Montreal, August 13th, 2022

To our stakeholders:

I am pleased to confirm that Transcontinental reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to sharing this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Peter Brues
President & Chief Executive Officer

TC Transcontinental seeks to ensure that every employee can perform their job functions under fair and reasonable working conditions, with respect for the employee's physical and psychological integrity and name, reputation and privacy.

Respect for human rights is specifically mentioned in our Code of Conduct, which details the values and principles by which all the company’s employees and directors must abide. Our Code of Conduct was initially published in 2000. Since then, it has been updated as required in accordance with significant changes to legislation or regulations, or as TC Transcontinental’s business and practices have evolved. Our Code also reflects TC Transcontinental’s culture and brand, which are the product of decades of hard work, dedication, and loyalty from the members of TC Transcontinental’s team. To remain worthy of this reputation, we are determined to ensure compliance with our Code of Conduct; it is the cornerstone on which our conduct and actions are based in every circumstance, and it reflects a continued commitment from each of us to our customers, business partners, suppliers and shareholders. Employees and directors of the company must review and formally acknowledge the Code of Conduct upon their hiring. Training is also provided and is mandatory for all.

The Supplier Code of Conduct supports the principles included in the Code of Conduct and extend these standards to our suppliers. The Supplier Code of Conduct is forwarded to all suppliers of TC Transcontinental. Some of provisions of this Code pertain specifically to human rights dimensions, child labor or forces labors, compensation and hours of work, anti-discrimination, collective bargaining, and freedom of association as well as health and safety.

TC Transcontinental is committed to the prevention of workplace harassment and violence and to comply with relevant Acts, Regulations, Codes and health, safety and wellness practices. In this regard TC Transcontinental is committed to foster an environment that is free of any type of harassment and violence in the workplace. We have a workplace harassment and violence policy in place since 2010, updated in 2012 and 2016.

TC Transcontinental values the health, safety and wellness of its employees and expects that its workplace(s) will be free of any type of workplace harassment and violence. TC Transcontinental will not tolerate threats of workplace violence perpetrated against or by any employee, customer, vendor, contractor, visitor or any other person at a Transcontinental workplace or involved in TC Transcontinental business and will enforce a zero-tolerance policy.

Finally, respect for diversity is of paramount importance at TC Transcontinental. Diversity is an imperative that leads to better performance, a healthier balance sheet, greater talent retention and a competitive advantage. Our gender diversity policy is systematically integrated into our recruitment, talent promotion and performance evaluation processes. Our vision is also aligned with the United Nations Sustainable Development Goal 5, which aims to "ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life".

To ensure that TC Transcontinental monitors and addresses Human rights risks, we used the EcoVadis platform to validate our suppliers’ measures and performance on this issue, amongst a variety of topics. Human rights are a fundamental theme of the EcoVadis methodology. Each supplier that are requested to undergo the EcoVadis sustainability assessment must complete a comprehensive questionnaire structured around 21 sustainability criteria. They must provide information on the programs that are in place, their policy, management approach, target, and performance. All the information provided must be supported by documentation and a score is provided for each dimension. Should an important issue be identified or should the score be too low, corrective action plans can be requested and monitored using the platform. In 2019, TC Transcontinental asked more than 28 suppliers, representing its most critical suppliers, to complete this assessment, enabling the company to gain valuable insight on its value chain’s practices.

TC Transcontinental is committed to promoting gender diversity at all levels and strongly believes that gender diverse organizations, including at the Board of Directors level, contribute to financial performance and create value for all stakeholders. We strive to provide access to different perspectives and innovative approaches, as well as attracting and retaining top talent. It is our aim to progressively move to a more equal gender representation in the workplace.

In 2019, we renewed our Gender Diversity Steering Committee, supported by the Chair of the Board and senior management, and including representatives, both male and female, from each of our sectors. More than ever before, our businesses are integrating gender diversity into their talent management practices and have established the responsibility of managers in promoting this diversity, with targets now included in their individual objectives and in the variable compensation based on the achievement of these objectives. In our Printing sector, a mentoring program has been created to support the development of senior managers, both men and women: one of the objectives of this program is to ensure gender diversity within the talent succession path. Our educational publishing group has implemented work-life balance initiatives and has also increased the representation of women as vice-president and managers. Each year, we organize the Women@TC conference to collectively reflect on future efforts to achieve our diversity objectives.

In 2021, we launched the second component of the Mentoring Program, where our most promising female talents are sponsored by members of the management committee. We also surveyed the participants of the first component and obtained their input to improve the program. We also expanded our diversity and inclusion programs to include ethnic diversity. To supplement the results already available in the United States, we proceeded for the first time in Canada to send out a questionnaire on visible minorities and First Nations, where more than 85% of employees completed a self- identification. The information collected was compared with local sociodemographic data. Having a complete portrait in hand, our business entities will now determine the measures and actions necessary to ensure better representation within their teams.

Finally, in keeping with our values, we believe that to reach their full potential, employees must feel safe and accepted for who they are. This is how True Colors, an employee-driven LGBTQ+ committee, was launched company-wide. This committee will implement educational and community initiatives to create an inclusive and safe space for members of the LGBTQ + community and their allies.

Our 2019-2021 plan contains 11 objectives along four axes: our people, our operations, our products and our communities. We have set ambitious goals with quantifiable targets that are reflective of our ever-evolving environment as we continue to transform and grow geographically.

Our People:
For over 40 years, TC Transcontinental has placed its employees first; our values of respect, teamwork, performance and innovation are at the core of its success. Throughout our network, we foster a safe, diverse and inclusive work environment. Additionally, we encourage our employees’ professional growth through engaging corporate training and development programs. The following two targets are the ones relevant to the Human rights topic:
TARGET 1 Maintain a safe and healthy work environment
• Reduce the total incident rate (incidents per 200,000 worked hours) by 15% for our Printing and Packaging sectors
TARGET 2 Move towards a more balanced gender representation in leadership
• Ensure at least 30% of female representation on the Board of Directors
• Have at least 3 women on the Executive Management Committee
• Reach 30% of women in executive and management positions

Our indicators to measure outcomes regarding our people:
In 2021, we have reached our target to reduce the total incident rate. Indeed, the total incident rate (incidents per 200,000 hours worked) in our Printing and Packaging Sectors was of 1.57, which represents a reduction greater than 50% in the three-year period.

In 2021, our continued efforts on gender diversity have enabled us to surpass our initial target by reaching 33% of women in leadership positions in our Packaging, Printing and Media Sectors. We also had 3 women which were part of the Executive Management Committee. In addition, the Corporation’s Board of Directors has a female representation of 39%.

TC Transcontinental’s success is based on our values – respect, teamwork, performance and innovation. Our values are strong, and they are fully integrated in our business practices. In this respect, our commitment to promoting these values extends not only to our own interactions but also to relationships with our customers, business partners, suppliers and shareholders. In keeping with our values, we are committed to ensuring that each and every one of our employees is treated with respect and dignity. This commitment is reflected in the policies and procedures put in place over the years to protect our employees and ensure a fair work environment. Thus, we rely, among other things, on our code of conduct, our equal employment opportunity policy and our policy on harassment and violence in the workplace. These practices are fully aligned with the United Nations Sustainable Development Goal 10 to "ensure equal opportunity and reduce inequalities of outcome, including through eliminating discriminatory laws, policies and practices and promoting appropriate legislation, policies and actions in this regard".

We are committed to continuing our efforts in occupational health, safety and wellness and will continue to implement measures to ensure the identification and reduction of risks, the ongoing training of our employees and leaders and the updating of our policies and internal audit tools.

The health and safety of our employees is a top priority, especially in our manufacturing environment. We are constantly seeking to do better by ensuring a healthy and safe environment that is conducive to their well-being. These priorities are also aligned with the United Nations Sustainable Development Goal 8, which aims to "protect labor rights and promote safe and secure working environments".

Beyond the implementation of specific initiatives, a real culture of health and safety has been established at all our sites. In order to maintain a safe and healthy work environment, several initiatives have been put in place in 2021:
• Corporate performance is frequently reviewed within the organization, both at the Board of Directors and Executive Committee level, as well as by business leaders and managers in the entities.
• We once again had to contend with the global COVID19 pandemic. Our united, cautious, and responsible approach to the pandemic, the expertise of our teams, as well as the preventive and rigorous measures applied continuously to protect our employees have paid off. In support, a communication campaign made up of illustrated material and videos made it possible to recall our main directives. Explanatory posters have been sent to all our workplaces, illustrating, among other things, the rules of distancing, the proper wearing of a mask, handwashing, and the importance of vaccination.
• A project to implement a platform allowing the centralized management of health and safety data has been started. Indeed, an agreement was signed in October 2021 with an industry leader to provide all TC Transcontinental sites with a robust, user-friendly, and multilingual web platform. This will allow all our entities to access data in real time, to investigate incidents that have occurred, and to carry out preventive inspections. The implementation of such a modern and unique platform, accessible on mobile devices and tablets, is a major area for improvement and will prove to be a tool of choice for monitoring the performance of our programs when it is fully deployed.
• The Health, Safety and Community Partners recognition program supported the commitment of our employees in the printing and packaging sectors. Thus, the best performing factories were rewarded with a cash donation given to a charity by each of the entities that qualified.
• • The Big Top program has made it possible to recognize excellence and innovation in health and safety initiatives and to highlight best practices. Among the selection criteria are the degree of impact, the complexity of the project, the costs and the results obtained. Several entities were rewarded for their innovative approach at the 2021 gala.
• • In terms of well-being, the implementation in 2021 of the new Dialogue integrated health platform is a flagship initiative. This multi-service one-stop shop brings together the Virtual Health Care Service (telemedicine), the Employee and Family Assistance Program (EFAP), including a marriage counseling service, support for children and the elderly, and the Stress and Wellness Management Service, providing unlimited access to psychologists and psychotherapists.

In 2021, 26% of TC’s employees are unionized employees. Further, we regularly communicate on our Code of conduct standards. Employees who would see unethical or practices going against the protection of labor could contact our anonymous ethics hotline to report it. Further, as explained in the Human rights section, we are extending these expectations to our suppliers as we included provisions regarding Occupational Health & Safety as well as Labor in our Supplier Code of Conduct. We are monitoring if our most critical suppliers, covering at least 60% of our spent, are meeting these requirements by asking them to complete an EcoVadis assessment. A portion of this questionnaire assesses their labor practices. During the 2019 exercise, all the suppliers that have completed the assessment have practices in place to manage this risk.

As a company specializing in packaging and printing, we strive for manufacturing excellence, which goes hand in hand with reducing our environmental footprint. We measure our performance in this sense, whether in terms of energy management, water consumption, greenhouse gas (GHG) emissions or residual materials management. Our corporate environmental policy is the cornerstone of our environmental program and covers the following topics: air pollution control and prevention, energy consumption, greenhouse gas emissions & use of renewable energy, logistics and distribution, operational waste management, paper procurement, plastics procurement, product stewardship, supply chain assessment and water management.

We recognize that climate change is one of the most important environmental issues of our time. It is caused by an increase in the concentration of greenhouse gases in the atmosphere, mainly attributed to human activities. TC Transcontinental is committed to reducing greenhouse gas emissions associated with its operations, reduce its energy consumption and increase the use of sustainable energy sources. Our strategy to reduce and optimize our energy consumption is aligned with the United Nations Sustainable Development Goal 7 to “increase substantially the share of renewable energy in the global energy mix and double the global rate of improvement in energy efficiency”. It also contributes to Goal 13 “ to ensure climate resilience, reduce operational emissions, develop products with negligible emissions and promote climate conscious behavior”.

We know that innovation is key to achieving our ambitious targets for sustainable packaging. This is why we are committed to investing at least 1% of our Packaging sector's annual revenues in research and development (R&D). This is in line with the United Nations Sustainable Development Goal 9, which states how important it is to "enhance scientific research and upgrade the technological capabilities of industry sectors, including encouraging innovation and substantially increasing the number of research and development workers".

Our sustainable development approach involves sound management of waste. We favour reduction at source, reuse, recycling and recovery, and we consider waste disposal as a last resort. Our approach is also aligned with the United Nations Sustainable Development Goal 12 aimed at "substantially reducing waste generation through prevention, reduction, recycling and reuse".

Our practices are in line with the United Nations Sustainable Development Goal 15, which aims to "promote the implementation of sustainable management of all types of forests, halt deforestation, restore degraded forests and substantially increase afforestation and reforestation globally". In that sense, for several years now, TC Transcontinental has been working with the non-governmental organization Canopy to encourage governments and the forest industry to support and promote the protection of old and endangered forests. The proportion of paper purchased that come from a recognized third-party certified or contains 100% recycled content reached 98% in 2021, up from 67% in 2012. Our in-house produced educational books are printed on 100% certified papers. We also hold relevant chain-of-custody certifications, which allow us to track fibres directly from their origin all the way to our printed product.

In 2021, we continued to implement initiatives to sustainably reduce our greenhouse gas emissions. Several plants in our printing and packaging sectors have carried out energy audits and developed multiyear plans to reduce their energy consumption. In 2021, multiple projects were completed, structured around several lines of action:
• Install heat recovery equipment
• Perform preventive maintenance and corrections to reduce air leaks
• Replace older equipment with state-of-the-art, more energy-efficient models
• Optimize the use of current equipment
• Improve the performance of our buildings.

In addition, to have a more complete overview of our carbon footprint, in 2021 we carried out a preliminary assessment of our indirect greenhouse gas emissions (category 3). By using the Quantis assessment tool, we were able to identify the most important categories of emissions, namely the extraction of raw materials needed to manufacture our products and emissions related to their end of life. Together, these two items represent more than 80% of total category 3 emissions. Over the next few years, we will continue to improve our data collection for certain specific categories and will use this preliminary estimate to build an action plan.
Our commitment to the circular economy and the ambitious objectives we have set ourselves required a strengthening of our research and development capabilities. Numerous projects are underway to address the technical challenges associated with the development of products that are compostable, recyclable or made from recycled resins. Issues related to end-of-life packaging affect our entire value chain, and the contribution of our customers and suppliers is essential to our design process. This collaborative vision ensures not only the commercial viability of our products, but also our ability to stay ahead of market demands and cements our leadership position. The many awards received by TC Transcontinental Packaging for its innovative and sustainable packaging demonstrate the success of this strategy.

In September 2019, TC Transcontinental Packaging, the Packaging Sector of TC Transcontinental, announced the launch of the vieVERTe sustainable product portfolio underscoring its dedication to contribute to a better environment and its commitment towards sustainability. This launch is also completely in line with its pledge for all of its packaging products to be 100% reusable, recyclable, or compostable by 2025.

In November 2020, TC Transcontinental Packaging announced the launch of Integritite™ 30% post-consumer recycled (PCR) collation shrink film. Integritite™ PCR collation shrink film includes 30% of post-consumer plastic resin transformed into a recyclable resource. Our R&D team has crafted a collation shrink film that is itself recyclable at store drop off locations and contains PCR without sacrificing performance, strength and durability.

In September 2021, TC Transcontinental Packaging unveiled it new ASTRA center, dedicated to Art, Science and Technology for Research and its Applications. This center located in Wisconsin, at the cutting edge of technology and supported by our R&D talents, represents a cornerstone of the company for innovating, prototyping, and commercializing sustainable solutions for our customers. Through our four labs, major brands and retailers can benefit from in-depth expertise in compostable, recyclable and recycled-content packaging, rapid time-to-market from design to commercialization, optimized solutions in performance, and cost and turnkey packaging solutions.
• The Analysis and Testing Services Laboratory performs physical tests to simulate the actual use of the packaging at each stage of use. The measurements carried out aim to develop molecular structures that meet the functionality requirements of the packaging for its entire life cycle.
• The Packaging and Applications Development Laboratory is equipped with nine-layer blown extrusion technology to perform experiments and optimize film compositions. The tests carried out also make it possible to guarantee the performance and efficiency of the packaging on our customers' equipment.
• The Advanced Compostable Products Lab, the first of its kind within a packaging manufacturer, aims to develop the next generation of packaging and improve the time and cost of certifying compostable packaging. This laboratory is itself certified to the ISO17025 standard and is equipped to test and meet the ASTM 64000 standards for compostable packaging.
• The Recycling Technology Lab, which is expected to be fully operational in 2022, will complement the R&D skill set with an in-house recyclability assessment lab. This lab will measure every aspect of a package designed against industry-accepted criteria, to ensure that it is truly compatible for recycling, in accordance with design guidelines available in the industry.

Regarding waste management, we favor the principles of the 4Rs, namely reduction at source, reuse, recycling, and recovery. We want to avoid burying the largest possible volume of residual materials. This zero-waste ambition is a natural extension of our commitment to the circular economy. Industrial waste has great value, and we take part in industrial synergies to circulate it in the local ecosystem, when possible. These partnerships have notably made it possible to divert wood pallets, cardboard, plastic, organic waste, fluorescent lamps, and printing plates from landfill. For example, in 2020 and 2021, our Transcontinental Transmag plant shared printing waste with the Centre de ressources et d'action communautaire de la Petite-Patrie (CRACPP), in Montreal. This non-profit organization that supports food security and fights against poverty and waste was thus able to reuse more than 500 kg of newspaper residue to protect its baskets during deliveries to vulnerable populations. In Latin America, many sites have rolled out innovative waste management initiatives. In Guatemala, a traceability system has made it possible to target areas with the greatest potential for improvement, facilitate better classification of residual materials and increase their conversion rate, in addition to reducing the risk of cross- contamination. A partnership has also been created with the company “Red Ecológica” to promote the recycling of paper used by administrative services. Finally, the plant has increased its plastic recovery rate by reintroducing used plastics into many of our agricultural films, thus supporting our circular economy strategy.
More specific to the flexible film industry, we actively manage plastic pellets to prevent them from ending up in the environment. To this end, measures for the prevention of loss, cleaning and containment of the granules have been put in place in the factories where we handle them. In Canada, all TC Transcontinental Packaging plants now take part in the Operation Sweep program, an international program focused on the prevention of pollution by plastic pellets deployed by the Chemistry Industry Association of Canada (CIAC). In the United States, we have included a section on pellet management in stormwater pollution prevention plans.
These plans include an annual review of procedures and quarterly monitoring of the quality of water discharges.

Through meaningful actions and a collaborative approach involving all stakeholders, we intend to lead the way and accelerate the creation of a circular economy for plastic, a model where plastic is better managed from sourcing to end-of-life. In 2019, TC Transcontinental was the first Canadian manufacturer to join the Ellen MacArthur Foundation’s New Plastics Economy Global Commitment. Setting out to build on its experience of being a key player in the creation of a circular economy for paper in Canada, TC Transcontinental also announced in early 2020 the creation of a new Recycling group within TC Transcontinental Packaging, marking yet another step towards the implementation of a circular economy strategy that supports the fulfillment of the Corporation’s objective as a signatory of the Ellen MacArthur Foundation’s Global Commitment.

Also, in February 2020, Cascades, Danone Canada, Dyne-a-pak, Keurig Dr Pepper Canada and TC Transcontinental joined forces and created the Circular Plastics Taskforce (Groupe d’action plastiques circulaires, or GAPC) to develop a circular economy for plastics, in partnership with the Canadian Plastics Industry Association (CPIA) and with support from Environment and Climate Change Canada

With this initiative, GAPC members are seeking to provide concrete solutions to the challenges currently facing the recycling industry in Québec and Canada. In 2021, The work of the GAPC led to the publication in September 2021 of the White Paper Rethinking the recycling of plastic packaging: Solutions towards greater circularity in Quebec and Canada. This white paper paints a portrait of the plastics situation in Québec, presents the players in the ecosystem, analyzes the potential markets, and suggests certain avenues for optimizing the system.

Our Operations:
As a large-scale printer and packaging converter, TC Transcontinental has developed strong manufacturing capabilities. By combining our employees’ expertise, our state of-the-art equipment and our continuous improvement culture, we can make quality products in an efficient manner and always aim to improve our footprint. We continuously strive to identify opportunities to reduce the environmental impact of our operations. Here are the two relevant targets for the environmental topic:

TARGET 4 Reduce our greenhouse gas emissions
• Reduce our greenhouse gas emissions by 5%
TARGET 5 Optimize waste management
• Aim for zero non-hazardous waste to landfill in our operating business units
Our indicators to measure outcomes regarding our operations:
Through the implementation of many energy-efficiency measures, TC Transcontinental has been able to reduce its annual GHG emissions by more than 10% in the three years period. This is twice the amount of our original target.
In 2021 TC Transcontinental achieved a 90% recovery rate for its non-hazardous operational waste.

Our products:
We create products and services that allow businesses to attract, reach and retain their target customers. Our packaging products serve a purpose: they contain, protect and facilitate the transport of the product they hold, and for applicable end markets, they also extend product shelf life. Our printing and media products inform, educate, entertain, help build brands and drive to action. Every day, our focus is on safety, performance, quality and sustainability: from sourcing to end-of-life, we make sure to use a circular approach in every step of our product design.

TARGET 7 Promote the use of sustainable materials
• 100% of our paper purchases to come from third-party certified or recycled sources
• By 2025, achieve a 10% use of post-consumer recycled content on average by weight across all plastic packaging in our product offering
TARGET 8 Design for end-of-life
• By 2025, 100% of our plastic packaging to be reusable, recyclable or compostable
TARGET 9 Focus on product research and development
• Invest at least 1% of our Packaging Sector’s annual revenues in research and development

Our indicators to measure outcomes regarding our products:
In 2021, 98% of our paper purchased that come from third-party certified or recycled sources. We also continued our efforts to achieve an average use rate of 10% PCR (post-consumer recycled) content by weight for all plastic packaging in our product portfolio by 2025. We achieved 0.79% average usage rate of PCR content by weight for all plastic packaging. Finally, we invested 0.68% of our annual revenues of the packaging sector in research and development.

Sound corporate governance principles are firmly rooted within our culture and within our Board of Directors’ oversight mandate. As such, they are already framed by our Corporation’s various policies such as the Code of Conduct, the Information Security Policy, as well as the Supplier Code of Conduct. The latter supports the principles included in the Code of Conduct and extend these standards to our suppliers. The Supplier Code of Conduct is forwarded to all suppliers of TC Transcontinental. Some of provisions of this Code pertain specifically to anti-corruption, such as anti-bribery requirements. These policies reflect our commitment to ethical, responsible, and honest practices in all of the Corporation’s activities.

TC Transcontinental conducts its activities in compliance with applicable laws. Thus, making payments or providing goods and services to gain a competitive advantage is prohibited as this would be considered bribery or corruption. Before transacting any business with a governmental body, TC Transcontinental ensures it obtains all necessary authorizations.

We encourage an environment of open and honest communication so that our employees feel comfortable in approaching their supervisor, a Human Resources representative, or the next level of management, in instances where there are grounds to believe that breaches TC Transcontinental’s Code of Conduct, to the policy regarding fraud, irregularity, corruption, misappropriation, non-compliant activities, theft, and any other acts that are criminal or unethical, or to the policy regarding workplace harassment and violence prevention have occurred.

TC Transcontinental fully investigates any breaches of TC Transcontinental’s Code of Conduct, to the policy regarding fraud, irregularity, corruption, misappropriation, non-compliant activities, theft, and any other acts that are criminal or unethical, or to the policy regarding workplace harassment and violence prevention without regard to the alleged individual’s seniority, position/title, or the nature of his/her relationship with the Corporation.

TC Transcontinental believes in the value of sound and responsible governance practices. The Irregularity, Fraud and Criminal Offense Whistleblowing Policy and Procedure, as well as other governance innovations, ensure that Transcontinental Inc. continues to exercise reasonable diligence in its operations. TC Transcontinental promotes honest and consistent conducts within its organization by setting clear guidelines and assigning responsibilities in order to properly oversee governance. Mandatory training is organized each year for all employees and a test is conducted at the end of the training to validate the acquired knowledge with a certificate attesting that the training has been successfully completed.