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Material topics

From Equinor's Integrated Annual report, 2022

Summary of enterprise level material topics

Our purpose is to turn natural resources into energy for people and progress for society. This requires an understanding of the interplay between our business activities and the societies and ecosystems in which we operate.

We have identified nine topics that we believe are key to deliver on our strategy. In line with the concept of double materiality, these are topics that may significantly affect our financial or operational performance, or that may significantly impact societies and ecosystems in which we operate.

Always safe

Improved safety and security performance

In 2022 there were no fatalities and no actual or potential major accidents, and the total number of actual serious incidents is the lowest ever recorded. Equinor also recorded the lowest number of serious oil and gas leaks ever, and there was no significant harm to people, assets or operations due to security incidents.

The company, however, experienced too many personal injuries and did not meet the 2022 target. Although there was a decline in work related illness, the total level of absence has increased further since 2021. Based on our 2022 performance, we recognise the need to continue to improve our health, safety and security performance. Given the measures reinforced in 2022, we consider our approach as adequate, and health, safety and security objectives remain a top priority for Equinor’s management.

Satisfactory performance on most nature related topics

Equinor’s performance related to non-GHG emissions to air and regular discharges to sea, is considered satisfactory. Although volumes of accidental spills are lower than in 2021, we are not satisfied with the slight increase in number of uncontrolled discharges and breaches of discharge permits in our operations in Norway, and there is continued focus on improvement activities to address compliance with relevant environmental regulations.

Our approach and ongoing improvement activities related to our impacts on
biodiversity, for example new disclosure metrics and preparation of NPI plans and site-specific inventories of key biodiversity features, are viewed as representing an adequate response to the need for action against loss of biodiversity.

Further maturation of approach to human rights

Equinor has continued to mature its approach to addressing human rights and tackling inequality with two important milestones in 2022 being the articulation of our just transition framework, and stand-alone human rights statement. We continued our efforts to further integrate human rights practices into the way we work, with a particular focus on addressing indications of forced labour and unacceptable working conditions in our supply chains. We consider our management approach adequate to address the salient risks but recognise the need for more systematic efforts and broader collaborations to tackle systemic issues. We will also continue our efforts to identify meaningful indicators of social and human rights performance with the aim of reporting in a more quantitative fashion in future years.

Diversity and inclusion performance satisfactory

The focus in 2022 has been on updating our diversity and inclusion (D&I) ambition, strategy and metrics to better support our business strategy, and reflect our external context, societal expectations and international reporting standards. While diversity targets have been put on hold in 2022 due to internal reorganisation, we continued to measure our inclusion index and use this data to identify actions that drive an inclusive culture. The inclusion index performance remains at the same level compared to a three-year average, and we recognise the opportunities for improvement. The plans for 2023 focus on further operationalising D&I, setting targets and actions locally and systematically measuring progress on both diversity and inclusion.

High value

Efficient and predictable operations

Equinor delivered stable equity liquids and gas production throughout 2022 at 2,039 mboe per day compared to 2,079 mboe per day for 2021. Divestments including exit from Russia and natural decline were offset by the Snøhvit, Peregrino and Njord fields resuming production and start-up of Johan Sverdrup phase 2 and Peregrino phase 2 in the fourth quarter of 2022.
Total renewables power generation increased by 5.6% in 2022 to 1,649 GWh, mainly due to the full year production from the Guañizuil IIA solar plant in Argentina.

Through efficient and stable production Equinor delivered a unit production cost for 2022 at 6.1 USD/ boe (5.6 USD/boe real 2021). Performance came in above target, reflecting the challenging economic environment which developed since setting the target at the beginning of the year. Increasing energy cost due to the energy crisis amplified by Russia’s invasion of Ukraine and higher environmental costs resulted in the higher unit production cost for 2022.

Profitable portfolio

Equinor’s strong financial performance and results has placed the company in a robust financial position. We delivered first among peer group on Adjusted Return on Average Capital Employed for the year with a 55% adjusted ROACE*, and above average on Relative Total Shareholder Return*.

Equinor’s oil and gas portfolio is well positioned to deliver energy during an ongoing energy crisis. Strong cash generation enables Equinor to continue reinvestment in an optimised oil and gas portfolio and ensuring high value growth in renewables and low carbon solutions, with USD 8.3 billion organic capex* (adjusted to USD/NOK exchange rate assumption in the Outlook presented at CMU 2022) in 2022. Equinor continue to optimise and reprioritisenon-sanctioned projects to ensure high value creation though cycles.

Significant societal value creation

Delivering value to society at large and to our host communities in particular, is fundamental to the success of our ongoing business activities and the energy transition. Our 2022 performance was geared towards ensuring crucial energy production and supply, and providing significant tax contributions, employment and procurement spend. In 2022, Equinor paid over USD 45 billion in taxes and spent around USD 17.1 billion on procurement.

Integrity and anti-corruption targets met

The number of confirmed corruption cases were zero, which is aligned with the target. 95% of employees confirmed they had read, understood and signed-off the company’s Code of Conduct which also addressed the gap identified in 2021.

Low carbon

Satisfactory progress on climate performance

Equinor’s total scope 1 and 2 GHG emissions were 11.4 million tonnes CO₂e in 2022, representing a decrease compared to a three-year average. The CO₂ intensity was 6.9 kg CO₂ per barrel of oil equivalent, which is less than half of the current global industry average of 16 kg CO₂/boe. Equinor also continued its strong methane intensity performance with 0.02% compared to the OGCI average of 0.17%. Equinor’s scope 3 GHG emissions (use of sold products) were 243 million tonnes CO₂e which is a slight decrease compared to a three-year average. Equinor expects to maintain the same level of oil and gas production until 2030, which may result in increased emissions from use of sold products.

The company is on track towards its ambition of allocating 30% of its gross capex* to renewables and low carbon solutions by 2025, with investments increasing to 14% in 2022, compared with 11% in 2021. To account for both emissions and energy produced, Equinor uses a net carbon intensity (NCI) methodology, which accounts for scope 1, 2 and 3 emissions. Equinor’s NCI was 66.5 g CO₂e/MJ which is a slight improvement from 67.1 g CO₂e/MJ in 2021.