Overview

This report highlights our Environmental, Social, and Governance (ESG) strategy and commitments and the progress we have made. Although the information shared primarily covers our activities during fiscal year 2022, we’ve also included a few examples of our efforts from late 2021 and early 2023 to provide context on our progress and direction. Additionally, certain data points included in the report are measured on a calendar year basis and reflect information for calendar year 2022.

Atmos Energy supports the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) and has committed to work towards implementing these recommendations. Beginning in fiscal year 2021, we have been incorporating elements of this framework into our corporate responsibility reporting under the oversight of the Corporate Responsibility, Sustainability, & Safety Committee of our Board of Directors.

In fiscal year 2022, a team of senior leaders completed a materiality assessment with input from internal and external stakeholders to enhance our understanding of current and potential ESG impacts. In identifying material topics across our enterprise, the team focused on those that both align with our vision, principles, purpose, strategy, and geographic footprint and affect customers, employees, communities, regulatory agencies, and other stakeholders in the regions where we operate. This assessment will support the continued implementation of meaningful sustainability practices and reporting capabilities.

We have also aligned our reporting with the Sustainability Accounting Standards Board (SASB) and continue to report ESG metrics through the American Gas Association’s ESG/Sustainability template and the Global Reporting Initiative (GRI) index.

CAUTIONARY STATEMENT This material includes forward-looking statements. These statements can be identified because they use words such as “anticipate,” “believe,” “estimate,” “may,” “could,” “expect,” “forecast,” “target,” “goal,” “intend,” “objective,” “plan,” “projection,” “seek,” “strategy,” or similar words. Similarly, statements that describe future plans or strategies and future emissions reductions are forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. These risks and uncertainties include the following: federal, state, and local regulatory and political trends and decisions; increased federal regulatory oversight and potential penalties; possible increased federal, state, and local regulation of the safety of our operations; the impact of greenhouse gas emissions or other legislation or regulations intended to address climate change; possible significant costs and liabilities resulting from pipeline integrity and other similar programs and related repairs; the impact of climate change; increased dependence on technology that may hinder the Company’s business if such technologies fail; our ability to continue to access the credit and capital markets to execute our business strategy; the impact of adverse economic conditions on our customers; and other risk factors discussed under Part I, Item 1A, Risk Factors, and Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Cautionary Statement for the Purposes of the Safe Harbor under the Private Securities Litigation Reform Act of 1995 in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022, which should be read in conjunction with the forward-looking statements in this report. Atmos Energy undertakes no obligation to update or revise any of our forward-looking statements whether as a result of new information, future events, or otherwise.

MATERIALITY STATEMENT Throughout this report, we report on issues material to our stakeholders in this context. It should not be confused with materiality for financial or regulatory purposes. Issues deemed material for the purposes of this report may not be considered material for SEC reporting purposes.

Overview and Vision

Atmos Energy Corporation, an S&P 500 company headquartered in Dallas, is the country’s largest natural gas-only distributor. We safely deliver reliable, efficient, and abundant natural gas to more than 3 million distribution customers in over 1,400 communities across eight states. Atmos Energy manages proprietary pipeline and storage assets, including one of the largest intrastate natural gas pipeline systems in Texas.

Our vision is for Atmos Energy to be the Safest provider of natural gas services. We will be recognized for Exceptional Customer Service, for being a Great Employer, and for achieving Superior Financial Results.

Our ESG strategy aligns with our vision of being the safest provider of natural gas, with our culture founded on AtmoSpirit principles, and with our purpose and corporate strategy. This alignment means investing in safety, focusing on operational and environmental sustainability, hiring and training a diverse and engaged workforce, and Fueling Safe and Thriving Communities.

Employees

Atmos Energy’s culture, AtmoSpirit, has been the foundation of our enduring success for over a quarter century. AtmoSpirit principles are the beliefs and behaviors we embrace as a company and strive to embody as individuals at work, in our communities, and at home. AtmoSpirit is reflected in five core principles:

• Inspire Trust
• Be at Your Best
• Bring Out the Best in Others
• Make a Difference
• Focus on the Future

Every Atmos Energy employee is introduced to the AtmoSpirit principles and attends Atmos Energy Essentials, an introductory program facilitated by fellow employees who exemplify AtmoSpirit.

Financial Overview

Atmos Energy is committed to creating sustainable, long-term value. In fiscal year 2022, earnings per diluted share rose for the 20th consecutive year, and dividends increased for the 38th consecutive year. We invested $2.4 billion in modernizing our distribution and transmission system. Our consistent investment in the safety and reliability of our assets supports our long-term earnings and dividend per share growth target of 6 to 8 percent.

Customers

Atmos Energy has a long-standing tradition for Fueling Safe and Thriving Communities. We have grown from 279,000 customers in 1983 to more than 3 million customers today. With over 79,000 miles of distribution and transmission pipelines, our company has regulated utility operations in Colorado, Kansas, Kentucky, Louisiana, Mississippi, Tennessee, Texas, and Virginia. We proudly provide affordable, reliable, and efficient natural gas to residential, commercial, and industrial customers. To foster a positive customer experience, we encourage feedback through surveys and promote natural gas safety.

Operations Overview

Atmos Energy originally started in the Panhandle of Texas in 1906 and has since grown to be the largest natural gas-only distributor in the U.S., with operations in eight states. We work closely with state and federal regulators to operate a safe and reliable natural gas system across all our divisions.

• Atmos Pipeline-Texas Division
• Colorado-Kansas Division
• Kentucky/Mid-States Division
• Louisiana Division
• Mid-Tex Division
• Mississippi Division
• West Texas Division

Map of Our Service Areas

We also own and operate 17 underground gas storage facilities, totaling ~60 billion cubic feet (Bcf) in working capacity in Kansas, Kentucky, Mississippi, and Texas. Atmos Pipeline-Texas, with approximately 5,700 miles of transmission pipelines across the state, manages two-thirds of our ~60 Bcf working storage capacity and provides transportation and storage services to local distribution companies behind its intrastate pipeline system.

Salt-Dome Natural Gas Storage

In addition to our two existing caverns, we are constructing a third cavern at our Bethel facility in Texas which will provide expanded storage capacity to meet projected growth:

• Additional 5–6 Bcf of working gas capacity and 2 Bcf of withdrawal
• Projected service date starting in late 2022
• Timing covers required outages of existing two caverns to be completed by 2025

Industry Quick Facts^[1]

Natural gas is not only affordable, safe, and reliable, but it is also instrumental in maintaining the resiliency of our nation’s energy system and achieving a lower carbon economy that meets our nation’s climate goals.^[1] The U.S. Energy Information Administration projects natural gas to be 30–50% less than the price of other fuels through 2050, making it a competitive energy source for consumers well into the future.^[2]

Even as renewable energy sources are developed and explored, natural gas continues to be an important part of the energy solution in the United States. The frequency and severity of extreme weather events highlight the importance of reliable natural gas systems, diversified supply portfolios, system versatility, and underground storage capacity to fuel our energy needs now and in the future.

Not only is Atmos Energy in the business of transporting a reliable and resilient product, but we also provide affordable and efficient energy that helps communities grow and thrive. We are creating jobs, helping to protect the environment, storing natural gas to meet customer demand, maintaining system resiliency throughout the year, and providing affordable energy access to families across America.

[1] Source: American Gas Association Playbook

[2] Source: EIA Annual Energy Outlook 2020 report