Working Gazprom Group’s Sustainability towards Report 2019 our common future Gazprom Group’s Sustainability Report 2019 Contents Message from the Chairman of the Gazprom 5.7. Supporting Sports Federations 181 Management Committee 5 5.8. Sponsorship of Business Events 182 Our Report 7 6. Our Responsibility to the Planet 183 Procedure for Defining Material Topics 10 6.1. Environmental Sustainability Management Stakeholder Engagement 15 and Environmental Control 185 Gazprom Group’s Contribution to the Achievement of UN SDGs 22 6.2. Combating Climate Change 194 6.3. Environmental Protection 211 1. Our Governance 41 6.4. Initiatives to Increase Employee Engagement 1.1. Sustainability Management 43 in Environmental Conservation 228 1.2. Corporate Governance 51 6.5. Environmental Information Transparency 229 1.3. Values, Standards, and Norms of Behaviour 54 6.6. International Environmental and Climate Cooperation 232 1.4. Quality Management 60 Appendices 233 2. Our Operations 61 Appendix 1. GRI Content Index 234 2.1. Mission and Strategy 63 Appendix 2. To Our Report section 250 2.2. Hydrocarbon Production and Reserves 74 Appendix 3. To Our Governance section 253 2.3. Hydrocarbons Processing 78 Appendix 4. To Our Operations section 257 2.4. Development of the Natural Gas Transportation System 82 Appendix 5. To Our Personnel section 263 eport 2019 R 2.5. Hydrocarbon Sales 85 Appendix 6. To Our Workplace Safety section 266 2.6. Natural Gas Vehicle Fuel Market Development 94 Appendix 7. To Our Responsibility to the Planet section 268 2.7. Heat and Electricity Generation 99 Appendix 8. Glossary of Abbreviations and Code Names 2.8. Contribution to National Industrial Development 101 used in the Report 274 2.9. Innovations and R&D 106 Appendix 9. Assurance of the Russian Union of Industrialists ustainability and Entrepreneurs 277 S 3. Our Personnel 109 Appendix 10. Approval by FBK 278 3.1. HR Management 111 Appendix 11. Opinion Issued Following Public Consultations 280 roup’s roup’s 3.2. Headcount 112 G 3.3. Commitment to Labour Rights 120 Contacts and Feedback 282 3.4. Social Partnership and Collective Agreement 121 3.5. Financial Incentives for Employees 124 Gazprom 3.6. Social Policy 125 3.7. Employee Development 130 3.8. Future Professionals: Training of Schoolchildren and Students 132 3.9. Young Employees of Gazprom 138 3.10. Talent Pool 141 3.11. Participation in the Development of a National System of Qualifications 142 4. Our Workplace Safety 143 4.1. Labour Safety Management 145 4.2. Occupational Safety Performance 151 4.3. Industrial Safety Performance 155 4.4. Fire Safety Control Performance 157 4.5. Process Safety Culture Development 160 4.6. Staff Training in Process Safety 161 4.7. Control of Contractors in Relation to Occupational, Industrial, and Fire Safety 162 4.8. International Cooperation in Process Safety 164 5. Our Social Initiatives 165 5.1. Cooperation with the Regions 167 5.2. Indigenous Minorities of the North and Gazprom: Constructive Collaboration 17 0 5.3. Charity 172 5.4. Support of Culture and Arts 176 5.5. Revival of Spiritual Values 17 9 5.6. Development of Sports Programs 180 3 Our Report eport 2019 R ustainability S roup’s roup’s G Gazprom 4 Our Report Message from Alexey Miller, Chairman of the Gazprom Our Report Management Committee Dear friends! 1 The Gazprom Group is building a large-scale business both in Russia and abroad. Being keenly aware of our responsibility towards millions of people across the world, we are unequivocally committed to achieving our business goals in a well-balanced and efficient way to maximize positive impacts on society and environment. Our projects enhance consumer access to clean energy sources, 2 play a major role in boosting energy security, promote social and economic development in Russian regions, and generate additional revenue for the federal budget. In December 2019, we put into operation the Power of Siberia gas eport 2019 R pipeline, marking the start of Russian pipeline gas supplies to the highly promising Chinese market. Importantly, this gas trunkline will give a powerful impetus to gas infrastructure expansion in Eastern Siberia and 3 ustainability Russia’s Far East. S In January 2020, Europe and Turkey gained access to another roup’s roup’s low-carbon-footprint pipeline, TurkStream, which enables natural gas G supplies across the Black Sea. Pipeline exports to non-FSU European countries reached 199 bcm in 2019. Gazprom A reliable domestic gas supplier, Gazprom is building up 4 infrastructure to provide new consumers with access to gas supplies. In 2019, our domestic gas sales amounted to 235.8 bcm. With 124 new gas pipelines constructed under the Gas Infrastructure Expansion Program, Russia’s gas penetration rate rose from 68.6% to 70.1% by early 2020. The launch of a new independent source of alternative gas supplies for the Kaliningrad Region was a major milestone in the reporting year. 5 As part of the project, Gazprom built an offshore liquefied natural gas (LNG) receiving terminal and the Marshal Vasilevskiy floating storage and regasification unit. To meet consumer energy needs for decades to come, we prioritize efficient development of our resource base. In 2019, a new gas production center in the Yamal Peninsula saw the launch of full-scale development at the Kharasaveyskoye field, which is unique in terms of 6 reserves. 5 ppendices A OOurur Report work towards resource base replenishment continues. In the reporting year, Gazprom’s exploration efforts translated into 556.7 bcm of additional gas reserves, with production standing at 501.2 bcm1. For 15 years running, we have maintained gas reserves growth above production rates. The sustainable use of natural resources is an essential part of our Environmental Policy. Gazprom has been progressively reducing its carbon footprint while also pursuing energy effi ciency and environmental protection initiatives. In 2019, we achieved all of our Corporate Environmental Targets. Compared to 2018, the Gazprom Group’s water consumption fell by 8.4%, waste generation by 6.1%, and greenhouse gas (GHG) emissions by 1.5%. We were also working on the solutions designed to promote the goals of the Paris climate accord (adopted by Russia in September 2019) by leveraging the potential of natural gas and gas infrastructure. Taking into account the global shift to a low-carbon economy, we started putting together sustainable development scenarios for Gazprom through 2050. In addition to this, we are currently developing innovative technologies aimed at producing hydrogen from methane without any CO2 emissions. The key driving force behind Gazprom is its people – professionals eport 2019 at the very top of their game. In 2019, the Group’s headcount increased R to 473,800 people. We rigorously uphold employee rights, guarantee safe and comfortable working conditions, and support the professional ustainability development of our staff. In 2019, our skills upgrading and professional S retraining programs covered a record number of employees at all levels, in no small part thanks to the extensive use of distance learning. roup’s G Traditionally, we pay close attention to local communities in the regions where we operate. For example, Gazprom actively promotes local professional and amateur sports. In 2019, we completed Gazprom the construction of the Avangard Hockey Academy in Omsk and commissioned over 160 sports facilities under the Gazprom for Children program. We are also engaged in close and fruitful dialogue with indigenous minorities of the North. Furthermore, our corporate culture encourages the Gazprom employees to take part in volunteer initiatives. Dear friends, Our stakeholders’ proposals are very important to us, and we are committed to information transparency and openness. We are implementing best practices to ensure balanced and sustainable growth of Gazprom for years to come. We will continue to do so going forward. Alexey Miller, Chairman of the Gazprom Management Committee (1) Including the share in production of organizations in which Gazprom has investments classifi ed as joint operations. Our Report Procedure for Defining Material Topics 10 Stakeholder Engagement 15 Gazprom Group’s Contribution to the Achievement of UN SDGs 22 eport 2019 R ustainability S roup’s roup’s G Gazprom Our Report The Gazprom Group’s Sustainability Report 2019 highlights the Group’s production, social and environmental performance in the reporting period. The Report also contains disclosures on the corporate governance and the Group’s input in achieving the Sustainable Development Goals outlined in the United Nations 2030 Agenda. This is the eighth Sustainability Report published by the Group. eport 2019 R ustainability S roup’s roup’s G Gazprom 8 Our Report Our Report GRI 102-51 The previous Report for the year 2018 was published in September 2019. 1 The 2018 Report won the Best Public Non-Financial Report of an Oil and Gas Company award in a competition held by the Russian Ministry of Energy. Delivering more GRI Standards disclosures, the Report brings out the key sustainability development aspects in more detail. It is for the first time that PJSC Gazprom has made the Report available in an interactive version on its official corporate web site to offer the audience most convenient information access and text navigation. To prepare the Report, the Company set up a Task Force involving the Group updated its Procedure for Preparation, Publishing and Distri- 2 members from various structural units and subsidiaries of bution of the Gazprom Group’s Sustainability Report and Regulation on PJSC Gazprom who coordinate the activities on focal sustainable Permanent Task Force for the Gazprom Group’s Sustainability Report development areas and engage with stakeholder groups. Preparation2. The Report has been prepared in accordance with the At the beginning of 2020, to further improve the non-financial guidelines and timelines set out in the Procedure.