2022 Community andSustainability Report

Leading with integrity.
Caring for people.
Innovating for the future.

TABLE OF CONTENTS
This report describes NW Natural's
progress on significant areas
undertaken by our business including
sustainability, community, governanceissues, and includes disclosures fromthe SASB and TCFD frameworks. It is
divided into the following sections:

About NW Natural Holdings
NW Natural
Safety & Reliability
Environmental Stewardship
Our Communities, Our Customers
People & Culture

NW Natural Water
NW Natural Renewables
Sustainable Financings
GovernanceAppendix
Sustainability Accounting Standards
Board (SASB) Disclosures
Workforce Statistics
NW Natural Eligible Categories fromUN Sustainable Development Goals
NW Natural's Emissions
American Gas Association Template

Forward-Looking Statements

To Our Stakeholders
NW Natural Holdings experienced a dynamic year in 2022.
Across our growing family of companies, we stepped up to
deliver on our commitment to growing more sustainable,
serving people and leading the way to a resilient, lowercarbon energy system that benefits everyone in our region.

NW Natural Holdings
CEO David H. Anderson
at Vancouver
Resource Center.

At our natural gas utility, we exceeded our targeted pace
for cutting carbon emissions, formed a partnership to
generate hydrogen at our facilities, and completed our
first project to produce renewable natural gas (RNG) on
behalf of customers. Our NW Natural Water subsidiaryinvested in safety, reliability and environmental improvements while nearly doubling the company’s customer
base. Construction began on two RNG facilities we invested
in through NW Natural Renewables, the competitive
business we launched in 2021 to supply lower-carbon fuels
to the utility, commercial, industrial and transportation sectors. And every day, in the face of tumultuous world events andeconomywide inflation, we continued to provide safe, reliable, and affordable utility services to our customers.
Our core values of integrity, safety, caring, service ethic, and environmental stewardship guided our actions in 2022, as they always
have. Integrity is our foundation, and it informs how we serve our customers, operate our business, treat our colleagues, andengage with the community. I am particularly proud that NW Natural Holdings was recognized as one of Ethisphere® Institute's 2022
World's Most Ethical Companies® —an honor we received again in 2023—as the recognition belongs to each of the 1,200 employees
responsible for this company’s success.
As a key employer and service provider in our region, we put people at the center of everything we do. Safeguarding the healthand well-being of our communities and our workforce is paramount, and I am pleased to report that in 2022 we experienced thelowest number of workplace injuries in nearly two decades. We looked for ways to assist our low-income community members,
a commitment that led to the creation of our new bill discount program for low-income households in 2022. We also worked to foster
a diverse, inclusive company culture where everyone can thrive and grow. We increased the number of employee resource groups
that champion underrepresented employees, and we created a Community and Equity Advisory Group of representatives fromoutside organizations to bring an equity and environmental justice lens to our energy and operational planning.
The energy industry and the world around us are changing at a pace perhaps never experienced before, and we see unprecedented
opportunities for growth, innovation and reimagining our role as a trusted provider of essential services. This report provides aview of how we’re meeting today’s challenges and building on our strengths to continue serving our communities into the future.
We’ve sustained a thriving business for over 160 years by continually evolving, and we’re not slowing down. I’m grateful for our
dedicated people, whose steadfast focus on service, innovation and environmental stewardship allows us to meet this moment.

David H. Anderson
NW Natural Holdings CEO

2

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Awards and Certifications
Ethisphere® Institute's 2022 and 2023
World's Most Ethical Companies®

2022 - 2023
2022 Escalent
Environmental Champion

TOP 2 IN THE WEST

2022 Escalent Most
Trusted Utility Brand

in residential customer satisfaction

50/50 Women on Boards – Highest
distinction for Gender Balanced board

Gold Shovel Standard* certification fordamage prevention safety management* As of 2023, Gold Shovel Standard is now Damage Prevention Institute"Ethics matter. Organizations that commit to business integrity through robust programs and practices not
only elevate standards and expectations for all, but also have better long-term performance. Congratulations
to NW Natural Holdings for earning a place in the World’s Most Ethical Companies community.”

2022 - 2023

— Ethisphere CEO Erica Salmon Byrne"World’s Most Ethical Companies" and"Ethisphere" names and marks areregistered trademarks of Ethisphere LLC

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

3

2022 Highlights
SUSTAINABILITY

SAFETY

Exceeded our Low Carbon
Pathway target for cutting
carbon emissions 30% by 20351

Continued to operate
one of the tightest,
most up-to-date
systems in the nation

Ranked #2 in the West by residential customers in J.D. Power survey
for the 19th year running

Lowest number ofworkplace injuries
in nearly two decades
for the second year
in a row

Contributed nearly $1 million toorganizations supporting youth andfamily resiliency, environmental
stewardship, health and humanservices, and arts and culture

WATER

SUSTAINABLE FINANCING

Invested in criticalinfrastructure,cybersecurity, safety
and customer support
while nearly doubling
our customer baseContributed to a sustainable economy, allocating an amountequivalent to the $129 million raised through our sustainablefinancing framework to finance or refinance renewable energy,
energy efficiency, green buildings, and supplier diversity initiatives

Led the industry with one of
the lowest ratios of leaks permile of distribution pipeline
Completed our first renewable
natural gas project and delivered environmental benefits of
RNG to our customers
1

EMPLOYEES
86% of surveyed
employees saythey are proud towork for NW Natural

This is an emissions savings goal equivalent to 30%of the carbon emissions from our customers’ gas
use and company operations in 2015.

DIVERSITY, EQUITY& INCLUSION
45% of NW Natural Holdings'
board of directors identify
as women, including the Chairof the Board
Launched a new Employee
Resource Group, theNeurodiversity Network, that
contributes to an equitable,
inclusive workplace culture
and provides leaders with
important feedback
Created a Community andEquity Advisory Group to
help bring an equity andenvironmental justice lensto our energy and operational planning

4

CUSTOMERS &COMMUNITIESRENEWABLES

GOVERNANCE

Grew a competitive renewableenergy business to provide
renewable natural gas to theutility, commercial, industrial
and transportation sectors

Recognized by
Ethisphere® as oneof the 2022 and2023 World’s Most
Ethical Companies®

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

"World’s Most EthicalCompanies" and "Ethisphere"
names and marks areregistered trademarks ofEthisphere LLC

About NW Natural Holdings
NW Natural Holdings, based in Portland, Oregon, owns NW Natural Gas Company, NW Natural Water Company, NW Natural Renewables Holdings and other businessinterests. In 2022 we entered a new stage of growth while leading our industry in environmental stewardship efforts and delivering essential energy and services
safely and reliably with great care.

OVER 160 YEARSKEYINITIATIVES

doing business as arespected energy provider
in the Pacific Northwest

APPROXIMATELY
2 MILLION PEOPLE
in more than 140 communities depend on
us to deliver the energy and essential
services they need to heat their homes,
cook their meals and keep theirbusinesses running

MORE THAN 150,000
people in the Pacific Northwest,
Arizona, and Texas depend on us forclean, safe water and wastewater
utility services

1,200 EMPLOYEES

795,000 METERS

Aggressively pursuing arenewable, carbon-neutral
future for our gas utility

Expanding and investing in
our water and wastewater
utility businessproviding energy in Oregon
and Southwest Washington

serving customers safely and reliably every day

Investing in renewableenergy and the transition
to a decarbonized future fora variety of sectors

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

5Our Mission

Our Values

We provide safe, reliable, and affordable
utility services and renewable energy ina sustainable way to better the lives of
the communities we serve.

Since 1859, NW Natural Holdings has been a respected energy provider in the
Pacific Northwest. We have maintained this reputation by keeping our five corevalues at the center of everything we do.

Our Vision
Lead in service excellence, innovationand environmental stewardship byharnessing our passion for customers.

Integrity
We will display integrity in everything we do by being honest, ethical and true to our word. We will
always choose to do the right thing, even when it is the harder path.

SafetySafety is paramount in all aspects of our operations, infrastructure and workplaces. We are committed
to superior training and protective, healthy work practices to ensure we all return home safely.
We strive to educate our employees, partners, customers, and our communities about safety.

CaringWe are committed to respecting and caring about each other. We value teamwork, collaboration, andstrong individual contributions. We believe a diverse, equitable and inclusive culture, and involvementin the communities we serve, is essential to our collective success.

Service Ethic
We are driven by a desire to serve our customers and each other and go the extra mile to solve
problems. We take pride in our service excellence.

Environmental Stewardship
We are committed to a decarbonized and more sustainable future through energy efficiency, water
conservation, and expanding the supply of renewable resources we provide.

6

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

NW NATURAL

Safety & Reliability

Safe, reliable delivery of natural gas is our greatest
responsibility to our customers, our employees, and thecommunities we serve. Safety guides everything we do.

2022 FEDERAL REPORTS

ZERO• Reportable pipeline incidents• Corrective action orders• Notices of probable violation

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

7

Safety Highlights
NEARLY

Consistently low damages• Received Gold Shovel Standard certificationin 2022 for the second year running forcomprehensive damage-prevention actions• Continued to drive down our consistently
low damage rate to the lowest level inour history

OUR MODERN SYSTEM• No cast iron pipes since 2000, no bare steel
pipes since 2015
• Leading the industry with one of the lowest
ratios of leaks per 100 miles of pipeline in
2022, a fraction of the industry average70%

OF TRANSMISSION PIPELINE INSPECTED• 2.5 times the rate required by regulations• 86% of inspections performed throughinline assessment

LOWEST NUMBER OF
WORKPLACE INJURIESSINCE 2004

ZERO

reportable information
security breaches

8

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Our Tight, Modern System
One of the tightest, most modern natural gas distribution
systems in the nation
In the mid-1980s, we worked with our public utility commissions in Oregon andWashington state to proactively create a pipeline replacement program. In 2000
we became one of the first companies in the country to eliminate cast iron pipes,
and by 2015 we replaced all cast iron and bare steel pipe. We believe we are the firstpure-play local distribution company to completely remove these legacy pipelines.
Among U.S. natural gas utilities, NW Natural had one of the lowest ratios of leaks
per mile of pipe in 2022.1

Having eliminated vintage materials from our distribution
system years ago, we’re able to invest more of our resources in
the next wave of innovations, including renewable energy andother environmental advances.

Cast Iron Pipe Replacement Completed in 2000
250
200
150
100
50
0

1989

1990

1991

1992

1993

1995

1996

1997

1998

1999

2000

Source: Annual Department ofTransportation (DOT) reports

Bare Steel Pipe Replacement Completed in 2015
180
160
140

We vigilantly manage our 736 miles of transmission pipelines and approximately
14,300 miles of distribution pipeline. That means proactive monitoring, preventative
maintenance, and prompt identification and repair of potential issues. To help prevent
safety issues, our employees performed approximately 190,000 proactive field visits in
2022. We operate a 24/7 emergency hotline that enables us to promptly dispatch
responders when there’s a problem, and our NW Natural safety app connects
customers to our 24-hour emergency line with one click. On average, we respond todamage and odor calls across our service territory in about 30 minutes or less.

100

120
80
60
40
20
0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
MILES OF BARE STEEL

CORROSION LEAKS

Source: Annual DOT reports

In 2022, we performed safety inspections on our transmission
system at about 2.5 times the rate required by federal andstate regulations.
We inspect our transmission system with a combination of direct assessments andtechnologically advanced inline inspection. At the end of 2022, we had inspected nearly
70% of our transmission system, primarily through inline inspection — a superior
method, as it can assess pipeline integrity from inside the pipe.
Based on DOT Annual Report data for natural gas operators reporting more than 7,000 miles of distribution main

1988

MILES OF CAST IRON

Continuous inspection and monitoring

1

1987

Exceeded Transmission
Inspection Requirements

Majority of Transmission Pipeline
Inspected Using Inline Approach

MILES INSPECTED VS. REQUIREDINSPECT USING MULTIPLE APPROACHES

14%206 MILES
511 MILES

0

100

200

INSPECTION REQUIRED

300

400

86%
500

600

INSPECTION COMPLETEDDIRECT ASSESSMENT
INLINE INSPECTION

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

9Investing in safety improvements
We’re continually investing in the safety and reliability of our natural
gas infrastructure. In 2022 NW Natural invested $338 million3 tocomplete a range of projects, including system reinforcements toimprove reliability, pipeline retrofitting for inline inspection, andimprovements to our underground storage and Liquified Natural Gas(LNG) facilities. We also completed a significant multiyear project toupgrade our enterprise resource planning information system, andwe invested heavily in cybersecurity technology to protect our criticalsystems and customer data. These improvements are designed toenable us to continue providing our customers with safe, dependable
energy delivery services and strengthen our foundation forcontributing to a renewable energy future.
Total investment incapital expenditures
is calculated on an
accrual basis andincludes cloud-based
software.

NW Natural consistently leads the industry in the lowest
number of leaks per mile of distribution pipeline
We strive to perform a leak survey of eachgas main at least every five years, andsurvey 20% of mains every year. We also
strive to perform leakage and atmosphericcorrosion surveys every three years on
residential service lines. Raising the baron the federal requirement to performthese inspections annually in business
districts and high-occupancy buildings, wehave greatly expanded our classificationof business districts for 2023. We use
Supervisory Control and Data Acquisition(SCADA) and telemetry to monitor thesystem in real time and transmit datafrom remote sources. This powerful
technology makes it possible to quickly
detect leaks even in remote locations.

10

CAPITAL EXPENDITURES(in millions)

$350
$300
$250
$200
$150

LEAKS PER 100 MILES

$100

8

$50
$0

6

2018

2019

CUSTOMER GROWTH

4

2019

2020

NW NATURAL

2021

2022

INDUSTRY AVERAGE 2

2

Based on DOT Annual Report data for natural gas operators reporting more than 7,000 miles of distribution main3

Cap-ex is on an accrual basis and includes cloud-based software

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

2021

2022

SAFETY AND RELIABILITY

INFORMATION TECHNOLOGY& FACILITIES

2

0

2020

OTHER

RNG

Troubleshooting and teamwork to keep the system safe
The eight members of the Transmission Maintenance Group are responsible for keeping the high-pressure and transmission
pipeline system safe, reliable and in good working order. They patrol the pipelines in NW Natural’s service territory for leaks,
indications of landslides, and other changes that could compromise pipeline integrity. They also perform strength testing of
high-pressure pipelines and run devices that clean pipelines and inspect the integrity of the pipeline. And they do the criticalwork of “tapping and plugging” — isolating sections of pipeline during maintenance and repair to create safe work zones
without shutting down the system or venting emissions into the atmosphere. It's challenging work, grounded in safety
protocols. “We all trust each other, which is huge,” said longtime team member Darin Yost. “Our main job is to make sureeverybody stays safe and goes home at night."
Not to be used for investment purposes—see NW Natural and NW Natural
Holdings most recent Form 10-Ks as updated by the most recent quarterly
and periodic reports for information relevant to investment decisions.

11Reliability and Resilience
Careful planning for reliable delivery
Approximately 2 million people depend on us to deliver the energy andessential services they need to heat their homes, cook their meals andkeep their businesses running. NW Natural has developed a risk-based
method for determining how to provide this energy to customers
without interruption, both now and over the long term, even when
demand is at its highest. This is done through a process of evaluating
different energy-demand scenarios and resource-acquisition strategies,
as outlined in our Integrated Resource Plan (IRP).
We conduct this involved analytical process to help maintain adequate
gas supply to meet customer needs every day across the year (energy
planning) and during the coldest days we might experience (system
capacity planning). To help lower costs for our customers and mitigate
the risk of interruptions to our natural gas supply, we:• Purchase natural gas from geographically varied sources• Maintain a diversified portfolio of supply contracts• Own and contract with natural gas storage facilities
Our expertise in resource and energy planning will continue to be
essential as we transition to renewable fuels for the pipeline.

NW Natural has abundant storage capacity in or near ourservice area—a unique and valuable resource for reliableenergy delivery.
We expect to meet about 55% of our projected peak day energy requirement with gas fromstorage in or near our service area. Underground gas stored at our facility near Mist,
Oregon holds sufficient capacity to supply natural gas to the Portland metro area for
approximately one month during an average winter.

Our resilient infrastructure
Maintaining the resilience of the US energy system is imperative. Compared withabove-ground infrastructure, the underground gas delivery system is less vulnerable
to disruptive events from extreme weather such as hurricanes and snowstorms. Our
modern pipes are also designed to withstand stress from ground movement associatedwith earthquakes, landslides and other natural disasters.4 A study by Portland State
University’s Center for Public Service suggests the natural gas system can be a crucial
resource in the event of a major disaster that disrupts power to the Pacific Northwest.

Resilient operations
We take measures so that in the event of a disaster we can continue to operate criticalbusiness functions, including gas control and emergency response. We build and upgrade
our operations facilities to function in the event of a disaster so we can continue tooperate these critical business activities.
• Our Portland headquarters, opened in March 2020, is also designed to remain
operational after an earthquake. We completed construction of another NW Naturalbuilding that is designed to be operational after a large-scale seismic event. The
Vancouver Resource Center in Southwest Washington is built to Level 4 seismic
standards, which apply to structures that are most critical to resilience.

CUSTOMERS RELIED ON NW NATURAL WHEN TEMPERATURES DROPPED—AND WE DELIVERED
Reliability means peak planning and ensuring we have sufficient resources to meet all our customers’ needs during the coldest weather our service
territory can experience. That’s exactly what we were called on to do during the 2022-2023 winter heating season, which placed record demands on ourgas system. Time after time our infrastructure and our employees met those demands, and natural gas delivery continued uninterrupted all winter long—even through record-breaking temperatures, ice, and wind on Dec. 22, 2022, when we delivered an unprecedented 41 million cubic feet of gas in a single
hour. Our storage facilities and overall hedged position worked to mitigate the amount of gas purchased on the spot market and helped to minimize theimpact on customers’ bills. Meeting the moment in December was a result of disciplined investments in the system over many decades.

4122019 study by consulting firm ICF

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

• We continued to upgrade our facilities in 2022 as part of the company's LongRange Facilities Strategic Plan for building resilient, energy-efficient structures.
New resource centers in Vancouver, Washington and Lincoln City, Oregon werebuilt to the same Level 4 seismic standards we adhere to for new construction of
all critical facilities.
• NW Natural uses FEMA’s National Incident Management System and Incident
Command System (ICS) to manage emergency situations that could disrupt ouroperations. The ICS is designed to address any hazard, whether it be a natural
disaster, a pandemic, a technology issue, a cybersecurity incident, or an event
such as major damage caused by third-party excavation.

Installing excess flow valves
to extend system safety
Excess flow valves (EFVs) can automaticallystop the flow of natural gas to a home orbusiness if the service line is damaged bya seismic disturbance or other catastrophic
event. We’re installing EFVs on new service
lines and planning to retrofit EFVs on existing
service lines meeting certain specifications.
To date, we’ve installed more than 295,000
EFVs on about 40% of the service lines inour system, which compares to an industry
average of 27%.5

Taking system safety to the next level
NW Natural leverages new technologies and best practices to keep our
employees, our system, and the public safe.
• We’re active in the American Gas Association (AGA) Best Practices
Program, a voluntary peer review forum for local natural gas utilities
across the US to share information on safety and reliability andsupport safety management efforts at the industry level.
• In 2022 we were a partner company in the U.S. Environmental
Protection Agency's (EPA) Natural Gas STAR Program.6 EPA launchedthe voluntary partnership with natural gas operators in 1993 toachieve important reductions in methane emissions.7• We’re taking our safety program to the next level with our Pipeline
Safety Management System (PSMS), a voluntary, holistic framework for
promoting safety awareness, vigilance, and cooperation throughout
the company. Safety management systems have been shown in manyindustries to dramatically decrease safety incidents.8

5

Based on 2022 Pipeline and Hazardous Materials Safety Administration (PHMSA) data for natural gas
distribution companies with more than 400,000 service lines.

6

EPA transitioned the Natural Gas STAR Partnership Program in 2022 after 30 years, but the agency continues
to partner with operators making ambitious commitments to methane emission mitigation and transparency
through the Methane Challenge Partnership, NW Natural is a founding partner of the Methane Challenge.

7

Distribution partners cumulatively reduced methane emissions by 18.5 million MTCO2e over the life of the
program with practices such as leak detection and repairs and preventing gas loss from dig-ins.

8

For example, the U.S. Federal Aviation Administration (FAA) requires most U.S. commercial airlines to have
Safety Management Systems (SMS) in place.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

13Damage prevention
Digging by third-party contractors is the biggest cause of damages to NW Natural
pipelines. Excavation damages have a significant economic impact in the U.S., costingsociety an estimated $30 billion annually.9 Preventing these damages protects public
safety, prevents interruptions in gas service and helps reduce pipeline emissions.
NW Natural began comprehensive efforts to address this issue in 2006, working with
our state regulators to implement more rigorous dig laws, and providing training andintervention to help contractors excavate safely. Since then, damages due to digging
have declined by about 70%.

NW Natural’s already low damage rate decreased again in 2022,
to the lowest level we have ever recorded.
We continued to drive down our damage rate in 2022 as we refined our risk-based
locate response program. State-of-the-art technology makes it possible to evaluate
every locate request to identify the riskiest excavations. This data-driven approach helps
us understand where the risk of damage is highest so we can effectively prioritize andintervene where necessary. We also continued a robust multimedia campaign, in
Spanish and English, reminding landscapers, contractors and homeowners how to avoid
damaging lines. Excavators or homeowners can call 811 or use the free NW Naturalsafety app to have utility lines located before digging.

Continuously improving pipeline safety
Our commitment to safety extends beyond adhering to regulatory
mandates. Our Pipeline Safety Management System (PSMS) is anentirely voluntary program that provides a holistic framework for
managing risk and promoting continuous improvement of safety
practices. PSMS engages all employees, from frontline workers to
executives, in advancing the program’s ultimate goal of reducing
pipeline incidents to zero. In 2022 we accelerated our progress
toward establishing a mature, robust PSMS program by:• Strengthening NW Natural’s existing safety programs andintegrating them into our PSMS
• Implementing documentation for safety-related processes• Strengthening our event-learning program, including training
across a diverse group of personnel

14

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the mostrecent quarterly and periodic reports for information relevant to investment decisions.

In 2022 the percentage of excavation damage incidents attributable to insufficient
excavation practices fell to a historic low of 33% — down from 38% in 2021. In 2022,
we increased the amount of time damage prevention specialists spend on high-risk
interventions. Our specialists also engaged third-party excavators by:• Offering trainings tailored to the kind of work each contractor does
• Contacting individual excavators prior to project start date to discuss the scopeof work, dig laws, best practices and the location of NW Natural facilities• Meeting the excavator on-site to perform jobsite assessments• Providing a point of contact and support for the excavator on that jobsite
and any future jobsites
NW Natural is accredited by the Common Ground Alliance (CGA) Damage Prevention
Institute, an association committed to promoting public safety and effective damage
prevention practices through partnership and collaboration. We were the first Oregonbased utility to earn a Gold Shovel Standard certification in 2021, a widely recognizedcredential that certifies the company is taking specific, comprehensive actions toprevent underground infrastructure damages. In 2022, we were once again awarded
the certification.

9

https://commongroundalliance.com/Portals/0/2020%20DIRT%20Report_09.29.2021_Final4.pdf?ver=2021-11-03-143123-490

11

DAMAGES PER THOUSAND LOCATES
10.04

10
9
8
7

7.51

6

5.74
5-year average

5

4.66

4

3.34

3.56

3.14

3.03
5-year average
2.66

3

2.94

2.83

3.15

3.52

2.96
2.41
6-year average 2-year average
3.25 3.14
2.55 2.83 2.46 2.36

2102006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Source: Annual DOT Report

Cybersecurity
Intensifying our focus on cybersecurity
We prioritized cybersecurity in 2022 to protect our critical systems and customer data.
Our vigorous cybersecurity program continued to be a significant and growing pieceof our investment portfolio. About 6.5% of our total capital expenditures in 2022 wererelated to cybersecurity and nearly 24% were information technology (IT) related.
NW Natural’s commitment to cybersecurity encompasses our third-party partners.
We manage third-party cybersecurity risks by asking detailed questions, reviewing
independent assessments, requiring incident reporting, and ongoing monitoring. In
2022, we were not materially impacted by any information security breach of a third
party. Our cybersecurity activities are supported and overseen at the highest levelsof the company and the audit committee of our board.

NW Natural had zero known reportable10
information security breaches in 2022
With significant new investments to enhance cybersecurity protocols,
systems and staff, we continued to incorporate IT best practices in 2022.
This included expanding our IT teams, implementing new security
processes and products, and onboarding new partners for managed
services and 24/7 monitoring and detection.
Cybersecurity highlights for 2022 include:• Implemented more than half of our five-year cybersecurity roadmap
in a single calendar year
• Our cybersecurity team was engaged every step of the way as wecompleted the company’s largest IT project ever — a major upgrade
to our enterprise resource planning system.
• Executed eight tabletop exercises with the business to practice forpotential security incidents• Performed successful penetration tests. These simulated attacks,
carried out to evaluate the security of an IT infrastructure, are criticalfor detecting vulnerabilities and combatting threats• Received TSA approval of our Cybersecurity Implementation Plan for
meeting revised federal security directives

10

For the purposes of this report, "reportable information security breaches" are those that are required to bereported to the Securities and Exchange Commission or the public generally.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

15Cybersecurity strategy and operations
We continually review and update our cybersecurity strategy to help secure technology
systems and ensure the safe flow of gas to our customers. In 2022 we launched a new
cybersecurity strategic plan. The previous plan was a five-year strategy created in 2021,
but we updated it because more than half the proposals it outlined were completed
after just a year. The latest version of the plan defines our cybersecurity strategy from2023 through 2027. It focuses on six key objectives: objectives: security governance,
cybersecurity risk management, compliance, defensibility, zero-trust architecture,and cloud security.
While implementing new policies and plans in 2022, we sharpened our focus on
cybersecurity operations.
• 100% of our active employees participated in information security training that
demonstrates how to protect confidential information at work, identify potential
cybersecurity risks and take action in case of a suspected information security
incident. We also provided focused phishing training in 2022, including extra training
for groups that face elevated security risks.
• Additional staff onboarded in 2022 enabled us to provide security risk assessment
briefings for executives on threats to the company• Continued adhering to process controls, performing security assessments andworking to align our program to the NIST Cybersecurity Framework and otherkey standards• Expanded our detection capabilities• To reduce cyber risks, we routinely:» Use multiple layers of security technology» Employ a variety of technologies and processes, such as multi-factor
authentication (MFA), that add a layer of protection to the sign-in process» Have endpoint protection to shield servers and laptops from cyber threats» Execute third-party penetration tests to expose vulnerabilities» Perform periodic maturity assessments to measure our progress» Test response actions» Work closely with numerous local and federal agencies, including
the U.S. Department of Homeland Security, Department of Energy,
Transportation Security Administration and the FBI

16

Our cybersecurity operations received an excellent
rating of 750 in 2022 from BitSight, the world's
foremost cybersecurity ratings platform. NW Natural’s
rating was higher than 70% of our industry peers.
Cybersecurity activities are supported and overseen at the highest levelsof the company. Our executive team, with leadership from our vicepresident and chief information officer, is responsible for implementing
the information technology and services (IT&S) strategic plan and setting
the tone at the top with respect to cybersecurity. Specialists in particularbusiness areas (for example, information technology, security andprocurement) apply their specific expertise to the company’s strategy.
Our audit committee, comprised of four independent board members,
oversees management’s strategies, investments and risks related to thecompany’s IT systems, cybersecurity and compliance. In 2022, the audit
committee received three cybersecurity updates. The full board wasbriefed on cybersecurity matters reviewed by the audit committee, andthe board received two additional cybersecurity-specific updates in 2022.

Matt Carlson: 2022 Chief
Information Security Officerof the YearIn a time of urgency around the issue of cyber threats
to the nation’s energy delivery systems, the job of chief
information security officer for a utility requires technicalknowledge, strong leadership skills, composure under pressure and a deep
understanding of industry-related compliance standards and regulations.
These are the qualities NW Natural cybersecurity & compliance director Matt
Carlson displays as the person responsible for the security and compliance of allcompany-wide technology systems. His skills have been honed through a breadthand depth of experience that includes serving in the U.S. Navy, earning two
master's degrees and working at the U.S. Department of State and U.S.
Department of Treasury. In 2022 Carlson was named CISO (Chief Information
Security Officer) of the Year by the Portland chapter of the Society for Information
Management (SIM), which recognizes excellence in information security
leadership. He’s quick to point out that the award reflects his team's excellent
work. "My team members all share a strong desire to learn and they areconcerned with the impact their efforts have on the company," he said. "Thisaward attests to the high quality of their work."

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Employee Safety
NW Natural is engaged in a companywide initiative to systematicallypursue our ultimate goal of eliminating safety incidents. Our Journey
to Zero program, launched in 2020, focuses on preventing injuries andbuilding a safety culture based on open communication, collaboration,
and a strong service ethic. Each year, we set a target of reducing injuries
by 10% over the previous three-year period.

A year of strong safety results
Our Journey to Zero on-the-job safety initiative continued to deliver
results in its third year, with a decrease in workplace injuries and a
big increase in near miss reporting (good-catch rate) from 2021. The
period from 2020 to 2022 marked one of the best three-year safety
performances in our history. Highlights include:• For the second year in a row, we ended with the lowest number ofworkplace injuries in nearly two decades. This reflects a steady trendof improvement in the total recordable incident rate (TRIR), which has
decreased by nearly half since 2019.
• We also saw a 25% increase in near miss frequency/good-catch rate,
which improved from 12.64 in 2021 to 15.86 in 2022—an increase ofnearly 78% since we launched Journey to Zero in 2020. The near missfrequency rate is a leading indicator that reflects our expanded focus
on proactively addressing safety concerns.
• We had the lowest number of vehicle collisions in 12 years, one of thebest results since we started collecting data in 1979.
• The severity of injuries remained consistently lower. Although there
was a slight uptick of 0.15 (representing less than one injury) in days
away or restricted time (DART), most incidents resulted in fewer than
five days of days out of work or on restricted duty. Added together, theseverity of incidents for the entire three-year period from 2020-2022
was lower than the single-year total for 2019, the year before welaunched our Journey to Zero safety initiative.

DAYS AWAY OR RESTRICTED TIME RATE (DART)

5

4
3

BEAT
TARGET

-34%
2.06

BEAT
TARGET

-47%

3

2.97

2.21

2

2.71

2.67

2021

2022

1.48

1

DART =

5.05

4

3.37

2

0

TOTAL RECORDABLE INCIDENT RATE (TRIR)

1

2019

2020

2021

2022

# of incidents with lost time or restricted duty x
200,000 Number of hours worked

0

2019

TRIR =

LOST TIME INCIDENT RATE (LTIR)
32020# of incidents requiring medical attention x
200,000 Number of hours worked

NEAR MISS FREQUENCY RATE
16

15.86

2.81

-44%

12

12.64

2
1.78

1.57

1

2019

LTIR =

2020

8.91

4

.83
0

8

1.12

2021

2022

0

2019

2020

2021

2022

# of lost time injuries x 200,000
Number of hours worked• We had no OSHA injuries in October 2022—the best monthly safety
performance since we began documenting safety incidents.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

17Continuing the journey toward safety excellence
In addition to emphasizing critical on-the-job safety practices, we took several far-reachingsteps in 2022 to keep employees safe and healthy, including:• Introducing a “Work Ready” program designed to help employees work and move insafer ways, using the same techniques that keep athletes at peak performance. Work
Ready brings a scientific approach to preventing workplace injuries—including strains
and sprains, the most common causes of lost work time. The voluntary app-based
program is not just for employees out in the field lifting, reaching, climbing andbending; it's also for employees who are sitting at desks looking at screens.
Work Ready is available for employees and their immediate family members.
• Implementing powerful enterprise resource planning (ERP) technology that includes
new tools to streamline health and safety reporting. The new platform allows
employees to log incidents, near misses and safety observations in real time froma mobile device, laptop or desktop computer, and it provides a one-stop shop for
analyzing safety submissions and extracting key insights.
• Intensifying our focus on preventing Serious Injury and Fatality (SIF) incidents.
NW Natural has a zero SIF rate, with no fatalities for more than a decade. To take
SIF prevention a step further, we began reviewing all collisions, injuries and near
miss/good catch reports to identify potential SIF (PSIF) incidents and evaluate thecontrols we have in place to prevent serious injuries.
• Designing facilities to promote employee safety. Prior to the opening of our new
Lincoln City Resource Center in 2022, our operations, facilities and safety teams usedprevention through design principles to eliminate or mitigate safety and ergonomic
risks. These principles are applied in the design of all newly constructed or remodeled
NW Natural facilities.

• Signed on to a nationwide worker-safety study supported by the
National Institute of Safety and Health (NIOSH). The Total Worker
Health® research program focuses on reducing and preventing
work-related risk factors that have an impact on employees’ safety,
health and well-being. In Oregon the study is run by Oregon Health &Science University’s Oregon Healthy Workforce Center. In addition
to contributing to the research effort, we’re getting ideas we canimplement to contribute to the excellence of NW Natural’s employee
safety program.

Rising to the Work Ready Challenge
In summer 2022, NW Natural held its first Work Ready Challenge, a spiritedcompetition that encouraged employees to engage with the company’s new
app-based Work Ready injury prevention program. The challenge introduced
participants to new health routines and inspired teams to build connections.
The program has steadily gained traction. Many work groups practice theWork Ready dynamic warm-up routine every day, and benefits are showing
up in important ways. Within a month of the Work Ready launch, injury stats
were impressive, with only three musculoskeletal injuries and no recordable
injuries. We had zero OHSA injuries in October 2022 — the best monthly
safety performance since we began documenting safety incidents.

18

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent
quarterly and periodic reports for information relevant to investment decisions.

Our Safety Management Program
NW Natural’s health and safety policies and procedures are designed
to comply with all applicable regulations — and we strive to go beyond
compliance.
• We have a strict stop-work policy when an employee is involved inan accident, and a 24/7 nurse care line available to all employees.
We provide alternative working opportunities that allow employees
to recover while continuing to contribute.
• A portion of our executives’ compensation is tied to achieving oursafety metrics, and our board of directors regularly reviews company
safety metrics.
• We have a safety steering committee overseen by our executives,
as well as a dedicated safety team led by our VP, chief humanresources and diversity officer, who reports directly to the CEO.
• We monitor safety performance to help us understand the origins
of incidents and develop root-cause trend analysis.
• We work to incorporate industry best practices and benchmarking,including peer analysis and assessments done by the AGA. Ourinternal auditors periodically review our safety department andhealth and safety policies. We also conduct third-party assessments
to audit aspects of our safety management system.

• We seek to work with contractors that meet or exceed safety standards andpractices for their industries. We use ISNetworld’s contractor management services
to help us evaluate contractors’ safety performance and policies, including criteriasuch as insurance and drug and alcohol testing standards.

Comprehensive safety and technical training
We maintain an extensive, proactive training program that includes compliance,
emergency preparedness, identifying hazards and handling high-risk situations.
Every year operations employees complete classroom instruction and hands-on
training at our state-of-the-art Training Town facility, which features a simulated
neighborhood complete with functioning underground natural gas lines. We alsooffer self-paced virtual training through our learning management system (LMS)
to keep training current and support our blended learning approach.
NW Natural employees logged more than 30,000 safety training hours in 2022, and
we also continued to provide training for third-parties. We hosted more than 300
immersive safety trainings to prepare firefighters to respond to emergencies thatinvolve or affect the natural gas system.
The technical training department fully leveraged NW Natural’s new LMS in 2022 toobtain a robust set of data for analyzing the effectiveness of our safety training. The
ability to track employee qualifications and automate training requirements helps us
ensure regulatory compliance and verify that our field personnel have the knowledge
and skills to maintain system safety, identify hazards and safeguard our crews,
customers and communities.

2022 TRAININGS

30,667TOTAL PIPELINESAFETY TRAINING
HOURS

2,080

TRAINING HOURS
clocked by employees
at our “Training Town”
simulated neighborhood

362-member
field staff

attended additional quarterly, annual,and scenario-based safety trainings,
as well as monthly safety presentations

329 firefighterstrainedin emergency procedures
involving gas lines

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

19Quality Assurance Program
Quality Assurance (QA) programs for gas
distribution utilities are not mandated by federal
code, but NW Natural has had a QA program inplace since 2006. The QA team follows up on
training and inspects work in the field to verify
that employees and contractors are working safely
and effectively across field operations. In 2022,
the team completed nearly 3,000 inspections ofwork performed by NW Natural employees orcontractors. Our quality & qualifications manager
reports results quarterly to a QA steeringcommittee that includes leadership from field
operations and operations technical services.
Since implementing our QA program we have seen
consistent improvements in work performance, andwe have collected data to help us provide timely
feedback for employees and improve training,
policies and procedures. Our leading practices inthis area have allowed us to serve as a resource forcompanies looking to implement similar programs.

For more information see also:
Residential Safety
Our Safety Measures
Pipeline Safety20

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

NW NATURAL

Environmental Stewardship
NW Natural’s core value of environmental stewardship is a driving force behind everything we do.
We believe NW Natural has an important role to play in helping our region move to alower-carbon, renewable energy future in a more resilient and affordable way.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

21

Building on a Legacy of Environmental Leadership
Our long history of environmental leadership reflects the values we share with the people we serve in Oregon and Washington.

2000 REPLACED CAST IRON
Completed replacement of all castiron pipe in our system

2007 VOLUNTARYCARBON OFFSET PROGRAM
Provided customers with a voluntary
program that allows them to offset carbon
emissions from their natural gas use

2016 ESTABLISHEDCARBON SAVINGS GOAL
Established a voluntary carbon savings
goal for our operations and customers’emissions from the use of natural gas

2002 DECOUPLING

2022 FIRST RNG FACILITY

Adopted a rate structurethat encourages energy
conservation

Commenced operations at our first
RNG facility. We are the first local gas
distribution utility in the continental U.S.
to invest in a renewable natural gas facility
on behalf of its customers.

2015 REPLACED BARE STEEL
Completed replacement of bare steel pipe to create one of the nation’s lowest-leak systems.

2019 OREGON SENATE BILL 98 ESTABLISHED
Oregon passed groundbreaking legislation that supports gas utilities investing in and procuring renewable
natural gas and hydrogen for all its customers. Regulators completed rulemaking in 2020

11

22

Escalent’s Environmental Dedication Index score comprises customer ratings of utility actions to build strong environmental stewardship

2022 ENVIRONMENTAL
CHAMPION
Named 2022 Escalent
Environmental Champion1

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

OUR DISTRIBUTION SYSTEM IS A POWERHOUSE FOR DELIVERING NATURAL GASTODAY AND RENEWABLES IN THE FUTURENW Natural’s pipeline system• Delivers 50% more energy than any other utility in Oregon12• Meets 90% of energy needs for our residential space
and water heat customers on the coldest winter daysin Portland, Oregon

2x the energy
During winter peak-demand periods, the natural gas system
in Portland, Oregon, delivers about twice as much energy as
the electric system to residential customers

7% of Oregon’s emissions
The natural gas our residential and commercial
customers use accounts for only about 7% ofOregon’s greenhouse gas emissions13
12

Per data from the Oregon Public Utility Commission, 2021 Oregon Utility Statistics Book

13

NW Natural sales load data from the Oregon Department of Environmental Quality
Greenhouse Gas Sector-Based Inventory 2021

OREGON GREENHOUSE GASEMISSIONS BY SECTOR

35%

TRANSPORTATION

29%

ELECTRICITY
OTHER

24%

(other fuels & waste)

NATURAL GAS(gas utility use)

7%

THE ELECTRIC SYSTEM
DEPENDS ON NATURAL GASElectrical power generation is thelargest end-use sector of natural
gas in the U.S.14

12%

Electric power generators use
more natural gas in Oregon than
the amount delivered by natural
gas utilities to their customers
for direct use.15

NW Natural residential andcommercial customer use

Source: Oregon DEQ In-Boundary GHG Inventory 2021 data.
14

U.S. Natural Gas Consumption by End Use (eia.gov)

152022 Oregon Public Utility Commission Biannual Report

Reducing emissions is crucial not only for gas utility systems, but also for electrical power generation, which is now the largest user of natural gas in the
U.S. and accounts for more gas use than direct residential and commercial customers combined.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

23

Industry leader in lowering emissions
Our vision of carbon neutrality begins with reducing emissions associated with thenatural gas we deliver. The aggressive pipe replacement program we completed in2015 has yielded important results. We saw a further decrease in fugitive emissions
in 2022 compared to 2021 (see NW Natural's Emissions in Appendix). We’re also
focused on reducing emissions from our operations and our customers' use ofnatural gas.

24

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for
information relevant to investment decisions.

NW Natural named
Environmental Champion
NW Natural honors Earth Month every year with
events to raise environmental awareness, andin 2022 we had an extra reason to celebrate:
On Earth Day, the company was named an
Escalent Environmental Champion. Escalent’s
Environmental Dedication score is based on
customer ratings of utility actions to build strong
environmental stewardship. In 2022 the survey
included 79,223 customers of the nation’s largest
140 utilities — electric and combination as wellas natural gas providers. NW Natural was oneof 31 companies to achieve the Environmental
Champion designation in a year when overall
scores were at a multi-year high.

Our Carbon
Savings Goal

88,9132022: Ahead of Target Savings Rate

We believe we have a pivotal role toplay in helping our region move to alower-carbon, renewable energy future
in a more resilient and affordable way.
In 2016 we established NW Natural’s
Low Carbon Pathway as a cornerstoneof the company’s strategic plan, setting a
voluntary goal of 30% carbon savings by2035.16 This is a unique and aggressive
target because it includes emissions
from our customers’ use of our productas well as emissions from our own
operations. In 2022 we remained aheadof target pace for meeting this goal.
We’re taking steps right now to help
achieve deep decarbonization in our
region by:• Lowering energy use throughincreased energy efficiency and308,097
decreased consumption• Providing customers with a voluntary
program to purchase carbon offsets
as an interim tool to reduce emissions• Working to procure conventional
natural gas with lower carbon
intensity across the value chain• Evolving our supply to include
renewables in the pipelines

16

Based on 2015 emission levels attributable to NW Naturaloperations and customer use of our product200,000

300,000

535,881 metric tons of carbon dioxide equivalent saved.
This marks 42% of savings toward goal, ahead of target pace.
1% Renewable
Natural Gas

2022 Source of Savings Mix
45% Energy Efficiency

46% Smart Energy

8% Upstream
Methane2022: Ahead of Target Savings Rate

2022 savings equal to removing n early 119,000 carssavings
equal
toEquivalencies
removing
535,881 metric 2022
tons ofcarbondioxideequivalent
saved.
fromthe road.
(EPA GHG
Calculator).
nearly119,000
cars
fromtheofroad.
This marks 42%
of savings
towardgoal,
ahead
target pace.
379,064
1% Renewable
Natural Gas

2022 Source 463,137
of Savings Mix
46% Smart Energy

45% Energy Efficiency

535,8818% Upstream
Methane400,000

500,000

600,000

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

25

Empowering customers to help fight climate change
NW Natural was the first stand-alone gas utility in the U.S. to offer
customers a voluntary program that allows them to offset carbon
emissions from their natural gas use. Launched in 2007, our Smart Energy
program purchases third-party verified high-quality carbon offsets fromprojects that reduce or prevent the release of greenhouse gases.17 Manyof these projects are biodigesters on family-owned dairy farms.
In 2022 we added RNG to the Smart Energy program for our Washington
customers. RNG is a renewable, lower-carbon fuel produced frommethane emitted by livestock manure, landfills, and other waste streams.
Adding RNG projects to the Smart Energy program gives Washington
customers a new mitigation resource and aligns with recent legislationthat requires natural gas companies in the state to offer a voluntary RNG
service. In Oregon some of our large commercial customers have asked
for a renewable resource option, and at year-end in 2022 we werepreparing to request approval from the Oregon Public Utilities
Commission to add RNG to our Smart Energy program.
Smart Energy participation increased nearly 14% in 2022, and now morethan 11% or about 84,000 of our residential customers are enrolled in the
program. They funded over 246,000 metric tons in emission reductions,equivalent to removing over 53,000 cars from the road in 2022. That madeSmart Energy the largest contributor to our lower-carbon goal NW Natural
set in 2016 and accounted for more than 246,000 metric tons of savings
toward the goal. In recognition of customers who sign up for Smart Energy,

NW Natural makes a donation to Oregon Parks Forever, a nonprofit organization raisingfunds to enhance and preserve special places and experiences in Oregon’s parks.

Since its inception, the Smart Energy program has funded over
1.9 million metric tons of CO2e emissions reductions.
Reducing energy use
From conservation to energy efficiency improvements, reduced energy use currently
accounts for the second largest savings toward our Low Carbon Pathway goal,
and we’re working hard to increase that savings in the coming years.
• For two decades NW Natural’s rate structure has been based on decoupling, whichis intended to break the link between a utility’s revenues and the quantity of gas
used by its customers, removing any financial incentive a utility might have to
discourage customers from conserving energy. Today more than 81% of our gas
utility revenues are decoupled.
• Through our Less We Can public awareness campaign, we actively encouragecustomers to use less energy.
Through Energy Trust of Oregon, we’ve consistently supported energy-efficiency
measures such as cost-effective equipment upgrades, insulation and building
improvements that last for many years. In 2022, NW Natural customers provided fundingthat covered $35.2 million of energy-efficiency expenses and generated 5.6 million
therms in energy savings. That’s equivalent to removing greenhouse gas (GHG)
emissions from more than 6,500 cars for one year. Energy efficiency and reduced

Equipment innovation
We are working to encourage the development of progressive technologies that use less energy. Through ourpartnerships with GTI Energy,17 Low-Carbon Resources Initiative and Northwest Energy Efficiency Alliance we seek
to transform the market for innovative products like gas heat pumps, net zero energy homes, fuel cells and otherprogressive energy-saving technologies. We co-founded the North American Gas Heat Pump Collaborative to support
accelerated adoption of highly efficient space and water heat equipment that are designed to reduce carbon emissions.
Gas-powered heat pumps offer the opportunity to dramatically reduce natural gas consumption while maintaining
equipment performance in cold weather — a challenge for electric heat pumps, which lose efficiency in low temperatures.
As of 2022, gas heat pumps are currently being piloted in homes and research indicates that new technologies like thesehave the potential to reduce energy use by 40%18 or more in the residential sector.

26

17

Formerly Gas Technology Institute - https://www.gti.energy/about/mission-values-history/

18

Opportunities for Reducing Greenhouse Gas Emissions Through Emerging Natural Gas Direct-Use Technologies. An American Gas Foundation report prepared by Enovation Partners, 2019

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

usage contributed nearly half of the savings we achieved in 2022 toward our voluntary
goal of 30% carbon savings by 2035. Since 2016, we have saved about 240,000 metrictons related to efficiency work.
Energy-Efficiency Expenses(in millions)

Therms of Energy Savings(in million of therms)

Equivalent Cars
Removed from Roads

2022

$35.2

5.6

6,500

2021

$34.5

6.5

7,500

2020

$28.8

6.8

7,800

By market, in 2022 our Oregon service territory had 514,000 MMBtu of net energy
savings and our Washington service territory had about 43,000 MMBtu of gross savings.

Advancing energy efficiency in the Northwest
Northwest Energy Efficiency Alliance (NEEA) is a non-profit collaborative that works
to advance energy efficiency on behalf of more than 13 million consumers in Oregon,
Washington, Idaho and Montana. NEAA supports accelerated adoption of highly efficientspace and water heat equipment designed to reduce carbon emissions. After a long
history of success stories in the electric sector, NEEA began the nation's first natural
gas market transformation effort in 2015. Holly Braun, business development manager
at NW Natural, currently serves as vice chair of NEEA’s board of directors, which
includes representatives of energy efficiency organizations, public interest groups
and state governments.

Gas heat pumps
In 2022, gas heat pumps moved from the laboratory into real-world residential
settings. Through a FortisBC pilot program, two companies debuted gas heat pumpsystems that are intended to replace both a gas furnace and water heater. With adesign of 140% fuel-efficiency and a capacity to operate down to -40 degrees F, thetechnology is projected to save an average Fortis residential customer roughly six
months of annual gas use and reduce household GHG emissions by up to about two
tons of carbon dioxide (CO2) equivalent. To lower emissions even further, the units
are designed to operate on renewable natural gas or gas-hydrogen blends without
needing any modifications. Gas heat pumps provide cooling as well as heating, with adistinct climate advantage: They don’t rely on hydrofluorocarbons (HFCs), which are
typically used as refrigerants in electric heat pumps. HFCs are potent greenhousegases with a global warming potential thousands of times that of CO2.

Industrial energy efficiency
Sodbuster Farms Inc., a NW Natural customer, grows hops inOregon and uses gas-fired burners to process them for sale tobreweries in the Pacific Northwest. The hop production industry
has specialized heat processing requirements, and over theyears hop growers have moved from wood-fired kilns, to diesel,
to natural gas. “As farmers, we care deeply about our land, air,water and community, and natural gas is the cleanest-burning
fuel that can be used on our farm,” said Douglas Weathers,
Sodbuster Farms president. To advance its environmental
objectives, the company has focused on reducing gas use by
optimizing its drying equipment and introducing state-of-the-art
technology. Weathers is planning on more modifications to cut
energy use and emissions— and, he said, “We're excited thateven cleaner options such as renewable natural gas andhydrogen are coming online.”"We are fully supportive of statewide plans toinvest in renewable natural gas and hydrogen.
Ensuring the gas pipeline infrastructure is in placemeans we’ll be ready to convert when renewables
are available."— Douglas Weathers,
Sodbuster Farms President

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

27

Lower-Emissions Natural Gas
Our residential and commercial customers’ use of natural
gas accounts for just under 7% of Oregon’s greenhouse gas
emissions, and we’re working to reduce that footprint evenfurther. Cutting emissions across the supply chain isfoundational to this effort.
• NW Natural sources natural gas from two of the moststringently regulated regions of North America: the U.S.
Rockies and Western Canada.
• NW Natural is one of the first utilities in the nation to develop
and implement an emissions-screening tool that allows us tounderstand the carbon intensity of gas supplies and consider
environmental impact when we evaluate supply purchases(alongside other key purchasing criteria such as price,
creditworthiness and geographic diversity). Through thisanalysis we can award contracts to lower-emitting producers.
Our program reduced the upstream emissions associatedwith the natural gas production of the product we procureand deliver to customers from our U.S. supply purchasesby 34% in 2022.
• We use alternative blowdown practices that reduce emissions
from pipeline venting. In 2022, we avoided releasing 1,278
metric tons of CO2e, reducing the amount these blowdowns
would have vented into the atmosphere by 97%.
• Because the majority of emissions in the value chain occur
in upstream natural gas production and processing,19 we’re
working with like-minded industry members and tradegroups to encourage producers to adopt best practices.

By targeting gas purchases from moreenvironmentally conscious producers, wehave avoided more than 42,000 dekatherms of
methane emissions for a year over year savingsof more than 43,000 metric tons of CO2e.

28

NWN FOUNDING MEMBERThe Natural Gas Supply Collaborative is a group of natural gas purchasersthat deliver enough natural gas to meet the needs of more than 60 million
households. The group focuses on promoting safe and responsible natural
gas production practices, along with greater transparency around key issues
such as water and land use, air quality, and emissions associated withnatural gas production.

NWN MEMBERNW Natural is a member of Our Nation's Energy Future (ONE Future), a
coalition representing more than 20% of the U.S. natural gas value chain andcommitted to reducing methane emissions through adopting science-based
standards and best practices. ONE Future has exceeded its goal of reducing
methane emissions across the natural gas value chain to below 1% by 2025.20

NWN FOUNDING MEMBER

Methane Challenge Program partners are recognized by the EPA as leadersin reducing methane emissions. As a founding partner, NW Natural is adopting
practices such as alternative blowdown methods. Instead of venting gas into
the atmosphere when we depressurize pipelines, we flare gas or reroute it
to stay on a pipeline — a process known as cross-compression. With thesepractices we are able to reduce potential greenhouse gas emissions by 90% to
as much as 100%. We also use line isolation and drawdown to reduce volume
before venting. These are recognized as industry best practices.

Transportation
Replacing dirtier transportation fuels such as diesel with cleaner-burning natural gas reduces
pollutants and is another source of carbon savings. Heavy-duty vehicles that run on CNG
rather than diesel emit up to 90% less nitrogen oxide (NOx) air pollutants and particulatematter,21 and CNG can reduce tailpipe greenhouse gases by about 20%.22 Emissions also
generally do not vary with engine load, as they do with diesel engines. In 2022, NW Natural
supplied 14 companies with 5.5 million therms of CNG to power their fleets. Our entire
NW Natural CNG fleet was powered by RNG in 2022.

“Transportation is the largest contributor of greenhouse gas emissions inOregon, at 35%.”

19

U.S. EPA, Inventory of Greenhouse Gases and Sinks: 1990-201820

2022 Methane Emissions Intensity Report, One Future

21

Ultra-Low NOx Natural Gas Vehicle Evaluation. Report prepared by University of California Riverside’s College of Engineering-Center for Environmental Research and Technology, 201622https://www.epa.gov/greenvehicles/learn-about-green-vehicles-compressed-natural-gas#:~:text=CNG%20generally%20creates%20fewer%20smog,%2C%20processing%2C%20and%20distributing%20CNG— Oregon Department of Energy

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

NW NATURAL

Our Vision of Carbon Neutrality
We believe climate change requires rapid innovation and collective
action, which is why we're reimagining the role of our system and thefuel we deliver. We’re resourced and ready to play a pivotal role in
the transition to a diversified, resilient carbon neutral energy system.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

29Powerto GasIndustry

Destination Zero:Our vision ofcarbon neutrality

Commercial and
Residential Heating

Fuel Cell

Carbon Neutral
Waste

Electrolysis

A decarbonizing network:
Renewable Natural Gas
Dedicated Hydrogen
Waste CO2
Renewable Electricity

VIS
20 ION
50

Verified Offsets
Commercial
Transport

MarineDeepEnergyEfficiency

Aviation

Storage

R EN E WA B LE N ATU R A L GA S STO R AG E
H YDRO G EN STO R AGE

30

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Vision 2050
Since NW Natural started delivering energy in 1859, the fuel going through ourpipes has changed from manufactured gas to natural gas. We’re on the way to ournext evolution, from natural gas to renewable natural gas and hydrogen.
Our goals are focused on collective action to:• Further reduce energy use through intensive energy-efficiency measures andnew technologies• Lower the carbon intensity of the product we deliver by shifting fromconventional natural gas to renewable natural gas and hydrogen• Leverage our tight pipeline system and long-duration storage to enable a faster,resilient, cost-effective energy transition• Look to emerging decarbonization models such as carbon capture, utilizationand sequestration that align with our skills and services• Facilitate adoption of policies that use joint gas and electric system planningand encourage the development of renewables for the pipeline
Every year we focus on taking specific, measurable actions to advance our carbon
neutrality vision. In 2022, we:• Remained on track to meet or exceed our Low Carbon Pathway targets.
• Completed our first RNG project to serve our customers and began constructionof a second utility RNG project.
• Interconnected a new RNG facility in Eugene, Oregon onto our system to deliver
renewable supplies to the transportation sector.
• Successfully tested a 15% hydrogen blended gas and began using it to heat our
training facility in Sherwood, Oregon.
• Entered into a partnership with Modern Hydrogen on an innovative methane
pyrolysis technology project to create hydrogen and blend it into our Portland
facilities’ system.
• Signed contracts with several of our commercial customers to pilot new carbon
capture equipment designed to capture emissions from the existing boilers to
reduce both energy use and greenhouse gas emissions.

Our key decarbonization principles• Helping customers use less energy is the fastest and least
expensive way to reduce emissions• All forms of renewable energy are needed in a balanced,
lower-carbon future• A dual energy system — gas and electric — is essential
to handle peak energy loads, provide resiliency, andwithstand extreme weather events• Leveraging our existing modern system and long-term
storage capacity in new ways to help develop a renewableenergy future while maintaining long-term energy
affordability and dependability• Energy system diversification and competition provide thebest opportunity for accelerated innovation• We must drive toward carbon neutrality in a way thatleaves no one behind• Advocated for public policy support at the federal and state level to accelerate
the development of renewable energy for the pipeline and make it affordable
for customers.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

31Our vision of carbon neutrality

Delivering on Our Vision
At NW Natural, the ultimate vision of carbon neutrality isn’t a slogan or an afterthought: It’s alongstanding commitment that underpins and shapes our business. We are constantly deepening,refining and living our commitment toward that vision.
• In 2016 we established our Low Carbon Pathway as a cornerstone of the company’s strategic planand began planning for renewable energy in our pipelines.
• In 2018 we commissioned a deep decarbonization study to evaluate strategies for achieving an
80% reduction in economy-wide greenhouse gases by 2050.

RENEWABLE ENERGY*• In 2021 we released our Vision 2050: Destination Zero report, which presents multiple scenarios,
using currently available technologies, toward a carbon neutral future.

Renewable sources that do not contributenew carbon to the atmosphere

In-depth analysis lays out multiple scenarios of decarbonization
In 2021 we issued our Destination Zero Report, an in-depth scenario analysis for carbon
neutrality incorporating residential and commercial customers’ use of our products.
The scenarios we analyzed incorporate varying applications of:• Enhanced energy efficiency, coupled with new equipment technologies
that reduce consumption• Lower-carbon fuels such as RNG and hydrogen, along with small
amounts of carbon capture

COORDINATED ENERGY SYSTEMS
Partnership with cleaner electric systems to create
seasonal and peak energy storage

68
ENERGY EFFICIENCY• Verified offsets in amounts that decline over time
Using varying levels of these applications, the report analyzes three different views of
the future and demonstrates possible scenarios of carbon neutrality by leveraging ourexisting natural gas system. All scenarios draw on decarbonization measures that aretechnically viable today and ready to be implemented with public policy support.

"This is one of the first comprehensive assessments by a gas utility demonstrating
multiple scenarios to achieving carbon neutrality."— Justin Palfreyman, NW Natural President

Encouraging end-use innovation for deep efficiency*From a lifecycle emissions accounting perspective
32

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Renewable Natural Gas for the Pipeline
Displacing natural gas with increasing amounts of renewable energy is central
to our plan. We’re already procuring supplies of RNG, a lower-carbon natural gas
alternative that can be transported through our distribution system just as windand solar energy are transmitted through existing electrical wires.

The renewable fuel that reduces waste
RNG advances long-term carbon neutrality goals while closing the loop on waste.
As a renewable fuel that can directly replace natural gas, RNG provides a reliable
and cost-efficient decarbonization solution that exists right now and works with theinfrastructure we already have. RNG can help mitigate the negative environmental
impact of society’s growing accumulation of solid waste. In the U.S., that includes
methane emissions from 34 billion gallons of wastewater, more than a billion tons of
livestock manure, and 144 million tons of food waste every year. Governments suchas the UK and Denmark are already proving this concept by embracing methane
capture and utilization as a way to help achieve the net-zero goals outlined in the
Paris Agreement.

RNG is the future, and it’s here now
RNG is already in use at major facilities like WM (formerly Waste Management) and thePort of Seattle, which cut emissions by 46% in a single year by switching to RNG. There
are well over 450 RNG facilities online or under construction in the U.S. today. Denmark,a leader in the production of biogas in Europe, increased the proportion of biogas
injected into its system to almost 25% of total demand as of 2021, and the country
reports it is on track to meet 75% of its gas demand from RNG by 2030 and 100%by 2034.

RENEWABLE NATURAL GAS
IS AN ESSENTIAL ELEMENTOF OUR VISION FOR THE
GAS SYSTEM BECAUSE:

RNG can reduce greenhouse gas
emissions, and it is interchangeable with conventional naturalgas, so RNG can be added directly
into existing gas pipelines.

RNG can be stored for distribution on demand, and the supplyof waste doesn’t fluctuate theway weather-dependent
renewable energy sources do.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

RNG can replace diesel
fuel in transportation to
reduce emissions andimprove local air quality.

33

RNG potential
Studies indicate that the potential supply of RNG is sufficient. An Oregon Department of Energy report identified nearly 40 billion cubic feet of technical potential, almost
equivalent to the total amount of natural gas used by all Oregon residential customers today.23 Nationwide, RNG production potential is estimated to be 10 to 30 times greaterthan current production, and the number of production facilities in the U.S. increased by nearly 79% from 2020 to 2022. The Argonne National Laboratory’s database shows asustained, rapid increase in RNG projects, and RNG investment incentives in the 2022 Inflation Reduction Act could spur significant new growth of the industry.24

RNG PROJECTS ACROSS NORTH AMERICARNG Facilities
Operational: 268
Under Construction: 109
Planned: 136

TOTAL: 513
Source: RNG Coalition map as of 8/2/22

34

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Oregon supports renewables
In Oregon, Senate Bill 98 —the first legislation of its kind in the U.S.—allows gas
utilities to procure renewable natural gas, and eventually renewable hydrogen, forcustomers. The law outlines voluntary goals for adding as much as 30% RNG into thestate’s pipeline system by 2050 and allows gas utilities to use up to 5% of their revenue
requirement to cover the incremental cost. In 2021, we had agreements with options topurchase or develop RNG totaling 3% of our current annual sales volume in Oregon.
Washington state passed House Bill 1257 in 2019, which also supports renewableenergy procurement and investment by natural gas utilities.

Our renewable natural gas projects
NW Natural was one of the first movers in the market for RNG, which wasn’t
significantly developed even five years ago. As a result, we’ve been positioning
ourselves to play a key role in the market as it develops. We have a full-time staff
devoted to pursuing supplies of RNG with a focus on getting the best possible price onbehalf of our customers. Our NW Natural renewables team, which we believe to be thefirst of its kind in the U.S., is continuously pursuing contracts and establishing longterm relationships with RNG producers, developers, and feedstock owners.
NW Natural advanced the company’s RNG strategy on multiple fronts in 2022:• Our first biogas facility began flowing RNG to heat homes and businesses. The RNG
is produced from waste at a meat-packaging plant through a partnership with Tyson
Foods. NW Natural is the first local gas distribution utility in the continental U.S. toinvest in and own an RNG facility on behalf of its customers.
• We completed the bulk of construction of a biogas facility at a second Tyson
processing plant.
• The Metropolitan Wastewater Management Commission in Eugene became the firstwastewater facility in Oregon to produce RNG, and we partnered with the commission
to inject the RNG into oursystem—the first wastewater
Watch a video about the project.
interconnect in Oregon.
• We issued our third request for proposals (RFP) for RNG resources, which attracted
bids representing about 17% of NW Natural volumetric sales in Oregon.
• In the first year of our 21-year agreement with the RNG producer Archaea Energy
Inc., we helped support the development of RNG projects while generating revenue
from those projects in high-value RNG markets and returning that revenue to ourcustomers.25

Oregon Senate Bill 98 supports volumetric RNG targets
2025

10

%

2030

15

%

2035

20

%

2040

25

%

2045

30%

TAKING THE LEAD ON RNG
NW Natural is a member of the Coalition for
Renewable Natural Gas, a member-led nonprofit
representing nearly 300 companies, municipalities,
universities, and organizations dedicated to advancing
RNG through policy and education. The coalition’s
Sustainable Methane Abatement & Recycling Timeline is an initiative to capture and control methanefrom 43,000+ organic waste sites in North America
by 2050. NW Natural director of renewable resources
Anna Chittum served as chair of the coalition’s
Leadership Advisory Board for Advocacy in 2022.
NW Natural is also a member of the American
Biogas Council, a national trade association representing the entire U.S. biogas industry and dedicatedto maximizing the production and use of biogas fromorganic waste.
Mary Moerlins, NW Natural director of environmental
policy and corporate responsibility, served in 2022 asvice chair of the American Gas Association’s Climate
and Sustainability Committee, which champions
renewable development and leveraging the pipelinedelivery systems for a decarbonized future.

23

Oregon Department of Energy, Biogas and Renewable Natural Gas Inventory SB 334 Report to the OR Legislature, 201824

S&P Commodity Insights - US RNG Approaches Maturity As Lenders Eye 50% Production Growth By 2024

25

Under Oregon law, NW Natural is able to develop RNG projects and either transport the RNG directly to our customers or sell it and detach the environmental attributes to be used for our customers' benefit.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

35

Hydrogen: The Next Milestone
on Our Low Carbon Pathway

ExcessrenewableenergyClean hydrogen26 is a key piece of our vision to achieve carbon neutrality. It’s aversatile fuel at the point of use and can be blended with natural gas in our existing
pipelines to help decarbonize the gas system. Hydrogen is made in a range of waysthat result in lower emissions than conventional methods. It can be created using
renewable electricity, renewable biofuels, and natural gas paired with carbon captureand sequestration. We see significant opportunities for bringing hydrogen into ourenergy mix at a large scale.

Hydrogen is key to decarbonization• Hydrogen has zero CO2 emissions at the point of use.
• Conventional natural gas can be blended with hydrogen in existing
natural gas pipelines to reduce emissions and scale supply quickly.

Goes throughelectrolysis to split
water molecules• Hydrogen can be stored on a large scale for long periods of time for delivery
when it’s needed, adding stability and resilience to the energy system.
• Surplus electricity from wind and solar can be used to produce hydrogen,which can be stored.

O• Hydrogen can be produced from diverse domestic resources,
contributing to energy independence.
• “Hard to abate” sectors that currently rely on fossil fuels
for high-temperature energy and other specialized
requirements can be decarbonized with hydrogen.

26

36

Defined in the 2022 Inflation Reduction Act as ”The term ’qualified clean hydrogen’ means hydrogen
which is produced through a process that results in a lifecycle greenhouse gas emissions rate of not
greater than 4 kilograms of CO2e per kilogram of hydrogen.”And creates
renewable hydrogenfor long-term
storage or delivery

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Our hydrogen projects
Using blended hydrogen in our own facilities
After several years of initial testing, in 2022, we stepped up our hydrogen
blending efforts to 15% to heat NW Natural’s resource center and training facility
in Sherwood, Oregon, the first facility in the state to receive blended hydrogen.
We also tested the 15% blend on end-use equipment like furnaces, fireplaces,
and water heaters. Today we’re working on blending at 20% levels.
Countries like the Netherlands, United Kingdom and Germany have been
testing 20% hydrogen blending for some time. In fact, industry tests in Europe are
now going beyond 20% blends to test the efficacy of higher volumes of hydrogenin the existing gas system and equipment. Our engineering team is following this work
closely as we contemplate next steps to prepare our system for a hydrogen future.
Generating hydrogen for our pipelines

underway nationwide. On the research and development side, SoCalGas
has built a demonstration hydrogen powered microgrid and home thatconverts solar energy into hydrogen, which is blended with natural gas
and used in the home's heat pump heating, ventilation and air conditioning
unit, water heater, clothes dryer and gas range. SoCalGas is leading an
ambitious initiative to develop the nation's first hydrogen hub, which
could deliver hydrogen in an amount equivalent to almost 25% of thenatural gas it delivers today.

"Repurposing natural gas pipelines for the transmission ofhydrogen can cut investment costs 50-80%, relative to thedevelopment of new pipelines."— IEA Global Hydrogen Review 2022

In 2022 NW Natural formed a partnership with Seattle-based Modern Hydrogen to
generate hydrogen on-site at our facilities.
Modern Hydrogen’s groundbreaking technology is designed to strip the carbon fromnatural gas and turns the decarbonized gas into hydrogen at the point of use, without
the need for new infrastructure or storage. This process—called methane pyrolysis—
is designed to produce hydrogen and solid carbon as outputs, and the carbon can besequestered or used to make products such as asphalt, construction materials,
automobile tires and soil amendments (see a video about the technology). Unlike otherhydrogen production methods, Modern Hydrogen’s technology requires no electricity
or catalysts. Generating the hydrogen on-site reduces supply-chain risk and eliminates
fuel transportation.

NW Natural is working with technical partners to determine how
to convert our large industrial customers from natural gas to purehydrogen. We have evidence it can be done, because there are 1,600
miles of hydrogen infrastructure already operating successfully in the
U.S. today.

Unprecedented support for hydrogen
Policymakers across the globe are backing hydrogen as essential to achieving energy
security and carbon neutrality. More than 30 countries have policies for creating a stable
domestic source of hydrogen, with large-scale projects in progress from Western Europe
and Australia to Kazakhstan and Mauritania. In 2022, the European Commission put
forward a plan to fast forward the transition to cleaner energy, including a "hydrogenaccelerator" concept to scale up the deployment of renewable hydrogen.
In the U.S., some utilities are already delivering hydrogen blends through natural gas
pipelines. Hawaii Gas has been using up to 15% hydrogen in its distribution system sincethe 1970s, and New Jersey Natural Gas Co. recently completed the first project on the
East Coast to inject renewable hydrogen into gas distribution pipelines and begin flowing
it to customers. Gas utilities have more than two dozen hydrogen projects planned or

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

37

The U.S. is investing in clean hydrogen
Federal initiatives have created new potential for accelerating the deployment of hydrogen in gas distribution systems. In August 2022, U.S. lawmakers included alower-carbon hydrogen production tax credit in the Inflation Reduction Act, the nation's largest-ever investment in cleaner energy. Additionally, the U.S. Department ofEnergy advanced a plan to invest $8 billion to develop several regional hydrogen hubs. The DOE’s Hydrogen Shot program, launched in 2021, aims to accelerate breakthroughs in hydrogen technology and cut the cost of hydrogen by 80% in one decade, to $1 per kilogram. The department projects that if Hydrogen Shot goals areachieved, they can lead to a fivefold increase in hydrogen use.27

Collaborating on hydrogen
The transition to hydrogen will require broad support and investments in best practices
and science-based research. We’re active in the following groups: Renewable Hydrogen
Alliance (NW Natural is one of five founding members), Center for Hydrogen Safety,
Low-Carbon Resource Initiative, and HyReady. We’re partnering with other North
American utilities to map out the technical tests we need to do at different blending
percentages and share the learnings gained through hydrogen pilot projects. NW Naturalis also working with peers in the U.S. and Canada to develop a North American plan
similar to the European Hydrogen Backbone, which envisions developing a
23,000-kilometer hydrogen grid across Western Europe by 2040.

Meeting with global renewable energy leaders
NW Natural technical teams joined Oregon and Washington state policymakers on twofact-finding trips to Denmark in 2022 to understand how that country is implementing
RNG and hydrogen strategies. Denmark is a leader in the production of biogas inEurope, and the Danish government has secured EU funding to build capacity for
producing six gigawatts of renewable hydrogen by 2024 — equivalent to more than
18 million solar panels. Rather than dismantling its gas system, Denmark is looking
at installing more pipelines and repurposing existing gas lines. During the visit,
the NW Natural team repeatedly heard from government agencies, think tanks andgas companies that Denmark is relying on multiple energy sources to decarbonize,
including RNG, hydrogen, and renewable electricity. Molecules play an importantrole in the country’s energy system today, and Denmark is doubling down on pipeline
infrastructure, with plans in development for a hydrogen backbone transmission system.

27

38

US Department of Energy, Energy Earth Shots: Hydrogen Shot: An Introduction, 2021

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

39

The Gas System Delivers What We
Need for a Cleaner Energy Future
Leveraging our existing natural gas system in new ways is our priority.
We are seeking paths to a renewable energy future with long-term
dependability, resilience and affordability.

• Current state of electric generation: Electric utilities are the biggest users of natural
gas in the U.S., and they currently rely heavily on natural gas to back up renewables
that provide intermittent energy for power generation. For the foreseeable future,31
cities are likely to be using natural gas for direct heating in homes and businesses
or using it less efficiently to generate electricity in power plants where energy is lost
during electric generation and transmission.

A coordinated energy system: Two systems are better“An energy system with renewable electrons delivered over wires andrenewable molecules delivered underground gives our communities
a more effective hedge against potential risks posed by more extreme
weather, and a more cost-effective way to reduce emissions.”

To meet the needs of our communities and decarbonize the energy system,
our region will need an integrated portfolio of diverse lower-carbon energy
sources, delivered through pipelines as well as wires. A diversified energy
system is fundamentally stronger and more affordable—and diversification
will be even more important as climate change and severe weather pose
new risks to reliability and resiliency.
• Continued reliability: During winter peak-demand periods, the natural
gas system in Portland, Oregon, delivers about twice as much energy
as the electric system to residential customers. The gas system iscritical for energy reliability in a region where the electric grid alreadyfaces serious capacity limitations.28 In the future a gas system withrenewable molecules can complement electric renewables, adding
stability to the entire energy system.
• Capacity and cost: NW Natural delivers 50% more energy than any
other utility in Oregon.29 To handle that load without the gas system, theelectric system would need to increase substantially, requiring intense
investment to build new transmission and distribution lines and deploy
batteries for storing renewable energy. That would come with a highprice tag, and the investment in batteries to store renewable energy
would drive the cost even higher. Meanwhile, the infrastructure for
RNG distribution exists today.
• Community impacts: Some natural gas appliances and generators
can operate in a power outage and can operate on RNG, providing
critical energy resiliency benefits during extreme temperatures.
Efforts to mandate electric equipment would eliminate optionality
and create new energy system reliability risks.
• Challenging sectors: One of the world’s biggest climate challenges isdecarbonizing fossil energy uses that cannot be electrified. Amongthese so-called “hard-to-abate” sectors are major industries that
rely on fossil fuels, including steel, cement, chemicals, and building
materials, which together are responsible for approximately 30% of
the world’s annual CO2 emissions.30 RNG and hydrogen could fuelthese sectors in the future.

40— Kimberly Rush, NW Natural
Senior Vice President and Chief Operating Officer

Unmatched storage capacity
As the world transitions to decarbonized energy systems, long-duration storage of
renewable energy will be critical. Our natural gas infrastructure already provides
a massive, long-term storage resource that makes it possible to deliver energy on
demand to customers all year long. We envision that in the future, the storage facilities
we currently have in place could be used to store RNG or hydrogen. Leveraging theseunique assets can have significant benefits for decarbonization strategies across theenergy sector because:• The gas system in the U.S. can deliver 2.5 times the energy of hydrogeneration
facilities32 and gas storage provides about 1,500 times the energy from current
large-scale utility batteries.33• Gas storage facilities can make it possible to provide renewables at a significant
cost advantage when compared to the battery storage that would be needed todecarbonize the electric grid.

28

Northwest Power and Conservation Council, 2019 https://www.nwcouncil.org/energy/energy-advisory-committees/resourceadequacy-advisory-committee

29

Per data from the Oregon Public Utility Commission, 2021 Oregon Utility Statistics Book

30

Harvard School of Engineering & Applied Sciences-Clean Hydrogen: A long-awaited solution for hard-to-abate sectors

31

Global gas outlook to 2050 | McKinsey

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

NW Natural currently has 20 billion cubic feet of undergroundstorage—equivalent to the capacity of a battery that would cost
about $2 trillion in today’s market.34• A large power-to-gas hydrogen plant can enable renewable energy storage in
the gas system for less than half the cost per kilowatt hour of a battery storing thesame energy.35• The gas system can help protect customers from service interruptions as the demandfor energy continues to grow and the electric distribution system relies more heavily
on weather-dependent renewables like solar and wind that deliver an intermittent
supply of energy. NW Natural’s existing storage can hold 6 million MWh of energythat can be delivered whenever it’s needed.

Resilience
In the coming decades the U.S. energy system will need to be resilient to an increasing
number of catastrophic events. The natural gas system’s underground infrastructureis less vulnerable than above-ground systems to hurricanes, fires, winter storms,
and other extreme events associated with climate change. This ability to withstanddisruption will be needed for the transition to a carbon-neutral future, along with theflexible, large-scale storage the gas infrastructure provides. To ensure resilience, theenergy system needs pipeline delivery infrastructure and storage capabilities meeting
both short- and long-duration needs.36

32

Source: EIA Weekly Natural Gas Storage Report - Withdrawals are calculated and aggregated from a weekly regional report.
The figure for hydroelectric generation is the total net generation from hydroelectric facilities and does not distinguish between
what can and cannot be stored.

33

Source: EIA 923 Form–Hydroelectric and battery generation are pulled from generator level data identified with prime movers“HY” and “BA”, respectively. Net generation is aggregated for hydroelectric generators and gross generation is aggregated forbatteries.

34

Prices based on NREL https://www.nrel.gov/docs/fy19osti/73222.pdf. That’s equivalent to about 6 million megawatt hours ofstorage. To convert natural gas volumes to MWh for comparison, this figure uses a national average heat content of 1036 btu/cf
and a direct energy conversion of 0.29307 MWh/MMBtu

35

NREL-https://www.nrel.gov/docs/fy19osti/73222.pdf
PNNL-https://www.energy.gov/sites/prod/files/2019/07/f65/Storage%20Cost%20and%20Performance%20Characterization%20
Report_Final.pdf
Caltech source (published in Joule)-https://www.cell.com/joule/pdfExtended/S2542-4351(20)30325-1

362021 American Gas Foundation/Guidehouse report, Building a Resilient Energy Future

What would it take for electricity to meet
residential gas use on a peak winter day?
December 22, 2022, was a cold day — it was a record send-out day
for NW Natural. Between 8–9 a.m., NW Natural delivered approximately 41 million cubic feet of gas, of which about 23 million
served our residential customers. NW Natural commissioned aconsulting firm to help estimate what it would take for our local
electric system to serve that same customer load for just that one
hour. The preliminary analysis found that if all our residential
customers’ appliances were replaced with electric ones, it would
require more than 3.4 gigawatts of new electric capacity to provide
the same energy our system did.
To put this amount of energy into perspective, it’s equivalent toseven new 450-megawatt natural-gas fired power plants, which
would cost roughly $4 billion to build. But by state policy, newgas power plants are likely very challenging to build in the
Northwest, so we wanted to also explore what it would take with
only electric renewables.
To rely on a combination of wind, solar, and battery storage
would require about 14 GW of new capacity at a cost of approximately $20 billion — and that’s using National Renewable Energy
Lab (NREL) and Berkeley National Labs capital cost data (notincluding any potential incentives from the Inflation Reduction
Act). Based on NREL estimates, it would also require about
700 square miles of land to build all that new infrastructure on.
Importantly, these estimates don’t include the incremental
electric transmission and distribution system costs or the costto change out end-use appliances.
This example illustrates the value of the natural gas system forproviding reliable energy to our communities when they need it
the most.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

41

Polling shows Northwest voters want a decarbonized pipeline
A poll conducted in late 2021 in NW Natural’s service territory by the independent research firm DHM shows citizens in Oregon andSouthwest Washington want a diversified set of solutions for decarbonizing the energy system. Survey respondents overwhelmingly
said they want access to all forms of renewable energy — including renewable natural gas.

78%

voters value the natural gas
system for its critical role inlowering emissions withboth affordability andreliability as top priorities.

78%

of voters support local
government’s efforts toencourage the use ofrenewable natural gas.

73%

of voters agree that families
and businesses should havea choice of energy options tomeet their needs and not havethose choices mandated bytheir local government.

42

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Public Policy Support
The effort to decarbonize the electric grid has depended on public policy that supports
the development of renewable power sources, and policy is equally important indecarbonizing the gas system. We’re actively advocating for thoughtful design ofregulatory programs in Oregon and Washington state. We are excited about early steps
such as Oregon SB 98 and Washington HB 1257, which creates a pathway for RNG, andwe are also working toward additional policy support to accelerate the development of
renewable energy for the pipeline and make it affordable for gas customers. At thefederal level we partner with other utilities to support state and federal incentives for
RNG and hydrogen.

Where We Go from HereNW Natural is moving forward on multiple fronts to advance our vision of becoming
a provider of carbon neutral energy. We’re actively supporting the rapid development
and deployment of solutions like gas heat pumps and water heaters that don’t require
electric ignition, hybrid systems and hydrogen-ready appliances and processing
equipment. And we’re aggressively pursuing the adoption of renewable fuels for thegas distribution system.

Energy equity
Our climate plans and actions are guided by our conviction that opportunity is foundin new ideas and diverse perspectives. Our core value of caring includes principles ofdiversity, equity, inclusion and belonging, and that value is central to our vision of how
NW Natural intends to contribute to a future where everyone in our region has access tolower-carbon, reliable energy.

What’s next
Our nation is at the beginning stages of developing renewables for thegas system. As the electric system works to increase wind and solar
generation from 13.6% in 2022, we need to aggressively accelerate
development of renewables for our pipeline networks. We’re pleased
with the progress we’ve made at NW Natural, and we’re continuing tobuild on our long history of success—channeling the advantages ofour modern infrastructure, our expertise, and our innovative spirit insupport of Vision 2050: Destination Zero.

It is critical that customers, communities and other stakeholders take part in discussions
and decisions about transforming the energy system. That’s why in 2022 we launcheda Community and Equity Advisory Group (CEAG) to bring historically underrepresented
voices, perspectives and lived experiences to our energy and operational planning.
One of the group’s important functions is to provide NW Natural with direct feedback
to help us drive toward carbon neutrality in a way that leaves no one behind. We seek
input from this group on matters such as energy system planning, renewable resource
development, and keeping the energy we deliver affordable so those we serve are notenergy burdened.
We also have an employee-led Sustainability and Equity Engagement Committee (SEEC)
within the company that works with community-based organizations to help influence
policy and promote adoption of environmentally and socially sustainable practices.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

43Environmental Stewardship Is
A Priority Within Our Organization

CORE AND SHELL
GOLD CERTIFIED
Our building supports
employees’ health andwellness with an onsite
wellness center, locker
room and indoor bikeparking, ample daylightin work areas andaccess to the outdoors
and nature on ourrooftop deck.

Our values are reflected in our operations, at our facilities and through policies andprocedures that are designed to protect our environment as we serve customers.

Energy-efficient facilities
All newly constructed or remodeled NW Natural facilities are built with environmental
stewardship, seismic resiliency, and employees’ health and wellness in mind.
Our headquarters and operations center in Portland is LEED Core and Shell Goldcertified, meeting the U.S. Green Building Council’s rigorous standard for healthy andsustainable buildings. A range of features allow us to use less energy, conserve natural
resources, minimize waste and support our strategic goals:• Energy conservation measures – Through our high-efficiency building envelope(wall, roof and window assemblies), efficient heating, ventilation and air-conditioning
system and controls, 100% LED lighting and other measures, we estimate energy
cost savings for the building’s core and shell of approximately 28% annually,
compared to a code-compliant building—more than 550,000 kilowatt hours andapproximately 8,000 therms of natural gas saved.
• Water savings – Efficient plumbing fixtures that use approximately 40% less water
than code-compliant fixtures reduce water demand, along with a drip irrigation
system to efficiently water native plants on our rooftop deck. In 2022, we usedapproximately 463,760 gallons of water.
• Use of green building materials – Nearly 21% of the materials cost for the buildingcore and shell construction came from recycled materials, reducing environmental
impacts of extracting and processing virgin materials.
• Convenient downtown location – Our headquarters are conveniently located inour downtown core within walking distance of transit stops for public bus lines,
light rail and the streetcar. We provide secure and indoor bicycle parking to further
encourage sustainable transportation alternatives and reduce pollution fromautomobile use.
• Onsite recycling and composting – To limit waste, each floor is equipped withcentral recycling and compost stations.

44

Lower-carbon operations
NW Natural implemented its own company-wide goals to achieve net
zero emissions across our company’s operations, including our fleetsand facilities.
• In 2022, NW Natural used approximately 13.5 megawatt hours ofelectricity and 5.8 million therms of natural gas in our own operations.
• For our use of natural gas, we pay for carbon offsets through our
Smart Energy program. We became our first Smart Energy customer
when the program launched in 2007, and since 2020 we’ve offset
100% of the CO2 associated with our natural gas heating.
• We are part of the Energy Trust of Oregon’s Strategic Energy
Management program, which helps us continually improve ourown operations through equipment and building choices as well as
employee behavior. In 2022, we expanded our involvement in the
program to now include six enrolled facilities, up from three in 2020.
• We are examining additional renewable electricity program options,and we expect to use increasing amounts of renewable natural gas in
the future as we continue to procure RNG under Oregon Senate Bill 98.
• We continued our expanded recycling programs which now includes
a personal protective equipment recycling program and a plastic film
recycling program at certain NW Natural locations. This is in addition
to our long-standing programs for recycling hard plastics andfabrics. Employees can also give new life to NW Natural logo wear
through the Spring Cleaning Clothing Swap.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

• We celebrated Earth Month 2022 with two lunch-and-learns and a SOLVE
neighborhood cleanup day. Sponsored by NW Natural’s employee-run Sustainability
and Equity Engagement Committee, these events emphasized the importanceof ongoing engagement on sustainable landscapes, food justice and climate
and energy.

Environmental management, biodiversity,land, water, and non-GHG emissions• Our facility in Sherwood, Oregon received the Gold Level of the Washington County
Green Business Leaders award, which recognizes a company’s efforts in sustainable
materials management, toxics reduction and social responsibility.
GOLD
As we’re continuing to renovate and upgrade our facilities, we are20212023
inspired by LEED certification principles and focus on building
GREEN BUSINESS
resilient, energy-efficient structures that serve the needs of our
LEADERS
customers, employees and the business.

Environmental management: With one of the most modern natural
gas distribution systems in the country, in a well-established service
territory, NW Natural performs a limited amount of new construction orother work that might disrupt local communities and the environment,
including waterways. When work is required, our environmental
management team strives to comply with all environmental regulations
and leave the area the same as, or better than, it was when we began.
Our environmental management program is supported by:• We strive to use the lowest carbon fuel available for our fleet
vehicles, including CNG, renewable diesel and ethanol. In 2022,
all CNG consumed by our fleet was RNG.

Environmental policy and leadership
Our board, executives, employees, and customers have been committed for
decades to environmental performance, protection, and stewardship. Our dedicatedenvironmental management and sustainability team focuses daily on these issues,
and reports to our VP of public affairs and sustainability, who reported directly to
our CEO. The sustainability team provides direct monitoring of our environmental
performance, reports regularly on environmental issues and consults withstakeholders on these issues.
Board meetings for both NW Natural Holdings and NW Natural incorporate
environmental items, risks and opportunities into the topics reviewed, including
climate-related risks and opportunities. The Public Affairs and Environmental Policy
Committee of the boards of directors provides oversight of environmental matters.
The committee is guided by the company’s environmental policy, which is reviewed
and approved annually. It sets forth our commitment to:• Environmental stewardship• Reducing emissions, releases, and waste• Using our natural resources and energy more efficiently• Protecting and enhancing the quality of the natural environment• Operating our business in an increasingly sustainable manner

To help us use our precious resources wisely and efficiently, we havestrong environmental programs.

• Our rigorous procedure manual, which provides guidance on
environmental matters. This includes EPA, Oregon Department ofEnvironmental Quality (DEQ) and Washington Department of Ecology(DOE) regulations and local jurisdictions’ requirements. In certain
instances, we take the strictest regulation within our jurisdictions
and apply it to our entire service territory, which assists us in holding
ourselves to a higher standard and facilitates consistent procedures
across our operations.
• Our internal Environmental Management System (EMS), which
addresses how our resource centers and field work sites are designed
and operated. The EMS procedure manual:» Outlines how to design sites to prevent runoff and soil erosion,
mitigate spills, obtain necessary Clean Water Act permits, andfollow federal, state and local rules and regulations. These rules
and regulations are primarily related to water quality, air quality,
chemical handling, spill response, waste, cultural resources andthreatened and endangered species.
» Serves as a guide for rigorously vetting products, substances,
activities and services to help us minimize our impact on theenvironment and use the safest and most environmentally
responsible materials appropriate in our operations. We keep
environmental records and provide environmental training for eachproject, and we offer awareness programs and trainings for new
employees and refresher trainings for established employees.
» Allows us to assign roles and responsibilities, as well as monitor
activities for compliance with our permits. Our internal audit
department performs periodic audits of our environmental
programs and trainings, and external agencies such as EPA,
DEQ and DOE also periodically audit our permitted facilities.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

45• Our team of in-house environmental specialists who oversee all waste assessments.
The environmental specialists:» Participate on a chemical evaluation safety team to eliminate products that may
produce potentially hazardous waste before it’s generated, and they periodically
perform waste audits at our resource centers.
» Each have over ten years of experience managing waste stream assessments.

Suppliers» Have completed OSHA’s 40-hour “hazwoper” certification.
» Attend annual waste management training seminars hosted by the Oregon DEQ.
» Implement several written environmental modules directed at managing
commonly occurring waste streams.

In addition to our efforts to procure RNG and target gas purchases from
more environmentally conscious producers, we have similar criteria forvendors we work with:• Performing waste audits at all our resource centers.

• We have implemented a sustainable purchasing program coveringvarious focus areas, including sustainability, community, and governance.
We strive to procure goods and services in an increasingly sustainable
manner and we expect our suppliers to share our core value ofenvironmental stewardship through our Supplier Code of Ethics.

• Implementing and maintaining recycling programs in our operations. We currently
recycle 100% of the following items: batteries, waste oil from our fleet transportation,
oil filters, antifreeze, scrap metal, and some types of plastic. NW Natural’s recycling
activities in 2022, eliminated over 88% of the total volume of total ordinary operating
waste potentially requiring disposal and diverted those materials into recycling
opportunities instead.

• Our Supplier Code of Ethics contains expectations for our suppliers
related to environmental protection and sustainability. We also include
language setting expectations for environmental stewardship andsustainability in our master contracts and agreements, and we havelaunched a website specific to suppliers that allows them to better
understand how we promote sustainable procurement efforts.

• Diligently following EPA’s rules and regulations for hazardous waste. We report to thestate government the amount of hazardous waste that is incinerated or sent to thelandfill annually. In addition to materials recycled in 2022, NW Natural disposed ofmaterials from ordinary operations as well as remedial-site wastes. Of the ordinary
operational waste that was disposed; 99% was non-hazardous waste (100% landfilled
and 0% incinerated) and 1% was hazardous waste (6% landfilled and 94% incinerated).

• We monitor key vendors’ environmental records and we have
implemented a scorecard for certain vendors that addresses identified
sustainability-related topics, including environmental performance.

» Identify opportunities for continued improvement.
Waste: We strive to reduce and recycle any byproducts of our process by:

Water: While our natural gas distribution operations are not water intensive, we strive
to adhere to all Clean Water Act requirements, and we use limited water for hydrostatic
testing and pipeline construction. We also repurpose water, use leading stormwatermanagement techniques and conduct regular audits at construction sites.

• We have invested in five CNG stations for our own fleet, which includes 198 vehicles.
A station at our Sherwood Service Center is designed to provide backup service for
our CNG customers. We strongly believe that natural gas as a transportation fuelprovides significant economic and environmental benefits to our customers and to theoverall community. For example, heavy-duty vehicles that run on CNG rather thandiesel emit 90% less nitrogen oxide (NOx) air pollutants and particulate matter.
37

37• As part of our RFP process, we include in our bid evaluations the extent
to which contractors demonstrate their willingness to work together onfinding ways to reduce environmental impacts, and we ask prospective
suppliers to describe their current or planned practices for utilizing
recycled products and minimizing waste.

For more information see also:

Air: We work to promote healthy air quality in several areas.

46• We also have an idling-reduction initiative aimed at reducing particulate
emissions. Emissions such as sulfur oxides (SOx), NOx, and non-methane
volatile organic compounds (VOCs) are below applicable permitting
thresholds for the majority of our facilities and as such, we do notconsider them to be significant to our operations.

Less We Can
Renewable Natural Gas
Vision 2050: Destination Zero
Public Affairs and Environmental Policy Committee
Environmental Policy

As of August 2023

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

NW NATURAL

Our Communities, Our Customers
WE GREW UP HERE
We’ve operated for over 160 years with a focus on serving our customers andinvesting in our communities. It’s not just what we do, but how we do it.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

47

Community & Customer Highlights
CONTINUED TO RECEIVE
TOP-LEVEL CUSTOMERSATISFACTION SCORES
IN J.D. POWER AND
ESCALENT STUDIES

Kept customer bills lower than they were
15 years ago by judiciously managing
system capacity and skillfully navigatingrecord volatility in the natural gas market

DISBURSED$5.2 MILLION
to help low-income
customers pay theirbills and stay warm

DISTRIBUTED A RECORD

40$

DISTRIBUTED $2.3 MILLIONMILLIONin bill credits toOregon customers

DONATED$1 MILLION

to local nonprofits, with anemphasis on organizations that
demonstrate a commitment todiversity, equity and inclusion

PROVIDED 8,300 MEALS AND 174 TENTS

for events held by our nonprofit, communityand civic partner organizations
48

to fund weatherization projects andenergy efficiency upgrades for lowincome customers in Oregon

Introduced a program
to provide an ongoingbill discount forincome-qualifying
residential customers

Launched a Community and Equity Advisory Groupto help ensure NW Natural programs and policies are
informed by voices representing diverse communities

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Caring for Our Customers
Superior service and customer satisfaction
In 2022, our customer service center answered nearly 524,000 calls, and our service
technicians and other field resources responded to more than 190,000 requests. Ourinternal customer satisfaction survey continued to show high satisfaction ratings38
among contacted customers:

OVERALL

STAFF INTERACTIONPHONESERVICE TECH

2022

80.2%

90.0%

83.9%

96.2%

2021

83.5%

91.2%

86.2%

96.2%

2020

77.1%

89.0%

86.3%

92.9%

Top two in J.D. Power Customer Satisfaction Study for 19 years
In 2022, NW Natural continued its nearly two-decade streak of earning high marks
from our customers in the J.D. Power Gas Utility Residential Customer Satisfaction
Study. For the third year in a row, the company scored second-highest in customer
satisfaction among large utilities in the West. This is the nineteenth time the company
has scored in the top two in the West regional segment, which includes utilities serving
500,000 or more residential customers. NW Natural also scored in the top 10 in thenation among large gas utilities. The J.D. Power study measures residential customer
satisfaction with natural gas utilities across six categories: safety and reliability; billingand payment; price; corporate citizenship; communications; and customer service.

Customer Champion in Escalent study
NW Natural earned the designation of West Region Customer Champion in the2022 Syndicated Utility Trusted Brand & Customer Engagement™ Residential study
by Escalent. The distinction in 2022 went to standout utilities that scored well above
their industry peers for building engaged customer relationships and communicatingwith customers to help them find support in managing their energy use.
The Escalent study goes beyond J.D. Power customer-satisfaction scores to gauge thelevel to which customers want to do business with utility brands. It benchmarks andtrends performance of the largest approximately 140 utilities on the Engaged Customer
Relationship (ECR) score, a composite index of service satisfaction, brand trust andproduct experience performance. The sample design for conducting customer interviews
is based on US census data to ensure a demographically balanced sample of each
evaluated utility’s customers based on age, gender, income, race and ethnicity.
38"Our customers have always been the focal point at
NW Natural, and it is particularly satisfying to once again
receive such robust confirmation that they appreciate ourcommitment to service, safety and reliability.”— David Anderson, NW Natural CEO

A great customer
experience on any device
Our core value of service includes
making it easy for all our customers to
get help and manage their accounts 24/7
from any location. We offer more than 30 self-service
options online, with website accessibility features to servea more diverse set of customers. Currently nearly 500,000
customers are registered for an online account that allows themto use a phone or other mobile device to do things like get theiraccount information, view and pay their bill online, and find out
about energy efficiency resources. In 2022 we saw an upsurge
in adoption of self-service features:• Registration for online accounts increased 23%.
• More than 300,000 customers have signed up for paperlessbilling, choosing to receive their bill electronically rather than
through the mail. Enrollment increased by 10% in 2022, andtoday nearly 40% of our customers are enrolled for paperlessbilling. To further promote online transactions and paperlessbilling to conserve resources, during Earth Month in April we
promoted paperless billing. We also promote paperlessbilling to customers throughout the year via their bills,
print and electronic newsletters, and more.
• Online payments increased more than 8%, with nearly
5.9 million payments processed online.

Percentage of customers rated us either 9 or 10 on a 10-point scale, where 1 means poor and 10 excellent.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

49

GAS BILLS REMAIN AFFORDABLE

Natural gas is one of
the most affordable
utility bills ourcustomers have

ECONOMYWIDEINFLATION
39

+102%

+66%
+42%

+43%

+46%

Reductions in bills
from 15 years ago-2%

2%

RESIDENTIAL BILLSThe Portland metro area continues to be themost affordable major metropolitan areaon the West Coast. Even with economywide
inflation and increases in the wholesale priceof natural gas, our residential and smallcommercial customers are paying less forgas than they did 15 years ago. A typicalmonthly gas bill for a residential customer
using 50 therms or 100 therms of gasdelivered per year was $51.65 and $95.30
respectively. NW Natural has taken several
steps to increase affordability,40 including:• Locking in gas purchases at lower rates• Smart investments in energy storage• Effective and efficient operations• Energy efficiency measures

7%

SMALL COMMERCIAL BILLS

50

39National data from Bureau of Labor Statistics, U.S. Postal Service, and NW Natural bills 2022 vs. 2007.

40

Affordability also depends on the wider economic dynamics of our service territory as well as the cost of the natural gas commodity.

41

Natural gas bill data for NW Natural customers from 11/1/21–10/31/22 using normal weather assumptions

42

Electric bill information uses rates for 2021 in NW Natural’s service territory and data obtained from 2020 Oregon Public Utility Commission Stat Book (latest data
available) and other regional sources for usage information

43

Water and wastewater bill is from Bluefield Research U.S. Municipal Water & Wastewater: Annual Utility Rate Index, 2021. Oregon rates could differ from this.

44

Cell phone bill data is from J.D. Power’s 2022 U.S. Wireless Purchase Experience Full-Service Performance Study

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

RESIDENTIAL AVERAGE MONTHLY UTILITY BILLSNatural Gas41

Electricity42

Gas Space &Water Heating

Has Gas Space &Water Heating

$65

$76

Water & Sewer43

Cell Phone44

$112

$142

All-Electric Home

$166

$141

NW NATURAL GAS UTILITY STATS
SectorCustomers(as of 12/31/2022)

Gas Delivered

Natural Gas Rate

(During 2022)(Weighted Average Rates from 11/1/21 – 10/31/22)

THERMS

MMBtu

VARIABLE RATEPER THERM

FIXED RATEPER MONTH

Residential

724,287

478,092,635

47,809,264

$1.05

$8

Commercial

69,139288,499,121

28,849,912

$0.95

$24

Industrial

768

104,444,119

10,444,412

$0.76

$247

Transportation

303

381,300,739

38,130,074

$0.11

$880

TOTAL

794,497

1,252,336,614

125,233,662

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

51

Caring for Our Communities
As an essential service provider and a key employer in the Northwest, weview caring for our communities as both a moral imperative and a soundbusiness practice. We invest time and resources to benefit all the communities
we serve—especially those facing social and economic challenges. Our
customers and neighbors are key stakeholders in our business.
See a video about NW Natural’s dedication to nurturing
deep community roots and innovating for the future.
Community matters are overseen by the Public Affairs and Environmental
Policy Committee of our board of directors. Our VP, chief public affairs
and sustainability officer is the NW Natural executive tasked with primary
responsibility for government affairs and community involvement.

Stakeholder engagement
We value our community stakeholders, and we actively seek a broad rangeof perspectives in our decision-making processes. Our senior management
and board of directors use feedback received through our various outreachactivities to help inform business strategy and decisions.
Our community of stakeholders starts with our employees and extends
to our customers, business partners, suppliers, organized labor unions,shareholders, lenders, financial analysts, regulators, government officials,
community leaders, the media and nonprofits and other organizations.
Our Human Rights Policy sets forth our public commitment to work to
engage with these groups where appropriate to better enable us to listen
to, learn from, collaborate with and incorporate the views of stakeholders
into our business.
As a regulated utility, we remain transparent through regular public
meetings, workshops and proceedings before the public utility commissions
in the states where we do business. Approximately every two years, wedevelop our integrated resource plan (IRP), which describes how we plan tomeet our customers' energy needs now and in the future while fulfilling ourcommitment in helping the region reduce its impact on the climate. The IRP
is developed through a process open to the public, informed by feedback,reviewed by a diverse set of interested parties, and ultimately filed withthe public utility commissions that regulate our business. In September
2022, we filed our Integrated Resource Plan with Oregon and Washington
state regulators and went through a comprehensive engagement processwith stakeholders that was open to the public.

52

Service ethic is one of our core values, and one way we foster this value is by engaging
regularly with customers and community members through satisfaction and opinion
surveys, along with our website, newsletter and social media channels. Our government
affairs team regularly solicits feedback from governments, legislators, nonprofit
organizations and community members on important issues, trends and policies so we
can be responsive to the communities we serve. We also engage with our communities
through partnership, programs and philanthropic support of nonprofit organizations thatprovide essential services. In 2022, we continued our direct engagement with nonprofitsthat serve our low-income community and customer needs.
We aim to be the employer of choice and regularly engage with employees through awide variety of channels such as internal and external websites, meetings and events,
communications and surveys, including our annual engagement survey that is designed
to enable company leaders to gather valuable feedback and guidance from employees.
In 2022, we continued to engage in “pulse” surveys and other means in order to attend
to employee concerns. We have a hotline, maintained by a third party, available for our
employees, our communities or anyone else to anonymously raise concerns.

Our notable engagements in 2022 included:• Participated in ongoing policy, renewables project and climate action planning
discussions at the federal, state and local level, and worked with elected officials,
community leaders and nongovernmental organizations to share our low carbon
pathway goals and pipeline decarbonization strategies.
• Maintained an online customer survey and digital platform to engage withcustomers on our Low Carbon Pathway. Through this process, customers who havea greater interest in these issues can receive updates from the company and areprovided with more opportunities to engage with NW Natural and with policymakers
as part of an ongoing dialogue and feedback loop.
• Dedicated staff allowed us to increase capacity and focus on growing community
engagement. They worked with partners to continue to improve participation in
low- income and community serving programs and to increase responsiveness tocomplex needs of front-line communities.
• Continued funding and enhanced community outreach on arrearage management
resources, including partnering with community organizations to reach populations
experiencing hardship during COVID-19.
• Developed partnerships with local Community Action Agencies to increaseawareness of low-income assistance and weatherization resources.
• Attended more than 115 events and directly engaged with individuals on topics
ranging from natural gas safety to renewable energy education.
• Established a Community and Equity Advisory Group to better incorporate
underrepresented voices into our processes and programs, in keeping with

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

NW Natural’s commitment to improving energy equity and easing the energy burden
for low-income customers.
• In 2021, launched a website specific to vendors in furtherance of our efforts toengage with diverse suppliers and promote sustainable procurement. The effort has
built momentum into 2023. We have doubled the number of diverse suppliers as apart of this sustainable purchasing program.

Supporting customers during COVID-19
As the pandemic continued to take a financial toll on many households in 2022, we
focused on assisting customers who fell behind in making payments during the 18
months we suspended our normal disconnection practices to help the community
through the pandemic. We provided flexible payment arrangements and offered new
options for our customers and, in 2021, doubled the amount of time for customers tomake payments through our Time Payment Agreement program (TPA) for Oregon, to 24
months. Our comprehensive outreach programs continued to inform customers in needabout options for bill assistance, focusing on low-income, elderly, and non-native
English-speaking customers. The Arrearage Management Programs for low-income
residential customers in Oregon and Washington, introduced in 2021, provided up to 1.5%
and 1% of its respective Oregon and Washington retail revenues to fund these programs
and help customers reduce or eliminate past-due balances and avoid disconnection. The
total amount provided and committed to customers through these programs was nearly$9.4 million. The programs in both Oregon and Washington closed at the end of 2022.
The Federal COVID-19 Public Health Emergency declaration ended on May 11, 2023.

PROGRAMS TO HELP OUR CUSTOMERS STAY WARM AND PAY THEIR BILLS• Bill discounts for low-income customers• Suspension of disconnections during severe winter weather events, prolonged
periods of extreme cold, poor air quality, winter holidays and wildfires• Flexible payment options to help customers keep up with current bills andreconcile account balances• Time Payment Agreements (TPAs) that allow customers with past-due accounts
to pay in installments and avoid disconnection• A Gas Assistance Program that provides additional support for the most vulnerable low-income families and seniors in our communities• Medical Certificate exemptions and TPAs for customers with medical conditions• No-cost energy efficiency home improvements for income-qualified customers

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

53Energy assistance for low-income households
Energy equity is central to our core value of caring, and we believe it isessential to the strength and well-being of the communities where we live
and do business. We offer multiple financial assistance programs targeted
at reducing gas bills for low-income customers, especially energy
burdened households that spend a disproportionately high percentageof their income on energy costs.45 Our low-income energy assistanceprograms distributed $5.2 million in energy assistance during the 2022
program year 46—the largest distribution since the end of the 2008
recession, and the third-largest in more than two decades.

40 years of helping low-income
customers stay warmBill discounts to reduce energy burden
Looking to provide additional resources for low-income households, NW
Natural worked with a diverse coalition of stakeholders to help shape theOregon Energy Affordability Act—historic legislation that for the first timeallowed the Oregon Public Utilities Commission (PUC) to consider equity
in the ratemaking process.47 The bill passed in 2021 with the support ofregulators and organizations representing utility customers, historicallyunderserved communities and advocates for energy equity and climate
justice. This cleared the way for NW Natural to launch our Bill DiscountProgram in 2022. The program provides income-eligible customers withongoing discounts ranging from 15%–40%, in addition to other energy
assistance customers may already be receiving. To qualify, households
must be at or below 60% of the state median income level.
Recognizing that many financially eligible customers don’t take advantage
of energy assistance,48 we sought stakeholder input on how to reducebarriers that have been shown to decrease participation—including lack ofawareness, language barriers, application procedures and confusion about
eligibility. The program design includes:• Auto-enrollment of customers who have received energy assistancein the previous two years.
• Self-verification of financial eligibility.
• An intensive multilingual, multi-platform campaign to help community
action agencies and organizations inform their clients of this new resource.

54

NW Natural’s Gas Assistance Program (GAP) turned 40 in 2022, and it was a birthday worthcelebrating. Since its inception, the voluntary program has raised more than $6.6 million toassist more than 60,000 of the most vulnerable low-income families and seniors in ourcommunities. NW Natural customers, employees, retirees and shareholders all donate to theprogram, which supplements the support customers receive through federal and state energy
assistance programs. A network of community action groups distribute the funds directly tothose who need them most. Because NW Natural covers all administrative costs, 100% of thefunds are donated to the recipients. In 2022, customers facing financial challenges received
more than $120,000 from GAP to cover their heating costs.

"Our Gas Assistance Program gives our partner agencies additional
resources and flexibility to support customers when they need it."— Mary Moerlins, NW Natural Directorof Environmental Policy and Corporate Responsibility

45

Energy burden is defined as the percentage of gross household income spent on energy costs. According to DOE's Low-Income Energy Affordability Data (LEAD) Tool the national average energy burden for low-income households is 8.6%, nearly three times higher
than for non-low-income households, which is estimated at 3%.

46

The program year (PY) date range is October 1, 2021 to September 30, 2022, coinciding with the release of federal LIHEAP funds. Totals for 2022 include four temporary sources of additional federal Low-Income Energy Assistane Program (LIHEAP) funding that
became available to states through emergency COVID legislation: the Coronavirus, Aid, Relief and Economic Security (CARES) Act, the Energy Assistance Coronavirus Relief Fund (EASCR), the American Rescue Plan Act (ARPA), and the Oregon Emergency Rental
Assistance Program (OERAP).

47

Oregon House Bill (HB) 2475, passed during Oregon’s 2021 legislative session, allows the Oregon Public Utilities Commission to consider "differential energy burdens on low-income customers and other economic, social equality or environmental justice factorsthat affect affordability for certain classes of utility customers" when establishing rate classifications.

48

https://rmi.org/by-the-numbers-low-income-energy-assistance/

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Low-income needs assessment
We actively seek out income-eligible customers across our service territory tohelp them lower their gas bills. In 2022, we conducted our first low-income needs
assessment (LINA) to better understand the low-income customer base in our region.
Advanced Environmental Group (AEG), the third-party consultant we engaged, layered
multiple data sources to identify areas of high energy burden. When the research wascomplete, customers who had a high probability of being eligible for income-basedenergy assistance received postcards to inform them of available programs. Goingforward, the data will be used to help us target outreach efforts to connect with people
in the highest poverty and energy burden areas.

Outreach
We want all our customers who qualify for payment assistance to take advantage of theresources available to them. That’s why meaningful community engagement is a criticalpiece of our income-based programs. We work directly with community members andlocal community action agencies and organizations to get out the word about energy
assistance funds. Our outreach strategy includes:• Seeking community input to make sure we’re reaching out to residents
in a culturally competent way• Producing communication materials in our service territory’s five most commonly
spoken languages• Reducing barriers that prevent underserved communities from finding information
and receiving energy assistance• Maximizing the reach of our messaging through multiple communication channels,
including our customer website, four social media platforms, monthly newsletters,
emails and bill inserts.
In 2022 we created a Community and Equity Advisory Group (CEAG) that provides
NW Natural with input to advance inclusive policies and actions in a range ofimportant areas, including income-based and arrearage programs. Based on thegroup’s feedback, we created an innovative communication strategy for the launchof our Bill Discount Program. The centerpiece of the strategy was an online toolkit
that provides our partners with a variety of digital and printable content so they canchoose what works best for their clients. We engaged with 250+ community-based
partners to reach eligible clients through sources they already interact with, including
housing authorities, social service agencies, houses of worship, government agencies,
libraries and more than 835 schools.

49

Low-income energy-efficiency programs
Energy efficiency upgrades serve as a cost-effective strategy for reducing
energy use and lowering utility bills, but these upgrades are often out ofreach for people in communities most vulnerable to economic shocks suchas rising housing costs, stagnant wages and high inflation rates. These
communities are more likely to live in older, energy-inefficient housing andspend a disproportionately large percentage of their household income onenergy. This reality is more pronounced in certain racially and culturally
diverse households, who spend an average of 20% to 45% more of theirincomes on energy bills than white households.49
Our low-income energy efficiency programs in Oregon and Southwest
Washington are assigned to make energy efficiency more equitable andaccessible. Only customers who earn less than 200% of the federal
poverty line (roughly $55,000 for a family of four) are eligible for these
programs. We work directly with community agencies andorganizations to provide whole-home weatherization, efficiency upgrades
and energy education. Through our community partners we distributed$2.3 million of Oregon Low-Income Energy Efficiency Program (OLIEE)
and Washington Low-Income Energy Efficiency Program (WALIEE)
funds in 2022. To help address increased costs for energy-efficiency
projects, we joined with our community partners and other advocates toobtain regulatory approval for a 25% increase in the Oregon program’s
per-dwelling expenditure limit.

Report by the American Council for an Energy Efficient Economy, an independent nonprofit research organization that develops policies to reduce energy waste and combat climate change

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

55

Extending energy-efficiency home improvements
to more low-income households
To provide energy efficiency assistance to a greater number ofincome-eligible households in NW Natural’s Oregon service territory,
OLIEE’s Open Solicitation Program (OSP) extends support to qualified
multiple-dwelling buildings and amplifies opportunities for certain
types of dwellings and projects that fall outside the conventional OLIEE
parameters. NW Natural’s newest OSP investment will provide fullenergy retrofits for six buildings that house, shelter and care forapproximately 320 low-income children, youth and adults withintellectual and developmental disabilities.50 The buildings are owned
and operated by Albertina Kerr, one of Oregon’s leading social service
organizations. Kerr will manage client engagement and resident carethroughout the process. Oregon Energy Fund, Oregon’s premier energy
assistance nonprofit, is the project lead. National Association of Minority
Contractors — Oregon (NAMCO), a nationally respected coalition of Black,Indigenous and other underrepresented trade workers, will serve as theonsite construction manager.

2022 ENERGY EFFICIENCY PROJECTS EQUAL
SAVINGS FOR LOW-INCOME CUSTOMERS165 OREGON DWELLINGSSAVING OVER 58,000 THERMS OR 5,800 MMBTU

11 WASHINGTON HOMESSAVING ABOUT 2,600 THERMS OR 260 MMBTU

20% REDUCTIONAVERAGE ANNUAL GAS USAGE REDUCTION

50

56

All residents receive support through one or more federal programs including Medicaid, Supplementary
Security Income (SSI), free/reduced government lunch, Bureau of Census definition of disability, and therefore
meet OSP income eligibility qualifications.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Charitable Donations
Corporate philanthropy is an integral part of NW Natural's company culture and an
enduring example of our core value of caring. Through our shareholder-funded
Corporate Philanthropy Fund we gave nearly $900,000 to more than 300 local
nonprofits in 2022, with an emphasis on supporting youth and family resiliency.
Funding also went to organizations focused on health and human services,
environmental stewardship, and arts and culture.
Inclusion and belonging guide our charitable giving, and we’re committed to working
with the community to improve outcomes for people who face barriers based on racial,social, economic and geographic inequalities. We prioritize requests from organizations
that demonstrate actions, programming and practices that align with a commitment toinclusion and belonging principles.

2022 CORPORATECONTRIBUTIONSBY CATEGORY
Families & Children in Crisis
Youth Services & Education
Environmental Stewardship
Other

7%
16%

22%

55%

Spirit of Giving
Employees play an important role in NW Natural’s efforts to give back to the community.
Every fall, employees and retirees donate to their favorite local nonprofits through our
Spirit of Giving campaign, and a 100% match from the shareholder Corporate Philanthropy
Fund doubles the impact of their generosity. In 2022, employees gave over $163,000 to
local nonprofits and good causes, exceeding the previous year’s number of participants
and donations. Together with the company match, employees and retirees contributed
nearly $326,000 to local charities.

Top 10 Employee-Supported Nonprofits in 2022

Dollars for Doers
Through our Dollars for Doers program, NW Natural makes financial
contributions to the nonprofit organizations employees support with
their time. The program, funded with shareholder dollars through thecorporate philanthropy fund, is one of the ways NW Natural supports
our culture of caring and the good work employees do in the community.
Watch a video about Dollars for Doers

The following top 10 organizations received the highest numberof employee contributions in 2022 through the company’s annual
Spirit of Giving campaign:

1. Oregon Food Bank Inc.

6. Oregon Humane Society

2. Janus Youth Programs Inc.

7. United Way of
The Columbia-Willamette

3. Casa For Children Inc.
4. Path Home (formerly Portland
Homeless Family Solutions)

8. Portland Rescue Mission

5. Black United Fund of Oregon Inc.

10. Oregon Public Broadcasting28

Number of 2022 Dollars for Doers grants

7,584

Estimated Dollars for Doers volunteer hours in 2022

8

Average number of years Dollars for Doers volunteers
have been engaged with their organizations

9. Meals On Wheels People Inc.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

57

NW Natural's Volunteer of the Yearwants to tell the story of all Oregonians
Darren Nakata’s community leadership reflects his passion for history and education, as well as his
deep roots in and commitment to the community.
Nakata, who is NW Natural’s general counsel for NW Natural Water and NW Natural Renewables,
is proud to serve on the Oregon Historical Society’s (OHS) board of trustees and help make Oregon’scollective history visible and accessible to all. He is passionate about the potential of the organizationand its ability to educate by telling stories that encompass the voices of all Oregonians.

Living NW Natural’score value of caring
As the Russian military invasion escalated in
Ukraine in 2022, NW Natural pledged to match
up to $5,000 in employee donations to provide
shelter, food, water, and medical supplies andservices. Dina Thompson, enterprise applications
director in NW Natural’s Information Technology &Services department (IT&S), couldn’t help her family
members who were hiding from Russian missile
strikes in the basement of their building in Ukraine.
But she wanted to do something to help otherUkrainians, so she reached out to her fellow
NW Natural employees. They came through, using
the employee giving website to donate more than
$5,000 and maximize the company match. When
Thompson’s family finally made it across the Polishborder, IT&S solutions architect Jerzy Bilchuk andhis family in Poland helped them find housing.
"People at NW Natural have been wonderful,”
Thompson said. "There is still a lot of good in theworld, and my family experienced that."58

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent
Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant
to investment decisions.

Nakata traces this commitment back to his own family history. During World War II, his father, an
American-born U.S. citizen, lost everything he and his family ever had when they were removed fromtheir home in Portland, Oregon and incarcerated—first in a horse stall, then in a makeshift prison campin the Idaho desert for nearly four years. Nakata’s father nonetheless went on to serve in the U.S.
military and forge a successful career in international trade and finance. Finally, he built a second
career teaching about his family’s story, with the hope that educating Oregonians may better ourcollective understanding of the importance of constitutional rights and help prevent future injustices.
"My family's story is just one of many that make up Oregon's many-layered, rich and complex history,"
Nakata said. "OHS is tirelessly working to capture Oregon's incredible story, including shedding lighton important new stories that have not been heard before."Programs of Focus
Through Programs of Focus, NW Natural supports local organizations making a
difference for children and families in our communities. Grant recipients are chosen
through a competitive review process that actively engages a diverse group of
employees from across the company. The program is NW Natural’s highest levelof philanthropic support.

"As members of the communities we serve, our employees are best
suited to direct our philanthropic giving and help respond to uniquecommunity needs."— Mary Moerlins, NW Natural Directorof Environmental Policy and Corporate Responsibility

Over the three years ending in 2022, Programs of Focus gave a total of about $500,000 tofive local organizations that support children and families at risk. In 2022, the company
announced its Programs of Focus for 2023 -2025. Four local organizations will receive$420,000 in unrestricted funding over the next three years, along with in-kind resourcesand volunteer support from employees.

2023-2025 Programs of Focus:
Adelante Mujeres provides holistic educationand empowerment opportunities to marginalized
Latina women and families to promote their fullparticipation and active leadership in the community.
Asian Health & Service Center (AHSC)
works to bridge gaps between Asianand American cultures, reduce healthinequity and improve health care quality for all Asians. Funding fromNW Natural will enable AHSC to assist Asian immigrant students andtheir parents in Portland Public Schools.
Growing Gardens uses the experience ofgrowing food in schools, backyards andcorrectional facilities to cultivate healthy,
equitable communities. The organization builds gardens with thecommunity to create equal access to nourishing food and help people
become stewards of their own neighborhoods.
Store to Door supports independent living for
Portland-area homebound seniors and adults livingwith disabilities. Through their volunteer-based
grocery delivery program, the nonprofit provides social and community
connection, food access and food security.

Conservation Champion Award
In 2022 NW Natural launched a new Conservation Champion Award, which provides more than $100,000 over three years to help
environmental nonprofits grow capacity, develop innovative programs or reach new audiences. The award includes an annual cash
grant, in-kind resources and multi-level organizational engagement. Awardees are chosen from among nonprofits that haveestablished relationships with NW Natural. The first recipient for 2023-2025 is Oregon Bee Atlas, a volunteer-powered organization
based at Oregon State University. The group has compiled a comprehensive publicly accessible inventory of the state’s 700+ speciesof wild bees, and volunteers also meticulously document what flowers each bee visits. The award from NW Natural will be used toturn the data into a tool that will help people match the plants in their region to the bees that live there.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

59Political Contributions
NW Natural makes campaign contributions to state and local
candidates and political committees and caucuses, as allowed by law.
Our Code of Ethics sets forth our expectations regarding the use ofCompany funds for political purposes. We also maintain memberships
in various business and trade associations that advocate on public
policy. In 2022 we made campaign contributions and had lobbying
expenditures totaling approximately $1.5 million.51

For more information see also:
Supporting our Community
Bill Assistance Programs

Community Events

51

Calculated using Internal Revenue Service guidance

Hospitality engagement is part of NW Natural’s long history of community support, andevery year we contribute resources for events organized by nonprofit, community andcivic organizations. We make it a priority to maintain these longstanding partnerships.
In 2022 we ramped up our engagement activities as our partner organizations resumed
in-person events after a long period of cancellations due to the pandemic.
Our community events team served 8,300 meals and provided 174 loaner tents forevents held by groups such as Pride Northwest, Portland Veterans Stand Down and
CASA. NW Natural’s big blue tents and canopies have long been a familiar sight at local
gatherings, and they popped up again across our service territory in summer 2022 as
we helped organizations welcome people back. We also resumed our emergency
preparedness events, in partnership with local fire departments. We provided freelunches at several of these events, feeding up to 900 people in a few hours.
Part of our mission is to provide in-kind resources for organizations that receive
support through our charitable donation programs like Programs of Focus. As theseorganizations restarted their pre-pandemic activities, we ramped up delivery of
resources such as food service, event support and use of NW Natural conference
space. For example, A Village for One, one of our 2020-2022 Programs of Focus, held
its annual fundraiser at our downtown Portland headquarters, and we contributed
the space along with a full buffet dinner for 120 guests. Events like these are core
to how we show up for our communities.

60

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

NW NATURAL

People & Culture
We owe our success to the dedication of our employees. We’re committed to supporting,engaging and empowering them in a work environment where they can thrive and grow.
NW Natural has a longstanding commitment to creating a diverse, inclusive culture thatreflects and supports the communities we serve. We believe that excellence and innovation
requires a focus on diversity, equity, and inclusion (DEI) of all our employees.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

61

People and Culture Highlights

82%

of NW Natural employees describe
themselves as having a sense of
belonging at work
(2022 employee satisfaction survey)

WOMEN COMPRISED 45%
OF NW NATURAL HOLDINGS’
BOARD OF DIRECTORS

45%

WOMEN

100%

100% of employees who work more than
20 hours are eligible for all benefits
including paid time off; employees who
work more than 40 hours are eligible for
additional benefits including full medical
and dental coverage.

WOMEN COMPRISED
38% OF NW NATURALEXECUTIVES5238%

NW Natural Holdings
has the highest gender
diversity rating (“GB”
for gender balanced)
from 50/50 Womenon Boards

Launched a redesigned mentoring programthat includes diversity initiatives and aligns
with NW Natural's commitment to equity
and belonging

Added the Neurodiversity Network,
our seventh Employee Resource
Group (ERG)WOMEN

NW Natural Holdings is one of 7% of publicly traded companies
in the U.S. with a woman board chair 53

MLK
Launched theCommunity & Equity
Advisory Committee toaddress energy inequity

62

Martin Luther King Jr.
Day and Veterans Day
celebrated as new paid
company holidays

Expanded the Diversity,
Equity, and Inclusion portionof orientation program for
new hires, including content
that introduces the concept of
unconscious bias on day one

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Launched a supplier diversity page on our
website to highlight opportunities for diverse
businesses to work with us and help themnavigate the process of becoming a certified
culturally or racially diverse business.
52

As of June 2023

53

According to the Women Business Collaborative April 2022 report

“I am proud of our employees who embody
the ethics of NW Natural. The sense of
belonging and collaboration throughout
the company is evident.”— David Anderson, NW Natural CEO

Our 2022 workforce

10

Average yearsof employment

45

Average ageof employees

4.9%

Retirement rate

6%

Voluntary separation rate
(not including retirements)

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

63Employee benefits
NW Natural strives to offer competitive total compensation packages
designed to attract and retain employees and meet the needs of ourworkforce. We continuously look for ways to enhance employees’
physical, psychological and financial well-being, and this is reflected in
the programs we offer to meet the needs of employees and help themcare for their families. These benefits are outlined below.54
Health coverage for all full-time staff. We provide multiple insurance
carrier and health plan options for employees to choose from. All plansinclude outpatient and inpatient medical care, vision and dental
insurance, and coverage for dependents.
Flexible work options. We offer a hybrid work model based on meeting
individual employees’ needs and working styles. According to the Societyfor Human Resource Management, flexible work options are the mostsought-after work benefit today.
Generous vacation policy. NW Natural non-union employees start with160 hours of vacation at beginning of employment, while the average forother utilities in the Northwest is 66 hours for new hires.55 Nationally, theaverage number of vacation leave hours reaches 160 only after 20 yearsof employment.56 Non-union NW Natural employees receive 248 hours of
paid vacation (about six work weeks) after 15 years of service and union
employees recieve 208 hours of paid vacation after 13 years of service.
Paid holidays and leave. In addition to vacation time, employees have
10 paid holidays—including Martin Luther King Jr. Day and Veterans
Day—plus three floating holidays. We also provide paid parental andbereavement leaves.
Paid sick time and disability insurance. Non-union employees get 80
hours of paid sick time annually, more than the national average reportedby the U.S. Bureau of Labor Statistics. The company pays for short- andlong-term disability insurance that provide some wage replacement
when an employee is out for a qualifying health condition.

64

Career development. We invest in employees’ career growth through tuition assistance,
professional training programs and a robust mentoring program developed with anemphasis on cultural relevance for underrepresented groups. ERGs and other internalorganizations help employees form connections and visualize what opportunities areavailable. All employees have access to LinkedIn Learning self-guided professional
development modules.
Financial wellness. We provide 401(k) with employer match, automatic employer
contribution to 401(k) for non-pension employees, stock purchase plan, pension for
employees hired before 2007 (non-union) or 2010 (union).
Onsite offerings. We offer free fitness centers at our downtown Portland headquarters
and most resource centers. The headquarters building features indoor bike parking,ergonomic workstations, lactation and quiet rooms and access to nature on our rooftop
deck. Employees who work downtown can get a company-paid public transit pass.
54

Our package options vary depending on date of hire and whether the employee is full-time, part-time or a union member.
Employees who work more than 20 hours are also eligible for certain benefits

55

2022 Milliman NW Benefits Survey

56

Average PTO In USA & Other PTO Statistics (2023) – Forbes Advisor

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Healthcare &Insurance
MedicalDentalVisionFlexible
Spending
Accounts

HealthSavings
Account

Life
Insurance

Short-Termand Long-Term
Disability

Transgender-inclusive
benefits

Wellness

Financial

Health screenings,
Flu and COVID-19 shots

401(k) with employer match

Free fitness centers(company headquarters &certain resource centers)

Automatic employer contribution
to 401(k) for employees not in
pension plan (regardless of
employee contribution)

Paid Time Off(PTO)

Activity rewards program

Financial education workshops
for all employees

Tobacco cessation

Employee stock purchase plan

Digital Wellness Librarywith resources on mental
health, nutrition, seasonal
health considerations

Pension for employees
hired before January 1, 2007
for nonunion and January 1, 2010
for union employees

Work Ready digitalwellness andinjury-prevention
program, available toemployees and families

Wellness
Advisory Committee
Lactation & quiet rooms(company headquarters)

Work-Life Balance

NW Natural Scholarship programfor children of employees—awards
four scholarships toward full-time
study at an accredited institution
PTO Buy-back Program(union employees)
Tuition reimbursement
program for employees seeking
job-related degrees at
an accredited institution

Culture & Community

Employee Recognition& Discounts

Seven Employee
Resource Groups

Formal employee-recognition
program

Volunteer opportunities,
recognition and financial
support for volunteer work

Recognition of years of service(every five years)

Paid holidays (10)plus threefloating holidays
Sustainability andEquity Engagement
Committee
Flexible andhybrid work
arrangements,
based on employees’
needs andworking styles
Employeeassistance program
Education assistance
Paid parental leave
Paid bereavement leave
Predictable schedulingfor hourly employees

Diversity, Equity &Inclusion Committee
Company matchfor employee
charitable giving
Casual attire
dress code in the office

20% off natural gas service

Free public transit pass(company headquarters),
bike room, and carpoolingsupport programs

Discounts onnatural gas appliancesand equipment at
the NW Natural
Appliance Center

Vendor discounts
on personal technology,
sportswear, carsharing

Learning
opportunities,
including lunch & learns

Community and Equity
Advisory Group

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Discounts at
cultural and entertainment
establishments

65

Pay equity

2022 EMPLOYEE SURVEY RESULTS

We strive to compensate all our employees equitably, and we haveestablished multiple initiatives to help us achieve pay equity across
our workforce.

77%

Employees participated86%

Proud to work for NW Natural• We periodically review pay to provide adjustments when needed
during an employee’s tenure. These reviews include: internaland external equity reviews, promotions, reclassifications andreorganizations.

84%

Engaged, committed, and enthusiastic
about their work at NW Natural

Employee satisfaction

82%

Feel like they belong at NW Natural• We do a comprehensive pay analysis for each new hire.
• To help identify opportunities for improving equity, an external
consultant annually reviews all our regular employees’ pay data,
including protected characteristics such as gender and race.

Every year we conduct an engagement survey to ask our employees
how satisfied they are with their individual jobs, supervisors, work groups
and the company overall. This feedback gives company leaders valuableguidance on ways to make NW Natural a more effective company and abetter place to work. Every officer reviews the survey results, andfrontline managers are encouraged to initiate meaningful dialogue with
employees about the responses their teams provided. NW Natural CEO
David Anderson and our officers regularly visit resource centers toanswer questions and get input from field employees.
Results of our 2022 survey indicated that employees were highly engaged
in their work in the face of a challenging year. Nearly 84% of employees
described themselves as engaged in their work in 2022, compared withjust 32% of American workers. About 77% of our workforce completed
the survey — in contrast to the average response rate of 25-60% in U.S.
companies. NW Natural donates up to $1,500 to the Oregon Food Bank
every year based on survey participation and in 2022 contributed the
maximum amount.

EMPLOYEES ALSO AGREED OR STRONGLY AGREED WITH THE FOLLOWING:• My work area operates with integrity and ethical conduct (96%)• We demonstrate safe work practices in our work area (95%)• We engage with customers and the community in a way that
respects and values diversity and inclusion (94%)• I understand the importance of my job to the success of NW Natural (93%)• We provide excellent service to our external customers (91%)
While employee engagement slumped nationwide in 2022, NW Natural’s engagement
survey showed favorable responses57 in every category, and more than half of all
responses were above 80%. We did see modest declines in some areas, as employees
contended with external and internal challenges including rapid inflation, rising gas
prices, and customers’ questions about rate increases. However, thanks to our
dedicated employees, we successfully delivered essential utility services,with a focus on safety, reliability and customer service.

57

66

Responses with a score of seven and above are considered favorable. Gallup's Exceptional Workplace Award winners averaged
70% employee engagement

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Employees gave their immediate supervisors high marks for providing regularfeedback (86%), sharing goals and priorities of the company (87%), following through(90%), allocating people and resources wisely (87%) and being open to feedback (90%).

A work model that works for employees

84% of NW Natural employees described
themselves as engaged in 2022, comparedwith just 32% of employees nationwide.

As we planned for the transition to a “new normal” after pandemic restrictions began toease, we asked employees to give us their thoughts about what our workplace shouldlook like going forward—and we listened. Based on their feedback, our officer team
implemented a flexible hybrid work model that allows managers and supervisors todecide what’s best for the people they lead, as long as work arrangements meet thecompany’s goals and continue to support our high level of customer service.

“NW Natural is a great place to work, and the addition of flexible work
schedules and hybrid capabilities is helping retain good employees
and work life balance."— 2022 Employee Engagement Survey respondent

In 2022, we continued supporting all our employees with psychological services,
resiliency support, and frequent surveys. During catastrophic events, employees haveaccess to a long-standing fund that assists with needs. While the majority of ouremployees work in the field and maintained their work schedules and locations
throughout the pandemic, in 2022 most NW Natural office employees who had beenworking at home for three years began returning the company’s downtown Portland
headquarters at least part of the time. We conducted a survey at the end of 2022 to track
how people were doing with the hybrid work model, and results were overwhelmingly
positive, with 97% of employees saying their manager trusts them to manage their timeand 93% saying their team is connected and productive while working a hybrid schedule.

Productive partnership with our union employees
More than half of NW Natural employees are represented by the Office and Professional
Employees International Union Local 11. The company has a history of maintaining good
relations with the union through communication and collaboration. Working together,
union and NW Natural leaders reached a mutually beneficial agreement in 2019 that is ineffect through May 31, 2024. During calendar year 2022, NW Natural did not experience
any work stoppages (strikes or lockouts) and had zero idle days for the year.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly andperiodic reports for information relevant to investment decisions.

67

Growth and development
To help employees reach their full potential, NW Natural provides growthand development opportunities through programs designed to build skills
and relationships. In 2022, the company offered many learning anddevelopment options including:• Mentoring program – In 2022 we launched an all-new mentoring
program to provide a fresh path for employees committed to personal
and professional growth to connect with mentors who have experiences
to share. The program was designed from the ground up to offer robust
opportunities for development and to increase cultural relevance for
racially and culturally diverse employees.
• Scholarships and tuition – Qualified employees are eligible for tuition
support of up to $5,250 per year for undergraduate and graduate
degree programs. Employees have received more than $700,000 in
assistance for higher education over the past 10 years. NW Natural
also awards four annual scholarships to children of employees
seeking a degree at an accredited institution.

New mentoring program aims to empower adiverse workforce, one relationship at a time
In keeping with our core value of caring, NW Natural first createda mentoring program in 2006. In 2022 we launched Mentoring 2.0,
designed from the ground up in partnership with our Diversity, Equity& Inclusion Council and ERG leaders. The new program offers robust
new growth and development opportunities and aligns with NW
Natural’s commitment to fostering an inclusive culture and ensuring
racial, cultural, ethnic, and gender equity in all aspects of our work.
With a focus on reaching women and historically marginalized groups,
Mentoring 2.0 helps mentees build professional relationships, identify
potential career paths at NW Natural and develop strategies foradvancement. Mentors receive nine training sessions to help themstrengthen coaching and communication skills, listen effectively andengage productively with people who have different experiences andviewpoints. The first 25 mentor/mentee pairings were identified in 2022
and met in early 2023. The mentor group included four officers, and thementees were 28% women, 40% of whom were culturally or raciallydiverse. Participation in the new program is on paid company time.

68• Gas class – Our internal class gives employees a chance to learn
how the company operates, better understand how they contribute toachieving our key goals and see opportunities for career growth. For
years the class was offered in-person only, which meant the class size
was limited. In 2022 NW Natural’s Organizational Effectiveness teamredesigned the course as an online offering with a flexible, virtual
format that makes it available to all employees.
• Leadership and employee development – Many employees attend
internal and continuing education courses relevant to their areas ofexpertise, as well as ongoing management and leadership training
through a variety of programs. In 2023 we intend to expand our internal
leadership learning program to reach all managers across the company.
Our list of training and development programs include: University of
Idaho Energy Executive Course, Portland Business Alliance (nowPortland Metropolitan Chamber) Leadership Portland program,
AGA Executive Leadership Development Program, Willamette Utility
Management Certificate Program, WEI Business Acumen for Emerging
Leaders, Willamette Leadership for Attorneys in Business, Executive
Development Institute (EDI) programs, Executive Forum Advanced
Leadership program, AGA Next Level Leadership Women’s Programand Utility Finance for Non-Finance Professionals.
• Access to comprehensive learning programs – Employees have fullaccess to LinkedIn Learning’s massive collection of online skill-building
courses taught by industry experts.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Workplace culture and community engagement opportunities
We’re continuously developing programs and ways to engage our employees, help
them connect to their colleagues, and pursue their interests. In 2022 employees had
the opportunity to participate in a range of activities to connect with their peers.

WELLNESS ADVISORY COMMITTEE – The committee helps guide the company's
wellness program, offering advice, new ideas and feedback from their peers tofurther the health and well-being of all NW Natural employees.
SUSTAINABILITY & EQUITY ENGAGEMENT COMMITTEE (SEEC) – The employee-led
SEEC builds a broad coalition around energy, equity and environment practices at
NW Natural. The committee promotes sustainable practices within the company, andserves as a conduit to management as well as community partners working to address
climate change and environmental equity. The SEEC presented a series of lunch andlearn events to educate employees about Earth Month.
COMMUNITY & EQUITY ADVISORY GROUP (CEAG) – Established in 2022, CEAG focuseson energy equity, specifically aiming to expand energy access and remove barriers forunderserved customers. Led by employees, this group seeks out and engages withdiverse organizations and underrepresented voices within our community to bring a
racial equity and environmental justice lens to our energy and operational planning.

ECOCHALLENGE – NW Natural employees embraced the Ecochallenge in
2022, integrating sustainable actions into their daily lives while earning
points and winning prizes. The SEEC, in partnership with the Wellness
Committee and the DEI Council, connected employees with a 21-day
event run by Ecochallenge.org, a social change platform that encourages
a more sustainable way of living.
DOWNTOWN CLEANUP – NW Natural employees volunteered in thesecond annual cleanup event sponsored by SOLVE to help remove
4,715 pounds of trash and revitalize downtown.
BIKE CHALLENGE – The SEEC encouraged employees to reduce theircarbon footprint, connect with others and get moving in the 2022 Bike
Challenge. Participants logged their miles via an app, and every ride
counted, whether for fun, fitness or a commute to work.
ROSE CITY 5K – NW Natural was the start line sponsor of the annual
Rose City 5K run, which returned in 2022 after a COVID-19 hiatus. The
company’s sponsorship allowed employees to register for free andattend a post-race celebration in Portland’s Waterfront Park.
COMPANY PICNIC – After a two-year break during the pandemic, the
NW Natural company picnic returned to Portland’s Oaks Amusement
Park in July 2022. Employees, retirees and their families attended theevent, which featured rides, craft activities and food prepared and servedby the NW Natural catering team.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

69

Diversity, Equity & Inclusion Strategic Focus
At NW Natural, we know all of us benefit when we amplify underrepresented
voices, celebrate our differences and create an environment where everyone
can contribute, thrive and prosper. We prioritize cultural, racial, and gender
equity in all aspects of our work, from our hiring and daily operations, tothe way we interact with our customers and communities, to the biggest
decisions we make as a business.
To accelerate our work in this area, we hired an outside consultant toreview our progress on diversity. We convened focus groups and createdan assessment and a set of recommendations for our executives.
Incorporating this feedback, in 2019 we introduced a comprehensive
DEI strategy overseen by the Public Affairs and Environmental Policy
Committee of our board of directors. We view events of recent years
and the growing movement for racial equity as opportunities toaccelerate our work and serve as an active force for change.

LEADERSHIP. Diversity starts at the top, and we are proud to have racially or culturally
diverse individuals and women in leadership positions. In 2022 our board received
the highest gender diversity rating (“GB” for gender balanced) from 50/50 Women on
Boards; only three companies in Oregon and 11% of Russell 3000 companies wererated as gender-balanced. According to the investment research firm Morningstar,better stock price performance and value-creation strategies are associated withgreater women representation on boards and management teams.58

Women hold 45% of the seats on NW Natural Holdings’ board of
directors, and our board chair is a woman. Nationally, women hold28% of seats on the boards of publicly traded companies,59 andonly 7% of publicly traded companies have a woman board chair.60“Diversity is critical to NW Natural’s future success and an
important part of our culture and values. We know that a
broad base of perspectives, experiences, and ideas will be
our strength in a changing world – and a critical component
to achieving the company’s strategic plan.”

NW Natural
Holdings

Russell 3000
Companies

Percentage of board membersthat identify as racially or culturally diverse

27%

17% 61

Percentage of board members that identify as women45%

28% 62

Percentage of women that hold C-suite positions

38%

32% 63— David Anderson, NW Natural CEO

NW Natural
Gender 2022

PeopleWe actively work to build a diverse workforce that reflects
the communities we serve. We have a diversity strategy for all levels
in our organization, including senior management. Our VP, chief HR anddiversity officer leads these efforts and reports directly to the CEO
because we believe a diverse, equitable and inclusive workplace
is vital to our long-term success.

70

NW Natural
Holdings’ Board

Executive
Management

Mid & OtherManagement

All
Employees

Women

45%

38%

30%

27%

Men

55%

62%

70%

72%

Nonbinary

0%

0%

0%

<1%

Decline to Respond

0%

0%

0%

<1%

58

Morningstar Sustainability Matters, March 2023

59

As calculated by 50/50 Women on Boards, through September 2022

60

Fortune – More women are on boards, but few are chairs or lead directors, February 2023

61

5050WOB-Q4-22-Infographic-Final

62

5050WOB-Q4-22-Infographic-Final

63

Women in business 2022 | Grant Thornton insights

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

21%

EMPLOYEES
self-identified as raciallyor culturally diverse

WORKFORCE DEMOGRAPHICS. NW Natural highly values every
employee from every generation, background, and way of life. Our
diverse skills, deep company knowledge, unique perspectives, and broad
experience help us meet customers’ needs. In 2022 nearly 21% of ouremployees self-identified as racially or culturally diverse — an increase of
more than 23% since 2012. NW Natural maintains affirmative action plans
and these programs have been in compliance with every federal audit
since 2017.

Actively building a workforce
that reflects our communities
NW Natural2022

Oregon 2020
(Census Data)

American Indian or Alaska Native

3%

1%

Asian

6%

5%

Black or African American

4%2%

Decline to Respond

1%

N/A

Hispanic or Latino

5%

13%

Native Hawaiian or Other Pacific Islander

1%0%

Two or More Races

2%

4%

Undeclared/unknown

<1%

N/A

White

78%

75%

Race/Ethnicity

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the mostrecent quarterly and periodic reports for information relevant to investment decisions.

71

21%

EMPLOYEE DEMOGRAPHICS

A MULTIGENERATIONAL WORKFORCEAGE CATEGORIES

27%

WOMEN

17%

NW NATURAL
2022

VS.

23%

20-29 years

7%30-39 years

25%

40-49 years

28%

50-59 years

27%

60-69 years

12%

70+ years

1%

8%

WOMEN

6%

NATIONAL INDUSTRYAVERAGE 202264

Average age

3%
1%
2022

2012

DISABILITIES*

2022

2012

VETERANS*

2022

2012

RACIAL & CULTURAL
DIVERSITY

45*Disabilities and Veterans’ data is collected via voluntary employee disclosure beginning in 2015 and may be underreported.

64

72

U.S. Bureau of Labor Statistics, 2022 Labor Force Statistics from the Current Population Survey. Employed persons by detailed industry, sex, race, and Hispanic or Latino ethnicity : U.S. Bureau of Labor Statistics (bls.gov)

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Workplace culture and community
NW Natural offers a multitude of ways for employees to pursue their interestsand connect with their colleagues. In 2022, employees participated in a range ofactivities that strengthened and celebrated our work community.

DIVERSITY, EQUITY & INCLUSION COUNCIL – Founded 23 years ago, the DEI Council isa group of employees from across the company who work to make NW Natural a morediverse, inclusive and welcoming workplace for everyone. The council supports thisvision through education, outreach, advocacy and action. In addition to being a force forpositive change, employees who join the council have opportunities to learn new skills
and grow in their careers.
EMPLOYEE RESOURCE GROUPS (ERGS) – The DEI Council developed NW Natural’s
ERG program in 2020 to provide employees—especially historically underrepresented
groups—with a space to foster connections and create a sense of community at work. In
addition to helping their NW Natural co-workers understand and value differences, ERGs
engage in community outreach, partnerships, and support recruiting, development andadvancement of diverse employees within the company. Job seekers tell our recruitersthat the ERGs have been a positive factor in choosing to work for the company.

CURRENT ERGs

In 2022 NW Natural:• Launched our new Neurodiversity Network ERG, bringing our total number to seven• Hosted a PDX ERG event in Portland, bringing together 60 participants from 11 different
companies to discuss DEI training ideas and best practices• Conducted leadership training for ERG members to build their strengths as ERG leadersand prepare them for future leadership roles within the company

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly andperiodic reports for information relevant to investment decisions.

73

Honoring Juneteenth – 2022 marked the first year Oregon has observed Juneteenth
as a state holiday. Juneteenth commemorates the end of slavery in Texas, the last statein the U.S. to comply with the Thirteenth Amendment. NW Natural’s DEI Council and theAfrican American ERG invited their fellow employees to join in recognizing Juneteenthand provided resources with information about celebrations throughout Oregon.
Hispanic Heritage Month celebration – Honoring the contributions and achievements of
Hispanic and Latin Americans, the four-week event at NW Natural showcased the richdiversity of these cultures. Somos Unidos, NW Natural's Hispanic and Latin American
Employee Resource Group, kicked off the month with a special rooftop fiesta at thecompany’s downtown Portland headquarters, where attendees lunched on fare fromlocal Hispanic and Latin American businesses and homemade dishes provided by Somos
Unidos members.
Indigenous People’s Day – "Honoring Indigenous People" was the focus of the October
2022 "Be the Change Challenge" through the Virgin Pulse digital health and wellbeing
program available to all NW Natural employees. Participants could watch a video, readarticles, listen to a podcast, and/or support a nonprofit related to Indigenous People.

ERG-SPONSORED ACTIVITIES IN 2022 INCLUDED:
Celebrating Black History Month – Sponsored by NW Natural’s African
American ERG, this celebration featured a month of profiles, videos andother content to shine a light on the many ways Black Americans haveshaped U.S. history, politics, culture and more.
Women’s History Month – NW Natural’s Women’s Network held a monthlong celebration of the economic, cultural and political achievementsof women, with events to engage employees in discussions focusedon empowering them in their lives and careers and contributing toa workplace where everyone feels respected and supported.

Spotlight on gender awareness – During Non-Binary Awareness Week, NW Natural’s
Rainbow Alliance ERG invited employees to learn about and support individuals whose
identity falls outside traditional gender norms. The alliance sponsored a free workshop,
Understanding Gender 101.
March for Babies – NW Natural’s African American ERG and Women's Network ERG
sponsored the company’s team in the March of Dimes annual March for Babies walk,which raises funds to create positive change for moms and babies everywhere, especiallythose most at risk.

Honoring Asian American heritage – To celebrate Asian Pacific American
Heritage Month, NW Natural’s Asian American Network ERG curated alineup of virtual events, documentaries and articles that showcased thestruggles and achievements of Asian Americans and gave employees anopportunity to explore and experience the diverse aspects of Asian andAsian American culture.
Pride Parade – In July 2022, NW Natural employees took to the streets in
the Portland Pride Festival and Parade and celebrated at an after-party
hosted by the Rainbow Alliance ERG.
Paying tribute to Veterans – On Nov. 11, 2022, NW Natural employees forthe first time celebrated Veterans Day as a paid holiday to acknowledge
those who have served in the armed forces.

74

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

“Neurodivergent employees make unique contributions in the workplace. They
may have skills like creativity, perseverance, pattern-recognition, keen memory
and acute observations. Having someone who’s neurodivergent on your teamcan help keep the team robust and healthy.”— Vance Voyles, Engineering Technical Coordinatorand Neurodiversity Network ERG co-founder

Recruiting more diversity into NW Natural – 2022 highlights

Neurodiversity Employee
Resource Group celebrates
diverse perspectives
In 2022 employees spearheaded the creationof a Neurodiversity ERG to encourage the viewthat human brains function in diverse waysthat should be recognized and respected as
differences rather than deficits. The group’s
vision is to raise awareness, build acceptanceand increase openly neurodivergent
representation in company leadership andprograms. A top priority is to provide awelcoming atmosphere for neurodivergent
people from communities that have been
marginalized. The ERG also supports
employees who have neurodivergent family
members or dependents, offering resources
and connections to help caretakers createa happier life outside work and focus more
effectively when they're on the job.

Increasing the diversity of our workforce through recruitment is a top priority at NW Natural.
A significant focus is to understand and increase awareness of systems and structures that could
limit representation and equity for prospective employees. We have a comprehensive approachthat includes implementing new recruitment and hiring strategies, increasing our pool of diverse
candidates through our community partnerships and providing anti-bias training for HR and hiring
managers. We achieved the following results in 2022:• Increased the diversity of NW Natural’s construction team by 11% from 2018 to 2022;
now 29% of employees on the team are from historically underrepresented groups.
• Offered full-time positions at NW Natural to 83% of participants in our Construction Internship
Program, which provides paid on-the-job training for members of underserved populations.
• Launched a new, union-endorsed internship program for Construction Field Services• Leveraged our partnerships with local agencies to raise awareness about our commitment
to building an inclusive, welcoming workplace for everyone.
• Partnered with Urban League Construction Careers Training Institute to inform job candidates
about opportunities in construction and Customer Field Services at NW Natural.
• Strengthened relationships with Urban League and other community partners such as
National Association of Minority Contractors, Oregon Tradeswomen, and Constructing Hope.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

75

Diversity in the field
To serve our communities and promote diversity within our field workforce, we work
to create employment opportunities for underserved populations. We launched
an innovative Construction Internship Program in 2018 to seek out high-quality
prospective employees who might not have the background to qualify for—or even findout about — a well-paying construction job. Every year the program provides up to 12
interns with nine months of paid on-the-job training and practical work experience thatcan lead to full-time employment at NW Natural. We recruit applicants through local
public schools, careers fairs, online channels, social media and community organizations.
All our 2022 interns were diverse employees, and 83% were offered full-time positions
at NW Natural at the end of the program.
In 2022 we expanded our outreach by building on our strong relationship with Urban
League of Portland. NW Natural became a regular presenter at the Urban League’s
Construction Careers Training Institute, and one of the institute’s graduates subsequently
joined the company as a construction intern and has been hired as a full-time employee.
Based on the success of the program, we created a Construction Field Services
internship program in 2022.

Employees engaged
in recruiting diverse candidates
NW Natural employees attended or hosted many
events in 2022 aimed at recruiting women and raciallyand culturally diverse employees. These included:• “Say Hey” virtual networking events sponsored
by Partners in Diversity to welcome culturally or
racially diverse professionals who are new toOregon and Southwest Washington. NW Natural
is a founding member of Partners in Diversity, and
our VP, chief human resources and diversity officer
serves on the organization’s board.
• The Urban League of Portland Career Connections
Job Fair, which focuses on diverse job seekers.
• Urban League’s Construction Careers Training
Institute, where candidates gain the skills
necessary to enter the construction field.
• Constructing Hope, which supports women andculturally and racially diverse people in various
industries.
• Centro Cultural held a networking gala that wassponsored and attended by NW Natural employees.
• Participated in the Military Western Regional
Virtual Career Fair hosted by Military X. The career
fair is for active and retired military personnel
looking for jobs in the civilian world.
• Happy hours sponsored by Portland Women in Tech,
which helps empower women, nonbinary andunderrepresented people to join and remain in
the technology field.
• Used the Handshake platform to share NW Natural
job listings with colleges and universities, including
culturally diverse institutions of higher education.

76

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Constructing a career
When she was in high school Amanda Sears Wyman knew she wasn’tinterested in the college degree her counselors and teachers seemed
to be promoting. “My family can’t afford college, and it was just not
something I saw myself doing,” she said. “I never wanted to be in an
office. I wanted to be outside doing something physical.”After graduating she was accepted for a job as a traffic-control
flagger with NW Natural’s main flagging contractor. Working
alongside NW Natural construction crews, she watched the skilled
work they were doing and knew she wanted to pursue a career inconstruction. “I asked a lot of questions about what it would take forme to work at the gas company,” she said. “I had no construction
background—I’d never even held a shovel.” She applied for theConstruction Internship Program and was hired into the program in
2021 at age 22. The learning curve was steep, the work often
physically grueling and she excelled. “What helped me through was
my work ethic and my attitude—always being willing to learn and tohelp wherever needed,” she said. After completing just six months ofthe nine-month internship, she was offered full-time employment at
NW Natural. She now works as a pipefitter and was recently
promoted. Along the way she has had supportive mentors and acrew that treated her as a valued colleague in the field. “We’re all
one team here,” she said. “Sharing the work is a big thing at thiscompany, and we do a really good job of it.”
In 2023 Amanda spoke with high school students at the Oregon
Tradeswomen Annual Career Fair about her career at NW Natural.
“I wish schools would push the trades the way they push college,”
she said. “Most people my age aren’t doing what I do or making as
much money as I do. I’m saving for a house, and my friends graduatingcollege right now are in debt instead.” She sees NW Natural as aplace where she can continue to grow professionally. “Maybe one day
I’ll want to go into the training department,” she said. “But not anytime
soon. I show up every day with a smile on my face and I’m always
learning new things. My plan is to stick with this.”

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by
the most recent quarterly and periodic reports for information relevant to investment decisions.

77

Partners — Our Suppliers
We actively work to expand the diversity of our supplier network and increase
our purchasing from businesses owned by women, veterans, and other traditionally
underserved and underrepresented groups. We also encourage our suppliers to use
diverse subcontractors while performing work on NW Natural’s behalf. Our CFO and our
VP controller and treasurer works with our chief diversity officer to oversee our diversity
procurement activities.

2022 DE&I Highlights —Partners• Implemented an enterprise technology upgrade that gives us tools
to better measure and track our work with diverse suppliers

Through our Sustainable
Purchasing Program,
we form strategic
partnerships that
help us build a morediverse supplier base.

• Began using third-party supplier-diversity data for more accurate
and robust vendor analysis• Introduced new reporting to measure our suppliers’ spend on second-tier
subcontractors and determine the impact on our diversity goals• Launched a supplier diversity page on our website to highlight opportunities fordiverse businesses to work with us and help them navigate the process of becoming
a certified culturally or racially diverse business. In 2022, 26% of supplier inquiries
submitted through our website were from diverse businesses

Through our Sustainable Purchasing Program, we form strategic partnershipsthat help us build a more diverse supplier base. These relationships support
the communities we serve. Our current partners include:• Northwest Mountain Minority Supplier Development Council

WE PURCHASED$

23.7
MILLIONin goods and services fromverified culturally or raciallydiverse-, woman- or veteranowned businesses in 2022

78

WE PURCHASED• Oregon Native American Chamber

202.3• National Association of Minority Contractors

from small businesses
in 2022• Oregon Association of Minority Entrepreneurs$

MILLION• Latino Built– An Association for Latino Contractors in Oregon• Women’s Business Enterprise Council• National LGBT Chamber of Commerce

Our Corporate Purchasing and Expenditures Policy sets forth certain
business requirements, including diversity, that we consider whenreviewing purchase orders. When evaluating requests for proposals (RFPs),
we consider the prospective supplier’s ability to help NW Natural achieve
our business requirements along with our goals for supplier diversity and
we request information that includes the prospective supplier’s certification
as a culturally or racially diverse-owned, women-owned, underrepresented,
or emerging small business, as well as its own diverse-supplier programand opportunities to use diverse subcontractors.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Customers & Community
To serve our increasingly diverse community, we have a customers andcommunity strategy focused on ensuring all customers have equitable access to natural
gas programs. We’re also focused on fostering DEI in our communities throughpartnerships, volunteering and financial support. Multiple groups within ourorganization work to execute these strategies, including our customer service team,
our DEI Council, and our Environmental Management and Sustainability team.
These groups work closely with our chief diversity officer.

2022 DE&I Highlights – Customers & Community• Launched a Community and Equity Advisory Group to better incorporate
underrepresented voices into our processes and programs. The group provides
NW Natural with feedback and recommendations related to low-income andarrearage programs, company philanthropic investments, system planningand renewable resource development.
• Introduced a bill discount program for income-qualifying residential customers,
which incorporated their feedback, in keeping with NW Natural’s commitment toimproving energy equity and easing the energy burden for our low-income customers.
• Produced outreach materials in our service territory’s five most commonly spoken
languages to inform customers of bill assistance programs.
• Conducted our first low-income needs assessment to better understand the
low-income customer base in our region.
• Continued to employ an equity lens in the way we engage externally as a funder,
community partner and energy provider. In our philanthropic activities, this means weseek out and fund nonprofit partners that demonstrate a shared commitment to DEI.
• Redesigned and reestablished a competitive grant program that increases, expands
and accelerates funding for weatherization projects for income-qualified customers.
• Proactively worked with our ERGs to identify and fund new partners in the energy
justice, social justice and community-specific space and create programs forcorporate philanthropy to match the funds ERGs raise for these initiatives.
• Completed a landmark mural, initiated by the DEI Council, at NW Natural’s Portland
headquarters. Called “Inheritance” by local artists Alex Chiu and Jeremy Nichols,
the massive 52-by-50-foot art piece is 11 stories up and can be seen from many
vantage points across Portland.

91% of NW Natural employees feel their work group engages
with customers and the community in a way that respects
and values diversity and inclusion
Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly
and periodic reports for information relevant to investment decisions.

79

Community and Equity Advisory GroupNW Natural launched CEAG in 2022 which focuses on energy equity by directly engaging withdiverse voices in the community to help us enhance the company’s feedback channels, processes
and programs. From a place of listening and learning, this panel of representatives from
community-based organizations across our service territory seeks to elevate historicallyunderrepresented perspectives, bringing a racial equity and environmental justice lenses tothe company’s energy and operational planning. Through this deeper community engagement,
NW Natural works to uncover and address barriers to energy equity and ease the burden
for our most low-income customers.

Human Rights, Equal Opportunity
and Prohibition on Discrimination
NW Natural-sponsored series features
inspiring stories of Black Oregonians
NW Natural was one of five sponsors of a locally
produced video series, “Expressions in Black,” that
focuses on creative, successful Black Oregonians andtheir inspiring stories. The show’s creators sought towiden the lens through which the Black community isoften viewed. Portland’s Heart & Hustle Productions
created the series with a team that produces cuttingedge video content for brands like NIKE, the NBA and
Jordan Brand.

At NW Natural, we believe human rights are fundamental freedoms and standards of treatment towhich all people are entitled. Our Human Rights Policy was reviewed and approved by our boardof directors and articulates our commitment to identifying, preventing and mitigating human rights
risks, including: prevention of harassment and discrimination; commitment to diversity; freedom of
association; safety and security; land rights and biodiversity; and prohibition of child or forced labor,
among other things. We also maintain policies on equal employment opportunity and prohibitionof discrimination and harassment, in keeping with our intention to foster a culture of inclusivity
and support employees’ right to work in an environment free of discrimination and harassment.

For more information see also:
Diversity, Equity & Inclusion
Careers at NW Natural“NW Natural is excited to continue supporting
the 'Expressions in Black' series and amplifying the voices, experiences and contributionsof the Black Oregonians featured in thisyear’s episodes."Human Rights Policy— Melinda Rogers, Vice President
and Chief HR and Diversity Officer

80

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

NW NATURAL WATER

Water & Wastewater
Water is essential for life, security and stability, and we takeour responsibility seriously to provide and protect this criticalresource. The core values and competencies that have madeour natural gas utility successful for more than 160 years also
guide our growing family of water and wastewater utilities.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

81

Water Highlights

8x

Increased customer base byeight-fold since entering thewater utility sector in 2017

Completed acquisition of Far West(now Foothills), doubling ourcustomer base and extending ouroperations into a fifth state

Invested nearly $20 million in critical infrastructure
on an accrual basis in 2022, including new wells andbackup generation to maintain water and wastewater
services during power outages

Continued our investment in
Avion Water in Central Oregon,strategically expanding ourpresence in Oregon

Continued to formalize safety
standards and expand safety training
across our water subsidiaries

82$20 MILLION

Expanded our footprintin Texas with agreements
to acquire three moreutilities in the state

89%

of NW Natural Water employees responding to 2022
employee satisfaction survey described themselves as
engaged, committed, and enthusiastic about their work

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Building on a Strong Foundation

Safety & Reliability

NW Natural Water provides our service territories with financial, technical, andregulatory resources to help ensure safe, reliable and affordable delivery of water andwastewater services to our customers every day. As a subsidiary of NW Natural Holdings,
NW Natural Water is building on a strong foundation of superior customer service,responsible environmental stewardship and constructive regulatory engagement.

Investing in new infrastructure and meeting customer needs safely
and efficiently requires significant resources. We regularly invest in
infrastructure improvements and safety measures that can be out ofreach for small, stand-alone water utilities. In 2022, we invested nearly$20 million in our water and wastewater infrastructure on an accrualbasis with plans to invest $90 to $110 million in capital expenditures
over the next five years.

We’ve grown exponentially since NW Natural Holdings entered the water utility sector in
December 2017. Through a deliberate and measured growth strategy, NW Natural Water
has expanded its service territory to five states: Oregon, Washington, Idaho, Arizona, andTexas. We have acquired more than 25 water and wastewater utilities, serving around
155,000 people through about 63,000 connections as of December 31, 2022.

• We made broad investments in backup generation to keep electricdriven equipment operating in the event of a power outage. Thisequipment prevents pressure drops that can compromise water
quality and cause service interruptions. Standby generators to protect
reliability and safety aren’t required for some of our smaller water
utilities, but we’re investing in them because it helps us provide thesuperior service our customers deserve.
• We provided infrastructure capital to bring on new wells — one of themost involved and expensive projects in the water business.
• We started construction on a major upgrade of our Sunriver Water
wastewater treatment plant to create a state-of-the-art facility thatcan produce 1.5 million gallons of Class A recycled water each day,the Oregon Department of Environmental Quality's highest standard
for recycled water.
• We invested in technology to prevent business disruptions.
» We moved several programs to the cloud to reinforce security.
» We implemented supervisory control and data acquisition (SCADA)
systems at all our subsidiaries, making it possible to proactively
detect leaks and pressure drops.

“Since working with NW Natural Water we’ve been able
to pursue capital improvements that would have taken us
years to save up for. We simply would not be able to do thiswithout NW Natural Water.”— Ron Payne, Blue Topaz Utilities General Manager

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

83Building a culture of safety
As our water business has grown, we have created a comprehensive safety
program to help our NW Natural Water subsidiaries all meet the same highhealth and safety standards to protect our employees and communities.
To build that culture and standard of safety, we’ve implemented formalized
safety practices and training that we are continually integrating throughout
the workplace. Building a comprehensive safety program from the groundup is typically a long and challenging process, but we have been able to
make swift, steady progress with the support from our experienced safety
team. In 2022, the third year of our NW Natural Water safety program:• We performed a safety risk analysis at each facility and began making
item-by-item improvements.
• We began tracking safety metrics and reporting results to increase
visibility.
• We introduced a monthly meeting for all safety teams and managers
to review safety status and determine what needs to be done.

“It’s great to partner with a company that has hands-on
experience with safety issues that affect the utility
industry.”— Tony Wise, Falls Water Company Operations Manager

Our commitment to safety and reliability
served NW Natural Water customers well in 2022, when we
made a large investment in installing generators in all our
Texas water systems. During a freeze that lasted for several
days, our customers did not lose their water supply whenpower outages affected several other water systems in thestate. We are currently working on a generator project to help
ensure the customers who depend on our Southeast Texas
water systems will be supplied with water during storms.

Water conservation
In the midst of a multi-year drought, our Falls Water subsidiary has been emphasizing water conservation. To reduce theamount of water being pumped, the company developed a program that limits watering of lawns and landscaping to every
other day and encourages customers to start their sprinklers during off-peak hours. These measures, along with heightened customer awareness of the drought, helped Falls Water reduce production by 140 acre feet of water even while
adding 281 connections to the system. The company’s current rate case seeks approval for a tiered water rate to further
reduce consumption.

84

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Environmental Stewardship
Water is a precious resource, and we’re committed to using it wisely.

Sunriver closing the loop on waste• We strive to operate and maintain high-quality water and wastewater systems
so our facilities deliver safe and clean water to our customers.

Treated wastewater from our Sunriver wastewater treatment
plant is used to irrigate 64 acres of hay fields and nearby golfcourses. Putting to work about 117 million gallons of waterthat would otherwise be released into local waterways yielded
approximately 70 tons of orchard grass hay in 2022. Using thesolid biproducts of the treatment process, we created morethan 174 tons of rich, black compost that our community canuse in their gardens. Sustainable practices like these benefit
the environment and help reduce costs for our customers.

• We engage in comprehensive planning to support investments in infrastructure
and technology that are resource-efficient, cost-effective over their lifecycle, protectiveof the environment, and consistent with the goals of our communities.
• We invest in critical infrastructure that’s essential for meeting water-quality
regulations. For example, across our water utilities we’ve invested in new wells,
valves, pressure regulating valves, water mains, and technology like SCADA andGIS systems that help us maintain water quality by detecting and preventing
low-pressure events that can lead to contamination.

A major upgrade to our wastewater treatment plant in Sunriver hasbrought the water quality at the plant to the class “A” reclaimed water
profile, the Oregon Department of Environmental Quality’s highest
standard.
• At our wastewater treatment plants, we strive to meet the highest standards forenvironmental sustainability. We continue to install SCADA systems at lift stations
to help prevent wastewater overflow and protect lakes, rivers and streams.
• We are resolutely focused on reducing water loss, conserving water andpreventing waste.
» We have installed technology to help minimize water leakage across our
infrastructure. Our subsidiaries now have tools to perform water-loss analysis.
» We encourage customers to reduce water use. Our water utilities feature water
conservation tips on their websites and encourage customers to use watersaving household fixtures. Sunriver Utilities provides low-flow faucet kits at
no cost for homeowners who want to conserve water.
» Many of our water utilities have also adopted measures designed to reduce
the amount of water used by residential customers who consume the highest
percentage of water. In certain cases we work directly with heavy water-users
to help them reduce their consumption.
• We look for opportunities to implement water reuse strategies in areas of limited
supply —a practice we believe is good business as well as our responsibility to theenvironment. For example, at our Sunriver and Foothills utilities, we reuse treatedwastewater for secondary irrigation on several golf courses.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly andperiodic reports for information relevant to investment decisions.

85

Our Communities, Our Customers
Our customers are our community, and we are committed to serving andsupporting them.
SAFE, RELIABLE SERVICE – In 2022, our water utilities continued to work together
to address supply-chain disruptions to avoid material issues, although there werelong lead times for certain parts. Generators, which support safety and reliability,
were back-ordered for two years, and we developed an alternative strategic plan toprovide backup generation during power outages.

GEM STATE WATER

Continuing a tradition of putting customers first
Gem State Water in Coeur d’Alene, Idaho, prides itself on being a local
company, even three years after joining NW Natural Water. Customers
appreciate that Gem State Water’s employees reside in the sameneighborhood as they do, know many customers personally, and go
above and beyond to help each customer.
Gem State's employees' caring approach came in handy in 2022 as
Gem State Water began a large project to update aging infrastructure,including meters. Due to Idaho’s winters, Gem State chose to upgrade
to smart meter technology, which can help curb water costs forcustomers and conserve water. The new meters provides data andimmediate alerts if there is a leak or disruption in service, allowing
Gem State employees to address issues quickly. Gem State Water iseager to continue working on its comprehensive infrastructure plan tosupport its unique community with the assistance of NW Natural Water.

“Changes can be hard for people, and our customer
service ensures they make contact with everyone
that calls. We take the time to personally connect,
listen to their concerns, and create a relationshipwith them.”

CUSTOMER EXPERIENCE – We partner with community-oriented water utilities
that are dedicated to serving customers, and we’re committed to preserving andbuilding on that legacy. We have enhanced the online experience people have when
they do business with our subsidiaries, with updated and standardized websites where
customers can pay their bills and get instant access to features and information,
including water quality (consumer confidence) reports, rate structure, a “call us”
button, and water-emergency resources.
BILL PAYMENT ASSISTANCE – To support people experiencing financial hardship,
we offer time payment agreements that allow customers in need to pay a portion of
their bill in installments. We created this program during the pandemic and we are
keeping it in place to assist low-income members of our communities.
ENGAGEMENT – With deep roots in the communities they serve, our subsidiaries
work diligently to meet their customers’ needs, understand their stakeholders’concerns, and operate as good neighbors. Our water and wastewater companies
support a range of local nonprofits and they solicit community input on importantmatters such as rate cases and infrastructure upgrades.

“I have personal conversations with stakeholders who have questions
about a rate case. If a customer calls and wants to understandsomething, I pick up the phone.”— Tim Smith, Northwest Regional Manager— Leslie Abrams-Raynor,
General Manager of Gem State Water

86

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly andperiodic reports for information relevant to investment decisions.

Employees
Attracting and retaining a talented workforce is vital to the success of NW Natural Water,
and we continuously look for ways to meet the needs of the dedicated employees who
keep our water businesses running smoothly.
In 2022, NW Natural Water conducted its third employee engagement survey with 80%
of employees participating, and 95% reported that they take pride in their work and in
the company. In addition, 89% of NW Natural Water employees described themselves
as engaged — compared with just 32% of employees nationwide in 2022.

89%

Employees engaged, committed, and enthusiastic about theirwork at NW Natural Water

95%

Employees proud to work for NW Natural Water

94%

Believe their company provides excellent service to customers

Treated wastewater yields
a gift for a local nonprofit
Every year treated wastewater from our Sunriver Environmental
plant irrigates a bountiful crop of orchard grass hay. In 2022 theutility donated the entire crop—70 tons of hay—to Healing Reins
Therapeutic Riding Center in nearby Bend, Oregon. Healing Reins
offers nationally accredited programs that incorporate speciallytrained horses into therapy for people with a wide range of
disabilities and challenges. In partnership with the local medical
community and more than 100 volunteers, the organization
serves 190+ children, teens, adults and veterans every week.
Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly andperiodic reports for information relevant to investment decisions.

87Employees also agreed or strongly agreed with the following:• We demonstrate safe work practices in our work area (93%)• In my work area, we operate with integrity and ethical conduct (95%)• We engage with customers and community in a way that values
diversity and inclusion (98%)
Smaller water systems often experience challenges providing
competitive compensation packages for their employees. We continue
to seek opportunities to bring our employees’ wages in line with market
rates, and we do an annual wage analysis of all subsidiaries to make sure
we’re staying competitive.
Partnering with NW Natural Water has also enabled our water utilities toprovide benefits they weren’t previously able to offer, including formalized
paid time off programs, 401(k) retirement accounts and participation in
the NW Natural Holdings’ employee stock purchase program. At theend of 2022 we launched a package that pays for 75% of medical anddental coverage for employees and their dependents. Prior to being
acquired by NW Natural Water earlier in the year, employees at our
Foothills Utilities subsidiary in Arizona had been paying 50% of the costfor medical insurance, and the coverage didn’t cover dependents.

In 2022, all active NW Natural Water employees
completed annual ethics and compliance training in
support of a culture that mitigates risk and promotes
integrity and ethical behavior.

We’re Committed
We’re committed to managing our water and wastewater systems responsibly,
and we intend to continue focusing on the following priorities:• Maintaining and investing in systems as aging infrastructureneeds to be replaced• Providing financial capital for infrastructure improvements• Complying with increased and expanding regulation for water
and wastewater systems• Monitoring for contamination and proactively addressing emerging threats
from climate change and natural disasters• Implementing new technologies, including cybersecurity measures• Attracting and developing talented employees, as well as managing
an aging workforce

For more information see also:
NW Natural Water

88

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

NW NATURAL RENEWABLESNW Natural Renewables
NW Natural Renewables is a competitive business committed toleading in the energy transition by providing renewable fuels to
support decarbonization in the utility, commercial, industrial andtransportation sectors.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

89

NW Natural Renewables
Building on a long-standing commitment to a lower-carbon future, welaunched a competitive renewable fuels business in 2021. As a subsidiaryof NW Natural Holdings, NW Natural Renewables is well positioned tosupport the energy transition through the supply of lower-carbon fuels
to the utility, commercial, industrial and transportation sectors. Our
experienced team is focused on providing decarbonization solutions byutilizing waste streams and renewable energy sources to supply
renewable natural gas (RNG) and provide customers with cost-effective
sustainable solutions. These efforts are separate from and in addition to
NW Natural’s gas utility efforts related to lower-carbon fuels.
With NW Natural Holdings’ strong operational performance and successin reducing carbon emissions across its businesses, this expansion aligns
with our core competencies. Our country and region are in the earlystages of a historic energy transition, and we project the demand forrenewable fuels will only continue to grow. NW Natural Renewables isequipped to help customers achieve their decarbonization goals anddrive down emissions in our region and throughout the country.
In November 2021, we announced our first project with EDL, aleading global producer of sustainable distributed energy. NW Natural
Renewables has contracted to provide approximately $50 million
toward the development of two production facilities that are designed
to convert landfill waste gases to RNG and connect that production to
the existing regional pipeline networks. Construction on both facilities
began in 2022.

90“With our competitive renewables strategy, we're able to assist a broader
group of customers with the energy transition."— David Anderson, NW Natural Holdings CEO

NW Natural Renewables and EDL executed agreements designed to obtain a 20-year
supply of RNG produced by the facilities for NW Natural Renewables. NW Natural
Renewables has separately contracted to sell an equivalent amount of fixed-volume
RNG supply to investment grade counterparties under long-term contracts.
We recognize our role and responsibility in moving toward a lower-carbon energy
future, and we remain focused on advancing other RNG investments that support
this important transition.

For more information see also:
NW Natural Renewables

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

NW NATURAL HOLDINGS & NW NATURAL

Sustainable Financings
Through our Sustainable Financing Framework, we can issue
Sustainable Financing Instruments, helping us further support
and contribute to the transition to a sustainable economy.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

91

NW Natural Holdings supports sustainability in its financings. Under its
Sustainable Financing Framework, NW Natural and its subsidiaries may issue
Green Bonds, Social Bonds, Sustainability Bonds, or other financial instruments
to invest in a lower-carbon, sustainable economy. In addition, NW Natural and
NW Natural Holdings’ credit facilities have provisions that link borrowing costs
to environmental and safety metrics.

The allocation of net proceeds was 60% to green initiatives and 40% social projects.

ALLOCATION OF NET PROCEEDSBY ELIGIBLE PROJECT CATEGORY

Sustainable bond allocated in 2022
40% SO
CIA
L

11%
Renewable
Natural Gas

40%

60% GREENNW Natural issued its inaugural sustainable bond in November 2021, and net
proceeds from the issuance totaled $129 million. By the end of 2022, 100% of theamounts equivalent to the proceeds were allocated to finance or refinanceprojects in one of four eligibility categories: renewable energy, energy efficiency,
green buildings, and our supplier diversity program. Funds were allotted to thefollowing NW Natural initiatives:

31%• Renewable natural gas investments and procurement• Energy efficiency programs• Seismically secure and more sustainable headquarters building, which is
LEED core and shell gold certified

EnergyEfficiency
Green
Buildings
DE&I and Small
Business Purchase19%• Purchases from or support of culturally or racially diverse-owned, womenowned, veteran-owned, LGBTQIA+-owned and/or small businesses
An independent accountants’ report confirmed these allocations.

Sustainable bond and Sustainable Financing Framework
NW Natural Holdings and NW Natural can each issue sustainable bonds
under our Sustainable Financing Framework, with an amount equivalent to theproceeds of the bond issuance being used to finance or refinance projects
related to renewable energy, energy efficiency, green buildings, and our supplier
diversity program. The framework has been reviewed by Vigeo Eiris (V.E), an
independent global provider of ESG research and analysis.
V.E issued a second-party opinion confirming that the framework aligns withthe four core components of the Sustainable Bond Principles 2021 and thatinvestments in the eligible categories will lead to positive environmental andsocial impacts and advance the UN Sustainable Development Goals (SDGs).
V.E is a participant in the United Nations Global Compact.
In line with sustainable standards, NW Natural has agreed to publish an annual
report to track the financing of sustainable projects and their associatedenvironmental and social impacts, where feasible. The framework, together
with the V.E opinion, are available on NW Natural’s Sustainability webpage.
For more information on our SDG eligible categories, see the Appendix.
92

Sustainability-linked Credit Facility
In November 2021, NW Natural Holdings and NW Natural each amended andrestated its revolving credit facility, resulting in the extension of the maturity dateto November 3, 2026, and an increase in NW Natural Holdings and NW Natural’s
total borrowing capacity to $600 million. The amendments include provisions thatlink each Company's borrowing costs to an environmental metric related to
NW Natural’s carbon savings goal of 30% by 2035 and a safety metric related toin-line inspections of NW Natural’s transmission pipeline.

“With these financings, we've incorporated sustainability—
a long-held focus of our company—into another importantcomponent supporting our business strategy."— David Anderson, NW Natural Holdings CEO

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

NW NATURAL HOLDINGS

GovernanceStrong corporate governance and integrity form the foundation for everything
we do. Our board strives to adopt and maintain appropriate corporate governancepractices. And we expect our employees to do what is right for our stakeholders,
conduct business ethically, act with accountability, and work with business partners
who share our high standards and principles. Our 2023 Proxy Statement
provides a full discussion of our governance practices.

"The role of boards in setting long-term strategic direction
has perhaps never been more important."— World Economic Forum65
65

How company boards can be a vanguard for climate action | World Economic Forum (weforum.org)

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

93Governance Highlights

Board of Directors• Maintain a well-qualified, diverse and active
board of directors

Other Governance Practices• Maintain stock-ownership guidelines• Determine independence of directors(10 of 11 directors meet independence criteria)• Maintain insider trading policy applicable to directors,
officers and employees, agents, advisors andindependent contractors• Engage in robust succession planning process
supporting board refreshment (nearly one-half ofour directors are new within the last five years)• Maintain a hedging and pledging policy applicable
to directors and officers• Separate roles of Chair and CEO under current
leadership structure• Hold regular executive sessions of non-management directors• Oversee company’s risk management programs
and policies• Evaluate board of directors, committees andindividual directors on an annual basis• Provide comprehensive director orientationand continuing education to enable directors
to develop and maintain skills necessary or
appropriate for the performance of their duties

Business Integrity and Ethics• Maintain and promote an active ethics
and compliance program• Foster a culture that mitigates risk andpromotes ethical behavior and integrity• Recognized by Ethisphere® as one of the 2022 and2023 World’s Most Ethical Companies®

"World’s Most Ethical Companies" and "Ethisphere" names and marks
are registered trademarks of Ethisphere LLC

94

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

The Board of Directors of NW Natural Holdings establishes policies designed to promotemanagement of our business, to serve our stakeholders and maximize long-term shareholder
value, that we conduct our business in compliance with all applicable laws and regulations, andthat we do so with the highest standards of integrity. For complete information on our approach tocorporate governance, please visit the Governance portion of our website at nwnaturalholdings.
com. The following sections highlight our approach to corporate governance.

Board composition and refreshment
The board is responsible for selecting candidates for board membership, and the governancecommittee and board of directorshas been assigned the responsibility of recommending
nominees to the board of directors for election as directors.
The governance committee reviews director nominees in the context of the current compositionand diversity of the board, the operating requirements and existing and prospective businessenvironment faced by NW Natural Holdings, NW Natural Holdings’ business strategy, and thelong-term interests of shareholders. Director candidates must be able to make a significant
contribution to the governance of NW Natural Holdings by virtue of their business and financial
expertise, educational and professional background, and current or recent experience as a chief
executive officer or other senior leader of a public company or other relevant organization.
The business discipline that may be sought at any given time will vary depending on the needs andstrategic direction of our company and the disciplines represented by our incumbent directors.
In addition, the governance committee looks at the overall composition of the board and how
a candidate would contribute to the overall synergy and collaborative process of the board.
In conducting its assessment, the governance committee considers a variety of criteria,
including, but not limited to, the candidate’s integrity, reputation, judgment, knowledge,
experience, commitment, skills, diversity, and independence.
In recent years, the board undertook a comprehensive succession planning and refreshment
review in anticipation of the retirements of several long-tenured directors. In line with thoseplans, the board has undergone substantial refreshment in recent years, with 5 of the 10 current
independent directors being added to the board in the last five years. Our corporate governancestandards provide for several mechanisms to encourage director refreshment, including: annual
peer reviews of individual directors, a requirement to offer notice of resignation upon a change
in principal position, and a mandatory retirement age of 75.
COMMITMENT TO DIRECTOR INDEPENDENCE
The Board of Directors of NW Natural Holdings has adopted director independence standards thatcomply with New York Stock Exchange (NYSE) rules. The board of directors has affirmatively
determined that 10 out of 11 directors are independent, according to NW Natural Holdings’

Tenure*

1-5

8.4

years

Board of Directors

6-10
11-15

2
0

16+

3

Age*

50s

3

66

average years

60s

5

70s

3

Board Refreshment*

45%

5 out of 11 directors were first added tothe board in the last five years

45%

27%

GenderDiversity*

Cultural and Racial
Diversity*

5 out of 11
directors identify as women

3 out of 11 directors identify asculturally or racially diverse

Independence

10 out of 11 directors are independent(all directors except CEO)
Chairperson of the board is independent

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for
information relevant to investment decisions.

6

average years

years

Governance Practices

OUR BOARD COMPOSITIONCEO*Information provided for directors as of November 1 , 2023

95

director independence standards as well as additional qualificationsprescribed under the listing standards of the NYSE and applicable stateand federal statutes. All standing committees of the board are chaired byand currently comprised of independent directors. The current board
leadership structure also separates the roles of chair and CEO and isdesigned to promote independence between board and management.
Additionally, to support independence, the directors of the board meet
regularly in executive sessions at which the independent board chairpresides and only the non-management directors are present.
COMMITMENT TO BOARD DIVERSITYNW Natural Holdings’ director selection criteria include a consideration ofdiversity as a factor in evaluating candidates for board membership. The
board believes that diversity with respect to factors such as background,experience, skills, geographic location, race, gender, ethnicity, culture, veteranstatus, age, disability, and sexual orientation are important considerations inboard composition. The governance committee discusses diversity considerations in connection with each director candidate, as well as on a periodic
basis in connection with the composition of the board as a whole. In addition,
the governance committee and the board conduct formal self-evaluations
each year that include an assessment of whether the governance committee
and the board have adequately considered diversity, among other factors, in
identifying and discussing director candidates. Currently, of 11 members of ourboard, five directors identify as women, including our Board Chair, and three
directors identify as racially or culturally diverse. Our composition of womenon our board has earned a “Winning Company” award three times from 50/50
Women on Boards, which described the board’s gender diversity as a “shining
example of enlightened business leadership.” In 2023 our board received thehighest distinction for Gender Balanced.
BOARD EXPERIENCE
NW Holdings’ board consists of eleven directors with extensive professional
experience and a diverse array of skills. This diversity of experience provides
our board with a collective skill set that is advantageous to the board’s
oversight of our business and operations. In addition to the qualifications
required of all directors that are set forth in NW Holdings’ Director Selection
Criteria, our board members have experience in climate change anddecarbonization, cyber and IT, risk management, and more. More information
on board experience can be found in our 2023 Proxy Statement.

Board’s role in risk oversightManagement is responsible for managing the day-to-day risks faced by
the company, while the board of directors, collectively and through its
committees, has responsibility for the oversight of risk management.
96

The corporate governance standards describe the board’s primary responsibilities,
which include oversight of NW Natural Holdings’ mission, and key programs that enable
the board to assess and manage material risks, including, but not limited to, risks
related to business continuity and disaster response, gas supply, distribution andstorage operations, product safety, strategic planning and business development,
environmental and climate change matters, business improvement and information
technology, customer demand and market competition, economic environment, effective
governance, legislative and regulatory risk and compliance, state and federal regulatory
process and environment, financial performance, business integrity and compliance,
financial reporting and internal controls, financing programs, pensions and retirement
plans, reputational risk, human capital management, compensation and employee
benefits, succession planning (including the CEO), human risks such as safety anddiversity, equity and inclusion matters, environmental, social and governance mattersand company culture. The board periodically reviews its committee oversight authority
to ensure the board has adequate visibility and oversight of the company’s key areas ofrisk to execute its responsibilities. Appropriate members of management serve as
liaisons to board committees, attend board and committee meetings, and regularly
discuss with the board and the committees various risks confronting the company.
An important aspect of the board’s oversight role is the comprehensive enterprise risk
management process, under which significant enterprise-wide risks have been identified
and assessed with respect to likelihood of occurrence, potential impact on the business,and likely speed of onset, along with the mitigative measures to address and manage
such risks. The enterprise risk management process allows the board to remain
informed of risks, developing trends, or potential problems that might require theirattention. Management conducts the enterprise risk management process annuallywith periodic interim updates and discusses those findings with the board and reports
regularly to the board on significant risk categories. Additional review or reporting on
enterprise risks is conducted as needed or requested by the board. The board andmanagement consider enterprise risks and opportunities in their strategic and capitalspending decision process and in their governance and oversight responsibilities.

Board structure and function
COMMITTEES
There are five standing committees of the board: Audit, Finance, Governance,
Organization and Executive Compensation Committee (OECC), and Public Affairs
and Environmental Policy. Each of the standing committees operates according
to a formal written charter, all of which are reviewed annually and are available at
nwnaturalholdings.com. Each committee is comprised entirely of independent directors.
BOARD AND COMMITTEE OVERSIGHT
The full board considers key risks, issues and initiatives. Board committees additionallyhave primary responsibility and oversight with respect to the following areas:

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Audit Committee• Oversight and evaluation of policies withrespect to significant risks and exposuresand the procedures for assessing,monitoring and managing those risks.
• Oversight of accounting, financial reporting,internal controls, auditing, information
technology systems and cybersecurity,
enterprise risk management process,business continuity and disaster planning,
capital projects and contingencies, andmaterial litigation.
• Oversight of business compliance andintegrity program, including code of ethics,
and the company's system for review andtreatment of integrity hotline complaints.

Public Affairs andEnvironmental Policy Committee• Oversight of legislative and regulatory matters and policies andpractices on public and political issues, including charitable andpolitical contributions and budgets.
• Oversight of current and emerging political and societal trends.
• Oversight of programs and policies relating to civic affairs,
human rights, charitable and community affairs, safety, diversity,
equity and inclusion, equal employment opportunities, employee
well-being, customer engagement and other corporate social
responsibility matters.
• Review and recommendation of environmental matters andpolicies and sustainability efforts.
• Review of major environmental risks, and plans for managing
those risks.

Organization and Executive Compensation Committee• Oversight of company's human capital management.
• Review and recommendation of plans and preparations for talent succession andmanagement of risks associated with transfer of knowledge and expertise.
• Recommendation of executive compensation programs and benefit plans to theboard, as well as monitoring of risks and alignment of incentives related to suchplans and programs.
• Review and approval of grants under equity incentive plans to eligible employees.
• Primary responsibility for ensuring executive compensation programs and plans are
consistent with corporate objectives and OECC’s compensation philosophy.

Finance Committee• Oversight of financing programs, budgets andforecasts, financial policy matters, including hedging
policies and practices, economic environment, gas
supply and pricing, including liquidity and cash flow
impacts, and material regulatory issues, including
regulatory policy related to financial strategy andpolicy, capital structure and dividend policy.
• Oversight of investor relations program, and credit
agency and New York Stock Exchange relationships.
• Financial oversight of pension and retirement plans.
• Review and recommendation of finance aspects ofcorporate development strategies.

Governance Committee• Recommendations to the board regarding nominees for election to the board, and committee
composition and structure.
• Establishment of criteria for board and committee membership and policies that govern
the board’s activities.
• Review and recommendation of governance policies and structure, including the corporate
governance standards, to the board.
• Evaluation of board and individual director performance and oversight of director
onboarding and continuing education.
• Oversight and consideration of plans and preparations for board succession.
• Oversight of integrated environmental, social and governance matters.

MANAGEMENT LEADERSHIPOur officer team is responsible for leading and managing our business and for developing and executing company strategy as approved by the board, and meets regularly
to actively monitor operations, financial performance, and legal, regulatory, policy and other external developments; ensure compliance with policies, procedures and ethicalbusiness practices; identify, assess and manage company risks and opportunities; and develop and implement strategy to achieve sustainable, long-term performance. Eachof our officers has identified goals in support of sustainable, long-term business performance, with a portion of their compensation tied to the achievement of these goals.
We have a diverse group of corporate officers and have expanded the number of women in leadership positions. Today, our 12-person officer team includes five women.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

97

ESG governance and oversight
While our executives are responsible for day-to-day management and leadership of the company, the Board of Directors has responsibility for oversight of management
and its development and implementation of company strategy, including ESG matters and risks and opportunities, including those related to climate and cybersecurity.
The Governance Committee oversees the company’s integrated ESG strategy and reviews its full board and committee oversight authority to ensure that the board has
adequate visibility and oversight to execute its responsibilities. In order to assist the Governance Committee in its ESG oversight responsibilities, management provides
formal ESG updates to the Governance Committee at each regularly scheduled meeting (approximately five times per year). In addition, appropriate members ofmanagement serve as liaisons to board committees, attend board and committee meetings, and regularly discuss with the board matters relevant to the company,
including ESG matters and the company’s risks and opportunities. Areas of ESG oversight include, but are not limited to:

Audit

Board

• Business Integrity• Whistleblower Hotline• Enterprise Risk Management• Business Continuity• Significant Legal Matters• Interal Controls Over Financial Reporting• SEC Reporting Oversight• Cybersecurity and IT• Decarbonization; Including Low Carbon Pathway
and Vision 2050
• Customer Preference/Satisfaction• Tone at the Top• Operational and Business Development
Initiatives (e.g., Water and RNG)
• Other Natural Gas Applications• Strategic Matters• Pipeline Safety

Organization andExecutive Compensation

Governance• Compensation and Benefit Programs,
Including Alignment of Incentives with ESG• Talent Strategy and Succession• CEO Succession• Labor Relations• Employee Attrition Rates

98• Board Structure, Policies, Governanaceand Expectations• CEO and Board Succession Planning• Board Composition, Diversity and Independence• Board Evaluations• Committee Oversight Roles/Responsibilities• Continuing Board Education and Training• ESG Strategy (incl. developments from SEC,
Major Shareholders, and Other Stakeholders)Public Affairs andEnvironmental Policy• Employee Safety• Diversity, Equity and Inclusion• Employee Engagement and Well-Being• Civic and Human Rights• Environmental and Sustainability• Community and Public Relations• Charitable Giving and Political Contributions• Legislative and Regulatory Matters• Employee Satisfaction• Procurement• Customer Metrics, Engagement andAffordability Considerations

Finance• Financial Policies and Matters That May
Have ESG Implications• Investor Relations• Goal Setting and Performance Metrics• Rating Agency Relationships• Capital Markets/Green Financings• Investment in Key ESG Improvements

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Management ESG leadership
Each of our officers is responsible for developing and implementing our businessstrategy and lead areas that are considered ESG. For example, our VP and Chief
Public Affairs and Sustainability Officer leads our environmental management andsustainability, legacy environmental programs, community and government affairs andcommunity involvement teams. Our VP, Chief Human Resources and Diversity Officer
leads our safety, employee and labor relations, organizational effectiveness, diversity,
equity and inclusion and human resources and benefits teams. Our VP, Chief
Compliance Officer and Corporate Secretary leads our governance and businessintegrity and compliance teams and co-leads our ESG Steering Committee, a crossfunctional group of executives and senior management that meets regularly to discuss
the Company’s ESG strategy, implementation and disclosure. Each of these officers
report directly to the CEO or President and serve as an executive liaison to a relevant
committee of the Board of Directors. Also reporting directly to our President, our SVP
and Chief Operating Officer heads our efforts to pursue a lower-carbon pathway, which
includes reimagining the fuel we put in our pipelines, pursuing a carbon savings goalof 30% by 2035 educating stakeholders on the role of gas today and in a deep
decarbonization future, and managing pipeline integrity and safety. In addition, our
President leads teams focused on procuring renewable natural gas, pursuing hydrogengas initiatives, and furthering our acquisitions of water and wastewater utilities. Our
Chief Financial Officer, VP, Treasurer, and Chief Accounting Officer oversees oursustainable financing and sustainable procurement efforts. And, our VP and Chief
Information Officer, leads our cybersecurity and compliance, and information
technology (IT) teams. Each of our officers have identified goals in support ofsustainable, long-term business performance attentive to ESG matters, with a portionof their compensation tied to the achievement of these goals. Our 12-person officer
team meets regularly to discuss the development and implementation of company
strategy, including sustainability matters.

Stock ownership requirements
To closely align director interests with shareholder interest, the board has adopted
stock-ownership guidelines that require directors to own NW Natural Holdings sharesof at least $400,000 in value within five years of joining the board. Similarly, executive
officers are required to hold stock at a dollar value that is a multiple of base salary, with
the CEO holding five times their annual salary, the president holding four times theirannual salary, executive vice president or chief operating officer holding three times
their annual salary, senior vice presidents or named executive officers holding twotimes their annual salary and vice presidents holding one times their annual salary.

Insider trading
To foster integrity in trading in NW Natural Holdings stock, the company
maintains an insider trading policy that specifies that if a director, officer,
any employee of NW Natural Holdings or its subsidiaries, has material
nonpublic information relating to the company, it is the company’s policythat neither that person nor any related person may buy or sell securitiesof the company or engage in any other action to take advantage of, or passon to others, that information.

Policy on hedging and pledging
of NW Natural Holdings securities
NW Natural Holdings has adopted a policy on hedging and pledging
of securities that prohibits the directors and executive officers of thecompany and its subsidiaries from engaging in any short sales, zero-costcollars, or forward sale contracts with respect to the company’s securities,
or purchasing or selling puts, calls, options, or other derivatives securities
based on the company’s securities. In addition, the policy restricts theability of directors and executive officers to pledge their ownership ofcompany securities in a non-recourse loan, failing to meet a margin
call with respect to a margin account resulting in the sale of company
stock, or buying company securities on non-recourse margin.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

99

Business Integrity
Since 1859, NW Natural has been viewed as a respected leader in Oregon and SW
Washington. We could not have maintained this reputation for over 160 years without
one fundamental characteristic — integrity. Our customers trust us to provide themwith essential energy and deal with them fairly, in a caring and equitable fashion. Our
business integrity program aims to reinforce our core values in our everyday work.
We are honored to have been recognized as one of the 2023 World’s Most EthicalCompanies® by Ethisphere, a global leader in defining and advancing the standardsof ethical business practices. It is the second year NW Natural Holdings has beenrecognized and the company is one of only nine honorees in the Energy & Utilities
industry. In all, 135 honorees from 19 countries and 46 industries were recognized
for their commitment to ethical business practices through programs that positively
impact employees, communities, and broader stakeholders.

“Receiving this distinction underscores our commitment to our values
and honors our employees’ achievements on behalf of our customers,”— David Anderson, NW Natural Holdings CEO

Oversight of Business Integrity program
Our Business Integrity program is overseen by the Audit Committee of the Boardof Directors and is managed on a day-to-day basis by our business integrity team,which is a cross-functional team led by our chief compliance officer and consistingof members of the internal audit, legal and human resources departments. Our chiefcompliance officer and director of internal audit each regularly provide updates on
business integrity matters to the Audit Committee of the Board of Directors, including
updates on business integrity reports, management actions, business integrity trends
and updates, and benchmarking analysis.

Code of Ethics
We maintain a Code of Ethics that applies to all of our employees, including
supervisors, managers and officers, as well as to our board of directors and otheragents, vendors and business partners working on our behalf. Our Code of Ethics is
intended to set expectations for conduct that is consistent with our core values; help
promote compliance with laws and NW Natural policies; establish our high standardsof integrity; and provide information about how to resolve real-life questions orconcerns. Employees are required to annually certify their commitment to theprinciples outlined in the Code of Ethics and disclose any businessintegrity concerns. Our Code of Ethics is approved annually by theboard upon the review and recommendation of the Audit Committeeof the Board of Directors.

Code of Ethics training
and communications

the way

WE WORKTo reinforce the company's
core value of integrity,
every employee and director
completes an annual online
Code of Ethics training to refresh
their understanding of thecompany's Business Complianceand Integrity Program and Codeof Ethics. NW Natural’s program received the national award forBest Ethics and Compliance Program (Small and Mid-Cap) at the2018 Corporate Governance Awards event, in recognition of its new
Code of Ethics document and refreshed online training and certification
program. The Code of Ethics training covers a number of topics
including, but not limited to conflicts of interest, non-retaliation,
anticorruption/anti-bribery, fair business dealings, compliance withlaws, government relations, confidentiality, politics in the workplace,and social media, among other things.
NW NATURAL CODE OF ETHICS

Starting in 2019, all employees also complete annual online information
security training. The course demonstrates how to identify potential
cybersecurity risks and protect confidential information at work andprovides guidance on what employees should do if they suspect apossible information security incident. In 2022, 100% of our active
employees participated in these online information security and ethics
and compliance trainings. We also regularly provide specialized live
training to help managers and supervisors navigate pertinent businessintegrity questions and emphasize their role as the front line of integrity
at NW Natural and the resources available to them.
We reinforce our annual Code of Ethics and Information Security
trainings with periodic communications spotlighting pertinent businessintegrity topics and messages from senior leadership. We also provide
additional resources to employees via an internal intranet page dedicatedto business integrity.

"World’s Most Ethical Companies" and "Ethisphere" names and marks are registered trademarks of Ethisphere LLC

100

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Reporting, investigations and actions
We maintain our Integrity Hotline to empower employees, shareholders, customers,
the public and other third parties to raise issues or submit concerns anonymously at
1-866-546-3696 or NWNIntegrity.com, which is managed by a third party and is available
through our external and internal websites. Our hotline offers employees and others theopportunity to anonymously ask questions about ethical decisions. We also provide
several other avenues to raise issues or report concerns in addition to our hotline.
Our chief compliance officer and our director of internal audit handle matters reported
on the hotline and through other reporting avenues. Both regularly report to the audit
committee regarding hotline activity, and the chief compliance officer regularly reports
to the audit committee regarding our Business Compliance and Integrity program.
NW Natural is committed to investigating all potential violations of law, company policyor business integrity and handling each report fairly and reasonably. In 2022, we received
22 interactions with our hotline and other business integrity reporting channels(approximately 1.7 per 100 employees), of which 16 (approximately 1.3 per 100
employees) were determined to involve business integrity reports. Business integrity
reports are reviewed by our Business Integrity team and investigated as necessary
with assistance from the company’s internal audit, human resources, legal, or otherdepartments and/or other internal or external resources as appropriate under thecircumstances, depending on the type and nature of the allegation. When violations
are detected, appropriate actions are taken, which may include coaching or counseling,
administering disciplinary action, up to and including termination and/or improvements
to our policies, procedures or practices.
We maintain a Violation Reporting Policy, approved by the Audit Committee of theBoard of Directors, that prohibits retaliation and offers protections for individuals
that make good faith reports of possible violations of the Code of Ethics, company
policy or law or who participates in an investigation in good faith. Employees
who have engaged in retaliation may face disciplinary action, up to and including
termination. We proactively communicate our prohibition on retaliation in multiple
forums including our annual Code of Ethics Training, manager trainings, integrity
website and periodic communications to employees.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports
for information relevant to investment decisions.

101Supplier Code of Ethics and fair business dealings
We seek to do business with organizations and service providers thatembrace our core values, including integrity. We maintain a Supplier
Code of Ethics, which is available on our supplier website and sets forth
our expectations for our suppliers in areas of ethics and compliance,
safety, human rights, and diversity, among other things. Under the
Supplier Code, suppliers have a responsibility to report any suspectedillegal or unethical conduct involving NW Natural or its business
partners, and NW Natural’s business integrity hotline is available tosuppliers and other third parties to anonymously report concerns.
We monitor key suppliers on an ongoing basis and have implemented
a scorecard for certain vendors that considers whether such vendor
operated in accordance with our core values in doing business with us.
As set forth in our Code of Ethics, we strive to deal fairly and in goodfaith with NW Natural’s customers, shareholders, employees, regulators,
suppliers, competitors and others. We strive to avoid any attempt to takeunfair advantage of any person through manipulation, misrepresentation,
fraud, misuse of confidential information or any other unethical dealing,practice or act. Our Code of Ethics sets forth our policies and expectations
regarding fair business dealings, including our expectations regarding
expenses, purchasing and contracting, gathering competitive data, andengaging in transactions between utility and non-utility subsidiaries.
Our Code of Ethics also sets forth our strict prohibition on bribes andkickbacks. In 2022, we received zero substantiated reports of bribery
or corruption through our Integrity Hotline.

For more information see also:
Governance website

102

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent
quarterly and periodic reports for information relevant to investment decisions.

APPENDIX
Sustainability Accounting Standards Board (SASB) Disclosures
Workforce Statistics
NW Natural Eligible Categories from UN Sustainable Development Goals
NW Natural's Emissions
American Gas Association TemplateNot to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

103

NORTHWEST NATURAL HOLDING COMPANY SASB DISCLOSURESFor the year ended Dec. 31, 2022

The following index sets forth Northwest Natural Holding Company’s SASB reporting disclosures for our primary industry, Gas Utilities & Distributors. While we report information on nearly all of
SASB’s metrics, we may report a different unit of measure, different metric or partial information for the topic area or accounting metric as noted. Unless otherwise noted, data in the below SASB
disclosure is as of, or for the year ended December 31, 2022.

Gas Utilities & Distributors Accounting Standard
ENERGY AFFORDABILITYSASB CODEACCOUNTING METRIC

2022 DISCLOSURE RESPONSE

Average retail gas rate for residential customers66 per MMBtu$10.47

Average retail gas rate for commercial customers66 per MMBtu$9.50

Average retail gas rate for industrial customers66 per MMBtu$7.60

Average retail gas rate for transportation services66 per MMBtu$1.13

Typical monthly gas bill for residential customers for 50 MMBtu of gas delivered per year 67 (USD)$51.65

Typical monthly gas bill for residential customers for 100 MMBtu of gas delivered per year 67 (USD)$95.30IF-GU-240a.1

IF-GU-240a.2

Number of residential customer gas disconnections for nonpayment, percentage reconnected within 30 days

Approx. 3,513 within 20 days68 2022
Community & Sustainability Report,“Our Communities, Our Customers”

Percentage of residential customer gas disconnections for nonpayment reconnected within 30 days

66% reconnected within 20 days68 2022
Community & Sustainability Report,“Our Communities, Our Customers”

Discussion of impact of external factors on customer affordability of gas, including the economic conditions of the service territory

2022 Community & Sustainability Report,“Our Communities, Our Customers”

IF-GU-240a.3

IF-GU-240a.4

104

66

Weighted average rates from 11/1/21-10/31/22.

67

Based on weighted average rates for the heating year beginning 11/1/2021 and ending 10/31/2022.

68

NW Natural reports reconnections within 20 days rather than 30 days, consistent with our internal practice regarding measurement and reporting of reconnections.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

END-USE EFFICIENCYSASB CODE

IF-GU-420a.1

IF-GU-420a.2

ACTIVITY METRIC

2022 DISCLOSURE

Percentage of gas utility revenues from rate structures that are decoupled

81%

Percentage of gas utility revenues from rate structures that contain a lost
revenue adjustment mechanism

0%

Customer gas savings from efficiency measures by market (MMBtu)

Oregon Service Territory: 514,000 • Washington Service Territory: 43,0002022 Community & Sustainability Report, “Reducing Energy Use”

INTEGRITY OF GAS DELIVERY INFRASTRUCTURE
SASB CODE

IF-GU-540a.1

ACTIVITY METRIC

2022 DISCLOSURE

Number of federally reportable pipeline incidents0

Number of federal corrective action orders0

Number of federal notices of probable violation

0

Percentage of distribution pipeline that is cast and/or wrought iron

0%

Percentage of distribution pipeline that is unprotected steel

0%

IF-GU-540a.2

Percentage of gas transmission pipelines inspected

70% as of December 31, 202269

Percentage of gas distribution pipelines inspected

20%70

IF-GU-540a.3

IF-GU-540a.4

Description of efforts to manage the integrity of gas delivery infrastructure,including risks related to safety and emissions

2022 Community & Sustainability Report, “Safety & Reliability”,“Environmental Stewardship”

69

Pipeline inspected through December 31, 2022, but not limited to inspections during the calendar year 2022. As of December 31, 2022, we inspected 70% of our pipeline, 2.5 times the number required by
49 CFR 192.903 and reassess covered pipelines every seven years as set forth in 49 CFR §192.939(6) by the Pipeline and Hazardous Materials Safety Administration (PHMSA).

70

We strive to perform a leak survey on 20% of our gas mains annually, with every gas main surveyed at least every five years. We also strive to perform leakage and atmospheric corrosion surveys every three years on residential service lines and annually inbusiness districts and high-occupancy buildings.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

105

ACTIVITY METRICS
SASB CODE

IF-GU-000.A

ACTIVITY METRIC

2022 DISCLOSURE

Number of residential customers served

724,287

Number of commercial customers served

69,139Number of industrial customers served

1,071

Amount of natural gas delivered to residential customers (MMBtu)

47,809,264

Amount of natural gas delivered to commercial customers (MMBtu)

28,849,912

Amount of natural gas delivered to industrial customers (MMBtu)

10,444,412

Amount of natural transferred to a third party (MMBtu)

38,130,074

Length of gas transmission pipelines

736 miles

Length of gas distribution pipelines

14,300 miles

IF-GU-000.B

IF-GU-000.C

106

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

NORTHWEST NATURAL GAS COMPANY WORKFORCE STATISTICS
For the payroll ending December 31, 2022

The following table sets forth Northwest Natural Gas Company’s consolidated EEO-1 data as submitted for the payroll period 12/15/2022 through 12/31/2022

HISPANIC
OR LATINO
MALE

MALE

FEMALE

WHITE

BLACK OR AFRICANAMERICAN

NATIVE HAWAIIANOR PACIFIC ISLANDERASIAN

AMERICAN INDIAN OR
ALASKAN NATIVETWO OR MORE RACESWHITEBLACK OR AFRICANAMERICAN

NATIVE HAWAIIANOR PACIFIC ISLANDERASIAN

AMERICAN INDIAN OR
ALASKAN NATIVETWO OR MORE RACESJOB CATEGORIESFEMALEOVERALL TOTALSNOT-HISPANIC OR LATINOEXECUTIVE/SR OFFICIALS & MGRS

2

0

24

0

0

2

0

0

16

0

0

0

0

0

44

FIRST/MID OFFICIALS & MGRS

3

2

85

2

1

8

1

2

35

2

0

1

2

1

145

PROFESSIONALS

13

10

169

7

2

18

4

8

107

5

0

17

2

3

365

TECHNICIANS

0

0

1

0

0

0

0

0

1

0

0

1

0

0

3

SALES WORKERS

0

0

2

0

0

0

0

0

2

0

0

0

0

0

4

ADMINISTRATIVE SUPPORT

2

6

30

5

0

2

1

1

60

13

2

5

1

9

137

CRAFT WORKERS

26

0

303

7

3

9

19

4

5

1

0

0

0

0

377

OPERATIVES

2

1

48

2

1

2

0

2

4

0

0

0

0

0

62

LABORERS & HELPERS

1

0

3

1

0

0

0

1

0

0

0

0

0

0

6

SERVICE WORKERS

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

TOTAL

49

19

665

24

7

41

25

18

230

21

2

24

5

13

1,143

PREVIOUS REPORT TOTAL

47

17

686

25

4

33

27

9

249

23

2

24

4

11

1,161

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

107

NW Natural Eligible Categories from UN Sustainable Development Goals
Renewable Energy
Expenditures and investments related tothe construction, development, expansion,
production, acquisition, maintenance,transmission, research and development,
and operation of renewable energy
generation and infrastructure including:• Renewable natural gas

UN SDG ALIGNMENT 71

7

Affordable &clean energy

13

Climate action

Energy Efficiency
Programs to aid customers withenergy efficiency.

UN SDG ALIGNMENT 72

7

Affordable &clean energy

13

Climate action• Hydrogen
The purchase of renewable energy fromrenewable natural gas and hydrogen facilities.

Our Partners: Our Supplier
Diversity Program
Green Buildings

UN SDG ALIGNMENT

Expenditures related to the new
construction/renovation, development,
expansion, maintenance, rent oroperation of offices or service centersthat have received or are expected toreceive LEED Gold or Platinum.

9
13

88

Industry,
innovation andinfrastructure

Climate action

5

Genderequality

Diverse Supplier Procurement andEmpowerment — expenditures and program
investments related to enabling opportunities fordiverse business enterprises (minority-owned,
women-owned, veteran-owned, LGBTQ-owned,
and/or small businesses). Examples include:

8

Decent work andeconomic growth• Procurement of products and services
from diverse and small business suppliers

10

Reducedinequalities

Socioeconomic Advancement & Empowerment• Programs that empower diverse and small
businesses through training, education on
potential business opportunities andmentoring programs

108

71

https://sdgs.un.org/goals

72

Renewable natural gas will follow the European Union directive 2018/2001 on feedstock for advanced biofuels.

UN SDG ALIGNMENT 72

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

NW Natural’s Emissions
In 2022, scope 2 emissions calculations were expanded to include all electricity usage,
not just our main facilities’ emissions. Due to increasing amounts of renewable electricity
serving our locations, our scope 2 emissions were lower in 2022 than in previous years.
Increases in scope 1 emissions since 2020 are generally attributable to changes inoperations such as building capacity as employees return to the office.

NW NATURAL’S EMISSIONS
2022

2021

2020

0.126%

0.131%

0.135%

102,496 MTCO2e97,113 MTCO 2e

92,043 MTCO2e

Scope 2 Facility Emissions (electricity use)75

2,398 MTCO2e

2,972 MTCO2e

2,312 MTCO2e

Scope 2 Total Emissions (electricity use)

2,646 MTCO2e

Fugitive Methane Emissions Rate73
Scope 1 Emissions

74

76

N/A – information not available to perform calculation

73

Fugitive emissions calculated in accordance with EPA’s 40 CFR part 98 subpart W. Percentage is calculated by metric tons of fugitive emissions divided by volume of gas delivered through our system. MMscf of methane emissions per MMscf of methane throughput.

74

Includes NW Natural’s use of gas footprint, fleet fuel carbon footprint, and natural gas fugitive emissions from system operations. Company use of gas footprint includes emissions from direct use of gas by NW Natural, including space and water heat, line heaters,
compressors and other natural gas equipment, and calculations use emission factors from 40 CFR Part 98 Subpart C Table C-1 and C-2. Fleet fuel carbon footprint includes all NW Natural fleet fuel combustion associated with operating fleet vehicles (including
diesel, gasoline, and CNG vehicles), and fleet equipment, and calculations use emissions factors for CO2 from Appendix H of US EIA Instructions for Form EIA-1605. Natural gas fugitive emissions from system operation are calculated in accordance with EPA’s 40
CFR part 98 subpart W.

75

Includes data from electricity data from utility bills from facilities and legacy environmental accounts. Calculated by multiplying electricity usage at each facility by the emissions factor for the corresponding electric utilities (published in 2021 by the Oregon
Department of Environmental Quality and 2020 by the Washington Department of Commerce). Scope 2 Facility Electricity Emissions represent 12 months of electricity usage at the 18 main facilities operated by NW Natural. Due to the meter reading dates on theutility bills this value is approximate.

76

Includes data from utility bills from all NW Natural sites including legacy environmental accounts, rectifier, and telecom sites. Calculated by multiplying electricity usage at each facility by the emissions factor for the corresponding electric utilities (published in
2021 by the Oregon Department of Environmental Quality and 2020 by the Washington Department of Commerce).

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

109Gas Company ESG/Sustainability Quantitative Information
Parent Company:
Operating Company(s):Business Type(s):State(s) of Operation:
Regulatory Environment:
Report Date:NW Natural Holdings
NW Natural
Natural Gas Local Distribution Company
OR & WA
Regulated
2022

Refer to the "Definitions" column for more information on each metric.

Ref. No.

2020

2021

2022

Natural Gas Distribution
1
1.1

METHANE EMISSIONS AND MITIGATION FROM DISTRIBUTION MAINS
Number of Gas Distribution Customers

1.2

Distribution Mains in Service

1.2.1
1.2.2
1.2.3
1.2.4

Plastic (miles)
Cathodically Protected Steel - Bare & Coated (miles)
Unprotected Steel - Bare & Coated (miles)
Cast Iron / Wrought Iron - without upgrades (miles)

1.3

Plan/Commitment to Replace / Upgrade Remaining Miles of Distribution Mains (# years to complete)

1.3.1
1.3.2
2

Unprotected Steel (Bare & Coated) (# years to complete )Cast Iron / Wrought Iron (# years to complete )Distribution CO2e Fugitive Emissions

Definitions

All methane leak sources per 98.232 (i) (1-6) are included for Distribution. Combustion
sources are excluded. CO 2 is excluded.
774,476785,897

794,497
These metrics should include all local distribution companies (LDCs) held by the Parent Company that are above the LDC Facility
reporting threshold for EPA's 40 C.F.R. 98, Subpart W reporting rule.

7,590
7,285
0
0

7,697
7,277
0
0

7,799
7,269
0
0
These metrics should provide the number of years remaining to take out of service, replace or upgrade catholdically unprotected steel
mains, and cast iron/wrought iron mains, consistent with applicable state utility commission authorizations.

0
0

0
0

0
0

2.1

CO2e Fugitive Methane Emissions from Gas Distribution Operations (metric tons)

66,301

66,257

66,670

2.2

CH4 Fugitive Methane Emissions from Gas Distribution Operations (metric tons)

2,652

2,650

2,667

2.2.1

CH4 Fugitive Methane Emissions from Gas Distribution Operations (MMSCF/year)

138

138

139

2.3

Annual Natural Gas Throughput from Gas Distribution Operations in thousands of standard cubic feet (Mscf/year )108,040,414

111,461,397

116,408,812

2.3.1

Annual Methane Gas Throughput from Gas Distribution Operations in millions of standard cubic feet (MMscf/year)

102,638

105,888

110,588

2.4

Fugitive Methane Emissions Rate (Percent MMscf of Methane Emissions per MMscf of Methane Throughput )

0.1%

0.1%

0.1%

Human Resources

Optional: # yrs by pipe type.
Optional: # yrs by pipe type.
Fugitive methane emissions (not CO2 combustion emissions) stated as CO2e, as reported to EPA under 40 CFR 98, Subpart W,
sections 98.236(q)(3)(ix)(D), 98.236(r)(1)(v), and 98.236(r)(2)(v)(B) - i.e., this is Subpart W methane emissions as input in row 2.2
below and converted to CO2e here. This metric should include fugitive methane emissions above the reporting threshold for all
natural gas local distribution companies (LDCs) held by the Parent Company that are above the LDC Facility reporting threshold for
EPA's 40 C.F.R. 98, Subpart W reporting rule. Calculated value based on mt CH4 input in the 2.2 (below).

INPUT VALUE (total mt CH4) as explained in definition above. Subpart W input is CH4 (mt).

This metric provides gas throughput from distribution (quantity of natural gas delivered to end users) reported under Subpart W, 40
C.F.R. 98.236(aa)(9)(iv), as reported on the Subpart W e-GRRT integrated reporting form in the “Facility Overview” worksheet Excel
form, Quantity of natural gas delivered to end users (column 4).

Calculated annual metric: (MMSFC methane emissions/MMSCF methane throughput)See Safety and People & Culture sections for more information

Additional Metrics (Optional)© 2021 American Gas Association. All rights reserved.

110

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Forward-Looking Statements
This report and other materials prepared by NW Natural
Holdings from time to time may contain forward-looking
statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Forwardlooking statements can be identified by words such as“anticipates,” “assumes,” “continues,” “could,” “intends,”“plans,” “seeks,” “believes,” “estimates,” “expects” andsimilar references to future periods. Examples of
forward-looking statements include, but are not limited
to, statements regarding the following: plans, objectives,
assumptions, estimates, expectations, timing, goals,
strategies, commitments, future events, investments,
projections, expectations, outlooks, commitments,
intentions, acquisitions and timing, completion andintegration thereof, infrastructure investments, safety
and implementation of safety initiatives and expected
benefits, system inspections, system modernization,
improvements and reliability, infrastructure resiliency,
gas storage capabilities, business continuity andemergency preparedness measures, damage
prevention measures, risk management programs,
commodity costs and sourcing, competitive advantage,
marketing, service territory, customer service, customer
and business growth, customer satisfaction ratings,
weather and ability to serve customers during weather
events, customer rates, customer affordability and bill
payment assistance initiatives, customer preference,business risk, efficiency of business operations,operational performance and costs, businessdevelopment and new business initiatives, water andwastewater industry, acquisitions, partnerships andinvestments including timing, completion and integrationof such investments and related operational initiatives,
financial positions and performance, economic andhousing market conditions, trends and performance,
capital expenditures, technological and equipment
innovations and investments, cybersecurity initiatives
and investments, strategic goals and visions and ourcommunication of such goals and visions, environmental
initiatives and expected outcomes, matters related

111

to climate change, greenhouse gas reduction andthe role of natural gas and the gas delivery system,
including use of and demand for renewables, carbon
emissions, targets and savings, renewable natural gas
projects or investments and timing, and completion
thereof, hydrogen projects, programs and investments
and timing and completion thereof, emerging
decarbonization technologies and equipment, gas supply
initiatives and procurement of renewable natural gas
for customers, energy efficiency initiatives, investments
and funding, energy usage and savings, operationalsustainability measures, charitable donations andvolunteer programs, political contributions, workforce
trends, labor relations, diversity, equity and inclusion
initiatives, compensation and benefit programs,
employee training, sustainable procurement initiatives,
the regulatory environment, timing or effects offuture regulatory proceedings or future regulatory
approvals or rate case outcomes, effects of legislationand changes in laws and regulations, including but
not limited to carbon, climate, renewable natural gas
and renewable hydrogen regulations, effects, extent,
severity and duration of pandemics or epidemics
and any resulting economic disruption therefrom,geopolitical uncertainty, and other statements thatare other than statements of historical facts.
The forward-looking statements contained in thisreport are provided for the general information of
our stakeholders and are not intended to induce
any sales or purchases of securities or to be used inconnection therewith for any investment purposes.
Forward-looking statements are based on our current
expectations and assumptions regarding our business,the economy, geopolitical factors and other future
conditions. Because forward-looking statements relate
to the future, they are subject to inherent uncertainties,risks and changes in circumstances that are difficult
to predict. Our actual results may differ materiallyfrom those contemplated by the forward-looking

statements, so we caution you against relying on
any of these forward-looking statements. They areneither statements of historical fact nor guarantees orassurances of future performance. Important factorsthat could cause actual results to differ materiallyfrom those in the forward-looking statements are
discussed by reference to the factors described inPart I, Item 1A “Risk Factors,” and Part II, Item 7 andItem 7A “Management’s Discussion and Analysis ofFinancial Condition and Results of Operations,” and“Quantitative and Qualitative Disclosure about Market
Risk” in the Company’s most recent Annual Report on
Form 10-K, and in Part I, Items 2 and 3 “Management’s
Discussion and Analysis of Financial Condition and
Results of Operations” and “Quantitative and Qualitative
Disclosures About Market Risk”, and Part II, Item 1A,“Risk Factors”, in the Company’s quarterly reports
filed thereafter, which, among others, outline legal,
regulatory and legislative risks, public health risks,financial macroeconomic and geopolitical risks, growthand strategic risks, operational risks, business
continuity and technology risks, environmental
risks and risks related to our water and renewables
businesses.
All forward-looking statements made in this report andall subsequent forward-looking statements, whether
written or oral and whether made by or on behalf of theCompany, are expressly qualified by these cautionary
statements. Any forward-looking statement speaks
only as of the date on which such statement is made,and we undertake no obligation to publicly update any
forward-looking statement, whether as a result of new
information, future developments or otherwise, except
as may be required by law. New factors emerge fromtime to time and it is not possible to predict all suchfactors, nor can it assess the impact of each suchfactor or the extent to which any factor, or combinationof factors, may cause results to differ materially fromthose contained in any forward-looking statements.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.

Not to be used for investment purposes—see NW Natural and NW Natural Holdings most recent Form 10-Ks as updated by the most recent quarterly and periodic reports for information relevant to investment decisions.