Sustainability

A leader in stewardship and sustainable value creation

At SM Energy, we believe responsible operations and strong financial performance are mutually reinforcing. Operating safely, protecting the environment, investing in our workforce and maintaining strong corporate governance help reduce operational risk, improve efficiency, strengthen our license to operate and position the Company to create durable value over the long term. These principles are integrated into how we make decisions, allocate capital, and execute our business strategy.

Sustainability Leadership

Rystad Energy Recognition

SM Energy one of the top three operators excelling in sustainability performance in 2023

MSCI ESG Rating as of May 2025

We are proud to share the most recent strides we have made in not just living up to industry and societal standards, but also to our own:

2025

Strengthened the Company's Safety-First Culture by reducing Total Recordable Incident Rate (“TRIR”) 10% year over year to 0.60, while achieving zero employee and contractor fatalities in 2025.
Delivered record operating cash flow, record production, and record year-end proved reserves in 2025, returning $104 million to stockholders through dividends and share repurchases and raising the annual fixed dividend 10%.
Reduced Scope 1 and 2 greenhouse gas (“GHG”) emissions intensity in Texas 37% since 2019 while holding company-wide methane emissions intensity at 0.03 mt CH4/mBOE - below the 0.04 mt CH4/mBOE target.
Advanced emissions reduction through continued deployment of dynamic gas blending, electrified completion fleets, solar-powered field instrumentation, and continuous methane-detection systems across Company operations.
Demonstrated continued progress in water stewardship by increasing recycled water use in Utah operations to 87%, exceeding the basin's internal 80% objective and marking a 42% increase in water recycling since 2023.
Increased community investment, with charitable contributions rising to more than $2.1 million - a 74% increase since 2023 - and contributed 2,195 hours of employee community service.

2024

Advanced emissions reduction through strategic piloting and deployment of cutting-edge technologies—including dynamic gas blending, electrified fleets, solar-power infrastructure, and continuous methane detection systems—across the Company’s operations.
Demonstrated significant progress in water stewardship by increasing produced water recycling to 40%—a 25% improvement on a relative basis over the previous year.
Launched New Safety Initiatives and Leadership Training—strengthening the Company’s Safety-First Culture and empowering all employees and contractors.
Honored with two distinguished Leadership Development awards from the Brandon Hall Group^TM—a Gold Award for innovation in building competencies and skills, and a Bronze Award for overall leadership development excellence.
Welcomed two new board members, each bringing distinct and valuable expertise including expertise in Technology and Artificial Intelligence.

2023

Superior safety metrics including a total recordable incident rate of 0.20 per 200,000 hours worked, contractors plus employees, a 38% improvement from 2022.
Reported spill rate for 2023 was 0.006 per 1,000 Bbls of produced fluids, a 45% improvement from 2022.
Set up a Midland Basin Operations Surveillance Room (OSR) that allows for 24/7/365 monitoring by the Company’s Operations Specialists. In addition to enhanced monitoring, this technology allows for real-time notification with alarms to field personnel to improve our response time to unsafe, hazardous, or downtime events. The OSR has advanced our ability to proactively respond to equipment irregularities, and to identify and provide timely response to spill and emissions events, safety concerns, and theft.

2022

Developed operations EHS dashboard that provides nearly real-time tracking of the company’s safety and environmental performance, available to all employees.
Completed controlled emissions test simultaneously evaluating 5 different technologies.
Conducted aerial LiDAR flyover baseline study of 100% of operational locations.
Began monthly aerial LiDAR flyovers of all OOOOa locations in Midland Basin.

2021

Initiated water recycling with neighboring operators.
Participated in pilot aerial light detection and ranging (LiDAR) flyover program covering ~30 locations.
Met internal goals for implementing LDAR at 100% of Midland Basin and 100% of South Texas locations.
Developed corporate ESG and EHS dashboard to monitor essential data used by management and presented quarterly to the Board of Directors.
Established near- and medium-term emissions reduction targets for flaring, GHG and methane.
Conducted and reported scenario analysis applying International Energy Agency Sustainable Development Scenario assumptions.

2020

Initiated testing dual-fuel technology for completions operations.
Increased the ESG-related duties and renamed an existing committee of our Board of Directors to the Environmental, Social and Governance Committee.

2019

Added gas pipeline interconnections that serve to reduce flaring.
Exceeded internally set goal by implementing LDAR at 100% of Midland Basin and 50% of South Texas locations.

2018

Built water handling infrastructure in Howard County, which reduces emissions, truck traffic and operating costs.
Implemented compressed natural gas on first SM Energy dual-fuel rig.
Locally sourced 100% of sand for Midland Basin operations.

2016

Began utilizing solar power at select operations sites.
Initiated leak detection and repair (LDAR) in accordance with the Environmental Protection Agency’s (EPA) OOOOa.

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