Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• 2020 best year ever for environmental performance
• On track to achieve 63% global refining GHG emissions reduction/offset target by 2025
• Renewable diesel and ethanol reduce life cycle GHG emissions up to 80% and 30%, respectively

Social Achievements

• 2020 best year ever for safety performance
• Surpassed $58 million in community donations and fundraising, with more than $12 million for COVID-19-related support
• Expanded employee physical and mental health benefits, enhanced safety protocols and maintained high levels of communication with our workforce

Governance Achievements

• Diverse, independent board of directors: 5 of 11 represent diversity of race or gender, 3 of 11 are women, 10 are independent
• 3 fully independent committees
• Compensation aligned with performance: all-employee bonus program includes ESG efforts and improvements; and executive performance shares include an Energy Transition performance measure

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting operations and demand for products
• Water scarcity risks in some regions

Mitigation Strategies

• Leveraging safety and emergency preparedness protocols to protect employees during the pandemic
• Implementing water-risk-based approach integrated into operational and long-term planning
• Securing water supply through contracts for treated municipal wastewater, treated wastewater reuse, industry funds for desalination, and zero-discharge practices

Supply Chain Management

Responsible Procurement

• Vetting business partners for compliance with safety and security protocols and programs

Climate-Related Risks & Opportunities

Physical Risks

• Hurricanes
• Tornadoes

Transition Risks

• Changes in low-carbon fuel policies and stricter fuel efficiency standards

Opportunities

• Growth in renewable fuels (diesel, ethanol, SAF, hydrogen), carbon capture and storage

Reporting Standards

Frameworks Used: SASB

Third-party Assurance: Lloyd’s Register Quality Assurance Inc.

Sustainable Products & Innovation

• Renewable diesel
• Ethanol
• Sustainable aviation fuel (SAF)
• Renewable hydrogen
• Renewable naphtha

Awards & Recognition

• Forbes 2020 World’s Best Employers
• Institutional Investor's 'Most Honored Companies'

Environmental Metrics

ESG Focus Areas

• Greenhouse Gas Emissions Reduction
• Safety
• Community Engagement
• Workforce Diversity and Inclusion
• Governance

Environmental Achievements

• Reduced global refinery Scope 1 and 2 GHG emissions by 11.5% against 2011 baseline (28.5 million metric tons CO2e in 2021)
• Increased renewable diesel production capacity to 1.2 billion gallons annually by Q4 2022
• More than 1 million metric tons of CO2 captured annually at Port Arthur refinery
• Over 96% flaring-free operations in 2021
• 79% of large process flares equipped with flare-gas recovery systems
• 24% of total refinery energy consumption from renewable sources

Social Achievements

• Generated over $62 million for charities in 2021
• Maintained 99-100% pay equity ratios for gender and minority status
• Delivered merit and bonus payouts and maintained comprehensive benefits during the pandemic
• Included DEI metrics in the strategic portion of annual bonus
• Employee and contractor record low injury rates

Governance Achievements

• Established a Sustainability and Public Policy Committee
• 60% of independent directors represent diversity in gender or race/ethnicity
• Linked ESG, climate goals, and executive compensation through an energy transition modifier and ESG component of annual bonus
• Published EEO-1 report
• Adopted new or updated corporate policies, including Conduct Guidelines for Business Partners

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Climate events
• Water scarcity in some regions
• Maintaining safety and reliability in operations

Mitigation Strategies

• Investing in low-carbon projects
• Improving process safety and reliability
• Securing water rights and exploring alternative water sources
• Implementing comprehensive emergency response plans
• Investing in safety and preventive equipment maintenance

Supply Chain Management

Responsible Procurement

• Conduct Guidelines for Business Partners

Climate-Related Risks & Opportunities

Physical Risks

• Hurricanes
• Tornadoes
• Flooding

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of low-carbon fuels
• Carbon capture and storage

Reporting Standards

Frameworks Used: SASB, TCFD

Third-party Assurance: Lloyd’s Register Quality Assurance, Inc. (LRQA)

Sustainable Products & Innovation

• Renewable diesel
• Ethanol
• Sustainable aviation fuel (under development)
• Low-carbon hydrogen
• Renewable propane
• Renewable naphtha
• Renewable arctic diesel
• Fiber cellulosic ethanol

Awards & Recognition

• AFPM Elite Gold and Silver Awards
• AFPM Innovation Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Safety
• Community
• People
• Governance

Environmental Achievements

• Reduced/displaced more than 63% of global refinery Scope 1 and 2 emissions in 2022 (three years ahead of 2025 target)
• Expanded total renewable diesel production capacity to 1.2 billion gallons in 2022
• 97% of all refinery hazardous and exempted waste was recycled in 2022
• Roughly 25% of total refinery energy consumption originated from renewable sources in 2022

Social Achievements

• Generated more than $68 million for charities in 2022
• Employees volunteered more than 100,000 hours in 2022
• Published the Environmental Justice Audit Report and the Racial Equity Assessment in 2022 (both from independent third-party experts)
• Maintained 99%-100% pay equity ratios for gender and minority status

Governance Achievements

• Board diversity: 70% of independent directors representing gender or racial/ethnic diversity
• Enhanced mandatory compliance and ethics training for all employees
• Modified energy transition modifier in long-term incentive program for performance shares to use 2035 GHG emissions reduction/displacement target
• ESG component added to annual bonus program

Climate Goals & Targets

Environmental Challenges

• Climate-related risks (regulations, incentives, impacts)
• Water scarcity in some operating regions
• Maintaining safety excellence across all operations

Mitigation Strategies

• Investing in low-carbon fuels production and renewable energy projects
• Implementing water recycling and reuse initiatives
• Robust safety initiatives, year-round training programs, and safety management systems
• Risk-based approach to water management
• Investing in physical resilience of facilities (flood protection, hurricane resistance)

Supply Chain Management

Responsible Procurement

• Conduct Guidelines for Business Partners

Climate-Related Risks & Opportunities

Physical Risks

• Hurricanes
• Flooding
• Severe weather

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Growth in low-carbon fuels

Reporting Standards

Frameworks Used: TCFD, SASB

Certifications: ISO 14001 (Pembroke refinery)

Third-party Assurance: Lloyd’s Register Quality Assurance, Inc. (LRQA)

Sustainable Products & Innovation

• Renewable diesel
• Ethanol
• Sustainable aviation fuel (SAF)
• Low-carbon hydrogen
• Renewable propane
• Renewable naphtha
• Renewable arctic diesel
• Fiber cellulosic ethanol

Awards & Recognition

• S&P Global’s “2022 Deal of the Year - Strategic”
• Two 2022 AFPM Elite Gold Safety Awards
• Two 2022 AFPM Elite Silver Safety Awards
• Two 2022 AFPM Innovation Awards
• S&P Platts 2022 Energy Company of the Year
• Institutional Investor Magazine’s “Most Honored Companies” (7th consecutive year)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Safety
• Environment
• Community
• Employees
• Governance

Environmental Achievements

• Exceeded 2025 short-term GHG emissions target
• Remained on track to achieve 2035 medium-term GHG emissions target
• Achieved best-ever refinery environmental performance in 2023
• Implemented enhanced LDAR program resulting in improved leak identification and cost savings
• Roughly 26% of total refinery energy consumption originated from renewable sources in 2023
• 96% of all refinery hazardous and exempted waste was recycled in 2023

Social Achievements

• Generated more than $77.6 million for charities in 2023
• Recorded more than 129,400 employee volunteer hours in 2023
• Conducted a voluntary independent third-party audit in 2023, concluding Valero’s commitment to environmental justice goes beyond compliance
• Launched Communities in Schools of Houston program Wellness on Wheels

Governance Achievements

• 100% of committee chairs are either women or racially/ethnically diverse
• 36.4% of directors are women and 36.4% are racially/ethnically diverse
• Annual bonus program includes metrics for HSE performance, sustainability efforts, and improvements
• Performance shares component of long-term incentive program ties executive compensation to Valero’s low-carbon fuels strategy
• Mandatory cybersecurity training for all employees

Climate Goals & Targets

Environmental Challenges

• Insufficient data to meaningfully quantify Scope 3 GHG emissions
• Limited or no public disclosure of GHG emissions from many crude oil suppliers and customers
• Difficulty in accurately assessing upstream and downstream carbon emissions
• Inconsistencies in emissions calculations that disadvantage U.S. domestic crop-based biofuels due to ILUC penalties

Mitigation Strategies

• Introduced Use of Product GHG Emissions Intensity metric
• Conducted a value chain analysis
• Advocating for policies that eliminate inconsistencies in emissions calculations

Supply Chain Management

Responsible Procurement

• Conduct Guidelines for Business Partners

Climate-Related Risks & Opportunities

Physical Risks

• Hurricanes
• Tornadoes
• Flooding

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Low-carbon fuels
• CCS projects
• Renewable energy

Reporting Standards

Frameworks Used: SASB, TCFD

Certifications: ISO 14001 (Pembroke refinery)

Third-party Assurance: Independent third-party limited assurance

Sustainable Products & Innovation

• Renewable diesel
• Ethanol
• Cellulosic ethanol
• SAF

Awards & Recognition

• Energy Transition Award Downstream & Chemicals (S&P Platts)
• Most Honored Companies (Institutional Investor Magazine)