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1、2023 climate change resilience reportchairmans letter.2view from the lead director.3highlights.4executive summarydelivering long-term value in a lower carbon future .5section 1:governance frameworkcontinuing strong oversight.6section 2:risk managementassessing and managing transition and physical ri

2、sks .12section 3:strategypositioning for higher returns,lower carbon .22section 4:portfoliogrowing a competitive advantage .37section 5:performance and policymeasuring and advocating for what matters .50section 6:metricsaligning to TCFD,SASB and others .65section 7:about this reportpromoting transpa

3、rent reporting .82Original release October 2023;updates March 2024.35:updated IEA carbon intensity data;38:updated Chevrons production percentage;43:updated exhibit;48:updated patent number;53:added E-liability;60:added California mandatory reporting;7176:updated data tables and footnotesin this rep

4、ortat chevron,we believe that the future of energy is lower carbon and that human ingenuity and the power of innovation can solve any challengeadvancing energy progressPhoto:Anchor major capital project hull arriving to Kiewit in Ingleside,Texas.Our U.S.Gulf of Mexico facilities are some of the lowe

5、st carbon intensity-producing assets in the world.Chevron Corporation 2023 Climate Change Resilience Report1chairmans letterWe all have a stake in a reliable and affordable energy system and a lower carbon future.This belief drives Chevrons lower carbon ambitions and the actions we take to advance t

6、hem,which are detailed in this report.Our strategy is clear:Leverage our strengths to safely deliver lower carbon energy to a growing world.Our greatest strengths are our assets,the capabilities of our people and technology,and our customers.Were building on these strengths to create value for our s

7、tockholders and our stakeholders in three ways.First,we aim to lead in lower carbon intensity oil,products and natural gas,which are expected to be part of the global energy mix for the foreseeable future.While there are many potential pathways to achieving the goals of the Paris Agreement,all inclu

8、de the continued use of oil and gas,even in rapid decarbonization scenarios.Its within this context that we strive to be among the most efficient and responsible producers of lower carbon energy.To drive down the carbon intensity of our operations,we are high-grading our portfolio,improving operatio

9、ns and using marginal abatement cost analysis to drive the most reduction from each dollar spent.Examples of progress include our deepwater U.S.Gulf of Mexico operations,which produce some of the worlds lowest carbon intensity oil and gas,and our methane intensity performance in the Permian Basin,wh

10、ich was in the top quartile of oil and gas producers in 2021.Second,were helping to reduce the carbon emissions of major industries and hard-to-abate sectors by advancing new products and solutions,including renewable fuels,carbon capture and offsets,hydrogen,and other emerging technologies,such as

11、geothermal.Renewable fuels provide a promising path to reducing the carbon intensity of heavy transportation,including trucking,aviation and shipping,by allowing customers to use existing equipment.With the planned completion of the expansion of the Geismar biorefinery in 2024,our overall renewable

12、fuels capacity is expected to increase by 30%.We also continue to advance carbon capture,utilization and storage,another technology critical to advancing a lower carbon future.Through a joint venture with Talos Energy and Equinor,our Texas Bayou Bend project is positioned to be one of the largest ca

13、rbon storage projects in the United States.In early 2023,the project was expanded to cover nearly 140,000 acres of geological formation.Finally,we believe measurable outcomes are important to transparency and use metrics to track our progress.Our portfolio carbon intensity metric measures the full v

14、alue chain carbon intensity of our entire business.Many solutions will be needed to build the lower carbon energy system of the future.The strengths we have today experience,expertise,reach and partnerships are important to innovating and scaling the solutions oftomorrow.We look ahead with optimism

15、and remain confident in the power of human ingenuity to deliver progress.“the strengths we have today are important to innovating and scaling the solutions of tomorrow”Thank you,Michael K.Wirth Chairman of the Board and Chief Executive OfficerChevron Corporation 2023 Climate Change Resilience Report

16、2view from the lead directordr.wanda austinhow does the Board of Directors oversee climate-related risks?Directors provide oversight and advice for navigating the evolving landscape and furthering Chevrons strategy to leverage its strengths to safely deliver lower carbon energy to a growing world.Th

17、e Board has deep expertise and broad experience across many disciplines.The Boards four standing committees help our Board fulfill its oversight responsibilities related to climate issues.For example,the Public Policy and Sustainability Committee assists the Board in identifying,monitoring and evalu

18、ating potential implications of climate-related policies and trends that affect Chevrons businesses and performance.how does the Board bring in new ideas?The Board receives regular briefings from internal and independent external subject matter experts and considers broad perspectives on climate cha

19、nge-related matters.In four of the past five years,the Board participated in offsite strategy sessions that included presentations by third-party experts on issues related to climate change and the energy transition,such as policies,regulations,technology and marketplace evolution.Fostering long-ter

20、m andbroad-based perspectives are also important Chevron objectives.The Board engages extensively with external stakeholders,including stockholders,as an essential part of advancing the companys environmental goals.Our Directors regular participation in these dialogues enhances the Boards effectiven

21、ess.how is the role of technology evolving?Technology will play a major role in shaping the energy mix in both the near-and long-term future.Innovative solutions are needed to ensure energy is lower carbon,affordable and reliable.These solutions should consider lifecycle emissions and be cost-effect

22、ive and scalable.Although there is great focus on electrification,the world must look to many different solutions because reducing emissions in essential industries like air travel,shipping and heavy industry cannot be achieved through electrification alone.Chevron has a strategy that aims to advanc

23、e lower carbon technologies that can be developed and deployed on the scale needed for meaningful carbon reduction in hard-to-abate sectors,including its own.what are your views on the path and pace of the energy transition?Achieving a successful energy system of the future requires three things:Fir

24、st,it must deliver solutions that meet customer needs,balancing affordability,reliability and lower carbon;second,given the scale of the energy system,these solutions must be scalable to be meaningful;third,once a solution works and is scalable,the pace of transition can accelerate.Chevrons assets,t

25、he capabilities of its people and technology,and customers are distinct advantages in helping to meet the worlds energy and climate goals.Im optimistic about the progress Chevron is making,and I believe Chevron will play a major role in shaping the energy system of the future.“innovative solutions a

26、re needed to ensure energy is lower carbon,affordable and reliable”Chevron Corporation 2023 Climate Change Resilience Report3$8.0billionin lower carbon investments by 2028$2.0billionin carbon reduction projects by 2028advancing energy progresschevrons strategy is to leverage our strengths to safely

27、deliver lower carbon energy to a growing worldOur objective is to safely deliver higher returns,lower carbon and superior stockholder value in any business environment.Adopting intensity metrics provides Chevron the flexibility to grow our upstream and downstream businesses while aiming to become an

28、 increasingly carbon-efficient operator.We are investing to grow our traditional oil and gas business,lower the carbon intensity of our operations and grow new lower carbon businesses in renewable fuels,carbon capture and offsets,hydrogen,and other emerging technologies.planned capital allocation (p

29、ages 39,4549)lowering the carbon intensity of our operations 2028 targets(pages 6670)71 g COe/MJportfolio carbon intensity (Scope 1,2 and 3)by 202836 kg COe/boerefining carbon intensity(Scope 1 and 2)by 202824 kg COe/boegas carbon intensity (Scope 1 and 2)by 202824 kg COe/boeoil carbon intensity (Sc

30、ope 1 and 2)by 20282030 targets(pages 4548)100 mbd renewable fuels production capacity25 mmtpa offsets business and CCUS150 mtpa hydrogen equity production capacityChevron Corporation 2023 Climate Change Resilience Report4executive summaryfuels will remain an important part of the energy system for

31、years to come and that the energy mix will increasingly include lower carbon sources.As part of our strategic planning process,we use models and analysis to forecast demand,energy mix,supply,commodity pricing and carbon prices.This includes assumptions about future policy,such as those that may be i

32、mplemented in support of the Paris Agreements goal of“holding the increase in the global average temperature to well below 2 C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 C above pre-industrial levels.”We believe that our asset mix and actions in new ene

33、rgies enable us to be flexible in response to potential changes in supply anddemand.performance and policyIn 2022,more than 50%of our equity(i.e.,participating share of emissions both from facilities that Chevron operates and from our nonoperated joint ventures)direct emissions were in regions with

34、existing or developing carbon-pricing policies.Inthis environment,and into a future likely to include additional lower carbon policies,we seek to find solutions that are good for society and good for investors.To achieve societys goals most effectively,markets should be empowered to incentivize the

35、most carbon-efficient producers and enabled through transparent performance reporting.We continue to help develop standardized methodologies for carbon data that are calculated in a consistent,reliable,transparent way and are comparable across sectors and firms of all sizes to enable progress toward

36、 a lower carbon future.success in a lower carbon futureWe aim to grow our traditional oil and gas business,lower the carbon intensity of our operations and grow new lower carbon businesses in renewable fuels,carbon capture and offsets,hydrogen,and other emerging technologies.At Chevron,we believe th

37、e future of energy is lower carbon,and we support the global ambitions of the Paris Agreement.This report builds on our previous five editions and has updates throughout as we outline our governance,risk management,strategy,portfolio,performance and policy,and metrics.board and management oversightG

38、iven the nature of climate change and its relevance to our business,the entire Board of Directors addresses climate change-related issues,with the Boards committees assisting the Board by focusing on climate issues related to their respective functions.The Board has four standing committees:Public P

39、olicy and Sustainability;Audit;Board Nominating and Governance;and Management Compensation.At the executive level,we manage potential climate change-related risks and energy transition opportunities through the Enterprise Leadership Team and the Global Issues Committee,each of which meets regularly

40、throughout the year.risk assessment and managementWe face a broad array of climate-related risks,including physical,legal,policy,technology,market and reputational risks.We operationalize an enterprisewide process to assess major risks to the company and seek to apply appropriate mitigations and saf

41、eguards.As part of this process,we conduct an annual risk review with executive leadership and the Board of Directors and assess our risks,safeguards and mitigations.As Chevron aims to safely deliver higher returns and lower carbon in a transitioning world,we continue to place a high priority on the

42、 safety and health of our workforce and on the protection of communities,the environment and our assets.higher returns,lower carbonOur objective is to safely deliver higher returns,lower carbon and superior stockholder value in any business environment.Chevrons strategic and business planning proces

43、ses bring together the companys views on long-term energy market fundamentals to guide decision making by executives and to facilitate oversight by the Board of Directors.The worlds energy demands are greater now than at any time in human history.Chevron has a long history of producing oil,gas and o

44、ther products that enable human progress,which we proudly continue today as we pursue the energy future.Many published outlooks conclude that fossil Chevron Corporation 2023 Climate Change Resilience Report5section 1governance frameworkPhoto:In 2022,Lead Director Dr.Wanda Austin met with stakeholder

45、s and employees at Chevron operations in the Eastern Mediterranean and visited the Leviathan offshore platform.The Board of Directors approach to governance and oversight is informed by feedback and engagements from our stakeholders.1.1board oversight .71.2executive management of climate risks .111.

46、3organizational capability on energy transition .11Chevron Corporation 2023 Climate Change Resilience Report61.1board oversightChevrons Board of Directors oversees the companys strategy and risk management,both of which include climate change issues.Our governance structure gives the Board multiple

47、avenues to oversee risks and opportunities,including those related to climate change.The full Board annually reviews the companys strategy,including long-term energy outlooks and signposts on key trends.The Board has access to education and training on climate-related materials and to Chevrons inter

48、nal subject matter experts.The Board also regularly receives briefings on climate-related issues,including policies,regulations,technology and adaptation.The Board annually reviews Chevrons Enterprise Risk Management(ERM)process,which assists the Board and executive leadership in overseeing key stra

49、tegic risks for the company.Climate change is addressed in a comprehensive manner in the ERM process (see page 13).The full Board periodically meets with external experts to hear their perspectives on climate change and the energy transition.Accessing external experts who have varying viewpoints on

50、the speed and scale of the energy transition may enable the Board to consider a range of risks and opportunities arising from climate change.Given the nature of climate change and its relevance to our business,the entire Board addresses climate change-related issues,with the Boards committees assist

51、ing the Board by focusing on climate issues related to their respective functions.The Board has four standing committees:Public Policy and Sustainability;Audit;Board Nominating and Governance;and Management Compensation(Exhibit 1).Each Board committee includes only independent Directors,and each is

52、chaired by an independent Director.Each committee has access to management,company information and independent advisors.In 2020 and 2021,the Board reviewed its governance of climate change-related risks and energy transition opportunities with the aim of leveraging the purview of the four standing c

53、ommittees and more clearly defining how each committee assists the Board with its oversight responsibilities.As a result,the Board amended the charter of each of the four standing committees to clearly articulate each committees responsibility in assisting the Board in its oversight related to clima

54、te issues.Specifically,the Public Policy and Sustainability Committees charter was enhanced to underscore its role in assisting the Boards oversight of potential climate change-related risks and energy transition opportunities.section 1:governance frameworkboard and management oversightOur climate-r

55、elated governance is designed to manage potential climate change-related risks and energy transition opportunities.Board oversight,executive management and organizational capability are foundational elements to our disciplined approach.board engagementThe Boards approach to governance and oversight

56、is informed by feedback from stakeholders.Members of the Board periodi-cally engage stakeholders to discuss issues like climate change and to convey Chevrons approach to the energy transition.The viewpoints they hear on energy markets,geopolitics and technology trends enable the Board to effectively

57、 deploy our capital and human talent to achieve our higher returns,lower carbon objective.Chevrons actions are directly informed by engaging with our stockholders.In 2022,Chevron had over 90 one-on-one environmental-,social-and governance-focused meetings with stockholders representing approximately

58、 50%of outstanding common stock.Of these engagements,members of the Board participated in environmental-,social-and governance-focused meetings with stockholders representing approximately 28%of outstanding common stock.Chevron Corporation 2023 Climate Change Resilience Report7Board-level committees

59、 composed of non-employee directorsAssists the Board in overseeing accounting and financial reporting processes,including:Internal controls over financial reporting Relationship with independent auditor Implementation and effectiveness of compliance programs Financial risk management Cybersecurity r

60、isks as they relate to financial risk exposures Sustainability and climate change risks as they relate to financial risk exposures Operational Excellence audit and assuranceAssists the Board in overseeing governance practices and processes,including:Board succession planning Board skills,experiences

61、 and qualifications Stockholder engagement program(in conjunction with PPSC)Board,Committee and Director evaluation processAssists the Board in overseeing compensation programs and practices,including:Executive retention and diversity strategies and supporting processes Compensation program design a

62、nd goals Alignment of compensation with stockholders interests,including those related to sustainability and climate change risks and opportunitiesAssists the Board in overseeing policy issues and potential risks in areas such as:Environmental matters,including those related to sustainability and cl

63、imate change Legislative and regulatory initiatives Community relations Political contributions and lobbying Chevrons global reputation Stockholder engagement program(in conjunction with BNGC)audit committee(AC)Committees of executive officers operating under direction of the Boardexecutive committe

64、e(EC)enterprise leadership team(ELT)global issues committee (GIC)board of directors*board nominating and governance committee(BNGC)management compensation committee(MCC)public policy and sustainability committee(PPSC)Manages the composition,resource allocation and strategic direction of Chevrons por

65、tfolio in the following areas:Operational Excellence Performance improvement Energy transition Enterprise Risk Management process Market and price forecastsReceives briefings on these topics from internal subject matter experts and consults with outside experts to discuss energy transition and clima

66、te change issues.Oversees management of sustainability issues and practices,including:Energy transition Lobbying and trade association activity ESG reporting Revenue and tax transparency Human capital management Human rightsReceives regular updates on these issues from internal subject matter expert

67、s in advance of quarterly meetings.investorsAdditionally,events may be handled via ad hoc,cross-functional Crisis Management and Issue Management teams,which report regularly to members of the ELT,and if appropriate,provide updates to the Board.*Chaired by Chairman of the Board Chaired by Chief Exec

68、utive OfficerExhibit 1.Chevrons governance structure relevant to potential climate change-related risk and energy transition opportunity oversightChevron Corporation 2023 Climate Change Resilience Report81.1.1Public Policy and Sustainability Committee(PPSC)The PPSC assists the Board in identifying,m

69、onitoring and evaluating potential climate risks,policies and trends that affect Chevrons activities and performance.The PPSC discusses Chevrons progress in addressing sustainability and climate change matters such as the energy transition,establishment of climate-related goals and voluntary reporti

70、ng of environmental matters.The PPSC is briefed on emerging or ongoing issues related to capital markets,government policies and societal trends that could significantly impact Chevrons enterprise objectives.The PPSC reviews Chevrons political activities,including how direct and indirect lobbying on

71、 climate issues supports Chevrons climate strategy and reflects on the companys reputation.In conjunction with the Board Nominating and Governance Committee,the PPSC reviews climate-related proxy proposals and makes recommendations to the Board on responses to such proposals.1.1.2Audit Committee(AC)

72、The AC reviews the companys policies with respect to risk assessment and risk management and Chevrons major financial risk exposures,including sustainability and climate change risks.These risks are discussed in the“Risk Factors”section of the companys Annual Report on Form 10-K.1 The AC selects and

73、 engages the companys independent auditor and assists the Board in overseeing the audit of the companys financial statements.1.1.3Management Compensation Committee(MCC)The MCC considers the relative alignment of the companys compensation policies and practices with investors interests,including thos

74、e related to sustainability,climate change risks and energy transition opportunities.The MCC assesses and approves the incorporation of greenhouse gas-related performance measures into the scorecard that affects the compensation of management and most other employees.1.1.4Board Nominating and Govern

75、ance Committee(BNGC)The BNGC identifies and recommends prospective Directors with the goal of maintaining a Board composition appropriate to overseeing the wide-ranging risks that affect the company.The BNGC regularly reviews the appropriate skills and qualifications of Directors in the context of t

76、he current composition of the Board,the strategy of the company and the long-term interests of investors.The BNGC also regularly reviews the list of skills and qualifications desired for Board composition under the Corporate Governance Guidelines and,in 2021,added“experience leading business transfo

77、rmation”in light of the energy transition.Among the other collective skills and qualifications desired for an appropriate Board composition are experience and knowledge of environmental(including climate issues),governmental,regulatory,legal,public policy,financial,global business,international affa

78、irs and technology issues.Chevrons Directors have a diverse set of skills,experience and expertise to enable the Board to effectively oversee potential climate change-related risks and energy transition opportunities for the company.Several independent Directors bring specific environmental and poli

79、cy skills and qualifications to the Board.Our Directors experience comes from academic,government and business sectors.These diverse perspectives enable the Board to challenge itself and company management on climate change-related risks and energy transition opportunities.The Board periodically rea

80、ssesses Chevrons governance structure and the skills,experience and expertise of the Board.Such assessment helps Chevron maintain an effective framework for managing the companys performance and the risks to our business.PPSC oversight on climate lobbyingLobbying is an important way for Chevron to p

81、articipate in the political process.Chevron engages in direct and indirect lobbying.Direct lobbying is conducted by our employees and contract lobbyists.Related activities that support our employees and contractors are referred to as“indirect”lobbying activities and include research and analysis rel

82、ated to issues and pending legislation.Indirect activities are performed by our employees as well as the trade associations of which we are a member.Both lobbying and corporate political contributions are managed internally with oversight by Chevrons corporate compliance and internal audit teams and

83、 the Board of Directors.The PPSC assists the Board in overseeing political activities and providing effective responses to stockholder concerns regarding such activities.The PPSC annually reviews the policies,procedures and expenditures related to the companys political contributions and lobbying to

84、 assess the value of these activities and ensure alignment with Chevrons positions,inter-ests and trade-offs.The PPSC provides guidance on Chevrons political activities to the vice president of Corporate Affairs.For more information on our lobbying practices,see our lobbying and trade association we

85、bpage chevron.co/lobbyingandtrade.Chevron Corporation 2023 Climate Change Resilience Report9board of directorshighly engaged,diverse board with relevant skills and qualificationsMichael K.Wirth,Chairman and CEOFormer Vice Chairman of the Board and Executive Vice President of Midstream&Development,Ch

86、evronWanda M.Austin,Lead DirectorRetired President and CEO,The Aerospace Corporation(2,3)John B.FrankVice Chairman,Oaktree Capital Group,LLC(1)Skills,Experiences and Expertise:CEO/Senior Executive/Leader of Significant Operations Science/Technology/Engineering/Research/Academia Government/Regulatory

87、/Legal/Public Policy Finance/Financial Disclosure/Financial Accounting Global Business/International Affairs Environmental Leading Business TransformationCommittees of the Board:(1)Audit:Debra Reed-Klages,Chair(2)Board Nominating and Governance:Wanda M.Austin,Chair (3)Management Compensation:Charles

88、 W.Moorman,Chair(4)Public Policy and Sustainability:Enrique Hernandez,Jr.,ChairDebra Reed-KlagesRetired Chairman,CEO and President,Sempra Energy(1)D.James Umpleby IIIChairman and CEO,Caterpillar Inc.(2,4)Cynthia J.WarnerFormer President and CEO,Renewable Energy Group,Inc.(4)Jon M.Huntsman Jr.Former

89、Governor of Utah;U.S.Ambassador to Russia,China and Singapore(3,4)Charles W.MoormanSenior Advisor to Amtrak,Retired Chairman and CEO,Norfolk Southern Corporation(2,3)Dambisa F.MoyoCo-Principal,Versaca Investments(1)Alice P.GastRetired President and Professor Emeritus of Chemical Engineering,Imperial

90、 College London(2,4)Enrique Hernandez,Jr.Executive Chairman,Inter-Con Security Systems,Inc.(3,4)Marillyn A.HewsonRetired Chairman,CEO and President,Lockheed Martin Corporation(1)Chevron Corporation 2023 Climate Change Resilience Report101.2executive management of climate risksUnder the direction of

91、the Board,Chevrons Executive Committee(EC)is composed of executive officers of Chevron and carries out Board policy in managing the business affairs of the company.The Enterprise Leadership Team and Global Issues Committee,described below,are subcommittees of the Executive Committee.1.2.1Enterprise

92、Leadership Team(ELT)The ELT is responsible for managing the composition,resource allocation and strategic direction of Chevrons portfolio to achieve Chevrons objectives.The ELT focuses on performance improvement by understanding current performance and business drivers and assessing the progress and

93、 status of key corporate initiatives,like the development of our New Energies business lines(see pages 4649)to evolve our portfolio in light of energy transition opportunities.The ELT also oversees the ERM process(see page 13),which includes and addresses climate change-related risks.The ELT receive

94、s briefings from Chevrons subject matter experts on topics such as climate change;geopolitical risk;market conditions;energy transition strategies;peer activities;performance on and updates to metrics;technology and innovation;policy;and future energy opportunities.The ELT reviews market fundamental

95、s for oil,gas,products,carbon and new energy solutions(see page 24).1.2.2Global Issues Committee(GIC)The GIC,chaired by the Vice Chairman of the Board,oversees the development of Chevrons policies and positions related to global issues that may have a significant impact on Chevrons business interest

96、s and reputation.the vice president of chevron strategy and sustainability also serves as secretary to the PPSC,helping to connect the GICs work to the PPSCThe GIC receives updates from subject matter experts on an array of climate change-related issues,such as carbon policy development around the w

97、orld;company positions on carbon policy;political developments;lobbying and trade association activity;and environmental,social and governance(ESG)reporting practices.The GIC reviews the public climate change-related actions of other companies to understand how our peers are responding to climate ch

98、ange-related risks and energy transition opportunities.It also oversees our stockholder engagement plan and reviews feedback from our stockholder engagements.The GIC is focused on ensuring that our strategy and position are clearly communicated and that stakeholder feedback and concerns are carefull

99、y considered.1.3organizational capability on energy transitionOur people strategy is focused on engaging the full potential of our people to deliver the future of energy.We will achieve this by building great leaders,advancing our culture,and strengthening core and emerging skills.We strive to conti

100、nually improve execution across all aspects of our business as the energy system evolves.Our Oil,Products&Gas(OPG)organization combines upstream,midstream and downstream the full value chain which allows for a more integrated approach to capital alloca-tion,asset class excellence and value chain opt

101、imization.For example,the OPG Lower Carbon organization provides coordination to accelerate execution of high-impact opportunities and development of future lower carbon pathways.Chevron Technology Ventures(CTV)identifies,invests in and integrates externally developed technologies and business solut

102、ions.CTV targets innovation and transformational technology in areas like carbon capture,utilization and storage(CCUS);hydrogen;and emerging power technologies,among others.The Chevron Technical Center develops and deploys technology enterprisewide,including integrating lower carbon technology into

103、our operations.Chevron New Energies is focused on developing new lower carbon businesses that have the potential to scale.Its focus includes commercial-ization opportunities in renewable fuels,CCUS and offsets,hydrogen,and emerging technologies.Chevron Strategy and Sustainability(CSS)stewards the co

104、mpanys long-term strategy by integrating climate change,energy transition and other sustainability themes into macroeconomic forecasting,supply-and-demand forecasting,price forecasting,portfolio modeling and competitor intelligence.In 2022,CSS formed a methane reduction team to guide and implement o

105、ur enterprise methane strategy.Chevron Corporation 2023 Climate Change Resilience Report11section 2risk managementPhoto:Workers inspecting pipe atCO injection well.Chevron Australias Gorgon liquefied natural gas facility incorporates one of the worlds largest integrated carbon capture and storage pr

106、ojects.2.1physical risks .132.2transition risks .14Chevron Corporation 2023 Climate Change Resilience Report12Climate disclosure frameworks generally identify two main areas of corporate climate risk:physical risks and transition risks.*Physical risks include potential physical impacts driven by bot

107、h acute events and long-term shifts in climate patterns.Transition risks include the potential risks to a company arising from the transition to a lower carbon energy system,such as litigation,technology advancements and changes in policy,supply and demand,and stakeholder perceptions.2.1physical ris

108、ksAccording to the UN Intergovernmental Panel on Climate Change(IPCC)Sixth Assessment Report,the physical risks of climate change are varied and widespread.As disclosed on page 21 of the companys 2022 Annual Report on Form 10-K,the companys operations are subject to disruption from natural or human

109、causes beyond its control,including physical risks from hurricanes,severe storms,floods,heat waves,other forms of severe weather,wildfires,ambient temperature increases,sea level rise,fires and earthquakes,some of which may be impacted by climate change and any of which could result in suspension of

110、 operations or harm to people or the natural environment.Our operations have practices in place to help manage risksassociated with the impacts of ambient conditions and extreme weather events,regardless of any connection to anthropogenic climate change.These long-standing practices are also applied

111、 to address possible effects of climate change and to maintain the resilience of our infrastructure.For example,Chevrons Metocean Design and Operating Conditions guideline provides guidance for the physical parameters to be used in the design,construction and operation of offshore and coastal facili

112、ties,including those on land that may be threatened by coastal inundation due to storm surges.Chevron and a third party developed screening tools to identify potential physical risks at our assets globally as part of the Physical Risk from Climate Change procedure,formerly Climate Assess.The procedu

113、re is captured within the corporate OEMS,as part of the Environment Risk Management Process,and is for use in identifying,assessing,managing and mitigating the potential physical impacts of climate change to Chevron activities,including existing operations,operational changes,projects and new opport

114、unities.With worldwide operations subject to diverse microclimates and weather phenomena,we stay prepared for the possibility of natural disasters.Based on risk evaluations and business impact analysis,business units develop and implement a business continuity plan to provide continuous availability

115、 or prompt recovery of critical business processes,resources and facility operations.Our business units work with local communities and emergency response teams to develop site-specific plans in the event of any disruption.The plans and processes are regularly reviewed and tested to promote business

116、 continuity.enterprise risk managementChevron employs risk management processes for identifying,assessing and managing the risks to our business,including potential climate change-related risks.Our ERMprocess provides corporate oversight for assessing major risks to the company and the safeguards an

117、d mitigations that are put in place.As part of the annual ERM process,the ELTreviews risk categories that pertain to external stakeholders,geopolitical and legislative issues,organizational capability,and skilled personnel,among others,and their potential conse-quences,financial and otherwise.An exe

118、cutive from the ELT owns each risk category,directs a team to identify,safeguard and mitigate enterprise risks,and reports the findings to the ELT.Following endorsement by the ELT,the annual ERM assessment is reviewed by the Board of Directors.Potential climate change-related risks are integrated in

119、to multiple ERM categories.Our management of risk is further aided by other systems and processes such as our Operational Excellence Management System(OEMS).For more information on OEMS and focus area examples,see our 2022 Corporate Sustainability Report.section 2:risk management*Two such frameworks

120、 are CalPERS/Wellington Management,Physical Risks of Climate Change(P-ROCC),which can be accessed at the Task Force on Climate-related Financial Disclosures(TCFD),Recommendations of the Task Force on Climate-related Financial Disclosures,which can be accessed at assets.bbhub.io/company/sites/60/2020

121、/10/FINAL-2017-TCFD-Report-11052018.pdf.Chevron Corporation 2023 Climate Change Resilience Report132.2transition risksOur ERM process encompasses risks typically identified as climate-related transition risks,including policy,technology,market,legal and reputational risks.Risks that could materially

122、 impact our operations and financial condition are discussed in the“Risk Factors”section of our Annual Report on Form 10-K.2.2.1Policy risksPolicies addressing climate-related issues are evolving(see pages 5464).The direct effects,as well as second-and third-order effects,of potential policy changes

123、 will depend on the type and timing of such changes.As disclosed on pages 2224 of the companys 2022 Annual Report on Form 10-K,significant changes in the regulatory environment,including those driven by climate-related issues,could affect our operations.For example,legislation,regulation and other g

124、overnment actions related to global greenhouse gas(GHG)emissions and climate change could continue to increase Chevrons operational costs and reduce demand for Chevrons hydrocarbon and other products.Climate-related issues are integrated into the companys strategy and planning,capital investment rev

125、iews,and risk management tools and processes,where applicable(see page 24).They are also factored into the companys long-range supply,demand and energy price forecasts(see page 36).2.2.2Technology risksDevelopment and deployment of innovations and emerging technologies in pursuit of a lower carbon e

126、conomy may disrupt or displace portions of the current economic system.As disclosed on page 20 of the companys 2022 Annual Report on Form 10-K,technology advancements could affect the price of crude oil.The Chevron Technology Center(CTC)supports Chevrons businesses through research,technology and ca

127、pability development.The CTC also helps bridge the gap between business unit needs and emerging technology solutions developed externally to the company(see pages 2628,49).Chevron established the Chevron Future Energy Fund in 2018 with a commitment of$100 million and a follow-up Future Energy Fund I

128、I in 2021 with a commitment of$300 million to invest in breakthrough technologies that could help advance the energy transition.2.2.3Market risksThe potential impacts of climate change on markets are complex and uncertain.As disclosed on page 20 of the companys 2022 Annual Report on Form 10-K,Chevro

129、n is primarily in a commodities business that has a history of price volatility.Potential consumer use of substitutes to Chevrons products that may be developed in the future may impact our business.We are focused on maintaining a strong balance sheet and preserving prudent liquidity levels.Our poli

130、cies and controls provide centralized governance over key enterprise processes,including banking,liquidity management,foreign exchange,credit risk,financing,and climate change-related risks and energy transition opportunities(see page 24).we continue to place a high priority on the safety and health

131、 of our workforce and on the protection of communities,the environment and our assetsGuided by The Chevron Way,we have embedded and long-standing processes that are designed to grow our workforce capabilities and engage with stakeholders to manage potential impacts in the communities where we operat

132、e.We aim to:Employ risk management processes to evaluate facility-,activity-and product-related risks across the lifecycle of the business,from planning and construction through operation and decommissioning.Empower our people through programs that promote their health,well-being and development,inc

133、luding training and development for employees to help them achieve their full potential and to meet the needs of the evolving business.Cultivate innovative collaboration in the communities where we operate to support robust social investment programs,including investing in STEM education and program

134、s that support small and diverse businesses and supporting workforce development programs.Involve communities and other stakeholders in meaningful discussions and planning where there may be asset retirement or divestiture.For more information on activities regarding employees and communities,see ou

135、r 2022 Corporate Sustainability Report.Chevron Corporation 2023 Climate Change Resilience Report142.2.4Legal risksIn recent years,a variety of plaintiffs have brought legal claims against various defendants alleging climate-related losses and damages.As disclosed on page 24 of the companys 2022 Annu

136、al Report on Form 10-K,increasing attention to climate change may result in additional government investigations and private litigation against Chevron.We have highly capable legal staff and associated safeguards through all levels of the enterprise to identify,evaluate and actively address legal ri

137、sks.Our legal experts review and report on emerging issues and trends that could impact the company.They aim to provide systematic reviews of climate-related matters and timely analysis and advice for the management of identified risks.2.2.5Reputational risksAs disclosed on pages 2425 of the company

138、s 2022 Annual Report on Form 10-K,increasing attention to ESG matters,including those related to climate change,may impact our business.Organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their a

139、pproach to ESG matters.Such ratings are climate-related litigationChevron,along with other investor-owned energy companies comprising a small subset of the industry,has been named as a defendant in 25 lawsuits brought by four U.S.states,the District of Columbia,various county and city governments,an

140、d a fishing trade group.The lawsuits seek to hold the targeted companies financially responsible for the alleged effects of climate change,seeking billions of dollars in alleged damages,remediation costs and contingency-fee payments to private lawyers representing most of the plaintiffs.The lawsuits

141、 proponents seek to radically transform modern society.In the only case that to date has been finally resolved on the merits,the U.S.Court of Appeals for the Second Circuit affirmed the dismissal of all claims:“To permit this suit to proceed under state law would risk upsetting the careful balance t

142、hat has been struck between the prevention of global warming and energy production,economic growth,foreign policy and national security.”See City of New York v.Chevron Corp.,993 F.3d 81(2d Cir.2021).The court characterized climate change as a“uniquely international problem of national concern”that i

143、s not apt for adjudication under state law.In Chevrons view,the suggestion that a few,investor-owned energy companies should be held retroactively liable for the cumulative effects of the phenomena contributing to climate change is legally and factually baseless.These companies collective production

144、 meets only a small fraction of global oil and gas demand and contributes an even smaller portion of overall GHG emissions.The production of oil and gas has brought immense economic and security benefits to billions of people around the world,including the citizens of the state and local governments

145、 filing these lawsuits,which is why it has long been permitted,promoted and even mandated by governments around the world.Seeking to impose retroactive liability against a small group of energy companies disregards the history of how our complex energy system has developed,as well as national securi

146、ty and geopolitical imperatives.Granting the putative relief requested in these lawsuits would neither reduce global demand for oil and gas nor effectively address climate change.Targeting investor-owned energy companies while ignoring the much larger production of state-owned companies and GHG emis

147、sions from other sectors of the economy is arbitrary and opportunistic and would punish companies that are often the most transparent,innovative and responsible producers of the energy that is essential to modern life.Claims that Chevron has improperly concealed superior knowledge of climate change

148、from the public are false.The potential climate effects of GHG emissions including those produced by certain end users of fossil fuels have been the subject of extensive study funded and published by the United States government,among other national and international bodies,for more than half a cent

149、ury.This massive body of research has been the subject of widespread public discussion by prominent scientists,activists and government officials.Within this broad public debate,policymakers at every level of government including government entities that are plaintiffs in these lawsuits have made po

150、licy decisions to continue the produc-tion and use of oil and gas after weighing the costs,benefits and competing priorities.Chevron believes that climate change is a global issue that requires global solutions.We welcome meaningful efforts to address climate change and look forward to continuing to

151、 engage with governments and stakeholders to develop constructive solutions to help deliver a lower carbon future.Attempting to use the court system to usurp the proper role of policymakers,stifle disfavored speech on issues of public importance,and retroactively punish investor-owned energy compani

152、es for lawful and beneficial activity is not an appropriate or effective means of accomplishing that objective.used by some investors to inform their investment and voting decisions.Also,some stakeholders,including but not limited to sovereign wealth,pension and endowment funds,have been promoting d

153、ivestment of fossil fuel equities and urging lenders to limit funding to companies engaged in the extraction of fossil fuel reserves.Unfavorable ESG ratings and investment community divestment initiatives may lead to increased negative investor sentiment toward Chevron and our industry and to the di

154、version of investment to other industries.Our GIC actively stewards our reputation by working toward alignment of key corporate policies,practices and public positions related to climate change.Refer to Section 1,“Governance Framework”(see pages 711).The Stakeholder Engagement and Issues Management

155、process in our OEMS facilitates engagement with local communities and stakeholders to identify and assess the unique risks for each business units operations.Potential social,political and reputational risks are identified,leading to risk management strategies.We regularly engage with investors and

156、other stakeholders to receive feedback on climate-related issues.Chevron Corporation 2023 Climate Change Resilience Report15175125150751002550202220302026205020382042204620340IPCC scenariosIEA NZE Scenario(2022)IEA NZE Scenario in contextThe International Energy Agency(IEA)Net Zero Emissions by 2050

157、(NZE)Scenario is one potential path to a 1.5 C scenario.Described by the IEA as“a pathway to reach net zero emissions by 2050,not the emphasis added pathway,”the scenario was originally published in 2021,with an update issued in October 2022.We used the assumptions in the NZE Scenario(2022)to test t

158、he resiliency of our portfolio.The statements that follow in this section represent projections and assumptions associated with that scenario test.They are not representative of Chevrons own predictions or actual conditions at the present time.The hypothetical NZE Scenario sets outa pathway to achie

159、ve net zero emissions from the global energy system in 2050.It assumes a transition based on three fundamental shifts in the global energy system:massive electrification,unprecedented levels of energy intensity improvement and widespread global policy cooperation.In the scenario,the global economy m

160、oves away from one largely powered by fossil fuels to one powered predominantly by renewable energy and decreases in oil and gas demand put downward pressure on prices.The NZE Scenario has lower oil and gas demand than other externally developed Paris-aligned scenarios such as the average C1 pathway

161、,described as warming limited to 1.5 C with no or limited overshoot,through C4 pathway,described as warming limited to 2 C(Exhibit 2),of the Intergovernmental Panel on Climate Change(IPCC).The NZE Scenario also reflects lower oil and gas prices than other 1.5 C scenarios such as the Network for Gree

162、ning the Financial System Net Zero by 2050 Scenario(NGFS Net Zero by 2050 Scenario).The IEAs NZE Scenario projects the price of oil drops to approximately$35 per barrel by 2030 and to less than$25 per 2.2.6scenario teststress-testing our portfolio under the IEA NZE scenariobarrel by 2050 in real ter

163、ms.This compares with projections for oil prices greater than$85 per barrel in 2030 and approximately$110 per barrel in 2050,in real terms,in the NGFS Net Zero by 2050Scenario.The 2022 update to the NZE Scenario reflects higher near-term emissions following the worlds rebound from the COVID-19 pande

164、mic,initial increased use of coal and a faster transition from gas to renewables in Europe following the Russia-Ukraine military conflict,and revisions to behavior-based assumptions.Compared with NZE Scenario forecasted assumptions in 2021,the 2022 We consider a range of long-term energy-demand scen

165、arios*and commodity prices when evaluating our portfolio.For longer-term scenarios,we routinely use external views to both inform and challenge our internal views.This includes scenarios that assume a wide range of energy transition outcomes,which may include scenarios for which the possibility of o

166、ccurrence is remote.We analyze these alternative scenarios representing diverse potential futures to stress-test our portfolio and integrate lessons learned into our decision making to assess investments and evaluate business risk.*A scenario is a hypothetical construct that uses assumptions and est

167、imates to highlight central elements of a possible future but is not a forecast,prediction or sensitivity analysis.The IEA defines energy intensity improvement as the percentage decrease in the ratio of global total energy supply per unit of gross domestic product.Exhibit 2.IEA NZE Scenario in conte

168、xt:oil and gas demand in various 2 C or lower external scenarios(mmboe/d)Sources:IEA,World Energy Outlook 2022,iea.org/reports/world-energy-outlook-2022;IPCC,AR6 Scenario Explorer and Database Hosted by IIASA,data.ene.iiasa.ac.at/ar6/#/downloads.Chevron Corporation 2023 Climate Change Resilience Rep

169、ort16800400200060020502030204020218 billion10 billionNuclearOther renewablesHydropowerNatural gasCoalOilBioenergyPopulationupdates result in very little change in overall energy demand or price.Natural gas demand is the notable exception.Based on the IEAs projection of how present-day energy securit

170、y concerns over international gas supply could cause a shift away from gas demand in the coming decade,gas demand is down markedly in favor of coal and biomass,followed by nuclear and renewable power.The IEA also specifically calls out the need for policymakers to“do much more to provide signals on

171、the demand side”to develop clean energy supply chains and emphasizes that the NZE Scenario pathway“cannot be achieved without the rapid and large-scale adoption of measures that limit growth in energy demand.”The scenarios assumptions are limited to the energy sector and do not address natural clima

172、te solutions,such as offsets,or impacts to land-use change that occur in non-energy sectors.The framework also assumes less use of negative emissions technologies,like CCUS,than IPCC scenarios.The IEA describes the pathway as“narrow but still achievable,”in that it“entails very ambitious policies an

173、d measures to improve energy efficiency and reduce energy demand,including through behavioral change,”and acknowledges that“there are many areas where progress is well short of what is envisaged in the NZE Scenario.”We agree the scenario and its assumptions are challenging.The NZE Scenario requires

174、globally coordinated policy design,strong international cooperation,vast capital redeployment,nearly quadrupling of renewables and nuclear capacity additions,accelerated technology deployment,and an improvement in energy intensity that is two-and-a-half times higher than the observed trend of the pa

175、st decade.We see the NZE Scenario as remote and highly unlikely due to the immediate and unprecedented action required to transform the global energy system.“there is still a large gap between todays ambitions and a 1.5 C stabilization”3Modeling of long-term scenarios is inherently speculative,given

176、 the wide range of unpredictable variables and externalities that could affect outcomes through 2050.We do not rely on the NZE Scenario for our business planning.Nonetheless,we have conducted a scenario test of the NZE Scenario demand projections,as well as its oil and gas projections,to stress-test

177、 our portfolio.The IEA does not directly provide all the necessary market details required to run an NZE Scenario analysis(e.g.,regional pricing or product consumption).Where necessary,we developed additional assumptions consistent with the NZE Scenario narrative to estimate the performance of our p

178、ortfolio.Our Corporate Audit department,which performs the internal audit function at Chevron,conducted a nonrated assurance review of the NZE Scenario analysis.The Corporate Audit department found that the analysis was conducted in accordance with established internal process and emerging external

179、guidance.IEA NZE Scenario assumptionsThe NZE Scenario results in approximately 15%lower global primary energy demand in 2050 than in 2021(Exhibit 3)while supporting 2 billion more people and a doubling of the global economy.A selection of the scenarios assumptions are as follows:Global energy invest

180、ment doubles,increasing from an average of 2%of annual GDP from 2017 to 2021 to nearly 4%by 2030.Universal energy access is achieved globally by 2030.Electricity use increases from approximately 20%of final energy consumption today to over 50%by 2050.Renewables and bioenergy account for over 80%of t

181、he global energy mix by 2050.The oil and gas sectors share of total primary energy demand declines from over 50%today to approximately 15%by 2050.The power generation sector reaches net zero emissions across all advanced economies by 2035 and net zero emissions globally by 2040.Source:IEA,World Ener

182、gy Outlook 2022,iea.org/reports/world-energy-outlook-2022,License:CC BY 4.0(report),CC BY NC SA 4.0(Annex A).Exhibit 3.Total primary energy demand in IEA NZE Scenario(Exajoules)Chevron Corporation 2023 Climate Change Resilience Report17ElectricityIndustryBuildingsOtherTransportHistoricIEA STEPSIEA A

183、PS APSNZE20504030201020152020205020400 Battery storage increases 30-fold between 2021 and 2030,with storage surpassing natural gas as the principal source of system flexibility by 2035.No new cars with internal combustion engines are sold after 2035,and nearly all trucks sold in 2040 and beyond use

184、electricity or hydrogen.By 2050,crude oil prices drop to less than$25 per barrel,in real terms,and international gas prices drop to$2$5 per mmbtu,in real terms.By 2050,carbon prices rise to$250 per tonne COe in advanced economies,$200 in China,India,Indonesia,Brazil and South Africa,and$180 in other

185、 emerging-market and developing economies(Exhibit 4).By 2050,CCUS accounts for 6.2 gigatonnes(Gt)of CO removals.Energy efficiency and changes in consumer behavior drive much of the emissions reduction(Exhibit 5):Approximately 50%of emissions reductions for industry and buildings result from energy e

186、fficiency measures Fuel switching(approximately 65%)and behavior changes(approximately 20%)drive demand reductions in the transportation sector Approximately 75%of the projected emissions reductions related to behavior change stem from measures directly mandated or influenced by government policies

187、such as congestion charges,speed limits and high-speed rail build-out Behavior changes include less space heating and air conditioning,levies on frequent fliers,and policies that encourage travel by rail and discourage car use in cities and SUV ownershipoil Oil demand:In the NZE Scenario,oil demand

188、drops to approximately 23 mmbd by 2050,a decrease of approxi-mately 75%from todays levels.The majority of oil demand in 2050 is from uses for which oil is not combusted,such as chemical feedstocks,lubricants,paraffin waxes and asphalt.Oil consumption for transportation drops by approximately 90%from

189、 2021.Sectors such as aviation and shipping decline to a lesser extent and account for approximately 2 mmbd of demand in 2050.Oil supply:Lower demand implies that less supply is required.However,because of the natural decline inherent in oil production,even under the NZE Scenario,ongoing investment

190、in existing fields is still needed.Upstream oil investment averages approximately$300 billion per year through 2030 Exhibit 5.Global CO emissions from energy reductions in IEA APS and IEA NZE Scenario(Gigatonnes)APS=Announced Pledges ScenarioSTEPS=Stated Policies Scenario Source:IEA,World Energy Out

191、look 2022,iea.org/reports/world-energy-outlook-2022,License:CC BY 4.0(report),CC BY NC SA 4.0(Annex A).*Includes all Organization for Economic Co-operation and Development(OECD)countries except Mexico.Includes China,India,Indonesia,Brazil and South Africa.Note that as of the 2022 IEA NZE Scenario up

192、date,this no longer includes Russia.Source:IEA,World Energy Outlook 2022,iea.org/reports/world-energy-outlook-2022,License:CC BY 4.0(report),CC BY NC SA 4.0(Annex A).Exhibit 4:IEA NZE Scenario(2022)assumed carbon price20302050advanced economies with net zero pledges*$140/tonne$250/tonneemerging-mark

193、et and developing economies with net zero pledges$90/tonne$200/tonneother emerging-market and developing economies$25/tonne$180/tonneand$125 billion per year thereafter,in real terms,following rapid deployment in clean energy technology.The IEA states that“reducing oil investment to this level would

194、 lead to a very different outcome if done in advance of or instead of the huge scaling up in clean energy spending and consequent reduction in oil demand that features in this scenario.”Chevron Corporation 2023 Climate Change Resilience Report18 Oil price:The NZE Scenario projects that the price of

195、oil drops to approximately$35 per barrel by 2030 and to less than$25 per barrel by 2050 in real terms.We have assumed this global oil price represents Brent.“there is continued investment in existing fields.to ensure that supply does not fall faster than the decline in demand”4natural gas Natural ga

196、s demand:The NZE Scenario approximates that gas demand peaks in the near term and drops 30%through 2030 to 3,300 bcm and 1,200 bcm in 2050,70%lower than in 2021.By 2050,approximately 40%of global natural gas demand goes to CCUS-paired hydrogen production.Natural gas supply:As with oil,continued natu

197、ral gas investment is needed to maintain supply at existing fields in the NZE Scenario.Natural gas investment averages approximately$200 billion per year through 2030 and$85 billion per year thereafter.Under the NZE Scenario,traded volumes of liquefied natural gas(LNG)fall by two-thirds and traded v

198、olumes of pipeline gas fall by 85%between 2021 and 2050.Natural gas price:The NZE Scenario includes projections for country-and region-level gas prices in the United States,European Union,China and Japan.The United States benchmark decreases to$1.9 per mmbtu in 2030 and$1.8 per mmbtu in 2050.The Eur

199、opean Union benchmark decreases to$4.6 per mmbtu in 2030 and$3.8 per mmbtu in 2050.The China and Japan benchmarks decrease to approximately$6 per mmbtu in 2030 and$5.1 per mmbtu in 2050.The lack of granular market descriptors and/or regional information in the dataset necessitates additional judgmen

200、ts;we have made additional assumptions to convert these prices to regional benchmarks.refined productsIn the NZE Scenario,rapid electrification of the vehicle fleet leads to a sharp decline in demand for refined products,such as gasoline and diesel,which implies decreased refinery throughput.At the

201、same time,demand for noncombusted refined products,such as petrochemicals,remains more resilient.Refineries able to shift production to chemicals and biofuels may gain competitive advantage,as both of these products see increased demand through 2030.Nevertheless,the scale of changes in the NZE Scena

202、rio would inevitably lead to rationalization.Refineries able to shift to other areas,such as chemical recycling,renewable fuels or hydrogen production,may be able to reconfigure to avoid full closure.CCUS,hydrogen and renewable fuels CCUS:The NZE Scenario assumes implementation of policies to suppor

203、t a range of measures that establish markets for CCUS investment.By 2050,approximately 6.2 Gt of carbon are captured.While efforts are pursued to increase the efficiency of industrial processes such as cement manufacturing in the NZE Scenario,CCUS plays an important role in limiting these emissions

204、from harder-to-abate energy-consuming sectors.In addition,many developing nations have recently built or are building large numbers of coal power plants.Given the service life of these facilities,retrofitting them with CCUS will be central to reducing emissions in these economies.Hydrogen:Lower carb

205、on intensity hydrogen production increases from very low current levels to approximately 450 million tonnes in 2050 in the NZE Scenario projections.Approximately 60%is used in end-use sectors,such as for steel and chemical production,with the remainder converted to power or other fuels.By 2050,over

206、70%of hydrogen production is from electrolysis,with the remainder largely from natural gas in combination with CCUS.Renewable fuels:Renewable fuels supplies accelerate in the NZE Scenario,with liquid biofuels expanding by a factor of approximately three and biogases by a factor of approximately 12 b

207、y 2050.Liquid demand is driven by conventional ethanol and biodiesel for passenger cars and trucks through 2030,shifting to advanced biodiesel and sustainable aviation fuel for shipping and aviation through 2050.Advanced liquid biofuels increase their share of the global aviation fuel market to 40%i

208、n 2050.In addition,biogas and biomethane are used for clean cooking fuels and transport via compressed natural gas(CNG)in the NZE Scenario.Chevron Corporation 2023 Climate Change Resilience Report19portfolio analysisWe tested our portfolio against projected global demand and prices under the NZE Sce

209、nario.The NZE Scenario is hypothetical and relies on assumptions that would entail unprecedented policy and other actions by a large number of stakeholders and governments worldwide to achieve net zero global emissions by 2050.While the NZE Scenario paints a fundamentally different and generally unl

210、ikely picture of the energy future,based on the assumptions underlying the scenario,we believe Chevron could transition to help meet the worlds evolving energy needs projected in the NZE Scenario by taking a number of actions,including:further focusing our upstream portfolio on assets that are the m

211、ost competitive from a returns,cost of supply and carbon intensity perspective in the short term and midterm;aligning our downstream and chemicals business around scaled,efficient,flexible,integrated and high-margin value chains and renewable fuels;and concentrating our New Energies investments in h

212、igh-demand growth areas where we have competitive advantage,such as CCUS and hydrogen.Our business model can evolve to deliver the growth of our New Energies business if policies,such as significant economywide carbon prices envisioned in the NZE Scenario,enable lower carbon solutions to scale.Under

213、 this hypothetical scenario,we would expect to experience reductions in projected free cash flow*as we evolve from a company focused primarily on hydrocarbon extraction and refining to one primarily focused on low-carbon fuels,low-carbon gases and CCUS.In the long term,New Energies would likely gene

214、rate the majority of Chevrons free cash flow.As such,New Energies would shift from being a small segment in the portfolio to becoming the most significant contributor to free cash flow.Short-term and midterm impacts(010 years),upstream:In the NZE Scenario,Chevrons upstream investments would likely d

215、ecrease,adapting to changing industry economics.Our existing portfolio is diverse and flexible,which would allow us to mitigate risk and enable the prioritization of capital to existing assets and resource bases with the highest returns,lowest cost of supply and lowest carbon intensity within our po

216、rtfolio.In addition,our GHG reduction investments would enable us to further reduce the carbon intensity of our assets and supply the market with lower carbon intensity crude oil and natural gas,which is still needed in the NZE Scenario.Upstream capital and exploratory spending,production and free c

217、ash flow would decline over the first decade in the NZE Scenario;however,free cash flow is projected to remain positive.Today,much of our upstream investment is focused in short-cycle,lower carbon intensity assets or development of major existing fields.Our short-cycle assets,like those in the Permi

218、an and the Denver-Julesburg basins in the United States,give us the flexibility to respond to commodity price volatility.Our assets in Kazakhstan,the U.S.Gulf of Mexico,Nigeria,Angola and the Eastern Mediterranean would continue to generate positive free cash flow in the short term at lower commodit

219、y prices,given limited point-forward investment requirements.These assets provide opportunities for investment in infill drilling and backfill projects that are typically higher return and lower risk,given that they leverage existing assets and infrastructure.Our LNG assets in Australia would genera

220、te positive free cash flow in an environment that lacks substantial price growth with our existing asset base and select backfill investments.We believe that our advantaged asset base would continue to attract capital and generate competitive returns even in a hypothetical low-price environment like

221、 the NZE Scenario.In a declining-demand and low-price environment like the NZE Scenario,operating costs would likely decline across the portfolio,driven by efficiency initiatives and portfolio rationalization,and a general reduction in industry cost structure would occur due to reduced demand for go

222、ods and services.Short-term and midterm impacts(010 years),downstream:Although the NZE Scenario shows a sharp decline in demand for conventional transport fuels,we believe that the downstream portion of our portfolio would remain resilient through 2030 due to continued demand for certain products,in

223、cluding chemicals and lubricants,combined with the actions we have taken to enhance refinery competitiveness.In addition,our investments in the renewable fuels value chain,like our acquisition of Renewable Energy Group,Inc.in 2022 and our joint venture with Bunge North America,Inc.,would provide opp

224、ortunities for more rapid growth as demand for these commodities would increase in the NZE Scenario.Petrochemical demand also increases slightly through 2030 in the NZE Scenario,which could help grow free cash flow from the chemical business.Short-term and midterm impacts(010 years),New Energies:Our

225、 focus on scaling lower carbon intensity hydrogen and CCUS solutions aligns with the significant demand growth that occurs in this decade in the NZE Scenario.As is typical of a business in its growth stage,we expect that New Energies free cash flow will be negative during the next decade as we inves

226、t in projects.We believe it could become positive and continue to grow post-2030 if businesses scale and achieve positive rates of return and policy remains supportive in the NZE Scenario.*Free cash flow is a non-generally accepted accounting principles metric and is defined as net cash provided by

227、operating activities less capital expenditures.It generally represents the cash available to creditors and investors after investing in the business.Chevron Corporation 2023 Climate Change Resilience Report20summary of scenario testAlthough our asset mix would need to evolve to adapt to various scen

228、arios,we believe our signpost framework(see page29)and portfolio management approach(see pages 2324)would enable Chevron to pivot and scale into areas of opportunity under the modeled assumptions.We believe our processes for tracking leading indicators and adapting our business enable us to be flexi

229、ble in response to potential changes in policy,supply,demand and physical risk.stranded assetsHigh-profile publications have stated that the portfolios of many oil and gas companies are not competitive in a“well below 2 C world,”implying that companies and their investors have significant exposure t

230、o“stranded”assets because a companys value is tied to undeveloped assets.Chevron has several robust processes and controls in place to assess our reserves and the economic productivity of our assets.As part of the internal control process related to reserves estimation,the company maintains a Reserv

231、es Advisory Committee,an organization that is separate from the business units that estimate reserves,chaired by the Manager of Global Reserves.Annually,the company assesses whether any changes have occurred in facts or circumstances,such as changes to development plans,regulations or government pol

232、icies,that would warrant a revision to reserve estimates.A common way to evaluate the depth of a companys reserves is to divide the quantity of proved reserves(R)by the annual production(P),creating a ratio(R/P)that indicates the number of years remaining before all proved reserves will be produced.

233、At the end of 2022,Chevrons R/P ratio was 10.2 years.Impairment reviews are triggered when events test market assumptions upon which our business plans and long-term investment decisions are made and are based on managements best estimate of future expected cash flows.Reserve changes and the results

234、 of our impairment review processes are detailed in the companys 2022 Annual Report on Form 10-K.Long-term impacts(10-plus years),upstream:In this scenario,post-2030,upstream investment would be limited to only our assets that provide the highest returns and have the lowest cost of supply and lowest

235、 carbon intensity,signposted by the pace of global demand decline in the NZE Scenario.Positive free cash flow would likely decrease substantially as production would decline.In the NZE Scenario,between 2040 and 2050,positive free cash flows end.The NZE Scenario will ultimately advantage producers at

236、 the lowest end of the cost of supply stack.An increase in hydrogen demand could create opportunities to supply gas for CCUS-paired hydrogen from our Permian Basin,Denver-Julesburg Basin and legacy gas assets,such as Gorgon and Wheatstone in Australia and those in the EasternMediterranean.Long-term

237、impacts(10-plus years),downstream:The continued decline in demand for gasoline and diesel would result in reduced need for those products globally.Lighter crudes and lower runs would lead to less feed for conversion units in more complex refineries,which in the absence of flexibility,efficiency and

238、reconfiguration could disadvantage high-conversion refineries(e.g.,coking)relative to simpler refineries.Our investments in renewable fuels could allow for full refinery conversion to meet the continued demand for these fuels in the NZE Scenario.In addition,tightly integrated value chains,in areas s

239、uch as the U.S.West Coast,the U.S.Gulf Coast and Asia,could enable us to pivot these operations to lower carbon intensity hydrogen.Finally,the continued demand for chemicals could enable continued select investments in petrochemical facilities.Long-term impacts(10-plus years),New Energies:New Energi

240、es would generate a significantly larger share of Chevron free cash flow in 2050 as the demand for lower carbon intensity hydrogen and CCUS continues to increase in the NZE Scenario.We expect that New Energies free cash flow will turn positive between 2030 and 2040,given the assumptions previously m

241、entioned.The rise in carbon prices and enabling policies assumed in the NZE Scenario create significant demand growth for lower carbon intensity hydrogen and CCUS.Our investments in these areas would continue to grow,potentially enabling us to meaningfully pivot and scale into them.Chevron Corporati

242、on 2023 Climate Change Resilience Report21section 3strategyPhoto:A worker at a tankless facility in Greeley,Colorado.Tankless production facilities reduce GHG emissions and surface footprint.3.1long-term fundamentals .243.2future energy mix .293.3demand and supply .313.4prices:near term and long ter

243、m .36Chevron Corporation 2023 Climate Change Resilience Report221900191019201930194019501960197019801990200020102020203020402050050100150200250Energy source demand0100200300400500600700800Total primary energy demandTraditional biomassModern biomassOilNatural gasNuclearHydropowerOther renewablesCoalT

244、otal primary energy demand under IEA STEPS 20222050Total primary energy demand19002022our strategy is to leverage our strengths to safely deliver lower carbon energy to a growing worldhigher returns,lower carbonOur purpose is to develop the affordable,reliable,ever-cleaner energy that enables human

245、progress.We operate in many jurisdictions that have enacted lower carbon policies.Policy-enabled markets are advancing around the world with emerging support for mandatory reporting,renewables,electric vehicles,hydrogen fuel and CCUS technologies,among others.Under current and potential future marke

246、t conditions,we seek to understand the impacts of climate-related policies to help guide our actions.section 3:strategyThe worlds energy demand in recent years is greater than at any time in human history(Exhibit 6).Most published outlooks conclude that fossil fuels will remain a significant part of

247、 an energy system that increasingly incorporates lower carbon sources of supply.Within this context,we align our strategy with areas in which we have a competitive advantage and in which we see the potential to generate increased value for our investors.Oil and gas reservoirs and resources decline n

248、aturally over time investment is needed to maintain them in order to meet projected demand,even in lower carbon scenarios.Given this,we will continue to develop resources to help fulfill the worlds demand for energy.At the same time,we will maintain flexibility in our portfolio and examine ways to a

249、dapt investment patterns in response to changing policy,demand and energy transition opportunities.We discuss our approach to each energy transition opportunity in Section 4,“Portfolio”(see pages 3849).Sources,as modified by Chevron Corporation:19001970,Hannah Ritchie,Max Roser and Pablo Rosado(2022

250、),“Energy,”OurWorldInData.org,ourworldindata.org/energy;Energy Institute Statistical Review of World Energy(2023);Vaclav Smil(2017);19712020,IEA(2022),World Energy Balances(database),iea.org/data-and-statistics/data-product/world-energy-balances-highlights;20212050,IEA,World Energy Outlook 2022,iea.

251、org/reports/world-energy-outlook-2022,License:CC BY 4.0(report),CC BY NC SA 4.0(Annex A).Exhibit 6.Global energy transformation since 1900(Quadrillion BTU)Chevron Corporation 2023 Climate Change Resilience Report23total demandfor energy and mixstrategic focuslong-termmarketfundamentalssupply level a

252、nd cost of supplypricefor each energy solutioneconomic macrotrendspopulation growth,increased living standards and consumer behaviorpolicypolicy trends,framework and impactstechnologytechnology breakthroughs and scale-upWe believe that lower carbon intensity oil and gas assets will remain economical

253、ly competitive under a wide range of futurescenarios.We also believe that our asset mix enables us to be flexible in response to potential changes in supply and demand,even in hypothetical lower carbon scenarios like the NZE Scenario(see pages 1621of Section 2).Our growingnew energy businesses provi

254、de us with the opportunity to deploy capital and generate returns in accelerated energy transitionpathways.The scale of investment and time involved in finding,extracting and processing oil and gas requires long-term planning and decision making to effectively manage the uncertainties inherent in th

255、ese markets.Our strategic and business planning processes guide our actions as we aim to safely deliver higher returns and lower carbon.Key strategic processes that support our ability to operate in a lower carbon future include:Decision analysis(DA):Our DA process is structured for developing,evalu

256、ating and comparing alternatives,including future options,in the face of risk and uncertainty.Our DA function incorporates deterministic and probabilistic analyses and economic and financial analysis tools,along with debiasing techniques,to improve decision quality in many of the followingprocesses.

257、Capital-project approvals:Investments are developed,approved and implemented in the context of the strategic plan,segment-specific business plans and commodity price forecasts.Investment proposals are evaluated by management and,as appropriate,reported to the Executive Committee and the Board of Dir

258、ectors.Final decisions are guided by a strategic assessment of the business landscape.GHG-related factors are considered in project-appropriation assessments.Business-development screening:Our screening processes to assess opportunities include a range of considerations,such as portfolio fit and imp

259、act on portfolio carbon intensity.Marginal abatement cost curve(MACC):Our MACC process is a disciplined and value-driven approach to cost-effectively reduce the carbon intensity of our operations and assets by optimizing carbon reduction opportunities and integrating GHG mitigation technologies acro

260、ss the enterprise(see page 39).We source emissions reduction opportunities from operated and nonoperated assets.We apply both deterministic and probabilistic analysis to assess opportunities,consistent with our DA practices.We use portfolio theory and efficient frontier analysis to identify a portfo

261、lio of opportunities across the technology spectrum,segments,business units and geographies.3.1long-term fundamentalsFundamentals that drive strategic focus and actionChevrons strategic and business planning processes bring together our views on long-term energy market funda-mentals to help guide de

262、cisions on strategy,portfolio management,business planning and capital allocation by executives and to facilitate oversight by the Board of Directors(Exhibit 7).We use models and internal analysis to forecast demand,energy mix,supply,commodity prices and carbon prices,all of which include assumption

263、s about future policy and technology developments.A cross-functional team tracks and forecasts long-term fundamentals to inform us of potential changes in market dynamics that could indicate the need for changes to strategy.Exhibit 7.A disciplined approach to strategy developmentChevron Corporation

264、2023 Climate Change Resilience Report2436%Percentage of population using wood or other solid fuels for cooking600400200020102020203020402050Developing economiesAdvanced economiesTotal primary energy demand,IEA Stated Policies Scenario3.1.1Macroeconomic and demographic driversAffordable,reliable ener

265、gy enables economic development by facilitating modern production techniques across all segments of the economy,which ultimately leads to increased life spans and a higher quality of life.5Individuals and society benefit from access to affordable,reliable and ever-cleaner energy(Exhibit 8).As popula

266、tions increase and urbanize and as incomes grow and billions of people in less-developed countries seek a higher standard of living,many experts forecast global energy demand to increase(Exhibit 9),even as the energy intensity of the worlds economic output declines.6 Developing economies currently c

267、onsume 59.1 gigajoules of energy per person as compared with 160 gigajoules per person in advanced economies.Energy use per person across developing economies is approximately 37%of the levels across advanced economies,up from 29%a decade ago.As advanced economies shift to the service sector,they ou

268、tsource their manufacturing to developing economies.Rising income levels,population growth and manufacturing expansion contribute to increased energy consumption across developing economies,helping to close the gap with advanced economies.As incomes improve,more economic growth comes from the servic

269、e sector,which is often more energy-and carbon-efficient than manufacturing.Technological advancements and improvements in energy efficiency will likely further reduce energy intensity.Changes in consumer behavior can also influence energy demand.Behaviors like remote working and videoconferencing c

270、an lead to a decrease in energy demand.Others,like more home deliveries,can lead to an increase in energy demand.The impact of behavior changes may be modulated by other demand drivers,such as government policies or the long life of existing infrastructure.In 2022,the residential sector accounted fo

271、r approximately 15%of natural gas consumption in the United States,and natural gas was the source of approximately 42%of residential sector end-use energy consumption.7Approximately 60%of homes in the United States use natural gas for space and water heating,cooking,and drying clothes.8 Demand for n

272、atural gas is primarily driven by existing homes and buildings,which typically have very long service lives.The IEA estimates that half of the buildings expected to be in use by 2050 are already built.9Exhibit 8.Billions of people would benefit from affordable,reliable and ever-cleaner energySource:

273、World Health Organization,Proportion of Population with Primary Reliance on Clean Fuels and Technologies,who.int/data/gho/data/themes/air-pollution/household-air-pollution.Wood or other solid fuels for cooking are defined by WHO as biomass,charcoal,coal and kerosene.Exhibit 9.A growing middle class

274、drives demand for access to energy(Exajoules)Source:IEA,World Energy Outlook 2022,iea.org/reports/world-energy-outlook-2022,License:CC BY 4.0(report),CC BY NC SA 4.0(Annex A).Chevron Corporation 2023 Climate Change Resilience Report2512840202120302050CCUSNatural climate solutionsRemovals:The IPCC 1.

275、5 C report points out that many pathways to achieving the 100k tCOe)to cut emissions by 4.9%per year Proposed requirement that large,listed entities and large financial institutions disclose climate risks,commencing with the 2024/2025 financial year National Greenhouse and Energy Reporting Act cover

276、s facilities with emissions 25k tCOeUnited StatesRenewable power 100%carbon-free electricity target by 2035$369 billion in funding and incentives for renewable-energy and low-carbon initiatives through IRA Carbon capture 45Q tax credit expanded and extended,providing up to$85/t for permanent CO stor

277、age and$60/t for CO industrial usesHydrogen$7 billion of funding for regional hydrogen hubsMandatory reporting SEC has proposed a rule for climate change disclosure EPA GHGRP requires facility-level emissions reporting for emissions 25k tCOeCaliforniaRenewable power 90%of energy from renewables targ

278、et by 2035 Carbon capture CCS projects qualify for Low Carbon Fuel Standard credit generationHydrogen$2.9 billion zero-emission investment plan includes$90 million for hydrogen infrastructure 200 hydrogen refueling stations by 2025 goalMandatory reporting CARB covers facilities with GHG emissions 10

279、k tCOe GHG emissions disclosure and mandatory reporting on climate-related financial risksBrazilCarbon capture and hydrogen Exploring CCUS for emissions reduction paired with blue and green hydrogen generation from natural gas and biogasEuropean UnionRenewable power 40%renewable-energy mix target by

280、 2030Carbon capture and hydrogen$3 billion in public funding for CCS and$5.2 billion in public funding for hydrogen Up to$41 billion innovation fund between 2020 and 2030 to scale up hydrogen and CCUS projects and other low-carbon technologiesMandatory reporting Reporting directive for companies wit

281、h more than 250 employees,$39 million turnover or$19.4 million assetsKazakhstanMandatory reporting Emissions Trading System for facilities with emissions 20k tCOChinaRenewable power Increase wind and solar generation capacity to 1,200 gigawatts by 2030,with 25%of total energy consumption from renewa

282、ble sourcesHydrogen Up to$220 million per chosen city to build hydrogen infrastructure and promote fuel cell vehicle adoption Target fleet of 50,000 hydrogen-fueled vehicles by 2025Mandatory reporting Emissions Trading System for power sector 26k tCOeSingaporeCarbon capture and hydrogen Low-Carbon E

283、nergy Research Funding Initiative awarded$39 million to low-carbon hydrogen and CCUS projects,with planned additional funding of$91.7 millionMandatory reporting Proposed mandatory climate-related disclosures,starting from financial year 2025 Carbon Pricing Act charges facilities with emissions 25k t

284、COe at$3.6/tCOe,which increases to$18 in 2024 and$33 in 2026South KoreaRenewable power 20%renewable-power targets by 2030 and 30%35%for 2040Hydrogen Roadmap to develop hydrogen and fuel cell economy,with$3 billion in planned investment Safety management law provides legal framework for government ef

285、forts,including subsidies$383 million fund to promote development of the hydrogen industryMandatory reporting Emissions Trading System for facilities with emissions 25k tCOeSource,as modified by Chevron Corporation:consolidation of publicly available information.Italics indicates a policy is under d

286、evelopment.United StatesBrazilEuropean UnionUnited KingdomNorwayKazakhstanChinaSouth KoreaSingaporeAustraliaChevron Corporation 2023 Climate Change Resilience Report60 Global engagement:Build up an integrated global carbon market that creates a level playing field and mitigates trade distortions.Inc

287、entivizing the lowest-cost abatement on the widest scale possible is critical to mitigating climate change,as it allocates limited resources as efficiently and effectively as possible to create the greatest opportunity for success.Research and innovation:Support promising pre-commercial technologies

288、 designed to spur innovation and mitigation across all sectors of the economy.Investments in pre-commercial early-stage abatement technologies can lead to commercially viable businesses and ultimately reduce the need for incentives over time.Balanced and measured policy:A balanced and measured appro

289、ach aims to meet long-term economic,environmental and energy-security needs;allocates costs in an equitable,gradual and predictable way;and considers both GHG mitigation and climate change adaptation.Involve all sectors,technologies and solutions to maximize efficient and cost-effective reductions a

290、nd avoid duplicative and inefficient regulations.Transparency:Strive for transparency and efficiency in measuring and driving the lowest-cost emissions reductions.Transparently communicate policy benefits,costs and trade-offs to the public.chevron supportswell-designed climate policyChevron supports

291、 the global ambitions of the Paris Agreement and continues to take actions to help lower the carbon intensity of our operations while continuing to meet the worlds demand for energy.Chevron believes that broad,market-based mechanisms are the most efficient approach to addressing GHG emissions reduct

292、ions.Chevron supports carbon pricing,innovation and efficient policies.Chevron supports:innovation supportInvestments in pre-commercial early-stage abatement technologies can lead to commercially viable businesses and ultimately reduce the need for incentives over time.Carbon pricing should be the p

293、rimary policy tool to achieve GHG emissions reduction goals.It incentivizes the most efficient and cost-effective emissions reductions when applied broadly across the economy while enabling support to affected communities,consumers andbusinesses.Direct regulations should be narrowly and efficiently

294、targeted to enable cost-effective lower carbon opportunities not addressed by carbon pricing or innova-tion policies(e.g.,apartment efficiency standards,because the owner pays for efficiency improvements,but the renter pays the utility bill).carbon pricingtargeted policiesMarginal abatement cost cur

295、ve,promoting carbon efficiency at the least cost to society(Quantity,tonnes COe)Chevron Corporation 2023 Climate Change Resilience Report61+=transportproduction25kg CO2e/boe5kg CO2e/boe5kg CO2e/boe420kg CO2e/boe37kg CO2e/boemanufacturingtransportuse492kg CO2e/boelifecycleemissions+A lifecycle assess

296、ment is a comprehensive method for assessing a range of environmental impacts across the full lifecycle of a product system,from materials acquisition to manufacturing,use and final disposition.When focused on carbon emissions,this approach enables product differentiation by enabling a holistic comp

297、arison of product carbon performance.Chevron is working within and beyond our sector to help develop global standards and guidance to advance carbon accounting as we seek to lead in carbon transparency.Actual data,a standardized approach to allocating emissions,and single-attribution to avoid double

298、 counting are all needed as the foundation for consistent carbon accounting.The best decisions are made with reliable data.Pursuing a lower carbon future is no different.The world is not on track to meet the goals of the Paris Agreement*and needs better data to enable better decisions to advance the

299、se goals.Chevron believes lifecycle analysis(LCA)is a powerful tool to enable data-driven decisions.A lifecycle approach to carbon accounting facilitates informed decision making throughout the value chain.Also known as “carbon footprinting,”this accounting approach can be used to quantify the carbo

300、n intensity associated with a good or service,inclusive of both direct and indirect emissions.Such an approach could enable policymakers to drive the most pragmatic policy,incentivize producers to abate more,inform buyers on making lower carbon choices in a standardized manner and identify more cost

301、-efficient emissions reduction options.chevron supports a lifecycle approach to carbon accountingprinciples Relevant:Actual data compared on a common basis enables day-to-day decision making.Consistent:Data enable performance comparisons across suppliers and over time.Accurate:Common set of assuranc

302、e standards promotes the reliability of information.Complete:Lifecycle summation,inclusive of all relevant emissions,and annual global reconciliation of emissions are achieved.It is important to assess carbon performance for comparable stages in the lifecycleLifecycle emissions are the sum of GHG em

303、issions and removals in a product system expressed as CO-equivalents.*The UN Environment Programmes Emissions Gap Report 2022,unep.org,shows that the world is not on track to meet the Paris Agreement goal of limiting global warming to well below 2 C,preferably 1.5 C.Illustrative values are based on

304、production and manufacturing values from Chevrons oil and refining carbon intensities,respectively,as stated on page 66 in Chevrons GHG reporting equity metrics and targets table;transport value based on Chevron internal analysis of IEA,World Energy Outlook 2018,iea.org/reports/world-energy-outlook-

305、2018;end-use value from API,GHG Compendium(2021),api.org.Chevron Corporation 2023 Climate Change Resilience Report62 A focus on emissions:Public research,development,demonstration and deployment should be based on opportunity for scalable emissions reduction,supporting the most promising pre-commerc

306、ial opportunities,irrespective of energy source.Balanced and transparent government policies:Policy should be balanced to enable research,development and demonstration of promising technologies while minimizing market distortions.Policy should be open to participation and competition from across sec

307、tors and transparent in order to build public trust and communicate benefits,costs and trade-offs to the public.chevron supportspolicy to advance innovation and lower carbon solutionsChevron supports energy policies that incentivize the investment in projects and products that promote new technologi

308、es.We believe carbon pricing should be the primary policy tool to achieve GHG emissions reduction goals.In regions lacking sufficient carbon markets,government incentives and grants can be useful tools in encouraging a lower carbon future.If designed properly,incentives,research and innovation,grant

309、s,and public partnerships can be effective policy tools to enable lower carbon operations and products.Chevron supports:Pre-commercial support:To maximize limited public resources and minimize harmful market distortions,innovation policy should focus on advancing emerging technologies so they become

310、 commercially scalable without subsidy within a carbon-pricing program.Incentive-oriented programs should be designed with the goal of ultimately enabling technologies and products to compete without government support.Scalable solutions:Innovation policy should leverage scientific research to advan

311、ce promising technologies that can offer scalable economic solutions to climate change.Policy should aim to drive down costs so these opportunities are commercially scalable and reduce the need for incentives over time.incentivesWe acknowledge and support incentives for nascent technologies and regi

312、ons lacking a viable carbon market.Incentives should be designed with the intent to create cost competitiveness and scalability for lower carbon businesses and reduce the need for incentives over time.research and innovationWe support policies that promote research,development and deployment of tech

313、nologies to enable scalable solutions,drive down costs and improve performance.Investments in pre-commercial technologies can lead to commercially viable businesses and ultimately reduce the need for incen-tives over time.grants and public partnershipsWe believe competitive grant programs,public-pri

314、vate partnerships or co-investments in lower carbon technologies can be useful tools if designed to be competitive,results-oriented,transparent and inclusive of appropriate investment terms.Innovation policy grants should focus on advancing emerging and pre-commercial technologies.Grants for existin

315、g commercial opportunities that distort markets and create unfair competition should be avoided.Chevron Corporation 2023 Climate Change Resilience Report63chevron supports:MRV programs:Methodologies need detection technology performance specifications,measurement protocols and verification to ensure

316、 consistent quantification and reporting of methane emissions across all covered operators and sectors.Currently,there is greater measurement uncertainty with methane emissions than with CO emissions.A robust MRV framework will need to balance the use of emission factors,engineering estimates and ad

317、vanced technologies.Technological innovation:Policy should flexibly incorporate advanced technologies,such as aerial and drone monitoring,that can detect and measure methane emissions most effectively,particularly from super-emitters that have a disproportionate impact on overall emissions.Policy fr

318、ameworks should be based on realistic current capabilities of measurement technologies and encourage further technology advancement.All sectors contributing:Improving methane performance is important for oil and natural gas,which generate approximately 24%of global methane emissions,and the other se

319、ctors that generate the remaining 76%.Policy should apply to all key sectors.Performance-based regulation:When jurisdictions pursue methane regulations,they should set appropriate methane targets based on industry best practices,including reasonable minimum equipment standards,while providing flexib

320、ility for companies to determine the optimal way to meet those targets.chevron engages:We believe learning from and sharing best practices within the oil and gas industry can help improve industrywide methane management.We engage policymakers and other entities for knowledge sharing on methane emiss

321、ions.This includes participation in groups that develop and share best practices for methane reduction,such as The Environmental Partnership in the United States and Insitituto Argentino Del Petroleo Y Del Gas in Argentina,as well as direct feedback on specific policy proposals,such as in Kazakhstan

322、,Nigeria and the United States.Additional examples of our engagements include:Low Carbon Working Group(LCWG):Chevron participates in the LCWG,which hosted the Roundtable on Methane Emission Quantification and Reduction in the Oil and Gas Industry in Kazakhstan.The roundtable included members of gove

323、rnment,industry and experts,who discussed reduction opportunities.National Petroleum Council(NPC):Chevron is leading a task group on baseline and expected emissions pathways for a study by the NPC,which is a federal advisory committee for the U.S.Department of Energy,on methane and other GHG emissio

324、ns reduction opportunities for the U.S.natural gas supply chain.Global Methane Pledge:Chevron supports efforts like the Global Methane Pledge to reduce global human-made methane emissions by at least 30%from 2020 levels by 2030.We participated in the Methane Guiding Principles initiative to develop

325、a policy toolkit for use by the 150 countries that have committed to the effort.United States Agency for International Development(USAID):At the USAID Southeast Asia Smart Power Program workshop on oil and gas methane emissions,we gave a presentation on the current deployment of methane detection te

326、chnologies and participated in a capacity-building session on regional needs for methane reduction.U.S.Trade and Development Agency(USTDA):As part of the Global Methane Pledge launched at COP26,the U.S.government,through the USTDA,invited government officials from Algeria,Egypt and Libya to visit th

327、e U.S.to showcase U.S.methane detection technology and reduction practices.Chevron hosted a field tour in Midland and a discussion in Houston with the delegates during their visit.To view our public statements and comment letters,go to in methane policychevron believes that methane management is cri

328、tical to a lower carbon future and that methane reductions are possible through adoption of industry best practices,advancement in measurement technologies,carbon pricing and methane regulationsWe support carbon pricing as the primary tool to most efficiently and effectively enable GHG emissions red

329、uctions,including methane.However,carbon pricing requires robust measurement,reporting and verification(MRV)programs to accurately quantify emissions,and continued advances in methane measurement technologies and protocols are needed.In jurisdictions where MRV programs for methane are not robust and

330、 mature,we continue to engage on and support effective methane regulations as the transitional policy approach.we share our experiences on what has been effective within our operations and are committed to engaging in the public policy processChevron Corporation 2023 Climate Change Resilience Report

331、64section 6metricsPhoto:A worker conducting checks aboard the Agbami floating production,storage and offloading vessel.calculation methodology .67performance data .71climate-related disclosure .77citations .78glossary .80Chevron Corporation 2023 Climate Change Resilience Report65section 6:metricsinc

332、reasing transparency by annually reporting metrics and performance data*The following data tables compile our greenhouse gas(GHG)emissions and other metrics for environmental performance in alignment with several reporting standards.Due to the overlapping reporting of GHG emissions across scopes bet

333、ween different entities within the same value chain,Chevrons reporting on metrics,targets,aspirations and projections does not preclude other entities in the value chain from calculating or reporting emissions performance associated with Chevron-sold products or services.We consider reporting guidelines,indicators and terminology in the frameworks of the Sustainability Accounting Standards Board(S