Petrol d d : Ljubljana publishes the Petrol Group Sustainability Report 2022

In August 2023, Petrol d.d., Ljubljana was one of the first Slovenian public listed companies to have obtained the ESG rating from S&P Global Ratings, and now the company has also published the Petrol Group Sustainability Report 2022. This is the Petrol Group's first sustainability report which includes all elements of the European Sustainability Reporting Standards (ESRS) and, as such, it marks an important step in Petrol's commitment to the environmental, social and governance accountability.

The Petrol Group Sustainability Report 2022 is prepared in accordance with the Global Reporting Initiative (GRI) standards and the ESG aspects such as defined in the draft European Sustainability Reporting Standards (ESRS). It also includes reporting elements in line with the Task Force on Climate-related Financial Disclosures (TCFD). This way, the company is preparing for reporting in accordance with the Corporate Sustainability Reporting Directive (CSRD), which introduces uniform sustainability reporting standards.

The Petrol Group Sustainability Report 2022 discusses the governance aspect and discloses Petrol d.d. Ljubljana's approach to the sustainable and climate management. Furthermore, it discusses the key risks and opportunities and the approach to incorporating environmental/climate risks in the Petrol Group's comprehensive risk management. The social aspect covers own employees, the value chain, buyers, end users and local communities. The environmental aspect presents the environmental impact through own activity and offer for the market.

On the occasion of the publication of the Sustainability Report, Nada Drobne Popović, President of the Management Board of Petrol, pointed out: "Given our energy activity and size in the region, we, at the Petrol Group, are aware of our responsibility not only for our own success, but also for the greater good of the current and future generations. We are taking many steps towards establishing a systematic and efficient management of all sustainable development aspects. We have appointed a Sustainability Committee, adopted the Sustainability Strategy, which will shortly be updated, calculated our carbon footprint for the first time, obtained the first ESG evaluation, and adopted the Climate Policy. The Petrol Group Sustainability Report 2022 is a new step in our commitment to ensuring the sustainable development and energy transition despite the complex business situation in the last few years. Through the organizational transformation which is currently underway, we will define the competences and responsibilities of all segments for the management of sustainability topics and risks at the Petrol Group even more clearly and continue to pursue our vision to become an integrated partner in the energy transition with a "wow" customer experience. We are aware, of course, that the only way to pursue the sustainable development goals is in cooperation with our employees and other stakeholders."

As a partner to industry, the public sector and households, the Petrol Group has assumed one of the leading roles in achieving sustainability targets. The Petrol Group's business strategy is built on three interlinked pillars: strengthen the core (tap into the potential in the sales of fuel and related products), be ready for the future (offer integrated services in the energy transition with high added value), and be an agile partner in the energy transition, offering a "wow" customer experience.

The transition to a low-carbon energy company, a partnership with employees and the social environment, and a circular economy are the Petrol Group's sustainability commitments in the strategic period 2021-2025. In the context of the low-carbon energy company commitment, we endeavour to strengthen the energy independence and energy efficiency, as well as to generate electricity from renewable energy sources, ensure a cleaner energy mix and develop the sustainable mobility. In the context of our partnership with employees and the social environment, we organise trainings, provide for the development and satisfaction of employees, ensure non-discrimination and occupational health and safety, and implement social responsibility and corporate volunteering projects. We pursue our circular economy commitment by reducing the use of primary raw materials, biowaste and number of waste collections, and by recycling and reusing wastewater for our own activity, treating municipal wastewater and cleaning and reusing industrial wastewater.

In June 2023, S&P Global Ratings awarded Petrol d.d., Ljubljana an ESG evaluation score of 56 Adequate which is above the average score in the global oil and gas sector where the average score was 54 in August 2023.

The success of ensuring the sustainable development of the company is one of the more important qualitative criteria of Management Board's work evaluation. In terms of the respect for human rights, we have zero tolerance for any kind of breach which we monitor using various mechanisms. In the context of stakeholder engagement, we provide all stakeholders with a possibility to report irregularities to the anonymous Speak Up hotline. Whistleblower protection is ensured.

In the strategic period 2021-2025, the Petrol Group plans to spend a total of EUR 698 million on investments, of which 35% in the energy transition.

We invited more than 4,000 suppliers to assess the sustainable development and received scores from 468 key suppliers in 2021 and 2022.

In total, the Petrol Group's duties in Slovenia in 2021 and 2022 amounted to more than EUR 2 billion.

As part of its own activities, the Petrol Group carries out many activities for managing the natural environment, such as regular monitoring activities (of wastewaters, emissions to air, noise emissions, fuel quality, etc.), water management, energy generation from renewables, management of raw materials (packaging, waste), efficient energy use, and biodiversity preservation. In the context of the market activity, the Petrol Group offers a sustainable energy mix, efficient energy use, water management, electricity generation and supply, and an open Tango platform for business analytics and artificial intelligence for integrated environmental management.

At Petrol, we have certified systems of quality management ISO 9001, environmental management ISO 14001 and energy management ISO 50001. Furthermore, the company has been a part of the Responsible Environmental Management initiative, a global commitment of the chemical industry to the sustainable development, for 12 years.

In 2022, Scope 1 and 2 carbon footprints of Petrol d.d., Ljubljana (excluding the Energy and Solutions unit) amounted to 18,776 tons CO2 eq, a year-on-year decrease of 13.5 percent or nearly 1 ton CO2 eq per employee. We have committed ourselves to reducing our carbon footprint by 40 percent by 2025 compared to 2021.

The Petrol Group's important decarbonization pillars are the efficient energy use and energy generation from renewables. In 2022, we generated 150 GWh of electricity from renewables, which is enough for almost 30,000 users. By 2025, we aim to increase both indicators to 500 GWh annually to meet the needs of more than 100,000 end users and also ensure it for the needs of the industry, transport and heat supply. In 2022, we generated 38,951 MWh in energy savings with end users. In the context of the Petrol Green project, we started installing solar power plants on rooftops of our service stations in Slovenia, Croatia, and Serbia.

As at the last day of 2022, we had 594 service stations and 417 e-charging points in Slovenia. In efforts to reduce emissions in transport we add biofuels to fuels and use fuel additives, the latter by applying a unique new Dual Action Technology, which lowers petrol and diesel fuel consumption, thereby providing users in all markets where we sell QMax fuels with additional savings. Our QMAx fuels were awarded the EQTM certificate (European Quality Trademark) by the EOQ (European Organization for Quality) in 2022.

As part of projects for the market, we generated thermal energy savings (3,948 MWh), electricity savings (1,692 MWh) and environmental savings (2,116 tons CO2) through the energy renovation of 19 buildings in 2022. By having optimised district heating systems, we achieved energy savings (13,859 MWh) and environmental savings (43,933 tons CO2) in 2022. With the energy renovation of public lighting, we generated 3,814 MWh in energy savings and 2,669 tons CO2 in environmental savings. By having reused/recycled water in our carwashes, we reduced water consumption by 71,720 m3.

More than 54%, that is, more than EUR 30 million of capital expenditure was taxonomy-aligned in 2022 for the purpose of mitigating and adjusting to climate change.

The Petrol Group earmarked 48% of all investment funds in energy transition projects in 2022.

We promote the circularity of our resources through many projects, including: the introduction of circular models in packaging, increasing digitalization in business processes, and reducing the use of primary packaging raw materials. In 2022, we transformed the packaging of our own water brand "Na poti" into 100% recycled PET (rPET). In terms of supplying the industry, we enveavour to establish a reusable packaging system with suppliers. In addition, we participate in conserving biodiversity. We have signed a commitment on long-term support for the Green Heart of the Karst project for restoring forest in the Karst.

As at the last day of 2022, the Petrol Group had 6,224 employees (including third-party operated service stations), of which 49 are sustainability ambassadors who are in charge of presenting and implementing sustainability behaviour in their units. In 2022, all employees together completed 121,876 hours of training. In the same year, 190 managers participated in competence development programmes. In 2021 and 2022, Petrol trained 35 internal certified coaches. By 2025, our goal is to ensure an average of three days of training per employee annually.

We provide a stable and safe working environment to Petrol employees and by 31% higher gross salary than the average in Slovenia. With our Healthy in Petrol programme, we encourage our employees to take care of their own health. In 2022, 3,477 employees took part in this programme's activities. The Petrol Group also holds the Family Friendly Company certificate and performs a number of activities to facilitate the work-life balance.

In 2022, the Petrol Group earmarked EUR 2,404,579 for donations and sponsorships in Slovenia.
We also notify our suppliers about the Petrol Group's sustainability focus. Our goal is to increase transparency throughout the supply chain so that we can fully understand and measure our social and environmental footprint. By knowing the supply chain and the purchased materials and services, we are creating a base of suppliers who will actively cooperate with us and provide us with sustainable solutions.
In Slovenia, Petrol kept its leading position in terms of service station brand strength and image in 2022. We have improved the Petrol brand image in all dimensions. Customer experience has been Petrol's major advantage for many years. According to Petrol's customers, the customer experience increased by 9% in 2022 compared to 2021.

Petrol published the first environmental sustainability report in 2012. We continuously upgrade our sustainability reporting and take strategic approach to the sustainable development. The Petrol Group is part of a larger narrative and is aware that further bold steps towards ambitious sustainability targets can only be taken in agreement with all stakeholders.

Petrol Group Sustainability Report 2022