ESG REPORTDear Stakeholders,
In 2022, the world was reminded that energy security matters and without it we cannot make any progress toward an energy transition. While we are still grappling with the financial, environmental, and social costs of undervaluing energy security, one important thing became clear over the past year — American energy, specifically liquefied natural gas (LNG), is the key to purposedly providing the low-cost, reliable, clean energy needed to power the world and ensure prosperity for all.
While this past year was marked by extreme geopolitical and market uncertainty, at EQT we never lost sight of our environmental, social, and governance (ESG) priorities. As a result, we achieved significant milestones during 2022, including:
Environmental
- We told the world we are aggressively addressing methane emissions and we did what we promised: completing a $28 million initiative to eliminate 100% of natural gas-powered pneumatic devices from our production operations and reducing our annual carbon footprint by more than 300,000 metric tons (MT) of carbon dioxide equivalent (CO2e).
- In recognition of EQT’s ambitious methane reduction efforts, EQT was awarded a “Gold Standard” rating for 2022 by the United Nations’ Oil & Gas Methane Partnership (OGMP) 2.0.
- We made substantial progress toward achieving our emissions reduction targets.
- We reduced our EQT Production segment Scope 1 and Scope 2 greenhouse gas (GHG) emissions to 433,450 MT CO2e (a 19.8% reduction compared to 2021).
- We reduced our EQT Production segment Scope 1 GHG emissions intensity to 232 MT CO2e/billions of cubic feet of natural gas equivalent (Bcfe) (an approximately 15% reduction compared to 2021).
- We reduced our company-wide Production segment Scope 1 methane emissions intensity to 0.038% (86% lower than the 2025 target set by ONE Future for the Production segment).
- We announced a collaboration with the state of West Virginia, Battelle, GTI Energy and Allegheny Science & Technology to form the Appalachian Regional Clean Hydrogen Hub (ARCH2).
- EQT remains the largest producer of certified Responsibly Sourced Gas (RSG) in North America, producing 3.3 Bcf per day of certified RSG
during 2022.[1]
Social
- We paid more than $1.8 billion in royalties to local landowners in 2022, a 158% increase from 2021.
- EQT employees doubled their volunteer time in 2022, volunteering over 14,000 hours in local communities.
- The EQT Foundation awarded more than $3.8 million in grants, scholarships, and contributions in 2022.
- We hosted three Ukrainian women displaced by the Russo-Ukrainian war and donated natural gas production equipment to Ukraine’s largest natural gas producer.
- EQT was named one of Pittsburgh’s Top Workplaces and a National Top Workplace for 2022.
Governance
- We improved our Climate Disclosure Project (CDP) Climate Change score from a “C” in 2021 to a “B” in 2022.[2]
- We improved our MSCI ESG Rating from an “A” in 2021 to an “AA” in 2022.[3]
- ESG-related performance metrics are included in both our annual and long-term incentive compensation programs, aligning executive compensation opportunity with the successful achievement of our environmental and safety goals.
I am excited to share more details about these initiatives with you in our 2022 ESG Report, Purpose. Power. Prosperity., which was produced under disclosure frameworks maintained by the Global Reporting Initiative, the Sustainability Accounting Standards Board, the Task Force on Climate-related Financial Disclosures, and the American Exploration and Production Council. This report outlines our 2022 operational data, environmental and governance disclosures, and our social outreach efforts. For more information, please see our ESG Performance Highlights summary.
In addition to the achievements listed above, we continue to meet with leaders from around the world to raise awareness of the opportunity for the United States to play a leading role in driving the replacement of foreign coal with American LNG and reducing global emissions at an unprecedented rate. To further support those efforts, we spearheaded the launch of the Partnership to Address Global Emissions (PAGE), a coalition of responsible energy producers, leading climate activists, and labor groups sharing this vision and advocating for the infrastructure that is required to make our vision to Unleash U.S. LNG a reality.
Since launching our plan to Unleash U.S. LNG in March 2022, we have seen a dramatic shift in the global conversation about natural gas. The world has moved to an “all of the above” approach to addressing this energy crisis and there is now a clear distinction between natural gas and other fossil fuels. But to be truly successful, we must move to a “best of the above” approach. And that’s American natural gas.
At EQT, we are guided by the higher purpose of providing energy security to the world and lowering global emissions. Everything we do is about seeking to deliver cheaper, more reliable, and cleaner energy to the world. We are committed to demonstrating how natural gas can play a leading role in the world’s energy evolution to lower carbon solutions, and we hope you will join us and continue to support our efforts.
Sincerely,
Toby Z. Rice
President and Chief Executive Officer
June 21, 2023
[1] Based on the amount of North American RSG certificates issued during 2022 under MiQ’s Digital Registry (https://www.miqregistry.org/).
[2] Climate Disclosure Product (CDP) is one of the most widely recognized environmentally focused rating organizations globally. CDP maintains the largest environmental database in the world, and in 2022 scored nearly 15,000 companies on their climate change, forests and water security disclosures. A CDP score provides a snapshot of a company’s disclosure and environmental performance. Companies are issued a letter grade from “A” to “F”. Companies that score a “B” have addressed the environmental impacts of their business and ensure good environmental management. For more information on CDP’s scoring rubric, please visit https://www.cdp.net/en/scores/cdp-scores-explained.
[3] MSCI ESG Ratings aim to measure a company’s management of financially relevant ESG risks and opportunities. MSCI utilizes a rules-based methodology to identify industry leaders and laggards according to each company’s exposure to ESG risks and how well they manage those risks relative to peers. MSCI ESG Ratings range from leader (“AAA”, “AA”), average (“A”, “BBB”, “BB”) to laggard (“B”, “CCC”). For more information on MSCI’s ESG Rating rubric, please visit https://www.msci.com/our-solutions/esg-investing/esg-ratings.
