Executive Summary

RESPECT for Our Planet, People and Future

We are pleased to present our 2023 Sustainability and Climate Risk Report.

In 2022, we celebrated our 25th anniversary. As we look ahead to the next 25 years, we are steadfast in our commitment to the Environmental, Social and Governance (ESG) practices that have guided us since our founding.

In this – the seventh edition of our annual Sustainability Report – we begin with the RESPECT values that have always been, and will continue to be, at the core of our company:

RESPECT for the Planet: Our planet’s resources are precious and finite. We must treat them as such.

RESPECT for All People: Every person can make a difference. We must include diverse thoughts, experiences and backgrounds in all we do to achieve our best.

RESPECT for the Future: Every day is a new opportunity to do better and be better. We must embrace every challenge and opportunity to improve. Continuous improvement is an ever-changing process at Pioneer.

We are invested in the work we have done to advance our ESG priorities and align them with our values – and we plan to do even more. Our 2,000+ employees embody the ‘can do’ and ‘will do’ spirits that have brought Pioneer to our current industry leadership position, and they are working hard every day to fulfill our mission: to be America’s leading independent energy company, focused on value, safety, the environment, technology and our greatest asset, our people.

This year, we have incorporated our Climate Risk Report into the Sustainability Report for the first time, reinforcing our view that sustainability and our climate go hand-in-hand.

As one of the most active drillers and the largest oil producer in the state of Texas, we have a responsibility to provide low-cost, low-emission products. Our financial discipline supports our ability to do so, while also allowing us to weather market and economic challenges. In recent years, the overall cost of doing business has increased, from supply chain disruptions to escalating prices on raw materials, combined with increased volatility in the commodities market as a result of the Russian invasion of Ukraine and increased global recession concerns.

It is important to note that, in this reporting year, we have been investing significantly to align our most recently acquired assets – DoublePoint Energy and Parsley Energy – with our operational standards. We will complete that integration by mid-2023.

Reducing Emissions and Freshwater Use

Pioneer intends to achieve net-zero Scope 1 and Scope 2 emissions in our operations by 2050. To achieve this, we have set ambitious goals to reduce greenhouse gas emissions (GHG) intensity 50% by 2030 and methane emissions intensity 75% by 2030. We will also sustain an annual flaring intensity of less than 1% and end routine flaring by 2025.

Pioneer maintains one of the lowest energy breakeven costs in the world, along with a low carbon dioxide (CO2) intensity (per barrel equivalent) – enabling us to deliver responsible and low-cost energy.

We are one of the first U.S. operators to commit to the Oil and Gas Methane Partnership 2.0 (OGMP), a voluntary, multi-stakeholder initiative launched by the United Nations Environment Programme. OGMP is a comprehensive, measurement-informed reporting framework for the oil and gas industry that improves the accuracy and transparency of methane emissions reporting. As part of this commitment, we established a short-term, measurement-informed methane intensity target of 0.20% of natural gas produced by 2025. This short-term target complements our longer-term methane emissions goals and puts Pioneer on the path to achieving the OGMP “Gold Standard” designation.

As you will see in this report, we aim to use renewable, low-cost energy in our Permian Basin operations to mitigate Scope 2 emissions.

We continue to move specific operations to the electricity grid as power load and infrastructure become available. Later this year, we will conduct a trial moving one of our completions fleets to the grid and powering it partially with electricity. We have partnered with other leading Permian oil and gas operators to forecast future electricity grid demand, enabling accelerated transmission upgrades and infrastructure build-out. In addition, we plan to transition other completions fleets to cleaner fuel.

You will find an extensive discussion of water management in this report. Access to clean water is a growing global priority, and we plan to reduce freshwater in completions to 20% by the end of 2026. We believe our program to manage freshwater is the most sustainable in the Permian Basin, and we disclose all freshwater consumed in our completions operations. In 2022, we used freshwater in 23% of our completions operations, putting us well on our way to meeting our goal.

Accountability from the Top Down

We place tremendous value and emphasis on ensuring data accuracy in our reporting, and we focus significant time and effort on getting it right. Pioneer is committed to the principles set forth by the Task Force on Climate-related Financial Disclosures (TCFD). The TCFD sets out a framework to assess the climate resiliency of corporate business strategies over the short, medium and long term, given various physical and transition risks.

The significance of these metrics and their importance to our organization are embodied by our Board of Directors and senior leadership team. Our ESG priorities are approved and overseen by our Board of Directors through our Sustainability and Climate Oversight Committee. Our senior leadership team actively oversees the ESG Task Force. Both the task force and committee meet multiple times per year to review progress and make recommendations for continued advancement.

Prioritizing Diversity, Equity and Inclusion (DEI)

We are a better company when we consider different ideas, experiences and strategies, ensuring that our teams have diverse representation companywide:

• 42% of our Board and 44% of our Executive Committee are women or hail from historically underrepresented communities.
• Pioneer earned a spot on the 2022 DiversityInc Top Regional Companies list in our second year of participating in that organization’s benchmarking survey.
• We scored 90 (out of 100) on the Human Rights Campaign Corporate Equality Index, which measures workplaces on LGBTQ+ equality.
• Our commitment to human rights is reflected in our formal support for the Ten Principles of the United Nations Global Compact.

Building ESG into Our Supply Chain

In 2021, Pioneer became one of the first oil and gas companies to incorporate transparent, measurable and accountable ESG performance into our supply chain management.

Our Supplier Diversity Commitment demonstrates our dedication to advancing stewardship and inclusivity within our supplier base. Pioneer maintains high ethical standards regarding safety, environmental stewardship and human rights, and we expect the same from companies that do business with us. Our Supply Chain team continues to fine-tune the procurement process, focusing on bringing more small, minority- owned and women-owned businesses into the company’s supplier base. In 2022, Pioneer spent $140 million with our diverse suppliers, and we plan to continue this investment in the years to come.

Giving Back

Our company has always believed in the importance of giving back to the communities that give us so much. In 2022, we provided nearly $8 million social investments and employee-led giving to hundreds of charities in the Permian Basin and the Dallas-Fort Worth area. Additionally, we extended our giving internationally, donating $20 million to assist with humanitarian efforts in war-torn Ukraine.

We continue to work closely with other operators in leading the Permian Strategic Partnership. Formed in 2017, this unprecedented coalition of oil and gas companies is improving the quality of life for Permian Basin residents in healthcare, education, infrastructure/roads, affordable housing and workforce development. Since its inception, the partnership has leveraged ~$125 million in member funds into $1 billion in collaborative investments with other stakeholders. We are proud to be a founding member of this important initiative and look forward to continuing to work with our partners to make a lasting positive impact in the region.

RESPECT for All

The subsequent chapters of this report provide more details related to the highlights in this letter, and we believe our deeply held commitment to sustainability will be apparent at all levels of our business, from the leadership teams to our roots in the oil fields.

To achieve our ESG goals, we are committed to maintaining a strong balance sheet, generating strong investment returns for our shareholders and operating efficiently to ensure that we thrive and make a positive impact in the years ahead.

Thank you for your continued support of Pioneer and our sustainability journey.

J. Kenneth Thompson
Chairman of the Board of Directors

Scott D. Sheffield
Chief Executive Officer