Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Improved fuel efficiency by 5.2% compared to 2015 baseline.
• Significantly decreased Scope 1 and Scope 2 GHG emissions over the past three years.
• Zero oil spills larger than one barrel.

Social Achievements

• LTAF of 0.67 (2016: 0.65).
• Exceeded target of 6.0 near-miss reports per month per vessel (6.7 achieved).
• Senior Officer retention rate above 90%.
• 100% compliance with customer requirements (officer matrix compliance).

Governance Achievements

• Zero notifications received by the whistleblower facility.
• Continued anti-corruption training program for all shore-based staff and officers.

Climate Goals & Targets

Environmental Challenges

• Slight increase in LTAF from 2016.
• One small oil spill overboard of less than one barrel.
• One robbery, four attempts to board vessels, and four cases of stowaways.

Mitigation Strategies

• Each injury investigated and corrective measures taken.
• Incident investigated and procedures revised.
• Close monitoring of security situation and actions taken to safeguard seafarers and vessels.
• Continued focus on safety culture program.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Global Compact, UN Sustainable Development Goals

Environmental Metrics

ESG Focus Areas

• Climate Action
• Quality Education

Environmental Achievements

• Achieved fuel efficiency improvements of 6.9% compared to the 2015 baseline.
• Joined the Clean Shipping Alliance 2020 (CSA 2020) to support the IMO 2020 Sulfur Directive.
• Implemented a new system for generating emission data from vessels, improving data quality and transparency.

Social Achievements

• Continued strategy to employ seafarers with different nationalities.
• Launched Safety Delta, a tool to track and monitor safety culture on board vessels.
• Launched a revised performance development concept for seafarers.
• Supported 21 students graduating from TORM Philippines Education Foundation.
• Supported the building and continued support of ZP Prathmik School in India.
• Supported the construction of an additional toilet and bathing block for female students in India.
• Supported the 'V Promote Education' project with the distribution of 100,000 notebooks.

Governance Achievements

• Continued anti-corruption training program for all shore-based staff and officers on vessels.
• Whistleblower facility received three notifications, investigated and closed without critique.

Climate Goals & Targets

Environmental Challenges

• Marine pollution constitutes the largest environmental risk within the shipping industry.
• Security risks such as piracy, theft, and stowaways.

Mitigation Strategies

• Increased internal audits on vessels.
• Focus on on-board training.
• Daily engagement with vessels to encourage best practice behavior regarding fuel consumption.
• Investing in and implementing energy-efficient technologies.
• Renewing hull coatings to reduce fuel consumption.
• Minimizing air travel emissions through video conferencing.
• Compliance with IMO Ballast Water Management Convention.
• Following Best Management Practices to respond to piracy.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Marine pollution

Transition Risks

• IMO 2020 Sulfur Directive

Opportunities

• Energy-efficient technologies

Reporting Standards

Frameworks Used: UN Global Compact, Greenhouse Gas Protocol (partially)

Certifications: Maritime Labor Convention

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 4 (Quality Education)
• SDG 13 (Climate Action)

TORM's CSR activities are linked to these SDGs.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Action
• Quality Education
• Safety
• Diversity & Inclusion
• Anti-Corruption

Environmental Achievements

• 9.3% fuel efficiency improvement compared to 2015 baseline
• 2,200 mangrove propagules planted in partnership with CENRO
• Hull coating renewal on two vessels resulting in significant fuel consumption reductions

Social Achievements

• 93 scholars supported by TORM and its Education Foundation
• Construction of a new classroom with toilet under the Adopt-A-School Program
• Various social development initiatives in the Philippines (Trainers of scholars, basketball court construction, community outreach project, water tank donation, computer training for teachers)

Governance Achievements

• Continued anti-corruption training program for all shore-based staff and officers
• Implementation of new OCIMF SIRE inspection regime
• Two notifications received by the whistleblower facility, investigated and closed without critique

Climate Goals & Targets

Environmental Challenges

• Developing meaningful KPIs for fuel consumption for cargo operations
• Data unavailability for London office emissions

Mitigation Strategies

• Deeper studies necessary to obtain meaningful KPIs in fuel consumption for cargo operations
• Continued efforts to improve data collection and verification processes

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Global Compact, Greenhouse Gas Protocol

UN Sustainable Development Goals

• SDG 4: Quality Education
• SDG 13: Climate Action

Directly link to the Company’s current corporate activities

Environmental Metrics

ESG Focus Areas

• Climate Change
• Safety
• Leadership Diversity
• Environmental Protection
• Social Responsibility
• Governance
• Transparency

Environmental Achievements

• Reduced CO2 impact by 22% since 2008
• Zero oil spill to sea policy

Social Achievements

• Long-standing support of maritime education in Denmark, India, and the Philippines
• Focus on safe and secure working conditions for seafarers

Governance Achievements

• Adoption of the UK Corporate Governance Code
• Establishment of Audit, Remuneration, Nomination, and Risk Committees

Climate Goals & Targets

Environmental Challenges

• Accelerating global climate change
• Minimizing pollution of seas and atmosphere
• Uncertainty regarding future technologies for alternative fuels

Mitigation Strategies

• Focus on improving energy efficiency and reducing CO2 emissions through operational and technical improvements
• Developing next-generation ship design and new energy-improving technologies
• Seeking to influence the development of alternative fuels and pursuing broad industry cooperation

Supply Chain Management

Responsible Procurement

• Business Principles covering Child and/or Forced Labor, Human Rights, and Modern Slavery

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Global Compact

Certifications: ISO 14001:2015

UN Sustainable Development Goals

• SDG 13: Climate Action
• SDG 4: Quality Education

Commitment to reducing carbon footprint, supporting maritime education in India and the Philippines.

Environmental Metrics

ESG Focus Areas

• Climate change
• Safety
• Diversity & Inclusion
• Responsible Procurement
• Human Rights
• Community Investment
• Governance

Environmental Achievements

• Reduced Annual Efficiency Ratio (AER) by 37.6% compared to the IMO baseline (2008)
• 52 of 84 vessels fitted with scrubbers by year-end, with plans to fit more.
• Testing Flettner Rotors on two LR2 vessels, expecting 5-7% energy savings.

Social Achievements

• Launched 'Well at TORM' wellness program.
• Vaccinated over 1,100 seafarers against COVID-19.
• Supported 74 scholars through TORM and its education foundation.
• 37% women in shore-based workforce, 22% in leadership positions.

Governance Achievements

• Established anti-corruption training for all employees.
• Implemented a robust remote audit scheme.
• Maintained a strong focus on ESG throughout the year.

Climate Goals & Targets

Environmental Challenges

• Challenging market conditions due to COVID-19, impacting oil demand and freight rates.
• Supply chain disruptions.
• Crew changes complicated by COVID-19 travel restrictions.
• Increased costs associated with crew changes and quarantine.

Mitigation Strategies

• Developed a robust remote audit system.
• Leveraged the integrated One TORM platform to maintain operations.
• Implemented cost optimization measures.
• Secured access to various funding markets (bank and leasing).

Supply Chain Management

Supplier Audits: Periodic assessments of suppliers starting in 2021.

Responsible Procurement

• Compliance with recognized international standards
• Focus on human rights, labor conditions, environmental impact, safety, corruption, and quality

Climate-Related Risks & Opportunities

Transition Risks

• Peak oil demand
• Technological changes in vessels
• Insufficient access to financing due to ESG concerns

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: SASB, UN Global Compact

Certifications: ISO 9001, ISO 14401

UN Sustainable Development Goals

• SDG 4: Quality Education
• SDG 13: Climate Action

Supporting maritime education in Denmark, India, and the Philippines; minimizing pollution and reducing CO2 emissions.

Sustainable Products & Innovation

• Flettner Rotors

Environmental Metrics

ESG Focus Areas

• Climate Change
• Safety
• Diversity & Inclusion
• Legal Compliance
• Business Ethics
• Responsible Procurement
• Community Investment

Environmental Achievements

• Reduced carbon intensity by 37.1% compared to the IMO 2008 baseline.
• Installed scrubbers on more than 50 vessels.
• Initiated an air lubrication system pilot project with expected energy savings of approximately 5% per vessel.
• Acquired a 75% ownership stake in ME Production to support climate goals through environmental innovation.

Social Achievements

• Reinstated face-to-face annual officer seminars.
• Supported hundreds of children through education scholarships in India and the Philippines.
• Rolled out online harassment training to all employees.
• Improved crew engagement survey results showing high job satisfaction and positive relationships with leadership.
• Increased senior officer retention rate to 95%.

Governance Achievements

• Introduced a new Distribution Policy aligning cash generation with shareholder distributions.
• Created dedicated teams for technical and commercial decarbonization.
• Incorporated financial mechanisms linking senior management KPIs to ESG targets.
• Enhanced anti-corruption training for all employees.
• Conducted a climate-related scenario analysis using TCFD guidelines.

Climate Goals & Targets

Environmental Challenges

• Geopolitical instability and the war in Ukraine impacting trade patterns and energy security.
• Vessel delays in Latin America due to exceeding discharging capacities.
• Changes in the refinery landscape leading to increased fuel imports and longer ballast distances.
• Supply chain disruptions due to global inflation and geopolitical events.
• Cybersecurity risks due to increased interconnectivity and external threats.

Mitigation Strategies

• Spot-oriented strategy to limit market risk exposure.
• Hedging strategies for freight rates and bunker exposures.
• Conservative capital structure and focus on loan-to-value ratios.
• Integrated platform with in-house safety, technical, and operational staff.
• Disaster recovery plans and safety resilience programs.
• Updated Customer Credit Risk Policy.
• Cybersecurity program to enhance and mature TORM's cybersecurity.

Supply Chain Management

Supplier Audits: Supplier assessment questionnaire rolled out to high-spend suppliers in 2022.

Responsible Procurement

• Compliance with recognized international standards.
• Supplier assessment questionnaire covering quality management, human rights, labor, environment, health, safety, business ethics, and complaint procedures.

Climate-Related Risks & Opportunities

Transition Risks

• Declining demand for oil and gas.
• Higher cost of capital and reduced access to capital.
• Carbon price regulations.
• Decarbonization of vessels.

Opportunities

• Diversification into transport of low-carbon fuels.
• Market volatility due to weather and refinery consolidation.
• Higher asset utilization due to vessel supply shortage.

Reporting Standards

Frameworks Used: SASB, TCFD, UN Global Compact

Certifications: ISO 14001:2015

UN Sustainable Development Goals

• SDG 4 (Quality Education)
• SDG 13 (Climate Action)

Initiatives supporting education in India and the Philippines, and ambitious climate targets.

Sustainable Products & Innovation

• Scrubbers
• Heat pumps
• Air lubrication systems
• Variable frequency drives

Environmental Metrics

ESG Focus Areas

• Climate Change
• Safety
• Diversity
• Governance
• Human Rights
• Responsible Procurement

Environmental Achievements

• Reduced carbon intensity by 39.6% compared to 2008 IMO baseline (close to 40% 2025 target)
• More than half of TORM’s vessels had silicone hull coating applied, helping achieve emission reductions of more than 87,000 tons of CO2 annually.
• Completed VFD program across fleet (except recently purchased vessels)
• Completed Propeller Ultrasound program across fleet (except recently purchased vessels)

Social Achievements

• Lost Time Accident Frequency (LTAF) of 0.32 (2022: 0.42)
• High seafarer retention rate (95% for senior officers)
• Employee engagement score of 8.6 out of 10 (96% response rate)
• Continued support for education in India and the Philippines through foundations

Governance Achievements

• Signed UN Global Compact's Anti-Corruption Call-to-Action
• Established a cross-organizational task force to develop a methodology and system to automatically estimate and collect data for EU ETS compliance.
• Completed debt refinance of USD 528m, extending maturities to 2028 and 2029
• Successfully issued USD 200m bond in January 2024

Climate Goals & Targets

Environmental Challenges

• Geopolitical tensions and volatility in freight rates
• Supply chain disruptions due to Panama Canal restrictions
• Cybersecurity threats
• Declining demand for oil products (long-term)
• Higher cost of capital and reduced access (long-term)
• Carbon price regulations (long-term)
• Decarbonization of vessels (long-term)
• Maritime safety threats (piracy, terrorism)

Mitigation Strategies

• Active management of market exposure through FFAs and time charters
• Selective fleet replenishment and growth, divesting older vessels and acquiring newer, eco-friendly vessels
• Implementation of new policies and procedures for cybersecurity, based on ISO 27001 framework
• Development of an energy transition plan towards 2030
• Investing in vessel positioning tools, voyage optimization, and BI setup
• Maintaining a conservative capital structure and access to multiple funding sources
• Decarbonizing fleet faster than required by IMO by 2030
• Following industry best practices and having procedures in place for security incidents

Supply Chain Management

Supplier Audits: Supplier assessment questionnaire rolled out in 2022, focusing on high-spend suppliers; second wave completed in 2023.

Responsible Procurement

• Supplier code of conduct
• Compliance with international standards (e.g., UK Modern Slavery Act)

Climate-Related Risks & Opportunities

Transition Risks

• Declining demand for oil products
• Higher cost of capital
• Carbon price regulations
• Decarbonization of vessels

Opportunities

• Diversification into low-carbon fuels
• Market volatility due to extreme weather
• Higher asset utilization due to vessel supply shortage

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC, EU Taxonomy

Certifications: ISO 14001:2015

UN Sustainable Development Goals

• SDG 4 (Quality Education)
• SDG 13 (Climate Action)

Support for education in India and the Philippines; ambitious climate targets and initiatives.