Kistos Holdings plc aims to generate value for shareholders while maximising operational sustainability and reducing emissions for the benefit of future generations.
Our approach to environmental, social and governance (ESG) shapes how we operate as a business. Kistos’ commercial activities are conducted responsibly, supported by strong governance structures and with the utmost consideration for our environmental and social impact in the locations where we operate.
As an energy business, we have a vital role to play in society’s transition to a low-carbon future. We seek opportunities to grow and create value for our investors in harmony with the planet and with people at the heart of our approach.
In 2021, we identified the material ESG issues that are most important to the Group and our stakeholders (see below). These issues form the foundation for our ESG strategy. In particular, our strategy guides our approach to reducing our impact in the environment, operating responsibly and putting people first.
We remain committed to supplying the natural gas that will enable the transition to an economy where renewable energy plays an ever-increasing role, while emitting as little CO2 as possible. We support the aims of the countries in which we operate – the UK, the Netherlands and Norway – to reach their national greenhouse gas (GHG) emissions targets by 2050, and we continue to work closely with partners and suppliers to promote good environmental practice. By doing so, we are confident that we can contribute to a more sustainable future without compromising our own ambitions for growth.
We will continue to put sustainable business decisions with every decision we make..
We will act with integrity to ensure we’re always doing the right thing.
We will create safe, inclusive workplaces, promote human rights and strengthen our local communities.
We manage the ESG issues associated with our Group through responsible and sustainable business practices. Our approach encompasses the major material issues facing our business today.
Emissions and energy
We recognise the important role that natural gas and oil have to play in energy transition, bridging the gap between fossil fuels and a zero-carbon future. In the short term, we believe that renewable energy is unlikely to fully meet demand so developing and extracting oil and gas helps improve security of supply in the meantime. We consider the emissions intensity and carbon footprint of future projects in operational and project decisions, and when considering potential acquisitions.
Our acquisition of onshore gas storage assets in the UK enables us to further contribute to the security of energy supply in the UK. The gas caverns and associated infrastructure comprise c.3% of the UK’s total available onshore gas storage capacity and up to 11% of its flexible daily gas capacity. These assets not only enhance our place in the traditional energy space but could be deployed to support energy transition.
In line with international net zero targets, our own goal is to achieve carbon neutrality for Scope 1 and Scope 2 emissions by 2030. Scope 1 emissions associated with gas production from our operated assets are minimal, thanks to the solar panels and wind turbines that power the unmanned Q10-A platform in the Dutch North Sea[1].
As part of our wider emissions reduction ambitions, we will upgrade the Balder floating production unit (FPU) with the more efficient Jotun floating production storage and offloading vessel (FPSO) in Norway by 2030, we don’t flare as part of routine production operations and we have annual inspections to identify and prevent methane leaks, exceeding the four-year inspection requirement.
[1] Less than 0.01 kg of CO2 per barrel of oil equivalent produced (kg CO2/boe).
Spills and effluents
Our robust processes to prevent major accidents and spillages at sea, as well as clearly defined mitigation and clean-up procedures should an incident occur, are supported by an emergency response team and participation in emergency response exercises. And to help avoid hazardous contaminants in discharges to water, we strictly adhere to EU REACH regulations, which prevent the use of certain chemicals and materials that are considered harmful to the environment.
Biodiversity
To incorporate nature-inclusive design principles into new operated projects, we prioritise building materials and construction methods that promote local habitats. We monitor bird migrations to minimise any disruptions from our operations, limit ultrasonic sounds to prevent harm to marine life and seek expert advice to keep seals away from our offshore platforms.
In the UK, gas production from our non-operated Greater Laggan Area assets have an emissions intensity of approximately 13 kgCO2/boe (versus a UK industry average of 25 kgCO2/boe[1]).
In Norway, we aim to reach 7 kgCO2e/boe[2] by 2025[3] from non-operated interests in the Balder and Ringhorne oil fields to match the Norwegian Continental Shelf (NCS) average.
Wherever we have non-operated assets, we work closely with operators to identify opportunities for further emission reductions.
[1] Source: Welligence Energy Analytics.
[2] Source: Welligence Energy Analytics.
[3] Following the on-station arrival of the Jotun floating production storage and offloading vessel (FPSO).
Health and safety
Our top priority is the safety of people in our offices and operated sites, and throughout the entire value chain. Having incorporated third-party contractors into our safety culture, our health, safety and environmental (HSE) performance remains strong, with low rates for lost time incidents, non-compliance incidents, near misses and hazards during drilling and testing operations. The strict protocols and rigorous testing procedures we have in place to keep employees and contractors safe have been enhanced with a new Process Safety Management Standard, introduced to help us manage the main risks across our operated and non-operated assets, and the application of the International Association of Oil & Gas Producers’ (IOGP) nine Life-Saving Rules, replacing our own 12 safety rules. We are now aligning our businesses in the UK, the Netherlands and Norway under a five-year HSE plan to improve HSE leadership, certification, contractor management and behavioural safety.
Workplace culture
To help our employees thrive at work, we provide a flexible working environment and foster a culture that encourages collaboration, flexibility, fairness and continual improvement. Our interactions with employees include remuneration reviews and work appraisals, training and development opportunities, and communicating important business decisions. The importance we place on diversity, equality and inclusion (DEI) is reflected in two of our ESG goals. As well as recruiting from a wide range of candidates, we also seek to break down systemic barriers to inclusion through a range of policies and practices.
Human rights
Kistos recognises its responsibility to respect human rights in all aspects of our business. We have embedded human rights into our procedures and policies, including our Code of Business Conduct and our Modern Slavery Statement. Our integrated approach, which applies to all employees and contractors, focuses on labour rights, communities, supply chains and security.
Stakeholder engagement
To create meaningful social impact, we must understand what our stakeholders’ needs and interests are, and maintain ongoing communications with our employees and contractors, joint venture (JV) partners, suppliers and investors. Our continued success also relies on the involvement and welfare of coastal communities living near our operations, as well as safety regulators and national coastguard services.
Our Board of Directors
The Board is responsible for setting the Group’s strategic aims, defining our business plan and strategy, and managing Kistos’ financial and operational resources. Overall supervision, acquisition, divestment and other strategic decisions are also determined by the Board. Along with other Executive Directors, our Executive Chairman is responsible for implementing the Group’s strategy.
Due to our relatively small workforce, the Board’s level of collaboration with management-level employees is high. Following the acquisition of Mime Petroleum AS (Mime) and EDF’s gas storage business, policies, processes and structures are now being harmonised across the enlarged Kistos Group.
Risk management
We work hard to identify, assess and manage the risks that are critical to our success and that protect our business, people and reputation. We use our risk management process to provide reasonable assurance that the financial, operational and reputational risks we face are recognised and controlled, enabling our organisation to achieve its strategic objectives and create value. A Group-wide Corporate Risk Register is regularly updated and presented at Board meetings.
Ethics, anti-corruption and bribery
We foster a culture that promotes ethical and responsible behaviour and even though we work in locations where bribery and corruption are unlikely, we remain vigilant. We provide all permanent employees and longer-term contractors with training on our Code of Business Conduct, which was refreshed in line with legislative and regulatory developments.
Ethical behaviour and responsible business practices are embedded throughout the business. For example:
Suppliers and procurement
We treat suppliers equally, without discrimination, and promote a ‘one-team’ culture. Where applicable, we work with suppliers that are pre-qualified for oil and gas operations. We ensure any risks and costs borne by suppliers undertaking activities that support our business are proportional to the scope of the work.
Operations in sensitive or complex locations
The Group manages such risks in the context of upcoming developments through engagement with a wide range of stakeholders. Where necessary, alternative options are also considered to mitigate the risks. External consultants with experience in managing these developments are employed to complement our skills and knowledge.
To help us manage risk, we must understand the issues related to sustainability and responsible business that are most important to the Group and our stakeholders. In 2021, with support from a third party, we undertook our inaugural materiality analysis to identify and prioritise these ESG issues.
The process involved:
The key responses and findings from this assessment were plotted on a matrix. All issues plotted on the matrix are significant to both stakeholders and Kistos, but the most material issues were deemed to be spills and incidents, risk management, and health and safety. Risk management includes the governance approach to risk, considering short-, medium- and long-term risks and opportunities. It also encompasses the major accident prevention and crisis management systems we have in place. Most issues are interrelated and should not be considered in isolation.
As the Group continues to grow, we will continuously monitor what issues are material to both our business and our stakeholders, and aim to perform a broader reassessment in the coming years.
In late 2023, following the acquisition of Mime Petroleum AS (Mime) in Norway earlier in the year, we began re-evaluating our ESG goals to explore whether any adjustments or refinements were needed. We have now developed a revised set of ESG goals for 2024 and beyond.
We concluded that some of our previously published goals were no longer aligned with our evolving business while others were not applicable at a Group level. We have therefore developed, approved and published a revised set of ESG goals, which will apply from 2024.
We believe the following ESG goals more accurately align with our current business strategy and will allow both Kistos and our stakeholders to measure progress across our strategic operations more effectively.
Caring for the environment |
Achieve carbon neutrality for Scope 1 and Scope 2 emissions by 2030. |
Maintain zero operational spills annually in our operated sites[1]. |
Maintain zero hazardous contaminants in discharges to water annually in our operated sites1. |
Incorporate nature-inclusive design principles into new operated projects1. |
Putting people first |
Achieve zero harm to workers annually in our offices and operated sites1. |
Recruit from a diverse, qualified group of candidates to increase range of thinking and perspective. |
Foster a culture that encourages collaboration, flexibility and fairness to enable all employees to contribute to their potential and increase retention. |
Embed diversity and inclusion in policies and practices, and equip leaders with the ability to manage diversity and be accountable for the results. |
[1] Operated sites and projects comprise oil and gas fields, facilities and infrastructure where the Group has control, responsibility and accountability over activities, safety, emissions and decisions impacting the sites. Operated sites therefore comprise all Dutch licences, including the Q10-A platform and offices owned or leased by the Group.