GRI Standard: general basic contents

Disclosure

Page number (s) and / or GRI Content Index

Omission

Assurance

Corporate Sustainability Assessment - Dow Jones Sustainability Index

GRI 101: Foundation, 2016

GRI 102: General Disclosures, 2016

102-1 Name of the organization

Canacol Energy Ltd.

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102-2 Activities, brands, products, and services

Canacol Energy

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102-3 Location of headquarters

Canacol Energy Ltd.
Corporate Headquarters: Suite 2650, 585 – 8th Avenue SW, Calgary, Alberta T2P 1G1.
Branch in Colombia: Calle 113 No. 7-45, Bogotá, Torre B, Oficina 1501.

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102-4 Location of operations

Operations map

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102-5 Ownership and legal form

ESG report 2020
Canacol Energy

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102-6 Markets served

Operations map

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102-7 Scale of the organization

Operations map

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102-8 Information on employees and other workers

Key indicators. A safe and committed team, Number of Canada and Colombia employees
Key indicators. A safe and committed team, Women employees (number) / Diversity of governance bodies and employees
Key indicators. A safe and committed team, Men employees (number)
Employability indicators, Total number of full-time employees by gender and region
Employability indicators, Canada, Number of employees by job category, age, and gender, Diversity of employees
Employability indicators, Colombia, Number of employees by job category, age, and gender, Diversity of employees
Employability indicators, Colombia, Number of employees by employment contract and gender
We strengthen local talent

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102-9 Supply chain

Key indicators. A society guided by sustainable development. Procurement of goods and services
Contractors and suppliers. Procurement of goods and services

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102-10 Significant changes to the organization and its supply chain

There were no significant changes in the organization or in the supply chain

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102-11 Precautionary principle or approach

Climate change strategy. Impacts, mitigation or remediation strategies, and challenges
Biodiversity. Impacts, mitigation or remediation strategies, and challenges
Integrated water resources management. Impacts, mitigation or remediation strategies, and challenges
Waste management. Impacts, mitigation or remediation strategies, and challenges
Risk management
We comply with the agreement of the precautionary principle, indicated in the national and international regulations. We have current certification in the ISO 14001: 2015 Environmental Management Systems standard, granted by the certifying entity SGS Colombia, which performs follow-up and evidence audits of the full compliance.

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1.3 Risk & crisis management

102-12 External initiatives

ESG report 2020
We are the future, we are energy
Environmental, social, and governance (ESG) strategy: sustainability is fundamental to our business
We participate in different arenas promoted by the Colombian Network of the Global Compact

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102-13 Membership of associations

• ACIPET (Colombian Association of Oil Engineers)
• ACP (Colombian Petroleum Association)
• Colombian Stock Exchange
• Canada Colombia Chamber of Commerce
• Campetrol
• Chamber of Commerce of Bogotá’s Circle of Affiliates
• Deceval
• EITI (Extractive Industries Transparency Initiative)
• Naturgas (Colombian Association of Natural Gas)
• Global Compact

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Strategy

102-14 Statement from senior decision-maker

We are the future, we are energy

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102-15 Key impacts, risks, and opportunities

We are the future, we are energy
Meeting Colombia’s natural gas demand
Environmental, social, and governance strategy (ESG): sustainability is fundamental to our business
Climate change strategy. Impacts, mitigation or remediation strategies, and challenges
Integrated water resources management. Impacts, mitigation or remediation strategies, and challenges
Biodiversity. Impacts, mitigation or remediation strategies, and challenges
Waste management. Impacts, mitigation or remediation strategies, and challenges
Risk management

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1.3 Risk & crisis management

Ethics and integrity

102-16 Values, principles, standards, and norms of behavior

Canacol’s value proposition
Environmental, social, and governance (ESG) strategy: sustainability is fundamental to our business
Ethics and compliance system
We honed our culture of ethics

Consult: http://canacolenergy.com/sustainability/governance/

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1.3 Risk & crisis management
1.4.1 Codes of conduct
1.4.3 Corruption & bribery
1.4.4 Systems / Procedures

102-17 Mechanisms for advice and concerns about ethics

Key indicators. A society guided by sustainable development. CCCR
Ethics and compliance system
Reporting mechanisms
Concerns, requests, complaints and claims (CRCC) system
relacioneslaborales@canacolenergy.com is the channel for attending to any questions from workers, community members, authorities, etc. concerning labor compliance by contractors and subcontractors.

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1.4.4 Systems / Procedures

Governance

102-18 Governance structure

Board of Directors
Key indicators. A transparent and ethical business. Members of the Board of Directors (number)
Key indicators. A transparent and ethical business. Committees supporting the Board of Directors (number)
Board of Directors

Board of Directors: Executive director (1), Independent director (6), Other non-executive directors (1)
http://canacolenergy.com/site/assets/files/2845/corporate_governance_code.pdf
The chair of the board should be an independent director. Where this is not appropriate, an independent director should be appointed to act as lead director. However, either an independent chair or an independent lead director should act as the effective leader of the board and ensure that the board’s agenda will enable it to successfully carry out its duties.

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1.1 Corporate governance

102-19 Delegating authority

The Board shall also develop formal Authority Guidelines delineating authority retained by the
Board and authority delegated to the CEO and the other members of senior management. The
Authority Guidelines shall also clearly state matters which should be presented to the Board and
its Committees.
http://canacolenergy.com/site/assets/files/2845/governance_guidelinesmy1721.pdf

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102-20 Executive-level responsibility for economic, environmental, and social topics

Corporate governance structure for addressing climate change

The highest level executive responsible for economic, environmental and social topics is our CEO. The ESG Director is responsible for:
1. Following up on performance related to our ESG strategy which are managed by the organization’s different areas.
2. Reporting directly to the CEO on the ESG strategy.
3. Orienting the exercise of communicating progress through the annual ESG report.

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102-21 Consulting stakeholders on economic, environmental, and social topics

Consult: http://canacolenergy.com/site/assets/files/2845/governance_guidelinesmy1721.pdf

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102-22 Composition of the highest governance body and its committees

Board of Directors
Key indicators. A transparent and ethical business. Members of the Board of Directors (number)
Key indicators. A transparent and ethical business. Independent Board Members (percentage)
Key indicators. A transparent and ethical business. Committees supporting the Board of Directors (number)
Board of Directors

Consult: Management Information Circular: http://canacolenergy.com/site/assets/files/2845/canacol_-_2020_agm_circular.pdf – pages 6-9
Consult: http://canacolenergy.com/about-us/board-of-directors/

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1.1 Corporate governance

102-23 Chair of the highest governance body

Board of Directors

Chairman is non-executive and independent.
Consult: http://canacolenergy.com/about-us/board-of-directors/

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1.1.2 Non-executive Chairman / Lead Director

102-24 Nominating and selecting the highest governance body

The Corporate Governance and Nominating Committee has the responsibility to review with the Board, on an annual basis, the appropriate skills and characteristics required of Board members in the context of the current make-up of the Board and any perceived needs. Consult: http://canacolenergy.com/site/assets/files/2845/4_gc-1_corporate_governance_and_nominating_committee_te.pdf
The nominating committee looks for the following: qualified individuals with diverse experience, backgrounds, perspectives and skills, independence, individuals with the highest personal and professional ethics and commitment to the long term interests of shareholders as well as those who have sufficient time to effectively fulfill duties as a board member.

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1.1.5 Board effectiveness: Board election process

102-25 Conflicts of interest

Other initiatives in 2020
Consult: http://canacolenergy.com/site/assets/files/3517/aif_-_ingles_-_4q2020.pdf Page 47
The audit committee meets four times per year, and inquiries about any conflict of interest situations are asked during these meetings.

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102-26 Role of highest governance body in setting purpose, values, and strategy

A transparent and ethical business: Board of Director
Consult: http://canacolenergy.com/site/assets/files/2845/governance_guidelinesmy1721.pdf

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102-27 Collective knowledge of highest governance body

No formal continuing education program currently exists for the directors of Canacol.
The Company encourages directors to attend, enroll or participate in courses and/or seminars dealing with financial literacy, corporate governance and related matters, and has agreed to pay the cost of such courses and seminars. Each director of the Company has the responsibility of ensuring that he maintains the skill and knowledge necessary to meet his obligations as a director. The Company has a formal process in place for assessing the Board, its committees and individual Board members.
This formal process includes an independent evaluation of the board done on an annual basis. The most recent evaluation was completed in May, 2020.
Consult: http://canacolenergy.com/site/assets/files/2845/canacol_-_2020_agm_circular.pdf

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102-28 Evaluating the highest governance body’s performance

The Audit Committee conducts an annual self-assessment of its performance and the Terms of Reference and makes recommendations to the Corporate Governance and Nominating Committee with respect thereto. Members of the Committee shall be provided with appropriate and timely training to enhance their understanding of auditing, accounting, regulatory and industry issues applicable to Canacol. New Committee members shall be provided with an orientation program to educate them on the Corporation’s business, their responsibilities and the Corporation’s financial reporting and accounting practices.

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1.1.5 Board effectiveness: Board performance review

102-29 Identifying and managing economic, environmental, and social impacts

The ESG Committee has been established by resolution of the Board of Directors of Canacol Energy Ltd for the purpose of assisting the Board in fulfilling its oversight responsibilities with respect to the Corporation’s social responsibility and sustainability management. Consistent with this function, the Committee will encourage continuous improvement of, and should foster adherence to, Canacol’s policies, procedures, and practices at all levels. The Committee’s primary roles and responsibilities are to:
• Serve as an independent and objective party to monitor the integrity and quality of Canacol’s ESG
strategy.
• Ensure that Canacol’s ESG strategy is integrated into its business plan, corporate values and
objectives and serves to foster a culture of responsibility and transparency.
• Review and approve Canacol’s annual Sustainability Report.
• Review and approve the qualifications, independence, engagement, compensation and performance
of the external party chosen to provide assurance on Canacol’s annual Sustainability Report.

Consult: http://canacolenergy.com/site/assets/files/2845/esg-1_committee_terms_of_reference.pdf

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102-30 Effectiveness of risk management processes

Risk management

The Board ultimately has the responsibility to oversee the development and approval of the mission of Canacol, its goals and objectives, and the strategy by which these objectives will be reached. In guiding the strategic choices of Canacol, the Board must understand the inherent prospects and risks of such strategic choices. While the leadership for the strategic planning process comes from the management of Canacol, the Board shall bring objectivity and a breadth of judgment to the strategic planning process and will ultimately approve the strategy developed by management as it evolves.
Consult: http://canacolenergy.com/site/assets/files/2845/canacol_-_2020_agm_circular.pdf Page 49

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1.3 Risk & Crisis Management

102-31 Review of economic, environmental, and social topics

The ESG Committee shall have the roles and responsibilities set out below as well as any other functions that are specifically delegated to the Committee by the Board and that the Board is authorized to delegate by applicable laws and regulations.
1. Assist the Board in establishing and monitoring the Corporation’s ESG policies and practices, 2. Propose changes as necessary from time to time to respond to ESG recommendations or guidelines from authorities or investors as well as changes in the Corporation’s business environment, 3. Assist the Board with an annual review of the Board and Committee structure, 4. Ensure that the Corporation has in effect adequate policies and procedures to identify and manage the principal ESG risks of the Corporation’s business, 5. Review the main challenges the Corporation faces in ESG, 6. Review and approve material ESG disclosure, 7. Review and approve the external party assurance process and report.
Consult: http://canacolenergy.com/site/assets/files/2845/esg-1_committee_terms_of_reference.pdf

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102-32 Highest governance body’s role in sustainability reporting

The Board of Directors (ESG Commiteee) formally reviews and approves the organization’s sustainability report and ensures that all material topics are covered.

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102-33 Communicating critical concerns

Reporting policy for improper acts and whistleblower policy.
Consult: http://canacolenergy.com/site/assets/files/2845/whistleblower_policy.pdf
At every quarterly audit committee meeting the board chair asks all executives and board members if they have become aware of any incidents of whistleblowing.

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102-34 Nature and total number of critical concerns

No critical concerns were communicated to the highest governance body.

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102-35 Remuneration policies

The Corporation’s executive compensation program is administered by the Compensation Committee of the Board. The Compensation Committee’s mandate includes reviewing and determining or making recommendations to the Board in respect of compensation matters relating to the executive officers, employees and directors, including the Named Executive Officers.
Consult: http://canacolenergy.com/site/assets/files/2845/4_gc-1_corporate_governance_and_nominating_committee_te.pdf
Consult: http://canacolenergy.com/site/assets/files/2845/canacol_-_2020_agm_circular.pdf Page 15.

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1.1.8 Executive compensation - Success metrics
1.1.9 Executive compensation - Alignment with long-term performance

102-36 Process for determining remuneration

Annual General and Special Meeting of Shareholders. p. 15-21 Statement of Executive Compensation
Compensation committee of the board of directors meets to discuss as required. Canacol engages an independent consultant to provide a detailed compensation report on an annual basis.
Consult: http://canacolenergy.com/site/assets/files/2845/canacol_-_2020_agm_circular.pdf

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1.1.8 Executive compensation - Success metrics
1.1.9 Executive compensation - Alignment with long-term performance

102-37 Stakeholders’ involvement in remuneration

Consult: http://canacolenergy.com/site/assets/files/3517/aif_-_ingles_-_4q2020.pdfPage 40-42
Consult: . p. 10-21 Statement of Executive Compensation.

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102-38 Annual total compensation ratio

• Colombia’s annual total compensation ratio: 7.37

• Colombia’s highest-paid individual (Executive) $ 250.779 (dollars) - Data only consider base salary and other cash incentives

• Median annual total compensation for all Colombian employees excluding highest-paid individual
USD $ 34.023 (dollars) - Data only consider base salary and other cash incentives

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102-39 Percentage increase in annual total compensation ratio

• Ratio: 28.6%

• Increase in annual total compensation for Colombia’s highest-paid Executive 3.7%

• Median percentage increase in annual total compensation for all Colombian employees excluding highest-paid Executive 12.9%

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Stakeholder engagement

102-40 List of stakeholder groups

Stakeholders

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102-41 Collective bargaining agreements

Labor relations

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3.2.6 Freedom of association

102-42 Identifying and selecting stakeholders

Stakeholders

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102-43 Approach to stakeholder engagement

Stakeholders

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102-44 Key topics and concerns raised

Material topics 2020

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1.2.1 Material issues
1.2.2 Materiality disclosure

Reporting practice

102-45 Entities included in the consolidated financial statements

ESG report 2020

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102-46 Defining report content and topic Boundaries

ESG report 2020
Material topics 2020

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1.2.1 Material issues
1.2.2 Materiality disclosure

102-47 List of material topics

Material topics 2020

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1.2.1 Material issues
1.2.2 Materiality disclosure

102-48 Restatements of information

There were restatements of information in the following indicators:

• GRI 403-9 Work-related injuries. Lost time injury frequency rate (LTIFR) indicator for contractors reported
in 2019. Restatements resulted from the measurement method. A contractor’s fatality was included in
the LTIFR indicator as a work-related incident that results in a worker being unable to return to work.
However, the fatality already affects the TRIR recordable accident indicator and should not be included in the LTIFR indicator.

• GRI 201-1 Economic performance. The 2018 and 2019 figures were reclassified from previously issued reports for comparative purposes.

• The 2017, 2018 and 2019 figures related to financial performance, operations and infrastructure were reclassified from previously issued reports for comparative purposes.

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the data tables

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102-49 Changes in reporting

Environmental, social, and governance (ESG) strategy: sustainability is fundamental to our business

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102-50 Reporting period

ESG report 2020

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102-51 Date of most recent report

October, 2020

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102-52 Reporting cycle

Annual

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102-53 Contact point for questions regarding the report

Point of contact for further information

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102-54 Claims of reporting in accordance with the GRI Standards

ESG report 2020

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102-55 GRI content index

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102-56 External assurance

Independent assurance statement by Deloitte

The external assurance of Environmental, Social and Governance (ESG) information was approved by the Board of Directors. The Board of Directors has been involved a 100% in the selection of the indicators to be verified and in the validation of the external assurance result.

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2.1.2. Environmental Reporting - Assurance
3.1.2. Social Reporting - Assurance