‘We have established this reporting process because we intend to be in business for a great many decades to come.’
June 15, 2022, will be remembered as a milestone date in Aramco’s history because this was the day Aramco issued its first-ever Sustainability Report.
First of A Kind
“This report — the first of its kind in our company’s history — sets out the actions we are taking and the standards against which our performance may be judged. A significant part of this work concerns climate change because this is the biggest long-term challenge that Aramco or indeed any business faces,” said Aramco’s chairman, HE Yasir O. Al-Rumayyan.
“As a company, we have always taken a long-term view of the future. We have … established this reporting process because we intend to be in business for a great many decades to come — responsibly producing energy and creating value for our shareholders.”
— Yassir O. Al-Rumayyan
Building on the chairman’s introduction, president and CEO Amin Nasser observes in the report that to effectively address climate change, a new way of thinking is needed. This starts with acknowledging three facts.
Fact 1: Even in the most aggressive climate models the reality is that hydrocarbons will continue to play a vital role in the global energy system for the next several decades.
Fact 2: The future is unevenly distributed. In some markets there will still be a need for hydrocarbons beyond 2050.
Fact 3: When it comes to oil and gas, the future now clearly belongs to the lowest cost, least carbon intensive producers.
“We intend to be one of those producers. And the Sustainability Report sets out how,” he said.
Our Sustainability Priorities
Public sustainability reporting has evolved from just being publications that highlight successes and performance metrics, to being more strategic documents that identify how companies are incorporating sustainability thinking into their corporate business strategy, and identifying the challenges and actions that companies need to take to deliver value for a wide range of stakeholders.
To this end, Aramco’s Sustainability Report identifies four impact areas where Aramco can make the most difference:
- To more effectively combat climate change and play a part in a successful energy transition, the report illustrates how the company is embracing energy efficiency and increasing use of renewable energy for its operations, while advancing the science of carbon capture, including both natural and technology-led solutions. It also highlights how Aramco is working with international partners to develop more sustainable engines and fuels, and playing a leading role in growing the emerging hydrogen economy.
- To improve safety and well-being, the report shows how the company is working to make a positive impact on local, national, and global communities, from providing world-class skills and training, to becoming the number one choice in the Kingdom for Saudi female talent. It clearly spells out the company’s commitment to providing a safe and respectful working environment. The report also highlights a number of additional focus areas such as emergency preparedness, contractor safety, Aramco’s response to COVID-19, and diversity and inclusion.
- To minimize the environmental impact of our business, the report shows how Aramco is not only limiting its environmental footprint, but creating a legacy of projects that improve both natural habitats and shared resources, while incorporating circular economy principles across business activities. It highlights a range of initiatives, including the company’s 950 km2 of protected biodiversity to planting 7-million mangrove seedlings in 2021 alone.
- To grow social value and our value chain, the report highlights how Aramco is developing a diverse, sustainable and globally competitive energy sector in Saudi Arabia and beyond, while adding robustness and efficiency to its In-Kingdom Total Value Add (iktva) supply chain efficiency program, which has delivered tens of thousands of jobs and billions of dollars of economic activity.
Across these four impact areas, the report illustrates how Aramco’s activities align with and support various aspects of both the United Nations’ Sustainable Development Goals and the Kingdom’s Vision 2030.
A Pathway To Net Zero
Given the priority of the climate challenge that the chairman identified, at the core of the report is Aramco’s narrative regarding its role in the energy transition and its response to the climate challenge.
When Aramco made a public commitment in October 2021 to achieve net zero Scope 1 and Scope 2 greenhouse gas emissions across its wholly owned and operated assets by 2050, it recognized that both internal and external stakeholders would expect the company to explain how it plans to do this. The Sustainability Report includes certain interim targets, which extend through 2035. These interim targets are intended to guide and measure the company’s progress toward its ultimate 2050 ambition.
Specifically, Aramco announced two interim targets that it hopes to achieve by 2035. First, to reduce upstream carbon intensity by at least 15% by 2035, against a 2018 baseline. Second, the company is striving to reduce its net Scope 1 and Scope 2 GHG emissions from both the Upstream and Downstream businesses by 52 million metric tons of carbon dioxide equivalent as compared to a base case 2035 forecast.
To see all of these efforts, and the many other positive steps the company is taking, the full report is available at https://www.aramco.com/en/sustainability/sustainability-report.
— The Arabian Sun: June 15, 2022