Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate change
• Energy consumption
• Environmental regulation
• Resource scarcity
• Human rights
• Labor practices
• Worker welfare
• In-country value
• Diversity & Inclusion
• Ethical business practices
• Compliance

Environmental Achievements

• Improved Carbon Disclosure Project (CDP) rating to 'B'
• Reduced GHG emission intensity (although absolute emissions increased in some segments due to asset divestments and increased diesel consumption)
• Reduced recordable spill volume by 45%
• Implemented 'Estidama' sustainability principles in Al Taweelah Alumina Refinery project, reducing energy consumption by 12% and potable water consumption by 54%
• 80% of structural steel procured with recycled content in Al Taweelah Alumina Refinery project
• Implemented circular economy initiatives, reusing surplus construction materials on Khazzan site in Oman

Social Achievements

• Launched Petrofac Workforce Forum, engaging employees directly with Board directors and senior management
• Improved employee engagement survey results (PetroVoices)
• Launched a new global bonus accrual framework and extended eligibility for the Performance Share Plan
• Introduced a programme of new training and career development initiatives
• Recruited 165 graduates in 2019, 46% of whom were women
• Supported the SmartReading programme in the UAE, improving literacy skills for construction workers
• Social investments of US$2.5 million
• Supported municipalities in Tabasco State (Mexico) to establish and fund their own Municipal Development Plans

Governance Achievements

• Revised Enterprise Risk Management policy, standard and supporting procedures
• Established links with business planning to enable establishment, tracking and reporting of risk appetite measures
• Embedded an emerging risk identification process within the business planning cycle
• Updated Code of Conduct, launched in January 2020
• Restructured the compliance team, including new appointments in Trade Compliance and Compliance Risk Management
• Implemented an online screening system to identify high-risk relationships in supplier due diligence
• Improved investigations process using digital tools, reducing time from notification to resolution

Climate Goals & Targets

Environmental Challenges

• Low order intake due to clients' capital discipline, increased competition, and the impact of the Serious Fraud Office (SFO) inquiry
• Adverse geopolitical changes in key geographies (Middle East and North Africa)
• Failure to deliver strategic initiatives
• Poor operational and project performance
• HSSEIA incidents
• Insufficient IT resilience
• Loss of financial capacity
• Misstatement of financial information
• Non-compliance with laws, regulations, and ethical standards
• Inadequate leadership and talent management

Mitigation Strategies

• Focus on best-in-class delivery, cost reduction, and digital technologies to maintain competitiveness
• Diversification into new geographies and adjacent sectors
• Stage-gate process and Group-level steering committee for strategic initiatives
• Detailed execution strategies and operational reviews to manage project risks
• Group-wide Safety Improvement Plan, enhanced business continuity plans, and crisis management training
• Group-wide Information/cyber security programme and cloud strategy to maintain IT resilience
• Conservative and flexible funding strategy, robust across a range of business plan scenarios
• Financial Control Framework to ensure adequate controls are identified, implemented, and monitored
• Group-level Compliance Programme, including updated Code of Conduct, compliance training, and monitoring programmes
• Organisational restructuring, succession planning, and employee engagement initiatives to improve leadership and talent management

Supply Chain Management

Supplier Audits: 7 project labour rights audits

Responsible Procurement

• ICV programmes to maximise support of local supply chains
• Labour Rights and Worker Welfare Standards
• Due diligence screening of third parties

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Energy transition

Opportunities

• Opportunities in renewable energy infrastructure, particularly offshore wind

Reporting Standards

Frameworks Used: GRI G4 (core)

Certifications: Null

Third-party Assurance: Ricardo UK

UN Sustainable Development Goals

• SDG 7
• SDG 8
• SDG 12
• SDG 13

Petrofac's initiatives contribute to these goals through energy transition strategies, ICV programmes, circular economy initiatives, and GHG emission reduction targets.

Sustainable Products & Innovation

• Petrolytics™ (predictive maintenance analytics service)

Awards & Recognition

• Best private sector oil and gas company 2019 for Emiratisation by the UAE’s Ministry of Human Resources and Emiratisation (MOHRE)
• Al Roya 2019 Business Awards in Oman (Best In-Country Value (ICV) Project for Salalah LPG project)
• Middle East Enterprise of the year by EC-Council at the 2019 CISO Summit & Awards

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity and Inclusion
• Ethical Conduct
• Safety
• In-Country Value
• Human Rights

Environmental Achievements

• Launched a new sustainability strategy with a commitment to reduce Scope 1 and 2 emissions to Net Zero by 2030 (EPS by 2025).

Social Achievements

• Improved employee engagement scores in PetroVoices survey (85% to 87%).
• Increased the number of women in senior roles from 6.3% to 18.7%.

Governance Achievements

• Launched a revised Code of Conduct.
• Improved the Speak Up tool for reporting ethical concerns.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic significantly impacted operational performance and market conditions.
• Deterioration in safety performance, including two fatalities.
• Ongoing Serious Fraud Office (SFO) investigation.

Mitigation Strategies

• Implemented a Group-wide COVID-19 response programme.
• Implemented cost-cutting measures (over US$140 million in 2020, targeting over US$100 million more in 2021).
• Launched a Safety Back to Basics campaign.
• Enhanced compliance function and improved Speak Up tool.

Supply Chain Management

Supplier Audits: 100% of vendors and suppliers screened against human rights criteria.

Responsible Procurement

• Code of Conduct
• Labour Rights and Worker Welfare Standards

Climate-Related Risks & Opportunities

Opportunities

• Helping clients achieve their low-carbon ambitions.
• Pursuing opportunities in new energies.

Reporting Standards

Frameworks Used: UN Global Compact, UN Sustainable Development Goals, Task Force on Climate-Related Financial Disclosures (TCFD)

Third-party Assurance: Ricardo UK

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 10 (Reduced inequalities)
• Goal 13 (Climate action)
• Goal 17 (Partnerships for the goals)

Petrofac's initiatives contribute to these goals through various environmental, social, and governance programs.

Awards & Recognition

• Best Practice Award in the ‘Omani Products and Services’ category at the Oman Society for Petroleum Services (OPAL) Awards.

Environmental Metrics

ESG Focus Areas

• Climate change (Net Zero)
• Climate resilience (energy transition)
• Health and safety
• Diversity and inclusion
• Human rights
• In-country value
• Ethical behaviour and compliance
• Transparency, governance and disclosure

Environmental Achievements

• Reduced flaring intensity by 49% in Block PM304, Malaysia.
• Phased out single-use plastics across permanent offices.
• Switched over 90% of UK office energy contracts to renewable energy.
• Zero reportable spills.

Social Achievements

• Increased participation rate in PetroVoices employee engagement survey and strong engagement scores.
• Reduction in number and frequency of workplace injuries.
• Established two new employee network groups.
• In-country value (ICV) action plans implemented in all key geographies.
• US$345 million spent on local goods and services.

Governance Achievements

• Continued embedding of a compliance ethos across the Group.
• Improvements in the quality of Speak Up reports.
• Enhanced processes and controls through a new cloud-based due diligence platform.
• Governance practices ranked as ‘leading those of peers’ by MSCI.

Climate Goals & Targets

Environmental Challenges

• Further unrecovered cost overruns in legacy portfolio.
• Adverse commercial settlements.
• Cost increases on the Thai Oil Clean Fuels joint venture contract.
• Delays in the award of new contracts.
• Supply chain disruptions.
• Limitations in charging infrastructure for electric vehicles.
• Decarbonisation inertia in critical parts of the supply chain (e.g., steel products).
• Higher voluntary attrition levels (14.3%).

Mitigation Strategies

• Substantially completed a number of projects in legacy E&C portfolio.
• Embedded a single technical services organisation (1tec).
• Maintained bidding discipline.
• Enhanced E&C bids with low-carbon offerings.
• Developed alternative sourcing strategies.
• Implemented gas abatement plans on PM304 to reduce gas flaring.
• Implemented ICV action plans.
• Introduced several new talent acquisition initiatives.
• Proactively contacted former employees to encourage their return.

Supply Chain Management

Supplier Audits: 1,911 suppliers pre-screened for human rights in E&C business unit.

Responsible Procurement

• Code of Conduct
• Labour Rights and Worker Welfare Standard
• Low-carbon supply chain elements codified into vendor management systems.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events disrupting operations.

Transition Risks

• Evolving policy landscape (carbon taxation, emissions legislation).
• Shift to low-carbon economy.
• Changing stakeholder perceptions.

Opportunities

• Growth in offshore wind, CCUS, hydrogen, and waste-to-value markets.
• Increased demand for low-carbon solutions and services.

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC

Certifications: ISO 9001

Third-party Assurance: AA1000 licensed assurance provider

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)

Petrofac's sustainability strategy and initiatives contribute to these goals through decarbonisation efforts, local delivery model, and support for STEM education and community development.

Sustainable Products & Innovation

• Low-carbon service offerings.
• Petrolytics (AI-powered analytics platform).

Awards & Recognition

• Top three EPC companies in Oil & Gas Middle East magazine.
• Equality, Diversity & Inclusion Initiative of the Year award.

Environmental Metrics

ESG Focus Areas

• Climate change and GHG emissions
• Circular economy
• Diversity and inclusion
• Worker welfare
• Human rights
• In-country value
• Process safety
• Responsible governance
• Anti-bribery and corruption
• Ethical conduct

Environmental Achievements

• 13% reduction in Group-wide Scope 1 emissions
• 15% cut in emissions at Malaysian operations
• 22% saving in electricity usage at Sharjah office, UAE
• Switched to 100% green energy in Mumbai office, India
• LEED Green Building certification for Chennai office

Social Achievements

• Exceeded diversity targets (30.5% women in leadership roles)
• Achieved highest ever employee engagement ratings of 88%
• 47% of project spend going to in-country suppliers
• Gold Impact Seal award for delivering on sustainability strategy in the UAE

Governance Achievements

• Strengthened Health, Safety, Environment and Quality (HSEQ) teams
• Improved the quality of Speak Up reports
• Enhanced processes and controls through cloud-based due diligence platform
• ISO 27001:2022 accreditation

Climate Goals & Targets

Environmental Challenges

• Challenges in securing performance guarantees due to market-wide and Company-specific reductions in issuer appetite
• Increased losses on the Thai Oil Clean Fuels project
• Write-downs of receivables to protect cash flows in E&C
• Low activity levels with adverse operating leverage in E&C
• Bad debt provision for a client entering insolvency in Asset Solutions
• Delays to securing guarantees contractually required to deliver contracts awarded in the year
• Fragile financial position requiring a comprehensive financial restructure

Mitigation Strategies

• Initiated a formal review of strategic and financial options
• Welcomed Tareq Kawash as new Group Chief Executive
• Strengthened leadership team, bringing in additional commercial and contractual expertise
• Recalibrating roles and responsibilities to put more emphasis on assurance and executive oversight
• Pursuing a comprehensive balance sheet restructure
• Managing payment obligations and liquidity carefully
• Seeking to delay all but critical payments to creditors

Supply Chain Management

Supplier Audits: 2,401 companies pre-screened for human rights in E&C business unit

Responsible Procurement

• ESG questionnaire for potential suppliers
• TenneT Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Flooding

Transition Risks

• Evolving policy landscape
• Shift to a low-carbon economy
• Changing stakeholder perceptions

Opportunities

• Growth in offshore wind, CCUS, hydrogen, and waste-to-value projects
• Demand for decommissioning services

Reporting Standards

Frameworks Used: GRI, TCFD, UNGC

Certifications: ISO 9001, ISO 27001:2022

Third-party Assurance: AA1000 licensed assurance provider

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 10 (Reduced inequalities)
• Goal 13 (Climate action)
• Goal 17 (Partnerships for the goals)

The report details how Petrofac's initiatives contribute to these goals through various programs and strategies.

Sustainable Products & Innovation

• Emissions forecasting tool
• Low-carbon bid pack

Awards & Recognition

• Gold Impact Seal award (UAE)
• Collaborative Impact Award (India)
• Leader of Excellence award (AUS)
• Employer of Choice award (AUS)