Assurance report of the independent auditor

To: the Board of Directors of Saudi Basic Industries Corporation

Our conclusion

We have reviewed the data and the accompanying disclosures for the following indicators (hereafter ‘the sustainability indicators’) in the Sustainability Report 2022 (hereafter the ‘Sustainability Report’) of Saudi Basic Industries Corporation (hereafter ‘SABIC’) based in Riyadh, Saudi Arabia, for the year ended 31 December 2022.

The total absolute values and the intensity values (per metric ton of product sales) at corporate level of the Environmental Footprint indicators:

• Greenhouse gas emissions (scope 1 and 2) (p. 23, 46)
• Greenhouse gas emissions (scope 3) (p.47)
• Energy consumption (p. 23, 49)
• Water usage (p. 23, 50)
• Material loss (p. 23, 51)

The total percentages at corporate level of the Environmental Footprint indicators:

• Flaring reduction compared to 2010 (p. 23, 45)
• CO₂ utilization (p. 23, 45)

The corporate values of the Ethics and Integrity indicators:

• Compliance concerns raised (p. 21, 23)
• Incidents closed (p. 21, 23)
• Violations found and addressed (p. 21, 23)
• Code of Ethics training completion (p. 22, 23)

The corporate values of the Environmental, Health, Safety and Security indicators:

• EHSS rate (p. 23, 58, 59)
• Total Recordable Incident Rate (p. 23, 58,59)
• Occupational Illness Rate (p. 23, 58,59)
• Fatalities (p. 23, 58)
• API 754 PSE Tier 1 (p. 23, 58)
• Hazardous substances released (p. 23, 58, 60)
• Security incident rate (p. 23, 58)

The data for the indicators included in the scope of our engagement are marked in the Sustainability Report 2022 with an asterisk (*) with the footnote ‘Assured by KPMG’.

A review is aimed at obtaining a limited level of assurance.

Based on the procedures performed nothing has come to our attention that causes us to believe that the sustainability indicators are not prepared, in all material respects, in accordance with the reporting criteria as described in the ‘Reporting criteria’ section of our report.

Basis for our conclusion

We performed our review in accordance with Dutch law, including Dutch Standard 3000A ’Assurance-opdrachten anders dan opdrachten tot controle of beoordeling van historische financiële informatie (attest-opdrachten) (assurance engagements other than audits or reviews of historical financial information (attestation engagements)). Our responsibilities in this regard are further described in the ‘Auditor’s responsibilities’ section of our report.

We are independent of SABIC in accordance with the ‘Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence). Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics). We believe the assurance evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.

Reporting criteria

The sustainability indicators needs to be read and understood together with the reporting criteria. SABIC is solely responsible for selecting and applying these reporting criteria, taking into account applicable law and regulations related to reporting.

The reporting criteria used for the preparation of the sustainability indicators are the applied internally developed reporting criteria as disclosed in the section ‘Reporting Frameworks’ on page 98 of the Sustainability Report.

MATERIALITY

Based on our professional judgement we determined materiality levels for each relevant part of the sustainability indicators. When evaluating our materiality levels, we have taken into account quantitative and qualitative considerations as well as the relevance of information for both stakeholders and SABIC.

Scope of the group review

SABIC is the parent company of a group of entities. The sustainability indicators incorporate the consolidated indicators of this group of entities to the extent as specified in the section ‘Reporting period, scope, and boundaries’ on page 98 in the Sustainability Report.

Our group review procedures consisted of both review procedures at corporate (consolidated) level and at site level. Our selection of sites in scope of our review procedures is primarily based on the site’s individual contribution to the consolidated indicators. Furthermore, our selection of sites considered relevant reporting risks and geographical spread.

By performing our review procedures at site level, together with additional review procedures at corporate level, we have been able to obtain sufficient and appropriate assurance evidence about the group’s sustainability indicators to provide a conclusion about the sustainability indicators.

OUR KEY ASSURANCE MATTER

Key assurance matters are those matters that, in our professional judgement, were of most significance in our review of the Sustainability Report. We have communicated the key assurance matter to General Manager Corporate Sustainability. The key assurance matter is not a comprehensive reflection of all matters discussed.

The Scope 3 indicator is subject to estimations and assumptions

Description

The Scope 3 indicator includes both upstream and downstream emissions of the organization’s activities. These are the result of activities from assets not owned or controlled by the reporting organization but that the organization indirectly impacts in its value chain. Inherent to the nature of information and data on Scope 3 is that these are to a large extent based on the use of estimates and underlying assumptions.

As a result, reported data relating to the indicator is inherently subject to estimations and assumptions and judgements with regard to the relevant activities and the related emissions. We put special attention to the review of these assumptions and judgements due to the related evel of subjectivity.

Our response

We have performed review procedures in order to evaluate the applied estimations and assumptions, aimed to determine the plausibility of information. These procedures include among others:

– Perform interviews with the Scope 3 category owners, for example on: business data- & corporate finance, performance reporting, finance and procurement, in order to understand the judgements and assumptions used and we have gained an understanding of the data gathering process;

– Evaluating the suitability of the reporting criteria (based on the Greenhouse Gas Protocol)

– Assessing the plausibility of the estimations and assumptions made against the Greenhouse Gas Protocol;

– Limited sampling procedures in order to review the accuracy of items in areas that rely on assumptions, for example on: purchased goods, processing sold goods and use of sold products;

– Review of applied emission factors, for example by determining whether these are based on widely known and commonly adopted sources.

We have no matters identified that management’s key assumptions and estimates are inadequate with respect to the reported Scope 3 indicator.

Limitations to the scope of our review

The sustainability indicators include prospective information such as ambitions, strategy, plans, expectations and estimates. Inherently the actual future results are uncertain. We do not provide any assurance on the assumptions and achievability of prospective information in the sustainability indicators.

References to external sources or websites relating to the sustainability indicators are not part of the sustainability indicators itself as reviewed by us. Therefore, we do not provide assurance on this information..

Responsibilities of the Board of Directors and those Charged with Governance

The Board of Directors of SABIC is responsible for the preparation of the sustainability indicators in accordance with the applicable criteria as described in the ‘Reporting criteria’ section of our report, including the identification of stakeholders and the definition of material matters.

Furthermore, the Board of Directors is responsible for such internal control as it determines is necessary to enable the preparation of the sustainability indicators is free from material misstatement, whether due to fraud or error.

Those Charged with Governance is, amongst other things, responsible for overseeing the SABIC reporting process.

Auditor’s responsibilities

Our responsibility is to plan and perform our review in a manner that allows us to obtain sufficient and appropriate assurance evidence for our conclusion.

Procedures performed to obtain a limited level of assurance are aimed to determine the plausibility of information and vary in nature and timing, and are less in extent, compared to a reasonable assurance engagement. The level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed.

We apply the ‘Nadere Voorschriften Kwaliteitssystemen’ (NVKS, Regulations for Quality management systems) and accordingly maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

We have exercised professional judgement and have maintained professional skepticism throughout the review, in accordance with the Dutch Standard 3000A, ethical requirements and independence requirements.

Our review included among others:

• Evaluating the appropriateness of the reporting criteria used, their consistent application and related disclosures in the sustainability indicators;
• Obtaining an understanding of the reporting processes for the sustainability indicators, including obtaining a general understanding of internal control relevant to our review, but not for the purpose of expressing a conclusion on the effectiveness of SABIC’s internal control;
• Identifying areas of the sustainability indicators where a material misstatement, whether due to fraud or error, are most likely to occur, designing and performing assurance procedures responsive to these areas, and obtaining assurance information that is sufficient and appropriate to provide a basis for our conclusion. These procedures included, amongst others

These procedures included, amongst others:

• Interviewing management and relevant staff at corporate level responsible for the strategy, policy and results;
• Interviewing relevant staff responsible for providing the information for, carrying out internal control procedures over, and consolidating the data in the sustainability indicators;
• Determining the nature and extent of the review procedures for the group components and locations. For this, the nature, extent and/ or risk profile of these components are decisive. Based thereon we selected the components and locations to visit. The visits to 7 production sites in the Kingdom of Saudi Arabia, Asia, Europe and United States of America are aimed at, on a local level, validating source data and evaluating the design and implementation of internal controls and validation procedures;
• Obtaining assurance information that the sustainability indicators reconcile with underlying records of SABIC;
• Reviewing, on a limited test basis, relevant internal and external documentation;
• Performing an analytical review of the data and trends;

• Evaluating the consistency of the sustainability indicators with the information in the Sustainability Report which is not included in the scope of our review;
• Evaluating the presentation, structure and content of the sustainability indicators;
• Considering whether the sustainability indicators as a whole, including the disclosures, reflects the purpose of the reporting criteria used.

We have communicated with the Board of Directors of SABIC regarding, among other matters, the planned scope and timing of the review and significant findings that we identify during our review.

Amstelveen, 30 March 2023

KPMG Accountants N.V.

D. A.C.A.J. Landesz Campen RA