135 ANNUAL REPORT 2022 SUSTAINABILITY STATEMENT GHG METHODOLOGY & VERIFICATION • To align with the industry best practices and to be comparable to our peers. • To reduce any potential double counting of Scope 1 and Scope 2 emissions among clients, suppliers, and partners. • To identify the areas of operations and emissions where Yinson has direct control. The FPSOs under the Group are either finance lease or operating lease assets, which means that Yinson has no direct control over the reduction of emissions from the operation of these assets. Therefore, the emissions from FPSOs that were previously accounted under Scope 1 emissions have been reclassified under Scope 3 Category 13 – Downstream Leased Assets based on the operational control consolidation approach. The emissions reclassification helps with the understanding of stakeholder responsibilities towards strategising an effective emissions reduction plan. As a responsible business owner, we acknowledge the importance of accounting Scope 3 emissions. Therefore, further engagements will be conducted with our clients to understand the collaboration effort and partnership required to reduce the emissions of these FPSOs. Scope 1, 2 & 3 Emissions Scope 1 emissions are direct GHG emissions that occur from sources that are controlled or owned by Yinson, which also include direct emissions from company-owned vehicles and other machinery that use fossil fuels. The emissions are based on conversion factors published by the Department for Business, Energy and Industrial Strategy – UK Government GHG Conversion Factors for Company Reporting. Scope 2 emissions are indirect GHG emissions associated with the purchase of energy. This include the purchased energy by all offices and base offices over which Yinson has operational control. The emissions related to the use of purchased energy of leased assets, where Yinson is the lessee and does have operational control, will be accounted under Scope 2 emissions. These are reported on the location-based method. Grid intensity factors are based on IGSE (2021) List of Grid Emission Factors, version 10.11, for locations outside of Europe. European emissions are based on grid intensity factors published by the European Environment Agency’s ‘EEA 2017 CO2 emission intensity of electricity generation’. Scope 3 emissions include all other indirect emissions that occur throughout Yinson’s value chain. The Scope 3 emissions categories accounted for and reported include Category 6: Business Travel and Category 13: Downstream Leased Assets. The emissions from business travel (Category 6) includes air travels for business-related activities, where the emissions data has been provided by our travel agents. The emissions are calculated using the distance-based method. The emissions related to leased assets, where Yinson is the lessor and does not have operational control, will be allocated to downstream leased assets (Category 13) under Scope 3 emissions. Yinson’s fleet of FPSOs are leased to our clients, and thus considered to be under the client’s operational control. In accordance with the GHG protocol, emissions of leased assets are on lessees’ Scope 1 and lessors’ Scope 3 when using the operational control approach. It is also the general understanding among key industry stakeholders that the owner of the fluids produced on the FPSO is the owner of the emissions. This has been communicated to our clients to ensure that we avoid double counting, and more importantly that the emissions are not underreported. Yinson aims to achieve carbon neutrality by 2030 and net zero by 2050. Our net zero goals covers emissions from Scopes 1, 2 and 3 (including Category 13 - Downstream Leased Assets). Note that all the onshore and offshore transfers for businessrelated operations are not included in our Scope 3 Category 6. As Yinson provides energy infrastructure and technology services, we do not have ownership and responsibility on the use of the final product. Hence, the Scope 3 emission of Category 11: Use of Sold Products is irrelevant to our operation. Restatement of FYE 2021 GHG Emission Yinson reported a total of 576,616.20 tonnes of CO2 equivalents in FYE 2021. It was later discovered during a quality assurance assessment that the total emissions based on equity share in assets should be 571,881.49 tonnes. The error in GHG emissions reported is found to be less than 1%. The reason for the restatement was traced back to human error and the use of estimated rather than actual activity data (fuel consumption and production volumes). The restatement of GHG emission has been verified by DNV to reasonable assurance. Note that due to the changes in consolidation approach from equity share to operational control, the total GHG emissions for FYE 2021 without the consideration of equity share in assets will be 756,226.73 tonnes CO2e. The GHG emissions for FYE 2020, restated in Annual Report 2021, covered the assets FPSO JAK and FPSO Adoon, and as disclosed, are not representative of Yinson’s emissions as a whole.
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