esg
report2021
THIS REPORT HAS BEEN PREPARED
BASED ON THE REQUIREMENTS OF
THE SUSTAINABILITY ACCOUNTINGSTANDARDS BOARDSASB ACTIVITY METRICS 2021

CONTENTS

5|INTRODUCTION

6|OUR ESG FRAMEWORK8|SUSTAINABILITY GOVERNANCE

10 |BUSINESS ETHICS AND ANTI-CORRUPTION

12 |ENVIRONMENT

16 |SAFETY, LABOUR CONDITIONS AND HUMAN RIGHTS

20 |SUSTAINABILITY ACCOUNTING STANDARD DISCLOSURES23 |DISCLAIMER AND ASSUMPTIONSFOR THE SASB REPORTING

ACTIVITYMETRICUNIT OFMEASURE

DATA
2021

DATA
2020

SCOPE BY
CONTRACT

CODE

Number of shipboard
personnel

Number338

144

Operated fleet

TR-MT-000.A

Total distance travelled by vessels

Nautical miles (nm)

1 351 803

820 438

All assets

TR-MT-000.B

Operating days

Days

4 560

2 683

Operated fleet

TR-MT-000.C

Deadweight tonnage

Deadweight tons

1 221 177

936 884

All assets/Operated fleet

TR-MT-000.D

Number of assets infleet

Number13

10

All assets

TR-MT-000.E

Number of vessel port
calls

Number228

149

All vessels/Operated fleet

TR-MT-000.F

ABOUT FLEXABOUT THIS REPORTFLEX LNG LTD. (“Flex LNG”) is a commercial operator of fifth generation LNG carriers
with large cargo capacity, focusing on the growing market for Liquefied Natural Gas(LNG). Flex LNG is listed on the Oslo Stock Exchange (OSE), and on the New York Stock
Exchange (NYSE) under the symbol FLNG.

This report is our fourth comprehensive and stand-alone sustainability report. The report meets the disclosure requirements of the Sustainability Accounting Standards Board (SASB) Marine Transportation Standard(2018) and has been prepared in accordance with the Global Reporting Initiative (GRI) Standards (2021). A
separate GRI Index is available on our website. The report presents our material environmental, social, andgovernance (ESG) performance, along with how we manage material sustainability topics, for the financial
year ended December 31, 2021.

Our fleet consists of thirteen LNG carriers on the water, and all of our vessels are stateof-the-art ships with the latest generation two-stroke propulsion (MEGI and X-DF). These
modern ships, built between 2018 and 2021, offer significant improvements in fuelefficiency, and thus also a lower carbon footprint including methane slip compared tothe older steam and four-stroke propelled ships. During 2021, we built up a significant
contract backlog while maintaining market exposure to capture the opportunities in thegrowing LNG shipping market.

Determination of sustainability impacts and material ESG topics for reporting was undertaken by an independent expert ESG advisor, in consultation with our staff and stakeholders, and was approved by the
BoD. The materiality determination method followed the GRI Materiality Standard, GRI 3 (2021). Critical ormaterial events occurring on or after December 31, 2021, and up until the publication date are also coveredin this report.
For questions or feedback to this report, please contact us at ir@flexlng.com

3 • ABOUT FLEX | SASB ACTIVITY METRICS 2021 | ABOUT THIS REPORTINTRODUCTION

0.34

343

0

LOST TIME
INCIDENT RATEREVENUE
USD MILLIONNUMBER OF
SPILLS

climate change is the biggest global challenge, and2021 saw world leaders come together in Glasgow toagree a roadmap to a low carbon future. According to
the IEA, the decarbonisation of the gas and broader
energy systems will require the deployment and scale-up
of low-carbon gases.1 The war in Ukraine adds to thecomplexity: While Europe relies
on Russia for 34 percent of its
natural gas, the gas market isglobal, and Europe’s need foralternative gas sources willaffect other LNG importers
in Asia, the Middle East, andLatin America.

THE LNG VALUE CHAIN

EXPLORATION &PRODUCTION

LIQUEFACTION

SHIPPING

In 2021, we took delivery of three newbuilds, and our
fleet now counts 13 ships, all built between 2018 and2021. Last year, the EU adopted the first of two delegatedacts for the Taxonomy, confirming the parameters onsustainable activities for climate change adaptationand mitigation objectives. FLEX LNG welcomes thesedevelopments, and has an ESG
strategy that is forward looking
and resilient to increasing
regulation.

“Higher fuel costs provide
us with a competitive
advantage as our fleet ismore efficient than theindustry average."

STORAGE &REGASIFICATION

END
USERS

OUR CARGO – LNG IN BRIEF
access to energy is vital for economic and social development. The Director of the International Energy
Agency (IEA), Dr Fatih Birol, has stated that natural gas is one of the mainstays in the global energy mix. Where
it replaces more polluting sources of energy, it improves air quality and limits emissions of carbon dioxide.
LNG plays a key role in reducing carbon intensity across all segments of the energy system including power
generation, industry, the residential sector and transport.
the president of the european commission, Ursula von der Leyen, has stated that “Gas will have a role toplay in the transition towards a carbon-neutral economy (...) in particular by making full use of the potentialof affordable liquefied natural gas.” Looking ahead, LNG can help to further decarbonise the transport sector,
with the use of synthetic and bio LNG, that offer significant GHG emissions reductions. As nations move todisplace traditional energy with low-carbon energy, LNG is viewed as a viable solution for years ahead.
at flex lng, we believe that supplying LNG to the market by the most efficient seaborntransportation makes an important contribution to the broader agenda of SDG 3 andSDG 13, as the use of LNG relates to reducing air pollution and limit the rise in energyrelated emissions by displacing coal and oil in power generation, heating, transportationand industrial uses.

The existing natural gas
infrastructure can act as
an enabler in the deployment of low-carbon gases by
providing network access, reducing transport costs
and ultimately facilitating their integration into thebroader energy system. Currently, we are transporting
conventional LNG, and we deem the IEA’s predictions tounderline that our services will be an important part ofthe infrastructure needed for reaching net zero emissions
by 2050.

This roadmap will have a major effect on the shipping
industry, and challenges the Initial IMO GHG Strategy,
which aims to reduce carbon intensity of international
shipping by 40% by 2030, compared to 2008. In June
2021, the IMO adopted guidelines on the operational
carbon intensity reduction factors, which is set at a rate,
relative to 2019, of 11% by 2026. The introduction of
the Efficiency Existing Ship Index (EEXI) and the GHG
emissions reduction requirements will in our segment
lead to a massive reduction in available capacity: Of
the global LNG fleet consisting of 747 vessels2, 30 per
cent are of the first and second generations – vessels
not likely to meet emission reduction requirements. For
FLEX LNG, running the latest technology, this puts us ina favourable spot.

Throughout 2021, the pandemic
continued to cause strain on the
global economy and societies
across the globe. In spite of thechallenges, FLEX LNG was able
to operate effectively, thanks toour employees and business partners who have worked
hard and shown great determination under difficult
circumstances. Notwithstanding the health threats ofthe pandemic, FLEX LNG has succeeded in keeping avery strong track when it comes to lost time incidents.
Since we started publishing our annual ESG reports in
2019, the LTIR remained at zero (0) until 2021. In Marchlast year, we experienced one incident at Flex Rainbow,
contributing to an LTIR of 0.34. We will keep our strong
focus on safety in all operations to avoid risk adverse
health impacts to our staff and seafarers.
We hope you find this report informative of our approachto ESG.

The prospects of higher fuel costs also provides us with acompetitive advantage as our fleet is highly fuel efficient.

1 Gas Market Report Q4 2021, IEA: 57
2 Fearnleys, Poten, Clarksons, SIN and Company – includes conventional LNG carriers with a capacity of 100k cbm. Laid up vessels are included.

5 • INTRODUCTION

Øystein Kalleklev
CEO, Flex LNG Management AS

OUR ESG FRAMEWORK
our approach to managing relevant ESG topics is structured around the three core environmental, social andgovernance pillars. Our framework reflects the incorporationof the UN Global Compact principles in our operations ingeneral, and our enhanced ESG management system in formof a digital platform.

MATERIAL TOPICS
We have reviewed and refreshed the comprehensive analysis
of material ESG topics undertaken in 2020, which included
feedback from selected stakeholders such as employees,
investors, customers, crew, bank relations, analysts, board
representatives and a select number of NGOs, e.g. Nordea,
SEB, ABG Sundal Collier, Arctic Securities, the WWF, and the
Fridtjof Nansen Institute. Our review of potentially material
topics followed the GRI Materiality Standard (GRI 3, 2021),
considering the severity and likelihood of our impacts. Our
ESG priorities also take into consideration those which arefinancially material, and we are guided by the SASB Marine
Transportation Standard (2018) in this regard.
The following topics have been considered by the Board andare deemed material for inclusion in this report:
•
•
•
•
•
•
•
•
•

Climate-related risks
Direct emissions
Energy mix
Marine casualties involving crew and assets
Corruption risk
Ship recycling
Spills and releases
Compensation and remuneration
Training – compliance training and training on board(e-based)

FLEX LNG will continue to work to improve performance inthese areas, and our public ESG targets include →6 • 2021 • Environmental Social Governance

ACTUAL2020

ACTUAL
2021

TARGETS
2022

E

OVERALL FLEETWEIGHTEDAVERAGECARBONINTENSITY
RATING

Not
reportedAASLOST TIME
INCIDENT RATE

0

0.34

0

G

% OF NEW BUSINESS PARTNERSSCREENED INCOMPLIANCE
WITH THE KYBPPOLICY

Not
reported

100%

100%

7 • OUR ESG FRAMEWORKSUSTAINABILITY
GOVERNANCE
we believe clear guidance and robust control mechanisms
are essential to ensure the proper handling of sustainability
risks and opportunities. FLEX LNG has established policies
and control processes to manage our material risks and toensure compliance with all applicable international and local
laws and regulations. Our most important ESG related policies
are available on our website.
Our Board of Directors (BoD) is responsible for ESG at FLEX
LNG. The BoD oversees the strategy, including ESG priorities,
ensures that appropriate and effective related risk management and internal control systems are in place, and that our
corporate governance framework is reviewed annually. In linewith the Norwegian Corporate Governance Code, the BoD
has throughout the year considered important ESG matters,
and has reviewed our annual ESG report. The BoD’s Audit
Committee monitors reports and complaints received by
the company relating to internal controls and compliance.
All incidents are reported to the BoD in an annual review. The
Chief Executive Officer (CEO) carries the responsibility for the
daily implementation of ESG at FLEX LNG and our technicalmanagers are the ﬁrst in line to handle incidents. Crewing
and ship management is outsourced to third parties that areclosely supervised and assessed by our ﬂeet manager.
We have established a comprehensive Compliance Program
led by our Compliance Officer to ensure we conduct ourbusiness in an honest and ethical manner. FLEX LNG has
implemented policies and procedures outlining how wemanage ESG issues to help mitigate potential risks. In 2021,
we conducted a full Compliance Risk Assessment to identify and mitigate the compliance risks FLEX LNG is exposed
to. The Compliance Risk Assessment resulted in a risk map
covering all identified risks, with sanctions and cybercrime
dominating the risk map.
All FLEX LNG policies and procedures were updated in 2021.
Communication and training regarding compliance andgovernance helps our company follow laws, reduce risks ofcorporate and personal liability and operate effectively. FLEXLNG provides training to all employees and management,
as well as the BoDs, through physical training sessions andan e-learning platform which was implemented this year. All
employees and management need to undergo mandatory
training in our internal policies and procedures on an annual

8 • 2021 • Environmental Social Governancebasis. New employees undergo the training as part of their
onboarding. 100% of FLEX LNG’s employees have completed
the main mandatory training session. Further, we conducted
face-to-face training. The training focused on potential
compliance issues; how to identify them, what to do if facing
a potential issue and included cyber risks.
FLEX LNG relies on data driven sustainability management,
meaning that we collect and use data to make decisions that
support sustainable business practices that can be measured. To do so, we use our digital ESG management system.
By using the insights and support functions within the digitalplatform, we effectively communicate on ESG topics, bothinternally and externally with our ship management companies. This has enabled the full integration of ESG management
within our business and has laid the foundation for setting
targets for our material risks and opportunities with associated KPIs, for the short, medium and long term.

CO-OPERATION TO PROMOTE SUSTAINABLE
OPERATIONS

MATERIAL ISSUE

INTERNAL GOVERNANCE DOCUMENTS

INTERNATIONAL STANDARDS AND REFERENCES

Climate change

Environmental Policy

The Paris Agreement
The Intergovernmental Panel on Climate Change (IPCC)

Some of the challenges our industry is facing require joint
actions. Together with industry peers such as Avance Gas,
Frontline, Golden Ocean and SFL, FLEX LNG has established an ESG forum: the goal is to design industry leading
approaches to ESG performance and risk management, as
well as reporting parameters.

Initial IMO Strategy on Reduction of GHG Emissions from Ships
Air emissions

Environmental Policy

IMO MARPOL Convention Annex VI EU
Sulphur Directive 2016/802 UNCLOS

Ecological impact

Environmental Policy
FLEX LNG Ship
Recycling Policy

UN Global Compact
IMO MARPOL Convention Annex VI
IMO Ballast Water Management Convention IMO MARPOL
Convention Annex VI
Hong Kong Convention

Anti-Corruption

Corporate Code of Business Ethics and Conduct
Financial Crime Policy
Know Your Business Partner Policy

UN Global Compact
The US Foreign Corrupt Practices Act and the UK Bribery Act

Employee Health &SafteyCorporate Code of Business Ethics and Conduct
FLEX LNG Ship Recycling Policy

UN Global Compact
ILO Conventions
Maritime Labour Convention, 2006 (MLC, 2006)
International Management Code for the Safe Operation of Ships
and for Pollution Prevention (The ISM Code)Hong Kong Convention
Marine Crew Resource Management

Accident &SafetyManagement

Corporate Code of Business Ethics and Conduct
Know Your Business Partner Policy

International Management Code for the Safe Operation of Ships
and for Pollution Prevention (The ISM Code)Marine Crew Resource Management

We actively participate in and support the following initiatives:• The Neptune Declaration• The Maritime Anti-Corruption Network (MACN)• The Clean Shipping Alliance• The International Association of Independent Tanker
Owners (Intertanko)• Oil Companies International Marine Forum (OCIMF)

9 • SUSTAINABILITY GOVERNANCE

BUSINESS ETHICS AND
ANTI-CORRUPTION
flex lng is committed to conducting its business in an
honest and ethical manner, and these values are embedded
in our way of working with customers, business partners,
employees, shareholders and the communities in which we
operate. We have a zero-tolerance policy towards bribery
as stated in our Corporate Code of Business Ethics andConduct and Financial Crime Policy, which applies to all entities controlled by FLEX LNG’s officers, directors, employees
as well as workers and third-party consultants, wherever
they are located. Our anti-corruption and money laundering
policies are modelled on the UK Bribery Act and US Foreign
Corrupt Practices Act (FCPA).
Assessing and monitoring business processes, training
and controls are fundamental tools in implementing ouranti- corruption policy. As part of our compliance processes,
appropriate risk-based communication and training areprovided to employees as part of their onboarding andongoing development programme.
As a member of the Maritime Anti-Corruption Network (MACN), and through our own
diligent anti-corruption procedures, we
support collective action to reduce corruption and bribery in all their forms. This initiative supports SDG target 16.5, which aims at substantiallyreducing corruption and bribery in all their forms.
We also have a whistleblowing hotline available online that isopen to everyone, including staff, seafarers and those outsideof our organisation. The whistleblowing facility is tested quarterly by FLEX LNG’s Compliance Officer. FLEX LNG recordedno (zero) whistleblowing cases in 2021.

ACCOUNTINGETHICS

UNIT OFMEASUREDATA
2021

CORRUPTION INDEXFLEX LNG has not been involved in any legal proceedings
associated with bribery, corruption or anti-competition in
2021.

Number of calls at ports in

Number12

countries that have the 20
lowest rankings in Transparency International’s Corruption Perception Index

CORRUPTION
Total amount of monetary

Reportinglosses as a result of legal

currency

proceedings associated withbribery or corruption

10 • 2021 • Environmental Social Governance11 • BUSINESS ETHICS AND ANTI-CORRUPTION0ENVIRONMENTat flex lng, we recognise our responsibility to manage ourenvironmental impact. Some of the largest environmental
and ecological risks posed by the shipping industry are
related to emissions, discharges and spills. These factors havesignificant implications for air and water quality, and marine
biodiversity if precautionary actions are not taken. FLEX LNG’s
ability to manage such risks are vital for protecting the environment, the sector, our customers and our own business.

EMISSIONS TO AIR
Flex LNG believes improved logistics, enhanced hydrodynamic technology, better machinery, and cleaner fuels will be
important components in our work towards a more sustainable shipping industry. Our Environmental Policy states ouraim to reduce harmful emissions through optimal operationof vessels and machinery, new technology and diligent workwith our Ship Energy Efficiency Management Plan (SEEMP).
Climate change and air emissions are shaping the course of
the shipping industry and will continue to do so going forward.
The IMO has set out a strategy towards 2030 in line with theParis Agreement to combat climate change. The strategy
aims to reduce CO2-emissions per transport work compared
to 2008 levels by at least 40 per cent by 2030. When it comesto climate-related risks, in the short to medium term, decarbonization is positive for Flex LNG. However, in the long term
it is more challenging as there are uncertainties around what
will become the leading technology. Carbon Capture andStorage systems on ships are set to play a potential role – thetechnology exists, it remains to be determined how to handle
the captured CO2 in an efficient way.
Flex LNG operates vessels with the latest LNG propulsion
technology, and currently it is not economically feasible toincrease the efficiency of our main engines. Flex LNG is inclose contact with the engine manufacturer, i.e. Wartsila, andparticipates in relevant committees in the three large classcompanies. The field of energy efficiency and emission reduction technologies is in constant development, and we arecontinuously exploring new technologies with the potential
to enhance our performance.
Technological developments play important roles in reducing
emissions. The introduction of gas injection for LNG carriers
through two-stroke propulsion, known as MEGI and X-DF,

12 • 2021 • Environmental Social Governance

ESTIMATED EMISSION
REDUCTIONS OF NATURALGAS VERSUS COAL
ELECTRICITY GENERATIONFLEX LNG SUPPORTS the UN Sustainable Devel-

deaths and illnesses from hazardous chemicals, andopement Goals – SDG 13 – targeting the global fightair, water and soil pollution and contamination by

against climate change. This is also part of the IMO

2030. Our contribution relates to reducing air pollu-

strategy towards 2030, and Flex LNG will continue

tion and limit the rise in energy-related emissions by

to make an effort to contribute to the attainment

displacing coal and oil in power generation, heatingof these goals. SDG 7 (7.1.2) is also relevant as Flex

and industrial uses, by supplying markets with LNG:

LNG enables the adoption of cleaner fuels in i.e.

The global annual premature mortality due to fossil

power generation in the markets we cater to. We alsofuel combustion is estimated at 10.2million. Naturalcontribute to SDG 3 – Good Health and well-being –gas dramatically reduces emissions causing severe

which aims to substantially reduce the number ofhealth issues.

13 • ENVIRONMENT“FLEX LNG operates
vessels with the latest
LNG propulsion
technology"

ACCOUNTINGMETRICUNIT OFMEASURE

DATA
2021

CO₂ EMISSIONS
Gross global Scope 1

Metric tonnes (t)emissionsCO₂-e

727 999

ENERGY CONSUMED(1)Ttotal energy

Gigajoules (GJ),

12 333 021,

consumed

Percentage (%)100%(2) Percentage heavy

Gigajoules (GJ),

0fuel oil

Percentage (%)

0%

EEDI
Average Energy Effi-

Grammes of CO₂

ciency Design Index

per ton-nautical(EEDI) for new ships

mile

4.55

OTHER EMISSIONS TO AIR(1) NOx (excluding N2O)

Metric tonnes (t)18 419(2) SO x

Metric tonnes (t)207(3) Particulate matter

Metric tonnes (t)169MARINE PROTECTED AREAS
Shipping duration

Number of

in marine protectedtravel days

marks an important milestone in this regard. Nine of Flex
LNG’s vessels are powered with M-type, ElectronicallyControlled, Gas Injection (MEGI), Tier III engines, and fourof our ships are powered with Low Pressure Gas Injection
X-DF technology. These are the most efficient LNG vessels
on the water. By applying the latest technology in our fleet,
we contribute significantly to reducing emissions. Our aim is
to continue to emit 30 per cent less CO2 per tonne nautical
miles than an average fleet of tankers. Periodic hull inspections with condition-based cleaning is part of our strategy
to reduce fuel consumption by minimizing resistance in thewater. We also have periodic plans for propeller cleaning –this is conducted twice a year.

17,9areas or areas ofprotected conservation statusI M P L E M E N T E D B A L L A S T W AT E R(1) Exchange

Percentage (%)

Not applicable(2) Treatment

Percentage (%)

100 %SPILL S AND RELE ASE S TO THE ENVIRONMENT(1) Number

Number0(1) Aggregate volume

Cubic meters (m³)

0

14 • 2021 • Environmental Social GovernanceIn 2021, we had 70 per cent more operating days in our fleet,
and thus higher absolute GHG emissions. Due to the soaring
prices on natural gas, our vessels did have a relatively andsignificantly higher consumption of VLSFO and ULSMDO/ULSMGO as compared to 2020. Our vessels are charteredout, and the decision to switch to other fuels are made by ourcharterers. The higher consumption of VLSFO and ULSMFO/ULSMGO did also have a negative impact on the fleets GHG
levels, and also on the SOx and NOx emissions. We cooperatewith our partners to reduce energy consumption and associated emissions. In times where natural gas prices remain
at a high level making VLSFO and ULSMDO a significantly

cheaper fuel option, optimal routing and other fuel saving
measures are also the more important to increase fuel efficiency to keep emissions as low as possible.

SPILLS, DISCHARGES AND ECOLOGICAL IMPACTS
Marine transportation carries risks to the environment
through discharges and emissions to air, land and water andthrough potential spills. Flex LNG works diligently to manage
such risks, and our efforts are critical for protecting the environment, the sector, our customers and our own business.
A set of stringent monitoring and management tools cover
all of Flex LNG’s activities related to such risks as we work
to minimise the environmental impact of our operations,ensuring compliance with international and local regulations.
We implemented a thorough system for incident reportingand our Fleet Management was ISO9001/ISO 14001 certified
in May 2020.
Flex LNG is aware that larger volumes of oil have long-lasting
adverse impacts on ecosystems, and incidents may cause
grave injuries and fatalities. We carry LNG, a gas which is
non-toxic, non-corrosive and thus does not represent a large
spill risk as it will simply evaporate. FLEX LNG recorded zeroincidents relating to spills during 2021.

15 • ENVIRONMENT

Ships contain hazardous materials, and ship recycling mustbe performed according to strict standards for protecting
human health, safety and the environment. The Hong Kong
Convention aims to ensure that ships, when recycled after
reaching the end of their operational lives, do not pose a risk
to the safety of workers or to the environment. With a fleet
avergaing 2.2 years, FLEX LNG does not have any foreseeable ship recycling activities. However, we have establisheda Ship Recycling Policy to ensure that any future recyclingof Flex LNG ships will only take place at a yard on the EU
List (as applicable) or otherwise certified by the Hong Kong
Convention.
Flex LNG has identified Sustainable Development Goal (SDG)
14 – Life below water – as a goal for our operations. SDG14
is aimed at enhancing the conservation and sustainable
use of oceans and their resources. At Flex, we monitor our
fleet continuously, and we track our sailing time in protectedareas. Independently of where Flex LNG operates, our crew
members follow stringent rules for avoiding spills – and incidents are to be diligently reported. Additionally, already in
2019, we introduced strict procedures for ensuring that all
debris containing plastics are collected and disposed of in asafe manner.

SAFETY, LABOUR CONDITIONSAND HUMAN RIGHTS
ensuring the health and safety of our crew is our number
one priority. By providing training and the right equipment,
our employees should experience and contribute to a safe
and inclusive working environment. There are inherent safety
and security risks related to operations at sea. These must
always be managed carefully to safeguard crew, vessel, thecargo and the environment. Our company has a zero-accident
ambition and operates according to the principle that noserious injury or environmental incident is acceptable.
FLEX LNG works diligently to ensure that our operations
are in accordance with applicable regulations, and with our
Corporate Code of Business Ethics and Conduct. All our
employees are expected to abide by the values and guidelines
set out in the code. We make sure to employ and train qualified seafarers in accordance with requirements of the flagstate and Standards of Training, Certification & Watchkeeping
Convention (STCW). Our technical manager is regularly
supervised and formally audited annually in order to ensurecompliance. Since 2020, we have kept our technical management in-house. Bringing our technical management in-housefurther enhanced the efficiency and control of our operations.
Through our risk assessment systems, we review all identified
potential risks to our ships, personnel and the environment,
establishing appropriate safeguards and practices. Due diligence of HSE track records is of the essence when FLEX LNG
commissions work at shipyards, and our new ships are being
built at leading Korean shipyards operating in accordancewith global safety management standards. All accidents,
incidents and near misses shall be reported, and proactive
measures are taken to ensure that we encourage our crew
to report these without hesitation and with the support oftheir managers. Our Lost Time Incident Rate (LTIR) was 0.34
in 2021.
Annual audits are performed of the safety management
system in accordance with the same regulatory frameworks
for all vessels and office functions involved in operating thevessels.

COVID-19
The Covid-19 pandemic has caused disruption globally, tosocieties, businesses and individuals. FLEX LNG has worked
to soften the negative impacts of the pandemic on our staff

16 • 2021 • Environmental Social Governanceand seafarers, as we view their wellbeing as our responsibility.
To do this, we developed and implemented a crewing strategy
that was driven both by safety and corporate responsibility
perspectives, as well as a desire to preserve the welfare of ourcrew and ensure they return home safely.
One of our primary concerns has been the wellbeing of ourseafarers while they were in enforced quarantine. The lockdown’s around the globe have shown everyone how difficult
it is to be isolated from those you love, and this difficulty isheightened for crew that cannot leave their ship and/or stayin quarantine. To counter this we required ship managers
to provide laptops or iPads to all seafarers, as well as makeprovision for training where appropriate. We also establisheda psychological hotline and made this available to everyone
to help them cope with any difficulties they may be experiencing.
In addition to wellbeing, safety is a primary concern and FLEXLNG instructed its ship managers to carry out a vaccination
drive for its seafarers, with the aim to vaccinate over [99%]of our seafarers. From December 2021, all new seafarers

17 • SAFETY, LABOUR CONDITIONS AND HUMAN RIGHTS“We make sure to employ
and train qualified
seafarers - we have a zeroaccident ambition"

Thai, Bangladeshi, Indian, Philippine, Russian, Ukrainian, Sri
Lankan and Georgian. Our shipboard employees are predominantly men, however we encourage female seafarers andhave had female cadets onboard our vessels.

HUMAN CAPITAL
Our success is built on the ability, determination and dedication of our staff, both onshore and shipboard. We recognise
the value of our staff and try to promote from within wherever
possible. In order to assist with this, we provide a numberof opportunities for employees to develop their skills andcareers, including trainings.

HUMAN RIGHTSFLEX LNG is committed to respecting and protecting internationally recognised human rights as laid out in the UN Guiding
Principles on Business and Human Rights (UNGP). We are aninternational company with suppliers from several parts of theworld. We strive to have and update the necessary policies,
due diligence processes and access to remedy in line with theUNGP. In 2020, FLEX LNG established its Know Your Business
Partner Policy to ensure compliance with the company’s
ethical standard in all business relations. We also conductsocial risk assessments of yards and carry out due diligenceof business partners. Where we have concerns, human rights
clauses are inserted into contracts. We consider that we are
well placed to comply with the Norwegian Transparency Law
that comes into force in July.

onboarding our vessels are to be vaccinated. Entering 2022,
there are still many restrictions due to the pandemic aroundthe world, however we aim to support our seafarers to lessen
the burden they may experience.

LABOUR RIGHTS AND WORKING CONDITIONSIn addition to securing our workers’ health and safety, we
seek to ensure that our employees, onshore and offshore, areworking under conditions that meet the requirements set out
in the International Labour Conventions and the Maritime
Labour Convention. As part of safeguarding seafarers labour
rights, these conventions include the right to collective
bargaining agreements, and that no employee is discriminated based on nationality, race or any other basis. The PSC
and the OCIMF Ship Inspection Report Programme (SIRE)
are implemented ensuring that applicable labour rights arebeing complied with.

DIVERSITY
FLEX LNG prohibits discrimination against any employee or
any other person on the basis of sex, race, colour, age, religion,
sexual preference, marital status, national origin, disability,
ancestry, political opinion, or any other basis. FLEX LNG is aninternational company with shipboard employees from acrossthe world. The main nationalities amongst our employees are

18 • 2021 • Environmental Social Governance19 • SAFETY, LABOUR CONDITIONS AND HUMAN RIGHTSEMPLOYEE HEALTH &SAFETY

UNIT OFMEASUREDATA
2021

L O S T T I M E I N C I D E N T R AT E
Lost time incident rate (LTIR)

Rate

0.34

M A R I N E C A S U A LT I E S
Incidents

Number0

Very serious marine casual-

Percentage (%)

0

ties

CONDITIONS OF CLASS
Number of Conditions of

Number

0

Class or Recommendations

P O R T S TAT E C O N T R O L(1) Deficiencies

Number0.10(2) Detentions

Number0

SUSTAINABILITY ACCOUNTINGSTANDARD DISCLOSURESTOPIC

ACCOUNTING METRICUNIT OF MEASUREDATA 2021

DATA 2020

CODE

TOPIC

ACCOUNTING METRICUNIT OF MEASURE

CO2 EMISSIONS
Metric tons (t) CO₂-e

Gross global Scope 1 emis-

727 999

485 793

Number of calls at ports in countries

TR-MT-110a.1

12-15

12

Numbermanage Scope 1 emissions,

5

TR-MT-510a.1

0

0

TR-MT-510a.2

0Additionaltion Perception Index h

BUSINESSETHICSFound on pageemissions reduction targets,

CORRUPTION
Total amount of monetary losses as a

and an analysis of perfor-

Reporting currency

result of legal proceedings associatedmance against those targets

with bribery or corruption

Indirect emissions: Scope 2 ,Metric tons (t) CO₂-e

9.4

Additional

Metric tons (t) CO₂-e

2 680

Additional

F A C I L I TAT I O N PAY M E N T S

purchased electricityb
Indirect emissions: Scope 3,

Number of incidents where bribes

Number

FINES AND SANCTIONSENERGY CONSUMED(1) Total energy consumed(2) Percentage heavy fuel oil

Gigajoules (GJ),

12 333 021

8 533 076

Percentage (%)

100 %

100%

Gigajoules (GJ),00Percentage (%)

0%0%TR-MT-110a.3

Grammes of CO₂ per

Design Index (EEDI) for new

ton-nautical mile

4.55

4.99

TR-MT-110a.4

EMPLOYEEHEALTH &SAFETY

Grammes of CO₂ per(AER)

ton-nautical mile

5.51

6.25

Additional(1) NOx (excluding N2O)dMetric tonnes (t)18 41911 700(2) SOxd

Metric tonnes (t)

207

60.3

(3) particulate matterd

Metric tonnes (t)

169

68.8

TR-MT-120a.1

ACCIDENT &SAFETYMANAGEMENT

Non-monetary sanctions for non-Number0000Additional

L O S T T I M E I N C I D E N T R AT E
Lost time incident rate (LTIR)i

Rate

0.34

0

TR-MT-320a.1

TR-MT-540a.1

Incidentsj

Number00

Very serious marine casualtiesk

Percentage (%)

0

0

17.9

39.8

TR-MT-160a.1

protected conservation statuse

DIVERSITYI M P L E M E N T E D B A L L A S T W AT E R
Percentage (%)

Not applicableNot applicable(2) Treatment f

Percentage (%)

100%

100%

NumberNumber00(2) Aggregate volumeg

Cubic meters (m³)

0

0

0

TR-MT-320a.1

TR-MT-540a.3

TR-MT-160a.2(1) deficiencesm

Number0.10

0(2) detentionsm

Number00

Number of individuals in the organization’s governance bodies by gender

NumberMale: 100%
Female: 0%

Male: 100%
Female: 0%

Number of individuals in the organization’s governance bodies by age group

NumberUnder 30 years
old: 0 | 30-50
years old: 2 |Over 50 years
old: 2

Under 30 years
old: 0 | 30-50
years old: 2
Over 50 years
old:

SPILLS AND RELEASES TO THE ENVIRONMENT(1) Numberg

0

Recommendationsl

DIVERSIT Y – GENDER AND AGE

protected areas or areas of(1) Exchange f

Number of Conditions of Class or

P O R T S TAT E C O N T R O L

MARINE PROTECTED AREAS
Number of travel days

currency

CONDITIONS OF CLASSOTHER EMISSIONS TO AIR

Shipping duration in marine

Number and reporting

value of fines

M A R I N E C A S U A LT I E S

shipscCII/ Annual Efficiency Ratio

Number of fines and total mone- tarycompliance with laws and/or regulations

E E D I & C A R B O N I N T E N S I T Y I N D I C AT O R
Average Energy Efficiency

0

have been requested

business travelb

20 • 2021 • Environmental Social Governance

12

Transparency International’s Corrup-

TR-MT-110a.2

short-term strategy or plan to

ECOLOGICALIMPACTS

CODE

that have the 20 lowest rankings in

Discussion of long-term and

AIR QUALITYDATA 2020

CORRUPTION INDEX

sions: Financial controla

GREENHOUSEGASEMISSIONSDATA 2021

TR-MT-160a.3

21 • SUSTAINABILITY ACCOUNTING STANDARDS DISCLOSURES

Additional

DISCLAIMER AND ASSUMPTIONSFOR THE SASB REPORTING
OUR FLEET OPERATES EFFICIENT LNG
PROPULSION TECHNOLOGIESThe information provided is based on the best data available at the time of reporting. The ESG disclosures should
be used to understand the overall risk management of sustainability related issues, however, in some areas data are
based on estimates, please see comments below.
aCO emissions – scope 1: Based on IMO emission factors. The “finan2

cial control” approach defined by the GHG Protocol has been applied.
Scope 1: Owned vessels, based on fuel consumption for the year.
Flex LNG utilises vessels with the latest technology to reduce fuel consumption and we optimise the use of our cargo capacity. The graph above shows how
our fleet compares to past technologies.

bCO indirector emissions: scope 2: Based on electricity consumption
2
in reporting year, and calculated using conversion factors from NVE’selectricity disclosure statement for power suppliers 2020 and AIB
Residual Mixes 2020. Scope 3 based on crew flights and transported
purchased goods, data provided by vendors - in 2022, we will screen our
Scope 3 emissions and consider including information in our coming
reports.
cAverage Energy Efficiency Design Index (EEDI) for new ships: New

ships average EEDI is based on new ships entering the fleet in 2020 (keellaid after July 2013).
dParticulate matter (PM), NOX, SOX emissions (Metric tonnes):
Deviations from 2019 numbers are highly influenced by the IMO 2020
requirements entry into force and may partly also be affected by our
updated reporting methodology. The updated methodology has beendeveloped with support from DNV.
eShipping duration in marine protected areas or areas of protect-

ed conservation status: A marine protected area as defined by theInternational Union for Conservation of Nature (IUCN). However, thereported number does not necessarily include all Marine protectedareas internationally established and regulated in International the
Marine Organization (IMO) Conventions and areas established nationally by member states. Shipping duration is the sum of the travel days
(24-hour periods).
fPercentage of fleet implementing ballast water exchange and treat-

ment: Only ships performing ballast water exchange with an efficiency
of at least 95 percent volumetric exchange of ballast water have been
included. When it comes to treatment, approved systems must discharge (a) less than 10 viable organisms per cubic meter that are greaterthan or equal to 50 micrometres in minimum dimension and (b) lessthan 10 viable organisms per millilitre that are less than 50 micrometresin minimum dimension and greater than or equal to 10 micrometres inminimum dimension.
gSpills and releases to the environment (Number, Cubic meters (m3)):

The total number of oil spills to the environment (overboard), excluding
contained spills.
hNumber of calls at ports in countries that have the 20 lowest rank-ings in Transparency International’s Corruption Perception Index(CPI): In the event that two or more countries share the 20th lowest
ranking, all have been included in the scope of disclosure. The list isbased on the CPI for 2020.

jMarine Casualties: Regarding SASB TR-MT-540a.1, the reporting isin accordance with the standard, however injuries to personnel as
described in section 1.1.1 is reported as part of Health & Safety statistics(LTIR). The threshold for reporting on material damages as outlined in
1.1.4 and 1.1.6 is defined as USD 1,000,000. Section 1.1.7 “Severe damage
to the environment” is reported under ‘Ecological Impacts’ and/or “Veryserious marine casualties”. Incidents concerned with oil spills, re SASB
1.1.7 “Severe damage to the environment” is covered under “ecological impact”. For an event to be reported as a marine casualty, one orseveral out of the below criteria must be true: (1) the loss of a personfrom a ship, (2) the loss, presumed loss, or abandonment of a ship, (3)the stranding or disabling of a ship that triggered a Lloyds Open Form
Salvage or the involvement of a ship in a collision that would seriously
endanger the safety of life or property. (4) material damage to marine
infrastructure external to a ship, that could seriously endanger thesafety of the ship, another ship or an individual.
kVery Serious Marine Casualties: A marine casualty involving the total

loss of the ship, a death, or severe damage to the environment thatis not related to oil spill. Any deaths shall be reported. If the death isdecisively concluded not to have anything to do with a marine (veryserious) casualty such as latent and unknown illness shall be addressed
separately for a case-by-case discussion. Severe damage to the environment that is not related to oil spill is covered by “Very serious marine
casualties”.
lNumber of Conditions of Class or Recommendations: Those condi-

tions/recommendations of class that has led to withdrawal of vessel
certificates of otherwise has invalidates the ship’s compliance areincluded in this figure.
mNumber of port state control (1) deficiencies and (2) detentions:
Number of port state control deficiencies and detentions. Practices ofport state controls reporting on deficiencies do not follow an entirely
harmonised methodology making it less useful for reporting purposes without further explanations, hence we have chosen to report
this number as a rate: number of deficiencies per Port State Control
Inspection. Detentions are reported in number of actual cases. The
figure represents number of detentions received from regional PSC
organisations.
nNumber of shipboard employees: Only the number of employees onboard ships at any time are recorded, this does not reflect the aggregate
number of shipboard employees during the year.
oTotal distance travelled by vessels: The distance (in nautical miles)

travelled by all vessels during the reporting period.
pOperating days: Total operating days, i.e., total number of vessel- days

for active vessels during the reporting year. Active vessels are referring
to vessel(s) which were in possession of the shipowner during thereporting year.
qNumber of assets in fleet: Reported number of owned assets at theend of the reporting year.
rNumber of vessels port calls: Total number of port calls during thereporting period.

iLost time incident rate (LTIR): A lost time incident is an incident

that results in absence from work beyond the date or shift when it
occurred. Lost time incidents are Fatalities, Permanent Total Disabilities,
Permanent Partial Disabilities and Lost Workday Cases. The rate isbased on lost time incidents / 1,000,000 hours worked.

This ESG report was prepared by FLEX LNG LTD. with assistance from
Position Green Advisory.

23 • DISCLAIMER AND ASSUMPTIONS FOR SASB REPORTING

BERMUDAFLEX LNG Limited
Par-La-Ville Place
14 Par-La-Ville Road
Hamilton
NORWAYFLEX LNG Management AS
Bryggegata 30250 Oslo
UNITED KINGDOMFLEX LNG Management Ltd.
3rd Floor, 183 St Vincent Street
Glasgow G2 5QD
UNITED KINGDOM
Flex LNG Management Ltd.
4th Floor, 10 Eastcheap,
London, EC3M 1AJ