Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Health and Safety
• Employee Engagement
• Diversity and Inclusion
• Governance
• Community Relations
• Business Ethics
• Human Rights

Environmental Achievements

• Reduced greenhouse gas (GHG) intensity of portfolio by 9% to 149 tonnes of CO2e per thousand tonnes of production (from 164 in 2018)
• Improved energy efficiency at North Sea assets (e.g., Tolmount development designed for minimal emissions, wave-powered device at Huntington field)
• Revised Sea Lion project EIA to reduce environmental footprint (direct offloading of crude, flare recovery mechanism, minimized lighting and noise)

Social Achievements

• Reduced Total Recordable Injury Rate (TRIR) to 1.04 (from 2.65 in 2018)
• Launched Global Workforce Engagement in HSES survey to identify and address gaps in HSES engagement and culture
• Launched new ‘Staff Forum’ initiative to enhance two-way communication between employees and management
• Rolled out first phase of new Diversity and Inclusion roadmap
• Addressed outcomes of 2018 employee engagement survey through action plans across corporate functions and business units
• US$0.68 million spent on community investment projects

Governance Achievements

• Integrated climate change into Executive Directors’ Annual Bonus framework (effective from 2020)
• Updated corporate investment guidelines to integrate climate change analysis into investment decision-making processes
• Implemented several strategic initiatives to address outcomes of 2018 independent organisational review (improved Business Management System, strengthened Group technical functions, new contract management plans, improved employee development)

Climate Goals & Targets

Environmental Challenges

• Volatile macro environment highlighting the importance of sustainable free cash flow positivity
• Increasing focus on ESG performance and corporate purpose
• Climate change risks (physical and transitional)
• Resource nationalism
• Ageing fields and infrastructure in the UKCS
• Impact of volatile oil and gas prices
• Sharply reduced investment in recent years
• Significant decommissioning liabilities

Mitigation Strategies

• New Climate Change Policy committing to net zero Scope 1 and 2 GHG emissions for 100% of operated oil and gas facilities by 2030
• New Climate Change Strategy with 'Low Carbon by Design' and 'Carbon Neutral by Commitment' workstreams
• Asset-by-asset review to identify and prioritize new emissions reduction projects
• Integration of carbon pricing and scenario analysis into decision-making
• Proactive collaboration with joint venture partners and other operators to share knowledge and rationalise decommissioning programmes
• Application of innovative technological and engineering solutions to minimise HSE risks and reduce costs during decommissioning
• Continued focus on sustainable cost reduction efforts within supply chains
• Transfer of staff to new roles where possible to avoid redundancy

Supply Chain Management

Supplier Audits: 97% of new material contracts subject to Supply Chain Contractor Due Diligence Process in 2019

Responsible Procurement

• HSES assessments for prospective contractors
• Inclusion of HSES and human rights obligations in major contracts
• Monitoring of contractor HSES performance
• Implementation of SCIMITAR contract management system

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Long-term sea level rises

Transition Risks

• Reputational risks
• Legal risks
• Technical risks
• Impact of volatile oil and gas prices
• Significant decommissioning liabilities

Opportunities

• Improving energy efficiency
• Investing in Best Available Technology (BAT)

Reporting Standards

Frameworks Used: GRI Standards

Certifications: ISO 14001, OHSAS 18001 (transitioning to ISO 45001)

Third-party Assurance: Independent third party

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 13 (Climate action)

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Finalist in D&I category of 2019 OGUK Awards
• Finalist in Energy Transition category of 2019 OGUK Awards
• Home for Good project received Social Integration Award at Team London Awards 2018

Environmental Metrics

ESG Focus Areas

• Climate change
• Safety
• Community Investment
• Diversity & Inclusion

Environmental Achievements

• Reduced annual absolute operated-asset CO2 emissions by 77,700 tonnes, achieving total gross operated CO2 emissions of 899,152 tonnes against a target of 950,000 tonnes. Improved carbon intensity of operated production to 19.1 tCO2/mboe (2019: 21.3 tCO2/mboe).
• Submitted licence applications for storing CO2 in depleted Viking and Victor gas reservoirs.

Social Achievements

• Maintained a good safety culture with half the number of incidents compared to 2019.
• Donations to charities close to operations, including Aberdeen Cyrenians, Maggie’s Aberdeen, Charlie House, Centrepoint London, Evelina London, and the Red Cross in Oslo. Donation to NHS Grampian for COVID-19 testing equipment.
• Workplace wellbeing programme focusing on physical, financial, social and mental wellbeing.

Governance Achievements

• Incorporated carbon emission incentives into senior debt facility and annual performance scorecard, tied to emission reduction progress.
• Implemented a Compliance Programme, awareness programmes, leadership reviews and initiatives.

Climate Goals & Targets

Environmental Challenges

• Coronavirus pandemic impacting operations, leading to suspension of operated drilling for six months and reduced offshore activities.
• Commodity price collapse impacting financial performance and leading to asset and goodwill impairments.
• Unplanned shutdowns due to the lack of key staff as a result of the coronavirus, leading to asset integrity issues or equipment failure.

Mitigation Strategies

• Mobilised crisis and business continuity teams; implemented barrier approach to prevent virus spread offshore; suspended operated drilling; deferred summer shutdowns; strong commodity hedge programme; reduced capital and operating expenditure; maintained safety-critical work.

Supply Chain Management

Climate-Related Risks & Opportunities

Transition Risks

• Increased climate change policies, legislation, and regulation; increased costs; limited investment capital; accelerated cessation of production.

Opportunities

• Carbon capture and storage; hydrogen production; low-carbon power; electrification of assets.

Environmental Metrics

ESG Focus Areas

• Safety
• Climate Change and Energy Transition
• Value Generation and Distribution
• Diversity, Equity and Inclusion
• Governance

Environmental Achievements

• Delivered emissions 6% under target through improvements in operational efficiency and flaring, and offset >25% of emissions.
• Secured 1.2 million tonnes of carbon offsets (forestry conservation and landfill gas capture).

Social Achievements

• Launched Diversity, Equity & Inclusion Policy.
• Announced annual dividend of $200 million.
• Donated $1.1 million to charities and community groups.

Governance Achievements

• Established a new, diverse Board of Directors.
• Published new Climate Change Policy and Tax Policy.
• Implemented Group-wide ESG and other policies.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic.
• Operational challenges.
• Volatile market.
• Transitional climate risks (shifts in demand for fossil fuels, regulatory changes).
• Physical climate risks (extreme weather events).

Mitigation Strategies

• Proactive steps to protect employees, suppliers, and local communities from COVID-19.
• Net Zero strategy for Scope 1 and 2 emissions by 2035 (including emissions reduction and offsetting).
• Exploration of Carbon Capture and Storage (CCS) and offshore electrification.
• Environmental Hopper process to identify and implement emissions reduction projects.
• Climate-related risks managed within Harbour’s risk management framework.

Supply Chain Management

Responsible Procurement

• HSES assessment of new contractors.
• Supply Chain Contractor Due Diligence Process (assessing human rights, labor rights, corruption risks).

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Long-term sea-level rises

Transition Risks

• Shifts in demand for fossil fuels
• Reputational, legal, and technological risks
• New climate change regulations
• Supply chain challenges

Opportunities

• CCS
• Offshore electrification
• Repurposing of assets

Reporting Standards

Frameworks Used: GRI Standards Core Option, TCFD, SASB

Third-party Assurance: Intertek Assuris (limited assurance)

Environmental Metrics

ESG Focus Areas

• Safety
• Climate Change
• Society
• Governance

Environmental Achievements

• Reduced Total Recordable Injury Rate (TRIR) by 41% to 0.75
• Made progress on Viking carbon capture and storage project
• Invested $292 million in energy transition activities (decommissioning, offsetting, emissions reduction projects, and CCS)
• Reduced unplanned hydrocarbon released to sea to 0.01 tonnes (from 0.8 tonnes in 2021)
• Achieved GHG intensity of 21 kgCO2e/boe

Social Achievements

• Generated $5.5 billion in economic value
• 84% of employees and contractors participated in the first global engagement survey
• Made a cost-of-living payment to all UK employees and core contractors
• Donated $1.5 million to charities
• Appointed a global head of diversity, equity and inclusion

Governance Achievements

• Zero incidents of breach of the Code of Conduct
• 63% of new contracts were made with local suppliers
• Zero incidents of violation of applicable environmental regulations
• Integrated standards, policies, procedures, and systems into a single governance framework

Climate Goals & Targets

Environmental Challenges

• Increasing number of high potential incidents in the first half of the year
• Impact of the UK Energy Profits Levy on the value of shares
• Complying with EU and UK sanctions due to Russia's invasion of Ukraine
• Increased threat landscape and intrusion attempts in cybersecurity

Mitigation Strategies

• Launched a 'Back to Basics' safety campaign
• Announced shareholder distributions totaling $600 million in dividends and buybacks
• Matured risk management system and processes
• Enhanced cyber and information security capabilities, including increased audits, exercises, and training

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Code of Conduct
• Supplier sustainability requirements
• HSES assessment of new contractors

Climate-Related Risks & Opportunities

Physical Risks

• Storms and high winds
• Extreme cold
• River flooding
• Extreme rainfall flooding
• Coastal flooding
• Wildfires
• Landslides
• Extreme heat
• Water stress and drought

Transition Risks

• Carbon pricing
• Policy incentives and emerging regulation curtailing future fossil fuel demand
• Reduced customer demand for fossil fuels
• Limitations on access to capital or increase in cost of capital

Opportunities

• CCS
• Hydrogen
• Use of lower-emission sources of energy (electrification)

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC

Certifications: ISO 14001, ISO 45001

Third-party Assurance: ERM Certification & Verification Services Limited

UN Sustainable Development Goals

• Goal 3 (Good Health and Well-being)
• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 13 (Climate Action)

Initiatives contributing to these goals are described throughout the report

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• IChemE Training and Development Award

Environmental Metrics

ESG Focus Areas

• Safety
• Governance
• Social
• Climate Change
• Environment

Environmental Achievements

• Reduced flaring by 7% to 47k tonnes compared to 51k tonnes in 2022.
• Reduced operational emissions by 54 ktCO2e through emissions reduction projects.

Social Achievements

• Improved safety record with reduced TRIR, zero LTIR and zero serious (Tier 1 and 2) process safety events.
• Completed UK organisation review and formed new strategic supply chain partnerships.
• Embedded a new, scalable enterprise management system into our business.
• Charitable donations totalled $1 million.

Governance Achievements

• Zero substantiated allegations of wrongdoing.
• No significant fines or non-monetary sanctions for legal or regulatory breaches.
• Successfully amended and extended RBL facility.

Climate Goals & Targets

Environmental Challenges

• Lower production volumes impacting operating costs and GHG intensity.
• Uncertainty caused by the UK organisation review impacting employee engagement.
• Energy Profits Levy (EPL) impacting cash flow, debt availability, and share price.
• Fiscal uncertainty in the UK reinforcing the importance of international diversification.
• Supply chain disruptions due to contractors refocusing on energy transition activities or other geographies.

Mitigation Strategies

• Active management of cost base and leveraging scale in the UK.
• Streamlined UK organisation and standardised operating practices.
• Investment in international growth opportunities in Mexico and Indonesia.
• Hedging strategy to support predictable cash flows.
• Strategic approach to supply chain management, forming long-term strategic supplier partnerships and reducing the overall number of suppliers.

Supply Chain Management

Supplier Audits: 69 second-line audits across operational sites; over 6,000 first-line audits and field verifications.

Responsible Procurement

• HSES assessment of new contractors; seven key performance indicators used to manage contractors; Contractor Due Diligence Process screening for human rights, labour rights, corruption, and financial and business ethics risks.

Climate-Related Risks & Opportunities

Physical Risks

• Storms and high winds
• Extreme heat
• Coastal/extreme rainfall flooding

Transition Risks

• Carbon pricing
• Policy incentives and regulation curtailing fossil fuel demand
• Reduced customer demand
• Limitations on access to capital

Opportunities

• CCS
• Hydrogen
• Electrification

Reporting Standards

Frameworks Used: GRI 2021 and Oil and Gas supplement, TCFD, SASB Oil & Gas Exploration and Production industry standard, CDP, UN Sustainable Development Goals (SDGs), UN Global Compact (UNGC)

Certifications: ISO 14001, ISO 45001

Third-party Assurance: Ernst & Young LLP (EY)

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 13 (Climate action)

Supporting the UN Sustainable Development Goals through management practices and performance; commitment to net zero emissions; investment in CCS projects.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Offshore Energy UK’s Apprentice of the Year Award
• Offshore Energy UK Equality, Diversity and Inclusion Award
• Green classification (Indonesia)