Corporate governance is vital to value creation and business excellence. Our continuous commitment to foster a culture of integrity, ethical behaviour and professionalism underpins our ability to remain a resilient organisation. This also promotes higher levels of accountability and transparency.
Our policies are aligned to the applicable laws and regulations of countries where we operate.
The PETRONAS Board of Directors, supported by the relevant Sub-Committees, provides effective foresight on the business’ strategic direction as stipulated in the Board Charter, and is aligned with all applicable laws.
The Executive Leadership Team (ELT) assists the President and Group CEO in managing the organisation’s strategic business development plans and growth strategies, including cross-business issues of the PETRONAS Group.
The Board and ELT collectively ensure that PETRONAS delivers upon its obligations in a responsible manner, ensuring all aspects of business decision making adhere to strict ethical standards.
To ensure accountability and integrity, we have established a dedicated governance structure with clear reporting lines that drives our sustainability strategies, action plans, and initiatives. This structure ensures that our sustainability principles and priorities are fully integrated across the organisation, embedded in decision-making and drives the delivery of our sustainability related matters. With this structure, we delineate roles and responsibilities clearly, enabling effective oversight, proactive decision-making and efficient execution.
PETRONAS' Sustainability
Governance Structure
The Board, as the top authority in sustainability governance, shapes the company’s sustainability approach, strategy, and goals.
The Board’s oversight of climate-related risks and opportunities, includes active deliberation of climate-related matters, acknowledging their significance as both risks and opportunities to the business. We are purposefully elevating sustainability, particularly climate-related discussions at the board level, to shape the Company's long-term strategic direction.
In September 2023, a dedicated Sustainability Executive Leadership Team (ELT) established to provide a dedicated focus for the ELT to engage on sustainability-related matters. The focused scope of Sustainability ELT is to steer PETRONAS’ enterprise-wide sustainability activities, as they relate to strategy, performance, legal and reputational impact, as well as oversee the integrity of PETRONAS sustainability reporting and disclosures.
The Sustainability Committee, which is one of the PETRONAS Corporate-level committees, supports the ELT in the management oversight and steering on sustainability at the Group level in support of PETRONAS' purpose and long-term resilience.
The PETRONAS Code of Conduct and Business Ethics (CoBE) underpins our commitment to upholding the highest standards of ethics and integrity in the conduct of the Group’s business and operations and this applies to all employees, directors and third parties who represent or act for the Group. The CoBE also contains specific provisions on anti-competitive practices.
The CoBE is supported by the PETRONAS Anti-Bribery and Corruption Manual which is applicable to all employees as well as third parties. PETRONAS enforces zero tolerance for all forms of bribery and corruption. Our No Gift Policy and PETRONAS Integrity Compliance Framework collectively aim to further fortify the culture of ethics and integrity across the Group.
Embedding human rights across our business activities means effectively implementing the United Nations Guiding Principles on Business and Human Rights and upholding our own values and standards. The respect for human rights begins with our organisational culture and commitment to all our employees to enjoy a safe and healthy workplace and where everyone feels valued and respected and that they understand their responsibility to promote human rights through their work.
Finally, the Whistleblowing Policy encourages disclosure on any form of improper misconduct, where matters raised are deliberated by the Whistleblowing Committee. Updates are provided on a regular basis to the Audit Management Committee and Board Audit Committee. To lodge a report, please visit our Whistleblowing page.
CoBE
The CoBE contains detailed policy statements on the standards of behaviour and ethical conduct expected of each individual to whom the CoBE applies.
CoBE – Country Supplement In view of the CoBE’s international application, some provisions of the CoBE will be modified to adapt the CoBE to the requirements of the local jurisdictions which PETRONAS is operating. The country supplement is intended to cater to the respective local jurisdiction, applicable legislation and social mores.
CoBE Guide The CoBE Guide is a user friendly guide which will serve to illustrate the application of the CoBE in practice.
PETRONAS Contractors Code of Conduct on Human Rights
In compliance with PETRONAS Human Rights Policy, we seek to work with contractors who share our values of integrity, are committed to fighting bribery and corruption, and contribute to sustainable development.
PETRONAS requires its contractors to:
In line with the above, contractors shall ensure adherence to the following material risks:
PETRONAS will assess contractors' compliance from time to time. Failure by contractors to comply with the requirements set out in the CoCHR may result in actions taken by PETRONAS, including terminating the non-complying party’s relationship with PETRONAS and other measures.
The CoCHR applies to any parties performing work or services for or on behalf of PETRONAS and those holding PETRONAS’ license and/or registration. It is the contractors’ obligation to ensure that any parties performing work and/or business to PETRONAS for or on its behalf adhere to the CoCHR as well.
This policy contains our overarching commitment to respect human rights, which is also reflected in other policies, frameworks, guidelines and processes throughout our business
PETRONAS is committed to respecting all internationally recognised human rights, as set out in the International Bill of Human Rights and the International Labour Organization's Declaration on Fundamental Principles and Rights at Work, being guided by the United Nations Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, complying with all applicable laws in the countries in which we operate.
Respect and acknowledgement of internationally recognised human rights
We are committed to respecting the human rights of all people who are impacted by our activities, as well as respecting diversity and inclusion, elimination of all forms of discrimination as defined by applicable laws, modern slavery, child labour and human trafficking.
Adoption of a risk-based approach to human rights due diligence
Areas of material importance include labour and working conditions, supply chain, responsible security, communities' well-being and how they are impacted by, among other things, climate change, environmental issues and energy transition.
We apply a risk-based due diligence approach to identify, prevent, mitigate and address actual and potential adverse human rights impacts arising from activities performed across the organisation, and resulting directly from our operations, products or services, with a focus on significant risks and priority areas, and with input from engagement with relevant stakeholders.
Access to effective grievance mechanisms and remedies
We are committed to providing for and cooperating in the remediation of adverse human rights impacts that we identify we have caused or contributed to. Our grievance mechanisms are designed to be confidential, reasonably prompt, non-retaliatory and fair. We seek to ensure that our grievance mechanisms are accessible to all stakeholders, including within and outside our organisation.
This policy is approved by the Board of Directors and its implementation is overseen by the leadership team. Human rights management in PETRONAS is guided by supporting documents, including our Code of Conduct and Business Ethics (CoBE) and our Contractors Code of Conduct on Human Rights (CoCHR)
This policy applies to every employee, director, and officer of PETRONAS. Third parties that may perform works or services for or on behalf of PETRONAS and joint venture companies in which PETRONAS is not a controlling stakeholder and associate companies of PETRONAS are encouraged to adopt this Policy of similar principles and standards.
Click here to view PETRONAS Human Rights Policy
The CoBE is supported by the PETRONAS Anti-Bribery and Corruption Policy & Guidelines (ABC Manual) which is applicable to all employees as well as third parties. PETRONAS enforces zero tolerance for all forms of bribery and corruption. Our No Gift Policy and PETRONAS Integrity Compliance Framework collectively aim to further fortify the culture of ethics and integrity across the Group.
The Whistleblowing Policy encourages disclosure on any form of improper misconduct, where matters raised are deliberated by the Whistleblowing Committee. Updates are provided on a regular basis to the Audit Management Committee and Board Audit Committee. To lodge a report, please visit our Whistleblowing page.
