Within our governance process, the role of business unit (BU) management is to review and evaluate sustainability risks, priorities, strategy, development and processes. The management review hierarchy includes:

• The Sustainable Development Leadership Team (SDLT) which is comprised of global business unit presidents and functional department heads and is supported by the SD team. Chaired by the Vice President, Sustainable Development, the SDLT provides consultation for SD focus areas, goals, priorities, action plans and results. Strategic planning, goal setting, implementation, performance and reporting for climate-related risk are reviewed by the SDLT.

• The Environment & Sustainable Development Steering Committee which enables the organization to lead on environmental and social performance and risk management through global collaboration, functional excellence, and assured management of environmental and social-related risks. The global group meets monthly including in person once per year.  The leadership team consists of participants representing BUs and functions (Low Carbon Technologies, stakeholder engagement, finance, etc.)

Operations and leadership teams within our BUs and across functions are responsible for integrating sustainability into their day-to-day operations, project development and decision making. To support consistency across our global operations, subject matter experts collaborate in Issues Working Groups focused on climate, water, biodiversity and social issues to leverage global cross-functional expertise from each BU. They meet quarterly to discuss risks, risk mitigation challenges and best practices, and to align on consistent practices.

Within the Strategy, Sustainability and Technology organization, the SD team supports the business in developing and tracking metrics for annual reporting and forecasting for the Long-Range Plan. Team members are responsible for key topics, including:

• Climate change.

• Nature, including water and biodiversity.

• Stakeholder engagement and social responsibility.

• Risk management.

• Supply chain sustainability.

The SD team coordinates sustainability-related efforts across the business. Working with the Strategy, Planning and Portfolio Management group, the team is responsible for informing the ELT and board of directors of risks to, and opportunities for, our business and integration of sustainability-related risks into strategic decisions.

The SD team works closely with the Environmental Assurance group as it relates to our Health, Safety and Environment (HSE) policy, standards and practices to ensure environmental risks are identified and monitored by our BUs and metrics are tracked and publicly reported. The groups collaborate to develop and integrate environmental risk tools, processes, standards, practices, guidelines and procedures into the company’s HSE Management System. Read more about our HSE Management System.

The SD team also routinely collaborates with the Low Carbon Technologies organization on emissions reduction projects, the pathway for achieving net-zero Scope 1 and Scope 2 emissions, pilots for newly emerging competitive opportunities, and implementation of the Climate Risk Strategy.

Linking compensation to sustainability performance

Executive and employee compensation is linked to sustainability performance through our annual Variable Cash Incentive Program (VCIP). This annual cash incentive is based on company success on critical performance metrics and individual performance. We have also linked broader employee compensation to sustainability performance. Those metrics include certain Energy Transition and Strategic Milestones that are aligned with SD priorities. In 2023, the VCIP included the following Energy Transition milestones: Demonstrating progress toward our Plan for the Net-Zero Energy Transition, achieving an annual greenhouse gas (GHG) emissions intensity aligned with our 2030 target trajectory range (including any updates to the 2030 target), and advancing two or more accretive low carbon business opportunities covering hydrogen and carbon capture and storage (CCS) investments. In addition, the Strategic Milestones included implementing action plans for priority environmental and social risks and tracking progress against mitigations. about how compensation is linked to sustainability performance in our Proxy Statement.

We engage with our stockholders regularly on SD priorities, and this feedback is reviewed with the Human Resources and Compensation Committee of the board when considering executive compensation programs.

In 2023, we successfully demonstrated meaningful progress against our Plan for the Net-Zero Energy Transition, including by increasing our target trajectory range for 2030 from 40-50% to 50-60% of gross operated emissions intensity reduction using a 2016 baseline. We also achieved an annual GHG emissions intensity aligned with our 2030 target trajectory range.

Another factor in our compensation program was progressing the 2023 elements of our DEI priorities and tactics including:

• Launching our refreshed diversity, equity and inclusion (DEI) strategy.

• Reviewing the results of the 2023 Perspectives survey and continuing to integrate the insights into our DEI efforts.

• Updating governance and membership for both global and business unit and functional DEI Councils.

• Enhancing our Employee Networks by clarifying their strategic intent and creating a consistent sponsorship structure.

• Hosting workshops tailored to business units to further educate on the definitions of DEI.
• Developing a training called DEI Foundations and launching it to senior leadership.