Our Approach to Sustainability Governance
We are committed to creating positive, long-term value and emphasizing sustainable performance, as expected by our stakeholders. Consistent with our commitment, we embrace working to conduct business in a socially responsible and ethical manner, including managing our impact on the economy, the environment, and our communities. Since becoming a standalone midstream company in 2018, we have built a corporate culture that takes into account sustainable operations, encourages improvements where appropriate, and fosters honest and proactive communication with our stakeholders. Our goal is to be a positive contributor as we transition to a lower-carbon economy, engaging in sustainable business practices and creating long-term value for our shareholders, employees, customers, and communities.
As we strive to enhance the efficiency and management of our ESG reporting, we have initiated work on two Companywide initiatives. In 2022, we began developing an internal ESG operating model to enhance our data collection, data management, and auditing/assurance framework, as related to the data disclosed in our CSR and other ESG reports. This process includes mapping the flow of data from the source to the final disclosure, identifying data owners, and creating or enhancing data controls, as needed. Given the importance of GHG emissions to our stakeholders, we are implementing further improvements to our control environments for the information used to calculate Scope 1 and 2 GHG emissions.
In addition to implementing the ESG operating model, Equitrans is working to better align our ESG reporting with the Task Force on Climate-related Financial Disclosures (TCFD) framework. Building upon the TCFD-readiness assessment completed in 2022, Equitrans is now in the process of conducting two TCFD risk scenario analyses — physical risk and transition risk. To demonstrate the importance of this project, Equitrans included a “Sustainability-TCFD” metric in the Company’s 2023 Short-Term Incentive Plan (STIP). This metric includes three individual STIP targets as follows: completing one TCFD risk scenario analysis; completing a second TCFD risk analysis; completing two TCFD risk analyses and preparing a publishable TCFD report for the Board.
Our Board of Directors, acting through its committees, oversees Equitrans’ policies, programs, and strategies regarding corporate social responsibility and sustainability, including ESG matters and related risks and opportunities. In April 2022, the Board revised the name of the Health, Safety, Security and Environmental Committee to the Health, Safety, Sustainability and Environmental (HSSE) Committee, to highlight the Company’s focus on and importance of sustainability, as well as the Committee’s role in providing oversight of a large number of sustainability matters. The HSSE Committee is chaired by one of our independent directors and provides oversight with respect to our approach to health, safety, sustainability, and environmental policies, programs, and initiatives. The Board reviews key ESG policies and commitments, such as our Climate Policy published in 2021, and regularly receives, directly or through Board committees, updates from management regarding our sustainability program and pertinent ESG topics. As part of exercising oversight responsibility, Board members also actively oversee our ESG performance, provide insight on management and process improvements, and review our annual Corporate Sustainability Report. Read more about our Board’s structure and oversight responsibilities on the Corporate Governance page of this report.
At Equitrans, we believe that sustainability starts at the top with our Board of Directors and continues through to our employees, who carry out their everyday processes and practices.
Chief Sustainability Officer and Executive Oversight
At Equitrans, the Chief Sustainability Officer (CSO) position is responsible for the development, oversight, and management of our sustainability program, including the identification, assessment, and management, as appropriate and in combination with other members of the management team, of related risks and opportunities and the establishment of related policies, standards, and statements. Additionally, the CSO is responsible for furthering the Company’s ESG reporting efforts. Accordingly, the CSO collaborates with employees across the Company to ensure continual development and implementation of Equitrans’ sustainability program and accurate and timely provision of relevant information to stakeholders. Further, the CSO provides updates to our Board of Directors quarterly, at a minimum. In managing our most critical ESG and sustainability topics, our CSO directly oversees our internal, management-level ESG Steering Committee, and related cross-functional working groups.
ESG Steering Committee and Working Groups
Equitrans established a management-level ESG Steering Committee and various ESG working groups to help implement and manage the day-to-day efforts and actions related to our most material ESG and sustainability topics. The CSO and ESG Steering Committee outline initiatives to maintain and improve our sustainability program, and the ESG working groups develop plans to implement the initiatives. During implementation, the ESG Steering Committee is responsible for providing oversight and allocating appropriate resources to the ESG working groups.
In January 2023, the committee structure was enhanced by adding a new Supply Chain working group and incorporating the leads for two working groups (Workforce and Governance) directly on the ESG Steering Committee, in place of maintaining these separate working groups. This change is intended to further enhance the operations of the ESG Steering Committee as it works to focus on the most impactful initiatives in 2023 and beyond. Based on the Equitrans’ materiality assessment and/or importance to the Company, five of the working groups were developed to align with our primary ESG and sustainability focus areas. The sixth ESG working group is a Research and Development committee that evaluates new technologies that may enable Equitrans to further incorporate aspects of sustainability into our operations.
United Nations Sustainable Development Goal Statement
In 2015, all United Nations Member States adopted the 2030 Agenda for Sustainable Development, which outlines priorities for people and the planet to prosper. The key framework for this agenda is the 17 Sustainable Development Goals (SDGs) and associated targets that represent the actions to pursue social, economic, and environmental sustainability.
As an energy infrastructure company, we understand that we play a vital role in meeting energy demand, which supports growth and development, in a sustainable manner. Equitrans’ Core Values set the foundation for our Sustainability Framework, which utilizes five pillars (Safety Leadership, Environmental Stewardship, Corporate Governance, Stakeholder Engagement, and Economic Benefits) to define our approach to sustainability for our stakeholders.
In 2021, we formally announced our intent to align our business and operations with relevant SDGs through our United Nations Sustainability Development Goals Statement, which includes our commitment to environmental integrity, protection of environmental resources, and climate change mitigation. Equitrans continues to demonstrate a robust governance structure for implementing our sustainability program, which incorporates our vision to focus on relevant SDGs. While all of the UN’s 17 SDGs are important on a macro-level, we have identified eight SDGs that align with our objectives and the practical aspects of our business, operations, and geographic footprint. Moving forward, we will continue to evaluate the full breadth of all relevant SDGs, with an expectation to enhance and expand our alignment as applicable. We will prepare biennial progress summaries that outline actions taken to align our operations with the select SDGs. Our first progress summary was published in 2021, covering both 2019 and 2020 operations, and our second summary is expected during 2023.
In 2022, 95% of funding through our corporate local giving program and 100% of the funds distributed through the Equitrans Midstream Foundation aligned with one or more SDGs.
In 2022, we began incorporating the SDGs into our annual Stakeholder Engagement and Community Investment Plan. Specifically, each potential corporate local giving and/or sponsorship opportunity was evaluated to determine if the organization or specific initiative would align with one or more of the 17 United Nations SDGs or the associated targets and indicators. In 2022, 95% of the funds donated through our corporate local giving and sponsorship program aligned with at least one SDG. Further, 100% of the funds distributed through the Equitrans Midstream Foundation aligned with one or more SDGs. Additional information about our corporate local giving and sponsorship program and the Equitrans Midstream Foundation can be found in the Community Engagement section of this report.