We are committed to developing natural resources in a safe, efficient, and environmentally-friendly manner and supplying the society with clean, reliable and stable energy and meeting the reasonable energy demand of the people, which comprises our commitment to a sustainable development. The economy, environment, and society are the three cornerstones for the Company to develop energy resources and create value. As our business and economic contributions grow steadily, we will press ahead on the road of environmental protection and social progress. Continued efforts will be made to integrate economic, environmental and social factors to drive the sustainable development of the Company.

The Company believes that sustainable development should not only rely on the knowledge, beliefs and ideas of the management or individual employees. We must integrate sustainability requirements into our corporate management systems to make it part of our corporate culture.

We constantly assess our performance and make improvements and adjustments to ensure that our operations and management are more environmentally friendly, efficient and safer, and to achieve balance in the development of the economy, environment and society.

Materiality Analysis

The Company, in accordance with the requirements of the Environmental, Social and Governance Reporting Guide issued by the Stock Exchange of Hong Kong Limited (HKEx), has understood the opinions of stakeholders on our environmental, social and governance (ESG) issues, identified issues that stakeholders are potentially concerned with and determined their importance, as important references to the extent and scope of issue disclosure, to ensure more accurate and comprehensive disclosure of ESG information and respond to stakeholders' concerns by means of questionnaire surveys, business review and discussion, ESG performance benchmarking and internal workshops.

The materiality analysis results of CNOOC Limited’s ESG issues in 2023 are as follows:

ESG Management

The Board is the top decision-making body for ESG matters and takes overall responsibility for the Company's ESG strategies and reporting. Its responsibilities include evaluating and identifying ESG risks, ensuring the establishment of effective ESG risk management and internal control systems, and overseeing and managing ESG goals and their progress. The Board is briefed by management on the Company's initiatives for risk control and compliance twice a year, and annually reviews the corporate governance report, the Company's internal control, risk and compliance management work reports.

The Board has established the Strategy and Sustainability Committee, which is responsible for conducting research on the Company's sustainability issues, making recommendations to the Board on relevant policies and strategies and monitoring the Company's commitment and performance on key issues such as climate change. The Committee is briefed specifically by the management on the Company's performance on safety and environmental protection at least once a year, and conducts annual reviews of the Company's ESG report, the results of stakeholder communication and analysis of material issues to ensure the Board's participation in the whole process of ESG governance and ESG disclosure. In 2023, the Company completed the amendment to the articles of the Strategy and Sustainability Committee, and introduced an additional function of monitoring climate change related issues.

In 2023, the Company established the ESG Leading Group and the ESG Management Office under the Strategy and Sustainability Committee. Headed by the Executive Director/CEO, the ESG Leading Group is responsible for implementing the Board's decisions and deployments, arranging and monitoring major issues in ESG management, and receiving reports on ESG work. Members of the Team include the leaders of Human Resources Department, QHSE Department, Department of Science, Technology and Information, and other departments.

The Leading Group convenes a meeting at least once a year, during which major ESG matters are reviewed, and the work priorities in the future is determined. The ESG Management Office, headed by the Board Secretary, has been established under the ESG Leading Group, which organizes, coordinates and monitors the implementation of ESG programs and prepares the Annual ESG Work Plan for review by the Leading Group. In 2023, the Company held the ESG Leading Group meeting, clarifying tasks around key issues relating to climate change information disclosure under the TCFD framework. All responsible leading departments have formulated the three-year work plan on key ESG issues respectively and are executing it properly.

CNOOC has incorporated ESG indicators such as carbon reduction and new energy production into the appraisal mechanism for senior managers, and set energy-saving and carbon reduction indicators for executive directors/CEOs and safety directors; and clarified natural gas production in the appraisal of oil and gas production indicators for executive directors/CEOs and senior managers in charge of development and production, among others.