1 4 | T M X G R O U P S U S TA I N A B I L I T Y R E P O R T 2 0 2 4 REPORT CONTENTS ABOUT THIS REPORT SUSTAINABILITY STRATEGY SUSTAINABILITY GOVERNANCE PROSPERITY PLANET PEOPLE APPENDICES RISK TYPE DESCRIPTION MITIGATION & APPROACH TO RISK Physical Risk Acute and Chronic On a short-term and longer term basis, the increased severity of extreme weather events such as flooding, hurricanes, wildfires, cold or heat waves resulting from climate change could lead to power supply disruptions to key market infrastructure and/or create physical workplace access issues for employees. On a longer time horizon, changes in long-term climate conditions, including sea-level rise, changing patterns of precipitation, temperature or wind, could disrupt the production or operations of our listed issuers impacting their financial performance, with negative impacts to our business. We have a robust Business Resilience Management program to respond to disruptions when they arise. TMX Group’s Business Continuity Plans are designed to ensure continuous operations in the face of natural disasters and other physical risks associated with climate change. It is reviewed, at minimum, on an annual basis and more frequently if required. Transition Risk Concentration, shift in consumer preferences and sectoral stigmatization7 While TMX Group operates a globally diversified business, our performance is affected by the Canadian economy, a portion of which is based in natural resources and energy related businesses. As such, we are exposed to macroeconomic factors that impact these sectors, including those driven by environmental regulations, the transition to a low carbon economy and the growth of sustainable investing. In 2024, trading concentration by volume across mining and oil and gas sectors was 36% and 14%, respectively. In addition, TSX and TSXV depend on an adequate number of clients to maintain fair markets. Finally, listing (including IPOs), initial and additional financing, trading and clearing activities are also significantly affected by global economic, political and market conditions and the overall level of investor confidence. Any sustained fluctuation in the natural resources and energy sectors, including a downturn if those businesses fail to transition to greener undertakings as quickly as the market demands, or a general erosion of investor confidence, has the potential to impact our financial performance, including investment performance, the number of listed issuers, trading and transaction volumes across our trading, and market data sales, impacting our operating results. A significant loss of trading volume, listing activity or market capitalization in these sectors could impact our performance and limit our ability to build and support robust transition finance markets. To measure our exposure to resource-related sectors specifically, we track the aggregated activities of the mining, oil and gas and utilities and pipelines sectors as a percentage of the overall market capitalization on TSX and TSXV: Resource-related Issuer Base as a percentage of Total Market Capitalization (TSX & TSXV) % of Total Market Cap We focus on attracting increasingly global clients and targeting growth in innovation, clean technology and renewable energy, which builds on our existing advantage. By becoming a destination for transition finance, TMX Group can support the allocation of capital toward the decarbonization of our energy sector and the financing and scaling of climate solutions which presents an opportunity for resource sector issuers. 7 For additional information, please consult p. 84 and 86 of our 2024 Annual Report.
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