PETRONAS CORE PCG Sustainability Report 2021 - Website

02
MESSAGE FROM LEADERSHIP
06 ABOUT THIS REPORT
OVERVIEW OF PCG
08 Statement of Purpose, Vision, Shared Values
and Our Strategy
09 Who We Are
This Report
10 What We Do
12 Our Presence
14 Our Value Chain
SUSTAINABILITY @ PCG
16 Stakeholder Engagement
20 Material Matters
26 Sustainability Strategy
SUSTAINABILITY GOVERNANCE
28 Governance Structure
30 Sustainability & Risk Management
31 Sustainability Guidelines
33 Membership and Associations
34 Awards and Recognitions
36 SUSTAINABILITY SCORECARD
CATALYSING ECONOMIC PERFORMANCE

39 Innovation & Product Stewardship
42 Customer Relationship Management
44 Supply Chain Management
46 Cybersecurity & Digitalisation
48 Strategy Purpose & Financial Resilience
CONTRIBUTING TO THE GREEN AGENDA

50 Climate Change
55 New Plastics Economy (NPE)
57 Environmental Stewardship
EMPOWERING PEOPLE & COMMUNITIES

61 Human Rights
64 Workplace and Occupational Safety & Health (OSH)
67 Talent Development
70 Community Engagement
STRENGTHENING ETHICS & INTEGRITY

74 Corporate Governance
ADDITIONAL INFORMATION
77 Independent Limited Assurance Report
79 Appendix
80 Glossary of Terms, Abbreviations and Acronyms
82 Global Reporting Initiative (GRI) Content Index
Futher details of PETRONAS Chemicals Group

Berhad can be found on www.petronaschemicals.com
This Sustainability Report is printed on Forest Stewardship Council (FSC) certified material in line with ISO 14001 to reduce
environmental impact.
2. SUSTAINABILITY REPORT 2021
MESSAGE FROM
LEADERSHIP
Dear Stakeholders,
As the new Chairman and the new MD/
CEO of the Group, we are appreciative
for the commendable work done by
our predecessors in catalysing PCG’s
Sustainability Agenda. This year has
been monumental for PCG’s sustainability
journey, and we are excited to embark
on our roles at such a pivotal moment.
The Group has made significant progress
in instilling sustainability at the core of
everything we do, with a reinforced
commitment to creating positive
Economic, Environmental and Social
(EES) impacts. This includes actively
mitigating the effects of climate change
and other sustainability risks when
reviewing growth projects and
opportunities.
DATUK IR. (DR.) ABDUL

RAHIM HASHIM
Chairman
PETRONAS CHEMICALS GROUP BERHAD 3.
ME SSAGE FROM L E A DE R SH I P
Futher details of PETRONAS Chemicals Group

Berhad can be found on www.petronaschemicals.com
Sustainability is essential to remaining

competitive, enabling us to address key
EES challenges that threaten the long-
term resiliency of our business, society
and planet. This year, we reached a
key milestone with the establishment
of our Net Zero Carbon Emissions
(NZCE) Roadmap, which aligns with
PETRONAS Group’s roadmap of
achieving net-zero carbon emissions
by 2050. Our overall sustainability
efforts were also recognised by the
Dow Jones Sustainability World Indices
(DJSI) 2021. We were ranked the top
10% of the largest 2,500 global
companies, positioning PCG as one of
the top ten chemical companies for
the World Index and top three for
Emerging Markets. We had also
sustained a 4-star rating from
FTSE4Good Bursa Malaysia for our
Environmental, Social and Governance
(ESG) Disclosures.
IR. MOHD YUSRI MOHAMED YUSOF

Managing Director/Chief Executive Officer
(MD/CEO)
M E SS AG E F R OM L EAD ER S HIP
CATALYSING ECONOMIC DEVELOPMENT PROTECTING THE ENVIRONMENT

As a major integrated chemicals player, our work significantly Climate action has become a top priority in PCG’s Sustainability
contributes to economic progress. Our customers stem from a Agenda, in line with SDG 13. Our ability to create long-term
range of industries, including agriculture, home, industrial & stakeholder value depends on how we mitigate and adapt to the
institutional (HI&I), packaging and construction. We strive to deliver imminent environmental threats and opportunities. With this in
responsible products and solutions that meet their changing needs mind, we established PCG’s NZCE Roadmap to guide our climate
and drive their industry forward. For instance, we developed the change strategies and navigate the global shift to a low-carbon
Ultra-High Purity Methanol (UHPM) for Fuel Cell Application, in economy. The roadmap also aligns with the Task Force on Climate-
line with market demand for clean energy. Every litre of UHPM related Financial Disclosures (TCFD) recommendations, which helps
utilised emits 24% lower CO2 compared to diesel portable power investors and other stakeholders fairly assess our climate resilience.
generators of similar capacity. Part of our climate strategy includes setting ambitious carbon-
reduction targets, starting with a 20% reduction by 2030 towards
At the same time, our strong regional presence also creates a an ultimate goal of becoming net-zero by 2050.
catalytic effect in spurring the economy through employment
opportunities and spinoff into the downstream value chain. This Our long-term approach to taking care of the environment also
extends to our value chain, which we view as an opportunity to includes contributing to a circular economy. Plastic waste has
contribute to decent work and greater economic growth. In 2021, become a major global environmental problem that we have the
we transacted with PETRONAS Group of Companies for feedstocks influence to address. Although this presents a challenge to the
amounting to RM8.3 billion and we worked with 1,243 local Group, we are excited about its opportunities. We will leverage
suppliers, contributing RM2.4 billion to the local economy. our expertise and resources to accelerate the region’s shift towards
Additionally, we enabled 13 local vendors into becoming well- a New Plastics Economy (NPE), ensuring responsible consumption
established companies through PETRONAS’ Vendor Development and production for a more sustainable planet. Our commitment
Programme (VDP). We look for ways to improve the income of to NPE includes exploring ways to convert end-of-life plastic
SMEs and other underserved businesses through our supply chain. waste into pyrolysis oil, creating an end product of certified circular
polymer resins. This year, we made progress with a process trial
of converting plastic waste into circular naphtha at a PETRONAS’
refinery in Melaka. We have also conducted a feasibility study on
converting end-of-life Polyethylene Terephthalate (PET) articles
to recycled food-grade PET resins. Our efforts to solve the plastic
waste problem contributes to Malaysia Plastics Sustainability
Roadmap 2021-2030.
ME SSAGE FROM L E A DE R SH I P
HELPING PEOPLE THRIVE

PCG would not be where it is today without its dedicated network In addition to COVID-19 challenges, the year ended on a hard
of people. This ranges from committed employees, trusted suppliers note for many Malaysians, with thousands of people forced to
and vendors, to our customers and communities. With that, we evacuate their homes due to severe flooding events. We are
support social peace and justice by ensuring that the rights of all grateful for our caring PCG employees, who set up volunteer
our stakeholders are protected. This year, we enhanced our initiatives with PCG to help those impacted by the natural disaster.
compliance with Human Rights by conducting our Contractors As part of our corporate responsibility, employees collected and
Code of Conduct on Human Rights (CoCHR) awareness sessions distributed food and other essential items at PETRONAS service
and assessments to contractors. This resulted in the CoCHR stations, as well as made personal contributions to the National
coverage of 100% of identified contractors. Disaster Management Agency (NADMA) worth over RM250,000
through PCG employees’ own salary deductions. Their efforts
As the world entered its second year of the pandemic, PCG helped minimise potential inequalities, hunger and poverty among
maintained its moral duty to support local communities. We hard-hit communities.
activated our COVID-19 Relief Programme, which included the
Community Relief Package (CRP) to help provide essential items In closing, we are proud of the progress made by our dedicated
and aid to the underprivileged and low-income communities employees in driving PCG’s Sustainability Agenda. It truly shows
where we operate. During the Movement Control Order (MCO), how businesses can achieve growth that creates positive outcomes
we partnered with the Department of Social Welfare (JKM) and for everyone. As we continue to prioritise shared value and positive
PETRONAS stations’ Food Bank Programme to provide families in EES impacts, we would like to thank our stakeholders for their
need with food and support. We also provided essential equipment roles. Solving sustainability challenges requires a collective effort,
to support the vaccination process through the Vaccine Distribution so we would not have made such progress without their trust
Relief Centre. Similarly, through our Frontliners Relief Package and support. Moving forward, we will continue to embed
(FRP), we supplied healthcare frontliners with gloves, masks and Sustainability at the Core of everything we do.
other protective gear. In total, our COVID-19 efforts had helped
more than 18,000 people near our operations in 2021, playing Co-signed by Chairman & MD/CEO.
our part in ensuring the good health and well-being of our
communities.
Datuk Ir. (Dr.) Abdul Rahim Ir. Mohd Yusri Mohamed
Hashim Yusof
Chairman Managing Director/
Chief Executive Officer
ABOUT THIS REPORT

SCOPE OF REPORTING NAVIGATION ICONS
This is our fourth year producing PCG’s Sustainability Report to encapsulate our Economic,
Environmental, Social (EES) and Governance impact. This report delivers a clear and concise Material Matters
account of our contributions to the Sustainability Agenda, what it means to our business,
and how we create long-term value for our various stakeholders. Climate Change
Environmental Stewardship
REPORTING PERIOD & BOUNDARY
This report covers our sustainability performance for the 2021 calendar year, unless stated Innovation & Product
Stewardship
otherwise. Where relevant, we will also include data from previous years to track year-on-
year progress and provide additional context. The report provides information on all our
manufacturing subsidiaries with more than 50% ownership. In this regard, we are including New Plastics Economy (NPE)
data for BRB Group’s operations, where available. The report also addresses our response
to 14 material matters that impact our business and stakeholder value. This is further Workplace and Occupational
Safety & Health (OSH)
elaborated on pages 20 to 25, as well as in our Integrated Report 2021, pages 82 to 89.
Supply Chain Management
Community Engagement
Talent Development
Sustainable Corporate Governance

Development
Goals (SDGs) Strategy Purpose &
Financial Resilience
Plant Operations
Human Rights
Cybersecurity & Digitalisation

The coloured goals represent PCG's priority SDGs.
Customer Relationship
Management
REPORTING STANDARDS
This report has been prepared in accordance with the Global Reporting Initiative (GRI)
Standards: Core option. Additionally, we have adhered to the best practice sustainability Key Stakeholder Groups
guidelines, standards and frameworks as follows:
Employees
• Bursa Malaysia’s Main Market Listing Requirements on Sustainability Reporting
• FTSE4Good Bursa Malaysia Index’s Environmental, Social and Governance indicators
Customers
• International Petroleum Industry Environmental Conservation Associations’ (IPIECA) Oil
and Gas Industry Guidance on Voluntary Sustainability Reporting
• Dow Jones Sustainability Indices Suppliers & Vendors
• The United Nations Sustainable Development Goals
• Taskforce on Climate-related Financial Disclosures (TCFD) Business Partners
Shareholders &
INDEPENDENT ASSURANCE Investment Community
The authenticity of the information provided in this report is verified with an independent
assurance, as conducted by KPMG. This verification demonstrates our commitment to Government & Regulators
ensure transparent reporting standard.
Communities
POINT OF CONTACT
Media
We value your feedback and suggestions on how we can further improve our sustainability
journey. Please contact our sustainability team at [email protected].
ABOUT THIS REPORT
OVERVIEW OF PCG
STATEMENT OF PURPOSE
A progressive energy and solutions partner enriching
lives for a sustainable future
VISION
To be the preferred chemical company providing innovative
customer solutions
SHARED VALUES
Our shared values are deeply embedded in our culture and ensure we operate with integrity
at all times while contributing to the well-being of people in every nation where
we have presence
LOYALTY INTEGRITY PROFESSIONALISM COHESIVENESS

Loyal to corporation Honest and upright Strive for excellence United, trust and respect
for each other
OUR STRATEGY
First-prong
SUSTAIN strength in basic petrochemicals
through Operational Excellence &
Commercial Excellence in Maximising Cash
Generation from existing business
1 Two-
Pronged
Strategy
2
Second-prong
Selectively DIVERSIFY into derivatives,
specialty chemicals and solutions through
Growth Delivery Excellence via Expanding
Core & Stepping-out opportunities
For more details on our strategy, refer to MD/CEO's Review on pages 39 to 43 and Our Strategy on pages 99 to 105 of the Integrated Report
OVERVIEW OF PCG
MARKET CAPITALISATION:
AS AT 31 DECEMBER 2021 WHO WE ARE
RM71.4 PCG is the chemical arm of PETRONAS and Malaysia’s leading integrated chemicals
BILLION producer. We operate in the manufacturing, marketing and selling of a diversified
range of petrochemicals. We were established more than 30 years ago, and publicly
listed on 26 November 2010.
Our Operational Excellence and Commercial Excellence has propelled us to become

TOTAL ASSETS BASE: one of the largest integrated chemicals producers in Southeast Asia. We currently
RM46.6 operate from 11 manufacturing sites in Malaysia, the Netherlands, Singapore, Germany
and Canada. The Group’s Growth Delivery Excellence has been a driving force in
BILLION expanding into segments with opportunities to future-proof the business. Our
investments in specialty chemicals continue to strengthen with the commencement
of the silicone blending facility in Gebeng, Pahang.
As we realise our vision of becoming 'The Preferred Chemical Company Providing

ONE OF THE Innovative Customer Solutions', we remain focused on creating positive Economic,
LARGEST
INTEGRATED CHEMICALS
Environmental and Social (EES) impacts. With sustainability at the centre of all our
decisions, we are on track to achieving net-zero carbon emissions by 2050.
PRODUCERS IN
SOUTHEAST ASIA
PRODUCTION CAPACITY:
12.8
MILLION TPA
DOW JONES SUSTAINABILITY

INDICES (DJSI) 2021:
TOP 10
COMPANIES
DJSI WORLD
(CHEMICALS INDUSTRY)
TOP QUARTILE
FTSE4GOOD
BURSA MALAYSIA INDEX
WHAT WE DO
PRODUCT PORTFOLIO
MANUFACTURING
Polymers
Our 11 world-class chemical manufacturing sites
worldwide produce a range of commodities and specialty
chemicals that are used by customers in various sectors – from
agriculture to automotive, and packaging to personal care – to
manufacture items that enhance our daily lives.
Products from joint ventures

and associates
PRODUCT APPLICATION
Personal Care Electrical and Electronics Textile
Automotive Oil and Gas Construction
Pharmaceutical Agriculture Packaging

OVERVIEW OF PCG
WH A T W E DO
Silicones, Lube oil Additives Ammonia and Fertilisers Methanol and MTBE
and Chemicals
Aromatics Oleﬁns, Glycols and

Derivatives
COMMERCIAL
We market and sell integrated chemical solutions, including

specialty products and chemical derivatives. Through
innovative products and solutions, we deliver best-
in-class commercial value to our customers globally.
OUR PRESENCE
As at 31 December 2021
NETHERLANDS POLAND
CANADA
2 8 4 9
16
GERMANY
14
USA
TURKEY
BRAZIL
Plant
Sales Office SOUTH 12

AFRICA
Representative Office
R&D Laboratory
Countries of Sales Distribution
1 BRAZIL 7 MALAYSIA 13 THAILAND
2 CANADA 8 NETHERLANDS 14 TURKEY
3 CHINA 9 POLAND 15 UAE
4 GERMANY 10 PHILIPPINES 16 USA
5 INDIA 11 SINGAPORE 17 VIETNAM
6 INDONESIA 12 SOUTH AFRICA

OVERVIEW OF PCG
OUR PR E SE N C E
S A L ES B Y M A R K E T S
31%
Malaysia
26%
Southeast Asia
24%
Northeast Asia
19%
Rest of the World
(excluding Malaysia)
SOUTH KOREA
MYANMAR
SA LE S
BY COUNTRY
3
MALAYSIA 30.6%
CHINA JAPAN CHINA 14.0%
UAE
THAILAND 12.6%
VIETNAM INDONESIA 9.9%

15
5 AUSTRALIA 5.4%
INDIA 10 PHILIPPINES PHILIPPINES 4.8%
THAILAND 13
17 SINGAPORE 4.0%
7 MALAYSIA VIETNAM 3.5%
SINGAPORE 11 JAPAN 3.4%
NEW ZEALAND 2.1%

6
INDIA 1.9%
SOUTH KOREA 1.5%

INDONESIA
OTHERS* 6.3%
* Others include but is not limited to Austria,

AUSTRALIA Bangladesh, Chile, Germany, Hong Kong, Mexico,
Pakistan, Sweden, Switzerland and United States
NEW
ZEALAND
MA LA YSIA N O P ER A T I ON S
FEDERAL TERRITORY OF TERENGGANU PAHANG JOHOR
KUALA LUMPUR Kertih Integrated Petrochemical Gebeng Integrated Pasir Gudang
PETRONAS Chemicals Group Complex (KIPC) Petrochemical Complex • Styrene
is head quartered in the • Ammonia • Ethylene Glycols • Methyl Tertiary • 2-Ethylhexanoic Monomer*
PETRONAS Twin Towers, • Benzene • Ethoxylates Butyl Ether Acid*
Kuala Lumpur City Centre • Butanol • Polyethylene • Propylene • Silicone Gum KEDAH
• Butyl Acetate Glycols • Highly Reactive Blend Gurun
FEDERAL TERRITORY OF • Butyl Glycol Ethers • Paraxylene
Polyisobutylene* • Silicone • Ammonia
LABUAN • Ethanolamines • Polyethylene
• Acrylics* Antifoam • Methanol
• Methanol • Ethylene • Propylene
• Acetic Acid* • Citral* • Silicone • Urea
SABAH • Citronellol* Emulsion • NPK Fertilisers*
SARAWAK
Sipitang • L-Menthol* • Diesel Exhaust Fluid
Bintulu
• Ammonia • Ammonia * Produced by joint
• Urea • Urea ventures and
associates
OUR VALUE CHAIN
PRODUCTION
We use natural resources efficiently through a prudent energy
management system, optimising the use of raw materials and
recycling back our waste. We minimise our footprint by leveraging
technology and digitalisation.
SOURCING
We seek to only work with
suppliers who share our values of
integrity. To ensure responsible
sourcing, we conduct due diligence
in our supply chain management.
Our support for local suppliers
helps develop them into
multinational companies.
DISTRIBUTION
We ensure the safe and sound delivery of our products
through our comprehensive Road Transport Operational
Guideline (RTOG) programme focusing on leadership, vehicle
and journey management.
OVERVIEW OF PCG
OUR VA L UE C H A I N
MARKETING AND SALES

We co-create with customers to deliver sustainable
solutions. We also strive to meet our customers’
needs by maintaining high satisfaction levels and
further enhance on how we can deliver through
periodic customer survey.
WASTE MANAGEMENT
We collaborate with our stakeholders,
including the government, to recycle
plastic waste into a circular economy.
Our activation on sustainability module
had reached internal and external
stakeholders nationwide to educate the
importance of recycling.
STAKEHOLDER ENGAGEMENT
WHY WE ENGAGE
EMPLOYEES
We have 4,585 skilled and dedicated employees to
drive our business objectives and execute our world-
class manufacturing operations.
Our long history in the chemicals
industry is built on the trust and ENGAGEMENT PLATFORM
support of our stakeholders. RESPONSE
• Virtual townhalls A
Therefore, an essential aspect of
• Digital communication W
our sustainability efforts involves • Implement more initiatives
maintaining open communication • Staff engagement and appreciation sessions M on employee’s well-being
with our key stakeholders to keep • HSE campaigns Q and mental health
them informed and updated, while • Provide a safe working
understanding how to create value KEY CONCERNS environment to our
for them in the many years to employees
• Health, safety and environment • O f f e r f l e x i b l e w o r k i n g
come. Our strategy and decisions
are based on their feedback and • Cybersecurity arrangements
expectations. • Well-being and mental health
• Work-life balance
• Human rights
Frequency of Engagement
D Daily Q Quarterly
W Weekly A Annually
M Monthly BA Bi-Annually
AM Alternate Month BM Bi-Monthly
AR As Required
WHY WE ENGAGE
CUSTOMERS
Our customers play an integral part in our business
Quality of Engagement growth. In order to deliver quality value-added
products, we need to understand their expectations
which will, in turn, build customer loyalty.
No existing relationship
ENGAGEMENT PLATFORM
RESPONSE
• Meetings with customers W
Relationship established, but much work to
be done to improve the quality of • Customer satisfaction surveys BA • D e s i g n d i s t i n c t v a l u e
relationship • Feedback management system M
propositions for each
customer segment
• Customer appreciation programmes Q
• I n t e g r a t e p r o d u c t
• Product stewardship seminars A
stewardship into product
Relationship established, value-generating
connection, but with some room for Research & Development
improvement KEY CONCERNS process to develop safe and
sustainable products
• Product quality and delivery
• Collaborate with strategic
• Plastic and waste management partners to create high
Good-quality, mutually beneficial relationship,
• Product pricing and credit terms performance and
with some room for improvement
competitive products
Strong relationship of mutual benefit

STAKE HOLDE R E N G A G E ME N T
WHY WE ENGAGE
SUPPLIERS & VENDORS
Our suppliers and vendors support us in delivering high-quality products and services,
which will, in turn, enable us to create value for our own products. This relationship
means we also provide suppliers with the right support to thrive in the market.
ENGAGEMENT PLATFORM
• Regular meetings M RESPONSE

• Day-to-day interactions D
• Implement stringent policies that
• Forums M BA protect suppliers’ well-being
• Site visits Q • Provide robust grievance mechanisms
for suppliers
KEY CONCERNS • Incorporate environmental and
social standards in our procurement
• Health, safety and environment process
• Human rights • Conduct governance-related
• Ethical business practices sharing sessions
• Sustainability in supply chain
WHY WE ENGAGE
BUSINESS PARTNERS
Our business partnerships – largely created through joint ventures, joint operations and
associates – provide beneficial support to the growth of all respective businesses.
ENGAGEMENT PLATFORM
• Periodic meetings M BM
• Day-to-day interactions D
RESPONSE
• Strategic dialogue AR • Closely monitor and build upon

• Conferences and forums A partnership benefits
• Strengthen good governance
KEY CONCERNS leveraging on each shareholders’
governance practice
• Company performance • Provide a reliable supply of
• Ethical business practices feedstock to partner ventures
• Good governance
• Continuous value creation
ST A K EHO L D ER ENGAGEMENT
WHY WE ENGAGE SHAREHOLDERS &

INVESTMENT
With the financial capital from our shareholders and investors enabling our sustainable
COMMUNITY
growth, we are required to maintain their confidence in our ability to generate sustainable
financial returns in a responsible manner.
ENGAGEMENT PLATFORM
• Investors’ and Analysts’ Briefings Q AR RESPONSE

• Meetings and conferences M Q AR
• Annual reports • Access to board members and
A
• Annual general meetings senior management
A
• Announcements via Bursa Malaysia Q AR • Increase communication frequency
• Company website Q AR utilising available communication
platforms such as conference calls,
virtual conferences and one-on-
KEY CONCERNS
one meetings
• Sustainable value creation • Improve communication materials
• Company’s operational, commercial and financial performance including easy website navigation
• Growth project progress and deliverables • Ensure compliance of disclosure
guidelines
• Environmental management
• Timely disclosure on key topics
• Corporate Governance
WHY WE ENGAGE
GOVERNMENT
Our strong relationship with the Government and regulators ensure that we operate & REGULATORS
within legal requirements and stay on top of any of the changing regulations.
ENGAGEMENT PLATFORM
• Regular reporting to relevant agencies M

• Joint working committee with State Governments Q
RESPONSE
• Regular meetings and briefings with agencies/regulators M • Establish transparent communication

with relevant bodies
KEY CONCERNS • Collaborate with relevant agencies
with common objectives
• Regulatory compliance
• Environmental management
STAKE HOLDE R E N G A G E ME N T
WHY WE ENGAGE
COMMUNITIES
Our operations may directly or indirectly impact communities, so community engagement
is important to understand their concerns. This will also highlight our social citizenship
and instil public trust.
ENGAGEMENT PLATFORM
• Corporate Social Responsibility (CSR) programmes Q RESPONSE

• Briefings and engagement with local communities M
• Adopt stringent HSE best practices
at PCG plants
KEY CONCERNS • Regularly monitor air and water
quality surrounding operations
• Safety of plant operations
• Invest in community development
• Quality of air and water emissions
programmes
• Job and other income-generating opportunities
WHY WE ENGAGE
MEDIA
The media is an integral communication link between our business and our stakeholders.
They are a key player when it comes to distributing significant information about our
business and brand reputation.
ENGAGEMENT PLATFORM
• Virtual interviews with PCG Management Q RESPONSE

• Virtual press conferences A
• Foster open and transparent
• Press releases Q AR communication with the media
• Provide a speedy response to the
KEY CONCERNS media’s enquiries on business
developments
• Business performance
• Organise rapport-building activities
• Environmental management and sustainability efforts
• New innovation and technology
MATERIAL MATTERS
A solid understanding of industry trends, operating challenges and stakeholder expectations is essential to delivering
long-term value. With that, we devise our strategies according to the material aspects of business growth and
stakeholders’ needs. These material matters guide our Board and leadership team in building the company towards
sustainable growth.
MATERIALITY METHODOLOGY
We conduct a materiality assessment every two years to ensure that the material matters remain timely and relevant, while also allowing
time to incorporate them into our strategies. This report’s material matters are based on our most recent assessment initiated in 2021.
We applied the Global Reporting Initiative (GRI) Principles of Stakeholder Inclusiveness, Sustainability Context, Materiality and Completeness
during our materiality process.
The materiality process comprises four key steps:
STEP 1. STEP 2. STEP 3. STEP 4.

IDENTIFICATION PRIORITISATION STAKEHOLDER ENGAGEMENT VALIDATION
We review the trends, risks We plot the identified topics We analyse feedback received We submit the identified
and opportunities that affect onto a matrix to prioritise the from internal and external material matters to our
our strategic direction, which top material matters that stakeholder engagement Sustainable Development
enables us to identify our impact business growth and channels to determine the top Working Committee (SDWC)
most pertinent business issues stakeholder decisions stakeholder concerns and Management Committee
to deliberate and validate
MATERIALITY MATRIX
According to our latest assessment, the majority of the material topics have increased in significance and influence. There has also
been greater emphasis on Climate Change and Environmental Stewardship for both internal and external stakeholders. Additionally, we
have identified two new material matters:
• Strategy Purpose & Financial Resilience

• Plant Operations
HIGH
Material Matters
Climate Change
Environmental Stewardship
Climate Change Innovation & Product Stewardship

New Plastics Economy (NPE)
Stakeholders Perspective (Points of Differentiation)
Workplace and Occupational Safety & Health (OSH)

Environmental Stewardship Supply Chain Management
Community Engagement
Community Engagement Innovation & Product Talent Development
Stewardship
Corporate Governance
Supply Chain Management New Plastics Economy Strategy Purpose & Financial Resilience
Plant Operations
Corporate Governance
Human Rights Human Rights
Workplace and Occupational
Cybersecurity & Digitalisation Safety & Health Cybersecurity & Digitalisation
Customer Relationship Management
Strategy Purpose & Talent Development
Financial Resilience
Plant Operations The Materiality Matrix impacts value creation in PCG
within the three areas according to the colour shades
Customer Relationship below:
Management Points of Differentiation:
Topics where PCG can lead
Value Enhancement:
Topics that can add operational value to PCG
Value Protection:
Foundation topics for PCG
PCG Perspective (Points of Differentiation) HIGH

MATE RIA L MA T T E R S
PCG had conducted a reassessment of the material matters for Integrated Report 2021. Based on the reassessment, there are revisions on the
priority of the material topics as follows:
• Greater emphasis on the topics on Climate Change and Environmental Stewardship. Tougher regulations and increasing expectations from
both internal and external stakeholders
• Community Engagement, Supply Chain Management, and Corporate Governance increased as compared to last year’s. There is a rising
expectation from external stakeholders in the leadership role PCG plays in sustainability. This is supported by the level of involvement with
communities, suppliers & vendors, and business partners. It is also further determined by the revised Malaysian Code of Corporate Governance
which was published in April 2021 stating the need to strengthen these topics
• Customer Relationship Management and Talent Development shown decreased significance and influence as compared to last year’s. These
are foundation topics to PCG and considered as business as usual and may not be considered as critical as the top 5
According to our latest assessment, the majority of the material topics have increased in significance and influence. There has also been greater
emphasis on Climate Change and Environmental Stewardship for both internal and external stakeholders.
For clarity and context of the changes to the material matter topics, the following material matters have been renamed or introduced:
Material Matter Topic Rationale
• Previously Cybersecurity; Digitalisation was added for a broader scope and

Cybersecurity & Digitalisation context
• Previously Human Rights & Fair Employment; removed ‘Fair Employment’
Human Rights
as it is included in ‘Human Rights’
• Previously GHG Emissions & Climate Adaptation; the renaming covers
Climate Change
broader climate issues
• New material matter; highlights the importance of having the right strategy
Strategy Purpose & Financial Resilience
for future resilience and sustainability amidst challenging markets
• New material matter; describes the importance of asset reliability and
Plant Operations
uninterrupted production
Additionally we have re-aligned four material matters: Cost Management, Price Volatility and Market Volatility are covered under Strategy Purpose
and Financial Resilience; Asset Reliability is covered under Plant Operations.
Based on our materiality assessment, we identified 14 material matters that can either support or impede our growth. As shown in the materiality
matrix, five of our material matters are of high priority to PCG:
• Climate Change
• Environmental Stewardship
• Innovation & Product Stewardship
• New Plastics Economy (NPE)
• Workplace and Occupational Safety & Health (OSH)
We implement mitigation measures and monitor performance indicators for all 14 of our material matters. Additionally, our material matters
are categorised into Economic, Environmental, Social and Governance:
ECONOMIC ENVIRONMENTAL SOCIAL

Innovation & Product Workplace and Occupational
Climate Change
Stewardship Safety & Health
Supply Chain Management Environmental Stewardship Community Engagement
Strategy Purpose & Financial

Resilience New Plastics Economy (NPE) Talent Development
Plant Operations Human Rights
Cybersecurity & Digitalisation
Customer Relationship
Management
GOVERNANCE Corporate Governance

MA T ER I AL M AT T ER S
SUSTAINABILITY MATERIAL
WHY IT IS IMPORTANT RISKS
PILLARS MATTERS
Meeting the demands of customer • Slow expansion into specialty

and societal needs with innovative chemicals and new products
product solutions adds a competitive impedes our growth ambitions
edge. Delivering high-performance • Poor adoption of emerging
Innovation & products safely and responsibly while technology and innovation
Product ensuring proper product usage helps impacts our competitive edge
Stewardship customers maximise value from our
products.
Issues faced by suppliers can create • Disruptions in feedstock supply

a ripple effect across the value chain, directly impact operational
thus strong supply chain management continuity and production volume
is key to operational efficiency. This • Unavailability of goods and
is to maintain reliable feedstock and services affecting business
Supply Chain service from our suppliers. operations
Management • Non-compliance to procurement
governance exposing the business
to value leakage
Having the right robust strategy is • L o s s o f c o n f i d e n c e f r o m

critical in meeting our financial and stakeholders and investment
sustainability goals. It helps us balance opportunity due to unsustainable
stakeholders’ needs for future growth. positioning
Strategy Purpose
This includes ensuring financial returns • Inability to secure project growth
& Financial
to shareholders by optimising cost funding
Resilience
management.
Safe, reliable and efficient plant • Unsafe working environments

operations are key to consistently expose our employees and
delivering high plant performance. contractors to physical and
For the business to expand and grow, chemical hazards, leading to
ECONOMIC the business relies on the performance potential injuries or fatalities
of plant operations which translates • Unreliable and inconsistent
to cash generation. production impacts sales volume
and revenue growth
• Unreliable feedstock, utilities and
Plant Operations
chemicals supply may disrupt
plant operations
• Unreliable plant assets due to
poor asset management impact
plant operation continuity
Enhanced digitalisation of systems • Network intrusion impacting

and technologies brings the operations, delays delivery of
opportunity of convenience and customer products
efficiency to promote new business • Cybersecurity breaches and data
models, revenue streams and value loss leading to financial loss and
creation opportunities. However, it reputational damage
also exposes us to cyberattacks and • Low utilisation of digital application
Cybersecurity &
breaches. It is our corporate tools causing slower realisation
Digitalisation
responsibility to protect the business of benefits and return on
and stakeholders from any malicious investment
cybercrime. • Unreliable infrastructure leads to
disruptions in digital systems
Cultivating meaningful customer • Inability to effectively meet

relationships come with our customers’ expectations will
collaborative efforts and staying ahead impact our brand reputation
Customer of their expectations. With that, we • Reduced customers’ confidence
Relationship build long-term customer trust and and loyalty leads to lower revenue
Management loyalty.
OUR APPROACH,
STAKEHOLDERS
OPPORTUNITIES PERFORMANCE & SDGS
AFFECTED
KEY INITIATIVES
• New and innovative products enable customers

to penetrate new markets and grow their
businesses
• Rising demand for sustainable products helps
expand our product portfolio and encourages Read more on
pages 39 to 41
innovative creations
• Strong partnerships with suppliers enhance

downstream supply and productivity
• Relevantly skilled suppliers help maintain our
standard of HSE performance
• Sound procurement governance enables in Read more on
securing credible and commercially attractive pages 44 to 45
vendors
• Improved stakeholders’ trust

• Strong business fundamentals to attract
investment and funding for growth projects
Read more on
page 48
• Drive the implementation of HSE excellence

programmes at all levels to ensure a safe
working environment
• Deliver Operational Excellence through digital
implementation, effective collaboration with
feedstock, utilities and chemicals suppliers,
and focusing on managing plant reliability
issues Read more
on page 87 of the
Integrated Report
• Robust cybersecurity measures build stakeholder

trust
• Safe use of technology protects critical data
and business continuity
• Digitalisation promotes an efficient and safer
way of working through automation and built-
in governance and control Read more on
pages 46 to 47
• Enhanced data management enables better
services to internal and external customers
• Collaborations and partnerships with customers

maximise regional and global market growth
• Regular dialogues with customers allow for
continuous improvements to meet customers’ Read more on
pages 42 to 43
expectations and cultivate close relationships
M A T ER I AL M AT T ER S
SUSTAINABILITY MATERIAL
WHY IT IS IMPORTANT RISKS
PILLARS MATTERS
Climate change, directly and indirectly, • Inability to meet new climate-

affects our profitability and sustainable related regulations causes non-
growth. It is crucial to protect these compliance and financial costs
by mitigating and adapting to climate- • Reallocation of capital to green
related risks. investments by financial institutions
impacts business funding
Climate Change • Poor climate change adaptation
exposes our physical assets to
severe damage and high financial
losses
Responsible environmental practices • Environmental non-compliances

ENVIRONMENTAL protect our business from regulatory, lead to regulatory penalties and
reputational and operational costs. It fines
also protects society and the planet • Unsustainable environmental
Environmental
from pollution and degradation. practices negatively impact public
Stewardship
trust and confidence
The current linear economy is • Lack of action to address plastic

unsustainable for environmental and waste damages the company’s
social health. We need to transition reputation
to NPE and circular economy to • Slow transition to a circular
New Plastics ensure the sustainable consumption economy lowers our competitive
Economy (NPE) and production of plastic. advantages in the long-term
It is our responsibility to always • Accidents and injuries result in

prioritise the health and safety of our regulatory penalties and
people. In conducting business in our reputational damage
Workplace and organisation, OSH protects the • D a m a g e d a s s e t s i m p a c t
Occupational company against financial, operational o p e r at i o nal c o nt inu it y a nd
Safety & Health and legal ramifications. financial performance
(OSH)
Empowering the communities where • Business activities that negatively

we operate reinforces our commitment impact communities lead to loss
to social development and corporate of financing from investors and
responsibility. The community reputational damage to our public
engagement programmes create an image
Community
ecosystem of trust and growth. • Community-related disagreement
Engagement
or tensions may result in protest
SOCIAL and boycotts
Our employees drive our plans • Disengaged and underdeveloped

forward and execute our strategies. employees contribute to low
Attracting and retaining the industry’s productivity and performance
top talent is instrumental, as well as • Lack of relevant skills and
Talent
future-proofing them with the skills competencies hinders growth in
Development
to thrive in the long-term. derivatives and specialty chemicals
Upholding basic human rights is a • Breaches in human rights lead to

fundamental aspect of any responsible regulatory penalties and costs
business. Protecting these rights • R e p u t a t i o n a l d a m a g e f r o m
create a stable and inclusive operating breaches results in loss of
environment for all stakeholders to customers and public trust
Human Rights
thrive and contribute to a healthy
work culture.
Good corporate governance is central • Corruption and misconduct cases

to sustainable growth, long-term result in reputational damage
CORPORATE planning and strategic decision- • Severe breaches in corporate
GOVERNANCE making. A robust governance system governance result in forced stop-
Corporate
protects the best interest of both work orders or business closure
Governance
business and stakeholders.
OUR APPROACH,
STAKEHOLDERS
OPPORTUNITIES PERFORMANCE & SDGs
AFFECTED
KEY INITIATIVES
• Effective emissions management improves

stakeholder trust and public perception
• Lower resource consumption contributes to
cost savings and better performance
• Secure positioning in low carbon solutions
market in order to meet increasing demand Read more on
pages 50 to 54
• Waste reduction and resource efficiency

reduces operational costs
• Environmentally responsible activities attract
investors and funding opportunities Read more on
pages 57 to 59
• Rapid advancements in NPE reinforces our

role as a leader in Malaysia’s NPE
• Conversion of plastic waste into circular
feedstock has the potential to improve resource
Read more on
efficiency and create new business opportunities
pages 55 to 56
• Emphasis on health and safety culture attracts

and retains top industry talent
• Reputation as a safe and reputable manufacturer
attracts investors Read more on
pages 64 to 66
• Social responsibility programmes increase

visibility and safeguard reputation as a caring
and environmentally-responsible organisation
• Community engagement provides insight into
the efficient execution of key projects, e.g., Read more on
NPE pages 70 to 72
• Inclusive and empowering work culture

improves agility and efficiency
• Effective talent development programmes retain
and attract top-quality industry talent Read more on
pages 67 to 69
• Reputation as a fair employer attracts high-

quality talents
• Strong human rights practices reinforce
reputation as a responsible corporate citizen Read more on
pages 61 to 63
• High transparency leads to the efficient

execution of business plans and strategy
• Good governance creates a high-performance
work environment Read more on
pages 74 to 76
SUSTAINABILITY STRATEGY
ECONOMIC
Business Sustenance & Green Initiatives
• Operational Excellence
• Commercial Excellence
• Growth Delivery Excellence
GOVERNANCE
ENVIRONMENTAL
Environment Stewardship & Resource Efficiency
• GHG Emission Reduction
• Energy Optimisation
• Waste Minimisation
• Water Conservation
• New Plastics Economy (NPE)
SOCIAL
Social Responsibility
• Managing Human Rights Risk
• Community Well-Being
• NPE Education and Clean Up
SUSTAINABILITY ST R A T E G Y
FTSE4GOOD Bursa Malaysia

Score: 4-Star Rating
Achieved Top 10%

DJSI World Ranking
At PCG, we view sustainability as a

key aspect of our business success.
We aim to integrate sustainability into
everything we do. Therefore, our
Sustainability Strategy aligns with the
Group’s Two-Pronged Strategy, which
is built on the three Pillars of Economic,
Environmental and Social (EES). Our
Economic contribution is supported
by the three strategic thrusts of
Operational Excellence, Commercial
Excellence and Growth Delivery
Excellence, which subsequently
contributes to positive Environmental
and Social impact.
GOVERNANCE STRUCTURE
At PCG, we strive always to uphold the highest level of integrity and accountability, while promoting a solid sustainability mindset
across the Board and leadership team. This year, we introduced sustainability key performance indicators (KPIs) in top management
performance appraisals. Additionally, the Board holds quarterly deliberations on sustainability issues and undergo external training on
sustainability-related matters. Similarly, we have included PCG’s sustainability performance as a permanent agenda in quarterly Board
meetings.
PCG’s sustainability governance prioritises transparency and accountability when delivering our sustainability strategies. A Sustainable
Development Working Committee (SDWC) leads our sustainability agenda, which is then reviewed and approved by the Management
Committee and reported to the Board. The clear delineation of roles and responsibilities enables us to uphold the highest level of
integrity and efficiency for our sustainability agenda and implementation.
Board of
Directors
Management Committee (MC) Chairperson

Ir. Mohd Yusri Mohamed Yusof
MD/CEO
Management Committee
SDWC Chairperson
Fauzamsaari Geran
Head of HSE Department
SDWC Secretary
M Khairul Anuar Bakri
Staff Engineer
(Environmental Management)
Members of the SDWC
Manufacturing Risk Management Procurement

Mohd Noor Fitri Mohd Yusof Hazlina A Hamid Norkhayati Idris
Manager Manager Manager
(Performance & Planning) (Governance & Planning) (Procurement Governance)
Human Resource Management Investor Relations Commercial

Dahnia Adnan Safarah Zeba M Salim Jessie Yap Siew Yein
Manager Manager Manager
(People Planning) (Investor Relations) (Commercial Performance & Planning)
Strategic Communications Project Directorate Strategic Planning & Ventures

and Administration M Nazrul Razi A Razak Faisal M Ghazali
Nur Akmal Ahmad
Manager Manager
Manager
(Corporate Social Responsibility) (Project Services) (Strategy & Portfolio)
Product Stewardship
Shri Gugan Siva Subramaniam
Manager
(Product Stewardship)
SUSTAINABILITY
GOVERNANCE
GOVE RNANCE ST R UC T UR E
ROLES & RESPONSIBILITIES
Management Committee Quarterly Board of Directors

Reporting Oversees PCG’s
Provides direction and endorses all decisions implementation &
pertaining sustainability performance on
sustainability
Quarterly
Reporting
Sustainable Development Working Committee Quarterly PCG HSE, Corporate Office

Reporting
Formulate sustainability strategy and monitor
objectives and action plans • Consolidate, monitor and analyse
sustainability reporting
• Lead formulation of sustainability
strategy, objectives and action plans
PCG subsidiaries Monthly • Coordinate cross-department
Reporting
• Reporting of sustainability-related KPIs sustainability initiatives
• Managing sustainability-related risk and opportunity • Report sustainability performance
Role of the SDWC
1 2 3
Reviews quarterly Coordinates cross-

Monitors quarterly
information that will be departmental
performance indicators
reported to the enhancements and
against targets.
Management Committee. initiatives.
4 5 6
Conducts an annual
materiality review to Reviews data related to Implements initiatives
determine PCG’s each material matter that are required to
sustainability focus areas that will be publicly support each material
and formulate reported. matter.
sustainability strategy.
SUSTAINABILITY &
RISK MANAGEMENT
At PCG, we proactively identify, analyse and manage risks that materially impact our value creation abilities, including sustainability-
related risks and opportunities. Economic, Environmental, and Social (EES) factors are fundamental to business resilience and stakeholder
trust. Therefore, we adopt a holistic view in managing risks interrelations between our strategy, EES risks and sustainability.
We have embedded effective risk management processes across the entire value creation in all our lines of business. We identify,
assess, treat, and monitor all risks that could potentially impact our business, including inherent risks as early as possible. During the
year under review, sustainability risk was added to include climate change as well as circular economy, previously known as ‘War on
Plastic’.
We are also conscious of the rapidly rising climate change, including both Physical and Transition risks. In response, we developed
PCG’s Net Zero Carbon Emissions 2050 Roadmap, which is aligned with the Task Force on Climate-Related Financial Disclosures (TCFD)
recommendations. This guides our analysis of climate-related risks and opportunities, which is regularly deliberated by the Board and
driven by the management team. We also assess Physical and Transition risks using qualitative and quantitative climate-related scenario
analysis. Furthermore, PCG had integrated climate risks identification, prioritisation management and disclosure processes as well as
various GHG mitigation initiatives into our Corporate Risk Profile (CRP).
We also believe that if governments and businesses fail to enforce, enact or invest in effective climate change adaptation and mitigation
measure, preserve ecosystems, protect populations and transition to a net-zero economy; this may result in and continue to be an
emerging risk.
Additionally, we strive to meet the standards of global sustainability indices to improve our governance and disclosures on sustainability-
related risks in meeting our stakeholder expectations.
Climate Change
Climate change will have wide-
ranging effects on the environment
and socio-economic related sectors.
These include water resources, Circular Economy
agriculture and food security, human With global awareness of the circular
health, terrestrial ecosystems, and economy increasingly shaping
biodiversity and coastal zones. stakeholder expectations, aggressive
Delays in our climate change environmental pushes by policymakers
response lower our competitive and environmentalists may affect our
edge against changing markets, SUSTAINABILITY business performance, reputation and
regulations and technologies. RISK long-term growth.
This risk is likely to continue to exist

if governments fail to establish and
enforce effective policies to support
climate change-related initiatives
and businesses fail to execute and
leverage on the opportunities.
Despite the latest Nationally

Determined Contributions (NDCs)
to decarbonisation made at the 2021
COP26, the rising temperature trend
indicates that it will still fall short
of the 1.5°C goal set out in the Paris
Climate Agreement.
For more details, please refer to pages 90 to 98 of the Integrated Report.

SUSTAINABILITY
GOVERNANCE
SUSTAINABILITY
GUIDELINES
MATERIAL MATTERS LIST OF POLICIES & GUIDELINES AIM OF POLICIES & GUIDELINES
PETRONAS Technical Standards on To provide guidance on climate risks, opportunities and mitigation.
Greenhouse Gas (GHG) Emissions
Management
Climate Change PCG Net Zero Carbon Emissions 2050 To provide guidance on the selection of pathways for
Roadmap decarbonisation.
PCG Health, Safety and Environment (HSE) To iterate PCG’s aspiration and commitments to attain and sustain
Policy excellence in environmental matters.
Environmental PETRONAS Mandatory Control Framework To strengthen our governance on responsible environmental
Stewardship (MCF) management.
Research & Development Management To provide guidance for the selection and execution of Research
Guidelines for PETRONAS Chemicals Group & Technology projects through a stage-gate process.
Innovation &
Product To guide the incorporation of sustainable product criteria into
Product Sustainable Design Guideline
Stewardship the design and development of innovative product selection.
To set the path towards recovering plastic waste into a circular

PCG Sustainability Agenda
economy.
New Plastics To increase public awareness and community outreach on the
Economy (NPE) NPE Communication Plan
aims and aspirations of NPE.
PCG Health, Safety and Environment (HSE) To reinforce our commitment to health and safety excellence.
Policy
Workplace and To strengthen HSE governance and expedite the implementation
Occupational Safety PETRONAS Mandatory Control Frameworks
of process safety aspects and clearly defined scope of HSE
& Health (MCF)
assurance.
PETRONAS Contractors’ Code of Conduct To strengthen the implementation of PETRONAS Human Rights
on Human Rights (CoCHR) Commitment and practices across the business value chain.
PETRONAS Tender and Contracts To secure the best value in the procurement of goods and
Administrative Manual (PTCAM) services whilst upholding good procurement governance.
Supply Chain
Compliance Clauses (Ethics and Anti-Bribery, To mitigate legal, financial and reputational risks to PETRONAS,
Management
Anti-Money Laundering, Competition Laws, which extend to our supply chain.
Personal Data Protection, Sanctions, Human
Rights)
To define the standard procedures and guidelines for donation

Yayasan PETRONAS Guidelines for Donation
management.
To define the standard procedures and guidelines on matters

Yayasan PETRONAS Guidelines for
related to the Corporate Social Responsibility programme
Community Programme Development and Execution
development and execution.
Engagement
PETRONAS Strategic Communications To provide guidance for the PETRONAS Group to plan, implement
Management System and execute strategic communications activities.
To provide an enabling environment for employees to self-drive

Talent Development for PETRONAS performance and development in order to create and add value
to the individual and organisation’s growth and sustainability.
Talent To create a ready pool of talents that are agile and well-equipped
Development with the necessary skills and experience to thrive in the long-
PCG Leadership Development Framework
term through the right exposure from the early stages of their
career.
SUST AI N AB I L I T Y GU ID EL INES
MATERIAL MATTERS LIST OF POLICIES & GUIDELINES AIM OF POLICIES & GUIDELINES
PETRONAS Anti-Bribery & Corruption Manual To provide guidance on how to deal with improper solicitation,
bribery and corruption activities and issues that may arise in the
course of business.
PETRONAS Code of Conduct & Business To advance the principles of discipline, good conduct,
Ethics professionalism, loyalty, integrity and cohesiveness, which is critical
to the success and well-being of the PETRONAS group.
Corporate PETRONAS Whistleblowing Policy To provide an avenue for stakeholders to disclose any improper
Governance conduct in accordance with the procedures, ensuring whistleblowers
are protected from any retaliation.
PCG Risk Policy To be a risk resilient organisation in achieving business objectives.
PETRONAS Tender and Contracts To secure the best value in procurement of goods and services
Administrative Manual (PTCAM) whilst upholding good procurement governance.
PCG Two-Pronged Strategy To develop a portfolio of derivatives and specialty chemicals

while sustaining PCG’s strength in basic petrochemicals.
Strategy Purpose & PCG Sustainability Agenda To build and grow a sustainability portfolio with the aim for
Financial Resilience net-zero carbon emissions by 2050.
Production & Operations Management To provide the minimum requirements to manage plant operations
System safely and efficiently.
Physical Asset Management System To effectively manage maintenance and physical assets, including
the Turnaround Management system.
Plant Operations
Quality Management System To ensure the effective management of product quality throughout
the whole process.
PETRONAS Contractors’ Code of Conduct To strengthen the implementation of PETRONAS’ Human Rights
on Human Rights (CoCHR) Commitment and practices across the business value chain.
PETRONAS Human Rights Commitment To state the company’s respect for human rights through
management commitment.
Human Rights Compliance Clauses (Ethics and Anti-Bribery, To mitigate legal, financial and reputational risks to PETRONAS.
Anti-Money Laundering, Competition Laws,
Personal Data Protection, Sanctions, Human
Rights)
PETRONAS ICT Principles To serve as the overarching statements that set out the purpose,
commitment, and governance of ICT and records management.
PETRONAS Enterprise Cybersecurity To provide a single consolidated view of the frameworks, standards,
Governance Framework and guidelines required to govern and manage cybersecurity
across PETRONAS, with clear lines of accountability.
PETRONAS Cybersecurity Control Standards To provide relevant employees, contractors and third parties
across the PETRONAS group of companies with guidance on
Cybersecurity & how to apply cybersecurity control requirements.
Digitalisation
PETRONAS Cybersecurity Risk Management To establish the governing elements and processes to assess,
Guidelines evaluate, treat, monitor and review cybersecurity risk.
PETRONAS Records Management Standards To standardise documents classified in accordance to the

& Guidelines appropriate document security classification (i.e. secret, confidential,
internal and open).
PETRONAS Anti-Bribery and Corruption To help employees learn how to deal with improper solicitation,
(ABC) Manual bribery and corruption activities and issues that may arise in the
course of business.
Customer PETRONAS Code of Conduct & Business To emphasise and advance the principles of discipline, ethical
Relationship Ethics (CoBE) conduct, appropriate standards of behaviour, professionalism,
Management loyalty, integrity and cohesiveness in our business conduct and
operations.
SUSTAINABILITY
GOVERNANCE
MEMBERSHIP AND
ASSOCIATIONS
ASSOCIATIONS PCG’S CONTRIBUTION
• Promoted gas-based production through MI Beijing Office, which supports China’s move on
Carbon Neutrality (a plan which includes gas-based methanol) with a commitment to achieve
carbon neutrality by 2060
Methanol Institute (MI) • Collaboration with MI on Product Stewardship programmes
• Board Member advocating for cleaner feedstocks, i.e. methanol for marine fuel, and fuel cells
• Regular discussions on product development updates, i.e. e-Methanol and bio-Methanol
• Participating in the methanol low-carbon task force
• Produces sustainable fertiliser to increase PCG’s energy efficiency and CO2 emission targets
• Active participation in IFA through quarterly Board Meetings to drive the industry towards sustainability
International Fertilizer
efforts in agriculture, as well as ammonia and fertilisers
Association (IFA)
• Leveraging IFA Green Fertilizers for stabilised nitrogen focusing on Asia Pacific to improve the
reduction of losses
• Collaborated with Pusat STEM Negara (from Ministry of Education), MPMA and Solid Waste
Management and Corporation (SWCorp) in developing and activating the module to equip teachers
with the right information on plastics and proper waste management to address global warming
Malaysian Plastics and marine litter issues
Manufacturers • Organised advocacy works on the circular economy of plastics
Association (MPMA) • Active committee member for MPMA webinars and MPMA Plastech Month
• Capability building on understanding plastic materials
• Acted as a speaker for the 2nd Council Meeting of the 19th Term AFPI and 31st APF – Combined
Meeting (Topic: ‘Plastic, Sustainability & You’ Module)
Malaysian • Held the leading position as the President of the MPA Council from 2020-2022
Petrochemicals • Represented as a committee member and speaker for the MPA-Plastic Resin Producers’ Group
Association (MPA) (MPA-PRPG) Plastic Webinar
Malaysia Sustainable • Participated as a team member in the development of the Malaysia Plastics Sustainability Roadmap
Plastic Alliance (MaSPA) 2021-2030
Fertilizer Industry • Initiated the standardisation of fertilisers vocabulary, jargon and terms to match international
Association of Malaysia standards
(FIAM) • Organised a seminar on bio-fertilisers
AWARDS AND RECOGNITIONS

• 39th Malaysian Society for Occupational Safety & Health • Annual Report Competition (ARC) Awards International 2021
(MSOSH) OSH Award – Silver for Specialized Annual Reports: Integrated AR & CSR:
– Gold Merit Award – PC ESB, PC PSB, PC MTBESB Non-Traditional Format
– Bronze for Financial Data
• Prime Minister’s Hibiscus Award 2019/2020 – Best of Malaysia
– Exceptional Award in Environmental Performance –
PC PSB
• The Edge Billion Ringgit Club 2021
– Excellence Achievement in Environmental Performance –
PC ASB – Super Big Cap Companies: Companies with more than
– Silver Award for Special Project – PC ASB RM40 billion Market Capitalisation
– Highest Returns to Shareholders over Three Years
• Royal Society for the Prevention of Accidents (RoSPA) Health
& Safety Awards • Sustainable Business Awards Malaysia 2020/21 by Global
– Gold Award – PC FKSB Initiatives
– Silver Award – PC ESB, PC PSB – Winner, Energy Management
– Winner, Water Management
• IKM Laboratory Excellence Award 2021 – Significant Achievement, Sustainability Strategy
– Silver Award – PC ESB, PC MTBESB, PC PSB – Significant Achievement, Workforce
– Excellence Award – PC OSB, PC GSB, PC DSB, PC ASB, – Significant Achievement, Stakeholder Management
PC LDPESB, PC FKSB, PC MSB, ABFSB
• Malaysian Top Sustainable Employer by the Sustainable

• International Convention on Quality Control Circle (ICQCC)
Employer Research Centre
2021, Hyderabad
– Par Excellence Award – PC OSB, PC GSB, PC DSB, PC ESB,
PC PSB, PC ASB, PC LDPESB • Dow Jones Sustainability Indices (DJSI) 2021
– Member of DJSI World Index
• MSWG-ASEAN Corporate Governance Awards 2020 – Member of DJSI Emerging Markets Index
– Winner, Industry Excellence Award (Industrial Products and
Services Category)
• FTSE4Good Bursa Malaysia
– Runner-up, Excellence Award for Corporate Governance
Disclosure – Full 4-Star ESG Rating of Public Listed Companies Assessed
in line with the FTSE4Good Bursa Malaysia Review Cycle
• Australasian Reporting Award (ARA) 2021

– Gold Award for General Award
– Bronze Award for Sustainability Reporting
full names of the operating units, please

For
refer to page 81 (Glossary of Terms,
Abbreviations and Acronyms)
SUSTAINABILITY
GOVERNANCE
AW ARDS AND RE CO G N I T I ON S
• Certifications
– ISO 14001:2015 Environmental
Management System
– ISO 9001:2015 Quality Management
System
– ISO 45001:2018 Occupational Health
& Safety Management System
– ISO/IEC 17025:2017 Testing and
Callibration Laboratories
– MS 1500:2009 – Halal Food-
Production, Preparation, Handling
and Storage
• Export Excellence Awards 2021

– Silver Award for Industrial Product
(Mid-tier & Large Company)
• Malaysia’s Most Attractive Graduate

Employers to Work for in the Chemical
Sector by Talentbank
– The Graduates’ Choice Award
SUSTAINABILITY SCORECARD
ECONOMIC ENVIRONMENTAL
AIR
Production Volume
10.4 GHG Emissions
7.00
Sales Volume
8.2
million tpa
2020: 10.7 million tpa million tonne CO2e
million tpa 2020: 7.10 million tonne CO2e
2020: 8.2 million tpa
GHG Emissions
Plant Reduction*
0.08
Utilisation (PU) GHG Emissions Intensity
93% 0.67
tonne CO2e/tonne
million tonne CO2e
2020: 94%
Order Fulfilment * Cumulative emissions reduced
2020: 0.66 tonne CO2e/tonne since 2018
Reliability
87%
2020: 97%
Air Emissions (NOx)
25.07 Air Emissions

Intensity
Production
capacity Number of
kilotonne
2020: 23.31 kilotonne
2.42
tonne/kilotonne
12.8 new products
16
Air Emissions (SOx) 2020: 2.21 tonne/kilotonne
million tpa
2020: 12.8 million tpa 2020: 11 0.27
kilotonne
63%of total
Number of
Co-created Hazardous Waste
WASTE
Hazardous
procurement Solutions Generation Waste 3R
spending towards
local suppliers
2020: 60%
16 26.2
kilotonne
75%
2020: 85%
2020: 21
Note:
The intensity calculation is now based on an improved calculation approach, i.e: to reflect the efficiency of each production unit in relation to the
indicator. The denominator applied has been changed to Production Volume, replacing the previously applied Sales Volume.
SUSTAINABILITY
SCORECARD
SUSTAINABILITY S C OR E C A R D
SOCIAL
WATER
Number of Products
Corporate social Stewardship and
responsibility Technical Seminars
12
initiatives reach
~295,000
Freshwater Withdrawal Freshwater
38.52
Withdrawal Intensity
million m3 3.69
m3/tonne
people
2020: ~70,000 people
2020: 14
Completed all High and

Medium priority Global Product
2020: 37.83 million m³ Strategy Safety Summaries
2020: 3.53 m³/tonne Inclusive of NPE reach
Wastewater
Wastewater Discharge Discharge Intensity
171.4
tonne
0.02 Employee Training
& Development
2020: 177.8 tonne

tonne/kilotonne
2020: 0.02 tonne/kilotonne RM6.9
million Invested
World-Class Safety
ENERGY ecoCare Performance 2020: RM17.6 million
0.07
Invested
Energy Intensity
15.76
Lost Time Injury
Frequency (LTIF) Female Workforce
GJ/tonne
2020: 1 5.73 GJ/tonne
compared to oil & gas
industry benchmark of 0.26 17%
2020: 0.14
2020: 17%
Energy
Consumed
102.27
million GJ Mangrove
2020: 110.01 trees planted
1,200
million GJ
Training Days
3.0
Women
Energy Intensity Representation
Reduction 2020: 2,000 in Senior
(man-days)
11%
Management
On average per
from baseline
employee
2020: 3.3 (man-days)
18%
year 2014 on average per employee
2020: 24%
CATALYSING ECONOMIC
PERFORMANCE
From employing millions of people globally to generating
billions of dollars in shareholder value and tax revenues
for governments, the chemicals industry unlocks major
economic contributions across the board. It lies at the
crux of several value chains solidifying its role as a
solutions provider to multiple economic sectors, all of
which leads to a sustainable economic recovery. This is
especially instrumental, given the uncertainty of the past
two years. PCG aims to maximise profitability in the long
term, starting with our assets creating value, allowing us
to share the wealth generated with current and future
stakeholders. Our efforts range from delivering innovative
and sustainable products to collaborating with customers
to meet their changing demands. This is aligned in
helping the sector move towards a renewable and resilient
future.
Innovation & Customer

Product Stewardship Relationship
Management
32 products and
co-created application 87% Order Fulfilment
solutions Reliability
Supply Chain
Management
100% response rate to
grievances received
from suppliers
Cybersecurity & Strategy Purpose &

Digitalisation Financial Resilience
99% of cybersecurity RM24.1 billion
training module Revenue and
completed Other Income
Note: The following chapters elaborate on our Economic, Environmental

and Social (EES) impacts during the year. The material matter ‘Plant Operations’
covers the reliability and resilience of our production assets, focusing more
on its impact on our business. Therefore, it has been excluded from this
report. For more details on Plant Operations, please see page 87 of the
Integrated Report.
CATALYSING ECONOMIC
PERFORMANCE
INNOVATION & PRODUCT STEWARDSHIP

potentially hazardous substances as well as prioritise sustainable
design criteria to maximise product benefit while minimising risk
during production, distribution, use-phase and end-of-life stages.
We embed Product Stewardship principles and best practices into

our daily operations to ensure that customers and stakeholders
benefit from our products with minimum impact on the environment.
We also proactively monitor legislative developments to ensure all
our product innovations comply with regulatory requirements in
our market locations. This includes requirements across global
chemical management, labelling requirements, dangerous goods
transportation, banned/restricted chemical management, and Halal
Assurance Systems.
With an extensive value chain and customer base, our products

are handled by a wide network of people. Therefore, we equip
relevant stakeholders with knowledge of our products through
PCG’s Product Stewardship programmes. We routinely assess and
characterise the risk of our chemical products to ensure we
communicate accurate and sufficient information to our customers
and stakeholders. This is provided through an efficient SAP system,
which manages our Product Safety Data Sheets (SDS), enabling
customers and the public to access accurate and updated
WHY IS THIS IMPORTANT? information via https://sds.petronas.com.my. The system also
In strengthening our position as a reputable and trustworthy includes our voluntary development of the Global Product Strategy
solutions partner, we strive to provide innovative products and (GPS) Safety Summaries to tabulate accurate information on hazards
application solutions to our customers. Despite COVID-19 and risk mitigation of PCG chemical products. These have been
uncertainties, we continuously innovate and co-create for customers completed for all high-risk chemical products and are published
by addressing their pain points and supporting their specific business on PETRONAS’ portal to share our approach to stakeholders and
needs. the public transparently.
In pursuing our growth agenda, we have laid out clear growth

plans by undertaking long-term bets on emerging technologies, HOW DID WE CREATE VALUE
aligned with the strategic direction to meet fast-changing market Co-creation with Customers
demands and trends. The early adoption of emerging technologies
• Focused on delivering innovative, value-added solutions to
and innovations is key to staying ahead of the competition,
customers while maximising business growth.
benefiting both customers and consumers.
• Intensified efforts in becoming a total solutions partner to
customers by providing webinars and online engagements to
As we shift towards more sustainable solutions, the demand is
reach a wider customer base.
moving towards supporting the low-carbon transition and meeting
the needs of developing populations. Adopting a lifecycle approach
Sustainable Product Development/Sustainable Research &
and employing sustainable product design criteria prioritises the
Technology
development of innovative product solutions that are safe and
sustainable. These customised product solutions carry significant • Focused on two main areas of Sustainable Product Development:
commercial opportunities in enabling our customers to penetrate – To develop natural and environmentally-friendly specialty
new markets, grow their business, and derive optimal value from chemicals.
our products. – To develop chemicals to support a circular economy.
• Identified commercial opportunities to develop products that
will deliver environmental or social benefits.
WHAT IS OUR APPROACH? • Adopted a lifecycle approach in the design of innovative product
solutions to deliver superior product solutions while minimising
Our approach to innovation is spearheaded by PCG’s Product the use of hazardous substances.
Research and Development (R&D) team, who collaborates with
customers to meet their needs and aspirations. PCG R&D focuses Product Stewardship Communication
on creating solutions that are resilient to market risks and trends.
• Equipped stakeholders with accurate knowledge on product
PCG is also a signatory of the Responsible Care global charter,
hazards and risk mitigation, including product regulatory
therefore, we adopt the principles of the Responsible Care
compliance and safety information for all products.
programme. In doing so, we would be systematically conducting
product design studies that allow us to assess raw materials for
I NN O V AT I O N & P R OD U C T S T EWA RDSHIP
Product Stewardship and Technical Engagements Regulatory Compliance

• Continuously educated customers, suppliers and distributors on We performed consistent screenings on legislative developments
product safety handling through regular direct engagement and in making sure that all our products meet with the compliance
Product Stewardship programmes. and regulatory requirements of the markets that PCG serves. This
• Conducted regular technical exchanges with customers to impart includes requirements across global chemical handling for safety
knowledge on our products and applications to enable them and environment, labelling requirements, transportation procedures
to maximise benefits from our products. for dangerous chemicals, handling of restricted chemicals, and
Halal Assurance Systems, among other things.
Exploring bio-based feedstocks/Provided bio-alternative
feedstock for plastic production In April 2021, PCG won the STA2010 Compliance Award from the
• Invested more than RM40 million in project Bio-Monoethylene Ministry of International Trade and Industry (MITI). The
Glycols (Bio-MEG), which uses bio-alternative feedstock to acknowledgment was granted to the top 3 out of 131 Internal
produce polyethylene terephthalate (PET). Compliance Program (ICP) companies enrolled under the Strategic
• Explored chemical markets and commercially ready bio- Trade Act 2010 in performing their internal due diligence in
technologies to further mature the process technology to develop ensuring smooth import and export activities of Chemical Weapon
natural and environmentally-friendly specialty chemicals. Convention (CWC) listed items. PCG was also awarded a maximum
5-year extension period, allowing us to perform import and export
Life Cycle Analysis (LCA) of Products activities of CWC listed items until 2026.
• Rigorously assessed the impact of our products on human health
and the environment to identify opportunities to further reduce
these impacts.
WHAT WERE THE ACHIEVEMENTS?
301 technical solutions 100% completion of

32 new delivered to customers covering 648 people from 12 GPS Safety Summaries for
products oil and gas, automotive, paint and countries trained in 12 products with medium
and co-created coating, industrial and institutional product stewardship and high risks, published
application cleaning, packaging, and and technical seminars. on PETRONAS online
solutions. agriculture industries. SDS portal.
65% of all key

19 products completed 80 of our
products
their LCA on 18 health and product Produced the first drop of crude
completed
environmental impact grades are halal- Bio-MEG from empty fruit bunches.
their LCA
categories. certified.
assessments.
NEW PRODUCT SOLUTIONS DEVELOPED BY R&D IN 2021
Ultra-High Purity Methanol (UHPM) Si-COAT 461RC AGRENAS Stabilised Nitrogen Fertiliser
This was hatched for fuel cell applications A better formulation of silicone coatings In the agriculture sector, this product is
in line with market demand for clean for roof coating, developed to perform used to improve the Nitrogen (N) uptake
energy, as the use of methanol fuel cells as waterproof roof coating. This efficiency of the crop. It also reduces
has increased. maintenance product is applied to used the transformation rate of Ammonium
roofing substrates to increase the lifespan (NH4+) into Nitrite (NO2–) and Nitrate
of existent roofing substrates. This is to (NO3–), thus extending the time required
endure longer weather stability, high for nutrient availability onto the crops.
thermal reflectivity and optimal roof
recovery and water sealability.
CATALYSING ECONOMIC
PERFORMANCE
INNOVATIO N & PRODUCT STE W A R DSH I P
NEW APPLICATION SOLUTIONS CO-CREATED WITH CUSTOMERS:
PE3838MA attracted a pioneering and globally recognised bubble wrap maker, qualifying the polymer as one of the grades for
production of their high stiffness bubble wrap.
The formulation of the DOT-4 brake fluid with Tri-ethylene Glycols (TEG) as co-base fluid increases PCG’s opportunity to break
into the DOT-4 break fluid formulations.
Water-based cleaning solutions were co-created to address the safety and environmental concerns arising from the usage of
solvent-based solutions, as well as regulatory restrictions.
PRODUCT SAFETY COMMUNICATION

Responded to customer requests regarding products
2019 2020 2021
401 283 328

Mid-Term
Target
Indicators Target & Results 2019 2020 2021 (2022-2026)
Target 2 5 3 2
Number of new products
Results 6 11 16 –
Target 15 20 14 20
Number of co-created application solutions
Results 13 21 16 –
Target 100 350 200 200

Number of technical solutions
Results 183 545 301 –
Number of product stewardship & technical Target 5 6 12 14

seminars Results 8 14 12 –
CUSTOMER RELATIONSHIP MANAGEMENT
WHY IS THIS IMPORTANT? HOW DID WE CREATE VALUE

PCG’s relationship with our customers is built on sustainable and 1 Ongoing Customer Engagement & Dialogue
collaborative partnerships, delivering innovative products to meet
• Maintained continuous engagements with customers through
their needs and adding value to their business. Ultimately, our
virtual meetings and webinars, despite travel restrictions and
Customer Relationship Management (CRM) is essential to our
COVID-19 precautions.
long-term growth and Commercial Excellence. This aligns with
our vision to be ‘The Preferred Chemical Company Providing
2 Partnerships & Collaborations
Innovative Customer Solutions’.
• Collaborated with local associations to provide requirements
Our customers are at the heart of everything we do – and our or feedback for smooth business operations and continuity.
business and decisions are anchored on meeting their needs. This These associations and agencies include:
includes staying ahead of their expectations to build long-term – Malaysian Petrochemicals Association (MPA),
customer trust and loyalty. Regular collaboration and dialogue – Malaysian Plastics Manufacturers Association (MPMA),
with customers allow us to identify their pain points and continuously
– Federation of Malaysian Manufacturers (FMM),
apply improvements and innovate product solutions. As market
competitors gradually increase, we are expected to stay in the – Ministry of Domestic Trade and Consumer Affairs
game and remain relevant by always bringing something new and (KPDNHEP), and;
valuable to the table. – Ministry of International Trade and Industry (MITI).
• Leveraged our relationship with MITI to assist and guide
our customers through getting approvals to operate during
WHAT IS OUR APPROACH? the Movement Control Order (MCO).
At PCG, we aim to proactively meet customers’ changing expectations,
thus encouraging customer loyalty. Our close partnership with 3 Packaging & Transportation
customers allows us to co-create innovative products and • Launched the China Domestic Delivery (CDD) for Polymer
applications that bring added value to their business and contribute products, unlocking greater value to customers with
to sustainable growth. Through consistency, timely and high-quality competitive prices from lower delivery costs and faster
product deliveries, we continuously strengthen our relationships delivery lead time. There are four types of distribution
with our existing network of customers. This extends to also methods which include:
building strong relationships with new customers. – Delivered Duty Paid (DDP) at the discharge port,
With our customers’ needs continuously evolving, we have to – Delivered at Place (DAP) from the discharge port,
innovate to satisfy their changing needs. Our value propositions – Ex-warehouse (EXW) sales, and;
are customised accordingly to different customer segments, specific – DAP from warehouses.
to their pain points and business needs. We curate these by
collaborating with strategic customers to develop high-quality 4 Customer Complaint Management
product offerings and application solutions. This is further improved
• Remained responsive to customer feedback and ensured
by ongoing customer engagement and communication assisted
positive customer experiences.
by PCG’s digital tools delivering a more reliable, efficient and
effective customer experience. With increasing requirements for • Continued to ensure effective customer engagement, improve
sustainable products and solutions, we also initiate strategic responsiveness in attending to customer requests, and
partnerships with our customers to meet their sustainability needs. increase our product and application knowledge based on
the previous Customer Satisfaction Survey (CSS) in Business
& Sales support.
CATALYSING ECONOMIC
PERFORMANCE
CUSTOME R RE LATIONSHIP MA N A G E ME N T
5 Addressed Customer Complaints

• Non-Technical: Leakage on flexitank
Unsuitable size of flexibag and foreign particles found inside the container caused a leakage. Immediate mitigation was deployed
to change the flexibag to a smaller size, and requested the vendor to revise the fitting checklist to include a cover for shoes
for fitter personal protective equipment (PPE). We also performed site verification and audit on the vendor, resulting in a suspension
until further notice. No complaints on the flexibag leakage since.
• Technical: Contamination on board
A bulk shipment had product contamination during unloading where the ship’s pump, ship’s piping manifold system and topside
facilities led to damage of total product inventory in the tank. This was a Cost, Insurance and Freight (CIF) shipment where we
had assisted the customer in claiming the insurance. The customer agreed to close complaints as we had executed our
responsibilities.
Acquired a 12 virtual product 25 PCG virtual engagement

Achieved lower technical
stewardship programmes sessions held with key
5.1 sigma complaints:
held across Indonesia, the customers from China, Japan,
against the industry
Philippines, Thailand, Thailand, Indonesia and
standard of 5.0*. 2021: 10 vs 2020: 13 Singapore, and China. Vietnam.
* T
his is based on the Six Sigma methodology monitoring customers’ experience and product quality on a monthly basis. The higher the sigma rating,
the closer to process product or service perfection, with the Six Sigma being the highest.
Mid-Term
Target
Indicators Target & Results 2019 2020 2021 (2023)
Target 95 95 95 95
Order fulfilment reliability (%)
Results 97 97 87* –
Limit 0.25 0.24 0.21 0.20

Total vehicle accident rate
Results 0.07 0.13 0.20 –
* The sudden worldwide disruption impacted the global supply chain and reduced the number of available containers and operational vessels.
Number of customer complaints Customer Satisfaction Survey*

Industry benchmark
PCG results
23 23
21
3.0
3.5
3.0
3.3
2019 2020 2021 2018 2021**

* Conducted every two years
** Not conducted in 2020 due to COVID-19 restrictions
SUPPLY CHAIN MANAGEMENT

WHY IS THIS IMPORTANT? We expect our contractors and suppliers to also respect and
protect Human Rights, and have made explicit requirements as
Strong supply chain management is critical for our operational
outlined in the PETRONAS Contractors Code of Conduct on
efficiency. It is an integral part in incorporating environmental,
Human Rights (CoCHR).
social and governance practices as a corporate citizen. This
translates to taking responsibility for the life cycle of products and
All contractors and suppliers are required to adhere to the following:
protecting workers’ rights. For PCG to grow our capabilities and
deliver world-class products to our customers, we upkeep a Freedom of Labour
resilient supply chain. It is key to maintain reliable feedstock and by not engaging or employing people, under any
services from suppliers. Any sudden changes in the value chain circumstances, against their own free will or engaging
can create a ripple effect, thus disrupting our ability to meet in bonded labour/debt slavery
stakeholder needs.
Establish Grievance Mechanisms
Therefore, we seek to only work with suppliers who share our by providing a means of grievance reporting and
values of integrity, are committed to fighting bribery and corruption, appropriate follow-up measures while ensuring that
and contribute to sustainable development. Our established best the identity of the complainant is protected
practices help ensure that our suppliers embrace our robust
standards for safety, technical, environmental and human rights
expectations and requirements. More importantly, this will enhance Wages and Benefits
downstream productivity while maintaining PCG’s standard of by complying with all applicable laws related to
health, safety and environment (HSE) performance. Responsible employee compensation, including minimum wage,
supply chain management will also maximise economic growth overtime hours and legally mandated benefits
surrounding our areas of operations. It is the perfect opportunity
to improve the livelihoods of local communities. Working Hours
by complying with local laws of the host country or
agreements regarding working hours, overtime hours,
WHAT IS OUR APPROACH? and work during holidays
We enforce ethical business practices ensuring governance of the
procurement process is guided by PETRONAS’ Tender and Contracts Prevention of Child Labour
Administrative Manual (PTCAM) and established procedures. The by not employing children below the legal minimum
process of suppliers’ selection and tenders is in alignment with working age requirement of any country (generally at
relevant PETRONAS Anti-Bribery and Corruption Manual. All least 18 years)
contractors must meet safety, technical, environmental and Code
of Business Ethics (CoBE) requirements for the licensing, bidding,
contracting and execution stages. To strengthen the third-party Foreign or Migrant Workers
due diligence process, we provide a “Know Your Customer” by employing them in full compliance with the labour
questionnaire to suppliers during evaluations. and immigration laws of the host country
We have zero tolerance for non-compliance or malpractices within Humane Treatment

our supply chain. Failure to comply with social and environmental by respecting employee’s rights and ensuring no harsh
regulations will result in serious action, including contract and inhumane treatment, including any form of
termination. A formal grievance system has been established for mental or physical coercion, or verbal abuse
stakeholders to safely report any misconduct or malpractice. All
grievances are investigated and resolved based on specific site
arrangements. Non-Discrimination
by respecting diversity in the workplace and not
engaging in any form of unlawful discrimination based
on gender, race, ethnicity, skin colour, religion,
nationality, sexual orientation, age, marital status,
pregnancy, political affiliation, or disability in hiring
and employment practices
Freedom of Association
by respecting the legal rights of employees to
become members of a labour union, etc
CATALYSING ECONOMIC
PERFORMANCE
SUPPLY CHAIN MA N A G E ME N T
HOW DID WE CREATE VALUE?

1 Corporate Liability 4 Human Rights
• Required for all vendors to understand the Corporate Liability • Enforced the PETRONAS Contractors Code of Conduct on
Provision and establish adequate procedures against corporate Human Rights (CoCHR) and HSE requirements during the
liabilities. vendors’ selection and tendering process.
• Encouraged all vendors to sign the Integrity Pledge as proof • Conducted CoCHR awareness sessions with our contractors
of commitment in the fight against corruption. to ensure the expectations and requirements of the
• Enhanced our third-party due diligence process to ensure PETRONAS Human Rights Commitment and CoCHR is
that contractors, vendors and joint venture partners meet understood and abided by.
PETRONAS’ standards of integrity through the “Third Party • Conducted CoCHR assessments to ensure our contractors
Risk Assessment”. were not committing human rights violations.
2 Sustainable Supply Chain 5 Supporting Local Suppliers

• Establishing a raw material purchasing framework consisting • Conducted structured programmes to empower local
information on the input of raw material used to manufacture contractors to thrive in a competitive digital environment.
PCG products with the objective to minimise the presence • Implemented the PETRONAS Vendor Development
of substance of concern. Programme, which focuses on nurturing local vendors to
• Assessed and rated suppliers’ performance according to be resilient and sustainable, and work towards becoming
Health, Safety, Security & Environment (HSSE) and contract technically competent, commercially attractive, develop
compliance, specifically for outbound land and transportation home grown technologies, and foster growth in expanding
security. internationally, as well as become a candidate for a Bursa
Malaysia listing.
3 Health and Safety
• Deployed PCG’s Road Transport Operational Guideline for 6 Digitalisation
logistical providers. • Implemented digital tools and technologies into our end-
• Maintained the Contractors HSE Mentorship Programme to to-end procurement function.
strengthen contractor capabilities in HSE Management.
• Offered ongoing and extensive supplier training programmes
on up-to-date HSE topics.
100% response
WHAT WERE THE rate to grievances
received from
ACHIEVEMENTS?
suppliers.
Supporting local suppliers
Indicators 2019 2020 2021
Total number of suppliers 1,608 1,445 1,607
Ratio of total number of suppliers (local:international) 75:25 72:28 77:23
Total number of local suppliers from PETRONAS Vendor 12 11 13

Development Programme (VDP)
Ratio of total procurement spending (local:international) 68:32 60:40 63:37

CYBERSECURITY & DIGITALISATION

WHY IS THIS IMPORTANT? Operationally, the implementation of advanced analytics and data-
driven technology can pre-empt and prevent equipment failure,
As we progressively rely on digital tools for our day-to-day
minimising overall downtime. This includes operationalising the
operations, the use of digital technologies also promotes new
Asset Performance Management to digitalise critical data for
business models, revenue streams and value creation opportunities.
improved plant efficiency. Other digitalisation tools include drones,
The increased use of digital services has been instrumental for
which were also employed to safely monitor our equipment and
PCG to achieve Operational Excellence and Commercial Excellence.
operations at remote higher elevations during turnaround.
On the flip side, digitalisation is also used alongside protecting
data from cyberattacks and information confidentiality breaches.
While the digitalisation of systems and processes enhances
In the past two years, the pandemic has increased global connectivity,
operational and resource efficiencies, the connectivity carries an
which has brought about increasingly sophisticated cybercrime.
inherent risk of cyber intrusion. As for PCG’s cybersecurity efforts,
Attackers are employing new methods to circumvent traditional
the PETRONAS Enterprise Cyber Security Governance Framework
security controls. In ensuring the security of our sensitive data,
(ECSGF) is a single governance framework for cybersecurity based
PCG has embraced the digitalisation of systems and processes.
on industry best practices and standards. It aims to protect our
systems and data from malicious attacks. Our operations and
network are actively monitored for cyber threats and attacks,
WHAT IS OUR APPROACH? which include conducting vulnerability assessments.
With our PCG Digital Steering Committee, we have created a
platform for digital progress and value creation. This includes the The next crucial step is educating employees on best practices
downstream Operational Excellence Result 2 (OE R2) implementation to avoid cyber threats, as it helps them understand the potential
to all PCG operating plant units (OPUs), through the adoption of risks associated with operating and communicating on our network
the Downstream Digital Framework. Additionally, the digital Enterprise and applications. These educational campaigns include modules
Optimiser and PETRONAS Integrated Vision for Operational on simple social engineering scams and sophisticated cybersecurity
Excellence Transformation (PIVOT) drives the best value for attacks designed to steal intellectual property or personal data.
molecules, accelerating and integrating data analysis for faster Additionally, regular phishing tests are carried out to ensure
decision-making process. employees are kept vigilant at all times.
CATALYSING ECONOMIC
PERFORMANCE
CYBE RSE CURITY & DIGIT A L I SA T I ON

1 Asset Performance Management (APM) 5 Digital devices
• Managed asset reliability and integrity, so that plant facilities • Enabled safe, smart devices and 4G LTE connection for
operate at acceptable risk and optimum costs. accessibility and real-time information and updates in the
process area.
2 Plant Operations Integrated Tools (POINT)
• Designed for Operate Facility Work Process (OFWP) for 6 Cybersecurity initiatives
operators’ tasks management, shift log management, plant • Implemented a Cybersecurity Strategy Deployment
manning and fatigue management. Programme (CSSDP) while an Enterprise Security Management
System protects our data from spyware and virus attacks.
3 PIVOT Advanced Analytics (AA) • Organised campaigns to raise employee awareness of
• Enabled monitoring and abnormalities detection in plant cybersecurity.
facilities so that necessary steps can be taken to prevent • Performed phishing tests to exercise caution when using
plant downtime. IT communication platforms to protect against phishing
scams.
4 Primavera P6-SAP • Continued to conduct Cybersecurity Risk Management as
part of our remediation against cyber risks and threats.
• Accelerated the process of task scheduling for maintenance
• Operationalised PCG’s Enterprise Cyber Security Governance
technicians from SAP Maintenance Orders.
Framework.
• Initiated the Cybersecurity Business Impact Assessment
(CSBIA) Legal & Regulatory Assessment (LRA) on PCG ICT
system assets.
99% of employees
Zero system attended and
>RM16 million value >RM10 million
downtime in completed 188 modules
realised from APM in value realised from
with 95.7% passing the
2021. 2021. PIVOT AA in 2021.
cybersecurity
assessment.
Mid-Term
2021 2021 Target
Indicators Target Results (2022-2026)
Employees attended and completed cybersecurity modules (%) >95 99 100
Phishing Test fail results (%) <8 4.3 <6
Operational Excellence Result 2 (OE R2) Digital Transformation Progress (%) 100 90 100
STRATEGY PURPOSE &

FINANCIAL RESILIENCE
WHY IS THIS IMPORTANT? On top of that, we commit to embedding the sustainability element
as part of our day-to-day business decisions and growth initiatives.
PCG’s Two-Pronged Strategy is designed to support future financial
This also includes reaching key stakeholders in addressing risk
resilience and the overall sustainability of our company in order
and governance on sustainability.
to remain robust and resilient in weathering external challenges.
This includes maximising cash generation and revenue growth for
business sustenance, which the past two years and its uncertainties
have put our strategy to the test.
Sustainability Strategy for financial resilience
This extends to the sustainability development of the business, • Pursued sustainability-related growth projects as part of sustainable
which encapsulates the Group’s sustainability agenda covering development initiatives to achieve net-zero carbon emissions
Economic, Environmental, Social (EES) and Governance. by 2050.
• Optimised current assets for greater efficiency resulting in lower
GHG emissions and cost reductions from manufacturing assets.
WHAT IS OUR APPROACH?
• Diversified product offerings with bio-based and circular economy
In ensuring a holistic and cohesive strategic purpose, PCG is in
portfolios, such as the Bio-Monoethylene Glycols (Bio-MEG).
alignment with PETRONAS’ net-zero carbon target by 2050 with
the establishment of our own Net Zero Carbon Emissions (NZCE) • Initiated flagship projects to spearhead the circular plastic
2050 Roadmap. The long-term strategy is to reduce climate impact economy initiatives in Malaysia through New Plastics Economy.
as well as improve the resilience of the business and capitalise
on opportunities from the circular economy.
DIRECT
ECONOMIC ECONOMIC
VALUE ECONOMIC VALUE DISTRIBUTED VALUE
GENERATED RETAINED
REVENUE AND DIVIDENDS PURCHASE OF EMPLOYEE INCOME TAX ECONOMIC

OTHER INCOME* – PAID – GOODS AND – BENEFIT – EXPENSES = VALUE
(RM MILLION) (RM MILLION) SERVICES EXPENSES (RM MILLION) RETAINED
(RM MILLION) (RM MILLION) (RM MILLION)
24,087
13,527
14,379
3,206
1,200
5,763
9,803
2,292
1,049
964
391
271
2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021
* Comprises net other income, financing costs and contribution from joint ventures and associates
Mid-Term
2021 2021 Target
Increase in Cash Flow from Operations (CFFO) from 2020 (%) 10 >100 50
CONTRIBUTING TO
THE GREEN AGENDA
CONTRIBUTING TO THE
GREEN AGENDA
Environmental stewardship is more than just seizing
competitive opportunities and strengthening our resilience;
it also enables us to give back to the green agenda. Our
environmental efforts focus on creating a safe and healthy
environment while improving productivity, lowering costs,
and spurring innovation. Our focus remains on efficiency
while researching breakthrough technologies for
environmentally-friendly solutions. We adopt a holistic
approach towards meeting rising expectations for greener
and more sustainable practices. As a corporate citizen,
we strive to consistently improve our environmental
footprint and protect our planet for generations to come.
Climate New Plastics

Change Economy (NPE)
100 kilotonne 130,000 internal and
CO2e reduction external stakeholders
from 2020 reached nationwide
Environmental
Stewardship
14,000 m2 land
area rehabilitated
through ecoCare
CLIMATE CHANGE
WHY IS THIS IMPORTANT?

Climate change is the biggest challenge facing humanity. The Intergovernmental Panel on Climate Change (IPCC)’s Sixth Assessment
Report has indicated that the current state of climate change is reaching alarming levels. In 2021, we saw extreme weather events,
from wildfires across North America and Southern Europe to extreme flooding in China and Western Europe. Some of these natural
disasters also hit closer to home with devastating tropical cyclones from the Indian and Atlantic Oceans, causing floods and destruction.
This crisis threatens our ability to deliver long-term value to customers and stakeholders, who will also face significant impacts themselves.
Climate change brings upon physical risks, in which our assets and operations may face disruption from natural disasters.
Climate change also presents transition risks and opportunities related to the global shift towards a low-carbon economy. Through
our portfolio review, we can expand our products and solutions into new markets. We support PETRONAS aspirations to achieve net-
zero carbon emissions by 2050 and have identified and reinforced our position as a sustainability thought leader.

To tackle climate change, we are deploying multiple transformational changes to our systems. This is supported by external frameworks,
primarily the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. Our holistic approach ranges from assessing
and mitigating our operations’ impact on climate change to factoring in carbon pricing in our growth projects.
Climate Scenario Analysis

Following TCFD recommendations, we performed a climate-related Pathway (RCP) scenarios, RCP 8.5 and RCP 4.5 have been used
analysis to quantify the possible future financial impact on profitability to assess potential business implications.
from different climate change scenarios. The results inform a The scope of assessment includes:
longer-term strategic decision making to improve the resilience • Climate transition risks and physical risks.
of the business, and capitalise on opportunities from climate
• Potential scenarios for legislation, technological development
change and a circular economy.
and market conditions.
We adopted the IEA World Energy Outlook 2020 Scenarios to • Our own operations, upstream and downstream activities and
understand the potential impact of transition risks, including Stated clients.
Policies Scenario (STEPS) and Sustainable Development Scenario • The expected lifetime of the assets and activities to be consistent
(SDS). For physical climate risks, two Representative Concentration with the assessment.
Assessment Approach
STEP 1. STEP 2. STEP 3.
Define the range of climate Evaluate business impacts Identify potential strategic
scenarios and identify the across different time horizons response measures
climate-related risks and and scenarios
opportunities that are relevant
to the business
CONTRIBUTING TO
THE GREEN AGENDA
CLIMATE C H A N G E
Scope 3 GHG Emissions Assessment

For the first time, we also assessed our Scope 3 emissions. Our scope 3 GHG emissions categories are identified according to the
GHG Protocol – Corporate Value Chain (Scope 3) Accounting and Reporting Standard. From the assessment, we determined our most
material sources of Scope 3 GHG emissions:
Top 2 Most Relevant Sources of Scope 3 GHG Emissions Assessment:
Category I: Category II:

Purchased Goods and Services Use of Sold Products
Emissions from purchased goods and services are more Emissions from use of sold products is material to the
material for companies with downstream operations majority of oil and gas companies, including
in the oil and gas value chain, such as petrochemical petrochemical companies that produces products such
companies. as fertilisers that produce GHG emissions when they
are used by customers.
Emissions calculation methodology Emissions calculation methodology
• Estimation of category I Scope 3 emissions has • Estimation of category II Scope 3 emissions has
applied simplified IPCC Tier 1 method using default applied simplified IPCC Tier 1 method using default
emissions factors emissions factors
• Tonne CO2e = GHG activity data (unit) x default • Tonne CO2e = GHG activity data (unit) x default
Emission Factor (tCO2e/unit) Emission Factor (tCO2e/unit)
HOW DID WE CREATE VALUE

1 Integrating Climate Action into the Business
• Established PCG’s Net Zero Carbon Emissions (NZCE) 2050 Roadmap, aligning with PETRONAS’ aspiration, to achieve net-zero
carbon emissions by 2050.
• Developed PCG’s Climate Strategy Framework, which includes strategic responses to climate-related risks and opportunities,
decarbonisation and other initiatives.
• Integrated climate risks, strategy, metrics with performance evaluation and incentives into existing business processes and
governance system.
The four-step approach in the development of NZCE 2050 Roadmap and Climate Strategy:
Task 1: Task 2: Task 3: Task 4:

GHG Scope 1 and Scope 3 GHG Climate-related Roadmap to
2 Data Review Emissions Risks and Achieve Net-Zero
Assessment Opportunities Carbon Emissions
Target by 2050
Understand GHG Understand indirect Identify key climate- Prioritise GHG

emissions baseline GHG emissions and related risks and mitigation options
(Scope 1 and 2) and how these can be opportunities and for the NZCE 2050
main sources to addressed in the potential response Roadmap, develop
suggest mitigation future measures to inform an overarching
options for the NZCE 2050 Climate Strategy
NZCE 2050 Roadmap and and Action Plan
Roadmap Climate Strategy
C LI MAT E C HANGE
PCG NET ZERO CARBON EMISSIONS 2050 ROADMAP
PCG baseline
20%
emissions
reduction
from PCG
baseline
emissions
80%
reduction
from PCG
baseline
emissions
Net-zero
by 2050
2020 2030 2040 2050
PCG NET-ZERO CARBON EMISSIONS PATHWAYS
Increase Scope 1 Scale up renewables Optimise the use

and Scope 2 Carbon capture & and low carbon of forest-based
emissions reduction storage solutions carbon offset
efforts
Improve energy Collaborate with key Invest in renewables Remove carbon using
efficiency and increase stakeholders on and embrace the nature-based solutions
reduction from carbon capture from circular economy like afforestation and
operational GHG gas combustion and avoid deforestation
emissions transport to storage
2 Climate-Related Risks
• Conducted deeper quantitative analysis of climate risks and asset-level financial implications.
• Assessed physical climate risks in PCG’s operating locations. An example of our strategic response to physical risk is as follows:
– Conducted a freshwater availability study at one of our plants in Labuan to assess future freshwater availability against projected
demands from 2021 – 2050 through detailed water availability projection modelling.
– Identified current and future risks associated with freshwater availability and developed appropriate mitigation actions.
– Developed an adaptation plan to address the future climate impact on freshwater availability.
CONTRIBUTING TO
THE GREEN AGENDA
CLIMATE C H A N G E
The diagram below shows assessed climate-related transition and physical risks identified in an analysis conducted in 2021:
Climate-related Transition Risks & Opportunities
Transition Risk Chemical Business Implications Transition Risk Chemical Business Implications
Carbon pricing and • Restrictive cap and trade Increased stakeholder • Increase in cost of capital,
reporting obligations policy concern/negative both debt and equity
Policy and legal
• Carbon taxes feedback
Reputation
Carbon Border • CBAM to be implemented Shift in consumer • Reputational risks can
Adjustment Mechanism in European Union (EU) preferences/ degrade the intangible
(CBAM) and climate- • Other countries with Stigmatisation of sector value of the company and
related trade barriers net-zero ambitions and goodwill
carbon taxation may follow
suit
Transition Risk Chemical Business Implications Transition Risk Chemical Business Implications
Reduce demand for • Higher demand for circular Substitution of existing • Products from less carbon
virgin plastics polymer products and services intensive sources will be
with lower emissions preferred
Increase in demand for • Plastics use intensity will options • Bio-fuels and bio-feedstock
Electric Vehicles (EVs) change • Methanol-derived products
Technology
Market
• Higher demand for as a blend

methanol and ammonia in
Development and • Synthetic fuel, carbon
the long-term
maturity of new capture, utilisation and
Improved application • Reduction in demand for technologies storage (CCUS), hydrogen
efficiency in the ammonia and urea over • Bio-feedstock, electrification
agriculture sector, and the long-term • Patented technology that is
reduced wastage not readily available
Key Physical Climate Risks Identified
China indicates comparatively higher risk due to Thailand indicates the highest risk due to sea level
drought as compared to other countries of interest rise among the countries of interest
Risk Hazard Drought Cyclone Extreme Heat Extreme Cold Flooding Sea Level Rise
Rank
Scenario RCP 4.5 RCP 8.5 RCP 4.5 RCP 4.5 RCP 4.5 RCP 8.5 RCP 4.5 RCP 8.5 RCP 4.5 RCP 8.5 RCP 4.5 RCP 8.5
Country
2030
2030
2030
2030
2030
2030
2030
2030
2030
2030
2030
2030
2050
2050
2050
2050
2050
2050
2050
2050
2050
2050
2050
2050
1 Thailand 1 1 1 1 2 2 2 3 2 2 2 2 -1 -2 -2 -2 3 3 3 3 3 3 3 3
2 China 2 2 2 3 2 2 2 3 2 3 2 3 -2 -3 -2 -3 2 3 2 3 1 2 2 2
3 Indonesia 2 1 1 1 2 2 2 3 1 2 1 2 -1 -2 -1 -2 3 3 3 3 1 2 1 2
4 Malaysia 1 1 1 1 2 2 2 3 1 2 1 2 -1 -2 -1 -2 3 3 2 3 1 2 1 2
5 India 1 1 1 1 1 2 2 2 2 2 2 3 -2 -2 -2 -3 3 3 3 3 1 2 1 2
6 The Netherland 1 1 1 1 NA NA NA NA 2 3 2 3 -2 -2 -2 -2 2 2 2 2 1 1 1 2
Cyclones indicate intensification under RCP 8.5 Floods could be a major concern throughout Asia.
scenario by 2050. Particularly, East and Southeast Particularly Thailand, Indonesia and India indicate Risk of sea-level rising
Asia indicate higher risk due to cyclone comparatively higher risks in the region increases towards mid-
century under both the
Category RCPs
3 Significant Increase
Reference: IPCC, 2014: Climate Change 2014: Impacts, Adaptation, and 2 Moderate Increase
Vulnerability. Part B: Regional Aspects, Contribution of Working Group II to 1 Increase
the Fifth Assessment Report of the Intergovernmental Panel on Climate 0 No Change
Change -1 Decrease
-2 Moderate Decrease
-3 Significant Decrease
C LI MAT E C HANGE
100 ktCO2e
reduction
for GHG 11% reduction in energy intensity (against 2014 baseline).
emissions from
2020.
Energy Intensity
94
93
92 We recorded an energy intensity of 15.76GJ/tonne in
2021, hence exceeding our target to sustain reduction by
10% from 2014 baseline.
15.76
15.73
15.37
Plant Utilisation Rate (%)
Energy Intensity (GJ/tonne)

2019 2020 2021
GHG Emissions and Intensity
0.68
0.67 Scope 1 (million tonnes)
0.66 Scope 2 (million tonnes)
GHG Intensity (tonnes CO2e/tonne)*

1.33
1.29
Total Scope 1 and Scope 2 (million tonnes) 7.02 7.10 7.00

1.33
Target Scope 1 and Scope 2 (million tonnes)** ≤6.98 (by ≤6.98 (by ≤6.98 (by
2024) 2024) 2024)
Scope 3 (million tonnes) – 3.06 3.27
* The denominator of the calculation had been changed following an improvement in our calculation
5.67
5.73
5.77
approach. The denominator is Production Volume (previously Sales Volume) to reflect the efficiency
of each production unit in relation to the indicator.
** Revised due to change in values of Global Warming Potentials according to the Fourth Assessment
2019 2020 2021 Report of the Intergovernmental Panel on Climate Change.
CONTRIBUTING TO
THE GREEN AGENDA
NEW PLASTICS ECONOMY (NPE)

WHY IS THIS IMPORTANT? HOW DID WE CREATE VALUE?
The irresponsible usage and disposal of plastic is a growing threat In supporting the government’s effort, towards ending plastic
to the environment when not managed effectively. The current pollution, we have aligned our sustainability agenda through the
linear economy for plastic is unsustainable and harmful to four key workstreams of innovation, infrastructure, education and
environmental and social health. To minimise this crisis, we need clean-up. As a founding member of the MaSPA, we also actively
to transform the linear economy into a circular one. Through participated in the development of the Malaysia Plastics Sustainability
NPE, plastic does not become waste or pollution. Instead, it can Roadmap 2021-2030.
be converted into a new resource, thus ensuring the sustainable
production and consumption of plastic. This addresses the current 1 Innovation
plastics system’s two main concerns – the use of finite resources • Collaborated with Plastic Energy Ltd to develop a solution
to produce plastics and the plastics’ impact on marine health and turning non-recyclable plastic waste into crude naphtha,
the environment. and further processed to produce polymers as a feedstock
for plastic production.
By taking the lead in the advancements of NPE, we will reinforce
• Performed a feasibility study with Plastic Energy Ltd to
our role as a chemical industry leader. It also aligns with stakeholders’
construct plastic waste to crude naphtha facility in Malaysia.
future expectations of improved design and recycling requirements.
The objective of the feasibility study is to bring the technology
We view this as an opportunity to secure new and emerging
to Malaysia by turning low-quality, mixed plastic waste from
markets, explicitly turning plastic waste into new applications. This
landfills into the naphtha quality pyrolysis oil.
conversion of plastic waste into circular feedstock allows us the
potential to create important value. By addressing plastic waste, • The pyrolysis oil will be used as a feedstock for polymer
we strengthen our resilience, maintain our competitive advantage, production, enabling PCG to offer certified circular polymers.
ensure sustainable growth, and, most importantly, protect the • Explored other innovative solutions based on the three
future of our planet. focus areas under the innovation workstream.
2 Infrastructure
• Secured feedstock supply for projects currently ongoing in
PCG’s NPE strategy aligns with Malaysia’s plastic waste agenda, collaboration with local recyclers.
to end pollution from the Single-Use Plastics by 2030 and enhance
• Initiated internal and external collaborations to improve the
the waste management system. PCG targets to recover 100% of
recovery of recyclable materials through our internal 3R
the plastic waste of our polymer production volume for the
programme involving PCG Operating Units and other
Malaysian market by 2030, ultimately redirecting the waste into
PETRONAS Business Units, including PETRONAS Gas Berhad.
a circular economy. PCG had contributed to establishing Malaysia
Plastics Sustainability Roadmap 2021-2030 with the Ministry of
3 Education
Environment and Water (KASA). As one of the founding members
of Malaysia Sustainable Plastic Alliance (MaSPA), we continuously • Developed and distributed ‘Plastic, Sustainability & You’
maintain a good rapport with government agencies, including Education (PSYE) modules to all schools in Malaysia, in
Ministry of Housing and Local Government (KPKT), brand owners, collaboration with the Ministry of Education (MOE), Solid
industry leaders and NGOs, to collectively tackle plastic waste Waste Management and Public Cleansing Corporation
issues in Malaysia. (SWCorp) and Malaysian Plastics Manufacturers Association
(MPMA).
We adopt a holistic approach to NPE by focusing on four key • Held live webinar sessions on Pusat STEM Negara’s social
workstreams: media channels for primary and secondary school students
as well as teachers. We also conducted webinar sessions
• Innovation: Establishing a viable collaboration in innovative
for:
technology solutions to address plastic pollution. The innovative
solutions are through these three focus areas: – Public and school students through Karnival Sains Sabah
Edition, in collaboration with PETROSAINS and Ministry
– ReDESIGN: Enhance the recyclability of plastic materials
of Science, Innovation and Technology Sabah
– ReGENERATE: Regenerate the end-of-life plastic into valuable
– Employees of the Prime Minister’s Office and its agencies
materials
– ASEAN polymer industry players during the ASEAN
– ReNEWABLE: Develop renewable-based plastic materials
Federation of Plastic Industries (AFPI) meeting and Asia
• Infrastructure: Developing strategic partnerships and Plastics Forum (APF) Conference in collaboration with
collaborations for an effective, sustainable waste recovery system. MPMA. The participants were from 12 countries, namely
Malaysia, Bangladesh, China, India, Indonesia, Japan,
• Education: Imparting knowledge and education on plastic to
Myanmar, the Philippines, Singapore, Sri Lanka, Thailand
address misconceptions and promote change in behaviour and
and Vietnam.
culture.
• Clean-up: Enhancing awareness of caring for the environment
through 3R education, CSR activities and green campaigns.
NE W P L AS T I C S EC ONOMY
4 Clean-up
• Conducted clean-up initiatives through our Be Green Programme, which encourages surrounding communities in our area of
operations to learn about the importance of preserving the environment through proper waste and plastic management.
Nine sessions of the

Completed ‘Plastic, Sustainability &
the Detail You’ webinar were held, More than 46 tonnes of 1.4 tonnes of recyclable
reaching over 130,000 recyclable waste collected waste was collected as part
Feasibility
teachers, students, through our internal 3R of the Be Green programme
Study with Plastic
government officers, internal programme. online competition.
Energy in Q4 2021.
staff, public and industry
players.
Investments in NPE (RM million) 8 3 3
Recyclable waste collected via Be Green Programme (tonne) 1.3 2.0 1.4
Mid-Term
Target
Indicators (2022-2026)
Education reach (number of people) 1,000,000

CONTRIBUTING TO
THE GREEN AGENDA
ENVIRONMENTAL STEWARDSHIP
WHY IS THIS IMPORTANT? HOW DID WE CREATE VALUE?
PCG uses natural capital such as energy, water and other finite 1 Preserving Air Quality
resources, which we would need to safeguard for future generations.
• Utilised 100% LDAR to inspect joints, valves and potential
We must continue maintaining our Operational Excellence while
leak points at all our operating plants.
ensuring our environmental footprint is kept to its minimum. While
meeting the requirements of environmental standards and • Lowering pollutant in emissions through our Ultra High
regulations, we also strive to go beyond compliance towards best Purity Methanol (UHPM) fuel cell applications in line with
practices. Responsible environmental management is more than market demand for clean energy, as the use of methanol
just an ethical growing concern approach to business – it is also fuel cells has increased.
a motivator to grow and innovate current operations.
2 Minimising Water Intake
• Continued water consumption verification exercise to identify
WHAT IS OUR APPROACH? opportunities for improvement and to establish water
We ensure all our plants and operations consistently comply with reduction targets.
environmental regulations across all our operating locations. We • Utilised mobile reverse osmosis technology at PC Methanol
also subscribe to voluntary environmental standards, with almost to enable the recovery of 140m3/hour of process condensate.
all of our operations receiving ISO 14001:2015 certifications. PCG This will help PC Methanol to reduce raw water consumption
is also moving towards digitalisation and utilising technology to by 110m3/hour or 16% and significantly lessen the high raw
minimise material consumption and waste production. water stress of Labuan Island.
PCG’s Health, Safety & Environment (HSE) policy provides the 3 Going beyond compliance for wastewater discharge
guidelines and practices to manage the plants’ water, waste and
• Invested more than RM3 million to install an automated
air emissions. We also have three frameworks to monitor our
water quality monitoring system, backed by renewable
usage and impact on the following natural resources:
energy, to monitor wastewater discharge from the Kertih
Integrated Petrochemical Complex (KIPC), Terengganu in
Water Consumption and Effluents Quality real-time. The alarm level set for the system is stricter than
the regulatory limit. The facilities at KIPC discharges water
PETRONAS Guidelines on Water Practices (WAPS)
into a 6 km common drain which eventually flows to the
Aim: To monitor water usage from our operations, covering Kertih river.
four systems: ion exchange, steam generator, condensate, • Ensured the KIPC drain is in good condition by reducing
and cooling water. the environmental impact of water and wastewater discharges
to minimise the disturbance to aquatic life.
4 Responsible Waste Management

• Conducted the annual waste minimisation plan to identify
opportunities for waste reduction.
Waste Management
• Developed a turnaround and shutdown waste minimisation
PETRONAS Technical Standards Waste Management & PCG blueprint to tackle waste at its source.
Waste Minimisation Blueprint
• Segregated waste to prevent mixture of waste, thus reducing
Aim: To minimise and recycle hazardous and industrial waste total waste volume.
generated from our operations while managing any waste • Improved waste recycling by identifying and implementing
produced responsibly with minimal impact on the surrounding 3R on the targeted waste stream.
communities and environment.
• Launched a digital competition nationwide encouraging
employees to promote the Be Green education and
competition programme among friends and neighbours;
aiming to improve the recovery of recyclable materials from
Air Emissions/Quality home.
PETRONAS Technical Standards on Air Emissions & PCG
Leak Detection and Repair (LDAR) Programme 5 Environmental Compliance
Aim: To address fugitive emissions through small or any other • Implemented penalties for non-compliance to PCG’s HSE
potential leaks, as well as monitor air emission pollutants via policy, including consequences on employees’ salaries,
the Continuous Emissions Monitoring System, to obtain real- promotions, and contractor payments.
time data.
6 Raising Environmental Awareness
• Implemented ecoCare, a mangrove conservation and
biodiversity programme for the Kertih river community to
protect high biodiversity and ecologically sensitive areas.
E N VI R O NM E NT AL S T EWAR D S HIP
Zero cases ecoCare programme Water Consumption

of environmental Rehabilitated a total land area of more than Reduced raw water consumption at PC
non-compliance*. 14,000 m2 within a span of 15 years. Methanol by 16%.
Freshwater Withdrawal Wastewater Discharge
3.69
3.57
3.53 0.02 0.02 0.02
The discharge is lower than

The increase in freshwater the corresponding period, resulting
177.8***
withdrawal is due to higher water from various wastewater

38.52
37.06
37.83
171.4
intake from a higher number of improvement projects and lower

153.7
mandatory plant turnarounds. discharge from plant turnarounds.
2019 2020 2021 2019 2020 2021
Freshwater withdrawal (million m3) COD (tonne)

Freshwater withdrawal intensity (m /tonne)**
3
COD Intensity (tonne/kilotonne)**
* Above USD100,000 materiality threshold

** The intensity calculation is now based on an improved calculation approach, i.e: to reflect the efficiency of each production unit in relation to the
indicator. The denominator applied has been changed to Production Volume, replacing the previously applied Sales Volume
*** Revised based on change of calculation method
CONTRIBUTING TO
THE GREEN AGENDA
E NVIRONME NTAL STE W A R DSH I P
Hazardous Waste
85
75
70
The 3R rate is lower than the corresponding

period due to higher non-recyclable waste
produced during turnarounds.
Hazardous waste generation (kilotonne)

Hazardous waste underwent 3R (kilotonne)
Hazardous waste final disposal (kilotonne)
Hazardous Waste 3R rate (%)
26.2
19.7
22.9
27.0
18.0
25.5
5.3
6.4
5.2
2019 2020 2021
Indicators Target Results
Increase 3R rate for hazardous waste (%) 82 (by 2024) 75
Air Quality
2.83
2.42
2.21
The emissions are higher than the corresponding

period, contributed by high flaring activities at
several plants.
NOx (kilotonne)
SOx (kilotonne)
Air Emissions intensity (tonne/kilotonne)*
0.84
0.34 0.27
25.07
28.61
23.31
2019 2020 2021
* The intensity calculation is now based on an improved calculation approach, i.e: to reflect the efficiency of each production unit in relation to the
indicator. The denominator applied has been changed to Production Volume, replacing the previously applied Sales Volume
EMPOWERING PEOPLE &

COMMUNITIES
Our people are at the heart of everything we do at PCG.
From our employees and suppliers to the communities
surrounding our operations, they are what keep us
running. Our employees play a significant role in creating
an engaged, skilled and productive workforce. As one
of the leading chemical players in a rapidly changing
industry, we are dedicated to future-proofing our
employees, which includes motivating and empowering
them to thrive now and far into the future. Employee
safety is also tantamount to our business, as a strong
safety track record ensures operational productivity and
business continuity. Above all, it ensures the protection
of our valued employees from accidents and injuries.
Beyond the business’ internal operations, we also look

externally to empower the communities in the areas
PCG operates. It is important to give back to the
communities, allowing us to actively participate in
community development and foster a deeper sense of
unity and trust.
Human Rights
79% of employees
completed the
human rights
e-learning
IP
module
W Workplace And
Occupational Safety
& Health (OSH)
Zero fatalities in all
PCG Operations
Talent
Development
RM6.9 million invested
for employee training
& development
Community
Engagement
~295,000 people
reached through
CSR programmes
EMPOWERING PEOPLE
& COMMUNITIES
HUMAN RIGHTS
WHY IS THIS IMPORTANT? Ethics (CoBE) and all its relevant labour laws and employees’ rights,
such as providing competitive salaries and benefits. Our non-
Human rights are the fundamental rights and freedoms entitled
executive employees’ rights are also protected through unions, of
to every individual. They are based on the principles of dignity,
which its collective bargaining agreement process is led by PETRONAS’
fairness, respect and equality. Human rights include non-
Group Industrial Relations together with unions and management
discrimination, freedom of association, the right to education and
representatives. In the active promotion of gender diversity, the
safety, and access to clean air and water. This refers to the fair
collaboration with PETRONAS Leading Women Network (PLWN) is
and humane treatment of all employees, starting with treating
to inspire and motivate women to grow their leadership capabilities
everyone with respect and having zero tolerance for discrimination,
within the organisation.
harassment or bigotry. With that, it is imperative we maintain fair
employment, fair remuneration and diversity at PCG. These practices
foster a productive work environment and healthy work culture,
inspiring trust among employees, suppliers, and other stakeholders. HOW DID WE CREATE VALUE?
Protecting human rights also makes space for creativity and 1 Human Rights
innovation as employees feel safe and encouraged to thrive.
• Continued to educate employees and increase their awareness
on human rights with our e-learning module, highlighting
our commitment to human rights principles.
WHAT IS OUR APPROACH? • Embarked on a collective bargaining agreement process
PCG believes in upholding and promoting human rights and fair with employee unions, led by PETRONAS’ Group Industrial
labour practices within our operational facilities. We operate our Relations and representatives from various Operating Unit
business in the support and respect of the observance of human heads.
rights, which offer a framework to understand society’s common • Conducted Social Risk Assessment (SRA) to assess the impact
expectations and thus, deliver value to stakeholders. Our human and mitigate the social risk, especially human rights risks,
rights commitment standards and guidelines are in alignment with to manage both the positive and adverse impacts created
PETRONAS’ Human Rights Commitment, which is in line with the through our business activities, including through relationships
United Nation (UN) Guiding Principles on Business and Human with partners and contractors. The SRA is based on our
Rights. The objective of our commitment is to ensure our activities internal guidelines and standards, which align with the UN
are governed by human rights principles, laws, best industry practices Guiding Principles on Business and Human Rights, the
and standards to manage the impact in our areas of operation. International Petroleum Industry Environmental Conservation
Association, and other industry best practices. The assessments
This commitment applies to all employees, contractors and any emphasise four salient areas in accordance with PETRONAS
third parties within our premises performing work and/or on behalf Human Rights Commitments:
of PCG. We also respect the rights of local communities and other – Labour and Working Conditions
stakeholders we interact with across our operations. Furthermore, – Responsible Security
this includes complying with the Code of Conduct and Business – Community Well-Being
– Supply Chain Management
H U M AN R I G HT S
2 Employee Benefits • Implemented paternity leave of five working days, although

it is not part of the statutory requirement.
• Provide ‘Spousal Assistance with Leave Without Pay (LWP)’
for up to 36 months for employees on overseas assignments. • Implemented pilgrimage leave of up to a maximum of ten
This provision is added to the current LWP allowance of consecutive calendar days, to support employees of all
365 days. religions and faiths to perform religious pilgrimage and
rituals.
• Medical benefits for unionised employees upon the collective
agreement, which includes:
4 Employee Welfare & Well-Being
– Medical benefit which covers outpatient general practitioner
and specialist, including paediatric care, hospitalisation • Implemented special working arrangements for employees
and surgery. with dependant(s) affected by contagious diseases.
– Maternity benefit up to five delivery occasions including • Implemented a new working arrangement during COVID-19,
antenatal and postnatal treatment. where work-from-home is the default working arrangement
unless the nature of the job requires mandatory presence
– Standardised the definition of dependent children of all
on-site.
unionised employees to be comparable with other
categories of employees. • Conducted regular union engagement to strengthen our
relationship and address operational matters.
3 Diversity & Inclusion • Implemented daily FLEXWARE (smart casual attire) to provide
a positive, flexible, and inclusive work environment for all
• In the active promotion of gender diversity, the collaboration
employees.
with PLWN is to inspire all women to grow in the organisation
and support them in building their leadership qualities. In • Conducted a series of wellness and well-being programmes
this regard, they guide women employees to strengthen for employees.
their confidence and professional development through • Implemented the Employee Assistance Programme (EAP),
participation in international conferences such as the Women a worksite-based programme designed to support employees
Global Leadership Conference in Energy, the largest women’s in dealing with issues that may adversely impact their health,
event in the energy industry. The conference covers the work performance and well-being.
industry’s environmental, economic, professional, and human • Ran upskilling sessions for managers on Industrial Relations
capital issues. (IR) at the workplace and CoBE refresher training.
• Supported the establishment of the PETRONAS childcare
centre, which was part of the initiative by PETRONITA, an 5 COVID-19 Assistance
association of wives and female employees of PETRONAS • Provided assistance for employees and/or employee’s
to help working mothers. dependent(s) affected by COVID-19, which includes:
• Established a flexible working arrangement for pregnant – Medical treatment at private facilities
employees in their 28 weeks (seven months) to leave work – COVID-19 testing at private facilities
one hour earlier than the prescribed working hours. – Quarantine at private facilities
• Equipped the workplace with nursing rooms and complete – COVID-19 Vaccination Special Paid Leave
facilities, i.e., a fridge for temporary storage, sofas and power • Reimbursed quarantine cost for staff going for or returning
supply cable. from business travel.
• Implemented maternity leave with full pay for a total of 90 • Created a ‘green bubble’ that isolates critical employees
consecutive calendar days as compared to the minimum during plant turnarounds to ensure employee safety and
statutory requirement of 60 consecutive days. business continuity during the COVID-19 pandemic.
• Implemented workplace COVID-19 prevention measures,
which includes:
WHAT WERE THE ACHIEVEMENTS? – Self-testing prior to coming to the office
– Strict adherence to standard operating procedures, such
as physical distancing and usage of personal protective
equipment and hand sanitisers
79% of
employees – Office sanitisation
Almost 100%
completed vaccination rate for • Set up a temporary Vaccine Administration Centre to facilitate
the human PCG employees. employees’ vaccination at Gebeng, Pahang and Kertih,
rights e-learning Terengganu.
module.
EMPOWERING PEOPLE
& COMMUNITIES
HUM A N R I G H T S
Human Rights and CoBE Training Sessions:

• General IR at workplace
• Integrity briefings and training
• Refresher on CoBE at workplace
Union members
Percentage of union members out of total support staff (%) 74.3 76.0 75.0
Gender Diversity
Female 17.4 17.2 17.3

Distribution of workforce by gender (%)
Male 82.6 82.8 82.7
Female 25.2 24.0 18.2

Senior management (%)
Male 74.8 76.0 81.8
Female 36.4 36.4 25.5

Management Committee (%)
Male 63.6 63.6 74.5
Female 25.0 25.0 22.2

Board of Directors (%)
Male 75.0 75.0 77.8
Parental Leave
Female 61 56 66
Total number of employees who took parental leave
Male 386 412 375
The return to work rates of employees who took Female 100 100 100
parental leave (%) Male 100 100 100
Human Rights Assessment
Mid-Term
2021 2021 Target
Human Rights Assessment activities (%) 100 100 –
Human Rights Assessment – Gap closure (%) 100* 100 100**
* For 2019-2020 assessment

** For 2021-2022 assessment
WORKPLACE AND OCCUPATIONAL

SAFETY & HEALTH (OSH)
A strong health and safety culture at the workplace sets – where culture reinforces leadership and personal accountability in the
the foundation for our business to thrive. It underpins overall work environment; compliance intensifies efforts to strengthen the
both our financial success and moral obligation. adherence to HSE systems and procedures; and competency enhances the
Occupational Safety & Health (OSH) also protects the system’s capabilities in driving HSE excellence.
company against financial, operational and legal
ramifications. This safeguards our employees and assets,
maintains trust with stakeholders, and secures our license CULTURE
We aim to nurture a Generative
to operate. Additionally, our high safety standards and Reinforce the role of
HSE Culture where all
compliance to regulations ensures operational continuity leadership and instil
employees take responsibility
and efficiency. personal accountability
for their own safety and of
at all levels in amplifying
others.
a generative culture.
A good OSH reputation helps attract and retain top
industry talent, as well as brands PCG as a safe and
reputable manufacturer. Upholding a solid health and
safety culture allows our employees to work more COMPLIANCE We require compliance with
efficiently, boosts morale and productivity while reducing Reiterate efforts to all HSE regulations by all
costs. In turn, this can reliably deliver products to meet strengthen compliance employees as it is crucial to
our customers’ needs. As we commit further to developing to establish HSE systems ensure zero incidents at the
our health and safety culture, we strive to become a and procedure. workplace.
company where OSH excellence is a major tenet of how
we do business.
COMPETENCY We work continuously with

WHAT IS OUR APPROACH? Enhance asset our employees, suppliers and
Our utmost priority is to upkeep the health and safety capabilities, both human vendors to ensure a high level
of our employees, suppliers and vendors, and other and systems, in driving of safety standards and work
contractors. By establishing a stringent HSE framework, HSE excellence. processes are upheld.
we inculcate a generative culture that continuously strives
to keep safety incidents at zero. These efforts rest on
the foundations of culture, compliance and competency
Our approach to Workplace and OSH is governed by the aspiration to
sustain world-class HSE performance, while achieving our goal to inculcate
a culture of HSE excellence and striving for zero incidents.
EMPOWERING PEOPLE
& COMMUNITIES
WORKPLACE AND OCC UPA T I ON A L

SAFE TY & H E A L T H

1 Culture 3 Competency
• Enhanced focus on reflective learning of past HSE and • Continued coaching, personnel upskilling and implementation
Process Safety Incidents that occurred in PCG Operating of RTOG modules on leadership management, vehicle
Units (OPUs). management and journey management in ensuring
• Standardised the HSE implementation across PCG to effectiveness towards safe product deliveries.
circumvent the potential violations from employees and
contractors. 4 COVID-19
• Structured a housekeeping programme across all facilities. • Established and implemented the PCG Pandemic Preparedness
• Focused on achieving HSE Generative Culture through the Response Team (PPRT) to continue business operations
strengthening of the FELT Leadership Program, rejuvenating during COVID-19, working closely with Downstream
Focused Learning (Learning from Incident) and implementation COVID-19 Taskforce and PETRONAS PPRT.
of HSE Balance of Consequence. • Set the standard guides, procedures, directives, memos and
• Implemented the ‘8 Golden Rules of Process Safety’ which COVID-19 case managements throughout PETRONAS. All
were derived based on learnings from PETRONAS communications were delivered via the company Intranet
Downstream’s and PCG’s major process safety incidents and email blast.
that will emphasise good practices and act to reduce unsafe • Activated directives to ensure business continuity and the
acts and conditions leading to process safety incidents. safety of employees, focusing on:
• Conducted the HSSE Culture Maturity Survey to gauge HSE – New working arrangements
culture in PCG according to the culture maturity ladder. – Travelling employees for business and work trips
– Events and gatherings
GENERATIVE (5.00) – Entry requirements into premises
(High Reliability Organisation) – Requirements for employees
HSE is how we do business around here – Contractors and visitors with a history of travel to affected
areas
– Mask requirements
PROACTIVE (4.00) – Requirements for facilities within the premises (e.g., hall,
Safety leadership and values drive continuous meeting room and cafeteria)
improvement
• Successfully managed to keep crucial plant operations
running, including during turnarounds, ensuring both our
people and assets were safe.
CALCULATIVE (3.00)
We have systems in place to manage all hazards
REACTIVE (2.00) WHAT WERE THE ACHIEVEMENTS?

Safety is important, we do a lot every time we
have an accident
Scored 4.06 on the HSSE
Culture Maturity Survey 2021,
PATHOLOGICAL (1.00) which signifies that we are
Zero
Who cares as long as we are not caught proactive and on the right track
fatalities
towards achieving HSE
in all PCG
Generative Culture. With the
2 Compliance operations. challenges of operating during
• Strengthened the implementation of HSE Balance of COVID-19 restrictions, we view
Consequences (BOC) to ensure effective implementation, this as a commendable
deter non-compliance and encourage positive behaviour. achievement.
– Implemented several modules under the Road Transport
Operational Guideline (RTOG) focusing on leadership
management, vehicle management, journey management
as well as weekly virtual coaching as part of the focused
activities to increase the RTOG understanding among
contract owners, as well as hauliers.
– Completed Noise Risk Assessment, Chemical Health Risk
Assessment and exposure monitoring at our facilities.
– Heightened compliance to Operating Procedure (OP) and
Management of Change (MOC) to manage process hazards
effectively and prevent process safety incidents.
W O R K P L AC E AND OCC U P AT IONAL

SA F E TY & HEAL T H
Occupational Safety & Health
Fatalities (Number of cases) 0 0 0
Lost time injury frequency (Number of LTIs per million man-hours) 0.08 0.14 0.07
Lost time injury (Number of cases) 2 3 2
Total Recordable Occupational Illness Frequency (Number of cases per million 0.18* 0.30* 0.09
man-hours)
Total Recordable Case Frequency (Number of TRCs per million man-hours) 0.29 0.23 0.28
Total recordable injuries (Number of cases) 7 5 8
* Revised based on change of calculation method
Tier-1 Process Safety Event
Tier-1 Process Safety Event 2 3 1

EMPOWERING PEOPLE
& COMMUNITIES
TALENT DEVELOPMENT
WHY IS THIS IMPORTANT?

Our learning and development model for employees subscribe to
Driving PCG’s strategies and growth forward are our committed
a 70-20-10 Model, whereby 70% of talent development takes
and talented employees. It is essential to attract, develop and
place through on-the-job developmental experiences, focused on
retain high-performing employees, and subsequently future-proof
the employee’s current job and projects. 20% is through relationship-
them with the right skills they would need to thrive in the long
based developmental experiences such as coaching and mentoring,
term. This begins with a talent pool of competent leaders at the
and the remainder 10% is through formal development activities,
helm, helping employees realise their full potential and building
such as coursework and training. Our formal talent development
their own career progress.
programmes cover a broad range of learning and development
areas anchored on Assessment, Coaching and Training (ACT).
Talent development focuses on enhancing competencies and
These include conceptual and skill-based development programmes,
planning, selecting, and implementing development strategies. As
personal growth development programmes, feedback-based
the landscape is rapidly changing, creating an inclusive and diverse
development interventions, and action-focused development
workforce culture to achieve business success is also essential. A
interventions offered by our world-class technical and leadership
nurturing and empowering work philosophy would improve work
training. We have a range of ACT programmes available across
agility and efficiency. This ensures effective employee development
all organisation levels.
programmes and attracts top-quality industry talent.

With our aspirations to become a specialty chemicals company, Talent Development Programmes
we recognise the vital role talent development plays in delivering • Designed to enhance technical and leadership competency
quality performance and achieving growth. Our aspirations for through skills and behaviours while anchoring on a blended and
talent acquisition requires considerations for a specific workforce, continuous just-in-time development approach that contributes
including a strategy that incorporates trends in human capital to superior performance. ACT approach is based on three key
development, such as generating purposeful work. We continue building blocks leveraged on technologies and an emergent
to enhance our future talent pipeline, which is implemented to ecosystem.
nurture employees’ leadership competencies to fill critical positions
within the company. In securing PCG’s future success, the integrated
development programmes are comprehensive and efficient
succession plans that serve as recruitment efforts for scarce or
niche roles.
T A LE N T D E V EL OP MENT
A ASSESSMENTS C TECHNICAL
AND LEADERSHIP T TRAINING
COACHING
Identification of individual competency Knowledge transfer and experience Opportunities for competency for
gaps and organisation technical/ on-the-job learning closure through focused curriculum
leadership capability levels
Job Competency Profile (JCP)

and PETRONAS’ Competency- Personal Development Training
based Assessment System Plan (PDP) Roadmap
(PECAS)
List of skills and required competency Development plan used to guide and Tailored training plans
levels by discipline and roles track coaching
• Superior Managed Assessment is a • Talents are inculcated with a self- • Skill Group Development programme
process that empowers superiors to accountability culture where they are • NET Upgrading for operators and
manage the talent’s competency responsible for closing competency technicians
development, review, track and analyse gaps as per Fit For Purpose (F4P) • Assessment & Certification Programme
through an ‘Anywhere, Anytime, Any JCP, guided by feedback from e.g. PETRONAS Steam Boiler and
Way’ approach Competency Conversation, Personal Internal Combustion Engine Training
• PECAS for Technical Non-Executives Development Plan (PDP) & coaching and Assessment Scheme (PESITAS),
(NET) Chargeman, Permit To Work Approving
• Technical and Business Professional Authority (PTW AA)
Assessment • Steam Engineer Readiness Online
(SERO) Test programme
• Citizens Analytics Level I & II Learning
Series
• Innovation Engine Masterclass Series
• Enterprise Compliance Learning e.g.
Cybersecurity, Legal modules, HSE
modules
• Work Process, Management System
and Empowerment Learning Series
• Established the Leadership Development in Action (LDA) for

Potential Leaders, a structured programme for potential leaders
to go through a defined period to get involved in cross-functional
business routines. The programme was developed in collaboration
with subject matter experts from manufacturing, commercial
and strategy. Each participant will be assigned a coach to WHAT WERE THE RM6.9 million
maximise their learning experience. ACHIEVEMENTS? invested in
• Develop employees through the Innovation Engine (IE) Masterclass employee training.
programme that aims to build a “Sustainable Culture of Innovation”
by empowering employees with the right tools, capability and
ecosystem to drive innovation forward. The goal is to enable
the organisation to continuously create new opportunities and
revenue streams to generate 30% revenue by 2030 from non-
traditional business and net-zero carbon emissions by 2050. >90% and >80% and Technical Professional (TP) and
Technical Trade Specialist (TTS) positions filled (against 90%
and 85% target).
42 employees attended the Innovation Engine Masterclass.

EMPOWERING PEOPLE
& COMMUNITIES
TALE NT DE V E L OPM E N T
Average training per employee (man-days) 7.9 3.3 3.0
Training investment per employee (RM) 8,481 3,981 1,564
Success rate of Technical Professionals developed (%) 25 51 37
Total investment in employee training and development (RM million) 44.4 17.6* 6.9*
* Due to more online and e-learning training
Target 100 80 80
Capability assessment (%)
Results 95 95 96
Target 15 15 15
TPs developed (number)
Results 26 20 14
Target (CCP)* 2.4:1 2.7:1 2.9:1
Results (CCP)* 2.6:1 2.9:1 3.0:1

Ready talent to critical position (ratio)
Target (BCP)** 3.0:1 2.8:1 3.5:1
Results (BCP)** 3.5:1 3.3:1 3.7:1
* CCP: Corporate Critical Position

** BCP: Business Critical Position
COMMUNITY ENGAGEMENT
WHY IS THIS IMPORTANT? sustainability agenda under the Social Responsibility focus areas.
In our efforts to focus on key signature CSR programmes, we
The beginnings of any community engagement require a lot of
have streamlined our projects to align with PCG’s business strategy.
trust before achieving any growth or change. It is an acknowledgement
of the communities in the areas where we operate and a chance
Our community engagements adopt the three pillars of Yayasan
to contribute to their well-being and empowerment. Additionally,
PETRONAS CSR Framework: Education; Community Well-being &
our contributions reinforce our commitment to social development
Development; and Environment. Collaborations and partnerships
and corporate responsibility. To strengthen our sustainable social
are instrumental in our approach, as this cannot be executed
commitment towards the well-being of these societies, giving
alone. Our strength is in the dedication of our team to create
back to the community also means we can take an active role
sustainable community solutions through ongoing, long-term
in community development, learn to work together and foster a
interventions. PCG’s community work aims to create value for all
sense of unity.
parties involved, including NGOs, collaborators, local government,
and society. With that, employees are encouraged to take the
These Corporate Social Responsibility (CSR) programmes create
initiative to participate in CSR programmes and contribute volunteer
value and sustainable impact, via effective partnerships and
hours.
collaboration. It also provides community’s insight into the efficient
execution of key sustainability projects, such as the New Plastics
In 2019, we set a target to reach 100,000 community members
Economy (NPE).
cumulatively in the areas we operate in by 2024. We have achieved
more than 385,000 community members within the first three
years, exceeding the target. With the recent pandemic, giving back
WHAT IS OUR APPROACH? to the community has become more important. We are fortunate
PCG’s CSR programmes are devised with a lot of thought and to be a part of the community with the ability to make a change
intention, as we carefully make strategic investments when it and collectively lessen the burden together.
comes to community projects. This is designed to support PCG’s
EMPOWERING PEOPLE
& COMMUNITIES
COMMUNITY E N G A G E ME N T
PCG CSR Strategy
FOCUS Community Well-being

Environment Education
AREAS and Development
Better the environment through Better the standards of living for Sharing of knowledge on 3R and
conservation, rehabilitation and communities in our area of plastic education and the
OBJECTIVES preservation of the environment operations through community importance of sustainability in
through education and awareness health and safety improvement. support of the New Plastics
programmes. Economy.
PROGRAMMES NPE Clean Up Programme Safety Programme NPE Education Programme
Safe Handling of Chemicals at

Be Green
School (SHOC4School)
Forest Rehabilitation & Plastic, Sustainability & You

Community
Biodiversity Conservation Education (PSYE)
Relief Programme
Programme
ecoCare PCG COVID-19 Relief

1 Education
• Plastic, Sustainability & You Education (PSYE) Programme: Conducted nine webinar sessions, involving 130,000 teachers,
students, government officers, industry players, the public and internal PETRONAS employees nationwide. The webinars aim to
support NPE and educate the audience on sustainability and responsible plastic management.
2 Community Well-being & Development

• Safety Programme: Delivered safety education via digital posters to secondary schools nationwide encouraging the safe handling
of chemicals at school. It reached 2,400 schools, increasing the capabilities and skills in chemicals handling and first aid skills
via Safe Handling of Chemicals for School Programme (SHOC4School).
• PCG COVID-19 Relief Programme: Executed the COVID-19 Relief Programme, a community relief drive at six PCG operation
areas, focusing on the low-income group. The programme supports and eases the burden of the underprivileged affected by
the Movement Control Order (MCO). The programme:
(i) Benefitted 6,000 families.
(ii) Protected frontliners via the Frontliner Relief Package, which provided face masks, personal protective equipment (PPE), gloves
and others.
(iii) Supported the national vaccination programme by lending logistical assistance to open a vaccination centre via the Pusat
Pemberian Vaksin Relief Package.
3 Environment
• PCG Be Green: Implemented the digital Be Green education programme, and held a recycling competition at home. This initiative
is to encourage community members to practise Reduce, Reuse and Recycle and support PCG’s overall business and NPE.
• ecoCare: Increased the total number of mangrove trees and seedlings planted via the planting and education programme. This
initiative is to preserve the natural environmental landscape and encourage volunteerism for nature.
1,477.5kg total Reached ~295,000 people in 2021, with

recyclable waste 1,200 mangrove trees and 1,445
18,000 people through the COVID-19
collected. seedlings planted.
Relief Programme.
C O M M U N I TY E NGAGEMENT
CSR Spending – Community Investment (%) 15 30 39
CSR Spending – Commercial Initiatives (%) 20 15 6
CSR Spending – Charitable Donations (%) 65 55 55
Volunteer hours by employee 3,400 834.5* 732
Number of people reached** 20,000 ~70,000 ~295,000
* Revised due to adjusted hours from COVID-19 Relief Programme and Safety Programme
** Target cumulative number of people to be reached by 2024 is 1,000,000
ENHANCING SOCIAL WELL-BEING

The following table summarises our various community development projects:
Focus Areas Activity Timeline Areas
Education PSYE Karnival Sains Sabah 2021 Sabah

PSYE Comms Academy 2021 Kuala Lumpur
PSYE Teachers Since 2019 Nationwide
PSYE Secondary Students Since 2019 Nationwide
PSYE Primary Students Since 2019 Nationwide
PCG PSYE 2021 • Kuala Lumpur
• Kertih
• Kuantan
• Gurun
• Bintulu
• Labuan
• Sipitang
• Pengerang
PSYE Prime Minister’s Office 2021 Putrajaya
(PMO)
PSYE PETRONAS Upstream 2021 Kuala Lumpur
PSYE brief AFPI APF Regional 2021 • Bangladesh
Meeting • China
• India
• Indonesia
• Japan
• Malaysia
• Myanmar
• Philippines
• Singapore
• Sri Lanka
• Thailand
• Vietnam
Community PCG COVID-19 Relief Programme 2020 – ongoing • Kuantan
Well-being and • Kertih
Development • Gurun
• Bintulu
• Labuan
• Sipitang
Safe Handling of Chemicals for 2015 – ongoing Nationwide
School (SHOC4School)
Environment ecoCare Programme 2005 – ongoing Kertih
PCG Be Green 2013 – ongoing Nationwide
STRENGTHENING
ETHICS & INTEGRITY
STRENGTHENING
ETHICS & INTEGRITY
Upholding the values of ethics and integrity comes with
our commitment to our stakeholders. In a climate of
increased regulations and public awareness, it is vital to
have a clearly defined system of ethics and integrity to
guide the way. The foundation of ethical behaviour helps
create long-lasting positive effects for the business,
fostering strong business relations and empowering
employee productivity. This would then extend to
attracting and retaining talented individuals to build and
maintain a positive reputation among stakeholders. These
standards are governed from the top-down. As the
business is run ethically, creating stronger bonds between
stakeholders and instilling stability within the company
would invariably follow.
Corporate
Governance
100% Compliance to
operating laws and
regulations
CORPORATE GOVERNANCE
WHY IS THIS IMPORTANT? WHAT IS OUR APPROACH?

A strong governance system protects the interests of both the PCG adheres to the Malaysian Code of Corporate Governance
business and stakeholders. In PCG’s commitment to a well-defined (MCCG), and subsequently to the relevant guidelines in other
and effective system of governance, we maintain the highest level jurisdictions where we operate. Ensuring consistent compliance
of business ethics and compliance. We need to build trust and via the PETRONAS Integrity Compliance Framework, we conduct
communicate transparently with stakeholders, as integrity and trust our business according to the PETRONAS Code of Conduct and
in our company are critical to our business success. This enhances Business Ethics (CoBE). Good governance from the Board is more
our credibility and company reputation, reinforces the confidence than just strong leadership and guidance; it also ensures an ethical
of our stakeholders in us, and ultimately allows us to effectively and transparent corporate culture across the business. Clear-eyed
assess, adapt to and manage risks. direction from the Board sets the right priorities, places the
appropriate management team members in place, self-reflects on
In ensuring we align with the best practices, we continue to our progress, and regularly communicates with all our stakeholders.
strengthen our governance processes so that our approach to This has been particularly important in navigating the past two
disclosure remains timely and transparent. A culture of transparency volatile years. Given that focus, the management team executes
and responsible governance is central to sustainable growth. This the strategy while managing risks. With that, we endeavour to
encourages a high-performance work environment, resulting in increase the representation of Independent Directors of the Board
efficient business plans and strategy execution. On the flip side, to align with Practice 5.2 of MCCG.
a breach in corporate governance, such as corruption and
misconduct, would result in reputational damages, regulatory
penalties or, at its worst, complete business closure.
STRENGTHENING
ETHICS & INTEGRITY
CORPO RATE GOV E R N A N C E
BOARD OF DIRECTORS
Non-Independent Independent
Senior Independent
Chairman Non-Executive Non-Executive
Director (SID)
Directors (NINEDs) Directors (INEDs)
Responsible for the Provide in-depth Provide independent Acts as the point of
orderly conduct and knowledge and insight judgement and views contact between
function of the Board from PETRONAS’ Non-Executive Directors
perspective (NEDs) and Chairman as
well as shareholders
• Financial Reporting • B
oard Performance, Succession
• Risk Management
• Internal Reporting Plan and Remuneration
Board Audit Nomination and Board Risk

Committee (BAC) Remuneration Committee Committee (BRC)
(NRC)
3 INEDs 3 INEDs
3 INEDs
1 NINED 1 NINED
Internal Audit Department
Senior Management’s Performance & Remuneration
Quarterly Financial Reporting
MD/CEO
Responsible for the overall operations of the business, organisational effectiveness and
implementation of the Group’s strategies and policies
Monthly/Bi-monthly reporting performance & strategic KPIs
Management Committee Risk Management Committee People Development Committee Project Steering Committee
Regular reporting/progress updates
Working Group
Business Leadership Team, Manufacturing Leadership Team, Sustainable Development Working Committee
Decision-making process
C O R P O R AT E GOVER NANC E

1 Corporate Governance Framework – Anti-Bribery and Corruption Policy
• Enhanced our governance framework to support long-term • Deals with improper solicitation, bribery and other
value creation, which includes strategies on economic, corrupt activities that may arise in business.
environmental, social (EES) and governance considerations – PETRONAS Whistleblowing Policy
to strengthen the integration of sustainability in PCG’s
• Offers an avenue for employees and other stakeholders
operations.
to safely report misconduct within the Group.
• Identified sustainable practices for PCG to become more – Insider Trading
resilient and create durable and sustainable value while
• Prohibits the Board and Principal Officers from trading
maintaining the confidence of its stakeholders simultaneously.
securities based on knowledge acquired under their
positions. Directors and Principal Officers are also
2 Board Diversity & Competency reminded not to deal in the company’s shares when
• Ensured an appropriate mix of diversity, skills and experience possessing price-sensitive information relating to the
for the Board to discharge its responsibilities effectively. Group.
The Board comprises nine highly dedicated individuals from – PETRONAS Tenders & Contracts Administrative Manual
various nationalities, with various backgrounds and expertise • Conducts an independent review on evaluating bidders’
with notable careers in their respective fields. proposals to ensure tendering activities are carried out
• Supported the country’s aspirations of 30% female based on technically acceptable and commercially
representation at the Director level, and remained committed attractive bids.
to sourcing the right mix of talent, expertise and knowledge – Corporate Disclosure Guide
to strengthen the current membership.
• Describes the disclosures and conduct on the
dissemination of information. The guidelines are based
3 Policies & Guidelines on the Bursa Malaysia’s Main Market Listing Requirements
• Continued to implement the following stringent policies (MMLR), promoting transparency and accountability in
and guidelines to uphold integrity and ethical practices: communicating and disseminating material information
– PETRONAS Code of Conduct and Business Ethics (CoBE) to the public.
• Provides policy statements on the standards of behaviour

and ethical conduct expected of employees of the
Group and others performing work or services for or
on behalf of the Group.
22% of Board
WHAT WERE THE members
ACHIEVEMENTS? comprising
women.
Mid-Term
2021 2021 Target
Number of internal audits conducted 14 14 16 (for 2022)
Compliance to operating laws and regulations (%) 100 100 100
Closure of audit issues as planned (%) 100 100 100

ADDITIONAL
INFORMATION
INDEPENDENT LIMITED
ASSURANCE REPORT
TO THE MEMBERS OF PETRONAS CHEMICALS GROUP BERHAD
REGISTRATION NO: 199801003704 (459830-K)
(INCORPORATED IN MALAYSIA)
Independent Limited Assurance Report to PETRONAS Chemicals The Board of Directors and Management of the Group are
Group Berhad and its subsidiaries (“the Group”) on the Selected responsible for the prevention and detection of fraud and error
Non-Financial Material Matters for the year ended 31 December mainly through the implementation and continued operation of
2021 as published in the Integrated Annual Report 2021 an adequate system of internal control.
We, KPMG PLT (“KPMG”), were engaged by the Board of Directors
of the Group to provide limited assurance on the Selected Non- The Board of Directors and Management of the Group are also
Financial Material Matters, the (“Subject Matter”), listed below, for responsible for ensuring that staff involved with the preparation
the year ended 31 December 2021 as published in the Integrated and presentation of the description of the Subject Matter and the
Annual Report 2021 (“the Report”), in the form of an independent Report are properly trained, information systems are properly
limited assurance conclusion as to whether the Subject Matter is updated and that any changes in reporting encompass all significant
in all material respects in accordance with International <IR> business units.
Framework by the International Integrated Reporting Council (“IIRC”)
(hereafter known as the International <IR> Framework), as well as The Board of Directors and Management of the Group are
the Group’s definition and calculation methodologies which are responsible for disclosing to us their knowledge of: (i) known,
disclosed in the Report including any significant inherent limitations, actual or possible non-compliance with laws or regulations that
the (“Applicable Criteria”). have or may have a material effect on the Subject Matter and the
Report; and (ii) allegations of or suspected fraud or dishonesty
Subject Matter committed against the Group.
The Selected Non-Financial Material Matters covered by our limited The Board of Directors and Management of the Group are
assurance engagement are: responsible to make available to us draft the Subject Matter and
(i) Effluent Pollution Loading – Chemical Oxygen Demand the Report and any other information timely to facilitate the
(“COD”); completion of the engagement within the required time frame.
(ii) Greenhouse Gas Emissions Scope 1 & Scope 2;
The Board of Directors and Management of the Group are
(iii) Lost Time Injury Frequency (“LTIF”);
responsible for disclosing to us facts that may affect the Subject
(iv) Total Recordable Occupational Illness Frequency (“TROIF”); Matter and the Report, of which they may become aware during
(v) Total non-renewable energy consumption; the period from the date of the assurance report to the date the
(vi) Total weight of NOx and SOx emissions from the selected Subject Matter and the Report are issued.
operating sites;
Our Responsibilities
(vii) Total municipal water supplies (or from other water utilities);
and Our responsibility is to carry out a limited assurance engagement
and to express a limited assurance opinion based on the work
(viii) Tier 1 Process Safety Event (“T-1 PSE”).
performed and evidence obtained.
The boundary of the limited assurance engagement by KPMG
We conducted our engagement in accordance with International
represents the Group’s operations at the Group level (located at to
Standard on Assurance Engagements (“ISAE”) 3000 (Revised),
PETRONAS Chemicals Group Berhad headquarters at PETRONAS
Assurance Engagements other than Audits or Reviews of Historical
Twin Tower 1, Kuala Lumpur City Centre) and two (2) of its wholly-
Financial Information and ISAE 3410, Assurance Engagement on
owned subsidiaries being PETRONAS Chemicals Ammonia Sdn Bhd
Greenhouse Gas Statements, as adopted by the Malaysian Institute
(“PC Ammonia”) and PETRONAS Chemicals LDPE Sdn Bhd (“PC LDPE”)
of Accountants (“MIA”). ISAE 3000 (Revised) requires that we comply
located in Kertih, Terengganu (collectively known as the operating
with the requirements of the By-Laws (On Professional Ethics,
units or OPUs) for the site level data testing, and the remaining to
Conduct and Practice) of the MIA including independence, and
PETRONAS Chemicals Group Berhad’s wholly-owned subsidiaries or
implement quality control procedures that are applicable to the
OPUs for the group level consolidated data testing.
individual engagement in accordance with the requirements of
International Standard on Quality Control (“ISQC”) 1, Quality Control
Board of Directors and Management’s Responsibilities
for Firms that Perform Audits and Reviews of Financial Statements,
The Board of Directors and Management of the Group are and Other Assurance and Related Services Engagements as adopted
responsible for the preparation and presentation of the Subject by the MIA and plan and perform our engagement to obtain limited
Matter in accordance with the Applicable Criteria, and the information assurance that nothing has come to our attention that causes us
and assertions contained within it; for determining the objectives to believe that the Subject Matter, in all material respects, is not
in respect of sustainable development performance and reporting, prepared in accordance with the Applicable Criteria.
including the identification of stakeholders and material issues;
and for establishing and maintaining appropriate performance
management and internal control systems from which the reported
performance information is derived.
I NDE P E ND E NT L IMIT ED AS S U R ANCE RE PORT
We have complied with the independence and other relevant The procedures performed in a limited assurance engagement
ethical requirements of the International Ethics Standards Board vary in nature and timing from, and are less in extent than for, a
for Accountants’ International Code of Ethics for Professional reasonable assurance engagement and consequently the level of
Accountants (including International Independence Standards) assurance obtained in a limited assurance engagement is substantially
(“IESBA Code”), which is founded on fundamental principles of lower than the assurance that would have been obtained had a
integrity, objectivity, professional competence and due care, reasonable assurance engagement been performed.
confidentiality and professional behaviour. Those standards require
that we comply with ethical requirements. We exercise professional Inherent Limitations
judgement and maintain professional scepticism throughout the
audit. Due to the inherent limitations of any internal control structure it
is possible that errors or irregularities in the information presented
Procedures Performed in the Report may occur and not be detected. Our engagement
is not designed to detect all weaknesses in the internal controls
Our limited assurance engagement on the Subject Matter consists over the preparation and presentation of the Report, as the
of making enquiries, primarily of persons responsible for the engagement has not been performed continuously throughout
preparation of the Subject Matter presented in the Report, and the period and the procedures performed were undertaken on a
applying analytical and other evidence gathering procedures, as test basis.
appropriate. These procedures included:
• Enquiries of management to gain an understanding of the Conclusion
processes for determining material issues for key stakeholder Our conclusion has been formed on the basis of, and is subject
groups; to, the matters outlined in this report.
• Interviews with senior management and relevant staff at group
level and selected business unit level concerning sustainability We believe that the evidence we have obtained is sufficient and
strategy and policies for material issues, and the implementation appropriate to provide a basis for our conclusion.
of these across the business;
• Interviews with relevant staff at the corporate and business unit Based on the limited assurance procedures performed and evidence
level responsible for providing the Subject Matter in the Report; obtained, as described above, nothing has come to our attention
that would lead us to believe that the Subject Matter included in
• Interviews with sites, selected on the basis of a risk analysis
the Report of the Group for the year ended 31 December 2021,
including the consideration of both quantitative and qualitative
in all material respects, is not prepared in accordance with the
criteria;
Applicable Criteria.
• Identify the risks of material misstatement of the Subject Matter
and the Report, whether due to fraud or error, design and Purpose of our report
perform limited assurance procedures to address those risks,
In accordance with the terms of our engagement, this report on
and obtain limited assurance evidence that is sufficient and
the Subject Matter has been prepared for the Group and for no
appropriate to provide a basis for our opinion. The risk of not
other purpose or in any other context.
detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion,
Restriction of use of our report
forgery, intentional omissions, misrepresentations, or the override
of internal control; Our report should also not be regarded as suitable to be used or
relied on by any party wishing to acquire rights against us other
• Obtain an understanding of internal control relevant to the
than PETRONAS Chemicals Group Berhad, for any purpose or in
engagement in order to design procedures that are appropriate
any other context. Any party other than PETRONAS Chemicals
in the circumstances, but not for the purpose of expressing an
Group Berhad who obtains access to our report or a copy thereof
opinion on the effectiveness of the Group’s internal control;
and chooses to rely on our report (or any part thereof) will do
• Compare the Subject Matter presented in the Report to so at its own risk. To the fullest extent permitted by law, we do
corresponding information in the relevant underlying sources not accept nor assume responsibility and deny any liability to any
on a sample basis to determine whether all the relevant party other than PETRONAS Chemicals Group Berhad for our work,
information has been appropriately included in the Report; for this report, or for the conclusion we have reached.
• Evaluate the Subject Matter presented in the Report to determine
whether they are in line with our overall knowledge of, and Our report is released to PETRONAS Chemicals Group Berhad on
experience with, the sustainability performance of the Group; the basis that it shall not be copied, referred to or disclosed, in
• Evaluate the remainder of the Report to determine whether whole (save for PETRONAS Chemicals Group Berhad’s own internal
there are any material misstatements of fact or material purposes) or in part, without our prior written consent.
inconsistencies based on our understanding obtained as part of
our assurance engagement.
KPMG PLT (LLP0010081-LCA & AF 0758)

Chartered Accountants
Petaling Jaya,
4 March 2022
ADDITIONAL
INFORMATION
APPENDIX
EMPLOYEE DATA
Number of Employees
Indicator 2019 2020 2021
Total number of employees 4,424 4,714 4,585
Employees by Age Group
Indicator 2019 2020 2021
29 and below 490 798 439
30 – 39 2,142 2,180 2,276
40 – 49 1,286 1,253 1,386
50 – 59 491 452 434
60 and above 15 31 50
Employees Attrition and Turnover
Indicator 2019 2020 2021
Employee attrition rate (%) 3.3 3.0 5.9
Employee turnover rate (%) 0.7 0.8 1.9
Employee New Hire Rates by Gender
Indicator 2019 2020 2021
Female (%) 15.0 25.0 20.0
Male (%) 85.0 75.0 80.0

GLOSSARY OF TERMS,
ABBREVIATIONS AND ACRONYMS
Abbreviation Full Terms/Definations Abbreviation Full Terms/Definations
3R Reduce, Reuse, Recycle GRI Global Reporting Initiative

AA Advanced Analytic HSE Health, Safety and Environment
ABC Anti-Bribery and Corruption ICP Internal Compliance Program
ACT Assessment, Coaching and Training IFA International Fertilizer Association
AFPI ASEAN Federation of Plastic Industries INED Independent Non-Executive Directors
APF Asia Plastics Forum IPCC Intergovernmental Panel on Climate Change
APM Asset Performance Management IPIECA International Petroleum Industry Environmental
BAC Board Audit Committee Conservation Associations
BCP Business Critical Position IR Industrial Relations
Bio-MEG Bio-Monoethylene Glycols JCP Job Competency Profile
BRC Board Risk Committee JVs Joint ventures
BoC Balance of Consequences KASA Ministry of Environment and Water
CBAM Carbon Border Adjustment Management KDPNHEP Ministry of Domestic Trade and Consumer Affairs
CBS Competency Bench Strength KIPC Kertih Integrated Petrochemical Complex
CCUS Carbon Capture, Utilisation and Storage KPIs Key Performance Indicators
CE Commercial Excellence LCA Life Cycle Analysis
CIF Cost, Insurance, Freight LDA Leadership Development in Action
CRP Corporate Risk Profile LDAR Leak Detection and Repair
CSS Customer Satisfaction Survey LTI Lost Time Injury
CCP Corporate Critical Position LTIF Lost Time Injury Frequency
CG Corporate Governance LRA Legal & Regulatory Assessment
CO2 Carbon Dioxide LWP Leave Without Pay
CO2e Carbon Dioxide equivalent MaSPA Malaysia Sustainable Plastic Alliance
CoBE PETRONAS’ Code of Conduct and Business Ethics MC Management Committee
COD Chemical Oxygen Demand MCCG Malaysian Code on Corporate Governance
CoCHR Contractors Code of Conduct on Human Rights MCF Mandatory Control Framework
CIM Chartered Institute of Marketing MCO Movement Control Order
CRM Customer Relationship Management MI Methanol Institute
CSBIA Cybersecurity Business Impact Assessment MITI Ministry of International Trade and Industry
CSR Corporate Social Responsibility MMLR Main Market Listing Requirements
CWC Chemical Weapons Convention MoC Management of Change
DJSI Dow Jones Sustainability Indices MOE Ministry of Education
ECSGF Enterprise Cyber Security Governance Framework MPA Malaysian Petrochemicals Association
EES Economic, Environmental and Social MPC Malaysian Productivity Centre
EMS Environmental Management System MPMA Malaysian Plastics Manufacturers Association
F4P Fit for Purpose MSOSH Malaysian Society for Occupational Safety &
Health
FMM Federation of Malaysian Manufacturers
MTBE Methyl Tertiary Butyl Ether
FIAM Fertilizer Industry Association of Malaysia
NADMA National Disaster Management Agency
FRP Frontliner Relief Package
NGO Non-Governmental Organisation
FAQ Frequently Asked Questions
FTSE4Good Index Series designed to emasure the performance NINED Non-Independent Non-Executive Director
of companies demonstrating strong ESG practices NOx Nitrogen Oxide
GHG Greenhouse Gas NPE New Plastics Economy
GJ Gigajoule NRC Nomination and Remuneration Committee
ADDITIONAL
INFORMATION
GLO SSARY OF T E R MS,

ABBRE VIATIO NS AND A C R ON Y M S
Abbreviation Full Terms/Definations Abbreviation Full Terms/Definations
NZCE Net Zero Carbon Emissions PIVOT PETRONAS Integrated Vision for Operational
OE Operational Excellence Excellence Transformation
OE R2 Operational Excellence Result 2 PL Potential Leaders
OFR Order Fulfilment Reliability PLWN PETRONAS Leading Women Network

OHSMS Occupational Health and Safety Management POINT Plant Operations Integrated Tools
Systems PPRT Pandemic Preparedness Response Team
OP Operating Procedure PPVRP Pusat Pemberian Vaksin Relief Package
OPU Operating Plant Unit PSYE ‘Plastic, Sustainability & You’ Education
OSH Occupational Safety & Health
PTW AA Permit To Work Approving Authority
PC ASB/ PETRONAS Chemicals Ammonia Sdn Bhd
PTCAM PETRONAS Tender and Contracts Administrative
PC Ammonia
Manual
PC PETRONAS Chemicals Aromatics Sdn Bhd
PU Plant Utilisation
Aromatics
QMS Quality Management System
PC DSB/ PETRONAS Chemicals Derivatives Sdn Bhd
PC R&D Research & Development
Derivatives R&T Research & Technology
PC ESB/ PETRONAS Chemicals Ethylene Sdn Bhd RM Ringgit Malaysia
PC Ethylene
RoSPA Royal Society for the Prevention of Accidents
PC FKSB/ PETRONAS Chemicals Fertiliser Kedah Sdn Bhd
PC Fertiliser RTOG Road Transport Operational Guidelines
Kedah SDGs Sustainable Development Goals
PC FSSB/ PETRONAS Chemicals Fertiliser Sabah Sdn Bhd SDS (1) Safety Data Sheets
PC Fertiliser
SDS (2) Sustainable Development Scenario
Sabah
PC GSB/ PETRONAS Chemicals Glycols Sdn Bhd STEPS Stated Policies Scenario
PC Glycols SDWC Sustainable Development Working Committee
PC LDPESB/ PETRONAS Chemicals LDPE Sdn Bhd SID Senior Independent Director
PC LDPE
SERO Steam Engineer Readiness Online
PC MSB/ PETRONAS Chemicals Methanol Sdn Bhd
SMEs Small and Medium-sized Enterprises
PC
Methanol SOPs Standard Operating Procedures
PC MTBESB PETRONAS Chemicals MTBE Sdn Bhd SOx Sulphur Oxide
PC OSB/ PETRONAS Chemicals Olefins Sdn Bhd SRA Social Risk Assessment
PC Olefins SWCorp Solid Waste Management and Public Cleansing
PC PSB/ PETRONAS Chemicals Polyethylene Sdn Bhd Corporation
PC
tCO2e Tonnes of CO2 equivalent
Polyethylene
TP Technical Professionals
PCG or the PETRONAS Chemicals Group Berhad
Group TCFD Task Force on Climate-related Financial Disclosures
PEMSB Polyethylene Malaysia Sdn Bhd TROIF Total Recordable Occupational Illness Frequency
PCC PETRONAS Carbon Commitments TTS Technical Trade Specialist
PCG or the PETRONAS Chemicals Group Berhad tpa Tonnes per annum
Group TRCF Total Recordable Case Frequencies
PDP Personal Development Plan
TVAR Total Vehicle Accident Rate
PECAS PETRONAS’ Competency-based Assessment
UN United Nations
System
UHPM Ultra-High Purity Methanol
PESITAS PETRONAS Steam Boiler and Internal Combustion
Engine Training and Assessment Scheme VDP Vendor Development Programme
PET Polyethylene Terephthalate WAPS Guidelines on Water Practices
GLOBAL REPORTING INITIATIVE (GRI)

CONTENT INDEX
The PCG’s 2021 Sustainability Report has been prepared in accordance to the GRI Sustainability Reporting Guidelines: Core Option.
The following table presents the GRI Content Index for the period of 1 January 2021 to 31 December 2021.
Page
GRI Standards Brief Description of the Disclosures Brief Information on Key Disclosures, Reference Numbers
ORGANISATIONAL PROFILE
2-1 Organisational details PETRONAS Chemicals Group Berhad (PCG) 9
2-2 Entities included in the organisation's All entities are covered by the report in our GFR refer to
sustainability reporting Financial Statements GFR
2-3 Reporting period, frequency and 1 January 2021 to 31 December 2021, unless stated
6
contact point otherwise
2-4 Restatements of information PCG conducted a materiality assessment during the

reporting year, resulting in a change in material 20-21
matters
Independent Assurance
2-5 External assurance The authenticity of this report was verified by an 6 & 77-78
external auditor, KPMG
2-6 Activities, value chain and other

Overview of PCG – What We Do 10-15
business relationships
GRI 2: General 2-7 Employees Appendix: Employee Data – Number of Employees 79

Disclosures 2021
2-8 Workers who are not employees PCG has a strong network of suppliers (1,607 total) 45
2-9 Governance structure and

Governance Structure 28-29
composition
2-13 Delegation of responsibility for

Governance Structure 29
managing impacts
STRATEGY
2-14 Role of the highest governance body

Governance Structure 28-29
in sustainability reporting
STAKEHOLDER ENGAGEMENT
2-29 Approach to stakeholder

Sustainability @ PCG – Stakeholder Engagement 16-19
engagement
2-30 Collective bargaining agreement Human Rights

63
75.0% of union members out of total support staff
ADDITIONAL
INFORMATION
GL OBAL RE PORTING INITIATIVE (GRI) CO NTE N T I N DE X
TOPIC-SPECIFIC DISCLOSURES
Brief Description of the Page

GRI Standards Disclosures Brief Information on Key Disclosures, Reference Number
Material Matters – Innovation & Product Stewardship
3-1 Process to determine material Material Matters –

20-21
topics Materiality Methodology & Materiality Matrix
GRI 3: Material
3-2 List of material topics Material Matters 22-23
Topics 2021
3-3 Evaluation of the Management Catalysing Economic Performance –
39-41
of material topics Innovation & Product Stewardship
GRI 417: Marketing 417-1 Requirements for product We deliver innovative product solutions that meet the
and Labelling 2016 and service information and regulatory requirements and international safety/quality 39-41
labelling standards.
Material Matters – Customer Relationship Management

20-21
GRI 3: Material
Topics 2021
42-43
of material topics Customer Relationship Management
Material Matters – Supply Chain Management

20-21
GRI 3: Material
Topics 2021
44-45
of material topics Supply Chain Management
GRI 204:
204-1 Proportion of spending on 63% of total procurement spending is distributed to local
Procurement 45
local suppliers suppliers.
Practices 2016
GRI 308: Supplier 308-1 New suppliers that were

All contractors must meet our robust safety, technical
Environmental screened using environmental 45
environmental and CoBE requirements.
Assessment 2016 criteria
GRI 409: Forced 409-1 Operations and suppliers at We conduct human rights assessments for our suppliers
or Compulsory significant risks for incidents of based on PETRONAS Contractors Code of Conduct on 44-45
Labor 2016 forced or compulsory labour Human Rights.
Material Matters – Cybersecurity & Digitalisation
3-1 Process to determine Material Matters –

20-21
material topics Materiality Methodology & Materiality Matrix
GRI 3: Material
Topics 2021
3-3 Evaluation of the Catalysing Economic Performance –
46-47
Management of material topics Cybersecurity & Digitalisation
Material Matters – Strategy Purpose & Financial Resilience

20-21
GRI 3: Material
Topics 2021
3-3 Evaluation of the Catalysing Economic Performance –
48
Management of material topics Strategy Purpose & Financial Resilience
GRI 201: Economic 201-1 Direct economic value Catalysing Economic Performance –
48
Performance 2016 generated and distributed Strategy Purpose & Financial Resilience
GL O B AL R EP OR T ING INIT IAT IVE (GRI) CO NTE NT INDE X

Material Matters – Climate Change

20-21
GRI 3: Material
Topics 2021
3-3 Evaluation of the Contributing to the Green Agenda –
50-54
Management of material topics Climate Change
Contributing to the Green Agenda –

GRI 302: Energy 302-1 Energy consumption
Climate Change 37
2016 within the organisation
102.27 million GJ energy consumed
Contributing to the Green Agenda –

305-1 Direct (Scope 1) GHG
Climate Change 54
emissions
5.67 million tonne CO2e
GRI 305: Emissions Contributing to the Green Agenda –

305-2 Energy indirect (Scope 2)
2016 Climate Change 54
GHG emissions
1.33 million tonne CO2e
305-5 Reduction of GHG

1.4% reduction in total GHG emissions from 2020 54
emissions
Material Matters – New Plastics Economy

20-21
GRI 3: Material
Topics 2021
55-56
Management of material topics New Plastics Economy
Material Matters – Environmental Stewardship
GRI 3: Material 3-1 Process to determine Material Matters –

20-21
Topics 2021 material topics Materiality Methodology & Materiality Matrix

57-59
Management of material topics Environmental Stewardship
ADDITIONAL
INFORMATION
GL OBAL RE PORTING INITIATIVE (GRI) CO NTE N T I N DE X

Material Matters – Human Rights

20-21
GRI 3: Material
Topics 2021
3-3 Evaluation of the Empowering People & Communities –
61-63
Management of material topics Human Rights
401-1 New employee hires and 1.9% employee turnover rates, with 20% of new hires being
79
employee turnover women
401-2 Benefits provided to Empowering People & Communities –

full-time employees that are not Human Rights
62
GRI 401: provided to temporary or
Employment 2016 part-time employees
Empowering People & Communities –

Human Rights
401-3 Parental leave 62-63
66 female and 375 male employees took parental leave
with 100% return of work rates after parental leave

GRI 405: Diversity
405-1 Diversity of governance Human Rights
and Equal 63
bodies and employees 22.2% of our Board members and 18.2% of senior
Opportunity 2016
management roles are women
Material Matters – Workplace and Occupational Safety & Health (OSH)

20-21
GRI 3: Material
Topics 2021
64-66
Management of material topics Workplace and Occupational Safety & Health (OSH)
403-1 Occupational health and Empowering People & Communities –

64-65
safety management system Workplace and Occupational Safety & Health (OSH)
GRI 403: We prioritise the health and safety of our staff, contractors
403-8 Workers covered by an
Occupational and customers, in the conduct of our business, with the
occupational health and safety 64-65
Health and Safety stringent Health, Safety and Environment (HSE) framework
management system
2018 in place
During the year, zero fatality cases were recorded with two
403-9 Work-related injuries 66
(2) LTI cases
GL O B AL R EP OR T ING INIT IAT IVE (GRI) CO NTE NT INDE X

Material Matters – Talent Development

20-21
GRI 3: Material
Topics 2021
67-69
Management of material topics Talent Development
404-1 Average hours of training Average hours of training per employee, 3.0 training days
69
per year per employee per employee times 8 hours=24 training hours
404-2 Programmes for upgrading PCG has a range of Talent Development Programmes
GRI 404: Training
employee skills and transition designed to upskill and develop its employees 67-68
and Education
assistance programmes
2016
404-3 Percentage of employees As of 31 December 2021, 96% of PCG employees received
receiving regular performance their capability assessments, against an 80% target 69
and career development reviews
Material Matters – Community Engagement

20-21
GRI 3: Material
Topics 2021
70-72
Management of material topics Community Engagement

GRI 203: Indirect
203-2 Significant indirect Community Engagement
Economic Impacts 71-72
economic impacts Over 295,000 community members reached through our
2016
CSR programmes in 2021
413-1 Operations with local

Under Yayasan PETRONAS CSR Strategic Framework, we
GRI 413: Local community engagement, impact
engaged with local communities through numerous 70-72
Communities 2016 assessments, and development
programmes held in 2021
programmes
Material Matters – Corporate Governance

20-21
GRI 3: Material
Topics 2021
3-3 Evaluation of the Strengthening Ethics & Integrity –
74-76
Management of material topics Corporate Governance
GRI 205: Our Code of Conduct and Business Ethics (CoBE) and
205-1 Operations assessed for
Anti-corruption Anti-Bribery and Corruption Policy provide guidance 74-76
risks related to corruption
2016 concerning bribery and corruption
PCG’s Sustainability Report 2021 has been produced in line with our
theme: Sustainability at the Core. Every decision made during publication
had to consider its environmental impact. From the materials used and
acquired to the design conception and production; everything is intentional.
OPTIMAL PRODUCTION PRINTED SUSTAINABLY CONCISE LANGUAGE

• Ensuring the production and Produced the full report with Encapsulating concepts in a
printing of all reports follow the carbon neutral press machines and concise yet articulate manner,
FSC certified chain of custody. eco-friendly materials certified with focusing on the presentation
Optimised the use of ink, with one an ISO 14001 environmental of the content beyond just
primary colour for each book. management system in line with words.
• Combined the Governance section minimising environmental impact.
into the IR to reduce the usage
of 4c print for the Financial Report.
• Printed on FSC® certified Xtella
Brilliant White 256 gsm paper for
the cover, while inside pages are
printed on FSC® certified Xtella
Brilliant White 128 gsm paper.
• Used soy-based ink for a more
sustainable approach.
MINIMALIST PRESENTATION
Exhibiting the entirety of the report
in a straightforward and structured
package, with unfussy design
elements.
SIMPLICITY IN DESIGN
Replacing full-scale photographic
images with other graphic
representations such as graphs,
charts and diagrams.

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02

MESSAGE FROM LEADERSHIP

06 ABOUT THIS REPORT

CATALYSING ECONOMIC PERFORMANCE

CONTRIBUTING TO THE GREEN AGENDA

EMPOWERING PEOPLE & COMMUNITIES

STRENGTHENING ETHICS & INTEGRITY

Futher details of PETRONAS Chemicals Group

DATUK IR. (DR.) ABDUL

Futher details of PETRONAS Chemicals Group

Sustainability is essential to remaining

IR. MOHD YUSRI MOHAMED YUSOF

CATALYSING ECONOMIC DEVELOPMENT PROTECTING THE ENVIRONMENT

HELPING PEOPLE THRIVE

ABOUT THIS REPORT

Supply Chain Management

Sustainable Corporate Governance

Cybersecurity & Digitalisation

LOYALTY INTEGRITY PROFESSIONALISM COHESIVENESS

Our Operational Excellence and Commercial Excellence has propelled us to become

As we realise our vision of becoming 'The Preferred Chemical Company Providing

DOW JONES SUSTAINABILITY

Products from joint ventures

Personal Care Electrical and Electronics Textile

Automotive Oil and Gas Construction

Pharmaceutical Agriculture Packaging

Aromatics Oleﬁns, Glycols and

We market and sell integrated chemical solutions, including

Sales Office SOUTH 12

Countries of Sales Distribution

1 BRAZIL 7 MALAYSIA 13 THAILAND

2 CANADA 8 NETHERLANDS 14 TURKEY

3 CHINA 9 POLAND 15 UAE

4 GERMANY 10 PHILIPPINES 16 USA

5 INDIA 11 SINGAPORE 17 VIETNAM

6 INDONESIA 12 SOUTH AFRICA

VIETNAM INDONESIA 9.9%

NEW ZEALAND 2.1%

SOUTH KOREA 1.5%

* Others include but is not limited to Austria,

OUR VALUE CHAIN

MARKETING AND SALES

AM Alternate Month BM Bi-Monthly

Strong relationship of mutual benefit

• Regular meetings M RESPONSE

• Strategic dialogue AR • Closely monitor and build upon

WHY WE ENGAGE SHAREHOLDERS &

• Investors’ and Analysts’ Briefings Q AR RESPONSE

• Regular reporting to relevant agencies M

• Regular meetings and briefings with agencies/regulators  M • Establish transparent communication

• Corporate Social Responsibility (CSR) programmes Q RESPONSE

• Virtual interviews with PCG Management Q RESPONSE

The materiality process comprises four key steps:

STEP 1. STEP 2. STEP 3. STEP 4.

• Strategy Purpose & Financial Resilience

Climate Change Innovation & Product Stewardship

Workplace and Occupational Safety & Health (OSH)

PCG Perspective (Points of Differentiation) HIGH

• Regular meetings M RESPONSE

• Strategic dialogue AR • Closely monitor and build upon

• Investors’ and Analysts’ Briefings Q AR RESPONSE

• Regular reporting to relevant agencies M

• Regular meetings and briefings with agencies/regulators M • Establish transparent communication

• Corporate Social Responsibility (CSR) programmes Q RESPONSE

• Virtual interviews with PCG Management Q RESPONSE

Workplace and Occupational Safety & Health (OSH)

For more details, please refer to pages 90 to 98 of the Integrated Report.

full names of the operating units, please