Environmental Responsibility

ESG Activities:

Environmental
Responsibility

ENVIRONMENTAL
RESPONSIBILITY

Clean Energy for a Sustainable Future

Climate Change Implication

Water and Effluents

Energy

Greenhouse Gas Emissions

Waste

Biodiversity Program

SOCIAL
RESPONSIBILITY

Gas Subholding Officers

Costumers

Community

Enhancing Business Sustainability

ESG Governance

ESG Rating

Clean Energy for
a Sustainable Future

PT Perusahaan Gas Negara Tbk (PGN) realizes that the Company's operational activities can affect the environment, both directly and indirectly, especially in PGN's operational areas. Some of the direct impacts of PGN's operational activities on the environment include greenhouse gas emissions, water and soil pollution, and land use that has the potential to disrupt natural ecosystems. Greenhouse gas emissions from PGN activities, such as the use of gas as fuel for Gas Turbine Compressors, can cause an increase in air temperature which can accelerate global climate change. Pollution of water and soil can occur due to operational waste being dumped into rivers, seas, and land. Land use for PGN's operational activities can also disrupt the natural habitat of flora and fauna.

Aside from the direct impact, PGN's operational activities can also have an indirect impact on the environment through large energy consumption and the use of natural resources, such as water and fuel. Excessive use of energy and natural resources can cause environmental damage, for example, through deforestation, decreased air quality, and reduced availability of clean water. In response to the impact, PGN has implemented various programs to improve energy efficiency, water efficiency, reduce greenhouse gas emissions, manage operational waste better, and maintain environmental compliance.

“The Company is committed to protecting the environment from potential adverse impacts arising from the Company's operational activities. This commitment has been contained in PGN's Health, Safety, Security and Environment (HSSE) policy”

For this reason, the Company is committed to protecting the environment from potential adverse impacts arising from the Company's operational activities. This commitment has been contained in PGN's Health, Safety, Security and Environment (HSSE) policy which was approved by the President Director on March 9, 2022. The policy puts emphasis on the principles of prevention, risk management, compliance with regulations, participation, environmental protection and improved sustainability.

PGN's HSSE policy contains environmental aspects and regulates actions to minimize risk, raise awareness, and carry out environmental protection efforts. PGN also always complies with laws and regulations and other requirements that apply in the field of HSSE including internal regulations, national and international laws, standards and best practices in all of the Company's business and operational activities. This is a form of PGN's commitment to stakeholders

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Climate Change
Implication

The Company realizes that climate change can have implications for future operational and production activities; therefore, the Company internally continues to analyze potential risks that occur and their mitigations. PGN is committed to addressing climate change challenges by referring to the taxonomy risk guidelines related to climate change, the Risk Management charter, PGN's HSSE Policy, and Performance Indicator (IK) Risk Profile Preparation (I-003 0.20) to measure the impact of risks related to the environment.

One of the impacts of climate change in Indonesia related to PGN's business activities is the advent of tropical cyclones causing high rainfall. This phenomenon potentially causes operational disruptions within PGN activities. For example, continuous rains, floods, and landslides will disrupt the gas pipeline construction process.

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“PGN is committed to addressing climate change challenges by referring to the taxonomy risk guidelines related to climate change.”

Water
and Effluent

In carrying out its operational activities, PGN's gas distribution and transmission do not require water. However, maintenance activities, such as cleaning pipes, machines, and other infrastructure, require insignificant amounts of water. The main use of water is to fulfill domestic needs at PGN's head office and operational support offices. Even though the use of water in maintenance activities is relatively small, PGN continues to ensure that the Company is consistently efficient in using water and that it does not harm the environment. PGN uses water sourced from the Regional Drinking Water Company (PDAM) and groundwater whose extraction is adjusted to the applicable usage limit provisions.

The flow of water from these two sources does not interfere with water bodies for the community or the ecological needs of water. Water intake and consumption increased by 22.8% in 2022 compared to the previous year. The increase in the figures is because the Company increased the implementation of the Work From Office (WFO) scheme in 2022 compared to 2020 and 2021, where the majority scheme was Work From Home (WFH) in line with the ongoing situation of the COVID-19 pandemic. In addition, the Company also provides clean water faucets that can be used by local residents.

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“PGN continues to ensure that the Company is consistently efficient in using water and that it does not harm the environment”

Energy

“PGN emphasizes its commitment to energy management by not only relying on conventional energy sources such as electricity and fuel, but also actively implementing conservation initiatives, especially through the installation of solar panels, as a real response to the issue of climate change.”

Energy becomes the main requirement to run the Company's operational activities. PGN utilizes energy for various needs, including electrical energy for lighting and the operation of office electronic equipment as well as operational equipment of offtake network/gas stations, Fuel Oil (BBM) for Diesel Engine Generator (DEG) as a backup in case of emergency (power failure) and fuel for the Company's operational vehicles.

Furthermore, Gas Fuel (BBG) is also used for the Company's operational vehicles and Gas Engine Generator (GEG) then is used for lighting, office electronic equipment, and off take network/gas station equipment for areas without electricity. There are no energy standards or requirements related to distribution or transmission activities. PGN also implements energy conservation initiatives by utilizing renewable energy through the installation of solar panels at its operational gas distribution and transmission stations.

The electrical energy generated through solar panels is capable of supplying electricity needed for street lighting at Gresik Station, Tandes Station, Kalisogo Station, and Pagardewa Station. Although this initiative has yet to have a significant impact on the renewable energy mix in PGN's total energy consumption, this small step is a form of PGN's efforts to respond to climate change issues.

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Greenhouse Gas
Emissions

One of PGN's commitments to protecting the environment is by managing greenhouse gas (GHG) emissions as stipulated in PGN's HSSE Policy in order to use energy more efficiently and reduce GHG and Non-GHG emissions through energy conservation programs, reduce combustion initiatives, and promote renewable energy.

PGN has formed an Environment, Social and Governance (ESG) Team which is responsible for handling ESG issues including decarbonization projects related to the risk of greenhouse gas (GHG) emissions. This team consists of the Board of Directors up to the managerial level tasked to monitor risks and carry out sustainable decarbonization projects. Reporting related to transition risk is also the responsibility of the risk monitoring team which is carried out periodically.

“PGN continues to ensure that the Company is consistently efficient in using water and that it does not harm the environment”

The Board of Directors is also highly committed to managing GHG which is manifested in the Key Performance Indicator (KPI) of the Board of Directors, where one of the indicators is emission reduction.The Company has been calculating its carbon footprint since 2012, using a carbon calculator.

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The calculations performed

Greenhouse gas emissions from electricity consumption in buildings and stations.

Greenhouse gas emissions from fuel consumption for generators.

Greenhouse gas emissions from fuel consumption for motorized vehicles.

Greenhouse gas emissions from gas consumption for chillers and compressor turbines.

Greenhouse gas emissions from natural gas distribution activities.

Greenhouse gas emissions from business travel by plane.

“PGN continues to ensure that the Company is consistently efficient in using water and that it does not harm the environment”

Waste

In accordance with laws and regulations, every business activity is required to make efforts to manage and process waste to deter environmental damage. Waste management can be done by reducing, recycling, reusing or disposing of it in a responsible way. Based on its characteristics, the waste produced by the company is in the form of hazardous and toxic waste (B3 waste) and non-B3 waste.

In addition, 2022 saw an increase in the volume of waste due to battery waste that has been used up every three years. In the meantime, in relation to cases of waste spills, during the last three years up to the reporting period there were no cases of waste spills.

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Biodiversity Program

“By integrating aspects of biodiversity into the Company's activities to achieve net positive impacts.”

PGN's operational areas are not contiguous to protected areas, so there are no negative impacts on biodiversity, both protected flora and fauna. However, PGN also promotes the protection of biodiversity in Indonesia through various sustainable environmental activities.

PGN has established responsibility for managing biodiversity in the 2017 GTM Kehati Determination Decree. In addition, PGN's commitment to protecting biodiversity is contained in PGN's HSSE Policy, that is, the Company always promotes the preservation of biodiversity by integrating aspects of biodiversity into the Company's activities to achieve net positive impacts. PGN's commitment to protecting the environment and biodiversity is not only manifested through internal initiatives.

The company also has an external program in the environmental field, which is part of the implementation of social and environmental responsibility mandated by the Minister of State-Owned Enterprises Regulation number PER-1/MBU/03/2023 concerning Special Assignments and Social and Environmental Responsibility Programs for State-Owned Enterprises. One of the external programs in the field of environment implemented by PGN is the effort to conserve biodiversity located around PGN's operational areas.

The implementation of biodiversity conservation efforts is preceded by surveys and environmental baseline studies, including aspects of biodiversity as a basis for determining priorities for biodiversity conservation programs and then setting targets and work plans. In practice, the implementation of the program is carried out by involving the surrounding community and monitoring and evaluation is carried out every year.

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