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Trends in Corporate Responsibility

Legacies of the past… “Add on” issue Rigid operating standards Philanthropy Reactive engagement Financial reporting Traditional techniques. … actions for the future Function of doing business – value driven Integrated systems – OEMS and ESHIA Partnerships, capacity building

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Trends in Corporate Responsibility

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  1. Legacies of the past… “Add on” issue Rigid operating standards Philanthropy Reactive engagement Financial reporting Traditional techniques …actions for the future Function of doing business – value driven Integrated systems – OEMS and ESHIA Partnerships, capacity building Proactive engagement Comprehensive reporting Innovation, technology Trends in Corporate Responsibility

  2. Chevron and Corporate Responsibility • Recognized as part of the way companies operate • All Chevron’s peers in U.S. and abroad • and … General Electric, Wal-Mart, Citigroup, Disney, Microsoft, Time-Warner, Xerox, L’Oreal and Toyota among others • Investors are paying attention • Mainstream investment community - Goldman Sachs, Dow Jones, London Stock Exchange • Financial community - Equator Principles • Continued growth of the SRI community in the U.S. • Mainstream business advisors’ views • Accenture – CR is an area for IOCs competitive advantage over NOCs • McKinsey - Social and environmental issues can alter an industry’s landscape • KPMG - 64% of Global Fortune 250 companies publish CR reports for economic (74%) and ethical (53%) reasons

  3. Chevron and Corporate Responsibility • Integrated approach - environmental and socioeconomic performance • OEMS (Operational Excellence Management System and training) • ESHIA (SIA training) • Multiple types of training, in addition to those listed above • HIV-AIDS, Human Rights • Business Conduct and Ethics Code, Compliance • Health and Safety • HIV-AIDS policy, Malaria programs, Avian Flu pandemic planning • “Zero is attainable” • Capacity building and partnerships • Community engagement theme – capacity building, sustainability • Partnerships – strategic, “fit for purpose,” influenced by industry drivers and society’s needs • Angola Partnership Initiative (multilateral institutions, NGOs) • Discovery Channel partnerships (private) • Regional Development Councils in Nigeria (multi-stakeholder) • Global Business Coalition on HIV-AIDS (multi-sector)

  4. Chevron and Corporate Responsibility • Local content or supply chain management • Jobs, skills, technology transfer, safety performance • Stakeholder engagement • Shareholders, governments, communities and business partners • Industry associations, Media • NGOs, multilateral institutions • Voluntary initiatives or membership organizations • Extractive Industries Transparency Initiative (EITI) • Voluntary Principles on Security and Human Rights • Global Sullivan Principles • Local chambers of commerce, Int’l Chamber of Commerce

  5. California and Climate Change • California Global Warming Solutions Act of 2006 (AB32) signed into law on September 27, 2006 • Law requires a state-wide reduction of current (2006) CO2 emissions to 1990 levels, by 2020.

  6. Sources of GHG • 81% of GHG comes from Burning of Fossil Fuel

  7. Sources by End-Use Sector • Only 23% of GHG comes from Industry, • (but 41% comes from Transportation) Refineries 1.4% Upstream 3.0%

  8. Multiple Initiatives on Global Greenhouse Gas Emission Reductions • California AB 32 caps GHG emissions statewide beginning 2012 • California Low Carbon Fuel Standard (LCFS) reduces carbon footprint for passenger vehicles • CEC developing plan to increase use of alternative fuels (AB 1007 process) • Biofuel mandates proposed/enacted in various states • Northeast states cap & trade program for GHG emissions from electricity generation • President proposes 35 billion gallons of renewable and alternative fuel by 2017 • European commission proposes transport fuel standard very similar to LCFS • Automakers promising to produce 50% of new vehicles as FFVs by 2012

  9. How would you manage this issue? • How would you handle this issue if you were • the CEO • the Chief Technology Officer • a Refinery Manager • the CSR Manager at Chevron • a summer intern • To be successful in moving a company towards CSR or Sustainability requires (at least) 3 things • An understanding of the business – if you’re speaking another language – nobody will listen or follow you • A compelling business case which can be made to, and adopted by, key stakeholders in the company • A belief in the ability of the private sector to be part of the solution…but don’t lose sight of what the fundamental mission of your business is

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