UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

ESSENTIAL UTILITIES, INC.2020 2022 PROXY STATEMENT   1

Notice of Annual Meeting of Shareholders

Notice of Annual Meeting of Shareholders
Essential Utilities, Inc. 762 W. Lancaster Avenue Bryn Mawr, Pennsylvania 19010

The annual meeting will be held:

Wednesday, May 6, 2020 8:00 A.M. Local TimeVirtual Annual Meeting of Shareholders   LocationWednesday, May 4, 2022 8:00am Local Time Peoples Natural Gas Headquarters 375 North Shore Drive Pittsburgh, Pennsylvania 15212 Record Date March 7, 2022   Record DateDue to public health concerns about COVID-19 and to support the health and safety of our shareholders and employees, this year’s Annual Meeting will be conducted virtually, entirely by live audio broadcast. March 9, 2020 To attend, go to: www.virtualshareholdermeeting.com/ WTRG2022 and log in using the control number on your Notice of Internet Availability, proxy card or voting instruction form. The list of shareholders will be available for inspection upon request by any shareholder for any purpose germane to the Annual Meeting for a period of 10 days prior to the Annual Meeting at our principal office located at 762 W. Lancaster Avenue Bryn Mawr, PA 19010, by contacting us at www.essential.co/investor-relations Shareholders will have the same opportunities to participate as they would at an in-person meeting, with the opportunity to vote and ask questions on the matters discussed in this proxy statement.		Purpose The Annual Meeting of Shareholders of Essential Utilities, Inc. (the “Company”) will be held for the following purposes: 1  To elect nineeight nominees for directors; 2To approve an advisory vote on the compensation paid to the Company’s named executive officers for 2021; 3  To ratify an Amendment to the Company’s Amended and Restated Bylaws (the Bylaws) to require disclosure of derivative securities holdings when a shareholder makes a nomination for a director or presents a proposal to be considered by shareholders at an annual meeting of shareholders; 4  To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the Company for the 20202022 fiscal year; 3  To approve an advisory vote on the compensation paid to the Company’s named executive officers for 2019; 4  To approve an amendment to the Amended and Restated Articles of Incorporation, as amended, (the “Articles of Incorporation”) to establish a majority voting standard in uncontested director elections; 5To approve an amendment to the Articles of Incorporation to increase the number of authorized shares of common stock from 300 million to 600 million; and 6  To transact any other business as may properly come before the meeting or any adjournments or postponements thereof.   Who can vote Only shareholders of record at the close of business on March 9, 20207, 2022 will be entitled to notice of, and to vote at, the meeting and at any adjournments or postponements thereof.meeting.
How to vote
Your vote is important We urge each shareholder to promptly sign and return the enclosed proxy card, or to use telephone or internet voting. See our questionsQuestions and answersAnswers about the meetingAnnual Meeting and the voting section of the proxy statement for information about voting by telephone or internet, how to revoke a proxy and how to vote your shares in person.at the virtual annual meeting.
			How to vote
	Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 6, 20204, 2022.   The Notice of Annual Meeting, Proxy Statement and 20192021 Annual Report to Shareholders are available at:www.essential.co/investor-relationswww.proxyvote.com.   If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting login page.		By internet*Online before the meeting* www.proxyvote.com www.proxyvote.com Online at the meeting Attend the Annual Meeting virtually at www.virtualshareholdermeeting.com/WTRG2022 and follow the instructions for voting	By phone* In the U.S. or Canada dial toll-free 1-800-690-6903 1-800-690-6903		In person At the 2020 Annual Shareholders’ Meeting	By mail Return your proxy card in the postage-paid envelope provided
			*   You have until 11:59 p.m. (ET) on May 5, 20203, 2022 to vote through the internet or by phone, for shares held directly and if you are a plan participant you have until 11:59 p.m. (ET) on May 3, 20201, 2022 to vote through the internet or by phone. If you vote by Internet or by Phone,phone, you do not need to mail back your proxy card.
		As part of our precautions with respect to the coronavirus or COVID-19 outbreak, we may consider alternative arrangements for the 2020 Annual Meeting, which may include a change in date, time, or location of the meeting, including holding the meeting solely by means of remote communication. If we make any such changes, we will announce the decision in advance through all appropriate means, and provide details on our website.
		By Order of the Board of Directors,   Christopher P. Luning Secretary March 27, 202021, 2022

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Contents

Forward-Looking Information

This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”)Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)Exchange Act). Forward-looking statements are based on management’s beliefs and assumptions. Various factors may cause actual results to be materially different than the suggested outcomes within forward-looking statements. Accordingly, there is no assurance that such results will be realized. For details on the uncertainties that may cause the Company’s actual future results to be materially different than those expressed in our forward-looking statements, see our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (“SEC”)(SEC) and available on the SEC’s website at www.sec.gov.www.sec. gov. In light of these risks, uncertainties, and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than described. Forward-looking statements speak only as of the date they are made. Essential Utilities, Inc. expressly disclaims an obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

ESSENTIAL UTILITIES, INC.2020 2022 PROXY STATEMENT   3

Proxy Summary

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement before voting. For more complete information regarding the Company’s 20192021 performance, please review the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.2021.

Summary of Matters to be Voted upon at the Annual Meeting

The following table summarizes the items that shareholders are being asked to vote on at the 20202022 Annual Meeting:

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Proxy Summary

Director Nominees

Director Nominees (page 10)

The following table provides summary information about each of the Company’s nineeight director nominees. Each director will serve a one-year term if elected.

All directors are independent except for Mr. Franklin and Mr. DeBenedictis.

Board Nominees from left to right Christopher H. Franklin Ellen T. Ruff Francis O. Idehen Wendy A. Franks Lee C. Stewart Christopher C. Womack Daniel J. Hilferty Elizabeth B. Amato Nicholas DeBenedictis

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Proxy Summary

Board Composition

Board Composition

Diversity of Skills and Experience

Corporate Governance Highlights

Board Composition as of December 31, 2021

Corporate Governance Highlights

We are committed to maintaining strong standards of corporate governance, which promote the long-term interests of our shareholders, strengthen Board and management accountability, and help build public trust in our Company. The “Corporate Governance”Corporate Governance section beginning on page 1819 describes our corporate governance framework.

* As of December 31, 2021

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Proxy Summary

20192021 Performance Highlights

20192021 Performance Highlights

During 2019,Despite the many challenges during 2021, our leadership team remained focused on growing our customer base through acquisitions, prudently investing capitalinvested a record amount of over $1 billion in infrastructure, maintained operational excellence and demonstrated the resiliency of our water and natural gas platforms. As of year-end 2021, we had a total of eight signed purchase agreements to renew our aging infrastructure, obtaining regulatory approval for the Peoples Natural Gas acquisition, successfully closing on the Company’s first public equity offering since 2006acquire water and its first corporate debt offering,wastewater systems, totaling over $471 million in purchase price and creating efficiencies across the organization.expected to serve approximately 235,000 equivalent retail customers or equivalent dwelling units. We see great opportunities ahead and remain focused on investing in infrastructure and delivering sustainable growth for our investors. We do this while building on our core values of respect, integrity, and the pursuit of excellence.

Financial Highlights

During 2019, we remained focused onexcellence and remaining dedicated to our mission to be the best possible provider of safely and reliably delivering Earth’s most essential natural resources by serving the needs and expectations ofto our customers shareholders, employees and the communities we serve both today and for future generations. At the same time we continued to focus on growing our customer base through acquisitions, prudently investing capital to renew our aging infrastructure, and creating efficiencies across the organization.

All of this was in addition to working on efforts to integrate and close the Peoples Natural Gas transaction and to negotiate and sign the DELCORA municipal wastewater acquisition, which is the largest municipal acquisition in our history. We continue to see great opportunities ahead and remain focused on investing in infrastructure and delivering sustainable growth for our investors.communities.

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Proxy Summary

Compensation Highlights

2017–20192019–2021 Pay for Performance Alignment

Our pay programs are designed to reflect the Company’s performance. The following table shows the relationship between financial performance goals and executive performance-based payouts over the past three years:

Comparison of Five Year Cumulative Total Return*Return*

Below is a chart showing our Total Return to our shareholders over the past five years as compared to the S&P 500 Index and the S&P MidCap 400 Utilities Index.

Compensation Highlights

Highlights of our executive compensation program include:

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Proxy Summary

20192021 Pay for Performance Compensation Program

20192021 Pay for Performance Compensation Program

Our goal is to instill acontinue our pay-for-performance culture throughout our Company. Our compensation program for named executive officers is designed to:

20192021 NEO Total Compensation Pay Mix

CEO

Shareholder Outreach and Results of 20192021 Advisory Vote to Approve Executive Compensation

At our 20192021 annual meeting of shareholders, fewerour shareholders overwhelmingly supported our say on pay proposal thancompensation program, with 96% of shareholders voting in agreement with the 2013-2018 averageCompany’s compensation design. We believe the high level of 95%. The Board believes thatsupport recognized the shareholder return result laggedthoughtfulness and consideration the industry due to the impact of the then-pending large acquisition of Peoples Natural GasExecutive Compensation Committee and the overhang ofmanagement team spent in redesigning the pending equity and debt issuances rather than the underlying performance of the Company. However, management and the Board took the resultingprogram to more closely align with driving shareholder vote seriously and committed to take several steps to address the executive compensation program in 2020.

value.

Over the course of 2019,2021, management held more than 500approximately 300 meetings with investors. Additionally, the Company requested meetings with the 25 largest shareholders, representing over 45%as part of our outstanding common stock. Wegovernance focused outreach, we offered to meet with our top 25 shareholders. For this effort, we engaged with every shareholder who accepted our offer to meet. During these meetings and calls, we discussed numerous topics, including strategic, executive compensation, and environmental, social and governance issues.

As a direct result of these meetings and calls, the Company took a number of actions in 2019 to address shareholder feedback on our executive compensation program and environmental, social, and governance programs.

For more information on our shareholder engagement program, investor feedback and the actions taken in response to that feedback, please see page 2554 in this proxy statement.

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Proposal 1:

Election of Directors

All of the director nominees who are elected, will be electedOur Board has nominated eight directors for election at this year’s Annual meeting for a one-yearone year term expiring atupon the 2021 Annual Meetingrecommendation of Shareholders, and until their successors are duly elected and qualified. Theour Corporate Governance Committee reviewed the qualifications of the directors in relation to the candidate nomination criteria under the Company’s Corporate Governance Guidelines. The Corporate Governance Committee voted to recommend to the Board of Directors, and the Board of Directors approved, the nomination ofCommittee. Ms. Amato, Mr. DeBenedictis,Ciesinski, Mr. Franklin, Ms. Franks, Mr. Hilferty, Mr. Idehen,Ms. Kelly, Ms. Ruff, Mr. Stewart, and Mr. Womack for election as directors at the 20202022 Annual Meeting, with each nominee abstaining from the vote with respect to his or her nomination, as applicable. Mr. Idehen recently informed us that he is not able to stand for re-election. We have included his information, including his biography, below, as he served on our Board during all of 2021. We thank Mr. Idehen for his service on our Board.

Therefore, nineEight nominees will stand for election by a plurality of the votes cast at the 20202022 Annual Meeting. At the 2020 Annual Meeting, proxies in the accompanying form, properly executed, will be voted for the election of the nineeight nominees listed below, unless authority to do so has been withheld in the manner specified in the instructions on the proxy card or the record holder does not have discretionary voting power under NYSE rules. Discretionary authority is reserved to cast votes for the election of a substitute should any nominee be unable or become unwilling to serve as a director. Each nominee has stated his or her willingness to serve and the Company believes that the nominees will be available to serve.

Director Independence

Based on a review applying the standards in the Company’s Corporate Governance Guidelines, including a review of the applicable NYSE, SEC, and Company standards, and considering the relevant facts and circumstances of any transactions, relationships, and arrangements between the directors and the Company, theThe Board of Directors has affirmatively determined that each director and nominee for director is independent, other than Mr. Franklin, the Company’s Chairman, President, and Chief Executive Officer, and Mr. DeBenedictis, the Company’s Chairman Emeritus and former Chief Executive Officer.For more information, see “GovernanceGovernance Practices & Policies”Policies beginning on page 3034 for our Director Independence Standards and Related Persons Transaction Policy.

Age and Term Limits

Term Limits: The Board believes that term limits are an important element of good governance. However, it also believes that it must strike thegovernance, helping create an appropriate balance between the contribution of directors who have developed, over a period, meaningful insight into the Company and its operations, and therefore can provide an increasing contributionnew directors who bring a fresh perspective to the Board as a whole. Accordingly, in 2015, the Board established thatour Board. Any director, upon reaching the fifteenth anniversary of a directortheir accepting an initial appointment or election to the Board of Directors, the director willmust tender his or her resignation to the Board (the “Term Limit Policy”).Board. The Term Limit Policy does not apply to directors who were elected on or before December 1, 2015.

As of the date of this proxy statement, only two directors, including our CEO, were first elected prior to or in 2015.

Following extensive research, including conducting an outreach program to the Company’s largest shareholders to seek their opinion, the Board determined that 75 years of age was the appropriate age for a director to submit his or her resignation from the Board of Directors. As such, allAge Limits: All directors are now required to submit their resignation from the Board effective as of their 75^thbirthday.

Information Regarding NomineesBoard Diversity

ForWhen assessing a director nominee candidate, consideration is given to the effect the candidate will have on the diversity of the board. Diversity of the board is evaluated by considering a broad range of attributes, including, without limitation, race, gender and national origin, background, demographics, expertise and experience. Each year, the directors complete a targeted questionnaire that is administered by a neutral, non-affiliated entity to assess the performance of the board and each of the nine nominees for election asstanding committees. Every second year, directors atcomplete a targeted questionnaire to assess the 2020 Annual Meeting, set forth below is information as to the positions and offices with the Company held by each, the principal occupation of each during at least the past five years, the directorships of public companies and other organizations held by each and the experience, qualifications, attributes or skills that, in the opinionperformance of the Corporate Governance Committee and the Board of Directors, make the individual qualified to serve as a director of the Company.directors individually.

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Proposal 11: Election of Directors

Information Regarding NomineesBoard Diversity

Director Nominee Experience, Qualifications, Attributes and Skills Criteria

The chart below summarizes the experience, qualifications, attributes, and skills of each of thethese nominees:

Based upon these qualifications, attributes, and skills, the Board of Directors determined that the following membersdirector nominees are best suited for service on the following Committees:

*†Audit Committee Financial Expert

Annually, the Corporate Governance Committee and the Board of Directors review the membership of the individuals on the Committees and re-organize the Committees, if necessary.

Information About Our Director Nominees

For each of the eight nominees for election as directors at the 2022 Annual Meeting, we have included biographical information on the following pages that highlights their experience, qualifications, attributes and skills that led the Board to determine the individual is qualified to serve as a director of the Company. At the end, we have included Mr. Idehen’s biography.

��	The Board of Directors unanimously recommends a vote FOR the election of each of these nominees as director.

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Proposal 11: Election of Directors

Nominees for Election at the 20202022 Annual Meeting

Nominees for Election at the 20202022 Annual Meeting

Board Committees ·  Chair, Corporate Governance Committee ·  Executive Compensation Committee ·  Executive Committee   Key Skills ·  Legal/Government ·  Leadership ·  Mergers & Acquisitions ·  Geographic Diversity ·  “C-Suite”C-Suite Experience	Elizabeth B. Amato Former Executive Vice President and Chief Human Resources Officer, United Technologies Corp.		Director since2018 Age6365 Independent Director
	Experience ·  Executive Vice President & Chief Human Resources Officer of United Technologies Corp. (“UTC”)(UTC) 2015 to present.2020. ·  Senior Vice President, Human Resources and Organization of UTC with global responsibility for UTC’s Human Resources and Communications functions 2012-2015.	·  Ms. Amato joined UTC in 1985 at Pratt & Whitney and has held a variety of the most senior human resources leadership positions across the corporation in both aerospace and commercial building systems, including UTC Climate, Controls & Security (2011-2012), Carrier (2010-2011), Pratt & Whitney (2006-2009) and Sikorsky (1997-2006).
	Ms. Amato is a recipient of the YWCA Women Achievers Award and is currently a member of the Human Resources Policy Association, the CHRO Board Academy and is a member of the Board of Directors for Children’s Healthcare Charity, Inc. Ms. Amato holds a bachelor’s degree in political science from Davidson College and a law degree from the University of Connecticut.   Qualifications: Ms. Amato has over 30 years of experience in various roles with responsibilities ranging from integrating acquisitions to human resources to executive compensation. The Board of Directors views Ms. Amato’s independence, her broad experience, and her leadership roles within the industry as important qualifications, skills and experience that support the Board of Directors’ conclusion that Ms. Amato should serve as a director of the Company.   Other current public company directorships (0).

Board Committees ·  Chairman, Risk Mitigation and Investment Policy Audit Committee ·  Corporate Governance Committee   Key Skills ·  Utility Industry ·  Regulatory ·  Financial ·  Legal/Government ·  Leadership ·  Mergers & Acquisitions ·  “C-Suite” Experience	Nicholas DeBenedictis Chairman Emeritus, Essential Utilities, Inc.		Director since1992 Age74
	Experience ·  Chairman Emeritus of the Board, having retired as Chief Executive Officer of the Company in 2015 and as non-executive Chairman of the Board in 2017. ·Chief Executive Officer from 1992 until 2015 and Chairman of the Board from 1993 until 2017.	·  Senior Vice President for Corporate Affairs of PECO Energy Company (an Exelon Corporation) 1989 to 1992. ·  President of the Greater Philadelphia Chamber of Commerce 1986 to 1989. ·Secretary of the Pennsylvania Department of Environmental Resources 1983 to 1986.
	Qualifications: In addition to his knowledge and experience as the Company’s previous Chairman of the Board from 1993 to 2017 and Chief Executive Officer from 1992 to 2015, and his prior experience as a senior executive of a major electric utility, Mr. DeBenedictis has experience as the head of Pennsylvania’s environmental regulatory agency. He serves as a director of three other public companies, including, as member of the corporate governance, audit, finance and compensation committees of those companies. Mr. DeBenedictis has also held leadership positions with various, educational, business, civic and charitable institutions. The Board of Directors views Mr. DeBenedictis’ experience with various aspects of the utility industry and his demonstrated leadership roles in business and community activities as important qualifications, skills and experience supporting the Board of Directors’ conclusion that Mr. DeBenedictis should serve as a director of the Company. Other current public company directorships (3): Exelon Corporation, P.H. Glatfelter Company and Mistras Group. Other current directorships: Mr. DeBenedictis serves on the Boards of Pennsylvania area non-profit, civic, and business organizations, including Independence Health Group.

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Proposal 1 Election of Directors

Nominees for Election at the 2020 Annual Meeting

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Proposal 11: Election of Directors

Nominees for Election at the 20202022 Annual Meeting

Board Committees ·  Chair, Executive Committee ·  Risk Mitigation and Investment Policy Committee   Key Skills ·  Utility Industry ·  Regulatory ·  Financial ·  Legal/ Government ·  Leadership ·  Mergers & Acquisition ·  “C-Suite”C-Suite Experience	Christopher H. Franklin Chairman, President, and Chief Executive Officer, Essential Utilities, Inc.		Director since2015 Age5456
	Experience Chairman, President, and Chief Executive Officer of the Company.
	·  Mr. Franklin has worked for the Company for 2729 years in a variety of leadership positions: President and Chief Executive Officer since July 2015; Executive Vice President, and President and Chief Operating Officer, Regulated Operations 2012 to 2015; Regional President—Midwest and Southern Operations and Senior Vice President, Public Affairs 2010 to 2012; RegionalRegional.	·  Regional President—Southern Operations and Senior Vice President, Public Affairs and Customer Relations 2007 to 2010);2010 Vice President, Public Affairs and Customer Operations 2005 to 2007; Vice President, Corporate and Public Affairs 1997 to 2005);2005 and Manager, Corporate & Public Affairs 1992 to 1997.
	Mr. Franklin earned his B.S. from West Chester University and his M.B.A. from Villanova University.   Qualifications: Since 2015, under Mr. Franklin’s leadership as CEO, the Company’s customer base has nearly doubled by completing over 5065 acquisitions and increased its market capitalization from $4.1$4.4 billion to $11$13.6 billion at the end of 2019.2021. During the same period, total shareholder return has been in excess of 70%130%. During his long tenure at the Company, Mr. Franklin has held a series of roles. Among his accomplishments in public affairs was the passage of key legislation designed to provide customers with improved water quality and better water and wastewater systems while allowing a fair and reasonable return for shareholders; as vice president of customer operations, Mr. Franklin lead the implementation of a single-customer information system and the creation of three central call centers; as operating president, he integrated the acquisition of AquaSource and brought the utility back to full profitability.   The Board of Directors views Mr. Franklin’s extensive experience with the Company, capabilities, and his demonstrated leadership roles with the Company and in business and community activities as important qualifications, skills and experience supporting the Board of Directors’ conclusion that Mr. Franklin should serve as a director of the Company.   Other current public company directorships (0). Other current and past directorships: Past Board member of ITC Holdings (which was sold in 2016). Mr. Franklin is active in the community and serves on a number of nonprofit and higher education boards including the University of Pennsylvania Board of Trustees and the Franklin Institute of Philadelphia.

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Proposal 11: Election of Directors

Nominees for Election at the 20202022 Annual Meeting

Lead Independent Director Board Committees ·  Chair, Corporate GovernanceExecutive Compensation Committee ·  Executive Committee ·  Executive Compensation Committee   Key Skills ·  Regulatory ·  Financial ·  Leadership ·  Mergers & Acquisitions ·  “C-Suite”C-Suite Experience	Daniel J. Hilferty Lead Independent Director, Essential Utilities, Inc. President Chairman and CEO, Dune View Strategies Executive Advisor, Independence Health Group		Director since2017 Age6365 Independent Director
	Experience ·  Former President and Chief Executive Officer of, and current Executive Advisor to Independence Health Group (“IHG”)(IHG), one of the nation’snation's leading health insurers serving nine million customers in 25 states and Washington D.C., since 2010. 2010 - 2020. Prior to 2010, Mr. Hilferty was: ·  President and Chief Executive Officer of the AmeriHealth Mercy Family of Companies	·  Executive Director of PennPORTS in the administration of Pennsylvania Governor Robert P. Casey. ·  Assistant Vice President overseeing community and media relations for Saint Joseph’s UniversityUniversity.
	Qualifications: Mr. Hilferty has extensive knowledge and experience in the areas of mergers and acquisitions, the health care field, and government relations and regulation. Based on Mr. Hilferty’s experience, qualifications, and knowledge, in 2017, the Board of Directors determined that Mr. Hilferty should serve as its Lead Independent Director. The Board of Directors views Mr. Hilferty’s independence, his experience with regulation, his reputation in the healthcare industry, and his leadership roles in business and community activities as important qualifications, skills and experience supporting the Board of Directors’ conclusion that Mr. Hilferty should serve as a director of the Company.   Other current public company directorships (0). Other current and past directorships: Mr. Hilferty serves on several industry-based and nonprofit boards, including America’s Health Insurance Plans (serves on the Executive Committee), Greater Philadelphia Chamber of Commerce (serves as Chairperson)on the Executive Committee), and on a fund board of FS Investments. In 2015, he served as co-chair on the Executive Leadership Cabinet of the World Meeting of Families; and, was the past Chairman of the Board of Directors for the Blue Cross and Blue Shield Association.

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Proposal 11: Election of Directors

Nominees for Election at the 20202022 Annual Meeting

Board CommitteesNominee ·  Audit Committee ·  Risk Mitigation and Investment Policy Committee   Key Skills ·  Utility Industry ·  Regulatory ·  Financial ·  Leadership ·  Mergers & Acquisitions ·  Geographic Diversity ·  “C-Suite”  C-Suite Experience	Francis O. Idehen Chief Operating Officer, GCM Grosvenor		Edwina Kelly Managing Director, sinceCanada Pension Plan Investment Board, Sustainable Energies Group.		Nominee Age 201935 Age42Independent Director Independent Director
	Experience ·  Chief Operating OfficerManaging Director, Canada Pension Plan Investment Board (CPPIB) 2019 to present; responsible for GCM Grosvenor, an independent alternativeoriginating new investments, transaction management and asset management firm since May 2017.for investments in the CPPIB's global Power & Renewables group.	·  Served in senior rolesDirector at Exelon Corporation from 2011 to 2017, serving as its treasurer, headEFG Hermes UAE, where she helped manage the renewable energy platform, led solar portfolio acquisitions, and equity restructuring of investor relations, and managing director of its investment office.wind farm investments.
	Mr. IdehenMs. Kelly has a bachelor’s degree in philosophy, politics and economics from Yalethe University of Oxford and is an MBA from Harvard Business School. associated chartered accountant member of the Institute of Chartered Accountants in England and Wales. Ms. Kelly is nominated to the Board as designated by CPPIB under the terms of the Company’s private placement transaction with CPPIB.
Qualifications: Mr. IdehenThe Board has extensivedetermined, based on her abilities, qualifications, knowledge, judgment, character, leadership skills, education, background and experience with largein fields and complex businesses,disciplines relevant to the Company, including her financial expertise, that Ms. Kelly is qualified to serve on the Board and will make a major utility Company, in various management and financial positions. Mr. Idehen has lived and worked in Illinois, an important area ofpositive contribution to the Company’s operations, for many years.Board. The Board of Directors views Mr. Idehen’s independence, hisMs. Kelly’s extensive experience with various aspectsUS renewable energy, mergers and acquisitions, her auditing and evaluation of the utility industry,financial statements and his experience as a chief operating officer charged with making prudent financial investmentscomplex accounting issues, her capabilities, and her demonstrated leadership roles as important qualifications, skills and experience supporting the Board of Directors’ conclusion that Mr. IdehenMs. Kelly should serve as a director of the Company.   Other current public company directorships (0). Other current directorships: Canterra, a Canadian farmland portfolio. VTRM Energia, a joint venture between CPPIB and Votorantim investing in renewable energy in Brazil.

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Proposal 1: Election of Directors

Nominees for Election at the 2022 Annual Meeting

Board Committees ·  Chair, Executive CompensationCorporate Governance Committee ·  Executive Committee ·  Corporate Governance Committee   Key Skills ·  Utility Industry ·  Regulatory ·  Legal Government ·  Leadership ·  Mergers & Acquisitions ·  Geographic Diversity ·  “C-Suite”C-Suite Experience	Ellen T. Ruff Former President, Office of Nuclear Development Duke Energy Corporation		Director since2006 Age7173 Independent Director
	Experience ·  President, Office of Nuclear Development, for Duke Energy Corporation, 2008 until her retirement in January 2011. ·  Partner at the law firm of McGuire Woods LLP from 2011 to 2018.	·  President of Duke Energy Carolinas, an electric utility that provides electricity and other services to customers in North Carolina and South Carolina from 2006 to 2008.
	Ms. Ruff joined Duke Energy in 1978 and during her career held a number of key positions, including: Vice President and General Counsel of Corporate, Gas and Electric Operations; Senior Vice President and General Counsel for Duke Energy; Senior Vice President of Asset Management for Duke Power; Senior Vice President of Power Policy and Planning; and Group Vice President of Planning and External Affairs.   Qualifications: Ms. Ruff has over 30 years of experience with a major utility company in various management, operations, legal planning and public affairs positions. Ms. Ruff has lived and worked in North Carolina, an important area of the Company’s operations, for many years.   The Board of Directors views Ms. Ruff’s independence, her experience with various aspects of the utility industry, her knowledge of North Carolina and her demonstrated leadership roles in business and community activities as important qualifications, skills and experience supporting the Board of Directors’ conclusion that Ms. Ruff should serve as a director of the Company.   Other current public company directorships (0).

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Proposal 1 Election of Directors

Nominees for Election at the 2020 Annual Meeting

Board Committees ·  Chairman,Chair, Audit Committee ·Executive Committee ·  Risk and Investment Policy Executive Compensation Committee   Key Skills ·  Utility Industry ·  Regulatory ·  Financial ·  Leadership ·  Mergers & Acquisitions ·  Geographic Diversity ·  “C-Suite”C-Suite Experience	Lee C. Stewart Private Financial Consultant		Director since2018 Age7173 Independent Director
	Experience ·  Mr. Stewart is a private financial consultant with over 25 years of experience as an investment banker. ·  Vice President at Union Carbide Corporation from 1996 to 2001, responsible for various treasury and finance functions.	·  Chief Financial Officer of Foamex International, Inc. 2001 to 2002.
	Qualifications:   Mr. Stewart has over 25 years of experience as an investment banker and over 2025 years of experience as a director of a public Company.company. Mr. Stewart possesses significant experience with financial services, finance and banking, public Company accounting and financial reporting, strategic planning, operations and risk management, and corporate governance. The Board of Directors has determined that Mr. Stewart is an independent director. The Board of Directors views Mr. Stewart’s independence and his experience as important qualifications, skills and experience supporting the Board of Directors’ conclusion that Mr. Stewart should serve as a director of the Company.   Other current public company directorships (2):(1). Currently serves on the boardsboard of P. H. Glatfelter Company, a New York Stock Exchange-listed global supplier of specialty papers and engineered materials, and Mood Media, Inc, an international in-store provider of music, digital signage, hold music, on-hold messaging, scent, integrated audio/video, and interactive mobile marketing products. materials.

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Proposal 1: Election of Directors

Nominees for Election at the 2022 Annual Meeting

Board Committees ·  Corporate Governance Committee ·  Executive CompensationRisk Mitigation and Investment Policy Committee   Key Skills ·  Utility Industry ·  Regulatory ·  Legal/Government ·  Mergers & Acquisitions ·  Leadership ·  Geographic Diversity ·  C-Suite”C-Suite Experience	Christopher C. Womack Chairman, President External Affairs, Southern Companyand Chief Executive Officer, Georgia Power		Director since2019 Age6264 Independent Director
	Experience ·  Chairman, President External Affairs, Southern Company,and Chief Executive Officer, Georgia Power, a leading American gas and electric utility holding company based in Atlanta, Georgia, 20082020 to present. ·  He has worked in various executive leadership positions at Southern Company since 1988, including President of External Affairs and	Executive Vice President, Georgia		Power Company from 2006 to 2008; Senior Vice President, Fossil & Hydro Power, Georgia Power Company from 2001 to 2006; and Senior Vice President, Human Resources from 1998 to 2001. ·  From 1979 to 1987 he served as a legislative aide in the U.S. House of Representatives.
	Qualifications: Mr. Womack has over 20 years of experience as an executive of a gas and electric utility. Mr. Womack possesses significant experience with utility operations, human resources and governmental affairs. The Board of Directors views Mr. Womack’s independence and his experience as important qualifications, skills and experience supporting the Board of Directors’ conclusion that Mr. Womack should serve as a director of the Company.   Other current public company directorships (0)(1). Currently serves on the board of Invesco Ltd., a New York Stock Exchange-listed global independent investment management firm.

	The Board of Directors unanimously recommends a voteFORthe election of each of these nominees as director.

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Director in 2021 Not Standing for Re-Election

Not Standing for Re-Election

Director Not Standing For Re-Election at the 2022 Annual Meeting

Mr. Idehen served as a director on December 31, 2021 and is included for selected statistics in this proxy statement.

Board Committees ·  Chair, Risk Mitigation and Investment Policy Committee ·  Audit Committee ·  Executive Committee Key Skills ·  Utility Industry ·  Regulatory ·  Financial ·  Leadership ·  Mergers & Acquisitions ·  Geographic Diversity ·  C-Suite Experience	Francis O. Idehen Former Chief Operating Officer, GCM Grosvenor		Director since 2019 Age 44 Independent Director
	Experience ·Chief Operating Officer for GCM Grosvenor, an independent alternative asset management firm since May 2017.	·Served in senior roles at Exelon Corporation from 2011 to 2017, serving as its treasurer, head of investor relations, and managing director of its investment office.
	Mr. Idehen has a bachelor’s degree in economics from Yale University and an MBA from Harvard Business School. Qualifications: Mr. Idehen has extensive experience with large and complex businesses, including a major utility Company, in various management and financial positions. Mr. Idehen has lived and worked in Illinois, an important area of the Company’s operations, for many years. The Board of Directors views Mr. Idehen’s independence, his experience with various aspects of the utility industry, and his experience as a chief operating officer charged with making prudent financial investments as important qualifications, skills and experience supporting the Board of Directors’ conclusion that Mr. Idehen should serve as a director of the Company. Other current public company directorships (0).

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Corporate Governance

Board Leadership Structure

Corporate Governance

The Board sets high standards for our employees, officers, and directors. Implicit in this philosophy is the importance of sound corporate governance. Following the principles of our Corporate Governance Guidelines, the Board serves as a prudent fiduciary for shareholders and oversees the management of our business.

Board Leadership Structure

Mr. Franklin serves as Chairman of the Board and Chief Executive Officer. The Board of Directors deliberately and intentionally determined that the structure of the combined chairmanChairman and Chief Executive Officer along with the position of a strong lead independent director and independent Committee Chairs to be the most appropriate and efficient approach to managing the Company, while providing clear accountability to the execution of the Company’s strategy and its results.

Lead Independent Director

The Board of Directors annually elects the lead independent director to execute the following clear and specific duties:

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Corporate Governance

Board Committee Membership, Meetings and Director Attendance

Board Committee Membership, Meetings and Director Attendance

Under our Bylaws, the Board of Directors may designate an Executive Committee and one or more other committees, with each committee to consist of two or more directors except for the Audit Committee and Executive Compensation Committee, which must have at least three members. The Board of Directors annually elects from its members the Executive, Audit, Executive Compensation, Risk Mitigation and Investment Policy, and Corporate Governance Committees. The Board may also appoint ad hoc committees. The Retirement and Employee Benefits Committee, which is comprised of senior management of the Company, reports periodically to the Board of Directors.

The Board of Directors held 126 meetings in 20192021

Board Committees as of December 31, 2021

Chair Lee C. Stewart   Members WendyDavid A. FranksCiesinski Edwina Kelly Francis O. Idehen All members are independent under NYSE listing requirements and SEC rulesrules. All members are financially literate and twoall members of the Committee are financial experts within the meaning of applicable SEC rules. .	Audit	Meetings Required:Required 4 20192020 Meetings Held:Held 108
	The Committee’s primary responsibilities are to: ·monitor the integrity of the Company’s financial reporting process and systems of internal controls, including the review of the Company’s annual audited financial statements; and ·monitor the independence of our independent registered public accounting firm. The Committee has the exclusive authority to select, evaluate and, where appropriate, replace the Company’s independent registered public accounting firm.   The Committee has considered the extent and scope of non-audit services provided to the Company by its independent registered public accounting firm and has determined that these services are compatible with maintaining its independence.

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Corporate Governance

Board Committee Membership, Meetings and Director Attendance

Chair Ellen T. RuffDaniel J. Hilferty   Members Elizabeth B. Amato Daniel J. HilfertyEllen T. Ruff ChristopherLee C. WomackStewart All members are independent under NYSE listing requirements	Executive Compensation	Executive Compensation	20192021 Meetings Held:Held 79
	The Committee is responsible for administering our equity compensation plans and determining executive compensation each year. As part of its annual compensation-setting process, the Committee: ·reviews the recommendations of the Chief Executive Officer as to appropriate compensation of the Company’s executive officers (other than the Chief Executive Officer) and determines the compensation of these executive officers; and ·reviews and recommends to the Board of Directors the compensation for the Chief Executive Officer, which is subject to final approval by the independent members of the Board of Directors. The Committee has retained an independent compensation consultant, Pay Governance LLC, to assist in designing our executive compensation program and assessing its competitiveness through benchmarking peer analysis and other methodologies. The Committee has the power to delegate aspects of its work to subcommittees, with the approval of the Board of Directors.

Chair Daniel J. HilfertyElizabeth B. Amato   Members Elizabeth B. Amato David A. Ciesinski Ellen T. Ruff Christopher C. Womack All members are independent under NYSE listing requirements	Corporate Governance	2019Corporate Governance	2021 Meetings Held:Held 64
	The Committee’s primary responsibilities include: ·identifying and considering qualified nominees for directors; ·developing and periodically reviewing the Corporate Governance Guidelines; ·advising the Board of Directors on director nominees, executive selections and succession planning, including a succession plan for the CEO and other senior executives; and ·  implementing and overseeing the comprehensive Board, Committee and peer review process.   The Committee also reviews and approves, ratifies or rejects related person transactions under theCompany’s written policy.   The Committee also has direct oversight over most ESG matters and provides guidance on ESG decisions. At each committee meeting, updates on ESG projects, trends and developments are presented. Additionally, each meeting features presentations on a key area of ESG, allowing for the Committee to study each area in-depth over the course of a year.

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Corporate Governance

Board Committee Membership, Meetings and Director Attendance

ChairChair* Nicholas DeBenedictisFrancis O. Idehen   Members Edwina Kelly Christopher H. Franklin Wendy A. FranksChristopher C. Womack Francis O. Idehen Lee C. Stewart	Risk Mitigation and Investment Policy	20192021 Meetings Held:Held 6
	The Committee oversees the Company’s risk management process, policies, and procedures for identifying, managing and monitoring critical risks, including cyber-related risks, and its compliance with legal and regulatory requirements.   ·  The Committee also oversees the Company’s acquisition process in which it is briefed on all potential transactions in excess of $10 million, and reviews all acquisitions valued in excess of$20 million and all transactions that involve the Company’s stock. ·The Committee’s Chairperson communicates with other Board of Directors Committees to avoid overlap and potential gaps in overseeing the Company’s risks. ·The Committee advises the Board of Directors in its performance of its oversight of enterprise risk management.

Chair Christopher H. Franklin   Members Elizabeth B. Amato  Daniel J. Hilferty Ellen T. RuffFrancis O. Idehen Lee C. Stewart	Executive Committee	20192021 Meetings Held:Held 0
	The Committee has and exercises all the authority of the Board in the management of the business and affairs of the Company, with certain specified exceptions.   ·The Committee is intended to serve in the event that action by the Board of Directors is necessary or desirable between regular meetings of the Board or at a timeand when convening a meeting of the entire Board is not practical, andor to make recommendations to the entire Board with respect to various matters. ·The Chairman of the Board of Directors serves as Chairman of the Committee.

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Corporate Governance

Board and Committee Evaluations

Board and Committee Evaluations

Each year, the directors complete a targeted questionnaire that is administered by a neutral, non-affiliated entity to assess the performance of the Board and each of the standing Committees. Every second year, directors complete a targeted questionnaire to assess the performance of the directors individually. Both questionnaires elicit quantitative and qualitative ratings in key areas of Board operation and function. Each Committee member completes questions to evaluate how well the Committees on which he or she serves are functioning and to provide suggestions for improvement.

In 2019,2021, the Lead Independent Director and the Chairman met with each director, provided the results of the evaluations to each director, and discussed the director’s participation, preparation, and performance.

Board Refreshment as of December 31, 2021

In 2015, the Board of Directors undertook a multi-year program aimed at refreshing the Board to encourage new ideas, expertise, and oversight while maintaining the institutional experience of the then-current directors. As of December 31, 2021, the Board of Directors consisted of nine directors, with eight of those directors having been newly appointed or elected since 2015. Each of these directors brings his or her own level of expertise and experience.

In 2015, the Board of Directors undertook a multi-year program aimed at refreshing the Board to encourage new ideas, expertise, and oversight while maintaining the institutional experience of the then-current directors. As a result, the Board of Directors now consists of nine directors, with seven of those directors having been hired since 2015. Each of these directors brings his or her own level of expertise and experience.

Director Onboarding and Continuing Education

In 2019, the Company appointed Mr. Womack and Mr. Idehen as directors. As part of its transaction withthe 2021 equity investment by CPPIB, in March 2020, the Company appointed Ms. FranksKelly was nominated by CPPIB to serve as a director.director of the Company. Mr. Ciesinski also joined the Board as director in July 2021. In addition to informal meetings with the existing directors, and in conjunction with their appointment, Messrs. WomackMs. Kelly and Idehen and Ms. FranksMr. Ciesinski participated in an onboarding process that includedincludes in-depth meetings with the executive officers focused on items such as:

In addition, during 2019, the Board of Directors participated in several education sessions that included rate making, repair tax deduction, and various sessions aimed at financing mechanisms.

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Corporate Governance

Board Oversight of Risk Management

Board Oversight of Risk Management

Full Board

The Board believes that the present leadership structure, along with the important risk oversight functions performed by management, the Audit Committee, the Risk Mitigation and Investment Policy Committee, the Executive Compensation Committee, and the full Board, permits the Board to effectively perform its role in the risk oversight of the Company.

Role of Management

Company.Management In addition to updates at each Board meeting by operating management regarding any significant operational, acquisition, or environmental matters, management provides the Board with an annual update on:

The Risk Mitigation and Investment Policy Committee

The Risk Mitigation and Investment Policy Committee’s primary purpose is to assist the Board of Directors in fulfilling its oversight responsibilities for o environmental matters by our Chief Environmental Officer; o the Company’s risk management practices,proposed capital spending plans by our Vice President, Corporate Engineering; and o the Company’s compliance with legal and regulatory requirements, the Company’s potential investments in acquisitions and growth vehicles, and to review and approve the Company’s risk management framework.

Management receives approval from the Risk Management and Investment Policy Committee on all potential acquisitions valued in excess of $20 million, and the Board approves every acquisition valued in excess of $50 million or which involves the issuance of the Company’s common stock as part of the consideration.

Enterprise Risk Management

The Corporation maintains a Company-wideEnterprise Risk Managementprocess intended to identify, prioritize and monitor key risks that may affect the Company. Management reports the progress and the results of the Enterprise Risk Management program to the Risk Mitigationby our Executive Vice President, General Counsel, and Investment Policy Committee at least quarterly.

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Corporate Governance

Oversight of Risk Management

The Risk Mitigation and Investment Policy Committee regularly reviews the results of the Company’s enterprise risk management process, and management presents to the Board a report on the status of the risks and the metrics used to monitor those risks.

The Audit Committee

The Audit Committee, in consultation with management, the independent registered public accountants and the internal auditors, discusses the Company’s policies and guidelines regarding risk assessment and risk management as well as the Company’sits significant financial risk exposures and the steps management has taken to monitor, control and report such exposures.

The Corporate Governance Committee

The Corporate Governance Committee leads an annual discussion by the Board of Directors regarding the Company’s strategic plans and management’s performance with respect to suchthese plans.

The Committee also has direct oversight over most ESG matters and provides guidance on ESG decisions. Executive Compensation Committee

The Executive Compensation Committee reviews the Company’s overall compensation program in the context of the various behaviors that the program may encourage and the risks to the Company as a result of the program. At least annually, the Executive Compensation Committee considers the risks that may be presented by the structure of the Company’s compensation programs and the metrics used to determine individual compensation under that program. Risk Mitigation and Investment Policy Committee The Committee’s primary purpose is to assist the Board of Directors in fulfilling its oversight responsibilities for the Company’s: o risk management practices; o compliance with legal and regulatory requirements; o potential investments in acquisitions and growth vehicles; o cybersecurity risks; and to o review and approve the Company’s risk management framework. Management receives approval from the Risk Management and Investment Policy Committee on all potential acquisitions valued in excess of $20 million, and the Board approves every acquisition valued in excess of $50 million or which involves the issuance of the Company’s common stock as part of the consideration. A company-wide Enterprise Risk Management (ERM ) process is used to identify, prioritize and monitor key risks that may affect the Company. The Committee regularly reviews the results of the Company’s ERM process, and management presents to the Board a report on the status of the risks and the metrics used to monitor those risks. o Each risk tracked as part of the ERM process has a member of the Company’s management who serves as the owner and monitor for that risk. The risk owners and monitors report on the status of their respective risks at the quarterly meeting of management’s Compliance Committee. o The Information discussed at the Compliance Committee meeting is then reviewed by the Disclosure Committee composed of the Company’s Chief Executive Officer, Chief Financial Officer, General Counsel, Chief Accounting Officer and Director of Internal Audit. The results of the Disclosure Committee’s meetings are presented to the Risk Mitigation and Investment Policy Committee or the Audit Committee each quarter, as appropriate.

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Corporate Governance

Board Oversight of Risk Management

Board Oversight of Cybersecurity Management

The Board oversees the Company’s cybersecurity risk assessment and security measures. By receiving at least quarterly reports, the Board of Directors and the Risk Mitigation and Investment Policy Committee ensure that the Company is devoting the appropriate amount of time and resources to ensure that the risk of a cybersecurity breach is mitigated and that there is a clear response plan in the event of a breach.

The Board of Directors annually reviews and approves the capital and operating budgets, ultimately reviewing and approving the amount spent on cybersecurity measures.

Board Oversight of ESG

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Corporate Governance

Board Oversight of Risk Management

Board Oversight of Compensation Risk

In administering the executive compensation program, the Executive Compensation Committee aims to strike an appropriate balance among the elements of our compensation program to achieve the program’s objectives. Each of the elements of the program is discussed in greater detail in this proxy statement. As a result of its review of the Company’s overall compensation program in the context of the risks identified in the Company’s enterprise risk management processes, the Executive Compensation Committee does not believe that the risks the Company faces are materially increased by the Company’s compensation programs.

Therefore, the Executive Compensation Committee believes that the compensation program does not create the reasonable likelihood of a material adverse effect on the Company.Company.

ConsiderationBoard Oversight of Human Rights Risk Management

The Board of Directors is responsible for overseeing human rights risk management. In 2019, it enacted a Human Rights Policy that underscores the Company’s commitment to conducting business in a way that minimizes the adverse effects our operations may have on people and the communities that we serve. As more fully described on page 28,34, at a minimum, the Company and its vendors will:

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Corporate Governance

Board Oversight of Succession Planning

Succession Planning

Under the Company’s Corporate Governance Guidelines, theThe Board of Directors is responsible for the development and periodic review of a management succession plan for the Chief Executive Officer and other executives. The Board and management recognizes the importance of human capital beginning with internal development initiatives and talent reviews, culminating in an annual review on succession planning with the Board of Directors. At least annually and at a special meeting held to only discuss succession planning, including in 2019,2021, the Board of Directors reviews the Company’s succession planning process for the Chief Executive Officer and the named executive officers. During this review, the directors review succession candidates on an immediate basis and more developmentallonger term candidates as well as their development plans so that the Company is well-prepared for the future.

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Corporate Governance

Shareholder Outreach

Shareholder Outreach

At our 20192021 annual meeting of shareholders, fewerour shareholders supported our say on pay proposal thanoverwhelmingly agreed with the 2013-2018 average of 95%. The Board believes that the shareholder return result lagged the industry due to the impactCompany’s compensation program, with 96% of the large acquisitionshareholders voting in agreement with our compensation design. We believe the high level of Peoples Natural Gassupport recognized the thoughtfulness and consideration the overhang ofmanagement team spent in redesigning the pending equity and debt issuance rather than the underlying performance of the Company. However, management and the Board took the resultingprogram to more closely align with driving shareholder vote seriously and committed to take several steps to address the executive compensation plan in 2020.

value.

Over the course of 2019,2021, management held more than 500approximately 300 meetings with investors. Additionally, the Company requested meetings with the 25 largest shareholders, representing over 45%as part of our outstanding common stock. Wegovernance focused outreach, we offered to meet with our top 25 shareholders. For this effort, we engaged with every shareholder who accepted our offer to meet. During these meetings and calls, we discussed numerous topics, including strategic, executive compensation, and environmental, social and governance issues.

As a direct result of these meetings and calls, the Company took a number of actions in 2019 to address shareholder feedback on our executive compensation program and environmental, social, and governance programs.

20192021 Shareholder Feedback and Actions Taken

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Corporate Governance

Environmental Stewardship and Corporate Responsibility

Environmental Stewardship and Corporate Responsibility

Essential’s ESG Program Objectives

At Essential, looking to the future is ingrained in our corporate responsibility and in how we conduct our business with environmental, social and governance (ESG) initiatives. For over 130 years, it has been our mission to be the best possible provider of essential resources by serving the needs and expectations of our customers, shareholders, employees and the communities we serve both today and for future generations. We are committed to being responsible stewards of our environment, maintaining a safe, diverse, competitive and respectful culture, and overseeing the governance of Essential with the utmost transparency.

We have been in the business of practicing sustainability and corporate social responsibility for more than 130 years. Each year, we deliver more than 86 billion gallons of water, the Earth’s single most essential resource, to approximately 3 million people across eight states. Our top priority is to provide our customers with water that is safe to drink and is treated through the most environmentally sustainable methods available. We also focus on rebuilding aging infrastructure in the states in which we operate.

In 2018, the Company published its first Corporate Social Responsibility (“CSR”) reportand reinforced its commitment to environmental stewardship by joining the CDP, an international not-for-profit organization that runs a global disclosure system for companies to manage their environmental impacts. For 2019, the Company’s CDP rank improved to a “B-”, ranking it among the top 40 percent of U.S. companies and among the top 25 percent of worldwide companies in terms of its understanding of climate change impact on business and the positioning of senior leadership to oversee key environmental issues.Our CSR Report and additional information can be found at csr.aquaamerica.com.

Oversight Responsibility

The Board of Directors receives reports at regularly scheduled meetings on ESG matters including safety, sustainability, and environmental stewardship matters. These programs are overseen and managed by the Company’s senior leadership. A significant portion of the performance-based goals for our executives focus on these important issues.

Our corporate responsibility and sustainability programs include the following:

As just one example, in 2019, the Company signed an agreement for our New Jersey, Pennsylvania, Ohio and Illinois water and wastewater subsidiaries to purchase 100% renewable power by 2022. This will put our Company in compliance with the Paris Accord and will allow us to make a significant contribution toward the environment. These commitments to renewable energy reduce the Company’s overall absolute greenhouse gas emissions by nearly 60% from a 2018 baseline*.

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Corporate Governance

Environmental Stewardship and Corporate Responsibility

*2018 baseline is based on the Company’s water and wastewater operations only.

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Corporate Governance

Environmental, StewardshipSocial, and Corporate ResponsibilityGovernance Program

Environmental, Social, and Governance Program

Essential is not a newcomer to the notion that ESG is a critical aspect of business operations. We have successfully delivered resources for life since the 19^thcentury because we have woven environmental, social, and governance inextricably into our DNA. Successive generations of corporate management have built upon our legacy of excellence in water and wastewater treatment, stewardship of our waterways, provision of reliable and affordable energy, and trust in the communities where we serve, live, and work.

We encourage you to explore our innovative microsite ESG.Essential.co for full details of our initiatives and commitments or download our 2020 ESG report at https://ESG.Essential.co/pdfs/essential-esg20.pdf

Board Oversight of ESG

Governance Policies

These policy documents are available on the corporate governance section of our website at https://www.Essential.co/corporate-governance/documents:

ESG Reporting

Essential’s ESG reporting includes the following components, which are available at ESG.Essential.co:

•    2020 ESG Report- Our flagship report that provides detail on all relevant ESG topics

•   SASB and ESG Metrics Index- A concise document containing key ESG metrics, primarily of the SASB framework

•   2020 TCFD Report- Concise climate reporting as outlined by the Task Force on Climate-Related Financial Disclosures

•   2020 CDP Report- Detailed climate reporting via the CDP questionnaire

•   2020 AGA Sustainability Template- Technical emissions data via the American Gas Association’s common industry template

Alignment with UN SDGs:

Essential is committed to supporting the achievement of the United Nations’ Sustainable Development Goals (SDGs), which aim to address global challenges and achieve peace and prosperity for all. Of the SDGs, our business can most significantly positively impact:

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Corporate Governance

Environmental, StewardshipSocial, and Corporate ResponsibilityGovernance Program

Environment

Essential’s mission is to sustain life and improve economic prosperity by safely and reliably delivering Earth’s most essential resources to our customers and communities.

Climate Change and Greenhouse Gas Emissions

In January of 2021, Essential announced an enterprise-wide commitment to substantially reduce its Scope 1 and 2 greenhouse gas (GHG) emissions. By 2035, we will reduce our emissions by 60% from our 2019 baseline. Our water and wastewater operations as well as our gas operations will each be contributing roughly 60% reduced emissions. Essential has estimated that as of December 31, 2021, it has achieved a 7% emissions reduction from its 2019 baseline. Upon formal calculation of its 2021 greenhouse gas inventory later in 2022, the Company will adjust and finalize this achievement figure, communicating this through its annual ESG reporting.

The two most significant actions that will lead to these deep reductions are:

Investing in Our Nation’s Infrastructure

Essential is committed to renewing and improving water and wastewater infrastructure through thoughtful and continuous capital investment. We have invested over $3.5 billion in infrastructure improvements and replaced more than 1,300 miles of aging water main since 2012. We are also making critical and robust investments in gas infrastructure. In 2013, Peoples Gas launched its Long-Term Infrastructure Improvement Plan (LTIIP), an aggressive 20-year effort to replace and upgrade more than 3,000 miles of distribution main with modern resilient materials.

Excellence in Providing Safe Drinking Water

Essential consistently and widely outperforms the national average for percentage of community water systems with health-based violations, typically smaller by a factor about 6 to 8 times. Cutting edge technology has enabled us to increase our detection levels from parts per million to parts per trillion in many cases. In 2021, we opened a brand new, state-of-the-art environmental laboratory at our Bryn Mawr headquarters, employing a staff of 20 scientists and featuring an annual capacity of approximately 300,000 tests on water samples across 240 water quality parameters.

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Corporate Governance

Environmental, Social, and Governance Program

Human Capital Management

At Essential, we recognize our 3,000+ employees are our greatest assets in delivering life’s most essential resources. Our goal is to build a talented, skilled and diverse workforce that values teamwork as well as a steadfast commitment to our customers and to the environment. Essential offers our employees a wide array of challenging and exciting careers and jobs that support our mission to provide natural resources for life in a safe and reliable manner. Essential is committed to providing professional opportunities for career growth, competitive benefits packages and a respectful workplace to every employee across the communities we serve in our 10 states. We’re dedicated to creating a culture that empowers employees and where all feel welcomed, respected and recognized for their contributions.

Engaging our Employees

Our success depends on employees understanding how their work contributes to Essential’s overall strategy. We use a variety of communication channels to facilitate open and direct dialogue, including open forums with our executives, monthly town halls, regular engagement surveys, and employee resource groups. Efforts to foster an inclusive culture include:

Flexible Work Location Program. Essential Utilities values our employees and recognizes a flexible work environment is critical in attracting, motivating and retaining high performing employees, particularly in the post-pandemic environment. In June 2021, Essential introduced the Work Location Flexibility Program allowing eligible employees to work remotely up to two scheduled days a week.

Talent Management – Training and Development

At Essential, we believe in an integrated talent development approach and understand that a balanced and holistic approach to learning will allow for greater sustainability of changed workplace behaviors.

We align our development model to support our vision, mission, and competencies, with a balanced approach to developing our workforce and creating a confident, committed and high-performance culture.

Vision, Mission, Values, Strategies & Competencies

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Corporate Governance

Succession Planning

Succession Planning

Our succession planning strategy identifies leaders at different stages in their career and customizes their development approach. The Essential Utilities executive leadership development strategy for future executives is a combination of development experiences to include: 360 performance assessments and coaching, executive presentation skills and formal learning programs.

Diversity, Equity and Inclusion

Diversity of backgrounds, ideas, thoughts, and experiences is essential to our culture and the way we do business. Creating an environment where our differences are valued and where every person feels a sense of belonging and engagement supports a thriving organization that cares about our employees and customers. We believe it is important that all employees are supported by an environment where people of all backgrounds, ages, races, abilities, and sexual orientations feel engaged and safe to collaborate and learn from one another.

To strengthen our DE&I efforts, we took the following actions:

From monthly discussions and metric reviews with our leaders, to community partnerships, we encourage conversations that elevate diversity and inclusion as a key strategic priority.

Building a Diverse and Inclusive Culture

To help us achieve our goals, we have been building and expanding our program and actions in this area to create an environment where our differences are valued, every person feels a sense of belonging, and engagement supports a thriving organization.

Essential Employee Programs

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Corporate Governance

Succession Planning

Board Diversity As of December 31, 2021 More than 55% of the board is diverse. Three of our nine board members are female and two of our male board members are people of color. Employee Diversity o Diversity hiring for the organization grew by more than 8%. o Diversity at the management level also grew, with 10% of management comprised of minorities and 22% comprised of women by the end of 2021. * Please refer to ESG.Essential.Co. for more detailed work force composition data in line with EEO-1 standards.

Supplier Diversity

Supplier diversity is critical for our communities as well as for our business. We want to source from and partner with businesses owned by individuals representing the diverse communities where we live, work, and operate each day. This also enriches and strengthens local economies, increases sourcing options, and fosters collaboration and innovation.

Essential is committed to increasing our work with qualified and certified diverse suppliers, which are measured by majority of ownership and control, and include one or more of the following classifications:

Essential has taken steps to increase our work with diverse suppliers. Essential spent $108 million with diverse suppliers. This diverse spend resulted in a 31% increase of diverse spend year-over-year, from 8.3% of controllable spend in 2020 to nearly 11% of controllable spend in 2021.

Safety And Wellness

The Essential Safety program focuses on identifying hazards, training our employees on the best practices to remain safe and providing them with the equipment and facilities to face these hazards in the safest way possible. We rigorously follow OSHA reporting guidelines to identify, report and investigate any injuries to our employees.

The health of our employees is just as important to us as is their safety. We provide access to a variety of innovative, flexible, and convenient employee health and wellness programs. With mental health becoming more of a central part of an employee’s well- being, we have added additional resources and counseling access for employees and their families.

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Corporate Governance

Succession Planning

Safety Culture Survey

This survey was conducted by a third party in 2020 and provided us an opportunity to obtain feedback on safety from our employees, which have assisted us in obtaining clear insight into our strengths and opportunities for improvement.

Subsequent Action:

Results of Essential’s company-wide Safety Culture Survey were to be shared with Operations leaders and employees. The 89% favorable score in survey results affirmed that the majority of employees perceive Essential’s safety culture as strong.

Our follow-up actions continue to be monitored and tracked through the Essential Strategic Safety process.

Strengthening Our Community

Essential operates in ten states across America, but our presence is felt locally. We primarily source water and gas nearby our customers, we do business with many local suppliers and our employees often live in the communities they serve. Our services enable households to grow, commerce to bustle with life, and the health of our towns and cities to flourish. Simply put, we thrive when our communities thrive. For these reasons, our organization and team members enthusiastically contribute time and resources to strengthen these community bonds.

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Corporate Governance

Governance Policies and Practices

Governance Policies and Practices

Anti-Hedging and Anti-Pledging Policy

We believe that issuance ofissuing incentive and compensatory equity awards to our directors and named executive officers along with our stock ownership guidelines help to align their interests with our shareholders. As part of our insider trading policy, we prohibit all directors and employees from engaging in hedging or pledging activities with respect to any owned shares or outstanding equity awards. The policy specifically prohibits all insiders from engaging in any short sales of the Company’s securities, buying or selling puts, calls or other derivative securities relating to the Company’s securities, or pledging the Company’s securities as collateral for a loan.None of our directors nor any of our named executive officers engaged in any hedging or pledging activities with respect to the Company stock during 2019.2021.

Equal Employment Opportunity and Anti-Harassment Policy

This policy provides that all employees are entitled to a work environment in which they are treated with dignity and respect and which is free of harassment and discrimination of any kind, including discriminatory, emotional, physical and sexual.

Essential Utilities will not tolerate any form of harassment on the job by managers, other employees, or by non-employees, such as customers, vendors or contractors. The policy clearly defines harassment as including verbal comments that are offensive or unwelcome regarding a person’s national origin, race, color, religion, gender, sexual orientation, age, body, disability or appearance, including epithets, slurs and negative stereotyping and nonverbal harassment to include distribution, display or discussion of any written or graphic material that ridicules, denigrates, insults, belittles or shows hostility, aversion or disrespect toward an individual or group because of national origin, race, color, religion, age, gender, sexual orientation, pregnancy, appearance, disability, sexual identity, marital status or other protected status.

Human Rights Policy

The Board of Directors is responsible for overseeing human rights risk management. In 2019, it enacted a Human Rights Policy that underscores the Company’s commitment to conducting business in a way that minimizes the adverse effects our operations may have on people and the communities that we serve. At a minimum, the Company and its vendors will:

Together, these policies ensure that the Company is committed to providing all of its employees with a work environment in which they are treated with dignity and respect and which is free of harassment of any kind, and affirmatively commits the Company to making efforts to avoid causing or contributing to human rights violations. Copies of these policies can be found at www.Essential.co/investor-relations or at ESG.Essential.co.

Director Independence Standards

The Board of Directors is responsible for determining whether each of the directors is independent. The Board has adopted Corporate Governance Guidelines that contain categorical standards of director independence that are consistent with the listing standards of the NYSE. Under the Company’s Corporate Governance Guidelines, a director will notIn 2021, all directors were determined to be deemed independent, if:

For purposes of the categorical standards above:

In addition to these categorical standards, no director will be considered independent unless the Board of Directors affirmatively determines that the director has no material relationship with the Company (either directly, or as a partner, shareholder, director or officer, of an organization that has a relationship with the Company). When making independence determinations, the Board of Directors broadly considers all relevant factsexcept our Chairman, President and circumstances surrounding any relationship between a director or nominee and the Company. Transactions, relationships and arrangements between directors or members of their immediate family and the Company that are not addressed by the categorical standards may be material depending on the relevant facts and circumstances of such transactions, relationships and arrangements.CEO Mr. Franklin.

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Corporate Governance

Governance Policies and Practices

Policies and Procedures for Approval of Related Person Transactions and Determination of Director Independence

Review of Transactions for Director Independence Determination

The Board of Directors considered the following transactions, relationships and arrangements in connection with making the independence determinations for the current Board of Directors: