The use of oil and gas will only be significantly addressed when there is no demand, said Dr Kenneth.
ESG is a journey and not a destination, which is why Hibiscus Petroleum Bhd (Hibiscus) will continuously strive to find new, better ways to improve and progress.
According to its co-founder and managing director Dr Kenneth Gerard Pereira, Hibiscus has long infused high standards of health, safety and environmental management into its corporate DNA, in addition to prioritising corporate governance and social responsibility – even before environmental, social and governance (ESG) became part of the corporate lexicon.
Hibiscus reprioritises ESG as GSE, he said, adding that when it comes to its direction on ESG practices, the priority thus lies in continuously raising the bar in its governance standards, while remaining agile as an organisation.
“A well-governed organisation will deliver on all aspects of its corporate and social responsibilities, including its obligation to contribute to a healthy planet,” he said.
This reflects Hibiscus’ commitment to understanding and implementing sustainable practices to achieve the right balance between the objectives of its shareholders; attaining economic success; as well as fulfilling its ethical obligations to other stakeholders and the wider community in which it has a presence.
Noting that the company’s most valuable asset is its people, Dr Kenneth pointed out that Hibiscus sets policies and communicates its standard expectations for conduct, while also continually reviewing and improving its governance structures and processes.
He added, “Such efforts are undertaken to continually instil a strong culture of governance to ensure that we are doing and are seen to be doing the right thing.”
This has enabled Hibiscus to be accorded a Green Lane Policy status since 2019 by Bursa Malaysia, in recognition of good corporate governance and disclosure practices.
Such ethos has also seen the company maintaining its constituency on the FTSE4Good Bursa Malaysia Index since late 2020 and the FTSE4Good Bursa Malaysia Shariah Index. It has also retained the 4-stars rating from FTSE Russell, which has repeatedly placed it in the top 25% by ESG ratings amongst public listed companies in the FBM EMAS Index.
In 2021, Hibiscus announced its aspiration to be a net zero emissions producer by 2050 and published its roadmap to achieve this aim in its corporate mission statement, energy transition strategy and climate change framework.
An initiative towards the net zero objective, the energy transition strategy is underpinned by three key pillars, namely the creation of a resilient portfolio of hydrocarbon assets; efforts to decarbonise upstream operations to optimise operational energy efficiency and the material reduction of and reliance on diesel fuels for offshore installations with its switch to hybrid power sources of solar photovoltaics and wind turbines; as well as exploring green investment opportunities through progressive and disciplined steps to preserve shareholder value.
He shared, “We acted on our stated plans through the successful acquisition in January 2022 of Repsol Exploración SA’s producing assets in Malaysia, Vietnam and the Malaysia-Vietnam Commercial Arrangement Area, thus increasing our natural gas portfolio by almost 30% and thereby fortifying Hibiscus’ energy transition efforts.
“It should be noted that gas is seen as the cleanest form of fossil fuels and has been included by the European Union as part of their green taxonomy.”
In tandem, it has aligned its sustainability policy to the United Nations Sustainable Development Goals (UNSDGs), while key principles in the UNSDGs match commitments in its environment policy.
Further, Hibiscus follows the principle of common but differentiated responsibilities, as prescribed within the UN Framework Convention on Climate Change.
ESG practices have become a critical part of any dialogue, whether it involves the industry, the investment community and financial institutions or even the community, particularly the younger generation.
He opined, “Being in the fossil fuels business, our emissions immediately attract attention and those who are not willing to do a deep dive into details, generally view our activities negatively. We are conscious of the importance of the health of our planet, but we are also cognisant of the wellbeing of our community and humankind in general.”
The balance, Dr Kenneth stressed, lies in adopting common, differentiated responsibilities during the energy transition period.
“We all share a common goal, but we should be given different timelines to achieve this goal. It works like a handicap system in a golf game that includes professionals and amateurs. Each golfer finishes 18 holes with a different number of strokes but their personal handicap, which is based on their personal ability, normalises the scores.
“Similarly, the developed economies are the professionals in this golf game, so they carry low handicaps. The emerging economies are amateurs and are thus accorded high handicaps. Simply said, we can all participate in a rewarding round of golf, or contribute to a cleaner planet, if we declare our handicaps honestly and play the game fairly,” he said.
Through this initiative with Star Media Group, Hibiscus is taking the opportunity to communicate the message that the use of oil and gas will not be materially impacted by attacking supply alone. It will only be significantly addressed when there is no demand, he opined.
He concluded, “Demand is driven by human behaviour and unless each and every one makes a conscious sacrifice to reduce our personal carbon footprint, oil and gas demand will be fulfilled.
“Remember, we do not eliminate fishermen in order to stop people consuming shark’s fin soup to protect the sharks from cruelty. Instead, we ask people to stop consuming the soup!”
