ConocoPhillips : 2021 ​Sustainability Report

Sustainability Report 2021

Contents

Chairman and CEO Message	2
Board Message	4
Integrating Sustainability	6
Sustainable Development
Governance	7
Managing Sustainable
Development Risks	13
Business Ethics	16
Supply Chain Sustainability	17
Key Stakeholders	21
About Our Reporting	22

Climate	24
Governance Framework	26
Strategy	30
Risk Management	52
Performance Metrics and Targets	56
External Collaboration and
Engagement	74
Public Policy Engagement	76

Water	88
Governance and Strategy	89
Risk Management	90
Performance Metrics	94
External Collaboration	97

Biodiversity	100
Governance and Strategy	101
Risk Management	102
Proactive Conservation	108
Performance Metrics	110
External Collaboration	111

Social	118
Creating Shared Value	119
Working with Communities	121
Global Giving	126
Human Rights	130

Valuing Our People	136
A Compelling Culture	137
Attraction and Retention	141
Employee Engagement and
Development	143
Compensation, Benefits
and Well-being	146

Safety, Health and Security	148
Safety	149
Emergency Preparedness	156
Occupational Health and
Industrial Hygiene	157
Security and Cybersecurity	158
Performance by Year	160
Performance by Country	166
AXPC ESG Metrics Template	168
API Template for GHG Reporting	170
Data Quality and Assurance	172
Ratings and Recognition	174

S P O T L I G H T S

Optimizing Operations

to Reduce Emissions in

Canada's Oil Sands

82

84

		The Net-Zero
		Roadmap:
	112	Operationalizing
	our Ambition
Use in the		114
Smart Water
Permian Basin
98
	Restoring Burrowing	Collaborating
Monitoring Caribou on	with the International
Owl Habitat in the	Crane Foundation
Alaska's North Slope	Permian Basin	in China
		Fostering	134
		Inclusion in
		Australia

132

116 Supporting Safer

Communities in the

Permian Basin

Chairman and CEO Message

A Message from our Chairman and CEO

Throughout 2021, a year of challenge and transformation, our sustainable development (SD) priorities remained a foundational element of our long-term value proposition. Environmental, social and governance (ESG) performance, including climate risk management, remained a strong focus of our ongoing engagements with a wide range of external stakeholders including the financial sector, policymakers and residents in the areas in which we operate.

ConocoPhillips concluded 2021 with an enhanced portfolio after completing two transformative acquisitions. We successfully integrated Concho Resources and Shell's Permian assets into the business, while navigating one of the most challenging eras in industry history, one marked by a global pandemic and accompanying economic and energy demand downturns. As the world economy recovered, we continued operating safely, addressed our SD priorities and advanced our climate risk plans and actions.

This performance demonstrated that our business model

• focused on peer-leading distributions, balance sheet strength, disciplined investment and ESG leadership - positions us to adapt and compete across business cycles, geopolitical events and the evolving energy transition.

Meeting the central aim of the Paris Agreement to respond to the climate challenge is a worldwide imperative for which governments and companies alike have adopted net-zero ambitions. We intend to play a meaningful role in this vital effort by fulfilling our Triple Mandate to responsibly meet energy transition pathway demand, deliver competitive returns on and of capital and achieve our net-zero operational emissions ambition. This mandate represents our commitment to create long-term value while enhancing climate protection and accelerating our contribution to the energy transition.

We've developed and published a detailed Plan for the Net-ZeroEnergy Transition that describes how we will manage the transition's associated risks and emerging opportunities. Under this plan, we intensified our efforts to reduce our Scope 1 and 2 emissions, with an ambition to become net-zero by 2050. Steps taken include:

• Increasing our previously announced operational GHG emissions intensity reduction target from 35-45% to 40-50% by 2030 on a gross operated basis.
• Broadening this goal to include non-operated net equity investments.
• Setting a further 10% reduction target for methane emissions intensity by 2025 from our 2019 baseline, building on the 65% reduction achieved since 2015.
• Aiming for zero routine flaring by 2025, five years earlier than the World Bank's goal.
• Advocating for a U.S. carbon price that would directly reduce consumer energy demand and thus end-use (Scope 3) emissions.
• Expanding our scenario planning to include multiple alternative energy transition pathways that test our strategy's resilience to climate-related risk.
• Incorporating into our capital allocation process a fully burdened cost of supply, including cost of carbon.
• Refocusing our portfolio on assets with the low cost of supply and low emissions intensity that will be essential in meeting energy transition pathway demand.

Our vital role in the energy transition will also include capturing potential business value through a recently formed Low Carbon Technologies organization. This team is tasked with developing a companywide Net-Zero Roadmap for Scope 1 and 2 emissions, understanding the new energies landscape and prioritizing possible future investments in low

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Chairman and CEO Message

carbon energy solutions. Initially identified opportunities include carbon capture and storage and hydrogen production and use.

This year's report also highlights environmental stewardship efforts of our business units. Our water management achievements included using more than 54% recycled produced water as source water in the Permian Basin and reducing freshwater withdrawals by 25% at APLNG in Australia. Our biodiversity management efforts in our Lower 48 business unit included maintaining voluntary conservation agreements on more than 500,000 acres in New Mexico, Oklahoma and Texas, and the creation of a biodiversity mapping tool to inform stakeholders of our development strategies. We strengthened community relationships, and enhanced community sustainability by utilizing local service and supply providers.

Our ESG leadership efforts include constructive, meaningful dialogue that enhances our understanding of stakeholder priorities and concerns and enables us to collaboratively address them. ConocoPhillips remains committed to engaging with our stakeholders as expectations rise and challenges continue. We intend to meet our SD priorities and respond effectively to evolving risks and opportunities that arise throughout the energy transition.

Ryan Lance

Chairman and Chief Executive Officer

June 2022

ConocoPhillips Sustainability Report 2021

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