Introduction
Yinson was founded in 1983 as a humble transport and logistics company in Johor Bahru, Malaysia. In the following two decades, the company grew to become one of Malaysia’s largest transportation companies. In 2011, Yinson ventured into the oil and gas industry by forming a consortium with PetroVietnam Technical Services Corporation (“PTSC”, a subsidiary of PetroVietnam). The joint venture company was awarded a contract for the charter of an FSO (Floating Storage and offloading unit) asset, FSO PTSC Bien Dong 01 and paved the way for Yinson to win a contract for the charter of FPSO PTSC Lam Son.
In 2014, Yinson acquired the established Norwegian FPSO company, Fred. Olsen Production ASA. With the acquisition, Yinson inherited a strong and experienced team to strengthen its oil and gas business. By mid-2016, Yinson has divested from non-oil and gas businesses and streamlined the business to focus on serving the offshore oil and gas industry. Since the acquisition, it added six new FPSO projects to its track record, three of which are currently under construction. Today, Yinson is an energy infrastructure and technology company with businesses in offshore production, renewables, green technologies, and offshore marine. Our geographical presence extends across the world, from West Africa, America, Europe, and Asia.
Yinson Corporate Governance
Yinson understands the importance of robust corporate governance and believes that this is the foundation of our long-term business success and performance. We commit ourselves to the highest standards of integrity and ethics in the conduct of our business while balancing the interests of our many stakeholders. Our corporate governance approach provides the framework to attain our business objectives while managing the risks that encompass every sphere of management, from action plans and internal controls to performance management and corporate disclosures. Our Board and Senior Management continue to provide prudent leadership and strategic guidance to safeguard stakeholder value creation with a robust governance framework and effective control systems.
Sustainability Journey
At Yinson, we believe in the empowerment of our team through our shared Vision, Mission, and Core Values, which we believe, is the key to delivering greater value to our stakeholders. Since setting Sustainability as a Core Value in 2018, Yinson has embarked on an ambitious journey that puts sustainability considerations at the core of our decision-making process. This has required us to step out into the unknown to pioneer, innovate, and forge new partnerships toward achieving our goals and targets. We aim to enhance long-term shareholder value with due regard to the environmental, economic, social and governance aspects by being a reliable and adaptable partner to all our stakeholders.
Yinson Renewables 175 MW Bhadla Solar Park
Yinson GreenTech investment in advanced hydrofoil system for electric vessels.
Yinson GreenTech investment in EVs and EV charging infrastructure.
Some notable recent sustainability milestones include the announcement of our Climate Goals and support for the Task Force on Climate-related Financial Disclosures (“TCFD’), improvements to our various sustainability-related ratings, raising RM1.0 billion through Malaysia’s first Sustainability-Linked Sukuk Wakalah Programme and the release of our inaugural TCFD-aligned Climate Report. Today, ESG considerations are integrated into how we operate, for example, as part of our employee compensation evaluations, supplier selection and project selection.
Sustainability Governance and Sustainable Operations
Yinson adopts a holistic approach to sustainability. We understand that an impact on the environment (for example, pollution) could trigger a chain reaction and impact community safety, affecting the overall success of our business operations. Yinson’s corporate governance structure provides guidance and a management approach on sustainability-related matters. The success of the sustainability governance structure is the result of sustainable leadership from our leadership team, including the Board and Senior Management.
To ensure effective management of the Board’s functions and duties on sustainability-related issues, the Board has delegated sustainability-related responsibilities to the Board Risk and Sustainability Committee (“BRSC”), with ultimate accountability tied to the Chairman of BRSC. The BRSC serves as a bridge between the management level and Board- level and receives inputs from the Management Committee (“MC”) cum Risk Management Committee and Sustainability Committee (“SC”). The BRSC reviews Yinson’s sustainability matters in their quarterly meeting agenda and advises the management on implementing relevant action plans. Sustainability action plans and initiatives will be presented to the Board for consideration and approval before implementation.
The leadership team sets the tone, policies, and action plans to manage our sustainability-related risks. We embed a sustainability mindset throughout our operations. Yinson constantly engages with our stakeholders to understand their areas of concern through our materiality analysis and highlights the importance of sustainability in our operations. We greatly value the feedback from our stakeholders and strive to incorporate them into our sustainability focus areas for continuous improvement. This helps us to better understand societal concerns and navigate our business in an ever-evolving environment.
We believe in working with our clients, vendors, contractors, suppliers, and communities to create long-term sustainable value. On a project level, we advocate and work closely with our clients to incorporate sustainability elements into the design of our FPSOs. In order to achieve our Climate Goals, we endeavour to partner with stakeholders in our value chain to achieve our shared objectives. For example, in one of our recent FPSO designs, we worked with our clients to incorporate combined cycle technology and closed flaring to achieve GHG reductions of up to 20-25%. Yinson also aims to contribute to the development of local economies in the countries where we operate by creating local job and upskilling opportunities, knowledge transfer and sourcing from local suppliers where feasible.
Yinson’s Climate Goals & our role in the energy transition
Climate action is no longer a luxury but a necessity. Climate change is one of the greatest and most urgent challenges of our generation that brings widespread economic disruptions and threatens lives. As our economies grow, so is our demand for cheap and reliable energy. The energy sector has so far been responsible for approximately three-quarters of the emissions that pushed the global average temperatures up by 1.1°C as compared to pre-industrial times. We believe global efforts are required to tackle climate change with the fundamental transformation of the energy system being a key mitigation focus area.
At Yinson, we aspire to be part of the solution towards creating a low-carbon, climate-resilient environment by providing access to affordable, reliable and sustainable energy. In 2021, we established our Climate Goals to be carbon neutral by 2030 and net zero by 2050. Our climate ambitions and targets have been set to be fully consistent with the Paris Agreement to keep global temperature rise to well below 2°C and pursue the effort to limit it to 1.5°C.
Yinson’s Climate Goals Roadmap provides a forward-looking trajectory of Yinson’s carbon profile up to 2050, highlighting specific action plans and operational changes to reduce carbon emissions. The projected key milestones for emissions reductions of Yinson Production are outlined within the Roadmap, providing a realistic direction towards the achievement of our Climate Goals. We ensure that our climate actions are aligned with our Group strategies. We believe this alignment will create greater value for our stakeholders and the wider community.
Currently, around 97% of Yinson’s overall carbon emissions stem from Yinson Production. Therefore, significant focus is placed on reducing the emissions of our current and future FPSO fleet. Yinson is working with clients and business partners to develop and implement the Zero Emission FPSO concept. We believe our Zero Emissions FPSO concept is an important way to tackle the issue, through innovative solutions such as a closed flaring system, hydrocarbon blanketing, carbon capture, utilisation and storage, and direct air capture. We also recognise the challenges in delivering suitable decarbonisation solutions at different timelines. We constantly monitor and measure the climate-related metrics against the targets set on an annual basis to ensure we have a holistic view of our progress.
Since our announcement for the support of the TCFD framework in August 2021, Yinson has been working towards implementing the recommendations. Yinson published its first Climate Report TCFD- aligning with the TCFD recommendations in December 2021. Yinson’s Climate Report outlines our strong governance and commitment to transparency in climate disclosure covering the four core elements
- Governance, Strategy, Risk Management, Metrics and Targets.
Yinson recognised the unique characteristics of climate-related risks and their related socioeconomic impacts are essential considerations in the integration process into our existing risk management framework. Climate-related risks are integrated into Yinson’s current risk management process with due consideration as to whether such risks should be treated as standalone risks or as the drivers of existing risks that have been defined.
Yinson’sapproachtoclimateriskmanagementincludes risk identification, risk analysis and the development of responses or action plans. Yinson currently adopts a top-down approach for climate risk assessment, to ensure consistency and encourage comparability among different business units. We are working on improving the granularity of the assessment by exploring a bottom-up or hybrid approach while incorporating relevant business units and asset-specific insights. Yinson focuses on the transitional risks of climate change including changes in policy, technology, and the structure of markets, over physical risks. Our fleet of FPSOs has incorporated environmental design values to withstand physical and environmental impacts, making them less likely to be impacted by the physical effects of climate change. Our learnings and engineering experience from offshore production will be shared and transferred to other Yinson businesses.
YINSON RENEWABLES HAS PROJECTED TO INCREASE YINSON’S ANNUAL RENEWABLE ENERGY GENERATION TO 1.7 TWH BY 2025 AND 5.6 TWH BY 2030.
Aligning with the TCFD recommendations to describe the resilience of our climate strategy, accounting for different climate scenarios, Yinson conducts scenario analysis to understand the potential implications of a range of plausible climate-related events under conditions of uncertainty. The scenario analysis exercise enables Yinson to identify, assess and understand our business’ resilience against different climate scenarios over the short, medium and long- term.
Yinson discloses our climate-related matters, including the identification and management of climate-related risks and opportunities under different climate scenarios in our TCFD-aligned Climate Report.
Creating Long-term Value Creation: Yinson Renewables & Yinson GreenTech
While we recognised climate change as a material risk, we believe it can unlock new business opportunities. In line with Yinson’s vision, we aspire to provide powerful solutions to access affordable, reliable and sustainable energy.
The transition of global energy demand to more sustainable sources, such as renewable energy, is a critical global decarbonisation strategy. In 2019, Yinson diversified into renewable energy with the aim to be a leading global developer and independent power producer (“IPP”), contributing to the global energy transition towards a sustainable energy system and delivering long-term value to our stakeholders. Within a year, we acquired our first operational renewables asset, the 140 MW Bhadla solar plant in India. In early 2021, Yinson Renewables secured a new contract to build, own and operate a 190 MW solar plant in the Nokh Solar Park, India. Our renewables footprint is rapidly expanding as we continue to build a strong pipeline of greenfield development projects across the globe. Yinson Renewables has projected to increase Yinson’s annual renewable energy generation to 1.7 TWh by 2025 and 5.6 TWh by 2030. The growth of Yinson’s renewable energy portfolio is anticipated to lower Group-wide carbon intensity and accelerate the Group’s transition to become a clean energy producer.
Yinson also aims to increase access to affordable energy, increase energy security, and diversify the global energy supply. To support our growth into the low-carbon and climate-resilient business, Yinson established Yinson GreenTech (“YGT”) in 2020. The focus of YGT is to create a low-carbon ecosystem of logistics and services. YGT strategically invests and progressively establishes our brand in the green technology businesses, including e-mobility, charging infrastructure, battery swap technology, and autonomous solutions. We invest and partner with like-minded tech companies and leading research institutions, leveraging our shared knowledge, resources, and collective network to achieve a tech-enabled sustainable future.
