This report covers Cairn’s global operations from 1 January to 31 December 2016.
Cairn reports its 2016 Corporate Responsibility (CR) information in accordance with AccountAbility’s AA1000 Accountability Principles Standard (AA1000 APS) founding principles of inclusivity, materiality and responsiveness. This ensures that we engage with internal and external stakeholders, identify and assess our most important CR issues, and address and respond to them in a structured way.
We also use the Global Reporting Initiative (GRI) Standards (Core option). We follow its content principles of materiality, stakeholder inclusiveness, sustainability context and completeness; and its quality principles of balance, comparability, accuracy, timeliness, clarity and reliability.
Scope and boundaries
We report on an ‘operational control’ basis, which means that we report on those assets and activities over which we have operational control in terms of CR policies and practices during 2016, irrespective of the licensed operating party. We exclude data where we are not controlling operations, but consider risks associated with our partners’ position and their control of such activities. In line with this, our 2016 CR information covers Cairn’s head office in Edinburgh, other offices in the UK, Norway, Senegal and Morocco (until April 2016 when the Rabat office closed), and field operations in Senegal.
The report excludes the performance of non-operated joint venture activities and the performance of Cairn India (Cairn Energy has around a 10% shareholding and is not involved in management of activities).
Data and performance indicators
We measure our performance against set Key Performance Indicators (KPIs), which are aligned with the strategy and operational programme of the Company and revised annually. The KPIs in 2016 were set based on strategic business objectives and fell into these categories:
- Deliver exploration and appraisal success;
- Portfolio management;
- Deliver operational excellence;
- Maintain licence to operate; and
- Deliver a sustainable business.
Detailed CR objectives and KPIs are included under the ‘maintain licence to operate’ objective and CR KPIs amount to 15% of the total indicator score of performance across the Group as a whole in 2016, with two thirds of that total covering ‘leading’ indicators (proactive improvement activities, e.g. training) and the remaining third ‘lagging’ indicators (reactive values, e.g. Lost Time Injury Frequency).
CR KPIs and a wide variety of data are collected over a range of topics within the areas of environment, health and safety, security, communities and employees. Data is used for monitoring and reporting processes, and it is maintained in a specialist database. This database records data by geographical region, and defines the KPIs to be measured and the frequency in which data should be recorded. Data entry and approval are tracked within the database.
Our incident and accident data is recorded in a separate incident reporting system that stores all relevant details and emails defined individuals, including senior managers, across the business to keep them informed of progress with the reporting, and triggers investigation and follow-up of an incident depending on its nature.
We use definitions set by the GRI and International Association of Oil and Gas Producers (IOGP) to provide comparable and credible data that can be benchmarked against our peers in the oil and gas sector.
Data is collected from our offices and from our field operations, which includes each individual rig, vessel, aviation company and shore base involved. The field operations data is usually provided by the contractors that Cairn takes on for the project (e.g. the rig, vessels, aviation). These contractors are informed about Cairn’s KPI requirements in advance of the work as part of the contracting process and receive detailed instructions about the data needed. The instructions include definitions of the KPIs, instructions about reporting and methods (e.g. waste reporting with volume-to-mass conversion factors), and information on incident reporting. The data is collected from field operations on a monthly basis. Data is entered directly into our database via an online connection where possible and is otherwise submitted via Excel spreadsheets. Data is queried through the database and via email communications between Cairn’s head office and the data providers in their different locations.
We update our methodologies on a regular basis and any factors used are reviewed annually. For example, when improved methodologies are identified, there are developments in best practice or emission factors are updated.
We report historical data from all our activities over the last five years. Levels of activity at Cairn vary considerably from year to year and for this reason we do not have a fixed baseline.
Uncertainties and estimates
While we make every effort to ensure our data is as accurate as possible, it is not possible or practical to measure all data exactly. Where this is the case, e.g. obtaining electricity consumption data for a small office that is part of a larger building, or recording water effluent from an office or vessel that has no water outflow meter, then we use accepted estimation methodologies that may involve the use of conversion factors, e.g. calculating office data as a proportion of the figures for the whole building; using volume-to-mass conversion factors for calculating tonnage of waste; calculating GHG emissions. We highlight these methodologies in our data.
We recognise the importance of targets in driving performance improvements. Cairn sets corporate objectives at the start of each year, and these include some health, safety and environment (HSE)-related KPIs, e.g. spills, Total Recordable Injury Rate (TRIR) and HSE Leading Performance Indicator targets. When Cairn owned operated producing assets, it used to have Group greenhouse gas (GHG) emission targets normalised against production. This was not a meaningful target in 2016, as Cairn does not have operated producing assets. It is also hard to forecast, or set targets for, annual GHG emissions from our operated exploration activities as these operations can change significantly from year to year depending on location and scale of activity.
Reporting guidelines for 2016 Key Performance Indicators provides a methodology and definitions for selected KPIs from subject areas that were assessed through our materiality process to be the most important to Cairn and its stakeholders.