Embedding sustainability in governance and risk management
At Equinor, our approach to sustainability is embedded in how we work. Our sustainability priorities – building a low-carbon advantage, ensuring responsible operations, protecting the environment and creating shared value – are closely linked with our three strategic pillars.
How we work to ensure an integrated approach to sustainability, is reflected in our corporate governance principles, performance and reward framework and management system. These elements are described in the Equinor book, available via the link below.
We are committed in being a leader in the energy transition. We work actively to reduce emissions from oil and gas to maintain our position as industry leading in carbon efficiency, grow significantly in renewables and help society move towards net zero.
Safe and responsible operations are essential for our license to operate and an enabler of long-term value creation. We have set clear targets for continuous improvement of our safety records. We are managing our environmental impact, respecting human rights and promoting integrity and transparency.
We deliver energy to millions of people and create value for our shareholders. Through our core business and supply chain, we create economic value and opportunities for society and communities. We provide jobs, invest in employees’ skills and capabilities and work collaboratively with stakeholders to accelerate action and progress on pressing social and environmental issues in society.
Governance
At Equinor, the Board of Directors (BoD) and Corporate Executive Committee review, monitor and discuss safety, security and sustainability issues and risks on a regular basis, while the Chief Executive Officer (CEO) is responsible for the day-to-day management of these areas.
BoD members are elected by the corporate assembly. In addition, there are employee-elected representatives as required by Norwegian company law.
The board’s composition is diverse in terms of background and geography. They have background from oil, gas, renewables, shipping, telecom, politics and climate policy.
The BoD has three sub-committees which act as preparatory bodies.
Supervises the company’s safety, security, sustainability, including climate, and ethics policies, systems, risks and performance.
Assists BoD on terms and conditions for employment of the CEO, and on the philosophy, principles and strategy for the compensation of leading executives in Equinor.
Instructions include achieving goals related to climate and energy transition, and how these goals are a part of the remuneration policies.
Ensures that the group has an independent and effective external and internal auditing system.
Supervises the implementation of and compliance with the group’s expectations, commitments and requirements for ethical conduct concerning financial reporting.
Corporate functions responsible for sustainability-related issues include:
The safety, security, and sustainability function
The people and organisation function
The legal and compliance function
These functions are responsible for setting strategic direction, give advice and report on risk and performance within the topics to the Corporate Executive Committee and the BoD, including relevant committees.
The business line is accountable for executing the company’s sustainability ambitions and for managing relevant risks and performance.
Management of sustainability-related risks, including climate-related risks, is embedded in our enterprise risk management process.
We regularly identify, evaluate and manage risks to create sustainable value and avoid incidents. Our enterprise risk assessment and related actions are reviewed biannually by the corporate executive committee and the BoD.
We perform impact assessment everywhere we operate to ensure the best possible overall risk management process. We do this based on national requirements in the countries we operate, and guidance as set out in international standards such as the International Finance Corporation (IFC) Standards.
Want to know more about how we assess the impact of our work?
At Equinor, safety, security and sustainability are embedded into our performance and reward framework. The reward framework is an integrated part of our values-based performance culture and has been designed to contribute to the business strategy, long-term interests and sustainability of the company.
Management of sustainability performance is integrated in strategy, business planning, risk management, decision-making and management follow-up processes. Our performance framework translates our vision, values and strategy into action and results, creating clear links to team and individual contributions. We measure progress and results in a holistic way, using key performance indicators such as the following when relevant:
Serious incident frequency (SIF)
Total recordable injury frequency (TRIF)
Oil/gas leakages
CO2 intensity (upstream)
Tax and transparency
We believe that responsible and ethical behaviour is a prerequisite for sustainable business. We have zero tolerance for corruption and all Equinor personnel are expected to adhere to our policy and familiarise themselves with the Code of Conduct through a confirmation statement.
Our code is based on our values and reflects our commitment to high ethical standards in our business activities. We look for business partners with similar values and ethical standards to ours, and we work with our suppliers to ensure integrity throughout our value chain.
Transparency is a cornerstone of good governance and is vital in the combat of corruption. We are committed to conducting our business activities in an open and transparent manner, promoting transparency in our industry and supporting efforts to improve openness and accountability to combat corruption worldwide. Transparency allows businesses to prosper in a predictable environment, contributes to a level playing field and enables citizens to hold governments accountable. Our business generates significant revenues in the societies where we operate, and transparency is vital to ensure that the wealth derived from the energy we produce is put to effective and equitable use.
Open is one of our four company values. We were among the first major oil and gas companies to voluntarily start disclosing all revenues and payments to governments in the countries where we operate. We are a signatory to the anti-corruption initiative Call to Action by the United Nations Global Compact, an appeal by the private sector to governments to address corruption and enhance good governance.
In addition to our revenue transparency disclosures, we aim to be open about other aspects of our sustainability performance. Our climate advocacy position is publicly available, and we are disclosing both our ambitions and goals, as well as annual performance in our efforts to combat climate change.
Equinor’s approach to tax
Equinor is committed to be a responsible corporate citizen world-wide. We will execute tax compliance and planning in a professional manner, aligned with good business practice. Transparency in tax payments is vital to ensuring that the revenues derived from our operations is put to effective and equitable use, as it enables citizens to hold governments accountable for the payments they receive. An important principle is that Equinor will pay taxes where legally due and where the economic value is generated. Artificial transactions with no connections to our business activities will never be pursued.
Payments to governments
Equinor was among the first major oil and gas companies that voluntarily disclosed payments to governments. We have welcomed initiatives to strengthen revenue transparency legislation and actively shared our experience with peer companies, governments and civil society. For Equinor, it is important that revenue transparency regulation applies globally, is effective, and creates a levelled playing field for all companies, communities and governments.
As now required by Norwegian legislation, we disclose payments to governments pertaining to our extractive activities per project in a separate report. In order to provide context, the report also contains information on investments, revenues, purchases of goods and services and production volumes per country, in addition to a full list of subsidiaries and information about inter-company interest expenses.
The Extractive Industries Transparency Initiative (EITI)
We have supported the Extractive Industries Transparency Initiative (EITI) since its inception, and we respect and promote the EITI principles. The EITI is a global standard to promote open and accountable management of oil, gas and mineral resources. It is supported by coalition of governments, companies, civil society groups, investors and international organisations.
The EITI has evolved from payment disclosures into providing context and use of revenue data. In the 2019 EITI Standard, new contracts awarded by governments from 2021 must be made public.
Equinor has made public its position that we support and will advocate for the public disclosure by host countries of their petroleum contracts and licenses. We also support efforts to improve beneficial ownership transparency and have a policy stating that Equinor will not voluntarily enter into partnerships with anonymously owned companies. More information about the EITI, including individual country reports are available at www.eiti.org
