios exist that could materially impact our performance and resilience longer term. Our existing business, focused on energy transportation and midstream services, is sound and we will continue to invest in, and grow, our integrated value chain to meet our customers’ needs for many years to come, including responding to opportunities to provide new services. In continuing to meet global energy demand and its customers’ needs, while ensuring Pembina’s long-term success and resilience, the company has established four strategic priorities:

1.	To be resilient, we will sustain, decarbonize, and enhance our businesses. This priority is focused on strengthening and growing our existing franchise and demonstrating environmental leadership.

2.	To thrive, we will invest in the energy transition to improve the basins in which we operate. We will expand our portfolio to include new businesses associated with lower-carbon commodities.

 

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3.	To meet global demand, we will transform and export our products. We will continue our focus on supporting the transformation of Western Canadian Sedimentary Basin commodities into higher margin products and enabling more coastal egress.

4.	To set ourselves apart, we will create a differentiated experience for our stakeholders. We remain committed to delivering excellence for our four key stakeholder groups: employees, communities, customers and investors.

For each strategic priority, management has identified opportunities to translate the strategy into action, and as a board we look forward to providing the necessary oversight and direction for effective execution, including ensuring Pembina continues to build and mature new capabilities that will be instrumental in its success and continued ability to deliver value to our shareholders for many years to come.

Purpose

Through the strategy work, Pembina’s Purpose was modified to reflect the breadth and diversity of Pembina’s existing operations and future aspirations. Our purpose, ‘To deliver extraordinary energy solutions so the world can thrive’, will build on Pembina’s strengths by continuing to invest in and grow the core businesses that provide critical transportation and midstream services to help ensure reliable and secure energy supply. At the same time, Pembina will capitalize on exciting opportunities to leverage its assets and expertise into new service offerings that proactively respond to the transition to a lower-carbon economy.

2022 outcomes

2022 was another significant year of accomplishment for Pembina. The following are just some examples of the board’s activities this year:

●

Oversaw the joint venture transaction with KKR to combine our respective western Canadian natural gas processing assets into a single, new joint venture entity, Pembina Gas Infrastructure Inc.

●

Continued to actively review Pembina’s environmental, social and governance (ESG) and sustainability strategy, which is a core responsibility of the board. The board regularly engages on ESG issues through presentations by management and third-party experts at its annual strategy sessions and quarterly meetings. Specifically, in 2022, we were active in:

-

Ensuring Pembina maintains an unwavering commitment to safety and supporting the communities where we operate.

-

Monitoring progress towards Pembina’s greenhouse gas reduction target, which was announced in 2021 and will help guide business decisions and improve overall emissions intensity performance while increasing the company’s long-term value and ensuring Canadian energy is developed and delivered responsibly.

-

Continuing to advance Pembina’s equity, diversity and inclusion strategy.

●

Continued to oversee the development of the proposed Cedar LNG Project, in partnership with the Haisla Nation.

Looking ahead

In our ongoing stewardship of Pembina, the board remains committed to maintaining the high standards of corporate governance expected of us by our stakeholders, while continuing to focus on our business strategy. Strong and effective governance is not an end unto itself, but rather an essential foundation to a successful, sustainable business. Our focus on governance supports our ability to mitigate risk and create value. We will continue to monitor emerging governance trends and adhere to an education plan to enhance the board’s understanding of matters critical to Pembina’s continued success.

In conclusion, I would like to thank my fellow directors for their ongoing stewardship and commitment to Pembina’s success, and the management team and employees for continuing to deliver outstanding operational and financial results year after year. And finally, thank you to our shareholders for trusting us with your investment. As the global energy landscape continues to evolve, ample opportunities exist for Pembina to leverage the strength of its existing business while evolving to meet future demands. We remain dedicated to working diligently on your behalf to deliver long-term value and industry-leading returns.

Sincerely,

(signed) “Henry W. Sykes”

Henry W. Sykes

 

 

Pembina Pipeline Corporation • 2023 Management Information Circular		2

Notice of our

2023 Annual Meeting of Shareholders

You are invited to our 2023 annual meeting of shareholders (the meeting):

 

When      May 5, 2023                   2:00 p.m. (Mountain daylight time)		Where to get a copy of the circular   We use the notice and access procedures to deliver meeting materials (this notice and the circular) to registered and beneficial holders of our common shares. Notice and access is a set of rules developed by the Canadian Securities Administrators that allows companies to post meeting materials online, reducing paper and mailing costs.   You can view the circular at: www.sedar.com, www.edgar.com or https://www.pembina.com/ investors/investor-documents-filings/   If you would like us to mail you a paper copy of the circular instead, please contact us:   ●  online:         www.pembina.com/Investor                       Centre/Shareholder-information ●  by phone:   1-855-880-7404 ●  by email:     investor-relations@pembina.com   You may request a paper copy of the circular free of charge within one year of filing the circular on SEDAR. In order to receive a paper copy before the date of the meeting, we need your request at least five days before the proxy deposit date listed on the enclosed form of proxy or voting instruction form.   If you have questions about notice and access, call us toll-free at 1-855-880-7404.   How to vote   Registered and beneficial shareholders are encouraged to vote in advance of the meeting by completing the form of proxy or voting instruction form provided to them. Detailed instructions on how to complete and return proxies and voting instruction forms are provided in the circular starting on page 7.   Shareholders may also vote their shares by telephone or through the internet using the procedures described in the form of proxy or voting instruction form.
Where     Virtual-only meeting                 live audio webcast online at                  https://web.lumiagm.com/440249827
We will cover five items of business at the meeting—see Business of the meeting in our 2023 management information circular (the circular): 1.  Receive our 2022 Audited Consolidated Financial Statements and the auditors’ report thereon. 2.  Vote on electing the directors. 3.  Vote on appointing the auditors. 4.  Vote on our approach to executive compensation. 5.  Vote on any other business that properly comes before the meeting.   Your vote is important   The circular includes important information about the meeting and the voting process. Please read it carefully before you vote.   We mailed you a copy of our 2022 audited consolidated financial statements and the auditors’ report if you asked us to (in accordance with applicable corporate and securities laws). You can also find a copy of our financial statements on our website (www.pembina.com), on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov).   The meeting will be a virtual-only meeting held by live audio webcast. Every shareholder and duly appointed proxyholder, regardless of geographic location and ownership, will have an equal opportunity to participate at the meeting and vote on the matters to be considered at the meeting. You will find detailed instructions about how to participate in the meeting in the circular starting on page 7. There are different processes if you are a registered shareholder or a beneficial shareholder. Most of our shareholders are beneficial shareholders, meaning that they hold their shares through a bank, broker or other such institution. Closely follow the applicable instructions in this notice, the circular and in your voting information form or form of proxy.   By order of the board,   (signed) “Jason Metcalf”   Jason Metcalf Vice President, General Counsel & Corporate Secretary Pembina Pipeline Corporation Calgary, Alberta March 17, 2023

 

		2023 Management Information Circular

 

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About this Management Information Circular

 

You have received this document because you owned Pembina shares on March 17, 2023 (the record date) and are entitled to vote at our 2023 annual meeting of shareholders, which will be held at 2:00 p.m. (Mountain daylight time) on May 5, 2023, or at a reconvened meeting if the meeting is postponed or adjourned.   The meeting will be held in a virtual-only format, by live audio webcast as a cost-efficient and environmentally friendly way to engage with shareholders. Every registered shareholder and duly appointed proxyholder, regardless of geographic location and ownership, will have an equal opportunity to participate at the meeting and vote on the matters to be considered at the meeting. The meeting cannot be attended in person. The full webcast will be available on our website after the event, including any questions we receive from shareholders and their answers.   This circular is dated and all information is provided herein as of March 17, 2023. In addition, all dollar amounts are in Canadian dollars, unless we note otherwise.   You will find financial information about Pembina in our 2022 Audited Consolidated Financial Statements and Management’s Discussion and Analysis of our Financial and Operating Results (MD&A). You may contact us if you would like to receive a paper a copy of these documents. You can also find these documents and other important information about Pembina on our website (www.pembina.com), on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov).						In this document   ●  meeting means the annual meeting of shareholders to be held as a virtual-only meeting on May 5, 2023 ●  you, your, and shareholders mean holders of Pembina common shares ●  we, us, our, Pembina and the company mean Pembina Pipeline Corporation and our consolidated subsidiaries ●  common shares, shares and Pembina shares mean common shares in the capital of Pembina ●  circular means this 2023 Management Information Circular ●  board means Pembina’s board of directors   Our principal corporate and registered office:   Pembina Pipeline Corporation 4000, 585 – 8th Avenue S.W. Calgary, Alberta T2P 1G1   T. 403-231-7500 F. 403-237-0254

This circular contains forward-looking statements that are based on our current expectations, estimates, projections and assumptions in light of our experience and perception of historic trends. This information is provided to assist readers in understanding the company’s future and expectations and may not be appropriate for other purposes. Please see Forward-looking information on page 102 for more information.

In this circular, we also use certain financial measures and ratios that are not defined by generally accepted accounting practices (GAAP). Please see Non-GAAP and other financial measures on page 103 for more information about these measures and why they are used.

 

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About the Shareholder Meeting – Voting Information

 

		Voting Information

 

Who can vote?
You can vote at the meeting if you held our common shares at the close of business on the record date of March 17, 2023, even if you sold your common shares after this date.   You are not allowed to vote at the meeting if you acquired your shares after the record date, unless you ask us to include your name in the list of voting shareholders at least two days before the meeting and provide adequate evidence that you own the shares.   Common shares We are authorized to issue an unlimited number of common shares. As at March 17, 2023, we had 550,364,102 common shares issued and outstanding. Our common shares are listed and trade on the Toronto Stock Exchange (TSX) (TSX: PPL) and the New York Stock Exchange (NYSE) (NYSE: PBA).   To the best of the knowledge of the company’s directors and officers, no person beneficially owns, or controls or directs, directly or indirectly, more than 10% of our common shares.		About voting results We will post the voting results on SEDAR (www.sedar.com) and EDGAR (www.sec.gov) as soon as possible following the meeting.
		Where to go with questions If you have any questions about the meeting or need help voting your shares, please contact our investor relations group at:   1-855-880-7404 investor -relations@pembina.com   Or our proxy solicitation agent, Kingsdale Advisors at:   1-866-657-5859 (toll-free in North America) 1-416-867-2272 (outside North America) contactus@kingsdaleadvisors.com

Proxy solicitation

Management is soliciting your proxy for the meeting. Management may use the service of external proxy solicitors and you may be contacted by Pembina employees or Kingsdale Advisors, our strategic shareholder advisor and proxy solicitation agent, by mail, by telephone or by personal interview. This year, Kingsdale Advisors is providing governance and strategic shareholder advisory services to the company and may also provide proxy solicitation services in connection with the meeting. We have paid Kingsdale Advisors approximately $45,000 for this work and we may also pay them customary fees for contacting shareholders in connection with voting at the meeting. Pembina pays all costs related to producing and mailing this circular and other meeting materials, and for soliciting your proxy.

 

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About the Shareholder Meeting – Voting Information

 

About the virtual meeting

We are holding a virtual-only meeting this year by live audio webcast as a cost-efficient and environmentally friendly way to engage with shareholders. Every registered shareholder and duly appointed proxyholder, regardless of geographic location and ownership, will have an equal opportunity to participate at the meeting and vote on the matters to be considered at the meeting. The meeting cannot be attended in person. The full webcast will be available on our website after the event, including any questions we receive from shareholders and their answers.

Attending as a guest

All shareholders can attend the meeting as a guest by logging in online at https://web.lumiagm.com/440249827, selecting “I am a guest” and completing the required form. If you attend the meeting as a guest, you will not be permitted to vote during the meeting. Guests can, however, ask questions after the formal part of the meeting is over, during the live question and answer session.

Asking questions at the virtual meeting

Questions may be submitted at any time during the webcast through the chat thread on the live webcast; however, during the formal part of the meeting, only questions from registered shareholders and duly appointed proxyholders that relate to the business of the meeting will be addressed.

Pembina will host a live question and answer session after the formal part of the meeting, where we will answer other questions submitted during the meeting. Registered shareholders, duly appointed proxyholders (including beneficial shareholders that have duly appointed themselves as proxyholders) and guests can submit questions during the live question and answer session.

To make sure we can answer as many questions as possible, please keep your questions brief and concise, and limit each question to a single topic. If there are questions from several shareholders or proxyholders on the same topic or that are otherwise related, we may group, summarize and answer them together. While all shareholder questions are welcome, we do not intend to address questions that are not related to the business of the meeting or Pembina’s operations, are repetitive or have been asked by another shareholder, are personal in nature or in furtherance of a shareholder’s personal or business interest, are related to material non-public information, are considered derogatory or otherwise offensive or are out of order or otherwise not appropriate.

To ensure the meeting is conducted in a way that is fair to all shareholders, the chair of the meeting may exercise discretion in responding to questions, including the order that questions are answered in, the grouping or editing of questions and the amount of time devoted to any question.

Technical difficulties

If you participate in the virtual meeting, it is important that you stay connected to the internet at all times during the meeting in order to vote. It is your responsibility to ensure connectivity for the duration of the virtual meeting. You should allow ample time to log into the virtual meeting and complete the above procedure.

All meeting participants must use the latest versions of Chrome, Safari, Microsoft Edge, or Firefox. Please do not use Internet Explorer. We recommend that you log in at least 30-60 minutes before the meeting starts as this will allow you to check compatibility and complete the related procedures required to log in to the meeting.

Caution: Internal network security protocols including firewalls and virtual private network (VPN) connections may block your access to the meeting. If you are experiencing any difficulty connecting to or watching the meeting, ensure your VPN setting is disabled or use a computer or other device on a network that is not restricted by any particular security settings.

If you have any questions about the virtual meeting portal or requiring assistance accessing the meeting website, please go to https://www.lumiglobal.com/faq for information.

 

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About the Shareholder Meeting – Voting Information

 

How to vote

You can vote your shares by proxy (by appointing someone—a proxyholder—to represent you), or by attending the virtual meeting and voting. The rules for voting depend on whether you are a registered shareholder or a beneficial shareholder, as further described below.

Beneficial shareholders

You are a beneficial shareholder if your shares are registered in the name of a nominee, such as a bank, trust company, securities broker, trustee or other intermediary. The majority of our shares are held by beneficial shareholders. Beneficial shareholders have the option to vote their shares during the virtual meeting or by proxy before the meeting, as set forth below.

Option 1: Vote during the virtual meeting

Before the meeting:

1.

Appoint yourself as the duly appointed proxyholder by printing your own name in the blank space provided in the proxy or voting instruction form. Then return the form in the envelope provided (or by following the instruction on the form). Do not complete the rest of the form or mark your voting instructions on the form, because your vote will be taken at the meeting.

2.	Register online with our transfer agent, Computershare Trust Company of Canada (Computershare) online by going to www.computershare.com/pembina before 2:00 p.m. (Mountain daylight time) on May 3, 2023 and input your name and contact information.

Computershare will email you a username before the meeting. You will need your username to log in to the meeting and vote. Without a username, you will not be able to vote at the meeting but will be able to participate as a guest.

On the day of the meeting:

1.	Log in online at https://web.lumiagm.com/440249827. We recommend visiting the site before the meeting starts to make sure it works on your computer or device. You must stay connected to the internet for the entire meeting.

2.	Select “I have a Control Number/Username” and enter the username Computershare provided by email.

3.	Enter the password (case sensitive): pembina2023

4.	Complete the ballot online during the meeting.

Beneficial shareholders who have not appointed themselves as proxyholder will not be able to vote online during the virtual meeting but will be able to participate as a guest.

Option 2: Vote by proxy before the meeting

If you are a beneficial shareholder and wish to vote by proxy before the meeting, you must send your voting instructions to your nominee who will vote for you. You will receive a request for voting instructions for the number of shares held for your benefit. Follow the instructions on the proxy form or voting instruction form and send your voting instructions to your nominee. You likely have an earlier deadline for returning your voting instruction form to your nominee, so be sure to complete and return the form early, to allow enough time for your nominee to receive your voting instructions and then send them to Pembina before the proxy cut-off time.

We use Broadridge Financial Solutions Inc. to send proxy-related materials to non-objecting beneficial shareholders. We intend to pay for intermediaries to deliver proxy-related materials to objecting beneficial shareholders.

Beneficial shareholders located in the United States

If you are a beneficial shareholder located in the United States and wish to vote at the meeting or, if permitted, to appoint a third party as your proxyholder, in addition to the steps described above, you must obtain a valid legal proxy from your nominee. Follow the instructions from your nominee included with the legal proxy form or contact your nominee to request a legal proxy form if you have not received one. After obtaining a valid legal proxy from your nominee, you must then submit such legal proxy to Computershare. Requests for registration from beneficial shareholders located in the United States that wish to vote at the meeting or, if permitted, to appoint third parties as their proxyholders must be sent by e-mail or by courier to: uslegalproxy@computershare.com (if by e-mail); or Computershare Trust Company of Canada, Attention: Proxy Department, 8th Floor, 100 University Avenue, Toronto, ON M5J 2Y1, Canada (if by courier), and in both cases, must be labeled “Legal Proxy” and received before 2:00 p.m. (Mountain daylight time) on May 3, 2023. You will receive a confirmation of your registration by email once Computershare receives your registration materials.

 

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About the Shareholder Meeting – Voting Information

 

Registered shareholders

You are a registered shareholder if your shares are registered directly in your name. Registered shareholders have the option to vote their shares during the virtual meeting or by proxy before the meeting, as set forth below.

Option 1: Vote during the virtual meeting

On the day of the meeting:

1.	Log in online at https://web.lumiagm.com/440249827. We recommend visiting the site before the meeting starts to make sure it works on your computer or device. You must stay connected to the internet during the meeting.

2.	Select “I have a Control Number/Username” and enter your 15-digit control number (this is your username and you will find it on the bottom left corner of the first page of the enclosed proxy form).

3.	Enter the password (case sensitive): pembina2023

4.	Complete the ballot online during the meeting.

Option 2: Vote by proxy before the meeting

Registered shareholders can vote by proxy in one of the following three ways:

·

Online: Go to www.investorvote.com. You will need to enter your 15-digit control number (located on the bottom left corner of the first page of the enclosed proxy form) to identify yourself as a shareholder on the voting website;

·

By phone: Call 1-866-732-VOTE (8683) toll-free and follow the instructions. You will need to enter your 15-digit control number (located on the bottom left corner of the first page of the enclosed proxy form) to identify yourself as a shareholder on the telephone voting system; or

·

By mail: Complete the enclosed proxy form, sign and date it and return it in the enclosed envelope.

Computershare must receive your completed proxy form at least 48 hours before the meeting (not including Saturdays, Sundays or holidays). The chair of the meeting can waive or extend the time limit for receiving proxy forms without notice, at his or her discretion.

About your proxyholder

The officers named on the proxy form and voting instruction form have agreed to serve as your proxyholder and will vote your shares according to your instructions. If you do not specify your voting instructions, they will vote your shares for each item of business at the meeting. If there are changes to the items of business or other matters that are properly brought before the meeting, your proxyholder can use their discretion and vote as they see fit. As of the date of this circular, we do not anticipate any changes to the items of business or other matters to be brought before the meeting.

Choosing someone else to be your proxyholder

You have the right to appoint someone else to be your proxyholder and act on your behalf at the virtual meeting. The person you appoint does not have to be a shareholder. Make sure this person knows he or she has been appointed to attend the virtual meeting and vote on your behalf. Your proxyholder must vote (or withhold from voting) your shares according to your instructions. If you appoint someone else to be your proxyholder and do not give them specific voting instructions, your proxyholder has the discretion to vote as they see fit.

To appoint someone other than the officers named in the proxy form and voting instruction form as your proxyholder:

1.	Appoint your proxyholder as a duly appointed proxyholder by printing his or her name in the blank space provided on your proxy form or voting instruction form. Then return the form in the envelope provided (or by following the instructions on the form).

2.	Register your proxyholder online with Computershare by going to www.computershare.com/pembina before 2:00 p.m.

(Mountain daylight time) on May 3, 2023 and input your proxyholder’s name and contact information.

Computershare will email your proxyholder a username, which they will need to log in to the meeting and vote. Without a username, your proxyholder will not be able to vote at the meeting but will be able to participate as a guest.

On the day of the meeting, your proxyholder will:

1.	Log in online at https://web.lumiagm.com/440249827. We recommend visiting the site before the meeting starts to make sure it works on the computer or device the proxyholder is using. Your proxyholder must stay connected to the internet for the entire meeting.

2.	Select “I have a Control Number/Username” and enter the username Computershare provided by email.

3.	Enter the password (case sensitive): pembina2023

4.	Complete the ballot online during the meeting.

 

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About the Shareholder Meeting – Voting Information

 

Changing your vote

If you are a registered shareholder, you can revoke a proxy form you previously submitted by:

·

voting again at the meeting;

·

voting again by internet, telephone or fax before 4:30 p.m. (Mountain daylight time) on the last business day before the meeting;

·

delivering a revocation notice in writing executed by the registered shareholder or by an authorized officer or attorney (duly authorized in writing) to: (i) our head office before 4:30 p.m. (Mountain daylight time) on the last business day before the meeting; or (ii) with the chair of the meeting prior to the start time of the meeting; or

·

in any other manner permitted by law.

If you are a beneficial shareholder, you can revoke voting instructions you previously submitted by contacting your nominee.    

 

Shareholder proposals

If you want to present a shareholder proposal at our 2024 annual meeting of shareholders, you must submit it by February 5, 2024 to be considered for inclusion in next year’s management information circular.

Send your shareholder proposals to:

Corporate Secretary

Pembina Pipeline Corporation 4000, 585 – 8th Avenue S.W.

Calgary, AB T2P 1G1

 

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About the Shareholder Meeting – Business of the Meeting

 

		Business of the Meeting

The meeting will cover the following items of business:

1. Receive our 2022 Audited Consolidated Financial Statements and Auditors’ Report

You have received our 2022 Audited Consolidated Financial Statements and the Auditors’ Report thereon, which are included in our 2022 Annual Report, if you requested a copy. Copies are available on our website (www.pembina.com), on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov), or you can request a copy from our Investor Relations department.

2. Elect the directors

 

Our articles state that the board must have between five and 13 directors. In accordance with our by-laws, the board has fixed the number of directors to be elected at the meeting at 12.   The following 12 persons are nominated for election to the board at the meeting:				Our policy on majority voting According to our majority voting policy, each director must receive a majority of the votes cast for their election, or they must resign immediately following the meeting.   The governance, nominating and corporate social responsibility committee will consider the resignation and recommend to the board the action to be taken. The director who resigned does not participate in these discussions.   The board will consider the committee’s recommendation and, within 90 days of the meeting, will accept the resignation unless there are exceptional circumstances. The resignation will be effective when it is accepted by the board. The board will announce its decision in a news release.   If the board accepts the resignation, it can appoint a new director, call a meeting of shareholders to vote for other candidates or leave the position vacant until the next annual meeting of shareholders.   Our majority voting policy does not apply if a director election is contested.
·  Henry W. Sykes  (chair)		·  Maureen E. Howe
·  Anne-Marie N. Ainsworth		·  Gordon J. Kerr
·  J. Scott Burrows		·  David M.B. LeGresley
·  Cynthia Carroll		·  Andy J. Mah
·  Ana Dutra		·  Leslie A. O’Donoghue
·  Robert G. Gwin		·  Bruce D. Rubin
All of the nominated directors currently serve on our board. Mr. Mah was appointed to the board on February 23, 2023. Turn to the profiles starting on page 15 for detailed information about each nominated director.   The directors elected at the meeting will serve until the next annual meeting of shareholders, or until their successors are elected or appointed.   The proxy form allows you to vote for all the nominated directors, vote for some of them and withhold your vote for others, or withhold your vote for all of them. The board recommends you vote for the election of each nominated director. Unless instructed otherwise, the Pembina officers named in the proxy form and voting instruction form will vote for all our nominated directors.

 

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About the Shareholder Meeting – Business of the Meeting

 

3. Appoint our auditors

You will vote on appointing our external auditors. The audit committee and the board propose that KPMG LLP (KPMG), Chartered Professional Accountants, be appointed as auditors of Pembina and serve until the next annual meeting of shareholders. The audit committee will recommend KPMG’s compensation to the board for its review and approval.

KPMG have been Pembina’s auditors since September 1997. Pembina’s audit committee and management conduct a comprehensive review of the external auditor at least every five years. A comprehensive review was last completed in 2020 for the five-year period from 2015 to 2019. The results of this review supported the continuation of KPMG’s audit engagement.

Independence rules under the United States Securities Exchange Act of 1934, as amended, require mandatory rotation for the lead audit partner and concurring partner after serving a maximum of five years, followed by a five-year period without any involvement with the Pembina audit engagement. For other audit partners involved in the Pembina audit, the mandatory rotation occurs after a maximum of seven years of service followed by a two-year period without any involvement with the Pembina engagement. This rotation helps ensure auditor independence is maintained by changing the key personnel working on Pembina’s audit after a set period of time.

The following table shows the fees paid or payable to KPMG for the fiscal years ended December 31, 2021 and 2022.

 

Fee category		2021 ($)				2022 ($)
Audit fees			2,724,500				3,478,480
Fees for auditing our annual financial statements, reviewing our quarterly financial statements, and services related to statutory and regulatory filings or engagements. Fees in 2021 also included review of information contained in various prospectuses and other securities offering documents.
Audit-related fees			119,000				180,150
Fees for assurance and related services, including French translations in connection with statutory and regulatory filings, reasonably related to the performance of the audit or review of Pembina’s financial statements and not reported under Audit fees above.
●  In 2022, these fees included audit fees for the pension plan and Younger facility pension plan audits of $30,000 and $25,000, respectively.
●  In 2021, these fees included audit fees for the pension plan and Younger facility pension plan audits of $25,000 and $18,000, respectively.
Tax fees			120,305				48,450
Fees for non-audit tax services provided by KPMG’s tax division, including $3,450 (2021: $2,850) for tax compliance and $45,000 (2021: $117,455) for tax advice and tax planning. Fees in both years also include tax consultation and compliance fees for preparing and filing tax returns for our subsidiaries.
All other fees			199,250				191,250
Fees for other products and services provided by the auditors not described above, which included fees related to advice and assistance with assurance and advisory services over GHG emissions and ESG sustainability reporting.
Total fees			3,163,055				3,898,330

The board recommends you vote for appointing KPMG as our auditors until the close of our next annual meeting of shareholders. Unless instructed otherwise, the Pembina officers named in the proxy form and voting instruction form will vote for the appointment of KPMG as our auditors.

 

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About the Shareholder Meeting – Business of the Meeting

 

4. Vote on our approach to executive compensation

 

You will vote on our approach to executive compensation disclosed in this circular.   A key principle underlying executive compensation at Pembina is ‘pay for performance.’ We believe that linking executive compensation to strategy and corporate performance helps us attract and retain excellent people and motivates them to focus on our success. You will find a detailed discussion of our executive compensation program beginning on page 57 of this circular.		Say on pay votes In 2022, our executive compensation approach was supported by 88.01% of shareholder votes for our say on pay resolution.

The board gives shareholders the opportunity every year to vote for or against our approach to executive compensation (to have a say on pay). This is an advisory vote, so the results of the “say on pay” resolution will not be binding on the board. The board will, however, consider the outcome of the vote as part of its ongoing review of executive compensation. If a significant number of shareholders oppose the “say on pay” resolution, the board will consult with shareholders to understand their concerns, and then review our approach to executive compensation with their concerns in mind.

At the meeting, you will be asked to consider and, if deemed advisable, approve the following non-binding resolution:

RESOLVED, on an advisory basis and not to diminish the role and responsibilities of the board of directors of Pembina Pipeline Corporation (Pembina), that the common shareholders of Pembina (shareholders) accept the approach to executive compensation disclosed in Pembina’s 2023 Management Information Circular delivered in advance of the 2023 annual meeting of shareholders.

This resolution conforms to the language of the resolution recommended by the Canadian Coalition for Good Governance. The board recommends you vote for this resolution. Unless instructed otherwise, the Pembina officers named in the proxy form and voting instruction form will vote for our approach to executive compensation as described in this circular.

5. Other business

You will vote on any other items of business that may be properly brought before the meeting. As of the date of this circular, we are not aware of any other matters to be brought before the meeting.

 

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About the Shareholder Meeting – About the Nominated Directors

 

				About the Nominated Directors

To ensure strong stewardship, the board needs to operate independently, have a prudent mix of relevant skills and experience, including industry knowledge and experience, a mix of age ranges and tenure, sufficiently diverse backgrounds and opinions to support balanced discussion and debate, and must be a manageable size to facilitate productive discussion and decision-making. We believe this year’s group of 12 nominated directors meets all of these requirements.

The profiles on the following pages tell you about each nominated director’s background and experience, independence, meeting attendance, share ownership, other public company directorships and voting results from our 2022 annual meeting of shareholders (as applicable). All information is provided as of March 17, 2023, unless indicated otherwise.

All of the nominated directors are independent except Mr. Burrows, who is our President and Chief Executive Officer (CEO). The board has reviewed the independence and qualifications of the non-management directors and has recommended their nomination.

A strong and diverse slate of nominated directors

 

 

1

An individual is considered diverse if the individual belongs to one of the four designated groups in the Employment Equity Act (Canada): Indigenous peoples, persons with disabilities, members of visible minorities and women.

 

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About the Shareholder Meeting – About the Nominated Directors

 

		Henry W. Sykes (64)
		Independent | 2022 voting results: 98.55% for, 1.45% withheld

 

 

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About the Shareholder Meeting – About the Nominated Directors

 

		Anne-Marie N. Ainsworth (66)
		Independent | 2022 voting results: 98.80% for, 1.20% withheld

 

 

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About the Shareholder Meeting – About the Nominated Directors

 

		Scott Burrows (43)
		Non-independent | 2022 voting results: 99.70% for, 0.30% withheld

 

 

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About the Shareholder Meeting – About the Nominated Directors

 

		Cynthia Carroll (66)
		Independent | 2022 voting results: 97.97% for, 2.03% withheld

 

 

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About the Shareholder Meeting – About the Nominated Directors

 

		Ana Dutra (58)
		Independent | 2022 voting results: 87.99% for, 12.01% withheld

 

 

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About the Shareholder Meeting – About the Nominated Directors

 

		Robert G. Gwin (59)
		Independent | 2022 voting results: 98.54% for, 1.46% withheld

 

 

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About the Shareholder Meeting – About the Nominated Directors

 

		Maureen E. Howe (65)
		Independent | 2022 voting results: 98.36% for, 1.64% withheld

 

 

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About the Shareholder Meeting – About the Nominated Directors

 

		Gordon J. Kerr (69)
		Independent | 2022 voting results: 98.83% for, 1.17% withheld

 

 

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About the Shareholder Meeting – About the Nominated Directors

 

		Andy J. Mah (64)
		Independent | 2022 voting results: n/a

 

 

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About the Shareholder Meeting – About the Nominated Directors

 

		David M. B. LeGresley (64)
		Independent | 2022 voting results: 98.45% for, 1.55% withheld

 

 

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About the Shareholder Meeting – About the Nominated Directors

 

		Leslie A. O’Donoghue (60)
		Independent | 2022 voting results: 94.00% for, 6.00% withheld

 

 

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About the Shareholder Meeting – About the Nominated Directors

 

		Bruce D. Rubin (66)
		Independent | 2022 voting results: 99.42% for, 0.58% withheld

 

 

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About the Shareholder Meeting – About the Nominated Directors

 

				Corporate Governance   This section of our circular describes our governance practices, the board’s responsibilities, and what we expect of the directors who serve on the board.

		Where to find it
		29		Our Governance Practices
		40		About the Board of Directors
		47		Board Committees
		54		Director Compensation

 

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Corporate Governance – Our Governance Practices

 

		Our Governance Practices

Good governance is important for all our stakeholders—our customers, our investors, our employees and the communities where we operate. Strong stewardship by the board, and high standards of governance and ethics throughout our business, are essential for achieving our purpose and operating our business effectively.

Our governance practices meet or exceed legal and stock exchange requirements that apply to us. We also regularly benchmark ourselves against our peers to ensure we are following best practices. We continue to focus on ensuring our practices are aligned with our TSX 60 peer group.

Governance guidelines

Our board and management operate under governance guidelines that set out our commitment to principles of good governance.

 

Board independence			ü			an independent chair of the board
			ü			audit committee, human resources, health and compensation committee and governance, nominating and corporate social responsibility committee members must be independent
			ü			majority of the board must be independent
			ü			regular in-camera meetings held without management and without non-independent directors
Board diversity			ü			commitment to maintaining a reasonable diversity of background, skills, education, experience and personal characteristics among the directors
			ü			commitment to diversity of tenure through reasonable board turnover and renewal
			ü			commitment to our board diversity policy, which includes specific targets for women and overall diversity, including Indigenous peoples, persons with disabilities, and members of other racial, ethnic and/or visible minorities
Board effectiveness			ü			formal process for nominating directors and succession planning
			ü			ongoing director orientation and director education program
			ü			clearly established and distinct roles of board members and senior management
			ü			commitment to maintaining dialogue between management and directors
			ü			ability of the board and board committees to seek independent advice as appropriate
			ü			formal board assessment and peer review process, including engaging a third-party independent advisor at least every three years
Integrity and ethical   conduct			ü			commitment to ensuring the integrity of internal controls and public disclosure
			ü			monitoring of overboarding, board interlocks, and other potential conflicts of interest
			ü			established equity ownership requirements for directors
			ü			formal policy on majority voting
Organizational   effectiveness			ü			requirement of the board to oversee corporate strategy and manage organizational risks

 

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Corporate Governance – Our Governance Practices

 

The board’s mandate

 

The board of directors oversees our business, provides guidance to management, monitors management’s activities and sets corporate policy. The board is also responsible for developing our approach to corporate governance, including policies, standards and practices that ensure we operate ethically and meet or exceed the laws and regulations that apply to us.   The board’s charter sets out specific matters that must be approved by the full board. All significant strategy-related operational, governance, financial and risk management decisions that could affect our shareholders are reviewed by the board.   The board’s charter includes: ·  ensuring an ethical culture;   ·  strategic planning oversight;   ·  risk management oversight;   ·  executive succession planning and diversity;   ·  financial management and reporting; and   ·  officer compensation.				Board charter You can find a copy of the board’s charter on our website (www.pembina.com).   The board’s oversight of sustainability and ESG crosses many of the responsibilities in its charter, including ensuring an ethical culture, overseeing strategy and risk, increasing diversity, approving reporting and overseeing compensation design. You can read about the board’s efforts throughout this section.   The board’s approach to governing sustainability and ESG is discussed on page 34. Pembina’s sustainability report and performance data are available on our website at:   https://www.pembina.com/sustainability/.

The board also oversees Pembina’s overall environmental, social and governance (ESG) strategy.

The board fulfils its duties directly and by delegating certain responsibilities to its four standing committees (see page 47 for information about the committees).

 

Ensuring an ethical culture
One of our most valuable assets is our reputation as a leading energy transportation and midstream service provider, with consistent financial performance and long-term financial stability. Fostering and ensuring a culture that promotes integrity and ethical conduct is key to maintaining our reputation.   Our commitment to respecting human rights applies to all of our directors, officers and employees and also extends to all of our contractors and subcontractors working at our sites and includes, among other things:				Ethics policies Pembina maintains the following policies and standards: ·  Code of ethics ·  Anti-bribery policy ·  Whistleblower policy ·  Community relations policy ·  Indigenous and tribal relations policy ·  Supplier code of conduct

 

·

eliminating unlawful discrimination and harassment in the workplace;

 

·

recognizing the legal rights of all individuals and communities, including women, Indigenous peoples, persons with disabilities, members of other racial, ethnic and/or visible minorities, and the economically disadvantaged;

 

·

respecting the importance of the environment in the communities where we operate;

 

·

respecting employee rights related to freedom of association and collective bargaining;

 

·

recognizing the right to water as a fundamental human right; and

 

·

addressing risks of modern slavery, forced labour and child labour (as applicable, recognizing that the risk of these human rights violations is very low due to the primary geography of Pembina’s operations).

Our commitment to respecting human rights is informed by the principles of the Universal Bill of Human Rights, the United Nations Universal Declaration of Human Rights, the United Nations Guiding Principles on Business and Human Rights, the International Labor Organization’s Declaration of Fundamental Principles and Rights at Work and the Organization for Economic Cooperation and Development Guidelines for Multinational Enterprises.

All executives and employees must acknowledge every year that they have read and understand our code of ethics (the code), anti-bribery policy, whistleblower policy and other policies, will review all updates, and will comply with them at all times. You can find these and other policies on our website (www.pembina.com).

 

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Corporate Governance – Our Governance Practices

 

Code of ethics

All directors, executives and employees of Pembina are governed by our code, which sets out principles for ethical conduct in the following areas:

 

·  conflicts of interest;   ·  business relationships and fair dealing;   ·  compliance with the law;   ·  human rights;   ·  government relations;   ·  health, safety and environmental matters;   ·  integrity of financial information;   ·  disclosure and insider trading;		·  stakeholder and public relations;   ·  privacy and confidentiality;   ·  protecting our assets and records;   ·  gifts, meals, hospitality, entertainment, travel and other benefits;   ·  workplace environment and relationships; and   ·  reporting responsibilities and procedures.

Compliance with the code is mandatory and everyone has a responsibility to report violations of the code. Violations of the code can result in disciplinary action, including dismissal.

The board is responsible for establishing procedures for monitoring compliance with the code and does so through a combination of periodic reports from management, our annual certification process, as well as through our whistleblower policy (see below). No aspect of the code can be waived unless it is approved by the board and properly disclosed, as required by applicable laws and regulations. The board has not waived any aspect of the code since it was implemented in 2005, and no material change reports related to the conduct of any director or officer have been filed (which would generally be required for conduct that would constitute a material departure from the code). The code was last updated and approved by the board in August 2022.

Whistleblower policy

Our whistleblower policy is designed to help us uphold our reputation and maintain public confidence by encouraging employees, consultants, contractors, agents and other stakeholders to act responsibly and report possible unethical practices without fear of discrimination, retaliation or harassment. The policy includes examples of activities that should be reported, and the process whistleblowers should follow to file a confidential report, including a whistleblower line that allows people to report anonymously by telephone or the internet, or through our external legal counsel addressed as confidential for direct delivery to the chair of the audit committee, at any time. Each whistleblower complaint is treated confidentially and thoroughly investigated.

Anti-bribery policy

Our anti-bribery policy formalizes and records Pembina’s procedures to ensure the company and its directors, officers and employees conduct business in an honest and ethical manner when dealing with government officials and all other parties and comply with anti-corruption laws. The anti-bribery policy also reflects the standards Pembina expects its contractors, agents and other third-party representatives to adhere to when acting on Pembina’s behalf.

Community relations policy

By committing to being recognized as a leader in its relationships with communities, where Pembina is welcomed as a safe and responsible partner, Pembina employees, consultants, contractors and directors are expected to: understand what communities value and what is important to them; make measurable commitments and deliver on them; minimize potential impacts of Pembina’s projects and operations by conducting early, meaningful and ongoing engagement; and identify partnership opportunities in support of community and economic development for mutual benefit.

Indigenous and tribal relations policy

As part of Pembina’s approach to Indigenous relations, Pembina seeks to enter into lasting and mutually-beneficial relationships with all Indigenous peoples affected by its operations. By striving for positive and mutually-beneficial relationships with Indigenous leadership and communities, Pembina employees, consultants and contractors will help build continued success for Pembina’s existing and expanding systems and other businesses.

Supplier code of conduct

Pembina prides itself on working with suppliers who place safety as a top priority, uphold the highest standards of ethics and integrity, and are economically, environmentally, and socially responsible. The purpose of the supplier code of conduct is to help ensure Pembina works with suppliers who share our commitment to the following principles, which help shape Pembina’s business philosophy on a day-to-day basis: creating a safe workplace; environmental stewardship; diversity,

 

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Corporate Governance – Our Governance Practices

 

inclusion and equity; protection of human rights; ethics, integrity and compliance; anti-corruption and anti-bribery; and privacy, confidentiality, and information security.

Conflicts of interests and related party transactions

The directors and officers of Pembina may be directors or officers of entities that we are in competition with or are customers or suppliers of Pembina or certain entities in which Pembina holds an equity investment. This may give rise to a conflict of interest in the administration of their duties for Pembina. Directors and officers of Pembina are required to disclose the existence of potential conflicts of interest in accordance with the code and other corporate governance policies and in accordance with the Business Corporations Act (Alberta).

The audit committee has oversight of related party transactions. Under our code, a director who has a material interest in a transaction or agreement involving Pembina must disclose the interest to the CEO and the chair of the audit committee immediately and may not participate in any discussions or votes on the matter. All directors and officers of Pembina also complete an annual questionnaire disclosing any related party transactions. The oversight process is managed by Pembina’s financial services team in cooperation with the governance team, who maintain a list of all affiliations and run a process quarterly to ensure that related party transactions are reported and disclosed as required. See Note 27 in our 2022 Audited Consolidated Financial Statements for further discussion on related party transactions.

Related party in this context means: (a) individuals who are considered key management personnel, including certain key officers and the directors of Pembina, and close members of the individual’s family; (b) any entities that the above individual’s control, jointly control, have significant influence over, or serve as key management personnel or directors; (c) joint ventures held by Pembina; and (d) pension plans that benefit employees. A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.

 

Strategic planning oversight
The board oversees the development and execution of our long-term strategic plan and shorter-term objectives and initiatives. Pembina is committed to growing shareholder value through strategic project development and acquisitions that support the long-term success of both our company and our customers.						2022 highlights   In December, the board approved a comprehensive strategy that will drive resilience in Pembina’s business and help the company thrive in the next decades.

The board holds dedicated strategy sessions every year. At these sessions, the board meets with management to review Pembina’s current activities, long-range financial forecast and future growth opportunities, including input from third-party advisors from time to time about industry or other trends and developments that may benefit us or pose a risk. The board approves our strategic plan and monitors performance against it throughout the year, based on quarterly updates and reports from management.

Following a recent period of succession and re-organization, Pembina’s executive and board viewed 2022 as an opportune time to revisit the company’s strategy to ensure it would be resilient into the future. Accordingly, through a year-long, detailed undertaking, Pembina’s business was reviewed and analyzed on a commodity-by-commodity basis, incorporating a scenario-based planning exercise grounded in the two key themes that could most impact the energy industry: decarbonization and globalization. Using a differentiated pace of decarbonization grounded in scenarios published by the International Energy Agency and layering in varying degrees of Canadian integration into global markets, allowed a thorough assessment of our business resiliency against four potential future outcomes resulting in a refined strategy that can meet performance aspirations across a broad range of scenarios. This strategy was approved by the board in December 2022 and will enable Pembina to continue to deliver value to its stakeholders well into the future.

Through the strategy work, Pembina’s Purpose was modified to reflect the breadth and diversity of Pembina’s existing operations and future aspirations. ‘To deliver extraordinary energy solutions so the world can thrive’ will build on Pembina’s strengths by continuing to invest in and grow the core businesses that provide critical transportation and midstream services to help ensure reliable and secure energy supply. At the same time, Pembina will capitalize on exciting opportunities to leverage its assets and expertise into new service offerings that proactively respond to the transition to a lower-carbon economy.

 

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Corporate Governance – Our Governance Practices

 

In continuing to meet global energy demand and its customers’ needs, while ensuring Pembina’s long-term success and resilience the company has established four strategic priorities:

 

1.	To be resilient, we will sustain, decarbonize, and enhance our businesses. This priority is focused on strengthening and growing our existing franchise and demonstrating environmental leadership.

2.	To thrive, we will invest in the energy transition to improve the basins in which we operate. We will expand our portfolio to include new businesses associated with lower-carbon commodities.

3.	To meet global demand, we will transform and export our products. We will continue our focus on supporting the transformation of Western Canadian Sedimentary Basin commodities into higher margin products and enabling more coastal egress.

4.	To set ourselves apart, we will create a differentiated experience for our stakeholders. We remain committed to delivering excellence for our four key stakeholder groups: employees, communities, customers and investors.

These four strategic priorities will ensure Pembina is stewarding to achieve financial excellence. We remain committed to maintaining our strong financial position and delivering industry-leading returns through adherence to our financial guardrails, prudent capital allocation, and a focus on return on invested capital.

Risk management oversight

The board is responsible for overseeing risk management at Pembina. The board ensures it understands the principal risks of our business and assesses the balance between risk and potential return for Pembina and our shareholders to ensure our viability over the long-term.   As part of its responsibility, the board makes sure we have: •  an enterprise risk management (ERM) process aligned with strategy, designed to identify and assess potential risks that may affect our business, operations or results, and to manage risk factors within our risk appetite;				Risk management policies Pembina maintains the following policies:   ·  Enterprise risk management policy ·  Market risk mitigation policy ·  Counterparty risk management policy ·  Acceptable use of information assets policy ·  Information management policy ·  Security management policy

 

·

a risk management infrastructure to respond to identified risks, and critical risk management policies and procedures, including risk response, controls, monitoring, mitigation and reporting to the board; and

·

specific management processes for addressing corporate, regulatory, securities and other compliance requirements.

To facilitate our risk review, we have an enterprise risk committee (ERC) made up of members of senior management. The ERC meets at least quarterly to review the performance, appropriateness and the current business environment surrounding our risk management activities. As part of the risk review process, the ERC identifies Pembina’s top risks and divides them into four categories:

 

·

New action required: risks where mitigation will require a new approach or strategy;

·

Mitigated with ongoing diligence: risks where there is mitigation strategy in place, but such mitigation strategy may require some further adaptation or adjustments;

·

Black swan: risks that are remote, and no current mitigation is in place or contemplated; and

·

Watch list: risks that may escalate to enterprise risks.

For these top risks, the ERC identifies potential impacts, mitigation strategies currently in place, emerging risks, and proposed additional mitigation approaches. In addition, the CEO or a senior vice president is assigned to every risk categorized as “new action required” or “mitigated with ongoing diligence”.

Management reports periodically to the board about the risks that have been identified and, at least once per year, presents to the board a summary of the ERC’s review of risk identification, management and reporting, and any deficiencies identified. The governance, nominating and corporate social responsibility committee reviews the risk oversight functions of the board and board committees to confirm that identified risk oversight is appropriately allocated. The audit committee also reviews Pembina’s corporate insurance program and coverage to ensure that appropriate insurance is in place for other insurable risks.

The ERM process also guides our materiality and disclosure decisions in relation to risks, based on the overriding principle that risks must be disclosed if they would most likely influence an investor’s decision to purchase securities of the company, and weighing both the probability of an outcome as well as the potential financial impact to the company. You can find a

 

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Corporate Governance – Our Governance Practices

 

complete listing and explanation of our risk factors under the heading Risk Factors in our annual information form (AIF), which can be found on our website (www.pembina.com), on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov).

Cyber security

Pembina’s cybersecurity strategy is a core responsibility of the board.

The safety, environment and operational excellence committee oversees the development, implementation and monitoring of risks and policies related to Operations Management System (OMS) programs, including cyber security.

We have a robust program for identifying and mitigating cyber security risks, enhancing the skills of our people, our processes and technology. Pembina’s cyber security program aligns to the National Institute of Standards and Technologies Cyber Security Framework, a world renown framework for managing cyber security.

Three components form the core of our approach to cyber security:

 

Governance		Ongoing guidance to measure success and adherence to cyber best practices; routine training and testing of the workforce on cyber risks and appropriate behaviours.
Risk and Compliance		Focus on evolving regulatory requirements, management of Pembina’s third party(s) and supply chain risks; assurance that the architecture, processes and controls are in place within Pembina’s operational technology and information system assets.
Security Operations		Continuous round-the-clock monitoring to identify potential vulnerabilities, irregular or threat activities as well as global trends and incidents; automatic response capabilities on technical platforms for protection on known threats and ongoing cyber-attacks; ongoing maintenance of cyber technology platforms and incident response activation capabilities.

We have cyber insurance and have not experienced an information security breach in the last three years.

 

Sustainability and ESG
Over the last two years, Pembina has taken a deliberate and robust approach to identifying our sustainability-related focus areas, using a third-party materiality assessment that included broad engagement with capital markets participants and other stakeholders. Through this process, Pembina has identified six sustainability focus areas: governance, energy transition and climate change, employee well-being and culture, health and safety, responsible asset management and Indigenous and community engagement.   The following is a summary of highlights from Pembina’s key ESG initiatives across these sustainability focus areas. You can find a more detailed discussion on our overall sustainability strategy in our 2021 sustainability report, which can be found on our website at www.pembina.com/sustainability/.   Governance   Board oversight   The board oversees Pembina’s overall sustainability strategy, including the integration of ESG considerations into our long-term business planning, organizational structure and corporate policies and practices.				ESG Initiatives in 2022   ·  Launched the five-year Indigenous Engagement Strategy and Path to Reconciliation. ·  Commenced the first climate-related scenario analysis to inform strategic planning. ·  Incorporated sustainability financing into the broader capital structure through the establishment of a $1 billion sustainability- linked revolving credit facility, aligning Pembina’s financing strategy with its ESG priorities. ·  Continued progress on EDI targets and focus on employee engagement. ·  Identified GHG reduction opportunities, including operational improvements, construction of a co-generation facility and execution of a renewable power purchase agreement.

 

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Corporate Governance – Our Governance Practices

 

The board has delegated the following ESG related responsibilities to its four standing committees.

 

Committee		ESG-related responsibilities
Audit Committee		●   Maintains oversight of the integrity of Pembina’s financial statements, the reporting process, and the internal audit function.
Human Resources, Health and Compensation Committee		●   Provides oversight of Pembina’s approach to director compensation, employee health and wellness, employee compensation, executive performance and compensation, executive succession planning and corporate equity, diversity and inclusion.   ●   Focuses on sustainability by including ESG metrics in incentive plan design and compensation decisions.
Governance, Nominating and Corporate Social Responsibility Committee		●   Responsible for Pembina’s corporate governance practices.   ●   Oversees Pembina’s ESG strategy and makes recommendations to the board on the integration of ESG considerations into long-term business planning, organizational structure and corporate policies and practices.   ●   Oversees the development of Pembina’s sustainability report and facilitates and provides education of the board, including on ESG matters.
Safety, Environment and Operational Excellence Committee		●   Oversees the development, implementation and monitoring of risks and policies related to process and occupational safety, environment, operational excellence, asset and integrity management, corporate security and cyber security.

Management’s role

Each member of our senior executive team is responsible for components of our ESG strategy, including employee and contractor safety, environment and process safety, assessing climate-related risks and opportunities, overseeing the development of strategic opportunities, enhancing organizational culture and diversity of our employee base and reporting to the board on the company’s ESG-related actions.

 

Senior executive		ESG-related responsibilities
President and Chief Executive Officer		●   Responsible for providing oversight and coordination of sustainability-related matters and for ensuring timely and effective reporting to the board and our stakeholders.
Senior Vice President and Chief Financial Officer		●   Responsible for overall financial stewardship, including assessing climate-related risks and opportunities, financial reporting as well as providing timely, accurate and transparent information to our stakeholders.
Senior Vice President, External Affairs & Chief Legal and Sustainability Officer		●   Responsible for overseeing Pembina’s ESG strategy, including oversight and monitoring of sustainability issues, risks, trends, and Pembina’s performance as well as making recommendations to the executive team and board on sustainability matters.
Senior Vice President and Corporate Development Officer1		●   Responsible for initiatives associated with extending Pembina’s value chain and exploration of new opportunities centered around a lower carbon economy, including new energies.
Senior Vice President and Chief Operating Officer		●   Responsible for business development and commercial services, operationalizing our ESG objectives, including through engineering and construction, and supporting our various Operating Management System strategies and programs.
Senior Vice President and Corporate Services Officer		●   Responsible for advancing Pembina’s ESG objectives by enhancing organizational culture and diversity of our employee base, strategic supply chain management and through support of our various Operating Management System strategies and programs.

 

1

In connection with the launch of Pembina’s refreshed strategy, on March 1, 2023 Stuart Taylor became Pembina’s Senior Vice President and Corporate Development Officer (previously, Senior Vice President, Marketing and Ventures and Corporate Development Officer) and Chris Scherman was appointed Senior Vice President, Marketing and Strategy Officer. As of the date of this circular, detailed ESG responsibilities for Mr. Scherman are being determined.

Energy transition and climate change

In 2021, Pembina committed to a 30% GHG emission intensity reduction target by 2030, relative to 2019 baseline emissions. In 2022, we focused on operational opportunities, greater use of renewable and lower emission energy sources and investments in a lower carbon economy.

 

Pembina Pipeline Corporation • 2023 Management Information Circular		35