Please review the attached IFRS S1, S2 and ARAMCO Company Sustainability Annual Report 2022, then Summarize all of them.
After that, check if ARAMCO are following the IFRS standards, then write a report on it.
the report shall contain:
Index
Aramco Sustainability Report 2022
Investing in growth
Innovating for sustainability
About this report
We are Aramco,
one of the world’s largest
integrated energy and
chemicals companies
Our approach to sustainability reporting
In this Sustainability Report, we provide an overview
of how we have integrated sustainability within
our corporate strategy and operations; the material
sustainability issues that impact our business and
stakeholders; and a summary of key initiatives and
sustainability performance during 2022.
Reporting standards
The following sections of this report have been
prepared with reference to and guidance from the
following frameworks, standards and guidelines:
• Reporting guidelines for our Environment, Social
and Governance (ESG) disclosures: Ipieca;
• For developing and reporting our materiality
matrix: Global Reporting Initiative (GRI)
Sustainability Reporting Principles;
• For measuring and reporting on our greenhouse
gas (GHG) emissions: Greenhouse Gas Protocol;
and
• For developing and reporting our health and
safety performance metrics: Occupational Safety
and Health Administration (OSHA) Standards and
the American Petroleum Institute Recommended
Practices.
Reporting boundaries, scope and basis
of preparation
This report contains data for the full year 2022
(January 1 – December 31). Where available, we have
compared 2022 performance with 2021 and 2020
data.
We have followed industry guidance on defining the
boundary scope for performance data. For clarity
and transparency, the specific reporting boundaries
of each metric for 2022, 2021, and 2020 data have
been noted in detail on page 86 in the Data section
of this report.
As we progress on our reporting journey and our
controls around ESG data mature, we have expanded
the scope of our reporting for some metrics, which were
limited to the Kingdom of Saudi Arabia in 2021, to cover
our operational control reporting boundary for 2022.
Acquisitions made during the year will not be reportable
until after the first full year of operation. Therefore,
acquisitions made during 2022 will be reportable from
FY2024 onwards. Any site that is not fully operational
will be excluded from reporting to ensure effective data
controls and systems are in place.
The basis of preparation on how we measure and report
on the sustainability performance metrics that undergo
external independent assurance can be found online
here.
ore information
M
on assured data and
assurance statements
can be found online
here
For the avoidance of doubt, SABIC and S-Oil’s nonfinancial performance data are not in the scope of this
report. Both subsidiaries are publicly listed and issue
separate annual sustainability reports.
Internal controls and data validation
All figures in this report represent the latest available,
internally validated data, unless specifically referenced.
Some of the totals presented may reflect the roundingdown or rounding-up of subtotals.
Aramco’s internal reporting systems capture and record
the data used in this report. All data has been subject
to internal validation, including data reviews by the
reporting businesses and internal subject matter experts.
Independent assurance
Third-party independent assurance has been sought
against 16 prioritized performance metrics, including
GHG emissions and fatalities, in accordance with
the revised International Standard on Assurance
Engagements 3000 (ISAE 3000 revised). Data that has
undergone assurance has been referenced throughout
the report and the assurance statements can be found
online here.
Cover image:
To protect the highly
sensitive ecosystem
in Manifa, we
followed strict
environmental
policies enforcing
drilling, land, and
air protection
measures. We also
designed a causeway
to improve and
increase the density
of marine life. Learn
more about Manifa
oil field.
OVERVIEW
Investing in growth
Innovating for sustainability
Governance ……………………………………………………………………… 83
Overview
At a glance ……………………………………………………………………………….. 02
Aramco strives to provide reliable, affordable,
and more sustainable energy to communities
around the world, and to deliver value to
its shareholders through business cycles
by maintaining its preeminence in oil and
gas production and its leading position in
chemicals, aiming to capture value across
the energy value chain and profitably
growing its portfolio.
Data
Executive summary ………………………………………………………………….. 08
Abbreviations, terms and glossary…………………………………………….. 94
Our stakeholders ………………………………………………………………………. 10
Forward-looking statements……………………………………………………… 99
Chairman’s message …………………………………………………………………. 06
Our metrics ………………………………………………………………………………. 86
Sustainability framework ………………………………………………………….. 12
Materiality………………………………………………………………………………… 13
Our sustainability focus areas
19
see page
Safe operations and
people development
43
see page
Minimizing
environmental impact
57
see page
GOVERNANCE
Climate change
and the energy transition
GROWING
SOCIETAL VALUE
President and CEO’s message……………………………………………………. 07
Sustainability and our strategy………………………………………………….. 04
MINIMIZING
ENVIRONMENTAL IMPACT
Contents
Aramco’s vision is to be the world’s
preeminent integrated energy and chemicals
company, operating in a safe, sustainable
and reliable manner.
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
Our mission
CLIMATE CHANGE AND
THE ENERGY TRANSITION
Our vision
Growing
societal value
71
see page
DATA
01
At a glance
Our business in 2022
$161
Net income
(billion)
13.6
258.8
Total hydrocarbon reserves1
(billion boe)
56.3
Total hydrocarbon production2
Net chemicals
production capacity3
(MMboed)
(MMtons/year)
4.1
$38
Net refining capacity
Capital expenditures
(MMbpd)
(billion)
12.0
Employees
(MMbpd)
as at December 31, 2022
10.3
R&D spend4
Upstream carbon intensity5
(billion)
(Kg CO2e/boe)
0.014
As part of a long-term strategy
of investing (e.g., via our
contribution to the Oil and Gas
Climate Initiative (OGCI))
in innovative solutions to
achieve lower carbon and
lower energy intensity, Aramco
established a new $1.5 billion
Sustainability Fund to invest
in technologies needed to
address climate challenges.
70,496
Maximum Sustainable
Capacity (MSC)
$1.2
$1.5 billion Sustainability
Fund
50+
Lost time injuries/illnesses
rate5
Countries
(per 200,000 work hours)
in which we operate
85+
Circular economy
For the first time in the
Middle East and North Africa
(MENA) region, Aramco
and its partners produced
International Sustainability
and Carbon Certification +
(ISCC+) certified circular
polymers from plastic waste
derived oil at SATORP.
Aramco Sustainability Report 2022
Nationalities
globally
1. Hydrocarbon reserves of Saudi Arabian Oil Company (the Company) as at December 31, 2022, under
the Concession agreement.
2. Total hydrocarbon production (mboed) is derived from MMscfd (for natural gas and ethane) by dividing
the relevant product production by 5.400 (in the case of natural gas) and 3.330 (in the case of ethane).
3. Excludes SABIC Agri-Nutrients and Metals (Hadeed) businesses.
4. Total Group R&D including SABIC.
5. This figure has undergone external limited assurance in accordance to the ISAE 3000 (revised). The
assurance report can be found online here.
02
Voluntary carbon market
Aramco participated in the
first carbon credit auction
held in the MENA region
through the Regional
Voluntary Carbon Market.
OVERVIEW
CLIMATE CHANGE AND
THE ENERGY TRANSITION
Manifa field development
The Manifa field development project was recognized
as the Upstream Project of the Year at the 2022 Middle
East Energy Awards for its development, management,
and production, and its innovative solutions for
protecting the fragile marine ecosystem in Manifa Bay.
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
MINIMIZING
ENVIRONMENTAL IMPACT
Maximizing liquids-to-chemicals value chain
As part of plans to utilize more hydrocarbons for
non-combustion uses, Aramco agreed to develop one
of the world’s largest refinery-integrated petrochemical
steam crackers in South Korea through its S-Oil affiliate,
which will convert crude oil into petrochemical
feedstock.
Reinforced supply chain
Our Jafurah unconventional
gas field
Containing an estimated 200 trillion
standard cubic feet (scf) of natural gas,
the Jafurah unconventional gas field
development is now underway, targeting
one of the largest liquid-rich shale gas
plays in the Middle East. The Jafurah
facility is expected to play a key role in
the Saudi Arabian domestic energy sector,
displacing significant volumes of oil with
gas and in turn lowering emissions.
DATA
Through its In-Kingdom Total
Value Add (iktva) program,
Aramco signed over 90 corporate
procurement agreements valued
at $17.3 billion (SAR 64.9 billion)
with manufacturers in Saudi
Arabia, which are expected
to reinforce Aramco’s robust
supply chain.
A joint development agreement
between Aramco, SLB and
Linde was signed to construct
one of the world’s largest
planned carbon capture and
storage (CCS) hubs, in Jubail,
Saudi Arabia, with a capacity
target of 9 MMtpa by 2027.
GOVERNANCE
As we explore the
development of blue hydrogen
as a commercial opportunity
that could support emissions
reductions in hard-todecarbonize sectors, two
Aramco subsidiaries (SASREF
and SABIC Agri-Nutrients (AN))
received the world’s first
independent certification for
production of blue ammonia
and blue hydrogen.
Building one of the
world’s largest carbon
capture and storage hubs
GROWING
SOCIETAL VALUE
Blue ammonia and blue
hydrogen certification
03
Sustainability and our strategy
Positioning Aramco
for the future
Increasing shareholder and
societal value sustainably
Aramco supports the aims of the Paris Agreement;
all of us have a vested interest in protecting
the world from human-caused climate change
while pursuing economic and social sustainable
development.
As one of the world’s largest integrated energy
and chemicals companies, we have an important
role to play along our value chains.
As the world emerges from the effects of
COVID-19 lockdowns and deals with the
on-going impacts of the conflict in Ukraine,
we are facing significant global energy
challenges. In Aramco’s view, these challenges
have confirmed the world’s need to increase
oil and gas investments, especially capacity
development. Importantly, investing in
conventional resources does not mean that
alternative energy resources and technologies
should be ignored.
We believe that any energy transition requires
a new global energy consensus built on three
long-term strategic pillars:
• Recognition by policy makers and other
stakeholders that supplies of affordable
conventional energy will continue to be
required over the longer term;
• Further reductions in the carbon footprint
of conventional energy and improved energy
intensity across the economy are priorities,
and technology will be a critical enabler for
this; and
Aramco Sustainability Report 2022
• New, lower carbon energy sources, steadily
complementing proven conventional resources.
04
At Aramco, we are addressing all three.
We are investing to increase our maximum
sustainable oil production capacity to 13 million
barrels per day by 2027. We are also growing
our gas production, potentially increasing
it by more than half through 2030 with a mix
of conventional and unconventional gas.
At the same time, we are working to lower
our upstream carbon intensity, our gas flaring
intensity, and our methane intensity, which
are already among the lowest in the world.
We are also intensifying efforts to advance
key enabling technologies, particularly CCS,
which is mission-critical to a sustainable future.
Importantly, we are gradually adding new, lower
carbon energy products to our own portfolio,
such as blue hydrogen and blue ammonia,
renewables, and low carbon synthetic fuels.
Meanwhile, chemicals will become a much larger
and more strategic part of our portfolio, growing
the non-combustible, and lower emission, uses of
oil. This is our plan to be part of a practical,
stable, and orderly energy transition.
We must partner to drive innovation and
value on an unprecedented scale and speed to
deliver results across the three pillars successfully.
In our view, technologies of the Fourth Industrial
Revolution are ripe for such partnerships,
especially the rapid digital transformation of our
industry. The right digital investments now could
help deliver greater efficiency, lower costs, lower
emissions, higher reliability, and higher profits
over decades.
Transforming the massive existing worldwide
energy system, and delivering a secure and
sustainable future for everyone, is a truly
formidable task that will require both individual
and collaborative efforts across industries, along
value chains and involve governments, regulators
and consumers.
OVERVIEW
Our
strategic
themes
Aramco focuses on four strategic themes across its businesses:
Upstream preeminence
Lower carbon initiatives
Localization and the promotion
of national champions
The Company facilitates the development of a
diverse, more sustainable and globally competitive
in-Kingdom energy ecosystem to underpin the
Company’s competitiveness and support the
Kingdom’s economic development.
GROWING
SOCIETAL VALUE
Aramco’s strategy requires a number of enablers to be successful, including:
People
See page 19
Aramco’s technology program
strives to develop new solutions
for its Upstream and
Downstream businesses, and to
help in diversifying its product
portfolio, grow its business
sustainably and achieve its
net zero ambition.
Safe operations
and people
development
See page 43
Portfolio optimization
Aramco seeks to unlock value,
enhance its capital structure and
reallocate capital to higher
growth and return investments.
Aramco has a comprehensive
and disciplined internal approval
process for capital expenditures,
new projects and debt issuance.
Minimizing
environmental
impact
See page 57
Growing
societal
value
See page 71
05
DATA
Climate change
and the energy
transition
Technology
GOVERNANCE
Aramco recognizes the need to
prepare its workforce for the
future, thereby ensuring its
capabilities match the
requirements of its strategies,
by advancing technical and
professional skills, developing
commercial and leadership
competencies and supporting
the progress of localization,
and focusing on diversity and
inclusion.
Our
sustainability
focus areas
The Company has a dedicated linkage to domestic
and internationally wholly-owned and affiliated
refineries and chemicals operations that are critical
to monetizing its upstream production. Through
continued strategic integration, the Company
captures additional value across the hydrocarbon
chain.
MINIMIZING
ENVIRONMENTAL IMPACT
The Company plans to reduce the net carbon
emissions of its operations and to support the
global energy transition through the development
of lower carbon products and solutions across the
energy, chemicals, and materials sectors.
Downstream integration
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
As the principal engine of value generation, the
Company intends to maintain its position as the
world’s largest crude oil company by production
volume and one of the lowest cost producers. The
Company’s vast reserves base, spare capacity, and
unique operational flexibility allow it to effectively
respond to changes in demand.
Our key
enablers
CLIMATE CHANGE AND
THE ENERGY TRANSITION
Our strategy
Chairman’s message
Investing in growth
In 2022, we took further action to reduce
Aramco’s emissions impact, by enhancing
our energy efficiency, participating in the
Kingdom’s inaugural carbon credit auction,
and unlocking the Kingdom’s first large-scale
carbon sequestration opportunity. All of these
activities are designed to ensure that as long as
oil is needed, a barrel of Aramco crude will be
among the least carbon intensive on the market.
When we talk about sustainability at Aramco,
we understand that it is about balancing the
economic benefits to our owners, the social
value and utility that our activities and products
generate for customers and consumers, and
minimizing any negative environmental and
social impacts, to build something that will last:
a company that will still be standing strong,
generations from now.
At Aramco, we recognize the challenge of
sustaining our business and supporting the
world’s climate ambitions. As we set out in this
report, all plausible pathways to global net zero
show that ample supplies of conventional energy
will still be needed in 2050 and beyond. With
one of the lowest upstream carbon intensities
per barrel of oil equivalent and an ambition
for near zero routine flaring, Aramco is ideally
placed to help meet that demand. Demand
continues to rise, though not always reliably
matched by global supply.
2022 provided an unwelcome reminder that high
and volatile energy prices are deeply damaging
to the global economy. This could also impede
the energy transition itself by raising the costs
related to energy policies as well as the cost of
material inputs needed for a lower carbon
energy system. At a time of great geopolitical
stress and underinvestment across our industry,
we view our commitment to invest in new
upstream production as a responsible course.
Aramco Sustainability Report 2022
However, ensuring security of supply is not
where Aramco’s responsibilities end. We also
have a responsibility to the environment and
to the communities in which we are privileged
to operate.
We are also continuing to support a global
orderly energy transition towards a lower carbon
emissions future, as we seek to develop blue
hydrogen, advanced fuel combustion systems
and lower carbon synthetic fuels.
While the climate challenge remains central,
for Aramco, sustainability also means having
a robust local supply chain, operating in resilient
local communities, and being part of a vibrant
Saudi economy that excels in many other fields
besides crude oil. As you will see in this report,
we continue to make progress in all these areas.
The Company’s recent achievements in supply
chain localization — including the first ever
“made in Saudi Arabia” drilling rigs — are
a personal highlight for me.
We are also continuing to support a global
orderly energy transition towards a lower
carbon emissions future, as we seek to
develop blue hydrogen, advanced fuel
combustion systems and lower carbon
synthetic fuels.”
As ever, our gratitude goes out to The Custodian
of the Two Holy Mosques King Salman bin
Abdulaziz Al Saud, and His Royal Highness Prince
Mohammed bin Salman Al-Saud, Crown Prince
and Prime Minister of the Kingdom of Saudi
Arabia. Guided by their vision, Aramco is a global
energy and chemicals powerhouse — securing
our future as the world’s indispensable
energy supplier.
H.E. Yasir O. Al-Rumayyan
Chairman of the Board of Directors
06
President and CEO’s message
OVERVIEW
Innovating for sustainability
Aramco has strengthened its unique
and central role in providing the
world the reliable energy it requires
for an orderly energy transition.”
GROWING
SOCIETAL VALUE
As you will see in the following pages of this
report, Aramco continues to make significant
progress in key areas of sustainability,
biodiversity, localization and more. These
improvements are a direct result of the talented
people who work for Aramco, and credit goes
to them for their commitment, passion and drive
to succeed. While our Company has plentiful
oil and gas reserves, our number one asset is
our people. Our successes are their successes,
and I look forward to achieving and reporting
continued progress as we advance on our
sustainability journey together.
GOVERNANCE
As the world seeks to strike the right balance
with the energy transition, Aramco is maintaining
positive momentum through our ambitious
chemicals program and a focus on the materials
transition. We are striving to convert up to
4 million barrels of liquids-to-chemicals per day
by 2030. In addition to significant advancements
in CCS and hydrogen, we are also investing
in renewables.
MINIMIZING
ENVIRONMENTAL IMPACT
In 2022, we made significant progress on interim
targets toward our net zero ambition. We also
proudly established a $1.5 billion Sustainability
Fund through Aramco Ventures, which will invest
in technologies that will make a difference in
addressing the challenge of balancing energy
security and sustainability. In addition, we
announced plans for one of the largest scale
CCS hubs in the world. Aramco, in partnership
with SABIC Agri-Nutrients, shipped 25,000 metric
tonnes of the world’s first commercially
accredited blue ammonia to South Korea in 2022.
We have made significant strides in increasing
diversity in the workplace, employing more
women and people with disabilities, including
a 23% increase in the number of women in
leadership roles at Aramco.
Safety is one of Aramco’s core values, and each
health and safety incident must be reported and
investigated to avoid recurrence. While we
recorded enhancements in a number of safety
metrics in 2022, unfortunately, we suffered the
loss of five lives from our dedicated team of
employees and contractors. These incidents
underscore the critical importance of focusing
on safety above all else, and we are fully
committed to ensuring that we learn from these
incidents, and that each and every person returns
home safely, every day.
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
Over the last year, there has been increasing
acceptance of the fact that there needs to be
a better balance between maintaining energy
security, energy affordability and environmental
sustainability. As you will see in this year’s
Sustainability Report, Aramco has strengthened
its unique and central role in providing the world
the reliable energy it requires for an orderly
energy transition.
CLIMATE CHANGE AND
THE ENERGY TRANSITION
We are also placing an enhanced focus on
innovation and technology to maintain our
leadership position as one of the lowest
average upstream carbon intensive producers
in the world, along with seeking to improve on
our upstream methane intensity of 0.05% which
is already well below the Oil and Gas Climate
Initiative ambition (0.20% by 2025).
DATA
Amin H. Nasser
President and CEO
07
Executive summary
Our sustainability performance
Our focus areas
Aramco has an important role in helping the world navigate the energy
transition. What we do as a global community will determine the legacy
we leave for future generations. Our intention is to be a part of the solution
that creates a stable energy environment which fosters innovation and
growth opportunities in developing and developed countries.
We are also committed to providing a healthy, safe, and rewarding
environment for our people, our suppliers and communities where we
operate while rehabilitating and mitigating the impact on our natural
environment.
We have identified four focus areas:
Climate change and the energy transition
Safe operations and people development
Minimizing environmental impact
Growing societal value
Each of these focus areas support Aramco’s strategic themes and align
with both Saudi Arabia’s Vision 2030 and the UN Sustainable Development
Goals (SDGs), directly and indirectly. These elements form our sustainability
framework, which is presented on page 12.
As part of ongoing materiality reviews and engagement with our
stakeholders, we continue to build on this framework, and in 2022 we
have measured and added an additional 25 ESG metrics (5 environmental
metrics, 17 social metrics and 3 governance metrics) to the 36 metrics we
reported in 2021.
These metrics allow us to continue to prioritize key issues most material to
our Company and our stakeholders, which we discuss further on page 10.
Climate change
and the energy
transition
In line with our ambition to achieve
net zero Scope 1 and Scope 2 GHG
emissions across wholly-owned
operated assets by 2050, we strive
to provide reliable energy while
maintaining leadership as one
of the lowest carbon intensity
producers of hydrocarbon products.
For more details, see page 19
• Committed to build one of the
world’s largest CCS hubs (capacity
target of 11 MMtpa by 2035)
• Established a $1.5 billion
Sustainability Fund to invest in
technology to address climate
challenges
• An ambition to reduce our
emissions by ~52 MMtCO2e and
lower our upstream carbon
intensity by 15% by 2035
• Delivered an upstream methane
intensity of 0.05%, well below the
OGCI ambition (0.20% by 2025)
• Participated, and purchased
credits, in the first carbon credit
auction through the Regional
Voluntary Carbon Market
Scope 1 emissions2
(MMtCO2e)
55.7
16.1
(2021: 52.3)
Scope 2 emissions2
(MMtCO2e)
10.3
Aramco Sustainability Report 2022
(2021: 15.5)
Upstream
carbon intensity1
(kg CO2e/boe)
(2021: 10.7)
1. This figure has undergone external limited assurance in accordance to the ISAE 3000 (revised). The assurance report can be found online here.
2. The Jazan Refinery (our downstream refinery) is excluded from our current GHG reporting because in 2022, it remains in the startup and stabilization phase and is not fully
operational. Aramco is working to stabilize the refinery’s operations and complete all necessary reporting configurations before the end of 2023. Reporting on the refinery’s
environmental and sustainability elements will commence immediately thereafter, in line with the Company’s commitment to operational transparency.
08
OVERVIEW
Growing
societal value
We strive to conserve natural
resources, apply circular models
across our value chain, and to have
a legacy of projects that improve
both natural habitats and shared
resources.
For more details, see page 57
We seek to grow value wherever we
operate. With our biggest footprint
in Saudi Arabia, we have invested in
the Kingdom’s oil and gas ecosystem
to enhance the reliability of our
supply chain, providing employment
and economic opportunities to
thousands of Saudi nationals.
For more details, see page 71
For more details, see page 43
• 50% of enrollment in Aramco’s
college preparatory programs
were female
• 23% increase in female
employees in leadership positions
• 26% increase in apprentices
(1,728 in 2022 versus 1,369 in
2021)
11
(%)
6.4
• Pursuing a water neutrality
strategy
• Planted 11 million mangroves and
an additional one million trees
Freshwater
consumption
(million m3)
Hydrocarbon spills
(number)
(2021: 11)
(2021: 5.61)
93.61
15
(%)
• Spent $370 million on a range
of global socio-economic and
environmental initiatives
iktva spend
(% in-Kingdom)
(2021: 94.6)
53
(2021: 13)
Net positive impact
on biodiversity*1,2
• Via iktva, facilitated creation
of 31 new local manufacturers
(2021: N/A)
63
90.9
(2021: 59)
Saudi nationals
employed
(%)
Social
investment*
($ million)
370
(2021: 90.5)
DATA
Female employees
• ISO 14001 certification for 98%1
of applicable facilities in 2022,
with a view to complete coverage
in 2023
• Via our investments, encouraged
suppliers to have an aggregate
investment of over $600 million
in capex, which also created
over 4,000 jobs in our supply
chain in Saudi Arabia
GOVERNANCE
5
(2021: 1)
(number)
• Ambition to deliver net positive
biodiversity and ecosystem impacts
• Aramco entered into over
90 agreements with an estimated
value of $17.3 billion to build longterm collaborative relationships
with strategic local suppliers
GROWING
SOCIETAL VALUE
• Conducted over 1,100 exercises
for emergency preparedness
Tier 1 process
safety events
• Over 20 initiatives incorporating
circular economy principles
• Continued investments in tail gas
treatment facilities
• 66% increase in interns (3,190
in 2022 versus 1,922 in 2021)
(number)
• Launching refurbishment and
recycling programs for material
streams and equipment
MINIMIZING
ENVIRONMENTAL IMPACT
• 28% of direct hires were female
Fatalities1
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
We are committed to providing
a safe and respectful working
environment for all, on-site and
within the community, supported
by appropriate safety procedures,
policies and resources. We strive
to support, diversify, and empower
our workforce.
Minimizing
environmental
impact
CLIMATE CHANGE AND
THE ENERGY TRANSITION
Safe operations
and people
development
(2021: N/A)
1. This figure has undergone external limited assurance in accordance to the ISAE 3000 (revised). The assurance report can be found online here.
2. The Net positive impact (NPI) metric is a new KPI developed in 2022 and there is no prior year comparative. The purpose of the NPI is to aspire to achieve net gains for biodiversity
and ecosystem services. This is when overall negative impacts on biodiversity are outweighed by the biodiversity gains that are achieved through conservation projects. For the
formula of the metric, please refer to page 86 in the Data section of this report.
* Metric reported for the first time externally.
09
Our stakeholders
Stakeholder engagement
Aramco recognizes that there is a social contract
between our Company and the society within
which it operates. Aramco interacts with a range
of stakeholders to ensure that their perspectives
are considered in the development of our business
plans, sustainability plans and objectives; from
project planning, to execution, long-term operations
and of course, customer service.
During the year, we engaged with key stakeholders
on a diverse range of topics.
Our people
Communication channels and examples of engagement:
Our suppliers, partners and contractors
Communication channels and examples of engagement:
• Business performance reviews
• Workshops
• On-boarding program
• Training programs
• Supplier facility visits
Discussion topics:
• Engagement on supply chain
disruption and mitigation plans
• Performance on quality,
delivery and price
• Safety requirements
• Supplier Code of Conduct
• Agreeing ESG initiatives with
suppliers to improve their
capabilities
• iktva
Investors, financial institutions,
rating agencies, and insurers
• Town halls
• Human Resources
Communication channels and examples of engagement:
• Employee engagement surveys
• Recognition events
• Semi-annual earnings calls
• Employee networks
• Senior leadership meetings
• External disclosures
• Young Leaders Advisory Board
• Safety meetings
• Direct investor communication
• Training
• Quarterly engagement talks
on current events
• Annual General Meeting
• Intranet
Discussion topics:
• Annual insurance renewals
• Engagement with
ClimateAction100+
• Conferences and non-deal
roadshows
Discussion topics:
• Our vision and mission
• Remuneration
• Corporate ethics and values
• HSE performance
• Climate change and the energy
transition
• Financial and operational
performance and outlook
• Professional development
• Industry trends, current events
• Environmental performance
• Career progress
• Community support/
volunteering
• Human capital management
• Sustainability (including
GHG emissions) related targets
and performance
• Our strategy
• Risk management
• Sustainability
Our customers
Communication channels and examples of engagement:
Aramco Sustainability Report 2022
• Revolving credit facility
meetings
• Customer feedback forms
• Customer service centres
• Face-to-face meetings
• Trade shows and conferences
• Regular engagement between
sales teams and our business
customers
• Email/newsletters
Discussion topics:
• Sustainability
• Health and safety performance
• Quality control
10
Local charities and
nonprofit organizations
Communication channels and examples of engagement:
• Volunteer events
• Student mentoring
• Community events
• Citizen Advisory Panel
meetings
• Employee service on
community boards
Discussion topics:
• Corporate donations
• Matching contributions
• Community needs
OVERVIEW
CLIMATE CHANGE AND
THE ENERGY TRANSITION
Regulators and industry associations
Communication channels and examples of engagement:
• Community of ESG
Practitioners Working Group
within the World Economic
Forum (WEF)
• Saudi ministries and regulators
• OSHA
• Various working groups in
Ipieca
• International Sustainability
Standards Board (ISSB)
• US Environmental Protection
Agency (EPA)
• Saudi Organization for
Chartered and Professional
Accountants (SOCPA)
• American Petroleum Institute
• International Emissions Trading
Association (IETA)
• American Fuel and
Petrochemical Manufacturers
• OGCI
• Saudi Exchange, Capital
Market Authority, London
Stock Exchange
• American Society for Testing
and Materials
• Standards setting
• Permits
• Compliance with regulatory
standards
• Knowledge sharing on best
practices
• Project specific discussions
• Collaboration on industry
standards
• Balancing the energy
transitions
• City Council meetings
• School board meetings
• Local industry groups meetings
• Quarterly community
newsletters
• Plant tours
• Direct mailings
• Conferences
Discussion topics:
• Social impacts of operations
and expansion plans
• Charitable giving
• Emergency response and
preparedness
• Workforce development
• Environmental stewardship
• Local content
• Health and wellness programs
• Community development and
outreach
• Mentoring programs and
scholarships
• Economic and social
investments
• Small business support
“Meeting the world’s energy needs in a sustainable
manner, without compromising energy security,
reliability and affordability, is more essential today
than ever before. The B20 Energy, Sustainability, and
Climate Task Force plays a key role in leveraging
existing capacities and aligning collectively to solve
energy transition challenges.”
DATA
• Pipeline awareness
Aramco B20 Co-Chairmanship’s message:
GOVERNANCE
• Citizen Advisory Panel meetings
• Economic development
associations
• Enhancing consumer level access and ability to consume
clean, modern energy.
GROWING
SOCIETAL VALUE
• Community events
Aramco’s Co-Chairmanship of the Energy, Sustainability,
and Climate Task Force was demonstrated through the
year-long active negotiations that led to the publishing
of a policy paper proposing three policy recommendations
as part of the B20 communique to the G20, which were
centred around enhancing global cooperation to:
• Ensuring a just, orderly, and affordable transition to
sustainable energy use across developed and developing
countries; and
Communication channels and examples of engagement:
• Student mentoring
Aramco’s Co-Chairmanship
• Reducing carbon intensity of energy use through multiple
pathways;
Our local communities
• Volunteer events
What are we doing?
MINIMIZING
ENVIRONMENTAL IMPACT
Discussion topics:
• Supply disruptions
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
• Business20 (B20) Energy,
Sustainability and Climate Task
Force under G20 Indonesia
2022
11
Sustainability framework
Our sustainability framework
the UN SDGs and Vision 2030 to our four focus
areas, and which encapsulate the material ESG
topics stakeholders expect us to address.
Our sustainability framework sets out the areas
that hold the greatest potential for our business
to have long-term positive impacts, connecting
’ Sustainable Developme
ations
nt G
oals
ted N
i
n
U
i Arabia’s Vision 2030
Saud
At trac t
in g
t al e n t
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societal
value
Minimizing
environmental
impact
Re
ti
or
pp m p
Su a n d t e r
en
n
ed g s
m
ris ium all
es
Em
Aramco Sustainability Report 2022
pow
e
s o c i ri n g
et y
12
W
ma n a s t e
ag eme
nt
Alternat
i ve
hydrog energ
y
en
a m mo a nd :
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g fo
Investin erm
lo n g t
How
we work
Safe operations
and people
development
r s if y in g
Dive nomy
e co
the
Climate change
and the energy
transition
g
c in e n t
du y m
R e p lo
em
A
un
Sa
u
I n di
i ti
a
en
re
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t
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re
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t
the icip en’ g
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ustainability focus a
rk n i
o’s s
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r
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e
as
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e
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llu g a
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ti n g
C o m b a ti o n
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r
P rin
ma
Materiality
The exercise consisted of:
• External stakeholder engagement
(details on pages 10 and 11);
• Internal stakeholder engagement
(details on page 10);
• Review of existing (e.g., Ipieca sustainability
guidelines) and upcoming standards
(particularly the ISSB); and
From our benchmarking, internal analysis, and
stakeholder engagement, we identified and
evaluated over 150 ESG topics. The outcomes
of these assessments were tested with external
and internal stakeholders to evaluate the relative
significance of multiple topics impacts on our
business. Prioritizing topics enables us to focus
on where we can make meaningful differences.
• Greater quantitative and qualitative
information is required on some material
topics, e.g., biodiversity and human rights,
which had no metrics in the prior year.
Therefore, for this report, we have introduced
metrics and more information on our approach
toward biodiversity and human rights;
• Reconfirmed that Aramco’s roadmap to
establish additional metrics to better monitor
and report on our performance under each
focus area and material topic is correct.
Due to the increasing maturity of existing
KPIs and new metrics, we have increased
the number of KPIs and metrics in this report
to 61 (an increase of 25 metrics from the
36 metrics in the 2021 Sustainability Report);
MINIMIZING
ENVIRONMENTAL IMPACT
• Peer benchmarking.
• Our four focus areas and 13 material topics
(plus our focus on corporate governance2)
remain relevant and appropriate;
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
The materiality assessment is an in-depth analysis
of the risks and opportunities that we face in our
stakeholders’ topics of interest and serves as an
essential process for selecting key sustainability
topics for Aramco.
Upon completion of our materiality refresh
exercise and extensive stakeholder engagement,
a summary of conclusions and subsequent
actions, where appropriate, are provided below:
CLIMATE CHANGE AND
THE ENERGY TRANSITION
During 2022, we performed an annual
materiality1 refresh to assess whether our
sustainability focus areas, ESG material topics,
prioritized SDGs and metrics remain relevant
and appropriate.
OVERVIEW
Our material ESG topics
GROWING
SOCIETAL VALUE
• Ensure our metrics present a more complete
picture of our total footprint. Therefore,
various metrics (e.g., water consumed and
waste generated) have expanded in scope
from Company in-Kingdom to the operational
control boundary level;
• Increase our prioritized SDGs from 10 to 12
by including SDG 4 (Quality Education) and
SDG 17 (Partnerships for the Goals) — more
details on how we’ve contributed to these
are provided over the next few pages; and
• Increasing the number of our metrics in our
Sustainability Report undergoing external
assurance; from 6 metrics in 2021 to 16 metrics
in 2022.
GOVERNANCE
DATA
1. The concept of “materiality” refers to the guidance on external reporting from the Global Reporting Initiative, and does not necessarily correspond to the concept of materiality
used in connection with Aramco’s financial reports.
2. For more information on our governance, relevant material topics and our governance metrics, please refer to page 83 in this report and also page 90 in the 2022 Aramco Annual
Report.
13
Materiality
Mapping our
material ESG topics
Focus area
Relevant metric to monitor performance against each material topic
Climate change
and the energy
transition
Climate change (including GHG emissions)
• Scope 1 emissions (million metric tonnes of CO2e)
• Scope 2 emissions (million metric tonnes of CO2e)
• Upstream carbon intensity (kg CO2e/boe)
• Upstream methane emissions (metric tonnes of CH4)
• Upstream methane intensity (%)
For more details, see page 19
• Flaring intensity (scf/boe)
• Flared gas (MMscf)
• Energy intensity (thousand Btu/boe)
Example of our contributions to UN SDGs
Material topics
Impact
Climate change
(including GHG emissions)
Investing in more than 12 GW in solar and wind energy by 2030, expanding
CO2 storage capacity (e.g., CCS and CCUS) to support clean and affordable
energy production, as well as investing in innovative flaring reduction
technologies contribute to improved access to affordable, reliable and
sustainable energy for all.
Given the material impact climate change can have on human life and economic
opportunities, Aramco continuously invests in lower carbon energy and
alternative energy sources. This will create jobs and contribute to economic
growth.
Being one of the world’s lowest upstream carbon intensity major producers
in line with the Kingdom of Saudi Arabia’s Vision 2030 toward cleaner energy,
having an ambition to reach net zero emissions by 2050 from wholly-owned
operated assets, and also leveraging our influence in non-operated assets,
within the timeframe set by the Paris Agreement.
As part of our commitment to this SDG in 2022, we planted 11 million mangroves
and have set a target to plant another 31 million mangroves by 2025 along the
Arabian Gulf and Red Sea shorelines.
Aramco Sustainability Report 2022
Partnering with organizations with a climate focus, such as the OGCI, Ipieca and
WEF, via collaboration with governments, the private sector across the different
industries and civil society.
Impact on our business
Very high
High
Moderate
Impact on our stakeholders
14
OVERVIEW
CLIMATE CHANGE AND
THE ENERGY TRANSITION
Focus area
Relevant metric to monitor performance against each material topic
Safe operations
and people
development
Workforce protection
• Number of fatalities
• Lost time injuries/illnesses rate (number of LTI cases x 200,000/total work hours)
• Total recordable case frequency (total recordable incidents x 200,000/total
work hours)
• Health performance* (number of overdue major health findings) x (100)/total number
of open major health findings)
Process safety and asset integrity
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
For more details, see page 43
• Number of Tier 1 process safety events
Human rights
• Number of grievances raised*
Material topics
Impact
Workforce protection
• Sites with a grievance mechanism in place* (%)
Labor practices
• Attrition rate* (%)
• Number of company employees
• Number of female employees*
MINIMIZING
ENVIRONMENTAL IMPACT
Process safety
and asset integrity
• Female (%) of total employees
• Female (%) of total number of new hires*
• Number of female employees in leadership positions*
Human rights
• Female employees (%) in leadership positions
• Number of contractor employees*
• Employee engagement score* (%)
Labor practices
• Employees receiving regular performance reviews (%)
• Number of hired graduates
GROWING
SOCIETAL VALUE
• Number of apprentices
• Number of interns
• Total hours of training and development*
• Average hours of training and development* (per employee)
Examples of our contributions to UN SDGs
Aramco has various health and safety and well-being programs for our
employees (mental health initiatives, workplace standards and technology
to minimize exposing our workers to unnecessary risk).
GOVERNANCE
Aramco believes in lifelong learning and development and continues to provide
world-class learning experiences that drive personal growth and effective
operations at all levels of the Company through innovative platforms such as
corporate e-Learning, the Hosted University Programs, Advance Development
Programs and others.
Aramco is improving the gender balance of its workforce via a range of female
empowerment initiatives. In Saudi Arabia, Aramco funds the STEMania program
for school-age girls, offering university scholarships for science, technology,
engineering and mathematical degrees.
Very high
High
We have strong policies and processes to manage our ethics, bribery and
corruption risks, and ensure a decent working environment for our workforce.
DATA
Impact on our business
Moderate
Impact on our stakeholders
* Metric reported for the first time externally.
15
Materiality
Mapping our
material ESG topics
Focus area
Relevant metric to monitor performance against each material topic
Minimizing
environmental
impact
Local environmental impact
• Number of hydrocarbon spills
• Volume of hydrocarbon spills (bbl)
• Recovered hydrocarbon* (%)
• Hydrocarbon discharge to water (barrels)
• SO2 emissions (kilotonnes)
For more details, see page 57
• Number of sites with ISO 14001 certification* (%)
Biodiversity and ecosystems
• Net positive impact (%)*
Water management
Material topics
Impact
• Freshwater consumption (million m3)
• Freshwater withdrawal (million m3)
Product stewardship and waste management
Local environmental
impact
• Industrial waste generated (metric tonnes)
• Industrial waste recycled* (%)
Biodiversity and ecosystems
Examples of our contributions to UN SDGs
Given water scarcity in Saudi Arabia, the Company has a large seawater
treatment and injection network of facilities. Seawater is used as the primary
source of water for oil production and to ensure clean water is available for our
workforce and local communities.
Water management
Embracing circular economy (reduce, reuse, recycle and remove) principles and
business models across our operations and activities. For example, our recent
scrap-to-commodity program successfully recycled over 200,000 drum
containers and over 80,000 tons of steel. Reintroducing these materials to local
manufacturers as feedstocks eases the pressure on raw materials extraction and
allowed us to recover over $30 million of value. For more information, please
refer to Aramco’s circular economy section on our website.
Product stewardship
and waste management
Aramco has systems in place to manage all discharged water to the sea, meeting
Government requirements by investing in maintenance and monitoring systems
while proactively managing operations to avoid hydrocarbon leaks and spills by
maintaining asset integrity throughout the life cycle.
Committed to delivering biodiversity net gain in support of SDG15, Vision 2030
and the Saudi Green Initiative.
Aramco Sustainability Report 2022
Partnering with organizations, such as Ipieca, WEF and others, to help promote
good industry practice and better environmental performance. We are also
working closely with our suppliers and creating incentives to reward them for
improvements in their environmental performance.
Impact on our business
Very high
High
Moderate
Impact on our stakeholders
* Metric reported for the first time externally.
16
OVERVIEW
CLIMATE CHANGE AND
THE ENERGY TRANSITION
Focus area
Relevant metric to monitor performance against each material topic
Growing
societal value
Labor practices
• Number of people on Aramco sponsored programs*1
National content
• Saudization (%)
For more details, see page 71
• Saudization of construction contracts (%)
• Saudization of service contracts (%)
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
• iktva procurement spend in-Kingdom (%)
Human rights (supply chain)
• % of active suppliers signed up to Aramco’s Supplier Code of Conduct*
Material topics
Impact
• Number of active suppliers*
Community and society
Labor practices
• Social investment* ($ million)
• Number of volunteers*
• Number of volunteer hours*
National content
Economic contribution
Human rights (supply chain)
MINIMIZING
ENVIRONMENTAL IMPACT
• Direct economic value generated and distributed ($ million)
• Total R&D spend ($ million)
Examples of our contributions to UN SDGs
Aramco has various social investment programs, which look to improve the
health and well-being of our host communities around the world.
Community and society
Economic contribution
GROWING
SOCIETAL VALUE
Aramco believes in lifelong learning and development and continues to provide
world-class learning experiences in our community. With a mission to equip
the Saudi market with a highly motivated and qualified Saudi workforce, the
Company has historically been building and maintaining schools for children
and is also creating market/demand driven national training centers, which offer
high standard vocational training programs to sponsored trainees.
The Company also has a history of supporting the community via financing
various education centers for people with development disabilities, such as
Hiba Center for Down Syndrome and the Abdullatif AlFozan Autism Center
(the first community center of its kind in Saudi Arabia’s Eastern Province to
support children on the autism spectrum).
GOVERNANCE
Supporting the economic development of our employees and communities in
Saudi Arabia via our iktva spend, various home ownership and Aramco initiatives
to seed micro industries (e.g., Roseyar, beekeeping in al-Baha, fisheries in Yanbu’
and Baish, olive products in al-Jouf, coffee cultivation in Jazan).
Industry: Creating a world-class local supply chain to serve the needs of the
Company and its partners, facilitating the development of a diverse, sustainable,
and globally competitive energy sector in the Kingdom.
Innovation: At the heart of our business lies a commitment to innovate and
maximize production from our resources, to deliver energy as efficiently as
possible from the wellhead to customers.
Very high
High
Moderate
Impact on our stakeholders
Infrastructure: The Kingdom’s Master Gas System delivers natural gas to industry
across Saudi Arabia; while Aramco has also built various roads, educational facilities,
cultural centers (e.g., Ithra, which delivered over 8,000 programs and welcomed
more than one million visitors during 2022) and numerous other facilities across
the Kingdom.
DATA
Impact on our business
Partnering with governments, suppliers, non-profit organizations and education
institutions. During 2022, $370 million was invested in various social initiatives,
supporting more than 30 non-profit organizations around the world.
* Metric reported for the first time externally.
1. These programs include the Vocational College Internship Program (VCIP), University Internship Program (UIP), Summer enrichment program, Tomooh program, Advantage
program, and ACCEL International Ajyal Center.
17
Aramco Sustainability Report 2022
18
The challenge is to develop and deploy
technology solutions at speed and scale, to
provide the benefits of oil and gas for future
generations, while minimizing emissions.
It is a complex, multidimensional, and capital
intensive challenge that will span generations.
Climate change
(including GHG emissions)
Scope 1 emissions (million metric tonnes of CO2e)
Scope 2 emissions (million metric tonnes of CO2e)
Upstream carbon intensity (kg CO2e/boe)
Upstream methane emissions (metric tonnes of CH4)
Upstream methane intensity (%)
Flaring intensity (scf/boe)
Flared gas (MMscf)
Energy intensity (thousand Btu/boe)
Relevant UN SDGs
GROWING
SOCIETAL VALUE
Relevant metrics
MINIMIZING
ENVIRONMENTAL IMPACT
Material topics
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
We are investing in technology needed for
a stable energy transition that utilizes all sources
of energy to meet the world’s growing energy
demand while reducing GHG emissions.
Our focus is on leading in lower carbon
intensity energy production and supporting the
development of non-fuel applications for crude
oil, targeting the highest impact solutions across
our value chain.
CLIMATE CHANGE AND
THE ENERGY TRANSITION
As one of the world’s largest integrated energy
and chemicals company, we have an important
role to play to support energy security and
promote sustainable practices in response to
climate change.
OVERVIEW
Climate change and
the energy transition
GOVERNANCE
DATA
Learn more about
Aramco’s GHG emissions
management program.
For more details on relevant metrics, see page 86.
Scan here
19
The energy landscape
Navigating the energy transition
Toward a low carbon system
Aramco supports the aims of the 2015 Paris
Agreement to limit global temperature increase
in this century to 2 degrees Celsius, while
pursuing efforts to limit the increase even further
to 1.5 degrees, and the commitment of the
Kingdom of Saudi Arabia to achieve net zero
emissions in its economy by 2060. This requires
a transition of the global energy system toward
a low carbon system, requiring thousands of
large-scale projects across multiple sectors. This
presents unprecedented design, engineering,
and implementation challenges. The McKinsey
Global Institute has estimated that a net zero
world will cost around $275 trillion by 20501.
Policymakers, industrial suppliers and customers
recognize that this transition will not be uniform
across geographies. What might be achievable
today in more developed economies will be
distinct from what is appropriate and effective in
emerging markets. Growing markets, particularly
in developing countries, face additional challenges
to their ability to achieve sustainable development
while meeting their needs for affordable, reliable
energy. Reduction in GHG emissions across
Europe and North America will proceed at
a different pace from developing countries.
What does unite all economies and societies
is not only the desire to address the impacts of
climate change, but also the need for affordable,
reliable energy. Across any society, higher energy
prices are a burden that disproportionately
impacts lower income households.
Balancing energy security, affordability
and emissions
Aramco Sustainability Report 2022
Events of the last few years, particularly
COVID-19 and the conflict in Ukraine, have
highlighted the risks of under-investment in
energy sources and underlined the importance
of energy security and energy access.
Alternatives to traditional hydrocarbon-based
energy sources are progressing, but on their
own will be insufficient to meet the world’s
energy demands today and ensure an orderly
energy transition. As COP27 in Sharm El Sheikh
highlighted, many developing economies
depend upon the low-cost and reliability of
hydrocarbons to avoid energy shortages and
cost inflation — and they need realistic solutions
now to ensure economic security, even while
the energy transition develops in parallel.
Although global energy systems are becoming
more efficient each year, requiring less energy
to meet the same level of economic activity,
the demands of a growing middle-class and
facilitating access to economies and communities
that lack access to energy is leading to a growing
energy demand.
The definition of “affordable, reliable energy”
diverges depending on the society and its
position in the development index. Accordingly,
prudent solutions will require a variety of energy
sources and technologies. For example, around
800 million people do not have access to
electricity and some 3 billion people still depend
on indoor fires for cooking2 — their requirements
differ substantially from those living in a highly
advanced economy.
With the focus on energy security and
affordability, Aramco’s continued investment
and capital expenditure to increase supply,
combined with our high level of reliability
and low carbon intensity of production, will
support a global orderly energy transition.
Our 2050 net zero ambition and 2035 GHG
emissions reduction targets keep us focused
on advancing in lower carbon intensity and
abatement technologies and supporting the
development of non-fuel applications for crude
oil. We also continue to invest in the ability
to meet the world’s need for energy sourced
from hydrocarbons. This includes expanding
the gas supply in Saudi Arabia, and exploring
new markets, including for blue hydrogen
and additional non-combustible uses for oil.
A parallel materials transition
At the same time, the global economy is facing
the realities of having to invest in new supply
chains for minerals, metals, and materials.
Without adequate investment in oil and gas,
there remains the risk of raising the cost of the
critical inputs needed for any transition.
Hydrocarbons will increasingly be used without
combustion or where carbon emissions can be
captured and removed. Fuels, such as blue
hydrogen, using CCS technologies, are projected
to increase in demand. Petrochemicals will
provide feedstock essential to the development
of new materials that will play a significant role
in the energy transition — advanced, durable
materials are essential for manufacturing wind
turbines, solar panels, all modes of transportation,
1. McKinsey Report: “The Net Zero Transition”, January 2022.
2. Overseas Development Institute ‘Oil and gas, poverty and energy access’.
20
McKinsey Global
Institute has
estimated that
a net zero world
will cost around
$275
trillion by 20501
OVERVIEW
Energy
security
Energy transition scenarios
Affordability
Once the scenario pathways are defined, they
are modeled using a proprietary energy analytics
system. Scenario outputs include global economic
indicators, energy market fundamentals, and GHG
emission projections.
MINIMIZING
ENVIRONMENTAL IMPACT
In our latest set of scenarios, we have used the
energy trilemma framework, first developed by
the World Energy Council, to determine alternate
pathways for the future. The framework utilizes
affordability, energy security and environmental
sustainability as three policy objectives that
require balance and trade-offs. Each of our
scenarios accentuates one dimension of the
energy trilemma triangle, while a fourth scenario
depicts a balanced approach to these trade-offs.
GROWING
SOCIETAL VALUE
The Company employs in-house expert
economists and analysts to develop these
scenarios. A wide range of internal and external
stakeholders are engaged to determine the
drivers of future energy landscapes, our
strategies, and investment decisions. These
and other important determinants, such as
policy developments and climate goals, and
technological progress form the basis of
our scenario pathways.
Environmental
sustainability
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
Scenario planning has been integral to Aramco’s
decision-making process for around a decade.
The first scenarios were developed in 2014,
depicting four pathways to the future energy
landscape our business operates in. We have
updated the scenarios five times since the start of
this journey, each time successively incorporating
the increasingly complex nature of our business
amid a fast-paced transition. During this decade,
the energy world has endured a major downturn
in oil price cycles, a pandemic, and several
geopolitical events. Scenarios and outlooks
have been critically important to strategic
dialogues within our Company.
CLIMATE CHANGE AND
THE ENERGY TRANSITION
storage devices, and infrastructure. The faster
we accelerate the transition, the more of these
materials we will need. Today, chemical products
made from oil and gas enable over 90% of all
manufactured goods.
Aramco’s integrated energy and economic modeling system
Climate
model
Natural
gas
Macroeconomy
Energy
demand
Oil supply
Prices
Refining
Petrochemicals
DATA
The system operates in an integrated manner with eight
different sub-modules including economics, energy
demand, climate, oil supply, gas supply, coal supply,
refining, and petrochemicals. The system is capable of
modeling at a country-level on 26 sub-sectors, 25 fuel
types, energy carriers including electricity and hydrogen,
and GHG emissions.
GOVERNANCE
Aramco developed its proprietary energy solutions
platform in collaboration with a number of industryleading energy data providers and modelers. The
platform is a computer-based integrated solution
comprised of global economic and energy models.
These models represent energy supply (oil, gas, and
coal), demand (transportation, residential, commercial,
and industrial), conversion (refining, power, and
petrochemicals), and macroeconomics.
21
Climate change and the energy transition
Our climate change and
energy transition framework
Our corporate strategy is based on producing
hydrocarbons that have one of the lowest
upstream production costs and carbon intensities
in the world, and supporting a global orderly
energy transition towards a lower carbon
emissions future through investing in
technologies and offering lower carbon
products, including e-fuels.
Our climate change and energy transition
framework is informed by the circular carbon
economy principles of reduce, reuse, recycle
and remove.
We have four areas of focus that provide the
framework for our climate change initiatives
and investments:
Differentiate
Sustain
Diversify
Leading in low carbon
intensity operations
Supporting the transition to
low-impact energy pathways
Developing and growing
low-impact value chains
GHG emissions management
Lower carbon fuels and transport
technologies
Non-metallics
Flaring and methane reduction
Liquids-to-chemicals
Hydrogen
Energy management
Renewable energy investment
In-Company renewables
Enable
Aramco Sustainability Report 2022
Collaboration with partners
to develop and deploy
technologies and infrastructure
at speed and scale
Read about how Aramco
seeks to adopt the
principles of the circular
carbon economy.
Scan here
22
Carbon capture and storage
Leveraging technology
Developing offsets and supporting
carbon markets
Differentiate
Sustain
Diversify Enable
We recognize the need to reduce our GHG and
methane emissions and have ambitions and
targets to reduce carbon emissions associated
with our operations.
Net zero ambition
Aramco’s ambition is to reduce GHG emissions
from our operations and achieve a net zero
GHG emissions footprint by 2050 across our
wholly-owned operated assets.
It requires internal targets to be set for our
businesses and assets, and for these targets to be
embedded into our business planning, to ensure
capital expenditure and resource requirements
are in place.
Risk
Mitigation
Policy: Policies restricting or
banning use of fossil fuels, or
applying a cost on carbon
• Climate-related demand scenarios to
inform business decision making
Technology: Adoption of
disruptive technologies and/or
slow development of GHG
reduction technologies
• Accelerated development of our
technology portfolios, including synthetic
fuels, CCUS and CCS technologies,
e.g., Jubail CCS Hub
• Diversification into low GHG emitting
Market: Loss of demand for
products, e.g., chemicals and hydrogen
hydrocarbons as customers move
to achieve their GHG targets
Legal: Potential exposure to
climate-related litigation
• Accurate and transparent reporting and
disclosures with independent assurance
Reputation: Impact on corporate • Stakeholder engagement, including
reputation
independent external consultants
and subject matter experts to advise
on reporting and disclosures, and explain
the Company’s energy transition pathway
What are we doing?
Emissions management starts at the subsurface
GOVERNANCE
Our philosophy of sustainable reservoir management is key in reducing
our upstream carbon intensity. Instead of maximizing production from
wells which could irreversibly damage them, we prioritize the long-term
health of our reservoirs. This entails producing our fields at low depletion
rates to prevent premature water breakthrough, reducing the quantity of
produced water.
GROWING
SOCIETAL VALUE
Having undertaken analysis to support this
corporate ambition, we know that achieving
net zero operational emissions while we grow
our business to meet global energy demand will
be a huge challenge.
Climate change is considered a top corporate priority for us and we assess
this on a medium to long-term horizon. Our response to climate change
is embedded in our business strategy, supported by our climate change
and energy transition framework and our five GHG reduction initiatives.
MINIMIZING
ENVIRONMENTAL IMPACT
Aramco’s industry leading low carbon intensity
production performance is the result of almost
half a century of careful reservoir management
and investment in efficiency, reducing flaring
and produced water management. This has
yielded an environmental advantage that forms
a key pillar of our corporate strategy. We are
confident that we can help the world meet its
rising energy needs, while reducing emissions
from our operations.
Climate change risk and mitigation
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
Our emissions reduction strategy includes
investing in low-emission technologies, including
CCS, energy efficiency programs and energy mix
diversification. We are committed to developing
and deploying innovative solutions, optimizing
operations, and adopting efficient project designs.
What are we doing?
CLIMATE CHANGE AND
THE ENERGY TRANSITION
GHG emissions management
OVERVIEW
Leading in low carbon
intensity operations
DATA
Using advanced reservoir modeling and real-time data, our geoscientists
and engineers steer multilateral wells with maximum reservoir contact to
ensure optimum well placement which help minimize water production.
Additionally, these wells are equipped with smart completions which
enable shutting off when detecting water. Such practices result in
superior produced water management and low water oil ratios (WOR).
When the production of water is minimized, less energy is required for
fluid separation, treatment and disposal. These energy savings result in
lower carbon emissions. As a consequence, Aramco’s average WOR is
significantly lower than the global average, and hence our upstream
carbon intensity is amongst the lowest globally.
23
Diversify Enable
What are we doing?
Digital twins
Our EXPEC Computer Center developed
a solution to reduce energy intensity and
emissions associated with operating subsurface
artificial lift systems, leveraging digital twin
technology by optimizing the performance
of our electric submersible pumps (ESP).
The system was trial tested across 42 ESP lifted
wells resulting in a 22% average reduction in
power consumption, equivalent to 12 GWh
of energy savings during 2022. It is projected
that deploying this solution across all fields will
result in a 25% average reduction in artificial
lift energy intensity at Company level.
What are we doing?
Aramco Sustainability Report 2022
Targeted GHG reduction
Our Yanbu’ Refinery facility successfully
obtained the International Sustainability and
Carbon Certification under its circular cracker
oil initiative. The initiative drives the
certification relates to an in-house sustainable
circular route to produce circular cracker oil
from waste oil to reduce our Scope 2 GHG
carbon footprint.
During 2022, we have made progress toward
achieving our 2035 and 2050 ambitions across
our five identified levers: energy efficiency,
reduced methane and flaring; increased
renewables; CCS; and offsets to address
emissions we cannot reduce or capture. For more
information on our 2022 efforts and impact,
please refer to pages 26 and 27.
We have also been conducting site-level
bottom-up assessments of what it would take
to decarbonize our assets. Once this is completed
in 2023, we will update our decarbonization
strategy in the next report.
GHG emissions
The Company’s GHG emissions management
program monitors direct (Scope 1) and indirect
(Scope 2) emissions from wholly-owned operated
assets, in a manner consistent with the GHG
Protocol. Despite increased hydrocarbon
production by 10% in 2022, total emissions
(Scope 1 emissions and Scope 2 emissions) from
the Company and its operationally controlled
entities increased by only 6% (71.8 MMtCO2e
in 2022 versus 67.8 MMtCO2e in 2021) compared
to the previous year.
This was enabled by more efficient operations
and a reduction in flaring intensity by 17%
compared to the previous year due to improved
operations of the Company’s in-house flare gas
recovery systems across several facilities. For
more information on our flaring, please refer
to page 28.
1. 2018 was the first year our GHG inventory was independently assured.
2. This figure has undergone external limited assurance in accordance to the ISAE 3000 (revised). The assurance report can be found online here.
24
2035
Targeted
GHG
reduction
67
52
-52
Forecast
business-asusual growth
119
-15%
(MMtCO2e)
2035
(kg CO2e/boe)
Scope 1 and Scope 2
emissions GHG reduction
targeted by 2035
722
-15%
2022
By 2035, consistent with the corporate growth
strategy in oil and gas production and
development of new businesses, particularly
hydrogen and liquids-to-chemicals, we forecast
our business as usual Scope 1 and Scope 2 GHG
emissions for our wholly-owned operated assets
will increase to 119 MMtCO2e. Our goal is to
mitigate this growth in emissions and reduce
our emissions to 67 MMtCO2e by 2035.
Scope 1 and Scope 2
emissions upstream
intensity: 15%
reduction by 2035
8.7
In parallel with our intensity targets, we are
aiming to reduce our net annual Scope 1 and
Scope 2 GHG emissions from both the upstream
and downstream businesses by 52 MMtCO2e
from our business as usual 2035 forecast emissions.
2035
GHG emissions targets
10.21
Sustain
2018
Differentiate
Our Southern Area
Oil Operations
won a 2022 Society
of Petroleum
Engineers Regional
Distinguished
Corporate Support
Award for reducing
its emissions by
600,000
tCO2e
OVERVIEW
This improvement is predominantly driven by
energy efficiency, and reduced flaring across
Upstream operations due to improved reliability
and performance of our flare gas recovery
systems (FGRS). In 2022, two new FGRS became
operational in both Abu Ali and Qatif central
processing facility resulting in estimated annual
flared gas recovery of over 1.0 bscf per year.
For more details on what we have done during
2022 regarding our progress on our five levers
to meet our 2035 interim GHG targets, please
refer to pages 26-27.
10.31
10.71
2021
2022
10.63
2020
16.11,2
2022
15.51,2
2021
During 2022, we increased our R&D spend
on developing potential solutions that will assist
the global energy transition towards a lower
carbon emissions future — notably over a 45%
increase in sustainable mobility R&D spend and
over 380% increase in crude to chemicals R&D
spend, reflecting the increasing importance of
these areas to our future business. For more
details on our R&D spend, please refer to
pages 40-41.
What are we doing?
Vessel Speed Program
GOVERNANCE
To support the national and corporate GHG reduction aspirations, our
terminals instituted the Vessel Speed Program reducing the speed of
vessels sailing through the Ras Tanura and Ju’aymah Port to 12 knots
from 15 knots. 12 knots was determined as the optimal speed based
on vessel engine efficiency, while minimizing impact on customers’
satisfaction or our reliability. It is estimated that the program has reduced
the GHG emissions of visiting ships by more than 90,000 tCO2e per year4.
DATA
Scope 3 — value chain emissions
Our focus is on measurement, reporting, and
management of those emissions within our direct
control. To date, we have not reported Scope 3
emissions from our supply chain or from
customers’ use of our products. We are working
on supporting the global energy transition towards
a lower carbon emissions future through investing
in technologies and working with suppliers to
integrate ESG performance measures through
our iktva program.
Our investment in hydrogen, chemicals and
renewable energy sources and the increasing share
of gas in our production provide products that
will support the global energy transition towards
a lower carbon emissions future. We continue
to invest in a number of product stewardship
partnerships and technologies to reduce emissions,
this includes research and development into low
emissions transport solutions.
GROWING
SOCIETAL VALUE
Aramco is leveraging its R&D and technology
initiatives to develop, and implement innovative
approaches that could help lower emissions
across our industry and have potential
application in other industries.
10.3
MINIMIZING
ENVIRONMENTAL IMPACT
Upstream carbon intensity
The Company’s 2022 upstream carbon intensity
figure remains among the lowest in the industry
at 10.31 kg CO2e/boe (2021: 10.71 kg CO2e/boe).
2020
55.71,2
2022
2021
2020
16.1
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
55.7
18.11,2,3
(kg CO2e/boe)
52.31,2
Upstream carbon intensity
(MMtCO2e)
50.21,2,3
Scope 2 emissions
(MMtCO2e)
CLIMATE CHANGE AND
THE ENERGY TRANSITION
Scope 1 emissions
1. This figure has undergone external limited assurance in accordance to the ISAE 3000 (revised). The assurance report can be found online here.
2. The Jazan Refinery (our downstream refinery) is excluded from our current GHG reporting because in 2022, it remains in the startup and stabilization phase and is not fully
operational. Aramco is working to stabilize the refinery’s operations and complete all necessary reporting configurations before the end of 2023. Reporting on the refinery’s
environmental and sustainability elements will commence immediately thereafter, in line with the Company’s commitment to operational transparency.
3. Fadhili Gas Plant is excluded from 2020 GHG emissions inventory.
4. These emission reductions were calculated from real vessel performance data at different speeds and application of the International Maritime Organization guidelines. Prior to
implementation, terminals benchmarked the initiative with other worldwide ports, such as Los Angeles and San Diego in the United States, and other countries including Canada
and Singapore.
25
Differentiate
Sustain
Diversify Enable
GHG reduction initiatives to 2035
Levers to achieve
interim targets
Energy efficiency
Our plans
• Continue to sustain/improve
energy intensity
To achieve reductions in GHG
emissions by 2035, we are focusing
on five key levers: energy efficiency
across our upstream and
downstream assets; further
reductions in methane and flaring;
increased use of renewable energy
sources; CCS; and development or
purchase of offsets to help address
hard-to-abate emissions.
• Optimize co-generation and
steam systems
Our plans
• Commitment to OGCI near zero
upstream methane intensity by
2030 and the World Bank’s “Zero
Routine Flaring by 2030” initiative
• Ensure energy efficiency in new
project design
• Further enhance LDAR (Leak
Detection and Repair) Program
• Expand utilization and application
of the energy efficiency digital
solutions
• Unmanned aerial vehicles and
satellite methane detection
• Initiatives include gas turbine
upgrades, boiler and fired heater
efficiency improvements
Our actions in 2022
• Achieving a 3% improvement
in energy intensity performance
compared to last year
• Implementation of new energy
efficiency technologies in our
industrial and non-industrial
facilities
Aramco Sustainability Report 2022
MMtCO2e
1. This figure may not match up due to rounding.
26
• Implementing a Flaring
Minimization Roadmap, with
site-specific priorities across
Aramco operations
• Investing in and developing
innovative flaring reduction
technologies
• Enhancing hydrogen blending
capabilities for current boilers
• Installing high efficiency burners
• Introducing new strategies for
implementing energy conservation
initiatives for more than
700 buildings
~52
• Upstream methane intensity
of 0.05%
• Introducing a smart flaring
monitoring system
• 36 organizations received the
ISO 50001 certification for their
energy management system
1
Our actions in 2022
• Achieved our lowest ever flaring
intensity
• Using modern low NOx burner
technologies to boost fuel efficiency
• Upgrading and optimizing
operation of boilers, steam traps,
and fired heaters
GHG reductions
targeted by 2035
Flaring and methane
11
MMtCO2e
• As part of the LDAR program,
surveyed thousands of points
across our operations in the
Kingdom to minimize methane
leaks
• Installed two new Flare Gas
Recovery Systems at Abu Ali and
Qatif Central Processing Facility
1
MMtCO2e
OVERVIEW
Our plans
• Commitment to invest in 12 GW
of solar and wind energy by 2030
for our business and also in
support of the Kingdom’s National
Renewable Program
• Installing PV systems to power
Aramco’s remote pipelines load
• Jubail Hub targeted to store
9 MMtpa, with Phase 1 capturing
around 6 MMtpa by 2027 from
gas plants at Wasit, Fadhili and
Khursaniyah, plus circa 3 MMtpa
from other industry sources
• Phase 2 will capture around
5 MMtpa and may include CO2
from other facilities
Our actions in 2022
• Joint Agreement signed with
SLB and Linde to build the Jubail
CCS hub
• Identified 9 MMtpa of storage
capacity with CO2 injection
expected by 2027
Our plans
• Develop carbon offsets from
natural climate solutions
• Ambition to plant 300 million
mangroves in Saudi Arabia and
350 million mangroves outside the
Kingdom by 2035 — expected to
remove and offset an estimated
16 MMtCO2e by 2035
• Assist in developing a credible and
functioning carbon credit market
in the Kingdom for carbon offsets
and credits produced in the MENA
region
MINIMIZING
ENVIRONMENTAL IMPACT
• Approved installation of
renewable systems to power
20 offshore water injection wells
at Berri and Zuluf
Our plans
• Jubail CCS hub to capture up to
11 MMtpa by 2035 — contributing
towards the Kingdom reaching its
goal of 44 MMtpa of CCUS by 2035
Offsets
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
Our actions in 2022
• Sudair Solar PV Plant has
reached 56% completion — power
generation expected to start in
Q4, 2024
CCS
CLIMATE CHANGE AND
THE ENERGY TRANSITION
Renewables
Our actions in 2022
• Participated, and purchased
credits, in the first carbon credit
auction held in 2022 through
the Regional Voluntary Carbon
Market in Saudi Arabia
GROWING
SOCIETAL VALUE
• Captured around 238 MtCO2
from our pilot Hawiyah Natural
Gas Plant resulting in a cumulative
total of about 1,570 MtCO2 stored
in the reservoir, since the CO2
injection started in 2015
GOVERNANCE
MMtCO2e
11
MMtCO2e
16
DATA
14
MMtCO2e
27
Diversify Enable
During 2022, our flaring intensity fell by 17%,
(4.601 scf/boe in 2022 versus 5.51 scf/boe in 2021)
due to significant investments, installations and
improved operations of our in-house flare gas
recovery systems across several facilities and
a reduction in routine and non-routine flaring.
From April 2022, two new FGRS became fully
operational in both Abu Ali and Qatif central
processing facility, which will result in an
expected annual reduction of 1.5 bscf per year.
Substantial investments and developments
in innovative flaring reduction technologies
continued throughout 2022. These included
implementing the Flaring Minimization
Roadmap, which has identified priorities across
Aramco operations, with every operating facility
having a flare minimization plan and targets.
Aramco’s operations are monitored in real-time
at our Fourth Industrial Revolution (4IR) Center
in Dhahran. This has enabled us to achieve
near zero routine flaring already. We have
maintained a flare volume of < 1% of total raw
gas production since 2012.
Aramco Sustainability Report 2022
Methane
Addressing methane emissions is one of the
fastest, most effective ways to slow the rate
of global temperature rise.
An enhanced Leak Detection and Repair
program for the Company’s methane emissions
in the Kingdom prioritizes actions at operating
facilities. Hundreds of thousands of points are
surveyed across our operations to minimize
potential methane leaks. We use drones to
monitor and measure methane emissions from
our operating facilities.
In addition to LDAR, we are assessing and
deploying remote detection solutions and
technologies such as the use of satellite
monitoring.
Aramco’s upstream methane intensity measures
the ratio of our upstream methane emissions
for operated assets against the quantity of
marketed natural gas. Our upstream methane
intensity remained low in 2022 at 0.05% (0.05%
in 2021) and is already well below the OGCI
ambition to achieve at least 0.20% by 2025.
< 1%
We have maintained
a flare volume of
of total raw gas
production
since 2012
What are we doing?
Two technologies
In 2022, two technologies were piloted to enhance the management
of flaring emissions:
• A flaring monitoring system detects flaring performance and optimizes
burner feed inputs via cameras equipped with artificial intelligence
programs.
• We piloted portable ignition systems for on-demand flaring needs,
replacing continuous flaring and emissions.
1. This figure has undergone external limited assurance in accordance to the ISAE 3000 (revised). The assurance report can be found online here.
2. The Jazan Refinery (our downstream refinery) is excluded from our current GHG reporting because in 2022, it remains in the startup and stabilization phase and is not fully
operational. Aramco is working to stabilize the refinery’s operations and complete all necessary reporting configurations before the end of 2023. Reporting on the refinery’s
environmental and sustainability elements will commence immediately thereafter, in line with the Company’s commitment to operational transparency.
3. Fadhili Gas Plant is excluded from our 2020 reporting.
28
2022
2021
4.601,2
5.512
5.972,3
4.60
2020
0.05
(scf/boe)
0.05
(%)
2022
Minimizing flaring
Aramco is a signatory to the World Bank’s
“Zero Routine Flaring by 2030” initiative and is
committed to sharing best practices with industry
partners to accelerate global flaring reduction.
Flaring intensity
Upstream methane
intensity
0.05
Flaring of waste gases has long been recognized
as one of the most significant contributors to
GHG emissions in the oil and gas sector. Aramco
has been a pioneer in gas flaring reduction and
now has industry-leading methane intensity and
gas flaring metrics.
2021
Flaring and methane
0.063
Sustain
2020
Differentiate
OVERVIEW
Energy efficiency
The Company seeks to reduce energy
consumption at facilities, design new facilities
to be energy efficient, and promote energy
efficiency in Saudi Arabia.
146.21
116.61,2,4
2021
2022
112.41,2,3,4
Several initiatives have been planned to improve
energy efficiency, including:
• Upgrading of simple cycle gas turbines with
energy efficient combined cycle systems;
• Replacement of older inefficient boilers with
highly efficient fast ramp up boilers; and
• Implementation of advanced digital solutions
to improve energy efficiency performance.
At the end of 2022, all our operational facilities
have received the ISO 50001 certification for
their energy management system (EnMS). EnMS
enables our facilities to focus on an ongoing,
sustained improvement in energy efficiency,
and reduction in greenhouse gas emissions,
along with monetary savings as a result of
smarter energy utilization and improved energy
efficiency.
What are we doing?
Innovative Energy Project of the Year Award
Aramco won the Innovative Energy Project of the Year Award from the
Association of Energy Engineers in recognition of implementing the
Energy Demand Forecasting Solution in Oil and Gas facilities. The
solution was recognized due to its novel machine learning capabilities
that accurately forecast energy demand.
GOVERNANCE
We started an energy efficiency management
program in 2000. The program has evolved
through the implementation of energy efficiency
initiatives such as process improvements, fuel gas
optimization, higher co-generation utilization,
continuous performance monitoring of
significant energy users, reduction in energy for
crude oil transportation, and load management
of top energy users.
in our interconnected
co-generation
facilities
GROWING
SOCIETAL VALUE
While our reporting boundary has expanded
as per footnote 1 below, in 2022, at a Company
in-Kingdom level, the energy intensity was
112.9 thousand Btu/boe (a fall of 3% from
prior year), which demonstrates continued
improvement in our energy efficiency initiatives
across our business.
146.2
70.7%
MINIMIZING
ENVIRONMENTAL IMPACT
We are harnessing what would otherwise be
waste energy by maximizing the conversion
of energy released from the combustion of
fuel into power and steam to achieve improved
thermal energy efficiency and reduce overall
GHG emissions. In 2022, we achieved an average
thermal efficiency of 70.7% (70.8% in 2021)
in our interconnected co-generation facilities.
(thousand Btu/boe)
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
We analyze the real-time data of the power
generated, which allows us to streamline our
carbon footprint.
As of 2022, we
achieved an average
thermal efficiency of
Energy intensity
2020
Co-generation
Highly efficient co-generation plants enable
us to produce electricity as a byproduct of our
operations and are enabling self-sufficiency
in electrical power generation for our own
operating plants. We are retrofitting some of
our existing plants with co-generation systems
to create energy, as well as heat for oil and gas
production processes.
CLIMATE CHANGE AND
THE ENERGY TRANSITION
Energy management
DATA
1. As we progress on our reporting journey and our controls around ESG data mature, for this metric from 2022 onwards, we have expanded the reporting boundary from Company
in-Kingdom to operational control. The 2021 and 2020 figures are at a Company in-Kingdom level only. In 2022, at a Company in-Kingdom level, the energy intensity was
112.9 thousand Btu/boe.
2. The Jazan Refinery is excluded from our reporting because in 2022, it remains in the startup and stabilization phase and is not fully operational. Aramco is working to stabilize
the refinery’s operations and complete all necessary reporting configurations before the end of 2023. Reporting on the refinery’s environmental and sustainability elements will
commence immediately thereafter, in line with the Company’s commitment to operational transparency.
3. Fadhili Gas Plant is excluded from our 2020 reporting.
4. This figure has undergone external limited assurance in accordance to the ISAE 3000 (revised). The assurance report can be found online here.
29
Differentiate
Sustain
Diversify Enable
Pathways to lower carbon energy
Aramco’s strategy is to increase its production
of hydrocarbons while seeking to maximize
opportunities for lower carbon products.
We recognize the need to reduce emissions
and support a global orderly energy transition
towards a lower carbon emissions future through
investing in technologies and offering lower
carbon products, such as e-fuels, and working
with suppliers, to integrate ESG performance
measures through our iktva program.
We are researching:
Gasoline compression ignition
Opposed piston engines
Turbulent jet ignition
Dilute boost engines
For more information
on advanced engine
technologies see
our website
Low carbon fuels and transport
technologies
Achieving sustainable mobility requires
collaboration across the value chain to meet
consumer demand for affordable, low emission
transport. Electric vehicles are fast growing and
will play an important role in mitigating climate
change when integrated with renewable
electricity. However, in the near term, transport
electrification alone is unlikely to be adequate
to meet global CO2 mitigation goals. This has
to be complemented by advanced combustion
engines, fuel cell vehicles, and low carbon fuels,
including renewable fuels and hydrogen.
Sustainable mobility
Aramco has around 100 scientists and engineers
in four locations across the world working on
the challenges of sustainable mobility. Through
our global network, we are working to create
breakthrough transportation technologies
with the goal of improving efficiency that has
the potential to reduce emissions — both CO2
and other air pollutants, including NOx and
particulates.
Aramco Sustainability Report 2022
We are seeking to redesign internal combustion
engines, and the fuels that power them including
advanced combustion systems, novel engine
architectures, and innovative after treatment
systems.
We have two flagship projects that aim to
advance the development of low carbon
synthetic fuels, one in Spain and another in
Saudi Arabia. Aramco’s low carbon synthetic
fuels plan is to combine CO2 captured from
industrial processes or directly from the air with
green hydrogen and target a CO2 reduction
potential of at least 80% on a lifecycle basis.
30
Scan here
What are we doing?
Demonstrating sustainable fuels through
Formula racing
Building on our strategic partnership with Formula 1 (F1) to accelerate
our engineering excellence and achieve our respective net zero targets,
we are working closely with F1 to support their goal of fully switching
to sustainable fuels by 2026.
In February 2022, Aramco entered into a strategic partnership with the
Aston Martin Aramco Cognizant Formula One™ Team to promote the
development of highly efficient internal combustion engines to
accelerate high performance sustainable fuels and advanced lubricants,
making use of the diverse technologies Aramco has developed.
Beyond F1, Aramco signed a Memorandum of Understanding with
Formula Motorsport Limited to introduce alternative, lower carbon fuels
in the Formula 2 and Formula 3 racing championships beginning
in 2023.
Through this collaboration, we plan to demonstrate the potential of
liquid synthetic fuels to reduce emissions both in motorsport and the
broader transportation sector.
OVERVIEW
CLIMATE CHANGE AND
THE ENERGY TRANSITION
What are we doing?
Aramco Ventures and our
$1.5 billion Sustainability Fund
Aramco Ventures is our venture capital vehicle,
that invests globally in innovative startup companies.
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
Aramco Ventures supports three key elements of Aramco’s
overall strategy:
• Commitment to innovation and technology leadership.
• Supporting our digitalization journey and use of Fourth
Industrial Revolution (IR 4.0) technologies.
• Supporting the Company’s sustainability ambitions and
development of new lower carbon energy solutions.
The Sustainability Fund’s focus is on sectors closely aligned
with Aramco’s decarbonization and lower carbon energy
solutions business strategies, including:
• Carbon capture, utilization and storage;
• Renewable energy and energy storage;
• Nature-based solutions;
• Hydrogen and ammonia value chains;
• Synthetic renewable fuels, including direct air capture; and
• Digital sustainability solutions.
Our $1.5 billion Sustainability Fund will be among the largest
sustainability focused venture capital programs announced
globally, and the largest by any oil and gas producer.
It will join Aramco Ventures’ other investment programs:
• As a founding member of the OGCI, Aramco participates
in OGCI’s Climate Investments Fund. This is a $1 billion fund
that includes the participation of 11 major oil and gas
companies. It is focused on investments in carbon capture,
utilization, and storage, methane emissions reduction, and
carbon dioxide emissions reduction in the oil and gas and
transport sectors.
GOVERNANCE
• Energy efficiency technologies;
This fund has invested in various companies since inception,
with three companies achieving IPO, six reaching “Unicorn1”
status, and more than 25 technologies deployed in Aramco.
This fund will continue to operate focusing on digital and
industrial technology domains.
GROWING
SOCIETAL VALUE
Launched in 2022, Aramco Ventures’ new $1.5 billion
Sustainability Fund will accelerate the Company’s progress
towards developing and using innovative solutions to address
the climate challenge, and represents a major expansion
of our sustainability investment activities.
MINIMIZING
ENVIRONMENTAL IMPACT
As we accelerate the implementation of our vision to become
the world’s preeminent integrated energy and chemicals
company, the breadth of our businesses, operations, and
geographic presence offer unique opportunities to pilot and
deploy the technologies created within the startup companies
we invest in.
The Sustainability Fund builds on Aramco Ventures’ existing
strategic venturing program, which invests in companies
developing technologies with strategic importance to
Aramco to accelerate their development and deployment
in Aramco’s operations.
• Prosperity7, Aramco’s $1 billion diversified growth
venturing program invests in disruptive technologies and
start-ups outside of the energy sector. The program focuses
on investing in highly scalable start-ups in the U.S. and
China. The program has made over 25 investments to date.
DATA
1. Unicorn companies are those that reach a valuation of $1 billion without being listed on the stock market.
31
Differentiate
Sustain
Diversify Enable
Hydrogen
Hydrogen is a primary element in oil and gas,
and holds significant potential as a clean,
affordable energy that could support emissions
reductions in hard-to-decarbonize sectors such
as heavy-duty transport, heating, and industrial
applications. We believe hydrogen has significant
potential to provide a material reduction in
GHG emissions, as a global market develops over
the next decade.
Hydrocarbon’s crucial role in the development
of a global hydrogen business
Despite the interest and possibility of producing
hydrogen from multiple energy sources, in
the short and medium term, hydrocarbons will
remain the primary feedstock for its production.
Hydrogen has the potential to become a
tradeable commodity, which opens commercial
opportunities for our business over the medium
to long term.
At the same time, investments in low carbon
hydrogen can help foster new technological
and industrial development in economies around
the world, while also creating skilled jobs.
Natural gas and hydrogen
Natural gas has the potential to be a viable,
cost-effective feedstock for blue hydrogen
production. Natural gas is the most used
feedstock for hydrogen production today.
Aramco Sustainability Report 2022
Aramco is a steering member of The Hydrogen
Council, a CEO-led organization that promotes
collaboration between governments, industry
and investors to provide guidance on
accelerating the deployment of hydrogen
solutions globally.
32
What are we doing?
Blue hydrogen certification
In 2022, Aramco and the SABIC Agri-Nutrients Company obtained the
world’s first independent certifications recognizing “blue” hydrogen and
ammonia production.
The certification was granted by an independent testing, inspection
and certification agency based in Germany, to SABIC AN, in Jubail, for
37,800 tonnes of blue ammonia and to Aramco’s wholly-owned refinery
(SASREF), also in Jubail, for 8,075 tonnes of blue hydrogen.
To certify ammonia and hydrogen as “blue” a significant part of the CO2
associated with the manufacturing process must be captured and utilized
in downstream applications.
Capitalizing on this agreement, we made the world’s first commercial
shipment of blue ammonia to South Korea.
Differentiate
Sustain
Diversify Enable
OVERVIEW
Developing and growing lower
environmental impact value chains
CLIMATE CHANGE AND
THE ENERGY TRANSITION
The energy transition offers challenges but also
various opportunities for us to diversify our
portfolio into new, lower impact value chains,
including utilizing hydrocarbons for noncombustion uses, such as non-metallic materials
and chemical applications, as well as investment
in renewables projects.
The materials transition
investment gap
over the next
15 years for the
minerals needed to
limit climate change
No matter which energy transition scenario plays
out, oil demand from the petrochemicals sector
is likely to remain robust. In fact, under a net zero
scenario, petrochemicals could account for more
than half of total global oil demand by 2050.
The more intense the transition, the more
important petrochemicals will be to the oil and
gas industry, and other industries. Our pursuit
of sustainable materials is underpinned by a
powerful business case that is driving our world
leading chemicals growth ambitions — making
our business portfolio even more robust.
GOVERNANCE
For example, emissions from concrete are
projected to total almost four gigatonnes of CO2
by 2050 because of the growth in demand.
Meanwhile, the iron and steel sector accounts for
more emissions than the whole of road freight,
and global demand for steel alone is expected
to rise by more than a third by 2050.
$2 trillion
There is a projected
GROWING
SOCIETAL VALUE
Energy demand is projected to more than double
from 79 gigatonnes in 2011 to 167 gigatonnes
in 2060. Materials production, use, and eventual
disposal already accounts for almost a quarter
of all global CO2 emissions. The increase in
materials use, even if decoupled from economic
growth, will be accompanied by a further rise
in CO2 emissions, particularly in hard-to-abateindustries.
At Aramco, we see opportunities arising from
the materials transition. Steel, concrete and
other traditional materials are responsible
for significant CO2 emissions. Non-metallic
materials, (e.g. polymers) and other carbonbased materials, can provide durable materials
at a lower GHG impact with potential use in
housing, construction, infrastructure, automotive,
and renewables. At Aramco, we are working
across them all.
MINIMIZING
ENVIRONMENTAL IMPACT
According to a report issued this year by the
Atlantic Council, a net zero energy system will be
six times as mineral intensive as its hydrocarbonbased predecessor. However, the supply chains
needed to deliver these minerals are significantly
underdeveloped and undercapitalized; there is
a projected $2 trillion investment gap over the
next 15 years for the minerals needed to limit
climate change — the world is underprepared
for the risk of surging transition-related mineral
demand. For example, one megawatt of installed
renewable energy capacity utilizes eight to
11 tonnes of petrochemicals-based materials.
SAFE OPERATIONS AND
PEOPLE DEVELOPMENT
Such actions provide us with commercial
opportunities and help improve our resilience
to changes in customer demands caused by the
energy transition.
To achieve an accelerated materials transition,
cutting-edge R&D, innovation, and the necessary
investments are essential.
DATA
33
Differentiate
Sustain
Diversify Enable
Liquids-to-chemicals
Our 2020 acquisition of a 70% stake in SABIC
brought together two global companies
committed to growth and value creation
in petrochemicals.
This propels our strategy to convert up to
4 million barrels per day of liquids-to-chemicals.
More advanced, more sustainable materials
would strengthen the power of our net zero
ambition and our chemicals’ strategies. To earn
a larger share of the mat...
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