We’re committed to transparency and accountability for our environmental performance and to addressing stakeholders’ concerns about climate change. To act on our core value to do the right thing – for our environmental stewardship efforts, our stakeholders and our business – Devon published a Climate Change Assessment Report in 2018.
Listening to our stakeholders
Understanding the political, legal, technological, market and reputational risks of the transition to a lower-carbon economy is important to Devon’s business. Aligned with our stakeholders, Devon is committed to understanding the potential impacts of climate change and a possible carbon-constrained future on our long-range business plans.
In 2018, we retained a leading third-party consultant, ICF, to help assess Devon’s oil and gas portfolio in relation to the potential impacts. During this assessment, we evaluated several possible future climate-change scenarios to quantify the risks to Devon from aggressive global carbon reduction policies, modeled through 2050. Devon evaluated pricing scenarios and model results from both ICF and the widely referenced International Energy Agency (IEA). In response to stakeholder interest, the report focuses primarily on the transitional risks, in particular the risks of potential changes in demand and price for oil and natural gas as a result of policies related to greenhouse-gas reduction.
The assessment determined that oil and natural gas remain crucial to meeting global energy demand, even in the carbon-constrained future scenarios and that Devon’s current portfolio has the characteristics to be resilient in such scenarios. Additional conclusions included:
- Devon’s assets are likely to be well-positioned to remain profitable, even in an aggressive low-carbon scenario.
- Model results under some low-carbon scenarios (e.g., the IEA Sustainable Development Scenario) reflect that oil, natural gas and natural gas liquids (NGL) prices will be robust and Devon’s current portfolio is likely to thrive under these scenarios.
We continue to work proactively to reduce our emissions by driving innovation, operational excellence, energy efficiency and conservation. Devon plans to closely monitor climate-change impacts in the market and policy arenas so that we are prepared to adapt our business. Devon’s risk-management program includes formal and ongoing consideration of the quantifiable effects of climate change on our portfolio. We are committed to continuing dialogue with our board of directors and other stakeholders about these risks.