Climate Change Data

Environmental Metrics

ESG Focus Areas

• Health and Safety
• Climate and Environment
• People
• Responsible Business Conduct

Environmental Achievements

• Total Recordable Incident Rate (TRIR) of 0.19, the lowest in company history. No major unplanned discharges to the sea from any rigs.
• Reduced CO2 emissions through efficient power generation and fuel consumption. 75% of rigs were ODS free and used green freon.
• Recycled or reused over 1,000 items with an estimated steel content of 1,900 tonnes, saving approximately 3,500 tonnes of CO2.

Social Achievements

• Effectively achieved a fully nationalized workforce in India, Egypt, and Nigeria. 83% of offshore workforce comprised of nationals.
• 80 offshore supervisors promoted in 2019 (62 nationals, 18 expats).
• Low employee turnover due to high national content and local management engagement.

Governance Achievements

• Implemented a comprehensive climate risk review in line with TCFD recommendations.
• Established a rigorous Enterprise Risk Management (ERM) system to identify and assess sustainability risks.
• Adheres to the Norwegian Code of Practice for Corporate Governance and SEC guidelines.

Climate Goals & Targets

Environmental Challenges

• Increasing expectations from investors, lenders, and customers regarding ESG.
• Harsher weather conditions increasing risks of accidents, supply chain disruptions, and downtime.
• Transition risks related to the shift to a low-carbon economy (increased cost of capital, tightening regulations).

Mitigation Strategies

• Initiated a climate risk review aligned with TCFD recommendations and integrated findings into the ERM framework.
• Implemented comprehensive HSE policies, processes, and systems.
• Focus on managing other environmental factors (spills, local pollution). Efforts underway to map emissions, CO2 intensity, and energy transition scenarios.

Supply Chain Management

Supplier Audits: At least 80% of service vendors assessed in 2019.

Responsible Procurement

• Vendor Selection and Review process, including mapping of 24 risks (including ESG risks). Vendor Code of Conduct.

Climate-Related Risks & Opportunities

Physical Risks

• Harsher weather conditions increasing risks of employee accidents, supply chain disruptions, spills, and downtime.

Transition Risks

• Increased cost of capital, tightening industry regulations, disadvantages in lagging markets.

Opportunities

• Reducing environmental impact from current operations and enhancing decommissioning/P&A projects.

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

UN Sustainable Development Goals

• Goal 1 (No Poverty)
• Goal 8 (Decent Work and Economic Growth)
• Goal 13 (Climate Action)
• Goal 14 (Life Below Water)

Contribution through local employment, industrialization, climate risk review, and managing discharges to the sea.

Environmental Metrics

ESG Focus Areas

• Health & Safety
• Climate & Environment
• People
• Responsible Business Conduct

Environmental Achievements

• Reduced CO2e emissions through recycling by 6,097 tonnes
• Two unplanned discharge events with total volume of 103.1 bbls of drilling fluid

Social Achievements

• 87% offshore national content
• 0.19 Total Recordable Incident Rate (TRIR), matching 2019's best-ever result
• 0.00 Lost Time Incident Rate (LTIR)

Governance Achievements

• Developed a rig recycling policy
• Updated Code of Business Conduct and Ethics, Global Anti-Corruption Policy, and Vendor Code of Conduct
• Expanded ESG-related risks into the overall ERM process

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic and oil price crisis impacting operations and workforce
• Supply chain disruptions due to travel restrictions
• Challenges in obtaining paperwork for rig recycling due to the Basel Convention

Mitigation Strategies

• Rapid deployment of COVID-19 protocols
• Transitioning to remote working
• Cost-cutting measures
• Engaging external consultants for rig recycling oversight

Supply Chain Management

Supplier Audits: 100% of service vendors assessed in 2020

Responsible Procurement

• Vendor Code of Conduct
• Due diligence and onboarding processes
• Master Service Agreements

Climate-Related Risks & Opportunities

Physical Risks

• Harsher weather conditions increasing risk of downtime or incidents
• Supply chain disruption
• Crew transport delays
• Potential health-related issues for employees
• Increased potential for safety incidents

Transition Risks

• Increased cost of capital
• Tightening industry regulations
• Disadvantages of operating in markets with lagging regulations

Opportunities

• Relative stability of oil and gas production in shallow water
• Lower emissions from production in operating areas
• Growing demand for P&A services
• Potential for carbon capture and storage (CCS)

Reporting Standards

Frameworks Used: SASB, TCFD, GRI

Certifications: ISO 14001 (8 rigs and India office)

UN Sustainable Development Goals

• Goal 1 (No Poverty)
• Goal 8 (Decent Work and Economic Growth)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 13 (Climate Action)
• Goal 14 (Life Below Water)

Shelf Drilling's operations contribute to these goals through local employment, national content, emissions reduction initiatives, and responsible environmental practices.

Environmental Metrics

ESG Focus Areas

• Health and Safety
• People and Society
• Climate and Environment
• Responsible Business Conduct

Environmental Achievements

• Reduced total recordable incident rate to 0.16, the lowest in company history
• Zero unplanned overboard discharge events
• 90% of rigs were ODS-free and used green freon
• 13,875 tonnes of CO2e emissions prevented through recycling

Social Achievements

• 88% of offshore workforce comprised of nationals
• Launched a ‘Make It Safe Today’ campaign
• 56,756 hours of safety training performed
• 320 promotions in 2021

Governance Achievements

• Improved CDP rating to B- and ESG100 rating to A-
• Implemented a new sustainability strategy
• Developed an integrated emission tracking and reporting tool
• Established Sustainability Committees for each rig and shore-based location

Climate Goals & Targets

Environmental Challenges

• COVID-19 disruptions
• One fatality due to an accident
• Unequal distribution of vaccines
• Lack of published targets (addressed in 2021 report)

Mitigation Strategies

• Established COVID-19 protocols
• Launched ‘Make It Safe Today’ campaign
• Provided immediate support to the family and colleagues after the fatality
• Included details on goals for emissions reduction and other key sustainability topics in the report

Supply Chain Management

Supplier Audits: 100% of service vendors assessed in 2020

Responsible Procurement

• Vendor Code of Conduct
• Due diligence and onboarding process
• Master Service Agreements

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions (extreme temperatures, cyclones/typhoons)
• Loss of efficiency, increased risk of accidents, delays

Transition Risks

• Increased regulation and taxes
• Diminishing investor appetite
• Increased cost of capital

Opportunities

• Increased volume of production from the Middle East
• Increasing volume of P&A
• Carbon Capture and Storage opportunities

Reporting Standards

Frameworks Used: SASB, CDP, TCFD, GRI

Certifications: ISO 14001 (rig and India office)

UN Sustainable Development Goals

• Goal 8: Decent Work and Economic Growth
• Goal 9: Industry, Innovation and Infrastructure
• Goal 13: Climate Action

Nationalization strategy supports SDG 8 and 9; initiatives to reduce emissions contribute to SDG 13

Environmental Metrics

ESG Focus Areas

• Health & Safety
• People & Society
• Climate & Environment
• Responsible Business Conduct

Environmental Achievements

• Reduced per-rig, per-day Scope 1 emissions by 5.5% in 2022 from the 2021 baseline
• 93% of rigs were ODS-free in 2022
• One unplanned discharge event resulting in an estimated overboard oil spill of 4.8 liters of diesel.

Social Achievements

• Achieved a Total Recordable Incident Rate (TRIR) of 0.16, the lowest in the company’s history
• Launched a Mental Health First Aid (MHFA) program
• 90% national workforce on rigs
• 26% women across offices
• 2,400+ hours of safety training performed

Governance Achievements

• Formalized Corporate Social Responsibilities program
• Achieved an A- rating from Position Green's ESG 100 report and a B- rating from the Carbon Disclosure Project

Climate Goals & Targets

Environmental Challenges

• Fourth-quarter emissions did not meet the 4% reduction target due to an increase in the number of rigs working in drilling operations versus workover or plug and abandonment.
• Increased absolute Scope 1 GHG emissions for 2022 due to a higher number of working rigs.

Mitigation Strategies

• Continuing to look for ways to establish an activity-based metric and further enhance the measurement platform in 2023.
• Performed a detailed analysis in line with the Greenhouse Gas Protocol to identify further areas for assessment and inclusion in reported Scope 3 data.
• Developing a pilot project for a real-time energy and emissions management system to automate data collection and increase accuracy.

Supply Chain Management

Supplier Audits: Quarterly audits to ensure compliance with HSE and/or quality standards.

Responsible Procurement

• Vendor Code of Conduct
• Due diligence and onboarding process
• Master Service Agreements

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather, floods, and drought affecting employee safety and wellbeing and causing damage to assets, suspension of operations and/or disruption of supply chains

Transition Risks

• Potential for carbon tax or other regulations leading to increased cost of operations, cost of compliance or restriction of activity; potential for lawsuits from parties who suffer damage leading to increased costs; breakthroughs or incremental improvements requiring investments; existing technologies becoming obsolete leading to write-offs; change in consumer and investor behavior causing change in company valuation and access to capital; new production models affecting viability of business model; concerns surrounding the nature of the Company’s activities and impacts damaging brand value; talent attraction and retention.

Opportunities

• Investments in emissions reduction measures, targets and technology; investments in plug & abandonment projects, pursuing carbon capture; collaboration with external stakeholders, industry associations to collaborate and drive innovation; enhanced transparency and disclosures in sustainability reporting; stakeholder engagement and communication; competitive compensation and benefits and focus on employee wellbeing; potential opportunities in carbon-capture and storage.

Reporting Standards

Frameworks Used: SASB, CDP, TCFD, GRI

Certifications: ISO 14001 (rigs and India office), IAPP (International Air Pollution Prevention)

UN Sustainable Development Goals

• SDG 8 (Decent Work and Economic Growth)
• SDG 9 (Industry, Innovation and Infrastructure)

Nationalization strategy; CSR programs focusing on health and education support.

Environmental Metrics

ESG Focus Areas

• Climate & Environment
• Health & Safety
• People & Society
• Responsible Business Conduct

Environmental Achievements

• 27 rigs reduced engine emissions intensity by 3.7%
• ~60,000 Tonnes CO2e Prevented through Circularity
• Emissions Tracking Pilots completed on engine and emissions monitoring
• Fuel Additives Pilot launched for one rig

Social Achievements

• Launched a comprehensive Employee Assistance Program (EAP)
• Expanded mental health first aid program to the UK and Denmark
• Achieved a Total Recordable Incident Rate (TRIR) of 0.12, the lowest since the company’s inception
• 29 of 36 rigs operated recordable incident free for the entire year

Governance Achievements

• Published first Norwegian Transparency Act Statement
• Enhanced vendor due diligence, onboarding, and audit processes to include specific requirements on ESG, including human rights
• Completed a Double Materiality Assessment (DMA)

Climate Goals & Targets

Environmental Challenges

• Increase in Scope 1 emissions due to increased drilling operations
• Extreme weather events disrupting operations and increasing costs
• Potential for carbon tax and other GHG emissions-related regulations
• Challenges in reducing fuel consumption due to operational requirements

Mitigation Strategies

• Pilot projects to provide real-time data on engine performance and fuel consumption
• Progressive rollout of modification kits to reduce emissions
• Enhanced Scope 3 emissions reporting
• Recycling used equipment and parts
• Engagement with key suppliers to support recycling initiative
• Developing alternative sourcing strategies
• Implementing a real-time monitoring system to enhance understanding and management of fuel usage and greenhouse gas emissions

Supply Chain Management

Supplier Audits: Several key vendors audited in 2023; ESG-focused third-party due diligence initiative planned for 2024 targeting identified tier 1 vendors

Responsible Procurement

• Vendor Code of Conduct emphasizing ethical sourcing, labor standards, environmental responsibility, and adherence to applicable laws and regulations
• Tiered and risk-based due diligence when onboarding vendors
• Human rights and other ESG risks integrated into vendor due diligence processes

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events disrupting operations
• Extreme weather increasing cost of operations

Transition Risks

• Carbon Tax
• Other GHG Emissions related Regulations

Opportunities

• Increase of energy efficiency onboard the rigs
• Environmentally Sustainable Drilling Services
• Developing Carbon Capture and Storage activities

Reporting Standards

Frameworks Used: SASB, GRI, TCFD

Certifications: ISO 14001 (UK and India offices, North Sea and India rigs)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 7 (Affordable and Clean Energy)
• SDG 8 (Decent Work and Economic Growth)
• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 13 (Climate Action)

Initiatives related to emissions reduction, energy efficiency, local employment, and community development contribute to these goals.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed