133 ANNUAL REPORT 2022 SUSTAINABILITY STATEMENT CLIMATE CHANGE & THE ENERGY TRANSITION While we recognise climate change as a material risk, we believe it can unlock new opportunities for the business. We also recognise the challenges in delivering suitable decarbonisation solutions at different timelines. We constantly monitor and measure the climate-related metrics against the targets set on an annual basis to ensure we have a holistic view of our progress. Global energy demand that is driven by population and economic growth is expected to increase as it recovers from the impact of the pandemic. Transitioning the global energy demand to adopt sustainable development in the renewable energy space is a critical global decarbonisation strategy. In line with the energy transition and our ambition to be a global leading independent power producer of renewable energy, Yinson is committed to providing affordable and clean energy as the world’s demand for energy increases. Yinson Renewables has projected to increase Yinson’s annual renewable energy generation to 1.7 TWh by 2025 and 5.6 TWh by 2030. The growth of Yinson’s renewable energy portfolio is anticipated to lower Group-wide carbon intensity and accelerate the Group’s transition to become a clean energy producer. Our commitment to the energy transition aims to also increase access to affordable energy, increase energy security, and diversify the global energy supply. To support our growth into a low-carbon and climate-resilient business, Yinson GreenTech focuses on creating a low-carbon ecosystem of logistics and services. Yinson strategically invests and progressively establishes our brand in green technologies such as e-mobility, charging infrastructures, battery swaps, and autonomous solutions. Yinson’s approach to Climate Risk Management Risk management is a structured approach to identifying, monitoring, measuring and managing exposures to reduce the potential impacts of uncertain occurrences. The unique characteristics of climate-related risks are essential considerations when integrating them into the existing risk management process to ensure practicality and effectiveness. Climate-related risks are integrated into Yinson’s current risk management process with due consideration on whether such risks should be treated as standalone risks or as the drivers of existing risks that have already been defined. Yinson’s approach for climate risk management includes risk identification, risk analysis and development of responses or action plans. Yinson adopts a top-down approach to understand the risks and impacts from the macroeconomic perspective. Initiating the risk assessment process with a top-down approach ensures consistency and encourages comparability among different business units. Yinson will be looking into a bottom-up or hybrid approach to ensure that the insights relevant to specific assets or business lines are incorporated to provide granularity in the assessment. As part of risk identification and analysis, Yinson focuses on transition risks including changes in policy, technology, and the structure of markets over physical risks. This is because physical risks are less likely to impact our main operations in the offshore production business as our FPSO assets have incorporated environmental design values to withstand environmental impacts. Yinson has adopted two publicly available climate scenarios that are widely used in the industry. The climate scenarios are the Stated Policies Scenario (STEPS) and Sustainable Development Scenario (SDS) based on IEA, WEO 2020. The scenario analysis exercise is neither for predictions nor forecasts, but it allows Yinson to analyse the potential outcome of such climate-related events. Scenario analysis also enables Yinson to understand our business resilience against different climate scenarios over the short, medium and long-term. Scan this QR code to access our Climate Report, including more information on the identified climate-related risks and opportunities and the risk rating under different climate scenarios
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