2025 McDermott Sustainability Report - Report - Page 45
OUR PATH
OUR APPROACH
ENVIRONMENT
Energy Consumption Metrics
Energy consumption metrics are reported at the location or activity
level in alignment with how associated emissions are captured in ESG
Management Software. All relevant energy sources under McDermott’s
operational control are included.
Locations or activities that meet exclusion criteria, based on materiality,
are considered out of scope.
In accordance with the GHG Protocol, carbon dioxide emissions from
biomass combustion are reported separately as biogenic. Methane
and nitrous oxide emissions from biomass combustion are included
within Scope 1 emissions.
7. Data preparation and calculation
On-site Energy Data Collection and Allocation Process
McDermott collects on-site energy consumption data through the ESG
Management Software platform. Most data (approximately 95%) is
sourced directly from monthly electricity and fuel invoices entered by
site personnel, who also upload the invoices as supporting evidence.
This year, invoice uploads were introduced to strengthen data
traceability and veri昀椀cation.
To ensure consistent monthly reporting, McDermott applies a
standardized approach when invoice service periods do not align with
calendar months:
Majority-of-Days Rule (Primary Method):
SOCIAL
GOVERNANCE
FRAMEWORK ALIGNMENT
PERFORMANCE DATA
As sustainability metrics are consolidated at the calendar-year level,
any minor month-to-month variations are reconciled within annual
totals, ensuring accurate and complete year-end reporting.
Treatment of unmeasured sources
Welding-related process emissions are recognized as a material
source within the emissions boundary. These emissions are not
reported in the current cycle due to methodology and data-control
readiness. A quantitative range is not provided in the current cycle due
to insuf昀椀cient data quality; estimation will be completed prior to the
next reporting cycle. Final quanti昀椀cation and full inclusion are planned
for the next reporting cycle, supported by 昀椀nalized calculation methods,
data ownership, activity data capture, and control procedures.
Fugitive refrigerant emissions
Fugitive emissions from refrigerant leaks and top-ups are tracked
through the inventory management system, warehouse reports, and
maintenance records. These emissions are expected to represent less
than 1% of total Scope 1 and Scope 2 emissions for the reporting period.
Each site is responsible for maintaining a site-speci昀椀c asset register
to track and record any losses or top-ups throughout the year. This
information is consolidated and entered into Management Software at
the end of the reporting period.
While this information is collected for completeness, it will not be
reported in this year’s disclosure cycle.
Renewable Energy Certi昀椀cates (RECs)
Exception – Month Stated on Invoice:
McDermott follows recognized best practices for renewable electricity
instruments, including RE100 guidance on certi昀椀cate quality and market
relevance. Priority is given to purchasing Energy Attribute Certi昀椀cates
generated within the same legal or energy market jurisdiction. Regional
substitutes may be used only when in-country certi昀椀cates are not
available.
If the invoice clearly speci昀椀es the reporting month (e.g., “September
2025”), that stated month is used, even if service dates differ.
McDermott purchases RECs annually for relevant sites based on
year-end electricity consumption forecasts. These certi昀椀cates are used
When an invoice spans two months, the consumption is attributed
to the month containing the majority of service days (more than
15 days). This avoids splitting invoices and ensures consistent
reporting.
APPENDIX
2025 SUSTAINABILITY REPORT
for the purpose of Scope 2 market-based reporting. McDermott does
not procure other renewable electricity products such as green tariffs.
Contracts and purchase orders serve as the primary evidence of
REC procurement until retirement documentation is received. The
retirement documentation then supersedes the initial procurement
evidence and serves as the 昀椀nal veri昀椀cation of the RECs purchased.
Key Judgments
As per McDermott’s De Minimis Threshold, energy metrics are
excluded from reporting when associated emissions are considered
operationally insigni昀椀cant, and the site quali昀椀es for exclusion based
on the following organizational criteria:
Sites with a headcount of 20 or less. Human Resources will
provide data on headcount periodically. The exception
to this exclusion will be vessels owned and operated by
McDermott and 昀椀xed sites such as fabrication yards, shops or
warehouses, where McDermott is the only tenant or occupant
of the entire facility.
Projects in commissioning phase may stop reporting once
their headcount drops to 20.
FEED and Pre-FEED projects. Their associated emissions are
already included in Of昀椀ce emissions.
Note: The insigni昀椀cance of excluded sites and activities is revalidated
on an annual basis to ensure that no material emission sources
are omitted. Based on current estimates, emissions associated with
excluded locations and project phases represent less than 1% of total
Scope 1 and Scope 2 emissions. This assessment will continue to
be reviewed each reporting cycle to con昀椀rm that any unmeasured
sources remain immaterial.
Estimates
Emission factors are sourced from various recognized emission
factor databases and are assigned in ESG Management Software
automatically in accordance with the hierarchy de昀椀ned in vendor
documentation.
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