Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• No identified incident of non-compliance with environmental laws and regulations in the regions where CAO conducts its business is reported in 2018.
• Zero incidents relating to significant oil spill in 2018.

Social Achievements

• Zero workplace related fatality or injury for CAO’s employees in 2018.
• No significant incidents of non-compliant products impacting the end customers’ health and safety in 2018.
• Initiated a performance incentive scheme to reward employees who have made special contribution to CAO’s business growth and corporate development in 2018.
• No reported breach of the Group’s Trade Sanctions Policy in 2018.

Governance Achievements

• Enhanced and improved its corporate governance through a comprehensive risk review exercise and conducted company-wide internal governance processes review in 2018.
• No fraud, corruption and bribery incidents reported in 2018.
• Embarked on a comprehensive Standard Operating Processes (“SOPs”) review to identify and enhance its internal oversights measures to improve the Group’s operational processes and internal controls in 2018.

Climate Goals & Targets

Environmental Challenges

• Constantly changing demand and supply dynamics in the PRC such as increased domestic oil production capacity.
• Regulatory changes such as market liberalisation as well as the dynamics of the Chinese economy.
• Rising global demand, the oil and gas sector is facing increasingly stringent environmental laws and regulations.
• Risks of failure to comply with new regulatory requirements in expanding global supply and trading operations and investments across multiple jurisdictions.
• Risks including spillage of oil products during transportation and storage that may have immediate and/or long-term environmental impact on the environment.
• Increasing regulatory requirements at national, regional and international levels as the Group continues to diversify its operations and investments across multiple jurisdictions.
• Failure to mitigate compliance risks would pose reputational risks to the Group and hinder its sustainable growth and development.
• Heightened uncertainty including the US-China trade conflict, US sanctions against Iran, increasing crude output from the United States, Russia and OPEC, as well as credit risks arising from geopolitical conflicts, natural disasters, OPEC negotiations and exchange rate fluctuations.

Mitigation Strategies

• Continuously expand its global jet supply and trading value chain and extend its geographical presence through developing new supply and trade routes and forming new strategic partnerships.
• Diversified into other oil products which contributed to the growth of the Group’s total supply and trading volume.
• Reinforced its portfolio strengths through both geographic expansion, product and customer base diversification.
• Continue to extend its jet fuel supply and trading activities as well as aviation marketing business outside the PRC.
• Further develop and optimise its integrated business model and expand its global supply and trading network to penetrate new markets globally.
• Build on its Safety, Health and Environment (“SHE”) Policy and Guidelines which covers environmental management guidelines with a focus to proactively and responsibly monitor and manage constantly changing environmental compliance requirements.
• Continually strive to foster a safe and environmentally friendly workplace for our stakeholders to ensure our business practices are in compliant with local and international environmental laws and regulations.
• Business units supported by various departments are required to check local environmental laws and regulations before new market entry as part of a thorough due diligence process.
• Adopted an Oil Discharge Prevention and Contingency Plan (“ODPCP”) that enhanced our policies and practices to reduce our environmental impact, and ensures the Group’s compliance with the State of Alaska’s oil spill contingency planning requirements.
• Continuously uphold high levels of corporate governance and undertake strategic initiatives to further enhance compliance and governance across its businesses.
• Continue to stay abreast on any changes of relevant environmental laws and regulations and comply with all relevant laws and regulations to avoid any potential non-compliance incidents and ensure smooth operational efficiency.
• Takes all reasonable steps to prevent pollution by minimising the occurrence of oil spills in its daily operations.
• Put in-place a stringent ship vetting policy with the objective of minimising health, safety and environmental risks.
• Put in-place an Operational Safety Incident Reporting Guidelines for the reporting of operational incidents.
• Put in-place a Crisis Management Plan that includes establishment of an Emergency Response Team (“ERT”) to proactively manage an emergency in a timely and effective manner.
• Continually reviews and improves its global compliance strategy to ensure the Group’s policies, practices, guidelines and internal control systems remain relevant and robust.
• Provide compliance related trainings for the Group’s workforce to maintain a constant level of awareness and vigilance.
• Strengthened the credit risk management team as part of an enhanced global credit risk framework to manage growing uncertainties in the Group’s key markets.
• Conduct deep-dive reviews on high risk counterparties or industry segments, allowing the Group to adopt pre-emptive measures and actions to avert potential credit events.
• Developing in-house accounts receivables monitoring and reporting system for aviation marketing customers to better support the growth of aviation marketing business within the Group.
• Enhancing the credit insurance coverage to better support the Group’s expanding global business activities through mitigation of potential credit losses.
• Actively develop and refine our centralised risk control and support network to facilitate global business growth.

Supply Chain Management

Responsible Procurement

• Ensuring its tendering and procurement process is conducted in an open, unbiased and just manner by following clear and standardised guidelines that are aligned with the Group’s Corporate Values - Fairness, Integrity, Innovation and Transparency.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IIRC Integrated Reporting Framework, GRI Standards

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced paper consumption by 21% and electricity consumption by 6% in 2021 compared to 2020.
• Achieved carbon neutrality for two shipments of imported jet fuel by purchasing carbon credits to offset emissions from ship chartering activities (307 tonnes of GHG emissions reduced).

Social Achievements

• Provided care packages and personal protective equipment to less privileged children and their families during the pandemic.
• Organized workshops on environmental issues (carbon neutrality and net-zero emissions) to raise awareness among employees.
• Maintained zero infection among its workforce in 2021 despite the COVID-19 pandemic through various prevention measures.
• Average training hours per employee exceeded 22 hours.

Governance Achievements

• Implemented a comprehensive system of compliance oversight aligned with the COSO framework.
• Conducted compliance-related online training sessions on anti-bribery and anti-corruption with 100% participation (117 employees).
• Conducted additional compliance training modules on conflicts of interest, information security, anti-money laundering, fraud prevention, and insider trading with 100% participation.
• No serious violations or confirmed incidents of corruption in 2021.

Climate Goals & Targets

Environmental Challenges

• Unpredictable global economy affected by the ongoing COVID-19 pandemic, geopolitical uncertainties, and a difficult market environment.
• Slow recovery of the aviation industry coupled with a fluctuating oil market.
• Increasingly stringent environmental laws and regulations.
• Risks associated with environmental compliance increasing with global business expansion.
• Prevention of oil spills during transportation and storage.

Mitigation Strategies

• Strengthened risk controls and compliance management across global business operations.
• Complied with SHE Policy and Guidelines, including environmental management guidelines.
• Required all business units to include local environmental laws and regulations as part of their due diligence reports.
• Complied with strict compliance to the Chartering and Vessel Audit Management Measures.
• Leveraged on resources and market competitive advantages, built strategic partnerships, and extended its global jet fuel supply and trade supply chain.
• Developed arbitrage jet fuel trading from Asia to Europe and North America.
• Closely monitored all expenses and practiced prudent cost management.

Supply Chain Management

Supplier Audits: Regular credit risk and trade sanction risk checks on counterparties

Responsible Procurement

• Open, fair, and impartial bidding and procurement in accordance with a standardized procurement process.
• Regular updates of eligible counterparties list.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Decline in demand for traditional energy markets (oil, petrochemicals, coal).

Opportunities

• Market development and trading of carbon credits, emission allowances, water access entitlements, and clean energy sources.

Reporting Standards

Frameworks Used: SGX-ST Comply or Explain, IIRC Integrated Reporting, GRI Standards

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Successfully pursued and achieved necessary accreditation for participation in the SAF industry including ISCC CORSIA and ISCC EU.
• Minimized paper consumption by encouraging the adoption of electronic documents.
• Reduced electricity consumption by setting moderate air conditioning temperatures and switching off unused appliances.

Social Achievements

• Provided ample supply of COVID-related health and safety “care kits” to each employee.
• Implemented remote working and split teams’ arrangements to safeguard employee health and safety.
• Engaged in projects benefiting the elderly and underprivileged in society.
• Conducted 2903 training hours for employees (over 19 hours per employee).

Governance Achievements

• Strengthened risk controls and compliance management across global operations.
• Conducted compliance-related online training sessions with 100% participation rate (101 employees).
• Conducted e-learning course modules on various compliance topics with 88% participation rate.
• Maintained a good track record of no major oil spills.

Climate Goals & Targets

Environmental Challenges

• Persistent effects of the COVID-19 pandemic.
• Macroeconomic and geopolitical uncertainties.
• Oil price volatility and high inflation.
• Strict regulation faced by airline customers in terms of GHG emissions reduction.
• Increasingly stringent environmental laws and regulations.
• Risks associated with environmental compliance.
• Complex geopolitical and global economic landscapes.
• Oil price volatility and the development of green energy products.
• Changes in China’s aviation fuel market policies.
• Changes in the supply and trade network structures of jet fuel in China.

Mitigation Strategies

• Exploring new business opportunities in sustainable aviation fuel and carbon credits trading.
• Strengthening risk controls and compliance management.
• Collaborating with suppliers and customers to achieve carbon emissions reduction.
• Monitoring energy consumption and promoting initiatives to reduce it.
• Complying with SHE Policy and Guidelines, including environmental management guidelines.
• Requiring all business units to include local environmental laws and regulations in due diligence reports.
• Strictly complying with Chartering and Vessel Audit Management Measures to prevent oil spills.
• Leveraging resources and market competitive advantages, building strategic partnerships, and extending the global jet fuel supply and trade supply chain.
• Developing arbitrage jet fuel trading from Asia to Europe and North America.
• Expanding aviation marketing networks and securing contracts to supply aviation fuel to airlines.
• Closely monitoring expenses and practicing prudent cost management.
• Adhering to diversification strategy while prioritizing risk and compliance management.
• Actively exploring business opportunities in new energy markets, including biofuel.
• Enhancing infection prevention and control policies.
• Conducting various Group-level and inter-department meetings to discuss infection prevention measures.
• Issuing 7 preventive guidelines and conducting 56 rounds of deep cleaning and disinfection within office premises.
• Procuring and distributing personal protection care kits to all employees.
• Complying with Oil Inspection Policy and Guidelines to ensure oil product quality and safety.
• Continuously enhancing responsiveness in customer service and providing quality products and services.
• Maintaining a diverse and inclusive corporate culture.
• Adhering to fair and non-discriminatory workplace practices.
• Complying with the requirements of the Fair Consideration Framework.
• Conducting a comprehensive review of internal employee selection and recruitment processes.
• Conducting regular credit risk and trade sanction risk checks on counterparties.
• Establishing a jet fuel procurement committee to supervise bidding and procurement procedures.
• Upholding Personal Data Protection Policy.
• Setting up a personal data protection taskforce to monitor policy implementation.
• Developing a comprehensive system of compliance oversight aligned with the COSO framework.
• Regularly reviewing and identifying potential compliance risks.
• Streamlining and optimizing internal policies and management directives.
• Engaging an independent third-party audit firm to conduct internal audits.
• Upholding a zero-tolerance policy towards corruption or bribery.
• Implementing a robust whistleblowing policy.
• Conducting regular reviews and updates of trade-related risk limits.
• Actively developing and refining a centralized risk control and support network.

Supply Chain Management

Responsible Procurement

• Conducting bidding and procurement in an open, fair and impartial manner.
• Regularly updating the list of eligible counterparties.
• Conducting regular credit risk and trade sanction risk checks on counterparties.
• Establishing robust protocols to monitor the procurement bidding process for jet fuel.
• Establishing a jet fuel procurement committee.
• Implementing comprehensive policies and protocols to monitor and control procurements for non-oil products.
• Selecting suppliers with a high level of corporate social responsibility.

Climate-Related Risks & Opportunities

Opportunities

• Growth of the Sustainable Aviation Fuel (“SAF”) industry.

Reporting Standards

Frameworks Used: SGX-ST Comply or Explain requirements, International Integrated Reporting Council’s (IIRC) Integrated Reporting approach, Global Reporting Initiative Standards (GRI) 2021

Environmental Metrics

ESG Focus Areas

• Climate Change Management
• Low Carbon Transition and Carbon Neutrality
• Biodiversity and Ecological Impact
• Diversity and Equal Opportunity
• Health And Safety
• Community Investment and Development
• Sustainable Aviation Fuel
• Sustainable Supply Chain
• Corporate Governance
• Asset Integrity and Critical Incident Management
• Cyber Security and Data Privacy
• Climate Change Strategy

Environmental Achievements

• Renewed ISCC CORSIA and ISCC EU certifications for bio-jet fuel and biodiesel
• Completed a 3,000-ton blended bio-jet fuel trade
• No oil spills or environmental pollution incidents in marine oil transportation
• No reportable pipeline incidents, accident releases, or non-accident releases in storage and transportation

Social Achievements

• Issued internal policies to promote diversity and equal opportunities
• No incidents classified as ‘Major injuries’ or ‘Fatalities’ by the Singapore Ministry of Manpower
• Supported underprivileged children through partnerships and initiatives
• Organized a health lecture and fire drills for employee well-being

Governance Achievements

• Enhanced governance over climate change-related issues
• Maintained a good track record of no serious violations or corruption
• Conducted comprehensive compliance training for all employees
• Revised and updated internal policies and guidelines

Climate Goals & Targets

Environmental Challenges

• Persistently tight labor markets
• Elevated inflation levels
• A heightened interest rate environment
• Disruptions in global supply chains
• Climate change
• Increased market demand for sustainable products
• Regulatory changes (higher carbon pricing, stricter regulations on aviation sector)
• Potential for acute physical risks (cyclones, flooding)
• Transition risks (policy & legal, technology, market, reputation)

Mitigation Strategies

• Developed a sustainability roadmap and implementation plan
• Enhanced governance structure to incorporate roles and responsibilities over sustainability-related issues
• Initiated climate risks identification and assessment
• Established a dedicated sustainable jet fuel trading team
• Incorporated strategic emerging industries and green, low-carbon transformation into the Company’s “14th Five-Year Plan”
• Implemented environmental management practices
• Adhered to SHE Policy and Guidelines
• Implemented robust risk management approaches to prevent potential oil spills
• Conducted annual internal workshops on emergency response and preparedness
• Strengthened network security management
• Updated Personal Data Protection Policy
• Implemented rigorous measures (access controls, encryption, security assessments) to maintain data integrity and confidentiality

Supply Chain Management

Supplier Audits: 5

Responsible Procurement

• Utilizing certification systems recognized by EU or ICAO to assess and manage suppliers
• Developing and updating Sustainable Fuels Management System Manual

Climate-Related Risks & Opportunities

Physical Risks

• Cyclone, intensifying storm and flooding

Transition Risks

• Increased ambition of national decarbonisation strategies
• Increasing carbon taxes and implementation of emissions trading scheme
• Enhanced reporting obligations
• Increased market demand for sustainable products
• Substitution of existing products with lower emissions options, and costs to transition to lower emissions technology

Opportunities

• Development of SAF business
• New energy project investment opportunities

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Certifications: ISCC CORSIA, ISCC EU

Sustainable Products & Innovation

• Sustainable Aviation Fuel (SAF)

Awards & Recognition

• “Most Transparent Company” Award