Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Zero incidents relating to spills during 2019
• 100% of the fleet implementing ballast water exchange and treatment
• SOx emissions are minor and NOx emissions are top of the class due to a modern fleet and the installation of selective catalytic reactors

Social Achievements

• Zero serious incidents and zero LTIR in 2019
• Initiated the process of moving technical management in-house to improve efficiency and control of operations

Governance Achievements

• Initiated the process of enhancing ESG management system by scoping the development of a digital platform for monitoring, management and reporting of ESG issues
• Became listed on the NYSE in addition to OSE
• Established an Audit Committee which monitors reports and complaints received relating to internal controls and compliance

Climate Goals & Targets

Environmental Challenges

• Climate change and stricter environmental policies affecting the shipping industry
• Ecological risks posed by ballast water loading and unloading
• Corruption in the maritime sector

Mitigation Strategies

• Enhancing the efficiency of ships and utilizing vessels with the latest technology to reduce fuel consumption
• Installing ballast water exchange and treatment technology on all vessels
• Implementing a zero-tolerance approach towards bribery and developing enterprise-wide anti-corruption and money laundering policies
• Joining initiatives such as the Maritime Anti-Corruption Network (MACN), Clean Shipping Alliance and the Society of International Gas Tanker and Terminal Operators (SIGTTO)

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Developing a Supplier Code of Conduct for 2020

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• New regulations on air emissions

Opportunities

• Improved logistics, enhanced hydrodynamic technology, better machinery, and cleaner fuels

Reporting Standards

Frameworks Used: SASB, NASDAQ ESG Reporting Guide 2.0, Euronext Guidelines to issuers for ESG reporting, UN Global Compact

Certifications: Working towards ISO9001/ISO 14001 certification

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 3
• SDG 13
• SDG 14
• SDG 16

SDG 3: Reducing air pollution. SDG 13: Combating climate change. SDG 14: Life below water, monitoring fleet and avoiding spills. SDG 16: Reducing corruption.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate-related risks
• Direct emissions
• Energy mix
• Marine casualties involving crew and assets
• Corruption risk
• Ship recycling
• Spills and releases
• Compensation and remuneration
• Training – compliance training and training on board (e-based)

Environmental Achievements

• Achieved an overall weighted average carbon intensity rating of B under the CII in 2022 (based on DNV verified data).
• Full digitalisation of ship performance and emission data via Veracity platform.
• EEXI compliance achieved.
• CII roadmaps established for each vessel.
• EU ETS readiness.
• Investment in edge computing and digital twins for all vessels.
• Agreement with Arundo for gas management and machine learning to improve efficiency and reduce fuel emissions.
• Zero oil spills or other releases to the environment in 2022.

Social Achievements

• Lost Time Incident Frequency (LTIF) of 0.33 in 2022 (one incident).
• Implementation of the Maritime Partners in Safety Program across the fleet.
• Human Rights Risk Assessment conducted in accordance with the Norwegian Transparency Act.
• Rollout of SayFlex app for seafarers' mental health monitoring.
• Introduction of Bazeport for crew entertainment.
• 100% of employees and management completed e-learning, including a mandatory webinar on insider trading.

Governance Achievements

• Establishment of an ESG Committee in 2022.
• ESG KPI integrated into the company bonus program.
• Strengthening of the Compliance department with the hire of a legal counsel.
• Update of all Flex LNG’s policies and procedures in Q3 2022.
• Full Compliance Risk Assessment conducted to identify and mitigate compliance risks.

Climate Goals & Targets

Environmental Challenges

• Unprecedented extreme weather conditions.
• Shortage of energy supply in Europe in 2022, leading to increased harbour and manoeuvring time, negatively impacting CII.
• Climate change posing physical, technological, regulatory, and reputational risks.
• Sanctions and cybercrime risks.
• Bribery and corruption risks.
• Human rights risks related to shipbuilding, ship repairs, dry-docking, sale of ships, ship recycling, and crew.

Mitigation Strategies

• Close collaboration with governments and stakeholders to develop and implement effective policies and regulations.
• Investments in research and development, infrastructure, and alternative fuels.
• Maintaining a modern, energy-efficient fleet.
• Ongoing monitoring of fleet through IHS Markit’s Maritime Intelligence Risk Suite (MIRS).
• Third-party testing, strict due diligence requirements, monitoring of business partners, and contractual risk mitigation.
• Cyber training and phishing tests.
• Due diligence on business partners, reporting on facilitation payment demands to MACN, anti-corruption and bribery clauses in contracts, and training of employees and key third parties.
• Compliance testing and screening of current and potential business partners.
• Inclusion of audit rights and termination clauses in contracts with business partners.
• Regular and randomized book audits (incl. assessment of wages and working hours), announced and unannounced on-site visits, inspections and interviews with the crew.

Supply Chain Management

Responsible Procurement

• Know Your Business Partner Policy
• Compliance testing and screening of business partners
• Inclusion of audit rights and termination clauses in contracts with business partners

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather causing delays and changes to routes

Transition Risks

• Regulatory changes
• Technological developments

Opportunities

• Continued demand for LNG transportation

Reporting Standards

Frameworks Used: SASB, GRI

Certifications: ISO 9001, ISO 14001

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