Ecopetrol S A : Stakeholder Capitalism Metrics (SCM) Index

Stakeholder Capitalism Metrics (SCM) Index

A World Economic Forum (WEF) and International Business Council (IBC) led initiative.

Starting January 2021, Ecopetrol will report using the WEF/IBC Stakeholder Capitalism Metrics. which were released September 2020. Ecopetrol is currently working on strengthening its information and reporting mechanisms to fully comply moving forward with these set metrics.

2020 Integrated Sustainable Management Report

20F

THEME	#		SCM METRICS AND DISCLOSURE		SCM sequence	Where to find
PRINCIPLES OF GOVERNANCE- Core
Governing	1		Setting purpose				Ch 1, Pg. 24.
purpose			The company's stated purpose, as the expression of the means by which a
			business proposes solutions to economic, environmental and social issues.		WEF 1
			Corporate purpose should create value for all stakeholders, including
			shareholders.
Quality of	2		Governance body composition					Ch 1, Pgs. 29, 35, 39
governing			Composition of the highest governance body and its committees by:					and 44.
body			competencies relating to economic, environmental, and social topics;
			executive or non-executive; independence; tenure on the governance body;			WEF 2
			number of each individual's other significant positions and commitments, and
			the nature of the commitments; gender; membership of under-represented
			social groups; stakeholder representation.
Stakeholder	3		Material issues impacting stakeholders				Ch 1, Pg. 25.
engagement			A list of the topics that are material to key stakeholders and the company,		WEF 3
			how the topics were identified and how the stakeholders were engaged.
Ethical	4		Anti-corruption					Ch 1, Pgs. 53, 54, 55, 57
behaviour			1. Total percentage of governance body members, employees and business					and 59.
			partners who have received training on the organization's anti-corruption
			policies and procedures, broken down by region.
			a) Total number and nature of incidents of corruption confirmed during			WEF 4
			the current year but related to previous years; and
			b) Total number and nature of incidents of corruption confirmed during
			the current year, related to this year.
			2. Discussion of initiatives and stakeholder engagement to improve the
			broader operating environment and culture, in order to combat corruption.

1

Ethical	5	Protected ethics advice and reporting mechanismsA description of				Ch. 1, Pgs. 52 and 56.
behaviour			internal and external mechanisms for:1. Seeking advice about ethical and
			lawful behaviour and organizational integrity; and2. Reporting concerns		WEF 5
			about unethical or unlawful behaviour and lack of organizational integrity.
Risk and	6		Integrating risk and opportunity into business process				Ch. 1, Pg. 62.
opportunity			Company risk factor and opportunity disclosures that clearly identify the
oversight			principal material risks and opportunities facing the company specifically (as
			opposed to generic sector risks), the company appetite in respect of these		WEF 6
			risks, how these risks and opportunities have moved over time and the
			response to those changes. These opportunities and risks should integrate
			material economic, environmental and social issues, including climate change
			and data stewardship.

THEME	#		SCM METRICS AND DISCLOSURE		SCM sequence Where to find
PRINCIPLES OF GOVERNANCE- Expanded
Governing	1E		Purpose-led management				Ch 0, Pg. 12; Ch 1, Pg.
purpose			How the company's stated purpose is embedded in company strategies,		WEF 1E	24.
			policies and goals.
Quality of	2E		Progress against strategic milestones				NA
governing			Disclosure of the material strategic economic, environmental and social
body			milestones expected to be achieved in the following year, such milestones
			achieved from the previous year, and how those milestones are expected to
			or have contributed to long-term value.		WEF 2E

2

Quality of	3E	Remuneration				Ch 4, Pg. 146.
governing			1. How performance criteria in the remuneration policies relate to the
body			highest governance body's and senior executives' objectives for economic,
			environmental, and social topics, as connected to the company's stated
			purpose, strategy and long-term value.
			2. Remuneration policies for the highest governance body and senior
			executives for the following types of remuneration:
			- Fixed pay and variable pay, including performance-based		WEF 3E
			pay, equity-based pay, bonuses and deferred or vested
			shares
			- Sign-on bonuses or recruitment incentive payments
			- Termination payments
			- Clawbacks
			- Retirement benefits, including the difference between benefit
			schemes and contribution rates for the highest governance
			body, senior executives and all other employees
Ethical	4E		Alignment of strategy and policies to lobbying					Ch 1, Pg. 69.
behaviour			The significant issues that are the focus of the company's participation in
			public policy development and lobbying; the company's strategy relevant to			WEF 4E
			these areas of focus; and any differences between its lobbying positions and
			its purpose, stated policies, goals or other public positions.
Ethical	5E	Monetary losses from unethical behaviour				Ch 1, Pg. 57.
behaviour			Total amount of monetary losses as a result of legal proceedings associated
			with fraud, insider trading, anti-trust,anti-competitive behaviour, market		WEF 5E
			manipulation, malpractice or violations of other related industry laws or
			regulations.
Risk and	6E		Economic, environmental, and social topics in capital allocation					Ch 1, Pg. 41; Ch 2, Pg.
opportunity			framework			74.
oversight			How the highest governance body considers economic, environmental and			WEF 6E
			social issues when overseeing major capital allocation decisions, such as
			expenditures, acquisitions and divestments.

3

THEME	#			SCM METRICS AND DISCLOSURE		SCM sequence	Where to find
PLANET- Core
Climate					Greenhouse gas (GHG) emissions				Ch. 5, Pg. 223.
Change					For all relevant greenhouse gases (e.g. carbon dioxide, methane, nitrous
					oxide, F-gases etc.), report in metric tonnes of carbon dioxide equivalent
		7			(tCO2e) GHG Protocol Scope 1 and Scope 2		WEF 7
					emissions.
					Estimate and report material upstream and downstream (GHG Protocol
					Scope 3) emissions where appropriate.
Climate					TCFD implementation					Ch. 5, Pgs. 204, 222,
Change					Fully implement the recommendations of the Task Force on Climate-related					and 234.
					Financial Disclosures (TCFD). If necessary, disclose a timeline of at most
		8			three years for full implementation. Disclose whether you have set, or have			WEF 8
				committed to set, GHG emissions targets that are in line with the goals of
					the Paris Agreement - to limit global warming to well below 2°C above
					preindustrial levels and pursue efforts to limit warming to 1.5°C - and to
					achieve net-zero emissions before 2050.
Nature loss					Land use and ecological sensitivity				Ch. 5, Pg. 251.
		9			Report the number and area (in hectares) of sites owned, leased or managed		WEF 9
					in or adjacent to protected areas and/or key biodiversity areas (KBA).
Freshwater										Ch. 5, Pgs. 210 and 217.
availability
					Water consumption and withdrawal in water-stressed areas
					Report for operations where material: megaliters of water withdrawn,
		10			megaliters of water consumed and the percentage of each in regions with			WEF 10
				high or extremely high baseline water stress, according to WRI Aqueduct
					water risk atlas tool. Estimate and report the same information for the full
					value chain (upstream and downstream) where appropriate.

4

THEME

#

SCM METRICS AND DISCLOSURE

SCM sequence

Where to find

PLANET - Expanded

Climate

Paris-aligned GHG emissions targets

Change

Define and report progress against time-boundscience-based GHG

emissions targets that are in line with the goals of the Paris Agreement - to

limit global warming to well below 2°C above pre-industrial levels and

pursue efforts to limit warming to 1.5°C. This should include defining a date

7E

before 2050 by which you will achieve net-zero greenhouse gas emissions,

WEF 7E

Ch 5, Pgs. 223 and 228.

and interim reduction targets based on the methodologies provided by the

Science Based Targets initiative, if applicable.

If an alternative approach is taken, disclose the methodology used to

calculate the targets and the basis on which they deliver on the goals of the

Paris Agreement.

Climate

Change

Impact of GHG emissions

8E

Report wherever material along the value chain (GHG Protocol Scope 1, 2 &

WEF 8E

NA

3) the valued impact of greenhouse gas emissions. Disclose the estimate of

the societal cost of carbon used and the source or basis for this estimate.

Nature loss

Land use and ecological sensitivity

Report for operations (if applicable) and full supply chain (if material):

- Area of land used for the production of basic plant, animal or mineral

commodities (e.g. the area of land used for forestry, agriculture or mining

activities).

- Year-on-year change in the area of land used for the production of basic

plant, animal or mineral commodities.

Note: Supply-chain figures can initially be estimated where necessary

9E

based on the mass of each commodity used and the average mass

WEF 9E

NA

produced per unit of land in different sourcing locations.

- Percentage of land area in point 1 above or of total plant, animal and

mineral commodity inputs by mass or cost, covered by a sustainability

certification standard or formalized sustainable management program.

Disclose the certification standards or description of sustainable

management programs along with the percentage of total land area, mass

or cost covered by each certification standard/program.

Nature loss

Impact of land use and conversion

10E

Report wherever material along the value chain: the valued impact of use

WEF 10E

NA

of land and conversion of ecosystems.

5