Oil and Gas Sustainability Strategies

Sustainability Strategies
for Oil & Gas
Intellectual Capital
11 June 2020
Internal use only

Contents
Executive Summary
1. The Sustainability Imperative
2. Oil & Gas Sustainability Trends
3. Elements of a Sustainability Strategy
Appendix : Company Summaries
Sustainability Strategies for Oil & Gas 11 June 2020

Strategy& Internal use only 2
The current renewed focus on sustainability is driven by the
role of oil & gas in global Greenhouse Gas (GHG) emissions
GHG Emissions by Sector
Global GHG Emissions, 2000 – 2018, Gt Co2 Equivalent Discussion
60 • Global GHG emissions continue to rise by 2% per annum such that meeting the
1,0%
emissions level needed to limit temperature rise to 1.5⁰C will require drastic action
50 2,4%
• Energy accounts for 2/3 of global emissions, driven by the combustion of coal,
40 oil & gas for power generation.
30 • Direct contributions of oil & gas operations are significant and account for 10%
F-Gases of global GHG emissions
20
N2O • Major IOCs are taking action to manage emissions from their own operations
10 CH4 resulting in a flattening or reduction in GHG emissions intensity in recent years
CO2
0 • However, there are growing calls for companies to take further action to reduce own
2000 2005 2010 2015 emissions and emissions from oil and gas combustion for power generation
Breakdown of Global GHG Emissions, 2018, Gt Co2 Equivalent Oil & Gas Co. Emissions Intensity, 2015 – 2018, ‘000t Co2 Eq. / MMboe
89
85 86
O&G Production Others O&G Production IOCs
74
8% 1%
73 72 71
69
66 64 62
61
Non-Energy 57
34% 53
O&G Combustion 48 48
23% 45 45 45
55 41 41
Gt Co2 Eq.
34%
Coal Combustion Exxon Mobil Eni Chevron Shell Total ConocoPhillips BP
Strategy& Sources: CSIS Oil & Gas Industry Engagement on Climate Change, Netherlands Environment Assessment Agency, GlobalData The Journey to Net Zero in Upstream Oil and Gas 3
Internal use only
Growing societal expectations to manage emissions is creating
pressure on oil & gas companies in four key areas
Key Drivers for Oil & Gas Emissions Management
Improvement in
Evolving policies and Public and Changing investment
renewables energy
regulation shareholder activism strategies
economics
• Commitments to the • Shareholder pressure and • Rise of sustainability • Reduction in the Levelized
reduction of emissions in resolutions to provide indices and tools Cost of Electricity (LCOE)
accord with the 2015 Paris transparency on emissions highlighting sustainability from renewable sources of
Agreement and efforts to address performance power
climate concerns • Investment strategies of • Growing contribution from
• Growing application of
carbon pricing • Public activism private equity, investment solar and wind to future
mechanisms highlighting the negative banks and Government power generation
role of the sector in institutions to decarbonize
climate change investment portfolios

Strategy& Source: Strategy& analysis Internal use only 4
As a consequence, sustainability has evolved into a business
imperative critical for long-term competitiveness
Evolution of Sustainability in Oil & Gas
Element From… To…
Objective • Regulatory license to operate • Social license to operate
• Efficient HSSE performance • Reduce emission to address climate change

Focus
• Fulfill corporate social responsibilities • Enable energy transition
• Regulator, employee and local community

Stakeholder • Regulator, employee and local community
• Shareholder and customer
Reporting • Voluntary and ad-hoc • Standard and regular practice
• Clear board oversight

Responsibility • HSE, PR with input from line management
• Senior management accountability
Sustainability is a critical necessity for being a Sustainability is a critical pillar for long term
good corporate citizen business competitiveness

Strategy& Source: Strategy& analysis 5
Internal use only
Oil & gas companies have responded to the new sustainability
imperative by taking actions in six main areas
Oil & Gas Sustainability Responses
Commitments & • Commitments to long-term sustainability objectives, especially on decarbonization

Targets • Continuous improvement targets
Low Carbon • Increasing investment in low carbon energy sources and technologies
Business Models • Establishment of new energy venture organizations
Investment • Evaluation of investment opportunities including sensitivities on carbon pricing

Screening &
Portfolio • Portfolio actions to reduce exposure to assets with high carbon footprints
Investment in • Investment in digital and other technologies to reduce / mitigate emissions

Technology • Evaluation and piloting of “adjacent” technologies e.g. carbon capture, hydrogen
Governance & • Strengthened governance structures to elevate sustainability management to Board level
Performance
Management • Improved visibility on sustainability performance and link to executive remuneration
Standards & • Adoption of industry-wide standards and participation in industry initiatives

Reporting • Linking of sustainability reporting to established standards e.g. UN SDG

Internal use only
Different approaches to decarbonization and expansion into
low carbon illustrate different levels of maturity in the sector
Oil & Gas Company Sustainability Positioning
• Net Zero
commitment for Commitment for Emission Reduction
scope 1, 2, 3
• Partial pledged
commitment to
Scope 1, 2, 3
or
• Net Zero to
Scope 1, 2
• Partial pledged
commitment to
Scope 1, 2
Commitment Towards New Energy
• Sustainability and new energy priorities • Strong focus on oil & gas related • Strong commitment in new energy
focused primarily on HSE and CSR sustainability action with selective focus areas to enable energy transitions in
aspects related oil & gas activities on few new energy areas addition of reducing impact from O&G

Internal use only
Holistic oil & gas sustainability strategies include elements
required for compliance along with strategic choices
Elements of a Sustainability Strategy for Oil & Gas
Holistic oil & gas sustainability strategies comprise 4

main elements:
1• Vision and Objectives that express the intent of the
1 strategy and the relevance to broader company
objectives
2• Elements related to Health and Safety,
Environmental Impact and Contribution to
Society that demonstrate how the company will
comply with policies and regulations, incorporate
2 3 best-practices and align with stakeholders
3• Elements related to GHG Emissions and Low
Carbon Energy that include elements of
compliance, but also strategic choices for the
company in terms of positioning for the energy
transition
4 • Corporate Governance and Transparency to meet
4
regulatory requirements and proactively
communicate the company sustainability strategy
and performance

8
Strategy& Source: Strategy& analysis Internal use only
Current focus on energy transition requires companies to
make strategic choices on sustainability positioning…
Strategic Choices for Oil & Gas Sustainability Strategies
Reduction in Scope 1,2 Intensity Net Zero in Scope 1,2,3

Commitments &
Targets NOCs
Primary Focus on Oil & Gas Transition to Low Carbon Energy

Low Carbon
Business Models NOCs
Investment Financially Optimized portfolio Sustainability Optimized Portfolio

Screening &
Portfolio
Focus on Core Oil & Gas Operations Transition Technology / Energy Ventures
Investment in
Technology NOCs
Governance & Embedded with Existing Structures Explicit Sustainability Structures

Performance
Management NOCs
Minimum Required by Law Proactive, Transparent & Structured

Standards &
Reporting NOCs

Internal use only
…that have to be considered in the context of the overall
balancing of sustainability and profitability objectives
Achieving a Sustainability and Profitability Balance
Typical Questions in Developing a Sustainability Strategy
• What are the expectations of stakeholders in balancing sustainability and

Deliver profitability?
Shareholder • What are essential activities required to retain licence to operate in HS&E
Returns
and contribution to society?
Sustainable & • How can HSE&S performance be further improved?
Profitable
• What is the sustainability vision for the company in terms of Net Zero vs.
Improve Manage continuous improvement in emission intensity?
Oil & Gas Energy
Sustainability Transition • What are the investments required to achieve the greatest impact in terms
of emissions reductions?
• Sustainability has emerged as a topic of critical importance for oil
• What is the optimal sustainability governance structure for the company?
and gas companies
• What reporting standards and frameworks should the company employ?
• As important as sustainability is for stakeholders, companies also need
to remain profitable and attractive for investors • What new technologies should be piloted and adopted?
• Successful sustainability strategies require a conscious choice on the • Which new business models should the company consider (if any)?
sustainability positioning that best reflects key stakeholder • What are the core competencies that can be leveraged to expand into new
expectations, and delivers an optimum sustainability impact for any business models?
given investment
• How should sustainability vision, targets and performance be communicated
• This impact may be expressed in monetary terms or in broader terms to stakeholders?
around importance for continuity of the business

10
Strategy& Source: Strategy& analysis
Internal use only
Contents
Executive Summary

Strategy& 11
Internal use only
The current renewed focus on sustainability is driven by the
role of oil & gas in global Greenhouse Gas (GHG) emissions
GHG Emissions by Sector
Global GHG Emissions, 2000 – 2018, Gt Co2 Equivalent Discussion
60 • Global GHG emissions continue to rise by 2% per annum such that meeting the
1,0%
emissions level needed to limit temperature rise to 1.5⁰C will require drastic action
50 2,4%
• Energy accounts for 2/3 of global emissions, driven by the combustion of coal,
40 oil & gas for power generation.
30 • Direct contributions of oil & gas operations are significant and account for 10%
F-Gases of global GHG emissions
20
N2O • Major IOCs are taking action to manage emissions from their own operations
10 CH4 resulting in a flattening or reduction in GHG emissions intensity in recent years
CO2
0 • However, there are growing calls for companies to take further action to reduce own
2000 2005 2010 2015 emissions and emissions from oil and gas combustion for power generation
Breakdown of Global GHG Emissions, 2018, Gt Co2 Equivalent Oil & Gas Co. Emissions Intensity, 2015 – 2018, ‘000t Co2 Eq. / MMboe
89
85 86
O&G Production Others O&G Production IOCs
74
8% 1%
73 72 71
69
66 64 62
61
Non-Energy 57
34% 53
O&G Combustion 48 48
23% 45 45 45
55 41 41
Gt Co2 Eq.
34%
Coal Combustion Exxon Mobil Eni Chevron Shell Total ConocoPhillips BP
Strategy& Sources: CSIS Oil & Gas Industry Engagement on Climate Change, Netherlands Environment Assessment Agency, GlobalData The Journey to Net Zero in Upstream Oil and Gas 12
Internal use only
A particular challenge for oil & gas are Scope 3 emissions,
which typically account for 85% of all company emissions
Scope 1, 2 and 3 Emissions
Breakdown of GHG Emissions by Scope The Challenge of Scope 3 emissions
• Oil & gas companies typically address direct Scope 1

emissions, whilst Scope 2 emissions are often negligible
• Oil & gas contributes to all of the categories of Scope
3 emissions – either embedded in the supply chain, or in
the use and end-of-life processing of sold products
• As a consequence, Scope 3 emissions typically account
for 85% of total oil and gas company emissions
• Reducing Scope 3 emissions requires oil & gas
companies to reduce the carbon intensity of the
products they sell and/or offer less carbon intensive
alternatives
• Possible industry responses include:
• Investing in nature-based carbon sinks to offset the
emissions impact of oil & gas products
• Investing in renewable and/or lower carbon
intensity products for sale to customers

Strategy& Source: GHG Protocol, Center for Strategic & International Studies, Strategy& analysis 13
Internal use only

Growing societal expectations to manage emissions is creating
pressure on oil & gas companies in four key areas
Key Drivers for Oil & Gas Emissions Management
Improvement in
Evolving policies and Public and Changing investment
renewables energy
regulation shareholder activism strategies
economics
• Commitments to the • Shareholder pressure and • Rise of sustainability • Reduction in the Levelized
reduction of emissions in resolutions to provide indices and tools Cost of Electricity (LCOE)
accord with the 2015 Paris transparency on emissions highlighting sustainability from renewable sources of
Agreement and efforts to address performance power
climate concerns • Investment strategies of • Growing contribution from
• Growing application of
carbon pricing • Public activism private equity, investment solar and wind to future
mechanisms highlighting the negative banks and Government power generation
role of the sector in institutions to decarbonize
climate change investment portfolios

Policies & Regulations
Government policy is evolving in response to the 2015 UN

Paris Agreement committing signatories to reduce emissions
Evolving Government Policies and Regulations
Paris Agreement “Ratchet Mechanism” and Potential Policy Levers Selected UN Climate Action Priorities for 2020
• Securing commitments from the main emitters of more ambitious national

commitments
2015 2020 2023 2025 2028
• All countries coming forward with 2050 carbon neutrality commitments
COP21 Paris Countries Global Countries Second global • Increasing the ambition of national commitments in sectors that were not fully
Countries communicate stocktake on submit stocktake taken in account in the past, such as the use nature-based solutions
submit 2nd round of climate, 3rd round of
1st round of climate mitigation & climate • Accelerating the transition to 100% renewable energy
climate pledges finance pledges • Accelerating the shift of the financial flows, pushing on carbon pricing to tax
pledges pollution not people, and ensuring access to sustainable finance
Expected acceleration of
policy announcements • Implementing the Summit’s initiatives aiming at the deep decarbonization of key
economic sectors
Coal Phase Out ICE Sales Bans Carbon Pricing Status of Climate Laws in Europe (February 2020)
Adopted Under
UK phase-out unabated All new cars emission-free 57 pricing initiatives Adopted In Preparation
coal use by 2025 in Netherlands by 2030 ongoing across world with long-term target Consideration
• Denmark • Austria • Croatia • Belgium
CCS / Decarb. Zero-Carb. Power Energy Efficiency • Latvia
• Finland • Bulgaria • Portugal
• France • Malta • Luxembourg
• Germany • Iceland • Slovenia
Only 2 large-scale CCS 36% of global electricity 8 European cities pledge
power projects end-2018 generation in 2018 complete decarb by 2050 • Ireland • Liechtenstein • Spain
• Netherlands • Switzerland
“It is inevitable that governments will be forced to act more • Sweden
decisively….leaving investor portfolios exposed to significant risk” • Norway
• UK
Strategy& Source: PRI “Inevitable Policy Response”, Strategy& analysis 15
Internal use only
Policies & Regulations
Carbon pricing is increasingly used as a tool by Governments

to support meeting of carbon reduction targets
Carbon Pricing
Carbon Pricing Initiatives – Implemented and Planned Evolution of Carbon Pricing Initiatives
• 96 of 185 parties to the Paris Agreement plan to implement

State / province carbon pricing in support of their Nationally Determined
level policies Contributions
• 57 pricing initiatives already implement or scheduled
• Emissions Trading Systems
• Carbon Taxes
• To deliver on Paris Agreement commitments, the World Bank
estimates that higher carbon prices are required
ETS implemented or scheduled
Carbon Tax implemented or scheduled • $40 - $80 / t Co2 in 2020
Initiatives under consideration
• $50 - $100 / t Co2 in 2030
Carbon Prices and Emissions Covered
• In 2019, Shell, ENI, BP, Repsol, ConocoPhillips, Chevron and
100 ExxonMobil committed to supporting “economically
Carbon price ($/tCo2e)
80
meaningful” carbon prices a meeting in the Vatican
Minimum 2020 price to meet Paris Agreement commitments
60 Korea
California Scandinavia
40
China Pilots
EU ETS
20
Japan Tax
0
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500
Emissions Covered (MtCO2e)

Sustainability Strategies for Oil & Gas ETS: Emissions Trading System 11 June 2020
Strategy& Source: World Bank, Strategy& analysis Internal use only 16
Public & Shareholder Activism
Public and shareholder activism are creating pressure on oil &

gas companies to improve climate reporting and set targets
Public and Shareholder Activism
Discussion Mentions of Climate Change in Major IOCs Filings and Earnings
• In recent years, major investors like Blackrock and Vanguard
have joined activist groups in pushing shareholder resolutions 350
at O&G companies 300 Royal Dutch Shell

• Shareholders are putting pressures on IOCs to provide 250 BP
transparency into action plans to address carbon emissions and ENI
200
paths to address global climate efforts like the Paris Agreement Exxon Mobil
150
• IOCs are responding in a number of ways including making Chevron
climate a key topic throughout filings and strategies, and 100
Total
partnering with reporting bodies to achieve long-term 50
sustainability goals
0
2016 2017 2018 2019
Climate-Related Shareholder Resolutions at O&G Companies Reporting Bodies that IOCs are Partnering with (not exhaustive)
18
Political activity(1)
16
15 Carbon asset risk
13 13 13
Unconventional fossil energy
10 10 10 10 Sustainability oversight and
9
8 management
7 7 7
6
GHG management
4
3
2
1
2015 2016 2017 2018

Strategy& Sources: CSIS – Oil and Gas Industry Engagement on Climate Change – 2019, GlobalData – The Journey to Net Zero in Upstream Oil and Gas 17
Internal use only
Investment Strategies
Major institutional and private investors are changing

strategies to decarbonize investment portfolios
Changing Investment Strategies
S&P Global Ratings Green Evaluation Decarbonization Strategies of Major Investors
S&P has created a tool which aims to provide market participants with a • Blackrock
comprehensive snapshot of the environmental impact and climate risk of a • Responding to pressure and scrutiny of prior lack of sustainability focus by taking
security or an asset. a more public stance and outlined the following initiatives:
This analysis provides an independent evaluation of the security or asset and its • Making sustainability integral to portfolio construction and risk management
• Exiting investments that present a high sustainability-related risk (e.g.
alignment to Green Bond Principles (GBP) and-or the Green Loan Principles
thermal / coal producers)
(GLLP).
• Launching new investment products that screen fossil fuels
• Strengthening firm’s commitment to sustainability and transparency in its
Impact Assessment Categories investment stewardship activities
Green Buildings Green Energy Green Transport • Deutsche Bank

• Adopted a new climate change strategy in 2007 to resonate environmental focus
Energy Efficiency Water Fossil Fuel Plants
across the board and adopted a three pillared strategy:
Nuclear Agriculture & Forestry Waste • Financial Intermediary – financing infrastructure solutions that promote
renewable energy
Benefits for Issuers • Eco-Efficiency Manager – reduce operational carbon footprint and move to
Investor Base Diversity Potential Long Term Internal Green renewable energy
Pricing Advantages Performance Benchmarks • Climate Ambassador – provide strategic consulting to promote private
investment in clean energy and technologies
Strong, Pro-Active Message to Appeal to Environmentally Conscience
Shareholders Employees and Customers • The European Investment Bank
• Ending funding for all fossil fuels (oil, gas, coal) by 2021 and align all funding
Benefits for Investors decisions with the Paris climate accord
Meet Clients’ Needs to Balance Risk-Adjusted Reduce Time to Evaluate
• Energy projects applying for funding will need to show energy production of
Satisfy Green Mandates Financial Returns with Complex and Growing 1kW/h with less than 250´grammes of CO2
Sustainability Benefits Investment Type
Strategy& Sources: Company Websites, Fortune, The Guardian, 18
Internal use only
Renewable Energy
Growth in renewable energy sources, and improving

economics present a direct threat to oil & gas
Global Renewables Trends
Global Renewables Generation, 2016 – 2030, ‘000 TWh Observations
14
12.0
• Renewables strongest growing energy source until
12 Marine1) 2030, reaching a generation share of 36%
9.6 2.2
10 CSP • Growth in renewables mainly driven by
1.5 1.1
8 Geothermal
6.0 6.4 0.9
3.2  Governmental decarbonization efforts
6 0.3 0.4 2.3 Solar PV
0.6
1.0
0.6
1.1 Bioenergy  Technological advancements leading to “grid parity”
4
4.8 5.3 Wind and increased supply security
2 4.0 4.1
Hydro  Availability of investment capital from growing number
0
2016 2017 2025 2030 and size of infrastructure funds
 Improvements in battery technology and costs making
Historical Mean Unsubsidized LCoE2 values, 2018, $/MWh)
renewable energy more dispatchable
400 • Hydro, wind and solar PV are expected to be the major
359
renewable energy sources
Nuclear
300  Hydro with decelerating growth due to social and
248 Coal
environmental concerns (e.g. China and Brazil)
Gas - Combined Cycle
200
135
157
Solar PV - Crystaline  Wind to grow strongly despite reduced subsidization
124 125
104
Wind due to cost competitiveness
100 83 75 70 79
59 64 55
47
50
45
43  Utility size solar PV (>1 MWp) with strongest growth
55 42
until 2030 due to cost competitiveness and versatile
0
2008 2010 2012 2014 2016 2018 application in commercial, residential and off-grid use
1) Wave energy etc.
Sustainability Strategies for Oil & Gas 2) Levelized Cost of Energy 11 June 2020
Strategy& Source: IEA World Energy Outlook 2018, Strategy& analysis 19
Internal use only
As a consequence, sustainability has evolved into a business
imperative critical for long-term competitiveness…
Evolution of Sustainability in Oil & Gas
Element From… To…
Objective • Regulatory license to operate • Social license to operate
• Efficient HSSE performance • Reduce emission to address climate change

Focus
• Fulfill corporate social responsibilities • Enable energy transition
• Regulator, employee and local community

Stakeholder • Regulator, employee and local community
• Shareholder and customer
Reporting • Voluntary and ad-hoc • Standard and regular practice
• Clear board oversight

Responsibility • HSE, PR with input from line management
• Senior management accountability
Sustainability is a critical necessity for being a Sustainability is a critical pillar for long term
good corporate citizen business competitiveness

Internal use only
…and the sustainability agenda for oil & gas companies has to
be extended to include GHG emissions and low carbon energy
Strategy& Sustainability Framework for Oil & Gas
Vision and Objectives
Health and Environmental Contribution to GHG Low Carbon

Safety Impact Society Emissions Energy
Corporate Governance and Transparency
Established Pillars New Pillars

Internal use only
At the same time, the industry needs to reconcile sustainability
priorities with profitability and long term shareholder returns
Sustainability & Profitability Trilemma
Oil & Gas Company Share Price Evolution, 2010 – 2019, Indexed The Oil & Gas Energy Transition Trilemma
220
200
180
160 Deliver
140 Shareholder
120 Returns
100 100
80
60
Sustainable &
40 World O&G Index Profitable
20 MSCI World Index Improve Manage
0 Oil & Gas Energy
01/10 01/11 01/12 01/13 01/14 01/15 01/16 01/17 01/18 01/19 01/20 01/21
Sustainability Transition
Oil & Gas Company Return on Capital Employed, 2010 – 2019, %
22 • The oil and gas sector has struggled to remain attractive to investors,
20 particularly since the decline in oil prices in 2014, and more recently through the
18 impact of Covid-19 on demand
16
2010 2015
14 • To continue to attract investment, companies will need to achieve a balance
2011 2016
12 between three, potentially conflicting, objectives:
2012 2017
10
2013 2018 1. Establishing a clear vision to improve oil & gas sustainability, and
8
6 2014 2019 demonstrate continuous improvement across all sustainability elements,
4 especially in reduction of GHG emissions
2 2. Developing and communicating a clear approach on how the company will
0
manage energy transition and the role of low carbon in the portfolio
Shell BP ExxonMobil Chevron
3. Maintaining focus on operational excellence and cost discipline, and
Strategy& Source: Bloomberg, Strategy& analysis
demonstrating profitable growth to deliver shareholder returns 22
Internal use only
Long-term impacts of Covid-19 are uncertain, but are likely to
reinforce the drive towards sustainability in oil and gas
Covid-19; Competing Forces on Oil & Gas Sustainability Strategies Covid-19; Governmental Support for Sustainable Reconstruction
Reduced profitability
and ability to invest Increased need to Covid-19: EU recovery plan should include climate
in new energies develop strategies crisis action
resilient to future
disruptions As the EU looks at how best to recover from the impact of the Covid-19
pandemic, MEPs say the Green Deal must be at the centre of any
reconstruction package.
The current health crisis and its consequences remain the immediate
priority, but the European Parliament is also focusing on a strategy for
the post-crisis period.
In a resolution adopted on 17 April, MEPs said the EU needs a massive
recovery and reconstruction package with the Green Deal, a series of
• The Covid-19 crisis has emphasizes the need for oil & gas company strategies initiatives to make Europe's economy sustainable, at its core to stimulate
that are resilient to future demand shocks…at the same time, oil & gas the economy and fight climate change.
companies are struggling to remain profitable and have substantially reduced
investments in conventional oil & gas
• Under these circumstances, momentum for a shift to low carbon business models Even at this time of immediate challenge, we must also maintain
may be reduced as companies focus on survival the focus on the long term…. which is why we aim to be a net
• However, balance suggests that companies will maintain their focus on zero emissions energy business by 2050 or sooner. Society, and
sustainability our customers, expect nothing less
[3rd PARTY PERSONNEL 1], [TITLE], April 2020

Strategy& Source: European Parliament News, Strategy& analysis 23
Internal use only
Contents
Executive Summary

Strategy& 24
Internal use only
Oil & gas companies have responded to the new sustainability
imperative by taking actions in six main areas
Oil & Gas Sustainability Responses
Commitments & • Commitments to long-term sustainability objectives, especially on decarbonization

Targets • Continuous improvement targets
Low Carbon • Increasing investment in low carbon energy sources and technologies
Business Models • Establishment of new energy venture organizations
Investment • Evaluation of investment opportunities including sensitivities on carbon pricing

Screening &
Portfolio • Portfolio actions to reduce exposure to assets with high carbon footprints
Investment in • Investment in digital and other technologies to reduce / mitigate emissions

Technology • Evaluation and piloting of “adjacent” technologies e.g. carbon capture, hydrogen
Governance & • Strengthened governance structures to elevate sustainability management to Board level
Performance
Management • Improved visibility on sustainability performance and link to executive remuneration
Standards & • Adoption of industry-wide standards and participation in industry initiatives

Reporting • Linking of sustainability reporting to established standards e.g. UN SDG

Commitments and Targets
An increasing number of European companies have set targets

to have net zero carbon emissions by 2050 or earlier
European Net Zero Targets
Company Commitment Coverage Additional Targets Key Levers Quotes
Progressive reduction in • Low carbon power generation "We are convinced that we must set more
emissions: • Balanced gas and oil ambitious objectives to fight climate change.
Net Zero
Scope 1,2,3 10% by 2025 • Focus on circular economy We believe now it is the right time for Repsol”
by 20501
20% by 2030 • High performance biofuels
405 by 2040 • Green hydrogen [3rd PARTY PERSONNEL 2], [TITLE]
• Energy efficiency “The world’s carbon budget is finite and

Reduction in emissions of • Carbon capture running out fast; we need a rapid transition to
Net Zero
Scope 1,2,3 Scope 3 and 5 MT CO2 eq. by • Low carbon energies net zero”
by 20501
2025 (Scope 1,2) • Increased focus on gas, carbon
fuel, lubes, petchem [3rd PARTY PERSONNEL 3], [TITLE]
• Operational efficiency “We aim to be a net zero emissions energy

Reduced Net Carbon Footprint
Scope 1, 2, 3 • Natural gas shift business by 2050 or sooner. Society, and our
Net Zero of products:
Scope 3 dependent • Renewables generation customers, expect nothing less”
by 2050 30% by 2035
on customer actions • Carbon capture
65% by 2050 [3rd PARTY PERSONNEL 1], [TITLE]
• Natural sinks; New fuels
• Energy efficiency “We have designed a strategy that combines

Upstream 2025 targets:
• Growing share of gas economic sustainability with environmental
80% reduction 43% reduction in GHG intensity
Scope 1, 2, 3 • Growth in zero carbon sources sustainability”
by 2050 80% reduction in fugitive
• Circular approach
methane emissions [3rd PARTY PERSONNEL 4], [TITLE]
• Carbon capture
60% reduction in carbon “Providing tangible solutions to contribute

• Energy efficiency limiting global warming constitute the
intensity globally by 2050 with
Net Zero • Low carbon energies challenges that a major energy player like
Scope 1, 2, 3 emission reductions of
by 20502 • Growing share of gas Total can help to tackle”
15% by 2030
• Circular approach
35% by 2040 [3rd PARTY PERSONNEL 5], [TITLE]
1) Scope 3 includes emissions from sales of its own production
Sustainability Strategies for Oil & Gas 2) Net Zero by 2050 for Scope 1, 2, and 3 in Europe and Net Zero by 2050 for Scope 1 and 2 globally 11 June 2020
Strategy& Source: Company websites, Strategy& analysis 26
Internal use only
Other companies, like ExxonMobil, Chevron and Equinor have

set targets to reduce emissions, short of committing to net zero
Emissions Reduction Targets
Company Commitment Coverage Strategic pillars Notable Actions & Results Quotes
“Companies setting targets and then
selling assets to another company so that
• Developing scalable technology solutions • $9B+ investment in lower emission their portfolio has a different carbon
• Engaging on climate related policy energy solutions since 2000 intensity has not solved the problem…(We
15% by 2030 Scope 1, 2 • Providing products to help customers • 400M tonnes of net CO2 reductions are) taking steps to solve the problem for
reduce emissions since 2000 society as a whole and not try and get into
• Mitigating emissions in operations • 100M+ CO2 captured since 1970 a beauty competition”
[3rd PARTY PERSONNEL 6], [TITLE]
• $8.5B invested in R&D since 2000, “We’ve not set long term targets that we’re
including geothermal, battery not exactly sure how we will get to. Our
technology and alternative fuels approach has been, get on the path, start
• Reducing greenhouse gas emissions • 47% reduction in methane from taking actions, set short-term
5%-10% by 2030 Scope 1, 2
globally upstream operations since 213 accountability metrics, make progress and
• 12% reduction in GHG emission start marching in that direction”
intensity from direct operations
between 2014 and 2018
• Plans to devote 15-20% of total

CAPEX in new energy by 2030 “we continue to be one of the world’s most
• Collaborates with governments and carbon efficient oil and gas producers, with
• Engage in responsible operations
organizations to support carbon a carbon intensity half of the industry
50% by 2050 Scope 1, 2 • Create a low-carbon business advantage
pricing average”
• Create shared value
• Exploring opportunities with Total and
Shell in Norway to transport and store
CO2 1-2km below sea level

Strategy& Source: Company websites, Strategy& analysis Internal use only 27
Stakeholder response to net zero targets is generally positive,

although the challenge is to translate ambition into action
Net Zero Carbon Targets – Stakeholder Reactions
Select Net Zero Announcement Stakeholder Reactions
Positive responses to welcome net zero ambition Skepticism about the net zero plans
“BP's net-zero pledge looks like an attempt to grab some positive headlines…with
little of substance to show how it will achieve these grand claims“
“This announcement significantly increases
[3rd PARTY PERSONNEL 12], Global Witness
Shell's ambitions and commitments”
[3rd PARTY PERSONNEL 9], [TITLE] “Companies need to go further and extend the boundary of their net
zero ambition to meet Paris agreement”
[3rd PARTY PERSONNEL 9], Co-Chair and [3rd PARTY PERSONNEL
13] [TITLE]
“It’s brilliant to have a poster child because we can all point Net Zero
“Investors are being fobbed off with vague aspirations that
to that and say ‘well, if they can do it, why cant you?’,” Announcements don't tackle Shell's monstrous carbon footprint and pass the
Leading UK Asset Manager
buck to Shell's customers to offset their emissions”
"How will they reach net zero? Will it be through offsetting?

“This is a very welcome announcement from BP's new
When will they stop wasting billions on drilling for new oil
CEO. We need to see a wholesale shift to a net-zero
and gas we can't burn?”
economy by 2050” [3rd PARTY PERSONNEL 15], [TITLE]
"With the world demanding ever more energy, policymakers are focusing
on efficiently utilized, lower-emissions, lower-carbon fuels that are
“It raises the bar and sets out an approach for others in the affordable to end-users and aligned with economic growth. Such
oil and gas sector to follow” transformation creates both risks and opportunities for the existing
[3rd PARTY PERSONNEL 11], [TITLE] energy capital stock and the incumbent players”

Strategy& Sources: Strategy& analysis, S&P, IIGCC, CNBC, Greenbiz 28
Internal use only
Low Carbon Business Models
Integrated oil & gas companies have expanded their business

models to include investments in low carbon energies
Integrated Oil & Gas Company Investments in Low Carbon
Energy
Power EV Energy Carbon
Company Solar Wind Geothermal Biofuels Hydrogen Ventures
Distr. Charging Storage Capture
Unit
         
        
       
        
        
        
        
  
Increasing focus on transitioning to new energy business
Strategy& Source: IEA, Company Websites, Strategy& analysis Internal use only 29
For example, since 2016 Shell’s new energy business have been
investing in cleaner energy related projects around the world
Overview Shell’s New Energy Businesses Evolution
2001-2015 2016 2017 2018
Borssele 3&4 Silicon Ranch* Sonnen*

NewMotion
US 5 onshore wind Netherlands First Utility USA Germany
Europe
USA, since 2001 UK Cleantech Solar* GI Energy
Hydrogen stations
FitCar** Singapore USA
UK & California
USA Solar Now* Moerdijk solar Rheinland Hydrogen
NoordzeeWind SBI BioEnergy
Uganda/Kenya Netherlands Electrolyser
Netherlands, since Canada
Sense Home Steamaco* TetraSpar* Germany
2002 IH2
Monitor Africa/Asia Norway Shell Energy Inside**
India
USA Atlantic Shores Offshore USA
Raízen advanced Kite Power Systems Wind JV
UK Stockton on-site
biofuels Sunseap USA Husk Power*
USA
Brazil, 2011 Singapore Mayflower Wind Energy India/Tanzania
Innowatts JV SunFunder*
Fare Pilot** USA USA Kenya
Hydrogen stations UK Greentown Labs
Germany, 2015 Connected Freight** USA Light and heavy-duty HyET
Philippines hydrogen stations NL
New Energies business established Canada and USA Axiom Exergy
Junction City biogas plant USA
Wind Solar New Fuels Digital businesses Energy solutions Shell Ventures Energy access USA Ample
* Minority investment ** Product launch date
USA

Internal use only
Investments in low carbon are typically managed “at arms-

length” through energy ventures organizations
Low Carbon Investment Operating Models
BP Ventures Portfolio Discussion
• To manage investments in low carbon, many oil & gas companies have created
new “Energy Ventures” organizations
• Management of low carbon ventures is often “at arms-length” that reflects the
characteristics of the low carbon portfolio:
• Emerging technologies and business areas where business models and
technologies are not yet mature
• Non-traditional capability requirements with limited synergy potential with
core oil & gas business
• Whilst growing, investments to date in new projects outside of core oil & gas are
Total Carbon Neutrality Ventures Portfolio limited, amounting to only 1% of total company expenditure
• CO2 & hydrogen Large Oil & Gas Company Low Carbon Investments, 2015-2019, $Bn
• New Energy generation
• Storage
+9%
• Smart Energy 2.1
1.9 0.1
• New mobility 1.5 1.6 1.7 0.2
0.1
Biofuels
0.4
0.1 0.2 0.3
• Logistics 0.0
0.2 0.2 Carbon Capture
0.4 0.3 0.4
0.3 0.4 Onshore Wind
• Access to energy 0.2
0.4
0.3 0.4
• Next generation technology 0.4 Offshore Wind
1.1
0.6 0.6 0.7 Solar
• Oil & gas 0.5
Sustainability Strategies for Oil & Gas 2015 2016 2017 2018 2019 11 June 2020
Strategy& Source: IEA, Company Websites, Strategy& analysis 31
Internal use only
Principles of circular operations are increasingly used in oil &

gas, particularly for downstream operations
Circular Operations
Renewable and bio-

Optimize based inputs
resource Advance Biofuel
usage Energy Efficiency
Produce Circular
Johan Sverdrup Field
Compounds®,
Powered by Renewable
Maximize Circular Products
onshore source
PP and PE from
recycle products
product
Circular
use procurement
BP Enhance Recycling
Technology INFINIA to
Supports commercial scale Green sourcing
model: Awareness
chemically-based plastic Total
recycle PET waste recycling processes Criteria in campaign for
purchasing policies EcoSolutions vendors
Program
End Product
Recover Recycling
byproducts
Chemical
and waste Management
In Practice

32
E&P companies have, to date, taken a more opportunistic

approach to investments in low carbon
E&P Company Investments in Low Carbon - Examples
Company Country Focus Area Investment Action
Working on field development on the Norwegian Continental Shelf to make NOAKA the first energy
Offshore Wind positive zero emissions field on the NSC through full electrification enabled by shore & offshore
wind
Piloting world’s first offshore green hydrogen project to integrate three energy systems in the Dutch
Hydrogen North Sea - offshore wind, offshore gas and offshore hydrogen to gain experience of integrating
working energy systems at sea and the production of hydrogen in an offshore environment
Develops & commercializes new products and technologies using captured CO2 to leverage and
Carbon Capture grow Occidental’s CO2-EOR infrastructure and expertise to lead and support the development of
innovative new carbon capture technologies
Replacing and no longer uses high-bleed natural gas pneumatic controllers on hundreds of wells in
Wind
Wyoming, New Mexico and Texas to reduce methane emissions from production sites

Oilfield service companies, as well, are also capturing this

opportunity to develop and service evolving client needs
OFS Company Investments in Low Carbon - Examples
Company Country Focus Area Investment Action
Testing and deploying new initiatives like electrified pumps which will significant reduce emissions
Technology and noise pollution and thus empower customers to improve their ecological footprint efficiently, and
cost effectively
Developed a technology-enabled system that help operators make informed decisions to reduce
Technology subsurface risk, optimize production, reduce resource consumption, and save greenhouse gas
emissions
Invested in advanced sensing and control technologies to reduce flare emissions, eliminate venting
Technology
and pinpoint fugitive emission with speed and accuracy
Acquired carbon dioxide storage company CO2DeepStore to develop and CO2 capture technology
Carbon Capture from major emissions sources such as coal and gas fired power generation facilities, LNG and gas
processing plants
Running a green ammonia trial in the U.K. (wind-powered) since 2018 to look at the potential of
Energy
creating green ammonia at sea for passing ships to use as fuel

34
In June 2020, ENI announced a new business structure

aiming to become a leader in the energy transition
ENI Business Structure
New function to be CEO

created New Organization Structure Yet to be Finalised
Corporate Services &

Technology,
Legal Affairs Affairs & Stakeholder NATURAL RESOURCES ENERGY EVOLUTION
R&D, & Digital
Governance Relations
Oil & Gas

International External Commercial Natural Gas Power
Sustainability Expl., Devt., Mobility
Affairs Comms. Negotiations Wholesale Generation
& Prod.
Integrated Forestry Refining &

Integrated Rewind Retail Gas &
Risk Conservation Chemicals
Compliance (Environ.) Power
Management & CCS
Sustainability to
integrate across all
activities
Finance
Corporate Core to be
streamlined and
reorganized Business Lines Business Lines
Corporate Core Shared Services
(Traditional) (New Energy)

Strategy& Source: ENI Press Release, 4th June 2020 Internal use only 35
bp has also announced a new business structure which moves

away from traditional oil & gas value chain models
bp Business Structure
CEO
Regions, Production
People & Strategy & Customers
Finance Cities & &
Culture Sustainability & Products
Solutions Operations
• Global Business Services • Trading, Shipping & Culture • City & Corporate Int. Solutions • Strategy • Subsurface • Aviation
• Accounting, reporting & Control • Gas & Low Carbon Energy • Intelligence, Security, Crisis Mgmt. • Sustainability • Wells • Castrol
• Internal Audit • Enablers • NOJV Excellence • Portfolio Mgmt. & Capital Allocation • Projects • Chemicals & Circular
• M&A • Customers & Products • Europe • Competitor Insights • Production • Customer Value Proposition
• Tax • Production & Operations • China • Economic, Energy Insights • Chemical Operations • Fuel Supply & Midstream
• Investor Relations • Innovation & Engineering • Latin America • Market Analytics • Refining • Future Mobility
• Reinvent BP • Talent • America • Ethics & Compliance • Angola • Mobility & Convenience Americas
• Procurement • Reward & Wellbeing • India • HSE & Carbon • Mobility & Convenience Europe
• Treasury • Services & Solutions • Middle East • Azerbaijan, Georgia, Turkey • Mobility & Convenience Asia
• Business Group Finance • People & Culture, Capability • Asia Pacific • bpX Energy • Reinvent bp
• Reinvent bp • HSE & Carbon
Gas & Low Innovation

Comms. & Trading &
Legal Carbon &
Advocacy Shipping
Energy Engineering
• Trading & Shipping • C&A Strategic Planning • Refining & Product Trading • Applied Sciences
• Innovation & Engg., Finance, Corp. • External Campaigns • Gas & Power Trading International • Digital Enterprise
• People & Culture • Internal Campaigns • Gas & Power Trading Americas • Digital Production
• Prod. & Ops., and Regions, Cities • Content & Creative Services • Analytics & Insights • Digital Customers & Markets
• Strategy & Sustainability • Brand & Showcasing • Special Projects • Digital Security
• Gas & Low Carbon, Cust & Prod. • C&A Regions • Digital Science & Engineering
• Safety & Op. Risk Assurance
• Engineering
• Launchpad & Venturing
Enablers Integrators Business Groups
(corporate core) (shared services)
Strategy& Source: bp 36
Internal use only
Low Carbon Business Models Commitments and Targets
Different approaches to decarbonization and expansion into

low carbon illustrate different levels of maturity in the sector
Oil & Gas Company Sustainability Positioning
• Net Zero
commitment for Commitment for Emission Reduction
scope 1, 2, 3
• Partial pledged
commitment to
Scope 1, 2, 3
or
• Net Zero to
Scope 1, 2
• Partial pledged
commitment to
Scope 1, 2
Commitment Towards New Energy
• Sustainability and new energy priorities • Strong focus on oil & gas related • Strong commitment in new energy
focused primarily on HSE and CSR sustainability action with selective focus areas to enable energy transitions in
aspects related oil & gas activities on few new energy areas addition of reducing impact from O&G

Investment Screening and Portfolio Management
Screening of new investments increasingly considers the

impact of new policies, notably carbon pricing, on project value
Carbon Pricing and Portfolio Actions
Carbon Prices Included in Project Screening - Examples
80
Stress Including Sustainability in Investment Decisions
test
60
$ / t CO2
At
40 Least Repsol will analyze alignment with the Paris Agreement in
2025
each of its investments. Accordingly, each major investment will
20 2018
be accompanied by a report from the Sustainability unit to ensure
this alignment.
0
Projects and facilities that produce more than 50,000 tonnes of
GHG emissions a year are required to have a GHG and energy
management plan. To assess the resilience of proposed
Portfolio Action to Support Sustainability - Examples projects, we also consider potential costs associated with
operational GHG emissions
Royal Dutch Shell has agreed to sell most of its carbon-heavy Canadian oil
sands assets for $8.5bn as the chief executive warned that the industry The profitability of our main investment projects is tested with a
risked losing public support without progress towards cleaner energy. sensitivity analysis on carbon pricing, both in the Final
Investment Decision (FID) and subsequently in the biannual
Equinor is no longer exploring for heavy oil. This means that we will not monitoring of projects, on the basis of the following assumptions:
acquire licenses or assets with explicit heavy oil prospects or proven heavy Eni’s hydrocarbon pricing and CO2 cost scenario, and the
oil resources. International Energy Agency’s Sustainable Development Scenario
(IEA SDS) hydrocarbon pricing and CO2 cost low-carbon
Repsol pledged on Monday to reduce net carbon emissions from its scenario
operations and most of its products to zero by 2050 and absorb a $5.3
billion hit to the value of its oil and gas assets in the process.

Internal use only
Investments in Technology
Investments in technology increasingly focus on improving

energy efficiency and abatement of carbon emissions
Oil & Gas Technology Investments
Development of a Site-Specific Transition Pathway - Illustrative Developing Concrete Action Plans
• Incorporating technology developments is a key element for

CO2 Emission reduction Pathway
Digital Processes
100%
Heat recovery site specific decarbonization plans
Biomass Co-Generation
Heat Pump & District heat • Key elements of transition roadmaps include:
Water Exchange with industry
Process Heating Network • Site assessments

50% Waste Exchange with Industry
Decomm Old Production
Recyclable Materials • Technology screening and planning
H2 Based Process
• Funding options and economic assessment
0% • Market and policy trends to incorporate
2020 2025 2030 2035 2040 2045 2050
• R&D strategy
Marginal Abatement Cost Curve – Client Example • The cost / benefit impact of specific improvement opportunities is
typically expressed in terms of a Marginal Cost Abatement
Curve
Abatement Cost
USD$ per tCO2e
40
Future Downstream Upstream 1
30 • Typical elements for oil and gas companies include:
Petrochem Upstream 2
20
• Process efficiency improvement
10
0
• Flare gas recovery
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
-10 • Steam system optimization
Abatement Potential
-20 Mt CO2e • Heat recovery
-30
• Renewable power implementation
-40
• Fugitive methane and CO2 emission capture
Carbon Capture and Underground Storage (CCUS) is seeing

renewed interest supported by carbon price expectations
Carbon Capture and Underground Storage
CCUS Facilities Pipeline, 2010 – 2019, Million tpa Northern Lights CCUS Project
180
160
140 -13%
120
+26%
100
80
60
40
20
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Early Development Advanced Development In Construction In Operation
Global Large Scale CCUS Projects
• The Northern Lights CCUS project is promoted by the Norwegian

Government as a catalyst for the wider deployment of CCUS in Europe
• Key features include:
• Joint Venture Equinor, Shell, Total
• Capacity 5 million tpa
• Capture of CO2 at multiple industrial facilities
• Ship-based transportation to enable widespread capture
• Open access to infrastructure

Whilst still in its infancy, Green Hydrogen is the only energy

source for deep decarbonization with current use case examples
Hydrogen allows a deep carbonization of the total energy sector
Power Storage Decarbonized dispatchable

H2
H2
(Dispatchable power generation
<95%
RES) Power
H2 Storage Decarbonized heat

70-80% Hydrogen generation
H2
Electro- Feed into gas grid NatGas w/ H2
RES Decarbonized transport and
power lysis mobility
gen Methane/methanol, s
Power-to-X 35-55% synthetic kerosene
chemicals
& derivates
Decarbonized chemical
feedstock
Carbon
Carbon sequestr (negative CO2
capture CO2
emissions)
ation …
H2O
Xx% end-to-end efficiency
Internal use only
Globally, investments in hydrogen are increasing across the

value chain
Hydrogen Investment Trends
Investment by segment (US$ bn) Companies and deal volume by region (#, US$)
65 2101) ~200 270m ~3.1bn US$ m # Companies funded 0 1–5 >5
Companies Deals Investors Largest Deal Capital Invested EU

NA 27
33 95
Regional split: 71% North America | 23% Europe | 5% Asia 104 704
2,195 Asia
Monolith
2
1.2 114m
6
Trend 162
0.2
Oceania
ME
Nikola 2
0.9 210m
Number of companies 1
3
0.4 Number of deals 3
17
Total deal value ($M) 1
PE 0.4 Ballard;
nel
VC 0.5 183m Main deals and investors (US$)
0.3 0.5
Corporate / Strat. M&A HQHP 0.2 Bloom- Operating
IPO ($1.6bn post-combustion
valuation); solid Grows algae
Fuel cell that capture
products fundedCO2 in open
by Weichai
Hydro- 0.1 CC facility,
oxide received
fuel cell $190 from
manufacturer ponds, deal ledengines)
Power (Diesel by ARCH Venture
and Partners
Zhongshan
157m energy
IPO 0.4 270m
genics; $190M (2017)
270m (2018) the U.S. Dep. of Energy $92M (2015)
183m (2018) Comp. (manuf. electric AC and DC motors)
nel
Individual 0.3 0.3 236m 0.3 CC
Fuelfrom
cellbiomass
producerand& waste Operates AllamSECycle power plant in Texas,
IPO Shenzhen ($550M valuation),
plants, deal lead
electrolyzers by Mitsui
acquired by USA. Received
hydrogen thee.whole
mobility, deal sum
g. refueling from
stations
Other 0.1 $188M(2019)
236m (2014) Global
Cummins Investment $90M (2014)
157m (2015) Exelon (power generation company)
2010-12 2013-15 2016-18 YTD 08/2019 Grows algae

Fuel cell thatmanufacturer
trucks capture CC from biomass and waste plants, funding
Manufacturer of carbon black
CO2 in by
funded ponds,
NELinvestor
+ other i.a. received from Novo Holdings on August 6,
and hydrogen gas in the US funded by
$144M(2018)
210m (2012) Monsanto
undisclosedGrowth Ventures
investors $72M (2019)
114m (2018) 2019
Warburg Pincus (PE)
# Deals 45 81 70 15
Note: total raised: >0.5m; Deal date after 01/2010; Deal types: all Buyout; Private Equity; VC; M&A/Control Transactions; IPO; excl. bankrupt, out of business & failed deals
Sustainability Strategies for Oil & Gas 1) Including 40 undisclosed deals; 11 June 2020
Internal use only
Governance & Performance Management
Companies with the most mature approach, typically govern

sustainability through committees with direct Board oversight
Sustainability Governance Models
Increasing level of prominence towards sustainability Key Insights
By Public Policy or Public Strategy and CSR or Ethics Sustainability or Safety, • There is a clear board
Issues Committee or Risk Committee Sustainability and oversight of sustainability
Board of Director and HSE Committee Environment Committee performance
Oversight
Kuwait Saudi
• Sustainability is mostly a
Petro. Corp. Aramco part of overall executive
teams’ mandate, however
Executive Management Committee (EMC) Dedicated Management Sub-committee to
Mandate of with sustainability listed as a mandate oversee sustainability mandate some companies are
Executive creating dedicated sub-
Management committees
Committee
Kuwait
Petro. Corp.
Saudi
Aramco • Sustainability is mostly
embedded either with
Embedded within Embedded within Embedded within Stand-alone HSSE or Strategy, but some
Technology and HSSE Strategy Sustainability players are creating
Functional Digitization function
dedicated functions
Alignment
Kuwait Saudi
Petro. Corp. Aramco

Governance & Performance Management
There is an increase transparency in performance reporting

and management including linkage to exec’s performance
Sustainability Performance Management
Sustainability Performance Metrics - Examples Key Insights
Market Leader Clean Energy

Sustainability Vision • Global Standards – UN SDG, GRI etc. • Portfolio mix of assets • Increased transparency by providing full
• Climate risk and performance access to detailed sustainability performance
Fatalities Safety across a range of metrics
Strive for • Injuries and process safety incidents • Transport safety (Road, Aviation etc.)
Zero Accident • Fatal accident rate • Product related incidents • Increased focus on benchmarking by
• Process safety event rates providing industry comparable
Water Bio-Diversity Waste management • Increased linkage between sustainability
Minimize Impact
• Water withdrawn and used • Ecosystem activities • Hazardous waste generated
from Operations
• Oil discharge to water • Mitigation measures • Waste disposed
agendas and companies’ strategic
objectives
Gender diversity Labour laws Community Engagement
Enhance Contribution
to Society
• In supervisory positions • Child labour • Training institutes • Board oversight is established for
• In management positions • Forced labour • Social Investments managing sustainability agenda and review
Reduce GHG
GHG emissions Air emissions Operational Efficiency performance across sustainability metrics
• Net carbon footprint • Total VOCs emitted • Energy intensity
Emissions • Shift towards independent audits to assess
• Direct total GHGs • Total SO2 emissions • Flaring reduction
Energy efficiency New Energy Business

their sustainability performance
Enable Energy
• Total energy consumption • New investments
Transition • Increase pressure from shareholders to link
• Mfg. Energy Index • …
executive pay and incentives to
Be a Role Model in Fines and settlements Board Oversight sustainability targets (e.g., Shell on carbon
Corporate Governance • No. of fines paid during the year • Sustainability Committees set up footprint)
and Transparency • Amount of settlements • Sustainability officers appointed

Standards & Reporting
ESG reporting frameworks have evolved over time, and now

focus on initiatives and principles required by investors
Timeline of major reporting frameworks
2000 2005 2007 2011 2014
1997 2002 2015
(initially launched in 1994)
• Earlier reporting frameworks were aimed to communicate ESG impact to a wide range of stakeholders, however, reporting frameworks launched
post 2010 are targeted towards investors community
• Also, earlier frameworks focused on passive reporting of information, but recent frameworks are action oriented and target not only disclosures but
also details on clean energy investments, decarbonization strategy, fossil fuel divestment details etc.
Reporting guidelines/ Frameworks Initiatives/ Principles

Many oil & gas companies participate in industry bodies that

establish sustainability standards and reporting
Oil & Gas Industry Sustainability Bodies (not exhaustive)
Organization Carbon Disclosure Project (CDP) Oil and Gas Climate Initiative (OGCI) IPIECA
[IMAGE]
Outputs
“We want to see a thriving economy that works for “OGCI Climate Investments strives to reduce
“IPIECA’s vision is an oil and gas industry that
Objective people and planet in the long term. We focus methane leakage across the full methane value
successfully improves its operations and products
investors, companies and cities on taking action to chain. We invest in innovative startups in the
to meet society's expectations for environmental
build a truly sustainable economy by measuring energy and industrial sectors and use our OGCI
and social performance”
and understanding their environmental impact” network to help them achieve commercial success”
Members
(not exhaustive)

Internal use only
Whilst there are alternatives, reporting against UN Sustainable

Development Goals is becoming the norm in oil & gas
United Nations Sustainable Development Goals
Approaches to Sustainability Reporting
LEVEL 0 LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4
Little / no disclosure of Reporting of select metrics Reporting of ESG metrics Mapping of a range of pre- Proactive target setting and
sustainability metric or with limited reference to according to non-SDG existing ESG metrics to SDG enhanced disclosure on
performance external standards external standards framework comprehensive list of SDGs
Increasing Maturity
UNSDG Most Commonly Reported Goals for O&G companies

Top 3 Goals
25 24
22
19 19
15 15

Strategy& Sources: UNDP, UNDP Mapping Oil and Gas to SDGA: An Atlas, Strategy& analysis 47
Internal use only
There are multiple ways in which companies are adopting and

contributing towards UN SDGs
Level 3 and Level 4 of contributing towards UN SDGs
Level 3 reporting Level 4 reporting
ExxonMobil Shell
List of selected UN SDGs are mapped to existing initiatives, ExxonMobil has Each UN SDG is listed and linked with various initiatives, 3 selected SDGs are
focus on 8 UNSDGs as mentioned below in focus for Shell i.e. UNSDG 7, UNSDG 8, UNSDG 13
UN SDGs
Initiative UN SDG 7 – Affordable and Clean Energy
Environmental*
Env. management system • Growing New Energies business with

investments in lower-carbon technologies,
Spill Performance including hydrogen, electric vehicle charging,
solar and wind power
Waste Management
• Working to improve the energy efficiency of
Community Investments our facilities and offering customer products
that can help boost their efficiency
Social*
Workplace Security • Setting and ambition to provide a reliable

Healthy & engaged electricity supply to 100Mn people, primarily in
workforce Africa and Asia, by 2030 and investing in
commercial business to progress this
Governance*
Board Leadership
• Collaborating with partners to implement self-
Engaging with governments sustaining access to energy projects that help
unlock local markets for energy products and
Ethics and Integrity services
Sustainability Strategies for Oil & Gas * Non-Exhaustive list of initiatives across environmental, social and governance factors 11 June 2020
Strategy& Sources: Company websites, Strategy& analysis 48
Internal use only
Contents
Executive Summary

Strategy& 49
Internal use only
Holistic oil & gas sustainability strategies include elements
required for compliance along with strategic choices
Elements of a Sustainability Strategy for Oil & Gas
Holistic oil & gas sustainability strategies comprise 4

main elements:
1• Vision and Objectives that express the intent of the
1 strategy and the relevance to broader company
objectives
2• Elements related to Health and Safety,
Environmental Impact and Contribution to
Society that demonstrate how the company will
comply with policies and regulations, incorporate
2 3 best-practices and align with stakeholders
3• Elements related to GHG Emissions and Low
Carbon Energy that include elements of
compliance, but also strategic choices for the
company in terms of positioning for the energy
transition
4 • Corporate Governance and Transparency to meet
4
regulatory requirements and proactively
communicate the company sustainability strategy
and performance

Sustainability visions typically include a view of the future, the
integration of core business, and meeting energy demand
Sustainability Vision of O&G Leaders
Sustainability Vision Key Themes and Take-Aways
• Though O&G leaders may have different approaches to sustainability
“Sustainability at Shell means providing more and cleaner energy
solutions in a responsible manner – in a way that balances short- and (e.g. committing to net zero vs not), there are key themes seen across
long-term interests, and that integrates economic, environmental and sustainability visions:
social considerations into decision-making” • Creating a better future – delivering short-term and long-.term
benefits to the world
“Enabling human progress in a sustainable manner requires reliable, • Integration into the core business – sustainability is not seen
affordable, and ever-cleaner energy to serve the world’s growing as an outlier, or a separate function, but an integrated piece of the
population and create a better future” core business
• Delivering against the world’s energy demand – integrating
sustainability as a key principle to the business while remaining
“To be a global energy company, creating value in a sustainable manner the customer’s energy provider of choice
through innovation, efficiency, and respect for the progress of society”
• The sustainability vision typically describes what sustainability means to
the organization, how it relates to the business, what the key areas of
“ExxonMobil is committed to producing the energy and chemical impact are, and reflects the company’s core values
products that are essential to modern life, economic development
and improved standards of living. In doing this, we are also committed
to protecting our people, the environment and the well-being of
communities where we operate”
“A sustainable approach to business is inherent in our purpose –
reimagining energy for people and our planet. We want to help the
world reach net zero and improve people’s lives and can do this by
being a safe, focused, responsible, well-governed and transparent
organization”
Achieving top HSES performance means complementing
adherence to regulations with a focus on culture & behavior…
HSE Performance Improvement Curve
HSES Foundation
Adequate technology and standards and management systems However, improving

are key for an adequate HSES performance culture would also lead to
improvements in the
 Facilities - Facility layout, workstation configuration etc. technology, standards and
 Working environment –Noise, lighting, housekeeping etc. management systems due
 Equipment – Displays, ease of use, warning system etc.
to increased workforce
 Safety – signs, PPE etc.
involvement
Incident Rate
Technology  Integrated HSE-MS

and Standards  Training
 Reporting
 Investigation
 Consequence management
Management
Systems
 Personal accountability
 Shared purpose & belief
 Aligned speech and actions
HSES
Culture
Time
HSES driven by HSES driven by management HSES is integrated into every

operations systems aspect of the business

Internal use only
…which requires special focus on the way in which applied in
practice in the business
HSE Operating Model
Typical Industry Status  Articulated vision /mission
and associated objectives
and KPIs, strategy, and plans
through which the objectives
are delivered
Strategic
Direction
 Formal HSE Management
Systems, processes and
standards in place to achieve
the objectives
Processes,
systems, standards × Unclear organization
structure, governance
framework, and
× Limited resources & accountabilities between HSE
capabilities available in the Function and Business Lines
Business Line and in the HSE
Function to execute on Resources Organisational
accountabilities & capability model
× No standardized model of
how the accountabilities
Business
should be discharged Line
through day-to-day
operations
“HSE Culture”
53
Strategy& Source: Strategy& analysis
Internal use only
Current focus on energy transition requires companies to
make strategic choices on sustainability positioning…
Strategic Choices for Oil & Gas Sustainability Strategies
Reduction in Scope 1,2 Intensity Net Zero in Scope 1,2,3

Commitments &
Targets NOCs
Primary Focus on Oil & Gas Transition to Low Carbon Energy

Low Carbon
Business Models NOCs
Investment Financially Optimized portfolio Sustainability Optimized Portfolio

Screening &
Portfolio
Focus on Core Oil & Gas Operations Transition Technology / Energy Ventures
Investment in
Technology NOCs
Governance & Embedded with Existing Structures Explicit Sustainability Structures

Performance
Management NOCs
Minimum Required by Law Proactive, Transparent & Structured

Standards &
Reporting NOCs

…evaluate multiple levers with different required investment
and sustainability impact…
Achieving Sustainability Targets
Sustainability Themes and Initiatives Sustainability Initiatives Impact vs. Investment (Illustrative)
Hydrogen
• Reduce Flaring • Reduce Fugitive
Reduce Emissions • Reduce Venting Emissions Power-to-X
Wind
Solar
Manage Carbon • Implement CCS scale CO2 EOR
Footprint • Deploy commercial …
Bio Fuels
Product Standards
• Manage waste operations Reforestation Offset
Reduce Waste • Enable circular • Optimize water usage Decommision Oil Production Product Recyclability CCUS
Shift to Gas
Contribute to Carbon • Contribute to carbon • Develop carbon Process Heating Network
Water Exchange
Impact
Offset funds marketplace
District Heat
Recyclable Materials
Rebalance O&G • Build gas portfolio Heat Pumps
Portfolio •… Co2 EOR
Manage Waste Biomass Cogeneration
Build New Energy • Develop new energy Wind, Nuclear etc. Digital Processes
Business portfolio – Solar, Renewable Power Reduce Venting
Circularity Principles Production Efficiency
Design Sustainable • Develop bio fuel for • Adopt sustainable Heat Recovery Supply Chain Sustainability
Products mobility feedstocks Eliminate Routine Flaring Capture Fugitive Emissions
Scope 1/2
• Provide financial • Encourage New Business Models
Manage Demand Side incentives behavioral changes
Scope 3
Investment
55
…that have to be considered in the context of the overall
balancing of sustainability and profitability objectives
Achieving a Sustainability and Profitability Balance
Typical Questions in Developing a Sustainability Strategy
• What are the expectations of stakeholders in balancing sustainability and

Deliver profitability?
Shareholder • What are essential activities required to retain licence to operate in HS&E
Returns
and contribution to society?
Sustainable & • How can HSE&S performance be further improved?
Profitable
• What is the sustainability vision for the company in terms of Net Zero vs.
Improve Manage continuous improvement in emission intensity?
Oil & Gas Energy
Sustainability Transition • What are the investments required to achieve the greatest impact in terms
of emissions reductions?
• Sustainability has emerged as a topic of critical importance for oil
• What is the optimal sustainability governance structure for the company?
and gas companies
• What reporting standards and frameworks should the company employ?
• As important as sustainability is for stakeholders, companies also need
to remain profitable and attractive for investors • What new technologies should be piloted and adopted?
• Successful sustainability strategies require a conscious choice on the • Which new business models should the company consider (if any)?
sustainability positioning that best reflects key stakeholder • What are the core competencies that can be leveraged to expand into new
expectations, and delivers an optimum sustainability impact for any business models?
given investment
• How should sustainability vision, targets and performance be communicated
• This impact may be expressed in monetary terms or in broader terms to stakeholders?
around importance for continuity of the business

Contents
Executive Summary

Company Summary - Shell
Shell’s strategic ambition
• To thrive in the energy transition by responding to society’s desire for more and cleaner, convenient and competitive energy;
• To provide a world-class investment case. This involves growing free cash flow and increasing returns, all built upon a strong financial framework and resilient portfolio;
• To sustain a strong societal license to operate and make a positive contribution to society through our activities.
GHG Emissions, 2010 – 2019, Mt Co2 Equivalent Sustainability Strategy Assessment
755 • Aims to reduce its emissions to net zero by 2050, with 65%
Commitments
scope 3 commitment dependent on customers mitigating
683 686 & Targets
681 664 681 emissions
654 661 656
641
Low Carbon • Established new Shell energy venture with focus to increase
Business investments in low carbon energy renewables, biofuels etc.
Net Zero Models • Invests in CCUS, power generation & Storage and EV charging
Scope 1, 2
65% Scope 3 Investment • Shell has committed to assess the resilience of proposed
374 Screening & projects against GHG emissions
Portfolio • No information on carbon pricing
• Spent $986 million on R&D in 2018

Technology
• Shell TechWorks brings proven technologies from other
Investment
industries into the oil and gas sector
Governance & • Has BoDs’ dedicated Safety, Environment and Sustainability
Performance Committee to govern issues related to sustainability
Management • Embedded sustainability in HSSE and EMC
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2050 • Reports against IPIECA, Global O&G Ass. for advancing
Standards &
environmental & social performance, GRI, TFCD guidelines
Scope 1 Scope 2 Scope 3 Total Reporting
• Focuses on selected1 3 UN SDGs
Low Score High Score
Sustainability Strategies for Oil & Gas 1) - Affordable, reliable, sustainable and modern energy, Decent work and economic growth and Climate action 11 June 2020
Internal use only
Company Summary - BP
BP’s strategic ambition
To become a net zero company by 2050 or sooner, and help the world get to net zero:
• Five aims for BP to get net zero in operations, in upstream production, through halving carbon intensity, reducing methane emissions and investing in non O&G business
• Five aims for the world to get net zero through advocating, employee incentives, aligning associations, transparent leader and clean cities
58 58 Commitments • Plans to reduce emissions to net zero by 2050; aims to reduce

57
54 54 & Targets its scope 1 and 2 emissions by 3.5 Mt CO2-eq by 2025
Low Carbon • Established new BP ventures portfolio with focus to increase

Business investments in low carbon energy
Models • Invests in CCUS, lubes and petrochems
Investment • BP believes that well-designed carbon pricing provides the right
Screening & incentives – energy producers and consumers – to reduce
Portfolio emission
• Plans to invest ~3% of total CAPEX ($17B) in low-carbon tech

Technology
• Launched ‘Advancing Low Carbon’ accreditation to identify lower
Investment
carbon opportunities and made 76 accreditations in 2019.
Net Zero by Governance & • Dedicated safety, ethics and environment assurance executive
2050 Performance committee to govern issues related to sustainability
0 Management • Embedded sustainability function in HSSE
2015 2016 2017 2018 2019 2050 • Reports against IPIECA, SASB, GRI, TFCD guidelines
Standards &
• Focuses on selected1 3 UN SDGs for direct reporting but
Scope 1 Scope 2 Total Reporting
supports 7 more UN SDGs
Sustainability Strategies for Oil & Gas 1) Climate action, Decent work and economic growth and Affordable and clean energy 11 June 2020
Internal use only
Company Summary - Equinor
Equinor’s vision and purpose
• Vision: Shaping the future of energy with three sustainability priorities – responsible operations, creating a low-carbon business advantage, and creating shared value
• Purpose: To turn natural resources into energy for people and progress for society. Equinor’s strategy is to always safe, high value and low carbon positions to deliver long-
term value in a low carbon future
270 • Plans to reduce its overall emissions to by 50% by 2050;

268 265 Commitments
258 257 emissions from its domestic operations by 40% by 2030, and to
& Targets
near-zero by 2050
Low Carbon • Focus on enhancing traditional oil and gas operations and
Business deploying CCUs and dedicated BU which invests in solar and
50% reduction
Models wind solutions
by 2050
Investment • Collaborating with govt. & organization to support carbon pricing
132 Screening & • Committed to not explore heavy oil assets, therefore will not
Portfolio acquire licenses or assets with explicit heavy oil prospects
• Plans to devote 15-20% of total CAPEX in new energy by 2030

Technology
• Exploring opportunities with Total and Shell in Norway to
Investment
transport and store CO2 1-2km below sea bed
Governance & • Leads the industry with dedicated BoDs’ safety, sustainability
Performance and ethics committee; Has Corporate Sustainability function
Management which reports into Global Strategy and Business Development
2015 2016 2017 2018 2019 2050 • Reports against IPIECA, Global O&G Ass. for advancing
Standards &
environmental & social performance, GRI, TFCD guidelines
• Focuses on selected1 3 UN SDGs
Sustainability Strategies for Oil & Gas 1) Climate action, Decent work and economic growth and Affordable and clean energy 11 June 2020
Internal use only
Company Summary - Total
Total’s vision and purpose
• To become the responsible energy major means by committing to providing tangible solutions
• To combat three key industry challenges: meeting the energy needs of a growing population, contributing to limit climate change and reinventing the customer
relationship
504 • Plans to net zero in Scope 1 and 2 2050 and net zero across all
Commitments
475 scope 1, 2, 3 Europe by 2050
464 458 & Targets
454 • 60% reduction in the average carbon intensity used worldwide
Low Carbon • Expand from production to sales to customers & energy storage
Business • Promote sustainable biofuels like hydrogenated vegetable oil &
Net Zero
Scope 1, 2
Models jet fuel
60% Scope 3
Investment • Implemented carbon pricing to encourage energy efficiency,
Screening & support low-carbon technology and develop carbon sinks to
240
Portfolio achieve carbon neutrality
• Invest $100mn a year in natural carbon sinks such as forests

Technology
and wetlands
Investment
• 10% of R&D budget dedicated to industrial deployment of CCUS
Governance & • Has BoDs’ entrusted Strategy and CSR Committee to govern
Performance issues related to sustainability
Management • Embedded sustainability mandate within Strategy and Innovation
2010 2015 2016 2017 2018 2050
Standards & • Reports against IPIECA, VPSHR, GRI, TFCD guidelines
Scope 1 Scope 2 Scope 3 Total Reporting • Focuses on selected1 3 UN SDGs
Sustainability Strategies for Oil & Gas 1) Affordable, reliable, sustainable and modern energy, Decent work and economic growth and Climate action 11 June 2020
Internal use only
Company Summary - Chevron
Chevron’s vision and purpose
• To be the global energy company most admired for its people, partnership and performance. We enable human progress by developing the energy that improves lives and
powers the world forward
• To make the world’s energy ever-cleaner and our environmental footprint smaller
463 • Aims to reduce the intensity of greenhouse gas emissions from

454 Commitments
435 its oil production by 5% to 10% over a seven-year period ending
424 430 430 & Targets
2023
Low Carbon • Set up $100 million Future Energy Investment Fund in 2018
Business • Invested in CCUS, distributing and selling biofuels, and
Models renewable power purchase agreements
Investment
Screening & • TBD
Portfolio
Technology • Invested $1.1bn in CCUS projects, which are expected to reduce

Investment GHG emissions by approximately 5mn MT/year
Governance & • Has entrusted Public Policy Committee to govern issues related
Performance to sustainability
Management • Embedded sustainability with strategy function
2014 2015 2016 2017 2018 2023 • Reports against IPIECA guidelines
Standards &
2%-15% • Contributes to all UN SDG with focus on delivering affordable
reduction in and clean energy goal
Scope 1, 2
Company Summary - ExxonMobil
ExxonMobil’s vision and purpose
• Committed to producing the energy and chemical products that are essential to modern life, economic development and improved standards of living
• In doing this, committed to protecting our people, the environment and the well-being of communities where we operate
128 126 127 15% reduction Commitments

124 122 125 123 124 • Plans to reduce scope 1,2 emissions by 15% by 2030
in Scope 1, 2
& Targets
105 • Investing in renewables & leveraging the use of gas

Low Carbon
Business • Developing advanced fuels, high performance vehicle lubricants
Models and plastics
Investment
• Active supporter of adopting carbon fee and returning revenues
Screening &
to citizens
Portfolio
• 250 millions dollars investment in the development of biofuels

Technology
from algae-based feedstocks
Investment
• Partnering with cloud providers and quantum computing co.
Governance & • Has entrusted BoD’s to oversee issues related to sustainability

Performance • Separated sustainability function with appointed VP of
Management sustainability reporting to CFO
2011 2012 2013 2014 2015 2016 2017 2018 2030 • Reports against IPIECA, Global O&G Ass. for advancing env. &
Standards &
social perf., Intl. Ass. of O&G Producers and API1 guidelines
Scope 1 Scope 2 Total Reporting
• Contributes to all UN SDG with focus on 8 selected2 UN SDGS
1) American Petroleum Institute
Sustainability Strategies for Oil & Gas 2) No poverty, Good health and well-being, Quality education, Gender equality, Affordable and clean energy, Decent work and economic growth, Responsible production and consumption and Climate action 11 June 2020
Internal use only
Company Summary - ENI
ENI’s mission
• We are an energy company and we are working to build a future where everyone can access energy resources efficiently and sustainably
• Our work is based on passion and innovation, on our unique strengths and skills, on the quality of our people and in recognizing that diversity across all aspects of our
operations and organization is something to be cherished.
• We believe in the value of long term partnerships with the countries and communities where we operate.
290 293 296 Commitments

289 Net zero
Scope 1, 2 • Plans to reduce scope 1,2 emissions to net zero by 2030
& Targets
264
252
Low Carbon
• Invests in renewables energy, biofuels, hydrogen, CCUS, power
Business
generation & Storage and EV charging
Models
Investment • Profitability of main investment projects is tested with a

Screening & sensitivity analysis on carbon pricing, both in the FID and
Portfolio subsequently in the biannual monitoring of projects
• Invested €197 million in scientific research and tech in 2018

Technology
• 13 new patents files of which are directly concerned with
Investment
developing technologies in the field of renewables
Governance & • Entrusted BoD’s sustainability and scenarios comm. and set up
Performance cross-cutting structure “Responsible and Sustainable Enterprise”
Management reporting to Chief Services & Stakeholder Relations Officer,
2014 2015 2016 2017 2018 2030
Standards & • Reports against IPIECA, GRI, TCFD guidelines
Scope 1 Scope 2 Scope 3 Total Reporting • Contributes to all UN SDG
Internal use only
Company Summary - Repsol
Repsol’s vision
• To be a global energy company, creating value in a sustainable manner through innovation, efficiency, and respect for the progress of society
• To envision the company, there are four guiding principle – value creation, respect, efficiency and anticipation
181 181 180 Commitments

173 • Plans to reduce scope 1,2 and 3 emissions to net zero by 2050
& Targets
139 Low Carbon

• Focus on low carbon power generation, on circular economy,
Business
high performance biofuels and green hydrogen
Models
Investment • Align with the Paris Agreement in each of its investments.

Screening & • Each major investment will be accompanied by a report from the
Portfolio Sustainability unit to ensure this alignment
• 40% of total R&D projects on tech initiatives focusing on

Technology
reducing GHG emissions, new materials and green chemicals,
Investment
and the generation and distribution of renewable electricity
Net zero
Governance & • Entrusted BoD’s sustainability committee with supervisory,
Performance informative, advisory, and proposal functions in the
0 Management environmental, social, and safety spheres
2014 2015 2016 2017 2018 2050
Standards & • Reports against IPIECA, GRI, TCFD guidelines
Scope 1 Scope 2 Scope 3 Total Reporting • Contributes to all UN SDG
Thank you
strategyand.pwc.com
© 2020 PwC. All rights reserved.
PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see pwc.com/structure for further details.
Disclaimer: This content is general information purposes only, and should not be used as a substitute for consultation with professional advisors.
Internal use only
Authors
[PwC PERSONNEL 1] [PwC PERSONNEL 3]
Partner at Strategy& Senior Executive Advisor at Strategy& Germany
and a member of the firm’s Energy, Utilities and a member of the firm’s Energy, Utilities
and Resources practice in the Middle East and Resources practice in EMEA
[XXX] [XXX]
[EMAIL] [EMAIL]
[PwC PERSONNEL 2] [PwC PERSONNEL 4]

Partner at Strategy& Partner at Strategy&
and the leader of the firm’s Energy, Utilities and the leader of the firm’s Energy, Utilities
and Resources practice in the Middle East and Resources practice in EMEA
[XXX] [XXX]
[EMAIL] [EMAIL]
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Appendix : Company Summaries

Sustainability Strategies for Oil & Gas 11 June 2020

Sustainability Strategies for Oil & Gas 11 June 2020

Element From… To…

Objective • Regulatory license to operate • Social license to operate

• Efficient HSSE performance • Reduce emission to address climate change

• Regulator, employee and local community

Reporting • Voluntary and ad-hoc • Standard and regular practice

• Clear board oversight

Sustainability Strategies for Oil & Gas 11 June 2020

Commitments & • Commitments to long-term sustainability objectives, especially on decarbonization

Investment • Evaluation of investment opportunities including sensitivities on carbon pricing

Investment in • Investment in digital and other technologies to reduce / mitigate emissions

Standards & • Adoption of industry-wide standards and participation in industry initiatives

Sustainability Strategies for Oil & Gas 11 June 2020

Commitment Towards New Energy

Sustainability Strategies for Oil & Gas 11 June 2020

Holistic oil & gas sustainability strategies comprise 4

Sustainability Strategies for Oil & Gas 11 June 2020

Reduction in Scope 1,2 Intensity Net Zero in Scope 1,2,3

Primary Focus on Oil & Gas Transition to Low Carbon Energy

Investment Financially Optimized portfolio Sustainability Optimized Portfolio

Governance & Embedded with Existing Structures Explicit Sustainability Structures

Minimum Required by Law Proactive, Transparent & Structured

Sustainability Strategies for Oil & Gas 11 June 2020

• What are the expectations of stakeholders in balancing sustainability and

Sustainability Strategies for Oil & Gas 11 June 2020

Appendix : Company Summaries

Sustainability Strategies for Oil & Gas 11 June 2020

• Oil & gas companies typically address direct Scope 1

Sustainability Strategies for Oil & Gas 11 June 2020

Internal use only

Sustainability Strategies for Oil & Gas 11 June 2020

Government policy is evolving in response to the 2015 UN

• Securing commitments from the main emitters of more ambitious national

Carbon pricing is increasingly used as a tool by Governments

• 96 of 185 parties to the Paris Agreement plan to implement

Emissions Covered (MtCO2e)

Public and shareholder activism are creating pressure on oil &

at O&G companies 300 Royal Dutch Shell

2015 2016 2017 2018

Sustainability Strategies for Oil & Gas 11 June 2020

Major institutional and private investors are changing

Green Buildings Green Energy Green Transport • Deutsche Bank

Growth in renewable energy sources, and improving

Element From… To…

Objective • Regulatory license to operate • Social license to operate

• Efficient HSSE performance • Reduce emission to address climate change

• Regulator, employee and local community

Reporting • Voluntary and ad-hoc • Standard and regular practice

• Clear board oversight

Sustainability Strategies for Oil & Gas 11 June 2020

Vision and Objectives

Health and Environmental Contribution to GHG Low Carbon

Corporate Governance and Transparency