Our Company & Governance

V I T O L G O V E R N A N C E R E P O R T

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Contents

Overview of Vitol 4

Vitol at a glance 5

Vitol trading 8

Vitol assets 10

Our people 12

Ethics, integrity & behaviour 16

Ownership, governance & structure 18

Our Compliance Programme 20

Environment Social Governance (ESG) 24

Health, Safety, Environment, Human Rights and Communities (HSEC) 25

Stakeholders 28

Supply chain 31

Sustainability 32

Notes 36


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Letter from the CEO

Vitol began energy trading and distribution 54 years ago in Holland. Today the business operates globally out of 40 offices, with four regional centres, and our core activity remains the same; serving as a high-volume, cost-efficient intermediary between producers and consumers. As one of the larger participants in our sector of the market, our operation has evolved along with the energy mix consumed; hence our original business of transporting oil and refined products has grown to include important activities in power, natural gas, LNG and renewables.

In the past decade, Vitol has expanded its involvement across the energy value chain, becoming a producer of oil and gas, an investor in refining and marketing assets, port infrastructure (transhipment terminals), and tankers. We recognise our responsibility to uphold the highest and safest standards of operation across our business, including in the companies in which we invest.

More recently, and mindful of our responsibility to support the energy transition objectives, we have been deploying capital in renewable projects, including wind, solar and battery.

This document aims to provide an overview of our business and the way we work today. We will continuously challenge ourselves to improve and intend that this document will evolve over time to reflect this.

Russell Hardy April 2020


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Overview of Vitol

Vitol is an energy and commodities company; its primary business is the trading and distribution of energy products globally – it trades over eight million barrels per day of crude oil and products and, at any time, has 250 ships transporting its cargoes.

Vitol’s clients include national oil companies, multinationals, leading industrial and chemical companies and the world’s largest airlines. Founded in Rotterdam in 1966, today Vitol serves clients from some 40 offices worldwide and is invested in energy assets globally including: circa 16mm3 of storage, 480kbpd of refining capacity and circa 7,000 service stations across Africa, Australia, Brazil, Eurasia and in Northwest Europe.

More information about both the trading business and the assets in which we are invested is contained overleaf.


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Vitol at a glance Founded and headquartered in

Rotterdam since 1966

1,400+ employees in Vitol

40 Vitol offices worldwide

8m bbls / day

40+ countries in which we are invested in assets

$225 billion revenues in 2019

16mm3 of storage located across every continent

480kbpd of refining capacity

7,000+ service stations across Africa, Australia, Brazil, Eurasia and in Northwest Europe


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Vitol’s core business is trading, that is the distribution of physical energy products, such as crude oil, petroleum products, natural gas, liquid petroleum gasses and power. We source from producers, refiners and intermediaries and deliver to refineries, utilities, airlines and retail distribution networks, as well as wholesalers and other traders.

Our business requires complex logistical processes and understanding of associated infrastructure, from terminals to store and blend the products to the required specification, and ships, pipelines, trains, trucks and barges to transport it.

In addition to the complexities of managing physical risks, the business has to manage financial and other business risks. It does the former through hedging, careful credit management and a conservative approach to financial management, and the latter through rigorous business and compliance controls.

The markets in which Vitol operates are highly competitive and to anticipate our customers’ requirements and understand markets better, we invest in data gathering and the tools to enable us to use it.

An evolving modelTo complement our core activity, we have invested extensively in associated infrastructure, some of which facilitates the core trading business and some of which provides a business opportunity. Today, the businesses in which Vitol is invested involve circa two million barrels a day of our volumes. In order to optimise the use of capital and increase the range of opportunities, Vitol invests alongside strategic investment partners, which share our long-term outlook and are aligned with our approach to managing businesses.

We are also mindful of the significant challenges our industry is likely to face in the decades to come. We recognise that our business will have to change and will seek to evolve as required.

The business model


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We sit at the heart of global energy flows, moving energy products from source to customer as quickly, responsibly and cost-effectively as possible. Vitol’s customers include national oil companies, multinationals, leading industrial and chemical companies and the world’s largest airlines. Our business is founded on the long-term relationships we’ve built with our customers, on our expertise, market understanding and reputation for reliably

delivering the required products, on time and to specification. Furthermore, Vitol works with its customers to identify and develop solutions which work best for them, helping them manage physical risk and optimise opportunities. Our trading presence is underpinned by investments in complementary infrastructure: refining, storage, distribution and a marketing network across every continent.

Vitol trading

0 50 100 150 200

LNG 10.5

13.3

14.5

62.3

49.7

38.0

204.0

LPG

Naphtha

Jet

Fuel Oil

Gasoline

Gas Oil

Crude

18.4

Traded volumes by product, mts


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RefinersOthers

Midstream

Traders

20%

17%

10% Majors - Integrated Oil & Gas

National Oil Companies & Gov’t Agencies

21%

16%

16%

Sales by counterpart type

(by volume)

Middle East6%

Asia Pacific

Americas

Africa

Europe

24%

10%36%

24%

Sales by delivery location

(by volume)

16%

Africa11%

Middle East

AmericasAsia Pacific

Europe

30%

37%

6%

Purchases by location (by volume)

Others

6% Traders

23%Independent

Oil & Gas producers12%

Midstream

National Oil Companies & Gov’t Agencies

20%

8%Majors - Integrated Oil & Gas

Refiners

18%

13%

Purchases by counterpart type

(by volume)

Our business by counterpart type and region


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Vitol assets

Vitol is invested in energy assets which complement its position at the heart of the world’s energy markets and facilitate the flow of energy from, into and across key markets globally. We invest for the long-term and look for growth opportunities where we can share best practice.

We are mindful of the changes which will impact our industry and are looking for opportunities to evolve our business and its asset base in line with future energy demand trends.


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Vitol is a relatively small producer of oil and gas. Its only significant project is offshore Ghana (OTCP) where it is working with Eni, GNPC and the World Bank to produce oil and produce and deliver gas onshore Ghana, enabling the country to move to a cleaner, more reliable, form of generation.

New Tech

Renewables

Power

Gas/LNG/LPG

Downstream

Midstream

Upstream

New technologies will be essential if our economies move to a model which uses less carbon and causes less pollution. Vitol is trying to identify and invest in projects where its expertise and/or footprint enable it to add value.

Renewables will become an increasingly important source of energy, particularly power. The move to electric vehicles and electric boilers will shift demand from hydrocarbons to power. Renewables have already reached an efficiency and scale where they can be used commercially, both in localised and large scale grid-based projects.

We anticipate a world with fewer molecules and more electrons. The current intermittency of renewables means that, for the time being, gas fired generation is an essential partner to renewable generation. Vitol is invested in one of the largest and most efficient combined heat and power plants in the EU.

Gas and LPG have a role to play in the energy transaction. Gas is complementary to renewables, ensuring security of energy supply. LNG offers a manageable cleaner energy solution in many developing markets where it can displace diesel or fuel oil in generation, and LPG can cost-effectively replace wood or charcoal when burned domestically, reducing household pollution.

We are invested in companies that deliver energy to consumers in five continents through circa 7,000 service stations. We see greater opportunity in developing economies where the energy infrastructure is not as mature. Mindful of the future change in the energy mix, we are looking at ways to add additional value to our customers.

The safe and efficient distribution and conversion of energy around the world requires extensive infrastructure; from storage terminals and ships, to pipelines and refineries. Vitol is invested in assets across every continent. Our network facilitates the flow of energy worldwide and enables us to serve our customers better.


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Our people

Our people are our business. It is on our people’s expertise, innovation, drive and relationships that we depend for the development and growth of our business. Talent is precious to us and we strive to create an environment in which individuals from a diverse range of backgrounds can reach their full potential.

Vitol has a flat, meritocratic organisational structure. We believe this helps enable an entrepreneurial and collaborative ethos, with everyone primarily focused on delivering results, efficiently and safely.

We prefer to develop our own capabilities, building the requisite skillset from within. Hence, we have developed proprietary trading and management systems and core activities are undertaken by Vitol employees. At times, we require niche expertise, in these instances it is most effective for us to work with specialist partners or advisers.

Vitol respects the right of any individual to be part of a trade union, however very few Vitol employees belong to professions represented by a trade union and there are no Vitol employees covered by a collective bargaining agreement. Vitol benchmarks its remuneration policies to ensure they are in line with the market.

DiversityOur business is truly global and we serve a diverse global customer base. Being diverse is not optional, it is what we must be; experience tells us that we serve our customers better when our teams comprise diverse experiences, perspectives and insights.

Our team comprises over 60 nationalities and we are committed to developing and sustaining a diverse work environment. To succeed we need the best people and these are to be found only by searching across the full breadth of race, religion, gender, age and sexual orientation.

Vitol partners with multiple executive search firms and recruitment companies, all of which are required to produce a diverse slate of qualified candidates. Furthermore, we are investing in a diverse workforce for the future by attracting diverse talent at entry-level and developing that talent with a view to achieving greater diversity among our senior leadership and commercial/market facing roles.

All our colleagues must feel that they operate in an inclusive environment that encourages and supports differences. Vitol recognises everyone’s right to expect a workplace in which they can bring all of who they are to work.


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RemunerationWe actively monitor remuneration within the organisation to ensure that a colleague’s role, performance and alignment with our behaviours are the only determinants of their remuneration.

Grievance ProcessVitol is committed to ensuring a positive and effective working environment where people are treated fairly and with respect, in line with our values and culture. We recognise, however, that there may be occasions where employees may have concerns about their work, working environment, relationships with their colleagues or behaviour of others towards them. In the first instance we seek to resolve issues informally through dialogue and provide the required advice and support. Where this is not possible or appropriate a formal grievance will be raised.

Our Grievance Process and procedure enables colleagues to raise concerns relating

to their employment and have them dealt with in a fair and consistent manner. The procedure is applied consistently in all instances. All colleagues will be treated fairly and sensitively and supported during the process. Grievances will be investigated promptly, thoroughly considered, and in confidence. Employees have the right to be accompanied at formal meetings. Employees also have a right of appeal against the outcome of the grievance procedure.

Integrity HotlineWe have recently implemented a global Integrity Hotline. Operated by an independent third party, the hotline enables employees to raise any issues of concern with senior management, anonymously and in confidence. The issues are dealt with by the most senior member of the relevant department and in the instance of a conflict, for example if there is a complaint against the most senior person in any department, the case will be reviewed by the CEO.


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Asia-Pacific

Americas

EMEA

58%

29%

13%

Employees by region

(1,400+ full time employees)

Female

Male

68%

32%

Gender split of total employees (1,400+ full time employees)

Male

81%

Female

19%

Gender split of professionals*

globally

Historically under represented groups**

White

69% (216)

31% (99)

Ethnicity data US offices (315 full time employees)

Our colleagues

*Professionals are employees who have risk and/or decision-making discretion, significant impact on commercial outcome, or require a professional qualification to perform their roles.

**Historically underrepresented minorities: African Americans, American Indians and Alaska Natives, Hispanics (or Latinos), Native Hawaiians and other Pacific Islanders.

N.B. Of the circa 70 contractors employed by Vitol the gender split is as follows; EMEA 21% female, 79% male; Asia 100% male; Americas 35% female, 64% male.


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Ethics, integrity & behaviour

Vitol’s culture is integral to the business. It characterises the way its people work, creates an optimal working environment and underpins its success. It is owned by the Board.

Vitol’s culture originates over 50 years ago with its founders and their combination of entrepreneurship, determination to succeed, integrity, hard work and humility. As Vitol has grown, its leadership has been mindful to preserve and evolve the elements it believes to be both the

foundations of a successful business and conducive to a pleasant and constructive working environment. Our limited hierarchy enables the leadership team to have a good understanding of how people work, as well as what they achieve.

The Code of Conduct outlines how we expect our employees to behave in given circumstances, and our commitment to its employees. A broader set of behaviours which underpin our culture are detailed below.

Behaviour Definition How we work

Ambitious Take the initiative and continuously strive to be and do better Identify and seize

opportunitiesEntrepreneurial Seek out opportunities and work hard to make them a success

Efficient Focused on successful outcomes and optimise time and resources Get things done

Collaborative Together we achieve more

Responsible Assume ownership and accountability for our actions

In the right way

Respectful Treat everyone with respect

Honest We are honest with ourselves and others

Humble Never forget how much we owe to good fortune

Kind Be kind and consider those less fortunate than ourselves


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OwnershipVitol’s holding company, Vitol BV is incorporated in the Netherlands where Vitol was founded in 1966. Since inception Vitol has been employee owned. Today it is owned indirectly by over 350 employees, with no one shareholder owning more than 5%. Vitol believes that this broad employee ownership ensures that the interests of key employees are aligned with its long-term interests and hence a responsible and cautious approach to risk.

GovernanceVitol is led by a Board and management team, headed up by CEO, Russell Hardy. Its members are responsible for important business areas, the core geographies around which the business is organised: EMEA, the Americas and Asia, and business critical functions: business development, the crude oil business (which represents circa 50% of Vitol’s turnover), finance and the company’s technology infrastructure.

In additional to the business’s financial performance, the Board is responsible for setting purpose, ethos and strategy.

CommitteesA number of committees which oversee the mitigation of key risks across the business report regularly to the Board. The committee members are drawn from the company’s most experienced employees, many of which built their expertise in major financial institutions and oil companies before joining Vitol. To ensure the committees’ oversight is in full alignment with Vitol’s ethos, at least one member of the Board is a member of each committee.

Compliance CommitteeThe Compliance Committee is responsible for devising and implementing the Compliance Programme to ensure it is fully compliant with relevant legislation and international standards and controls as applicable to its business, both directly and indirectly.

Environment, Social & Governance (ESG) CommitteeThe ESG Committee reviews and considers the ESG implications of all aspects of the business. It monitors performance in key areas and recommends appropriate improvements to the monitoring and understanding of ESG risks.

Ownership, governance & structure


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Upstream Investment CommitteeThe Upstream Investment Committee meets on a quarterly basis to evaluate new upstream opportunities that meet Vitol’s strategic and investment objectives. In addition, the committee reviews the performance of its existing upstream assets to ensure compliance with internal and external standards and to ensure effective management of its portfolio.

Investment CommitteeThe Investment Committee is responsible for the company’s investments in assets and other ventures. In addition to assessing the financial implications of any investment, the committee considers broader issues such as execution risk, reputational risk and the appropriateness of potential investments.

Risk CommitteeThe Risk Committee oversees the company’s risk management procedures. Regionally, its members work closely with the relevant business lines to ensure the alignment of the business with the company’s prudent approach to risk.

Credit CommitteeThe Credit Committee oversees the deployment of the company’s capital for pre-financing and other non-equity deployments of capital. In addition to assessing the financial implications of any investment, the committee considers broader issues such as execution risk, reputational risk and the appropriateness of potential investments.


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Our Compliance Programme

The Compliance Programme is fully aligned with our behaviours and formally underpins the way in which we work. It is designed to reflect the high standard of ethics to which we hold ourselves, the complex and multifaceted business which we operate and to ensure compliance with the appropriate laws, regulations and international standards.

Compliance governance and programme implementationThe Compliance Committee is chaired by the CEO and reports directly to the Board. Its remit is global and it has compliance oversight of all Vitol’s business activities.

The Compliance Committee is responsible for determining Vitol’s compliance and risk management framework, training,

monitoring and reporting system (the “Compliance Programme”), which includes policies, systems and controls necessary to ensure that key compliance and reputational risks are appropriately identified and managed. Key policies have to be approved by the Board.

Once determined, the Compliance Programme is implemented by the Compliance Working Group, which comprises senior members of the regional compliance teams, as well as representatives of the front office, risk and support functions. The programme is reviewed annually, after the Working Group has completed its annual risk assessment of all the compliance and reputational risks faced by Vitol and its business partners globally.


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Compliance ProgrammeOur policies are intended to make clear to all employees the standards expected of them in relation to business ethics, conduct and compliance with all applicable laws and regulations. All employees are required to comply with Vitol’s polices and any breach is regarded as a serious disciplinary matter.

The policies include amongst others, Know Your Customer Policy (KYC), Anti-Bribery and Corruption Policy, Sanctions Policy, Conflict of Interest Policy and Insider Dealing Policy.

The Compliance Programme’s policies and controls have been rigorously benchmarked against relevant guidance and recommendations. For example, our KYC Policy is based on the Joint Money Laundering Steering Group guidance (“JMLSG”) and is therefore aligned with the policies that are implemented by EU financial institutions and regulated firms. Other guidelines used include those published by Transparency International, the US Department of Justice, the OECD and the UN, among others.

Vitol Board

Compliance Committee

Compliance Working Group

Regional compliance teams

Governance, prioritisation and decision

making

Areas of responsibility

Global implementation

Policies, systems and

controlsMonitoring and testing

Communication and training

Regulatory oversight

Compliance Framework


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Implementation and monitoringCompliance in Vitol is based upon the principle and practice of collaboration at every stage of the process:

▪ Compliance and business functions: an ongoing process of active dialogue with the business to ensure understanding of and compliance with laws, regulations, standards and best practice

▪ Compliance and risk functions: the implementation of systems and controls that support compliance with the Compliance Programme

▪ Compliance and audit functions (internal and external): test the company’s compliance with policies, systems and controls

The compliance team also works with and draws additional resource from the legal, credit, treasury, IT and corporate affairs functions to ensure the effective implementation of the Compliance Programme.

All employees benefit from a bespoke and tailored training programme. Designed by the compliance team it includes online and face-to-face solutions. All training modules focus particularly on the risks and mitigants specific to Vitol’s business. Furthermore, there are monthly meetings between compliance and senior representatives from all departments in all Vitol’s main

offices, as well as with employees in high risk jurisdictions. The senior members of the compliance team visit Vitol’s offices regularly.

In addition, the Compliance Programme is integrated into Vitol’s core business processes and its proprietary trading system. This holistic system allows for compliance, credit, treasury, operations and legal to record the necessary information about all Vitol’s counterparties (trading and non-trading). Invoices and payment authorisations are also managed through a centralised system ensuring a comprehensive record and control of activity with counterparties.

Sanction information published by the US, UK, EU and Swiss authorities is reviewed and updated daily by compliance, and is communicated across the company and the JVs. Any sanction related exposure is managed between compliance, legal, credit and treasury to ensure that at all times existing and new trading activity (and related operations) are in compliance with applicable sanctions.

The implementation of the Compliance Framework is monitored through the Internal Audit process as well as compliance thematic reviews. Additionally, it is supported by the IT team that has designed monitoring reports aimed at ensuring compliance with the programme.


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The Environmental, Social & Governance Committee is responsible for reviewing and considering the ESG impacts of all aspects of the business. It monitors performance in key areas and recommends appropriate improvements to the monitoring and understanding of ESG risks across the company. The ESG Committee reports quarterly to the Board, raising any pertinent issues and two Board members are also members of the ESG Committee. Its members comprise: CFO, CIO, Head of HSEC, Head of Compliance, Head of HR, Head of Communications, COO Vitol Inc.

Urgent matters will be raised with the relevant Board members by the ESG Committee (or any of its members) as required.

A core responsibility of the ESG Committee is HSEC (Health, Safety, Environment, Human Rights and Community). The company’s HSEC Framework, procedures and performance are reviewed regularly by the ESG Committee at ESG meetings and through the HSEC due diligence and monitoring process. Any concerning HSEC findings are reported to the Board and the Head of HSEC will work with the relevant department or company to implement the required changes, liaising with the relevant Board member as required.

All employees are expected and encouraged to consider the HSEC implications of the business’s activities and to raise any queries or concerns with the Head of HSEC or the ESG Committee.

Environment SocialGovernance(ESG)


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Health, Safety, Environment, Human Rights and Communities (HSEC)

Vitol has always been focused on the safety and environmental controls relating to the movement of commodities, shipping and operations. Over the last few years, Vitol has invested in a number of physical assets, some owned directly and some via partnerships.

In order to ensure a consistent standard of HSEC across the company, a HSEC Framework covering all activities has been developed. The HSEC Framework sets out Vitol’s beliefs and requirements. Vitol expects all the companies in which it has a shareholding to follow these or similar standards, but recognises that its influence

will be commensurate with its shareholding, as well as other factors.

The HSEC Framework was developed through 2018/19 after consultation across the company and a review of current HSEC practices. It includes a reporting requirement for key performance indicators (KPIs) which are reported to the Board, enabling Vitol to take the appropriate action.

Vitol is currently working with its employees, joint venture partners and companies in which it is invested to communicate and roll out the framework.


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Vitol HSEC beliefs:

Our operations should be safe for employees, neighbouring communities and the environment – we commit to ensuring HSEC is an integral business consideration.

We recognize the importance and fragility of the environment – we commit to seeking to minimise our impact on the environment through upholding high HSEC standards.

We aim for a zero-harm approach – we commit to reporting, investigating and learning from incidents and near misses.

A risk-based approach is the most suitable to the complex environments and geographies in which we operate – we commit to implementing this rigorously.

All our operations should be compliant with the applicable legislative and regulatory regimes – we commit to support this, as well as our HSEC Framework, through ensuring the appropriate resources and systems are in place.

We respect all internationally recognized human rights – we will seek to conduct our business in accordance with the UN Global Compacts ten principles, including those on human rights.

We must monitor our performance and continuously try to do better – we commit to clearly monitoring and tracking our performance as well as setting targets and auditing to improve our HSEC Framework.

We recognise the importance of communication – and commit to communicating as appropriate with all key stakeholders. Responsibility is core to Vitol’s culture – we commit to assuming responsibility for our actions; as individuals, as a team and as a company.

The Vitol HSEC Framework is available at www.vitol.com

http://www.vitol.com


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Vitol Board of Directors

Vitol ESG Committee Vitol HSE Department

Vitol HSEC Framework

Vitol HSEC beliefs Vitol HSEC requirements Vitol HSEC KPIs

Vitol HSEC management obligations guidanceHSEC KPI definitions guidance

Power Crude oil & products

trading

Upstream Terminals Gas & LNG Retail & distribution

Refining

Risk assessmentVitol has a high-level HSEC Risk Framework in place, including a HSEC risk register and risk assessment matrix in order to assess HSEC related risks across its business. The latter underpins Vitol’s approach to the HSEC reviews it undertakes across its portfolio of investments. The outcomes of these reviews are shared with the relevant executives and acted upon as appropriate. High risk items are reported to the Board.

Human rightsVitol already meets many of the items contained within the Commodity Trading

Sector Guidance on implementing the UN Guiding Principles on Business and Human Rights published by the Swiss Federal Department of Foreign Affairs and the Swiss State Secretariat for Economic Affairs. KPIs related to human rights are already reported by its portfolio companies and Vitol has developed a plan to embed human rights thinking further in its business.

HSEC performanceA consolidated HSEC Framework which will enable Vitol to report coherently has been put in place and consolidated reporting will begin in 2020.

HSEC Framework


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Stakeholders

Direct stakeholders

Ongoing dialogue

Employees

Customers & counterparties

Financing banks (our contacts)

Governments

Investors

Regulators

Indirect stakeholders

Ongoing dialogue

Compliance / sustainability departments

Governments

NGOs

Press

Regulators

No direct communication

Public

Impacted Communities*

*on a project basis


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Vitol engages directly with all relevant stakeholder groups.

We appreciate that our business’ licence to operate is not a given right, but one that must be earned through responsible operations and gaining the trust of our stakeholders. We recognise the important role that NGOs, the media and others play in society, in holding business to account.

Vitol will seek to address any topics or concerns raised by stakeholders (both direct and indirect - see above). This engagement is undertaken by suitably senior employees, either Board members or direct reports of Board members. This is intended to ensure that any relevant issues are raised promptly with the Board. The engagement is ongoing.

Other stakeholders: The public – are important but (mostly) indirect stakeholders of the company. There are mechanisms via the website for anyone to raise an issue with us. Mostly, however, Vitol considers the press and NGOs proxies for the public and the mechanism through

which issues of public concern are raised, as well as the means through which Vitol communicates with the public.

Impacted communities – we seek to develop two-way communication channels with relevant stakeholders to ensure the Vitol and local HSEC Frameworks are understood. For exploration and production projects we tailor our approach depending on the type of project, geography and commodity in question, as well as the requirements of local regulations, and our operating and financial partners. As part of any HSEC impact assessment we seek to engage and consult with all relevant impacted stakeholders, including disclosing information to affected communities throughout our operations.

Employees – employees are Vitol’s most important stakeholder group. We rely on their expertise, commitment and professionalism for the business to function and succeed. They are also our owners and there are governance processes in place to ensure appropriate challenge and governance of Board decisions.


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Topic Stakeholders Response

Anti-Bribery and Corruption

BanksGovernmentsRegulatorsMediaNGOs

Vitol is committed to supporting all initiatives that aim at fighting bribery and corruption.

For this reason, Vitol is an active participant in both Swiss and OECD anti-corruption initiatives and engages with any country looking to address this issue.

Vitol believes that robust governance processes and strong controls are key to addressing the risk of corruption.

These include: ▪ Due diligence of trading counterparties and intermediaries ▪ Monitoring of payments ▪ Open and transparent tender processes ▪ Clear buyer / seller selection criteria and process, when a

Government-lead tender

The procedures are in line with the JMLSG Guidelines and are reviewed and updated on an ongoing basis.

Transparency, through for example, reporting and reconciliation of transactions, can be used as a tool for addressing corruption. Any reporting must be fit for purpose, that is, clear, reconcilable and easy to understand. Vitol continues its engagement with the EITI on the First Trade reporting template for buying companies.

Vitol already reports EITI related payments in accordance with the framework determined by a member country as per the EITI rules.

Information provided by the reporting of transactions, including their price, needs to be understood by the external stakeholders reviewing such information for it to be meaningful. The pricing of transactions in the oil market are highly complex and subject to multiple parameters. Hence, the need for well-defined and robust processes.

Vitol engages directly with any relevant stakeholders on ABC issues.

Transparency BanksMediaNGOs

For some time, Vitol has engaged proactively with a wide range of direct stakeholders.

Notwithstanding, Vitol recognises that, despite being a private company, there is increased interest in the manner in which the company operates and is evolving its communications accordingly.

More specifically, Vitol has received queries from stakeholders pertaining to its position with regard to transparency of payments, which is detailed above.

Diversity Banks MediaEmployees

Vitol values diversity and the value it brings to the business, and its employees represent over 60 different nationalities.

We acknowledge that there are areas where the company should seek to improve, most notably in respect of the proportion of women in commercial roles.

Given that women are poorly represented across the sector and that hiring senior women from other companies would not address the underlying issue, Vitol is seeking to address matters through increasing the number of women at entry level.

Sustainability BanksNGOsEmployees

The issue of sustainability is pertinent across the business and is addressed in the sustainability section of this report.

Topics raised by stakeholders


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The majority of Vitol’s core business is in crude oil, petroleum products and gas / LNG. Globally the international oil sector has high operations standards requiring skilled individuals throughout the value chain.

As with all business activity, Vitol’s supply chain is subject to the Compliance Programme (see compliance section - page 15) and is covered by the KYC Policy. The KYC Policy aims to ensure that all Vitol’s counterparties, both trading and non-trading, have been duly vetted. Our list of counterparties includes a broad range of companies, such as; third party intermediaries, ship owners, customers, agents, storage companies etc. For all counterparties, diligence is undertaken to ensure that Vitol:

▪ Does not breach sanctions on countries, activities, companies or individuals

▪ Does not get used to facilitate money laundering, financing of terrorism, VAT fraud or other criminal activity

▪ Identifies exposure to state-owned companies and public officials

▪ Manages and mitigates its exposure to the risk of bribery and corruption.

As previously stated, Vitol’s KYC Policy has been designed in accordance with the JMLSG. In respect of ownership and control of counterparties, Vitol has gone beyond

the JMLSG and its policy requires knowing 100% of the ownership of the company and by whom it is controlled, including Board members and, in certain circumstances, approved signatories. All individuals are checked against a third-party system.

The KYC process includes: ▪ A due diligence process, including

corporate document collection, background checks using an industry recognised third party due diligence system, as well as collection of information relating to Corporate Social Responsibility

▪ Risk rating of counterparties, and additional measures required for high risk counterparties, jurisdictions or transactions

▪ Strict procedures regarding third party payment requests

▪ A process of raising “Red Flags” in day-to-day business dealings

▪ The definition of and process through which concerns must be escalated to the Head of Compliance/Senior Management.

All employees are protected by our commitment to protecting whistle-blowers. Employees are required to report any breach, or the risk of any breach of any company policy. Vitol will never retaliate against any employee for making such a disclosure.

Supply chain


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Sustainability

Vitol’s role is to promote efficient energy markets through the movement of product. This is Vitol’s core business and its primary area of expertise.

We are aware of our responsibility to ensure this is carried out in a safe, responsible and efficient manner, as detailed in the section on HSEC (page 19).

We also recognise the challenges facing the environment and that there is a need for our industry to respond. We recognise that, in the long-term, there will be significant shifts in the demand for hydrocarbons and that the world will move away from consuming molecules and towards consuming electrons; the hydrocarbons that will be consumed via combustion will likely be at the ‘cleaner’ end of the spectrum (gas as opposed to fuel oil) and

that mitigating practices, such as carbon capture and storage, will also have to be developed alongside a reduction in overall consumption levels.

At present, Vitol is constrained by the energy products traded, but as clean energy markets evolve Vitol will look to deploy its expertise as swiftly as possible.

In the meantime, Vitol is seeking to expand the businesses that will be most relevant in a low-carbon world, to invest in renewable energy and ancillary businesses, and to identify opportunities for the future.

In terms of our carbon footprint, we are currently undertaking a thorough review to ascertain our CO2 emissions and identify practicable means through which these can be reduced.


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Cleaner cooking 2.8 billion people, predominantly in Africa and parts of Asia, still cook using biomass – including coal, charcoal, wood and dung. The poor ventilation of most homes results in high levels of household air pollution, which the World Health Organisation claims is responsible for over 3.5 million deaths a year. In low and middle-income countries this equates to 10% of mortality.

Longer term, the objective will be for all cooking to be with renewable sources of energy, more immediately, we believe that LPG offers an interim solution as an efficient household fuel which significantly reduces household air pollution, eliminating particulate emissions, reducing the time and physical burden on women and reducing deforestation.

Vitol has invested significantly in LPG infrastructure, notably in South and West Africa. In Nigeria we are invested in the most modern and largest LPG terminal on the continent which serves distributors across the regions, facilitating the use of cleaner cooking fuels.


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Humber ZeroWe anticipate that both green hydrogen and carbon capture and storage will be part of the near and medium-term solution to reducing CO2 emissions. The Humber Zero project, led by our power plant VPI Immingham, is a hybrid carbon capture and storage (CCUS) and hydrogen CHP project which could swiftly decarbonise up to 8m/tCO2 per annum of the UK’s industrial activity in the Humber region, with the potential for further decarbonisation in the future.

The project would enable the partial decarbonisation of the gas fired CHP power plant, one of the most efficient in Europe, and its adjoining refineries, which produce chemicals required in the manufacture of batteries, as well as more traditional energy products, and which provide a large number of skilled jobs in an area with limited employment opportunities.

The project is fully aligned with the Humber Industrial Decarbonisation deployment project (Humber-DP1) through which twelve companies are working together on a decarbonisation strategy for the region.


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RenewablesRenewable energy will continue to grow as part of the energy mix. We are looking for opportunities across the renewables space which enable us to deploy our core skills and expertise.

In Ukraine, in partnership with Low Carbon, a specialised investment company, we are invested in a project which will deliver 500MW of onshore wind and we continue to search for similar opportunities within Europe.

In the US we are invested in both solar and renewable natural gas projects, including a dairy manure biodigester in Idaho which converts 350,000 tonnes of manure a day into 700mcf of bio-methane. At present our solar projects are relatively localised projects, where we work with the local community or school to help them transition to solar. To date, we are invested in 156MW of solar, including the largest solar plant in New Jersey, the Ben Morell Solar Farm.

Further afield we are exploring opportunities in a number of developing economies, as well as challenging our downstream companies to consider how their infrastructure can be deployed to support the shift to renewables.


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Notes

- List of material topics: Stakeholder concerns, the energy transition

- Restatement of information: n/a.- Changes in reporting: n/a.- Reporting period: 2019- Date of most recent report n/a- Reporting cycle: annual- Contact point for questions regarding the

report: Andrea Schlaepfer, Vitol

External initiatives: ▪ The Commercial Energy Working Group in

the US that has been instrumental in liaising with the US regulators on Dodd Frank regulatory matters such as position limits, swap dealers thresholds

▪ The EITI Commodity Working Group looking at “Reporting guidance for first trades in oil, gas and other petroleum products”

▪ Advice provided to the OECD Policy Dialogue on Natural Resource-based development in relation to fighting Bribery and Corruption

▪ Membership of Working Group that lead to the publication of the Swiss Guidance on Implementing the UN Guiding Principles on Business and Human Rights

▪ Member of the ESMA (European Derivative Regulator) Commodity Working Group for second term after being selected by representatives of European Regulators and Exchanges

Membership of associations▪ Members of multiple international derivative

trade associations.

Our Company & Governance

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