MISC Integrated Annual Report 2020

OUTLOOK AND OPPORTUNITIES OUR RESPONSE There will be an increase in investments in emerging technologies providing a wider use of green energy sources and increasing alternative fuel options. Advancements in technology and digital transformation will be accelerated to address decarbonation goals with more cross-sectoral collaboration efforts and technology-based partnerships among industry leaders. For the maritime transport sector, digitalisation will help the industry respond to the increased demand with enhanced safety and efficiency whilst green technology enables cost- effective and environmentally friendly operations. MISC will continue to focus on improvement in voyage planning and digitalisation initiatives to optimise fuel consumption and reduce carbon emissions. MISC has also been investing in R&D in digitalisation and innovation applications such as safety and risk management digitisation systems, integration of inventory management systems and data-driven shipmanagement system. Further details on this investment can be found in Anchoring Sustainability @ MISC section on page 107. To keep up with market developments and to maintain our competitive advantage, we will leverage on digital technologies and continuously enhance and strengthen our internal capabilities with regards to technology requirements for greater operational efficiencies. The Group is driving the internal transformation in the areas of finance, procurement and document management towards becoming a data- driven organisation. There are also opportunities to commercialise LNG asset-based solutions whilst identifying and maturing non-conventional solutions. Meanwhile, the Offshore Business segment is in the process of identifying and potentially implementing available new technologies for offshore asset efficiency or for greater Offshore Business’ commercialisation. Material Matters Risks MEDIUM TO LONG TERM ADVANCEMENT IN TECHNOLOGY AND DIGITALISATION The rising tide of technology has been reshaping the maritime industry and more change is expected in the future. Commercial and environmental needs are driving these transformations and technology is a key enabler. Technological advances such as blockchain applications, cargo and vessel tracking, autonomous ships and artificial intelligence, hold opportunities for the global shipping industry to better meet the needs of their customers. Similarly, R&D efforts on new fuels and propulsion systems as well as technology for reducing emissions are coming to the fore. The pace of digitalisation in the energy sector is also increasing and investment in digital technologies by energy companies has risen sharply over the last few years. Oil and gas companies are looking into non-traditional partnerships, for example with technology, transportation and commercial companies to develop cost-effective solutions across their supply chains. Sources: IEA, GMF *Based on survey results of more than 350 shipowners and shipmanagers on reasons for digital adoption Source: Llyod‘s List OUR OPERATING ENVIRONMENT Health and safety Risk management Digitalisation and innovation Cybersecurity Increased automation and connectivity Survey: Top ve motives for digitalisation 0 10% 20% 30% 40% 50% 60% 70% 80% Increase ef ciency Regulation/ certi cation Customer value Competitiveness Safety 71% 60% 45% 44% 23% (%) // Key Messages / Highlights / Strategic Review / Sustainability / Financial Review ////// MISC Berhad / Integrated Annual Report 2020 4 80 MISC Berhad / Integrated Annual Report 2020 4 81 ////// Financial Review / Sustainability / Strategic Review / Highlights / Key Messages // Section Section