PETALING JAYA: Malaysia Petroleum Resources Corporation (MPRC) is targeting 1,235 oil and gas services and equipment (OGSE) companies to report their sustainability practices by 2030 as part of its efforts to accelerate the sector’s journey in energy transition.
MPRC’s National OGSE Sustainability Roadmap (NOS-R) launched today sets a target for 236, or 75%, of mid-tier OGSE companies and 973, or 50%, of OGSE SMEs to start sustainability reporting by 2030, with all 26 publicly listed OGSE companies to continue sustainability reporting as per Bursa Malaysia listing requirements.
The targets and number of companies are based on the population of 2,286 companies operating core OGSE businesses identified in OGSE100 FY2023.
MPRC president/CEO Mohd Yazid Ja’afar said, “The growing emphasis on sustainability has driven the oil, gas and energy industries to pivot to the energy transition to lower emissions. Furthermore, new regulations, standards, and frameworks on sustainability demonstrate heightened expectations from stakeholders for more transparent and accurate sustainability data to make informed decisions”.
NOS-R is the second of MPRC’s trilogy of OGSE sustainability documents from its National OGSE Sustainability Programme, which is an extension of the National OGSE Industry Blueprint 2021-2030 that identified sustainability as one of four key thrusts. NOS-R identifies four key factors that will drive the adoption of sustainable practices and reporting in the OGSE sector, namely; clients’ expectations and demands; requirements by investors and lenders; regulators and policies; as well as capturing opportunities.
Hence, this OGSE sustainability programme is essential to meet growing stakeholder pressure across the value chain for adopting sustainable practices. As environment, social and governance standards take priority, OGSE companies must adapt to ensure long-term viability and resilience, and this programme addresses these challenges by providing the tools and frameworks needed to help companies align with sustainability goals and thrive in the evolving landscape.
To address the drivers, NOS-R identifies 12 key projects under four strategic initiatives – accelerate low carbon supply operation and supply chain, support climate risk management, strengthen sustainability practices, and foster talent pool and communication. These will be spearheaded by MPRC alongside the initiatives’ key stakeholders: Petroliam Nasional Bhd, Petroleum Sarawak Bhd, Malaysian Green Technology and Climate Change Corporation and Malaysian Oil, Gas & Energy Services Council. Additionally, NOS-R outlines five key enablers driving the sector’s transformation to realise its goals.
NOS-R is also aligned with national low-carbon aspirations: net-zero GHG emissions by 2050, reducing carbon intensity by 45% against gross domestic product by 2040, and significantly cutting GHG emissions by 2050 as outlined in the Ekonomi Madani Framework, the Mid-Term Review of the 12th Malaysia Plan and the National Energy Transition Roadmap, among other policy documents.
In developing NOS-R, MPRC surveyed 123 OGSE companies and found that 45% of companies plan to begin sustainability reporting within the next 12 months, while 85% of non-PLCs and SMEs have yet to report sustainability practices and are considering publishing their sustainability report. Among the survey respondents, 15% were listed in the OGSE100, with over 60% being SMEs. These findings highlight a growing recognition within the OGSE sector of the need to communicate sustainability performance to external stakeholders.
The key challenges to sustainability reporting identified include a lack of clarity around sustainability standards, indicators, and required data, financial constraints, and a shortage of skilled sustainability talent. However, several opportunities have emerged including access to funding, equipping employees with knowledge and skills to respond to changing regulatory requirements and stakeholders’ expectations, and upgrading technology to adapt to a changing market.
Mohd Yazid said, “I strongly encourage companies in the OGSE sector to adopt this roadmap as they map out their sustainability strategies for long-term success. The National OGSE Sustainability Framework Guide, which will be launched in October 2024, will serve as a comprehensive resource to help firms implement NOS-R and evaluate
their sustainability efforts.”
