Performance Overview

The following are capsule summaries of achievements and events we have identified as significant to our corporate responsibility performance in 2005 and challenges we face in 2006 and beyond.

Response to Natural Disasters

We provided immediate and long-term response and assistance to communities affected by such natural disasters as hurricanes along the U.S. Gulf Coast and in Central America and the Caribbean; the tsunami in South Asia; and the earthquake in Pakistan. Along the Gulf Coast, we safely evacuated all offshore employees and contractors, encouraged those working onshore to evacuate to safe locations, and shut down and secured onshore and offshore facilities. We pledged immediate relief and supported short-term recovery efforts, including $8 million in contributions to relief agencies and nearly $9 million in grants and loans to employees.

Management Systems

Lloyd's Register Quality Assurance reviewed our Operational Excellence Management System (OEMS) and concluded that "the design of OEMS fully addresses, and in some respects goes beyond, the requirements of ISO 14001 and OHSAS 18001." These are leading international standards for environmental management, and health and safety management. We also made progress on developing global standards in select areas to make sure OE expectations are met across the company. One example is the Environmental, Social and Health Impact Assessment (ESHIA) newly developed by our international upstream organization for major capital projects.

Human Rights

We approved a Human Rights Statement in early 2006. Grounded in The Chevron Way, it makes clear our commitment to human rights, provides guidance to employees and acts as a framework for constructive dialogue. Deployment will begin in 2006.

Challenging Situations

Together with others, we continue to seek constructive solutions to the complex issues we face in countries where we operate. In the Niger Delta, Chevron Nigeria Limited (CNL) began working with multistakeholder Regional Development Councils that will design and implement their own community development projects. Like many other companies that operate in the Delta and whose employees live there, CNL also has been affected by the violence in the region. A serious incident involving a nonworkforce fatality occurred at CNL's Escravos facility in February 2005.

Revenue Transparency

We began participating in the newly established International Advisory Group, a panel of representatives from across sectors who are working to internationalize the scope of the Extractive Industries Transparency Initiative. We also engaged with the government of Kazakhstan in its endorsement of the initiative.

Renewable Energy

With the acquisition of Unocal, we are now the largest renewable energy producer among global oil and gas companies. We produce 1,152 megawatts of renewable energy, primarily from geothermal sources (1,150 megawatts). In 2005, operation of these geothermal assets avoided the generation of 1.88 million tons of greenhouse gas (GHG) emissions (CO2 equivalent) compared with conventional coal-fired operations.

Flaring

The Sanha Condensate Project, which became operational in 2005 in Angola, addresses the largest single source of flaring from our operations. It will reduce our flaring and venting, cutting GHG emissions by more than 2 million tons per year. We also established an environmental performance standard to ensure operational excellence in the management of upstream flaring and venting across all operations outside North America. The standard, which is aligned with international best practices, will help lower our greenhouse gas emissions.

Global Supplier Development

During 2005, we increased spending with small businesses to $1.8 billion, or 27.5 percent of total U.S. domestic expenditures. This increase from $1.4 billion in 2004 reflects our commitment to build a supplier base that reflects the diversity of our customers, host communities and the markets we serve. Overall, we spent approximately $20 billion globally on goods and services. Read more on global supplier development.