E. Tsotsoros
Chairman of BoD & CEO
“HELLENIC PETROLEUM’s strategy in regards to achieving its sustainable development goals in today’s rapidly changing global environment”
2017 proved to be the best year for the Group in terms of its financial and operational performance. The combination of beneficial international margins, the favourable dollar-euro exchange rate and oil prices, high operating performance, record production and sales, and a significant reduction in financial costs maximized the year’s financial results despite the southern refineries’ shutdown which lasted for several weeks.
With that being said, this year’s global events and negative geopolitical developments have left little room for complacency and highlight the need for increased alertness and coordinated and synchronized global action if we are to maintain our leading role in the energy sector, our significant performance and successful presence in regards to our international competitors.
To this end, it is necessary to systematically monitor and evaluate international developments in the broader economic, social, political and geopolitical spheres, as well as the particular significance of issues pertaining to climate change and energy transformation and their effects on the planet.
The reckless use of energy resources as part of the industrial and post-industrial development model has led to a deadlock in the consequences of climate change.
The EU is leading the transition towards a low-carbon economy, which the European refining industry, through recent announcements, has adopted, which also signifies the additional investments needed as part of the developmental adaptation plan for the new era. In addition, developments in the context of tackling climate change are further burdened by events shaping an unstable and uncertain international environment.
The global community is experiencing a multilevel, long-lasting, political and economic-social crisis, starting from the shocks of the transition to the post-digital era, the industries of the future (robotics, cyber security, commercialization of genomics, big data, money and markets coding) and the parallel integration of the history of the last thirty years characterised by digital technology, automation and globalization.
In light of these rapid changes and the uncertain and unstable international environment, our Group is being called upon to design a sustainable development plan to meet these challenges and to ensure that it is effectively implemented in order to strengthen its competitive presence in the coming years.
Α. The integration of sustainable development goals into HELLENIC PETROLEUM’s strategic planning
Adopting the principles of sustainable development and integrating selected SDGs into HELLENIC PETROLEUM’s development strategy:
- Enhancing their business value
- Improving risk management, and
- Ensuring that they are accepted by local societies where the Group operates.
As part of its strategy regarding the transition to a low-carbon economy (energy transformation), HELLENIC PETROLEUM Group aims at continuously improving its performance, competitiveness, environmental protection and the economic and social development of local and wider society, which are all pillars of sustainable development.
Energy transformation and new products designed to reduce the carbon footprint from our energy system, digital transformation, and the new challenges associated with the transition to the post-digital era, make it increasingly important that we understand the rapid changes that are taking place so that we can anticipate future changes for the benefit of our Group. However, it is crucial, if we are to maintain an effective active presence both in the domestic production process and in the markets, that we are aware of what the societies around us want, thus ensuring that the our stakeholders understand and share the strategy and related investments that are part of the Group's strategic planning.
The aforementioned main trends, emerging risks and opportunities, along with stakeholder engagement, are holistically taken into account in order to shape the Group's strategic priorities.
Essentially, the Group's strategy incorporates the priorities among the key issues of concern (materiality assessment) and matches them with the Group's broader industrial strategy and operational actions.
At the heart of the plan lies the major issue of moving to a low-carbon economy, with the main focus on battling climate change, energy transformation and energy security, as well as the rapid completion of the Group’s digital transformation.
Β. The strategic objectives of HELLENIC PETROLEUM’s development plan and the priority actions set with which to achieve the objectives
The objectives of sustainable development in the framework of the hierarchy of stakeholders are integrated into HELLENIC PETROLEUM’s development plan, which aims primarily at strengthening the Group's business value, with the main axes of interventions and actions to stabilize and strengthen its export orientation and competitiveness function and to quickly adapt to the new energy and business landscape being shaped by the energy and digital transformation.
Within this approach, the main objectives are:
- Enhance business value
- Improve business risk management
- Effective transition to a low-carbon energy system
- Digital transformation
- Improving trust and partnerships with local communities
A key prerequisite for the medium to long-term achievement of these goals if the Group is to remain a pioneering and innovative energy Group in SE Europe is to secure the necessary financing resources for the investment planning of a transition to a low-carbon energy system that involves a wide transformation of the Group's structures.
The starting point of this long-term program is the Group's five-year development plan, with investments of around €1 billion being driven, on the one hand, by improving international competitiveness, reducing the impact of exogenous factors such as crude oil and products, refining margins and exchange rates, as well as minimizing the impact of increasing CO2 costs, improving energy efficiency and labour productivity, developing RES and implementing the 5 year Hydrocarbon Research Program.
Management, executives and all employees are systematically following, monitoring and thoroughly analyzing the developments and characteristics of this new era. During 2018, a comprehensive proposal will be drafted and submitted to the parties concerned, with the options that are available, for obtaining the decisions that will determine the Group’s position and role in the post-digital era, low carbon footprint economies, both at national level and in South-eastern Europe, a region in which it possesses a competitive position and pioneering role.