MISC Integrated Annual Report 2020

MISC Group Total GHG Emission (Million Tonnes CO 2 e) LNG Fleet CO 2 Intensity (gCO 2 / ton-nm) Petroleum Fleet CO 2 Intensity (gCO 2 / ton-nm) Product Fleet CO 2 Intensity (gCO 2 / ton-nm) MISC Fleet Key Milestones *Recognition by Maritime Reporter & Engineering News for Seri Camellia, i.e. the first LNGC in a series of five of its kind • ISO 14001 (Environmental management system) • ISAVEFUEL (Fuel efficiency performance system) New Generation LNG Carriers* • Named one of the Great Ships of 2016 • Superior energy efficiency performance (EEDI 27% lower than IMO baseline • SEEMP (Ship Energy Efficiency Management Plan) • Digital Performance Monitoring Tool • LNG dual-fuel Aframax • Green Technologies: - Propeller Boss Cap Fin (PBCF) - Trim Optimisation - Advanced hull coating • MISC Carbon Commitments & 2020 Reduction Targets • ISO 50001 (Energy Management System) • GHG Scoping & Inventory Review • GHG MRV Procedure • Member of the Getting to Zero Coalition • Joint Development Project for an ammonia- fuelled vessel • LNG dual-fuel DPSTs (with VOC recovery) • Beyond 2020 target setting and strategy 2007 2011 2013 2015 2016 2017 2018 2019 2020 and beyond PETRONAS Walk4trees Challenge PETRONAS Walk4trees Challenge was commenced in November 2019 and aims at improving our employees’ health whilst saving the environment. For every one million steps collected, one tree will be planted. Our goal is to collect 20 billion steps with 20,000 trees to be planted in various locations within Malaysia. The virtual team-based walking challenge was held using the Bookdoc App. Participants used their fitness tracker and mobile phones to track the number of steps they walked. In 2020, the challenge encouraged our employees, especially those who were working from home due to the pandemic, to have a healthy active lifestyle. It also helps to strengthen teamwork, as they worked towards a common purpose of contributing to a better environment for the future. Live Workout Sessions During the year, we replaced our face- to-face workout sessions with virtual live workout sessions by qualified trainers. Employees could live stream these events from the fitness centre’s social media channels. Employee Assistance Programme The new realities of working from home, home schooling of children, and lack of physical contact with other family members, friends and colleagues, take time to get used to. Adapting to lifestyle changes such as these and managing the fear of contracting the virus and worrying about people close to us who are particularly vulnerable, were challenging for all of us. MISC understands the challenges faced by our employees and therefore during the year, we initiated the Employee Assistance Programme, a hotline which our people can call to speak to specialist consultants who provide them independent counselling. The programme not just provides help on pandemic-related health issues, but also other aspects such as legal matters, financial difficulties and family issues. The counselling service is provided by a third party service provider, and all communications that take place remain private and confidential. ENVIRONMENT ENVIRONMENT MANAGEMENT SYSTEMS In support of the overarching governance approach and framework of environmental management and in compliance with national and international regulations that are mandatory such as the IMO MARPOL we manage the impact of our operations on the environment via a combination of internal and external management frameworks and systems. As part of our approach, our operations are subjected to comprehensive standards such as the PETRONAS Mandatory Control Framework (MCF) and fleet environmental management system. Eaglestar, MHB and the Offshore Business Unit have been certified with the ISO 14001 Environmental Management System, while LNG and petroleum fleets have been certified with ISO 50001 Energy Management System. MISC Group Environmental Minimum Requirements In 2020, we rolled out a new procedure known as the MISC Group Environmental Minimum Requirements with the objective of strengthening environmental governance and compliance with environmental legislation through prescriptive requirements. This procedure provides the base standard for the management of six focus areas of significant environmental risks associated with MISC’s operations, namely: 1. Air Emission Management 2. Hazardous Waste Management 3. Wastewater Management 4. Soil and Groundwater Management 5. Environmental Management of Projects 6. Environmentally Hazardous Substances Management Compliance of our operations to this corporate procedure are regularly assessed as part of MISC’s internal verification and assurance. GREENHOUSE GAS (GHG) EMISSIONS MISC embarked on our carbon and energy efficient journey in 2007 with the intention of minimising our operations’ environmental footprint. Our journey began with obtaining the ISO 14001 Environmental Management System certification and the ‘ISAVEFUEL’ programme as a fuel efficiency and performance system for our LNG and chemical vessels. Since then, we have incorporated various green technologies and energy efficiency measures in our vessel management to progress with our journey. These include incorporating green technologies such as Propellor Boss Cap Fin and advanced hull coating. We incepted the Ship Energy Efficiency Management Plan in 2013, and by 2015 had obtained certification for the ISO 50001 Energy Management System for the petroleum fleet. Since 2016 onwards, we have taken delivery of vessels such as the Seri C Moss Type LNG carrier and more recently LNG dual-fuel vessels which incorporate eco-friendly technologies, reinforcing our commitment to operate responsibly and care for the environment. In 2017, we launched the MISC Carbon Commitments and set ourselves targets in relation to these. Since then, we have been focusing on delivering on these commitments. In 2019, MISC became a member of the Getting to Zero Coalition, a partnership between the Global Maritime Forum, the Friends of Ocean Action, and the World Economic Forum that is committed to developing commercially viable zero- emission vessels by 2030. In line with this, MISC embarked on a Joint Development Project (JDP) with our strategic partners, to develop an ammonia-fuelled vessel to support shipping’s drive towards a decarbonised future. See page 120 for The Castor Initiative. Our greenhouse gas (GHG) emissions monitoring and reporting is guided by the following key standards and references: the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition), Third IMO GHG Study 2014, and the American Petroleum Institute (API) Compendium of GHG Methodologies for the Oil and Gas Industry. The Group’s organisational boundary for GHG reporting is defined based on the operational control approach. Based on this approach, 100% of GHG emissions over the operations that are controlled by MISC are included in the MISC Group GHG accounting. Our GHG accounting includes Scope 1 (direct) and Scope 2 (indirect emissions from the generation of purchased energy) GHG emissions, while types of GHG included in the accounting for CO 2 e are carbon dioxide (CO 2 ), methane (CH 4 ) and nitrous oxide (N 2 O). The percentage of each gas contribution to the total CO2 equivalent is provided in MISC Group GHG Emissions by GHG Type diagram below. In 2020, we invested approximately RM164 million for our environmental protection initiatives where RM3.8 million was spent in supporting the mitigation of climate change. 2016 4.56 2018 4.17 2017 4.09 2019 4.25 2020 4.04 2016 9.82 (2020 Target) 2018 2017 2019 2020 10.45 9.65 10.01 8.73 8.54 2016 3.33 (2020 Target) 2018 2017 2019 2020 3.66 3.25 3.52 3.19 3.30 2016 9.59 (2020 Target) 2018 2017 2019 2020 9.69 9.16 10.23 8.83 9.23 CARBON AND ENERGY EFFICIENY 18% 10% 5% Reduction from 2016 baseline Total Emission Shipping Non-shipping MISC Group GHG Emission by GHG Type (Tonnes CO 2 e) • CO 2 – 97% • Methane - 2% • N 2 O - 1% OPERATING SAFELY AND SUSTAINABLY ///// Sustainability / Financial Review / Business Review / Leadership / Governance /// MISC Berhad / Integrated Annual Report 2020 7 214 MISC Berhad / Integrated Annual Report 2020 7 215 /// Governance / Leadership / Business Review / Financial Review / Sustainability ///// Section Section