Environment

Aiming for industry-leading performance

Devon is committed to doing what’s right for the environment. We want to be a good neighbor, a trusted partner and a responsible, competitive operator as we produce oil and natural gas to help meet global demand. We believe exemplary environmental performance is essential to managing risk, capturing forward-looking business opportunities, and delivering long-term value for our shareholders and other stakeholders.

To continuously improve our environmental performance, Devon is proactive and results-oriented. We consider the potential impacts of our operations when planning activities and making decisions. We strive to comply with all applicable environmental laws and regulations, often going above and beyond what’s required. In the process, we incorporate technology, tools and best practices to help minimize or avoid effects on air, water, land and wildlife.

Devon seeks to work with contractors who share our commitment to environmental stewardship. Our contractors must adequately train their personnel to perform environmentally sound work and have programs to comply with applicable environmental laws, rules and regulations. Contractors as well as employees have a responsibility to stop work to prevent spills or other environmental issues.

Devon has established a track record of environmental performance improvements. To document progress on our long-standing priority to reduce our greenhouse gas (GHG) and methane emissions, we’ve responded to the CDP climate change survey for 20 consecutive years. We continue to participate in the CDP, but no longer seek a grade on the survey. For almost two decades, we’ve been at the forefront of water conservation efforts in our industry. Devon takes great care to preserve biodiversity and protect wildlife habitat and cultural resources in areas surrounding our operations.

Transparency is important to our stakeholders and keeps us accountable for our results. Devon tracks specific metrics for GHG and methane emissions, flaring, spills, energy use, water use and others. We’ve consistently increased our disclosures in recent years and continue to share this information in this report and other public disclosures. In recent years, including 2024, Devon completed strategic asset acquisitions to enhance our diversified multi-basin portfolio in top U.S. resource plays. In doing so, we have communicated that progress toward our sustainability targets may not always be linear. We do not shy away from the challenge of incorporating new assets into our portfolio when it is good for our business and we have the opportunity to bring the environmental performance of these assets up to the Devon standard. These charts highlight the impact of the acquisitions of RimRock and Validus Energy in 2022 and Grayson Mill Energy (GME) in 2024.

Driving alignment

Devon has a strong organization to manage environmental performance, from our board of directors to field-level environmental, health and safety (EHS) and operations teams. We’ve been bringing together our EHS and sustainability core competencies and capabilities to drive alignment on our broader enterprise goals and objectives.

Our governance practices and organizational structure elevate EHS oversight and discussions, including those related to climate change and emissions mitigation. The board’s Governance, Environmental and Public Policy (GEPP) Committee reviews policies and performance relating to our environmental efforts and oversees sustainability strategy, goals and integration into our business activities. Through its role to nominate candidates for our board, the GEPP Committee establishes a close connection between corporate governance and sustainability.

The GEPP committee reviews Devon’s advocacy efforts and assists with evaluating political, legislative and regulatory developments that could affect the company. Our vice president of public and government affairs, who reports to our executive vice president and general counsel, leads our efforts to advocate for Devon’s interests, including those related to climate change. Beginning in 2024, this vice president also leads our sustainability and climate-related strategy and external communications, allowing for even deeper alignment between these critical responsibilities at the company.

Our vice president of corporate governance, secretary and associate general counsel, who also reports to our executive vice president and general counsel, leads Devon’s efforts to communicate with shareholders to understand their sustainability and environmental, social and governance related interests and expectations and shares those learnings with senior management and the board.

Devon’s board understands that climate change risks are often interrelated with other business and public policy risks. In its regular quarterly meetings, as well as other periodic and special meetings, the board reviews EHS matters brought to its attention and considers issues related to environmental strategy planning and risk management programs, including those pertaining to climate-related risks and opportunities. After approving Devon’s environmental targets in 2021, the board continues to review strategy, spend and progress toward these targets, including the implementation of various new operational and technological approaches.

As a component of executive compensation, environmental results included in our corporate goals are reviewed by the board’s Compensation Committee. In addition, at least eight Devon directors have an educational background or direct work experience in environmental matters.

Operations buy-in

The EHS Council, made up of Devon business unit and operations leaders, helps protect our social license to operate and advance our culture of environmental stewardship. The council sets environmental strategy and goals, tracks performance and evaluates the effectiveness of our environmental policies, protocols and practices. It also proposes corporate environmental goals tied to compensation to the board for approval. To continuously improve our performance, the council reviews environmental incidents and near misses, develops corrective actions as needed and shares best practices across Devon. Council members hold regular discussions with field production leaders to update them on rapidly evolving stakeholder expectations about environmental performance and climate change.

The Devon EHS Management System, developed by the council, includes an environmental management element to drive program improvements and assessments. Our environmental professionals work closely with Devon leaders to promote and implement environmentally sound operations that comply with applicable laws, regulations and company policies. Based on its assessment of Devon’s progress on the elements of our management system, the council focused on the asset integrity element in 2024 to enhance our overall environmental performance.

To position Devon for long-term success, the council reviews emerging EHS and sustainability issues, as well as proposed laws and regulations and their potential financial, operational and reputational impact on the company.

The council drives industry-leading environmental performance by developing annual environmental goals that are approved by the board as part of our executive compensation formula. In response to stakeholder requests to tie Devon’s compensation directly to our targets, in 2022 we set our first standalone emissions reduction goal. We maintained the standalone emissions reduction goal in 2023. The two-part compensation goal for 2023 included a reduction in our GHG emissions intensity and a reduction in our methane emissions detected by aerial flyovers that together accounted for 15% of the company’s 2023 performance scorecard. Our 2023 GHG emissions intensity reduction fully met the goal we set and the 19% decrease in our methane detection rate was deemed exceptional.

In 2024, Devon’s standalone emissions reduction goal enhanced our focus on methane emissions mitigation by targeting a reduction in both methane emissions intensity and methane emissions detected by aerial flyovers. Devon exceeded both 2024 goals, with a year-over-year decrease in methane emissions intensity and methane detection rate of 18% and 12%, respectively. Our 2025 environmental goals are to continue reducing our spill rate and increase our methane detection rate. Our corporate goals and medium- and long-term goals challenge Devon to improve our environmental performance and hold us accountable for producing oil and natural gas in an environmentally responsible way.

At the executive level, Devon’s senior vice president of E&P operations and Devon’s senior vice president of E&P asset management share accountability for our environmental compliance and program execution; emission reduction, mitigation and abatement programs; and carbon accounting.

As a result of our organizational efforts, environmental objectives and targets are considered in capital allocation decisions, corporate and business unit planning, and team strategies to operationalize emissions reductions into the way we do business.