92 YINSON HOLDINGS BERHAD | INTEGRATED ANNUAL REPORT 2024 BUILDING ENVIRONMENTAL AND CLIMATE RESILIENCE WHY IS THIS TOPIC MATERIAL TO US? Given the global urgency surrounding climate change, it is crucial to mitigate its impacts to prevent irreversible damage to the environment and humanity. These impacts encompass extreme weather events, resource shortages and regulatory changes, all of which have the potential to disrupt our supply chain and increase operational costs. Climate-related impacts are a risk to Yinson’s capacity to generate long-term value for our business and stakeholders. These issues can impact our performance, reputation, supply chain resilience, operating environment and overall business sustainability. Therefore, integrating climate considerations into our decision-making processes is imperative. Failure to address climate change in our operations exposes us to various risks, including stranded assets, short-sighted business planning, business disruptions and reputational damage. Additionally, the incorporation of climate-related assessment criteria by financial institutions in their lending and investing practices may restrict our access to debt and equity capital markets, potentially leading to higher financing costs. Further, the implementation of carbon pricing instruments is growing, with many organisations advocating for a global carbon price. The speed and extent of this implementation could have financial impacts on companies that fail to adapt their business models accordingly. Thus, proactively addressing climate change is not only essential for mitigating environmental risks but also for safeguarding our financial resilience and competitiveness. ME1 CLIMATE CHANGE & CARBON MANAGEMENT Integrate and adopt climate considerations for business resiliency and manage decarbonisation efforts through technology-driven optimisation and low-carbon processes. Risks • Shifting consumer demand for low-carbon products and services can lead to stranded assets and increase our business continuity risk. • Limited access for oil & gas businesses to debt and equity markets, leading to increasing financing costs. • Inability to adapt business models to evolving climate expectations and regulations poses business continuity risks. • Mandatory carbon pricing instruments could impact overall financial performance. • Failure to meet climate goals could negatively impact the company’s reputation. Opportunities • New business streams which leverage low-carbon solutions may be created for continued financial success. • Effective management of climate-related topics could boost stakeholders’ confidence, including the public and future talent pool. • Opportunities for ESG-positive and transitioning businesses to attract funding from sustainabilityfocused investors. • Establishing a clear transition pathway demonstrates a commitment to managing our business’s carbon footprint, thereby maintaining brand value. S1 S5 Concerned stakeholders S7 S8 S10 MANAGEMENT APPROACH We recognise that effective greenhouse gas (“GHG”) management enables Yinson to mitigate climate-related risks and capitalise on opportunities. Yinson acknowledges the potential climate-related risks and opportunities that could materialise over the short, medium and long-term, and our role in delivering clean and equitable energy while managing our climate impacts. We embrace the concept of ‘common but differentiated responsibility’ put forward by the UN Framework Convention on Climate Change, where we recognise our unique position in the value chain to actively contribute to the global effort to reduce emissions. For Yinson, as our FPSO operations currently account for approximately 97% of our total GHG emissions, this means that we are committed to operating our FPSO business with minimal impact on the environment while taking active climate action wherever possible. GHG methodology, verification and assurance Yinson accounts for and reports our Scopes 1, 2 and 3 GHG emissions in accordance with internationally recognised standards including: • UK oil & gas industry’s Environmental Emissions Monitoring System (“EEMS”). • GHG Protocol. • ISO 14064. • IPIECA guidelines.
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