2024 TCFD Report

Climate-related

financial disclosures

Introduction to Hochschild's approach to climate change

Within the Intergovernmental Panel on Climate Change's (IPCC) latest Assessment Report it was concluded that human activities, including the burning of fossil fuels and changes in land use, have caused unprecedented changes in the Earth's climate. We recognise climate change as being one of the most urgent issues people are facing globally and that it could significantly influence the physical, regulatory, and economic environment in which we operate.

Here at Hochschild, we understand the key role that we, and the mining industry as a whole, must play in supporting the global transition to a Net-Zero world. Therefore, we are dedicated to responsibly managing our impact on the environment, our carbon footprint, in addition to the potential effects climate change could have on our business.

This is reflected in the actions that we have taken in recent years, including:

• The undertaking of a series of updated climate-related risk and opportunity assessments - to provide additional insights into how climate change could potentially affect our assets, operations, and business strategy in the short, medium, and long-term future.

• Our ambition to reduce our Scope 1 and 2 Greenhouse Gas (GHG) emissions by 30% by 2030, against our 2021 baseline, as well as our commitment to achieve a Net-Zero emissions profile by 2050.

  We also will be undertaking a financial quantification assessment in 2025 to ensure that we fully understand the potential financial materiality of the most significant climate-related risks that our business faces.

  Task Force on Climate-Related Financial Disclosures (TCFD) requirements Hochschild is within the scope of the UK Financial Conduct Authority's (FCA) and the UK Companies Act climate-related reporting requirements. This requires us to disclose, on a comply or explain basis, against the recommendations of the TCFD, as well as against the UK Climate-related Financial Disclosure (CFD) requirements. The CFD's guidance states that disclosures consistent with the FCA's listing rule and the TCFD's recommendations are likely to meet CFD disclosure requirements. Therefore, the following report includes a summary of how we are managing

  our carbon footprint and the effect of climate change on our business in alignment with the FCA's reporting requirements and UK CFD. This includes the 11 TCFD key disclosure recommendations, covering four disclosure areas: Governance, Strategy, Risk Management and Metrics & Targets. For further details, please refer

  to the table on page 95.

  
  
  Mineral demand for Solar PV (kt) under the Stated Policies, Announced Pledges and Net Zero by 2050 scenario (IEA, 2024)

  Capacity for solar PV (GW)

  
  
  

  5,500

  5,000

  4,500

  3,500

  3,000

  2,500

  2,000

  1,500

  1,000

  500

  0

  2023 2030 2035 2040 2045 2050

  Net Zero Emissions by 2050 Scenario
  Announced Pledges Scenario
  
  
  Stated Policies Scenario
  
  

  Hochschild's products are key in the global transition to a low-carbon economy

  The transition to a low-carbon economy will require significant quantities and investment in precious metals such as gold and silver. This places Hochschild in a unique position to support the transition to a low-carbon economy and to assist in the global adoption of low-carbon technologies. Silver will play an important feature in the energy transition as it is a component for solar photovoltaic (PV) panels where global demand is continuing to grow. Additionally, gold will have multiple uses such as being used in battery technology and continuing to play a crucial role in investment portfolios by central banks and investors.

  A new opportunity identified within this year's updated scenario analysis was to maximise circular processes, ultimately reducing the intensity of energy use, alongside benefits of reducing waste. Over the long term, this will enable Hochschild to lower the emissions profile of both gold and silver, therefore supporting the downstream supply chain in reducing their Scope 3 emissions.

  Mineral demand for EV (kt) under the Stated Policies, Announced Pledges and Net Zero by 2050 scenario (IEA, 2024)1

  Mineral demand for EV (kt)

  
  
  

  20,000

  18,000

  16,000

  14,000

  12,000

  10,000

  8,000

  6,000

  4,000

  2,000

  0

  2023 2030 2035 2040 2045 2050

  Net Zero Emissions by 2050 Scenario
  Announced Pledges Scenario
  
  
  Stated Policies Scenario
  
  

  1 Please note that the IEA ("Institute for Environmental Analytics") data for total mineral demand for electric vehicles (" EV") does not include silver (but instead it includes other minerals such as copper, graphite, nickel, etc.). However, the data point has been selected as an indicator to represent the likely demand for silver in the future.

  Governance of climate-related issues

  Board of Directors

  Sustainability continues to be an increasingly important topic to Hochschild's stakeholders; therefore it is crucial that Environmental, Social, and Governance (ESG) topics are seamlessly integrated into our operations and governance structures. This includes ensuring there are clear governance structures that manage climate-related risks and

  opportunities responsibly. This is overseen at the highest level by our Board of Directors who have overall accountability

  for the management of policies and initiatives related to sustainability and climate change. This includes consideration of climate-related risks and opportunities that can affect several aspects of the Group's financial statements, such as production costs, capital expenditure, and closure costs, as well as influence the Group's approach to strategic planning and risk management. To date, Hochschild has effectively managed climate-related risks within its day-to-day budget allocations approved by the Board.

  Board members bring expertise from their respective careers, including individuals experienced in managing sustainability, climate change and water management within the mining industry. The Sustainability Committee supports the Board

  in its oversight of these matters. This is key to understanding the resilience of business operations in a changing climate. The Board's involvement in sustainability issues is facilitated through quarterly interactions with the Sustainability and Audit Committees, both of which are responsible for reporting climate-related issues to the Board. At these meetings, key sustainability topics are presented, including risks associated with climate, water management, and other environmental risks, as well as quarterly progress against Hochschild's ESG ambitions. This year, we have developed our first annual GHG emissions action plan - which outlines the specific measures that we intend to take to meet the interim goal set for the year, which is aligned with our 2030 GHG emissions reduction

  ambition. This GHG emissions action plan will be reviewed each year, and the Sustainability Committee will provide the Board with regular updates on the implementation of the action plan.

  Sustainability Committee

  Hochschild's Sustainability Committee (the Committee) has directly overseen sustainability systems and policies

  since 2006. The Committee comprises Hochschild's CEO, an independent Director, and is chaired by a second independent Director. Hochschild's COO, and the Vice Presidents of Legal and Public Affairs, and People Management and Corporate Affairs are also regular attendees. The Committee has a wide scope of responsibilities, and the discussion and management of climate-related issues are scheduled agenda items during every quarterly meeting. During these meetings, the Committee provides recommendations to the Board on climate change and GHG emissions-related topics that are material to Hochschild's operations and business plans. The Committee also manages the processes around ESG-related risks and opportunities, oversees Hochschild's compliance with relevant national and international standards, and reviews the policies and procedures in place for investigating relevant incidents.

  The Committee also reviews yearly ECO Score targets and ESG KPIs and presents these to the Board for approval. In addition to the Committee, special working groups are established in response to specific climate-related events. For example:

• The El Niño phenomenon triggered the formation of a taskforce in August 2023, which was in effect until the first quarter of 2024 and included the Peruvian General Manager, Corporate Safety Manager, Logistics Manager, and the Head of Internal Audit. This group was responsible for monitoring and managing business risks that might emerge by

  working to understand the situation alongside government authorities, implementing weather monitoring systems and providing support to the mines that could be impacted.

• In 2024, a working water management taskforce was established in response to water shortages across Argentina. This taskforce is comprised of a range of managers and superintendents across Argentina and is responsible

  for reviewing actions being taken to increase our water efficiency and reduce our overall water usage in San Jose. Our Sustainability Director meets with the water management taskforce on a bi-weekly basis - to track and monitor any progress being made by the taskforce.

  Managing climate-related risks

  Our process for monitoring climate-related risks and opportunities is led by the Risk Committee made up of Hochschild's CEO, Vice Presidents, Country General

  Managers, and the Head of the Internal Audit function.

  The Risk Committee is primarily responsible for executing the risk management process at Hochschild, and monitoring the impact and effectiveness of controls to support Hochschild's business objectives. The Risk Committee meets prior to quarterly Board meetings and approves the latest version

  of the risk register for consideration by (a) the Group's Audit Committee, which has oversight of risk management on behalf of the Board, and (b) the Board, in its consideration of the significant risks faced by the business. Sustainability risks

  and plans to mitigate these are also monitored by the Sustainability Committee.

  In 2024 we conducted an updated climate-related scenario analysis, identifying emerging physical and transition risks (detailed in the "Climate-related risks, opportunities and strategies" section on page 84). In addition, the carbon pricing risk and opportunity to reduce land transport emissions were selected for deeper analysis.

  Climate change is considered a significant risk in Hochschild's risk management framework (as detailed in the Risk Management section on page 107), and the key risks identified in the updated climate-related scenario analysis will be integrated into it, considering current and potential future implications of climate on the business. By leveraging forward-looking climate data and integrating climate-related risks

  into Hochschild's risk management framework, the Board and Management levels can assess the potential impact and implications on future budget allocations.

  Environmental management

  The Sustainability Director has responsibility for the ESG team and reports to the Vice President of People Management

  and Corporate Affairs. The ESG department monitors Hochschild's ESG performance through data gathering on ESG metrics, including GHG emissions, energy usage, water

  consumption, and percentage of waste recycled. The reporting, disclosure, and communication of Hochschild's progress within these ESG areas, to both internal and external stakeholders, are also managed by the ESG department.

  In each country where mining operations are present (Peru, Brazil, and Argentina) there is a dedicated Environmental Lead. It is the responsibility of each Environmental Lead to ensure environmental goals are met at all sites, and to take corrective actions when necessary.

  At Hochschild we have a Remuneration Policy in place to incentivise a reduction in our environmental impact, the details of which are available in the "Our Climate-Related Metrics and Targets" section on page 90.

  Our governance structure

  Board

  Chair

  (Non-Independent)

  2

  Non-Independent Directors

  5

  Independent Directors

  Sustainability Committee

  Chair (Independent), CEO and

  1 Independent Director

  Audit Committee

  Chair (Independent) and

  3 Independent Directors

  Remuneration Committee

  Chair (Independent) and

  3 Independent Directors

  Exploration working group Risk Committee

  Chair (CEO) and Senior Management

  Climate-related risks, opportunities, and strategies

  Our approach to assessing our exposure to physical and transition risks and opportunities

  At Hochschild, we understand the importance of fully considering how climate change could impact our business. As a result, in recent years we have undertaken a number of Climate-related Risk and Opportunity (CRO) assessments -focusing on how climate change could impact our current and future exposure to a full range of physical risks and transition risks and opportunities.

  Due to changes in our business and the availability of updated climate data, this year we have undertaken an updated CRO assessment. This included scenario analysis across physical risks and transition risks and opportunities, and a detailed transition assessment. These updated assessments have helped to:

• Improve our visibility of the different climate-related physical risks and transition risks and opportunities that may exist across our organisation (including the drivers and timing of these risks/opportunities); and

• Prioritise, support and inform our management - including our internal risk management decision-making process

- of the different physical risks and transition risks and opportunities that may be present across five mining facilities (including Inmaculada, Selene, Pallancata, Mara Rosa, and San Jose, located across Peru, Brazil, and Argentina).

During the process of undertaking the updated scenario analysis, and through Hochschild's existing governance structures, climate-related risks and opportunities have been assessed in alignment with our business-wide Enterprise

Risk Management framework. As with other business risks, each identified climate-related risk and/or opportunity was assigned a consequence of impact rating, that represented the potential damage and/or associated loss of service, and a probability rating that represented the likelihood of a climate hazard/event occurring. Based on these consequence and probability ratings, a 3x5 risk matrix, shown in the table below, used to map each risk under baseline and future projected climatic conditions (2030 and 2050). This produces an overall risk rating classified as a Low, Medium, or High risk. Once risk ratings were assigned, the potential impact of each risk was also qualitatively assessed, and next steps were recommended to manage each risk.

To ensure that physical and transition risks are appropriately considered, we have integrated and mapped the significant and emerging climate-related risks identified within previous years' CRO assessments onto our mining units' existing risk matrices (which are updated quarterly). These matrices are consistently reviewed during quarterly Risk Committee and Board meetings in the process described above. This ensures that we are consistently monitoring and managing climate-related risks and incorporating them into our financial strategy and budget allocations. We plan to follow this same process and integrate any significant and emerging climate-related risks identified within this year's updated CRO assessment in the coming months.

Following this we also undertook a more detailed assessment of the most significant transition risks and opportunities identified in the updated CRO assessment. The findings have provided

us with greater insight and understanding into the Group's potential exposure to the most significant transition risks and opportunities identified for our business.