Sustainability ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2023
table of content 02 BOARD STATEMENT 04 ABOUT THIS REPORT 04 Reporting scope and boundary 04 Reporting framework 04 Assurance 04 Feedback 11 APPROACH TO SUSTAINABILITY 11 Sustainability framework 12 Sustainability governance 15 Stakeholder engagement 21 MANAGING OUR ENVIRONMENTAL FOOTPRINT 21 Biodiversity 22 Energy and climate change 24 Water and effluents 26 Waste management 28 TCFD statement 32 SUPPORTING THE HEALTH AND SAFETY, WELL-BEING OF OUR PEOPLE AND VALUE CHAIN 32 Digitalisation and technology 33 Supply chain management 34 Health and safety 39 Community and well-being 42 Human capital management 47 Customer relationship management 06 ABOUT GEO ENERGY 18 ENSURING STRONG GOVERNANCE AND RESPONSIBLE BUSINESS ETHICS AND INTEGRITY 18 Corporate governance 20 Risk assessment and management 05 2023 PERFORMANCE HIGHLIGHTS 48 APPENDICES 48 Sustainability performance 57 GRI content index 67 TCFD content index
Sustainability Report 2023 02 board statement efficient machinery in our processes to further improve our environmental performance. We commenced our Task Force on Climate-related Financial Disclosures (TCFD) journey in 2022 and established an internal qualitative climate risk and impact assessment. Through the journey, we identified key climaterelated risks, such as extreme heat, flooding and increases in carbon pricing which may financially impact the business. We are currently working towards the development of more comprehensive climate disclosures, in line with the Accounting and Corporate Regulatory Authority (ACRA) and Singapore Exchange Regulation (SGX Regco) requirements of reporting climate-related disclosures (CRD) from financial year 2025 for listed issuers. We are further building on our effort in preparation towards including the International Sustainability Standards Board (ISSB)-issued IFRS Sustainability Disclosure Standards. SUPPORTING THE HEALTH AND SAFETY, WELL-BEING OF OUR PEOPLE AND VALUE CHAIN We place a high importance on managing the health and safety of our employees due to the nature of our operations. We emphasise strongly to our people to practise precautionary measures through close monitoring of the mine sites and engage them through the implementation of Standard Operating Procedures, regular briefings, and health and safety trainings. We aim to continue to strive for zero fatalities, occupational illnesses, and work-related incidents. In 2023, we had also kept up with continuing to provide support to the communities around us. We had performed assessments on the needs of the local communities near our mine sites and had supported community projects that had made an impact on the livelihood of these local communities. In total, our community investments had amounted to approximately USD 400,000. practices, including corruption, bribery, fraud and other unethical activities within our operations. We monitor and manage legal, ethical and risk issues within our operations, following the guidance set out by our Code of Ethics and Conduct and Supplier Code of Conduct. Our Whistleblowing Policy and grievance mechanism have established a safe environment for affected stakeholders, including employees or external parties, to voice their concerns about any unethical or unlawful business conduct or dealings, without fear of reprisal, discrimination, or adverse consequences. MANAGING OUR ENVIRONMENTAL FOOTPRINT Recognising the potential negative environmental impacts and risks that could arise from our operations, Geo Energy strives to minimise the impacts and risks by maintaining stringent environmental standards and practices in line with global standards. Our practices are aligned with ISO 14001:2015 standards for Environmental Management Systems (EMS) and we have established an Environmental and Social Management System (ESMS) across all our assets, in accordance with international benchmarks such as the Equator Principles III and IFC Performance Standards (PS), as part of our mitigation and remediation efforts over our operations’ impact on the environment. We are also continuing to refine our greenhouse gas (GHG) inventory in line with best practices such as the GHG Protocol by measuring additional Scope 3 categories in relation to the indirect emissions from our fuel and energy consumption and waste generation. With the recent acquisition of the TRA mine and expansion in our Scope 3 calculations, our total emissions have risen by 15% year-on-year to over 166,000 tCO2e. Despite this result, we remain committed in managing the impacts of our carbon emissions and are exploring use cases of renewable energy, alternative fuels, and energy- [GRI 2-22] Dear Shareholders, We are pleased to present Geo Energy’s 2023 Sustainability Report. Amidst the changing demand on our coal products due to international geo-political events and market shifts, as well as the global energy transition trends, maintaining stewardship over corporate governance of our Group and over the impact of our operations on the environment, economy and the people around us remains to be cornerstones in building a sustainable business. Therefore, we have maintained consistent effort and strategies in ensuring that the environmental, social and governance aspects of our operations and related impacts are being looked after. Our sustainability strategy and management, including identifying, reviewing, and approving the materiality assessment and sustainability reporting, continues to be overseen by the Board and the Chief Executive Officer. The Group's sustainability strategy management team reviews the material environmental, social and governance (ESG) factors to ensure that they remain relevant and aligned with our business direction and growth and continues to be reflective of our stakeholders’ expectations. ENSURING STRONG GOVERNANCE AND RESPONSIBLE BUSINESS ETHICS AND INTEGRITY We believe in upholding strong corporate governance, ethics, and integrity, and conducting our operations in a responsible manner. We continuously evaluate our internal policies and business practices to ensure compliance with laws and regulations, while managing the environmental, social and economic impacts of our operations. We maintain strict compliance with our policies and have zero tolerance for policy breaches and unethical
We will strive towards our strategic objectives and build sustainable business Geo Energy 03 On data security and technology front, we remain cognisant of the associated negative impacts of data security breaches and technological issues on our operations and value chain. We have put in place various preventive and detective measures to reduce and promptly address the risks of digital system disruptions that may impact our operations. In 2023, we did not have any cyber-attack incident, and we will continue to maintain the robustness of our measures to keep our track record. MOVING FORWARD We strive to continue to incorporate environmental, social and governance considerations across our operations to foster sustainable development. The coal produced by the Group, including from the recently acquired PT Triaryani coal mine in South Sumatra, has low ash and low sulphur characteristics. This is in line with the Group's sustainability strategy of achieving a balance between providing a more affordable source of energy with lesser impact to the environment. Furthermore, these coal characteristics allow the Group to command a premium in sales price, enabling the Group to capture the favourable demand outlook. The Group's sustainability strategy and management continues to be overseen by the Board to ensure that environmental, social and governance measures implemented remain relevant and aligned with our business direction and growth, and continues to be reflective of our stakeholders’ expectations. Yours sincerely, Dato’ Charles Antonny Melati Executive Chairman and CEO
Sustainability Report 2023 04 incorporating SGX’s climate reporting requirements. A summary of our TCFD qualitative disclosures can be found on pages 28-32. Overall, these internationally recognised sustainability reporting standards and frameworks were utilised as they offer comprehensive sustainability disclosure. The GRI Standards are widely recognised as a foundational framework for sustainability reporting while TCFD recommendations act as guidelines in disclosing climate-related financial information useful to investors, lenders, and insurance underwriters. We target to follow industry best practices in monitoring our sustainability performance by transparently and clearly reporting against these reporting practices. ASSURANCE [GRI 2-5] We engaged a third-party consultant to conduct a periodic evaluation of Geo Energy's policies, internal controls, and risk management concerning our sustainability reporting process. Although we have not requested external assurance during this reporting cycle, we will conduct external assurance in the upcoming years. FEEDBACK [GRI 2-3] We appreciate any questions, comments or suggestions to help us improve and progress further on our sustainability reporting journey. Please contact us at investor_ relations@geocoal.com. trading high-quality coal with low sulphur and low ash content from its Triaryani (TRA) coal mining asset located in South Sumatra. The data of GEE and TRA was included in this report from the date of acquisition. The procurement of the TRA mine signifies a significant expansion in our operational scope, which inherently results in elevated emissions in comparison to 2022. The increase in emissions observed can be attributed directly to our operational growth and does not necessarily indicate that our mines’ environmental performance is declining. Acknowledging our biodiversity and environmental obligations, we will endeavour to manage the environmental impact of our operational practice. REPORTING FRAMEWORK This sustainability report has been prepared with reference to the Global Reporting Initiative (GRI) Standards 2021 and GRI 12: Coal sector standards. Further details can be found in the GRI content index on pages 57-66. Given that Geo Energy is a listed entity on the Mainboard of Singapore Stock Exchange (SGX), we comply with the SGX Listing Rule 711 (A) and (B), as well as SGX’s enhanced disclosures on climaterelated information. We have enhanced our understanding of climate risks and opportunities by adopting the Task Force on Climate related Financial Disclosure (TCFD) since 2021, by Geo Energy Resources Limited, and from our mining contractors, PT Bukit Makmur Mandiri Utama (BUMA), PT Lancarjaya Mandiri Abadi (LMA), and PT Putera Kontrindo Abadi (PKA), are included in this report. Singapore and Indonesia are the countries of operation captured within this report. RESTATEMENT OF INFORMATION [GRI 2-4] We have restated past years’ data for emissions, water discharge, training hours and payments to providers of capital. Reasons for restatements and the effect of the restatements have been provided in the respective disclosure sections. CHANGES IN REPORTING SCOPE On 18 October 2023, the Group had successfully acquired PT Golden Eagle Energy Tbk, (GEE), an Indonesian coal mining group listed on the Indonesia Stock Exchange (stock code: SMMT). GEE has been producing and [GRI 2-2, 2-3, 2-4, 2-5] REPORTING SCOPE AND BOUNDARY [GRI 2-2, 2-3, 2-5] Our annual sustainability report illustrates the progress made in achieving sustainable development targets by outlining our sustainability approach and performance. This report highlights the key environmental, social and governance (ESG) aspects that align with the group’s values, stakeholders, and business operations. All information presented in this report correspond to the Group’s operations for the financial year from 1 January 2023 to 31 December 2023, which is in line with our Annual Report 2023. This report has been published on the Company’s website and uploaded on SGXNet on 29 April 2024. In compliance with the Greenhouse Gas Protocol, we used an operational control approach to establish the boundaries for our reporting organisations' data consolidation. The data from the operational mining concessions, owned about this report
Geo Energy 05 2023 performance highlights 2023 PERFORMANCE HIGHLIGHTS Ensuring strong governance and responsible business ethics and integrity • Zero recorded cases of corruption and bribery • Zero incidents of conflict of interest • Strengthened our governance over sanction-related risk exposure Managing our environmental footprint Waste • In 2023, 727 tonnes of hazardous and non-hazardous waste were generated from three of our sites (PT Sungai Danau Jaya (SDJ), PT Tanah Bumbu Resources (TBR) and PT Triaryani (TRA)), a 0.4% decrease from the previous year Water • Total water withdrawal was 96,034 m3, a slight increase from 2022 while total water discharge has remained stagnant compared to the previous year Energy and climate change • Total energy consumption was 2,271,202 GJ across all our corporate offices and mine sites • Total greenhouse gas (GHG) emissions were 166,227 tCO2e across Scope 1, Scope 2 and Scope 3 emissions for all our corporate offices and mine sites • Both energy and emissions intensity increased by 37% and 36% respectively compared to 2022 Supporting the health and safety, well-being of our people and value chain Health and safety • Zero work-related illnesses • Zero reported incidents • One fatality as a result of work-related injury Human capital management • 2,493 training hours provided to all employees, an average of 7 hours per employee • 343 employees across our operations, with 120 being less than 30 years old, 189 fall within 30-50 years old, and 34 being more than 50 years old • 42 new employee hires with a turnover rate of 5% Community and well-being • A total of USD 400,000 invested in community well-being • Focused on supporting communities by improving public and school infrastructure
Sustainability Report 2023 06 about geo energy [GRI 2-1, 2-2] Geo Energy Resources Limited (Geo Energy and together with its subsidiaries, the Group) is a major Indonesian coal producer with an established track record in operating coal mines, coal production and selling coal throughout the region. Geo Energy commenced its business in 2008 as a coal mining services provider and became a listed company on the Mainboard of the SGX in 2012, under the stock code: RE4 and is part of the Singapore FTSEST index. Since then, Geo Energy has transitioned from being primarily a coal mining services provider to a coal producer that subcontracts its coal mining operations. This transition has allowed the Group to change the business model from operating as a relatively small-scale mining services provider in an environment of high capital expenditure and relatively low operational efficiency, with high dependence on owners of coal mining concessions, to being a low-cost coal producer with high-quality coal mining assets, working in collaboration with worldclass business partners. Geo Energy’s corporate offices are located at Singapore and Jakarta, Indonesia, while the production operations are based in Kalimantan and Sumatra, Indonesia. Singapore Office 7 Temasek Boulevard #39-02 Suntec Tower One Singapore 038987 Jakarta Office The Suites Tower, Lantai 17, Jl. Boulevard Pantai Indah Kapuk, No. 1 Kav. OFS, Jakarta 14470 The Group owns five mining concessions through its subsidiaries, which are PT Sungai Danau Jaya (SDJ), PT Tanah Bumbu Resources (TBR), PT Bumi Enggang Khatulistiwa (BEK) and PT Surya Tambang Tolindo (STT) in Kalimantan, Indonesia, as well as the newly acquired in October 2023, PT Triaryani (TRA) in South Sumatra, Indonesia. The Group also owns a 49% equity stake in PT Internasional Prima Coal (IPC) in Kalimantan, Indonesia, and the majority 51% equity stake is owned by PT Bukit Asam Tbk, a stateowned coal mining company and one of the largest coal producers in Indonesia. The Group collaborates with various business partners, including coal mining contractors such as PT Bukit Makmur Mandiri Utama (BUMA), PT Lancarjaya Mandiri Abadi (LMA) and PT Putera Kontrindo Abadi (PKA); and coal offtakers such as Macquarie Bank Limited (TBR's offtaker), Trafigura Asia Trading Pte. Ltd. (SDJ's offtaker) and EP Resources AG (TRA's offtaker). Please refer to Geo Energy’s Annual Report 2023, page 79 to 83 for the full entity coverage.
Geo Energy 07 Owned by PT Golden Eagle Energy Tbk (GEE), an Indonesian coal mining group listed on the Indonesia Stock Exchange, the acquisition of which was completed in October 2023. The location of our mining operations: Mining Concessions SDJ TBR BEK STT TRA (newly acquired on 18 October 2023) Location Angsana and Sungai Lohan district, Tanah Bumbu regency, South Kalimantan Angsana and Sungai Lohan district, Tanah Bumbu regency, South Kalimantan Tering and Long Iram districts, Kutai Barat regency, East Kalimantan Kutai Barat regency, East Kalimantan Beringin Makmur II village, Rawas Ilir district, Musi Rawas Utara Regency, South Sumatera Province, Indonesia. Mining Permit (Izin Usaha Pertambangan – IUP) Extended to May 2027 Extended to January 2028 Valid until April 2031 Valid until October 2032 Valid until May 2030 Total Concession Area 235 ha 489 ha 4,570 ha 4,600 ha 2,143 ha Status Operational Operational Operational Exploration Operational SINGAPORE OFFICE JAKARTA OFFICE BEK Coal Mine (operational) IPC Coal Mine (49%-owned) (operational) SDJ & TBR Coal Mines (operational) TRA Coal Mine (operational) STT Coal Mine (exploration) South Sumatra South Kalimantan East Kalimantan Our Areas of Operations
Sustainability Report 2023 08 VISION To become one of Indonesia’s top ten coal producers. We are committed to sustainable growth and enhancing shareholder value through prudent capital allocation and long-term planning. MISSION We are committed to running our business with corporate social responsibility concepts firmly embedded within our daily operations to protect our people, the environment and the local communities in which we operate. CORE VALUES Accountable We take responsibilities for our actions, performance and products when conducting our business. Competence We employ the best people, engage the top mining contractors and work with recognised international traders. Teamwork We cooperate, communicate and support each other in achieving our vision and mission. Responsive We strive to achieve the best possible outcome in everything we do, for the benefit of our people, business partners and communities. The estimated monetary value of payments made to these suppliers, for both Indonesia and Singapore offices, was USD371.9 million as of 31 December 2023. Geography Nature of services Description of services Indonesia Mining Contractor Responsible for the provision of mining activities in the SDJ, TBR and TRA mines Landowner Owner of the plantation area and granted permission to SDJ and TBR to conduct mining activities within the plantation area Consultancy service A management company providing management and consultancy services in the mining and plantation sector, negotiated the settlement and use of certain overlapping land, mining and plantation rights Infrastructure Provision of the integrated coal mining support and infrastructure services from mine to anchorage for the export of coal for SDJ, TBR and TRA Singapore JORC consultant Provide technical report/Independent Qualified Persons Report for the Group’s SDJ, TBR, BEK, STT and TRA coal concessions located in East and South Kalimantan and South Sumatra, Indonesia in compliance with Joint Ore Reserve Committee (JORC) code Auditors, Legal Counsels, Risk and Sustainability consultants Where required, the Group solicits auditors, legal counsels, risk and sustainability consultants to carry out specific services and needs Our core markets remain as Indonesia and China, while we have scaled up our presence in other markets, such as South Korea, Philippines, Vietnam and India. The Group’s total coal sales volume in 2023 was 8.4 million tonnes, which was a 17.6% decrease from 2022 (10.2 million tonnes). Revenue for 2023 was USD489.0 million, of which coal sales in Indonesia and China comprise of 24% and 69% respectively of the total revenue. Our supply chain mainly comprised of suppliers from Indonesia and Singapore, providing the following services as stated below:
Geo Energy 09 DISTRIBUTING ECONOMIC VALUE [GRI 3-3, 201-1] We continue to create economic value for our stakeholders through our operations, including delivering low ash, low sulphur coal at a competitive price to our customers, making dividend payments to shareholder and taxes to local authorities. On the social front, we foster an inclusive and caring work culture for our staff and reward our high-performing employees and contractors. Beyond looking out for our people, we continue to care for our community and invest in their infrastructure, we also hire and source locally. Revenues Operating Costs Employee Wages and Benefits USD 489.0 million USD 386.5 million USD 20.8 million Tax Payment to Government Payments to Providers of Capital Community Investments USD 26.7 million USD 61.5 million USD 0.4 million OUR TAX APPROACH [GRI 207-1, 207-2, 207-3, 207-4] Geo Energy’s tax strategy is aimed at ensuring compliance with the relevant tax laws. We have adopted the following approach for our tax strategy: • To engage constructively and openly with the tax authorities and tax consultants; • To monitor the tax regulations of jurisdictions that we operate in, in consultation with tax consultants; • To be transparent with our tax disclosures which enables us to meet regulatory requirements and to reflect best practices; and • To engage in reasonable tax planning that is aligned with our commercial and economic activities. The Chief Financial Officer (CFO) performs a monthly review on the tax computation workings reported by the Group’s Senior Tax Manager, and advises on the strategic direction on tax matters. The Group’s Tax department also seeks advice from tax consultants on tax queries and tax computation workings. To ensure that we comply with tax regulations, we actively engage with our external tax advisers for updates on tax regulations and for matters of uncertainty in relation to taxation. Our tax approach is linked to the business and sustainable development strategies of the Group, whereby the Group pays the taxes in compliance with regulations, considers tax incentives and tax exemptions where appropriate and engages in reasonable tax planning that is aligned with our commercial and economic activities.
Sustainability Report 2023 10 Governance and Controls over Tax Geo Energy’s CFO oversees the Group’s compliance with its tax strategy and the tax functions of the Group, with the support of the Group’s Tax and Finance departments. The Senior Tax Manager manages the tax functions of the Indonesian operations, while the Group Assistant Finance Controller manages the tax functions of the Singapore operations. Our Tax function is a vital element of the broader Finance function, and both the Finance and Tax functions strive to improve function effectiveness and tax efficiency. Our finance staff undergo training that covers tax issues, including the impact of tax policies on the Group’s overall business strategy and how the Finance and Tax departments can work together to align the Group’s tax strategy with its business strategy. Regular meetings are also held between the Finance and Tax departments to discuss the Group’s financial performance and potential risks. Tax risks are monitored by our Legal and Tax departments. They actively review new government regulations and assess the impact on the Group’s tax strategy and computation. We also seek the views of our legal and tax consultants on the evaluation of potential impacts. The findings and proposed action plan will be shared with the Board of Directors for discussion and approval. In addition, the Group’s tax liabilities and deferred taxes are audited annually by external auditors. Please refer to our Annual Report 2023 from page 37 to 99. The Group has a whistleblowing policy which provides an avenue for employees and external parties to raise any concerns and misconduct concerning tax-related matters. Please refer to our Annual Report 2023 on page 31 for further details regarding our whistleblowing policy. Stakeholder Engagement on Tax Matters We work actively with our external tax consultants to review our compliance of corporate tax and transfer pricing policies. We also engage with the tax authorities on tax regulations and tax uncertainties. When there are tax matters affecting the decisions of other stakeholders, we engage these stakeholders through meetings, forums, interviews and tools such as presentations to educate them on how tax matters may impact the Group. Our stakeholders are encouraged to provide feedback through our communication channels to ensure that the feedback is handled correctly. Country-by-Country Reporting Tax resident entities in Singapore and Indonesia are included in the Group’s consolidated financial statements. Please refer to our Annual Report 2023 from page 37 to 99. Due to confidentiality constraints, we do not provide countryby-country reporting.
Geo Energy 11 approach to sustainability [GRI 2-9 to 2-15, 2-1, 2-17 to 2-21, 2-24, 3-1 to 3-3] At Geo Energy, we acknowledge the importance of managing the emissions of our operations while staying committed to running our business with corporate social responsibility concepts to protect our people, environment, and the local communities in which we operate. SUSTAINABILITY FRAMEWORK [GRI 3-1, 3-2] Materiality assessment In 2022, we undertook a benchmarking exercise against our industry peers and stakeholder engagement exercise with our internal stakeholders to understand both positive and negative impacts of our business operations. This process enabled us to identify and validate our materiality topics, and therefore allowing us to assess and prioritise our material topics based on the significance of impacts Geo Energy’s business operations bring to the people, environment, and economy. Our shortlisted material topics are then reviewed and approved by the Board. Geo Energy’s materiality assessment is disclosed with reference to GRI 2021 standards and in line with SGX 27 Core ESG metrics. This year, we reviewed our existing material topics and performed a refresh of material topics, structuring into three key pillars under our sustainability framework. Our key pillars help us to further enhance and prioritise our sustainability strategies and initiatives on the impacts of Geo Energy’s business operations on the people, environment, and economy around us. Whilst our material topics have not changed since our material assessment conducted in 2022, from our review, we have come up with a refreshed list of prioritised material topics as shown below. Our sustainability initiatives and performance are strongly aligned with the three pillars of our sustainability framework above. We will continue to drive performance under each pillar and monitor using key performance indicators and targets which will be further detailed in this report. Managing our environmental footprint • Biodiversity • Energy and climate change • Water and effluents • Waste management Ensuring strong governance and responsible business ethics and integrity • Corporate governance • Risk assessment and management Supporting the health and safety, well-being of our people and value chain • Digitalisation and technology • Supply chain management • Health and safety • Community and well-being • Human capital management • Customer relationship management
Sustainability Report 2023 12 SUSTAINABILITY GOVERNANCE [GRI 2-9, 2-10, 2-11, 2-14, 2-15, 2-17, 2-18, 2-19, 2-20, 2-21, 2-24] We stay committed in maintaining good corporate governance practices through disciplined risk management and strong compliance to policies and regulations. Our sustainability framework is embedded within our management, governed by the Enterprise Risk Management (ERM) Working Group, where the ERM Working Group identifies sustainability risks and opportunities across operations. This enables the Group to create and deliver tailored solutions, as well as to generate value. The Board (including the Board of Directors) represents the highest governance body in Geo Energy and recognises the importance of managing the Group’s impacts on the people, environment, and economy around us. The Board is assisted by the Chief Executive Officer (CEO), who oversees the management of the Group’s sustainability strategies, key ESG related matters including climate-related issues and their related impacts, the review of the materiality assessment and the relative importance of the material topics to ensure that they remain relevant to our business context, as well as the management of stakeholders’ expectations. Where there have been any major changes and any areas of concern to be considered during the materiality assessment, the refreshed list of material topics will be reviewed and approved. Our CEO, together with respective Heads of Departments and the Mining Operation Team, are responsible for managing sustainability related matters across day-to-day operations and areas of concern. The Board is responsible for overseeing the corporate governance of the Group. The principal functions of the Board are: • overseeing the Group’s long-term strategic objectives and direction, taking into consideration sustainability issues; • overseeing the management of the Group’s business affairs, financial controls, performance and resource allocation; • assisting the establishment of prudent and effective controls to assess and manage risks, safeguard shareholders’ interests and the Group’s assets; and • setting Geo Energy’s values and standards (including ethical standards) and ensuring that obligations to shareholders and other stakeholders are understood and met. The Board (includes Board of Directors) Respective Heads of Department and Mining Operation Team Enterprise Risk Management (ERM) Working Group CEO
Geo Energy 13 The Board comprises of three committees who are in charge of the execution of its responsibilities and decision-making. The Committees and their respective responsibilities include the following: • Audit and Risk Committee (ARC): Holds responsibility in reviewing the top risks, including climate-related risks identified by the ERM Working Group. The ARC also reviews and approves the adequacy and effectiveness of Geo Energy’s risk management and internal controls on key risks, including climate risks. • Nominating Committee (NC): Works together with the Board in the process for the selection, appointment and reappointment of directors. The NC reviews and selects candidates with relevant expertise, experience, and who display an awareness on the key climate issues impacting the coal industry and Geo Energy’s operations. • Remuneration Committee (RC): Reviews and recommends the Board and key management personnel’s remuneration framework to ensure that rewards are linked to corporate and individual performance. The Board is represented by six1 directors2, four of whom are independent directors. The composition of the Board is listed below: • Mr Charles Antonny Melati (Executive Chairman and CEO) • Mr Dhamma Surya (Executive Director) • Mr Lu King Seng3 (Lead Independent Director) • Mr Ali Hery (Independent Director), appointed on 1 June 2023 • Mr David Yan Kin Pung (Independent Director), appointed on 15 November 2023 • Mr Lee Chee Tak (Independent Director), appointed on 15 November 2023 ERM Working Group The ERM Working Group, consisting of the CEO, CFO and various heads of department, identifies sustainability and climate-related risks and opportunities across operations, enabling the Group to create and deliver tailored solutions to meet its objectives. An annual risk workshop was conducted by the Company’s ERM consultant, PricewaterhouseCoopers Risk Services (PwC) to facilitate management’s identification of strategic, financial, operational, information technology and regulatory/compliance risks that are likely to pose a barrier to the achievement of the Company’s strategic business objectives. The results of the risk workshop provided management with a more systematic approach to understand the major risks and that sufficient rigour has been applied to manage and mitigate these risks, including climate risks. The Risk Owners are responsible to monitor and manage these risks. The top risks and the full list of risks identified will be presented to the Audit and Risk Committee (ARC) and Board for review and approval. Nomination process for Board of Directors [GRI 2-10] Our Nominating Committee (NC) works closely with the Board during the process for the selection, appointment and reappointment of Directors. Executive recruitment services, recommendations and contacts are utilised to identify qualified and experienced candidates. The NC reviews the résumé of candidates, considers their skills, knowledge and experience, interviews shortlisted candidates, and recommends the most suitable individuals to the Board for approval. Given also the importance we place on sustainability, candidates must also display an awareness of key ESG issues impacting the coal industry and Geo Energy’s operations. Board appointments are made through a Board resolution. The composition of the Board is reviewed on an annual basis by the NC to ensure that the Board has the appropriate mix of expertise, experience, balance, diversity and knowledge of the Group and collectively possesses the necessary core competencies for effective functioning and informed decision-making. The Board as a group comprises members with core competencies in accounting and finance, business and management experience, industry knowledge, strategic planning and customerbased experience and knowledge. 1 This excludes our former independent directors Mr Soh Chun Bin (retired on 28 April 2023), Mr Ong Beng Chye (retired on 14 November 2023) and Mr Jim Rogers (retired on 14 November 2023). 2 In 2023, 67% (4 out of 6) of our directors are independent, where 100% are male and 0% are female. 3 Mr Lu King Seng is retiring as Directors on 26 April 2024.
Sustainability Report 2023 14 The Board is evaluated annually to ensure that they continue to be relevant and well-equipped to oversee the Group’s sustainability strategy and development. The Board, particularly first-time directors, will undergo training in the roles and responsibilities of a director of an entity listed on the SGX-ST as prescribed by the SGX-ST within one year from the date of his or her appointment to the Board. Such training includes ESG Essentials. The Board is also encouraged to undergo continuous professional development by attending relevant seminars or training related to the Group’s business operations and sustainability strategy and development, as recommended and funded by the Company. For the re-appointment of Directors, pursuant to the Constitution of Geo Energy, each Director is required to retire at least once every three years. Newly appointed Directors are required to retire at the next annual general meeting of the Company following their appointments. The retiring Directors are eligible to offer themselves for re-election. Shareholders play a role in determining whether the Director can be re-elected following their retirement from the Board. Shareholders’ opinions on this matter are solicited at the annual general meetings. The independence of an appropriate candidate from the Board is determined at the recruitment stage. The NC conducts a detailed background check on each candidate to identify any potential conflicts of interest with Geo Energy. The independence of each Director is also reviewed annually by the NC. The Directors of the Board are required to disclose to the Board their relationships with the Company, its related corporations, its substantial shareholders, or its officers, which may affect their independence. For independent Directors, their tenure for serving on the Board is limited to 9 years. Each independent Director is required to complete a checklist annually to confirm his independence. CONFLICT OF INTEREST [GRI 2-11, 2-15] Geo Energy’s personnel, including the Board, are required to disclose any direct or indirect interest in any of the Company’s suppliers, customers or competitors which could conflict with the Company’s best interests. For Directors deemed to be independent, their independence is reviewed annually by the Nominating Committee. Each independent Director is required to complete a checklist annually to confirm his/her independence based on the guidelines as set out in the Code. The Board has delegated the Audit and Risk Committee (ARC) to review any potential conflicts of interest that may arise, according to Geo Energy’s Conflict of Interest policy. Any Director who faces a conflict of interest or a possible conflict of interest, in relation to a matter, must promptly declare his interest
Geo Energy 15 with details of the conflict and to recuse himself/ herself from discussions and decisions on the matter. Any potential conflict of interests will be disclosed in Geo Energy’s annual report. EVALUATION OF THE PERFORMANCE OF HIGHEST GOVERNANCE BODY [GRI 2-18] A formal assessment process is in place to assess the effectiveness of the Board, the Board Committees, and each Director annually. Each director completes a self-assessment and self-evaluation form which contains objective performance criteria and factors such as the composition and effectiveness of the Board and the Board Committees, quality of information and decision making, Boardroom activities, Board’s relationship with the Management, performance, calibre and personality, as well as a Director’s skills, knowledge, experience and contributions (including the management of the organisation’s impacts on the economy, environment and people). Assessment results are analysed with key areas for improvement and followup actions are highlighted and discussed at the Board meeting. REMUNERATION POLICIES [GRI 2-19, 2-20] The Remuneration Committee considers all aspects of remuneration, including but not limited to director fees, salaries, allowances, bonuses, options, sharebased incentives and awards, benefits-in-kind and termination terms to ensure that they are fair. Geo Energy has a structured process in determining remuneration package, which considers remuneration competitiveness in the industry, the Group’s performance, and individual performance of the Directors and key management personnel. For more details on level and mix of remuneration, please refer to our Annual Report 2023 on page 27. ANNUAL TOTAL COMPENSATION RATIO [GRI 2-21] Geo Energy's annual total compensation ratio stands at 498.6 (2022: 255.94). This figure is high due to a larger proportion of employees from the mine site who receive lower annual remuneration. The percentage decrease in the annual total compensation ratio is 11.4 as the median total compensation showed a decrease, mainly attributed to fluctuations in exchange rates between the Indonesian Rupiah (IDR) and the US Dollar (USD). STAKEHOLDER ENGAGEMENT [GRI 2-29, 3-3] Geo Energy recognises the importance of stakeholder engagement in the sustainable development and strategic management of our business. It enables us to manage our stakeholder expectations, manage risks and opportunities associated with sustainability issues, as well as build trust and support during our sustainable journey. We engage with our stakeholders regularly via formal and informal channels. Our Stakeholder Engagement Plan (SEP) was established to facilitate Geo Energy’s sustainability planning and strategic development, including relevant engagement activities to gain insights and identify key issues with our key stakeholders. Our stakeholder engagement process encompasses one-way and two-way communication methods, such as websites, presentations, and interviews.
Sustainability Report 2023 16 Stakeholder Group Subgroup Key Issues to Be Addressed Approach and Tools Frequency Business Partners Supplier/ Contractors • Planning and coordination • Improving our partner’s sustainability performance • Compliance with all relevant regulations Approach: Assessment, Consultation, Collaboration, and Information Disclosure Tools: • Site inspections • Direct one-on-one meetings • Workshops • Quarterly • Ad hoc Employees • Maintaining a qualified, reliable and motivated workforce • Skills development • Fair, non-discriminatory employment practices that embrace diversity and equal opportunity Approach: Assessment, Consultation, Collaboration, and Information Disclosure Tools: • Appraisal • Employee feedback channels • Direct one-on-one meetings • Workshops • Annual • Ad hoc Government Institutions Law Enforcement Agencies • Project design and development, impacts and opportunities • Opportunity for partnership related to security aspects of the project assets, and safety throughout the construction and operation of the project • Policy and regulations Approach: Consultation and Information Disclosure Tools: • Socialisation forum in each village or district, involving village and district’s governments • Annual • Ad hoc Provincial/ Regency Government • Obtaining all regulatory permits and licensing requirements for the developed sites (TBR, SDJ, BEK, and TRA) and undeveloped site (STT) • Continue to conduct quarterly environment monitoring report, including social monitoring that is mandatory in Analisis Mengenai Dampak Lingkungan (AMDAL) report and report to the relevant agencies (Ministry of Environment and Forestry (MoEF), Ministry of Energy and Mineral Resources (MEMR)) Approach: Consultation, Collaboration, and Information Disclosure Tools: • Direct one-on-one meetings with relevant government agencies, as required • Focus group discussions at the regency level • Workshops • Annual • Ad hoc
Geo Energy 17 Stakeholder Group Subgroup Key Issues to Be Addressed Approach and Tools Frequency Investors • Facilitate a strong understanding of our organisation’s economic and operational performance • Address concerns around ESG related risks Approach: Consultation and Information Disclosure Tools: • Annual General Meeting • Analysts’ briefings with investors • Communication via Geo Energy’s website • Investor roadshows • Annual • Ad hoc Landowners • Landowners who might be impacted by the land acquisition process • Disagreements over compensation for land prices Approach: Consultation, Collaboration, and Information Disclosure Tools: • Direct one-on-one meetings as required • Socialisation forum at village level • Public displays • Annual • Ad hoc Local Communities • Final project design, identified impacts and proposed mitigation plans • Project’s local labour requirements and procurement mechanism • Opportunities for project involvement in community development Approach: Communication, Consultation, Collaboration, and Information Disclosure Tools: • Focus group discussion and socialisation forum in each impacted village • Posters and brochures in a location where they are easily accessible to the community • Public displays • Annual • Ad hoc Nongovernmental organisations (NGOs) Domestic • Project development, impacts and opportunities • Management of adverse environmental and social impacts • Project’s social investment/ community development programmes • Project local labour requirements and procurement mechanism, and opportunity for the local workforce to be involved in the project Approach: Consultation, Collaboration/Partnership, and Information Disclosure Tools: • Direct one-on-one meetings with relevant NGOs, as required • Focus group discussion at the regency level • Presentations • Workshop • Annual • Ad hoc
Sustainability Report 2023 18 CORPORATE GOVERNANCE [GRI 2-12, 2-23, 2-24, 2-27, 3-3, 205-2, 205-3] At Geo Energy, we recognise our responsibility to maintain our sustainability stewardship. We have implemented established processes on risk identification and assessments to manage our impacts on the environment and social aspects. Conducting our business activities with integrity and fairness is a key priority for Geo Energy as we strive to maintain high levels of trust with our key stakeholders. We are committed to maintain robust governance practices by providing accountability and transparency in our operations which helps us maintain strict business integrity and is integral in creating long-term sustainable value. As such, we commit to the following strategic goals where we aim to: • Protect the interests of the Group’s stakeholder and create long-term sustainable value; • Uphold accountability and transparency throughout business operations; • Create and support an appropriate culture, values, and an ethical standard of conduct at all levels; • Establish a business operational culture with zero tolerance of fraud, bribery and corruption; • Implement a confidential channel for employees and external parties to raise concerns about business ethics and non-compliance; ensuring strong governance and responsible business ethics and integrity • Establish a clear and robust ERM Framework to safeguard Geo Energy against risks; and • Prevent and manage any conflicts of interest through our Conflict of Interest Policy. How we manage this Geo Energy complies with the Employment Act, Singapore’s main labour law. It provides for the basic terms and conditions at work for employees covered by the Act. Foreign employees holding a work pass are also covered by the Employment of Foreign Manpower Act, which outlines an employer’s responsibilities and obligations for employing foreigners. We are fully committed to ensure that human rights of all employees and our contractors, particularly the rights of indigenous people will be respected in line with international human rights conventions such as the International Labor Organisation (ILO) Convention and Singapore Employment Act. Policy documents are communicated to all employees on commencement of employment and Employment Act of Singapore’s main labour law and Employment of Foreign Manpower Act are available online. The development of the policies and standard operating procedures (SOPs) were done by the respective department in-charge, together with the Senior Management, to ensure stewardship by the department responsible for managing the policy implementation. The implementation of the policies and SOPs are overseen by the CFO of the organisation, with assistance from the respective department in-charge. We have our independent internal auditor to perform a yearly audit review and evaluation to ensure the compliance of the policies and SOPs by the Group (Singapore and Indonesia). The results/ findings will be reported to the Audit and Risk Committee and the Board. Our Code of Ethics and Conduct policy and Supplier Code of Conduct policy: • The Code of Ethics and Conduct policy is designed to provide guidance on legal, ethical and risk issues that may be encountered during the course of work which would enable employees to consider the impact that their actions may have on the broader interests of stakeholders. Our code of conduct helps the organisation make ethical choices that are guided by integrity, honesty and compliance, and the organisation is committed to comply with all HSE policies, standards and practices.
Geo Energy 19 • Our operation is mainly at Indonesia and it is foreseeable that sometimes laws will conflict with each other or with the Code or Company policy. If such conflict arises, we will consult with the Group legal team or Management before any action is to be taken. All employees of the organisation, including board of directors are required to follow the Code. • The Supplier Code of Conduct applies to all current and future suppliers of the Group and conveys the expectation for suppliers to adhere to the highest ethical standards when conducting business. It covers the topics of general conduct (exercise reasonable care, competence and professional manner in the work performed with respect, integrity, courtesy and cooperative attitude), confidentiality, ethical dealings, conflict of interest that may adversely influence the business relationship with Geo Energy, compliance with applicable competition laws, equality/fair standards, health and safety working environment, and compliance with all laws and regulations. For new vendor selection, the Group has a set of criteria, such as cost competitiveness, offered credit term, quality and availability of goods and vendor reputation/ background (inclusive of trade sanctions) to assess and evaluate such new vendor before any engagement. For evaluation of an existing vendor, the Group will perform a yearly review and assessment on the competitive pricing, after sales service, satisfactory service, internal financial and trade sanctions, response time to queries and delivery schedule to determine whether such vendor will be continued as an approved vendor or to cease the transaction with such vendor. The above two sets of criteria apply to the bidding process. Policy Name Description Code of Ethics and Conduct (the “Code”) • The Code provides guidelines, principles and expectations on professional conduct that should be upheld. • The Code contains clear guidelines on how the Board of Directors, employees and associated guests are expected to behave, as well as disciplinary actions taken in the event of non-compliance. • Prohibition on anti-competitive behaviour has also been stipulated in the Code. Whistleblowing Policy • The Policy establishes a formal channel for employees and relevant stakeholders to report occurrences of malpractice within the organisation. • The Policy ensures that all reports received through this channel are treated with confidentiality and impartiality, with no employee or third-party subject to consequence or retaliation for a report made in good faith. • Whistleblowing reports are reviewed by the Audit and Risk Committee (ARC) to facilitate investigative action and resolution. • The ARC received zero whistleblowing reports during this reporting period. Anti-Bribery and Corruption (ABC) Policy • The ABC Policy outlines rules surrounding money laundering, gifts, entertainment and hospitality expenses. • Employees who violate the ABC Policy will be subject to prompt disciplinary action or termination. • The Group’s anti-corruption policies and procedures have been communicated to all governance body members and employees, including new joiners, in Singapore and Indonesia. All employees are mandated to undergo anticorruption and bribery training. The latest training was conducted in 2022, and the Group is looking to conduct the training annually from 2024. For investment opportunities, a preliminary analysis will be conducted to determine if the merger and acquisition (M&A) target fits into the corporate business strategy, followed by a due diligence exercise. We operate under our Good Corporate Governance (GCG) principles and framework which enables us to embed accountability and transparency within our operations. Our adherence to the Code of Corporate Governance 2018 (Code 2018), which is detailed in our annual report, is substantial and regularly reviewed in line with latest regulations and standards. Geo Energy strictly aligns to mandatory legislations and complies with necessary laws and regulations. We comply with SGX Listing Rules, the Principles and Practice Guidance as outlined in the Code of Corporate Governance 2018, and laws and regulations of the jurisdictions we operate in. In addition to this, we have implemented the following policies to further reinforce our corporate governance system. We are obliged to fully comply to the following policies:
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