Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Health
• Safety
• Social Responsibility

Environmental Achievements

• Reduced SOx, NOx, VOC, and Greenhouse Gas emissions compared to 2001 (normalized basis)
• Reduced total volume of liquid spills and releases by 84% from 2001 (92% reduction from 2000)
• Nearly a quarter of total oil production and throughput was from ISO-14001 certified operations by year-end 2002
• Reduced methane emissions by 623,000 Mcf

Social Achievements

• Implemented a formal Corporate Social Responsibility Policy
• Pledged support to the United Nations Global Compact
• Engaged in discussions with internal and external stakeholders
• Continued community activities such as participation in the March of Dimes and disaster relief efforts
• Initiated a social investment pilot project in West Africa

Governance Achievements

• Formed the Hess Leadership Team to provide strategic business direction and key operational decisions, including EH&S and SR
• Developed a new Environment, Health, and Safety Policy
• Established a new Corporate Social Responsibility Policy

Climate Goals & Targets

Environmental Challenges

• Did not achieve 2002 safety objectives, although recordable injury rate was reduced by 2%
• HOVENSA joint venture refinery experienced increased OSHA recordable rates and lost work time incident rates in 2002
• Two fatalities occurred in 2002 (one robbery, one vehicle collision)
• Increase in total waste in 2002 (largely due to new reporting from U.S. E&P operations)

Mitigation Strategies

• Developed new targets and strategies to significantly improve safety performance
• Established aggressive improvement targets for business units to achieve 2005 OSHA and lost work time incident rate goals
• Initiated collection of water use and energy data to better assess resource usage and facilitate target setting

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Revised Business Practice Guide providing guidance and expectations on business ethics, corporate citizenship, contracting and labor practices, regulatory compliance, employee safety, and environmental protection

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Global Reporting Initiative (GRI)

Certifications: ISO-14001 (Amerada Hess ApS)

Third-party Assurance: ERM Certification & Verification Services (ERM CVS)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environment
• Health
• Safety
• Social Responsibility

Environmental Achievements

• Reduced NOx emissions by 21%
• Reduced SOx emissions by 32%
• Reduced VOC emissions by 7%
• 8% reduction in normalized GHG emissions compared to 2003
• Successfully met emissions goals for reducing significant air pollutants

Social Achievements

• Contributed over four million dollars to education, healthcare and disaster relief efforts
• Donated $2 million to aid tsunami relief efforts
• Donated diesel fuel and gasoline for government emergency response vehicles after Hurricanes Charley and Frances
• Hess Express stores donated supplies to local food banks after Hurricanes Charley and Frances
• Established a system for tracking and reporting company-wide social investments, activities and key learnings

Governance Achievements

• Implemented a values-based, socially-responsible strategy focused on improving environment, health and safety (EHS) performance
• Management systems based on international standards to promote internal consistency and continual improvement in EHS performance
• EHS metrics are an integral part of each employee’s compensation package
• First United States oil and gas company to voluntarily endorse the United Nations Global Compact

Climate Goals & Targets

Environmental Challenges

• Did not meet interim target to reduce greenhouse gas emissions
• Challenges associated with adequately measuring the Corporation’s entire GHG inventory
• Need to improve GHG reporting
• Slight increase in recordable incident rate and lost time or restricted duty rate between 2003 and 2004
• Overall quantity of waste generated increased from 51,890 tons in 2003 to 90,708 in 2004

Mitigation Strategies

• Developed a solid reporting protocol and methodology for more precise measurement, management and control of GHG emissions
• Set a companywide target of reducing normalized greenhouse gas emissions by 5% by 2005 compared to 2001
• Developing additional programs to improve safety performance
• Tracking company-wide spill performance to identify common causes and plan mitigation measures
• 81% of waste generated was recycled

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Global Compact

Third-party Assurance: ERM Certification & Verification Services

Sustainable Products & Innovation

• Fuel cells through a venture with other parties
• Energy efficient technologies through Hess Microgen subsidiary

Environmental Metrics

ESG Focus Areas

• Environmental
• Health
• Safety
• Social Responsibility
• Climate Change
• Human Rights
• Financial Transparency

Environmental Achievements

• Reduced normalized VOC emissions by 20%
• Purchased 10% of annual electricity from renewable sources for two consecutive years
• Reduced upstream hydrocarbon flaring by 50 percent in Algeria and Equatorial Guinea over next five years (planned)

Social Achievements

• Best-ever employee safety performance with a 16% improvement over the previous year and a reduction in the severity of incidents
• Global employee engagement survey (Voice of Hess) with 84% participation rate
• Contributions to support health, education and community development grew to $21 million (from $16.4 million in 2007)
• Partnership with the government in Equatorial Guinea to improve primary education (trained 1,165 teachers and renovated 40 model schools)

Governance Achievements

• Executive compensation linked to select EHS & SR performance metrics
• Ranked second among large cap companies by Forbes magazine for trustworthy accounting and governance practices
• Continued participation in multi-stakeholder dialogue processes, provided comprehensive guidance for country managers and conducted training of business units in higher risk locations

Climate Goals & Targets

Environmental Challenges

• Volatile changes in commodity prices
• High costs of drilling and development activities
• Need for technical success in finding and developing hydrocarbon reserves
• Political instability in certain areas where we conduct operations
• Environmental concerns
• Need to maintain a competitive position by attracting and retaining innovative and highly skilled professionals
• Increased GHG emissions due to business growth
• Contractor safety
• Shortage of experienced oil field labor

Mitigation Strategies

• Sized 2009 capital and exploratory budget to $3.2 billion to maintain financial strength
• Plans in place to reduce greenhouse gas emissions intensity over the next five years and stabilize absolute emissions over the near term
• Formalized contractor engagement program and structured employee on-boarding process
• Worldwide driving safety initiative (driver training, monitoring, and smarter trip planning)
• Implementation of country-specific human rights risk assessment and training
• Continued involvement in Extractive Industries Transparency Initiative and promotion of Voluntary Principles for Security and Human Rights with business partners

Supply Chain Management

Supplier Audits: Quarterly debarment processing to ensure compliance with OFAC and the U.S. Patriot Act

Responsible Procurement

• Contracts include requirements for supplier compliance with applicable laws and regulations and Hess policies (safety, health, environment, process safety, drug and alcohol use, business ethics, conflicts of interest, FCPA, and labor practices)
• Incorporation of provisions relating to adherence to the Voluntary Principles into selected supplier contracts

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G3 Sustainability Reporting Guidelines, IPIECA and American Petroleum Institute’s Oil and Gas Industry Guidance on Sustainability Reporting, UN Global Compact Principles

Certifications: ISO 14001 (North Sea operations and St. Lucia oil terminal), OHSAS 18001 (Denmark Production and Carigali Hess)

Third-party Assurance: ERM Certification and Verification Services (ERM CVS)

UN Sustainable Development Goals

• Not disclosed

Sustainable Products & Innovation

• Reformulated gasoline and ultra-low sulfur diesel
• Hess “Green Suite” of sustainable energy options (Demand Response, Renewable Energy Certificates (RECs), and the C-Neutral program)
• Nuvera fuel cell systems

Awards & Recognition

• Forbes magazine: leader among the 100 Most Trustworthy Companies of 2008
• Corporate Responsibility Officer Association: 15th on its “100 Best Corporate Citizens 2009” list
• Roberts Environmental Center of Claremont McKenna College: best in social reporting and second overall among the 91 New York based public companies on the 2008 Fortune 1000 list

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Efficiency
• Human Rights
• Community Engagement
• Safety
• Diversity and Inclusion
• Environmental Protection
• Financial Transparency

Environmental Achievements

• Achieved 15 percent GHG intensity reduction against a 20 percent target (2013) and an absolute GHG reduction of 1.8 million tonnes
• Achieved 54 percent combined flare reduction in Algeria and Equatorial Guinea, meeting a 50 percent reduction target three years early
• Reduced workplace injury rate for the sixth consecutive year with no employee or contractor fatalities for the last two years
• Reduced total oil spills by 13 percent and total solid waste by 29 percent

Social Achievements

• Invested more than $18 million in social programs around the world, a 40 percent increase from 2009, focusing on education and healthcare
• 992 primary teachers graduated from a two-year training program in Equatorial Guinea as part of the PRODEGE education project
• Improved safety performance for the sixth consecutive year, with no employee or contractor fatalities
• Rolled out a global human resources data management system
• Increased participation of nationals in Asia-Pacific leadership

Governance Achievements

• Developed a Human Rights Policy and expanded human rights risk assessment and training efforts
• Modified Social Responsibility Policy to address the International Labor Organization Declaration on Fundamental Principles and Rights at Work
• Strengthened commitment to sustainable top quartile performance in key metrics
• Executive compensation linked, in part, to select environment, health, safety and social responsibility (EHS&SR) performance metrics
• No legal actions, significant fines or non-monetary sanctions relating to anti-competitive behavior, anti-trust or monopoly related laws or regulations

Climate Goals & Targets

Environmental Challenges

• Political instability, human rights and environmental concerns in certain operating areas
• National and international climate change measures
• Demand for affordable, clean and renewable energy
• Global competition for skilled workers
• Risk of technical obstacles in finding and developing hydrocarbon reserves
• Uncertainties in estimating proved reserves and their resulting net revenues
• Sustaining PRODEGE’s achievements and expanding them to secondary schools
• Sustaining a proactive approach to social investment
• Integrating policies into practice and reinforcing training
• Convincing other countries to become EITI candidates
• Managing implementation effectively
• Positioning the business strategically for long-term profitable growth
• Evaluating additional GHG reduction opportunities
• Identifying cost-effective flare reduction projects
• Strengthening data completeness and reliability
• Continuing development of identified local leaders
• Continuing to mature a behavior-based safety culture
• Enhancing and sustaining contractor safety performance

Mitigation Strategies

• Detailed review of deepwater operations and joining the Marine Well Containment Company and the Helix Well Containment Group
• Strengthened human rights program with a new Human Rights Policy and expanded risk assessments and training
• Updated Social Responsibility Policy to reflect industry best practices and commitment to ILO Declaration
• Focused social responsibility strategy centered on health and education through partnerships
• Voluntary measures to assess, monitor and reduce carbon footprint
• Clean energy strategy including the Bayonne Energy Center, research and development of hydrogen energy technologies, and demand response programs
• Benchmarking study of diversity and inclusiveness practices
• Career development program encompassing technical skills training, leadership development, mentoring, and challenging job assignments
• Integrated EHS&SR management system based on Operational Excellence framework, Hess Values, Code of Conduct, and industry best practices
• Implementation of standardized EHS contractor prequalification system
• Implementation of a corporate-wide energy efficiency program
• Purchase of renewable energy certificates equivalent to 10 percent or more of annual net purchased electricity
• Integrating the cost of carbon into the project economics of all major capital investments

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier diversity policy and program (U.S.)
• Focus on providing increased opportunities to certified small and diverse businesses

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• National and international climate change measures
• Regulatory and legislative uncertainty

Opportunities

• Development of energy-efficient products and services
• Carbon monetization opportunities

Reporting Standards

Frameworks Used: GRI G3 (A+ level), IPIECA, API Oil and Gas Industry Guidance on Voluntary Sustainability Reporting, UN Global Compact

Certifications: ISO 14001 (North Sea, South Arne operations, St. Lucia Terminal), OHSAS 18001 (Denmark Production operations)

Third-party Assurance: ERM Certification and Verification Services (ERM CVS)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Reformulated gasoline
• Ultra-low sulfur diesel
• Biodiesel
• Bioethanol
• Hydrogen fuel cells

Awards & Recognition

• CDP Carbon Disclosure Leadership Index
• Maplecroft Climate Innovation Index
• Oekem Prime Status
• Transparency International Revenue Watch (top performer for anti-corruption reporting)
• Workforce Diversity magazine’s Top 50 Employers List
• Woman Engineer magazine’s Top 50 Employers list
• Women’s Health Week Collaborator (CDC)
• Gold Level Fit Friendly Company (American Heart Association)
• National Safety Council’s 2011 List of CEO’s Who ‘Get It’

Environmental Metrics

ESG Focus Areas

• Climate Change and GHG Emissions
• Safety and Health
• Community and Social Performance
• Human Rights
• Governance
• Environment
• Economic Contributions
• Global Workforce

Environmental Achievements

• Reduced absolute GHG emissions (equity basis) by 26 percent (2.8 million tonnes) through 2012.
• Reduced combined flaring in Algeria and Equatorial Guinea by 61 percent through 2012.
• Decreased average volume of fresh water used for each hydraulic fracturing job by approximately 35 percent in Bakken.
• Improved gas gathering infrastructure resulting in lower flaring rates in Bakken (though still above industry average).

Social Achievements

• Invested $40 million in education, health and community development projects in more than 20 countries.
• Launched a Hess Scholars program in Ghana to increase access to secondary education.
• Improved overall workforce safety performance by 13 percent.
• Completed Phase 1 of PRODEGE in Equatorial Guinea, improving primary education.

Governance Achievements

• Established the role of Chief Compliance Officer to improve compliance related controls.
• Added a new corporate policy on Security and Human Rights.
• Revised and updated the Code of Business Conduct.

Climate Goals & Targets

Environmental Challenges

• Meeting society’s growing need for energy in an environmentally responsible, socially sensitive and safe way.
• Managing non-technical risks (NTR) associated with communities, stakeholder relationships and public perception.
• Achieving GHG emissions intensity reduction target due to portfolio changes.
• High flaring rates in North Dakota due to rapid expansion and remote well locations.
• Contractor safety performance in North Dakota.

Mitigation Strategies

• Developed and implemented policies and standards (Security and Human Rights Policy, improved contractor management program).
• Enhanced systems for managing potential impacts across project life cycles (increased risk assessments, new country entry process).
• Investing more than $1.2 billion to capture and monetize natural gas from shale energy wells.
• Implementing a North Dakota Safety Improvement Program and reevaluating contractor management program.
• Developing guidelines to define expected operating practices to manage key above-ground risks.

Supply Chain Management

Supplier Audits: Quarterly reviews to ensure compliance with U.S. Department of the Treasury’s Office of Foreign Assets Control and the U.S. Patriot Act.

Responsible Procurement

• Contracts include requirements for supplier compliance with laws and regulations in areas such as safety, health, environment, process safety, business ethics, conflicts of interest, FCPA, and labor practices.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI G3.1/Oil & Gas Sector Supplement, IPIECA, American Petroleum Institute, International Oil and Gas Producers Association Oil and Gas Industry Guidance

Certifications: OHSAS 18001 (1.6% of production)

Third-party Assurance: ERM Certification and Verification Services (ERM CVS)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• CDP Carbon Disclosure Leadership Indexes, Dow Jones Sustainability Index, MSCI ESG Indices, oekom research AG Prime Status, Newsweek Green Rankings, Maplecroft Climate Innovation Index, Corporate Responsibility Magazine 100 Best Corporate Citizens List, International Liquid Terminals Association Safety Excellence Award

Environmental Metrics

ESG Focus Areas

• Safety and Health
• Community and Social Performance
• Climate Change and Energy
• Environment
• Our People
• Governance

Environmental Achievements

• Reduced absolute greenhouse gas emissions (on a net equity basis) by 4.3 million tonnes between 2008 and 2013 (40% reduction)
• Reduced combined flaring in Algeria and Equatorial Guinea by 53 percent from 2008 to 2013
• Purchased renewable energy certificates equivalent to 14 percent of 2013 net electricity use
• Decreased overall company water use by 12 percent from 2012

Social Achievements

• Invested $37 million in social programs around the world
• Achieved a 26 percent decrease in workforce (employees plus contractors) Lost Time Incident Rate compared to 2012
• Achieved a 14 percent decrease in workforce Total Recordable Incident Rate compared to 2012

Governance Achievements

• Further strengthened the Global Compliance Program
• Completed a risk assessment and integrated risk register for non-technical risks for North Dakota operations
• Implemented programs to ease the transitions of employees leaving the company due to the major corporate reorganization

Climate Goals & Targets

Environmental Challenges

• Meeting society’s growing need for energy in an environmentally responsible, socially sensitive, safe and profitable way
• Non-technical risks associated with communities, stakeholder expectations, public perception and existing and emerging regulatory requirements
• Environmental challenges related to shale resource development (water use, flaring, etc.)
• Managing expectations for local employment opportunities
• Aging workforce in the U.S. oil and gas industry

Mitigation Strategies

• Sharpened focus on strategic community investments
• Honed enterprise risk management process
• Improved understanding and management of risk in day-to-day operations
• Proactive stakeholder engagement
• Investing in infrastructure to minimize gas flaring, assess alternatives to freshwater use, and reduce chemical additives
• Providing resources for employees in transition (enhanced severance, financial and career counseling)
• Implementing a new contractor prequalification and selection process
• Establishing a cross-functional Rail Transport Working Team

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Standardized approach to evaluate suppliers based on total value (safety, quality, delivery, cost)
• Compliance with applicable laws and regulations (EHS, drug and alcohol use, conflicts of interest, anti-corruption)
• Adherence to Hess Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI G3.1/Oil & Gas Sector Supplement, IPIECA, UN Global Compact

Certifications: ISO 14001 (2 operations)

Third-party Assurance: ERM Certification and Verification Services (ERM CVS)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Numerous sustainability awards and rankings (see page 59)

Environmental Metrics

ESG Focus Areas

• Economic Performance
• Environmental Performance
• Labor Practices and Decent Work
• Human Rights
• Society
• Product Responsibility

Environmental Achievements

• Installed a 1.1-MW solar energy facility
• Purchased 125,000 Green-e Energy certified RECs for wind power (equivalent to at least 10% of net electricity used)

Social Achievements

• 100% completion rate for employee anti-corruption training
• No significant disputes with local communities or indigenous peoples

Governance Achievements

• Updated and expanded online Hess Code of Conduct training for all employees and select contractors

Climate Goals & Targets

Environmental Challenges

• Emissions exceedances of sulfur dioxide at Tioga Gas Plant
• Three incidences of noncompliance associated with drilling and production operations in North Dakota
• Mislabeling trucks carrying crude oil

Mitigation Strategies

• Instituted corrective actions for mislabeling trucks
• Using highest Hazard Class Packing Group I on shipping paperwork
• Increased frequency and scope of crude oil testing

Supply Chain Management

Responsible Procurement

• Human rights and social responsibility clauses in contracts

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001 (UK North Sea and South Arne Operations), OHSAS 18001 (Denmark Production operations)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Purchased 100,000 Green-e Energy-certified RECs for wind power, equivalent to at least 10 percent of net electricity used in operations.
• Converted 25 vehicles in North Dakota fleet to lower emission fuels (CNG), representing approximately 4 percent of companywide vehicle fleet.
• Completed full subsea decommissioning of two major assets in the United Kingdom sector of the North Sea: the Fife, Fergus, Flora and Angus fields (FFFA) and the Ivanhoe and Rob Roy fields (IVRR).

Social Achievements

• Spent approximately $4.5 billion on local suppliers, representing 81 percent of total supplier spend.
• 93 percent of employees completed Code of Conduct training.
• No incidents of illegal discrimination.

Governance Achievements

• Hess’ Sustainability Report reviewed by the EHS Subcommittee of the Board of Directors, as well as by the Chief Executive Officer.
• EHS Subcommittee of the Board of Directors’ Audit Committee met four times in 2016. The full Board of Directors met eight times in 2016.
• Linkage between compensation for members of the highest governance body and the organization’s performance is stated in the Hess Corporation Compensation and Management Development Committee Charter.

Climate Goals & Targets

Environmental Challenges

• Various environmental regulations at different assets (e.g., EU ETS in Denmark, flaring regulations in North Dakota).
• Legacy downstream business environmental remediation costs.

Mitigation Strategies

• Annual purchases of emissions allowances to account for GHG emissions under EU ETS.
• Compliance with North Dakota’s gas capture mandate to reduce flaring.
• Continuing expenditures for environmental assessment and remediation; approximately $10 million in 2016.

Supply Chain Management

Responsible Procurement

• New Contractor Management Standard defining internal monitoring requirements for environment, health and safety performance of suppliers.
• Standard contract clauses include requirements for ethical business practices, human rights, social responsibility, business integrity.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4

Certifications: ISO 14001 (South Arne operations), OHSAS 18001 (South Arne operations)

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Purchased 90,000 Green-e Energy-certified RECs for wind power, equivalent to at least 10 percent of net electricity used in operations.
• Converted 25 vehicles in North Dakota fleet to lower-emission fuels (CNG), representing approximately 4 percent of companywide vehicle fleet.

Social Achievements

• 94 percent of active employees completed Code of Conduct training; 96 percent completed ABAC training.
• Spent approximately $4 billion on local suppliers (85 percent of total supplier spend).

Governance Achievements

• Established an EHS Subcommittee under the Audit Committee focusing on environment, health, safety, and social responsibility.
• Implemented a Global Compliance program with a Code of Business Conduct and Ethics applying to all directors, officers, and employees.

Climate Goals & Targets

Environmental Challenges

• GHG emissions
• Environmental compliance issues (fines paid)
• Supplier environmental and social risks

Mitigation Strategies

• Enterprise risk management program including EHS & SR risks.
• Environmental and social screening tools and impact assessments for major projects.
• Ongoing monitoring of suppliers' EHS performance through assessments, inspections, and audits.

Supply Chain Management

Responsible Procurement

• Environmental, health, and safety expectations during sourcing; Contractor Management Standard for ongoing monitoring; contract clauses on ethical business practices, human rights, and social responsibility.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, UN Global Compact

Third-party Assurance: Third-party assurance on sustainability data and GRI 'in accordance' option

Environmental Metrics

ESG Focus Areas

• Safety
• Climate Change
• Environment
• Social Responsibility
• People
• Governance

Environmental Achievements

• Reduced Scope 1 and 2 equity GHG emissions by approximately 64 percent over the past 11 years
• Reduced GHG emissions intensity by 17 percent compared with 2014 baseline
• Reduced flaring intensity by 41 percent compared with 2014 baseline

Social Achievements

• Achieved the lowest severe safety incident rate in company history – a 43 percent reduction from 2017
• Expanded LEAP program to help at-risk students in Houston
• Worked with joint-venture partners in Guyana to build capacity among the local workforce

Governance Achievements

• Board is climate change literate and actively engaged in overseeing Hess’ sustainability practices
• Executive compensation tied to advancing company’s environmental, health and safety goals
• Elevated EHS Subcommittee to a fourth standalone committee of the Board of Directors in June 2019

Climate Goals & Targets

Environmental Challenges

• Increased rate of contractor incidents resulting in a slightly higher TRIR in 2018 than in 2017
• Increased flaring in North Dakota due to changes in completion techniques
• Reduced gas capture by third-party gathering and processing facilities in North Dakota

Mitigation Strategies

• Emphasizing the vital importance of safety through companywide leadership site visits, refreshed safety leadership training and an expanded behavioral safety observation program
• Introducing additional cooling capacity during well completion and initial flowback to mitigate flaring
• Executing significant capital investment projects to increase gas capture rates, including installation of gas capture units, additional compression capability, and construction of the Little Missouri Four Gas Plant

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Procurement Policy specifies who should participate in tender evaluation, contract management, and ongoing procurement; includes code of ethics and conflict of interest guidelines; requires suppliers to meet expectations set forth in Code of Business Conduct and Ethics and Hess’ Voluntary Commitments

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of storms, drought, and flooding

Transition Risks

• Changes in policy actions, technologies, or market conditions

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards: Core option, UN Global Compact, IPIECA guidelines, SASB oil and gas industry metrics, TCFD recommendations

Certifications: ISO 14001:2004 (printer)

Third-party Assurance: ERM Certification and Verification Services

UN Sustainable Development Goals

• Goal 3
• Goal 4
• Goal 6
• Goal 7
• Goal 8
• Goal 13
• Goal 14
• Goal 15

Mapping of SDGs to material issues identified in materiality assessment

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• CDP Climate Change leadership status
• Dow Jones Sustainability Index North America
• Corporate Responsibility Magazine’s 100 Best Corporate Citizens
• MY AMCHAM CARES Certificate of Recognition

Environmental Metrics

ESG Focus Areas

• Safety
• Environment and Climate Change
• Social Responsibility
• People

Environmental Achievements

• Reduced Scope 1 and 2 equity GHG emissions by approximately 60% between 2008 and 2019
• Reduced GHG emissions intensity by 26% compared with 2014 baseline (ahead of 2020 target)
• Reduced flaring intensity by 35% compared with 2014 baseline
• Reduced energy consumption from Hess operated assets by 8% compared to 2018

Social Achievements

• Extended support of the LEAP educational program for three more years
• Began support for the MyKasih Foundation “Love My School” Student Bursary Program in Malaysia
• Provided Hess toy trucks and a STEM curriculum to every elementary school in North Dakota
• Joint venture in Guyana invested more than $3 million to support initiatives including the Centre for Local Business Development

Governance Achievements

• Established a standalone EHS Committee of the Board in June 2019
• Tied executive compensation to advancing the company’s environmental, health and safety goals
• Completed development of the Hess Operational Management System (HOMS)

Climate Goals & Targets

Environmental Challenges

• Increase in severe and significant safety incident (SSSI) rate early in the year, driven primarily by an increase in contractor incidents
• Increase in GHG emissions in 2019 due to increased production in North Dakota
• Increase in flaring in 2019 due to increased production and delays in gas plant construction

Mitigation Strategies

• Conducted root cause analyses and implemented corrective actions including leadership site visits, safety surveys and safety improvement workshops, achieving a 33% reduction in SSSI rate from April to December
• Implemented various emission reduction initiatives including increased gas compression capacity and flare recovery systems
• Partnered with Targa Resources to build the Little Missouri Four gas plant

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Code of Business Conduct and Ethics
• Voluntary Commitments regarding labor and human rights
• Model contracts for key spend areas

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of storms, drought, flooding

Transition Risks

• Changes in policy actions, technologies, or market conditions

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards: Core option, UN Global Compact

Certifications: Null

Third-party Assurance: ERM Certification and Verification Services

UN Sustainable Development Goals

• 3, 4, 6, 7, 8, 13, 14, 15

Mapping exercise included in 2018 Sustainability Report

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• CDP Climate Change leadership status
• Dow Jones Sustainability Index North America
• Corporate Responsibility Magazine’s 100 Best Corporate Citizens
• Bloomberg Gender-Equality Index
• Others listed on page 63

Environmental Metrics

ESG Focus Areas

• Climate Related Risk and Greenhouse Gas (GHG) Emissions
• Community and Stakeholder Engagement
• Diversity, Equity and Inclusion
• Emergency Preparedness and Response
• Occupational Health and Safety
• Process Safety and Release Prevention
• Supply Chain and Contractor Management
• Water Management

Environmental Achievements

• Reduced the GHG emissions intensity of our operated assets from 41 tonnes per thousand barrels of oil equivalent (BOE) in 2014 to 22 tonnes per thousand BOE in 2020, or by 46% versus our target of 25%
• Reduced the flaring intensity of our operated assets from 276 standard cubic feet (SCF) per BOE in 2014 to 114 SCF per BOE in 2020, or by 59% versus our target of 50%
• Reduced freshwater use by 28% compared with 2019
• Reduced the number of hydrocarbon spills by 31% compared with 2019, and the volume decreased by 69%
• Reduced the number of nonhydrocarbon spills by 17% compared with 2019, and the volume decreased by 14%

Social Achievements

• Provided financial and volunteer support for a variety of COVID-19 community relief efforts
• In Houston, continued to invest in the LEAP educational program and related initiatives, contributing approximately $7.4 million since 2013
• In Guyana, Hess and our partners contributed more than $3 million in 2020 as part of ongoing efforts to build capacity in the local Guyanese economy as well as COVID-19 relief efforts
• In Malaysia, contributed more than 60,000 units of personal protective supplies in response to the pandemic
• In North Dakota, provided Hess toy trucks to every elementary school in the state together with a STEM curriculum

Governance Achievements

• Completed a review and update of our environment, health, safety and social responsibility (EHS & SR) strategy
• Established new targets through 2025 to drive progress in high priority areas including climate change
• Tied executive compensation to advancing the company’s environmental, health and safety goals

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic
• Most active Atlantic hurricane season on record
• Lower oil prices leading to reduced activity in the Bakken
• Increased employee TRIR despite overall reduction in TRIR

Mitigation Strategies

• Multidisciplinary Hess emergency response team overseeing plans and precautions to reduce the risks of COVID-19
• Safely reduced activity in the Bakken
• Systemic review and addressed factors that may have impacted employee incidents
• Enhanced mental health and work life balance support for employees during the pandemic

Supply Chain Management

Supplier Audits: Annual management system reviews, desktop reviews and field verification

Responsible Procurement

• Code of Business Conduct and Ethics
• Voluntary Commitments regarding labor and human rights
• ESG criteria in procurement and supplier evaluation processes

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of storms
• Drought
• Flooding
• Worker heat stress
• Flooding of coastal logistics infrastructure

Transition Risks

• Changes in policy actions, technologies or market conditions aimed at emissions reductions

Opportunities

• Development of energy-efficient products
• Investment in innovative research and scientific solutions to mitigate climate change

Reporting Standards

Frameworks Used: GRI Standards (Core option), IPIECA Sustainability Reporting Guidance, UN Global Compact, TCFD recommendations, SASB oil and gas industry metrics

Third-party Assurance: ERM Certification and Verification Services

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 13 (Climate action)

Producing and enabling access to affordable, reliable energy; reducing GHG emissions; investing in innovative research and scientific solutions to mitigate climate change

Awards & Recognition

• CDP Climate Change leadership status (12 consecutive years)
• Dow Jones Sustainability Index North America (11 consecutive years)
• 3BL Media’s 100 Best Corporate Citizens (13 consecutive years)
• Bloomberg Gender-Equality Index
• Newsweek magazine’s America’s Most Responsible Companies
• Transition Pathway Initiative Level 4-star rating
• Human Rights Campaign’s Corporate Equality Index

Environmental Metrics

ESG Focus Areas

• Climate Change and GHG Emissions
• Community and Stakeholder Engagement
• Diversity, Equity and Inclusion
• Emergency Preparedness and Response
• Occupational Health and Safety
• Process Safety and Release Prevention
• Supply Chain and Contractor Management
• Water Management

Environmental Achievements

• Reduced operated Scope 1 and 2 GHG emissions intensity by approximately 47% from 2017 to 18 kg CO2e per BOE in 2021
• Reduced methane emissions intensity to 0.18% in 2021 (surpassing the 2025 target of 0.19%)
• Reduced flaring from Hess operated assets by 37% compared with 2020
• Achieved a 7% flaring rate from Bakken wells and pads (surpassing the target)
• Reduced freshwater use by 17% compared with 2020
• Increased produced water reuse by 91% from 2020

Social Achievements

• Announced a $1.4 million grant to the Jackie Robinson Foundation
• Announced a $9 million financial commitment over three years to fund educational programs in Houston
• Supported work by third-party organizations to address development initiatives in Guyana
• Achieved a 9% reduction in workforce total recordable incident rate (TRIR) from 2020
• Reached a six-year low in severe and significant safety incident rate (14% reduction from 2020)
• Launched five new employee resource groups
• Increased diverse supplier participation in direct business opportunities

Governance Achievements

• Tied executive compensation to advancing the company’s EHS and climate change goals
• Amended the EHS Committee’s charter to clarify oversight of climate change policies
• 99% of active employees completed Code of Conduct training and 99% completed ABAC training

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the COVID-19 pandemic
• Increased contractor TRIR due to one additional incident compared to 2020
• Increase in workforce lost time incident rate from 2020 to 2021
• Increase in Tier 1 PSEs in 2021 compared to 2020
• Potential risks associated with worker heat stress and flooding of coastal logistics infrastructure in the Gulf of Mexico
• Potential increase in extreme heat stress in Bakken operations

Mitigation Strategies

• Worked with suppliers to understand impacts to their operations and develop mitigation strategies
• Implemented corrective actions across onshore and offshore operations in response to incidents
• Completed investigations and root cause analyses of Tier 1 PSEs and implemented corrective actions
• Incorporated mitigations to address changing storm magnitude into the design of facilities
• Maintained severe weather and business continuity plans
• Maintained asset and company level emergency response teams and conducted training and exercises

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Code of Business Conduct and Ethics
• Voluntary Commitments regarding labor and human rights
• ESG criteria incorporated into procurement and supplier evaluation processes

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of storms
• Drought
• Flooding
• Worker heat stress

Transition Risks

• Changes in energy demand
• Policy changes
• Market shifts

Opportunities

• Development of energy-efficient products and services
• Investment in innovative research and scientific solutions to mitigate climate change

Reporting Standards

Frameworks Used: GRI Standards (Core option), TCFD recommendations, SASB oil and gas industry metrics, UN Global Compact

Certifications: Null

Third-party Assurance: ERM Certification and Verification Services

UN Sustainable Development Goals

• 7 (Affordable and Clean Energy)
• 13 (Climate Action)

Hess’s operations and initiatives contribute to these goals through responsible energy production, emissions reduction efforts, and support for sustainable development initiatives.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• CDP Climate Change leadership status (13 consecutive years)
• Dow Jones Sustainability Index North America (12 consecutive years)
• 3BL Media’s 100 Best Corporate Citizens (14 consecutive years)
• Bloomberg Gender-Equality Index (2 consecutive years)
• Human Rights Campaign’s Corporate Equality Index (100% in 2022)

Environmental Metrics

ESG Focus Areas

• Climate Related Risk and GHG Emissions
• Community and Stakeholder Engagement
• Diversity, Equity and Inclusion
• Emergency Preparedness and Response
• Occupational Health and Safety
• Process Safety and Release Prevention
• Supply Chain and Contractor Management
• Water Management

Environmental Achievements

• Reduced routine flaring intensity to 3% in Bakken, North Dakota operations by the end of 2022 (surpassing the 5% target).
• Reduced operated Scope 1 and 2 GHG emissions intensity by 45% from 2017 to 18.5 kg CO2e per BOE in 2022.
• Reduced methane emissions intensity to 0.15% in 2022 (surpassing the 2025 target of 0.19%).
• Achieved zero routine flaring at offshore facilities in 2022.
• Reused approximately 298,000 cubic meters of produced water to replace freshwater in the Bakken (9% increase from 2021).

Social Achievements

• Invested more than $20 million in social programs focused on education, healthcare, and the environment.
• Launched a new apprenticeship program in North Dakota in partnership with the North Dakota Tribal College System, investing $12 million over four years.
• Launched a national healthcare initiative in Guyana in collaboration with the government and Mount Sinai Health System, with a $32 million commitment over three years.
• Completed 45 supplier engagements, including 3 each with 10 strategic suppliers and 1 each with 15 core suppliers.

Governance Achievements

• Board of Directors actively engaged in overseeing EHS & SR practices.
• EHS Committee of the Board provides oversight of Hess’ sustainability practices, including climate change.
• Executive compensation linked to advancing the company’s EHS and climate change goals.
• 99% of active employees completed Code of Conduct training, and 99% completed ABAC training.

Climate Goals & Targets

Environmental Challenges

• Mixed safety performance in 2022, with an increase in incidents in Bakken operations, including two contractor fatalities.
• COVID-19 pandemic causing labor shortages, increased turnover rates, and crew continuity challenges.
• Hydrocarbon release at a Hess site and a produced water release at a Hess Midstream underground pipeline in North Dakota.
• Supply chain disruptions due to the COVID-19 pandemic.

Mitigation Strategies

• Leadership and teams worked with contractors to address safety incidents and areas for improvement.
• Collaborated with contractors to share learnings, deploy asset-specific safety improvement plans, and reinforce safety expectations.
• Accelerated implementation of advanced release detection technology.
• Worked with suppliers to understand impacts to their operations, monitor potential operational risks, and develop mitigation strategies.
• Undertook a quarterly “surety of supply” assessment to evaluate supply chain disruption risk.

Supply Chain Management

Supplier Audits: 45 supplier engagements in 2022

Responsible Procurement

• Code of Conduct, voluntary commitments, ESG criteria in procurement and supplier evaluation, expanded EHS risk assessments for prospective suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of storms, droughts, flooding
• Changes in weather patterns, water availability, rising sea levels

Transition Risks

• Market price volatility, demand degradation, stranded reserves
• Changes in regulations, policies, tax programs, exposure to litigation
• Step changes in technologies
• Reputational risks

Opportunities

• Resource efficiency (flare reduction, gas reinjection, energy efficiency improvements)
• Energy source (electrification, renewable energy)
• Diversification and resilience (CCS)

Reporting Standards

Frameworks Used: GRI Standards (including Oil and Gas Sector Standard), UN Global Compact, TCFD recommendations, SASB oil and gas industry metrics, World Economic Forum Stakeholder Capitalism Core Metrics

Certifications: Null

Third-party Assurance: ERM Certification and Verification Services

UN Sustainable Development Goals

• SDG 1 (End Poverty)
• SDG 7 (Affordable and Clean Energy)
• SDG 13 (Climate Action)

Producing and enabling access to affordable, reliable energy; reducing GHG emissions; supporting sustainable global development.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• CDP Climate Change leadership status (14 consecutive years)
• Dow Jones Sustainability World Index (13 consecutive years)
• 3BL Media’s 100 Best Corporate Citizens (15 consecutive years)
• MSCI AAA ESG Rating (2 consecutive years)
• FTSE4Good U.S. Index (9 consecutive years)
• Newsweek magazine’s America’s Most Responsible Companies
• Transition Pathway Initiative – Level 4 rating (3 consecutive years)
• Bloomberg Gender-Equality Index (3 consecutive years)
• Human Rights Campaign’s Corporate Equality Index (100% score)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Biodiversity
• Governance

Environmental Achievements

• Reduced operated flaring in North Dakota from 68 MMSCFD to 20 MMSCFD and eliminated 1.6 million tonnes of annual CO2e emissions between 2019 and 2023.
• Achieved a methane intensity reduction rate of 0.13% in 2023, below the 2025 target of 0.19%.
• Purchased 1,088,721 RECs to offset 100% of Scope 2 emissions from purchased electricity in 2023.

Social Achievements

• Engaged 55% of suppliers for re-registration with ESG screening criteria.
• Completed 45 supplier engagements, including three each with ten strategic suppliers and one each with 15 core suppliers in 2022.

Governance Achievements

• Board-level oversight of environmental issues.
• 20% of total C-suite and board-level monetary incentives linked to the management of climate change.
• Published information about the organization’s response to environmental issues in mainstream reports, in line with environmental disclosure standards or frameworks (GRI, TCFD).

Climate Goals & Targets

Environmental Challenges

• Potential substantive impact from North Dakota gas capture regulations.
• Potential fall in North American ESG rankings impacting cost and access to future capital.
• Uncertainty related to the legal durability of US EPA & BLM regulations to control methane emissions and waste.
• Increased costs related to preparedness and recovery of affected operations due to increased severity of extreme weather events.

Mitigation Strategies

• Invested approximately 3.6 billion gross in infrastructure spending to reduce flaring and meet gas capture targets.
• Implemented a climate change strategy aligned with TCFD recommendations, including public disclosure, flaring reduction, energy efficiency, and renewable energy.
• Established a methane intensity reduction target of 0.19% by year-end 2025.
• Maintains insurance coverage against property and casualty losses and strategic relationships with third-party emergency response specialists.

Supply Chain Management

Supplier Audits: 45 supplier engagements in 2022

Responsible Procurement

• ESG screening criteria included in supplier re-registration process.

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of extreme weather events

Transition Risks

• Changes to regulation of existing products and services
• Increased partner and stakeholder concern or negative partner and stakeholder feedback

Opportunities

• Increased sales of existing products and services (flare reduction)
• Increased efficiency of production and/or distribution processes (LDAR)
• Use of more efficient modes of transport (pipe transport)
• Increased availability of products with reduced environmental impact

Reporting Standards

Frameworks Used: GRI, TCFD, IPIECA’s Petroleum Industry Guidelines for reporting GHG emissions, 2nd edition, 2011, The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition), US EPA Mandatory Greenhouse Gas Reporting Rule

Third-party Assurance: ERM CVS

Sustainable Products & Innovation

• Natural gas (bridging fuel)
• Oil produced at Guyana asset (low carbon intensity)

Awards & Recognition

• CDP climate leadership for 15 consecutive years
• DJSI North America for 14 consecutive years
• Level 4 strategic assessment rating on Transition Pathway Initiative