Climate-Related Risks and Opportunities

As part of our structured Risk Assessment Process, we specifically identified the climate-related risks and opportunities that can affect our business in both the near and long term. The Task Force on Climate-Related Financial Disclosures (TCFD) divides climate-related risks into two major categories: (1) risks related to the transition to a lower-carbon economy and (2) risks related to the physical impacts of climate change.

+ Transition Risks

Transition risks reside in how an industry must adapt or exploit business activities and investments to mitigate carbon emissions. As Milestone’s operations result in minimal GHG emissions, we evaluate transition risks as they relate to the oil and gas industry in general, the role Milestone plays in this transition, and the opportunities that enable us to help mitigate this risk. Our customers’ activities are subject to increasing changes in public policy and federal, state, and local laws and regulations intended to reduce the environmental impact of their operations. Furthermore, as part of the energy transition, energy companies are facing added pressure from investors to evaluate their overall climate risk exposure, resulting in a commitment to reduce the emissions intensity of their lifecycle and setting net-zero targets.

Through our innovative waste sequestration technologies, we provide our customers a means to mitigate some of their climate-related risks and achieve their carbon emissions-reduction goals in the waste management part of the E&P lifecycle. Milestone is the premier partner of oil and gas producers to address the challenges posed by the energy transition. On Page 18 we provide additional insight into how our slurry injection process translates into savings in carbon emissions. Milestone’s climate change-resilient business strategy will result in financial growth as the world navigates the goals and challenges of a low-carbon future.

+ Physical Risks

In late 2022, we conducted a Physical Hazard Screening to identify short-term and future climate-related physical risks for all of Milestone’s operating locations. The analysis was conducted by an independent third-party consultant, who considered present-day weather and natural disaster hazards and potential future impacts of climate change. The present-day hazards were modeled based on publicly available information and analysis of historical data. The parameters used for the potential future hazards analysis were aggregated climate metrics under two scenarios derived from the Intergovernmental Panel for Climate Change’s (IPCC) Representative Concentration Pathways 4.5 and 8.5. The analysis was performed for general physical conditions at the locations without specific analysis of existing adaptation measures for our buildings, stations, and structures.

The screening did not identify any Milestone sites that could be exposed to the highest level of future climate change hazards. However, a small number of present-day hazards affecting our locations was identified. Based on these results, we reviewed the design elements of our facilities to address relevant present-day hazards and maintain the resilience of our assets for the long term. The analysis of the screening continued into early 2023, with the goal of developing mitigation measures for affected sites. For the two locations that were identified to have high-level hazards for tornadoes, we commissioned the installation of tornado shelters to protect our employees and allow the continued resilience of our business.

We will continue to conduct Physical Climate Hazard Screenings for every new facility we build in the future.