113 SUSTAINABILITY REVIEW EMBRACING GOOD CORPORATE GOVERNANCE Why is this topic material to us? At Yinson, we manage our business to deliver strong and sustainable cash flows to fund current operations and fuel future growth. We believe that solid liquidity and solvency management are foundational to our business and must be complemented by proper business planning to realise Yinson’s short, medium and long-term goals. Our overarching strategy for managing our Financial Capital guides the management of our financial inputs and outputs towards achieving long-term and sustainable cash flows and profitability. Disciplined and diligent cost management provides flexibility and frees up working capital to be channelled into growth opportunities, thereby maximising Yinson’s ability to create value for our stakeholders. With this, it met the parameters of the bank’s transition finance framework to achieve the corresponding labelling of Transition Finance facility for the bank. Prior to this, in 2021, Yinson issued Malaysia’s first Sustainability-Linked Sukuk which raised RM1 billion. The Sukuk directly links the cost of our capital to our achievement of climate targets. Green bonds and sustainability-linked bonds, as other examples, are increasingly attractive sources of funding due to their growing liquidity, driven by the increased appetite from ESG-focused investors. Our leadership position in sustainability allows us to capitalise on such instruments whilst incentivising us to manage our business more sustainably, in line with some of the criteria required to obtain such fundings. Business decision-making autonomy, strengthening capital stewardship at the centre In the year under review, findings from the GSR led to organisational changes that strengthened the decision-making autonomy of our business units. This is a significant move in the context of ensuring sustainable profitability for the Group as business units are now able to better establish and shape their own equity stories in accordance with their respective business contexts and growth journeys. At the Group level, we can devote more resources to guiding our businesses from a broader and more strategic view, including sustainability and governance matters. Management approach We are a high-growth business operating during a global movement towards a low-carbon, climate-resilient environment and an ever-evolving economic and geopolitical climate. To deliver our vision and strategy, we recognise the need to operate within a resilient and forward-looking financial framework that provides a strong financial position to support our growth plans. Transition-focused At Yinson, our desire to contribute to a sustainable and inclusive transition to a cleaner energy future underpins all our business decisions. As we transition, we must also focus on the here and now – to continue to provide affordable and reliable energy to meet the needs of the world today. This is why we are committed to deploying at least 30% of the Group’s equity in non-oil FPSO activities by 2030 and aligning all our business decisions to achieving our Climate Goals. In addition, with ESG performance becoming an increasingly important consideration for lenders and financiers, Yinson has been actively exploring financial instruments that are linked to sustainability performance. In 2022, we secured a USD720 million syndicated loan facility for the FPSO Maria Quitéria project. Standard Chartered Bank, one of the lenders, participated in this syndicated loan facility to finance the conversion of the FPSO, which incorporates technologies that aim to contribute to the reduction of flaring from the field. DEFINITION OF MATERIAL TOPIC Continued enhancements on processes directly related to business profitability, covering cost management and timely delivery of contracts. MG1 IMPACTS GS1 GS2 GS3 GS4 GS5 GS6 S9 S10 S7 S2 S4 S3 S1 S6 S5 BUSINESS MANAGEMENT & PROFITABILITY
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