162 YINSON HOLDINGS BERHAD OUR CAPITALS NATURAL CAPITAL Improving the quality of our disclosures Climate disclosure standards are constantly evolving, with both the scientific and business communities maturing in their understanding of emissions and in line with changing global trends. As a company that strives to demonstrate sustainability leadership, Yinson aims to improve the quality of our emissions disclosures in line with latest standards, in order to reflect a transparent picture of our climate action journey. In line with this, we have adjusted our GHG consolidation approach from equity share to operational control, and reclassified the accounted emissions for FYE 2022 and moving forward. Yinson reassessed the selection of consolidation approach due to several reasons as follows: • To align with the industry best practices and to be comparable to our peers. • To reduce any potential double counting of Scopes 1 and 2 emissions among clients, suppliers and partners. • To identify the areas of operations and emissions where Yinson has direct control. We also discovered an error in our disclosure for the total emissions during a third party assurance, which caused a variance of less than 1%. With this, we have restated our GHG emission for FYE 2021, which has been verified by DNV. Details on the reclassification and restatement is elaborated in further detail in our Sustainability Statement. GHG methodology & verification, pg 134 Stakeholder advocacy & engagement As a responsible business owner, we acknowledge the importance of accounting Scope 3 emissions. Therefore, further engagements will be conducted with clients to understand the collaboration effort and partnership required to reduce the emissions of these FPSOs. There is currently a shrinking pool of skilled FPSO contractors and a significant increase in project awards this year, resulting in a strong FPSO market. This market positioning gives Yinson greater opportunities to engage with potential clients to warm up to the idea of lower emissions FPSOs. As a Group that has sustainability at our core and that has set the lowering of our fleet’s emissions as a non-compromisable KPI, we believe we bring the extra edge when it comes to executing FPSO products in line with the evolving trends of the energy transition. As such, we will continue to engage with potential clients on low emission designs for our FPSOs and current clients on the possibility of including low emission technologies onboard our current assets. Climate Action: No longer a luxury but a necessity, pg 41; Embracing the Energy Transition, pg 43; Leading the way with responsible solutions, pg 103 Our climate initiative performance has been identified as a key area of concern for many of our stakeholder groups. For our bankers & lenders, how we manage our climate risk and GHG emissions helps them to gauge our long-term outlook and how well we are insulated against potential crisis. For our Government & regulatory bodies, meeting environmental performance standards provides us with our regulatory license to operate. Thus we frequently engage with our stakeholder groups on this topic, as listed in our Stakeholder Engagement section. Our approach to stakeholder engagement, pg 124 Reducing our carbon emissions Yinson has set an ambitious target to achieve carbon neutrality by 2030 and net zero by 2050, in which it covers emissions from Scopes 1 and 2. We aim to reduce Scopes 1 and 2 emissions from our operating assets and increase the utilisation of renewable energy in our operations. Apart from reducing carbon emissions in our operations, Yinson also focuses on purchasing high quality carbon credits to compensate for the emissions in our operations. Yinson will continuously revisit the strategy as carbon removal technologies such as CCUS and DAC solutions become technologically and economically feasible.
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