41 ANNUAL REPORT 2022 STRATEGY & OUTLOOK GROUP CEO REVIEW Commentary by Lim Chern Yuan, Group Chief Executive Officer GLOBAL OVERVIEW Looking back at 2021, resilience was everywhere. Despite the widespread rollout of vaccines, the Covid-19 virus continued to spread and mutate throughout the year, particularly affecting communities that faced vaccine inequity. Climate change caused more extreme weather events, from floods and dust storms in Henan, cyclones in Indonesia and Fiji, winter storms in the United States and heat waves in the Pacific Northwest. Closer to home, Malaysia experienced one of its most extreme flooding events in recent history, with over 70,000 residents displaced. Governments, communities and businesses everywhere responded with strength and solidarity, reminding us that everyone needs to play their part in order to overcome the world’s biggest challenges today. After a volatile 2021, Brent Crude Oil price steadily rose and breached USD100 per barrel in February 2022. The final surge was unfortunately due to the Russian invasion on Ukraine. I echo Benjamin Franklin’s words, ‘There was never a good war or a bad peace’. Our thoughts and prayers go out to those affected by the war and we hope peace will prevail soon. The global economy is recovering rapidly from last year’s Covid-induced recession, however that recovery has been uneven, causing strains on the global energy supply chain, particularly in developing economies. The World Energy Outlook (“WEO”) by the International Energy Agency (“IEA”) noted sharp increases in natural gas, coal and electricity prices in 2021, with coal and oil use rebounding. Although great advancements were made in electric mobility and renewables, the WEO reports that progress towards universal energy access has stalled, especially in sub-Saharan Africa. As a global energy solutions provider, access to energy is an issue that is close to our heart. Looking at these global trends alongside our unique potential to capitalise on the opportunities they bring, we believe that we are about to enter into one of the most exciting chapters of Yinson’s growth story. We have taken two bold steps to unlock greater value via a strategic review of our FPSO business, announced on 1 March 2022; and a Group Strategy Review (“GSR”). I encourage you to read my colleague Daniel’s Strategy Review for further details. Strategy Review, pg 51 CLIMATE ACTION: NO LONGER A LUXURY BUT A NECESSITY The 26th UN Climate Change Conference of the Parties (“COP26”) in Glasgow, UK, in late 2021 concluded with the Glasgow Climate Pact, where nearly 200 countries reaffirmed the long-term global goal to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels. The COP26 recognised that rapid, deep and sustained reduction in global greenhouse gas (“GHG”) emissions, including reducing global carbon dioxide emissions by 45% by 2030 relative to 2010 levels, is required to significantly reduce the risks and impacts of climate change. Alarmingly, the climate pledges made to date cover less than 20% of the gap in emissions reductions that needs to be closed by 2030 to keep a 1.5°C path within reach. The WEO further reports that the energy sector has been responsible for almost three-quarters of the emissions that have already pushed global average temperatures up by 2021 was a year of rediscovery, recovery and renewal globally, as the world emerged from the worst of the pandemic to find its feet in the new normal. Our theme for this Report, ‘Purpose Driven’, reflects how we remained focused in FYE 2022. Under the banner of our Vision, Mission and Core Values, we continued to be driven by a firm sustainability mindset, a deep desire to create sustainable value for all our stakeholders and a strong resolve to be an industry leader in the global fight against climate change.
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