ESG Goals

Since the company’s founding, California Resources Corporation (CRC) has consistently set a high standard for environmental stewardship, safe, responsible operations, and community empowerment across California. CRC’s Environmental, Social, and Governance (ESG) goals build upon the company’s long-standing commitment to sustainability, CRC’s 2045 Full-Scope Net Zero Goal, and investment in low carbon initiatives that position CRC to lead the energy transition in California and beyond.

CRC’s ESG goals focus on providing low carbon intensity fuel today and net zero fuel for the future that meet or exceed California’s unparalleled sustainability standards – not only related to lowering greenhouse gas (GHG) emissions, but also to decreasing methane emissions, reducing freshwater consumption, expanding leadership diversity, enhancing community engagement, and increasing accountability through linking executive compensation to ESG performance.

These ESG goals underscore CRC’s long-term commitment to helping our diverse communities across our state have a vibrant and sustainable future and demonstrate the company’s leadership position in the energy transition.

CRC ESG Goals

 

2045 Full-Scope Net Zero Goal

CRC is committed to the transition in the energy sector. Building upon the company’s carbon management strategy, in November 2021, CRC adopted a 2045 Full-Scope Net Zero goal for Scope 1, 2 and 3 emissions. This goal places CRC among a select few industry peers to include scope 3 emissions in their Net Zero goal. In addition, CRC’s 2045 goal puts the company on a timeframe five years sooner than most other companies’ Net Zero goals and aligns CRC with the state of California’s 2045 net zero ambitions.

CRC defines Net Zero as achieving permanent storage of captured or removed carbon emissions in a volume equal to all of our Scope 1, 2, and 3 emissions by 2045. We intend to achieve this goal by prioritizing 50% of our free cash flow to invest in projects that reduce our direct and indirect emissions or achieve sequestration of carbon in volumes necessary to offset these emissions.

Scope 1 emissions are direct greenhouse gas (GHG) emissions associated with sources controlled or owned by an organization such as fuel combustion in boilers, furnaces, vehicles, etc. Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling. Although scope 2 emissions physically occur at a facility where they are generated, they are accounted for in an organization’s GHG inventory because they are a result of the organization’s energy use. Scope 3 includes all other indirect emissions that occur in a company’s value chain. This includes emissions from purchased goods or services, business travel, employee commuting, waste disposal, use of sold products, and transportation and distribution.

CRC is one of the best positioned companies in the energy sector. The company’s strong operational and financial performance enables it to produce stable, low-carbon fuel and invest meaningful ESG projects such as Carbon TerraVault I that will help California achieve its ambitious emissions reduction goals today and in the future.

Methane Emissions Reduction Goal | 30% reduction by 2030

CRC’s updated Methane Emissions Reduction Goal commits the company to further reduce methane emissions by 30% from our 2020 baseline by 2030. This goal builds on our previous methane reduction goal to lower methane emissions by 50% from our 2013 baseline by 2030, which we surpassed in 2018, 12 years ahead of schedule. Because we have been able to achieve significant methane reductions to date, our updated methane goal significantly exceeds California’s own 2030 methane reduction goal.

CRC’s leadership on methane emissions reduction is the major reason why our low carbon intensity fuel is ranked by the Clean Air Task Force as the lowest carbon intensity of the top 100 producers in the US, and by extension in California. Our continued focus on reducing methane emissions will ensure we provide low carbon intensity fuel for Californians throughout the energy transition, while our Net Zero Goal will drive us towards net zero fuel in the future.

Freshwater Usage Reduction Goal | 30% reduction by 2025

CRC’s Freshwater Usage Reduction Goal aims to reduce freshwater usage in our low carbon intensity fuel production by 30% from our 2022 baseline by 2025 – exceeding California’s voluntary 15% water use reduction target.

CRC consistently produces more water for California water districts (5 billion gallons of treated, reclaimed water in 2021) than we consume for our own operations, which means we are net water positive. Given the water challenges California faces, CRC will continue to provide water safely and reliably for the state while we advance our focus on further reducing our consumption.

Ethnic and Gender Diversity in Leadership Goal

Our Ethnic and Gender Diversity in Leadership Goal further prioritizes ethnic and gender diversity in CRC leadership positions and on the Board of Directors by 2030:

  • Maintain greater than 20% of ethnically diverse professionals in leadership positions
  • Increase females in leadership positions to 30%
  • Maintain current board composition with at least 30% ethnically and gender diverse board members

In addition, CRC conducts annual assessments to promote gender pay equality. CRC believes a diverse workforce is key to successfully leveraging all talent towards producing low carbon intensity fuel today and net zero fuel in the future.

Community Giving Goal

CRC’s Community Giving Goal exceeds many of our sector peers on a donation per revenue basis and further gives back to our local California communities where we produce low carbon intensity fuel and develop carbon management initiatives. Since 2015, CRC has provided more than $15 million in cumulative contributions to local non-profits and organizations, and we are proud to continue investing in our communities where we live and work. Strong communities underwrite safe local production of fuel that is critical to California’s energy security and meeting the state’s GHG goals. A 100% California “field-to-fuel” strategy displaces foreign sources of fuel that have higher carbon intensity than local production, do not benefit local communities and do not meet California’s world-leading safety, labor, human rights and environmental standards.

Executive Pay Goal | 30% linked to ESG performance

CRC’s Executive Pay Goal links 30% of executive annual incentive pay related to company performance to ESG metrics, among the highest ESG weighting in the industry, underscoring the commitment of CRC’s leadership to achieving our ESG goals.

CRC’s 2045 Full-Scope Net Zero and updated methane, water, diversity, community giving and executive pay ESG goals are designed to meet or exceed California’s high standards for corporate and social sustainability. Our goals demonstrate CRC’s continued strong commitment to leading the energy transition while providing safe and reliable energy sources necessary to help ensure better human welfare and a more inclusive and equitable economy and society.

Check out our ESG Goals infographic (PDF).