SDFI and Petoro annual report 2019
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Corporate social responsibility

Petoro’s CSR presentation is based on guidelines for exercising CSR adopted by the company, and is tailored to its activities as a licensee on the Norwegian Continental Shelf (NCS).  CSR comprises the responsibilities companies are expected to fulfil for people, society, climate and the environment affected by their activities. The work on corporate social responsibility is an integral part of the board’s efforts. Petoro’s funding for performing its management duties and for running the company is provided through appropriations from the government. Pursuant to its mandate, Petoro will not provide monetary support for public welfare purposes. 

The owner’s expectations as regards corporate social responsibility are expressed in the report to the Storting on state ownership. The Ministry of Trade, Industry and Fisheries presented Meld. St.8 (2019-2020) “The state’s direct ownership in companies - sustainable value creation” in November. The board’s presentation below, tailored to Petoro’s role and mandate, is based on the owner’s expectations and the company’s guidelines for CSR. 

Petoro undertakes to pursue its business activities in an ethically prudent, sustainable and responsible manner. The board emphasises that the company’s CSR forms an integral part of its activities and strategies and is reflected through its values. These include dynamic, responsible, inclusive and bold. The company’s guidelines on business ethics support these values.

Petoro exercises its activities in accordance with good corporate governance. This applies to its participation in the individual production licences and as a partner in the joint ventures. The joint venture agreements for the production licences include governance requirements for the operators. Petoro exercises its role through active participation in management committees and sub-committees on the basis of a prioritisation of available resources and where it can make a difference. Follow-up of the state’s equity interests in all joint ventures is incorporated in Petoro’s management system. 

By exercising its supervisory duty, Petoro will contribute to continuous improvement of HSE results for fields and facilities where Petoro is a licensee. The Petroleum Safety Authority Norway’s annual topic for safety work and analysis of the risk level on the Norwegian shelf will be used as a basis for Petoro’s prioritisations. In 2019, Petoro has been a driving force for increased quality in major accident workshops and has demonstrated through the Petroleum Safety Authority Norway’s main topic “Safe, Strong, Clear” that safety is priority number one. Focus has also been on learning from investigations of serious incidents across the joint ventures. Major accident workshops are an important part of the joint ventures’ safety work. The company has devoted particular attention to major accident risk within drilling and wells. Petoro participates every year in HSE management inspections on selected fields and installations. 
 
Petoro exercises its activities in a sustainable manner which minimises negative impact on nature and the environment. Petoro recognises that climate challenges make it necessary to restrict man-made climate impact. The company wants to contribute to ensuring that the oil and gas industry on the Norwegian Shelf leads the way in addressing climate challenges.  Climate is an integrated part of Petoro’s governance. Petoro will work to ensure that a broad spectrum of effective climate solutions and new technology are considered in selected licenses.

Electrification of installations is the single measure that can provide a substantial contribution toward reducing emissions from the Norwegian shelf, particularly of CO2. Johan Sverdrup started up on 5 October 2019 with power from shore. As regards the Tampen area, the partners in the Snorre and Gullfaks fields submitted a Plan for Development and Operation of a floating offshore wind farm consisting of 11 floating wind turbines that will replace about one-third of the gas-fired power on the platforms with renewable wind power. Along with fields such as Troll A, Gjøa and Ormen Lange, which have already been electrified, they will contribute to low average CO2 emissions from the SDFI portfolio. 

Petoro reports emissions to the air and discharges to water from the portfolio in a separate chapter of its annual report on the external environment, based on figures obtained from the operators.

The company contributes to creating environmental awareness among all its employees through an incentive scheme to encourage increased use of public and environmentally friendly transport. Petoro emphasises efficient ICT solutions and good communication systems that can replace travel to meetings with videoconferencing. 

Petoro does not tolerate any form of corruption or other improprieties, and employees are not permitted to accept remuneration from others in their work for the company. Guidelines on business ethics define what is regarded as corruption, and the consequences of breaching these guidelines are addressed specifically. No breaches of these guidelines have been recorded. 

Petoro’s employees shall not accept or offer unlawful monetary gifts or other benefits to secure an advantage for themselves, for Petoro or for others. Employee directorships and secondary employment must be approved by the President and CEO in order to avoid possible conflicts of interest. Guidelines on business ethics detail the consequences of breaches. No breaches of the guidelines have so far been recorded. 

Petoro’s employees comply with the company’s business ethics guidelines. The company’s guidelines on business ethics are publicly available. Their purpose is to clarify principles which will govern the company’s commercial operations and employee conduct. All employees sign the company’s ethical guidelines each year. These guidelines set requirements for the individual to exercise conduct that does not raise questions, based on the requirement to maintain high ethical standards. It follows from the guidelines that the individual is expected to contribute to an inclusive work environment. The individual has a shared responsibility to ensure a good environment in terms of health and safety. The guidelines also address matters such as the duty of confidentiality, potential conflicts of interest and questions linked to accepting gifts and services. Senior employees (President and CEO and employees who report directly to the President and CEO) are prohibited from owning shares in licensee companies. Petoro has established requirements for information and ICT security in its activities. 
Petoro’s employees discharge their duties with a high level of integrity and honesty, and show respect for other people, public authorities and business contacts, as well as health, safety and the environment. Petoro aims to maintain a sound psychosocial and physical working environment for all employees. The company shall have a corporate structure that promotes good results within health, safety and the environment. Petoro shall actively encourage continuous HSE improvement and believes that all incidents can be prevented. The PetoroAktiv employee association organises a number of social, cultural and athletic activities for employees. The various events are well-attended.

Petoro does not discriminate on the basis of gender, religion, national or ethnic affiliation, social group or political views. Petoro emphasises equal opportunities for professional and personal development, pay and promotion. The company facilitates a flexible customising of working hours. When determining wages and in wage negotiations, Petoro is conscious that men and women must be treated equally. No systematic or significant differences exist between male and female pay in the company. The company has a number of employees with diverse cultural and ethnic backgrounds. Working conditions at Petoro are customised to allow employment of people with disabilities.

The company has routines for reporting improprieties. The board encourages the company’s employees to raise ethical issues and to report any breaches of the regulations they encounter. The internal audit function is an independent whistleblowing channel with the right and duty to report to the board. The right to report improprieties in the enterprise also comprises consultants who carry out assignments on behalf of Petoro. 

Petoro expects its partners and contractors/ suppliers to maintain the same ethical standards set for its own business operations. Petoro’s standard contractual terms incorporate requirements that contractors/suppliers must execute the assignment with a high level of professionalism and in accordance with high ethical standards. An extract from the company’s guidelines on business ethics is incorporated into all Petoro’s standard contracts as a normative standard. The management committee in each joint venture is responsible for considering and deciding issues related to the procurement and contract strategy. 
 
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