TCFD: TCFD-R1 / IPIECA: GOV-2, GOV-3, CCE-1 / GRI: 103-2, 103-3

A primary responsibility of SWN’s Board of Directors and Executive Leadership Team (ELT) is ensuring processes are in place to identify and properly manage risks to the company and its business.

Each standing committee of the Board, comprised entirely of independent directors, oversees and evaluates risks directly in its sphere.  For example, the Nominating and Governance Committee reviews corporate governance matters, matters involving members of the Board, and succession planning; the Compensation Committee reviews compensation and human resources matters; the Audit Committee assesses financial matters, cybersecurity, and overall risks to the enterprise; and finally, the Health, Safety, Environment and Corporate Responsibility Committee meets at least quarterly and specifically oversees and discusses key ESG trends and issues, including climate change, water resources, workforce safety and community concerns, and assesses health, safety and environmental risks and public policy matters. 

The Company’s internal Enterprise Risk Management team, led by our Chief Financial Officer with input from ELT leaders across our operating divisions and functions, meets at least quarterly with representatives of all business units and corporate functions specifically to review and assess risks and the steps being taken to manage them. These risks and management’s steps to mitigate them are discussed with the Audit Committee at least quarterly and with the full Board at least annually. The Audit Committee also meets independently with the Company’s external accounting and reserves auditors and the head of Internal Audit to discuss risks in financial reporting and other matters.

To formalize our management’s integral role in driving our Corporate Responsibility efforts forward, the Company created an ESG Steering Committee in early 2021. The ESG Steering Committee is a cross-functional senior management committee, reporting to the Company’s ELT, that works diligently to:

  • Advance the Company’s corporate responsibility strategy and performance by recommending policies and practices to the ELT
  • Consider and bring to the attention of the ELT, as appropriate, current and emerging ESG matters that may impact the Company, its business, operations or performance, or are otherwise pertinent to the Company and its stakeholders
  • Drive transparency improvements regarding the Company’s corporate responsibility strategy and performance based on stakeholder feedback

The chart below illustrates how the Board and management oversee risks:

ESG Specific Policies

Southwestern Energy has adopted specific policies that underpin our governance of and performance on key ESG issues, as set out below:

  • Human Rights Policy – Formalizes and enhances our existing policies and commitments for labor rights, community and stakeholder engagement and protection of health, safety and the environment
  • HSE Policy – Creates accountability for management and every employee to operate our business in ways that mitigate impacts on risks to people, safety, health and the environment
  • Anti-Corruption Compliance Policy – Requires us to conduct our business with integrity,selecting personnel, vendors, agents and consultants to assure we have the right people doing the right things
  • Equal Opportunity Policy – Recognizes the personal value of every employee; formalizes our belief that every person should be treated fairly and with respect; and clarifies that every employment-related decision should be based on an individual’s merits and qualifications for a particular job, including capability, performance and reflection of our corporate mission and values
  • Harassment and Discrimination Policy – Outlines the definitions of harassment, discrimination and retaliation in the workplace and prohibits any form of these directed at any SWN employee
  • Business Conduct Guidelines – Articulates SWN’s guidelines of conduct, which includes building shareholder value with integrity and character according to the highest ethical standards and values that recognize the dignity and worth of all individuals, commitment to excellence in performance, and courage of convictions and actions
  • Section 406 Code of Ethics – Requires each company registered with the Securities and Exchange Commission to disclose whether or not it has adopted a code of ethics for senior financial officers. Our company’s 406 Officers are bound by this Code, which sets forth the Company’s requirements with respect to ethical conduct, conflicts of interest and compliance with applicable laws

Health, Safety and Environmental (HSE) Management

The Board of Directors is actively involved in providing oversight and risk management of these HSE issues through its Health, Safety, Environment and Corporate Responsibility Committee. This committee – which meets regularly to address issues related to air, water resources, workforce safety and community concerns – holds senior management accountable for the company’s HSE performance and assists the full Board in discharging its HSE-related responsibilities.

Our Vice President of HSE and Regulatory, who reports to our Chief Operating Officer, directly manages HSE issues and presents regularly to the Board. The responsibilities of the Vice President of HSE and Regulatory include overseeing SWN’s dedicated HSE and Regulatory teams to ensure they develop effective policies and programs, monitor compliance, have the appropriate tools and implement training related to employee and contractor health, safety and environmental issues. While there is some overlap with respect to HSE and Regulatory responsibilities, generally speaking the HSE team is responsible for managing health and safety matters, while Regulatory is primarily responsible for managing environmental matters as well as day-to-day operational compliance, such as permitting.  HSE and Regulatory (HSER) employees are embedded within each operating division to support day-to-day HSER activities at the site level and ensure that all employees comply with applicable safety and environmental standards as well as identify hazards and mitigate risks. We actively engage our third-party contractors in HSE management and require them to meet our HSE standards. But HSE performance is not the sole responsibility of dedicated HSER managers: Every SWN employee and contractor is accountable for safety, and HSER managers ensure they have the tools they need to contribute to a safe work environment.

Our approach to managing HSE topics is governed by SWN’s HSE policy, which underscores our commitment to protecting employees, contractors, communities and the environment in all areas where we conduct business. It is the responsibility of every SWN employee to deliver on our commitment to this policy and help achieve our ONE Team goal of zero incidents.

This commitment is supported by SWN’s comprehensive HSE management system, which covers all SWN operating regions and divisions. The management system has integrated policies, programs, procedures, training and incentives to support HSER performance. It provides clear guidance on actions and processes for protecting health, safety and the environment and maintaining asset integrity. The management system requires recurring goal-setting, evaluation processes and performance metrics to drive improvements. It also requires regular audits of our own and contractors’ operations, as well as the implementation of corrective actions when relevant, to ensure compliance with SWN requirements and relevant external regulations.

All SWN leaders – from senior executives to frontline managers – are evaluated on, and held accountable for, the HSER performance of their respective teams. We measure leadership engagement in HSE using a balanced scorecard, which includes both leading indicators (e.g., management participation in site visits) and lagging indicators (e.g., Total Recordable Injury Rate). In addition, safety and environmental performance are factors in the performance-based element of every SWN employee’s annual bonus, which is established by the Board’s Compensation Committee.