KUALA LUMPUR: Velesto Energy Bhd will continue to focus on sustainability efforts, keeping intact its corporate responsibility towards environmental, social and governance (ESG).
President and executive director Rohaizad Darus said given the nature of the oil and gas (O&G) industry, there were three factors that are most important to look after.
"Given the nature of our industry, the upstream value chain of exploration and production, and our business model, operations and activities, Velesto's approach to sustainability remains driven by a strong focus on three key aspects — the protection of everyone's health and safety, enhancing people's lives, and environment preservation.
"Health and safety of our people are the most important aspects of our operations and last year, we had zero lost time incidents and zero recordable incident cases."
Rohaizad said that with regards to people, the company's priorities remained on local talent recruitment and development, and enhancing organisation culture. Velesto recruits mostly Malaysians and these employees are further developed via various in-house structured programmes.
Since 2014, Velesto has collaborated with Institut Teknologi Petroleum PETRONAS (INSTEP) via Velesto-INSTEP Drilling Academy, which provides internationally accredited training and certification to develop qualified drilling professionals.
"We also aim to improve the welfare and livelihoods of people around us through our community investments in education, safety and environmental awareness. We have been providing tuition classes and study aids for students from rural and suburban schools taking major examinations, working with fishermen on safety at sea, and cleaning beaches with university students," he told the New Straits Times in an interview recently. "This year, we are also making some contributions to Tabung Cerdik and MyStep initiatives.
"From the economic angle, we are increasing our product and service sourcing from local vendors and last year we have sourced about RM120 million locally, or about 70 per cent of our total procurement expenditures.
"In addition, our environmental priorities are in minimising pollution, specifically in the prevention of major spills and management of oil or waste, reducing our GHG (Greenhouse Gas) emissions, while ensuring the biodiversity of the environment is not harmed by our operations.
"These focus areas, together with our iLEAP corporate Core Values and continued strong emphasis on corporate governance, provide a firm base for the development of a robust organisation that is well suited to sustain itself, protect against possible future risks and generate enduring stakeholder value over the long-term amid a competitive operating environment," he added.
According to Velesto's 2019 Sustainability Report, the company has strengthened its practice of corporate governance.
It has also bolstered its commitment to anti-corruption and bribery with the establishment of Integrity Governance Unit under the guidance of Malaysian Anti-Corruption Commission on Jan 1 last year — an independent function to assist the board in driving integrity strategy and compliance for the group.
In addition to being included in FTSE4Good Bursa Malaysia Index, Velesto has been upgraded to Tier 1 (Setting the Pace) and is in the top-quartile for sustainability disclosures by FTSE Russell and Bursa Malaysia.
Rohaizad said while it was not easy to prove the correlation between sustainability and financial performance, this would materialise over longer term and will help to improve the business.
The group will continue to pursue further change and improvement.
"It must always be remembered that financial performance and sustainability go together. We will continue to uphold sustainability as key to Velesto and as such, will look to further integrate sustainability into our business model and operations."
This will entail further aligning sustainability policies, initiatives and action plans with business strategy, and to develop a stronger long-term perspective to enable a strategic response to emerging risks and opportunities, external trends and developments and other macro-factors.
"Guided by our sustainability conscience, we shall continue to operate in accordance with global best practices towards delivering long-term stakeholder value while securing Velesto group's future," he added.
He said the issue of sustainability was also one of the focus of its shareholders, especially with the company now focusing to woo and get more international investors.
"Even local funds like the Employees Provident Fund are putting high priority on sustainability and this trend is increasing going forward. Shareholders push more and more and push harder on sustainability.
"Being a public-listed company, we are pushing strongly towards sustainability and we need to have a structure in approaching this.
"We have a well-documented sustainability framework and strategy to guide us in implementing activities and things required to achieve our medium and long-term sustainability objective.
"In addition, there are several sustainability objectives that we incorporated in our key performance indicators, which align management compensation with achieving these objectives.
"We will continue to expand to identify more opportunities to develop capabilities and services in support of our clients, as well as enhance our sustainability capability," he said.