Consumers Energy : 2022 ESG & Sustainability Report

2022

Environmental,

Social, Governance and

Sustainability Report

CONSISTENT WITH EDISON ELECTRIC INSTITUTE (EEI) AND AMERICAN GAS ASSOCIATION (AGA) TEMPLATE

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A Letter from Our President and CEO

CMS Energy's purpose - World Class Performance Delivering Hometown Service - drives our decisions to prioritize our customers, communities, the environment and our company's success. This reflects our Triple Bottom Line - People, Planet and Prosperity.

Our long-term vision includes reducing our climate change impact through bold net zero carbon and methane emissions goals. We're retiring our remaining coal plants, adding clean, renewable and affordable energy, boosting energy efficiency options and implementing new technology to improve safety and reliability for customers. We're helping lead Michigan's electric vehicle transformation.

We know doing what's right for our customers, communities, employees and planet is critical to our sustained success. We use measurable short-term goals to meet the needs of our communities through our charitable foundation and corporate giving, and we improve our land and waters through environmental responsibility and stewardship. Our culture values are equally important as we work to retain our workforce and attract future generations of skilled employees. Our corporate values focus on safety, diversity, equity and inclusion and solid governance structures.

I am proud of our workforce, including our regulated utility, Consumers Energy, and NorthStar Clean Energy, a subsidiary of CMS Energy that develops, owns and operates U.S.-basedutility-scale renewable energy and storage facilities. They're committed to honoring our triple bottom line and show up with a heart of service. They help us deliver on our promise to serve our customers, communities, investors, state and each other. Throughout this report, you'll read about the many ways we're creating a sustainable energy future. We're excited to share our progress.

Garrick J. Rochow

PRESIDENT AND CHIEF EXECUTIVE OFFICER • CMS ENERGY AND CONSUMERS ENERGY

CMS Energy's purpose drives our decisions to prioritize our customers, communities, the environment and our company's success.

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About this Report

CMS Energy Corporation1 has integrated sustainable practices throughout our business, including its subsidiaries, Consumers Energy and NorthStar Clean Energy2. Consideration of environmental, social and governance (ESG) issues is embedded in our strategy, business planning and enterprise risk management processes. These key issues align with our purpose to make life better for the people of Michigan through providing safe, reliable, affordable and clean energy delivered with hometown service while supporting local communities through volunteerism and giving.

We participate in a voluntary industry initiative, coordinated by the Edison Electric Institute (EEI) and the American Gas Association (AGA), to provide the public, customers and our global investors uniform and consistent ESG- and sustainability-related metrics. This report supplements our existing disclosures on these issues, including content on our sustainability website.

Our Priority ESG Issues

Air Quality

Greenhouse Gases

Freshwater Protection

Environmental -

Planet

Energy Environmental

Reliability Compliance

Environmental, Social and Governance Priorities

The foundation of our sustainability efforts is determining which CMS Energy ESG issues are most important to us and stakeholders. Assessments help identify and improve upon sustainability goals and performance. In 2021, we conducted our ESG Materiality Assessment Stakeholder Survey in conjunction with a third party. Using survey results and additional analysis of our important ESG topics, we identified 13 priority ESG issues as communicated in our

2022ESG Materiality Assessment Executive Summary.

Knowing these 13 issues are priorities for our stakeholders, they help shape our ESG and sustainability strategy and communications. They are also highlighted in relevant sections throughout this report as we share our 2022 ESG and sustainability story.

Social -	Cyber Governance -
People	Security	Prosperity

Employee Safety and Wellness	Business Conduct
Public Health and Safety
Ethics
Diversity, Equity and Inclusion
Employment Practices
Energy Affordability

1. This report is written for CMS Energy Corporation, but includes substantial goals and achievements of its primary subsidiary, Consumer Energy Company. As such, we refer to CMS Energy as "the corporation" and Consumers Energy as "the company" throughout. Additionally, the report uses the pronouns "we" and "our" to refer to CMS Energy.
2. CMS Enterprises, CMS Energy's unregulated business, was renamed NorthStar Clean Energy in 2022.

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SECTION 1

Our Sustainability Story

ENVIRONMENT

Protecting the environment is a crucial pillar of our ESG and sustainability efforts. Our 2022 ESG Materiality Assessment found stakeholders deem our strategic goals to improve air quality, reduce greenhouse gas emissions and protect our waters high priorities. The resulting strategic plans demonstrate we are delivering on our promise to preserve and restore our environment.

We're committed to sustainable development as outlined in our environmental policyand demonstrate this commitment by exercising the precautionary principle and conducting due diligence to identify and minimize environmental impacts in the communities where we operate. Environmental compliance is ingrained in our processes and values.

We follow environmental management best practices that align with ISO 14001 standards to maintain and continually improve our processes. These standards hold us accountable to adhere to regulations, minimize environmental impacts and continually improve our environmental practices and stewardship.

Consumers Energy's

Clean Energy Plan

Consumers Energy's Clean Energy Plan, also known as its Integrated Resource Plan (IRP), is a comprehensive and far-reaching strategy to protect the planet and reinforce our promise of sustainability.

The Clean Energy Plan is a 20-year blueprint to guide our regulated electric business. The plan positions Consumers Energy as an industry leader, retiring its remaining coal-fired plants to help reach a net zero carbon emissions goal by 2040. This plan will also help us reduce carbon emissions from owned generation by approximately 60% from 2005 levels by 2025.

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Reducing emissions and expanding clean energy options will protect the environment for generations to come. The plan will also:

End coal use in 2025: Eliminating coal use 15 years sooner than previously planned will improve air quality, cut greenhouse gas emissions, reduce landfill waste and dramatically reduce our water use.

Increase renewable energy: By 2040, 61% of Consumers Energy's electric capacity will come from renewable sources including nearly 8,000 megawatts of solar.

Transition to a smarter grid: Energy efficiency programs and emerging technologies like grid modernization and battery storage will lower peak customer demand.

Offer more customer control and savings: The plan furthers Consumers Energy's commitment to energy efficiency and demand response options for customers.

Affordable energy: We expect to save customers as much as

$600 million through 2040 compared to the 2018 Clean Energy Plan.

Create a flexible strategy: The plan responds to emerging needs, adapts to changing conditions and embraces new, innovative technologies.

Ensure reliability: The purchase of the natural gas-fired Covert Generating Plant in Van Buren County will help us transition away from coal to electricity that meets our generation needs without creating new greenhouse gas sources.

Increasing Consumers Energy's

Renewable Energy

Consumers Energy's focus on renewable energy demonstrates our commitment to a sustainable planet while keeping energy affordable for customers. The company plans to add capacity incrementally, allowing flexibility in planning and resource type to adapt to changing conditions. Our plan is to add solar capacity, a mix of owned and purchased power, through a competitively bid, annual solicitation process to keep costs low. The Clean Energy Plan forecasts renewable capacity levels of:

• 30% by 2025

• 43% by 2030

• 61% by 2040

When renewable generation is combined with advances in energy storage and customer efficiency programs, Consumers Energy's goal is for customers' electricity needs

on the hottest days to come from 90% clean energy resources. Since 2005, renewable nameplate capacity, including from power purchase agreements, has grown from

3% to 14%. We look forward to continued growth as we transition from coal to renewables.

Consumers Energy owns and operates four wind parks in Michigan: Lake Winds® Energy Park (100 megawatts) in Mason County, Cross Winds® Energy Park (231 megawatts) in Tuscola County, the Crescent Wind Farm (166 megawatts) in Hillsdale County and the Gratiot Farms Wind Project (150 megawatts) in Gratiot County. The Heartland Wind Farm (about 200 megawatts) in Gratiot County is scheduled to begin operating in 2023. We've also procured about 1,005 megawatts of new solar capacity from nine projects expected to begin operating between 2022 and the end of 2024.

Consumers Energy offers voluntary renewable energy customer programs. These programs accelerate the Clean Energy Plan, greening the grid faster than would otherwise occur and enabling customers to be more environmentally sustainable.

Awards

Recognition for our commitment to ESG and sustainability

• Newsweek's Most Responsible Companies Award for 2021 & 2022
• 2022 ENERGY STAR® Partner of the Year
• Forbes® Magazine America's Best Large Employer for 2021 & 2022
• Forbes® Magazine America's Best Employers for Women in 2019, 2020, 2021 & 2022
• Forbes® Magazine America's Best Employers for Diversity 2020, 2021 & 2022.
• BEST Winner: Association for Talent Development for 2020, 2021 & 2022
• Top 50 global ranking in Military Times Best for Vets: Employers for 2020 & 2021
• 3BL's 100 Best Corporate Citizens of 2022, and the #1 company for ESG governance.
• Certified Gold-Level Veteran Friendly Employer by the Michigan Veterans Affairs Agency (MVAA)
• Ranked Top Utility of 2021 by Site Selection Magazine
• Ranked Top Quartile by EEI Utility Standards and Safety Performance