Sustainability Report 2020

Mapping our Sustainability Risks

Risk management

For OMV Petrom, a risk represents the uncertainty on objectives measured by the combination of the likelihood or frequency of an event and its consequences, which can result in opportunities (upside) or threats (downside). We have summarized the potential risks, mitigation measures, and net risks of OMV Petrom activities, structured by our material topics in the table below. Materiality in this context is defined as issues having a potential impact on the environment or society. Relevant risks reported were selected based on their magnitude using impact and probability, and at least one relevant example for each material topic was selected.

Material Topic: Climate change and Energy Transition
Risk descriptionMitigation activitiesEffects
► Failure to comply with existing and upcoming GHG-related legislation can impact costs and reputation.
► Reputational harm can also be caused by failure to deliver against the GHG reduction commitments publicly made.
► Acting according to Procedures on GHG Emissions Monitoring and Reporting under EU Emission Trading Scheme (EU-ETS).
► Internal Audits are undertaken annually for each ETS plant.
► Carbon Intensity is monitored at the OMV Petrom level on a systematic basis with quarterly internal reporting on emissions.
► Carbon Management Program adopted in Upstream.
► The impact on the environment or society is already described in the risk event.
► Increased use of renewable energy products generates lower demand for classical products (electricity, gas, crude oil).
► An increase in renewable energy adoption can generate a negative reputation impact on the traditional energy companies.
► Implementation of new energy solutions projects:
– mobility partnerships;
– gas mobility pilot project;
– co-processing of HVO ; (Hydrotreated Vegetable Oil);
– investments in photovoltaics projects;
– bioethanol advanced.
► Promoting new energy solutions ensures a healthy environment and economic development.
Material Topic: Health, Safety and Security
Risk descriptionMitigation activitiesEffects
► Surface integrity and process safety failures (risk drivers such as integrity failure or unsafe process safety conditions leading to injuries/fatalities of employees, contractors’ and 3rd parties’ staff, major oil spill, company reputational damage, property damages and business interruption).► Preventive maintenance.
► Risk awareness campaign.
► Lessons learned (internal incidents or industry experience).
► Integrity assessment programs.
► Corrosion Management Plan developed.
► Pipeline Integrity Management System in place.
► Awareness campaign for communities.
► The impact on the environment or society is already described in the risk event.
► Theft of petroleum products and infrastructure components that may lead to third-party injuries, environmental damages (after theft attempt), reputational impact.► Corporate Security and Resilience internal regulation.
► Standards from the Group OMV incorporated into OMV Petrom Scope of work.
► Security services framework
► Zero tolerance policy, Protocols with Ministry of Defense.
► Security dept. continuous monitoring new solutions.
► Security concept focused on technology
► Automated Security Incident Reporting Tool.
► The impact on the environment or society is already described in the risk event.
► Property damage offshore or onshore caused by different perils outside of normal operations or normal maintenance, such as fires and explosions (major accident events). Risk drivers such as integrity failure or unsafe process safety conditions would lead to business interruption, pollution, harm to employees’ safety and even reputational consequences.► Rejuvenation and Asset Integrity Program offshore.
► Operating and Safety Procedures.
► National Contingency plan coordinated by the Authorities.
► Insurance policy.
► Frequent turnarounds.
► Inspection program.
► Risk-Based Maintenance.
► Operating and emergency procedures.
► Personnel trainings, emergency plans and exercises (with the collaboration of firefighting authorities).
► The impact on the environment or society is already described in the risk event.
Material Topic: Environment
Risk descriptionMitigation activitiesEffects
► Restrictions to access the water resources for normal operations in low/ no precipitation periods (mainly for the sites in water- stressed/scarcity area). In drought periods due to climate change, the population has priority in accessing water resources.► International best industry practice to reduce wastewater volume and load of pollutants, e.g., segregated sewerage system, pre-treatment of residual waters, advanced purification of industrial wastewater through osmosis and electrode ionization.
► CCPP Brazi recycles 98% of the total amount of withdrawn water, which is best practice in water management.
► Water Management Plans in operations.
► Water risk assessment in relevant areas.
► The impact on the environment or society is already described in the risk event.
► Non-compliance with environmental legislation or other compliance obligations (internal or external) that could have a negative impact on the environment (e.g., aspects such as spills, water, waste, compliance).► Implementing an Environmental management system according to ISO 14001.
► Proper management of conformity budget and projects.
► Operating procedures.
► Risk-based maintenance.
► Emergency preparedness and response.
► Insurance for third-party losses.
► Environmental Risk Assessments.
► The impact on the environment or society is already described in the risk event.
Material Topic: Employees
Risk descriptionMitigation activitiesEffects
► Human capital loss and limited headcount/decreased industry attractively. The industry is bracing for a serious shortfall of experienced technical professionals over the next several years due to attrition/ retiring. The risk is as much about the number of workers retiring as it is about those ready to replace them.► Developing new projects to prepare young students for trade schools in various specialties for the oil and gas industry – such as Vocational School.
► Adapting new strategies to attract and retain key competences and key roles in the Company.
► The need for development in professional energy specialties could catalyze society’s interest in this education sector.
► Risk of unbalancing the relationship with the social partners.► We constantly anticipate any related risks.
► Maintain and improve social pace and dialogue (inform/consult them on each project to maintain social pace).
► No relevant impact on society or the environment.
► Not reaching a common agreement regarding the new collective labor agreement (CLA).► Identify solutions to reach an agreement.
► Involving representative trade unions in the negotiation as a partner, not from the opposite position.
► No relevant impact on society or the environment.
► Limited employees’ engagement for online learning.► Blended approaches.
► Engaging employees in active learning.
► Dedicated time slots for online learning during working hours.
► Differentiating instruction per relevant competencies and development needs.
► Frequent opportunities for employees to practice new knowledge or skills.
► Knowledge sharing sessions.
► Immediate and targeted feedback.
► No relevant impact on society or the environment.
Material Topic: Business Principles and economic impacts
Risk descriptionMitigation activitiesEffects
► Non-compliance with the principles of the Code of Ethics (e.g., bribery, unlawful gifts and hospitality, embezzlement by undisclosed conflict of interest, reputation damage caused by third parties working in partnership with OMV Petrom).► Internal rules in place: Code of Business Ethics. Advocacy of zero tolerance for bribery and corruption. Whistleblowing tools in place: confidential e-mail address, business ethics helpline.
► Training program (online and face-to-face).
► Communication activities to increase awareness regarding the principles of the Code of Ethics.
► Signing of the declaration of conflict of interest.
► Conduct Third-Party Checks, workshops, and recommendations.
► No relevant impact on society or the environment.
► Breaches of Competition Council requirements regarding cartels/ abuse of dominance.
► Lack of internal awareness on the relevant competition principles could cause their unintentional breach.
► Compliance program: ongoing training, antitrust guidelines, advice on sensitive matters, etc.
► Awareness campaigns.
► Advice on market policies/strategies and
relevant ad-hoc decisions.
► Legal check of the contracts.
► No relevant impact on society or the environment.
Material Topic: Customer and Product Responsibility
Risk descriptionMitigation activitiesEffects
► Non-compliance with existing technical and qualitative standards for our products (e.g., reducing the risks for the health and safety of consumers and the environment protection).► 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.
► Active campaigns to increase customers satisfaction and loyalty.
► Anticontamination and e-sealing devices implemented.
► The impact on the environment or society is already mentioned in the risk description.
Material Topic: Supply chain
Risk descriptionMitigation activitiesEffects
► Risk of poor-quality delivery of subcontractors (no decent wages in the supply chain (human rights); supplier pays wages below standards established by international human rights bodies).► Training for employees (focus on high-risk countries).
► Inclusion of labor rights aspects within the Human Rights Country Entry Check before launching operations in a country and within the regular human rights assessments conducted in our countries of operations.
► HSSE contractor management considers human rights aspects (incl. labor rights) in the pre-qualification and auditing phase.
► ESG supplier assessments Code of Conduct includes labor rights.
► The impact on the environment is not relevant, but referring to society, there is a possible impact on workers’ mental and physical health with even low life expectancy.
► Lack of sub-contractor availability and/ or poor quality delivered by subcontractors.► Build custom Supplier Risk alerts for subcontractors involved in high-risk projects► No relevant impact on society or the environment.
► Risk of dependency on a single supplier and vice versa.► Category strategy and a balanced supplier strategy for specific activity in accordance with requested business need/demand in place.► No relevant impact on society or the environment.
► Risk of increasing the carbon footprint of the Company (carbon footprint from goods & services purchased by Procurement).► Sustainability in Procurement concept defined in 2020.
► Increase transparency and awareness in Procurement. Create a dedicated carbon management reporting tool for Procurement.
► Start engaging with suppliers on carbon management topics.
► The impact on the environment or society is already mentioned in the risk description.
Material Topic: Community Relations and human rights
Risk descriptionMitigation activitiesEffects
► Risk of not fulfilling the expectations of local communities with regards to economic benefits.
► Perturbances produced to the inhabited areas close to our operational sites (gas pipelines, noise, air pollution, spills).
► Realization of CSR projects.
► Community engagement activities.
► Realization of safety communication campaigns.
► Effective grievance mechanism.
► The impact on the environment or society is already described in the risk event.
► Human rights policies in relation with OMV Petrom business activities (e.g., risk of non- compliance or risk of indirect participation in human rights violations).► Include human rights in social impact assessments and social engagement plans.► No relevant impact on society or the environment.