MISC Integrated Annual Report 2020

///// Sustainability / Financial Review / Business Review / Leadership / Governance /// MISC Berhad / Integrated Annual Report 2020 7 140 MISC Berhad / Integrated Annual Report 2020 7 141 /// Governance / Leadership / Business Review / Financial Review / Sustainability ///// Section Section Sustainability Pillar Initiatives and outcomes Environment Towards mitigating the impacts of climate change, and in line with our commitment to practice green shipping, we continued to explore the viability of low carbon emission solutions such as LBV that support the establishment of green infrastructure for the energy transition. We proactively managed our environmental footprint and inculcated a strong sense of environmental consciousness amongst our employees. In 2020, LNG vessels achieved an 18% reduction in emission, double the target set in 2016. Please refer to the Operating Safely and Sustainably section on page 206 of this Integrated Annual Report. Community The LNG Business segment is supporting the Group’s initiative in investing for the next generation of talent through well- established and fully functioning programmes that promote education and awareness amongst youths. Our efforts are contributing to the younger generation’s development and their journey towards becoming future industry leaders. KEY DEVELOPMENTS Notwithstanding the difficult market environment in 2020, the LNG Business has successfully grown its business and made strategic entry into new market and asset classes. The expansion of our footprint into China through the acquisition of six VLECs was historic and strategic. We also continued to explore opportunities to broaden our market presence by participating in pre-qualifications and tenders for LNG shipping requirements globally. Please refer to the side-bar for more details on this. Another significant milestone in 2020 is our successful venture into the LNG bunkering segment, becoming the region’s first commercial operator and ship manager for an LBV. The LBV, Avenir Advantage , is currently chartered by PETRONAS LNG Sdn. Bhd. for a three- year period. During the year, MISC was awarded AIP by Bureau Veritas on one of our L2P solutions. The AIP was obtained based on conversion of our Puteri and Puteri Satu class vessels into floating storage regasification unit (FSRU). In recognition of our operational excellence, the Seri Amanah was awarded the Best Quality Ship Award 2019 by the Japan Federation of Pilots’ Associations. The international recognition is a validation of the MISC’s consistent ship management track record of smooth operations. It is also testament of the vessel’s solid and reliable safety management systems that includes excellent ship to shore coordination, bridge resource management, crew competency and precision in safety and operational practices. In brief, the LNG Business has successfully created new revenue streams through our ventures into the VLEC and LBV segments, whilst selectively pursuing opportunities in the more competitive conventional LNGC market. The LNG Business is confident LNG ASSET SOLUTIONS Sustainability Pillar Initiatives and outcomes Shareholders In order to create sustainable and long-term financial value for our shareholders, we have focused our sights on continuing to grow the secured-revenue stream in both conventional LNG shipping and unconventional gas carriers like VLECs; and expand our third-party business portfolio including new market entry. In 2020, we developed several non-conventional LNG solutions to broaden our sources of revenue. Customers In line with our aim to exceed customer expectations, we have increased the quality of our service to improve customer perception and interactions. In 2020, the LNG Business through MISC Group, conducted a customer survey for our key customers. The aim was to gauge our customer’s perception of the Group and to identify areas of improvement to better serve them. In the ‘Meeting Expectation’ category, the LNG Business scored well, with more than 85% of respondents indicating that they were satisfied with services provided. Based on the findings, an action plan to address the identified gaps has been developed. For more details of the customer survey, please refer to Anchoring Sustainability @ MISC section on page 104 of this Integrate Annual Report. Governance and Business Ethics The LNG Business has embedded a strong culture of business ethics and ethical conduct as part of our DNA. We continue to inculcate a robust compliance culture through monthly sharing sessions and messages shared by the Vice President. During the year, we conducted due diligence exercises on new and existing clients. Employees We conducted many employee engagements to ensure they understand the business’ strategic priorities and targets for the year. These engagements also allowed us to share key development in the business as well as its performance. To gain further insight into our employees and identify areas for improvements, we conducted a survey to gauge their opinions on the work culture, compliance, human rights and the LNG Business as a whole. SUSTAINABILITY We continued the course with our sustainability agenda, through a spectrum of initiatives targeted at our stakeholders and areas of interest as follows. on delivering the business aspirations and meeting clients’ expectations by leveraging on commendable track records, a prudent and focused strategic approach, as well as customer-centric mindset.