ESG Leadership

Aloha kākou, greetings everyone.

Regardless of how it’s measured, a business’ long-term success must be sustainable. And sustainability is a function of how a business contributes to the success of its stakeholders.

At HEI, this principle has informed our actions for a very long time. It’s also why over the past three years we have significantly increased our reporting on environmental, social and governance (ESG) activities. Our ESG actions demonstrate our commitment not only to operating a sustainable business, but also to building a sustainable Hawai‘i in which our children and grandchildren, our communities, our customers and our fellow employees will thrive together both now and for generations to come.

As providers of critical infrastructure and services, the HEI family of companies plays an essential role in transitioning Hawai‘i away from fossil fuels and toward a net zero economy – one in which our industries remove whatever greenhouse gas (GHG) emissions they create. We view it as our kuleana (responsibility) to set ambitious climate goals and plans, and by doing so, to inspire and enable other sectors of the economy to take action to reduce GHG emissions and transition away from fossil fuels. Our board of directors, our customers, partners and suppliers, and every one of our employees plays a role in this transition, reflecting the way in which the climate crisis demands our community’s collective action.

Our utility, Hawaiian Electric, anchors these efforts, as it works to directly decarbonize Hawai‘i’s electricity and ground transportation sectors while enhancing the resilience of our electricity system and protecting our communities from the impacts of climate change. We made tremendous progress in 2021, achieving a consolidated renewable portfolio standard (RPS) of 38.4% that puts us well ahead of schedule to achieve Hawai‘i’s statutory goal of 40% RPS by 2030. We also set a new goal to reduce GHG emissions from electricity generation by 70% compared to 2005 on our way to net zero emissions from electricity generation by 2045. Our preliminary 2021 GHG emissions from electricity generation were 22% below 2005 levels.

Supporting Hawai‘i’s economy and affordability for those who live here continued to be a central focus for American Savings Bank in 2021. From 2020 through year-end 2021, ASB deployed Paycheck Protection Program funding totaling $551 million to support Hawai‘i businesses representing more than 40,000 employees. In 2021 ASB’s teammates also led a statewide business holiday card program that provided $750,000 in direct support to Hawai‘i’s restaurant and food supply industries. These efforts have helped small businesses stay afloat during the pandemic and keep jobs in our communities. In addition, ASB is helping address climate change by providing financing for customers to invest in clean energy and storage, energy efficiency and resilience projects and by improving energy efficiency across its banking operations.

Our infrastructure investment platform, Pacific Current, made steady progress in its mission to accelerate Hawai‘i’s transition to a sustainable future. For example, in 2021 Pacific Current

increased deployment of EverCharge electric vehicle charging systems to accelerate electrification of transportation and made its first investment in the water sector through a water-energy purchase agreement project. These efforts help to keep money in the state by investing local capital into local projects and local communities, contribute to local job creation, and build Hawai‘i’s talent base for the future.

We’re proud of how the HEI family of companies and our employees have responded to the escalating effects of climate change, a fast-moving pandemic and disruptive sociopolitical events. We’ve provided continuous essential services, supported our customers through economic hardships, and executed transformative strategies that include our utility’s climate change action plan and our bank’s digital transition.

This year’s ESG Report includes our first enterprise-wide GHG emissions inventory, an important initiative that will further guide our ambitious ESG strategies and provide even greater transparency around our companies’ progress on climate issues.

Yet there’s more work to do. As we write this letter, the global community is grappling with Russia’s invasion of Ukraine, an event with environmental, economic and humanitarian implications for people everywhere – including here in Hawai‘i. Until recently, approximately 30% of Hawai‘i’s crude oil was sourced from Russia. We denounce Russia’s actions, which only strengthen our resolve to end our state’s reliance on imported fossil fuel, and our thoughts, prayers and aloha are with the people of Ukraine. We’re committed to doing our part to build a future for Hawai‘i that is economically, environmentally and socially sustainable. We know continued success will require teamwork, discipline, imagination and thoughtful action as we meet the challenges ahead. Through the integrated efforts of our companies, we aim to put Hawai‘i at the forefront of clean energy, create a sustainable and growing local economy, and empower our families and communities to flourish.

Me ke aloha pumehana – with warm regards,

Scott Seu

President and Chief Executive Officer

Adm. Thomas Fargo

Chair, Board of Directors