1、SUSTAINABILITY AND PEOPLE2024ON THE COVER:(large photo)Zia II Gas Plant,HOBBS,NM(small photo)Rodeo Renewable Energy Complex,RODEO,CA Find company policies,key governance documents and related information in the Phillips 66 ESG Library.MISSIONProviding Energy.Improving Lives.VALUESSafety.Honor.Commit
2、ment.2PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEIntroduction4Health,Safety and Environment18Our Approach and Progress6Appendix52People and Communities32Governance44Lake Charles Refinery WESTLAKE,LA3OUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUC
3、TIONTo Our Stakeholders,At Phillips 66,we understand the challenge of meeting the worlds energy needs in an environmentally responsible manner.We have an important role in the energy transition,and we are focused on safely delivering reliable energy today while advancing high-return projects that wi
4、ll reduce emissions intensity,increase asset reliability and provide growth opportunities.As we look toward the future,we are pursuing lower-carbon and other investments that are the right strategic fit for our business.This report details the exceptional 2023 achievements of our employees and our b
5、usiness and celebrates the 2024 completion of the transition of our San Francisco Refinery in Rodeo,California,into one of the worlds largest renewable fuels facilities.Just a few months ago,the Rodeo Renewable Energy Complex began producing approximately 30,000 barrels per day of renewable fuels.Th
6、e facility is on track to increase production capacity to 50,000 BPD(800 million gallons per year)of renewable fuels,including sustainable aviation fuel.The Rodeo Renewable Energy Complex demonstrates our commitment to sustainability,and it is just one example of how we work every day to successfull
7、y execute our strategy.Our progress over the past year is a measure of what we have achieved and a road map for the future.We are energized by the challenges and opportunities ahead as we continue to provide energy and improve lives responsibly and sustainably.4PHILLIPS 66 2024 SUSTAINABILITY AND PE
8、OPLEOperating ExcellenceEverything we do is underscored by operating excellence,from prioritizing safety for our people and communities to striving for continuous improvement in our business and reducing our environmental footprint.In 2023,we achieved record safety rates,significant cost savings and
9、 strategic advancements and efficiencies across our businesses.We recorded our best-ever safety performance,with a combined workforce total recordable rate of 0.12,which is more than 25 times better than the U.S.manufacturing average.Refining performance improvements delivered above-industry-average
10、 crude utilization.We made notable progress on our emissions reduction targets.We also achieved cost and capital savings through business transformation efforts and advanced our natural gas liquids wellhead-to-market strategy by integrating DCP Midstream and capturing synergies.Our business results
11、and growth opportunities contribute to our long-term resilience and sustainability.People and CommunitiesNone of our achievements would be possible without our employees.Our people are at the heart of our success,and this report includes highlights of our human capital management practices and our w
12、orkforce data.In 2023,we continued to foster a workplace where people feel like they belong,can grow their careers and will thrive in our high-performing organization as we drive progress for the greater good.Social responsibility and keeping our communities strong are crucial to our sustainability
13、strategy,and our people stepped up in 2023.More than 2,600 employees and retirees contributed 118,000 volunteer hours as part of our Good Energy program.The impact was amplified through$8 million in grants and matching gifts.We also invested$30 million in community initiatives,focusing on education
14、equity,safety and well-being,social advancement and the environment.One Team,One ResultPhillips 66 is well positioned to drive the future of energy.We are delivering on our commitments and driving shareholder value through innovation,collaboration and efficient operations.This report is a snapshot o
15、f our 2023 performance and a preview of whats to come as we work together to deliver on our strategic priorities,position the company for the future and achieve our mission of providing energy and improving lives.Thank you for your continued trust and support.Mark Lashier Chairman and CEO5Wood River
16、 Refinery ROXANA,ILOur Approach and ProgressOUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTION6PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEAt Phillips 66,sustainability includes a focus on operating excellence,minimizing our impact on the environ
17、ment,developing our high-performing organization and engaging with our stakeholders.Our board diligently oversees sustainability and human capital management and weaves these topics into the responsibilities of each board committee.Our policies and practices support our vision to be the leading inte
18、grated downstream energy provider and enhance the long-term resilience and competitiveness of our business.We execute our mission of providing energy and improving lives while living our values of safety,honor and commitment.We translate data into action by enhancing our sustainability practices in
19、response to stakeholder feedback and developing trust through collaboration on key issues.Our engagement program aims to identify and understand stakeholder concerns and demonstrate responsiveness to feedback.Examples of recent sustainability disclosures in response to 2023 engagements include:Metha
20、ne management practices.Just transition of the San Francisco Refinery to the Rodeo Renewable Energy Complex.Sourcing renewable feedstocks.Updated lobbying activities reporting.We believe our success begins and ends with our people,whose talents,ideas and determination give us a competitive advantage
21、.Investing in our employees and nurturing their potential helps them develop skills to adapt to new technologies,build leadership capabilities that reflect our culture and maximize performance.We take a strategic approach to sustainability and human capital management.“Our industry is positioned to
22、drive innovation in emerging energies and play a critical role in a lower-carbon future.Hand-in-hand with that pursuit is a just transition that provides access to affordable and reliable energy.”Sustainability GovernanceThe success of our sustainability programs,policies and processes depends on th
23、e leadership of the following committees,teams and roles:PUBLIC POLICY AND SUSTAINABILITY COMMITTEE Provides broad oversight of our sustainability strategy,goals,progress toward targets and public reporting.Includes all members of the Phillips 66 Board of Directors.EXECUTIVE LEADERSHIP TEAM Develops
24、 corporate strategy,manages sustainability issues,implements sustainability efforts and reports company performance.SUSTAINABILITY EXECUTIVE STEERING COMMITTEE Reviews program development and emerging sustainability risks and trends;approves execution for the company.Includes a subset of the Executi
25、ve Leadership Team.EVP,EMERGING ENERGY AND SUSTAINABILITY Provides resources and drives accountability to enable the success of our programs.SUSTAINABILITY WORKING GROUPS Lead execution of specific sustainability initiatives,including our decarbonization strategy,methane management and lobbying acti
26、vities disclosures.Zhanna GolodrygaExecutive Vice President,Emerging Energy and Sustainability7OUR APPROACH AND PROGRESSClimate-related targetsLower-carbon investments and initiativesBiodiversity and natural capital managementEmployee and community engagementSafety and the environmentIssues of Inter
27、est to StakeholdersStakeholders are important to Phillips 66.They include employees,contractors,shareholders,customers,suppliers,people who live in the communities where we operate,policymakers and energy consumers.Our processes are designed to provide a proactive,respectful and responsive approach
28、to engaging with them.2023 HighlightsIn 2023,we had more than 2,500 stakeholder engagements.The top issues of interest were:Phillips 66 Lubricants Plant SAVANNAH,GARodeo Renewable Energy Complex RODEO,CAClinton Hills Conservation Park Exploration GardenSWANSEA,ILHEALTH,SAFETY AND ENVIRONMENTPEOPLE A
29、ND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTION8PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEcontributed to education equity,safety and well-being,social advancement and environmental projects$30MMreduction in air emissions compared to 20227%*engaged in more than 600 community events in the areas where we
30、 operate,including those involving Indigenous peoples,facilitated through our community advisory panels and committees,councils and social impact focus areasEmployee and community engagement Safety and environment MILITARY VETERAN EMPLOYMENTreduction in Scope 1&2 emissions intensity from 2019 levels
31、17%*reduction in Scope 3 emissions intensity from 2019 levels7%*PROGRESSED RODEO RENEWED PROJECTClimate and lower-carbon investments and initiativesNEW METHANE MANAGEMENT DISCLOSURESUPDATED CLIMATE LOBBYING ASSESSMENT2023 HIRE Vets Gold Medallion Awardrecognized as an employer that recruits,supports
32、 and hires military veterans2023 Military Times Best for Vets Employersearned industry-recognized safety awards across several operating facilities SAFETY AWARDS*See the Performance Data section.9OUR BUSINESS AND PURPOSE Our mission of providing energy and improving lives extends to every aspect of
33、our businesses.Access to secure,affordable,reliable and abundant energy is needed to drive human progress.As a leading integrated downstream energy provider,we manufacture,transport and market products to meet the worlds growing energy needs through our Midstream,Chemicals,Refining,and Marketing and
34、 Specialties businesses.Our people,financial strength,operational scale,asset diversity and commercial acumen contribute to our long-term resilience and sustainability.We must act with urgency to improve how we work,raise the bar on performance and streamline processes.Delivering on our commitments
35、and creating a sustainable organization for the future is critical to meeting our short-term goals and enabling long-term sustainability.”Kevin MitchellExecutive Vice President and Chief Financial OfficerDelivering Value Through Our Integrated BusinessesOur diversified portfolio positions us to crea
36、te value through economic cycles.We strive to increase the efficiency of our operations and reduce costs by promoting innovation and leveraging digital capabilities.Recent accomplishments in our businesses that have increased our financial resilience include:Improving Refining asset reliability and
37、market capture through high-return,low-capital projects.We also use tools such as steam network optimization and steam trap monitoring to improve energy efficiency and reduce greenhouse gas(GHG)emissions at our sites.Integrating DCP Midstream,LP assets with Phillips 66s fractionation and export faci
38、lities and adding legacy DCP Midstream employees to our workforce strengthened our competitive position,resulting in$250 million in operating and commercial synergies.Continuing our business transformation,which kicked off in 2022.Through 2023,we achieved$1.2 billion in run-rate cost and sustaining
39、capital reductions.We remain focused on further reducing costs in 2024.“OUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTIONin operating and commercial synergies$250MM10PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLELeveraging Technology Phillips 66 h
40、as been using artificial intelligence(AI)technologies since 2018.A few examples of how AI is helping us deliver on our strategic priorities include:Our Digital IT team is exploring platforms for generative artificial intelligence applications to leverage throughout our organization for enhanced deci
41、sion making,efficiency,productivity and innovation.The AI Governance Board at Phillips 66 monitors and approves how we use this function.Our Generative Artificial Intelligence policy helps us drive innovation while safeguarding our employees and our company by:Outlining ethical principles to prevent
42、 discriminatory practices and privacy violations.Ensuring compliance with laws.Mitigating risks associated with biased algorithms and unintended consequences.Automating Midstreams pipeline control with a learning model for increased throughputMaximizing Refining unit performance using machine learni
43、ngImproving safety by incorporating data and human performance principles into job planning Utilizing historical product lifting data to predict customer needsAI showcase at headquartersHOUSTON,TX11A Leading Integrated Downstream Energy ProviderPositioned for value creation through economic cycles 9
44、5%advantaged feedstock portfolio.Proprietary technology and global marketing network.9 refineries in the United States;2 in Europe.*1.8 million BPD of crude capacity.50,000+BPD of renewable fuels production capacity.*Natural gas liquids(NGL)wellhead-to-market value chain.Crude oil and product pipeli
45、nes and terminals.72,000+miles of crude oil,refined petroleum product,NGL and natural gas pipeline systems in the United States.7,260 sites in the U.S.and 1,670 internationally.Leading lubricants manufacturer in the United States.MIDSTREAMWellhead-to-market and highly integrated with other segmentsM
46、ARKETING&SPECIALTIESPhillips 66,Conoco,76,JET and Coop branded fuels and servicesCHEMICALSChemicals and polymers the world needsREFININGGeographically diversified and vertically integrated SHAREHOLDER DISTRIBUTIONSOPERATING EXCELLENCEHIGH-PERFORMING ORGANIZATIONLOWER-CARBON*As of March 31,2024.OUR A
47、PPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTIONProviding Energy.Improving Lives.Our products make modern life possible.In addition to transportation fuels and the raw materials for cooling and lubricating engines,we produce specialty products des
48、igned to support the manufacturing of medical devices,pharmaceuticals,electronics,vehicles,batteries,agricultural products and much more.12PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEOUR PRAGMATIC APPROACH TO THE ENERGY TRANSITION Our industry is crucial to the energy transition.We have the workforce,
49、technical skills and infrastructure to develop projects that can lower emissions and provide reliable energy.Phillips 66 is pursuing returns-focused projects,technologies and partnerships that support the decarbonization of our operations,increase the resilience of our assets and provide energy cons
50、umers with lower-carbon alternatives.We leverage our assets,skills and people to develop near-term opportunities in renewable fuels,electric vehicle(EV)charging and renewable power and longer-term opportunities in other technologies,including batteries,carbon capture and hydrogen.Lower-Carbon Invest
51、mentsWe are strategically pursuing opportunities with the right:1Returns that are consistent with our disciplined approach to capital allocation.2Technologies that can be delivered at scale.3Regulatory environments that enable capital deployment of lower-carbon projects.45Humber Refinery NORTH LINCO
52、LNSHIRE,U.K.Partners and capital structures that broaden and de-risk opportunities.Timing to maximize shareholder value.13Increasing Our Renewable Fuels Production Processing renewable feedstocks supports the decarbonization of liquid fuels.Phillips 66 responsibly uses renewable feedstocks sourced f
53、rom around the globe,such as used cooking oil(UCO)and vegetable oils,as well as low-carbon intensity waste oils and byproducts,to produce renewable fuels,including renewable diesel and sustainable aviation fuel(SAF)with lower life-cycle GHG emissions as compared to conventional fuels.The technicians
54、,scientists and engineers at our Phillips 66 Research Center in Bartlesville,Oklahoma,research alternative feedstock processing to advance our production of sustainable fuels and chemicals.Securing Responsibly Sourced Renewable Feedstocks Phillips 66 facilities complete a detailed permitting process
55、 before processing renewable feedstocks.Our ongoing compliance efforts include International Sustainability&Carbon Certification(ISCC).The ISCCs mission is to protect forests,high-carbon stock lands and biodiversity,enable waste utilization and increase traceability.As we source renewable feedstocks
56、,we comply with all laws and permitting requirements from relevant authorities in all markets.We assess and adjust our practices as regulations regarding renewable feedstocks evolve.We respect human rights and require our partners to abide by the laws in their country through our Business Partner Pr
57、inciples of Conduct.We also screen potential suppliers for compliance in areas such as sanctions,anti-corruption and human trafficking.Consistent with regulations to protect against deforestation,Phillips 66 can review satellite images to confirm that vegetable oils come from lands harvested before
58、the deadlines set by the relevant renewable fuels programs.In 2023,Phillips 66 was one of the first companies to get an approved fuel pathway for renewable gasoline derived from soybean oil produced in Argentina.Phillips 66 was also one of the first companies to receive a renewable identification nu
59、mber for Canadian canola oil in 2023.The United States does not have pathways to produce renewable fuels from palm oil for credit,and our Rodeo Renewable Energy Complex is committed to not processing virgin palm oil or palm oil derivatives.Throughout the world,Phillips 66 uses voluntary and regulate
60、d certifications,such as the ISCC,to demonstrate sustainable practices for renewable feedstocks.Supplying Sustainable Aviation FuelSAF is compatible with existing aircraft engines and can be directly blended into existing airport fuel infrastructure.Its key improvements over conventional jet fuel in
61、clude:Less particulate formation in the air.Lower emissions of sulfur oxides(SOx).In the United Kingdom,we have produced SAF at our Humber Refinery since 2022.In the United States,our Rodeo Renewable Energy Complex is expected to start producing SAF in the third quarter of 2024,with the flexibility
62、to produce up to 10,000 barrels per day(BPD)initially.We anticipate the demand for SAF will continue to grow.Participating in a Circular Economy Our Sweeny Refinery in Texas has ISCC PLUS certification to process pyrolysis oil,which is made from hard-to-recycle waste plastics.It is used in circular
63、ethane,circular propane,circular propylene and other sustainable feedstocks and petrochemical building blocks.We are evaluating and progressing certifications at other sites.In 2023,our Lubricants business increased the use of re-refined base stocks to blend finished lubricants,replacing base oils d
64、erived from crude oil.When compared to the average annual usage for the past five years,we incorporated twice as much re-refined base stock into our formulations in 2023.Using Hydrogen in Our OperationsPhillips 66 is evaluating ways to increase lower-carbon hydrogen use in our operations.One example
65、 is a project to produce and supply green hydrogen to our Ferndale Refinery in Washington state and reduce the carbon intensity of our fuels.Green hydrogen,a nearly GHG emission-free fuel,is created through electrolysis using wind or solar electricity.In 2024,Uniper and Phillips 66 Limited,a U.K.-ba
66、sed,wholly owned subsidiary of Phillips 66,signed a collaboration agreement to work to supply green hydrogen to our Humber Refinery.The hydrogen would be used to replace refinery fuel gas in industrial-scaled furnaces and reduce direct GHG emissions.OUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRON
67、MENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTION14PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEEnabling Deployment of EVs We are a leading manufacturer of specialty coke,a precursor material to synthetic graphite anodes used in lithium-ion batteries,which power EVs and other electronics like sm
68、artphones.These graphite anodes are a critical component for enabling EVs with greater driving range,faster charging and longevity.With lithium-ion battery demand projected to experience sharp growth over the coming decades,Phillips 66 is well positioned to be an important part of the U.S.and Europe
69、an battery value chains.Our battery development team at the Phillips 66 Research Center works with external collaborators to identify ways to incorporate readily available,responsibly sourced materials to extend the driving range of EVs.We use our expertise in material science and chemical process e
70、ngineering to develop fit-for-purpose materials that can be produced with a high level of consistency and at a meaningful scale.Additionally,Phillips 66 produces high-performing lubricants formulated to meet the unique needs of EVs through our e-Shield product line,which includes system fluid,grease
71、 and coolant.Enabling Lower-Carbon Steel Production Phillips 66s specialty coke also plays an important role in the industrial decarbonization effort within the steel industry.Recycled steel produced by electric arc furnaces(EAFs)is associated with a 75%reduction in carbon emissions versus more wide
72、spread blast furnace production.Under enormous thermal stresses within an EAF,graphite electrodes made from Phillips 66 needle coke are capable of efficiently channeling the required power into the system,producing liquid steel from scrap sources.With decades of research continually improving our ne
73、edle coke,we are one of the industrys leading suppliers,and we continue to push the boundaries of materials properties.Assessing Carbon Capture Opportunities Carbon capture and storage(CCS)could enable decarbonization across manufacturing and heavy industry.We are involved in projects to advance CCS
74、 technology,including joining several other companies through the Houston CCS Alliance in expressing support for the large-scale deployment of CCS technology in the Gulf Coast industrial area.We are evaluating projects that deploy CCS technology at other locations,including some Midstream assets and
75、 the Humber Refinery in the United Kingdom.Increasing Renewable Power Use Phillips 66 is utilizing renewable energy solutions to decarbonize key assets,minimize the carbon footprint of renewable fuels,reduce operating costs and adhere to regulatory requirements.Our first solar project,located at our
76、 Rodeo Renewable Energy Complex,will be commissioned in 2025,supplying 30 megawatts of renewable power,amounting to a 90%reduction in grid-supplied power.Phillips 66 has solar projects under development at our Wood River Refinery and the Hartford Terminal in Illinois,and we are actively participatin
77、g in multiple Illinois state renewable power programs.Other solar projects at our Refining and Midstream assets are under active evaluation,reinforcing our commitment to renewable energy.76 EV charger ribbon-cutting event BELLINGHAM,WAEV ChargingPhillips 66 is building a high-speed EV charging busin
78、ess focused on high-quality branded fuels locations in the United Kingdom and the United States.We support the decarbonization of the U.K.car fleet through our JET Charge ultra-rapid charging service,which debuted at our JET Refinery Service Station in Immingham in 2023 and is now at four locations
79、throughout the United Kingdom.In the United States,the first Phillips 66 branded chargers were installed at our flagship fuel station near our Houston headquarters in 2022.Our first 76 branded chargers were commissioned in Washington state in late 2023,followed by the first Conoco chargers in Colora
80、do in early 2024.By the end of 2024,we will have 20 active sites,and another 15 sites are planned to be online in 2025.We have been awarded$6.5 million in U.S.EV charging grants to date.These grants are aligned with state and federal EV infrastructure goals and enable the development of this new bus
81、iness.Of the new sites,46%will be in low-income or nonurban census tracts.15Phillips 66 made a final investment decision to move forward with our Rodeo Renewed project in 2022,transforming our San Francisco Refinery into one of the worlds largest renewable fuels facilities.In March 2024,the Rodeo Re
82、newable Energy Complex began producing approximately 30,000 BPD of renewable fuels.The facility is on track to achieve full conversion by the end of the second quarter and to produce SAF by the third quarter of 2024.The complex,which will be partially powered by solar energy,uses feedstocks like was
83、te oils,fats,greases and vegetable oils.Its geographic location,unique processing infrastructure and flexible transportation logistics make it a world-class supplier of renewable fuels,significantly reducing life-cycle carbon emissions as compared to conventional fuels.“The Rodeo Renewable Energy Co
84、mplex enhances our diverse portfolio and allows us to provide industry-leading renewable fuels to meet market demand.”Suresh VaidyanathanVice President,Renewable FuelsOUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTIONRodeo Renewed:Positioning P
85、hillips 66 as a Leader in Renewable Fuelsgallons per year of renewable fuels at full production capacity (50,000+BPD)fewer life-cycle carbon emissions compared with conventional dieselUP TO800MM80%Production Capability at Our Rodeo Renewable Energy Complex16PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLE
86、Transitioning Our San Francisco RefineryWhen changes to our operations potentially affect our employees,contractors,labor unions or surrounding communities,we respond with thoughtful planning to enable a just transition.We aim to maximize positive impacts and minimize negative ones for people and co
87、mmunities through redeployment,skills training and community renewal.Our approach also includes dialogue with our employees,often through unions,and references the International Labor Organizations(ILO)guiding principles as part of the process.We applied an engagement framework during the permitting
88、 and startup of the Rodeo Renewed project that included:Engaging:The Rodeo Renewed team engaged with numerous community entities in preparation for approval from the Contra Costa County Board of Supervisors.Engagements included informational meetings,booths at local events,stakeholder tours of the f
89、acility and presentations to external stakeholder groups like the Chamber of Commerce,school districts and city councils.Informing:Stakeholder communications included a project website enabling people to sign up for email and text message updates.We kept in contact with employees,contractors,vendors
90、,suppliers,the Community Advisory Panel and community leaders and organizations through regular emails,town halls and webinars.Planning:Phillips 66 retained all employees,union and nonunion,during the pandemic and project permitting process.After decommissioning the adjacent Santa Maria Refinery and
91、 Carbon Plant as part of the project scope,all employees were offered jobs at other Phillips 66 facilities or given severance packages.Planning also involved assessing environmental impacts.Enacting:We created training plans designed to give operators the skills they need to operate new units and un
92、derstand additions and changes to existing equipment.Training included classes,computer-based lessons,written materials,qualification tests on the changes and field walks to verify understanding.As the project continues through its initial startup phase,the Rodeo Renewable Energy Complex communicati
93、ons team provides ongoing stakeholder education and outreach.17Health,Safety and Environment Ponca City RefineryPONCA CITY,OKOUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTION18PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEWe aspire to lead our ind
94、ustry in health,safety and environmental performance.19Our health,safety and environment(HSE)strategy centers on eliminating injuries from serious incidents,maintaining process containment and reducing our environmental footprint.Enhancing Our Culture Through Integration of Human Performance Princip
95、lesWe are raising the bar on our safety performance,creating a paradigm shift in our culture by moving from measuring safety as an outcome to seeing it as the effectiveness of safeguards.We leverage human performance(HP)concepts and principles to enhance the resiliency of our systems,processes and p
96、eople,helping protect our workforce,communities and the environment.HP is understanding how people interact with equipment,processes and each other as part of a system to help manage risk and keep each other safe.It is anticipating that people make mistakes and ensuring safeguards are in place.We ar
97、e fostering a proactive learning culture to drive continuous improvement and prevent serious incidents and working to integrate safety principles in everything we do.Wichita Products TerminalWICHITA,KSEngaging Employees and Contractors in SafetyOur Good Catch program rewards employees and contractor
98、s who speak up when they spot a potential safety concern.Our annual Safety Commitment Cards inspire supervisors and employees to discuss our Principles of Safe Operation,share what the commitment to safety means to them personally and confirm their commitment to working and owning safety.Advancing O
99、ur HSE Journey10 Life Saving Rules Guidelines to prevent incidents and injuriesCause-Effect Mapping Primary investigation method Incident Risk Matrix Tool for assessing and categorizing potential severity of incidentsSafeStart Refresh Midstream safety trainingCritical and Emergency Procedure Digitiz
100、ation Energy Isolation Practices for preventing release of hazardous energy Electronic Work Permit(EWP)and Hazard Identification and Risk Assessment(HIRA)Processes for improving safety and efficiency in work permittingShield Your Future New hire training on critical safety messages201620172018201920
101、20OUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTION20PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEDriving Accountability in SafetyIn 2023,our employees delivered exceptional personal and process safety performance.Our combined total recordable ra
102、te(TRR)of 0.12 contributed to a 15%improvement over our prior three-year average.Our Lubricants business achieved zero total recordable injuries with a TRR of 0.00 for the fourth consecutive year,and our continued focus on eliminating spills led to the lowest number of releases in Lubricants history
103、.We believe leadership,ownership and engagement are keys to building a reliability centered culture and achieving safe,dependable operations.We strive to make it easier to succeed and harder to fail.Our work requires precise execution,and our HSE policy defines our commitment to protecting our emplo
104、yees,contractors,customers and communities while working to achieve our strategic goals.We want our employees and contractors to:Start when sure and stop when unsure.In planning our work,we instruct our employees and contractors to stop work if things dont go as planned or if they are not sure if th
105、ey can continue safely.No employee or contractor will experience negative repercussions for using their stop-work authority in good faith.Anticipate errors and build safeguards into our systems.We work collaboratively and seek a variety of perspectives,relying on the expertise of the people doing th
106、e work.We learn from our shortcomings and successes.of our annual bonus is linked to environmental and safety operating performance40%Safety and Environmental PerformanceWe operate in a highly regulated industry and comply with international,federal,state and local regulations affecting our operatio
107、ns,including those concerning air emissions,water effluent and solid waste-handling.We strive to eliminate environmental events and prevent releases of hydrocarbons and chemicals.Safety and environmental performance,including lower-carbon and GHG initiatives,are part of our Variable Cash Incentive P
108、rogram,our annual bonus program for executives and employees.We measure ourselves against the best performers in our industry and target top-quartile performance in safety,process safety and environmental stewardship.Operating excellence including personal and process safety,environmental stewardshi
109、p and asset reliability is critical to our corporate strategy.Reliability Event Investigation Focus on latent cause learningsLearning Teams Pilot program to promote a proactive vs.reactive learning cultureAdvanced Integrated Mechnical Integrity(AIMI)Risk-based inspection program deploymentApplying H
110、uman Factors in Procedures Written documentation for best practices OE Advance Video Series Education in support of operational excellenceStart When Sure Processes to have all safeguards in place before starting workHuman Performance Principles Methods for understanding how people interact with equi
111、pment,processes and each other to mitigate risks20212022202321Working SafelyOur HSE Management System sets our standards and expectations for maintaining and improving safety,reliability and environmental impact.In addition to safety training,employees are empowered to ask for help and stop any acti
112、vity that seems unsafe,and they are expected to follow our 10 Life Saving Rules.We take significant steps to protect our people.Each manufacturing site is supported by occupational health and safety professionals who understand the potential sources of exposure,the process for evaluating exposure an
113、d the methods of protecting employees and contractors.During inclement weather,operational or other emergencies,our crisis communications platform keeps employees updated and aware of the actions they need to take through real-time email,voice and text message notifications.We also have on-site secu
114、rity teams and control centers monitoring our offices and facilities.Improving Contractor SafetyOur contractors are a critical part of our operations.On average each year,contractor labor accounts for more work hours than employee work hours.Making sure those services are performed safely is a high
115、priority.Following a contractor fatality and serious incidents in early 2023,we formed internal teams and collaborated with contracting companies to develop recommendations to improve contractor safety,quality and productivity across our sites.As a result,we are implementing the following initiative
116、s:Enhancing front-line supervisor leadership development training to help incorporate Phillips 66 specific expectations for contract and employee supervision.This customized training program was built by our in-house Learning and Development team,HSE subject-matter experts and the Houston Area Safet
117、y Council.Increasing the engagement of employee and contractor supervisors by having them spend more time in the field,enhancing our key contractor sponsor and mentoring program and identifying less-experienced contract workers to increase awareness and provide focused onboarding.Enhancing our contr
118、acting strategies to attract and retain the best contract companies and top talent.Focusing on Industrial Hygiene ProgramsOur industrial hygiene program focuses on the long-term health of our employees and contractors.We assess potential exposures,evaluate data trends and implement processes to mana
119、ge hazards and help protect our people from chemical and physical agents in the workplace.We also confirm that the health protection programs of contracting companies working on Phillips 66 projects are effective and strong.In 2023,we completed a technology update at all Refining facilities and now
120、use a fully networked personal and portable gas monitoring system.This investment has enabled more sensitive and robust data gathering and provides faster response times.OSHA Voluntary Protection ProgramWe have 24 Refining,Midstream and Lubricants facilities with Occupational Safety and Health Admin
121、istration(OSHA)Voluntary Protection Program Star recognition.This is OSHAs highest workplace honor.Each site must complete self-evaluations yearly and undergo an OSHA site inspection every three to five years to maintain its Star status.123“Inclusion is a critical aspect of our safety culture becaus
122、e everyone who works here needs to feel safe to speak up.When we can all do that,were empowered to plan appropriately,start when sure and think about how to do things better.”Todd DentonSenior Vice President,Health,Safety and Environment and Field Operations SupportOUR APPROACH AND PROGRESSHEALTH,SA
123、FETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTION22PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEEliminating Process Safety EventsProcess safety events(PSEs)are unplanned releases of hazardous material from primary containment.We closely monitor and measure our performance in this
124、 area.Phillips 66 works to eliminate PSEs by applying best practices in design,engineering,operations and maintenance.We also perform hazard analyses and use change-management procedures to mitigate potential risk.We investigate PSEs to determine the underlying causes so we can act to prevent recurr
125、ences.HSE Awards and RecognitionSafety Meetings and Training Phillips 66 sites hold regular safety committee meetings for employees,managers and union representatives to review goals and safety practices.In addition to providing continuing education opportunities,these meetings enable knowledge shar
126、ing from experts such as industrial hygienists,safety specialists and process safety representatives.We also have frequent meetings with our field personnel and perform job safety analyses for each field job.Our safety training helps employees and contractors maintain consistent,safe work procedures
127、 and safeguards when working on Phillips 66 projects and sites.We periodically host company safety day training,where employees share techniques,skills,knowledge,goals and performance milestones.We also hold separate periodic safety summits with our major contracting companies,where we share best pr
128、actices and collaborate on continuous improvement opportunities.Distinguished Safety Award:Sweeny Refinery (third consecutive year)and San Francisco RefineryElite Platinum Award:Ponca City RefineryElite Gold Award:Lake Charles Refinery Innovation Award:Sweeny Refinerys Safety DaysAMERICAN FUEL&PETRO
129、CHEMICAL MANUFACTURERS RECOGNITIONS:Midstream received the top GPA Midstream Association Safety Award for 2023 performanceGPA MIDSTREAM ASSOCIATION SAFETY AWARDLake Charles RefineryWESTLAKE,LA23Fostering a Reliability Centered Culture Operating reliably prevents loss of containment and helps achieve
130、 safe and stable operations.This protects people in our facilities,surrounding communities and the environment.Asset integrity programs improve reliability by including quality assurance and quality control,defined inspection and maintenance intervals for process equipment,and established company st
131、andards.Many of our asset integrity,process safety and environmental standards exceed industry requirements.Asset and Pipeline Integrity RefiningIn Refining,our Advanced Integrated Mechanical Integrity program(AIMI)consolidates our inspection data into one system and focuses on early detection of da
132、mage mechanisms.AIMI systemically standardizes,validates and digitizes our equipment design,process information and inspection data.This provides a methodology to manage the integrity of fixed equipment based on risk versus fixed interval inspections.This knowledge allows our mechanical integrity te
133、ams to optimize and prioritize doing the right inspection at the right time on the highest-risk equipment.MidstreamOur pipeline integrity programs focus on three aspects of safe operations:Pressure Cycle Monitoring Tools and Process We use data integration and industry-leading tools to capture pipel
134、ine system data and generate solutions to improve our overall performance,reduce pressure cycles and drive efficiencies through reduced inspection and maintenance requirements.Advanced Inspections Advanced inspections combine guided wave testing with other ultrasonic inspection techniques to identif
135、y corrosion threats earlier than older inspection methods.Higher-Risk Pipe Replacement Our pipeline risk model prioritizes preventative and mitigative measures on our pipeline systems.In 2023,we replaced approximately 40 miles of existing pipelines,reducing risk and environmental impact to high-cons
136、equence areas.In 2024,we are further improving our asset integrity program by:Improving gas gathering integrity performance and implementing enhancements to our geohazard and stress corrosion cracking programs.Working with the Pipeline Research Council International and other joint industry projects
137、 to conduct research,develop solutions and evaluate new technology.Publishing an integrated integrity management plan(IMP)for our liquids pipelines and we expect to publish a gas IMP in 2024.OUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTIONDes
138、ign It Right.Maintain It Right.Operate It Right.Continuously Improve.24PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEPerforming Audits Our facilities are subject to rigorous internal,industry and external audits and inspections,and our operations are managed to support compliance and asset integrity.Ext
139、ernal auditing agencies include OSHA,the Environmental Protection Agency(EPA),the U.S.Coast Guard,the Pipeline and Hazardous Materials Safety Administration,the Chemical Safety Board and the U.K.Health and Safety Executive Environmental Agency.Audits are documented and include a process for communic
140、ating results to management.Timely completion of corrective actions is monitored through a compliance verification process,which requires business leaders from the operating level to the executive level to review and acknowledge outstanding items and time lines.Monitoring Product Compliance and Resp
141、onsibilityOur facilities follow Phillips 66 environmental and quality management systems,and many are certified to International Organization for Standardization(ISO)measures.These certifications and systems demonstrate our ability to consistently provide products and services that meet customer and
142、 regulatory standards.Our Lubricants business conforms to the ISO 14001:2015 Environmental Management System.Five of our Lubricants facilities have certification to ISO 14001 and the ISO 9001:2015/IATF 16949:2016 Quality Management System Standard.Lubricants Research and Development is accredited to
143、 the ISO/IEC 17025 standard for testing and calibration laboratories.Wood River Refinerys odorless mineral spirits and benzene business lines in Roxana,Illinois,conform to ISO 9001:2015 Quality Management System Standards.In the United Kingdom,the Humber Refinery is certified to ISO 14001:2015.Baywa
144、y Refinerys polypropylene business in Linden,New Jersey,is certified to ISO 9001:2015 for the design and manufacturing of plastic pellets.In April 2024,our polypropylene business received UL certification for six of our polypropylene grades for energy savings.Freeport Terminal FREEPORT,TX25Transitio
145、ning to Fluorine-Free Fire Foams In 2023,we continued implementing our foam procurement strategy to replace our existing per-and poly-fluoroalkyl(PFAS)-containing firefighting foams.We collaborated with industry peers and invested in 14 studies to test non-PFAS firefighting foams and their effective
146、ness.We will conduct two additional tests in 2024,one at our Borger Refinery in Texas.We are also evaluating PFAS in compliance with the EPAs Toxic Substance Control Act.Maintaining Emergency Response ReadinessOur emergency response teams protect lives and secure the area in an emergency.We routinel
147、y prepare to respond to emergencies and work with federal,state and local agencies that have jurisdiction and authority over our emergency response efforts.Every Phillips 66 facility has a local response team that utilizes emergency response plans with processes for identifying potential emergencies
148、 and planning for mitigation and control.Refinery fire brigades maintain preparedness with quarterly training for more than 800 brigade members.Emergency response plans include working with local fire and rescue departments,police and community members and are reviewed annually.Local response teams
149、can draw support from secondary response teams,which are overseen and staffed at a corporate level.Regular training and drills keep team members skilled and qualified.In 2023,all 50 team members from our Incident Management Assist Team participated in a weeklong event that included team-and role-spe
150、cific training and instruction on best practices from industry experts.We also hold yearly emergency trainings and response drills that prepare our company and community responders for various realistic scenarios.In 2023,we collaborated with Texas A&M Engineering Extension Services to offer speciali
151、zed industrial emergency training and scholarships to 60 community firefighters.Additionally,Indigenous people and tribal representatives participate in drills and training sessions held at our operations near Native American communities.They are consulted and involved in the planning and execution.
152、For example,members of the Lummi Nation near our Ferndale Refinery in Washington state participated in two of our most recent mid-case drills and our worst-case scenario drill.Each business unit completes multiple notification accountability drills for emergencies and tabletop exercises each year.In
153、 addition,we hold dozens of exercises for other scenarios,including the following:Process safety management.Risk management scenarios.Supervisory control and data acquisition failure exercises.If operations are interrupted,we enact business continuity plans to help keep employees,contractors and the
154、 community safe and enable our operating assets to safely resume manufacturing and transporting energy products to markets worldwide.We also participate in community safety and preparedness programs and provide resources and training to local police,fire and emergency management personnel.Responses
155、to real-world events,such as earthquakes and hurricanes.Government-initiated unannounced exercises.Continuity of business or pandemic exercises.Borger Refinery BORGER,TXOUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTION26PHILLIPS 66 2024 SUSTAI
156、NABILITY AND PEOPLEOUR ENVIRONMENTAL PERFORMANCE We work to lessen our environmental footprint by creating operational efficiencies to reduce waste and the consumption of natural resources,along with returns-focused investments in emissions reductions,nature conservation and biodiversity.Working Tow
157、ard GHG Emissions Intensity Reduction TargetsAchieving long-term GHG emissions reductions will require changes at Phillips 66,in our industry and throughout the rest of the world.The effort will also require significant technology developments,shifts in consumer behavior and changes to supply chains
158、.National policy and permitting reforms are also essential to encourage investment in lower-carbon infrastructure and deployment at scale.We have set returns-based targets to lower Scope 1,2 and 3 emissions intensity,supporting enterprise growth,including natural gas gathering and processing assets
159、operated by Phillips 66.In setting targets,we evaluated energy demand and technology development scenarios,including net zero.Current evaluations show no economically viable path to net zero by 2050,but we continue to progress our emissions intensity reduction targets and periodically review scenari
160、os with the Executive Leadership Team and the board to inform company decisions.We revisit our targets as technologies,policies and energy needs evolve.In 2023,we integrated GHG intensity metrics into our project approval process for consideration alongside financial metrics.Our emissions intensity
161、improved from 2019 levels due to portfolio changes,enhanced refining utilization,energy use optimization and renewable fuels blending.With the integration of DCP Midstream assets,methane management has become more critical,representing 4%of our Scope 1 and 2 GHG emissions.We are exploring technologi
162、cal innovations,partnerships and best practices to further reduce GHG emissions,including methane.GHG Emission Reduction Targets and ProgressEmissions Intensity Reduction Road MapManufacturing-related emissions Scope 1 and 2 from operated assets2019 Baseline 2030 Target 30%Reduction2050 Target 50%Re
163、duction2023 Progress 17%ReductionMANUFACTURING EMISSIONS INTENSITY Scope 1 and 2 Metric Tons of CO2e/MBOE2019 Baseline PRODUCT EMISSIONS INTENSITY Scope 3 Metric Tons of CO2e/MBOEProducts manufactured and sold Scope 3 from operated assets2030 Target 15%Reduction2023 Progress 7%ReductionNear-TermImpr
164、ove energy efficiency of operations Equipment optimization.Electrification.Waste-heat recovery.Reduce methane emissions Natural gas equipment conversion.Leak detection and repair.Equipment maintenance.Increase renewable power use in operations Behind-the-meter projects.Purchase agreements.Grow produ
165、ction of lower-emissions intensity products Renewable fuels.Natural gas liquids.Longer-TermCapture CO2 from operationsUse lower-carbon intensity hydrogenFind out more about our emissions reduction targets.27Our Four-Part Approach We have developed a four-part methane management approach that include
166、s integrating people and data systems,implementing best operating practices,utilizing technology,and leveraging academic and industry partnerships.Integrating People and Data SystemsSuccessfully integrating DCP Midstream legacy employees and data systems was a top priority in 2023,and weve efficient
167、ly combined them with the future in mind.Our Midstream organization has a structure for planning,sharing and governing GHG and methane initiatives.An executive committee,senior management GHG steering team and the methane management working group collaborate with various workstreams driving operatio
168、nal excellence and environmental improvement.OUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTIONManaging Methane EmissionsMethane is a GHG that can trap more heat than carbon dioxide and has a much shorter atmospheric life span than other GHGs,a
169、ccording to the EPA.Because of that,effectively managing methane may offer a near-term opportunity to positively impact Earths climate.We are analyzing proposed and recently enacted rules to ready our business for compliance with methane emissions management,and we support methane mitigation regulat
170、ions that are technology-neutral,cost-effective and efficient.Zia II Gas Plant HOBBS,NM28PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEImplementing Best Operating PracticesOperational best practices include improving employee training,conducting thorough leak detection and repair,and performing regular
171、equipment maintenance.Equipment modernization and electrification are also opportunities to reduce GHG emissions and are leveraged when applicable.We continue to seek opportunities to further reduce emissions from blowdowns,venting and flaring through improved operational practices and projects.Requ
172、irements for inspections vary within our footprint.In New Mexico,we have implemented monthly optical gas-imaging inspections in all areas,even when it is only required quarterly.Weekly audio,visual and olfactory inspections are also required in New Mexico,and we voluntarily extend that practice into
173、 our West Texas region,including improvements in using an electronic application for documentation.We seek transparency in our methane emissions,including complying with all regulatory requirements.We also evaluate participation in voluntary endeavors,such as the Oil and Gas Methane Partnership 2.0.
174、Utilizing TechnologyWe use technology to improve our monitoring practices.We continually evaluate commercially available and scalable technologies and test them within our operations.We adopt the most successful technologies on a wider scale.We encourage new technical developments and vendors in rem
175、ote detection to increase cost competitiveness and business robustness through vendor availability.In 2023,we piloted 25 acoustic sensors on 12 tanks.These sensors can“hear”when there is a problem with the hatch that might result in emissions.This program is being evaluated for expansion in 2024.We
176、also rely on advancements in aerial detection technologies,like the following:In a large portion of gas operations,we use an aerial system that combines signals from optical and hyperspectral infrared images collected with data from a GPS receiver to estimate methane concentration.We also use light
177、detection and ranging(LiDAR)to measure methane concentration.LiDAR uses eye-safe laser beams of specific wavelengths sent from a small aircraft,reflected from atmospheric molecules and collected by an airborne sensor.The methane plume imagery is mapped onto satellite imagery and aerial photography t
178、o guide ground crews directly to places that need repair.We regularly conduct aerial surveys of our gathering pipelines.These aerial surveys are complemented by drone surveys and satellite data.We use drones equipped with forward-looking infrared cameras to survey compressor stations.While satellite
179、s are less sensitive than surveys close to the ground,they can provide more frequent data.Satellite technologies continue to improve,and more satellites are being launched,enhancing the available data for monitoring to help us find and repair unexpected emissions faster.We are also gathering publicl
180、y available data and combining it with our asset locations to gain additional insights and respond quickly.Leveraging Industry and Academia Progress in methane management requires internal action and collaborations with industry peers and academia.One example of collaboration is our membership in Th
181、e Environmental Partnership to share best practices,learn from others and take action.We also collaborate with institutions like Colorado State University and the University of Texas at Austin to improve scientific understanding and support lower-capitalized operators.Methane Reductions Through Asse
182、t Improvementsfacilities shut down,eliminating emissions,which resulted in a 25%reduction in natural gas pneumatic emissions in New Mexicovapor combustion unit installed and operational at the National Helium facilitys nitrogen rejection systemfenceline monitors and optical gas-imaging cameras insta
183、lled at our Goldsmith Gas Plant and Tara Treater to aid in early emissions detectionblowdown headers installed on Colorado booster stations and gas plants to recover blowdown emissions 5113421vintage propane compression systems replaced with electric engines at our Goldsmith Gas Plant29Reducing Air
184、EmissionsOver the past five years,we have made significant investments in reducing air emissions,including nitrogen and sulfur oxides,particulate matter and volatile organic compounds.Since 2019,we have reduced our air emissions by 23%across our Refining assets.From 2022 to 2023,we reduced our air e
185、missions by 7%.Managing Water and WastewaterWater is essential in our manufacturing facilities and processes,and we strive to manage it responsibly.Our refineries and Rodeo Renewed Energy Complex have on-site wastewater treatment systems and oil recovery units.Understanding the local water demand an
186、d the potential for water scarcity are key considerations as we prioritize projects to improve efficiency and decrease our environmental footprint.Our water and wastewater management also includes:Operating 11 biological treatment plants and 13 pretreatment facilities in North America and the United
187、 Kingdom.Meeting or exceeding environmental performance standards from the National Pollutant Discharge Elimination System and other industrial pretreatment permits.Updating operations to conform to new American Society of Mechanical Engineers guidelines for boilers to increase reliability and energ
188、y efficiency.Selecting zinc-free treatment chemistry in the Lake Charles Refinery cooling towers to avoid zinc discharge.Helping identify opportunities to increase cycles on towers and boilers,which can reduce the amount of makeup water needed to maintain proper water levels.Optimizing operation of
189、our cooling towers and boilers by defining and standardizing key metrics across all sites and developing online dashboards to visualize and monitor performance indicators.This allows our engineers and operators to detect issues and inefficiencies more quickly,thus reducing water,chemical and energy
190、demands while increasing reliability.Managing Waste and RecyclingPhillips 66 has implemented waste management programs at our facilities to handle waste materials from creation to final disposition in a way that is designed to protect human health and the environment.The Phillips 66 Waste Network pu
191、rsues standardization across our assets by establishing best practices and procedures for compliance programs and evaluation of waste facilities and vendors.Phillips 66 also has a systematic hazardous waste program with processes and practices executed by trained personnel.Tanks at our refineries an
192、d terminals require periodic cleanouts,and we take steps to conserve water during the process.We recycle or dispose of the residual product in compliance with strict environmental laws.gallons of water conserved through our tank cleanout methods in 2023 gallons of waste-derived fuel for manufacturin
193、g processes generated from our tank cleanout methods in 20231.5MM+229,000+Supporting Nature,Biodiversity and ConservationOur environmental stewardship efforts go beyond regulatory requirements and focus on connecting conservation efforts to our business and managing natural capital in and around the
194、 communities where we work and market our products.Natural capital encompasses the supply of the worlds natural resources from which economic value and benefits can be derived,such as forests,oceans and freshwater,along with the biodiversity of these ecosystems.We consider the guidance and recommend
195、ations developed by the Taskforce on Nature-related Financial Disclosures(TNFD),which are designed to enable businesses“to integrate nature into decision making.”We also collaborate with national and local environmental and conservation organizations to support their efforts to promote biodiversity
196、and environmental stewardship.Our employees and interns volunteer their time and make monetary contributions,often enhanced by the companys match program.Phillips 66 has long-standing partnerships with many national conservation organizations,including the National Fish and Wildlife Foundation,Ducks
197、 Unlimited,Trees For Houston and the Wildlife Habitat Council.OUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTION30PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEProject PlanningWe view the management of natural capital and biodiversity risks as esse
198、ntial.To identify potential impacts and prepare environmental permits,mitigation plans and monitoring programs,we conduct environmental impact analyses by leveraging several federal,state and institutional sources and tools.We coordinate and engage with many agencies,including the EPA,the U.S.Army C
199、orps of Engineers,the U.S.Fish and Wildlife Service,and state and local regulatory agencies.We utilize existing pipeline corridors where feasible and use construction techniques that minimize the impact on the environment,local communities,wildlife and natural resources.Protecting Wildlife in Our Co
200、mmunities Preserving Habitats For Monarch ButterfliesOur Midstream business has a Certificate of Inclusion into the Monarch Butterfly Candidate Conservation Agreement with Assurances.To date,we have met all required conservation measures on more than 11,000 miles of our rights-of-way and are doing o
201、ur part to create and manage habitats for monarch butterflies.Participation in the program includes care and management practices,such as conservation mowing,idle lands,woody vegetation removal,targeted herbicide application and limiting broadcast herbicides to high-activity areas like terminals and
202、 valve sites.Because of the success of our participation,we are working to enroll an additional 3,300 miles of rights-of-way along NGL pipelines.Supporting Wetlands Biodiversity U.S.wetlands are home to more than 900 species of plants and animals.They also play an important role in helping prevent f
203、looding,improving water quality,buffering the land against coastal storms and replenishing groundwater.In 2023,we teamed up with Ducks Unlimited to provide a$300,000 gift to help construct ZooMontanas new Foster Waterfowl Refuge.Over the past decade,Phillips 66 and Ducks Unlimited have joined forces
204、 on more than 30 projects,contributing approximately$4 million toward conservation efforts to preserve or restore more than 35,000 acres of wetland in the United States.Our work protecting wildlife and ecosystems in and around our communities also includes projects with other local and national cons
205、ervation organizations,including Tri-State Bird and Rescue,Wildlife Center of Texas and International Bird Rescue.For detailed environmental data,see the Performance Data section.ZooMontana Foster Waterfowl Refuge BILLINGS,MT31James Lake Gas Plant GOLDSMITH,TXPeople and Communities OUR APPROACH AND
206、PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTION32PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEOur culture is the foundation for the future.Our people are bonded by our mission and core values.Our company strategy depends on our high-performing organization,defi
207、ned by our culture,capability and performance.Our incentives and benefits are competitive and responsive to the needs of our evolving business and workforce.Our Energy In Action (OEIA)sets behavioral expectations that influence our culture.Our employees,shareholders and communities are critical stak
208、eholders,and we engage with them proactively.Our investments in development and career growth begin the moment an employee joins Phillips 66 and continue throughout their tenure.Our human capital management key principles foster an environment where people can belong,develop and thrive.The principle
209、s are:Our commitment to safety and operating excellence makes us an industry leader in safety performance.Our ability to innovate,transform and compete in evolving energy markets depends on our ability to collaborate,empower our people and boldly try new things.Our inclusive environment attracts and
210、 retains exceptional,diverse employees.We shape the culture of Phillips 66 every day when we come to work.Every action we take and every interaction we have is an opportunity to move the organization forward to meet new challenges,deliver exceptional results and win as a company.”Andrez CarberrySeni
211、or Vice President and Chief Human Resources Officer“33Living Our Energy In Action OEIA is a set of behavioral expectations for all employees that preserves what makes Phillips 66 great and challenges us to become better.Together with our values,the principles of OEIA govern how we work together,infl
212、uence how we make decisions and help us seek different perspectives.We model and measure ourselves against these principles by integrating them into our people practices,including succession management,performance reviews,Total Rewards and recruiting.Advancing Inclusion and DiversityLiving the behav
213、iors of OEIA helps us foster an inclusive workplace.A diverse workforce powered by an environment of inclusion unleashes the creativity to solve energy challenges and drives our high-performing organization to deliver exceptional results.At Phillips 66,we consider diversity to be any dimension that
214、shapes who we are as individuals.It is an appreciation of,and respect for,differences in gender,race,ethnicity,age,national origin,disability,sexual orientation,education and religion.It also includes diverse perspectives,backgrounds,work experiences,lifestyles and cultures.Our Executive Inclusion&D
215、iversity Council sets and monitors the execution of our inclusion and diversity strategy,driving efforts to increase diversity and encourage inclusiveness.In 2023,34%of our global hires in professional roles were women,and 37%of our U.S.hires were from underrepresented groups.Strengthening workplace
216、 inclusion requires continuous effort,and third-party validation helps signify that companies are on the right track.In 2023,Phillips 66 earned a score of 100 from the Human Rights Campaigns Corporate Equality Index for the third consecutive year.OUR ENERGY IN ACTIONWe embrace our values as a common
217、 bond.Work for the greater good.Living our values earns us the confidence of our business partners,communities and coworkers.We depend on each other to do our jobs.Create an environment of trust.Trusting each other makes us more productive and agile.We create space for possibilities.Seek different p
218、erspectives.Championing inclusion enables us to innovate and thrive.We challenge ourselves and never settle.Achieve excellence.Continuing to improve ensures we deliver extraordinary performance.“Its important that were all rowing in the same direction.Our goal is to model Our Energy In Action every
219、day,in every situation,always.”Brenda BrinsonGeneral Manager,Culture and People Strategy,Chief Diversity OfficerOUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTION34PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEThe index is a national benchmarking t
220、ool on corporate policies and practices related to lesbian,gay,bisexual,transgender and queer employees.The ratings are based on four criteria:workforce protections,inclusive benefits,supporting an inclusive culture and corporate social responsibility.Employee Resource GroupsOur 10 Employee Resource
221、 Groups(ERGs)focus on engaging and developing our people and building internal networks that serve the communities where we live and work.They are forums for sharing perspectives,raising awareness and encouraging identity and belonging.Nondiscrimination PracticesAs a government contractor,Phillips 6
222、6 complies with the U.S.Department of Labor,Office of Federal Contract Compliance programs,specifically Executive Order#11246.The order requires affirmative action and prohibits federal contractors from discriminating based on race,color,religion,sex,sexual orientation,gender identity or national or
223、igin.Contractors also are prohibited from discriminating against applicants or employees because they inquire about,discuss or disclose their compensation or that of others,subject to certain limitations.Military VeteransThrough a third-party administered survey,9%of employees self-identified as vet
224、erans,indicating current or previous military service.Employees With DisabilitiesUsing the voluntary self-identification of disability form,9%of employees self-identified as having a disability or having a history or record of having a disability.Finding Common ThreadsOur annual Inclusion and Divers
225、ity Week presents a formal opportunity for our employees to unite to promote a culture of understanding and learning.The 2023 event had the best employee engagement ever,with participation rates three times higher than in 2022.The weeks programming focused on inclusion,allyship,community and courage
226、 and included nine webcast events with participants from 18 of our global locations.In Houston and Bartlesville,an interactive art installation encouraged employees to tie a string across a Phillips 66 shield based on their unique traits.Inclusion and Diversity Week at headquarters HOUSTON,TXOur Div
227、erse Abilities Network(DAN)hosted Shop with a Special Purpose,a showcase and market that featured local artisans and business owners with special needs and disabilities.DAN also hosts a quarterly In Their Shoes webinar,which highlights an employee who is either living with a disability or is the car
228、egiver of someone with a disability.DAN Raises Awareness35OUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTIONOUR APPROACH TO THE EMPLOYEE EXPERIENCEPhillips 66 empowers our people to think boldly,learn continuously,discover new solutions and gro
229、w in their careers.From attracting candidates with diverse talents and experiences to developing and promoting our people,Phillips 66 invests in our employees careers to create a future-ready workforce.We strive to create an environment where all employees feel safe,seen,heard and respected as a cat
230、alyst for innovation,growth and profitability.Recruiting Top TalentThe employee experience starts with how we recruit the people who work here.As a high-performing organization,we seek to hire people who are motivated to deliver results,find creative solutions and collaborate up and down our unique
231、value chain.We use multiple outreach strategies and leverage digital recruiting tools to reach an expanded network of experienced candidates and potential hires from universities and trade schools.These strategies and tools help us capture better data and provide a consistent and efficient hiring pr
232、ocess focused on a positive experience for recruits.To encourage diverse candidate pools and provide inclusive candidate experiences,weve expanded the use of blind resumes,diverse interview panels and gender-neutral job descriptions.In addition,we continually evaluate our recruiting efforts at the S
233、TEM(science,technology,engineering and math)organizations we support,such as the Society of Women Engineers and the National Action Council for Minorities in Engineering.Internships Our internship program,known as Intern Energy,is an important part of building a high-performing organization.We provi
234、de paid internships at every major location,offering students meaningful hands-on opportunities to learn and contribute to our success.Each intern is assigned a supervisor and mentor and has both formal and informal networking opportunities with leaders and peers.Our office-based interns get to see
235、our field operations firsthand by traveling to nearby operating assets,which helps them better understand the full scope of the business.Los Angeles Refinery WILMINGTON,CAPonca City Refinery PONCA CITY,OK36PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEFinding Critical Field Talent More than 70%of our wo
236、rkforce is in the field at our various refineries,Midstream operations and manufacturing facilities.These skilled trades are critical to keeping our sites operating safely and efficiently.To recruit trade talent and operators,we work with high schools,colleges,technical schools and junior colleges.W
237、e also offer technical intern programs and participate in career fairs and community outreach.of our workforce is in the field at our various refineries,Midstream operations and manufacturing facilities70%Supporting Military HiresWe support our military veterans personal and professional development
238、 by leveraging the skills and experiences they gained through military service.Our participation in the Hiring Our Heroes Corporate Fellowship Program provides transitioning service members with professional training and hands-on experience in the civilian workforce.Phillips 66 is consistently recog
239、nized for its support of military hires,including being named a Best for Vets Employer by the Military Times,with a No.1 ranking of all refiners and a top 10 ranking of all employers in Texas.We also received a 2023 HIRE Vets Gold Medallion Award for our success in recruiting,employing and retaining
240、 our nations veterans.Our Comprehensive Approach to Learning and Career DevelopmentIn addition to safety training and required job-specific training,we provide career development opportunities at all levels,beginning with onboarding and continuing with technical,professional and people-leader develo
241、pment.In 2023,we enhanced our existing curriculum and invested in new high-impact programs and activities to help employees take the next step in their learning.We offer in-classroom,on-demand and immersive learning resources to help employees reach their full potential,including comprehensive onboa
242、rding programs and experiences,skill-and business-unit-specific training programs and experiential learning through developmental assignments.hours invested in annual training per employee,on average57Onboarding New Hires In 2023,we focused on creating a positive,consistent onboarding experience for
243、 all roles and locations.New hires in professional roles attend an interactive two-hour virtual session and begin connecting and building their network right from the start.In 2023,we also built a standardized approach to our onboarding curriculum for all new-hire hourly operator and craft roles at
244、U.S.refineries.In 2024,a dedicated team of trainers is delivering this new immersive program during field visits,where they use a diverse set of learning techniques to engage new hires with hands-on experiences.of new hires say they found value in their orientation sessions96%of new hires say they f
245、eel like Phillips 66 is a place where they can belong98%Day of Learning at headquarters HOUSTON,TX37Early-Career Development Programs Our skill-and business-unit-specific development initiatives help early-career professionals gain necessary technical expertise,industry knowledge and networking skil
246、ls.KATALYST This three-month immersive energy commodity supply and trading development program is for new hires in market-facing businesses,like Marketing and Commercial.It focuses first on the energy value chain,followed by targeted career rotations.PREP AND PROPEL PREP is a multiyear engineering d
247、evelopment program focusing on business and financial acumen.It is complemented by PROPEL,a self-paced study with virtual courses for engineers in their first five years at Phillips 66.EDP This four-year comprehensive development program for early-career engineers in Midstream roles builds technical
248、 skills and foundational knowledge.LEAP This weeklong experience,launched in 2023,is for HSE professionals with fewer than five years of experience.It builds technical and communication skills while providing an overview of companywide business units and functions.Developing LeadersNew leaders recei
249、ve continuous support in a variety of formats,including short,instructor-led lunch and learns,Leader 2 Leader peer learning,workshops and online training covering a multitude of topics.In 2023,we launched a new program called G.O.L.D.(Grow.Optimize.Lead.Deliver.),which focuses on skill building and
250、training to support and develop executive-level leaders.OUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTIONPREP=Professional Refinery Engineering ProgramPROPEL=Phillips 66 Refining Online Program for Engineering LearningEDP=Engineer Development
251、ProgramLEAP=Learning and Education for Arriving Professionals KATALYST.KAT stands for Knowledge+Application=Transformation PREP course at headquarters HOUSTON,TX38PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEG.O.L.D.Executive Development at Rice University HOUSTON,TXBringing Home the G.O.L.D.in Leaders
252、hip DevelopmentEquipping our leaders with the right skills to effectively lead our business,support our people and navigate an ever-changing environment is key to our future success.Our Learning and Development Center of Excellence partnered with Rice University to build a flagship executive develop
253、ment program exclusively for Phillips 66,which aims to create a depth of expertise in enterprise leadership.The G.O.L.D.program is a two-week,classroom-based executive development program delivered over two to three months.Participants complete online work before each segment and attend classes on t
254、he Rice University campus.The topics covered include the global energy environment,strategic decision-making,managing risk,finance,driving organizational alignment and change,leadership and leveraging culture.G.O.L.D.stands for Grow.Optimize.Lead.Deliver.For us,that means we are committed to investi
255、ng in this program to grow our people,optimize our assets,lead our organization and deliver results.“The G.O.L.D.program provides a powerful shared learning experience to cohorts of leaders from across the organization.We offer each other different perspectives,have our positions challenged and try
256、out new ideas all extremely valuable to growth and innovation at this critical juncture in the companys transformation for a sustainable future.”Sonya BishopDeputy General Counsel,Litigation,Employment and Intellectual Property39Taking the Pulse of Employee Engagement In 2023,we increased opportunit
257、ies for real-time feedback by expanding the frequency of employee surveys to create a continuous listening program.This helps us understand the experiences of our employees throughout the year and strengthens our ability to raise the bar on our performance.We focus on engagement and other metrics su
258、ch as safety climate,manager effectiveness,performance enablement and our culture.Our 2023 Employee Perspectives survey had a 64%response rate and more than 14,600 comments.Our overall engagement score was lower than the oil and gas industry benchmark.The engagement score was based on how employees
259、responded to these two items on the survey:“How happy are you working at Phillips 66?”and“I would recommend Phillips 66 as a great place to work.”Our ELT is committed to improving this metric and making employee engagement an area of distinction for Phillips 66.In 2024,we are focused on helping our
260、employees better understand and connect with our vision and strategy,providing more visibility into opportunities for growth and development and increasing their sense of belonging.Overall,survey results show that employees think highly of their managers,and most manager-employee relationships are a
261、bove benchmark.We will utilize this strength as we work to increase our employee engagement scores.Investing in Our People Our Total Rewards programs are aligned with our vision and strategy,and we make significant investments annually to attract,engage and retain our people.Our median employee rece
262、ived$156,695 in total compensation and benefits in 2023.We benchmark our Total Rewards annually to evaluate whether our programs are competitive with our peers and customize our offerings to appeal to our diverse,multigenerational workforce.We provide competitive offerings aligned with market practi
263、ces and compensate all employees equitably regardless of race,gender or other personal characteristics.“Our people make everything possible.We value their contributions,and were proud to offer Total Rewards programs that meet the needs of our dynamic workforce and their families.”Alex ShabetGeneral
264、Manager,Total RewardsCompensation COMPETITIVEBenchmarked against our industry and the broader marketReviewed annuallyEQUITABLEAdverse impact analysisDisparity reviewsPeriodic pay equity reviewsPERFORMANCE-BASEDAnnual Variable Cash Incentive Program(VCIP)for eligible employeesRestricted Stock Unit(RS
265、U)Program for eligible employeesGet more infomation about our Total Rewards.OUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTION40PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEWorking With Unions and Works CouncilsOur core values align us with unions
266、 and works councils to achieve a high-performing organization and operating excellence.We encourage open communication,strive to maintain collaborative working relationships and promote an inclusive culture for both represented and nonrepresented employees across our company and within the industry.
267、We respect the rights of our union-represented employees to bargain collectively under the National Labor Relations Act in the United States,and we honor country-specific laws and requirements for international locations.We are committed to bargaining in good faith toward agreements that are fair an
268、d industry-competitive while enabling each business unit to compete in an increasingly challenging global market.U.S.employees in Refining,Midstream and Lubricants are union represented3,700of our U.S.workforce is union represented30%employees are represented by works councils in Austria and Germany
269、300managed collective bargaining agreements are in effect across our workforce46Represented WorkforceBayway Refinery LINDEN,NJ41Project Lead the WayIn 2023,we partnered with Project Lead the Way,awarding the organization$1 million to support STEM programming in qualified middle schools within our co
270、mmunities.Phillips 66 funded 72 schools with an average population of 67%underrepresented minorities and 67%participation in the free and reduced lunch program.ENGAGING OUR EXTERNAL STAKEHOLDERS We regularly engage with stakeholders to support the resilience of our businesses and communities.We valu
271、e fair and meaningful involvement of all people regardless of background or income.Our engagements start with identifying and prioritizing stakeholder issues.We review our practices,policies and procedures to understand any perceived gaps and look for alignments with our sustainability strategy,proc
272、esses and disclosures.We review the outcomes annually and realign accordingly.Providing Community Support and Communication We promote open communication through community awareness campaigns,education and listening panels,social media and community hotlines.Our refineries have Community Advisory Co
273、uncils or Panels(CACs or CAPs)made up of volunteer community members and refinery leadership who meet regularly to discuss topics of mutual interest.Topics include site safety and operating performance,special educational topics,planned maintenance activities,community outreach programs and voluntee
274、ring opportunities.Our Midstream pipeline operators have year-round education and listening panels to build community awareness.The panels inform those living or working near our pipelines or facilities of safe digging practices and emergency numbers and signs of potential leaks,and how to respond q
275、uickly if suspected.Strengthening Our Communities Through Social Impact We create purposeful partnerships and aim to strengthen economic,social and environmental resilience in the communities where our employees live and work.Our Good Energy employee volunteer program inspires employees around the g
276、lobe to connect with neighbors and share their compassion,talents and hard work to improve our communities.In 2023,more than 2,600 employees and retirees contributed 118,000 volunteer hours.ST Math Program at Jane Phillips Elementary School BARTLESVILLE,OKOUR APPROACH AND PROGRESSHEALTH,SAFETY AND E
277、NVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTIONinvested annually in ST Math,a program that helps elementary school children learn math skills through gaminginvested in 2023 across our key focus areas of education equity,safety&well-being,environment and social advancement and through
278、our Employee Giving programs$1.25MM$30MMLearn more infomation about our Social Impact programs.Contact us with any questions or concerns.Find Refinery hotline numbers.Find Midstream pipeline hotline numbers.42PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEIn April 2023,we completed our third annual Good
279、Energy Month,a campaign to unite employees to simultaneously embark on projects of all scopes and sizes to improve their communities.In one month,our employees across the globe logged 13,300 volunteer hours,a 66%increase from the 2022 event.Employees completed approximately 60 service projects and r
280、aised more than$300,000 in volunteer grant dollars.Our social impact strategy includes our focus areas for corporate giving:Education Equity Safety&Well-BeingAdditionally,eligible employees can take two days of paid leave each year to volunteer with community service initiatives that matter to them.
281、Connecting With Indigenous PeoplesWe respect Indigenous peoples and their land.Our field communicators and local CAPs/CACs consult with tribal representatives when pipelines or asset repairs or upgrades involve their heritage lands.We have a long-standing relationship with the Lummi Nation,for examp
282、le,whose members serve on our Ferndale Refinery CAP.Additionally,we are strengthening relations with the Otoe Missouri,Kaw,Tonkawa and Ponca tribes at our Ponca City Refinery by extending invitations to include them on our emergency training and drills.We support the American Indian Science and Engi
283、neering Society(AISES).In 2023,we were honored as a legacy sponsor of the AISES National American Indian Science and Engineering Fair at Oklahoma State University,the only national science fair focused on supporting Indigenous students.Supporting and furthering Indigenous students in STEM education
284、is a focus for our Native American Network ERG.At our Ferndale Refinery,we collaborated with the Boys&Girls Club of Lummi Nation to create a state-of-the-art Science,Technology,Engineering,the Arts and Math(STEAM)Center.We do business with Native American-owned businesses,such as Lummi Commercial Co
285、mpany.In November of 2023,we debuted the countrys first 76 branded ultrafast EV chargers at their market station.Managing Change and Addressing Social RisksWe adhere to national and local laws and regulations regarding environmental,social and health assessments before starting operations at any new
286、 site,including pipelines.We conduct a comprehensive social risk assessment to understand the people and concerns along a proposed route or project.We aim to provide stakeholders with up-to-date information about the potential environmental,health and safety aspects of our work through press release
287、s,our website,social media and door-to-door flyer distribution.We also hold public meetings to encourage dialogue and feedback from our stakeholders.Fighting Human TraffickingWe work to educate the truck drivers who transport our products and the people who sell our fuel at convenience stores to rec
288、ognize the signs of human trafficking and know what to do if they suspect someone is in trouble.Our platinum-level sponsorship of Truckers Against Trafficking(TAT)goes toward its mission to“educate,equip,empower and mobilize members of the trucking and busing industries to combat human trafficking.”
289、In January 2023,we hosted a TAT awareness session for employees during National Human Trafficking Awareness Month.We also included TATs human trafficking awareness training video in the onboarding training for DCP Midstream employees transitioning into the Phillips 66 workforce.In addition,employees
290、 in Houston and Calgary participated in TAT Coalition Build events that develop local public-private partnerships between key industries and law enforcement to combat human trafficking.Environment Social AdvancementHonoring a Legacy With the Wounded Warrior Project After Phillips 66 finalized its in
291、tegration of DCP Midstream in June 2023,we continued that companys legacy relationship with the Wounded Warrior Project.Phillips 66 donated$100,000 to the nonprofit organization that helps veterans and active-duty service members by offering no-cost programs,services and events.Vincent Compean,a Mar
292、ysville Area supervisor who joined Phillips 66 from DCP Midstream and served in the U.S.Navy,said,“As a veteran myself,I am proud to be a part of an amazing organization that means it when they say they support their veterans.”43OUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUN
293、ITIESGOVERNANCEAPPENDIXINTRODUCTIONGovernanceGlobal Town Hall at headquartersHOUSTON,TX44PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEGood governance and ethics are integrated throughout our organization and contribute positively to our corporate culture,sustainability and shareholder value.45Our value
294、s guide our processes,policies and decisions.Written policies and auditing programs create strong governance throughout our company and supply chain.Key policies and documents,including board governance documents and charters,are publicly available on our website and in our ESG Library.These and man
295、y other formal procedures and controls set the standards that guide our actions and efforts to maintain the highest levels of responsibility,integrity and legal compliance across our businesses.Managing Oversight and Governance Our highly qualified board of directors actively engages with Phillips 6
296、6 executive leadership on management strategies and oversight.The board regularly reviews evolving corporate governance best practices,regulatory requirements,shareholder feedback and emerging trends.Senior leaders regularly collaborate with the board to continue to enhance our high-performing organ
297、ization.Board members also collaborate with senior leaders and stay connected to our corporate culture through regular visits to our facilities,where they study day-to-day operations and talk with employees.View our Corporate Governance structure.Managing Risk Our governance structure allows the boa
298、rd and executive leadership to exercise their oversight responsibilities concerning risks.Executive leadership is responsible for the strategic and operational management of risks and opportunities while considering technology developments,policy changes and consumer energy demand.Our enterprise ris
299、k management program provides a systematic approach to identifying and understanding significant risks,including climate-related issues,changes in energy policy and physical or operational risks such as cybersecurity.Our scenario planning seeks to manage our businesses risks while evaluating opportu
300、nities to execute our strategy.Management directs and the board oversees the enterprise risk management program and processes.Experts from our business units and corporate functions are actively involved in our risk management program and processes.Each risk has a corporate owner,creating accountabi
301、lity within our organization.Our risk management team is designed to identify risks that could affect our overall policies and governance,strategy development,business units,forecasts and capital allocation decisions,among other things.Additionally,the team provides detailed,regular,timely and relev
302、ant information to our board of directors and ELT.The team:Quantifies risks based on our assessment of the probability of each risk and the potential significance of its financial,reputational or other impact.Assesses each identified risk,considering potential mitigating strategies or factors that m
303、ay be available.Assigns values to each mitigating factor based on assessments of potential timing,costs,effectiveness and other features.Includes assessments of potential GHG emissions policies and impacts.For more information regarding our board of directors and board committees,please see our 2024
304、 Proxy Statement.In addition,each board committees charter is posted on the Corporate Governance page in the Investors section of our website.Managing Climate-Related RisksThe potential physical effects of climate change and severe weather,as well as other chronic physical effects such as water shor
305、tages and rising sea levels,on our operations are highly uncertain and depend upon the unique geographic and environmental factors present.We have systems in place to manage potential acute physical risks,including those that may be caused by climate change.Such events could have an adverse effect o
306、n our assets and operations.We have incurred,and will continue to incur,costs to protect our assets from physical risks and to employ processes,to the extent available and economical,to mitigate such risks.OUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AND COMMUNITIESGOVERNANCEAPPENDIX
307、INTRODUCTION46PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEManaging Cybersecurity RisksManagement has implemented a comprehensive cybersecurity program that is designed to protect our information,and that of our customers and suppliers,against cybersecurity threats that may materially and adversely aff
308、ect the confidentiality,integrity and availability of our information systems.Our cybersecurity program includes processes and standards that leverage recognized cybersecurity frameworks,industry best practices and guidance from U.S.Government security directives that focus on cybersecurity and crit
309、ical infrastructure.The Audit and Finance Committee of the Board of Directors oversees the processes management has implemented to assess,identify and manage risks associated with cybersecurity and information technology systems.In carrying out this responsibility,the Audit and Finance Committee reg
310、ularly receives reports from the companys Chief Information Security Officer(CISO)and periodic briefings from the CISO multiple times per year.While the company and our third-party vendors and service providers have experienced cybersecurity events in the past,we do not believe that any such past cy
311、bersecurity events have had,or are reasonably likely to have,a material adverse impact to our business,operations or financial condition.We have not experienced a cybersecurity event in the last three years and,as such,we have not incurred any penalties,settlements or remediation costs during that t
312、ime.We maintain information security policies and procedures and provide training to our employees and contractors to help reduce the likelihood of cybersecurity incidents in the future.Lobbying on Behalf of the CompanyPhillips 66 participates in the political process at all levels of government.We
313、work with communities,environmental organizations,legislators and customers on public policy issues,including those related to climate change.Our lobbying activity is governed by our Political Giving and Activity policy.Within the policy,we provide extensive disclosures that include federal and stat
314、e filings,political contributions,trade association memberships,political expenses and independent expenditures.Phillips 66 lobbies directly through contact with legislative or executive branch officials and indirectly through trade associations and memberships.We review company positions for messag
315、ing alignment and consistency of our lobbying activities in support of our 2030 and 2050 GHG emissions reduction targets and lower-carbon initiatives.Trade Association AlignmentPhillips 66 collaborates with national,regional and state trade associations to advance sound and meaningful policy.We part
316、icipate in industry trade associations to share technical and standards expertise and lessons learned from incident investigations.We also develop best practices and participate in public education efforts regarding issues of common concern to our industry.We examine the business value of participat
317、ing in trade associations,coalitions and think tanks,which cover multiple issues,including climate change and others that may or may not apply to our business.Due to the membership variability within these trade associations,members may sometimes disagree on a position.As a result,positions taken by
318、 trade associations of which Phillips 66 is a member may not always reflect the companys viewpoints.When this happens,we work with the association to promote reasonable compromise on major initiatives affecting our business and our stakeholders.We use our positions and other policy principles to edu
319、cate members and seek alignment within trade associations on issues of importance to us,such as climate,biodiversity and engagement.We may discontinue membership if persistent misalignment exists on company priority issues,including climate change,or if there is limited value from our continued enga
320、gement.Employee-Activated Political Action Committee(PAC66)PAC66 is a political action committee funded exclusively through voluntary contributions from eligible employees and members of the board of directors.PAC66 contributes to federal and state political candidates it believes support responsibl
321、e energy industry activities and other business issues of interest.PAC66s board of directors includes a broad cross-section of employee volunteers.The PAC66 board approves all PAC66 disbursements,which are made solely in the best interest of the company and its shareholders and not according to the
322、personal agendas of individual directors,officers or employees.47Climate Lobbying AssessmentPhillips 66 recognizes that supportive policies drive at-scale deployment of lower-carbon energy alternatives,and we engage with policymakers directly and through trade associations.Examples of recent collabo
323、rations include:Influencing API and AFPM lobbying in favor of higher biofuel volumes(advanced category)in the EPAs Renewable Volume Obligations for Years 2023-2025 to advance renewable diesel production.This is a change in historical position under the Renewable Fuel Standard.Highlighting the import
324、ance of the Inflation Reduction Acts(IRA)energy tax credits to API and AFPM,resulting in meetings with the U.S.Treasury Department and the Department of Energy.Company-specific meetings with federal regulators also took place to maximize the opportunities afforded by the IRA.Engaging with the Fuel C
325、ell and Hydrogen Energy Association to promote the nascent hydrogen production tax credit and carbon capture credit enacted by the IRA.Working with API to support federal legislation allowing the year-round sale of E15 gasoline.Collaborating with ethanol-and biofuels-focused trade associations.Coord
326、inating with the Western States Petroleum Association to confirm workable Low Carbon Fuel Standard and cap-and-trade programs in California as state regulators seek to tighten the stringency of both programs.To evaluate our continued alignment with trade associations and memberships on climate-relat
327、ed positions in 2023,we:Reviewed global memberships with annual dues of more than$50,000 if a portion of the dues supports lobbying activities.Assessed each trade associations positions,advocacy actions and public statements supporting a climate policy.Quantified the level of alignment with our crit
328、eria.We analyzed the climate positions of our trade association memberships to assess the alignment with Phillips 66s climate positions.Those associations that have climate positions are aligned or mostly aligned with ours.Of those with published climate-related lobbying positions,details regarding
329、the Paris Agreement vary.We did not identify any misalignments.Our Position on Climate ChangeWe support the goals of the Paris Agreement and are committed to being a part of the solution to help the world address climate change.Our approach is to improve the efficiency of our diversified and resilie
330、nt operations and make investments to help meet the worlds evolving energy needs and advance a lower-carbon future.Phillips 66 supports climate policy that:Offers market-based,economywide solutions that are fuel-and technology-neutral for all energy sources to facilitate meaningful GHG emissions red
331、uctions that are most beneficial and least costly to society.Balances economic,environmental,energy security and local community needs.Rationalizes overlapping policies or programs.Ensures that energy producers,manufacturers and suppliers are responsible for their direct emissions.Recognizes and app
332、ropriately accounts for early or voluntary actions.Makes any regulatory cost and associated climate benefits transparent to the consumer.Promotes fundamental public research at the pre-commercial stage to advance viable energy solutions.OUR APPROACH AND PROGRESSHEALTH,SAFETY AND ENVIRONMENTPEOPLE AN
333、D COMMUNITIESGOVERNANCEAPPENDIXINTRODUCTION48PHILLIPS 66 2024 SUSTAINABILITY AND PEOPLEAlignment with Phillips 66 CriteriaTrade AssociationPhillips 66 Participation LevelIs market-based,economywideIs fuel-and technology-neutralAdvances meaningful emissions reductions that are most beneficial to societyCost and associated climate benefits are transparent to the consumer Assessment ResultsAmerican F
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