CNOOC Limited actively responds to climate change by carrying out special work in adherence to the IFRS S2 and the Implementation Guidance of the Stock Exchange of Hong Kong Limited. The Company has scientifically established a top-level design for its climate change response efforts, improved its strategic deployment for climate change governance, and formulated a three-year action plan. Starting with the identification and analysis of climate change risks and opportunities, the Company is systematically carrying out a series of initiatives to enhance its climate change governance. By the end of the reporting period, CNOOC Limited had established a climate change indicator system and completed a climate risk exposure assessment report, striving to become an industry benchmark in addressing climate challenges and accelerating the energy transition.

Governance

CNOOC Limited considers climate change as an important factor in the Company’s strategy, continuously improving the climate change governance system, and establishing a three-tier climate change governance structure of “Governance Level - Management Level - Executive Level” based on the existing ESG governance framework. By adding a special task force for climate change under the ESG management office at the executive level, we are able to strengthen capacity building for climate change-related matters at the execution level. Meanwhile, the Company will continue to strengthen the support for climate change response, increase the training of specialized talents, ensure a reserve of personnel for climate change response, and enhance the professionalism and precision of climate change response efforts.

To effectively enhance CNOOC Limited's climate change governance level, the Company continuously refines climate-related compensation indicators for senior management, incorporating metrics such as carbon reduction, new energy business development, and natural gas production into the compensation assessment system for the Company's main responsible persons and relevant leaders.

Strategy

To more scientifically and effectively identify the climate-related risks and opportunities, CNOOC Limited has analyzed climate change scenarios and time frame settings. For climate physical risk analysis, the Company has selected SSP1-2.6 (low emission scenario), SSP2-4.5 (medium emission scenario), and SSP5-8.5 (high emission scenario) as the physical scenarios for CNOOC Limited. For climate transition risk analysis, the Company has selected the Net Zero Emissions scenario (NZE) and the Announced Pledges Scenario (APS) as the transition scenarios for CNOOC Limited.

CNOOC Limited comprehensively considers the national dual carbon strategy goals and its development plan, clarifying short-term, medium-term, and long-term timeframes, and conducts climate change risk and opportunity assessments based on different timeframes. We conduct stress tests on the Company’s ability to adapt to climate change by combining climate change scenario models with the actual business operations of the Company, and comprehensively analyze and assess CNOOC Limited’s short, medium, and long-term risks and opportunities under different climate change scenarios.

Impact, Risk, and Opportunity Management

CNOOC Limited continuously strengthens its management of climate change risks, integrate climate change as a key issue into the Company’s long-term development strategy, and enhance and standardize the management of climate-related risks, which has been incorporated into the overall risk management process. Meanwhile, CNOOC Limited organically combines climate change risk assessment and risk management, establishing a comprehensive climate change risk management mechanism that forms a risk management process of “risk assessment - risk response - monitoring and review.”

Indicators and Targets

CNOOC Limited actively responds to the national “3060” dual carbon goals and is committed to promoting a green and low-carbon transition. The Company is dedicated to promoting greenhouse gas emission reduction and has set specific reduction targets.

In addition, the Company places great importance on various climate-related indicators. We strengthen monitoring work comprehensively through advanced technology and scientific management, and continuously assessing the completion status, which contribute to the realization of the national green development goals with practical actions.

Scope 3

In 2024, to enhance transparency and accountability in carbon emission management across the value chain, the Company officially launched the research process for Scope 3 GHG emissions. We conducted an in-depth analysis of the concepts and methodologies of Scope 3 GHG accounting and undertook research covering all 15 categories of Scope 3 emissions.

The Company has initially completed the categorization of Scope 3 emissions that are highly relevant to its business. In addition, the Company has begun pilot work on collecting Scope 3 emissions data, aiming to lay a solid foundation for subsequent accounting.

Internal Carbon Pricing

Currently, the Company adopts a shadow carbon pricing mechanism to predict the direct and indirect greenhouse gas emissions of various projects and to estimate the greenhouse gas emission costs of projects based on internal carbon pricing. Internal carbon pricing is widely applied in the economic evaluation of the Company's domestic investment projects, while overseas projects are assessed based on the carbon pricing policies of the respective countries, playing a role in carbon emission evaluation, planning research, and tracking economic assessments.

Following relevant national policies, the dynamic trends of the domestic carbon trading market prices, and taking into account the forecasts of future carbon prices by authoritative institutions, we prudently establish a unified internal carbon pricing standard.