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Our Approach to Sustainability

Our purpose is to be a progressive energy and solutions partner enriching lives for a sustainable future.

  • Sustainability Governance
  • Our Materiality
  • Memberships and Associations

Our Sustainability Governance

Our commitment to sustainability starts at the core of our operations and extends throughout our value chain. We understand that countries face an energy trilemma, with security, affordability, and sustainability concerns that require a unique spectrum of solutions. Therefore, a collective approach among governments, energy players, public and private sectors is necessary. By working together, we can leverage each other’s strengths to achieve a sustainable and low-carbon future.

To ensure accountability and integrity, we have established a dedicated governance structure with clear reporting lines that drives our sustainability strategies, action plans, and initiatives. This structure ensures that our sustainability principles and priorities are fully integrated across the organisation, embedded in decision-making and execution of our sustainability related matters. With this structure, we delineate roles and responsibilities clearly, enabling effective oversight, decision-making and efficient execution.

Our Sustainability


PETRONAS' Sustainability
Governance Structure


Board Oversight

Our board has been taking an active role in climate-related matters discussion as we recognised the climate change risk and opportunities to the business. We recognise that climate change is a critical business issue, contributing to a set of risks and opportunities. We are taking more deliberate actions to elevate sustainability, especially climate-related discussions at the Board, to shape the long-term strategic direction of the company. 

Read more on the key activities by the Board here.





Materiality Assessment

We use a non-financial materiality assessment to inform our sustainability priorities and disclosures that identifies topics that are most important to our stakeholders and have most impact on our business.





2021 – Full Materiality Assessment

2022 – Revalidation of Materiality Assessment



In-house desktop analysis to include a range of internal and external sources:

  • Reporting frameworks and standards
  • Internal strategies, policies, processes and documentation
  • Relevant legislations in the countries we operate
  • National industry-specific trends and surveys outcome
  • ESG rating and benchmarking agencies
  • Peer benchmarking

Data-driven tool to include new sources:

  • Existing and emerging regulations
  • Media
  • Sustainability Accounting Standards Board (SASB) Standards

Stakeholder Engagement


Validation process via interviews and surveys with stakeholders:

  • Employee representatives including union leaders
  • Government and regulatory bodies
  • Embassies, high commissions and foreign representatives
  • Communities and customers
  • Media
  • Investors, credit rating agencies and financial institutions
  • Industry partners, alliances and business councils
  • Non-government organisations (NGOs) and special interest groups
  • Learning institutions

In-depth feedback from external stakeholders, including:

  • Investors, banks, and rating agencies
  • Reputation Strength Index survey



We prioritised the identified topics based on two key areas – their importance to stakeholders and their impact on our business. Prioritisation criteria include:

  • Occurrence in grievances
  • Topics highlighted by investors and rating agencies’ assessments
  • Discussions at Board and Executive Leadership Team meetings
  • Alignment with risk elements in Corporate Risk Profile

Prioritisation criteria include:

  • Alignment with strategy and focus areas
  • Discussions at Board and Executive Leadership Team meetings
  • Alignment with risk elements in Corporate Risk Profile

Data-driven tool to assess and prioritise financial materiality and impact materiality.

Endorsement and Approval


Endorsed by Sustainability Committee and approved by Vice President and Chief Sustainability Officer









In 2022, our materiality matrix has seen a few movements of topics, signaling changes in the importance to our stakeholders and the impact to our business.

Further details can be obtained through our Integrated Report here.



Double Materiality

Through our double materiality approach, we consider both the financial and sustainability impact of our material topics. This approach allows us to understand the financial implications of sustainability risks and opportunities and how they may impact our long-term financial performance.

More info on our double materiality can be obtained through our Integrated Report here.



Material topics are an essential aspect of our value creation and growth strategy. By addressing these topics, we are able to stay ahead of new trends, evolving customer demands and other challenges based on our operating environment.

Material Topics


Greenhouse Gas (GHG) Emissions

Our approach to realising our NZCE 2050 pathway is guided by our four main decarbonisation levers – zero routine flaring and venting, energy efficiency, electrification and carbon capture and storage. Additionally, we are continuously improving measurement quantification to mitigate methane emissions from our operations to limit the impact of GHG emissions over a more immediate period. We also pursue collaborative initiatives with industry peers. We are focusing on gaining a clearer understanding of energy consumption within the company and throughout our value chain to support our emissions mitigation efforts.

Climate Change Risks

Our aim is to strengthen PETRONAS’ resilience to physical and transition climate change risks, while seizing the opportunities presented in the transition to a low carbon economy. We are actively looking into adaptation and resilience measures, as well as the relevant governance systems to manage climate-related risks and opportunities, as per the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Environmental Management

Protecting and conserving the environment will minimise the impact of our operations on the environment, given our role as an environmental steward. This will also ensure the long-term health of our business and the communities around us. We identify and assess the environmental impact of our operations and focus on managing our resources sustainably. This includes (but is not limited to) decreasing the impact of emissions, creating responsible waste and water management strategies, preventing spills, and decommissioning our assets in a safe and sustainable manner.

Nature and Biodiversity

Our inability to conserve and protect nature and biodiversity may impact our ability to deliver on our business goals and NZCE 2050 pathway. As climate change is significantly driving biodiversity loss and may cause irreversible damage, we aim to further understand our relationship and dependency on nature in order to improve oversight of our nature and biodiversity footprint.

Safety Management

Managing the safety of our people continues to remain a top priority as this ensures we protect our employees and contractors from any harm or injuries. In striving towards operational excellence, we conduct proactive risk management practices across our business and operations to provide the safest possible work conditions while ensuring our assets are continuously well maintained.

Human Rights

We aim to respect human rights across our suppliers, contractors, partners and communities where we operate with the establishment and implementation of human rights policies and practices. Periodically we review our policies and practices to address human rights issues on forced labour, human trafficking, modern slavery, fair working conditions and non-discrimination. We have also started to embed human rights due diligence practices in our systems and functions across our value chain, including remediation actions.

Employee Attraction, Retention and Development

Given the dynamically evolving landscape and energy transition taking place, we require future-ready talent with the right knowledge and skills to realise our strategies and drive business resilience over the long term. Investment in high-performing talents is crucial, especially in an environment of increasing competition for skills. Our aim is to continuously attract and retain the best talent by providing flexible work arrangements, creating opportunities to foster individual potential and implementing fair and equitable compensation that is consistent with a rewards-based performance. We also strive to create a fair and inclusive workplace by supporting equal treatment of all employees regardless of gender, age, cultural background, skills, race and religion.

Health and Well-Being

We place great emphasis on protecting all employees and contractors from work-related hazards and promoting good health and well-being among our workforce and the wider community. It is imperative to create a safe and conducive work culture, as our employees’ health and well-being directly impact our long-term performance. We conduct risk assessments, introduce adequate controls and implement a wide range of health and wellness initiatives that help address the physical and mental health of our employees and their families.

Corporate Governance

It is important that we practice and uphold the highest standards in corporate governance, a key factor in determining business resilience and long-term growth. Among our key priorities is to ensure the practice of the highest level of governance on structures, policies and strategies in sustainability-related matters. This also covers our strategies and roadmap in realising our NZCE 2050 pathway

Anti-Bribery and Corruption

We believe that creating a strong foundation based on ethics and integrity will drive shared and equitable values among stakeholders. We need to protect our operations and business from any form of corruption and unethical behaviour. Throughout the value chain, we strongly encourage ethical and responsible business practices and compliance with standards and guidelines among employees, business partners, suppliers, contractors and other intermediaries. We do this by closely adhering to PETRONAS’ Anti-Bribery and Corruption Policy and the PETRONAS Code of Conduct and Business Ethics (CoBE).

Lower Carbon and Energy Transition Business

In combatting the climate challenge, we continue to strengthen our efforts in lower carbon and energy transition business as this allows us to step out beyond our core and develop new businesses to realise our NZCE 2050 pathway. This includes our focus on natural gas as a fuel with lower carbon intensity than other fuels; and other business growth opportunities such as renewable energy, hydrogen, green mobility, specialty chemicals and biofuels among others. Our efforts are channelled towards achieving balance in energy security, affordability and sustainability, taking into consideration the latest policies, goals, accounting instruments and technologies that facilitate the energy transition.

Economic Contribution

Our ability to drive long-term business growth goes hand-in-hand with the prosperity of the markets and communities in which we operate. Our goal is to contribute to economic development that benefits all segments of society by generating economic value through our products and services, servicing capital payouts, and paying wages and taxes while generating social, commercial and working opportunities for local residents. We also provide assistance especially in times of crisis through funds, volunteering efforts and in-kind products or services. We strive to ensure that PETRONAS is responsible and transparent in tax practices, governed by applicable local or regional tax regulations.

Sustainable Supply Chain

We pay close attention to our overall supply chain management, product stewardship and procurement as this mitigates risks that impact the environment, society and economy. This ensures the sustainability and safety of our products throughout the entire life cycle. To improve supply chain resilience, we continuously strengthen our efforts to nurture and support local suppliers where possible and applicable. We also share global work practices with regional and local entities to support the local economy.

Innovation and Technology

We embrace innovation through the implementation of internal frameworks and measures that promote the practice of challenging the status quo in product design and operations to generate new solutions that enhance our competitive advantage and brand reputation. This includes developing and using advanced technologies and digital innovations to generate new business processes, including improving customer and other stakeholders' experiences. In terms of approach, we leverage innovation and technology across all operations and services to accelerate our business growth and offerings.

Circular Economy

Our long-term ambition is to minimise or eliminate the negative environmental impact of a product by eliminating waste and reducing materials consumption. We also wish to decrease plastic pollution by engaging in recycling and reusing, as this creates opportunities for innovation and lower waste generation. The circular economy model encourages the creation of a closed-loop system where waste from one process becomes an input for another. Our aim is to work towards a low-waste future, steward natural resources and minimise our carbon footprint while creating value.







Memberships & Associations

We actively participate in professional associations, events and memberships with the aim to strengthen our sustainability efforts. Through these various platforms, we are able to exchange knowledge on best practices to drive the sustainability agenda within and outside of our operations. This is part of our commitment to nation-building of Malaysia and creating positive impact across industries and society.

Industry associations/events/engagement Contribution/leadership role

CEO Action Network (CAN)

CAN is a peer-to-peer network of CEOs and Board members focused on sustainability advocacy, capacity building, action and performance. CAN includes 62 leading businesses, representing more than 20 business sectors in Malaysia.


President and Group CEO of PETRONAS, Datuk Tengku Muhammad Taufik chaired CAN during the period 2021-2022.

In 2022, under PETRONAS’ chairmanship and in collaboration with Climate Governance Malaysia (CGM), CAN ran a roundtable series to define policy recommendations aimed at improving the nation’s sustainability and climate ambitions.

World Business Council for Sustainable Development (WBCSD)

World Business Council for Sustainable Development (WBCSD) is a CEO-led community of over 200 of the world’s leading businesses working collectively to accelerate transformations needed for a net-zero, nature positive, and more equitable future.


PETRONAS joined WBCSD in 2020 to inform sustainability strategy and positioning and to broaden global outreach. PETRONAS is also a member of Business Council for Sustainable Development (BCSD) Malaysia.

PETRONAS is represented in WBCSD through our President & Group CEO, Datuk Tengku Muhammad Taufik as the Council member, and involving other Executive Leadership Team members through direct participation in WBCSD's CFO Network and The Business Commission to Tackle Inequality, in addition to working level participation across the breadth of WBCSD's programmatic activities.

Asia-Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC)

The private-sector arm of the Asia-Pacific Economic Cooperation (APEC)’s comprising high level officials from 21 member countries, dedicated to advising leaders and other APEC officials on issues of business interest.


President and Group CEO of PETRONAS, Datuk Tengku Muhammad Taufik is a member of ABAC, which plays a role in presenting recommendations to APEC Leaders in an annual dialogue and advises APEC officials on business-sector priorities and concerns.

As a co-chair to the Sustainability Working Group, PETRONAS President and Group CEO proposed recommendations on building small and medium-enterprises (SMEs) resilience in low carbon economy, which among others, were included in the 2022 Annual Report from APEC Business Advisory Council (ABAC) to APEC Economic Leaders.

International Emissions Trading Association (IETA)

The International Emissions Trading Association (IETA) is a global non-profit business organisation that plays a key advocacy role in establishing effective market-based trading systems for greenhouse gas (GHG) emissions and removals to promote market-based solutions for climate change.


PETRONAS became a member of IETA in June 2022. Through our participation in IETA’s working groups, taskforces and initiatives, PETRONAS is strengthening our internal capacity and building capability on carbon markets and carbon pricing instruments.



Pledges / Signatories

Methane Guiding Principles (MGP)

The Methane Guiding Principles (MGP) was developed collaboratively by a coalition of industry, international institutions, non-governmental organisations (NGOs) and academia. It is a voluntary, international multi-stakeholder partnership between industry and non-industry organisations with a focus for actions along the natural gas value chain, from production to the final consumer.


In 2020, PETRONAS became a signatory member of Methane Guiding Principles (MGP). In 2022, PETRONAS publicly reported our progress in accordance with the five (5) MGP principles on our approach to effective methane management.

World Bank's Zero Routine Flaring by 2030 Initiative

An initiative that commits governments and oil companies to end routine flaring by 2030, aiming to support cooperation between all relevant stakeholders so that solutions to gas flaring can be found through appropriate regulation, application of technologies, and financial arrangements.


PETRONAS endorsed the global pledge of zero routine flaring by 2030, in November 2021, with the aim to avoid routine flaring in new oil field developments; and for existing field, to seek implementation of economically viable solutions to eliminate this legacy flaring as soon as possible, by 2030. PETRONAS contributes with gas flaring and venting data towards the compilation of the World Bank's annual global gas flaring report.

United Nations Environment Programme (UNEP) 's Oil & Gas Methane Partnership (OGMP2.0)

The United Nations Environment Programme (UNEP)’s Oil & Gas Methane Partnership (OGMP2.0) is an industry-specific initiative, internationally recognized framework for effective methane emissions management. OGMP2.0 provides a mechanism for companies to address and report methane emissions systematically.


PETRONAS became a signatory member to the OGMP2.0 in November 2022. Efforts are taken to systematically enhance PETRONAS’ approach in accordance with the framework on methane emissions measurement, quantification, reporting, and implementation of our decarbonisation levers particularly zero routine flaring and venting, and energy efficiency.

Task Force on Climate-related Financial Disclosures (TCFD)

The Task Force on Climate-related Financial Disclosures (TCFD) sets out recommendations for climate-related disclosures and provides a framework for disclosures on potential long-term risks and opportunities associated with climate change.


PETRONAS has expressed public support for the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) to ensure greater transparency around how we approach climate risk. We are incorporating the TCFD framework into our disclosures from 2023 onwards.

World Economic Forum (WEF) Partnering Against Corruption Initiative (PACI) Signatories

A principal CEO-led platform to drive anti-corruption globally, building on the pillars of public-private cooperation, responsible leadership and technological advances.


PETRONAS became a signatory of PACI in July 2021, joining 90 other signatories across different sectors worldwide. In doing so, we strengthen our zero tolerance on corruption in all its forms and join collective action initiatives to increase public trust in business, deliver fair markets and level the playing field by fighting corruption.

World Economic Forum Stakeholder Capitalism Metrics

The Stakeholder Capitalism Metrics (“the Metrics”) were launched in September 2020 by the International Business Council of the World Economic Forum. The Metrics are a disclosure framework that aim to strengthen the ability of companies and investors in benchmarking progress on sustainability matters, and to enhance transparency of sustainability disclosures.


PETRONAS has adopted the Metrics as part of its annual performance reporting practice.

International Renewable Energy Agency (IRENA) Alliance for Industry Decarbonization

A lead global intergovernmental agency supports countries in their energy transitions and provides data and analyses on technology, innovation, policy, finance, and investment.


PETRONAS joined the Alliance for Industry Decarbonisation in November 2022 with the aim to foster action for decarbonisation of industrial value chains and enhance understanding of renewables-based solutions and their adoption by industry.

Hosted by PETRONAS

ASEAN Energy Sector Methane Roundtable

A series of regional roundtables to elevate conversation, shape practices, policies, and regulations in ASEAN on methane emissions with the aim to engage diverse stakeholders through dialogues on advancing strong performance and effective methane emissions management.


In 2021, PETRONAS convened the inaugural roundtable in cooperation with PTT Public Company Limited (PTT) of Thailand and PERTAMINA of Indonesia, followed by the second installation in 2022. Since then the activity has broadened to engage more stakeholders, to which the third installation was held at Thailand in December 2022, in partnership with the United States Agency for International Development (USAID) Smart Power Program (SPP), ASEAN Centre for Energy (ACE), and Asia Natural Gas & Energy Association.




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