Environmental Performance Metrics
and Transparency in Reporting

Regions’ commitment to thoughtful and meaningful environmental stewardship not only encompasses our sustainability practices but extends to our efforts at maintaining and enhancing transparency in reporting our environmental performance. In furtherance of this goal, Regions intends to disclose its climate-related risks in line with the standards promulgated by the TCFD within the upcoming year; in the meantime, however, we wanted to provide our stakeholders with an interim disclosure utilizing the TCFD framework. Our TCFD-aligned disclosure will concentrate on our underlying governance framework, strategy and risk management practices as described in this ESG report, with the goal of helping our shareholders, associates, customers and the communities we serve better understand and evaluate how Regions assesses and manages its climate-related risks and opportunities. We look forward to sharing the full disclosure with everyone soon.

Governance and Oversight of Environmental Risks and Opportunities

Board of Directors. Regions’ Board of Directors (Board) and each of its committees oversee matters related to Regions’ ESG practices, performance and disclosures. The Board, as overseer of the Company’s risk management and steward of long-term enterprise value, plays an important oversight role in assessing our environmental and social practices and understanding the potential impact of ESG issues on the Company’s operations and business. To aid in the exercise of this oversight, the Board and its committees receive regular updates from the Company’s senior management on progress achieved in specific ESG strategies and initiatives, including shareholder engagement on ESG concerns; updates on programmatic initiatives focused on ESG awareness and education within our stakeholder groups; and ratings that Regions has been assessed by various ESG data providers.

• The Nominating and Corporate Governance (NCG) Committee is responsible for overseeing the Company’s practices and reporting with respect to environmental topics, such as climate change, and corporate social responsibilities that are of significance to the Company and its stakeholders — our customers, shareholders, associates and communities. The NCG Committee also assists the Board in establishing and maintaining effective corporate governance policies and practices. Additionally, the NCG Committee reviews our Environmental Sustainability Policy Statement and related goals and performance.
• The Compensation and Human Resources (CHR) Committee oversees Regions’ strategies and policies regarding corporate culture and other human capital management functions, including: (i) associate conduct, engagement and career progression; (ii) diversity and inclusion initiatives and results; (iii) talent acquisition, development and retention; (iv) performance management; and (v) employment practices.
• The Risk Committee is responsible for the oversight of the Company’s risk management practices, including the review and approval of the Risk Management Framework, the Enterprise Risk Appetite Statement, and significant risk management policies and limits that guide the prudent pursuit of risk and opportunity across the Company. This includes environmental and social risk management topics, such as climate change.
• The Audit Committee is responsible for ensuring that the Company’s policies, procedures and controls that protect our customers and associates are functioning at an optimal level. The Audit Committee also oversees the disclosures of matters significant to our Company, including ESG-related matters, through our financial statements and reports.

Senior Management. We recognize the environmental challenges that face our planet and are committed to reducing our environmental footprint; these commitments start at the management level and are furthered through the efforts of our entire associate population. Generally, we view ESG as a Company-wide imperative, and ensure that it permeates our business model appropriately through the development of an organizational Risk Management Framework. The Risk Management Framework has been designed to promote environmentally sustainable and socially responsible business practices across our Company. Accordingly, several members of leadership spanning multiple areas of focus are charged with implementing the Framework, thereby allowing the Framework’s most effective execution through subject-specific expertise. The members of senior management entrusted to lead our ESG initiatives are our Corporate Secretary and Chief Governance Officer; our Chief Risk Officer; our Chief Human Resources Officer; and our Head of Corporate Real Estate and Procurement.

Thought Leadership. To encourage creative and innovative thought leadership at various levels of the organization in the evolving area of ESG, Regions has assembled a cross-departmental Environmental Working Group, whose objectives are to identify and develop priorities for the Company’s environmental initiatives; promote awareness and engage with associates on sustainability, resource conservation and recycling; and identify internal and external partnerships and collaborations to help advance our environmental efforts. A separate cross-functional working group is performing an enterprise-wide assessment of environmental and social risks associated with our lending practices. Regions also leverages cross-functional working groups to promote shared value and strategically advance our community engagement priorities. These working groups focus on specific subject areas, such as Economic and Community Development; Education and Workforce Readiness; and Financial Wellness.

Incorporating Environmental Stewardship into Business Strategy

Regions’ Internal Sustainability Strategy
We recognize the environmental challenges that face our planet, and we are committed to reducing our environmental footprint. Over the past few years, we have taken meaningful steps to advance our sustainability efforts. To support our commitment to environmental stewardship, in 2018, we adopted an Environmental Sustainability Policy Statement. At its core, this policy statement embodies our value of do what is right. We recognize the environmental challenges that face our planet and are committed to operating our business responsibly. This will help Regions create long-term and sustainable value for our Company by reducing costs, increasing revenue, reducing risks, enhancing our reputation, strengthening our communities and helping us meet the expectations of our shareholders, customers, associates, communities and future generations. To demonstrate our commitment to long-term, sustainable value creation through environmental stewardship, we have set the following environmental goals to be completed by 2023:

• A 30% reduction from our 2015 baseline in greenhouse gas (GHG) emissions (Scope 1 and 2) where Regions is responsible for direct payment of utilities; and
• A 30% reduction from our 2015 baseline in electric and natural gas energy use.

In 2019, Regions planned and began work at 12 sites, using a new approach to branch renovations. These renovations take a more holistic approach to evaluating energy and water efficiency needs in branches identified as environmentally poor-performing sites or where renovations are already scheduled. Among the energy- and water-related aspects of these renovations are the installation of rooftop solar panels, web-based HVAC controls, power monitoring, LED lighting and controls, and irrigation monitoring and controls. Preliminary results of these renovations indicate monthly reductions in grid-based electricity by up to 58 percent.

Building Construction. Our standards for construction of new branches and renovations focus on energy efficiency, water conservation and the adoption of other sustainability building practices. In 2019, we completed the construction of more than 30 facilities using the following green building design elements, among others:

• 100% LED light fixtures
• ENERGY STAR®-compliant window glazing
• Carbon neutral carpet tiles
• Ultra-high efficiency HVAC systems with demand control ventilation
• Light colored thermoplastic roofing materials
• Recycled content ceiling tiles, ceiling grid, carpet tile and wall base

Reducing Transportation Emissions. While transportation is not a significant contributor to our overall GHG emissions, we recognize that we need to do our part in reducing these emissions. Regions uses approximately 160 vehicles for corporate and branch security, to service Bank facilities and to operate the alternative-fueled associate shuttle service at our Birmingham office complexes. We continue to identify opportunities to reduce fuel use through more efficient routes and service frequencies. Further, the expanded deployment of web-based controls for HVAC systems is expected to help us reduce the number of branch visits required of our Facilities Management team by allowing for remote management of the systems.

Regions also encourages our associates to reduce their transportation emissions. We currently provide 14 charging ports at our Birmingham and Nashville campuses for electric vehicles (EVs) that are available to approximately 3,200 associates. To increase awareness about the environmental and economic benefits of EVs and plug-in hybrid EVs, we hosted two major demonstration events where associates were able to view and learn more about EVs.

Our associates in the Birmingham area also have the opportunity to participate in CommuteSmart, an initiative of the Regional Planning Commission of Greater Birmingham aimed at helping alleviate traffic congestion and reduce air pollution. The program offers a variety of smart commuting options such as vanpools, carpooling, walking, biking and mass transit. Associate participation in this program during 2019 reduced miles traveled by almost 365,400, saving 13,000 gallons of fuel, 223 metric tons of CO2e and 183 tons of other criteria pollutants.

Recycling. When reducing use is not an option, we strive to divert waste from landfills through recycling. Regions’ confidential waste program is our most widespread recycling program, resulting in more than 8.3 million pounds of paper and other confidential materials being recycled in 2019.

Beyond paper and confidential materials, our recycling program includes cardboard, aluminum cans, plastic bottles and electronic waste. It is provided in our major office buildings, operations centers and in some branches. We continue to work to expand our recycling capabilities while also engaging our associates on proper methods of recycling to reduce contamination rates.

Paper Reduction. In addition to reducing our carbon footprint, we are taking meaningful steps to reduce our paper use, focusing on reducing associate printing and encouraging customers to transition to online banking and the digital delivery of documents and statements. Thanks in part to our customers, our efforts have resulted in:

• 46% reduction in internal copy paper use over the past five years
• 92 million sheets of paper saved in 2019 as a result of customer accounts moving to electronic statements
• 1.18 million transactions completed using eSignature in 2019

The eSignature Program. The eSignature tool expedites the completion of necessary documentation for our customers, thereby providing them with access to our products and services on a shorter timeline; this, in turn, benefits the Company by requiring fewer associate hours, conserving paper usage and reducing mailing expenses associated with each transaction that uses eSignature. This technology provides customers with flexibility to bank at their convenience, offering the review and signature process digitally both in branch and remotely, as well as receiving their copies electronically. It also allows Regions to reduce the amount of paper printed, securely deliver and store sensitive documents, and automate many processes that have in the past been manual. In 2020, we aim to upgrade the eSignature core system, onboard at least 10 new business units and continue to add and enhance the tool’s functionality.

Some highlights achieved through the eSignature program in 2019 include:

• 755,080 eSignature packages completed
• Seven business units added eSignature functionality
• More forms available for eSignature within Sales and Service
• 31,165 Consumer Direct Loans closed via eSignature (a 53% adoption rate)
• $508,924 expense reduction

Electronic Waste. Regions strives to reuse electronic equipment whenever possible. In 2019, we redeployed 536 computers internally and resold 1,522 pieces of IT hardware. When reuse or resale is not feasible, we recycle using approved hardware recycling vendors that are Sustainable Electronics Recycling International R2:2013 Standard-certified. By using certified vendors, we ensure that our electronic waste is properly managed and that valuable raw materials are recovered and reused. Through this program, Regions recycled approximately 24,547 pieces of IT hardware.

In addition, we held three associate electronic waste recycling events at our Birmingham campuses, resulting in 2,977 pounds of associates’ personal electronic waste being recycled. Not only does this enable associates to properly dispose of unwanted electronics, but it also provides an opportunity for us to engage our associates on the topic of sustainability.

Sustainable Financing
Regions understands the role financial institutions play in the transition to a lower-carbon, sustainable economy. Our customers depend on us to provide opportunities they are interested in pursuing related to this transition. We have seen growth in our sustainable lending and asset management areas in the past few years, and we expect continued growth.

Renewable Energy Lending. Regions supports the development and implementation of clean energy solutions through our Solar Power Finance Team and our Energy and Natural Resources Group (ENRG).

The Solar Power Finance Team provides lease financing for utility scale and commercial photovoltaic (PV) solar power projects across the U.S. In 2019, the Solar Power Finance Team provided $198 million in funding for PV solar projects located throughout the U.S. with overall generating capacity exceeding 110 megawatts.

ENRG specializes in tailored financing products and services for renewable energy projects. Offerings include advisory and financing services to energy companies in conjunction with mergers and acquisitions, as well as issuances of bonds. In 2019, ENRG committed or closed over $80 million in construction or revolving financing for solar PV projects or solar-based independent power producers. Additionally, Regions participated in raising $600 million in a green bond issuance for a leading utility company. In 2019, Regions’ Consumer Banking group introduced a new electric vehicle (EV) loan product, which offers a discounted rate for loans used to purchase all-electric and plug-in hybrid EVs.

Sustainable Forestry. The Natural Resource and Real Estate Group (NRRE) within Wealth Management manages natural resources properties held in trusts, estates and agency accounts. Regions is responsible for the sustainable management of approximately 1 million acres of timberland across 15 states, as well as oversight and management of over 200,000 acres of farmland. As one of only a few banks that directly manages land and timber for clients, Regions demonstrates a commitment to sustainability and forestry best practices. Some examples of this commitment include:

• Regions adheres to all applicable U.S. state Best Management Practices (BMPs) for Forestry that contribute to water quality, carbon sequestration and wildlife habitat protection.
• A portion of the timberland acres managed by Regions’ foresters is certified under the 2015-2019 Sustainable Forestry Initiative Standard or the 2015-2020 American Tree Farm Certification Standard. Both third-party certification systems promote sustainable forestry practices aimed at protecting water quality, biodiversity, wildlife habitat, species at risk and forests with exceptional conservation value.
• A majority of Regions’ farm tenants utilize advanced technologies and equipment in their farming practices known as “precision agriculture,” which maximizes crop yields while minimizing the use of pesticides, fertilizers and water.

Coal Mining and Mountain Top Removal. Regions’ Energy and Natural Resources White Paper, an internal document that defines our risk appetite with respect to lending in this area, identifies many of the heightened environmental risks in lending to coal mining companies. This document is updated periodically and reflects Regions’ decision to not lend to companies that use mountaintop removal mining practices to extract more than 5 percent of their total annual tonnage. In addition, extensions of credit to coal companies require enhanced due diligence with respect to legal and environmental compliance, as well as approval from Credit Officers within the ENRG approval chain. Regions also manages its coal exposure as part of the Energy and Natural Resources portfolio, and commitments to coal companies are reported on a quarterly basis to senior management.

Management of Climate-Related Risks and Opportunities

Risk Management Framework. Regions provides financial products and services to companies in diverse industries, including energy and natural resources. As a lender, we acknowledge the unique risks and concerns surrounding the environmental and social impact of our lending practices. Our Risk Management Framework is designed to promote environmentally sustainable and socially responsible business practices with our customers, communities and other stakeholders. Furthermore, we are committed to appropriately managing the potential risks we encounter to most effectively serve our customers. As environmental and social risks continue to evolve, we will work to ensure that our Risk Management Framework properly captures and addresses these risks in line with our broader strategic goals.

Our Risk Management Framework outlines our approach for managing environmental and social risk in our lending practices, which includes the following four components:

• Collaborative Risk Culture. A strong, collaborative risk culture provides a focus on risks, including environmental and social risks, in all activities and encourages a mindset and behaviors to enable effective risk management and promote sound risk-taking within the bounds of our risk appetite. Our risk culture dictates that risks be promptly identified, escalated and challenged, thereby benefiting our overall performance. This culture is demonstrated by our concept of clearly defined roles and responsibilities, which are critical to the effective management of risk.
• Sound Risk Appetite. Our Enterprise Risk Appetite Statement, which incorporates environmental and social risks, defines the types and levels of risk we are willing to take to achieve our strategic objectives and business plans. The risk appetite must also be consistent with Regions’ mission and values.
• Sustainable Risk Processes. Effective risk management requires consistent processes and tools to effectively identify, measure, mitigate, monitor and report environmental and social risks. Associates leverage this cycle to manage risk and thereby help protect the interests of our shareholders.
• Responsible Risk Governance. Governance serves as the foundation for comprehensive management of the risks that we face. It outlines clear responsibility and accountability for managing, monitoring, escalating and reporting both existing and emerging risks. It also provides a robust challenge process which better allows us to reach our full potential as risk managers.

Environmental and social risks are embedded throughout our Risk Inventory and are managed in accordance with our existing enterprisewide framework of risk management tools and programs. The identification of existing and emerging environmental and social risks is ongoing and will continue to shape our Risk Inventory and Risk Management Framework. A few examples of our commitment to effective management of environmental and social risks in our lending practices include:

• A dedicated risk industry team, ENRG, that underwrites exposure to energy and natural resources clients. This focused effort includes expanded underwriting requirements and certain elevated approvals from senior credit executives.
• A dedicated industry team, NRRE, responsible for the prudent and sustainable management of natural resources assets held in a fiduciary capacity and/or owned by our banking clients.
• Due diligence on energy sector loans for which real estate serves as collateral, including those clients with an indirect link to the energy sector.
• Our Credit Moratoriums policy identifies industries, products and transaction types that present increased risk, including consideration of environmental and social risks, which we address by instituting a limited credit appetite and elevated approval and exception tracking requirements. The policy is reviewed, updated and approved at least biennially by the Credit Risk Committee.
• A current lending moratorium on coal mining and coal-related activities and enhanced due diligence on high-risk loans, as defined by the Credit Risk Committee.
• A specialized Credit Portfolio Management team that serves as a second-line-of-defense function in Risk Management and assesses macroeconomic factors and other early warning indicators to establish a methodical approach to risk including a concentration limit structure and risk measurement framework utilizing a scheduled reporting frequency.
• Designated resources to begin building out a dynamic scenario analysis related to environmental risks, including climate change, as relevant. By using a combination of technology and in-house associate talent, Regions can begin to better understand exposure to potential acute and chronic physical risks of climate change.
• A cross-functional working group that is performing an enterprisewide assessment of our environmental and social risk in lending practices.

Product Lifecycle Governance. Throughout the lifecycle of any product or service we offer, including our sustainable lending efforts, we have instituted guardrails to help ensure its soundness, quality and safety. At Regions, new or modified initiatives are subject to our New Initiative Risk Assessment Program (NIRA), which is administered by Enterprise Risk Management. Through the NIRA, any new, modified or expanded products, services or strategic relationships, as well as any new and/or innovative technology projects, are reviewed by subject-matter experts. Once a new, modified or expanded initiative has been reviewed through NIRA, it is subject to regular performance monitoring by business-level risk committees alongside reviews and audits by our Compliance and Internal Audit groups, respectively.

Operational Resilience. Business interruptions can occur as a result of acute and chronic natural events and can range from minor to catastrophic. Regions is committed to providing essential business and technology services in the event of business interruptions in order to support our customers and associates; for that reason, business resilience and contingency planning are integral components of our operations. Regions has an established Business Resilience Program, which directs the internal planning processes related to business continuity, crisis management, cyber security incident response, disaster recovery, pandemic planning and general emergency management. Additionally, all Regions business units are responsible for developing and maintaining business continuity plans to help protect critical business functions in the face of temporary or permanent business interruptions, which can range from loss of physical workspace to loss of information technology resources. For more on the support we offer our stakeholders preceding and following climate-related events, please see the Responsible Banking section, the Associates section and the Communities section of this report.

Metrics and Targets

At Regions, our mission and business strategy are based on the concept of shared value — that what we do as a business should benefit our customers, Company and shareholders, as well as the communities in which we operate. We recognize the environmental challenges that face our planet and believe that doing our part in addressing them is an extension of shared value. Thus, in April 2019 we published an Environmental Sustainability Policy Statement and accompanying goals, which incorporate the following commitments.

We are committed to operating our business responsibly in order to create long-term and sustainable value for our Company. To support our commitment to operate responsibly, we will endeavor to:

• Take steps to understand the environmental risks and opportunities associated with our business practices;
• Undertake initiatives to promote greater environmental responsibility and continuously evaluate opportunities to enhance our processes;
• Seek opportunities to support the development and dissemination of environmentally beneficial technologies; and
• Promote awareness and engage with our associates and customers regarding sustainability and our related initiatives.

We are committed to adopting practices that help mitigate the risks associated with climate change and to identify associated opportunities. To support our commitment to promoting energy efficiency and lowering our GHG emissions, we are endeavoring to:

• Measure, monitor and reduce our energy consumption and associated greenhouse gas emissions;
• Evaluate opportunities to provide financial products and services to assist in the transition to a lower-carbon economy; and
• Assess the risks that climate change poses to our operations, including regulatory, compliance, economic and physical risks, and if necessary, develop strategies and processes to manage such risks.

To support our commitment to resource conservation, we will endeavor to:

• Evaluate and identify opportunities on an ongoing basis to reduce the use of natural resources in our operations;
• Seek opportunities to expand access to recycling programs and the types of materials accepted for recycling;
• Seek to construct, retrofit and maintain branches and offices following design standards that minimize waste and improve efficiency;
• Seek to reduce water consumption through the use of water-efficient technology; and
• Engage associates and raise awareness about resource conservation and recycling to promote responsible behavior.