Petron Malaysia Refining & Marketing : Sustainability Report 2022

PETRON MALAYSIA REFINING & MARKETING BHD 196001000260 (3927-V)

Celebrating a Decade of

SUCCESS

SUSTAINABILITY REPORT 2022

INSIDE

THIS REPORT

COVER RATIONALE

CELEBRATING A DECADE OF SUCCESS

In 2022, Petron Malaysia celebrated 10 years of fuelling happiness. We trace back our humble beginnings to the time we built the first Petron service station in MRR2 Selayang, Kuala Lumpur in 2014. The following decade saw the incredible growth of our service station network, as well as numerous upgrades in our refinery, plant and distribution facilities, placing us at the forefront of the local oil industry.

Our 2022 Sustainability Report cover design highlights our journey in sustainability efforts, which aim to create positive economic, environmental and social impacts. The metallic silver in our 10th anniversary logo reflects the Company's strength and resilience in its journey.

In this Sustainability Report, we also celebrate the people - employees, business partners and other stakeholders, who have shared their time and dedication with us. We are proud of what we have achieved together and the impact we have made on our customers' lives through the products and services we offer, embedding sustainability in all that we do. Throughout our 10 years of Sustainability Journey, we have consistently created value for our stakeholders, planting the seeds today, for tomorrow.

We are poised to grow, rise and fuel more successes in the next decade and beyond without forgetting our responsibilities to the environment and the communities. We look forward to turning the pages to the next and more exciting chapters of our journey to sustainability.

OUR VISION

To be the leading provider of total customer solutions in the oil sector and its allied businesses.

OUR MISSION

We will achieve this by:

• Being an integral part of our customers' lives, exceeding expectations and meeting changing needs, delivering a consistent customer experience through quality products and innovative services
• Developing strategic partnerships in pursuit of growth opportunities
• Fostering an entrepreneurial culture that encourages teamwork, innovation and excellence
• Acting with professionalism, integrity and fairness at all times
• Adhering to the strictest safety and environmental standards
• Promoting the best interests of all our stakeholders and caring for our community

OUR VALUES

INTRODUCTION

04 About This Report

06 The Business of Petron

1. Message from the Chairman

1. Awards and Certifications

OUR SUSTAINABILITY IMPACT	03

Advancing Ethical Business Growth

1. Generating Economic Benefits

1. Ethical Business Practices

Protecting Environment and Nature

45 Climate Change and GHGs

1. Air Emissions and Pollution Management

1. Waste and Circular Economy

1. Water Management

1. Natural Resources
2. Biodiversity
3. Sustainable Supply Chain

Fostering Societal Well-Being

1. Agile, Diverse and Thriving Workforce

1. Safety

1. Customer Data Protection

01

SUSTAINABILITY AT PETRON	02

1. Sustainability Framework
2. Sustainability Governance

1. Stakeholder Engagement

1. Materiality Assessment

1. Risks and Opportunities

APPENDICES04

1. Membership of Associations
2. Sustainability Performance Data

1. GRI Content Index

1. Glossary

4	PETRON MALAYSIA REFINING & MARKETING BERHAD
	ABOUT THIS REPORT
	Our pursuit of a better and more resilient future is underpinned by our efforts in sustainability.
	It is the focal point of everything we do - from the time crude oil is refined to the time our
	petroleum products reach our customers.
	Our six corporate values - Excellence, Customer Focus,
	Innovation, Teamwork, Ethics and Safety - sum up our
	efforts towards a sustainable future. As we advance
	forward to become the leading provider of total customer
	solutions in the oil sector and its allied businesses, we
	remain guided by our sustainability commitment, even in
	the face of recent challenges.
	From	our	first	step into	sustainability	reporting in
	2013 Annual Report, we have continued to enhance
	our disclosures to comply with evolving local and
	global reporting standards and regulations. In 2018,
	we published our inaugural stand-alone Sustainability
	Report.
	The	content of	this	report	is based	on matters
	that	are	material to	our	business,	communities,
	and	the	environment,	reflecting	our	Economic,
	Environmental, and Social (EES) impacts, determined
	through a materiality assessment, as reported on
	page 20-21. This report outlines our initiatives,
	programmes and performance outcomes related to
	these material matters. It also communicates our efforts
	to incorporate sustainability into our everyday operations
	and business management, reflecting	our commitment
	to generate long-term value for our stakeholders.

SUSTAINABILITY IMPACTS

ECONOMIC

ENVIRONMENTAL

SOCIAL

SCOPE AND BOUNDARIES

This report encompasses the sustainability performance of Petron Malaysia Group, which includes Petron Malaysia Refining

• Marketing Bhd (PMRMB), Petron Fuel International Sdn. Bhd. (PFISB) and Petron Oil (M) Sdn. Bhd. (POMSB). This report covers all operations within the entities above, unless otherwise specified. The reported information covers the time period of 1 January 2022 to 31 December 2022.

SUSTAINABILITY REPORT 2022

ABOUT THIS REPORT

REPORTING FRAMEWORKS

This sustainability report has been prepared with reference to the Global Reporting Initiative (GRI) Standards and GRI 11: Oil and Gas Sector 2021 as well as the following reporting guidelines and requirements:

• Bursa Malaysia Sustainability Reporting Guide 2nd and 3rd Editions
• Securities Commission's Malaysian Code on Corporate Governance (MCCG) 2021
• The United Nations Sustainable Development Goals (UN SDG)

5

INTRODUCTION

6 PETRON MALAYSIA REFINING & MARKETING BERHAD

THE BUSINESS OF PETRON

OUR STRUCTURE

Petron Malaysia Group is under the Petron Corporation since 2012 and Petron is an Asian company with global mindset. We aim to be an integral part of the journey of every Malaysian.

Petron Malaysia Group comprises Petron Malaysia Refining & Marketing Bhd (PMRMB), and its sister companies, Petron Fuel International Sdn. Bhd. and Petron Oil (M) Sdn. Bhd. Petron Malaysia Group is Malaysia's third-largestdownstream oil and gas player.

Petron Malaysia

Petron Malaysia	Petron Fuel	Petron Oil (M)
Refining & Marketing	International	Sdn. Bhd.
Bhd	Sdn. Bhd.

73.4%100%100%

CONNECTING PEOPLE WITH OUR PRODUCTS

Our Business

REFINERY

TERMINALS

RETAIL

LPG

Our Facilities

Port Dickson Refinery, Negeri Sembilan

11strategically located terminals and plant

• Port Dickson Terminal, Negeri Sembilan
• Bagan Luar Terminal, Penang
• Kuantan Terminal, Pahang*
• Westport Terminal (JV-BHP), Selangor*
• KLIA Aviation Depot (JV-Petronas/Shell), Selangor
• Klang Valley Distribution Terminal (JV-Petronas/Shell), Selangor
• Pasir Gudang Terminal (JV-Chevron), Johor*
• Sepangar Bay Terminal, Sabah*
• Sandakan Terminal, Sabah*
• Tawau Terminal, Sabah*
• Lumut PME Plant, Perak

>750service stations nationwide

>100F&B inserts on our non-fuel offerings

~140service stations offer cash and carry LPG

SUSTAINABILITY REPORT 2022

THE BUSINESS OF PETRON

Our Products

Refined Products

• Gasoline 100, 97 and 95 RON
• Automotive Diesel Oil (ADO)
• Liquefied Petroleum Gas (LPG)
• Jet Fuel
• Naphtha
• Low Sulphur Waxy Residue (LSWR)

Distribution of our high quality fuels and LPG

• Blaze 100RON Euro 4M • Turbo Diesel Euro 5

• Blaze 97RON Euro 4M • Diesel Max Euro 5

• Blaze 95RON Euro 4M • Petron Gasul

Our convenience store Treats, provides a rewarding one-stop shop experience to cater to customers' needs.

Petron Gasul provides efficient energy for Malaysian households for cooking, lighting, etc.

12kg 14kg 50kg

7

INTRODUCTION

PMRMB is a publicly	Our head office is	We have
listed company on the	located at	658
Main Board of Bursa	Damansara Heights,	employees
Malaysia Securities	Kuala Lumpur
under Petron Malaysia
Berhad since 2012
	Group

INDUSTRIAL

Unbranded Mini stations, Transportation, Power Plants,	High quality selection of industrial products to
Plantations, Airlines, Workshops	fuel the Malaysian economy
	• Automotive Diesel Oil (ADO)
	•	Gasoline
	•	Jet Fuel
	•	Bulk LPG
	•	Lubricants

* PMRMB's sister companies' facilities

8 PETRON MALAYSIA REFINING & MARKETING BERHAD

MESSAGE FROM THE CHAIRMAN

To Our Valued Stakeholders,

The impacts of climate change have continued to worsen over the last few years, affecting businesses and livelihoods globally as weather events and natural disasters swing towards greater extremes. Petron being an oil company is also balancing its efforts to care for the environment as well as to support economic development of the country as we fuel the energy needs of the economy.

RAMON S. ANG

Chairman

SUSTAINABILITY REPORT 2022

MESSAGE FROM THE CHAIRMAN

Petron continues its commitment to uphold the highest occupational safety and health standards

9

INTRODUCTION

At Petron Malaysia, we are cognisant of our role in helping the nation to accelerate towards a low-carbon future and in responding to the global climate change emergency. We are committed to support Malaysia's aim of achieving carbon neutrality as early as 2050. This includes supporting Malaysia's National Energy Policy 2022-2040, which aims to drive the sustainable development of the energy sector while ensuring optimal utilisation of energy resources. Efforts such as identifying climate-related risks and opportunities, producing cleaner fuels, and promoting a circular economy. These are in addition to reducing our operational greenhouse gas (GHG) emissions.

We have commenced our journey towards cleaner energy since 2016 by introducing Malaysia's first and only RON 100 fuel, a motor gasoline with typically less than 10ppm sulphur content, emitting cleaner air and lower GHG. In addition, in the same year, our Turbo Diesel B7 complied with E5's sulphur content regulation. This clearly demonstrates our commitment to produce cleaner energy even before we invested in a Diesel Hydrotreater (DHT) facility, which produces cleaner fuel with lower sulphur content. Commissioned in 2021, this facility includes a Bio-Sulphur Recovery (BSR) plant that uses an eco-friendly desulphurisation process for it to be recovered as elemental sulphur that can be used to make fertilisers, enabling us to reduce our waste and further venture into the circular economy. Alongside the DHT, our new Marine Import Facility 2 (MIF2), which was also commissioned in 2021, has enabled us to lower our carbon emission as we can now receive larger parcels of imported finished

products, thus reducing the frequency of imports. Additionally, our investments in a Multi-Product Pipeline and the Klang Valley Distribution Terminal have allowed us to rationalise our truck deliveries by an average of 720,000 km/month. This generates an equivalent to 486,000 kg of CO2 emissions savings or carbon sequestered by 8,036 tree seedlings grown for 10 years.

The year 2022 was a momentous occasion for Petron Malaysia as we marked our 10th Anniversary, symbolising

1. significant achievement throughout a decade-long journey. During the year, we continued to invest in our facilities not only to increase production and efficiency, but also to bolster our sustainability efforts. This included the completion of our Lumut Palm Methyl Ester (PME) plant expansion, further boosting production capacity by 30% or up to 90,000 metric tonnes of PME per year, enabling us to meet the rising demand for biodiesel to support Malaysia's aspiration to improve air quality through cleaner emissions. The Lumut PME Plant (LPP) also completed the refurbishment and upgrading of its wastewater treatment plant, enabling the plant to further reduce its effluents by more than half.

STEPPING UP OUR SUSTAINABILITY EFFORTS

In the year under review, we took several concrete measures to strengthen the foundations of our sustainability journey. As a start, we enhanced our sustainability governance by establishing a Board Sustainability Committee (BSC) to steer sustainability strategies, priorities and targets. The BSC is tasked with advising the Board, which has oversight of sustainability matters including climate-related risks and opportunities.

To manage our economic, environmental and social (EES) impacts better, we reviewed our material matters by holding an in-depth materiality assessment. This crucial step allowed us to include Climate Change, Natural Resources, Biodiversity and Sustainable Supply Chain as the sustainability matters that are material to our business and stakeholders.

Additionally, we have taken steps to align our sustainability strategy with the Company's corporate strategy. This includes incorporating Petron Malaysia's six core values (Excellence, Customer Focus, Innovation, Teamwork, Ethics and Safety) into our enhanced sustainability framework, which is anchored on EES. Furthermore, we are reviewing and revising our sustainability-related policies. These efforts will enable us to implement strategic sustainability initiatives that are aligned with Petron Malaysia's goals and embed sustainability across our operations.

SUSTAINABILITY ACHIEVEMENTS

Our sustainability achievements in 2022 demonstrated our positive EES impacts and commitment to support the nation's mobility as businesses recovered from COVID-19 disruptions.

We made a significant impact to the nation's economy in the year under review by contributing over RM18 billion of economic value, which included paying taxes, dividends and salaries, investing in local community and supporting local businesses. To this end, we channelled RM8.2 billion or 46% of our procurement spend to local suppliers, who form 96% of our total suppliers. To further empower the local community, we have engaged

120 local entrepreneurs in our Sapot Lokal programme since its launch in 2021. This initiative supports local entrepreneurs by enabling them to sell their goods in our service stations and we plan to expand the programme to 150 service stations by 2025 and to all Treats stores by 2030.

Our support for local economic growth is also reflected in the presence of 95% local talent in our Senior Management team, where we prioritise local individuals in senior positions with decision-making authority. This allows the local community to acquire leadership skills, earn higher income, and contribute to local economic development.

While generating economic growth is an important part of our sustainability journey, we also prioritise high standards of ethical business practices and good governance. I am proud to report that we have maintained zero incidents of corruption cases and money laundering incidents. This was due to our robust Anti-Corruption and Anti-Money Laundering Policies, and the stringent measures we took to combat bribery and corruption in our organisation, including assessing all our operations for risks related to corruption.

Our efforts to operate and grow responsibly have led us to attain various international standards across our operations. International standards such as ISO 14001:2015 Environmental Management System, ISO 9001 Quality Management System and ISO 45001:2018 Occupational Health and Safety Management System achieved by our various business units reflect our commitment to minimise the negative impact of our operations.

10 PETRON MALAYSIA REFINING & MARKETING BERHAD

MESSAGE FROM THE CHAIRMAN

SUSTAINABILITY REPORT 2022

AWARDS AND CERTIFICATIONS

11

Under the environmental pillar, we have continually sought to implement renewable energy solutions to reduce our operational GHG emissions. We believe this will contribute to the nation's target of achieving 31% renewable energy share in the national installed capacity mix by 2025. It is worthy to note that we have made strides in adopting simpler, readily available and energy-

and contractors through training and rigorous risk assessments and management. In 2022, all of our operations including service stations were evaluated for risks and hazards, and the number of employees receiving OSH standards training increased to 306 from 211 in 2021.

AWARDS

INTRODUCTION

efficient alternatives such as switching to LED and solar-powered lights. We target to fully implement this initiative across our operations and business units by the end of 2023. Furthermore, 15 of our service stations are installed with solar power panels and we aim to install solar power panels in 120 of our service stations by 2024. This is estimated to reduce 6,740 tCO2 equivalent (CO2e) of emissions per year, which is equivalent to carbon sequestered by 101,103 tree seedlings grown for 10 years.

Apart from energy conservation, we have implemented other initiatives to conserve natural resources and protect the environment. This includes harvesting rainwater in all our operations for non-essential usage such as cleaning, landscaping and toilet flushing. In addition, we intensified our recycling efforts and awareness across our business

To develop an agile, diverse and thriving workforce, we prioritise the learning and development of our employees. As COVID-19 restrictions eased, we were able to resume physical training sessions. This resulted in a significant increase in the participation of management and female employees with the resumption of our Management Development Training in the Head Office. We also enhanced the sustainability knowledge and reporting skills of our Technical Working Group, whose roles are vital in enabling us to embed sustainability practices in our operations.

To remain relevant, we believe in having a diverse workforce with employees from various backgrounds and age groups. Notably, we have achieved a 33% representation of women on the Board of Directors,

Malaysian Society for Occupational, Safety and Health Awards (MSOSH) 2022

Category: Grand Award Winner

Kuantan Terminal*

Category: Gold Merit

Bagan Luar Terminal

Pasir Gudang JV Terminal*

Sepangar Bay Terminal*

Category: Gold Class 1

Port Dickson Terminal

Sandakan Terminal*

Tawau Terminal*

KLIA Aviation Depot

Prime Minister's Hibiscus Award 2021/2022

Exceptional Achievement in Environmental Performance

Pasir Gudang JV Terminal*

Port Dickson Refinery

Notable Achievement in Environmental Performance

Sepangar Bay Terminal*

Bagan Luar Terminal

Kuantan Terminal*

units and successfully increased our waste diverted from disposal by three times in volume compared to 2021. We also embarked on a Green Lung Project with Universiti Putra Malaysia to preserve and enhance the biodiversity of more than 400 acres of green areas within Port Dickson Refinery (PDR).

consistently meeting and exceeding the 30% benchmark over the past three years. This is aligned with the recommendation in the Malaysian Code on Corporate Governance (MCCG). Within our Senior Management team, female employees constitute 23% of the team. Additionally, we are developing transition assistance programmes for Petron employees who are nearing retirement, and we target to launch the initiative by 2024.

MOVING FORWARD

Graduates' Choice Award	Graduan Brand Awards
2023 Most Preferred Graduate	Malaysia's Top 50 Most Preferred
Employers to Work For	Employers 2022
(Received in 2022)	27th Place
Oil & Gas category: 4th place
Convenience Store category: 8th Place

CERTIFICATIONS

Given the increased volatility in the oil and gas sector, it is imperative that we conduct our business endeavours with sustainability in mind. Going forward, we will further enhance our sustainability efforts to mitigate risks and capitalise on opportunities. This will include adopting the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) to bolster our climate risk management. To enhance our leadership's commitment to sustainability, we aim to provide anti-corruption and anti-money laundering training to all Board members by 2024. We will also further embed sustainability practices in our supply chain by establishing a Sustainable Supply Chain & Procurement Policy by 2023 and a Supplier Code of Conduct by 2025. These efforts will pave the way for a

5S/Quality Environment Certification

3-Star Rating (Highest)

Bagan Luar Terminal,

Kuantan Terminal*,

Tawau Terminal*,

Sandakan Terminal*

2-Star Rating

Pasir Gudang JV Terminal*, Port Dickson Terminal

1-Star Rating

Sepangar Bay Terminal*

Integrated Management System (ISO 9001, ISO 14001,

ISO 45001)

Port Dickson Refinery,

Port Dickson Terminal,

Kuantan Terminal*,

Bagan Luar Terminal,

Pasir Gudang JV Terminal*

Quality Management System (ISO 9001)

KLIA Aviation Depot,

Sepangar Bay Terminal*,

Tawau Terminal*,

Sandakan Terminal*

The year 2022 also saw us continuously engaging with our employees and keeping them safe at the workplace. We recorded zero injuries and fatalities and we will continue to implement strict measures to ensure that the highest safety standards remain in place. We will also continue to increase the occupational safety and health knowledge and awareness of our employees

more holistic sustainability approach as we contribute to the transition to a low-carbon economy while supporting the nation's mobility and energy security needs towards a prosperous and strong economy.

RAMON S. ANG

Chairman

Malaysian Sustainable Palm Oil
(MSPO) Certification	HALAL Certification from JAKIM
Bagan Luar Terminal,	Lumut PME Plant
Lumut PME Plant
KOSHER Certification from Orthodox Jewish Community of Singapore
Lumut PME Plant

• PMRMB's sister companies' facilities.

12 PETRON MALAYSIA REFINING & MARKETING BERHAD

SUSTAINABILITY FRAMEWORK

At Petron Malaysia, we are guided by sustainability principles, as we seek to create sustainable value for our stakeholders. We are part of our ultimate parent company's commitment to achieve net zero by 2050, consistent with Malaysia's target.

SUSTAINABILITY REPORT 2022

SUSTAINABILITY GOVERNANCE

A strong governance structure plays a crucial role in driving an organisation's sustainability performance, ensuring that the business operates responsibly. We continuously seek ways to strengthen our governance to create value for our stakeholders.

13

In 2022, we engaged an external consultant to review our approach to sustainability and enhance our sustainability framework. As a result, we integrated the six values of Petron Malaysia: Excellence, Customer Focus, Innovation, Teamwork, Ethics and Safety into an enhanced sustainability framework.

Our Board of Directors (BOD) has the oversight of sustainability matters within the organisation. In 2022, Petron Malaysia took a significant step towards advancing sustainability by establishing the Board Sustainability Committee (BSC) to effectively lead and promote sustainable practices within the organisation.

The survey questions covered, among others, whether Board members can effectively convey and deliberate on the Company's sustainability matters. It also measured the effectiveness of the Company's overall sustainability governance framework in managing and reporting its risks, targets and initiatives. The evaluation, which

Economic

ADVANCING ETHICAL BUSINESS GROWTH

To stay CUSTOMER FOCUSED and promote work EXCELLENCE towards ETHICAL business growth by giving due regards to sustainability impacts of business activities

Generating Ethical

Economic Business

Benefits Practices

Social

FOSTERING SOCIETAL WELL-BEING

To promote TEAMWORK and SAFETY at all times whilst creating a balanced co-existence with all stakeholders

Agile, Diverse		Customer Data
and Thriving	Safety
Protection
Workforce

The BSC reports to the BOD on the sustainability performance of Petron Malaysia and reviews and endorses sustainability material matters, strategies, goals and targets. The BSC meets four times a year and is supported by a Sustainability Council (SC), which is assisted by a Technical Working Group (TWG).

The BOD, BSC, SC and TWG work closely through holding regular meetings to focus on mitigating significant EES impacts, resulting risks and leveraging opportunities to fulfil Petron Malaysia's intended sustainability outcomes. We conducted our first Sustainability Board Evaluation for the year 2022 as part of the annual Board Evaluation. The Sustainability Board Evaluation is one of MCCG 2021's recommended best practices.

received an average rating of 3.94 out of 5, reflected the nascent stage of our sustainability journey, including our sustainability governance. It is worth noting that the BSC was only formed in the second half of 2022. We will continue to address the gaps and focus on the areas where we are lacking.

To further reinforce our sustainability governance, policies, guidelines and procedures are established and implemented through our management systems based on respective ISO management system standards. For more information on our policies and guidelines, refer to https://www.petron.com.my/investor-relations/ corporate-governance/.

SUSTAINABILITY AT PETRON

OUR

FOCUS1

AREAS

Environmental

PROTECTING ENVIRONMENT AND NATURE

To adopt INNOVATIONS to promote responsible use of resources, reduce GHG emissions, minimise adverse environmental impacts and

transition to low carbon operations

Climate

Air Emissions

Waste and

Water

Natural

Sustainable

Change and

and Pollution

Circular

Biodiversity

Management

Resources

Supply Chain

GHGs

Management

Economy

Sustainability Policy

Our enhanced Sustainability Policy reflects our commitment to generate positive economic impact, minimise our environmental footprint, bolster our social contributions and enhance our corporate governance.

For more information on our Sustainability Policy, please visit our corporate website. https://www.petron.com.my/investor-relations/corporate-governance/

14 PETRON MALAYSIA REFINING & MARKETING BERHAD

SUSTAINABILITY GOVERNANCE

Petron Malaysia's Sustainability Governance Structure and the Key Roles and Responsibilities

SUSTAINABILITY REPORT 2022

15

STAKEHOLDER ENGAGEMENT

Stakeholders are individuals or groups of people whose actions and decisions can impact or be impacted by our decision making, activities and growth. As such, we regularly engage with our relevant stakeholders to identify and understand their needs and expectations. We use the results of the engagement process to inform the development of our sustainability strategy and supporting initiatives.

Board of Directors (BOD)

• Meets 4 times per year

Board Sustainability Committee (BSC)

• Meets 4 times per year

- BOD has oversight of sustainability including climate related risks and
	opportunities
-	Strategies, goals and targets related to material matters are approved at
	BOD level
- Delegated Board's oversight roles and responsibilities to Board
	Sustainability Commitee
- Comprises two Independent Directors and two Executive Directors (one
	shall be the CEO) or one Executive Director (the CEO) and a Non-Executive
	Director. BSC is assisted by up to three advisors (Senior Management)
	from the Company or the parent company
-	Advises the Board by reviewing and endorsing sustainability strategies,

In 2022, we revised our prioritised stakeholder groups, resulting in the identification of nine key categories. We prioritised the stakeholders by assigning weight based on their dependency and influence on Petron Malaysia and vice versa. This was done through internal discussions and using historical information. We are mindful of the dynamic relationships we have with our stakeholders, as our relationships depend on various factors and the changing business environment. As a result, we added Financial Institutions as a new stakeholder group and included Union in the Employees stakeholder group. We have also separated contractors/vendors/suppliers and service providers

from the Business Partners group, and categorised them as External Providers. Additionally, we have divided the

Customers stakeholder group into two groups: one consisting of dealers, distributors and commercial entities, and PETRON AT SUSTAINABILITY

the other comprising end users. This division allows us to better focus on the different needs of our customers.

The table provides an overview of the list of prioritised stakeholder groups for the present time including their relevant needs and expectations, the various methods of engagement and the frequency of our engagements with them.

goals and targets

- Ensures alignment of the Company's sustainability efforts, programmes

and reporting (where applicable) with the ultimate parent company

- Provides an annual report of its activities to the Board and reports its

activities in the Company's Annual Report or in the Company's Annual

Sustainability Report (as applicable/appropriate)

- Provides updates on a quarterly basis to the Board on pertinent items

addressed by the BSC

Stakeholder Groups

1	REGULATORS -
authorities, local
	governments/ministries
	We seek to work closely with
	regulators and authorities to
	ensure compliance and to

Stakeholder's Relevant Needs and Expectations

• Demonstration of compliance with respective authorities' requirements
• Supporting government policies and objectives
• Timely and responsive communication and actions

Engagement Methods	Frequency
Meetings	Ongoing
E-mail communication	Ongoing
Site visits and inspections	Ongoing
Periodic reports	Monthly/
	Quarterly/
	Annually
Corporate website	As and when
www.petron.com.my

Sustainability	-	Comprises the Company's key Senior Management
Council (SC)	-	Oversees the strategic management of material sustainability matters
• Meets 6 times		consistent with the Board's approval

keep abreast of the evolving

regulatory landscape.

per year	-	Ensures that sustainability related issues are taken into consideration
	when devising business strategies
	-	Determines sustainability material matters
	- Recommends appropriate KPIs in addressing the Company's material
		matters and sustainability related matters

Technical Working	- Comprises key personnel nominated by the SC
Group (TWG)	-	Facilitates day-to-day management of material sustainability matters
• Meets 12 times	-	Assists the SC to determine sustainability material matters
-	Gathers and consolidates sustainability related data for KPI monitoring

per year	and reporting purposes

2 CUSTOMERS - dealers, distributors, commercial

Our dealers and distributors are the face of the Company before our prospective customers.

They also act as an important channel of communication between Petron and the end customers.

• Quality products and services as per product specifications
• Fair and competitive product pricing
• Timely and responsive communication and actions
• Provision of support and guidance
• Honouring contractual agreements
• Conducive environment to conduct business

Meetings	Ongoing
Social media - Instagram and	Ongoing
Facebook
E-mail/Memo	As and when
communication
Corporate website	As and when
www.petron.com.my
Petron Miles Website	As and when
www.petronmiles.com.my
Call PMiles Customer Service
Hotline [phone]

Note:

Read more about the sustainability roles and responsibilities of our BOD at https://www.petron.com.my/wp-content/uploads/2023/03/Charter- Board-Sustainability-Committee-27122022.pdf.

16 PETRON MALAYSIA REFINING & MARKETING BERHAD

STAKEHOLDER ENGAGEMENT

SUSTAINABILITY REPORT 2022

17

STAKEHOLDER ENGAGEMENT

Stakeholder Groups

Stakeholder's Relevant Needs and	Engagement Methods	Frequency
Expectations

Stakeholder Groups	Stakeholder's Relevant Needs and	Engagement Methods	Frequency
	Expectations

3 CUSTOMERS - end users

We continue to gather feedback from our end users to improve the quality of our products and services as we seek to deliver excellence.

• Quality products and services as per product specifications
• Fair and competitive product pricing
• Timely and responsive communication and actions - good customer service
• Public safety and security
• Good housekeeping at service stations

Social media - Instagram	Ongoing
and Facebook
E-mail	As and When
Petron Care
[e-mail]
Corporate website	As and When
www.petron.com.my
Petron Miles Website	As and When
www.petronmiles.com.my
Call PMiles Customer Service
Hotline [phone]

		• Continued profitability and growth	Annual General	Annually
		• Product and service innovation to	Meeting
6	INVESTORS/	meet changing demands
Annual Report & Sustainability	Annually
• Compliance to legal and other
SHAREHOLDERS
	Report
	requirements
	Shareholders and investors	• Petron image and reputation to	Announcements	As required
	are vital for the health and	maintain business and social
	Corporate website	As and when
	licence to operate
	wealth of the Company.
	www.petron.com.my
	• Compliance to legal and other
	Regular engagements with our
	requirements
	shareholders and investors	Engaging with the local	As and when
		SUSTAINABILITY AT PETRON
	will ensure long-term business		Treasury/Investor Relations
	growth and sustainability.		group in Manila
		• Clear contract specifications	E-mail communication/memo	Ongoing
		• Clear requirements on compliance

4 EMPLOYEES - direct hire, permanent, regular, third party contract workers, unions

Employees are the driving force behind Petron Malaysia. As such, we strive to meet their needs and ensure the provision of a safe, healthy and conducive workplace to nurture their career development.

• Safety and health at the workplace
• Fair and competitive compensation and benefits
• Compliance to legal requirements and labour standards
• Opportunities for training and education
• Comprehensive guidance and support at workplace
• Non-discriminationand equal opportunity
• Diversity and representation at the workplace
• Employment security
• Job satisfaction

Intranet/Internal Memo	Ongoing
Team meetings	Weekly/
	Monthly/
	As and when
Team building sessions	Annually
Individual/Group discussions/	Ongoing
Coaching
Formal performance	Annually
evaluation
Training on HR Policies	Ongoing
Corporate website	As and when
www.petron.com.my

	with Petron's code of conduct,	Site visits/instant messaging/	Ongoing
	telephone calls
7 EXTERNAL PROVIDERS	policies and requirements
• Honouring contractual agreements	Meetings by territory/area	Monthly/
- Contractors/Vendors/
e.g. prompt payment		Quarterly/
Suppliers/Service Providers
• Fair treatment of workers according		Annually
We work closely with our	to legal requirements and labour		As and when
standards
contractors, vendors, suppliers
• Fair procurement practices -
and service providers to
non-discrimination and equal
deliver excellence and explore
opportunity
opportunities for sustainable
• Timely, responsive and transparent
mutual growth.
communication and actions
	• Continued business relationship
	• Compliance to banking terms and	Meetings and telephone calls	As and when
	conditions and legal requirements

5 LOCAL COMMUNITIES - surrounding public, neighbouring industries

Engaging with the local communities in our operational areas enables us to address their needs and generate long- lasting positive impact. We are committed to give back to society and ensure no one is left

• No harm to public safety, security and the environment
• No disturbance to quality of life
• Support for and participation in community programmes
• Timely, responsive and transparent communication and actions
• Potential business opportunities

Advocacy programmes such	Annually
as Go-to-Safety Point, road
safety and environment
Corporate Social	Annually
Responsibility (CSR)
programmes
Fenceline community	Quarterly
engagements/Meetings with
community representatives
Instant messaging/telephone	Ongoing
calls/letters

		•	Continued financial soundness	E-mail communication	Ongoing
8	FINANCIAL INSTITUTIONS	•	Timely, responsive and transparent
	communication and continued

We ensure continuing	business relationships
access to competitive rates/
terms by maintaining the
trust and confidence of
financial institutions. They
provide insight into the early
identification of opportunities
and emerging trends within the
financial markets.

behind in our bid to contribute to a sustainable future for all.

9 BUSINESS PARTNERS

AND JOINT VENTURES (JVs)

We actively engage with our business partners and JVs by exploring mutually beneficial partnerships.

• Honouring terms and conditions of agreement
• Timely, responsive and transparent communication and actions
• Continued business relationship

Meetings	Monthly/
	Quarterly/
	Annually
	As and when
E-mail communication	Ongoing
Periodic report	Monthly/
	Quarterly/
	Annually

18 PETRON MALAYSIA REFINING & MARKETING BERHAD

MATERIALITY ASSESSMENT

Our material matters represent Petron Malaysia's significant impacts on the economy, environment, and people, including impacts on their human rights. We review our material matters from time to time to ensure that they remain relevant with current sustainability issues in the oil and gas sector and to meet stakeholders' needs and expectations. The output of the materiality assessments helps us to address our significant EES impacts and resulting risks and opportunities for Petron Malaysia.

SUSTAINABILITY REPORT 2022

19

MATERIALITY ASSESSMENT

MATERIALITY ASSESSMENT PROCESS

Petron Malaysia's material matters are determined based on a comprehensive materiality assessment process as demonstrated below:

In 2022, we conducted a materiality assessment by determining our actual and potential EES impacts, assessing their significance and engaging with key stakeholders for their inputs. In assessing the EES significant impacts, factors such as the severity, likelihood, scale and scope of the impacts were taken into account. We also took into consideration impact assessments that have been carried out by Petron Malaysia to fulfil regulatory requirements such as Environmental Impact Assessment (EIA) and those

conducted to conform to international standards such as ISO 14001 and ISO 45001. Stakeholder input was gained through responses provided via questionnaires and engagement sessions.

We followed a defined step-by-step process as advocated by GRI. This process involved multiple employee awareness workshops, internal focus group interviews and discussions to ensure we captured the relevant EES impacts.

1 Assessment of EES Impacts

Based on the outcome of the internal EES Impact Assessment, we identified significant impacts on the economy, environment and people, including human rights that are relevant to Petron, taking into account of both positive and negative ones.

	SUSTAINABILITY AT PETRON
We engaged both internal and external stakeholders to score our Sustainability Survey

21	Stakeholder Engagement
	that included face-to-face interaction/engagements to obtain their opinions on
	Petron's significant impacts on the economy, environment and people, including

For more information on stakeholder groups engaged for the identification and prioritisation of sustainability matters, refer to Stakeholder Engagement from page 15-17.

human rights.

IDENTIFY AND ASSESS IMPACTS ON AN ONGOING BASIS

Engage with relevant stakeholders and experts

1 Understand the organisation's context

21 Identify actual and potential impacts

31 Assess the significance of the impacts

DETERMINE MATERIAL MATTERS FOR REPORTING

Test the material matters with subject matter experts

41 Prioritise the most significant impacts for reporting

Material Matters

• Generating Economic Benefits
• Ethical Business Practices
• Climate Change and GHGs
• Air Emissions and Pollution Management
• Waste and Circular Economy
• Water Management
• Natural Resources
• Biodiversity
• Sustainable Supply Chain
• Agile, Diverse and Thriving Workforce
• Safety
• Customer Data Protection

31 Analysis of Responses

We collated and analysed responses from stakeholders to understand their priorities of the material matters.

41 EES Categorisation

The material matters were categorised based on Bursa Malaysia's 11 Common Sustainability Matters and the GRI 11: Oil and Gas Sector 2021 Standard, as well as the practices of industry peers and sustainability leaders.

51	List of Material Matters

Validation of material matters through the Sustainability Council and the Board Sustainability Committee and reporting the result to the Board for their approval.

Source: GRI Standards 2021