<SEC-DOCUMENT>0001214659-23-004126.txt : 20230323
<SEC-HEADER>0001214659-23-004126.hdr.sgml : 20230323
<ACCEPTANCE-DATETIME>20230323124612
ACCESSION NUMBER:		0001214659-23-004126
CONFORMED SUBMISSION TYPE:	PX14A6G
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20230323
DATE AS OF CHANGE:		20230323
EFFECTIVENESS DATE:		20230323

SUBJECT COMPANY:	

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			VALERO ENERGY CORP/TX
		CENTRAL INDEX KEY:			0001035002
		STANDARD INDUSTRIAL CLASSIFICATION:	PETROLEUM REFINING [2911]
		IRS NUMBER:				741828067
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		PX14A6G
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-13175
		FILM NUMBER:		23755361

	BUSINESS ADDRESS:	
		STREET 1:		P.O. BOX 696000
		CITY:			SAN ANTONIO
		STATE:			TX
		ZIP:			78269-6000
		BUSINESS PHONE:		2103454524

	MAIL ADDRESS:	
		STREET 1:		P.O. BOX 696000
		CITY:			SAN ANTONIO
		STATE:			TX
		ZIP:			78269-6000

FILED BY:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Mercy Investment Services, Inc.
		CENTRAL INDEX KEY:			0001699865
		IRS NUMBER:				263224636
		STATE OF INCORPORATION:			MO
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		PX14A6G

	BUSINESS ADDRESS:	
		STREET 1:		2039 NORTH GEYER ROAD
		CITY:			ST. LOUIS
		STATE:			MO
		ZIP:			63131
		BUSINESS PHONE:		314-909-4609

	MAIL ADDRESS:	
		STREET 1:		2039 NORTH GEYER ROAD
		CITY:			ST. LOUIS
		STATE:			MO
		ZIP:			63131
</SEC-HEADER>
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<P STYLE="margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Valero Energy Corporation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Vote Yes: Proposal #5</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Annual Meeting: May 5, 2023</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONTACT: Mary Minette, Mercy Investment Services
| mminette@mercyinvestments.org</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10.4pt"><P STYLE="font: bold 13pt Times New Roman; margin: 0pt 0; text-indent: 9pt; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt">SUMMARY</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As long-term investors in Valero Energy (&ldquo;Valero&rdquo; or &ldquo;the
Company&rdquo;), we are concerned that the Company is not adequately managing the risks that climate change and the energy transition
pose to its core business of refining and selling fossil fuels. Without ambitious and clearly defined targets and stated plans to ensure
that the Company is reducing the greenhouse gas (GHG) emissions of both operations and products, investors are unable to evaluate whether
Valero is adequately taking advantage of opportunities to expand investments in innovative, lower-emissions alternatives and managing
its long-term climate risks. Accordingly, investors are encouraged to vote &ldquo;FOR&rdquo; this proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10.4pt"><P STYLE="font: bold 13pt Times New Roman; margin: 0pt 0; text-indent: 9pt; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt">RESOLVED
                                            CLAUSE</FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>RESOLVED, shareholders request Valero issue a report, at reasonable
expense and excluding confidential information, within a year and updated annually thereafter, on its climate transition plan to align
operations and value chain emissions with a well-below 2 degrees Celsius scenario, including short-, medium- and long-term reduction targets
for Valero&rsquo;s full GHG emissions (scopes 1, 2, and 3).</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10.4pt"><P STYLE="font: bold 13pt Times New Roman; margin: 0pt 0; text-indent: 9pt; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt">RATIONALE
                                            FOR A YES VOTE</FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I></I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">1)</TD><TD>Valero&rsquo;s existing GHG emissions reduction targets and lack of climate transition plan provide insufficient details for shareholders
to properly assess whether the Company&rsquo;s short-, medium- and long-term strategy is consistently aligned with a well-below 2&deg;C
scenario.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 29.95pt; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">2)</TD><TD>In contrast, Valero&rsquo;s peers have taken more ambitious steps to address the risks and to embrace the opportunities that climate
change presents, making Valero a laggard in both an absolute and relative sense.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.95pt; text-indent: -0.25in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10.4pt"><P STYLE="font: bold 13pt Times New Roman; margin: 0pt 0; text-indent: 9pt; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt">DISCUSSION</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Introduction</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>In its Statement of Opposition, Valero&rsquo;s Board claims that
our proposal seeks targets that &ldquo;<I>can only come from refinery closures</I>.&rdquo; This is inaccurate&mdash;we seek targets that
reflect a consistently constructed trajectory to lower emissions, and a transition plan that demonstrates that Valero is positioning
its assets to take full advantage of new opportunities that will arise in the energy transition.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="font-weight: normal">Investors
ranging from State Street<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>i</SUP></FONT> to Legal and
General<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>ii</SUP></FONT> to Aviva<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>iii
</SUP></FONT>have underscored the critical role that climate transition plans play in helping companies manage the risks and opportunities
of the energy transition. As CDP notes, a good transition plan should &ldquo;<I>clearly [outline] how an organization will achieve its
strategy to pivot its existing assets, operations and entire business model towards a trajectory that aligns with the latest and most
ambitious climate science recommendations.&rdquo;</I></FONT><I><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>iv
</SUP></FONT></I><FONT STYLE="font-weight: normal">The Task Force on Climate-related Financial Disclosures (TCFD) has further recognized
that an organization's transition plan and its adaptation plan are important components of a company's strategy to address its climate-related
risks and opportunities.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>v
</SUP></FONT>Simply put, a clear transition plan is a basic building block of any company&rsquo;s climate strategy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="font-weight: normal">The IEA has estimated
that under a net zero scenario, global oil use will need to decline 75% by 2050 compared to 2020, with even larger declines in refined
products like gasoline and diesel.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>vi</SUP></FONT>
Major markets like the EU and California have begun to mandate the phase-out of internal combustion engines, and jurisdictions globally
are putting a price on carbon emissions.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>vii</SUP></FONT>
Wood Mackenzie found in its 2&deg;C and 1.5&deg;C &lsquo;accelerated energy transition&rsquo; scenarios that refining faces continued
rationalization as oil demand collapses, with gross refining margin indicators all negative by 2050.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>viii</SUP></FONT></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">Valero&rsquo;s existing GHG emissions reduction
targets and lack of climate transition plan provide insufficient details for shareholders to properly assess whether the Company&rsquo;s
short-, medium- and long-term strategy is consistently aligned with a well-below 2&deg;C scenario.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">While Valero has adopted 2025 and 2035 GHG reduction targets, those
targets lack ambition as well as the details that investors would need to evaluate their feasibility and impact. Specifically, the targets:</P>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Count scope 3 emissions reductions (<I>e.g.</I>, from low-carbon products) against the company&rsquo;s scope 1 and 2 targets. For
a refiner, scope 3 emissions are largely a measure of a company&rsquo;s exposure to climate transition risk, and are influenced by product
slate, and diversification into lower-carbon fuels. Scope 1 emissions are largely a measure of refinery energy and process efficiency,
and are linked to a company&rsquo;s exposure to regulatory risk. While both are important, using one to offset the other is at best confusing
and at worst misleading, and suggests that the company does not really understand the material financial impact of these metrics.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Lack the details needed for investors to properly evaluate them. Specifically, the company doesn&rsquo;t make clear (a) how 100% absolute
scope 1 and 2 emissions reduction can be achieved in the medium and long term, (b) how it will reduce its scope 3 emissions, and (c) how
the Company plans to achieve its publicly-stated targets and adequately manage the risks posed by the energy transition to its business,
in the absence of a properly defined climate transition plan.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 47.95pt; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">a)</TD><TD><B>We are asking Valero to include credible scope 1 and 2 emissions
                                            reduction targets in its climate transition plan.</B> The 2035 GHG Emissions Target chart
                                            provided in the Board&rsquo;s Statement of Opposition, as well as in the Company&rsquo;s
                                            TCFD report<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>ix</SUP></FONT>,
                                            provides insufficient details and citations to global frameworks to explain how Valero can
                                            reduce its absolute scope 1 and 2 emissions, to move beyond the 7.4% absolute emissions reduction,
                                            which the Company achieved in 2019 and surpassed in 2020 and 2021. The following categories
                                            are particularly problematic:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">i.</TD><TD><I>Emissions Displaced by Valero&rsquo;s Ethanol and Renewable Diesel
Production, and by Global Blending of and Credits from Low-carbon Fuels &ndash; </I>These three types of displacements are not absolute
scope 1 and 2 emissions reductions. Rather, they reduce emissions <I>in the value chain</I> of the Company; hence, these displacements
should normally be tracked as scope 3 (use of sold product) emissions reduction.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>x
</SUP></FONT>Valero is also double counting these emissions reductions in its &ldquo;net scope 3 intensity&rdquo; calculation where reported
GHG emissions are &ldquo;<I>netted for avoided emissions and emissions reductions from low-carbon fuels displacement of petroleum-based
fuels.</I>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xi </SUP></FONT>In an example of better
disclosure, industry peer Neste reports displaced emissions from renewable diesel<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xii
</SUP></FONT>in a way that complies with industry standards.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xiii</SUP></FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

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<P STYLE="margin-top: 0; margin-bottom: 0"></P>

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<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">ii.</TD><TD><I>2035 GHG Emissions Reduced by CCS &ndash; </I>While we agree with the IPCC's and IEA's evaluations that net zero by 2050 ambitions
will require a &quot;<I>rapid acceleration in the deployment of CCS</I>&rdquo;, our concern with Valero's scope 1 and 2 emissions target
and CCS transition planning is that the company does not disclose sufficient detail for shareholders to properly assess whether the associated
emissions reductions should be accounted for as scope 1 <U>or</U> as scope 3 emissions reductions. CCS-related emissions reduction classification
is indeed case-dependent.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xiv</SUP></FONT>
It appears that Valero is currently double counting these emissions reductions in its &ldquo;net scope 3 intensity&rdquo; calculation,
where reported GHG emissions are &ldquo;<I>netted for avoided emissions and emissions reductions from (&hellip;) carbon capture.</I>&rdquo;<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xv</SUP></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">b)</TD><TD><B>We are asking Valero to include a credible scope 3 emissions target
                                            in its climate transition plan.</B> Scope 3 emissions represent the vast majority of any
                                            refiner&rsquo;s carbon footprint and, therefore, constitute most of its climate risk exposure.
                                            As noted below, for peers Marathon Petroleum and Phillips 66, scope 3 emissions represent
                                            at least 90% of total GHG emissions. Setting a scope 3 emissions reduction target, using
                                            existing guidance,<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xvi
                                            </SUP></FONT>would enable Valero&rsquo;s shareholders to assess how the company is managing
                                            its climate-related risks and opportunities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">In addition, Valero does not report its absolute scope 3
emissions, but instead last year began reporting &ldquo;net scope 3 intensity&rdquo; using a non-externally validated methodology and
concluding that its net scope 3 intensity leads its peers.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xvii</SUP></FONT>
In its Statement of Opposition, Valero&lsquo;s Board mentions that the GHG Protocol contemplates scope 3 intensity disclosures. It is
true that the GHG Protocol enables <I>optional </I>reporting of intensity metrics (<I>e.g.</I>, average GHG intensity of sold products).
However, it also <I>requires</I> the reporting, for each scope 3 category, of total GHG emissions in metric tons of CO<SUB>2</SUB> equivalent
(<I>i.e.</I>, absolute emissions reporting), which Valero does not provide.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xviii</SUP></FONT>
When it comes to netting off emissions, the GHG Protocol states &ldquo;<I>companies should report internal emissions in separate accounts
from offsets used to meet the target, rather than providing a net figure</I>&rdquo;; contrary to this global guidance, Valero only discloses
<I>net </I>scope 3 intensity.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xix</SUP></FONT>
Disclosure of absolute scope 3 emissions using existing recognized methodologies<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xx</SUP></FONT>
would be more useful to Valero&rsquo;s shareholders and other stakeholders, allowing direct comparison of Valero&rsquo;s absolute scope
3 emissions with its peers. It is also a prerequisite for the company to set a credible scope 3 emissions reduction target.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">c)</TD><TD><B>We are asking that Valero issue a climate transition plan to align
                                            operations and value chain emissions with a well-below 2&deg;C scenario.</B> This plan should
                                            make clear how Valero plans to achieve its publicly stated targets, and adequately manage
                                            the risks posed by the energy transition to its business. It should include timing, specific
                                            activities that will be undertaken as well as their scope and expected impact, and capital
                                            expenditure plans to carry out these activities.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxi
                                            </SUP></FONT>In its opposition statement and in other reporting, Valero has provided some
                                            details of low-carbon projects it has undertaken,<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxii
                                            </SUP></FONT>but these stories, without more, do not constitute a transition plan.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>In contrast, Valero&rsquo;s peers have taken more ambitious
steps to address the risks and to embrace the opportunities that climate change presents, making Valero a laggard in both an absolute
and relative sense.</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We believe that the creation of long-term shareholder value will be
enhanced if the Company follows its peers in taking a more transparent and ambitious approach to addressing climate risks and opportunities,
by regularly updating its climate transition plan and including full GHG emissions reduction targets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As set forth in the table below, Valero&rsquo;s industry peers have
more ambitious disclosures and emissions reduction targets, on shorter timelines.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top; background-color: #4F81BD">
    <TD STYLE="width: 14%; border-top: white 1pt solid; border-bottom: white 1pt solid; border-left: white 1pt solid"><FONT STYLE="font-size: 10pt; color: #404040"><B>Company</B></FONT></TD>
    <TD STYLE="width: 25%; border-top: white 1pt solid; border-bottom: white 1pt solid"><FONT STYLE="font-size: 10pt; color: #404040"><B>Scope
    1&amp;2 reduction <BR>
    targets (true <BR>
    emissions <BR>
    reductions)</B></FONT></TD>
    <TD STYLE="width: 13%; border-top: white 1pt solid; border-bottom: white 1pt solid"><FONT STYLE="font-size: 10pt; color: #404040"><B>Incorporates
    <BR>
    &ldquo;displaced <BR>
    emissions&rdquo; <BR>
    into scope <BR>
    1&amp;2 targets</B></FONT></TD>
    <TD STYLE="width: 16%; border-top: white 1pt solid; border-bottom: white 1pt solid"><FONT STYLE="font-size: 10pt; color: #404040"><B>Scope
    3 <BR>
    reduction <BR>
    targets</B></FONT></TD>
    <TD STYLE="width: 16%; border-top: white 1pt solid; border-bottom: white 1pt solid"><FONT STYLE="font-size: 10pt; color: #404040"><B>Total
    absolute <BR>
    scope 3 <BR>
    emissions <BR>
    disclosure <BR>
    (estimated <BR>
    percentage of <BR>
    total GHG <BR>
    emissions)</B></FONT></TD>
    <TD STYLE="width: 16%; border-top: white 1pt solid; border-right: white 1pt solid; border-bottom: white 1pt solid"><FONT STYLE="font-size: 10pt; color: #404040"><B>Scope
    3 <BR>
    emissions <BR>
    disclosure <BR>
    using standard, <BR>
    comparable <BR>
    methods</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; border-left: white 1pt solid; background-color: #4F81BD"><FONT STYLE="font-size: 10pt; color: #404040"><B>Valero</B></FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="color: red"><B>7.4% by 2035</B></FONT> <FONT STYLE="color: #404040">(</FONT><FONT STYLE="color: red"><B>vs
    2011</B></FONT><FONT STYLE="color: #404040">, absolute)</FONT></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #404040"><I>Rest of target made up of displaced emissions and
    carbon capture and storage</I></P></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt; color: red"><B>Yes</B></FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt; color: red"><B>No</B></FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt; color: red"><B>No</B></FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt; color: red"><B>No</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; border-left: white 1pt solid; background-color: #4F81BD"><FONT STYLE="font-size: 10pt; color: #404040"><B>Phillips
    66<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>xxiii</SUP></FONT></B></FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1"><FONT STYLE="font-size: 10pt; color: #404040">30% by 2030, 50% by 2050 (vs 2019, intensity)</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1"><FONT STYLE="font-size: 10pt; color: #404040">No</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1"><FONT STYLE="font-size: 10pt; color: #404040">15% by 2030 (vs 2019, intensity)</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1"><FONT STYLE="font-size: 10pt; color: #404040">Yes (~91%)</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1"><FONT STYLE="font-size: 10pt; color: #404040">Yes</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; border-left: white 1pt solid; background-color: #4F81BD"><FONT STYLE="font-size: 10pt; color: #404040"><B>Marathon
    Petroleum<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>xxiv</SUP></FONT></B></FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt; color: #404040">30% by 2030 (vs 2014, intensity)*</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt; color: #404040">No</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt; color: #404040">15% by 2030 (vs 2019, absolute)*</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt; color: #404040">Yes (~90%)</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt; color: #404040">Yes (provides emissions from refining throughput and production volume data)</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; border-left: white 1pt solid; background-color: #4F81BD"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt; color: #404040"><B>ExxonMobil<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>xxv</SUP></FONT></B></FONT></P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt; color: #404040"><B>Ex</B></FONT></P></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1"><FONT STYLE="font-size: 10pt; color: #404040">20% by 2030, net zero by 2050 (vs 2016 absolute)</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1"><FONT STYLE="font-size: 10pt; color: #404040">No</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #404040">No</P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #404040">&nbsp;</P></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1"><FONT STYLE="font-size: 10pt; color: #404040">Yes (~86%)</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #404040">Yes (provides emissions from refining throughput and
    production volume data)</P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #404040">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; border-left: white 1pt solid; background-color: #4F81BD"><FONT STYLE="font-size: 10pt; color: #404040"><B>Chevron<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>xxvi</SUP></FONT></B></FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt; color: #404040">Net zero upstream by 2050</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt; color: #404040">No - reports them separately as required by GHG Protocol</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt; color: #404040">Yes</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt; color: #404040">Yes (~87%)</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt; color: #404040">Yes</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; border-left: white 1pt solid; background-color: #4F81BD"><FONT STYLE="font-size: 10pt; color: #404040"><B>Neste<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>xxvii</SUP></FONT></B></FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1"><FONT STYLE="font-size: 10pt; color: #404040">50% by 2030 (vs 2019, absolute), carbon neutral production by 2035</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1"><FONT STYLE="font-size: 10pt; color: #404040">No - reports them separately as required by GHG Protocol</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1"><FONT STYLE="font-size: 10pt; color: #404040">50% by 2040 (vs 2020, intensity)</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1"><FONT STYLE="font-size: 10pt; color: #404040">Yes (~94%)</FONT></TD>
    <TD STYLE="border-right: white 1pt solid; border-bottom: white 1pt solid; background-color: #DBE5F1"><FONT STYLE="font-size: 10pt; color: #404040">Yes</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="font-weight: normal">*It is worth noting
that Marathon Petroleum developed its targets using guidance from the Science Based Targets Initiative (SBTi) and Ipieca.<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>xxviii</SUP></FONT></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Valero maintains that it leads the industry in producing low-carbon
renewable fuels.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxix</SUP></FONT>
However, according to Carbon Tracker: &ldquo;<I>without an extremely aggressive [low carbon fuels] ramp up, sufficient feedstocks and
technological advancements, it&rsquo;s hard to see how [low carbon fuels] will make a dent in the company&rsquo;s wider (&hellip;) processing
capacity&rdquo;.</I><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxx</SUP></FONT>
Ramping up the scale, pace and rigor of Valero&rsquo;s climate-related initiatives could unlock further opportunities for growth in new
renewable fuels, help strengthen financial resilience, and avoid investments in assets that will lose value as the global economy transitions
away from fossil fuels.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Recent reports from peer companies Phillips 66 and Marathon Petroleum
show investments in multiple low-carbon technologies and fuels and provide more detail than Valero of their plans to achieve more ambitious
GHG reduction targets.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxxi</SUP></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Investors, including Mercy and our co-filers, increasingly expect companies
to set targets and strategies to indicate that they are anticipating and managing the risks of climate change to their business and to
help ensure the world is on track to meet the goals of the Paris Climate Agreement. The Climate Action 100+ initiative, including investors
with more than $68 trillion in assets under management, has established a Net-Zero Company Benchmark, evaluating whether companies report
all emissions in their value chains (<I>i.e.</I>, including scope 3 emissions) and set short-, medium- and long-term targets aligned with
the 1.5&deg;C goal of the Paris Climate Agreement. Valero failed to meet any of the benchmark&rsquo;s requirements for setting targets
or for articulating a transition plan.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxxii</SUP></FONT>
In addition, the largest investors in the global market are increasingly asking companies to report all value chain emissions and set
targets to reduce them, including BlackRock, Vanguard and State Street Global Advisors.<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxxiii</SUP></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Not only does Valero&rsquo;s reporting of emissions fail to meet these
investor expectations and lag its peers, but also the Company&rsquo;s current, limited target does not align with the net zero goals being
set by many of its investors and lenders. In addition, Valero does not articulate a clear climate transition plan. As a result, Valero
risks losing market share and access to capital as more institutions commit to align their lending and investments to net zero goals.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10.4pt"><P STYLE="font: bold 13pt Times New Roman; margin: 0pt 0; text-indent: 9pt; background-color: #B8CCE4"><FONT STYLE="font-size: 10pt">CONCLUSION</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 10.4pt"></P>

<P STYLE="margin: 0pt 0"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">Vote &ldquo;YES&rdquo; on this Shareholder Proposal</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="font-weight: normal">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As long-term investors in Valero, we are concerned that the Company
is not adequately managing the risks that climate change and the energy transition pose to its core business of refining and selling
fossil fuels. Without ambitious and clearly defined targets and stated plans to ensure that the Company is reducing the GHG emissions
of both operations and products, investors are unable to evaluate whether Valero is adequately taking advantage of opportunities to expand
investments in innovative, lower-emissions alternatives and managing its long-term climate risks. <B>Accordingly, investors are encouraged
to vote &ldquo;FOR&rdquo; this proposal.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">--</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">THE FOREGOING INFORMATION MAY BE DISSEMINATED TO SHAREHOLDERS VIA TELEPHONE,
U.S. MAIL, E-MAIL, CERTAIN WEBSITES AND CERTAIN SOCIAL MEDIA VENUES, AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE OR AS A SOLICITATION
OF AUTHORITY TO VOTE YOUR PROXY. THE COST OF DISSEMINATING THE FOREGOING INFORMATION TO SHAREHOLDERS IS BEING BORNE ENTIRELY BY ONE OR
MORE OF THE CO-FILERS. PROXY CARDS WILL NOT BE ACCEPTED BY ANY CO-FILER. PLEASE DO NOT SEND YOUR PROXY TO ANY CO-FILER. TO VOTE YOUR PROXY,
PLEASE FOLLOW THE INSTRUCTIONS ON YOUR PROXY CARD<I>.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>i</SUP></FONT>
<I>See </I>https://www.ssga.com/library-content/pdfs/asset-stewardship/disclosure-expectations-for-effective-climate-transition-plans.pdf.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>ii</SUP></FONT>
<FONT STYLE="font-size: 10pt"><I>See </I>https://www.lgim.com/landg-assets/lgim/_document-library/capabilities/climate-governance-guide-tagged.pdf.</FONT>
</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>iii</SUP></FONT>
<I>See </I>https://www.avivainvestors.com/en-us/views/aiq-investment-thinking/2023/01/company-chairpersons/.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>iv</SUP></FONT>
<I>See</I> https://www.cdp.net/en/guidance/guidance-for-companies/climate-transition-plans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>v</SUP></FONT>
<I>See</I> https://assets.bbhub.io/company/sites/60/2021/07/2021-Metrics_Targets_Guidance-1.pdf, pgs. 39-41.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>vi</SUP></FONT>
<I>See</I> https://iea.blob.core.windows.net/assets/deebef5d-0c34-4539-9d0c-10b13d840027/NetZeroby2050-ARoadmapfortheGlobalEnergySector_CORR.pdf,
pgs. 21 and 102.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>vii</SUP></FONT>
<I>See for example </I>https://www.europarl.europa.eu/news/en/headlines/economy/20221019STO44572/eu-ban-on-sale-of-new-petrol-and-diesel-cars-from-2035-explained;
https://www.nytimes.com/2022/08/24/climate/california-gas-cars-emissions.html; and https://www.oecd-ilibrary.org/sites/e9778969-en/index.html?itemId=/content/publication/e9778969-en#execsumm-d1e47.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>viii</SUP></FONT>
<I>See </I>https://www.woodmac.com/news/the-edge/what-different-scenarios-tell-us-about-the-future-of-oil-and-gas/.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>ix</SUP></FONT>
<I>See</I> https://www.valero.com/sites/default/files/valero-documents/2022-TCFD-Report-FINAL-digital-spreads.pdf, p. 38.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>x</SUP></FONT>
<I>See </I>the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard: https://ghgprotocol.org/sites/default/files/standards/Corporate-Value-Chain-Accounting-Reporing-Standard-EReader_041613_0.pdf.
According to CDP, &rdquo;<I>Scope 3 encompasses 15 distinct categories covering all emissions along the corporate value chain. The use
of sold products falls under category 11 of Scope 3 and typically represents over 90% of total emissions relating to oil and gas companies</I>&rdquo;,
<I>see</I> https://cdn.cdp.net/cdp-production/cms/guidance_docs/pdfs/000/000/469/original/CDP-Scope-3-Category11-Guidance-Oil-Gas.pdf?1643046888,
p. 7. According to the API, &rdquo;<I>Scope 3 emissions are emissions that result from value chain activities that are not captured by
company scope 1 and scope 2 emissions, such as emissions that result from company-produced fuel used by end-use customers</I>&rdquo;,
<I>see</I> https://www.api.org/~/media/Files/EHS/climate-change/Scope-3-emissions-reporting-guidance-2016.pdf, p. 10.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xi</SUP></FONT>
<I>See</I> https://www.valero.com/sites/default/files/valero-documents/2022-TCFD-Report-FINAL-digital-spreads.pdf, p. 43.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xii</SUP></FONT>
<I>See</I> https://www.neste.com/sites/neste.com/files/attachments/corporate/investors/corporate_governance/neste_sustainability_report_2021.pdf,
p. 51.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xiii</SUP></FONT>
<I>See</I> https://www.chevron.com/-/media/chevron/sustainability/documents/2021-climate-change-resilience-report.pdf, p. 58, methodology
explained p. 62.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xiv</SUP></FONT>
According to the GHG Protocol, &rdquo;<I>[d]irect (scope 1) removals result where the reporting company owns or controls <U>both</U> the
sink that transferred CO<SUB>2</SUB> from the atmosphere <U>and</U> the pool where the carbon is stored. Indirect (scope 3) removals result
where the reporting company does not own or control both the sink and the associated storage pools.&ldquo;</I> Further, &rdquo;<I>[i]n
a fossil CCS pathway, CO<SUB>2</SUB> from industrial and energy-related sources is captured on site at a point source. (...) Geologic
storage pathways where carbon is derived from fossil fuels (...) are not accounted for as CO<SUB>2</SUB> removals. Instead, capture of
fossil CO<SUB>2</SUB> from a point source prevents emissions by capturing and storing the CO<SUB>2</SUB>. All GHG emissions from fugitive
losses and processes associated with the geologic storage pathway must be accounted for.</I>&rdquo; <I>See </I>https://ghgprotocol.org/sites/default/files/standards_supporting/Land-Sector-and-Removals-Guidance-Pilot-Testing-and-Review-Draft-Part-1.pdf,
Chapter 3, p. 27, Chapter 5, p. 68., Chapter 10, pgs. 175-177. <I>See also</I> https://ghgprotocol.org/sites/default/files/standards/Corporate-Value-Chain-Accounting-Reporing-Standard_041613_2.pdf.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xv</SUP></FONT>
<I>See </I>https://www.valero.com/sites/default/files/valero-documents/2022-TCFD-Report-FINAL-digital-spreads.pdf, p. 43.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xvi</SUP></FONT>
By the GHG Protocol, Ipieca or the Science Based Target Initiative, for example.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xvii</SUP></FONT>
<I>See</I> https://www.valero.com/sites/default/files/valero-documents/2022-TCFD-Report-FINAL-digital-spreads.pdf, pgs. 39 and 43.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xviii</SUP></FONT>
<I>See</I> https://ghgprotocol.org/sites/default/files/standards/Corporate-Value-Chain-Accounting-Reporing-Standard-EReader_041613_0.pdf,
Chapter 11, pgs. 123-124.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xix</SUP></FONT>
<I>See</I> https://ghgprotocol.org/sites/default/files/standards/Corporate-Value-Chain-Accounting-Reporing-Standard-EReader_041613_0.pdf,
Chapter 9, p. 103.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xx</SUP></FONT>
<I>See, e.g., </I>https://ghgprotocol.org/sites/default/files/standards/Corporate-Value-Chain-Accounting-Reporing-Standard_041613_2.pdf,
p. 119; or https://www.api.org/~/media/Files/EHS/climate-change/Scope-3-emissions-reporting-guidance-2016.pdf.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxi</SUP></FONT>
<I>See </I>for example the key characteristics of effective transition plans and the transition plan elements from TCFD, https://assets.bbhub.io/company/sites/60/2021/07/2021-Metrics_Targets_Guidance-1.pdf,
pgs. 40-42). <I>See</I> guidance from CDP, https://www.cdp.net/en/guidance/guidance-for-companies/climate-transition-plans. <I>See</I>
guidance from We Mean Business, https://www.wemeanbusinesscoalition.org/wp-content/uploads/2022/10/WMBC-Climate-Transition-Action-Plans.pdf.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxii</SUP></FONT>
<I>See</I> https://www.valero.com/sites/default/files/valero-documents/2022-TCFD-Report-FINAL-digital-spreads.pdf.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxiii</SUP></FONT>
<I>See</I> https://www.phillips66.com/sustainability/our-targets/ and https://issuu.com/phillips66co/docs/2022sustainabilityreport?fr=sYTYwYzUxMzk1MDc,
pgs. 53 and 63.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxiv</SUP></FONT>
<I>See</I> https://www.marathonpetroleum.com/content/documents/Responsibility/2022-MPC-MPLX-ClimateReport.pdf, p. 10, and https://www.marathonpetroleum.com/content/documents/Responsibility/2022-MPC-MPLX-ClimateReport.pdf,
pgs. 12 and 37.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxv</SUP></FONT>
<I>See</I> https://corporate.exxonmobil.com/-/media/global/files/advancing-climate-solutions-progress-report/2023/2023-acs-progress-report.pdf,
pgs. 6, 47, 92.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxvi</SUP></FONT>
<I>See </I>https://www.chevron.com/-/media/shared-media/documents/chevron-sustainability-report-2021.pdf, pgs. 15, 17, 61-64, 80.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxvii</SUP></FONT>
<I>See </I>https://www.neste.com/sites/neste.com/files/attachments/corporate/investors/corporate_governance/neste_sustainability_report_2021.pdf,
pgs. 22, 26, 51, 54 and 96.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxviii</SUP></FONT>
<I>See </I>https://www.marathonpetroleum.com/content/documents/Responsibility/2022-MPC-MPLX-ClimateReport.pdf, p. 10.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxix</SUP></FONT>
<I>See</I> https://www.valero.com/renewables.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxx</SUP></FONT>
<I>See</I> Refining exposure to an accelerating energy transition, https://carbontracker.org/reports/refining-exposure-to-an-accelerating-energy-transition/,
p. 6. Carbon Tracker specifies that &rdquo;<I>the contribution to Valero&rsquo;s processing capacity from renewable diesel and ethanol
is limited to under 50kb/d</I>&rdquo;. This is minimal compared to &rdquo;<I>the company&rsquo;s wider &gt;3Mb/d processing capacity.</I>&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxxi</SUP></FONT>
<I>See </I>https://www.marathonpetroleum.com/Sustainability/Reducing-Our-Carbon-Footprint/ and https://www.phillips66.com/sustainability/our-targets/.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>xxxii</SUP></FONT>
<I>See</I> https://www.climateaction100.org/company/valero-energy-corporation/.</P>

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Blackrock: &ldquo;<I>We encourage companies to discuss in their reporting how their business model is aligned to a scenario in which global
warming is limited to well below 2&deg;C, moving towards global net zero emissions by 2050. Companies help investors understand their
approach when they provide disclosures aligned with the four pillars of the TCFD.&quot; See</I> https://www.blackrock.com/us/individual/literature/publication/blk-stewardship-priorities-final.pdf.
Vanguard: &ldquo;<I>Where climate change is a material risk, Vanguard encourages companies to set targets that align with [the Paris Agreement&rsquo;s]
goals and to disclose them clearly.</I>&rdquo; <I>See</I> https://corporate.vanguard.com/content/dam/corp/research/pdf/Global%20investment%20stewardship%20principles_final_112021.pdf.
State Street, <I>see</I> https://www.ssga.com/library-content/pdfs/asset-stewardship/guidance-on-climate-related-disclosures.pdf.</P>

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