Globally and here in Malaysia, there are increasing stakeholder expectations on companies to start disclosing their climate and other sustainability related risks and opportunities, including the support and contribution to the Oil & Gas Services and Equipment (OGSE) sector. More than 80% of PETRONAS’ OGSE suppliers are identified as local SMEs (Small Medium Enterprises), which will require the support and guidance to navigate through these expectations in the name of a Just Transition. Thus, the PETRONAS Supplier Support Programme (PSSP) was established to provide the curated guidance for the local OGSE SMEs in embracing sustainability principles and practices across their organisations.  

PSSP embodies our commitment to sustainability and collaboration, creating a pathway for suppliers in the future sustainability landscape. Recognising the vital role of the OGSE industry in Malaysia's energy landscape, PSSP is a voluntary initiative for all PETRONAS suppliers in Malaysia. It aims to generate a sustainable and competitive ecosystem within Malaysia’s oil and gas sector, aligned with PETRONAS’ role as the national oil company. By fostering growth and resilience among local OGSE suppliers, especially SMEs, the programme contributes to key national frameworks such as the National Energy Transition Roadmap (NETR) and National Sustainability Reporting Framework (NSRF).

Transforming Challenges into Opportunities 

As Malaysia drives towards a low-carbon future, ambitious targets such as reducing economy-wide carbon intensity by 45% by 2030 and achieving more than 90% low-carbon energy sources by 2050 demand collective effort. The OGSE industry, contributing significantly to Malaysia’s GDP and greenhouse gas (GHG) emissions, faces the dual challenge of balancing operational growth with sustainability expectations. 

PSSP provides a framework to support this transformation, enabling suppliers to navigate evolving regulations such as the National Sustainability Reporting Framework (NSRF) and improve transparency in areas such as Scope 3 emissions. By fostering a sustainable supply chain, PETRONAS aims to drive measurable impact, ensuring no OGSE player is left behind in the energy transition journey.

Building Capabilities for a Sustainable Future

Launched by Puan Liza Mustapha, PETRONAS’ Executive Vice President and Group Chief Financial Officer, in August 2024, PSSP offers a comprehensive suite of tools and initiatives. These include:

• Sustainability Training and Capacity Building: Customised programmes tailored for Small and Medium Enterprises (SMEs) based on their sustainability maturity to enhance understanding and implementation of sustainability practices. 
• Transition Financing: Collaboration with financial institutions to provide accessible, sustainability-linked financing options, such as UOB Malaysia’s RM1 billion pledge and Bank Islam’s IFiRST programme. 
• Disclosure Platform: As a guided approach to our suppliers in disclosing their sustainability performance data and reducing GHG emissions.

“We recognise that OGSE suppliers, especially SMEs, face resource constraints in implementing sustainability practices, which are crucial for enabling the energy transition. We are rallying together with our suppliers in support of a just transition that ensures no one is left behind," Puan Liza said.

Engaging Suppliers Nationwide 

Since its inception, PSSP has prioritised meaningful engagement, reaching over 1,000 suppliers through 23 regional and virtual sessions in Kuala Lumpur, Terengganu, Johor, Sabah, and Sarawak. These sessions facilitate knowledge-sharing and address supplier concerns, with insights from key partners including the United Nations Global Compact Network Malaysia & Brunei (UNGCMYB), and Bursa Malaysia. 

The programme also introduces suppliers to digital tools such as:

• Centralised Sustainability Intelligence (CSI) Platform: A step-by-step guide to sustainability disclosures in alignment with the Simplified ESG Disclosure Guide (SEDG), developed in collaboration with Bursa Malaysia.
• PETRONAS Supplier Sustainability Hub (PSSH): A knowledge platform featuring case studies, e-learning modules, and practical tools for sustainability implementation.

A Collaborative Pathway to Success

PSSP represents a three-year collaborative effort involving suppliers, financial institutions, and strategic partners to drive sustainability adoption across the OGSE ecosystem. By the end of 2024, over 400 suppliers had registered, setting the stage for a transformative journey toward sustainable practices. With initiatives like transition financing, digital platforms, and targeted training, PSSP paves the way for a just and inclusive energy transition.

Together, we strive to create a resilient, innovative, and sustainable future for Malaysia’s OGSE industry, ensuring long-term success in a rapidly evolving energy landscape.