Governance

Disclose the organization's governance around climate-related risks and opportunities.

Describe the Board's oversight of climate-related risks and opportunities.Open

Evaluating climate risks and opportunities is the responsibility of all Board members, with climate updates scheduled at some Board meetings to review and guide strategy and major plans of action (including setting long-term targets), monitor progress towards goals as well as any changes in the regulatory environment, and review and guide risk management.

Describe management's role in assessing and managing climate-related risks and opportunities.Open

All C-suite positions are responsible for assessing the overall strategy, and reviewing and guiding major action plans, including setting targets and risk management policies, while identifying climate-related opportunities and establishing annual budgets for climate resilience and carbon reduction. Management meets regularly to discuss climate change-related topics. Main near- to mid-term target is a focus on emissions reduction. Climate-based incentive programs will be considered for implementation during the next 2 to 5 years.

Strategy

Disclose the actual and potential impacts of climate-related risks and opportunities on the organization's businesses, strategy, and financial planning where information is material.

Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.Open

Transition risks considered material to Dril-Quip include Policy and Legal, Technology, Market, and Reputational. These include energy regulation, carbon pricing, loss of business, higher costs, technology transition, lower demand, product oversupply, loss of customers and suppliers, and difficulties accessing funding. Physical Risks considered material to Dril-Quip include acute physical risks such as extreme weather, hurricanes, and flooding. Opportunities considered material to Dril-Quip are resource efficiency, energy sourcing, new product development, and access to new markets. These opportunities include recycling, waste management, energy efficiency, renewable sourcing, distributed energy sourcing, diversification of the business, aligning with customers, suppliers, and markets, and increased resilience of operations from acute physical risk or value chain disruption. From an energy transition standpoint over the long term, we view carbon storage and geothermal as our greatest opportunities. We are committed to investing in low-carbon solutions and more efficient manufacturing to drive a lower footprint. In addition to investing in carbon-conscious R&D, we are also engaged in market-leading collaborations.

Describe the impact of climate-related risks and opportunities on the organization's businesses, strategy, and financial planning.Open

Climate change has already influenced the strategy, operations, and financial planning of Dril-Quip's e-Series products. Planned/ongoing emissions abatement actions will further influence the value chain, capital allocation, and financing.

Describe the resilience of the organization's strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.Open

We have conducted a comprehensive scenario analysis around the business as usual (>3°C by the year 2100), middle of the road (>2°C), and green transition (1.5°C) scenarios across revenue, earnings, cash, and market value at risk for the business. In 2022, we will continue to evaluate various approaches toward incorporating the climate scenario analysis into our existing risk management and opportunity assessment processes.

Risk Management

Disclose how the organization identifies, assesses, and manages climate-related risks.

Describe the organization's processes for identifying and assessing climate-related risks.Open

The corporate executive team is responsible for identifying and escalating climate-related risks prioritized based upon revenue, earnings, and benchmarking versus peers. The Board oversees the risk management process.

Describe the organization's processes for managing climate-related risks.Open

Dril-Quip management will focus on regulatory compliance, financial optimization, and budget to achieve decarbonization, resilience, and emissions reduction goals.

Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization's overall risk management.Open

Dril-Quip integrates climate risks into a multidisciplinary, company-wide management process. The Company deploys this process as part of the Health, Safety, and Environment (HSE) Strategy to support the carbon reduction execution plan across operations and improve overall environmental performance.

Metrics and Targets

Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.

Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.Open

All public climate-related metrics, goals, and targets, as well as Scope 1, 2, and 3 emissions data, can be found here.

2022 Greenhouse Gas Emissions, carbon dioxide equivalent (CO2e) metric tonnes:
Scope 1: 4,080
Scope 2: 4,534 (market-based)
Scope 3: 301,675

Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks.Open

All public climate-related metrics, goals, and targets, as well as Scope 1, 2, and 3 emissions data, can be found here.

2022 Greenhouse Gas Emissions, carbon dioxide equivalent (CO2e) metric tonnes:
Scope 1: 4,080
Scope 2: 4,534 (market-based)
Scope 3: 301,675

Describe the targets used by the organization to manage climate-related risks, and opportunities and performance against targets.Open

All public climate-related metrics, goals, and targets, as well as Scope 1, 2, and 3 emissions data, can be found here.

2022 Greenhouse Gas Emissions, carbon dioxide equivalent (CO2e) metric tonnes:
Scope 1: 4,080
Scope 2: 4,534 (market-based)
Scope 3: 301,675

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