Enbridge Inc Fireside Chat Hosted By Bank of Montreal Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : So let's start the discussion a little bit. I've got a couple questions, and we'll have a bit of time and discussion and take questions from investors that are listening in or potential investors of Enbridge. Maybe I can start the conversation and talk about why ESG is -- why is it important to you? And what are the key messages that you would like to share with the audience this morning?

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Okay. And maybe I'd just spend a bit of time looking to your 19th report to better (inaudible) event. And correct me if I'm wrong, some targets you set a 35% reduction carbon emissions by 2030, carbon neutral by 2050 and that's carbon neutral by that time frame. Maybe address really what's the elephant in the room? Like what are the biggest sources of carbon emissions in your business today? And to some extent, you can flip that and think about what are the greatest opportunities for you in terms of reducing emissions and getting towards those targets.

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Okay. And what about evaluation and maybe just some event link to the governance? And as you report to investors, how do you plan to evaluate ESG performance versus your goals? I guess it's kind of like a report card that you're looking at or where the Boards' are looking at the end of the day. And then also linked to that, really, can you remind me, what about linking these goals, say, executive compensation, like what's the story around that?

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : And I think it is a big signal to the market of linking these reductions to your compensation, the management team and where that's going. So that's good to see. Good to see that in your strategy. And maybe next talk about, perhaps, how do you ensure the easy targets or policies are reflected in your strategy or potential projects you look at? Like how do you make sure you, the management team, the Board is constantly thinking about this as you evolve here the next couple of decades?

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : What -- it just seems myself, yourself, everyone else is working more now. And now we're followers with this ESG planning, it's good to see that. And maybe let's switch a little bit to the government policy. And maybe on the Canadian side, you've seen our prime minister, for those folks not (inaudible) the Canadian side so much as a proposal for carbon taxes to go quite significantly, in fact, to $170 a ton by 2030, which I think is the most ambitious carbon tax out there in the world. And so correct me if I'm wrong on that really. Clearly, this is probably an increasing friction or cost to you assuming your carbon emissions stay the same here, Al. But how do you think about really impacting your cash flows, if this carbon taxes has actually pushed through? And what are some of the mitigants that you can utilize? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2021 / NTS, BMO.TO - Enbridge Inc Fireside Chat Hosted By Bank of Montreal

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Okay. And maybe switching to the U.S. and speaking with government policy and new President. You have a big U.S. business as well and an overall mix and with Biden's folks on climate change, what do you think, Al, are the opportunities and risk for you?

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : I mean it's an interesting topic or comments that you mentioned, Al, really when you think about scale on the ground. And you're right, like it's just so hard to build new infrastructure in this marketplace. And you look at your footprint, North America looks well positioned to benefit for any sort of expansion needs going forward. And I think we always take for granted the need for energy really -- we only complain when the lights are down or running out of gas. And I looked at pictures in Texas, folks burning couches to stay warm. I mean it's incredible, really the dependency we have on infrastructure and then how you guys can connect to that. And you look at even -- here in (inaudible) it's Enbridge connect energy, that's energy transition, right? I want to insert a question from the audience because we're staying with the U.S. I'm just going to read it all verbatim here. How did Enbridge fare with the recent cold weather event in the U.S.?

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Okay. So I know for the longest time, it would just seem there's a lot ongoing debate around oil. Peak oil and we've gone through that. I wonder we've been talking a lot to investment (inaudible) is on the gas side and durability of gas demand long term. You got this interesting gas utility in Ontario, which you were -- where I live. And as I mentioned before this, we had our heat on (inaudible) all year even during the summertime. So we're also reliant on Enbridge Gas. But Al, what do you think about the thought process here with some pundits who talk about banning gas to home? And how do you think about the long-term durability of your gas utility?

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : No. I think it's definitely worth discussing it in a bit more detail. It's something that, I think, at least my conversations, there's been some modest concern about -- and we had capital markets professionals, and I'm always flattered to hear that you're considering me an expert from your earlier commentary on the market. The base is going to continue but maybe let's go back to oil for a second here. And there's some pretty scary figures coming out from EP or [ESPs], energy agencies around where oil could go in 2050. I think there's one scenario where oil is going to drop 80% from today. I'm not asking around what your views on that specifically, but I think it is worth going back to your Investor Day. You had some pretty interesting charts around, let's just assume, North American demand does drop, that's -- 50 is probably realistic narrow, but you have emerging markets, the middle class emerging, they're going to want to fly. I think it's a very logical outcome of what we're going to see. So when you think about your footprint in the Canadian oil sands and how do you think about your positioning to benefit from that exportation? And is there anything you need to do strategically to lever yourself to that longer-term dynamic?

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Okay. Maybe -- thanks for those comments, Al. It's good to encourage folks to go back to some of the slides at the Investor Day. There's some pretty interesting charts here to look at. The First Nations community, I think we got to address that during this session. I mean just talk about the environmental aspect of it. So let's maybe switch a little bit into that relationships. And how you foster and manage that part of the equation, the First Nations communities? Because it's clear that over the last 15 years, it's been a more focal voice in the pipeline industry. There's been legal cases. The First Nations communities have (inaudible), it's definitely important to maintain that. But how do you manage that? And how do you foster those relationships?

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Okay. Let's talk about people and I don't need to spend a lot of time on safety. I mean you look at your data. I mean, I see a very strong safety record. Let's talk about D&I, diversity -- human capital is quite important, I think, organization plus yourself. And can you remind us what are your key goals and diversity inclusion? And what are you advancing there in your workforce?

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Got it. I know you mentioned hydrogen and I'm switching gears. And now the renewable natural gas. And I want to touch on other bits because that is the topic of the day or topic of the year. However you want to frame it. So let me ask it to you, maybe just the backdrop for opportunity that you see in RNG and hydrogen.

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Okay. I just want to squeeze in -- I have a question from one of the listeners is, what are your thoughts on nuclear playing a bigger role? Are you even replacing gas as the reliable energy source?

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Okay. Let's talk about renewables next because sometimes I get lost (inaudible). Enbridge story is just really the size of your renewable business is actually quite significant. Obviously, you're a big company, so looks small from that lens. Can you remind us what your strategy is in the renewable side? And I know you put out a target of $1 billion CapEx a year. And that just seems quite small relative to the $300 billion you spend a year. So I'm just -- I'm always wondering or curious on why not -- why isn't it a bigger number?

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Okay. And as a related question that's on the audience. I just want weave in and be mindful of the time as well. The question is, does the fact that so many renewable projects that Enbridge has been active are done with partnerships or to help your ability to generate returns above your hurdle rates? Are there enough projects over the medium to long term to satisfy all the capital that are chasing these projects? I know it's a long question. I hope you got most it or all of it.

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Okay. I know there's a number of questions here, and I want to be mindful that time again. Maybe we can take 1 or 2 more. Al, does that sound to you?

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Yes. So just wonder about -- do you have any procedures to ensure ESG compliance with partners in nonoperating minority projects?

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Okay. And the better question is, in time, looking upstream and I guess this is in reference to the producers, will you differentiate to discriminate [them all] who gives you transport, i.e., will you only work align partners that meet your ESG standards?

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Okay. Well, time flies quite quickly here, Al. And is there anything that maybe we may have missed that you'd like to close off here. And for those who have questions on the board, feel free to reach out to the IR team with those outstanding questions. Al, anything you'd like to share? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2021 / NTS, BMO.TO - Enbridge Inc Fireside Chat Hosted By Bank of Montreal

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : No. Absolutely. And that (inaudible), you scored quite highly on the ESG score of things. I encourage listeners, again, to look at that 19th report. It's around the corner, in the 20th there. And Al, really, really thank you for your time. And it's been a great conversation. Lot of good questions answered. Thanks for your time.

Question: Benjamin Pham - BMO Capital Markets Equity Research - Analyst : Okay. Great. And for listeners, I hope you've enjoyed the conversation with Al Monaco, President and CEO of Enbridge and ESG and where they're going long term on net-carbon neutral targets by 2050. Stay safe, stay healthy, stay positive, everybody. Thanks.