Sustainability Reporting Guidance for the Oil and Gas Industry March 17", 2021About Sustainability Knowledge Group Ss< Cain group ur Vision is to make Sustainable Business a Choice for companies and organizations around the world. Pree aa ect ee ee eee Sete ay R and Sustainability solutions. We pravide tallor made training, coaching and advisory services {rounded in international theory and successful application. 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Sustainability Knolesgroup Our reach s< Soon = Our clients include” o + Banking * Oil & Gas * Construction * Consulting * Concessionaire + Education «= FMCG * Facility Management * Local Authorities + NGOs * Telecommunications = Technology * sample clientele 1© 2021 Sustainabitty Knowledge Group 4Sustainability Reporting Guidance for the Oil and Gas IndustrySustainal ity Reporting Guidance for the Oil and Gas Industry Ss< knowledge SS ee group The disclosure landscape is ever evolving. Individual and organizational stakeholders around the world want to better understand the oil and gas sector and the impact of its activities, risks, opportunities, and trade-offs. One of the ways companies are responding to these requests is through sustainability reporting. The International Environmental Conservation Association for the Petroleum Industry IPIECA), is an international association that aims to promote environmental and social issues in the oil and gas industry. IPIECA was established following the UN Environment Program (UNEP) request for the oil and gas industry to form channels of communication with UNEP. In 2020, IPIECA, in partnership with the American Petroleum Institute (API) and the International Association of Oil and Gas Producers (|OGP), released the fourth edition ability Reportin. jidelines for the Oil and Gas Industry” (the Guidance). The Guidance is a key tool for assisting companies in shaping their sustainability report structure and content. The Guidance covers 21 sustainability issue areas and 42 performance indicators that fall under five modules. These issue areas and indicators were selected based on industry consensus and significant insights and suggestions from an independent panel of stakeholders with expertise in the sector and in sustainability reporting. sustainabilityReporting Guidance for the Oil and Gas Industry Guidance structure Using the Guidance helps demonstrate companies’ efforts in the oil and gas sector to apply good reporting practices. The Guidance is divided into five modules: 1.Governance and business ethics: it covers issues of governance and management systems, business ethics, and transparency issues. 2.Climate change and energy: it covers climate strategy and risk, technology, emissions, energy, and flaring. 3.Environment: covers issues of water, biodiversity, air emissions, spills, materials management, decommissioning, 4 Safety, health and security: It covers issues of workforce protection, product health, safety and environmental risk, process safety, security. 5.Social: It covers issues of human rights management, labour practices, community engagement, local content. Benefits of reporting Energy helps economies grow, improve health and quality of life. Meeting the world’s future energy needs through a transition to low-emission energy sources is important to achieving sustainable development. Therefore, it is necessary that the oil and gas industry clearly communicate how it supports the energy transition. While reporting on sustainability strategy and performance matters to many stakeholders, its importance continues to increase for investors.‘Sustainal ustainabilit ity Reporting Guidance for the Oil and Gas Industry S< kmowledge group Climate change in particular has become a major topic for investors who themselves receive demands from their clients and other stakeholders (including regulators) to demonstrate their portfolios’ climate-related impact and climate resilience. High-quality reports can make a difference in gaining valuable contracts and working with companies of similar values. Likewise, companies can mitigate supply chain risks of poor social and environmental practices by encouraging transparency in their procurement processes. The UN Sustainable Development Goals Oil and gas companies play an important role in the global economy. While all of the SDGs are potentially relevant, their activities can contribute to achieving the SDGs. According to the IPIEC. nui stainabilit Survey results, 92% of Guidance users reported or referred to the SDGs in their reports. 88% felt that their companies were most material to SDG 8 (Decent work and economic growth) and 85% to SDG 7 (Affordable and clean energy) and SDG 13 (Climate action), At the same time, 81% of companies supplement their reports with additional communication on specific topics such as climate change risks and opportunities. The figure below shows the connection between the five modules and the SDGs and guides companies to demonstrate their contributions to the SDGs.__ Sustainability Reporting Guidance for the Oil and Gas Industry Ss< ae groupustainabilit Reporting Guidance for the Oil and Gas Industry Ss< inowteace ad up Many oil and gas companies report their contribution to the SDGs and usually do so in one of two ways: 1.Use SDGs as a framework to define their overall contribution to sustainable development. 2.Mapping and discussing the material issues against the SDGs which are most. applicable to their activities. Guidance assists companies with one of these two options, provides the data and other evidence for the assertions the company makes about its contribution to the SDGs. It is important to note that the company's contribution include positive contributions to the SDGs as well as activities that challenge the achievement of a Goal. To help, Guidance also refers to tools like the SOG Compass and IPIECA SDG Atlas provide guidance on how to align strategies and measure and manage contributions to the SDGs can be used. Reporting frameworks This reporting Guidance has been developed to provide oil and gas industry-specific information on good practices in sustainability reporting. The guidance takes into account other sustainability reporting frameworks. Since there is no single set of agreed-upon disclosures, this quidance aims to reflect other good practices and understand the frameworks that are important to key stakeholders as it adapts them to the context of the oil and gas industry.‘Sustainal ity Reporting Guidance for the Oil and Gas Industry S <€ inoweage ” The Guidance has listed the five frameworks most used by IPIECA members in 2019 to guide their reports, and they are: Global Reporting Initiative (GRI) “Task Force on Climate-Related Financial Disclosures (TCFD) “UN Global Compact -UN Guiding Principles on Business and Human Rights +UN Sustainable Development Goals (UN SDGs) in addition to a number of other well-established frameworks that are frequently used: «International Organization for Standardization (ISO) *Principles for Responsible Investment (PRI) “Sustainability Accounting Standards Board (SASB) “The Organization for Economic Co-operation and Development “CDP “WBCSD / WRIHave Trusted us for Training and Consultancy Assignments S < ee group Eanes ec [ores GEK TERNA Barking/Financiat Cry a ent een 2 SHANGRISIA HOLDAL aWaBlx = - A @® maleme @ more simaboacah Holiday Inn ‘AMORIM mHave Trusted us for Training and Consultancy Assignments S ¢< foun ee group International Agencies & Non Real Estate ian ersustainability Contact: S < a Email: contact@sustainabilityknowledgegroup.com United Kingdom 85 Great Portland Street, First Floor, WLW 7LT, London, UK TeL.: +44 (0)20 32392990 Cyprus United Arab Emirates Vasili Michailidi 9, Jumeirah Business Centre CY-3026, Limassol, Cyprus (JBC), Jumeirah Lake Towers (JLT), Dubai, UAE