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2018 | ENVIRONMENTAL, SOCIAL, GOVERNANCE AND SUSTAINABILITY REPORT

Compliant with Edison Electric Institute (EEI) and American Gas Association (AGA) Templates in place as of Nov. 29, 2018

2018 • ENVIRONMENTAL, SOCIAL, GOVERNANCE, AND SUSTAINABILITY REPORT • CMS ENERGY & CONSUMERS ENERGY • 1

2018

Environmental, Social, Governance (ESG) and Sustainability Report

SECTION 1: QUALITATIVE INFORMATION

Introduction

CMS Energy, including our primary subsidiary, Consumers

Energy, has integrated sustainable principles throughout

all levels of our company. Our commitment to the

triple bottom line — People, Planet and Profit — is our

foundation. As Michigan’s largest utility, consideration

of environmental, social and governance (ESG) issues is

embedded in our strategy, business planning and enterprise

risk management processes. These commitments align with

our purpose: World Class Performance

Delivering Hometown Service. The triple

bottom line balances the interests of all

of our stakeholders, including employees,

customers, suppliers, regulators, Michigan

residents and the investment community.

CMS Energy is participating in voluntary

industry initiatives, coordinated by the

Edison Electric Institute (EEI) and the

American Gas Association (AGA), to provide the public, our

customers and investors with uniform and consistent ESG

and sustainability-related metrics. This report supplements

our existing disclosure on these issues, including the 2018

Sustainability Report. CMS Energy also published a Climate

Assessment Report in November 2018, which can be found

here.

At CMS Energy, we know climate

change is hap-pening, and

know we can do our part to care

for the planet by focusing on a

clean and lean operating strategy.

https://s2.q4cdn.com/027997281/files/doc_downloads/2018/11/Climate_Assessment_Report.pdf


Governance

CMS Energy and Consumers Energy have multiple levels of

sustainability oversight integrated into our daily operations.

We use a variety of governance and risk management

tools when addressing ESG and sustainability matters.

These include, among others, oversight by the CMS Energy

and Consumers Energy Boards of Directors (Board), an

enterprise risk management program, and robust strategic

and business planning processes.

The Board is made up of a number of directors with experience and knowledge of ESG

and sustainability issues. The Board has the highest level of oversight over our ESG and

sustainability practices. Review of these practices occurs at the Board level by the Audit

Committees (Audit Committee), Governance, Sustainability and Public Responsibility

Committees (Governance Committee) and the Compensation and Human Resources

Committees (Compensation Committee). The Audit Committee oversees our

enterprise risk management framework, which includes strategic and operational risks,

as well as the processes, guidelines and policies for identifying, assessing monitoring

and mitigating such risks.

Risk management is embedded into business processes

and key decision making at all levels of the company. The

Governance Committee is responsible for reviewing and

evaluating the composition of the Board, recommending

Board nominees, broadly overseeing the corporate

governance and advising and assisting the Board on public

responsibility and sustainability matters.

Acknowledging the growing importance of sustainability

and climate-related matters, the Board in 2018 formally

tasked the Governance Committee with oversight of sustainability practices by adding

this responsibility to its charter. The Compensation Committee is responsible for our

executive compensation structure, benefit and compensation plans and critical human

resource programs. The committee charters can be found at CMSEnergy.com.


We also have an Environmental Advisory Committee, made

up of senior leadership that influences our environmental

compliance and sustainability programs and governs

decisions that support our commitment to the planet. This

includes short and long-term strategic decisions and ESG

disclosure reporting.

In addition to a robust oversight structure, CMS Energy has

an Enterprise Risk Management (ERM) program to ensure

risks that may have a significant impact on the business are

known and understood, and thus inform risk mitigation strategies.

The scope, objectives and roles and responsibilities related to the ERM program are

included in the company’s Corporate Risk Policy, which is approved by the Audit

Committee of the Board. The ERM program covers risks across several areas, including

strategic, operational, regulatory, environmental, financial, information technology

operations and cyber security for CMS Energy and its subsidiaries.

Strategy and Integration

Internal and external data sources are leveraged as input into

our long-term strategic planning. This data is analyzed, used

to update trend metrics and synthesized into an update on

trends critical to our current and future business.

This data influences multiple areas of our strategy including

distributed energy resources, wholesale markets, customer

energy usage trends and climate policy. This information is

used to assess our strategic choices and the assumptions underlying our strategy.

The senior team and Board engage with the insights and conclusions of this work

multiple times each year to evaluate the strategic choices and test for potential new

opportunities or threats.


Stakeholder Engagement

We spend significant time and effort listening to our

customers and key stakeholders before making decisions.

Our long-term resource plans and our environmental

and sustainability strategies consider People, the Planet,

and Profit. For example, in 2017 and 2018 we engaged

stakeholders in the development of our Clean Energy

Breakthrough Goal as well as the development of our

Integrated Resource Plan (IRP). That IRP engagement

included a series of widely promoted public forums to give stakeholders an opportunity

to provide input on our long-term resource plans. These forums were designed as basic

informational and educational sessions with the chance to make comments and ask

wide-ranging questions about topics such as renewable energy,

energy efficiency and emerging technology.

We also have an on-going outreach program to develop and

maintain communication with our investors. We value these

discussions, and the Board considers feedback when evaluating corporate governance

issues. Our management regularly participates in investor and industry conferences

throughout the year to discuss performance and ESG topics. Shareholders, employees

and third parties may contact the Board with any inquiry or issue by the methods

described on our website. The Board will respond as appropriate.

Climate Change

In the past five years, Consumers Energy has created a

cleaner, more sustainable energy future for Michigan by

taking a leadership position in reducing air emissions, water

usage and landfill waste.

“Our actions speak louder than words and we have a track

record of doing more than is required. Our actions to date

have reduced our carbon emissions by 38 percent, reduced

our water usage by 35 percent and avoided over one million cubic yards of landfill

disposal,” said Patti Poppe, president and CEO of CMS Energy and Consumers Energy.

https://www.consumersenergy.com/-/media/CE/Documents/sustainability/integrated-resource-plan-summary.ashx?la=en&hash=9F602E19FE385367FA25C66B6779532142CBD374


But we are not satisfied. In February 2018, Consumers Energy announced a goal to

reduce carbon emissions by 80 percent compared to 2005 levels and produce energy

with zero coal by 2040. At the same time, we plan to have renewable energy sources

and energy storage deliver more than 40 percent of our energy. Consumers Energy

is embracing a cleaner and leaner vision, focused on eliminating wasted energy and

adding more renewable energy sources, such as wind and solar.

Renewable Energy

As outlined in our IRP, we plan to add 550 megawatts of

wind to help us reach Michigan’s 15 percent renewable

energy standard by the end of 2021. We plan to add capacity

on an incremental basis, allowing flexibility in planning

and resource type to adapt to changing conditions. We’re

proposing 5,000 megawatts of solar energy with a ramp-up

throughout the 2020s to prepare for the retirement of certain

fossil-fueled units, as well as the end of some power purchase

agreements. The additional solar capacity may be a mix of

owned and purchased. The plan forecasts renewable energy

levels of:

• 25 percent by 2025.



This plan would help Consumers Energy reduce carbon

emissions by more than 90 percent from 2005.

Since 2005, Consumers Energy’s renewable capacity has

grown from 3 percent to 11 percent. We look forward to this

percentage growing as we transition from coal to renewables

in support of our clean energy goals.

We own and operate two wind farms: Lake Winds® Energy

Park in Mason County and Cross Winds® Energy Park in

Tuscola County.

We are proud to provide the strong leader-ship to protect our planet and our home state for generations to come.


In addition to wind, we’ve listened to customers to develop

new renewable energy sources including:

• Operating solar power plants at Grand Valley State and

Western Michigan universities that collectively generate

up to 4 megawatts of clean energy.

• Offering a pilot program for households to install solar

panels on rooftops.

• Launching a pilot program to allow businesses to

purchase 100 percent clean energy, helping businesses achieve their corporate

sustainability goals.

• Buying electricity from the 100-megawatt Apple Blossom wind farm in the Thumb.

Enabling Our Strategy

In addition to focusing on ESG-related issues in our core business, we also leverage our

philanthropic initiatives in corporate giving and employee volunteerism to focus on

our key People, Planet and Profit objectives.

Consumers Energy Foundation

Since 1990, the Consumers Energy Foundation has provided

grants and mobilized volunteers to strengthen local

education, social services, the environment and community,

economic and cultural development. Foundation giving is

separate and distinct from other company contributions, and

cannot be used to directly benefit the corporation.

The Foundation uses shareholder funds, along with

contributions from current employees and retirees to support nonprofit organizations

across Michigan and help create sustainable communities. In 2017, Consumers Energy,

our charitable foundation and employees contributed more than $17 million to

nonprofit organizations in the communities we serve.


Volunteerism

Our company has a long history of supporting active

employee volunteerism in a variety of areas. The company

targets key volunteer opportunities that make a difference –

ensuring our branded “Blue Shirts” make a strong showing

at key community events.

The company implemented an online technology platform

(CE Volunteers) in late 2017 to increase recruitment and

engagement in volunteer opportunities as well as provide metrics and data about

employee volunteerism that did not previously exist. In November and December of

2017, employees were asked to report 2017 volunteer hours in the new platform.

More than 11,000 hours were reported; however, we expect many more volunteer

hours were accrued throughout the year. As of August of 2018, approximately 10,500

volunteer hours in the communities we serve have been reported.

Other Resources

We provide extensive public reporting and are forthcoming

in disclosures about ESG and sustainability, including

our environmental stewardship and long-term strategy.

We address these matters in Securities and Exchange

Commission, Environmental Protection Agency and other

regulatory agency filings, and by voluntarily reporting our

climate risk strategy and related data to CDP (formerly

known as the Carbon Disclosure Project).

Additionally, we continually update and enhance disclosures relating to sustainability

efforts on our website and in our Sustainability Report, which provide a better

understanding of the breadth and depth of our climate-related planning and practices

and can be found at ConsumersEnergy.com. Information on key performance

indicators for Consumers Energy, the principal subsidiary of CMS Energy, can also be

found in the chart below.


SECTION 2: QUANTITATIVE INFORMATION

Disclaimer: All information below is being provided on a voluntarily basis, and as such, companies may elect to include or exclude any of the topics outlined below and customize the template to their specific needs. The decision to include data for historical and future years is at the discretion of each company and the specific years (e.g., historical baseline) should be chosen as appropriate for each company.

Parent Company: CMS Energy Corporation

Operating Company(s): Consumers Energy Company

Business Type(s): Electric and gas utility

State(s) of Operation: Consumers Energy - Michigan

State(s) with RPS Programs:

Regulatory Environment: Both Regulated and unregulated; Federal Energy Regulatory Commission, Michigan Public Service Commission, and Federal, state and local environmental laws and regulations

Report Date: 8/27/2018

CMS Energy Website: CMSEnergy.com

Consumers Energy Website: ConsumersEnergy.com

Sustainability Report: https://consumersenergy.cld.bz/Consumers-Energy-2017-Sustainability-Report

The quantitative information on pages 8 – 12 is Consumers Energy data only. CMS Energy is the parent company of Consumers Energy.

Baseline Last Year Current YearEMISSIONS 2005 2016 2017

PORTFOLIO

Owned Nameplate Generation Capacity at end of year (MW)1

Coal 3,055 2,105 2,105

Natural Gas 1,157 2,487 2,487

Nuclear 812 N/A N/A

Petroleum 729 720 720

Total Renewable Energy Resources 1,029 1,338 1,338

Biomass/Biogas N/A N/A N/A

Geothermal N/A N/A N/A

Hydroelectric 1,121 1,122 1,122

Solar N/A 4 4

Wind N/A 212 212

Other N/A N/A N/A

Purchased Power Nameplate Generation Capacity at end of year (MW)

Coal 173 160 160

Natural Gas 1,392 1,396 1,396

Nuclear N/A 813 813

Petroleum N/A N/A N/A

Total Renewable Energy Resources 212 603 706

Biomass/Biogas 202 234 235


Hydroelectric 9 20 22

Solar N/A 7 7

Wind 2 342 442

Other N/A N/A N/A

1 Represents Consumers Energy’s share of the capacity of the J.H. Campbell 3 unit, net of the 6.69-percent ownership interest of the Michigan Public Power Agency and Wolverine Power Supply Cooperative, Inc., and Consumers Energy’s 51-percent share of the capacity of Ludington. DTE Electric holds the remaining 49-percent ownership interest.


Baseline Last Year Current YearEMISSIONS (cont) 2005 2016 2017

Net Generation for the data year (MWh)

Coal 18,810,000 9,739,000 10,098,000

Natural Gas 119,500 6,161,500 5,154,000

Nuclear 5,336,000 N/A N/A

Petroleum 111,500 40,500 48,000

Total Renewable Energy Resources -93,000 767,000 788,000

Biomass/Biogas N/A N/A N/A


Hydroelectric -93,000 136,000 189,000

Solar N/A 4,000 6,000

Wind N/A 627,000 593,000

Other N/A N/A N/A

Purchased Power for the data year (MWh)

Coal 482,522 512,000 491,000

Natural Gas 7,061,151 5,995,000 5,521,000

Nuclear N/A 6,927,000 6,780,000

Petroleum N/A N/A N/A

Total Renewable Energy Resources 1,236,343 2,148,000 2,245,000

Biomass/Biogas 1,199,810 1,194,000 1,234,000


Hydroelectric 33,964 45,000 52,000

Solar N/A 7,000 6,900

Wind 2,569 902,000 952,000

Other 219,151 3,688,000 4,384,000

Investing in the Future: Capital Expenditures, Energy Efficiency (EE), and Smart Meters

Total Annual Capital Expenditures (nominal dollars) $593,000,000 1,656,000,000 1,632,000,000

Incremental Annual Electricity Savings from EE Measures (MWh) N/A 352,022 562,121

Incremental Annual Investment in Electric EE Programs (nominal dollars) N/A 77,215,000 13,500,000

Percent of Total Electric Customers with Smart Meters (at end of year) N/A 75 99

Retail Electric Customer Count (at end of year)

Commercial 214,025 221,483 220,734

Industrial 8,595 1,485 1,433

Residential 1,565,601 1,595,470 1,601,688

GHG Emissions: Carbon Dioxide (CO2) and Carbon Dioxide Equivalent (CO2e)

Owned Generation

Carbon Dioxide (CO2)

Total Owned Generation CO2 Emissions (MT) 20,157,066 12,968,880 12,831,770

Total Owned Generation CO2 Emissions Intensity (MT/Net MWh) 0.750 0.791 0.797

Carbon Dioxide Equivalent (CO2e)

Total Owned Generation CO2e Emissions (MT) N/A 13,001,487 12,890,968

Total Owned Generation CO2e Emissions Intensity (MT/Net MWh) N/A 0.793 0.801

Purchased Power


Total Purchased Generation CO2 Emissions (MT) 3,799,350 7,849,679 7,196,288

Total Purchased Generation CO2 Emissions Intensity (MT/Net MWh) 0.420 0.403 0.370


Total Purchased Generation CO2e Emissions (MT) N/A 7,875,639 7,229,254

Total Purchased Generation CO2e Emissions Intensity (MT/Net MWh) N/A 0.404 0.371


Baseline Last Year Current YearEMISSIONS (cont) 2005 2016 2017

Owned Generation + Purchased Power


Total Owned + Purchased Generation CO2 Emissions (MT) 23,956,416 22,531,986 20,028,058

Total Owned + Purchased Generation CO2 Emissions Intensity (MT/Net MWh) 0.669 0.628 0.563


Total Owned + Purchased Generation CO2e Emissions (MT) N/A 22,531,986 20,120,222

Total Owned + Purchased Generation CO2e Emissions Intensity (MT/Net MWh) N/A 0.628 0.566

Non-Generation CO2e Emissions

Fugitive CO2e emissions of sulfur hexafluoride (MT) N/A 1,767 1,756

Fugitive CO2e emissions from natural gas distribution (MT) N/A 116,103 101,645

Nitrogen Oxide (NOx), Sulfur Dioxide (SO2), Mercury (Hg)

Generation basis for calculation Fossil

Nitrogen Oxide (NOx)

Total NOx Emissions (MT) 29,105 4,945 4,029

Total NOx Emissions Intensity (MT/Net MWh) 1.19E-03 3.00E-04 2.50E-04

Sulfur Dioxide (SO2)

Total SO2 Emissions (MT) 85,020 17,026 5,226

Total SO2 Emissions Intensity (MT/Net MWh) 3.50E-03 1.04E-03 3.25E-04

Mercury (Hg)

Total Hg Emissions (kg) N/A 96 23

Total Hg Emissions Intensity (kg/Net MWh) N/A 5.503E-06 1.00E-06

Baseline Last Year Current YearRESOURCES 2005 2016 2017

Human Resources

Total Number of Employees 8,114 7,366 7,496

Total Number on Board of Directors/Trustees 12 12 10

Total Women on Board of Directors/Trustees 1 4 4

Total Minorities on Board of Directors/Trustees 1 2 2

Employee Safety Metrics

Recordable Incident Rate 7.01 0.88 0.75

Lost-time Case Rate 2.00 1.35 0.11

Days Away, Restricted, and Transfer (DART) Rate 3.22 0.50 0.40

Work-related Fatalities 1.00 0.00 0.00

Fresh Water Resources

Water Withdrawals - Consumptive (Billions of Liters/Net MWh) N/A 3.22E-07 2.94E-07

Water Withdrawals - Non-Consumptive (Billions of Liters/Net MWh) N/A 8.97E-05 7.61E-05

Waste Products

Amount of Hazardous Waste Manifested for Disposal N/A 32.7 52.1

Percent of Coal Combustion Products Beneficially Used N/A 12% 20%


AGA VOLUNTARY SUSTAINABILITY METRICS:Quantitative Information

Disclaimer: All information below is being provided on a voluntary basis, and as such, companies may elect to include or exclude any of the topics outlined below and customize the template to their specific needs. The decision to include data for historical and future years is at the discretion of each company and the specific years (e.g., historical baseline) should be chosen as appropriate for each company.

© American Gas Association. All rights reserved.

Parent Company: CMS Energy

Operating Company(s): Consumers Energy

Business Type(s): Combined Gas and Electric

State(s) of Operation: Michigan

Regulatory Environment: Regulated

Report Date: Nov. 29, 2018

Note: Data from from operating companies is rolled up to the corporate level.

NATURAL GAS Current Year

DISTRIBUTION RESOURCES 2017

Methane Emissions And Mitigation from Distribution Mains

Number of Gas Distribution Customers 1,763,743

Distribution Mains in Service

Plastic (miles) 14,239.48

Cathodically Protected Steel - Bare & Coated (miles) 12,467.55

Unprotected Steel - Bare & Coated (miles) 502.59

Cast Iron / Wrought Iron - without upgrades (miles) 424.90

Plan/Commitment to Replace / Upgrade Remaining Miles In order to improve the safety and reliability of our natural gas system, of Distribution Mains (# years to complete) CE is investing nearly $2 billion to replace 2,600 miles of natural gas pipelines. Our Enhanced Infrastructure Replacement Program (EIRP) is a 25-year project, which began in 2012.

Unprotected Steel (Bare & Coated) (yrs to complete) 19 years remaining in program

Cast Iron / Wrought Iron (yrs to complete) 19 years remaining in program

Distribution CO2e Fugitive Emissions

CO2e Fugitive Methane Emissions from Gas Distribution Operations (metric tons) 232,636.50

Natural Gas Throughput from Gas Distribution Operations in thousands of scf 353,761,510.00

CO2e Fugitive Methane Emissions Rate (metric tons per thousands scf of Throughput) 0.000658401

Natural Gas Transmission and Storage

Transmission Pipelines, Blow Down Volumes, and Fugitive Emissions

Total Miles of Transmission Pipeline Operated by gas utility (miles) 2419.38

Volume of Transmission Pipeline Blow Down Emissions - outside storage and compression facilities: Below reporting threshold for Subpart W

scf natural gas Below reporting threshold for Subpart W

metric tons 2 Below reporting threshold for Subpart W

Underground Natural Gas Storage Emissions Below reporting threshold for Subpart W

Storage Facility Wellhead Component Fugitive Emissions (metric tons of CO2e) Below reporting threshold for Subpart W

Onshore Natural Gas Transmission Compression Emissions

Compressor Station Fugitive Emissions (metric tons CO2e) 770.15

(3 of 7 compressor stations are above Subpart W reporting threshold)

Co2e Emissions For Transmission, Compression, And Storage

CO2e Emissions for Transmission Pipelines (metric tons) Below reporting threshold for Subpart W

CO2e Emissions for Storage Facilities (metric tons) Below reporting threshold for Subpart W

CO2e Emissions for Transmission Compression Facilities (metric tons) 1819.24 (3 of 7 compressor stations are above Subpart W reporting threshold)


NATURAL GAS Current Year

DISTRIBUTION RESOURCES 2017

Conventional Air Emissions from Transmission, Compression, and Storage

Emissions reported for all permitted sources (minor or major) Includes all 7 compressor stations

NOx ( metric tons per year) 1415.21

VOC (metric tons per year) 84.37

Natural Gas Gathering and Boosting

Methane Emissions

Gathering and Boosting Pipelines, Blow Down Volumes, and Emissions NA

Total Miles of Gathering Pipeline Operated by gas utility (miles) NA

Volume of Gathering Pipeline Blow Down Emissions (scf) NA

Gathering Pipeline Blow-Down Emissions outside storage and compression facilities (metric tons CO2e) NA

Co2e Combustion Emissions for Gathering & Boosting Compression

CO2e Emissions for Gathering & Boosting Compression Stations (metric tons) NA

Conventional Combustion Emissions from Gathering & Boosting Compression

Emissions reported for all permitted sources (minor or major) NA

NOx ( metric tons per year) NA

VOC (metric tons per year) NA

This report contains “forward-looking statements” which may cause our results to differ materially. All forward-looking statements should be considered in the context of the risk and other factors detailed from time to time in CMS Energy’s and Consumers Energy’s Securities and Exchange Commission (“SEC”) filings. Forward-looking statements should be read in conjunction with “FORWARD-LOOKING STATEMENTS AND INFORMATION” and “RISK FACTORS” sections of our most recent Form 10-K and as updated in other reports we file with the SEC, which can be found on our Regulatory Filings page. CMS Energy and Consumers Energy have no obligation to update or revise forward-looking statements regardless of whether new information, future events, or any other factors affect the information contained in the statements.