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 Proactive engagement Comprehensive reporting Innovation, technology

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

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)

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

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) CO 2 emissions to 1990 levels, by 2020.

Sources of GHG 81% of GHG comes from Burning of Fossil Fuel

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

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

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