Targets, metrics and performance

Pillars of carbon management and climate change

Given our scenarios and strategy, our actions related to carbon management and climate change are based on three pillars:

1. Carbon quantification and transparency

2.

Resilience of our position in fossil facing the low-carbon transition

3. Strengthening our skills to create value in a low-carbon economy

Carbon quantification and transparency

Our decisions today affect carbon performance and value generation in the short, medium, and long term. We strive to ensure that the risks and opportunities of climate change are adequately captured in our scenarios, quantified, and considered in our choices. Our goal is to promote sustainability and resilience in our business, which entails ongoing efforts to improve continuously our decision-making processes. We embrace carbon transparency and highlight our support for the TCFD (Task Force on Climate-related Financial Disclosures) and the adoption of external references of disclosure and performance like the Sustainability Accounting Standards Board (SASB), IPIECA, Global Reporting Initiative (GRI) and International Association of Oil & Gas Producers (IOGP).

Resilience of our position in fossil facing the low-carbon transition

The Oil and Gas industry supplies more than half of the primary energy consumed worldwide, meeting the needs of mobility, industrial production, residential cooking and heating, and electricity generation. Our scenarios indicate that oil and gas will remain in the world’s energy matrix over the next few decades, albeit in decreasing volumes. In 2021, the sector’s share exceeded 55% of the total supply of primary energy (bp Statistical Review of World Energy, 2022), and products meet this demand with widely varying carbon performance.

Our priority is to operate at low costs and with superior emissions performance, safeguarding the competitiveness of our oil in world markets in a scenario of slowdown and subsequent contraction in demand. In our understanding, companies will become more competitive in the long-term market the more they can produce at low costs and with lower greenhouse gas (GHG) emissions, thriving in scenarios of low oil prices, carbon pricing, and possible oil differentiation practices based on the GHG emissions intensity in production.

Strengthening our skills to create value in a lowcarbon economy

We recognize that the goals of the Paris Agreement require profound reductions in greenhouse gas emissions and the transformation of the energy supply. Our scenarios point to an unequivocal energy transition, albeit at an uncertain pace. The risks and opportunities are different and depend on the markets, each company’s characteristics, innovation evolution, and public policies.

To strengthen our low-carbon position, we prioritize investment in decarbonizing our operations, developing products with lower carbon intensity and skills for the future. We are advancing in the analysis of possible new businesses that can diversify revenues and reduce exposure to carbon, ensuring the company’s sustainability in the long term.