How We Manage Corporate Responsibility

1. Our Values Provide A Solid Foundation

Corporate responsibility at Talisman starts with our values. They reflect what we stand for as a company and guide our conduct at the highest level.

safety: our goal is to create working conditions where we cause no harm to people

passion: we inspire others by the passion we demonstrate for our work

results: we have a bias for results and take initiative to get things done efficiently, creating value for our shareholders

respect: we take time to consider and appreciate other people’s points of view and treat the environment with respect

excellence: we strive for excellence in what we do and how we do it

teamwork: by working effectively together, we can deliver results far beyond our individual capabilities

honest communication: we show courage to speak honestly and support others to do the same

2. Our Management System Drives Continuous Improvement

Our global management system for health, safety, security, environment and operational assurance (HSSE/OA) helps us to manage HSSE/OA risks, set common expectations for workers and is central to understanding and improving our performance. Building on the standards in this detailed framework allows us to translate many of our corporate values into actionable commitments for our employees and contractors.

In 2010, this system was expanded to include global projects and drilling and completions activities. Now known as the Talisman operating management system, it provides a single system that will further integrate our key HSSE/OA priorities into our daily operations and effectively manage related risks. We will continue implementing this system throughout 2011.

3. Our Board Provides Oversight

Our Board of Directors (Board) oversees the conduct of the business and management, including efforts to manage corporate responsibility. The Board ensures systems are in place to manage key financial and non-financial risks, including environment, health and safety. We have well-established structures in place to ensure the Board can function independently of management. All of our 11 directors are independent, except for Talisman’s president and chief executive officer.

In addition, the Board’s health, safety, environment and corporate responsibility (HSECR) committee oversees our health, safety and environment initiatives, policies and systems. In 2010, the mandate of this committee was expanded to include oversight for policies on security, community relations and human rights.

4. Ethical Conduct Is Fundamental To How We Do Business

Our policy on business conduct and ethics (PBCE) provides our employees and contractors with guidelines on a range of issues, including personal conduct, human rights, community relations and health, safety and environment. All employees and contractors are required to complete annual training and to sign a certificate of compliance. Training has been updated to reflect changes to the PBCE, which now references the new GCRP and prohibits facilitation payments.

Integrity Matters

Talisman’s Integrity Matters hotline was available to both internal and external stakeholders throughout 2010. The hotline is a confidential option for submitting inquiries or complaints regarding ethics matters and other areas of concern, such as human resources or workplace practices. It is managed by an independent third-party with global operations that offers services in more than 140 languages. All matters reported through this vehicle in 2010 were investigated for possible breaches of business conduct and actions were taken where appropriate.

5. We Follow International Standards For Human Rights, Security And Transparency

We promote adherence to and respect for human rights principles in all our areas of operation. We are a signatory to the United Nations Global Compact (UNGC), which supports a number of principles related to human rights, labour, the environment and anti-corruption. In early 2011, we were invited to participate in its LEAD program, which is comprised of a group of 54 companies committed to defining best practices for sustainability leadership.

We are also the first Canadian company to participate in the Voluntary Principles on Security and Human Rights Plenary Group. The Voluntary Principles guide companies in maintaining the safety and security of their operations, within an operating framework that promotes respect for human rights and security.

In addition, we are committed to transparency in our dealings with governments. We are a member of the Extractive Industries Transparency Initiative (EITI), and publish all royalties, taxes and other material payments to host governments across our global operations.

6. We Engage And Listen To Stakeholders

In carrying out our business, we communicate and consult with a wide range of stakeholders. They can include landowners, local communities, Aboriginal and indigenous people, regulators and governments. We create opportunities to engage stakeholders early in a project cycle and frequently throughout our activities. Our goal is to share information, learn from external perspectives and build strong relationships in the community – all with a view to supporting our long-term success.