Environmental, Social and Governance

California Resources Corporation (CRC) is a different kind of energy company. We are dedicated to serving Californians by producing ample, safe and reliable energy and actively promoting conservation of water, habitat and energy as a responsible steward of natural resources. CRC has some of the lowest carbon intensity production in the US and we are focused on maximizing the value of our land, mineral and technical resources for decarbonization by developing carbon capture and storage (CCS) and other emissions reducing projects. As CRC continues to make strides on our ESG strategy, we are proud of the progress we have made with our sustainability initiatives to date and are pleased to share our 2022 Sustainability Update (PDF).

ESG Goals

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

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

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

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    2045 Full-Scope Net Zero

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

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

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

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

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    Methane reduction

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

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

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    Freshwater Usage Reduction

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

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

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    Ethnic, racial and gender Diversity in Leadership

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

    • Advance ethnically and racially diverse professionals in leadership positions
    • Increase gender diverse professionals in leadership positions
    • Maintain current board composition with ethnically, racially and gender diverse board members

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

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    Community Giving

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

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    Executive Pay

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

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

    Check out our ESG Goals infographic (PDF).

Shared California Values

CRC proudly shares and endorses the state’s commitment to conserve our natural resources, mitigate climate change and protect our environment. We design and maintain our facilities throughout the state with our neighbors, communities and the environment in mind. At CRC, our values of Character, Responsibility and Commitment direct how we conduct our business, contribute to our communities, support local economies, protect the environment, and interact daily with our stakeholders. CRC increases our energy security by reducing the state’s chronic dependence on imports and helps California retain the value created by local energy production. CRC is dedicated to helping our diverse communities across our state have a vibrant and sustainable future.

CRC and its joint ventures operate exclusively in California. All of our properties, facilities and investments are located in California; and all of our oil, natural gas, natural gas liquids and electricity is produced in California. Working exclusively in California means that all of our operations are subject to California’s world-leading safety, labor, human rights and environmental standards and overseen by more than 20 federal and state agencies.

Key HSE and Sustainability Documents