Climate Change Resilience: A Framework for Decision Making
Craig May, Vice President, Upstream Capability, Chevron
Climate change is a growing area of interest for policymakers, investors, and other stakeholders – including the energy industry.
The company I work for, Chevron, also recognises the significance of climate change. Our new report, Climate Change Resilience: A Framework for Decision Making, explains Chevron’s governance, risk management processes, metrics, and strategic decision-making approach to risks – all within the context of climate change. The report’s findings align with recommendations issued by the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (TCFD).
Specifically, our report shows how our strong governance structure includes multiple avenues for the executive leadership and the Board of Directors to exercise its oversight responsibility with respect to climate change risks. It also explains how we integrate these risks into our risk management processes to allow them to be examined in connection with other broad-ranging risks affecting the company.
The report summarises our work to test the competitiveness of our current portfolio under multiple scenarios, including the International Energy Agency’s Sustainable Development Scenario. Additionally, it demonstrates how we are taking prudent, practical, and cost-effective action to 1) make our operations more energy efficient; 2) manage greenhouse emissions; 3) invest in, and test, new low-carbon technologies; and 4) reduce flaring. For example, since 2012, Chevron has reduced greenhouse gas flaring by 22 percent, developed country-specific plans to minimize gas flaring, and participates as an active member of the World Bank–led Global Gas Flaring Reduction Partnership.
Most energy experts agree that oil and natural gas will account for about half of global energy consumption for at least the next two decades under almost any future market scenario. Although no one can forecast exactly what will happen in the future, our portfolio, due to its maturity and diversity across assets and geographies, is resilient in a wide variety of possible scenarios, which enables us to be flexible in response to potential changes. In addition, we believe our governance, risk management, and strategy processes equip us to deliver industry-leading results and superior stockholder value in any business environment.
We hope this report helps to encourage and inform constructive dialogues on the issue of global climate change.
About Craig May
Craig May is Vice President of Upstream Capability within Chevron’s Technology, Projects, & Services organization. He is responsible for managing the functional Upstream groups – Base Business & Operations, Drilling & Completions, Non-Operated Joint Ventures, Reserves, and Reservoir Management. Craig assumed the role August 1, 2016, and is located in Houston, Texas.