2021 Owens Corning Sustainability Report | Appendices | 355 TCFD CLIMATE RISK & OPPORTUNITIES Appendix G solution lowers the cost of wind energy, thus contributing to the worldwide advancement of this alternative source of energy production. Another significant example of climate-related R&D with near term implications is the development of the newly announced FOAMULAR ® NGX™, a foam insulation optimized to demonstrate a greater than 80% reduction in embodied carbon, compared to legacy FOAMULAR ® insulation products, and, developed to comply with expected and actual blowing agent regulation, such as a phaseout in Canada that went into effect in 2021, and in several U.S. states that have enacted similar regulations to Canada, with several more states enacting phaseouts in the short term by 2022. FOAMULAR ® NGX™ is positioned to be immediately available in Canada and all US states affected by the anticipated regulation, managing the transition risk. ■ Operations Identified climate related risks and opportunities have had a significant impact for Owens Corning. To help meet our 2020 sustainability goal for GHG reduction, which was developed in response to climate risks for our company, in 2015 we made major investments in renewable energy. We installed a solar array at our corporate headquarters, satisfying about 20% of the building’s energy needs and offsetting the equivalent amount of GHG emitted by the building’s commuters. o expand our renewable energy platform, we have entered long-term power purchase agreements (PPAs), which support the development of large renewable energy projects. The PPAs signed in 2015 enabled wind capacity in Texas and Oklahoma, with the potential to generate 1.1 million megawatt hours (MWh) of electricity each year, from a capacity of 250 megawatts (MW) of renewable electricity. This includes 125 MW of wind energy in Texas and another 125 MW in Oklahoma. Owens Corning aspires to have contracts in place covering 75% of our global enterprise electricity demand through renewable agreements which will drive additionality to the grid over the next two years. Within the United States today, for every MWh of electricity generated by the renewable installation, we receive one energy attribute certificate (EAC), which we then apply to the manufacturing of our products. We retire all the EACs generated from our PPAs, which reduce our environmental footprint and the embodied carbon of our products. While it’s possible for a company to reduce its footprint simply by purchasing EACs, Owens Corning believes that we should also be directly responsible for bringing more renewable electricity into the grid through power purchase agreements or virtual power purchase agreements (VPPAs). The (VPPAs) that Owens Corning entered in 2021 will add 91 MW of renewable capacity to the grid. We have entered into two wind VPPAs, one in Finland and one in Sweden, which will bring in 43 MW and 48 MW of renewable electricity capacity, respectively. The VPPA in Sweden reached its commercial date of operation in 2021, while the VPPA in Finland reached its commercial date of operation in January 2022. In addition to growing our renewable electricity portfolio, in support of our goal of sourcing 100% renewable electricity by 2030, we are also changing our operations strategy in response to climate risks and opportunities through the electrification of assets. A recent example can be seen with Paroc, a European stone wool company that Owens Corning acquired in 2018. Paroc finished construction of a new energy-efficient line in Trzemeszno, Poland, in 2019 and the upgrade of the production technology supports our growth strategy for Central and Western Europe and further expands our current operational capabilities. We expect to reduce our CO 2 emission by 75-80% with this line compared to a traditional coke-fired furnace line. Moreover, the new line’s Electric Arc Furnace (EAF) will reduce carbon intensity by roughly 10% for all PAROC ® Insulation in Europe. The new EAF is the third stone wool electric furnace for Owens Corning in Europe and the second at the Owens Corning site in Poland. As we plan for the further development of the EU ETS in the long-term, we are proactively managing this risk with financial planning and operations changes like the electrification of the Trzemeszno furnace. Owens Corning has also developed strategies to address potential climate-related impacts on our financial planning. These include strategies for the following impact areas: ■ Revenues Owens Corning has incorporated climate risks and opportunities into our financial planning process. Our new product developments are factored into our forecasting, as previous climate related products, like EcoTouch ® PINK ® Insulation, were when they were being developed. Currently low carbon products, which were introduced in 2017 and made up 26% of 2021 revenues, have also been included in future revenue projections at a forecasted rate of growth. These risks and opportunities have a moderate impact on revenues in the financial planning process. We also monitor products that avoid emissions in the value chain, such as fiberglass products, and several composites products. These products accounted for 63% of revenues in 2021. Potential impacts of climate risks and opportunities on revenues include identified long-term opportunities, such as the growth in non-flammable insulation products in the long term due to stricter code adoption in North America.