Materiality Assessment

Identifying, Assessing, and Acting on Priorities that Drive Sustainable Growth.

At Cairn Oil & Gas, the materiality assessment forms the cornerstone of our responsible business strategy. It enables us to identify and prioritise Environmental, Social, and Governance (ESG) topics that require focused attention on our path to sustainable growth. Guided by insights from internal and external stakeholders, the process ensures a balanced alignment between business priorities and stakeholder expectations.

In 2025, we conducted a Double Materiality Assessment (DMA) to gain a holistic understanding of our most significant sustainability topics. This approach combines:

• Financial Materiality - how sustainability topics influence our business performance, resilience, and long-term value creation.
• Impact Materiality - how our operations affect the environment, people, and society.

Through this integrated lens, we identify key risks, opportunities, and impacts, ensuring our sustainability priorities remain aligned with our business strategy and the global transition towards a low-carbon future. Our materiality assessment acts as a strategic enabler, helping us anticipate emerging trends, strengthen risk preparedness, and drive responsible growth.

To maintain continued relevance amid changing business dynamics, the materiality assessment is refreshed every three years, ensuring responsiveness to evolving stakeholder expectations and global sustainability standards, and reinforcing our commitment to continuous improvement and responsible growth.

Our Materiality Methodology

Our approach follows a structured five-step process, ensuring relevance, transparency, and alignment with international best practices.

Identify Material Topics

Mapping of Key Impacts, Risk and Opportunities (IROs)

Stakeholder Consultation

Prioritisation and Materiality Matrix Development

Validation and Integration into Strategy & Reporting

Materiality Matrix

Material topics and Management Approach to Material Topics

The 2025 Materiality Assessment has been approved and signed off by Cairn’s Executive Leadership Team (ELT), reaffirming its alignment with business priorities. The process has also undergone independent third-party assurance to validate its robustness, transparency, and sector relevance.

Read more on our Material Topics in Sustainability Report 2025

Lifecycle Assessment

At Cairn Oil & Gas, we conducted a comprehensive cradle-to-gate Life Cycle Assessment (LCA) in 2025 to evaluate the environmental footprint of our crude oil and natural gas operations. Our approach involved conducting LCAs using the ReCiPe 2016 methodology and SimaPro software, aligned with international standards ISO 14040 and ISO 14044. The study assessed 18 environmental impact categories across exploration, development, production, processing, and midstream operations.

The LCA covered both onshore and offshore facilities and provided insights into carbon-intensive hotspots, resource efficiency opportunities, and potential pathways for low-carbon growth. Guided by our commitment to transparency, innovation, and sustainability, these findings are now integrated into Cairn’s ESG roadmap, enabling data-driven decisions to reduce Scope 1, 2, and 3 emissions and advance responsible resource management.

Boundary & Scope of Lifecycle Assessment

The Life Cycle Assessment followed a cradle-to-gate boundary, encompassing all stages from resource extraction to product dispatch. The study covered Cairn’s key operational phases and product streams to ensure a comprehensive understanding of environmental impacts.

Lifecycle stages of hydrocarbon production

Products Covered

From both Onshore & Offshore Assets

Environmental Impact Categories Assessed

The Life Cycle Assessment evaluated environmental impacts across 18 categories using the ReCiPe 2016 methodology. These categories span multiple environmental dimensions, providing a holistic understanding of operational impacts across Cairn’s crude oil and natural gas value chain.

Key Impact Categories:

• Climate Change: Global warming potential
• Ozone Depletion: Stratospheric ozone layer impacts
• Air Quality: Particulate matter formation and acidification potential
• Ecosystem Effects: Eutrophication and ecotoxicity
• Human Health: Carcinogenic and non-carcinogenic toxicity impacts
• Resource Consumption: Land use, water use, and depletion of mineral and fossil resources

This comprehensive evaluation supports Cairn’s strategic focus on identifying emission hotspots, enhancing resource efficiency, advancing circular economy initiatives, and integrating low-carbon technologies across operations.

Key Findings and Strategic Insights

The Life Cycle Assessment revealed that production and processing stages are the most significant contributors to overall environmental impacts due to energy-intensive activities and process emissions. These stages account for a major share of greenhouse gas emissions, energy use, and resource consumption across Cairn’s operations.

Hydrocarbon processing represents the largest opportunity for emission reduction, contributing approximately 70-85% of total environmental impacts. Focused interventions in this stage such as reducing electricity consumption, improving gas utilisation, deploying more efficient equipment and technologies can deliver the most substantial environmental benefits.

Offshore developments were found to offer considerable environmental advantages compared to onshore equivalents, primarily due to higher operational efficiencies and reduced land-use intensity.

Water management and recycling initiatives also emerged as key enablers of environmental performance improvement through re-injection and circular economy practices. In addition, waste co-processing in cement industries has contributed to reducing landfill disposal and advancing resource recovery. Together, these initiatives have delivered measurable benefits by conserving freshwater resources, minimizing waste generation, and strengthening resource circularity across operations.

Collectively, these insights are guiding Cairn’s strategy toward low-carbon technology adoption, enhanced resource efficiency, and strengthened circular economy practices. They form a critical input to our broader sustainability roadmap, supporting climate action, responsible resource management, and long-term business resilience.

Management System Certificates

IT & Cybersecurity

Cairn has established robust IT (information technology) and security governance policies to ensure data integrity, confidentiality, and availability across all operations. Our governance framework defines clear accountability, risk management mechanisms, and compliance with global information security standards.

Cairn’s IT systems and processes are certified under ISO 27001:2022 – Information Security Management System, reinforcing our commitment to safeguarding information assets, ensuring business continuity, and maintaining stakeholder trust.

As the organisation progresses in its digitalisation journey, embedded Artificial Intelligence (AI) is playing a pivotal role in enhancing decision-making, streamlining operations, and unlocking new opportunities for innovation and sustainability. We manage data privacy and cybersecurity risks through stringent oversight and a robust governance structure. Embedding cybersecurity into the organisation’s governance and operational framework remains a strategic priority, ensuring that technology systems are protected from threats, confidential information is safeguarded, data integrity is maintained, and business continuity is ensured even during disruptive events.