Seeking and listening to shareholder feedback
Building relationships with our shareholders helps Devon anticipate and manage issues that influence our long-term success. We’ve learned through years of active shareholder outreach that our ESG performance is a key component of stockholders’ assessment of the company. Insights from our shareholder engagements each year inform our plans for environmental targets, shape our ESG programs, impact our compensation structure and focus our reporting.
Based in part on our ongoing engagements, we’ve strengthened our governance structure and practices to more effectively manage the risks and opportunities of climate change, workforce diversity and other ESG issues of interest to our shareholders. The Governance, Environmental, and Public Policy (GEPP) Committee of our board of directors oversees the company’s work in setting strategy, establishing goals and integrating sustainability into our business activities. Our ESG/EHS and sustainability teams, with input from our ESG Steering Committee comprising senior leaders of the company, coordinates related efforts and regularly updates the executive committee, GEPP Committee and the full board on our progress.
Our vice president of corporate governance, secretary and associate general counsel leads Devon’s efforts to communicate directly with shareholders to understand their ESG-related interests. Devon senior leaders and subject matter experts on ESG topics — including executive compensation, field environmental practices and diversity — often join the shareholder meetings to share our strategies and plans. They report what they learn to Devon senior management and our board, who appreciate shareholder feedback.
Listening to shareholder feedback
We value shareholder feedback and use it to evaluate the strength of our programs and practices. We understand that minimizing the environmental impact of our operations is critically important. To reflect our focus, we set our first methane intensity reduction target in 2019. We re-doubled our environmental stewardship ambitions in 2021 when we adopted goals for net zero operational GHG emissions, GHG and methane emissions intensity reductions, flaring reductions and water conservation.
To demonstrate our commitment to transparency and reporting, we published Climate Change Assessment Reports in 2018, 2020, 2021 and 2023. The 2023 report is consistent with the core elements of the Task Force on Climate-related Financial Disclosures (TCFD) framework. We seek to align with TCFD because many of our investors and other stakeholders prefer this international, multi-industry-led initiative for voluntary disclosure of climate-related risk. We continue to share our tactics to meet our decarbonization targets, as well as information about our water use, biodiversity, land reclamation and other environmental topics.
To further reflect our environmental focus, Devon included a standalone emissions reduction goal with a 15% weighting on our 2022 corporate performance scorecard. In comparison, our 2021 emissions goal made up a portion of the ESG/EHS goal that had a cumulative weighting of 20%. We believe that setting challenging goals for EHS and ESG performance encourages alignment around an objective that motivates our employees and environmentally focused investors. Our goal-setting and performance have led to broad support for our compensation programs, with approximately 95% of voting stockholders casting ballots “for” Devon’s say on pay vote in 2022.
Benchmarking our progress
Devon participates in third-party ESG-focused surveys and assessments that help stakeholders benchmark our progress. Our ESG scores are ranked in the top tier of our peer groups by Sustainalytics, ISS, Moody’s Vigeo Eiris, RobecoSAM, CDP Climate and Water, Just Capital and CPA-Zicklin Index.
These assessments also allows us to gauge the information that our investors value and improve our ESG performance. We regularly evaluate surveys and additional public disclosures we could make to target our reporting on the information that is most meaningful for shareholders and other stakeholders.
In June 2023, Devon was pleased to learn that it has been removed from the list of focus companies for the Climate Action 100+ initiative, which is an investor-led initiative targeting the world's largest corporate greenhouse gas emitters.