ConocoPhillips : Managing Climate-Related Risks 2022

Building a

Resilient Strategy

for the Energy Transition

Managing Climate-Related Risks 2022

Contents	1
Contents
Building a Resilient Strategy
for the Energy Transition	2
Governance Framework	3
Board Oversight	3
Executive Management	4
Organizational Management	6
Climate-Linked Compensation	8
Key Processes	9
Strategy	10
Plan for the Net-Zero
Energy Transition	10
Scenario Analysis	14
Near-, Medium- and Long-Term Risks	20
Risk Response	22
Addressing Climate-Related Risks
and Opportunities	22
Contributing to the Energy Transition	32
Risk Management	36
Assessing Climate-Related Risks	36
Managing Climate-Related Risks	38
Integrating Climate-Related Risks
into ERM	39
SD Risk Management Process	39

Performance Metrics
and Targets	40
Emissions Reduction Targets and
Performance	42
Scope 1 and 2 Emissions
Reduction Activities	48
Addressing Scope 3 Emissions	57
Additional Climate-Linked
Performance Areas	59
External Collaboration
and Engagement	62
Public Policy Engagement	65
History of Engagement	70
Association Engagement	72

Building a Resilient Strategy for the Energy Transition

Managing Climate-Related Risks

In a world aiming for net-zero emissions, we have a framework that consists of the governance, strategic capability, risk management processes and disclosure to demonstrate resilience across a range of transition scenarios. Our current Climate Risk Strategy and actions for our oil and gas operations are aligned with the aims of the Paris Agreement while being responsive to shareholder interests for long-term value and competitive returns.

2022 PERFORMANCE HIGHLIGHTS

• Published a progress report on our Plan for the Net-Zero Energy Transition to describe key milestones achieved throughout 2022 as we advance our efforts to manage through the energy transition and address the associated risks and opportunities.
• Developed a new net-zero scenario modeling the collective global government and societal actions that would be required to align with limiting warming to
  1.5 degrees.
• Improved our Paris-aligned target framework with progress against our targets, including:
• • Strengthening our previously announced operational GHG emissions intensity reduction target to 50-60% by 2030 on both a gross operated and net equity basis from a 2016 baseline.
  • Achieving near-zero methane emissions intensity by 2030. This goal was set in response to meeting our 10% methane emissions intensity reduction target four years early, from a 2019 baseline.
  • Achieving a target of zero routine flaring by 2025, five years sooner than the World Bank Initiative's goal of 2030.

• Spent approximately $150 million on Scope 1 and 2 emissions reductions and low-carbon opportunities.
• Joined the Oil and Gas Methane Partnership (OGMP) 2.0 Initiative, a globally recognized initiative for methane emissions measurement and reporting.
• Compared to 2021, reduced our operational GHG emissions on both an intensity and absolute basis by 14%.
• Reduced both our methane intensity and flaring intensity (4% and 12% respectively) and decreased total flaring volumes by 13% compared to 2021. Routine flaring decreased 90% from 2021.
• Developed an implementation plan for our Scope 3 Supplier Emissions Strategy to address climate-related risks in our supply chain.
• Demonstrated active advocacy for an economy- wide U.S. carbon price that would directly address consumer demand for energy and end-use (Scope 3) emissions. Supported policy advocacy beyond carbon pricing to include other end-use emissions policy and regulatory action.
• Advanced several energy transition and low-carbon technologies efforts, including LNG and potential CCS and hydrogen projects.

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Governance Framework

Governance Framework

Our comprehensive climate-related risk governance framework extends from the Board of Directors through executive and senior management to the working levels in each of our business units (BUs).

Board Oversight

The ConocoPhillips Board of Directors oversees our position on climate change and related strategic planning and risk management policies and procedures, including those

for managing climate-related risks and opportunities. In particular, the board reviews:

• Sustainable development risk management processes.
• Enterprise risk management policy and output.
• Corporate strategy and Climate Risk Strategy.
• Energy transition scenarios and planning.
• GHG emissions intensity target and progress.
• Low Carbon Technologies plans.

The board delegates certain elements of climate oversight functions to one or more of the five standing committees:

• Executive
• Audit and Finance
• Human Resources and Compensation
• Directors' Affairs
• Public Policy and Sustainability

Each committee, other than the Executive Committee, is made up of independent directors and convenes at least quarterly. Issues considered by the committees are, as appropriate, regularly reported to the full board.

New electric compression packages were recently added to the Delaware West Central Facility 3 in the Permian Basin.

ConocoPhillips Sustainability Report 2022

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