Mapping our Sustainability Risks

Mapping our sustainability risks and opportunities

A summary of our potential risks and opportunities (identified risk and opportunity topics), their potential impact and our mitigation or other actions in management approach, structured by our sustainability material topics is presented, annexed to this report. Relevant risks and opportunities included were selected based on their magnitude using impact and probability, and at least one relevant example for each material topic was selected for our internal analysis. The summary includes risks and opportunities for each material topic, their effects and our mitigation measures or approach.

Climate change and Energy Transition

Risk/Opportunity		Effect Description (Positive or Negative)	Mitigation/Approach
Opportunity	Expansion of new energy solutions	Generation of new revenue streams Long-term value for OMV Petrom and its shareholders Carbon footprint reduction	Test and implement business opportunities, which offer significant upscale potential, fit to OMV Petrom’s capabilities
Opportunity	Use of renewable energy for own operations	GHG emissions reduction from energy efficiency improvements and technology changes Increase and enhancement of sustainable operations in entire business (reduced carbon footprint, increased energy efficiency consumption) Lower costs of electricity and carbon emissions (ETS) Improvement of reputation Renewable energy sources will reduce the carbon intensity of products in our Company’s portfolio.	Identify and execute business opportunities which offer significant upscale potential, fit OMV Petrom’s capabilities, and create long-term value Increase of energy efficiency and reduction of internal fuel consumption by renewable energy supplies such as own photovoltaic plants Ensure achievement of OMV Petrom’s long-term targets
Opportunity	Carbon capture and storage use	Lower carbon footprint Significant positive environmental benefits Potential new business line	Carbon capture and storage projects development and potential development of business line

Environment

Risk/Opportunity		Effect Description (Positive or Negative)	Mitigation/Approach
Risk	Reduction of flaring, venting and fugitive emissions – failure to comply	Potential enforcement action by regulators Stakeholder outrage (limited) Damage of reputation Potential environmental damage	Procedures on GHG Emissions Monitoring and Reporting under EU Emission Trading Scheme (EU-ETS) Carbon Intensity Monitoring at company level on a systematic basis, quarterly internal reporting on emissions Carbon Management Program in E&P
Risk	Spills, waste, and water management -environmental compliance issues	Pollution of soil, surface water or ground water, air Community nuisance from noises, odors, light Damage of company reputation Environmental costs from potential liabilities, fines	Environmental management system ISO 14001 – implemented Proper management of conformity budget and projects Operating procedures in place and risk-based maintenance Emergency preparedness and response Insurance for third party loses Environmental risk assessments
Risk	Theft of petroleum product, infrastructure components	Financial impact due to production interruption; loss of operational equipment/ petroleum product Associated safety risk that can lead to third party injuries Environmental damages (after theft attempt) Reputational impact Legal liability due to possible nonconformities with the legislation Personnel injuries due to interference with theft authors	Corporate Security & Resilience is currently managing security services for all OMV Petrom Group sites in Romania Standards from OMV have been incorporated into the Petrom SOW Security services framework Zero tolerance policy for theft Protocols with MAI HQ Security continuous monitoring new solutions Security concept focused on technology Develop ISS Standardized technical security through ISS CR&SA projects Replace Man guarding with Technology Automated Security Incident Reporting Tool Security Risk Assessment framework Security Operations Center (SOC) is operational Implemented Security Loss Management Program

Supply Chain

Risk/Opportunity		Effect Description (Positive or Negative)	Mitigation/Approach
Risk	Not supporting the OMV Petrom Group climate change targets	Lose share of SRI investors Lower ESG ratings agencies Reputational risk (image risk) Financial impact (e.g., EU carbon border adjustment mechanisms)	Sustainable Procurement targets in place Increase engagement with suppliers on carbon management topics through CDP Supply Chain Increase transparency on carbon footprint of purchased goods and services through carbon management reporting (Scope 3 of purchased goods and services) in Power BI
Risk	Reputational damage related to ESG topics in supply chain (e.g., climate change, human rights violations, business ethics, poor labor practices)	Reputational risk Business impact (i.e., losing customers) Business continuity (i.e., if a supplier is blocked and cannot continue to operate this has an impact on our business continuity) Consequences for OMV: Legal liability in case of direct complicity Reputational damage Low moral of employees Low quality of products and services delivered	Perform supplier audits and evaluations as part of the ‘Together for Sustainability” program Include sustainability performance in selection criteria Training for employees (focus on high-risk countries) Human Rights Country Entry Check before launching operations in a country, as well as regular human rights assessments in our countries of operations consider labor rights aspects Human rights aspects (incl. labor rights) included in the pre-qualification phase and suppliers/ contractors audits ESG supplier assessments done with EcoVadis TfS audits Code of Conduct includes labor rights

Health, Safety & Security

Risk/Opportunity		Effect Description (Positive or Negative)	Mitigation/Approach
Risk	Onshore Surface integrity and process safety failures	Injuries/fatalities of 3rd party Temporary stop of gas supply to populations Reputational damage to company incident reported by press Property damages	Risk awareness campaign Lessons learned (internal incidents or industry experience) Preventive maintenance Integrity assessment programs Corrosion Management Plan developed Pipeline Integrity Management System in place Awareness campaign for communities
Risk	Offshore Asset integrity and process safety	Loss of Life (up to 120 people) Loss of Assets (destruction of jackets and facilities) Costs for abandonment Major Oil Spill (up to 4,000 tons max) Significant negative public image with potential impact on OMV Petrom sales in Marketing Division Reputational damage of OMV Petrom as competent operator Production loss (no reconstruction of the facilities) Prosecution under Romanian laws and penalties/fines (transposition of Offshore Safety Directive in Romanian legislation)	Risk awareness campaign Lessons learned (internal incidents or industry experience) Preventive maintenance Integrity assessment programs Corrosion Management Plan developed Pipeline Integrity Management System in place Awareness campaign for communities
Risk	Asset integrity and process safety (Vapor Cloud Explosion potential incident in refinery)/	Maximum estimated damage in the process unit caused by an explosion Fire and blast destruction of equipment (property) Financial losses generated by the business interruption Environmental impact (toxic release, including a fine) Employee fatalities and injuries (approx. 10 persons) and injured (approx. 20 persons) Reputational consequences	Inspection program Risk Based Maintenance Operating and emergency procedures Risk mitigation measures: 24H operator, gas detectors and measurements Frequent turnarounds Training program HAZOP measures conducted (measures from risk analysis regarding possible sources of gas and ignition sources) Related measures from QRA study Third party liability insurance; Business interruption and Property Damage Insurance Life insurance for employees Emergency plans and exercises (with the collaboration of firefighting authorities)
Opportunity	Safety of contractors & suppliers – OMV Petrom requirements defined for integrating best practice HSSE aspects in all phases of the life cycle of contracts and contractor management enhancing local legal safety regulations	Strong reputation as a strong partner in a safer environment Shared knowledge stays within local community and increases safety and environmental awareness among the communities which leads to a positive impact on the environment and society	For improving the HSSE performance of OMV Petrom contractors: HSSE requirements in the SOW HSSE pre-qualification of contractors HSSE part of the capability audits HSSE requirements annex to the contract HSSE bridging document HSSE induction, common trainings, forums and workshops, common walks, periodical meetings HSSE management system audits to contractors, inspections, etc. Organization of common working groups (OMV-OMV Petrom – Borealis) on specific areas of interest related to contractors activities
Non-compliance with existing technical and qualitative standards for our products – Customer satisfaction management and reducing the risks for the Health & Safety of consumers and for the environment		Damage of reputation Financial liability towards clients Loss of clients Decrease of customer satisfaction level Customers claims	Implemented standards for products according to legislation Technical specifications for fuels in place Quality Council with regular meetings Regular audits on partners to ensure products quality and thus, customers satisfaction Anticontamination and e-sealing devices implemented Monthly quality control in FSs in order to check the fuels are according to the standards. In case of deviations, measures are applied to correct the quality of fuels or fuels are replaced with products in accordance with standards Active campaigns to increase customers satisfaction and loyalty

Business Principles & Economic Impacts

Risk/Opportunity		Effect Description (Positive or Negative)	Mitigation/Approach
Risk	Non-compliance with the principles of the code of ethics (Business ethics, anti-corruption and anti-competitive behavior)	Damage to business reputation that may result in withdrawal of business partners and difficulties to access credit lines Suspension of activity and fines contractual damage Drop in share price Misuse of company resources and improper direction of funds Imprisonment for bribe offering / taking and ancillary crimes	Internal rules in place: Code of Business Ethics entered into force on July 1st, 2012, and revised in October 2015, May 2018 and July 2019 and December 2022 containing rules regarding gifts & hospitality, disclosure of conflict of interest, embezzlement, donations, money laundering
Risk	Breaches of Competition Council requirements regarding cartels/ abuse of dominance	Fines between 3% and 10% of company turnover Damage to business reputation Damage claims by third parties Significant defense burden Criminal allegations against the management in case of fraudulent intent	Compliance program: ongoing training, antitrust guidelines, advice on sensitive matters, etc. Awareness campaigns Advice on market policies/strategies and on relevant ad-hoc decisions Legal verification of the contracts

Employees

Risk/Opportunity		Effect Description (Positive or Negative)	Mitigation/Approach
Risk	Talent acquisition & Retention – Human Capital Loss/ Niche roles	Key roles not filled, left vacant with short or negative handovers and a resulting drop in company performance	Development of new projects in order to prepare young students for trade schools in various specialties for Oil & Gas industry – such as “Vocational School” Adaptation of new strategies to attract and retain key competences and key roles in the company
Risk	Talent acquisition & Retention – Risk of non-capability of Talent Acquisition	Key roles not filled Left vacant with short or negative handovers and a resulting drop in company performance Damaged OMV Petrom reputation as an attractive employer New business model & key roles to be defined	Development of new projects in order to prepare young students for trade schools in various specialties for Oil & Gas industry – such as “Vocational School”, Fresh Graduates Program
Risk	Implementation of business projects (e.g., restructuring, and outsourcing projects)	Delays in implementation of business projects Blockage of business projects (restructuring/ outsourcing projects)	Constant anticipation of any related risks Maintain and improve Social Peace and Dialogue (inform/ consult them on each project in order to maintain social peace)
Risk	Decreased industry attractivity leading to limited headcount	Key roles not filled, left vacant with short or negative handovers and a resulting drop in company performance	Adapting new strategies to attract and retain key competences and key roles in the company
Risk	Non-conclusion of the new collective labor agreement (CLA) in Romania	Collective conflict, including strike (in the absence of a valid collective bargaining in place) Unpredictability in labor relations	Identify solutions to reach an agreement Try to involve representative trade union in the negotiation as a partner, not from the opposite position
Risk	Limited employee engagement for Online Learning	Less effective outcomes, impact on productivity related to online learning	Blended approaches Engaging employees in active learning Dedicated time slots for online learning during working hours Differentiating instruction per relevant competencies & development needs Frequent opportunities for employees to practice new knowledge or skills Knowledge sharing sessions Immediate and targeted feedback

Community relations

Risk/Opportunity		Effect Description (Positive or Negative)	Mitigation/Approach
Risk	Not fulfilling the expectations of local communities with regards to economic benefits. Perturbances produced to the inhabited areas closed to our operational sites (gas pipelines, air pollution, spills, other new strategic projects)	Consequences for communities: increased number of grievances/ social unrest, increased unemployment, limited economic opportunities, livelihood quality Consequences for OMV Petrom: reputational damage, loss of social license to operate, limited economic opportunities, production delays, security issues	Operating and emergency procedures Efficient Training and Inspection programs Close Coker blowdown system and new tanks for toluene and benzene and the old ones to be demolished in Petrobrazi Risk based maintenance Retro-HAZOP program and QRA study Insurance for third party loses Old gas pipeline replacement and pig traps installed Corrosion Management Plan developed and implemented Pipeline Integrity Management System in place-semi-quantitative risk evaluation Routine patrolling of pipeline sections CSR projects, community engagement, safety communication campaigns Effective grievance mechanism Community/ stakeholders engagement plans

Human Rights

Risk/Opportunity		Effect Description (Positive or Negative)	Mitigation/Approach
Risk	Human Rights policies in relation with OMV Petrom business activities	Consequences for stakeholders: limited rights of freedom of opinion and expression, discrimination Consequences for OMV Petrom: reputational damage, legal liability in case of actual violation, fines	Include Human Rights in social impact assessments and in social engagement plans Focus on the human rights component of all HSSE Management System Audits and include Human Rights expert in some of these audits Increase communication/ education on human rights topics to contractors via letters or in quarterly meetings, etc.

Sustainability Reports

Sustainability Report 2022

Mapping our Sustainability Risks

Mapping our sustainability risks and opportunities

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