The Executive Leadership Team (ELT) has final responsibility for developing corporate strategy, implementing sustainability efforts, and reporting company performance. The Executive Vice President (EVP), Strategy, Sustainability and Technology, who reports to the chief executive officer has overall accountability for corporate planning and development, including corporate strategy and long-range planning. The EVP, Strategy, Sustainability and Technology, also serves as the ELT’s climate change champion. In addition, the Sustainability and Public Policy Executive Council (SPEC), a sub-committee of the ELT, has global oversight of existing and emerging sustainable development (SD) and public policy risks and trends including SD and climate-related governance, strategic planning, risk management and public reporting. The SPEC consists of the following executives:

• EVP, Strategy, Sustainability and Technology
• EVP, Global Operations
• EVP, Lower 48
• SVP, Legal and General Counsel
• SVP, Government Affairs

Members of SPEC were briefed six times during the year on priority topics such as climate change, biodiversity, water, human rights and stakeholder engagement. The council’s scope includes:

• Reviewing risk trends and setting priorities.
• Reviewing and approving public policy and sustainability policies, positions, strategies, goals and actions on priority matters.
• Prioritizing resource allocation to external engagement and initiatives.
• Recommending which issues warrant additional executive leadership, full ELT review or additional Board engagement.
• Reviewing and endorsing agenda and meeting content for the Public Policy and Sustainability Committee (PPSC) of the Board.

The SPEC is also the governance link to the PPSC whose oversight covers SD matters including climate-related risks.

Linking Compensation to Sustainability Performance

Executive and employee compensation includes the annual Variable Cash Incentive Program (VCIP). This annual cash bonus is based upon company and individual performance on metrics that include health, safety and environmental performance as well as the achievement of milestones aligned with strategic sustainable development priorities including managing climate-related risk.

In 2021, employees were rewarded for successfully integrating Concho and demonstrating an annual run rate of $1 billion of sustainable cost and capital reductions that address aspects of our Triple Mandate. We demonstrated progress toward the Paris-aligned climate risk framework by improving GHG emissions reduction targets, executing 48 operational emissions reduction projects and evaluating low-carbon investments. We achieved top quartile ESG performance on company-prioritized rating frameworks, including MSCI, ISS ESG, Bloomberg ESG and DJSI rating frameworks relative to our performance peers. We increased internal and external transparency of DE&I metrics by disclosing the EEO-1 reports for the last three years, expanding the DE&I metrics on our corporate website and publishing our inaugural Human Capital Management report. Employees exhibited strong collaboration integrating acquired assets into our business’ HSE systems and processes, completed multiple turnarounds without serious incidents, and remain a leader among our peers on personnel safety performance with zero fatalities in 2021.

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