The need for collective and purposeful action on climate change has never been greater, with the latest Intergovernmental Panel on Climate Change (IPCC) Report showing that the earth is close to exceeding the 1.5˚C temperature limit to avoid irreversible impact on our climate10. In parallel to this heightened urgency, sustainability has become major determinant of consumer choice11, while investors are increasingly channelling their money towards companies that demonstrate a purposeful sustainability agenda and a clear action plan on climate12. This is especially the case for companies engaged in the extraction of fossil fuels, as we are. THE TRANSITION TO A LOW-CARBON ECONOMY OUTLOOK Moving forward, we will continue to action our Sustainability Framework by working towards intermediary targets and our long-term ambitions, while refining our net-zero roadmap. HOW WE RESPONDED • Launching our Sustainability Framework, which outlines four key sustainability themes – plus attendant objectives and ambitions – that will guide our sustainability initiatives and actions in the years to come • Appointing sustainability champions in each of our subsidiaries to inculcate sustainable thinking at all levels • Prioritising electricity saving strategies and implementing energy-efficiency technologies across our business presence • Placing greater focus on initiatives across the ESG spectrum, leading to an increase in our ESG rating from 1-star to 3-star POTENTIAL IMPACT Risks: • By not acting meaningfully, we would negatively impact natural environments and the communities that depend on them for their livelihood • Inaction on the climate would impact not only our business but the sustainable management of the resources we use, leading to greater financial impact on our businesses • Failure to establish an impactful emissions reduction plan would lead to poorer investor sentiment, reputational harm, and financial losses • We run the risk of not being in compliance with fastchanging regulations in our countries of operation, and being subject to penalties and sanctions Opportunities: • By establishing a meaningful, long-term action plan to reduce our emissions, we can safeguard our businesscritical resources, bolster our reputation as a progressive organisation, and future-proof our operations • Through a strong climate action agenda, we can better attract investment and drive partnerships, both in Malaysia and around the world 1 McKinsey (2020), How COVID-19 has pushed companies over the technology tipping point – and transformed business forever, https://www.mckinsey.com/capabilities/strategyand-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever 2 Accenture (2021), The future of work: A hybrid work model, https://www.accenture.com/us-en/insights/consulting/future-work 3 Great Learning (2022), The Growing Demand For Artificial Intelligence (AI), https://www.mygreatlearning.com/blog/the-growing-demand-for-artificial-intelligence-ai/ 4 Grand View Research (2022), Digital Transformation: Market Analysis Report, https://www.grandviewresearch.com/industry-analysis/digital-transformation-market 5 Consultancy.eu (2022), How the Russia-Ukraine conflict is impacting supply chains, https://www.consultancy.eu/news/7993/how-the-russia-ukraine-conflict-is-impactingsupply-chains 6 Deloitte (2022), European CFO Survey – Spring 2022, https://www2.deloitte.com/uk/en/insights/economy/russia-ukraine-war-inflation-impact.html 7 Strategic Finance Magazine (2022), Global economy set for weak growth as confidence drops, https://sfmagazine.com/post-entry/august-2022-global-economy-set-forweak-growth-as-confidence-drops/ 8 Korn Ferry (2022), The $8.5 Trillon Talent Shortage, https://www.kornferry.com/insights/this-week-in-leadership/talent-crunch-future-of-work 9 Randstad (2022), Why is there a global labour shortage?, https://www.randstad.com/workforce-insights/talent-acquisition/why-there-a-global-labor-shortage/ 10 IPCC: Sixth Assessment Report (2021), https://www.ipcc.ch/assessment-report/ar6/ 11 Deloitte (2020), Shifting sands: how consumer behaviour is embracing sustainability, https://www2.deloitte.com/ch/en/pages/consumer-business/articles/shifting-sandssustainable-consumer.html 12 OECD (2020), ESG Investing: Practices, Progress and Challenges, https://www.oecd.org/finance/ESG-Investing-Practices-Progress-Challenges.pdf IMPACTING Capitals Strategic Thrusts Material Matters M1 M4 M8 M10 55 DNeX INTEGRATED REPORT 2022
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