Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Management
• Health, Well-being and the Workplace
• Safety
• Product Stewardship and Supply Chain
• Social Responsibility
• Governance and Ethics

Environmental Achievements

• Set a Net Zero Carbon Emissions (NZCE) target by 2050, the first oil and gas company in Southeast Asia to do so.

Social Achievements

• Not disclosed

Governance Achievements

• Became an official member of the World Business Council for Sustainable Development (WBCSD) and Methane Guiding Principles (MGP) in 2020. Aligned sustainability disclosures with international frameworks such as IIRC’s International Framework and GRI Standards.

Climate Goals & Targets

Environmental Challenges

• Reducing GHG emissions while maintaining operations.

Mitigation Strategies

• Employing Life Cycle Assessment (LCA) methodology, pursuing low-carbon businesses, implementing a 'Measure, Reduce, and Offset' strategy for GHG emissions, and developing a detailed roadmap for short and mid-term sustainability targets.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: IIRC’s International Framework, GRI Standards, World Economic Forum’s Stakeholder Capitalism Metrics (future alignment), TCFD recommendations (future alignment)

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Seven of the 17 UN SDGs are prioritized, aligning with PETRONAS' business strategies.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Nature and Biodiversity
• Safety Management
• Human Rights
• Employee Attraction, Retention and Development
• Health and Well-being
• Corporate Governance
• Anti-Bribery and Corruption
• Lower Carbon and Energy Transition Business
• Economic Contribution
• Sustainable Supply Chain
• Innovation and Technology
• Circular Economy

Environmental Achievements

• 10.86% reduction in Scope 1 and Scope 2 GHG emissions from 2019 (Malaysia operations, operational control approach)
• 8.49% reduction in Scope 1 and Scope 2 GHG emissions from 2019 (equity share approach)
• 20% reduction in flaring and venting emissions in Malaysia operated assets, including four fields achieving Zero Routine Venting of Hydrocarbon
• Estimated 49.88% reduction in absolute methane emissions from PETRONAS Groupwide natural gas value chain since 2019
• Recycled 63,133 tonnes of hazardous waste from Malaysia operations (77% of total waste generated)
• PETRONAS Syntium Bag-In-Box (BIB) reduced plastic quantity up to 92% compared to traditional 20-litre packs

Social Achievements

• 100% completion of Human Rights compliance assessment for 22 high-risk contractors
• 100% grievance cases closed in 2022
• 81% of employees completed Human Rights Management e-learning module
• 5,210 new hires
• Employees spent an average of 39.1 hours on training
• RM264 million invested in training and development
• 33 MIND-A-CARE facilitators and 169 MIND-A-CARE ambassadors trained
• Upskilled 885 leaders on psychological safety
• 99.8% primary COVID-19 vaccine and booster uptake
• Close to RM900 million invested for Social Impact activations, benefitting over 1.5 million people

Governance Achievements

• Established extensive Board onboarding programme for new Directors on sustainability
• Broadened Board’s engagement and oversight of sustainability-related matters
• PETRONAS’ Executive Leadership Team signed the “Ikrar Bebas Rasuah” (Corruption-Free-Pledge)
• Published the PETRONAS Organisational Anti-Corruption Plan 2022-2023

Climate Goals & Targets

Environmental Challenges

• Geopolitical instability and the Russia-Ukraine conflict impacting commodity prices and supply chains
• Supply chain disruptions due to the lingering effects of the COVID-19 pandemic
• Rising inflation and potential global economic slowdown
• Increased scrutiny on ESG performance and climate change mitigation
• Talent competition and the need for upskilling/reskilling in the energy transition
• HSE incidents resulting in loss of life

Mitigation Strategies

• Prudent financial management and disciplined capital allocation
• Portfolio high-grading and diversification into new energy transition businesses
• Strengthening operational excellence and commercial agility
• Investing in decarbonisation efforts and cleaner energy solutions
• Implementing robust HSE and security management systems
• Investing in employee training and development
• Strengthening supply chain resilience through vendor development and alternative sourcing

Supply Chain Management

Supplier Audits: 100% for 22 high-risk contractors

Responsible Procurement

• PETRONAS Contractors Code of Conduct on Human Rights
• Sustainability awareness programmes for vendors

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Flooding
• Sea level rise
• Water shortages
• Intense precipitation

Transition Risks

• Changes in oil and gas pricing/margins
• Carbon pricing
• Increased regulatory pressure
• Changes in consumer preferences

Opportunities

• Growth in renewable energy, hydrogen, and green mobility
• Development of CCS technology
• Opportunities in specialty chemicals and biofuels

Reporting Standards

Frameworks Used: International Integrated Reporting Council (IIRC) Framework, GRI Standards, World Economic Forum’s Stakeholder Capitalism Metrics, Task Force on Climate-Related Financial Disclosures (TCFD)

Third-party Assurance: KPMG PLT (financial information); Bureau Veritas (M) Sdn Bhd (PETRONAS Contractors Code of Conduct on Human Rights)

UN Sustainable Development Goals

• 7 (Affordable and Clean Energy)
• 9 (Industry, Innovation and Infrastructure)
• 13 (Climate Action)

Initiatives contribute to these goals through various programs and investments

Sustainable Products & Innovation

• PETRONAS Syntium with CoolTech+™
• PETRONAS Iona range of e-fluids
• Bio-MEG
• Graphene-based paint additive
• Bio-polymer coated fertilizer
• Sustainable Aviation Fuel (SAF)

Awards & Recognition

• Numerous awards and recognitions across various categories (detailed in the report)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Greenhouse Gas Emissions
• Waste Management
• Air Emissions
• Water Management
• Oil Spill Prevention
• Decommissioning
• Nature and Biodiversity
• Health and Safety
• Human Rights
• Supply Chain Management
• Product Stewardship
• Talent Development
• Employee Well-being
• Integrity
• Community Engagement

Environmental Achievements

• Reduced GHG emissions from Malaysia operations by 2% compared to 2022 (45.16 million tonnes CO2e)
• Groupwide operational control GHG emissions dropped by 0.8% from 2022
• Equity share emissions dropped by 2.85% from 2022
• Achieved 58% reduction in methane emissions from 2019 levels in PETRONAS Groupwide natural gas value chain
• Received Oil & Gas Methane Partnership 2.0 (OGMP 2.0) Gold Standard on methane pathway
• Completed GHG emission reduction projects contributing to 1.8 million tonnes CO2e per year reduction
• Reduced 19.9 million tonnes CO2e of GHG emissions per year from operations since 2013
• 72% reduction in GHG emissions from hydrocarbon venting from 2019 to 2023
• Reduced continuous venting by implementing zero continuous venting requirement
• 80% weight average reduction in hazardous waste through carbonisation technology in MRCSB
• Eliminated approximately 540,000 pieces per year of food packaging single-use plastics for offices in Kuala Lumpur
• Recovered 140 tonnes of low-quality process condensate through water circularity practices in Project Rhea
• Achieved 85% water recovery rate in Project Rhea, providing 105 cubic meters of treated water daily
• Completed Water Availability Risk Assessment for PETRONAS assets in Gurun, Kedah and Gebeng, Pahang
• Converted scrap tubulars into artificial reef structures in Tubular-to-Reef pilot project
• Completed plug and abandonment for 45 wells and decommissioning for six facilities
• Reused Tanjong Baram topsides and Kikeh’s subsea x-mas tree for other projects

Social Achievements

• 18% reduction in Lost Time Injury (LTI) cases
• 10% reduction in Total Recordable Cases (TRC)
• 33% decrease in major and minor fires
• Walk4Trees Challenge surpassed target of four billion steps, leading to planting of 20,000 trees
• Successfully developed 290 mental health first aiders
• Implemented Individualised Coaching for Resilience Enhancement (i-C4RE) benefiting 417 employees
• Verified and inspected 317 food suppliers to ensure compliance with Food and Water Safety standards
• Successfully rolled out the new Fatigue Management System mobile app
• Completed 15 out of 16 planned Social Risk Assessments
• 100% of grievance cases closed
• Zero incidents of non-compliance with human rights regulations
• Upskilled 21 Petroleum Agreement Contractors members on Social Risk Assessment
• Provided guidance and training on the Contractors Code of Conduct on Human Rights (CoCHR) to 100% of Group Procurement Sustainable Supply Chain team personnel
• Completed 100% of CoCHR assessment for 2023
• Increased CoCHR Compliance Assessments by 173% to 60 assessments
• Organised two SME Sustainability Series events with 581 participants
• Facilitated engagements with Bank Negara Malaysia and other banks on Green Transition Financing
• Successfully gathered over 1,000 industry players at OGSE Partners Day 2023 (Kuala Lumpur)
• Enabled vendors to test and commercialise their technologies through Sandbox Offerings
• Partnered with MPRC on the MPRC OGSE Development Grant
• Onboarded 10 venture teams for Cohort 2 to the Accelerate phase in PING23 Sdn Bhd

Governance Achievements

• Board actively involved in climate-related matters, reviewing risk profiles and business plans quarterly
• Approved long-term incentive plan for senior leadership linked to Net Zero Carbon Emissions by 2050 Pathway
• Approved internal policy on PETRONAS Commitment to Net Zero Carbon Emissions by 2050 and PETRONAS Position on Nature and Biodiversity
• Strengthened reporting practices aligned with TCFD recommendations and CDP disclosure platform
• Achieved ISO/IEC 27001 certification for PETRONAS Digital Sdn Bhd
• Implemented revised Standardised HSE Accountability and Behaviour Reinforcement Guideline
• Established the Organisational Learning From Incidents portal
• Completed 100% of structured assurance (Document Review Audit and Adequacy Audit) planned in 2023
• Certified a cumulative total of 38 Plant Management System Qualified Person (PMSQP)
• Completed Industry Code of Practice for Plant Management System (ICOP PMS)
• Achieved 75% readiness for Self-Regulated Certification for six operating units
• Enhanced ethical guidelines and Employee Declarations, aligning with CoBE updates
• Implemented Declaration of Asset via myAsset platform with nearly 100% compliance
• Conducted 29 engagement sessions with trade unions

Climate Goals & Targets

Environmental Challenges

• Climate-related market risk (volatile commodity prices and demand fluctuations)
• Climate-related compliance risk (adapting to emerging regulations and policies)
• Climate-related reputation risk (scrutiny of sustainability efforts)
• Physical risks from climate change (extreme weather events, sea level rise, water shortages)
• Complexity of Scope 3 emissions reporting (data availability and intercompany arrangements)
• Limited waste recycling or recovery facilities in some international operations
• Challenges in oil spill prevention (pipe leaks)
• Cyber security threats (increasing digitalisation and interconnected systems)
• Human rights risks (labour and working conditions, community well-being, supply chain)
• Ensuring ethical and sustainable supply chains

Mitigation Strategies

• Continuous monitoring of market risks and adaptation to changing energy demand
• Proactive management of transition risks through the PETRONAS Energy Transition Strategy
• Continuous communication and stakeholder engagement to build trust
• Proactive mitigations for physical risks included in asset design and operations
• Continuous efforts to strengthen GHG emissions quantification, measurement and disclosure
• Collaboration with equity partners to obtain production data
• Upskilling personnel in GHG emissions management
• Progressive approach to measure, report and understand Scope 3 emissions
• Collaboration with authorities and stakeholders to improve waste management
• Implementation of spill prevention procedures and Digi-FIT
• Building solid capabilities to identify, detect and protect against cyber threats
• Implementing governance and incident response protocols
• Establishing standards and due diligence guidelines for human rights
• Implementing the Contractor Code of Conduct on Human Rights (CoCHR)
• Supporting and empowering suppliers, including SMEs
• Implementing rigorous processes to ensure compliance with human rights standards
• Leveraging relationships to promote good practices
• Conducting comprehensive assessments of vendors

Supply Chain Management

Supplier Audits: 1,008 contractors surveyed for human rights exposure; 63 high-risk contractors identified for targeted intervention; 60 CoCHR compliance assessments completed

Responsible Procurement

• Contractor Code of Conduct on Human Rights (CoCHR)
• SME Sustainability Series
• Green Financing
• Vendor Development Programme (VDP)
• Road to Bursa (R2B)
• Technology and Innovation Adoption (TITAN) programmes

Climate-Related Risks & Opportunities

Physical Risks

• Extreme precipitation
• Lightning
• Drought
• Heat wave
• Storm surge
• Fluvial and pluvial floods
• Rise in sea levels and average global temperature
• Water shortages

Transition Risks

• Climate-related market risk
• Climate-related compliance risk
• Climate-related reputation risk

Opportunities

• Renewable energy
• Hydrogen
• Green mobility

Reporting Standards

Frameworks Used: Greenhouse Gas Protocol, GRI Standards, TCFD, CDP, OGMP 2.0, Ipieca Guidelines, API Compendium, UNEP OGMP 2.0 Reporting Framework, World Bank/IFC EHS Guidelines, WRI Aqueduct Water Stress Atlas, ISO 14001:2015, ISO 45000:2018, ISO 14064-1-2018, ISO 14064-2-2019, ISO 14064-3:2019, ISO 14040/44, ISO 14067, OECD Guidelines for the Testing of Chemicals, UN’s Globally Harmonised System of Classification and Labelling of Chemicals

Certifications: ISO 14064-1:2018, ISO 14064-2:2019, ISO 14064-3:2019, ISO/IEC 27001

Third-party Assurance: LRQA Limited

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 13 (Climate action)
• Goal 15 (Life on land)
• Goal 17 (Partnerships for the goals)

Various initiatives contribute to these goals through emissions reduction, community development, education, and sustainable practices.

Sustainable Products & Innovation

• Sustainable Aviation Fuel
• Advanced Sustainable Fuel in Formula One
• Used Cooking Oil
• Electric Vehicle Charging Expansions
• Product Line Enhancement
• Race2Decarbonise
• Developing Solutions to Improve Our Emissions Footprint across the Value Chain

Awards & Recognition

• ASEAN Green Initiative (Walk4Trees programme)
• Bronze Award for Excellence in In-House Talent Pipeline Strategy (HR Excellence Awards 2023)
• Gold Award for Excellence in Digital Transformation (HR Excellence Awards 2023)
• Silver Award for Excellence in Hybrid Working (HR Excellence Awards 2023)
• Silver Award for HR Leader of the Year (Farehana Hanapiah, HR Excellence Awards 2023)
• Bronze Award for Excellence in Leadership Development (HR Excellence Awards 2023)
• Gold Award for Best Development Programme for Frontline Leaders (Brandon Hall Group HCM Excellence Award 2023)
• Bronze Award for Best Hybrid Learning Programme (Brandon Hall Group HCM Excellence Award 2023)
• Best Use of Games or Simulations for Learning (Brandon Hall Group HCM Excellence Award 2023)
• Bronze Award for the Entertainment Category (Putra Brand Awards)
• MiSHA Golden Awards on Occupational Safety and Health Principle of Prevention (OSHPoP) (MiSHA National Excellence Award 2023)
• “Largest Participation in a Robotic Interactive Learning Event” (Malaysia Book of Records)
• “Most Participants in a Science Themed Drama Competition” (Malaysia Book of Records)
• The Malaysia Book of Records on the deployment of the first artificial reefs using concrete structures and a decommissioned vessel