Dedicated Leadership, Strong Governance
Our climate governance includes accountability and ownership at every level, from our Board of Directors to the employees who impact our operations every day.
Board of Directors Oversight
Chesapeake’s Board has ultimate oversight of our strategy, planning and engagement around climate change and its related impacts.
Our Board’s Environmental and Social Governance (ESG) Committee takes active ownership in engaging with our executive team and organizational leaders to manage and mitigate climate-related risks. This committee meets at least quarterly to discuss climate-related risks and opportunities, among other ESG topics. Relevant findings, progress and issues are raised to the Board-at-large or shared with other Board committees as needed.
Board-level Climate Discussions
- Risk management and mitigation
- Emissions reduction and management practices
- Regulatory and legislative risk
- Goal setting and progress made
- Executive and employee compensation tied to climate-related goals
- Market sensitivity analysis
Board of Directors
Promotes the long-term success of the company and ensures proper oversight of management
Climate-related:
- Oversees and monitors environmental matters, including emissions reduction performance
- Reviews and evaluates significant company risks, including relevant ESG issues
- Develops and maintains executive compensation plans that tie executive pay to company performance, including emissions reduction targets when defined
Audit Committee
Oversees financial reporting, legal compliance, internal and external audit functions and risk management systems
Reviews climate-related risk as part of the enterprise risk management (ERM) process
Compensation Committee
Establishes and oversees compensation policies and standards that effectively attract, retain and motivate executive officers to achieve strategic and financial goals
Incorporates emissions reduction goals in our executive and employee annual incentive compensation program
Environmental and Social Governance Committee
Oversees ESG policies, programs and practices
Oversees climate-related performance, from managing and mitigating climate risk to confirming progress toward our ESG (including emissions reduction) goals
Nominating and Corporate Governance Committee
Oversees corporate governance
structure and practices, Board composition and performance,
and corporate social responsibility matters
Reviews climate and other
ESG-related experience / factors
when considering new directors
Management’s Oversight of Climate Performance
Chesapeake’s CEO and leadership team direct our climate performance, setting the strategic direction and holding business units accountable. Although our management team works together to champion our climate-related efforts, their individual responsibilities help ensure comprehensive coverage and planning related to this important issue.
| Oversight Category | CEO | Executive Leadership (Reports to CEO) | External Affairs (Reports to CEO) |
|---|---|---|---|
| Climate-Related Risks and Opportunities | Reviews ERM reporting and confirms risk mitigation planning | Oversees the ERM process assessing climate-related risk and mitigation plans; manages the Air team as well as the Internal Controls and Internal Audit teams | Provides oversight and leadership of our sustainability strategy, inclusive of current trends, climate-related risks and opportunities, and presents mitigation plans (in collaboration with other department partners) to management |
| Strategy Planning, including Net Zero Goal and Emissions Reductions | Directs long-term, strategic planning and ensures climate is factored when considering A&D opportunities; oversees progress related to emissions reduction targets and Annual Incentive Plan (AIP) metrics | Leads the teams executing the emissions reduction strategies to reach our net zero goal; actively involved with the team on emerging technologies and industry-adjacent lower carbon commercial solutions | Partners with the Environmental and Operations teams on the progress of and future opportunities toward achieving the company’s strategies; identifies and engages in third-party partnerships to further the identification and mitigation of emissions and advocate for supporting policies |
| Public Policy | Participates in trade association conversations (at the board level) and targeted meetings with industry, academia and legislative leaders | Provides input on emerging issues within legislative, regulatory and public opinion forums | Leads public policy engagement and is actively involved with trade association advocacy on key issues, including federal and state climate policy |
| Sustainability (and Climate) Transparency | Reviews and approves our annual sustainability reporting, including our TCFD disclosure; engages in discussions at the board level regarding disclosures | Oversees our annual sustainability reporting process and is a key liaison with the Board’s ESG Committee; is a primary company spokesperson with stakeholders interested in climate-related matters | |
Executive and Employee Remuneration Programs
For added accountability, we tie our executive and employee remuneration programs to sustainability goals. Our AIP aligns payout with the value drivers and discipline our shareholders value. Of the total amounts payable under the 2022 AIP, 20% were based on the attainment of certain companywide strategic leadership goals, including emissions reduction.
Should we fail to meet our environmental and safety performance thresholds, the AIP payout is capped at target for all other metrics regardless of results.
Accountability at All Levels
ESG Advisory Board
Made up of cross-disciplinary senior leaders, our ESG Advisory Board provides management-level leadership and oversight of the company’s ESG performance. The group meets regularly to:
- Ensure ongoing attention to monitoring, managing and reporting major ESG issues
- Validate the company’s sustainability and TCFD disclosures
- Help communicate sustainability-related matters with stakeholders
- Establish and implement climate policy strategy, including the path to net zero
- Aid in decision-making regarding emissions management solutions
- Approve emissions reduction projects
The ESG Advisory Board meetings provide opportunity for ongoing dialogue with departments across the company including:
- External Affairs and Sustainability
- Human Resources
- Investor Relations
- Legal
- Health, Safety, Environment and Regulatory
- Operations – COO and Business Unit VPs
Targeted Employee Action
Chesapeake employees care deeply about improving our carbon emissions performance. At our business unit level, we have several departments with dedicated climate-related job responsibilities, including our Air, Operations and Government & Regulatory Affairs teams.
We also maintain internal, multidisciplinary workgroups focused on implementing and improving our sustainability strategy and carbon emissions performance. This group of subject matter experts executes the company’s sustainability strategy, including our emissions reduction efforts. The council meets regularly for consistent accountability and company integration.
