MISC Integrated Annual Report 2020

///// Sustainability / Financial Review / Business Review / Leadership / Governance /// MISC Berhad / Integrated Annual Report 2020 7 152 MISC Berhad / Integrated Annual Report 2020 7 153 /// Governance / Leadership / Business Review / Financial Review / Sustainability ///// Section Section MOVING FORWARD The tanker market is expected to remain challenging in 2021, as subsequent waves of infections continue to hit oil demand centres of North America, Europe and Asia. Sustained oil supply cuts by OPEC+ are continuing to impact tanker demand. However, demand is likely to return by the second half of the year on the back of vaccine availability, and increase in refinery runs, which may support tanker rates. Tanker newbuilding activities have slowed down, due to in part COVID-19 and weak market outlook, but also in view of recent regulatory developments amplifying shipowners' concerns on the choice of propulsion systems and fuels. Overall, the tanker fleet capacity growth is projected to be 1.5% in 2021, underscored by high scrapping potential for an older fleet amid challenging market conditions. The maritime sector is increasingly focused on the reduction of shipping's GHG emissions. The continuing evolution of maritime regulation towards emissions reduction is in line with AET’s Sustainability Agenda to care for the environment and operate responsibly. Oil and gas players are expected to continue investing in energy with a focus on efficiency and GHG reduction technologies along their value chain, while the shipping finance fraternity is coming together with initiatives that promote alignment of their financing portfolio with IMO's GHG ambition such as Poseidon Principles. There is no single solution available to shipowners to meet emission reduction ambitions as green technologies continue to evolve and LNG is expected to remain one of the most competitive transition fuel option for shipping in terms of price and environmental impact. As a pioneer in LNG dual-fuel vessels, AET's specialised capability in managing these assets sets us apart from the competition. AET continues to monitor the development of eco-efficient technologies closely and seeks collaboration opportunities with technology and energy companies focusing on cleaner energy applications in maritime and shipping. Bearing in mind the uncertainties ahead, AET’s business strategies are geared towards pursuing long-term sustainability by growing our secured-income portfolio and participating in eco-efficient shipping opportunities either on our own or through strategic partnerships. Sustainbility Pillar Initiatives and outcomes Community In 2020, AET for the first time sponsored a MaritimeONE Scholarship with the Singapore Maritime Foundation (SMF). Driven by our desire to contribute to maritime education and training, we support our home grown cadetship programme in ALAM through EagleStar. Between 10 to 15% of our sea staff onboard our ships are trainees from ALAM. During the global pandemic, we are looking to do more for the communities where we are based. Despite the current challenges, our global intern programme continues to grow, and in 2020, we welcomed 19 undergraduates into the AET family to learn more about international shipping. We have collectively invested more than 7,600 hours in training and developing these promising individuals who have benefited from working in a hands-on capacity across a variety of functions within our diverse and multi-cultural teams. During the year, we contributed some USD600,000 towards food programmes to support over 2 million meals for the COVID-19 impacted vulnerable community members. The contributions were made through the national and local charities’ food programmes in Singapore, United Kingdom, United States, Brazil, India and Philippines. The details of our contributions are as follows: • Singapore: Migrant Workers’ Centre (MWC) delivered over 10,700 food care packs to workers in various sites and dormitories and provided 10,500 cooked meals for workers in need. AET employees also contributed 75 food packs to migrants in need. • India: Akshaya Patra Foundation provided 6,625 families with food packs in Delhi, Mumbai, Vadodara, and Ahmedabad, translating into more than 270,000 much-needed meals. • Philippines: Philippine Business for Social Progress supported around 3,175 families with food packs (fresh and dried goods) in Metro Manila and Cebu City, translating in over 240,000 cooked meals. 100 fishermen, farmers, sewer workers and their families received much-needed income from the food and masks sold for the packs, reinvested in fishing and farming supplies. • US: Houston Food Bank catered over 225,000 meals to children, families, and seniors in need, while the Galveston County Food Bank provided around 300,000 meals to meet the growing demand of the community. • Brazil: Rio Contra Corona distributed food packs to 13,500 families most impacted by COVID-19 in the Rocinha, Vidigal and other underprivileged communities in Rio De Janeiro, translating to close to 1 million meals. • UK: - - The Trussell Trust supported foodbanks that needed infrastructure to serve the underprivileged impacted by COVID-19. - - The contribution to Felix Project translated into about 115,000 meals cooked with the fresh supply being rescued and delivered to frontline charities. Our employees participated in the ‘Walk for Our Children 2020’ (Virtual Edition) to support the Singapore Children’s Society (SCS) with a collective goal to contribute 10 million steps by end November 2020. Our employees exceeded the target set clocking a total of 33,876,503 steps which also raised SGD1,150 for this campaign from personal donations. This was complemented by AET’s bronze sponsorship of SGD5,000 for the charity walk with all funds raised to support SCS’s day-to-day programmes and services. A key part of AET’s crisis management readiness plan in 2020 focused on an integrated response structure in close collaboration with other stakeholders. During the year, AET and Eaglestar collaborated with Gallagher Marine Systems (GMS) on a crisis drill requiring the setting up of a Unified Command (UC). The drill allowed AET to conduct further tests on our new Crisis Management Plan involving regional and global crisis management teams. Over 40 personnel from agencies such as GMS, the United States Coast Guard, Texas General Land Office and others have come together to constitute the UC. This partnership has strengthened our people’s ability to respond swiftly in the event of a crisis. PETROLEUM & PRODUCT SHIPPING