Several of our social investment projects are focused on supporting local communities with sustainable energy access and adaptation to environmental change. For example: • In Suriname, Kosmos partnered with Conservation International and Anton de Kom University to build Sediment Trapping Units (STUs) to help reverse coastal erosion in the Weg naar See coastal area. The structures promote sediment deposition and create conditions for halting and reversing erosion, including by creating a habitat for new mangrove juveniles. The next step is to quantify and document the effectiveness of the STUs and potentially extend the project to other coastal areas of Suriname. • In Mauritania, Kosmos and BP built solar-power installations that deliver a sustainable source of electricity to over 2,000 people in the rural region of Ndiago who were not connected to the grid. This new access to reliable power improved quality of life by improving health and indoor air quality; increasing connectivity through mobile device charging and better access to radio and television; and facilitating greater productivity in economic activities. • In Senegal, we launched a multi-faceted project to tackle environmental challenges and improve quality of life for fishermen in Saint Louis. This included reforesting over 10 hectares of coastal land with mangrove and filao trees to help tackle erosion; sinking 410 artificial reefs in the Marine Protected Area; and providing two biogas facilities as an alternative source of fuel for women fish processors. Between them the reforestation and biogas elements of this project are estimated to sequester around 130 tons of CO2 per year according to our implementing partner NGO, Le Partenariat. We recognize the challenge. Kosmos recognizes that the world is facing a serious challenge from climate change influenced by human activity. We welcome the Paris Agreement reached within the United Nations Framework Convention on Climate Change in 2015 and see it as a crucial step in global efforts to address climate change. We understand that achieving the internationally accepted target of limiting mean global temperature rises to well below 2°C will require significant and sustained reductions in greenhouse gas emissions. In addition, around 1 billion people (roughly 13% of the world’s population) still lack access to electricity, and global energy needs are expected to increase by 25% by 20402 . This will be particularly driven by emerging economies such as those in which Kosmos focuses much of its investment. The International Energy Agency (IEA) estimates that demand growth will require more than $2 trillion of investment in new energy supply per year. Tackling this challenge – reducing greenhouse gas emissions while meeting growing energy demand – will require actions from all parts of society: governments, civil society and the private sector, and companies like Kosmos must consider the opportunities and challenges that the global energy transition may present to our business. We are looking at how climate change may affect us long term. In 2017, Kosmos conducted a review of our approach to climate change and the external policy and stakeholder environment. In the review, we: • Benchmarked Kosmos’ approach on climate against a set of industry peers • Analyzed stakeholder attitudes, including emerging investor expectations around climate change reporting and initiatives such as the Task Force for Climate-Related Financial Disclosures (TCFD) • Examined the wider policy environment and climate-change risks and opportunities for our business The review’s findings were presented and discussed in Kosmos’ Health, Safety and Environment Management and Board Committees. We continue to monitor developments on climate on an ongoing basis, including through engaging in leading industry associations such as the International Association of Oil and Gas Producers (IOGP) and IPIECA, the global oil and gas industry association for environmental and social issues. We will continue to consider and integrate key developments as needed into our business strategy. We do what we can within the constraints of our own business. Kosmos operates to high environmental standards and we continually consider opportunities for efficiencies within our business. At this time, Kosmos does not operate production platforms or vessels. Our direct greenhouse gas emissions arise primarily from exploration activities such as use of an exploration drilling rig, seismic vessels and support vessels, and our offices and logistics bases. We report these emissions in our annual sustainability report and report key environmental data to IOGP annually. At the request of investors, we aim to report for the first time to the CDP (formerly the Carbon Disclosure Project) in 2019. We also follow developments in operational best practices and climate change, including through IOGP and IPIECA. In 2015 and 2016 Kosmos discovered significant natural gas reserves offshore Mauritania and Senegal, opening a major new natural gas province in which we are now partnered with BP. Expanding use of natural gas globally is widely regarded as critical to reducing CO2 emissions, given that it produces about half as much CO2 as coal when burned for power, and therefore offers a cleaner alternative to coal for power generation. The IEA expects demand for natural gas to increase by 45% by 2040 in its New Policies Scenario and positions it as the largest fuel in the global energy mix by that year under its Sustainable Development Scenario. We are now working with our partner BP and the Governments of Mauritania and Senegal to develop the resources we have discovered into an efficient, competitive natural gas project – both for export in the form of Liquid Natural Gas (LNG) and to provide a cheaper, cleaner source of energy for the economies of Mauritania and Senegal. We are also looking beyond our business. Finally, Kosmos is looking for contributions we can make to the dual energy challenge beyond our direct operations. TAKING A CLOSER LOOK AT CLIMATE CHANGE 16 17 BUSINESS PRINCIPLE IN ACTION: 2. International Energy Agency, World Energy Outlook, 2018 Sediment Trapping Units installed along the coast of Suriname promote sediment deposition and create conditions for halting and reversing erosion, including by creating a habitat for new mangrove juveniles. Solar power installations in Mauritania have helped bring reliable and sustainable electricity to communities near Ndiago.