Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Air Emissions
• Ecological Impact
• Employee Health & Safety
• Anti-Corruption
• Labor Rights
• Human Rights

Environmental Achievements

• Reduced Lost Time Incident Rate (LTIR) from 1.03 in 2018 to 0.68 in 2019.
• 98% of owned and operated vessels have installed ballast water exchange systems, and 53% have installed treatment technology.
• Invested more than 200 million USD in sulphur abatement technology to reduce global SOx emissions.

Social Achievements

• Improved Lost Time Incident Rate (LTIR) from 1.03 in 2018 to 0.68 in 2019.
• No spills during 2019.
• Developed and approved a Ship Recycling Policy.

Governance Achievements

• Initiated the process of enhancing our ESG management system by scoping the development of a digital platform.
• Joined the Maritime Anti-Corruption Network (MACN), Clean Shipping Alliance, and the International Association of Independent Tanker Owners (Intertanko).

Climate Goals & Targets

Environmental Challenges

• Meeting increasingly stringent IMO regulations on emissions (IMO 2020, IMO 2030 strategy).
• Managing ecological risks associated with discharges and potential spills.
• Addressing corruption risks in the shipping industry.

Mitigation Strategies

• Investment in sulphur abatement technology.
• Implementation of efficiency measures (hull and propeller cleaning).
• Development of a digital platform to track vessel fuel efficiency and emissions.
• Adherence to international and local regulations and internal policies.
• Membership in MACN and other industry initiatives.
• Implementation of enterprise-wide anti-corruption and money laundering policies.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Emission regulations

Opportunities

• Improving efficiency and reducing energy consumption.

Reporting Standards

Frameworks Used: SASB, UN Global Compact

Certifications: ISO 9001, ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 13
• SDG 14
• SDG 16

Goals closely tied to our industry and represent material topics which we monitor closely.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Performance

Environmental Achievements

• Fleetwide three-phase program to identify and address potential fuel savings and energy efficiency, targeting up to 10% improvement in fuel efficiency.

Social Achievements

• Not disclosed

Governance Achievements

• Joined Maritime Anti-Corruption Network (MACN), Clean Shipping Alliance, INTERTANKO, and OCIMF. Established an ESG forum with industry affiliates.

Climate Goals & Targets

Environmental Challenges

• Industry challenges requiring joint actions to manage material risks and opportunities.
• Charterers control vessel speed and trade routes, influencing SFL's impact on emissions.

Mitigation Strategies

• Cooperation with stakeholders, including industry and regulatory authorities.
• Continuous dialogue with charterers to find optimal solutions for emission reduction.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Stricter environmental regulations

Opportunities

• Development of energy-efficient products and lower-emission propulsion technologies

Reporting Standards

Frameworks Used: Sustainability-Linked Bond Principles (ICMA)

Certifications: Null

Third-party Assurance: The Governance Group

UN Sustainable Development Goals

• SDG 9, 13, 14, 16

Closely tied to shipping industry and represent material topics.

Sustainable Products & Innovation

• Vessels with Alternative Fuel Source engines (LNG, bio/electro-methane, hydrogen, biodiesel, LPG, ammonia)

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Committed USD 304.5 million towards vessel acquisitions, newbuildings, and retrofits equipped with Alternative Fuel Source engines, exceeding the USD 150 million target set in the Sustainability-Linked Bond Framework.

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ICMA’s Guidelines for Green, Social, Sustainability and Sustainability-Linked Bonds External Reviews, Sustainability-Linked Bond Principles (SLBP)

Third-party Assurance: Position Green Advisory AS

Environmental Metrics

ESG Focus Areas

• Greenhouse gas emissions
• Low carbon energy sources
• Health and safety involving crew
• Corruption risk
• Human rights
• Spills and releases
• Training – compliance training and training onboard (e-based)

Environmental Achievements

• 2.54% year-on-year improvement in Annual Efficiency Ratio (AER) for fleet average CO2 emissions
• Zero spills (excluding two minor spills on jack-up drilling rig Linus)
• 98.3% of vessels had ballast water treatment systems installed
• Reduced particulate matter pollution by 2.6% compared to 2022

Social Achievements

• 0% employee turnover rate for onshore workforce in 2023
• Zero work-related incidents onboard assets
• 100% completion rate on compliance training amongst employees
• Crew payment testing conducted with no significant irregularities detected

Governance Achievements

• 100% of new business partners screened for ESG compliance annually
• Zero monetary losses resulting from any form of corruption
• Successfully placed USD 150 million senior unsecured sustainability-linked bonds

Climate Goals & Targets

Environmental Challenges

• Ongoing geopolitical issues and armed conflicts
• Inclusion of the shipping industry in the EU Emissions Trading Scheme (EU ETS)
• Planned well-to-wake regulations
• Climate-related risks (physical, technological, regulatory, and reputational)
• Human rights risks in shipbuilding, ship repairs, dry-docking, sale of ships, and ship recycling
• Corruption and bribery risks

Mitigation Strategies

• Commitment to complying with EU ETS regulation
• Preparation for the Corporate Sustainability Reporting Directive (CSRD)
• Investment in and maintenance of a modern, energy-efficient fleet
• Decarbonisation projects and upgrades
• Sustainability-linked financing
• Screening of shipyards for human rights impacts
• External testing, spot checks, and on-site visits to business partners
• Strengthened due diligence procedure for potential buyers of second-hand vessels
• Anti-corruption training for employees and key suppliers
• Incorporation of anti-corruption clauses into contracts
• Screening and monitoring of business partners

Supply Chain Management

Supplier Audits: 100% of new business partners screened annually

Responsible Procurement

• Compliance testing and screening of current and potential business partners
• Incorporation of anti-corruption and bribery clauses into contracts
• Monitoring of business partners and beneficial owners

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes (EU ETS, FuelEU Maritime)
• Technological development

Opportunities

• Demand for low-emitting tonnage

Reporting Standards

Frameworks Used: SASB Marine Transportation Standard (2023), GRI Standards

Certifications: ISO 9001, ISO 14001

Third-party Assurance: DNV (Partial assurance – Scope 1 CO2 emissions)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed