Climate Change Data

Environmental Metrics

ESG Focus Areas

• Improved environmental performance
• Diversity, equity, and inclusion in the workplace
• Health and safety of employees and operations
• Enhanced community involvement
• In-country value creation
• ESG risk monitoring and accountability
• Public disclosure of ESG data and performance

Environmental Achievements

• Reduced Frac fleet’s Carbon footprint by 30%
• Reduced diesel consumption and GHG emissions in Frac operations
• Reduced job volume by 30% in fracturing operations, improving efficiency and reducing water consumption
• Saved an estimated 5 MM gallons of water per year through plug upgrades
• Shifted from using diesel-powered light towers to solar-powered light towers in Saudi Arabia
• Replaced some diesel-powered generators in Saudi Arabia with solar-powered generators
• Provided solutions to reduce hydrocarbon flaring and CO2 emissions using reinforced thermoplastic pipe technology
• No environmental violations across NESR’s operations in 2019 and 2020

Social Achievements

• Created Women in NESR (WIN) - an employee-driven affinity group to achieve gender diversity targets
• Increased the total population of women in NESR by 24% in 2020
• Launched company-wide ESG initiatives
• Launched Employee Engagement Program
• Company-wide mandatory training to enhance understanding and compliance with the Code was offered to all employees in 2020
• Contributed to several initiatives to help local governments combat the negative effects of COVID-19
• Spent $300,000 on developing local suppliers and 4,600 hours on training them in 2020

Governance Achievements

• Published Corporate Governance Guidelines on website
• Upgraded Code of Conduct in 2020 to incorporate clear guidelines on protecting human rights and whistleblowers, safeguarding equal opportunities, and applying fair hiring practices
• Introduced corporate ESG targets and linked corporate ESG performance to compensation
• Expanded and enhanced ESG public disclosures
• Made ESG data collection and reporting mandatory for different functions across the Company

Climate Goals & Targets

Environmental Challenges

• Lack of standardization and focus on financial materiality in ESG data and the diversity of ESG data reporting standards
• Challenges in producing inaugural ESG report due to limited experience and resources available for ESG data collection and reporting

Mitigation Strategies

• Reported ESG data using available data, focusing on sustainability issues most likely to materially affect the financial condition or operating performance
• Intend to align future ESG reporting with SASB, GRI, TCFD, and the UN SDGs starting in 2021

Supply Chain Management

Supplier Audits: 2,100 suppliers screened in 2020

Responsible Procurement

• Code of Conduct compliance
• Human rights and labor standards
• Environmental standards
• Local sourcing

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products and services
• Transition to a low carbon economy

Reporting Standards

Frameworks Used: SASB, GRI, TCFD, UN SDGs

Certifications: ISO 9001, ISO 14001, ISO 45001, OHSAS 18001, API Q1 and Q2

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

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

NESR aligns its strategies and programs with the UN Sustainable Development Goals

Sustainable Products & Innovation

• Solar-powered light towers
• Solar-powered generators
• Reinforced thermoplastic pipe technology for flare gas transportation
• Salt-tolerant fracturing fluid system
• Water treatment plants to convert high salinity produced water into fresh water

Awards & Recognition

• Environmental award for environmental initiatives
• Recognition by Saudi Aramco for outstanding accomplishment of environmental initiatives in 2019

Environmental Metrics

ESG Focus Areas

• Climate change
• Water management
• Environmental waste minimization
• Innovative energy solutions
• Diversity, Equity, and Inclusion (DEI)
• Health, Safety, and Environment (HSE)

Environmental Achievements

• Launched ESG IMPACT segment to develop a portfolio of products and services to mitigate climate change, enhance water management and conservation, minimize environmental waste, and introduce innovative energy solutions.
• Progressing toward implementation of water pilot projects in Iraq and Saudi Arabia.

Social Achievements

• Launched NESR Women Network (WIN) and Corporate Volunteering initiatives.
• Delivered ESG training to function heads across the company.

Governance Achievements

• Developed an ESG strategy, installed ESG data collection and reporting procedures, and started disclosing ESG data in company proxies (2019).
• Disclosed ESG information on the website including governance guidelines, tax strategy, and key ESG data on HSE, DEI (2020).
• Conducted an ESG gaps analysis and materiality assessment to identify ESG risks and opportunities (2020).

Climate Goals & Targets

Environmental Challenges

• Selectivity of growth opportunities, balancing returns against a significant addressable market for ESG initiatives.
• Water scarcity in the MENA region.

Mitigation Strategies

• Leveraging MENA footprint and customer familiarity to import unique technologies.
• Partnering with key water technology providers.
• Focusing on economical, GHG-friendly, and water-waste-friendly solutions.

Supply Chain Management

Climate-Related Risks & Opportunities

Opportunities

• Development of water management and innovative energy solutions.

Reporting Standards

Frameworks Used: UN Sustainable Development Goals (SDGs), UN Global Compact 10 principles, SASB (planned for 2022), GRI (planned for 2022), TCFD (planned for 2022)

Sustainable Products & Innovation

• Water management solutions
• Innovative energy solutions

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Awarded a significant contract to make brine for a major in Iraq, utilizing produced water and deploying technology to reduce carbon intensity.
• Developing a project in Saudi Arabia to convert produced water to potable water.

Social Achievements

• Achieved over 50% vaccination rate across the workforce.
• Maintained 100% operational capacity despite COVID-19 disruptions.
• Published inaugural ESG report.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• COVID-19 disruptions, including travel restrictions, quarantines, and increased testing costs.
• Inflation impacting input costs (steel, chemicals, shipping).

Mitigation Strategies

• Implemented crisis management team to maintain operations.
• Working to enable vaccine access for employees.
• Investing in Capex and resources to maintain service quality.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Water management technologies

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity, Equity, and Inclusion
• Corporate Governance
• Health and Safety
• Environmental Stewardship
• Community Development
• Supply Chain Management

Environmental Achievements

• Reduced Scope 2 emissions at Habshan, UAE operating base by up to 30% through solar electrification.
• Successful second pilot of Zero Liquid Discharge (ZLD) water treatment solution in Saudi Arabia.
• First at-scale deployment of AI-based continuous emissions monitoring (CEM) platform in Oman.

Social Achievements

• Increased workforce by 185% since inception, focusing on local hiring.
• Increased training hours per employee by +10% per year over the last three years.
• Launched Women in NESR (WIN) employee resource group to promote gender diversity.

Governance Achievements

• Completed restatement of historical financials.
• Implemented SAP Cloud and related training to improve financial processes.
• Aligned management compensation of finance & support functions more closely to key compliance-related initiatives.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions
• Lack of standardization across ESG reporting regimes
• Managing ESG risks in a rapidly growing company

Mitigation Strategies

• Investing in digital ESG data capture and reporting platform (planned for 2025)
• Aligning future ESG reporting with SASB, GRI, TCFD, and CDP standards
• Implementing robust internal controls and processes for ESG data capture and reporting
• Proactive strategies and investments in digital solutions for supply chain management

Supply Chain Management

Supplier Audits: Over 2,300 suppliers screened since 2020

Responsible Procurement

• Compliance with NESR Code of Conduct, human rights and labor laws, environmental standards
• Prioritizing local suppliers (80.3% of procurement budget in 2023)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Evolving environmental regulations
• Transition to a low-carbon economy

Opportunities

• Development of energy-efficient products and services (NEDA segment)

Reporting Standards

Frameworks Used: SASB, TCFD, GRI, CDP

Certifications: ISO 9001, ISO 14001, ISO 45001, OHSAS 18001, API Q1 and Q2

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

NESR's ESG strategy aligns with the UN SDGs

Sustainable Products & Innovation

• Zero Liquid Discharge (ZLD) water treatment
• AI-powered continuous emissions monitoring (CEM) platform
• Dynamic Vapor Recovery (DyVaR) technology

Awards & Recognition

• Sustainability prize from a leading national oil company customer for solar electrification investment