In our 2017 Sustainability Report, we provide descriptions of Hess’ 2017 strategy and performance regarding material economic, environmental and social issues. Our annual report, Form 10-K filing and proxy statement detail our financial and governance information and can be found at hess.com/investors.
Our sustainability report was prepared in accordance with the Core option of the Global Reporting Initiative (GRI) Standards. Our reporting is also informed by:
- the Oil and Gas Industry Guidance on Voluntary Sustainability Reporting document jointly developed by IPIECA (the global oil and gas industry organization for environmental and social issues), the American Petroleum Institute and the International Oil and Gas Producers Association;
- the United Nations (UN) Global Compact’s Ten Principles;
- key environmental, social and governance (ESG) ratings and scorecards, including Disclosing the Facts, an annual investor scorecard developed by As You Sow, Boston Common Asset Management and the Investor Environmental Health Network ranking the largest hydraulic fracturing companies in the U.S.; and
- recommendations from the Task Force on Climate-Related Financial Disclosure.
A GRI Content Index, cross-referenced with IPIECA indicators and the UN Global Compact principles, is available at hess.com/sustainability/sustainability-reports/gri-index.
We determined the content for this report by applying GRI’s reporting principles, including consideration of our operations and performance in the wider context of sustainability issues as well as ensuring stakeholder inclusiveness and completeness of information. Consistent with the GRI Standards’ materiality guidance, we identified and prioritized new and emerging issues important to our stakeholders when developing the content for the report. Engagement with our stakeholders – which include employees, suppliers, customers, communities, shareholders, governmental and nongovernmental organizations, industry peers and academics – enables us to strengthen our license to operate and brings increased focus to our transparency goals.
In 2015 we conducted a survey of select industry peers and a subset of priority external stakeholder groups to validate and expand upon our prior materiality assessments. We then supplemented the survey results with desktop research on a larger group of peers and stakeholders by reviewing public reports and websites documenting key issues for our industry, including key topics and disclosures from GRI’s Oil and Gas Sector Supplement. This process allowed us to validate that stakeholder expectations are being addressed.
We reassess and validate our list of key material issues each year based on issues raised through our enterprise risk management process, those receiving attention from Hess’ and our peers’ shareholders in sustainability surveys, and those identified through ongoing benchmarking efforts that assess stakeholders’ issues of concern. In 2017, as we have for the past several years, we conducted research on key concerns raised by shareholders and other stakeholders by reviewing shareholder resolutions, ESG investor ratings and reports, sustainability reporting and disclosure frameworks, regulatory activity, relevant nongovernmental organization and academic studies, and other sources, as part of our ongoing process for validating our material issues and defining report content.
The material issues identified through this process, which have informed our environment, health, safety and social responsibility strategy and helped to define the boundaries of this report, are presented on the Reporting Boundaries page.
Included within the scope of this report are the principal facilities and assets operated by Hess Corporation and our subsidiaries during calendar year 2017, unless otherwise indicated. Data presented are gross figures from operated facilities, unless specified otherwise.
The report includes partial-year data for the following assets that were divested in 2017:
- West Texas, including the Permian Basin enhanced oil recovery assets. Period of data included: January−July 2017.
- Equatorial Guinea, including the Okume and Ceiba production operations. Period of data included: January−November 2017.
- Norway, including the (nonoperated) Valhall production operations. Period of data included in GHG equity-share emissions and social investment spend: January−November 2017.
We report GHG emissions on both an operated and equity-share basis in accordance with the GRI G4 Oil and Gas Sector Supplement and the IPIECA Petroleum Industry Guidelines for Reporting GHG Emissions (3rd edition, 2015). We report social investments for our operated assets, joint ventures and nonoperated facilities in which we hold a significant interest. We include contractors in workforce metrics for those contractors whose hours we track.
The table on the Reporting Boundaries page provides a cross-reference with the relevant GRI categories for each issue and identifies the boundary for each issue.
We believe our approach to restating data complies with the GRI Standards’ principle of comparability and the specific disclosure regarding restatements of information, as well as IPIECA guidance. For GHG emissions, in cases of acquisitions and divestitures and other source ownership and control changes, we adjust our base year emissions if the change exceeds 10 percent of the original base year emissions total. The exact timing of the adjustment depends on several factors, as described in the Hess GHG Inventory Protocol.
We completed our transformation to an exploration and production company in 2014 after exiting our downstream business, which included refining, retail, energy marketing and energy trading. Historical safety and environmental data from 2013 and prior were restated to reflect the upstream (exploration and production) business only, with a few exceptions. For example, individual divestitures that did not meet the materiality threshold for removal from our new 2014 GHG emissions baseline – as delineated in the Hess GHG Protocol – are included in the restated data. In addition, downstream-focused social investment spend, which represented less than 5 percent of the overall expenditure, was deemed immaterial for restatement purposes. Therefore, our historical social investment spend was not restated.
When conducting our annual internal review of performance data for the 2015 report, we built upon our typical review process and initiated a more detailed investigation of the performance data for 2015 and prior years. Based on this analysis, we revised many of the historical environmental values stated in prior sustainability reports to improve the quality of our dataset.
During the second half of 2017, Hess divested several assets, including our interests in Equatorial Guinea and enhanced oil recovery assets in the Permian Basin in West Texas. These divestitures may impact our 2020 flaring and GHG intensity reduction targets, which were established in 2014 with an emissions baseline that included these now-divested assets. In 2018 we plan to restate our 2014 baseline and evaluate the potential impact of these divestitures on our current targets. If necessary, we will adjust these targets and present revised targets in our next sustainability report. It is not anticipated that our methane emissions reduction target, which relates to U.S. assets, will be impacted by these divestitures.
Internal Quality Assurance
Our internal information systems promote the centralized collection of data from Hess-operated and joint venture assets around the world. In order to evaluate accuracy and reliability, we conduct quality assurance/quality control reviews and validation of both aggregated and facility-level data. Individual numbers in the charts, tables and text may not precisely sum to the total amounts shown due to rounding. All currency found in this report is in U.S. dollars.
Our 2017 Sustainability Report, including our sustainability data and self-declared GRI “in accordance” status, was assured by ERM Certification and Verification Services. This external review helps to ensure consistent and objective data collection and reporting of our sustainability performance. The Independent Assurance Statement is provided on page 54 of our 2017 report.
In addition to providing assurance in relation to our sustainability report, ERM CVS also conducts a separate verification of the GHG emissions data provided in this report and in our CDP Climate Change response.
ERM CVS’ assurance in years prior to 2014 included a review of downstream data, as well as current exploration and production activities. As a result, the prior years’ data that has been restated or revised has not been assured.