HRC recognises and acknowledges Climate Change as a relevant long-term risk that could potentially impact the business. Our identification and assessment of the associated risks and opportunities will ensure long-term sustainability. Hence, “Climate Change from HRC businesses” has been added into our company-wide Risk and Opportunity Register so that we can track and take action to minimise risks. The Risk and Opportunity Register is reviewed quarterly by the Management and sighted by the Board of Risk Management Committee and Board of Directors. Our company has a crucial position to play in the global effort to take on decarbonisation initiatives and address climate issues. One of the mitigation measures that we started out with and continue to undertake is to conduct quarterly GHG emissions accounting with the aim to analysing the trend, and as much as practical, minimising them. As a responsible company, HRC is proactive in optimising waste handling to ensure waste reduction and that is done through various channels and collaborations with multiple parties. Subsequently in 2020, we have developed and launched the Energy Masterplan that comprehensively supports HRC’s commitment to reduce its carbon footprint.

Referencing to the standards outlined by the Task Force on Climate-related Financial Disclosures (TCFD) framework, climate-related risks shall be broadly captured into two main categories: transition risks, where we identify risks related to the transition to a lower-carbon economy (such as policy & legal, reputation, technology, and market); and physical risks, which relate to the physical impacts of climate change.

Policy & Legal
Risk Opportunities / Action Plan Horizon Baseline / Current Activity

New legislations related to environment or climate change may require us to implement a newer or an upgraded compliance solution.

May result to higher capital and operational costs associated with implementing the mandated compliance solutions.

HRC will continuously monitor and adopt any regulatory changes. In fact, HRC has been making progress towards a cleaner energy future through compliance to government environmental and fuel regulations. [Reference: Page 34, 2021 Annual Report]

Through ongoing and completed key investment projects, HRC continues to monitor and improve the quality of air emissions coming from our refinery operations and grow capabilities in producing cleaner fuel with reduced sulphur and carbon emissions. [Reference: Page 34, 2021 Annual Report]


HRC has heavily invested in several projects relating to air quality improvements and meeting new product specifications as mandated under the requirements issued by the Government of Malaysia since 2017. These projects aim to support HRC’s long-term sustainable commitments on climate change while ensuring HRC remains competitive in challenging times. [Reference: Page 20, 2021 Sustainability Report]

For example:

The implementation of Euro 5 Gasoil (E5G) improves air quality, as the fuel contains reduced sulphur content of 10 parts per million (ppm) from 500 ppm. HRC met the deadline and started rolling out supply of on-spec product from March 2021. The start-up of E5G production delivers HRC’s goal to assure a sustainable foundation for profitable future business, while ensuing the overriding sustainable goal of further improving air quality. [Reference: Page 38, 2021 Annual Report]

Other notable initiatives that have been rolled out:

  • Managing GHG emissions and integrating GHG emissions management into our operations
  • CAR (Clean Air Regulation) project
  • Rollout of the Energy Masterplan since 2020

[Reference: Page 14, 2021 Sustainability Report]

Risk Opportunities / Action Plan Horizon Baseline / Current Activity

Being perceived as a laggard in climate change action can affect our stakeholders’ perception towards our brand.

1. To begin with, HRC has a robust internal control framework, and HRC’s environmental stewardship is driven by our commitment to minimise any adverse impacts on the environment from our business operations through reduction of pollution, waste and resource use. [Reference: Page 42, 2021 Sustainability Report]

2. There are Initiatives in place. The opportunity here is to create content to tell a compelling story to stakeholders by showcasing the various initiatives undertaken, as highlighted in the column on the right.

3. To consider participating in business or trade associations that provide collaborative space, the right tools, and methodologies to help companies embed sustainability action into its business strategy and operations. It was disclosed in the 2021 Annual Report that HRC aspires to participate in one, after carefully reviewing options. [Reference: Page 47, 2021 Sustainability Report] Such association will enable HRC to foster stronger brand presence particularly in the space of climate change.


1. The Environmental Policy enables HRC to fulfil its obligations and ensure compliance of the Environmental Quality Act (EQA) 1974 and all other applicable environmental laws and regulations. We set our targets annually through our HSSE Annual Plan to improve and measure, appraise, and assess our performance for continuous improvements on our environmental footprint in and around the areas we operate. [Reference: Page 42, 2021 Sustainability Report]

We have the Environmental Regulatory Compliance Management Committee (ERCMC) in place that reviews and assesses environmental issues for the organisation, where close monitoring and management of potential environmental-related risks were managed and addressed. [Reference: Page 6, 2021 Sustainability Report]. As part of our efforts to minimise climate change risk from our operations as well as compliance to the CAR 2014, HRC commissioned two air pollution control systems known as Wet Gas Scrubber and Chlorosorb. [Reference: Page 47, 2021 Sustainability Report]

Risk Opportunities / Action Plan Horizon Baseline / Current Activity

As the world advances and the race against climate change intensifies, newer technologies for low-carbon solutions will be developed continuously. In addition to new technologies, new skills will be required to reflect the growing shift to greener energy solutions that involve harnessing technology and innovative approaches to reduce carbon footprint. [Source: Page 28, 2021 Annual Report]

New technologies will have significant impact to cost. However, since we are committed in maintaining our path in sustainability, options will have to be carefully evaluated to ensure the suitability of the solution.

HRC continues to actively explore new and matured technology to further optimise and reduce the energy consumption of the infrastructure and facilities at our non-processing areas. [Source: Page 43, 2021 Annual Report]


One of the on-going feasibility studies involves the viability of solar panel application to reduce the dependency from the power grid and advance towards a green building philosophy. [Source: Page 43, 2021 Annual Report]

Risk Opportunities / Action Plan Horizon Baseline / Current Activity

Rapid shift in customer expectations may be resulted from changes in consumer behaviour, where climate-friendly products and services would be given preference.

This shift could potentially lead to loss of revenue.

1. In anticipating this shift, HRC recognises cleaner energy as an opportunity seeing that there is generally a higher demand for it, and potential slowing demand for hydrocarbon transport fuels. [Source: Page 42, 2021 Annual Report]

2. To capitalise on the annual customer satisfaction survey by expanding the survey to include climate change and green-solution related questions to help gauge customers’ expectations.


1. Strategic planning was formulated by looking into options for future investment into petrochemicals and renewable energy / alternative energy to add on to our strong presence in hydrocarbon products. [Source: Page 42, 2021 Annual Report]

2. To assess our performance, we seek customers’ feedback in an annual customer satisfaction survey that measures variety of items. [Source: Page 20, 2021 Sustainability Report]

Risk Opportunities / Action Plan Horizon Baseline / Current Activity

Problems like ocean acidification and rising sea levels will require us to increase our frequency of monitoring, and in longer-term, may require us to replace assets at our jetty.

To prepare for severe or extreme weather is a necessity, of which we would need to consider higher operational and maintenance costs for assets, and as well as capital expenditure.


The oil refining business has several inherent risks associated with personal and process safety and asset integrity, among others. HRC applies and continues to enhance best practices to manage risks. [Source: Page 42, 2021 Annual Report]


The table below serves as a reference to locate HRC disclosures that are related to the recommendations by TCFD.

TCFD Recommendation HRC’s Disclosure


Disclose the organization’s governance around climate-related risks and opportunities.

a) Describe the Board’s oversight of climate-related risks and opportunities.

Addressing Sustainability Risks and Opportunities (page 59, 2021 Annual Report).

Sustainability Governance (pages 8 & 9, 2021 Sustainability Report).

b) Describe management’s role in assessing and managing climate related risks and opportunities.


Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning where such information is material.

a) Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term.

Not specifically on climate change.

b) Describe the impact of climate related risks and opportunities on the organisation’s businesses, strategy, and financial planning.

The impact is described very briefly in the 2021 Annual Report

c) Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.

Not mentioned.

Risk management:

Disclose how the organization identifies, assesses, and manages climate-related risks.

a) Describe the organisation’s processes for identifying and assessing climate-related risks.

Addressing Sustainability Risks and Opportunities (page 59, 2021 Annual Report).

b) Describe the organization’s processes for managing climate-related risks.

Risk Management and Governance (page 9, 2021 Sustainability Report).

c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management.

Statement On Risk Management And Internal Control (page 67 & 68, 2021 Annual Report).

Metrics and targets:

Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.

a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process.

Climate Change and Greenhouse Gas (GHG) Emissions (pages 46 to 47).

b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.

c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets.


Energy use and energy efficiency are actively monitored. The industry standard, Solomon Associates Energy Intensity Index (EII), has been, and is used to measure and rank our refinery energy efficiency. It is a matrix that is referred to when seeking to maximize operational process energy efficiency for existing and potential new projects. An EII target is set annually, and it is monitored regularly to ensure high overall energy utilizations, minimum use of fuel oil for power generation and drive EII reducing energy tactics. The overall aim is to reduce our CO2 emissions and improve energy efficiency over time