Welcome to DCP Midstream’s Second Annual Sustainability Report: Resiliency and Evolution

Wouter van KempmenTo reflect on 2020 is to enter a state of complete awe. Awe at the unprecedented challenges we faced, including the first pandemic of our lifetimes, negative oil prices, producer shut-ins, social unrest, and a significant economic downturn. I am also in awe of how Team DCP responded to and found opportunities to advance our company in this challenging environment. With so much uncertainty, we centered our focus on the fundamentals of safety, operational excellence, and sustainability; and our strong results were driven by the remarkable resilience and tenacity of our people.

As you will see throughout this report, we maintained a steadfast focus on delivering on our commitments. We drove improvements throughout our operational footprint and within our company culture despite the volatility and challenges we faced. Not only did we deliver strong financial results, we saw substantial improvements in our sustainability metrics across our company. Highlights of our achievements in 2020 include:
  • Executed an effective COVID-19 Pandemic Response Plan prioritizing employee and community health and safety, business continuity, increased communications, and continued cultural engagement;
  • A continued track record of safety outperformance, with a Total Recordable Incident Rate (TRIR) of 0.44, tying for our third-best company safety record and, again, beating the industry average;
  • Achieved a 6% reduction in our greenhouse gas emissions year-over-year as a result of improved reliability and work processes, an enhanced culture of individual ownership of sustainability outcomes, and technology improvements;
  • Launched the largest industry-led methane survey in the US, which is enabling significant reductions in fugitive emissions through detection and mitigation;
  • Focused on compressor and plant reliability, which yielded a 24% reduction in downtime events and a 13% reduction in downtime hours, representing the lowest rate of major equipment failures since we started tracking this metric in 2014;
  • Recognized as an innovative sustainability leader by the World Economic Forum, International Chamber of Commerce, and the GPA Midstream Association;
  • Established an Inclusion & Diversity (I&D Committee) made up of over 80 employee volunteers whose purpose is “to create equity and belonging for everyone, everywhere” at DCP;
  • Enacted unit ownership guidelines for our officers and directors, enhancing alignment with unitholder interests; and
  • Aligned our sustainability disclosures with the Sustainability Accounting Standards Board (SASB) Midstream Reporting Standards and Energy Infrastructure Council (EIC) and GPA Midstream Association ESG Reporting Template.

At DCP, 2020 was not defined by the challenges we faced, but by the achievements we celebrated. Following the 2014 oil crash, we made the decision to radically transform our company to ensure our long-term competitive advantage. We set our focus on being “the safest, most reliable, low-cost midstream service provider” and adopted a multi-year strategy to achieve operational excellence through targeted goals and behaviors. We called this DCP 2020.

Every year since, with intention and commitment, Team DCP has fought hard to evolve our company, battle outdated traditions, and create a better way for our employees, our business, and in some ways, our industry. We have transformed our base business, extended our value chain, and outperformed most of our peers on a relative equity basis, despite commodity price headwinds-while improving safety, reliability, and our employee experience. Highlights of our DCP 2020 journey over the past five years include:
  • Safety: Since we launched DCP 2020, we were recognized as the safest midstream company in the country for our 2018 performance, and our second and third safest operating years also occurred within our DCP 2020 journey. Every year, our TRIR has consistently been better than average for all GPA Midstream Division 1 companies, accounting for all employers that have a million or more midstream operational hours.
  • Reliability: We established Risk-Based Inspection as a primary program to reduce risk and cost. We also implemented an Equipment Health Monitoring program which allows us to identify maintenance issues real time, and we are actively tracking plant reliability. We reduced major equipment failures by 80% since 2014, with more than a 50% reduction in failures from 2019 to 2020 alone. Finally, plant runtime currently sits at an impressive 98.7%.
  • Costs: Our company is more automated, more streamlined, and more optimized than it has ever been. In total, our 2020 costs were down $145 million year-over-year, underpinned by our focus on operational excellence and our DCP 2.0 digital transformation.
Though the year 2020 came to an end, the tenets of DCP 2020 were not retired. These values and behaviors continue to be extremely relevant to our company, and so we decided that being “the safest, most reliable, low-cost midstream service provider” will live on as our permanent company vision.

As we emerge from a dedicated five-year strategy and a global pandemic, we have an entirely new perspective on how to best manage our business. The world is changing rapidly and DCP is committed to preparing for the industry of tomorrow through the hard work of today. We envision a continued evolution of our company, deeply rooted in sustainable practices, that enhances value for all stakeholders, including our employees, communities, investors, customers, and vendors. I am proud to announce forward-looking sustainability targets for DCP as we endeavor to fully live our company purpose of “Building Connections to Enable Better Lives”:
  • Emission Reduction Goals
    • By 2030, reduce total greenhouse gas emissions (Scope 1 and Scope 2) by 30% from a 2018 baseline
    • By 2050, achieve net zero greenhouse gas emissions (Scope 1 and Scope 2)
  • Inclusion & Diversity Goals
    • By 2028, ensure our workforce and leadership fully represents the gender and racial demographics of the communities in which we operate
    • By 2031, ensure that our internal leadership succession pipeline reflects the gender and racial demographics of the communities in which we operate
    • On an annual basis, ensure representation of our veteran communities aligns with national demographics
    • Over the next five years, maintain Employee Satisfaction and Belonging scores above industry benchmark
We are incredibly excited and motivated by these goals and our comprehensive sustainability strategy. I encourage you to read this report to learn more about our company, our performance, and sustainability focus, and invite you to share your thoughts with us as we move forward. Thank you for your interest in DCP Midstream.

Wouter van Kempen
Chairman, President, & CEO
August 2021