INDICATOR: 3-1
Process to determine material topics
See also disclosure GRI 3-3: Group approach per material impact
In December 2023, HELLENiQ ENERGY performed a double materiality analysis, taking into account for the first time the European Sustainability Reporting Standards (ESRS), while complying with the requirements of the GRI Standards, as the main reference standard for the preparation of this report. The steps taken for the double materiality analysis, which began in December 2023 and was completed in early 2024, for the 2023 reporting year, are described below:
1 – Impact Materiality – “Inside-out” approach
Α. Understanding the context
At this stage, the Group mapped its activities and business relationships, taking into account the underlying sustainability framework, by geographic area and mapped its value chain, including the impact drivers and the categorization of affected stakeholders in the value chain as a whole.
The Group’s operations were assessed based on the business model analysis, taking into account the sustainability framework and countries of operation, to identify impact drivers that cause direct positive/negative, actual/potential impacts on people and the environment.
In addition, with a view to identifying the impact drivers originating from the activities and business relationships of the Group’s entire value chain, the Group conducted an analysis on critical suppliers, partners, key customers and other Tier 1 entities in the value chain, including their geographical locations, to understand from which drivers, and where indirect impacts are generated, but also to understand the affected parties or affected aspects of nature (according to the recommendations of the Taskforce on Nature-related Financial Disclosures, TNFD).
The aspects of the business model considered include:
I. Main inputs to the business model (including human, intellectual, social, productive, financial and natural capital)
II. Main activities of the business model (Refining and Supply, Fuel Marketing, Petrochemicals, Renewable Energy, Power Generation and Natural Gas, Hydrocarbon Exploration and Production, Electromobility, Technical Studies)
III. Main outputs of the business model (including main products and services from all business areas)
IV. Main external impacts (e.g. waste, greenhouse gas emissions, leaks, air pollutants)
B. Identification of actual and potential effects
In order to identify the Group’s business-related impacts, HELLENiQ ENERGY collaborated with key stakeholder representatives and experts on sustainable development issues, conducting one-to-one interviews with them.
In addition, the following were taken into account: various external sources, including, but not limited to, the GRI 11 – Oil & Gas Supplement sector standard, the SASB sector standard, TNFD recommendations and guidelines and the UNEP Impact Radar.
After mapping the impact framework, impact factors related to actual impacts (those that have already occurred in 2023) and potential impacts (those that could occur in a specific time horizon – up to 2028) were identified stemming from the Group’s business activities, products/services and business relationships across its value chain. Internal and external sources used to understand impact causes included existing economic, environmental and people impact assessments, information from legal reviews, anti-corruption compliance management systems, financial audits, occupational health and safety inspections, information from assessments conducted by industry associations, grievance mechanisms, enterprise risk management systems, etc.
Once impact factors (regardless of their significance and likelihood) were identified, they were mapped across the value chain (upstream to downstream). The identification phase was completed with the mapping of impacts on people and the environment, including the categorization of actual/potential, positive/negative impacts.
C. Evaluation and prioritization of identified impacts
In order to assess the impacts on the environment and people, HELLENiQ ENERGY evaluated the materiality of the impacts based on the following criteria:
| Positive impact assessment criteria | Negative impact assessment criteria |
|---|---|
| Scale | Scale |
| Scope | Scope |
| Likelihood | Irremediable character |
| Likelihood |
The significance of positive impacts and the severity of negative impacts were assessed in relation to the other impacts identified by the Group so that they are classified from most to least significant and a threshold is established to determine which impacts are considered material. The impact assessment (positive and negative, actual and potential) was validated by the members of the Executive Committee and the Group’s Senior Executives through their involvement in specific assessment groups. The results of the evaluation teams determined the materiality threshold. The threshold used was based on a qualitative assessment, including as material only those impacts that scored above 3 on a 5-point scale.
The results of Impact Materiality are presented in the figures in the chapter entitled Sustainable Development/ Double Materiality Analysis.
2 – Financial Materiality – “Outside-in” approach
A. Identification of sustainability-related risks and opportunities (ROs)
HELLENiQ ENERGY used the results of Impact Materiality to identify the opportunities and risks arising from the Group’s impacts on people and the environment.
In addition, it examined dependencies on natural, human and social resources (such as dependence on crude oil), in addition to those already identified through Impact Materiality, and analyzed other risk/opportunity factors that create sustainability-related risks and opportunities for the Group (in addition to dependencies and impacts).
To develop the set of sustainability-related risks and opportunities, various sources were used, including: the SASB standard for sectors relevant to the Group’s operations, the Climate Disclosure Standards Board (CDSB) guidelines for climate, water and biodiversity-related disclosures, and peer company sustainability reports.
B. Assessment and prioritization of sustainability-related risks and opportunities (ROs)
Financial materiality was performed considering two-time horizons: 2023 for current financial impacts that occurred within the reporting year, and 2028 for potential financial impacts.
The Group then assessed each sustainability-related risk and opportunity against the criteria below and identified thresholds to prioritize material sustainability-related risks and opportunities that create material financial effects (either current or potential). The threshold used was based on a qualitative assessment, including as material only those risks and opportunities that scored 15 and above on a scale of 2- 25.
| Risk and opportunity assessment criteria |
|---|
| Magnitude |
| Likelihood |
The results of Financial Materiality are presented in the figures of chapter Sustainable Development/ Double Materiality Analysis.
3 – Double Materiality Analysis
The double materiality analysis was implemented taking into account the relationship between impact materiality and financial materiality, as well as the interdependencies between these two aspects.
In identifying and evaluating impacts, risks and opportunities in the Group’s value chain to determine their materiality, emphasis was placed on areas where impacts, risks and opportunities either already exist or are considered likely to arise, based on the nature of operations, business relationships, geographies or other relevant factors.
HELLENiQ ENERGY’s material impacts on an actual/current basis (fiscal year 2023) are seven (7) and in the figure of Chapter Sustainable Development/ Double Materiality Analysis, they are presented as having the highest level of materiality compared to the other fifteen (15) impacts, according to the evaluations per approach (Impact Materiality and Financial Materiality).
The double materiality analysis was completed in early 2024 and its results were validated by HELLENiQ ENERGY’s Management, specifically by the CEO and the Sustainability Committee of the Board of Directors, accompanied by a commitment to implement effective policies based on international best practices.
The approach takes into account the provisions of the ESRS and is not yet in compliance with the respective requirements. The Group aims to complete the double materiality approach and its detailed methodology and process data within 2024 in order to fully comply with ESRS in its first sustainability statement to be published in 2025, as part of the Board of Directors’ Annual Financial Report for the 2024 reporting year.