ESG PROGRESS AT MARRIOTT INTERNATIONAL → 82 ESEG PROAR TMS ORINOL Impact on Fina ncial Planning Revenues: Our expertise in implementing projects that create operational efficiencies, including energy and water savings, help lower operating costs and offset risks related to higher costs from carbon taxes. Successfully addressing reputational risks and opportunities can increase market share through attracting additional guests and group business customers and our ability to secure additional management and franchise contracts. Indirect Costs: Our commitment to energy and water conservation and our company’s related operational targets for all the hotels in our portfolio, helps to address both the physical climate and transition risks identified, including those relating to increasing energy and water costs. Capital Expenditures: We have invested in our utility tracking and environmental reporting platform, Marriott Environmental Sustainability Hub (MESH), and data analysis to help us more accurately provide individual hotel targets and to give us greater insight into our performance against targets and the impact of climate-related risks such as rising mean temperatures and temperature extremes. (c) R esilience of Strategy, Including Impact of Different Climate-Related Scenarios Mar riott performed a quantitative scenario analysis to identify physical climate change risks to its hotels in the continental U.S. Marriott used the Representative Concentration Pathway (RCP) scenarios RCP 4.5 and RCP 8.5 to evaluate the portfolio’s exposure to climate change risks under a range of potential futures. RCP 8.5 represents a business-as-usual future with increasing GHG emissions through the year 2100 and greater physical impacts from climate change, while RCP 4.5 represents a future with decreasing GHG emissions after mid-century and lesser physical impacts. The scenario an alysis showed that many Marriott U.S. hotels are projected to be exposed to increases in average and extreme temperatures. For most hotels, cooling costs are projected to rise and heating costs are projected to decrease. Exposure to other climate change hazards varied with hotel location. Future wildfire hazard exposure is projected to be greatest in the western states, while storm surge exposure was greatest along the East Coast and Gulf Coast states. Overall, impacts were larger in the RCP 8.5 scenario than the RCP 4.5 scenario and in both scenarios, impacts increased in severity progressing from the year 2030 to the 2050- and 2080-time horizons. Additional References 2021 Ser ve 360 Report (“Sustain Responsible Operations”, p. 23 and “2025 Sustainability and Social Impact Goals”, p. 10) CDP 2021 Climate Change Response, Questions C2.1 and C2.2-C3.4 (p. 6-17) RISK MANAGEMENT: THE PROCESSES TO IDENTIFY, ASSESS, AND MANAGE CLIMATE-RELATED RISKS (a) Pr ocess for Identifying and Assessing Climate-Related Risks Mar riott’s Internal Audit’s Enterprise Risk Assessment process identifies the top business and emerging risks facing the company, including climate-related risks and opportunities. The results of this process are reported to the Board of Directors as well as reviewed annually by key executives across the company. All the risks evaluated may be considered to have the potential for substantive impact, and as a part of the annual review, the risks are prioritized and data is gathered about current and long-term mitigation efforts, challenges, and performance tracking mechanisms. Due to the COVID-19 pandemic, the annual Enterprise Risk Assessment did not occur in 2020. Please n ote: Consistent with our focus on management, franchising, and licensing, we own or lease very few of our lodging properties. This asset-light business model reduces Marriott’s exposure to climate-related risks to asset ownership. Acut e physical climate-related risks, such as severe weather events, are managed and updated annually through our companywide approach to business continuity planning, including risk identification, readiness, response and recovery relative to operational disruptions. Additionally, Global Engineering actively engages with Enterprise Risk Management and external partners to evaluate and address climate-related risks to the property assets under Marriott’s care and to develop strategies, programs, and trainings to promote climate resilience across our global portfolio of properties. The Mar riott Infrastructure Resilience and Adaptation (MIRA) program, launched in 2019, evaluates climate-related risks to the physical assets managed by Marriott and creates resiliency strategies, programs, and training to help provide optimal preparedness and planning and to help mitigate losses associated with climate-related events.