Gazprom Group's Sustainability Report 2019

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 Gazprom Group’s Sustainability Report 2019 Management Committee Chairman oftheGazprom Message from AlexeyMiller, reserves. development attheKharasaveyskoye field, whichisuniqueintermsof production centerintheYamal Peninsula sawthelaunchoffull-scale efficient developmentofourresourcebase. In2019, anewgas and regasificationunit. (LNG) receivingterminalandtheMarshal Vasilevskiyfloatingstorage liquefiednatural ofthe project,Gazprombuiltanoffshore gas As part for theKaliningrad year. Regionwasa majormilestoneinthereporting early 2020. Program, Russia’s gaspenetration rate rosefrom68.6%to70.1%by new gaspipelinesconstructedundertheGasInfrastructure Expansion In 2019, ourdomesticgassalesamountedto235.8 bcm. With124 infrastructure toprovidenewconsumerswithaccessgassupplies. countries reached199 bcm in2019. tonon-FSU European supplies acrosstheBlackSea.Pipelineexports pipeline,TurkStream, whichenablesnaturallow-carbon-footprint gas Russia’s Far East. impetustogasinfrastructure expansionpowerful inEasternSiberiaand thisgastrunklinewillgivea promising Chinesemarket.Importantly, ofRussianpipelinegassuppliestothehighly pipeline, markingthestart revenue forthefederal budget. economic developmentinRussianregions,andgenerate additional promotesocialand play amajorroleinboostingenergysecurity, andenvironment. positive impacts onsociety our businessgoalsinawell-balancedandefficientwaytomaximize toachieving people acrosstheworld,weareunequivocallycommitted towardsmillionsof and abroad.Beingkeenlyawareofourresponsibility The GazpromGroupisbuildingalarge-scalebusinessbothinRussia Dear friends! O ur Report To meetconsumerenergyneedsfordecadestocome,weprioritize The launchofanewindependent sourceofalternative gassupplies A reliabledomesticgassupplier, Gazpromisbuildingup 2020,EuropeandTurkey gainedaccesstoanother In January In December2019, weput intooperation thePower ofSiberiagas Our projectsenhanceconsumeraccesstocleanenergysources, 5

1 5 3 4 2 6 Appendices Our Report O of additional gas reserves, withproductionstandingat501.2of additionalgasreserves, bcm year,reporting Gazprom’s translated into556.7bcm exploration efforts Our worktowardsresourcebasereplenishmentcontinues.Inthe without anyCO innovative technologiesaimedatproducinghydrogenfrommethane Gazprom through 2050.Inadditiontothis,wearecurrentlydeveloping togethersustainabledevelopmentscenariosfor putting started economy,we Taking toalow-carbon intoaccounttheglobalshift 2019) byleveraging thepotentialofnatural gasandinfrastructure. goals oftheParis climate accord(adoptedbyRussiainSeptember and greenhousegas(GHG)emissionsby1.5%. Group’s waterconsumptionfellby8.4%,wastegeneration by6.1%, Corporate EnvironmentalTargets. Compared to2018, theGazprom environmental protectioninitiatives.In2019, weachievedallofour its carbonfootprintwhilealsopursuingenergyeffi ciencyand our EnvironmentalPolicy. Gazpromhasbeenprogressivelyreducing production rates. For 15 above growth yearsrunning,wehavemaintainedgasreserves forward. ofGazpromforyearstocome.Wewillcontinuedoso going growth implementing bestpractices toensurebalancedandsustainable toinformationtransparencyare committed andopenness. We are encourages involunteerinitiatives. theGazpromemployeestotakepart Furthermore, ourcorporate culture indigenous minoritiesoftheNorth. program. dialoguewith Wearealsoengagedincloseandfruitful commissioned over160 facilitiesundertheGazpromforChildren sports the constructionofAvangardHockeyAcademyinOmskand In2019,local professionalandamateursports. wecompleted regions whereweoperate. For example,Gazpromactivelypromotes thankstotheextensiveuseofdistancelearning. levels, innosmallpart retraining programs coveredarecordnumberofemployeesatall In2019,development ofourstaff. ourskillsupgrading andprofessional theprofessional workingconditions,andsupport safe andcomfortable to 473,800 guarantee people.Werigorouslyupholdemployeerights, topoftheirgame.In2019,at thevery theGroup’s headcountincreased (1) Includingtheshare inproductionoforganizationswhichGazprom hasinvestmentsclassifi edas jointoperations. Chairman ofthe GazpromManagementCommittee Alexey Miller, ur Report

We werealsoworkingonthesolutionsdesignedtopromote The sustainableuseofnatural of resourcesisanessential part Our stakeholders’ proposals are very important tous,andwe important Our stakeholders’proposalsarevery Dear friends, Traditionally, tolocalcommunitiesinthe wepay closeattention The keydrivingforcebehindGazpromisitspeople–professionals 2 emissions. 1 .

Gazprom Group’s Sustainability Report 2019 Gazprom Group’s Sustainability Report 2019 Our Report Our to Achievement the of UNSDGs Group’sGazprom Contribution Stakeholder Engagement Procedure Defining Material for Topics

22 22 10 15 15 Sustainability published Report by Group. the 2030 Agenda. eighth United Nations the the in is This Development outlined Goals Sustainable achievingin the corporate the on governance Group’s the and input disclosures contains also period. Report The reporting the in Group’sthe production, performance social environmental and Group’s Gazprom The 2019 Report Sustainability highlights Our Report 8

Gazprom Group’s Sustainability Report 2019 Gazprom Group’s Sustainability Report 2019 (2) GRI 102-50, GRI102-52, GRI102-54, GRI102-56 ofPJSCManagement Committee Gazprom. isapprovedbytheChairmanof of dedicatedunits.The Report isconfirmedbytheheads The informationincludedintheReport GRI 102-32 framework andtotakeaccountofpersonnelchanges, reporting development areasandengagewithstakeholdergroups. PJSC Gazprom whocoordinatetheactivitiesonfocalsustainable members fromvariousstructural unitsandsubsidiariesof To theCompany prepare setupaTask theReport, Force involving fortheyear2018The previousReport waspublishedinSeptember2019. GRI 102-51 data provided throughout the Report maynotadduppreciselyto data providedthroughout theReport on theGazpromGroup’s progressinarespectivearea.Disaggregated (2016–2019) sothatthedatacanbecompared andconclusionsmade ofkeyindicatorsforafour-yearperiod showsthemajority The Report Public consultations Public endorsement Independent professionalauditor’s approval standards Reporting cycle Reporting period Reporting name Report O web site to offer theaudiencemostconvenientinformationaccessandtextnavigation. web sitetooffer more detail.ItisforthefirsttimethatPJSC availableinaninteractivecorporate versiononitsofficial GazpromhasmadetheReport developmentaspectsin bringsoutthekeysustainability ofEnergy.DeliveringmoreGRIStandardsdisclosures,theReport Ministry The 2018 ofanOilandGasCompany wontheBestPublicawardinacompetitionheldbyRussian Non-FinancialReport Report ur Report Approved byOrderofPJSC Gazprom No. 20datedJanuary 20, 2020 At the beginning of 2020, to further improvethenon-financial At thebeginningof2020,tofurther guidelines andtimelinessetoutintheProcedure. Preparation Permanent Task ForceReport Group’sSustainability fortheGazprom andRegulationon Report Group’sSustainability bution oftheGazprom the GroupupdateditsProcedureforPreparation, PublishingandDistri- performance may differ fromforecasts duetoobjectivefactors. maydiffer performance information.The Group’s containforward-looking the Report actual and managementaccountsduetorounding.The Planssectionsof the relevanttotalspresentedinconsolidatedfinancialstatements Stakeholder representatives of IndustrialistsandEntrepreneurs(RUIE) Council onNon-FinancialStatementsoftheRussianUnion Financial andAccountingConsultantsLLC (FBK) Core option hasbeenpreparedThis inaccordancewiththeGRIStandards: Report Annual 1toDecember31,From January 2019 (calendaryear) 2019Gazprom Group’s Report Sustainability 2 . The Report hasbeenprepared. Theinaccordancewiththe Report 9 1 5 3 4 2 6 Appendices Our Report Our Report

GRI 102-45, GRI 102-46 The Report includes the information about the Gazprom Group (specified in Appendix 2). The Report is publicly available in the Russian companies in line with the scope of consolidated statements under and English languages on the Company’s website (www.gazprom. IFRS 10 Consolidated Financial Statements, unless specified otherwise. ru, www.gazprom.com) and is also available in an interactive version Due to the existing differences in data gathering and consolidation, (https://sustainability.gazpromreport.ru/en/2019/). The printed version certain groups of disclosures may have their individual boundaries is distributed to the key stakeholders by direct mail.

Procedure for Defining Material Topics

GRI 102-46 The Report content is defined considering stakeholders’ opinions, For the Report 2019 preparation, the material topics were identified on sustainability context, as well as completeness and accuracy of the data the basis of two criteria: the importance of a topic for stakeholders and presented and their comparability against previous years. the significance of the Gazprom Group’s impact on a topic. The material The Gazprom Group’s Report complies with the GRI Standards topics were defined using a three-stage process. principles in terms of its quality and content.

Reporting principles are described in Appendix 2. eport 2019 R

Stage 1. Compiling a list of potential material topics to be included in the Report ustainability S Non-financial statements of leading Russian and international public A list of potential material topics corresponding to the Gazprom Group’s companies, media publications, the Social Charter of the Russian significant impacts on the economy and management, environmental

Business, GOST R ISO 26000:2012, and the Principles of the United protection, and interaction with society (personnel, population, and local roup’s G Nations Global Compact were analysed. communities in the Gazprom Group’s areas of operation) was compiled.

Recommendations of the Council on Non-Financial Statements of the RUIE along with comments and proposals of FBK regarding the Gazprom Report for 2018 were taken into account.

Stage 1 outcome

GRI 102-49 After being reviewed and updated, the list of potential material topics Report 2019 were identified: “Implementation of major gas transportation included 29 items. The following new topics to be disclosed in the projects”, “Quality management”, and “Respect of human rights”.

10 Gazprom Group’s Sustainability Report 2019 Stage 3. Developing a materiality matrix. Defining materialtopics help ofstakeholdergroupsandTask Force members. Stage 2outcome.Rankedlistsofmaterialtopicscompiledwiththe members Task Force and representatives groups’ stakeholder Surveying 2. Stage (4) http://opros.onutc.ru/run/survey/dfaae9a7 (3) topics mandatory fordisclosure. topics mandatory quadrant upper right-hand ofthematrixwereidentifiedas priority matrix.The topicsinthe Stage 3outcome.Developingamateriality O (representatives ofnine covered2,367processing. The onlinesurvey respondents topics is shown along the vertical axis. topics isshownalongthevertical The significanceoftheGazpromGroup’s impact withinthematerial An onlinesurvey rank scale. eachtopicusingathree-point importance ur Report Representativesofthe“Foreign regulatorsofenergymarkets”stakeholdergroupdidnotparticipate inthesurvey. 3 ofstakeholdergroupswasrunwithautomaticresult 4 stakeholdergroups),whowereproposedto matrix. resultsformedthebasisfordevelopingamateriality The survey members. involved24 judgements.The activity using expert Task Force potential materialtopicswasassessedbyTask Force members The significanceoftheGazpromGroup’s actualimpact within horizontal axis. forstakeholdergroupsisshownalongthe The topicimportance 11 1 5 3 4 2 6 Appendices Our Report Our Report

GRI 102-46 Materiality matrix Correlation between material topics and UN SDGs

SDG 1

SDG 2

SDG 3

SDG 4

SDG 5

eport 2019 R

SDG 6

SDG 7 ustainability

SDG 8 roup’s Gazprom Group’s impact Gazprom Group’s G

SDG 9

Gazprom

SDG 10

SDG 11

SDG 12

SDG 13

Importance for stakeholders SDG 14 Economy and Management Environment HR Management Health and Safety Social Policy and Community Investment

SDG 15

SDG 16

SDG 17

12 Gazprom Group’s Sustainability Report 2019 9 —Governmentandlocalauthorities 8 —Consumers 7 —Local communities 6 —NGOsandeducationalinstitutions 5 —Personnel 4 —Businesspartners 3 —Media 2 —Investors 1 —Shareholders Stakeholder groupslegend: 29. 28. 27. 26. 25. 24. 23. 22. 21. 20. 19. 18. 17. 16. 15. 14. 13. 12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. No. Importance oftopicsforstakeholdergroupsImportance GRI 102-44 O ur Report Ensuring saferworkofsuppliersandcontractors atGazpromGroup Occupational health,industrial,andfiresafety Gas infrastructure expansion intheRussianFederation Natural gasvehiclefuelmarketdevelopment Gazprom Group’s socialprojects Indigenous peoplesinGazpromGroup’s areasofoperations Interaction withlocalcommunities inGazpromGroup’s areasofoperations Respect ofhumanrights forallemployeesofGazpromGroup Equal opportunities Social benefitsandnon-financialmotivationoftheemployeesatGazpromGroup Training andeducationforemployeesprospective Freedom ofassociationandcollectivebargaining Gazprom Group’s presenceinthelabourmarketandemployment impact Disturbed landremediationbyGazpromGroup Energy savingandenergyefficiencyatGazpromGroup biodiversity topreserve Gazprom Group’s efforts intheGroup’s tomaintainacceptablewaterquality Gazprom Group’s areasofoperations efforts Waste handlingatGazpromGroup Emissions managementatGazpromGroup Anti-corruption practices atGazpromGroup Compliance withanti-trustandmonopolylaws Compliance withsocial,economicandenvironmentalrequirementsofthelaw Gazprom Group'sparticipation inpoliticalactivitiesandinternationalinitiatives management Quality inreplenishmentofhydrocarbonreserves Gazprom Group'sefforts projects Implementation ofmajorgastransportation Innovations andR&DattheGazpromGroup Gazprom Group’s economicperformance Gazprom Group'sprocurementsystemandlocalization Topic

13 interest inthetopic(prioritised Stakeholder groups withmost by extentofinterest) 9, 8,5 9, 6,5 8, 9,7 9, 6,7 5, 6,1 6, 5,1 5, 6,1 9, 6,5 6, 9,3 6, 3,9 2, 5,1 8, 9,7 9, 4,7 9, 8,7 3, 5,1 3, 5,1 2, 6,5 9, 4,5 5, 1, 9 5, 1, 6 5, 1, 8 2, 1, 5 9, 7, 6 7, 9,6 7, 6,9 7, 9,6 7, 6,9 6, 7, 9 7, 9,6 1 5 3 4 2 6 Appendices Our Report Our Report

GRI 102-47 Disclosure of material topics in the Gazprom Group’s Sustainability Report 2019 Topics Sections Economy and Management (1) Gazprom Group’s procurement system and procurement Our Operations, page 101 localization (GRI 204) (2) Gazprom Group’s economic performance (GRI 201) Our Operations, page 69

(3) Innovations and R&D at Gazprom Group Our Operations, page 106

(26) Natural gas vehicle fuel market development Our Operations, page 94

(4) Implementation of major gas transportation projects Our Operations, pages 67, 83, 89

(27) Gas infrastructure expansion in the Russian Federation Our Operations, page 88

(5) Gazprom Group’s efforts in replenishment of hydrocarbon Our Operations, page 74 eport 2019 reserves (GRI OG1) R (6) Quality management (GRI 416) Our Governance, page 60

(8) Compliance with social, economic and environmental Our Workplace Safety, page 147 requirements of the law (GRI 307; 419) Our Responsibility to the Planet, page 190 ustainability S (9) Compliance with anti-trust and monopoly laws (GRI 206) Appendix 1, page 244 roup’s roup’s (10) Anti-corruption practices at Gazprom Group (GRI 205) Our Governance, pages 54, 58 G

Environment Gazprom (11) Emissions management at Gazprom Group (GRI 305) Our Responsibility to the Planet, page 194

(12) Waste handling at Gazprom Group (GRI 306; OG7) Our Responsibility to the Planet, page 223

(13) Gazprom Group’s efforts to maintain acceptable water Our Responsibility to the Planet, page 211 quality in the Group’s areas of operations (GRI 303; OG5) (14) Gazprom Group’s efforts to preserve biodiversity Our Responsibility to the Planet, page 218 (GRI 304) (15) Energy saving and energy efficiency at Gazprom Group Our Responsibility to the Planet, page 198 (GRI 302) (16) Disturbed land remediation by Gazprom Group (GRI 304) Our Responsibility to the Planet, page 216

HR Management (17) Gazprom Group’s presence in the labour market and Our Personnel, page 125 employment impact (GRI 401; 402; 203) Our Social Initiatives, page 165 Appendix 1, pages 246, 247 Appendix 5, page 264 (18) Freedom of association and collective bargaining Our Personnel, page 121 (GRI 407) (21) Equal opportunities for all employees of Gazprom Group Our Personnel, pages 113, 120 (GRI 405; 406)

14 Gazprom Group’s Sustainability Report 2019 Inclusivity impact andresponsivenessassetoutintheinternationallyrecognized materiality, groups. The mainengagementprinciplesareinclusivity, The GazpromGroupmaintainsengagementofvariousstakeholder Stakeholder Engagement and EffluentsGRI403(2018) Occupational HealthandSafety. materialtopics–GRI303(2018)GRI Standardsfordisclosingtwo Water updated arebasedontwo Disclosures ofmaterialtopicsintheReport Health andSafety Investment Social PolicyandCommunity Disclosure ofmaterialtopicsintheGazprom 2019 Group’s Report Sustainability GRI 102-42 Impact O Group todevelopanexpedientandcommensurate responsemethod. inordertoenablethe significance andimpact matter ofa particular Taking intoaccountGazprom’s stakeholders’pointsofviewastothe environment, society, stakeholdersandtheGroupitself. environment, society, principles, activitiesandresultsofoperations ontheeconomy, Monitoring, measuringandassessingtheimpact ofGazprom’s ur Report (GRI 403;414) (29) Ensuringsaferworkofsuppliersandcontractors at GazpromGroup (28) Occupational health,industrial,andfiresafety (25) GazpromGroup’s socialprojects(GRI203) operations (GRI411, OG9;10) (24) IndigenouspeoplesinGazpromGroup’s areasof areas ofoperations (GRI413) (23) Interaction withlocalcommunitiesinGazpromGroup’s (GRI412;(22) Respectofhumanrights 410) employees atGazpromGroup(GRI401) (20) Socialbenefitsandnon-financialmotivationofthe employees (GRI404) (19) Training andeducationforemployeesprospective Topics Materiality Responsiveness Our Workplace Safety, page 162Our WorkplaceSafety, Our Operations, page 102 page 145Our WorkplaceSafety, Our SocialInitiatives,page 167 Appendix 1, pages 248, 249 Our SocialInitiatives,page 170 Our SocialInitiatives,page 167 Our Governance,page 44 Our Personnel, page 125 Our Personnel, page 130 Sections Stakeholder EngagementStandard(AA1000SES, 2015) AA1000 Principles Accountability (AA1000AP, 2018) andAA1000 stakeholders. underlying factorsthatmakeanimpact onGazpromandits and andranking relevantand significantmatters Identifying of theGazpromGroup(includingcommunications). making decisions,takingactionsandplanningday-to-dayoperations Taking intoaccountmaterialtopicsandcorrespondingimpacts in 15 . 1 5 3 4 2 6 Appendices Our Report Our Report

GRI 102-40 The Gazprom Group identifies ten stakeholder groups:

shareholders; investors;

business partners; personnel;

government and local authorities; local communities;

foreign regulators of energy markets; NGOs and educational institutions;

media; consumers.

The main channels to inform stakeholders are press releases and It was for the first time that the Company held public consultations on

responses to media requests, press trips, press conferences and the draft Report with a view to ensuring that the disclosed information eport 2019 media scrums, publications on the official web site, and social better meets stakeholder inquiries and requests. 13 stakeholder R media. PJSC Gazprom has official accounts on popular global social representatives took part in online consultations; 94 comments were networking sites: Instagram, Facebook, Twitter, and Sina Weibo. received, including 51 requests to provide additional data in the Report Available in four language segments of the internet (Russian, English, and 25 clarifying questions to the information contained in the Report. In German and Chinese), the Company’s accounts are used to inform the course of the public consultations, the stakeholder representatives ustainability

the audience and receive feedback through comments, as well as and received explanations on 49 comments, and 10 comments found a S to maintain a dialogue with stakeholders using public responses to direct reflection in this Report. 35 comments received will be handled by comments and personal correspondence. the Task Force for the Report preparation at its meeting in the following roup’s roup’s

reporting period. G Gazprom

16 Gazprom Group’s Sustainability Report 2019 impact stakeholders’decisionsandactions(2)thedegreeto that shows:(1)thedegreetowhichCompany’s operations Task Force membersformedthebasisforstakeholdermapping conductedamongthe stakeholder groups.The resultsofthesurvey for thefirsttimeanalysedmutualimpact oftheCompany andits 2019, Report When preparing theSustainability theGazpromGroup GRI 102-42 O Degree of stakeholders’ impact on Gazprom Group’s operations The forstakeholdergroups datachart mapping ur Report Degree ofGazpromGroup’s operations’ impact onstakeholders 10 —Media 9 —Consumers 8 —Personnel 7 —Governmentandlocalauthorities 6 —NGOsandeducationalinstitutions 5 —Local communities 4 —Investors 3 —Foreign regulatorsofenergymarkets 2 —Businesspartners 1 —Shareholders people. covered24on theirownexperienceandcompetencies.The survey three-point scalefrom1.0 (lowdegree)to3.0(highbased operations. The Task Force members ranked bothindicatorsona which stakeholders’decisionsandactionsimpact theCompany’s 17 1 5 3 4 2 6 Appendices Our Report Our Report

GRI 102-43 The system of stakeholder engagement at the Gazprom Group Stake- Corporate Units / Engagement Examples of Engagement in 2019 holder Bodies Responsible Mechanisms groups for Engagement Sharehold- — Coordinating — Implementation of the — Annual General Shareholders Meeting ers Committee for Share- Shareholder and Investor — Correspondence with shareholders on emerging issues holder and Investor Relations Action Plan5 — Telephone calls Relations of — In-person events and tele- — Quarterly and annual teleconferences, press conferences and road shows PJSC Gazprom conferences — Meetings of PJSC Gazprom’s independent directors, PJSC Gazprom — PJSC Gazprom — Information disclosure leadership and authorized representatives of the Company with share- unit performing the Responses to inquiries as holders at the Company offices in Moscow, St. Petersburg and abroad Corporate Secretary part of annual General share- — Information disclosure in the form of the Issuer’s Quarterly Reports, functions holders meetings Annual Report, Environmental Report and Gazprom Group’s Sustain- — Relevant units of — Correspondence with ability Report, and financial statements under the IFRS and RAS PJSC Gazprom shareholders on emerging — Publishing databooks “Gazprom in Figures”, “Analyst Data Book” issues (Gazprom Neft), “Gazprom Neft Statistic Data”, and “Gazprom Energo-

— Online (audio and video holding Group of Companies in Questions and Answers” eport 2019 conferences) and offline Placing the Group’s key projects overviews and corporate periodicals, R communications including Gazprom magazine, in the public domain Investors — Coordinating — Implementation of the — Gazprom’s Investor Day (Hong Kong and Singapore, 2019) Committee for Share- Shareholder and Investor — Meetings of PJSC Gazprom leadership and authorized representa-

holder and Investor Relations Action Plan tives of the Company with investors at the Company offices in Moscow, ustainability S Relations — In-person events and tele- St. Petersburg and abroad of PJSC Gazprom conferences — Independent directors’ meetings with investors, in particular on the 6 — PJSC Gazprom — Information disclosure ESG matters roup’s unit performing the — Responses to inquiries — Quarterly and annual teleconferences, press conferences, road shows G Corporate Secretary — Participation in investor — Information disclosure in the form of the Issuer’s Quarterly Reports, functions meetings Annual Report, Environmental Report, Gazprom Group’s Sustainability

— Relevant units — Road shows Report, financial statements under the IFRS and RAS, and PJSC Gaz- Gazprom of PJSC Gazprom — Online (audio and video prom’s Management Report conferences) and offline com- — Publishing databooks “Gazprom in Figures”, “Analyst Data Book” munications (Gazprom Neft), “Gazprom Neft Statistic Data”, and “Gazprom Energo- holding Group of Companies in Questions and Answers” — Off-site meetings of the leadership with investors at the key production facilities of the Group — Placing the Group’s key projects overviews and corporate periodicals, including Gazprom magazine, in the public domain

Business — Relevant units — Contractual relations — Participation in economic and energy forums and conferences (ADI- partners of PJSC Gazprom — Cooperation agreements PEC, Flame, European Gas Conference, International Conference & — Relevant units — Joint Coordination Com- Exhibition on Liquefied Natural Gas LNG 2019, GASTECH Exhibition of subsidiaries mittees and Joint Task Forces & Conference, World Petroleum Congress, World Energy Congress, between PJSC Gazprom and St. Petersburg International Economic Forum, St. Petersburg Interna- Russian and foreign partners tional Gas Forum, Eastern Economic Forum, Russian Energy Week, — Conferences and forums “Russia – EU Energy Cooperation Outlook. Gas Aspect”, etc.) — Industry unions and asso- — Meetings of Joint Coordination Committees and Joint Task Forces ciations held by PJSC Gazprom and business partners and focused on key areas — Pre-qualification of proof collaboration spective suppliers and con- — Collaboration and business meetings with Russian and international tractors oil and gas companies — 668 companies, including 461 SMEs, were included in the Gazprom Group’s Register of Potential Bidders as of February 1, 2020 after the pre-qualification procedure

(5) Approved by order of PJSC Gazprom No. 124 dated March 25, 2019 (6) ESG (Environmental, Social, Governance) refers to environmental protection, social policy, and corporate governance. 18 Gazprom Group’s Sustainability Report 2019 Personnel ties communi- Local thorities local au- ment and Govern- groups holder Stake The systemofstakeholderengagementattheGazprom Group O (7) ur Report Approved bytheconferenceofemployeesOJSC Gazpromanditssubsidiaries on 23 November2012; extendedin2018 forthe2019–2021 period. - agement charge ofHRman- in — Department of subsidiaries — PRdepartments sidiaries ofsub- departments — Environmental Commission — RegionalPolicy of PJSC Gazprom — Relevantunits Commission — RegionalPolicy Russian Federation ment relationsinthe charge ofgovern- in — Department for Engagement Bodies Responsible Corporate Units/ Наше управление development training andprofessional — Organizingassessment, — Satisfactionsurveys es toemployees — Top managementaddress- — Feedback nications — Systemofinternalcommu- public lawinstitutions non-profit organizationsand — Signingcontracts toassist operation opinionsurveys — Group-wideandareas-of- awareness events — Seriesofenvironmental projects andsponsorship — Charity — Informationdisclosure — Informationcenters — Openpublichearings — Mechanisms Engagement and partnership memorandaand partnership ness contracts, agreements — —

senior governmentofficials Gazprom Group’s activitiesto Federation the regionsofRussian Cooperation underbusi Presentations onthe Signing agreementswith

- General Collective AgreementofPJSC anditssubsidiaries Gazprom — Conferencestosummarizetheresultsofimplementation Examples ofEngagementin2019Examples on promotingtheuseofnatural gas asmotorfuel — Cooperation withregionalgovernmentsofRussiaunderagreements and meetingsongasinfrastructure expansion issues regions oftheRussianFederation, includingtheholdingofconferences — ImplementationoftheGasInfrastructure ExpansionProgram inthe comments andamendmentsthereto laws,preparation reviewofdraft — Participation ofproposals, inexpert — Participation inthedevelopmentofroadmaps raise theirawarenessofPJSC Gazpromoperations — Eventsinvolvingrepresentativesoffederal executiveauthoritiesto public organizations task forcesheldbythefederal and regionalexecutiveauthoritiesand — Participation hearings,forums,roundtablesand inparliamentary Region, St.Petersburg andLeningrad Region) Arkhangelsk Region,VologdaOrenburgSakhalin mous Area–Yugra, Yamal-Nenets stituent entitiesoftheRussianFederation Autono- (theKhanty-Mansi — Signingagreementsandmemoranda oncooperation withthecon - — Implementationofsocialinvestmentprograms byfloods) restoring theareasaffected a donationtoIrkutskRegionalBranch oftheRussianRedCrossfor (e.g.signingacontract— Sponsorshipactivitiesandcharity to make etc.) tional habitat,nationalcrafts, tradi oflifestyle, - (organizationofnationalfestivals;preservation North — Cooperation withrepresentatives ofindigenousminoritiesthe for childrenwhoneedsocialsupport) Friendship programs, annualNewYear actionrunbyPJSC Gazprom projects; implementationoftheGazpromforChildrenandFootball for education,healthcare,urbaninfrastructure development teur sports, historicandcultural heritage,professionalandama- ects topreserve proj- ofcultureandarts, andvolunteering(annualsupport — Charity — Holdingpublichearingsonenvironmentalimpact assessment development programs — Training newlyhiredemployeesundertheonboardingprofessional and itssubsidiaries) andathleticcontestsofPJSC— Group’s events(sports sport Gazprom management toresolvethetopicalissues andthe — Regularmeetingsoftherepresentativesworkforce — WorkshopmeetingsforpersonnelofHRdepartments A utonomous 19 A rea, Komi Republic, 7

1 5 3 4 2 6 Appendices Our Report Our Report

The system of stakeholder engagement at the Gazprom Group Stake- Corporate Units / Engagement Examples of Engagement in 2019 holder Bodies Responsible Mechanisms groups for Engagement Foreign — Department in — International energy — Membership in international industry associations regulators charge of foreign conferences and activity of — Participation in negotiations on supplies, uninterrupted and safe trans- of energy economic activity international organizations portation of natural gas, construction of new cross-border facilities of energy markets — Relevant units — Participation in the devel- infrastructure and their regulation, development of natural gas use as motor of subsidiaries opment of roadmaps fuel, reinforcement of the role of natural gas as a source of energy that could — Preparation of the energy enable transition to low-carbon economy sector’s regulatory docu- — Participation in a number of public consultations on key issues of the ments European energy market development such as implementation of the EU — Disclosure of information climate policy aimed at decarbonisation (Bridge Beyond 2025); participation and consultations in the Workshop on Supply Potentials and Market Related Assumptions held by the European Network of Transmission System Operators for Gas — Engagement with energy regulators of the markets covered, as well as with relevant gas transmission system operators on issues of European and national energy legislation, including pricing of transportation services and eport 2019

other operational aspects related to gas transportation R — Participation in economic and energy forums and gas and energy conferences (ADIPEC, Flame, European Gas Conference, International Confer- ence & Exhibition on Liquefied Natural Gas LNG 2019, GASTECH Exhibition & Conference, World Petroleum Congress, World Energy Congress, St. Petersburg International Economic Forum, St. Petersburg International ustainability S Gas Forum, Eastern Economic Forum, Russian Energy Week, “Russia – EU Energy Cooperation Outlook. Gas Aspect”, etc.)

— Submission of regular reporting materials which cover the terms of signed roup’s gas supply contracts and addenda thereto and provide updates on actual G gas supplies to the Agency for the Cooperation of Energy Regulators (ACER) and Energie-Control Austria (E-Control)

NGOs and — Relevant units — Joint programs and re- — Participation in the Carbon Disclosure Project (CDP), the initiative Gazprom educa- of PJSC Gazprom search activities of the international investor community on disclosure of information on tional in- — Environmental — Open public hearings greenhouse gas emissions and climate change risks stitutions departments of sub- — Information disclosure — Participation in industry events for young people (young scientists, sidiaries — Membership in public and specialists and students of Russian and international universities) — PR departments expert associations — Setting up special classes at secondary schools, opening special- of subsidiaries — Conferences, on-the-job ized departments at Russian universities Social services and training and internship pro- — Organization of work experience practice for students of secondary units of subsidiaries grams vocational education institutions and higher education institutions at — Development of training subsidiaries materials and learning aids — Organization of secondments of teachers from higher education — Secondary vocational and institutions at subsidiaries higher education institutions — Public assurance of the Gazprom Group’s Sustainability Report 2019 — Сooperation with desig- by the Council on Non-Financial Statements of the RUIE nated universities

20 Gazprom Group’s Sustainability Report 2019 ers ers Consum- Media groups holder Stake The systemofstakeholderengagementattheGazprom Group O ur Report - subsidiaries — Relevant unitsof cessing marketing andpro- liquid hydrocarbons charge ofgasand in — Department of subsidiaries — PRdepartments policy and communication charge ofinformation in — Department for Engagement Bodies Responsible Corporate Units/ — Informationdisclosure — Satisfactionsurveys system — Claimsmanagement — Conferences,forums — Meetings — Contractual relations projects PJSC Gazprom’s ownspecial — Implementationof community representatives ofblogger — Holdingofeventsfor projects withthemedia — Implementationofjoint communication web sitesandothermeansof — Developmentofofficial — Responsestoinquiries conferences — In-personeventsandtele- — Informationdisclosure Mechanisms Engagement

condensate, oil,andpetroleumproducts andprocessingofgas,gas onproduction,transportation and services ofproducts — Customersatisfactionmonitoringasrelatedtoquality Group’s companies tocustomersviaofficialwebsitesofthe — Informationalsupport Saving; CleanCity) without Problems; EcoGas:CostSavingforYou; Pure EcoCity; and vehiclesconversiontonatural gas(FirstTime, FirstGas;Year — Marketingincentivestoencourage consumers’equipment intotheproductionprocess meetingsandtrips forinsights — Offsite opinion leaders — 7specialprojectswiththeparticipationofmedia,bloggers,and objects ofcharity — 5tourswiththeparticipation of26bloggerstoPJSC Gazprom’s — 7onlineandofflinemediaevents questions — About1,000 explanations,commentsandanswerstojournalists’ infrastructure facilities portation — 17 presstourstoPJSC Gazprom’s productionsitesand gastrans- — 10 withthetopmanagementofPJSC interviews Gazprom — 25pressconferencesandbriefings — 321 officialpressreleases Examples ofEngagementin2019Examples 21 1 5 3 4 2 6 Appendices Our Report Our Report

Gazprom Group’s Contribution to the Achievement of UN SDGs

GRI 102-12, GRI 102-15 Supporting the 2030 Agenda for Sustainable Development enacted by the Resolution of the UN General Assembly in 2015, the Gazprom Group makes a significant contribution to the achievement of each of the 17 UN Sustainable Development Goals (SDGs) set forth in it.

In 2019, PJSC Gazprom conducted an online survey among stakehold- the respondents who are to a greater or lesser extent familiar with the ers to determine their assessment of the Company’s contribution to sustainable development goals, rated Gazprom’s contribution as being the achievement of the UN SDGs. As a result, the absolute majority of “extremely significant” or “significant” (30.5% and 59.1%, respectively).

Gazprom Group’s Contribution to the Implementation of the UN Sustainable Development Goals and Targets eport 2019 R ustainability S

Significant Insignificant roup’s 59.1 % 7.7 % G

Extremely significant 30.5 % No opinion expressed 2.7 % Gazprom

22 Gazprom Group’s Sustainability Report 2019 the vulnerable. achieve substantialcoverage ofthepoorand protection systemsandmeasures,by2030 Implement nationallyappropriatesocial (8) All thefigures provided relate to2019. Ifcomparisonsare made,thedataare compared withtheprevious period reporting Gazprom Group’s ContributiontotheachievementofUNsustainabledevelopmentgoalsandtargets. in poverty accordingtonationaldefinitions. in poverty of men,womenandchildrenallagesliving By 2030,reduceatleastbyhalftheproportion UN SDGTargets O ur Report processing, andundergroundstorage, GazpromMezhregiongaz LLC, LLC, GazpromEnergoholdingLLC, GazpromExport andotherorganizations withatotalheadcountexceeding310,000. In 2019, PJSC Gazprom’s budgetingsystemincluded110 organizations,includingPJSC GazpromAdministration, branches, andrepresentativeoffices,keysubsidiariesforgasproduction, transportation, Target 1.3 Target 1.2 inallitsformseverywhere End poverty SDG 1 salary andasocialpackage salary Making sureemployeeshaveacompetitive — Paying oftaxes afairproportion — subsistence level and social security forms subsistence levelandsocialsecurity with referencetotheexistingminimum living foremployeesandtheirfamilies — Maintaininganadequatestandardof ensuring thatemploymentisguaranteed and — Creatingemploymentopportunities the UNSDGsandrelevant targets Gazprom Group’s activitieshelpingachieve people. participants receivingapension–144,500 — Non-governmentalpensionscheme contracts –473,800 people. by theGazpromGroupunderemployment — Overall numberofpersonnelemployed included inPJSC Gazprom’s budgetingsystem at theentities — Average monthlysalary — Payroll expenses–RUB749,708 million RUB 45,114 million. expenses increasedby5.43%andamountedto — In2019, theGazpromGroup’s social countries –RUB255billion. — Total taxespaid tothebudgetsofforeign Federation atalllevels–RUB2.82trillion. — Total taxespaid tothebudgetsofRussian in 2019 –RUB104,900. the UNSDGsandrelevant targets in2019 Gazprom Group’s contributiontoachieving 23

1 5 3 4 2 6 Appendices Our Report Our Report eport 2019 R ustainability S roup’s roup’s G Gazprom

24 Gazprom Group’s Sustainability Report 2019 in agriculture.Participates SalavatLLC. inworkinggroupsofseveral projectsaimedatdevelopingGazpromNeftekhim andmonitorsoptimizestheoperation modeofprocessplantsformakingammoniaandcarbamide,whichareused Analyzes theperformance orhunger. of foodshortages development. Nochance and fosteragricultural thatboostyields fertilizers We produce mineral O Gazprom Neftekhim SalavatLLC Gazprom Neftekhim Rosa Buyanova P ur Report rocess Engineer, Gas&ChemicalPlant,

1 5 3 4 2 6 Appendices Our Report Our Report

UN SDG Targets Gazprom Group’s activities helping achieve Gazprom Group’s contribution to achieving the UN SDGs and the relevant targets the UN SDGs and the relevant targets in 2019 SDG 2 End hunger, achieve food security and improved nutrition and promote sustainable agriculture

Target 2.3

By 2030, double the agricultural productivity — Bringing gas to consumers in rural — Fertilizer (carbamide) sales to agricultural and incomes of small-scale food producers, in settlements for local infrastructure businesses increased by 63.7% and amounted particular women, indigenous peoples, family development to 113,460 tons. farmers, pastoralists and fishers, including — Respecting local communities’ interests — 9,100 agricultural facilities were supplied through secure and equal access to land, and ensuring responsible targeted social with natural gas. other productive resources and agricultural investment — Funds allocated to support traditional eport 2019

inputs, knowledge, financial services, markets lifestyles of indigenous minorities of the North, R and opportunities for value addition and non- including their agro-industrial activities, totalled farm employment. RUB 154 million. SDG 3

Ensure healthy lives and promote well-being ustainability

for all at all ages S roup’s roup’s G

Target 3.4 Gazprom

By 2030, reduce by one third premature — Providing employees, their family members, — 57,900 employees of the Gazprom Group mortality from non-communicable diseases and retirees with a package of therapeutic and received health resort and rehabilitation through prevention and treatment and promote rehabilitation measures to ensure healthcare treatment. mental health and well-being. and recovery, prolongation of life, and — Payments for rehabilitation treatment cardiovascular mortality reduction amounted to RUB 5,077.5 million. Target 3.6

By 2020, halve the number of global deaths — Implementation of obligations relating to — Number of road accident injuries dropped and injuries from road traffic accidents. road traffic safety requirements, reducing by 56%. risks of road accidents related to production activities

26 Gazprom Group’s Sustainability Report 2019 tamination. cals andair, waterandsoilpollutioncon- deaths andillnessesfromhazardouschemi- By 2030,substantiallyreducethenumberof university. education,including vocational andtertiary technical, andquality and mentoaffordable By 2030,ensureequalaccessforallwomen medicines andvaccinesforall. essential andaffordable quality safe, effective, andaccessto essential healthcareservices financial riskprotection,accesstoquality Achieve universalhealthcoverage, including UN SDGTargets O ur Report Target 4.3 and promote forall lifelonglearningopportunities Ensure education inclusiveandequitablequality SDG 4 Target 3.9 Target 3.8 health andlifespan environment and,consequently,onhuman — Reducingthenegativeimpacts onthe in productionactivities ofthoseinvolved systems; assessingthesafety management — Implementingprocesssafety skills, andreceivinghighereducation formal andnon-formaleducation,upgrading youthandadultsinreceiving — Supporting — Implementationofpreventivemeasures and insurance (includingtheirfamilymembers) — Providing employeeswithmedicalservices the UNSDGsandrelevant targets Gazprom Group’s activitieshelpingachieve health examination–35.3%. — Percentage ofemployeeswhohadaperiodic RUB 145.7 million. — Payments fortargetedpreventiveinitiatives– 89,800 retirees,165,200 familymembers. medical insurance plans:296,700employees; — 551,700 peopleinsuredundervoluntary 2,862,700 tons. sources werereducedby1.1% toatotalof — Grosspollutantemissionsfromstationary ISPSM –by37%. the companies coveredbyPJSC Gazprom’s incidents athazardousindustrialfacilitiesof — Reductioninthenumberofprocesssafety Management(ISPSM) –by47%.Safety PJSC Gazprom’s Integrated SystemofProcess from accidentsinthecompanies coveredby — Reductioninthenumberofinjuriesresulting receiving highereducation. companies; inaddition,276 employeesare training agreementswiththeGazprom Group Federation underemployer-sponsored educational institutionsoftheRussian — 2,051 studentsareintraining athigher the UNSDGsandrelevant targets in2019 Gazprom Group’s contributiontoachieving 27 1 5 3 4 2 6 Appendices Our Report Our Report

UN SDG Targets Gazprom Group’s activities helping achieve Gazprom Group’s contribution to achieving the UN SDGs and the relevant targets the UN SDGs and the relevant targets in 2019 Target 4.4

By 2030, substantially increase the number — Working together with educational — A total of 219,700 workers and 236,500 of youth and adults who have relevant institutions to develop professional training and executives, specialists, and other employees skills, including technical and vocational skills upgrading programs for staff completed training under skills upgrading and skills, for employment, decent jobs and — Developing professional education and professional retraining programs9. entrepreneurship. training programs accessible for all — 10,081 students took an internship at the — Training a talent pool Gazprom Group. — There are Gazprom Classes at 24 schools. — There are 13 anchor universities and 24 specialized university departments. SDG 5 Achieve gender equality and empower all women and girls eport 2019 R

Target 5.1 ustainability S

End all forms of discrimination against all — Respecting women’s rights at the — Equal pay and equal remuneration for men

women and girls everywhere. workplace, implementing the principle of and women are ensured for positions with the roup’s gender equality, ensuring equal pay for work of same competence requirements. G equal value — Percentage of women among the Gazprom — Ensuring sufficient participation of women Group’s staff – 28.8%.

in decision-making at all levels and in various — Percentage of women among specialists Gazprom business areas and other white-collar staff – 41.6%. — Percentage of women among executives – 24.6%. — In 2019, 28,400 women were hired to the Gazprom Group (37% of the total number of new hires). — There are 3 women among the 14 members of the Management Committee of PJSC Gazprom (with two of them being Deputy Chairpersons of the Management Committee).

(9) The number of employees who completed training is stated in man-courses (where one person received training twice, they are counted twice).

28 Gazprom Group’s Sustainability Report 2019 aquifers, andlakes. including mountains,forests,wetlands,rivers, Protect andrestorewater-relatedecosystems, fromwaterscarcity. suffering substantially reducethenumberofpeople and freshwater toaddresswaterscarcity sustainable withdrawals andsupplyof efficiency acrossallsectorsandensure By 2030,substantiallyincreasewater-use reuse globally. and substantiallyincreasingrecyclingsafe ofuntreatedwastewater halving theproportion release ofhazardouschemicalsandmaterials, pollution, eliminatingdumpingandminimizing byreducing By 2030,improvewaterquality UN SDGTargets O ur Report Target 6.6 Target 6.4 Target 6.3 of waterandsanitationforall Ensure andsustainablemanagement availability SDG 6 inclusion intheRamsarList family andsitesthatarecandidatesfor spawning— Preserving rivers forthesalmon water-related ecosystems — Ensuringprotectionandrestoration of sphere ofwatersupplyanddisposal sustainable resourcemanagementinthe and — Ensuringenvironmentalsafety ensuring efficientwastewaterdisposal water supplytoproductionandotherfacilities; — Ensuringsustainableandhigh-quality enhancing thewastewatertreatmentlevel waterbodiesand discharged intosurface — Reducingthevolumesofwastewater the UNSDGsandrelevant targets Gazprom Group’s activitieshelpingachieve expenditures amountedtoRUB13.03 billion. while currentwastewatercollectionandtreatment use ofwaterresourcestotalledRUB6.44 billion, Investments inprotectionandsustainable — increased by3.1%to11,409.12 mcm. The volume ofrecirculatedandreusedwater — fish resourcestotalledRUB98.49million. Investments inprotectionandreproductionof — released, includinghighly-valuedones. Over 26million ofvariousfishspecieswere — was reducedby12.15% to3,571.28 mcm. — Withdrawal ofwaterfromnatural sources purposes wasdownby8.4%to3,921.41 mcm. — Volumeofwaterwithdrawn forwatersupply capacity totalling26,660m capacity operation, withtheircombineddailythroughput 145 — waterpurificationplantswereputinto waterbodies. into surface accounted for97.3% ofwastewaterdischarged treatedwater Partially clean andpartially — the UNSDGsandrelevant targets in2019 Gazprom Group’s contributiontoachieving 29 3 . 1 5 3 4 2 6 Appendices Our Report Our Report

UN SDG Targets Gazprom Group’s activities helping achieve Gazprom Group’s contribution to achieving the UN SDGs and the relevant targets the UN SDGs and the relevant targets in 2019 SDG 7 Ensure access to affordable, reliable, sustainable and modern energy for all

Target 7.1

By 2030, ensure universal access to — Reliable, efficient, and balanced provision of — Natural gas sales to Russian consumers – affordable, reliable and modern energy natural gas, other energy resources and their 235.8 bcm. services. derivatives to consumers — Natural gas sales to non-FSU countries – — Developing the potential of natural gas as a 232.4 bcm. basis for the future low-carbon energy sector, — Gazprom Group’s natural gas sales to including for producing hydrogen and methane former Soviet Union (FSU) countries – eport 2019

and hydrogen mixtures 38.7 bcm. R — Sales of large-scale liquefied natural gas (LNG) in foreign markets – 3.78 mmt, or 5.04 bcm. — Exports of small-scale LNG produced and

supplied by the Gazprom Group companies in ustainability S 2019 – 27,940 tons. — Electricity sales – 152.83 billion kWh.

— Heat sales – 110.85 million Gcal. roup’s — Annual hydrogen output by the Gazprom G Group – over 350,000 tons, including 2,500 tons with the use of methane pyrolysis. Gazprom

30 Gazprom Group’s Sustainability Report 2019 financial services. sized enterprises,includingthrough accessto ofmicro-,small-andmedium- and growth innovation, andencourage theformalization and creation, entrepreneurship,creativity productiveactivities,decentjob support Promote development-orientedpoliciesthat improvement inenergyefficiency. By 2030,doubletheglobalrate of UN SDGTargets O (10) ur Report S tarting from2019,tarting thisindicatoriscalculatedforthe entireGazpromGroup. Target 8.3 and decentworkforall Promote sustained,inclusiveandsustainableeconomicgrowth, fullandproductive employment SDG 8 Target 7.3 medium-sized enterprises — Developingcooperation withsmall and supply chains — Creatingnewjobs,includingthoseacross sources and secondary energyresources sources andsecondary — Developingtheuseofrenewableenergy — Improvingenergyefficiency the UNSDGsandrelevant targets Gazprom Group’s activitieshelpingachieve Salavat –1.6 millionGJ. efficiency programs atGazpromNeftekhim implementation ofenergysavingand — Aggregateenergysavingsresultingfromthe 5.3 millionGJ. – efficiency programs atGazpromNeft implementation ofenergysavingand — Aggregateenergysavingsresultingfromthe energy savingprograms –47.33 millionGJ. implementation ofGazpromEnergoholding’s — Fuel andenergysavingsresultingfromthe saving programs –115.5 millionGJ. implementation ofPJSC Gazprom’s energy — Fuel andenergysavingsresultingfromthe Gazprom’s subsidiaries–1,830.98 millionGJ. — Fuel andenergyconsumptionatPJSC in Russiaincreasedby8.3p.p.to90.1%. — Associatedpetroleumgas(APG)utilization RUB 3.44 billion. 99.5%. materials andequipmentinprocurement– — Percentage ofdomesticallyproduced RUB 380billion. sized enterprisesforanamountexceeding 38,200 contracts withsmall-and medium- — GazpromGroupenteredintomorethan school graduates werehired. vocational andsecondary — 2,896university 76,600 people. — GazpromGroup’s employeeshiredin2019 – and secondary energyresources and secondary — Investmentsinrenewableenergysources resources –11.7 millionMWh. energy energy sourcesandsecondary — Electricpowergeneration fromrenewable the UNSDGsandrelevant targets in2019 Gazprom Group’s contributiontoachieving 31 10 – 1 5 3 4 2 6 Appendices Our Report Our Report

UN SDG Targets Gazprom Group’s activities helping achieve Gazprom Group’s contribution to achieving the UN SDGs and the relevant targets the UN SDGs and the relevant targets in 2019 Target 8.5

By 2030, achieve full and productive — Ensuring a competitive salary — Salaries and tariff rates of the employees of employment and decent work for all women PJSC Gazprom’s budgeted entities were raised and men, including for young people and by 4.6%. persons with disabilities, and equal pay for — Tariff rates of employees paid on the basis of work of equal value. the Uniform Tariff System were raised by 15%. Target 8.8

Protect labour rights and promote safe and — Protecting social, labour and professional — As of the end of 2019, the Gazprom Workers’ secure working environments for all workers, interests of employees and respecting labour Union’s structure included 650 trade union including migrant workers, in particular women rights organizations, and had 355,276 members. migrants, and those in precarious employment. — Ensuring freedom of association and — Trade unions of the Gazprom Workers’ eport 2019

collective bargaining Union conducted 473 inspections, reviewed R — Implementing health and safety 1,427 requests and inquiries, and met in management systems and mitigating potential person with 12,938 employees and retirees to health and productivity risks discuss issues relating to labour laws and the Collective Agreement. ustainability

— Collective agreements cover 73.3% of the S Gazprom Group’s headcount. — The number of workplaces with harmful and

hazardous conditions went down to 14%11 . roup’s G — Labour conditions were improved for 34,600 employees. Gazprom (11) From 38% in 2013–2019 at subsidiaries and entities of PJSC Gazprom due to the implementation of measures aimed at improving labour conditions.

32 Gazprom Group’s Sustainability Report 2019 respective capabilities. countries takingactioninaccordancewiththeir technologies andindustrialprocesses,withall adoption ofcleanandenvironmentallysound increased resource-useefficiencyandgreater industries tomakethemsustainable,with By 2030,upgrade infrastructure andretrofit access forall. andequitable being, withafocusonaffordable economic developmentandhumanwell- and transborder infrastructure, tosupport resilient infrastructure, includingregional reliable,sustainableand Develop quality, UN SDGTargets O ur Report Target 9.4 Target 9.1 industrialization andfosterinnovation Build resilient infrastructure, promote inclusiveandsustainable SDG 9 — Upgrading infrastructure Gazprom Group’s regionsofoperation — Developingsocialinfrastructure acrossthe transborder infrastructure — Developingenergyinfrastructure, including the UNSDGsandrelevant targets Gazprom Group’s activitieshelpingachieve 2018: 771.3 km). (GTS) receivedmajorrepairs inRussia(in — 782.1 kmoftheGasTransmission System Gazprom Group’s regionsofoperation. improve urbaninfrastructure acrossthe — MorethanRUB8.5billionwasspentto in21covered 34 settlements regionsofRussia. the GazpromforChildrenProgram, which — 164 facilitieswerecompletedunder sports (TPP) wasputonstream. 184 MW) oftheGroznyThermal Power Plant of — Secondpowerunit(withacapacity reached 508.9mcm. 843.3 high potentialmaximumdailydeliverability of (UGS) facilitiesinRussiaachievedanall-time — Gazprom’s undergroundgasstorage 1,880 kmwerebuiltinRussia. — 124 gassupplyfacilitieswithalengthof year wascompleted. of31.5pipeline withatotalcapacity bcmper gas — ConstructionoftheTurkStream export commenced. ever pipelinesuppliesofRussiangastoChina of 38bcmperyear)wasputonstream.First- capacity Siberia gaspipeline(withanexport complexofthePower of — Firststart-up the UNSDGsandrelevant targets in2019 Gazprom Group’s contributiontoachieving mcm. Actualmaximumdailydeliverability 33 1 5 3 4 2 6 Appendices Our Report Our Report

UN SDG Targets Gazprom Group’s activities helping achieve Gazprom Group’s contribution to achieving the UN SDGs and the relevant targets the UN SDGs and the relevant targets in 2019 Target 9.5

Enhance scientific research, upgrade the — Developing and implementing new — Investments in research and development technological capabilities of industrial sectors technologies and innovative products and (R&D) at the Gazprom Group companies in all countries, in particular developing services conforming to and exceeding increased by 34.4% to RUB 12.1 billion. countries, including, by 2030, encouraging international standards, as well as promoting — Economic effect from the use of R&D – innovation and substantially increasing the innovation RUB 10.5 billion. number of research and development workers — 289 R&D results were implemented for the per 1 million people and public and private amount of RUB 3.15 billion. research and development spending. — Financing of digital technologies implementation across the Gazprom Group amounted to RUB 498.68 million. — Economic effect from the implementation of technologies based on import substitution totalled RUB 14.8 billion. eport 2019 SDG10 R Reduce inequality within and among countries ustainability S

Target 10.3 roup’s roup’s G

Ensure equal opportunity and reduce — Implementing the Gas Infrastructure — Gas penetration rate across the regions of

inequalities of outcome, including through Expansion Program for regions of the Russian the Russian Federation increased from 68.6% Gazprom eliminating discriminatory laws, policies Federation and ensuring equal access to to 70.1%. and practices and promoting appropriate energy for economic and social development — Gas penetration rate increased from 59.4% legislation, policies and actions in this regard. to 61.8% in rural areas and from 71.9% to 73.0% in cities and towns. — Financing of gas infrastructure expansion programs – RUB 34.3 billion. — 86 gas infrastructure facilities with a total length of 1,196.8 km were put onstream. — Gas infrastructure expansion program covered 66 constituent entities of the Russian Federation. Target 10.4

Adopt policies, especially fiscal, wage and — Guaranteeing equality of rights and — Cases of discrimination across the Gazprom social protection policies, and progressively protection from any forms of discrimination for Group – 0. achieve greater equality. employees — Violations of rights and conflicts with local — Respecting rights of stakeholders communities, including indigenous minorities — Adopting a transparent Dividend Policy that of the North – 0. accommodates the interests of stakeholders — Dividend per ordinary share for 2019 – RUB 15.24.

34 Gazprom Group’s Sustainability Report 2019 the world’s cultural andnatural heritage. toprotectandsafeguard Strengthen efforts UN SDGTargets O ur Report Target 11.4 resilient andsustainable inclusive,safe, Make citiesandhumansettlements SDG 11 reserves museums,parks, andnatural— Supporting — Developinginternationalcultural exchange and aesthetically educating therisinggeneration bothmorally and localtraditions, values,andlanguages; cultural— Preserving andhistoricalheritage the UNSDGsandrelevant targets Gazprom Group’s activitieshelpingachieve Nesterov. restoration ofHolyRus,apainting byMikhail — RUB3.8millionwasallocatedforthe wascompleted. State Museum-Reserve palace andpark ensembleatthePeterhof Palace oftheOranienbaum formingapart — Restoration of10 hallsoftheChinese Museum andHeritageSite. Catherine Palace attheTsarskoe SeloState Resurrection ChurchandtheLyons Hallofthe had beendonatedfortherestoration ofthe — Asoftheend2019, RUB1.01 billion expenses totalledRUB39.9million. SalavatLLC’s— GazpromNeftekhim charity RUB 33millionforcharity. — GazpromEnergoholdingspentmorethan RUB 7.5 billion. RUB 2.6 billion.Total socialinvestments– social andeconomicagreementstotalled — PJSC GazpromNeft’s expendituresunder amounted toRUB27.7 billion. — PJSC Gazprom’s expenses charity the UNSDGsandrelevant targets in2019 Gazprom Group’s contributiontoachieving 35 1 5 3 4 2 6 Appendices Our Report Our Report

UN SDG Targets Gazprom Group’s activities helping achieve Gazprom Group’s contribution to achieving the UN SDGs and the relevant targets the UN SDGs and the relevant targets in 2019 Target 11.6

By 2030, reduce the adverse per capita — Supporting the natural gas vehicle (NGV) fuel — Sales of compressed natural gas (CNG) environmental impact of cities, including by market and developing gas fuel infrastructure at CNG filling stations in Russia increased by paying special attention to air quality and — Converting corporate vehicles to natural gas 30.3% to 779 mcm. municipal and other waste management. — Sales of natural gas as motor fuel abroad grew by 7% to 13.8 mcm. — Sales of CNG in FSU countries rose by 30.9% to 55.4 mcm. — Number of active gas filling stations of the Gazprom Group and Gazprom Gazomotornoye Toplivo LLC in Russia – 326. — As a result of dedicated marketing programs, consumers converted 10,296 new vehicles to natural gas. eport 2019

— 11,050 of the Gazprom Group’s motor R vehicles were converted to natural gas. — Percentage of NGVs in the Gazprom Group’s fleet suitable for conversion to natural gas reached 55%. ustainability SDG 12 S Ensure sustainable consumption

and production patterns roup’s G

Target 12.4 Gazprom

By 2020, achieve the environmentally sound — Implementing technologies minimizing — 10 waste treatment and recycling facilities management of chemicals and all wastes waste generated by production processes with a total annual capacity of 93,960 tons throughout their life cycle, in accordance were put onstream. with agreed international frameworks, and — 12 units for capture and treatment of significantly reduce their release to air, water hazardous substances in waste gases (with a and soil in order to minimize their adverse total hourly capacity of 2,387,050 m3) were put impacts on human health and the environment. onstream. — RUB 843.52 million was invested in implementing waste recycling, treatment, and dumping projects, with the current waste management expenses totalling RUB 5.69 billion.

36 Gazprom Group’s Sustainability Report 2019 in allcountries. climate-related hazardsandnatural disasters to Strengthen resilienceandadaptivecapacity recycling andreuse. generation through prevention,reduction, By 2030,substantiallyreducewaste UN SDGTargets O ur Report Target 13.1 and itsimpacts Take urgent actiontocombatclimatechange SDG 13 Target 12.5 change — Implementingmeasurestoadaptclimate and conversionofvehiclestonatural gas through gasinfrastructure expansion inregions production facilitiesandbyenergyconsumers — Reducinggreenhousegasemissionsat — Handlingwasteinasafemanner — Reducingwastegeneration the UNSDGsandrelevant targets Gazprom Group’s activitieshelpingachieve 25.9% to6.08milliontonsofСO underground storage –Scope2)wentdownby processing,and production, transportation, — EnergyindirectGHGemissions(fromgas million tonsofСO emissions werereducedby1.5% to236.45 — GazpromGroup’s greenhousegas(GHG) Scope 3)totalled301.63 kgofСО products (whenusedbyendconsumers– oftheGazprom Group’s— Carbonintensity – 0.03%ofthegasinstorage fromundergroundstoragetransported, activities activities–0.29%ofthegas transportation activities –0.02%ofthegasproduced,from production chainarecloseto0:from — MethaneemissionsacrossGazprom’s — 7,783 peoplereceivedenvironmentaltraining. protection. — RUB10,178.35 millionwasspentonair majors. and isthelowestamongglobaloilgas 95.3%. non-hazardous waste(classesIVandV)was — Percentage andalmost oflow-hazard 6.13% to3,337,080 tons. — Volumeofwastegenerated wentdownby the UNSDGsandrelevant targets in2019 Gazprom Group’s contributiontoachieving 37 2 equivalent. . 2 equivalent. 2 perboe 1 5 3 4 2 6 Appendices Our Report Our Report

UN SDG Targets Gazprom Group’s activities helping achieve Gazprom Group’s contribution to achieving the UN SDGs and the relevant targets the UN SDGs and the relevant targets in 2019 SDG 14 Conserve and sustainably use the oceans, seas and marine resources for sustainable development

Target 14.2

By 2020, sustainably manage and protect — Sustainably managing and protecting — Status of the Okhotsk-Korean population marine and coastal ecosystems to avoid marine and coastal ecosystems of gray whales included in the Red List of the significant adverse impacts, including by — Minimizing impacts on marine biodiversity International Union for Conservation of Nature strengthening their resilience, and take action was changed from critically endangered (CR) for their restoration, to achieve healthy and to endangered (EN). The population reached productive oceans. almost 300 whales. eport 2019 SDG 15 R Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, halt and reverse land degradation and halt biodiversity loss ustainability S

Target 15.1 roup’s roup’s G

By 2020, ensure the conservation, restoration — Maintaining an environmental balance — RUB 2,388.32 million was invested in and sustainable use of terrestrial and inland — Minimizing the environmental impact of protection and sustainable use of lands, Gazprom freshwater ecosystems and their services, production activities including remediation. in particular forests, wetlands, mountains — Investing in environmental protection — Area of remediated disturbed land – and drylands, in line with obligations under and enhancing resistance to environmental 17,670.50 hectares. international agreements. hazards — More than 30,000 young trees were planted and more than 500 hectares of land were cleaned during the 6th Green Spring national environmental clean-up. Target 15.5

Take urgent and significant action to reduce — Implementing biological and landscape — RUB 2.53 billion was invested in operational the degradation of natural habitats, halt the diversity protection programs environmental monitoring and control. loss of biodiversity and, by 2020, protect and — Continuous environmental monitoring — Current expenditures for biodiversity prevent the extinction of threatened species. — Protecting habitats of rare and threatened preservation and protection of designated species of plants and animals natural areas totalled RUB 353.06 million.

38 Gazprom Group’s Sustainability Report 2019 development. Enhance policycoherenceforsustainable transparent institutionsatalllevels. accountable and Develop effective, all itsforms. in Substantiallyreducecorruptionandbribery UN SDGTargets O ur Report Target 17.14 forsustainabledevelopment the globalpartnership Strengthen themeansofimplementationandrevitalize SDG 17 Target 16.6 Target 16.5 and inclusiveinstitutionsatalllevels provide accountable accesstojusticeforallandbuildeffective, Promote peacefulandinclusivesocietiesforsustainabledevelopment, SDG 16 for sustainabledevelopment — Helpingbuildaninstitutionalenvironment development practices responsible businessconductandsustainable — Workingwithstakeholderstostrengthen — Developingthebusinessethicsframework — Maintaininganefficientcontrolsystem management practices andtransparent— Creatingeffective — Improvingthecorporate culture bribery ofcorruption and — Combatinganytypes business — Conductinglegal,openandhonest the UNSDGsandrelevant targets Gazprom Group’s activitieshelpingachieve products. substituting of high-techinnovativeandimport Federation toencourage themanufacture in 25constituententitiesoftheRussian — 20roadmapsarebeingimplemented Federation. authorities ofconstituententitiestheRussian implemented in20citiestogetherwith projectisbeing — Russia.MyHistory administrations. contracts weresignedwithRussian regional — 10 newcooperation agreementsand Federation. into with81 constituententitiesoftheRussian — Cooperation agreementswere entered Gazprom BoardofDirectors. — There are3independentmembersinPJSC — Casesofcorruption–0. Gazprom Group. atthe countering fraud, corruptionandtheft inquiries werereviewedinconnectionwith — Morethan900HotLinerequestsand training. — 1,144 employeesreceivedanti-corruption the UNSDGsandrelevant targets in2019 Gazprom Group’s contributiontoachieving 39 1 5 3 4 2 6 Appendices Our Report Our Report

UN SDG Targets Gazprom Group’s activities helping achieve Gazprom Group’s contribution to achieving the UN SDGs and the relevant targets the UN SDGs and the relevant targets in 2019 Target 17.16

Enhance the global partnership for sustainable — Cooperating with international organizations — The most multinational football training development complemented by multi- and taking part in global energy forums, session in history took place as part of the stakeholder partnerships that mobilize and exhibitions and conferences Football for Friendship international children’s share knowledge, expertise, technology — Supporting joint development initiatives with social program, thus setting a new world and financial resources, to support the governmental and non-profit organizations and record and earning a GUINNESS WORLD achievement of sustainable development civil society RECORDS® certificate. goals in all countries, particularly developing — Joint Coordination Committees and Joint — More than 800 children and adults from countries. Working Groups with foreign partners Europe, Asia, Africa, and the Americas took — Scientific and technical collaboration part in the 7th season of the program. between PJSC Gazprom and foreign partners — Over 80 working groups for key projects and lines of cooperation with 17 foreign partners. — Over 90 technical dialogues and joint projects with 13 foreign partners are being eport 2019

implemented as part of scientific and technical R collaboration programs. ustainability S roup’s roup’s G Gazprom

40 1 Gazprom Group’s Sustainability Report 2019 Our GovernanceOur 1.4. 1.4. 1.3. 1.2. 1.1. Quality Management Management Quality Behaviourof Values, Standards, Norms and Corporate Governance Management Sustainability

54 54 43 60 60 51 51 1. Our Governance

GRI 102-16 Gazprom’s mission when it comes to sustainable development is to make a positive contribution to the social and economic development of Russia, adhere to environmental and social responsibility standards, maintain industrial safety, and enhance corporate governance while strengthening its leadership on the global energy market. eport 2019 R ustainability S roup’s roup’s G Gazprom

42 1.1. Sustainability Management Our Report

The priorities of Gazprom in sustainable development are to: 1 secure reliable gas supplies to consumers; respect human rights;

use natural resources in a sustainable way and improve energy preserve climate and biodiversity and minimize adverse efficiency; environmental impacts;

develop HR potential; foster zero tolerance to corruption;

ensure safety of employees and establish safe labour conditions; improve the quality of life for the population and facilitate social and economic development in the regions of operation; 2

improve the corporate governance system; make investments in a socially responsible manner;

promote innovative development; build global and national partnerships for sustainable development; eport 2019 R comply with laws and regulations; manage risks;

3 consistently improve economic efficiency; ensure information transparency; ustainability S support retired employees; contribute to (children’s) sports. roup’s roup’s G Corporate sustainability goals are integrated into Gazprom’s business strategy and achieved through implementing the Company’s development plans with respect to its core activities. Gazprom 4 Economic Performance and Innovative Development Goals of PJSC Gazprom:

improve technological and organizational capabilities of the Company improve labour efficiency. through encouraging innovative development and adoption of innovative technologies;

43 ppendices A 1.1. Occupational health and safety rights ofemployees: rights Occupational healthandsafety Rights ofindigenousminorities,localcommunitiesandotherstakeholders: Rights Resource Saving,Energy SavingandEnergy EfficiencyGoalsof PJSC Gazprom: Environmental Protection GoalsofPJSC Gazprom: ofemployeestolabourandeducation: Rights GoalsofPJSCHuman Rights Gazprom: particularly cardio-vasculardiseases; particularly duetooccupational orotherdiseases, reduce therate ofmortality the employees; create asafeworkingenvironmentandprotecttheliveshealthof regions; ensure gassuppliesandexpand gasinfrastructure acrossRussian facilitate regionalprograms promoting theuseofgasasmotorfuel; their originallivingenvironment; to theirtraditional (workandcultural lifestyle activities),andpreserve indigenousminoritiesinpromotingtheirinterestsandrights support the Company; requirementsatthefacilitiesof ensure compliancewiththefiresafety personal contributionofeachemployee; create anddevelopanunbiasedefficientframework toassess and savingenergyresourcesin productionoperations; continuously reduceunitcosts through standardisation, rational use reduce theshareofwastesentforburial; reduce pollutant(hazardous)airemissions; reduce greenhousegasairemissions,includingmethaneemissions; goals; comprehensively motivateeachemployeetoachievetheCompany’s Sustainability Management Sustainability ensure reliableoperation ofhazardousindustrialfacilities; procurement ofgoods,worksandservices; restrictions oncompetitionamongbiddersintheprocessof across theCompany; ensuretheabsenceofunreasonable fairnessandnon-discrimination promote theprinciplesofequality, with occupational health and industrial safety requirements. with occupational healthandindustrialsafety improve theefficiencyofoperational controloverthecompliance and managementtasks. production requirements andtheteamsareprepared toundertake meetstheCompany’sensure thatemployees’professionalexpertise Board ofDirectors seek toincreasethenumberofindependentdirectorsonCompany’s ofsocialinfrastructure inbuildinganetwork facilities; take part participate insolvingsocialissuestheconstituententitiesofRussia; and equipment. process managementandimplementation ofinnovativetechnologies consistently improveenergyefficiency through efficient production reduce thefeesforexcessiveenvironmentalimpact. waterbodies; into surface decrease dischargeofpollutedandinsufficientlytreatedwastewater provide employeeswithcompetitivesalariesandbenefits; .

Gazprom Group’s Sustainability Report 2019 1.1. Sustainability Management Our Report

Sustainability management is integrated into the corporate governance system of PJSC Gazprom. 1

PJSC Gazprom’s Sustainability Management System

PJSC Gazprom Board of Directors Reviews the information regarding sustainable development (innovative development, implementation of the Regional Gas Infrastructure Expansion Program, etc.), approves the top level documents governing individual aspects of sustainable development (e.g. Environmental Policy, Risk Management and Internal Control Policy, etc.) 2

PJSC Gazprom Management Committee Performs general management of various sustainable development aspects eport 2019

R Relevant departments PJSC Gazprom Quality Coordinating Committee for PJSC Gazprom Science and and directorates Assurance Council Responsible Use of Natural Technology Council Resources 3 Perform day-to-day Ensures comprehensive Ensures comprehensive Sustainable Development

ustainability management of various approach to and coordination approach to and coordination Council under the Science S sustainable development of the activities of organizational of the activities of organizational and Technology Council aspects falling within their units and subsidiaries as units and subsidiaries as related Prepares proposals on the competence (HR Department; related to quality management to environmental protection and roup’s roup’s strategic development topics of G Information Policy Department; energy efficiency PJSC Gazprom, concept studies Directorate in charge of for promising projects, including implementation of PJSC Gazprom comprehensive sustainability management Gazprom environmental policy, etc.) projects; develops proposals on the implementation of advanced 4 technologies and managerial solutions

PJSC Gazprom subsidiaries Develop their own by-laws governing specific aspects of sustainable development 5 Implement programs and initiatives pertaining to various sustainable development aspects at the local level

45 ppendices A 1.1. analyzing implementationofgas-savingmeasures,andpreparing proposalsforrelevantregulationsandguidelines. Involved inexercisingcorporate controlovertheefficiencyofgasusebysubsidiariesandentities PJSC Gazpromforinternaloperating needs, environmental footprint. processes toreduce our improve ourtechnological In addition,wecontinuously of gasinfrastructure. as wellsafeoperation use ofnatural resources, development andefficient Our goalistherational Gazprom GaznadzorLLC Evgeny Filippov H ead ofGasEfficiencyControlDivision,Administration, Sustainability Management Sustainability

Gazprom Group’s Sustainability Report 2019 1.1. Sustainability Management Our Report

2 eport 2019 R

3 ustainability S roup’s roup’s G Gazprom 4

47 ppendices A 1.1. Corporate governance Social aspect Economic aspect Key strategic documents GRI 102-26 ensures comprehensiveapproachtoandcoordinationoftheactivities forResponsibleUseofNatural Resources Coordinating Committee management withinthescopeoftheirrespectivecompetences.The anddirectoratesdepartments areinchargeofday-to-daysustainability ofthePJSCresponsibility Relevant GazpromManagementCommittee. of Directors.General aspectsisthe managementofsustainability development, fallwithinthecompetenceofPJSC GazpromBoard including documentsgoverningindividualaspectsofsustainable management, aswellreviewandapprovaloftop-leveldocuments, managementandcontrol.Strategic of sustainability sustainability The Company’s levelsareincharge leadershipofficialsofdifferent GRI 102-19, GRI102-20, GRI102-26 Anti-Corruption Policy ofPJSC; Gazprom Board ofDirectorsPJSC Gazprom Regulation ontheNominationand Remuneration Committee ofthe PJSC Gazprom; Regulation ontheChairmanofManagementCommittee of Code ofCorporate EthicsofPJSC Gazprom; ofAssociationPJSCArticles ; Gazprom PJSC itsSubsidiariesandEntitiesin2016–2020; Gazprom, Subsidiaries for2019–2021; Regional Policy Concept ofOJSC; Gazprom PJSC GroupCompanies; andGazprom Gazprom R R C G R L ong-Term DevelopmentProgram ofPJSC Gazprom; egulation ontheBoardofDirectorsPJSC Gazprom; egulation ontheGeneral Shareholders MeetingofPJSC Gazprom; egulation onProcurementofGoods,Works, andServicesby omprehensive Program forImprovementofHRManagementat eneral Collective LabourAgreementofPJSC andits Gazprom Sustainability Management Sustainability ; principles isreflectedinitskeystrategic documents. Management Committee. Council, whichispresidedoverbytheChairmanofPJSC Gazprom Council operates underthePJSC GazpromScienceandTechnology respective localprograms andinitiatives.The SustainableDevelopment to specificaspectsofsustainabledevelopmentandimplement PJSC Gazpromsubsidiariesdeveloptheirownby-lawswithregard PJSC management. Gazpromdoesthesameinsphereofquality Assuranceprotection andenergyefficiency,theQuality Councilof of organizationalunitsandsubsidiariesasrelatedtoenvironmental Dividend Policy ofPJSC Gazprom. Regulation ontheAuditCommission ofPJSC Gazprom; Gazprom, itsSubsidiaries andEntities; Gazprom, Policy forArranging andConducting Auditsof PJSC External Regulation ontheManagementCommittee ofPJSC Gazprom; Strategy until2021. Policy; Entities; Gazprom; Regulation ontheAuditCommittee oftheBoardDirectors ofPJSC Risk ManagementandInternalControl Policy ofPJSC Gazprom; Corporate GovernanceCode ofPJSC; Gazprom Innovative DevelopmentProgram ofPJSC until 2025; Gazprom P P H Q JSC Gazprom’s Process Safety ManagementSystemDevelopment ProcessSafety JSC Gazprom’s Occupational,Industrial,FireandRoad Safety JSC Gazprom’s R ManagementPolicy ofPJSC itsSubsidiariesAnd Gazprom, uality ManagementPolicyuality ofPJSC Gazprom. The GazpromGroup’s commitmenttothesustainabledevelopment 48

Gazprom Group’s Sustainability Report 2019 1.1. Sustainability Management Our Report

Environmental aspect 1 Environmental Policy of PJSC Gazprom; Energy Saving and Energy Safety Improvement Program of PJSC Gazprom for 2017–2019.

Energy Efficiency and Energy Saving Policy of PJSC Gazprom;

GRI 102-15 Gazprom’s sustainable development progress is monitored based on a set of key performance indicators (KPIs) across different areas of the 2 corresponding activities.

PJSC Gazprom’s KPIs related to sustainability: Financial and economic indicators, innovative development indicators: eport 2019

R economic profit growth; return on equity;

shareholders return; labour productivity. 3 ustainability

S integrated KPI for innovation (including the number of patents and share of R&D expenses in revenue);

roup’s roup’s Human rights indicators: G

average number of hours used by employees for professional number of employees who participated in professional development education during the year; / average headcount per year; Gazprom 4 reduction in workplace accidents rate; reduction in workplace incidents rate.

Environmental protection, resource and energy saving, and energy efficiency indicators:

reduction in unit greenhouse gas emissions (in CO2 equivalent); reduction in specific consumption of fuel and energy resources for internal process needs and transportation losses.

Membership in international organizations and support of sustainable and best practices, and support a dialogue on relevant topics. The ESG 5 development initiatives demonstrate the Company’s commitment to the ratings of PJSC Gazprom reflect the Company’s sustainability progress sustainable development principles, enable exchange of information and its assessment by domestic and international communities.

GRI 102-13 The Gazprom Group companies are part of the management bodies of PJSC Gazprom consistently strengthens its relationships with rating and contribute to the work of international industry associations, such as agencies and expands the number of its international ratings. In 2017, the International Business Congress (IBC), the International Gas Union the Company was included in three international ESG ratings, and (IGU), the Global Gas Centre (GGC), the European Natural Gas Vehicle in 2019 that number increased to eight. Association (ENGVA), the German-Russian Forum, the Boao Forum for 6 Asia (BFA), etc.

49 ppendices A 1.1. CDP MSCI (19) (18) (17) (16) Source:https://www.msci.com/esg-ratings/issuer/gazprom-pao/IID000000002167503 (15) scoreasofJune27, Sustainalytics 2019. (14) CHRBscoreasofOctober26,2018 (13) Source:https://www.cdp.net (12) andTransparency”“Responsibility and“SustainableDevelopment five yearsrunning,ithasbeen ranked amongtheleadersof consecutiveyears. for eight ratingplayer intheEnergysectorofRussianinvestmentpartnership According toCDP’s internationalrating, PJSC Gazpromhasbeenatop Vigeo Eiris CHRB Sustainalytics SAM ESG Gazprom’s ranking scores inESGratings, 2018–2019 Gazprom inESGratings, 2017–2019 ISS-Oekom R In 2019, PJSC Gazpromimprovedorretaineditsranking scoresinkeyESGratings. atings The Company alsoholdstoppositionsinRussianratings. For ISS OekomESGCorporate RatingasofSeptember10, 2019. Sustainalytics scoreasof2018.Sustainalytics Vigeo EirisscoreasofNovember2019. CHRB scoreasofSeptember26,2019. SAM ESG Sustainability Management Sustainability MSCI 017 2 CDP Group. Russian oilandgascompanies conceivedbyWWFRussiaand CREON ranks amongtheTop 10 intheenvironmentaltransparency rating of among theTop 3inRAEX-Europe’s annualESGranking. Gazpromalso magazineandwas the SustainableDevelopmentranking oftheExpert Vector” indicesoftheRUIE.In2019, PJSC Gazpromwasplacedfirstin Sustainalytics

SAM ESG CHRB MSCI

2018 2018 6.5 CDP BB 36 54 C – – 12 13 14 50

Sustainalytics ISS-Oekom Vigeo Eiris SAM ESG CHRB 10.4 BBB MSCI 2019 2019 CDP 38 36 61 C C 18 15 19 16 17

Gazprom Group’s Sustainability Report 2019 Gazprom Group’s Sustainability Report 2019 1.2. 1.2. Corporate GovernanceCode. extent basedontheprinciplesestablishedbyBankofRussia’s Improvement ActionPlanfor2018–2019. integrated company, fullycompletingtheCorporate Governance order toenhancetheCompany’s systemicefficiencyasavertically In 2019, Gazpromcontinuedtoimprovethecorporate framework in (29) (28) (27) (26) (25) (24) (23) (22) (21) (20) assessed undertheListingrulesofRussianstockexchanges stock exchangelistingrules.NomineestotheBoardofDirectorsare The membersofPJSC GazpromBoardofDirectorscomplywith andtheChairmanof of assets.The ManagementCommittee of investmentsandborrowings,riskmanagementadministration strategy, policiesandcoreoperating principles,includinginrespect management oftheCompany’s activitiesanddefinesitsdevelopment generalof theBoardDirectors.The BoardofDirectorsperforms governance bodyofPJSC Gazpromresponsibleforelectingmembers The General ShareholdersMeetingisthesupremecorporate GRI 102-18, GRI102-26 GRI 102-22, GRI102-24 them toaddressthetasksathandforbenefitofCompany as qualifications andimpeccableprofessionalreputation,whichenables of PJSC GazpromBoardofDirectorspossesssufficient expertise, members, includingthree independentmembers.The members As ofDecember31, 2019, theBoardofDirectorsconsistedeleven shares includedintheLevel 1(highest)quotationlist. key management and supervisory bodies:theGeneral Shareholders key managementandsupervisory The worktodevelopandrefinecorporate governancewastoalarge PJSC Gazprom’s corporate governanceisbasedontheCompany’s PJSC 2019, GazpromAnnualReport pages 165–168, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf PJSC MoscowExchange,PJSC St.Petersburg Exchange. https://www.gazprom.ru/f/posts/33/234647/meeting-protocol-appendix_2019.pdf https://www.gazprom.com/investors/documents/ PJSC 2019, GazpromAnnualReport pages 41–43, pages 171–174, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf asofQ4,pages 187–208,Issuer’s Report Quarterly https://www.gazprom.ru/f/posts/77/885487/gazprom-emitent-report-4q-2019.pdf 35). https://www.gazprom.com/f/posts/74/562608/gazprom-articles-2020-06-26-ed-en.pdf (Article Approved byresolutionofthePJSC GazpromBoardofDirectorsNo.3304dated August7, 2019. PJSC 2019, GazpromAnnualReport pages 165 and170, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf The Corporate GovernanceCodewasapprovedbytheBoardofDirectorsBankRussiaonMarch21, 2014 andrecommendedforapplicationbypubliclytraded joint-stockcompanies. Issuer’s Report Quarterly ofAssociationPJSCthe Articles Gazprom PJSC 2019 GazpromAnnualReport For documentssee moredetailsonthecorporate governancestructureandregulatory 20 28 ;

22 ; Corporate Governance Corporate Governance 26 ; 24 for of AssociationandinternalregulationsPJSC Gazprom: aregovernedbytheArticles Chairman oftheManagementCommittee andthe of theBoardDirectors,ManagementCommittee, General ShareholdersMeetingandtheBoardofDirectors.The activities operations andarrange theimplementationofresolutions administerthe Company’sManagement Committee day-to-day reviewed byanexternalauditor. The Company’s isindependently financialandbusinessperformance andtheAuditCommission. Chairman oftheManagementCommittee, the Meeting, theBoardofDirectors,ManagementCommittee, Directors ofPJSC Gazprom Induction Program forFirst-Time ElectedMembersoftheBoard a whole.In2019, theBoardofDirectorsdevelopedandapproved Commissions see: of PJSC and GazpromBoardofDirectorsanditsCommittees Financial DisciplineforDomesticGasSupplies. andtheCommissiononStrengthening and Remuneration Committee, For detailsontheselectioncriteria,compositionandstructure theNomination The BoardofDirectorshastheAuditCommittee, Governance CodeseePJSC 2019 GazpromAnnualReport For moredetailsonPJSC Gazprom’s compliancewiththeBankofRussia’s Corporate PJSC 2019 GazpromAnnualReport of DirectorsasindependentnomineestotheBoard Reasoned justificationforrecognizingindividualnomineesto PJSC GazpromBoard on theCompany’s websiteat 25 . 23

29 51

27 ; 1 5 3 4 2 6 Appendices Our Report 1.2. less remuneration thancalculatedunderthe not topay remuneration tothemembersofBoardDirectorsorpay Board ofDirectorsmayrecommendtheGeneral ShareholdersMeeting (33) (32) PJSC 2019, Gazprom AnnualReport pages 180–184, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf (31) ApprovedbyresolutionofPJSC GazpromBoardofDirectors No.2523 datedApril15, 2015. (30) management seeAppendix3. For moredetailsonPJSC Gazprom’s risk approachtosustainability GRI 102-30 1.2.1. of meetingswithinvestors,includingthosededicatedtoESGmatters. tions andongoingprojects.In2019, independentdirectorsheldanumber communication and,therefore,keepstheminformedoncurrentopera The BoardofDirectorsplacesaspecialemphasisonefficient stakeholder GRI 102-21 corporate governancesystem. improvement ofthe Gazprom BoardofDirectorsandusedforfurther resultsarereviewedbyPJSCof self-assessment.The performance intheform organizations, whileinternalassessmentisperformed fromspecialized assessment iscarriedoutbyindependentexperts undergoes regularexternalandinternalassessments.External ofthePJSCThe performance GazpromBoardofDirectors GRI 102-28 intherespective forth Board ofDirectorsisdeterminedinaccordancewiththeprocedureset The amountofremuneration payable tothemembersofPJSC Gazprom GRI 102-35, GRI102-37 person meetingsand42heldinabsentia. In 2019, theBoardofDirectorsheld55meetings,including13 in- GRI 102-31, GRI102-33, GRI102-34 PJSC Gazprom forremunerating theBoardofDirectorsmembersand recommendations totheBoardofDirectorsonpolicy of PJSC GazpromBoardofDirectorsinclude,inparticular, making receive noremuneration fromPJSC Gazprom.

The keyfunctionsoftheNominationandRemuneration Committee The membersoftheBoardDirectorsholdingpublicorciviloffice PJSC 2019, Gazprom AnnualReport pages 191–196, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf https://www.gazprom.com/f/posts/19/811541/annual-report-2019-add-inf-en.pdf Regulation

31 . The Risk Management Management Risk and Internal Controls Internaland Controls Corporate Governance Governance Corporate Regulation Regulation alsostipulatesthatthe . - by themembersofBoardDirectors. PJSC washighlyrated GazpromBoardofDirectorsanditsCommittees The currentlevelofdevelopmentthe Directors anditsCommittees. structure, organizationofactivities,andkeyfunctionstheBoard coveringthefollowingareas:compositionand questionnaire survey viaa wasperformed Board ofDirectorsanditsCommittees In 2019, internalassessmentoftheactivitiesPJSC Gazprom Committee forShareholderandInvestorRelations. Committee PJSCinvestment community, GazpromhasinplacetheCoordinating In ordertomaintainatransparent andmeaningfuldialoguewiththe PJSC GazpromBoardofDirectorswhoholdnopublicorciviloffice resolved topay aremuneration ofRUB227.3 milliontotheMembersof Committee. inthis andVladimirMaurepresentthemajority Martynov Viktor the adoptionandimplementationofthatpolicy.IndependentDirectors aswellsupervising and theChairmanofManagementCommittee, Members providing financialincentivesfortheManagementCommittee In 2019, theAnnualGeneral Shareholders MeetingofPJSC Gazprom

bodies seePJSC 2019 GazpromAnnualReport For moredetailsonthesystem ofremuneration ofthemembersgovernance Annual Report 2019Annual Report For detailsontheRiskManagementandInternalControlSystemseePJSC Gazprom Information toPJSC GazpromAnnualReport reviewedbytheBoardofDirectorsseeAdditional For thefulllistofmatters 33

Gazprom Group’s Sustainability Report 2019 Gazprom Group’s Sustainability Report 2019 1.2. 1.2. practices ofothermajorRussiancompanies. comparing thecurrentcorporate governancepractice withthe best use oftheNationalRatingCorporate Governancewithaviewto for theCompany tobeassessedwiththe system. Workisunderway PJSC Gazpromintendstocontinueimprovingitscorporate governance 1.2.3. 1.2.2. (34) PJSC 2019, GazpromAnnualReport pages 188–190, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf Annual Report 2019Annual Report For moredetailsonhowInternalandExternalAuditisarranged seePJSC Gazprom 34

Improvement Plans Corporate Governance Audit Internal External and Corporate Governance Governance Corporate Meetings. for theuseofelectronicvotingincourseGeneral Shareholders the RegulationonGeneral ShareholdersMeetingsoastoprovide In 2019, ofAssociationand amendmentsweremadetotheArticles

1 5 3 4 2 6 Appendices Our Report 1.3. Gazprom and approvesimilarby-laws. subsidiaries usedtheCode ofCorporate Ethicsasabasistodevelop at theentitiescontrolledbyPJSC Gazprom.Mostofthe Company’s to extendethicsrequirementsthemembersofboardsdirectors the membersofPJSC weremade GazpromBoardofDirectors.Efforts andpreventconflictsofinterest among provision designedtoidentify members ofPJSC GazpromBoardofDirectorsandinclude aspecial Governance Code. legislation. In2019, nochangeswereintroducedintotheCorporate includingtoreflectrelevantchangesintheapplicable when necessary, (38) (37) (36) (35) Commission. request directlytotheChairmanofPJSC GazpromCorporate Ethics by [email protected],ormakinga communication channels:byphone(HotLinenumber+7495719 1171), of Corporate usingavariety EthicsCommission)can besought Advice onethicalbehaviour(includingqueriesaddressedtothe GRI 102-17, GRI102-25 behaviour atPJSC Gazpromarethe values,principles,standards,andnormsof The keydocumentssetting GRI 102-16, GRI205-2 4,988 1.3.1. Anti-Corruption Policy ofPJSC Gazprom The CodeofCorporate EthicsofPJSC GazpromwasextendedtoapplyGazprom’s BoardofDirectors. In 2019, theCode ofCorporate Ethics wasamendedtoapply The Corporate GovernanceCode ofPJSC isupdatedifand Gazprom Approved byresolutionofthePJSC GazpromBoardofDirectorsNo.2846 datedNovember15, 2016. https://www.gazprom.com/investors/documents/ 2016, resolutionofthePJSC GazpromBoardofDirectorsNo.3172 datedOctober26,2018, andresolutionofthePJSC GazpromBoardofDirectorsNo.3307 datedAugust20,2019.Approved byresolutionoftheBoardDirectorsOJSC GazpromNo.2309 25,2014 datedFebruary asamendedbyresolutionofthePJSC GazpromBoardofDirectorsNo.2795 datedSeptember1, Approved bytheresolutionofannualGeneral ShareholdersMeetingofPJSC Gazprom datedJune30,2017, MinutesNo.1. 35 , theCode ofCorporate EthicsofPJSC Gazprom Corporate GovernanceCode ofPJSC Corporate Ethics and NormsofBehaviour Values, Standards, in corporate ethicsin2019 received training Gazprom Group employees ofthe 37 .

36 , andthe were conductedtoassesstheknowledgegainedbyemployees. 4,988 employeesoftheGazpromGroup.Atendtraining, tests Ethics atPJSC Gazprom.Training incorporate ethicswasprovidedto In 2019, theCompany launcheddistancelearningcoursesinCorporate Chairman ofthePJSC GazpromManagementCommittee. tothe ontheworkperformed Commission submitsannualreports are keptandupdatedonanannualbasis.The Corporate Ethics the compliancewithCode ofCorporate Ethics.These statements Corporate Ethics. ofPJSCcounterparties GazpromcomplywiththeCompany’s Code of contracts concludedbyPJSC Gazpromincludeaclauserequiringthat from2019,Starting the uponmutualagreementoftherelevantparties, the employeesofPJSC Gazpromanditssubsidiaries. and reviewed18 by items,including thoserelatedtoqueriessubmitted the Commissionthereof.In2019, theCommissionheldsevenmeetings conflict orthemeasurestakenareinsufficient,employeestoinform failstotakemeasuresresolvethe Ifsuchsupervisor supervisors. In caseofaconflictinterest,employeescancontacttheirimmediate Every year,Every Gazprom’s executivesstateinwritingtheirobligationson Company’s officialwebsite with thesedocumentswhicharepublicallyavailableinRussianandEnglishonthe suppliersandcontractors,bodies, businesspartners, canmakethemselvesfamiliar All stakeholders,includingalloftheCompany’s employees,membersofgovernance

Gazprom Group’s Sustainability Report 2019 Gazprom Group’s Sustainability Report 2019 1.3. 1.3. found theirreflectioninthefollowingby-lawsofCompany: intention toprecludeanyformsofdiscriminationorforcedlabourhave ofnativehabitat,aswellthe traditional wayoflife,andpreservation tohealthprotection,education,favourableas therights environment, inthesphereofemploymentandlabour,including therights aswell The GazpromGroup’s commitmenttotherespectofhumanrights, ganization’s Declaration onFundamental Principles atWork. andRights Universal Declaration andtheInternational LabourOr- ofHumanRights, out intheConstitutionofRussianFederation, theUnitedNations’ international laws.The Company isprimarilyguidedbytheprinciplesset fundamental valuesandfullycomplieswiththeapplicableRussian the unconditionalrespectforhumanrights. ofateamspiritwhenaddressingongoingtasks,butalsoon nurturing values buildnotonlyonbenevolence,promotionofcooperation and ingness toengageinadialogue,andmutualrespect.These corporate The keycorporate valuesofGazpromareprofessionalism,initiative,will- 1.3.2. (43) (42) (41) ApprovedbyorderofPJSC GazpromNo.416 datedSeptember17, 2019. (40) ApprovedbyorderofPJSC GazpromNo.432datedJune22,2017 (aswordedinorderofPJSC GazpromNo.21 20,2020). datedJanuary (39) relationships withtheCompany’s stakeholders. Group’s blockinbuildingconstructive socialobligationsandanimportant its subsidiaries; Entities the HRManagementPolicy ofPJSC itsSubsidiariesand Gazprom, the Code ofCorporate EthicsofPJSC Gazprom; Respect of human rights isanessentialelementoftheGazprom Respect ofhumanrights In the sphere of human rights, Gazpromsharestheglobalvisionof In thesphereofhumanrights, Approved by resolution of the Management Committee ofOJSC GazpromNo.32datedMay22,2003. Approved byresolutionoftheManagementCommittee ofOJSC GazpromNo.21Approved byresolutionoftheManagementCommittee datedMay25,2015, https://www.gazprom.ru/f/posts/73/278066/environmental_policy.pdf Approved byinstructionofOJSC GazpromNo. 49 datedNovember7, 2006. 39 andtheGeneral Collective AgreementofPJSC and Gazprom and Human Rights Human and Corporate Values Gazprom of Values, and Standards, Norms of Behaviour The keyfocusareasare: the RegionalPolicy Concept ofOJSC Gazprom workplace rights; Site andAccessAuthorizationProcedures”datedDecember28,2019. Order No.602ofPJSC “OnApprovalofInstructionsforOn- Gazprom the EnvironmentalPolicy ofPJSC Gazprom PJSC until2021 Gazprom ManagementSystemDevelopmentStrategythe ProcessSafety of Road Safety PolicyRoad Safety ofPJSC Gazprom interests ofindividualsandlegalentities. andlegitimate freedoms ofapersonandcitizentherights and procedures takingintoaccounttheconstitutionalrights withon-siteandaccessauthorization topersonalsafety, right toasafeenvironment; right oflocalcommunities,includingindigenousrights; rights 40 Occupational, Industrial, Fire and andtheOccupational,Industrial,Fire

41 55 ;

42 ; 43 ; 1 5 3 4 2 6 Appendices Our Report 1.1. Values, and Standards, Norms of Behaviour 56

Gazprom Group’s Sustainability Report 2019 1.1. Values, Standards, and Norms of Behaviour Our aim is to create transparent and fair Our Report cooperation mechanisms

and protect Gazprom’s 1 interests by all legal means. Yulia Efimenko Senior Legal Counsel, PJSC Gazprom 2

Engaged in legal support of PJSC Gazprom’s international projects in non-FSU countries. Strives not only to comply with the laws, but also to take into account the interests of all parties to the agreement and resolve disputes out of court through negotiation. eport 2019 R

3 ustainability S roup’s roup’s G Gazprom 4

57 ppendices A 1.3. as themostvulnerable areas.To apotentialconflictofinterest identify to corruptionrisks,withprocurementandcontract executiondefined Gazprom conductsmonitoringofoperations withthegreatestexposure GRI 205-1 mission ofpreventingandcombatingcorruptionforthebenefitcivil It isdesignedtointroduceaunifiedapproachtheCompany’s underpinning theCompany’s corruption. topreventandfight efforts The Anti-Corruption Policy ofPJSC isthekeydocument Gazprom 1.3.3. system.Distancelearningcoursesincorporateoccupational safety implementation ofsocialpolicies,andfine-tuningtheindustrial focus on,amongotherthings,applicationofthelabourandcivillaw, In2019,human rights. tooktraining witha thestaff inhumanrights knowledge withregardtovariousaspectsrelatedtherespectof The GazpromGroupensuresthatitsemployeeshavesufficient GRI 412-2, GRI410-1 screening. clausesorundergohumanrights not includehumanrights Russian constituententities)andcontracts signedbyPJSC Gazpromdo withthegovernmentsof Agreements (includingthoseonpartnership GRI 412-3 operating attheGazpromGroup’s facilities inRussiamustalsoconform ethics rulesadoptedbytheGazpromGroup. abiding bytheapplicablelegislationandcorporate andbusiness andcounterparties confirmed byitsfocusonengagingthe partners The Company’s isfurther commitmenttotherespectofhumanrights GRI 412-1 Apart fromcomplyingwiththelaw,suppliersandcontractorsApart Anti-Corruption Policy Anti-Corruption Values, and Standards, Norms of Behaviour beneficiaries. disclosetheirultimate requirethatthecounterparties counterparties in procurementactivities,contracts concludedwiththeCompany’s developed topreventandcombatcorruption. and responsibilitiesofgovernancebodies,asetmeasures PJSC setsout,amongotherthings,thegoals,competencies Gazprom shareholdersandemployees.The Anti-Corruptionsociety, Policy of that cover100% oftheGroup’s personnel. security and relevantpoliciesorproceduresattheGazpromGroup. are nodedicatedtraining programs protection devotedtohumanrights ethics werealsoorganizedfortheemployeesofPJSC Gazprom. There human rights the GazpromGroupentitiesandtheirsupplierscontractors respect industrial safety. themselves totheCompany’s corporate standardsinthesphereof However, briefings issuesareincludedinmandatory humanrights There isnospecialprocedureinplacetoassessthedegreewhich . 58

Gazprom Group’s Sustainability Report 2019 Gazprom Group’s Sustainability Report 2019 1.3. 1.3. in theformofpost-training tests.The numberofemployeeswho by introducingregularemployeetraining withknowledgeassessments of restrictionstocoverthemembersboardsdirectors,aswell requirements initscontrolledentities,includingbyextendingthescope In 2020,theCompany intendstocontinueenhancingcorporate ethics 1.3.4. Gazprom Group. actualorpotentialcasesofcorruptionwithinthe to identify via theHotLine,includinganonymousmessages,isanalysed clock viatheGazpromGroup’s HotLine.The informationreceived Fraud, round-the- corruptionandembezzlementcanbereported GRI 102-17 corruption activities.In2019, 89employeesreceivedtraining under Administration orotherprofessionalsdirectlyinvolvedintheanti- for newlyappointedexecutivesandspecialistsofPJSC Gazprom on howtopreventandcombatcorruption,whicharedesigned The professional developmenteducationalprograms Company offers GRI 205-2 and Norms of Behaviour of Norms and Values, Plans Enhance to Standards, Values, and Standards, Norms of Behaviour term priority with a significant potential for further development. withasignificant potentialforfurther term priority inthisdirectionhave along- corporate governancesystem.The efforts will continuetointegrate principlesintotheCompany’s humanrights upgrade theirskillsinanti-corruptionisalsosettoincrease.The work consumers. All incoming reports havebeendulyprocessed consumers. Allincomingreports fraud, andcomplaintsrelatedtothesalesofgasend third-party encountered topicsincludepotentialprocurementviolations, Russian Federation intheGazpromGroup.The most frequently them directlyrelatedtopotentialbreachesofthelegislation In 2019, withonly81 theHotLineprocessedover900reports, of combating corruptionreached1,144. total numberoftheGazpromGroupemployeeswhotooktraining in of PJSC Gazprom’s branches, subsidiariesandentities.In2019, the offline andonlineanti-corruptiontraining programs fortheemployees these programs. Moreover, GazpromCorporate Instituteputinplace 59

. 1 5 3 4 2 6 Appendices Our Report 1.4. audits ofPJSC Gazprom’s QMS. cycle, andarisk-orientedthinking.2019 sawthefirst-andsecond-party comprehensive approach,whichincludesaPDCA(Plan-Do-Check-Act) System (QMS)compliantwithISO9001:2015. The QMSisbasedona PJSC Management theQuality Gazpromimplementedandcertified Assuranceis theQuality Policy ofPJSC. Gazprom Assurance WorkingGroupinplace. Assurancemanagement team.There areaQuality Counciland assurance actsasaquality officerrepresentingthesenior Committee pliers andcontractors. ChairmanoftheManagement The Deputy PJSC Gazprom,fromtheBoardofDirectorstosubsidiaries,sup- (45) (44) methodology, thusimprovingtheefficiencyofGroupasawhole. managementsystems ofitssubsidiariesbasedonasingle quality integrated corporate QMStoaligntheofPJSC Gazprom and Gazprom continuesimprovingitsQMS.The planistocreateavertically 1.4.1. control. To withthe assessthecomplianceofgoods,worksandservices categoriesundergoquality About 70%ofsignificantproductandservice GRI 416-1 atallstages,andimprovebusinessprocesses. production andservices of managementdecisions,controlquality pany tomakemosteffective managementsystemofPJSCThe quality GazpromenablestheCom In 2019, GazpromUGSLLC wontheprizeofGovernmentRussianFederation assurance. foritscontributiontoquality As part of its efforts to improve the efficiency of quality management, toimprovetheefficiencyofquality ofitsefforts As part PJSC Gazprom’s management keydocumentinthesphereofquality managementactivitiescoverallgovernancelevelsof The quality https://www.gazprom.com/f/posts/74/562608/quality-assurance-policy-20-09-17-en.pdf Approved byorderofPJSC GazpromNo.643 datedSeptember20, 2017 Management Plans Management Quality Product Quality Management Management Quality 44 - and recommendationsensuringtheconsistencyofmeasurements. existing requirements,PJSC Gazpromusesasetofcorporate standards mandatory state certification system. statecertification mandatory equipment. GazpromusesINTERGAZCERT asanadditiontothe production facilitieswiththeGroup’s requirementsformaterialsand sourcedbyPJSCcompliance ofgoods,worksorservices Gazprom’s INTERGAZCERT, whichisoneofthekeytoolsusedtoassess management systemcompliantwiththeSTO Gazprom9001 standard. ofaquality during procurementproceduresistheavailability suppliers andcontractors. Oneofthecriteriaforassessingbidders standards andexpanded thescopeofQMSapplication. In 2019, PJSC assurance Gazpromadoptednewversionsofitsquality compliance with the process safety requirements. compliance withtheprocesssafety atGazprom’srender services facilities, aswellforcontrollingtheir worksor systemforauthorizingcontractors toperform certification usingtheINTERGAZCERT voluntary For 2020,itisplannedtostart

Gazprom has its own voluntary certification system– certification Gazprom hasitsownvoluntary requirementsonbothits Gazprom imposesstringentquality For Assurance thefulltextofQuality Policy ofPJSC seehere Gazprom 60

Gazprom Group’s Sustainability Report 2019 Our Operations

2.1. Mission and Strategy 63 2.2. Hydrocarbon Production and Reserves 74 2.3. Hydrocarbons Processing 78 2.4. Development of the Natural Gas Transportation System 82 2.5. Hydrocarbon Sales 85 2.6. Natural Gas Vehicle Fuel Market Development 94 eport 2019 R 2.7. Heat and Electricity Generation 99 2.8. Contribution to National Industrial Development 101 ustainability S 2.9. Innovations and R&D 106 roup’s roup’s G Gazprom

2 2. Our operations

GRI 102-16, GRI 102-26 PJSC Gazprom’s mission and the Group’s strategic goal set the tone for the Company’s operations and help define its general priorities. PJSC Gazprom’s mission is to ensure a reliable, efficient and balanced supply of natural gas, other energy resources and their derivatives to consumers. The Gazprom Group’s strategic goal is to strengthen its leading position among global energy companies eport 2019 by diversifying sales markets, ensuring energy security R and sustainable development, improving operating

efficiency and fulfilling its scientific and technical potential. ustainability S roup’s roup’s G Gazprom

62 2.1.

Mission and Strategy eport ur R O

The Company’s long-term strategic planning relies on a system of the Program is submitted for approval to the PJSC Gazprom Board of strategic target indicators (STI) coming in the shape of well-balanced Directors. 1 targets that span the entire range of operations and define the Strategic planning helps outline general development paths and quantitative dimension of strategic goal setting. management decisions that are set out in more detail at the stage The Long-Term Development Program of PJSC Gazprom is of medium- and short-term planning. It plays a key role, inter alia, in developed annually in accordance with the Company’s Planning the budgeting and development of the Investment Program of PJSC Procedures46 based on the STIs and incorporating the Guidelines on Gazprom for the upcoming year and next three years. Long-Term Development Programs for Strategic Open Joint Stock Companies and Federal State Unitary Enterprises, and Open Joint Stock Companies in which the Aggregate Share of the Russian Federation Exceeds 50%47. Once pre-approved by the Management Committee, For more details on strategic planning system see PJSC Gazprom Annual Report 2019 48 2 2.1.1. Gazprom Group’s Business Model

GRI 102-1, GRI 102-2, GRI 102-3, GRI 102-4, GRI 102-5, GRI 102-10 The Gazprom Group is a global vertically integrated energy company as generation and marketing of heat and electric power. The parent eport 2019

R focused on geological exploration and production of gas, gas company of the Group is PJSC Gazprom. condensate and oil; transportation and underground storage of gas; hydrocarbon feedstock processing; gas and petrochemistry; sales of 3 gas, gas condensate, oil, and refined hydrocarbon products, as well For the schemes of business processes within the Gazprom Group’s gas, oil and electric power businesses see PJSC Gazprom Annual Report 201949 ustainability S

Name and legal form of the company: Public Joint Stock Company Gazprom. roup’s roup’s Head Office: 16 Nametkina St., Moscow, 117420, Russian Federation. G

PJSC Gazprom’s form of incorporation is private property with the state- capital) through the Moscow Exchange using the stock exchange Gazprom owned stake. The Russian Federation controls the majority stake in the transaction technology. These transactions were based on, among 4 Company directly and indirectly (over 50%). other things, investor propositions and recommendations of the Bank of In 2019, there were changes in the share capital structure with the Russia’s Corporate Governance Code. sale of quasi-treasury shares (2.93% and 3.59% of the authorized

For more details on PJSC Gazprom’s share capital structure see Appendix 4.

The Gazprom Group carries out its operations in more than 20 countries 122 license and 243 sub-license agreements for the use of its and supplies its products to over 100 countries worldwide. trademarks in the Russian Federation and 46 foreign countries. As of the end of 2019, PJSC Gazprom granted 345 companies the right to use its trademarks50 in the Russian Federation, and concluded 5

Information on the Gazprom Group’s geography of operations is provided in Gazprom in Figures 2015–2019 Factbook51

(46) Approved by resolution of the Management Committee of the Company No. 34 dated June 26, 2006. (47) Instruction of the Government of the Russian Federation No. ISh-P13-2583 dated April 15, 2014. (48) pages 76–79, PJSC Gazprom Annual Report 2019, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf (49) Pages 36–37, PJSC Gazprom Annual Report 2019, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf (50) Detailed information about trademarks is provided on the official web site of PJSC Gazprom: https://www.gazprom.com/about/legal/trademarks/ (51) Pp. 95–98 of the Gazprom in Figures 2015–2019 Factbook, https://www.gazprom.com/f/posts/72/802627/gazprom-in-figures-2015-2019-en.pdf

63 ppendices A 2.1. Mission and Strategy

Total proven and probable hydrocarbon reserves nd N l a te a oi sa tu billion boe e n g ra 177.1 d de a l ru n s C o Length of gas trunklines in Russia c as

g 175,200 km Mitigation Installed electric capacity of the generating assets in Russia and of negative abroad impacts on the environment Rational use 40.13 GW

Installed thermal capacity of the generating assets in Russia and abroad of natural resources

70,270 Gcal/h Safety Group’s headcount of personnel 473,800 people Payroll expenses Development RUB 749,708 million of the regions Gazprom Group of operation R&D investment

RUB 12 .1 billion d e

r n i O v o s Investments in renewable energy sources and secondary energy i a i t a l

t a a g resources i t v l n r e d a o r

p g p u t r a s RUB billion o a 3.44 s n d a n u r f PJSC Gazprom charity spending c T o t s

improvement RUB billion governance 27.7 Corporate Professional Capital investments development of personnel RUB 1,818 .7 billion

PJSC Gazprom investments allocated to gas infrastructure development in the Russian regions RUB 34.3 billion Total environmental protection expenses

RUB 53.22 billion Electricity and heat

64 2.1. Mission and Strategy eport ur R

Natural and associated petroleum gas production O 501.2 bcm Oil production 48.0 mmt Gas condensate production 16.7 mmt Gas sales to non-FSU countries 1

bcm nd N 232.4 il a te a o sa tu e en g ra Gas sales to Russian consumers ud d as l r on C c as bcm g 235.8 Average gas penetration rate across Russia 70.1 % Electricity generation in Russia and abroad 2 149.02 billion kWh Heat generation

million Gcal Safety 122.38 Total taxes paid to the budgets of the Russian Federation at all levels of personnel RUB 2.82 trillion 3 Total tax payments to the budgets of foreign countries Gazprom Group RUB 255 billion Dividends per ordinary share in 2020

RUB d 15.24 e Implementation r n i O Market capitalization as of December 31, 2019 v o s i i of innovations a t a l t a a g i t v l n r e a RUB trillion d o r 6.1 p g p u 4 t r a s o a s n Gazprom Group’s employees covered by collective agreements d a n u r f c T o t s 73.3 %

Labour conditions improved for 34,600 employees Economic benefits from R&D results use

RUB billion 10.5 5 Built under the Gazprom for Children program 164 sports facilities Reduction of water consumption Electricity ⋆ and heat 8.4 % Decrease in waste generation ⋆ 6.1 % 6 Reduction of GHG emissions ⋆ 1. 5 %

⋆ Compared to the previous year.

65 ppendices A 2.1. Mission and Strategy

2.1.2. Scale and Results of Operations

Gazprom is one of the world leaders in natural gas reserves and Russian electricity and heat market in terms of installed electric and production, holding a significant share of the Russian market in liquid thermal capacity and the country’s largest heat generation company. hydrocarbons production and processing. Gazprom is a leader on the

16 % Share in global gas reserves 71 % Share in Russian gas reserves

12 % Share in global gas production 68 % Share in Russian gas production 52 Share in the European gas consumption Share in electric power generation 35.5 % (other than FSU countries) 14 % in the Russian Federation Share in Russian oil and gas condensate Share in heat generation 12 % production 9.2 % in the Russian Federation eport 2019 Share in the installed electric capacity of the R Share in the total oil and stable gas condensate power plants included in the Unified Energy 18 % processing in the Russian Federation 16 % System (UES) of the Russian Federation Share in the total gas processing in the Russian ustainability

>50 % Federation S roup’s roup’s

The Gazprom Group’s 2019 operating results highlight its scale of G business.

Gazprom’s key operating indicators as of 2019 Gazprom

53 501.2 6 7.1 Oil and gas condensate processing bcm Gas production mmt (tolling arrangements excluded)

54 48.0 14 9.0 2 mmt Oil production billion kWh Electric power generation

55 16.7 122.3 8 mmt Gas condensate production million Gcal Heat generation

31.5 Gas processing bcm (tolling arrangements excluded)

(52) Share of PJSC Gazprom’s gas supplies under contracts of Gazprom Export LLC in consumption of gas in Europe (other than FSU states). (53) Including the share in production of organizations in which Gazprom has investments classified as joint operations. (54) Including the share in production of organizations in which Gazprom has investments classified as joint operations. (55) Including the share in production of organizations in which Gazprom has investments classified as joint operations.

66 2.1. Mission and Strategy eport ur R O

2.1.3. Strategic Projects 1

In 2019, Gazprom brought into operation major strategic projects and A transit contract with Ukraine was signed. reached important agreements, including the following achievements.

Gas supplies to China commenced via the Power of Siberia gas An offshore terminal and the Marshal Vasilevskiy floating storage and pipeline. regasification unit were provided to supply gas to the Kaliningrad Region.

The TurkStream gas pipeline was put into operation. Power Unit No. 2 of the Grozny TPP was brought into operation; the 2 unit is the final facility within the program under capacity supply The Chayandinskoye field was put into operation. agreements.

2.1.3.1. Projects in the eastern area eport 2019 R The key milestone of 2019 was the launch of the Power of Siberia gas technologies, comprehensive process automation, and the use of trunkline. Russia started its first-ever pipeline supplies of natural gas renewable energy sources. 3 to China: gas from the Chayandinskoye field (Yakutia gas production In 2019, Gazprom also brought into operation top-priority facilities center) is now fed into China’s gas transmission system (GTS). With at the oil rim of the Chayandinskoye field. At the Kovyktinskoye field ustainability

S Power of Siberia brought into operation, Gazprom can now widen (Irkutsk gas production center), development drilling began. The cooperation with Russian companies, create new jobs, and provide Company continued the construction of the Amur Gas Processing Plant gas to the regions covered by the gas trunkline. Power of Siberia (GPP), one of the world’s largest facilities of this kind, and the expansion roup’s roup’s

G was built using solely pipes of Russian manufacture. The project was of the Sakhalin – Khabarovsk – Vladivostok gas pipeline between the carried out with a particular focus on maintaining a high level of process cities of Komsomolsk-on-Amur and Khabarovsk. and environmental safety. The solutions included minimally manned Gazprom 4 2.1.3.2. Projects in the southern area

With the addition of the TurkStream deep-water gas pipeline in 2019, the the way for the Russian gas to reach not only Turkey, but also, in transit, capacity of Russia–Turkey gas transmission systems expanded, paving Southern and South-Eastern Europe.

2.1.3.3. Projects in the northern area

Full-scale development began at the Kharasaveyskoye field (Yamal reached the final stage. As of the end of December 2019, in total 94% 5 gas production center) in 2019. A unique fishbone multilateral well of the pipeline (in all sections) was laid in the Baltic Sea. The creation of with eight sidetracks was built56 at the Vostochno-Messoyakhskoye an integrated gas processing and liquefaction complex near Ust-Luga field in the Tazovsky District of the Yamal-Nenets Autonomous Area. began. Gazprom continued expanding the Northern Gas Transmission In order to enhance the Kaliningrad Region’s energy security with Corridor by building compressor capacities at the Bovanenkovo – due consideration of the region’s geographical setting, Gazprom Ukhta 2 gas pipeline. Preparations were underway at the Ukhta – implemented an alternative gas supply project to provide liquefied Torzhok 2 gas pipeline to put a new compressor shop into operation. natural gas (LNG) deliveries by sea. An offshore terminal and the The Bovanenkovo – Ukhta 3 and Ukhta – Torzhok 3 gas pipelines were Marshal Vasilevskiy floating storage and regasification unit can now be being designed. The Nord Stream 2 gas pipeline construction project used for the purpose of gas supplies to the Kaliningrad Region. 6

(56) Project of JSC Messoyakhaneftegaz, a joint venture between PJSC Gazprom Neft and PJSC NK Rosneft.

67 ppendices A 2.1. Mission and Strategy

2.1.3.4. Amount of investment

Most of Gazprom’s capital expenditures under the Investment Program as the three strategic projects – Power of Siberia, Nord Stream 2, and are earmarked for its gas business. Gas investment peaked in 2019 TurkStream – were underway at the same time.

Gas business capex, 2016—2019, RUB billion 602.55 928.65 2016 2018 693.92 1,0 7 7.11 2017 2019

The investments made under the 2019 Investment Program totalled eport 2019 RUB 1,322.58 billion. R

2.1.3.5. Plans ustainability S PJSC Gazprom’s investment program for 2020 approved by resolution of the Board of Directors No. 3362 dated December 24, 2019 provides roup’s roup’s

for RUB 1,104.7 billion of capital expenditures. G

PJSC Gazprom’s major investment projects planned for launch in 2020—2025 Gazprom Fields:

Kovyktinskoye; Kharasaveyskoye;

Urengoyskoye (Achimov deposits); Yuzhno-Kirinskoye.

Kamennomysskoye-Sea;

Gas pipelines:

Development of gas transportation facilities of the UGSS in the Bovanenkovo – Ukhta 2 (CS); North-Western Region, Gryazovets – Slavyanskaya compressor station (CS) segment; Power of Siberia (expansion: loopings of the second string and the CS);

Power of Siberia (the Kovykta –Chayanda segment); Ukhta – Torzhok 2 (CS);

Sakhalin – Khabarovsk – Vladivostok (expansion); Bovanenkovo – Ukhta 3;

Nord Stream 2; Ukhta – Torzhok 3.

68 2.1. Mission and Strategy eport ur R O

PJSC Gazprom’s major investment projects planned for launch in 2020—2025 Processing/LNG: 1

LNG production, storage and shipment terminal in the vicinity of the Integrated gas processing and liquefaction complex near Ust-Luga. Portovaya CS;

Amur GPP;

2.1.4. Contribution to National Economy 2

GRI 102-7 Gazprom Group’s Key Financial and Economic Indicators, 2016–2019 Indicator 2016 2 017 2018 2019 eport 2019

R PJSC Gazprom’s market capitalisation at year end, RUB trillion 3.7 3.1 3.6 6.1 Sales revenue, RUB million 6,111,051 6,546,143 8,224,177 7,659,623 3 Profit on sales, RUB million 725,580 871,405 1,930,030 1,119,857

ustainability Profit for the year under IFRS, RUB million 997,104 766,879 1,528,996 1,269,517 S Profit for the year attributable to PJSC Gazprom’s shareholders, RUB million 951,637 714,302 1,456,270 1,202,887

57 roup’s roup’s Discounted EBITDA , RUB million 1,323,258 1,467,692 2,599,284 1,859,679 G

Based on the outcomes of PJSC Gazprom’s operations in 2019, the annual General Shareholders Meeting of PJSC Gazprom approved the nominal value of dividends per ordinary share in the amount of RUB 15.24. Gazprom 4

In 2019, PJSC Gazprom became Russia’s largest company by Sales revenue decreased by 7% in 2019 and landed at market capitalisation on the back of a significant re-rating of the RUB 7,659.6 billion, which was mainly caused by lower revenue from Company’s shares. The Company was valued at RUB 6.1 trillion at gas sales to non-FSU countries58. The Gazprom Group’s profit for the end of December 2019, which is a 67.4% gain on the 2018 result. the year under IFRS was 17.0% lower than in 2018 and amounted to PJSC Gazprom’s securities saw much higher trading volumes on the RUB 1,269.5 billion. London Stock Exchange and the Moscow Exchange with a rise of 2.5 times and over 3 times respectively.

For more details on the indicators describing the Gazprom Group’s contribution to the Russian economy in 2016–2019 see Appendix 4. For more details on direct economic value generated and distributed in 2016–2019 see Appendix 4. 5

One of the milestones of 2019 was the approval of PJSC Gazprom’s PJSC Gazprom. The target level of dividend payout is at least 50% of new Dividend Policy59. Based on the 2019 results, the Company will the adjusted net profit under IFRS in 2021. pay out a total of RUB 360.8 billion in dividends (RUB 15.24 per share), or 30% of the net profit under IFRS attributable to the shareholders of

The full text of PJSC Gazprom’s Dividend Policy is available here60

6 RUB 138.445 billion of dividends was accrued on Russia’s stake in the Company in 2019.

(57) Calculated as operating profit less depreciation and asset impairment loss (except accounts receivable, issued advance payments and prepayments). (58) Corresponds to “Revenue from gas sales to Europe and other countries” in the IFRS consolidated financial statements. (59) Approved by resolution of the PJSC Gazprom Board of Directors No. 3363 dated December 24, 2019. (60) https://www.gazprom.com/f/posts/08/697893/gazprom-dividend-policy-24-12-2019-en.pdf

69 ppendices A Dialogue with an expert

Approval of the new Dividend Policy was one of the most important events of 2019 for the Gazprom Group.

Famil Sadygov Deputy Chairman of the Management Committee of PJSC Gazprom

How does Gazprom’s new The purpose of the new Dividend Policy is to align the interests of the Company, government and minority Dividend Policy incorporate shareholders. the interests of different One of the principal objectives of the updates to the Dividend Policy was to establish a fair and transparent stakeholders, and how does it dividend calculation mechanism based on the Gazprom Group’s net profi t under IFRS adjusted for non- eport 2019 contribute to the Company’s monetary items. The dividends calculated on the basis of these adjustments more accurately refl ect the R own development? Gazprom Group’s cash fl ow.

What are the current and The Policy is intended to boost shareholder returns and enhance Gazprom’s investment case and market expected effects of the new capitalisation. The dividend payout is expected to reach 50% of the adjusted net profi t under IFRS in 2021. It is mostly thanks to these changes that in 2019 we saw our share price go up by 87% in US dollar terms. ustainability Dividend Policy? S

Did you consult any of the The Policy was drafted with input from PJSC Gazprom’s corporate brokers that had a clear understanding stakeholders in the process of the market’s expectations regarding the new document. In addition, we incorporated the results of direct roup’s G of working out the new calculation communication between Gazprom’s management and investors into the Dividend Policy. We also consulted methodology and drafting the Ministry of Finance of the Russian Federation. the Policy in general? If yes,

did they voice any suggestions Gazprom or concerns?

How are you going to fi nance One of Gazprom’s fi nancial policy priorities is still going to be the payment of dividends from positive free cash dividend payout? fl ow. The Company plans to maintain a comfortable debt level, with the net debt61 / EBITDA ratio standing at 1–2. That being said, we may take on additional short-term debt for specifi c purposes, such as payment of dividends to our shareholders.

(61) Net debt inclusive of bank deposits.

70 2.1. Mission and Strategy eport ur R O

2.1.4.1. Tax-related Improvements 1

One of the priorities embedded in the Gazprom Group’s development The Company has in place the Tax Strategy of PJSC Gazprom62, strategy is to enhance the efficiency of the Group’s operations, which that sets out long-term tax goals and targets. The Tax Strategy is is achieved through a variety of means that include effective and aimed at implementing the corporate strategy and is geared towards consistently optimized tax administration. cementing PJSC Gazprom’s status as a global energy leader. A Gazprom is among Russia’s largest taxpayers. In 2019, the Group’s special authorized Department of PJSC Gazprom is responsible for tax payments totalled RUB 3,077.150 billion, 62.8% of which were the carrying out the Tax Strategy. mineral extraction tax and customs duties. PJSC Gazprom implements a single tax policy and ensures uniformity in the application of the tax legislation by the Gazprom Group entities. 2 GRI 102-44 Questions from stakeholders How does the Gazprom Group A key initiative in this area is the creation of a Data Mart system as part of the Gazprom Group’s transition to adopt cutting-edge tax monitoring. The first subsidiary to join the tax monitoring regime was Gazprom Export LLC. Tax authorities IT solutions in the sphere were provided with remote access to the company’s accounting and tax data, tax registers, scanned copies of eport 2019 of taxation? source documents, and information on the internal control system. R In the future, almost all of the companies included into the Gazprom Group consolidated group of taxpayers will use the system. 3 ustainability

S 2.1.4.2. Taxation Plans

roup’s roup’s PJSC Gazprom’s Management Committee approved the PJSC Gazprom G 2. International taxation. 63 tax policy framework for 2020 and for the planning period of 2021–2022. One of the Tax Policy’s targets is to ensure that the Gazprom Group PJSC Gazprom’s plans regarding the tax policy for the following three is able to adapt to the changes in Russian and international tax years include: legislation on profit distribution introduced by the BEPS Action Plan Gazprom 1. Digitalisation in the sphere of taxation. and to provide ways of mitigating the Group’s tax risks. 4 PJSC Gazprom actively cooperates with the Federal Taxation Service of Russia in this area. In 2020–2022, the Company plans to continue 3. Ensuring the Gazprom Group’s compliance with the tax laws with a set of initiatives designed to expand the application of up-to- on transfer pricing when preparing reporting documents on the the-minute digital technologies in the taxation procedures of PJSC Group’s international entities, as well as the compliance with the Gazprom, from accounting, tax statistics collection and consolidation, Russian laws on tax control over the pricing of transactions between and tax forecasting to tax risk management processes and interaction interdependent parties. with tax authorities as part of tax control.

4. Shaping a favourable tax regime for the Gazprom Group. 5

(62) Approved by resolution of the PJSC Gazprom Management Committee No. 48 dated December 7, 2017. (63) Approved by resolution of the PJSC Gazprom Management Committee No. 2 dated January 23, 2020.

71 ppendices A 2.1. Mission and Strategy eport 2019 R ustainability S roup’s roup’s G Gazprom

72 2.1. Mission and Strategy eport ur R

Gazprom is Russia’s O largest taxpayer. By implementing extensive

investment projects, including 1 international ones, the Company ensures stability and growth of the Russian 2 economy. The timely payment eport 2019 R of taxes contributes 3

ustainability to the country’s development S roup’s roup’s

G and helps improve

Gazprom the well-being of vulnerable people. 4 Natalia Gotovtseva Deputy Head of Directorate, PJSC Gazprom

5 Provides tax support to major international projects of PJSC Gazprom, cementing the Company’s position as a leader in the global energy market. Even amid economic turmoil, PJSC Gazprom’s performance results ensure regular tax revenues, thus supporting the country's social programs and people's well-being.

73 ppendices A 2.2. Hydrocarbon Production and Reserves

2.2.1. Gas Reserves. Resource Base Replenishment

explored gas reserves proven gas reserves in in accordance with accordance with the international 34.9 tcm the Russian classification 17.7 tcm PRMS standards Gazprom boasts a rich resource base and leads the world in terms of Group’s efforts to replenish its resource base are regulated by the gas reserves. In 2019, the Group’s reserves replacement ratio stood Mineral Resources Base Development Program until 2040 and the Long- at 1.11, i.e. consistently above 1 over the last 15 years. The Gazprom Term Development Program for 10 years.

GRI OG 1 As of December 31, 2019, Gazprom’s explored reserves of natural gas in Siberia, and the Far East, as well as Russian seas. The growth of gas

accordance with the Russian classification (А+В1+С1) reached 34.9 tcm. reserves was mainly attributable to the Kruzenshternskoye field on the Based on an independent evaluation of the resource base under the Kara Sea shelf and its coastal area in the Yamal-Nenets Autonomous eport 2019

international PRMS standards, the Gazprom Group’s proven reserves of Area, as well as to the Dinkov and Nyarmeyskoye fields on the Kara R natural gas amounted to 17.7 tcm. Sea shelf. In 2019, the GPE operations in the gas business covered

In 2019, the Gazprom Group’s А+В1+С1 reserves in Russia grew by 144 license blocks, including 22 offshore areas. The expenses for GPE 556.7 bcm owing to geological prospecting and exploration (GPE). The (excluding UGS) amounted to RUB 68.7 billion.64 key regions for GPE were the Yamal-Nenets Autonomous Area, Eastern For more details on the Gazprom Group’s gas reserves see: ustainability S

Gazprom in Figures 2015–2019 Factbook65; PJSC Gazprom Annual Report 201966 roup’s G

The ongoing Program for Development of Unconventional and Hard- in the Kemerovo Region, with the Naryksko-Ostashkinskoye field

to-Recover Gas Resources of PJSC Gazprom includes an evaluation yielding 2.2 mcm of methane. Everything is ready for building three Gazprom of the resource base, analysis of existing and prospective production exploration well clusters to test and prove the high potential of coal-bed technologies, and rationale behind the choice of priority areas for methane production using new well construction and field development exploration and production at unconventional gas deposits. As part of technologies. the Program, 2019 saw continued efforts to produce coal-bed methane

(64) PJSC Gazprom and its subsidiaries. (65) Pages 12–21, Gazprom in Figures 2015–2019 Factbook, https://www.gazprom.com/f/posts/72/802627/gazprom-in-figures-2015-2019-en.pdf (66) Pages 82–86, PJSC Gazprom Annual Report 2019, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf

74 2.2. Hydrocarbon Production and Reserves eport ur R O

2.2.2. Gas Production 1

natural and associated petroleum gas production 501.2 bcm by the Gazprom Group in 2019

GRI OG 1 In 2019, the Gazprom Group’s production of natural and associated classified as joint operations), which is 0.5% or 2.5 bcm more than 2 petroleum gas reached 500.1 bcm (501.2 bcm including the Group’s in 2018. share in production of organizations in which it has investments

Gazprom Group’s gas production in the Russian Federation, 2016–2019 (excluding the organizations in which the Group has investments classified as joint operations) eport 2019 R

419.1 497.6 3 ustainability

S 9.4 12.9 2016 2018 roup’s roup’s G 471.0 50 0.1

Gazprom 10.3 16.5 2017 2019 4

Gas, bcm incl. APG, bcm The bulk of gas comes from the Nadym-Pur-Taz Region, where Siberia, and the Far East, as well as at the Russian shelf. production volumes are falling. At the same time, new prospective For more details on the Gazprom Group’s gas production centers see: gas production centers are emerging in the Yamal Peninsula, Eastern

67 68 PJSC Gazprom Annual Report 2019 ; Gazprom in Figures 2015–2019 Factbook 5 2.2.3. Gas Replenishment and Production Plans

In 2020, Gazprom plans to increase its gas reserves through GPE by at To ensure the required gas production volumes in the medium term, least 467.8 bcm. The growth of reserves will be mainly attributable to the PJSC Gazprom will continue developing the existing fields and ramping Kara Sea shelf, namely, to the Leningradskoye and 75 Years of Victory up their capacity to the respective design levels in a more efficient way, (75 Let Pobedy) fields. The GPE expenses (excluding UGS) are expected as well as establishing new gas production centers. to reach RUB 60.1 billion.69 6

(67) Pages 86–88, PJSC Gazprom Annual Report 2019, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf (68) Pages 10–11, 32–37, Gazprom in Figures 2015–2019 Factbook, https://www.gazprom.com/f/posts/72/802627/gazprom-in-figures-2015-2019-en.pdf (69) PJSC Gazprom and its subsidiaries.

75 ppendices A 2.2. Hydrocarbon Production and Reserves

GRI 102-44 Questions from Stakeholders Does the Gazprom Group Permafrost melting around the wells causes the accumulated intrapermafrost gas to release. Unlike gas in monitor gas emissions related producing horizons, intrapermafrost gas contains considerable nitrogen impurities, along with a different to the melting of permafrost balance of light and heavy carbon isotopes. In the Yamal fields, this kind of gas emerges from a depth of up to formations around the wells? 180 meters posing risks to the industrial safety of facilities. What do you do to control and We constantly monitor the condition of permafrost rocks containing gas wells and intrapermafrost gas, minimize this phenomenon? in particular at the Bovanenkovskoye field. Research shows that seasonal vapor-liquid cooling systems and vacuum insulated tubing (VIT) can significantly mitigate the risks of permafrost melting. Currently, 349 wells of the Bovanenkovskoye OGCF are equipped with VIT operating at a depth of 50 m. The plan for 2021–2024 is to build 178 gas wells with VIT to be placed at a depth of 150 m. We implemented a number of temperature-stabilizing solutions that helped prevent well pads from sinking, stop the development of wellhead cavings and behind-casing gas shows, and reduce excessive load on well structures. Along with VIT and seasonal cooling systems, the Kharasaveyskoye GCF uses conductor casing pipes with polyurethane-foam heat insulation (PU foam thermocases) operating at a depth of 40 m. The VIT running depth is set to reach 150 m. eport 2019 R 2.2.4. Oil and Gas Condensate Reserves. Resource Base Replenishment ustainability S

Gazprom Group’s proven oil proven gas condensate

reserves in accordance with the reserves in accordance with the roup’s 707.5 mmt international PRMS standards 730.2 mmt international PRMS standards G

GRI OG 1 Gazprom As of the end of December 2019, the Gazprom Group’s proven reserves Unconventional and hard-to-recover oil reserves (the Bazhenov of oil and gas condensate in accordance with the international PRMS formation, the Achimov, Domanic, and Paleozoic deposits) located in standards amounted to 707.5 mmt and 730.2 mmt, respectively. In ac- hardly-accessible areas play an important role in the replenishment of

cordance with the Russian classification (А+В1+С1), explored reserves the liquid hydrocarbon reserves. The hard-to-recover reserves account stood at 2,005.7 mmt of oil and 1,569.7 mmt of gas condensate. for nearly 70% of Gazprom Neft’s portfolio. Such reserves will only pay

In 2019, owing to GPE, PJSC Gazprom expanded its А+В1+С1 liquid off if high-tech horizontal and multilateral wells are used. hydrocarbon reserves in Russia by 11.7 mmt of gas condensate For more details on the Gazprom Group’s liquid hydrocarbon and 29.0 mmt of oil. Gazprom Neft's GPE expenses amounted to reserves and resource base replenishment see: RUB 53.5 billion.

Gazprom in Figures 2015–2019 Factbook70; and PJSC Gazprom Annual Report 201971

GRI 102-44 Questions from Stakeholders At which fields does The Group’s own seismic monitoring networks are up and running at three fields, namely, the Orenburgskoye, the Gazprom Group perform Astrakhanskoye, and Kirinskoye fields. The Naryksko-Ostashkinskoye and Kovyktinskoye fields rely on geo-ecological monitoring information from a regional network that monitors for technogenic seismic events mainly caused by coal of seismic activity? mining. 2019 saw no material seismic events reported at the above fields.

(70) Pages 12–21, Gazprom in Figures 2015–2019 Factbook, https://www.gazprom.com/f/posts/72/802627/gazprom-in-figures-2015-2019-en.pdf (71) Pages 82–86, PJSC Gazprom Annual Report 2019, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf

76 2.2. Hydrocarbon Production and Reserves eport ur R O

2.2.5. Liquid Hydrocarbons Production 1

oil production gas condensate production 40.8 mmt by the Gazprom Group in 2019 16.7 mmt by the Gazprom Group in 2019

GRI OG 1 In 2019, the Gazprom Group produced 57.5 mmt of liquid hydrocarbons72. as joint operations), which is slightly less than in 2018. Gas condensate 2 Oil production amounted to 40.8 mmt (48.0 mmt including the Group’s production reached 16.7 mmt, which is 4.9% more than in 2018. share in production of organizations where it has investments classified

Gazprom Group’s liquid hydrocarbons production in the Russian Federation, 2016–2019, mmt eport 2019 R 39.3 40.9 3 ustainability S 15. 8 15. 9 2016 2018 roup’s roup’s G 41.0 40.8 Gazprom 4 15. 9 16.7 2017 2019

Oil73 Gas condensate

For more details on the Gazprom Group’s oil and gas condensate production see PJSC Gazprom Annual Report 201974 5

2.2.6. Liquid Hydrocarbons Exploration and Production Plans

The Group will expand its resource base and develop hard-to-recover It is planned to continue using innovative digital technologies to increase and unconventional deposits of liquid hydrocarbons. In 2020, the plan is the potential of the existing active fields. 6 to increase liquid hydrocarbons reserves by 13.0 mmt through GPE.

(72) Excluding the Group’s share in production of organizations where it has investments classified as joint operations. (73) Excluding the Group’s share in production of organizations where it has investments classified as joint operations. (74) Pages 88–90, PJSC Gazprom Annual Report 2019, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf

77 ppendices A 2.3. Hydrocarbons Processing

2.3.1. Gas Processing

natural and associated petroleum gas processed 31. 4 7 bcm by the Gazprom Group in 2019 A greater refining depth and a higher output of value-added products accounts for over 50% of all natural and associated petroleum gas are a vital element of PJSC Gazprom’s production chain. Gazprom processing in Russia.

Natural and associated petroleum gas processing by volume, 2016–2019, bcm Company 2016 2 017 2018 2019 PJSC Gazprom and its key subsidiaries 30.06 29.94 30.14 30.60 Gazprom Neftekhim Salavat 0.49 0.43 0.46 0.44 Gazprom Neft 0.44 0.45 0.45 0.43 eport 2019 Gazprom Group, total 30.99 30.82 31.05 31. 47 R

In 2019, the Gazprom Group processed 31.47 bcm of natural and

associated petroleum gas (tolling arrangements excluded), which is ustainability 1.3% more than in 2018. S In the reporting period, the Gazprom Group commenced a project to set up a large integrated Complex for processing ethane-containing gas For more details on the Gazprom Group’s key gas processing projects roup’s near Ust-Luga and continued the construction of the Amur GPP. see Gazprom in Figures 2015–2019 Factbook75 G

2.3.1.1. Gas Processing Plans Gazprom

It is planned that PJSC Gazprom and its key subsidiaries will process 30.49 bcm of natural and associated petroleum gas in 2020.

2.3.2. Liquid Hydrocarbons Processing

liquid hydrocarbons processed by the 67.13 mmt Gazprom Group in 2019 In the reporting year, the Gazprom Group processed 67.13 mmt of liquid hydrocarbons (oil, gas condensate, fuel oil), down 0.4% versus 2018, as a result of scheduled repairs at refineries.

(75) Pages 71–73, Gazprom in Figures 2015–2019 Factbook, https://www.gazprom.com/f/posts/72/802627/gazprom-in-figures-2015-2019-en.pdf

78 2.3. Hydrocarbons Processing eport ur R O

Liquid hydrocarbons processing at the Gazprom Group, 2016–2019, mmt* Company 2016 2 017 2018 2019 1 PJSC Gazprom and its key subsidiaries (unstable gas condensate, oil) 17.55 17. 47 17. 75 18.82 Gazprom Neft (oil, stable gas condensate) 41.89 40.11 42.91 41.48 Gazprom Neftekhim Salavat (oil, stable gas condensate, fuel oil) 6.47 6.48 6.74 6.83 Gazprom Group, total 65.91 64.06 67.40 67.13

*Tolling arrangements excluded.

2 In the reporting period, Gazprom Neft continued implementing the Gas processing plants and oil refineries use hydrogen in their industrial second stage of technological and environmental upgrades at its processes, for example, for the production of light petroleum products. refineries, with the aim of enhancing oil refining depth, increasing the The Gazprom Group produces over 350,000 tons of hydrogen per year, output of petroleum products and improving the environmental aspect including 2,500 tons with the use of methane pyrolysis. of its production activities. eport 2019 R 2.3.2.1. Liquid Hydrocarbons Processing Plans 3 It is planned that PJSC Gazprom and its key subsidiaries will process ustainability

S 19.28 mmt of liquid hydrocarbons in 2020. roup’s roup’s G Gazprom 4

79 ppendices A 2.1. Hydrocarbons Processing Natural gas is one of the cheapest fossil energy resources and the most environmentally friendly one. Through its extraction, transportation, storage, and marketing Gazprom creates new opportunities eport 2019 for economic development R

and environmental ustainability S

conservation. roup’s G Olga Abramova Head of Division, PJSC Gazprom Gazprom

Manages the signing of contracts to sell natural gas for internal operating needs of gas production and transportation organizations during adjustment work at the Gazprom Group's facilities, which ensures uninterrupted and efficient operation of the Company's entities.

80 2.1. Hydrocarbons Processing eport ur R O

2 eport 2019 R

3 ustainability S roup’s roup’s G Gazprom 4

81 ppendices A 2.4. Development of the Natural Gas Transportation System

2.4.1. Natural Gas Transportation

length of PJSC Gazprom's gas thousand transportation system (GTS) gas intake by 175.2 km in 2019 678.96 bcm Gazprom’s GTS in 2019 In 2019, PJSC Gazprom continued developing its GTS, bringing its length to In 2019, PJSC Gazprom brought into operation 2,279.3 km of new gas 175,200 km. In the reporting period, the GTS received 678.96 bcm of gas in trunklines. Russia, which is 2% less than in 2018.

For more details on Gazprom’s GTS development projects see For more details on the Power of Siberia and TurkStream gas Gazprom in Figures 2015–2019 Factbook76 pipelines see PJSC Gazprom’s web site77

2.4.1.1. GTS Development Plans eport 2019 R

For details on the expansion plans for gas transmission capacities see PJSC Gazprom Annual Report 201978 ustainability S

(76) Pages 54–55, Gazprom in Figures 2015–2019 Factbook, https://www.gazprom.com/f/posts/72/802627/gazprom-in-figures-2015-2019-en.pdf (77) https://www.gazprom.com/projects/power-of-siberia; https://www.gazprom.com/projects/turk-stream/

(78) PJSC Gazprom Annual Report 2019, page 64, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf roup’s G Gazprom

82 Dialogue with an expert eport ur R O

Building stable and positive relations 1 with stakeholders is crucial for credibility to TurkStream.

Oleg Aksyutin 2 Deputy Chairman of the Management Committee and Head of Department at PJSC Gazprom

Who are the key stakeholders Our key stakeholders are governmental and regional authorities, as well as local communities in Russia in the TurkStream project? and Turkey. These local communities are represented by educational and healthcare institutions, as well as How do you engage with them? forestry, fishing and entrepreneur associations, to name a few. We maintain regular communications with Could you provide them, including formal and informal meetings, public events, presentations, and roundtables. eport 2019

R some examples? Let me give you a concrete example. In 2019, we opened an information hub in Kiyikoy where one can gain access to the data on TurkStream and talk to the project’s representatives. In Russia, professionals involved in the project held regular presentations at local schools and children’s camps throughout 2019 to nurture relationships with young people in the relevant localities. 3 Building stable and positive relations with stakeholders and raising awareness of TurkStream’s potential ustainability effects and benefits, grievance mechanism and planned social investments is not just part of our work, but S also the key to its success.

roup’s roup’s What grievance mechanism Stakeholders were made aware of the grievance procedures before the gas pipeline construction even G is in place for the TurkStream started. We distributed brochures describing the entire process among local communities in each country of project? the project. Complaints can be submitted via the TurkStream web site or local engagement managers. All

Gazprom complaints we receive are entered into a single register. Local engagement managers get in touch with the corresponding stakeholders to consider and address their complaint within 30 days. The grievance 4 mechanism will be used during the operational stage as well.

What does South Stream South Stream Transport’s approach and standards with respect to human rights are set forth in the Code of Transport79 do to ensure respect Corporate Ethics, which is to be signed by all its employees. The Code forms an integral part of agreements for human rights? Are there any made with contractors and suppliers, including construction companies. relevant training procedures for To mitigate relevant risks of violations, South Stream Transport requires that its contractors conduct employees? trainings for security personnel on how to apply force and observe human rights. In addition, we insist on background checks for security personnel and make sure that security firms are closely monitored.

Have there been any previous The bulk of claims received from stakeholders during the construction in 2018 and 2019 were related to the 5 cases of compensations to project’s impact on animal farms and fishery in Turkey. stakeholders for damages For instance, in Turkey, after a special assessment of the economic impact of the construction works on caused by the project the fishing industry in Kiyikoy, compensations were awarded in 2018–2019 to some 200 Turkish ship owners implementation? and divers, as well as to 513 crew members. We also developed and implemented a damage compensation scheme for animal farms, with funds allocated to some 50 farms to pay for animal food, water, and herd management. The overall approach to assessing claims for damages during the TurkStream construction is set forth in South Stream Transport’s Compensations Management and Livelihood Restoration Program. We are now making sure that all claims related to the construction stage are considered and closed. We have developed a similar framework regulation for the operational stage which helps streamline the company’s approach to 6 compensations or claims for damages (if any).

(79) South Stream Transport B.V. is responsible for the construction and operation of the offshore section of the TurkStream gas pipeline.

83 ppendices A 2.4. Development of the Natural Gas Transportation System

2.4.2. Natural Gas Storage

maximum possible daily capacity of Russian UGS facilities operated 843.3 mcm facilities 23 UGS in Russia PSJC Gazprom’s underground gas storage (UGS) facilities are part of PJSC Gazprom uses both own and rented gas storage capacities the Russian Unified Gas Supply System and serve to manage daily and abroad. By the end of 2019, PJSC Gazprom secured an operating seasonal fluctuations in gas supplies. They can cover up to 30% of daily reserve of 11.7 bcm of gas in European UGS facilities. By the beginning gas supplies in peak periods. In Russia, PJSC Gazprom operates 23 of the 2019/2020 withdrawal season, its operating reserve of gas in FSU UGS facilities in 27 geological structures. countries stood at 1.18 bcm. By the beginning of the 2019/2020 withdrawal season, PJSC Gazprom secured an operating reserve of 72.232 bcm of gas and achieved a potential maximum daily deliverability of 843.3 mcm – the highest volume for the last decade and a 36% rise as compared to the 2009/2010 withdrawal season. For more details on natural gas storage see PJSC Gazprom Annual Report 201980 eport 2019 R 2.4.2.1. UGS Development Plans

In the medium term, PJSC Gazprom plans to establish a network of seasons. The daily capacity is set to increase by some 200 mcm by the ustainability

high-performance small-scale underground gas storage facilities beginning of the 2030/2031 withdrawal season. S with a view to enhancing its operating flexibility in peak demand roup’s roup’s

(80) PJSC Gazprom Annual Report 2019, pages 96–97, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf G Gazprom

84 2.5.

Hydrocarbon Sales eport ur R O

2.5.1. Gas Sales to Russian 1 and International Consumers

gas sales by the Gazprom Group average gas penetration rate 235.8 bcm in Russia 7 0 .1 % across Russia

(5.04 bcm) sales of large-scale investments in gas infrastructure 2 3.78 mmt LNG in foreign markets 34.3 billion development in Russian regions exports of small-scale LNG produced and supplied by PJSC Gazprom’s share of gas the Gazprom Group companiess sales81 in European (non-FSU) tons in 2019 % gas consumption

eport 2019 2 7. 9 4 0 35.5 R

2.5.1.1. Gas Sales to Russian Consumers 3 ustainability

S The Gazprom Group supplies gas to 68 constituent entities of Regions, and the Republics of Tatarstan and Bashkortostan. In 2019, the the Russian Federation (in eight federal districts), with the largest Gazprom Group sold 235.8 bcm of gas to Russian customers, which is consumers being Moscow and St. Petersburg, the Moscow and Samara 3.9 bcm or 1.6% less than in 2018.81 roup’s roup’s

G For more details on the Gazprom Group’s gas sales to Russian consumers, see Appendix 4.

Breakdown of gas sales in Russia, 2019 Gazprom 4

Power companies 33.96 % Households 19.86 %

5 Other industrial consumers 32.19 % Utilities 13.99 %

2.5.1.2. Customer Relations

In Russia, PJSC Gazprom supplies natural gas to consumers via its their corporate web sites, which helps streamline communications and subsidiary, Gazprom Mezhregiongaz LLC. The company sells gas to document workflow. regional distribution companies which, in turn, enter into contracts The quality control of natural gas sold enables PJSC Gazprom to with, and directly collect payments from, end customers, including the determine the most efficient way of gas transportation and supply based 6 population. Many regional gas companies operate as a single point on its commercial and technical properties. The quality of gas supplied of contact dealing with requests for connection to gas distribution complies with GOST 5542-2014 and OST 51.40-93. networks. Some regional companies maintain customer accounts on

(81) Under contracts of Gazprom Export LLC.

85 ppendices A 2.1. Hydrocarbon Sales eport 2019 R ustainability S roup’s roup’s G Gazprom

86 2.1. Hydrocarbon Sales eport

Our goal is to provide every ur R household with natural gas. O Gas infrastructure expansion

across Russia helps create 1 equal conditions for people’s comfortable living.

Sergey Gustov 2 Director General, Gazprom Mezhregiongaz LLC

Gazprom Mezhregiongaz plays a key role in expanding gas infrastructure across Russia and ensuring reliable natural gas supplies to all consumer categories. Since 2005, the gas penetration rate has increased from 53.3% to 70.1% in Russia thanks to Gazprom. eport 2019 R

3 ustainability S roup’s roup’s G Gazprom 4

87 ppendices A 2.5. Hydrocarbon Sales

Once in three years, PJSC Gazprom performs mandatory certification of customer feedback book; gas in a specialized accredited institution. Certified products are subject to annual inspection control in line with gas certification rules. PJSC Gazprom’s retail subsidiaries monitor customer satisfaction social media. with respect to product quality. The following tools are applied by PJSC The results obtained are taken into account when developing the Gazprom to collect customer feedback: programs for better communications with stakeholders. hot Line (via phone, web site);

GRI 416-2 The reporting period saw no legal incidents with PJSC Gazprom’s products affecting consumer health and safety.

2.5.1.3. Gas Infrastructure Expansion in Russian Regions

PJSC Gazprom expands its gas infrastructure in Russian regions in line 9 high-pressure gas pipelines to residential communities; eport 2019 with the Regional Gas Infrastructure Expansion Program. In 2019, the R Program covered 66 constituent entities of the Russian Federation; a total of 124 gas supply facilities with a length of 1,880 km were built. In exit gas pipeline for connection to existing grids; 2019, investments under the Program amounted to RUB 34.3 billion, a 37.2% increase over the last four years (2016–2019). Since 2005, gas

76 inter-settlement gas pipelines. ustainability

infrastructure penetration as a result of the Program has increased from S 53.3% to 70.1% in Russia, from 34.8% to 61.8% in rural areas, and from 60.0% to 73.0% in cities. When implementing the Program, PJSC Gazprom is facing such

In 2019, 86 gas infrastructure facilities with a total length of challenges as insufficient regional funding of the measures to be roup’s G 1,196.8 km were brought into operation, including: implemented to prepare customers to the receipt of gas, as well as debts for gas supplies. Gazprom 2.5.1.4. Gas Infrastructure Expansion Plans

In 2020, investments under the Regional Gas Infrastructure Expansion and apartments and 410 boiler houses in 319 localities. By 2020, the gas Program are expected to stand at RUB 39.261 billion. infrastructure penetration rate in Russia is set to increase by 1.3 p.p. to It is planned to complete the construction of 141 gas pipelines with a 71.4%. By the end of 2030, the average gas infrastructure penetration total length of 2,350 km, which will help bring gas to 78,900 households rate across Russia is expected to reach 82.9%.

2.5.1.5. Gas Sales to International Consumers

Pipeline Gas Supplies. In 2019, the bulk of our natural gas sales went FSU countries are second major gas market for PJSC Gazprom. In to Western, Central and Eastern Europe, FSU countries, and China. 2019, PJSC Gazprom sold 36.5 bcm of natural gas in FSU countries Despite a highly competitive environment in the European gas excluding Russia, which is 2.4% more than in 2018. The growth was market in 2019, PJSC Gazprom82 maintained its export volumes at due to higher gas exports to Kazakhstan. 199.0 bcm, nearly on par with 2018 (down 1.4% year-on-year). After the Power of Siberia gas pipeline was brought into The reduction in natural gas supplies was mainly driven by weather operation in December 2019, PJSC Gazprom supplied 0.328 bcm effects, higher LNG supplies and economic challenges in some of natural gas to China. countries. In 2019, PJSC Gazprom’s share of gas sales83 in European (non-FSU) gas consumption was 35.5%.

For more details on gas sales to international consumers see Appendix 4.

(82) Under contracts of Gazprom Export LLC, including volumes sold by Gazprom Export LLC via gas auctions and through trading operations. The 2019 sales volumes include repo transactions for a total of 7.6 bcm. (83) Sold by PJSC Gazprom under contracts of Gazprom Export LLC. Including the EU-28 countries, but excluding the Baltic states, as well as Albania, Bosnia and Herzegovina, North Macedonia, Norway, Serbia, Turkey, and Switzerland.

88 Dialogue with an expert eport ur R O

The Power of Siberia gas pipeline 1 unlocked new opportunities for regional development.

Vladislav Borodin 2 Director General of Gazprom Transgaz Tomsk

How did you engage with When the project commenced, Gazprom Transgaz Tomsk signed cooperation agreements with the stakeholders at various Governments of the Republic of Sakha and the Amur Region for the duration of the construction and operation stages of the Power of Siberia periods of the Power of Siberia gas trunkline; these agreements set out the principles of interaction governing project implementation, the implementation of production and investment programs, coordination of works and performance of eport 2019

R including design development, environmental reviews, and recruitment of qualifi ed personnel from amongst local residents. We also signed construction and launch? an Agreement on Information Support with a view to gathering project information and keeping regional governments informed about the project in a more consistent way. To make the most of stakeholder feedback, Gazprom Transgaz Tomsk holds regular meetings with 3 authorities, public representatives, and the media. We discuss such matters as participation of local ustainability businesses in Power of Siberia, staff training, gas infrastructure expansion, interaction with indigenous S minorities of the North, as well as the company’s social and charitable priorities.

roup’s roup’s What do you do to support Back in 2016, we signed agreements with six communities of indigenous minorities of the North living in the G indigenous minorities of the areas where Power of Siberia was built. These documents aim to protect their traditional lifestyles and crafts North living in the areas of and also provide for compensations to cover possible damage to their ancestral grounds. Compensations the Power of Siberia project were paid in due time following necessary ethnological reviews and assessments.

Gazprom implementation? Gazprom Transgaz Tomsk takes an active part in preserving cultural traditions of indigenous peoples, supports national festivals such as Yhyаkh Tuymaady and the Days of the Evenki People. 4

What social and economic In 2019 alone, total taxes related to Power of Siberia that were paid to regional budgets exceeded RUB 510 effects has Power of Siberia million. had on local communities when As of the end of 2019, the branches established to support the gas pipeline construction and subsequent under construction and once operation created more than 1,400 jobs. The plan is to increase this number by more than 1.5 times by 2022. launched? Will it help boost the In addition, many branches employ up to 80–90% of their staff locally. gas infrastructure expansion? Gazprom Transgaz Tomsk partners with leading regional universities to hold career guidance events and job fairs. As of the end of 2019, 22 students from the Republic of Sakha (Yakutia) and the Amur Region study at higher educational institutions under employer-sponsored training agreements getting ready to be employed by Gazprom Transgaz Tomsk. 5 The construction of Power of Siberia enabled Gazprom to start expanding its gas infrastructure in the southern areas of the Republic of Sakha and the Amur Region. In the latter, a gas pipeline branch and the Uglegorsk gas distribution station are already built to supply gas to the Vostochny Cosmodrome and Tsiolkovsky Closed Town, and design works are nearly completed for an inter-settlement gas pipeline to be constructed. The plan for 2020 is to fi nish the design and survey works for future gas supplies to the town of Svobodny. In 2019, infrastructure design works were carried out to provide for gas supplies to the towns of Olyokminsk and Aldan and settlements of Bechencha and Iyengra in Yakutia. The Programs for Gas Infrastructure and Gas Supplies Expansion in the Amur Region and Republic of Sakha in 2021–2025 are now being agreed. In the longer run, between 2020 and 2035, we expect gas to be in much greater demand from all consumers in these regions. The annual gas consumption is likely to rise from 86.2 to 6 4,201.8 mcm in the Amur Region and from 0 to 2,491.5 mcm in the Republic of Sakha.

89 ppendices A 2.5. Hydrocarbon Sales

PJSC Gazprom exports natural gas to foreign markets mostly under natural gas supply contracts from time to time and at various hand-over long-term contracts at the prices that depend on both gas prices quoted points. In 2019, a total of 15.14 bcm of gas were sold via the ETP. on trading platforms and global prices for petroleum products. In the reporting year, PJSC Gazprom continued to develop its PJSC Gazprom develops new high-tech trading tools and constantly trading operations and entered into its first EFET agreement with Vitol, increases their share. PJSC Gazprom’s proprietary electronic trading with the first transaction effected in December 2019. A contract was platform (ETP) features a number of unique advantages, making it pos- also concluded with the Griffin Markets gas broker. On top of that, the sible to sell gas at both highly liquid gas hubs in Europe and illiquid bor- Company made its first commodity (gas) repo transactions in 2019 for a der points of handover. The ETP provides for an additional gas market- total of 7.6 bcm of gas84. ing channel where prequalified and registered companies can enter into

2.5.1.6. Liquefied Natural Gas Supplies

The Company ramps up LNG production volumes to tap into new 2018. The bulk of the Group’s LNG supplies in 2019 went to China (about markets which are beyond the reach of pipeline gas. The Gazprom 23%) and India (about 22%). Group keeps enhancing its LNG trading portfolio by both implementing The Sakhalin II project accounted for 33% of the Gazprom Group’s its own projects and purchasing LNG from third parties. LNG sales in foreign markets. Going forward, Gazprom intends to Gazprom supplies large-scale LNG to the Asia-Pacific Region (APR) expand its LNG trading portfolio by implementing new projects. eport 2019

and Europe. The APR is the main destination for international LNG R exports from the Gazprom Group’s trading portfolio (69% of supplies).

In 2019, the Gazprom Group sold 54 LNG shipments for a total of 3.78 For more details on the Gazprom Group’s LNG supplies see Appendix 4 mmt (5.04 bcm), which is generally in line with the sales observed in and PJSC Gazprom Annual Report 201985 ustainability S 2.5.1.7. Small-Scale LNG Supplies roup’s roup’s G In 2019, small-scale LNG exports86 totalled 443,500 tons, including which now includes the Baltic states, the Republic of Belarus, and 27,940 tons produced and supplied by the Gazprom Group’s Kazakhstan along with usual destinations (Poland, the Czech Republic). enterprises. Since 2016, the Gazprom Group’s enterprises have ramped In 2019, Gazprom sent its first small-scale LNG shipment by rail from

up their LNG exports by 68% on the back of a wider sales geography, Yakutia to Mongolia. Gazprom

GRI 416-1 The Gazprom Group87 is the only supplier under EU REACH and new requirements, in particular those applicable to classification and CLP environmental regulations for 100% of exported products. labelling, and conducts additional research on the composition and PJSC Gazprom continuously monitors the environmental legislation in physical and chemical properties of its products in compliance with the the European Union and elsewhere for new requirements to chemicals. European Chemicals Agency (ECHA) standards. The Company updates product safety data sheets in line with the

(84) From August 1 to December 30, 2019. (85) PJSC Gazprom Annual Report 2019, pages 114–115, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf (86) Small-scale LNG produced by the Gazprom Group enterprises and others and sold by Gazprom Export LLC. (87) Gazprom Export LLC in collaboration with the Special Envoy to the EU – Gazprom Marketing & Trading France.

90 2.5. Hydrocarbon Sales eport ur R O

Existing and prospective market destinations, pipeline gas and LNG flows 1

Yamal Peninsula

St. Petersburg Novy Urengoy Kaliningrad Ukhta Torzhok Lensk 2 Gryazovets Komsomolsk- Yuzhno-Sakhalinsk Minsk Moscow Uzhgorod on-Amur Khabarovsk Blagoveshchensk

to China Vladivostok eport 2019 Novorossiysk R Ulan-Bator Dzhubga 3 toв ChinКНР a ustainability S

Existing export supply routes and directions roup’s roup’s “Nord Stream” “TurkStream” Bovanenkovo – Ukhta 2 Gryazovets – Vyborg G Yamal – Europe Urengoy – Uzhgorod Ukhta – Torzhok 2 LNG supplies “Blue Stream” “Power of Siberia” Pipelines under construction Gazprom 4 Prospective supply routes

LNG production, processing, and regasification facilities LNG plant on Sakhalin Island Regasification terminal in Kaliningrad

LNG production, storage and shipping Project for the creation of an integrated complex for natural complex near Portovaya compressor station gas processing and liquefaction near the settlement of Ust-Luga

Phase 3 of LNG plant on Sakhalin Island 5

Existing transport destinations for 2020

>95 % West <5 % East

>95 % Pipeline transport <5 % LNG Existing transport destinations for 2030 6 70 % West 30 % East

90 % Pipeline transport 10 % LNG

91 ppendices A 2.5.

2.5.1.8. Plans for Pipeline Gas and LNG Sales to International Consumers

Gazprom intends to maintain its leadership across key export destinations New additions to LNG capacities will help ramp up export volumes by leveraging flexible market mechanisms and ramping up supplies via and enhance access to distant gas markets. The share of LNG sales in cutting-edge gas pipelines working with a minimum carbon footprint. PJSC Gazprom’s export portfolio is projected to reach 10% by 2030. The Company will keep expanding its ETP capabilities by offering more flexible delivery terms and convenient sales tools, and entering into framework agreements to facilitate counterparty relationships.

2.5.2. Sales of Oil and Gas Condensate

In 2019, the Gazprom Group’s crude oil and stable gas condensate sales amounted to 27.27 million tons. For more details on PJSC Gazprom’s sales of oil and gas condensate see PJSC Gazprom Annual Report 201988

2.5.3. Sales of Refined Oil and Gas Products

The Gazprom Group sold 70.18 million tons of refined oil and gas products expanded its product range. As of the end of 2019, Gazprom Neft’s GS in 2019. network in Russia consisted of 1,458 facilities, including 1,251 facilities In 2019, Gazprom Neft continued developing its own gas station owned by the company and 207 facilities managed by franchisees. The (GS) network. It also enhanced small-scale marketing channels and average daily sales per one GS in Russia stood at 18.54 tons.

For more details on Gazprom’s sales of refined oil and gas products For more details on sales of petroleum products see PJSC Gazprom Annual Report 201989 see Gazprom Neft Annual Report 201990

(88) PJSC Gazprom Annual Report 2019, page 118, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf (89) PJSC Gazprom Annual Report 2019, page 119, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf (90) Gazprom Neft Annual Report 2019, pages 81–97, https://ir.gazprom-neft.com/upload/iblock/8a0/2019_annual_report_en.pdf

92 2.5. Hydrocarbon Sales eport ur R O

2.5.3.1. Customer Relations 1

Gazprom Neft’s interaction with all consumer groups, both wholesale fuel quality perception by the customers of the Gazprom Neft retail GS and retail ones, lies at the heart of its sales activities. To raise awareness network. among its customers, the company uses several communication At the gas stations of Gazprom Neft, each customer can get channels, including the Unified Customer Support Center, official social information about the physical and chemical properties of petroleum media communities of the Gazprom Neft GS network, face-to-face products on sale, with quality data sheets publicly available and placed communication with employees at GS facilities, and advertising. at information boards. All GS facilities are subject to additional fuel The comprehensive 360-Degree Quality program launched in 2019 tests at least once a month. The fuel quality inspections are always seeks to coordinate the company’s PR and marketing functions, internal conducted without prior notice to GS and retail branch personnel. and external experts and line personnel at GS facilities for a better 2

GRI 416-2 2019 saw no incidents of non-compliance concerning the quality and authenticity of the Gazprom Neft’s products. eport 2019 R

3 ustainability S roup’s roup’s G Gazprom 4

93 ppendices A 2.6. Natural Gas Vehicle Fuel Market Development

Russia’s transition to a low-carbon economy requires a further boost friendly and safe kind of fuel. Its use as vehicle fuel is associated with a to natural gas vehicle (NGV) fuel production and improvements in the number of positive effects for society in general. infrastructure for users. Natural gas is the most efficient, environmentally

Economic effect. Domestic natural gas prices in Russia make it possible to reduce fuel costs by up to 60%, which makes the transport and logistics chain more efficient and Russian products more competitive. Environmental effect. The use of methane as vehicle fuel improves the urban environment and the standards of living. Vehicles are a major source of discharges into the environment, accounting for about 40% of aggregate air emissions (80–90% in big cities) and about 10% of GHG emissions. Social effect. The use of natural gas in certain transport segments will contribute to social solutions such as capping municipal passenger fares and consumer prices for everyday goods, as well as cutting fuel costs for low-income families as a result of switching to methane.

Relations with authorities. PJSC Gazprom is working together with natural gas in the transport sector by almost four times to 2.7 bcm per authorities towards the successful development of the NGV fuel market year by 2024 and to expand the stationary methane refill station network in Russia. At the initiative of PJSC Gazprom, the government took to 1,273 units. RUB 19.29 billion has been allocated for the NGV Fuel measures to support this market segment, including subsidies for the Market Development Subprogram.

construction of gas refilling facilities. Other key measures of government In order to facilitate the projects aimed at creating the LNG eport 2019 support include tax incentives, with the transport tax reduced or slashed production and marketing infrastructure, PJSC Gazprom has prepared R to zero for NGVs in 25 constituent entities of the Russian Federation. proposals for the Russian government’s draft resolution On Approval As a result of joint efforts of PJSC Gazprom and the Ministry of of the Rules for Granting Subsidies from the Federal Budget to Legal Energy of the Russian Federation, the Energy Sector Development Entities for Partial Reimbursement of Expenses on Investment Projects 91

Program of the Russian Federation was supplemented with the NGV to Build LNG Production and Fuelling Infrastructure Facilities, which ustainability Fuel Market Development Subprogram aimed at boosting the use of will improve the financial and economic aspects of LNG projects for S natural gas as vehicle fuel, developing the gas refilling infrastructure, investors. and increasing the number of NGVs. The targets are to boost the use of roup’s roup’s G

2.6.1.

NGV Fuel Market Development in Russia and Gazprom Abroad

number of gas filling facilities owned by the Gazprom Group and Gazprom Gazomotornoye Toplivo total capacity of the gas filling 326 units LLC in Russia 2.45 bcm stations network number of CNG filling stations number of CNG filling stations of of the Gazprom Group in FSU 68 units the Gazprom Group in Europe 39units states

The Russian NGV fuel market development is strategically important for There are a total of 447 gas filling stations currently operating in PJSC Gazprom. However, there are growth constraints for this market Russia, of which 326 are owned by the Gazprom Group and Gazprom such as underdeveloped fuelling and service infrastructure, a limited Gazomotornoye Toplivo LLC92. CNG sales at filling stations increased number of NGVs, high costs associated with converting vehicles from by 30% to 779 mcm in 2019. The overall capacity of the refill stations conventional fuels, and low public awareness of the benefits of natural network reached 2.45 bcm of natural gas per year. In the reporting year, gas as a vehicle fuel. Gazprom Gazomotornoye Toplivo LLC invested RUB 6,247 million in the

(91) https://minenergo.gov.ru/node/323 (92) Gazprom Gazomotornoye Toplivo LLC is not included in the IFRS consolidated statements of PJSC Gazprom. Gazprom Gazomotornoye Toplivo LLC is a single operator for the development of the NGV fuel market and has been included in the Report because the Development of the NGV Fuel Market was recognized as a material topic.

94 2.6. Natural Gas Vehicle Fuel Market Development eport ur R O

development of gas filling infrastructure facilities, and built 28 new gas Furthermore, PJSC Gazprom is expanding its LNG sales. LNG refilling filling stations93. services were offered in the Sverdlovsk, Kaliningrad and Kemerovo 1 As of the end of December 2019, the Gazprom Group and Gazprom Regions. A cryo unit at the Moscow Gas Processing Plant provided Gazomotornoye Toplivo LLC operated their CNG filling stations in 63 LNG to 25 semi-trailer trucks owned by Avtomobilnaya Kompaniya – constituent entities of the Russian Federation. Fast-track pilot NGV market Mostrans LLC. development projects were underway in five regions (St. Petersburg, Turning to foreign markets, the Gazprom Group sold 13.8 mcm of as well as the Belgorod, Kaliningrad, Leningrad and Rostov Regions). natural gas as a vehicle fuel through its own stations in Germany, the PJSC Gazprom continued converting its vehicles to natural gas under the Czech Republic, Serbia and Poland in 2019, which is 7% more than in Program for the construction of gas filling infrastructure at the industrial sites 2018. As of the end of December 2019, the Gazprom Group operated 68 of Gazprom subsidiaries. From 2014 through 2019, the number of NGVs in CNG filling stations in Europe. In FSU states, with 39 CNG filling stations the Company’s vehicle fleet reached 12,300 units – more than 50% of all operated by the Gazprom Group, CNG sales totalled 55.4 mcm, which is vehicles suitable for conversion to natural gas – generating RUB 4.8 billion 30.9% more than in 2018. 2 in savings and reducing pollutant emissions by more than 108,600 tons.

GRI 416-2 No incidents of non-compliance with the NGV fuel quality regulations 1,210 complaints; concerning the health and safety impacts of products and services resulting in a fine or penalty were recorded in 2019. The quality of CNG eport 2019 211 customer support queries; R for internal combustion engines is controlled daily, with certain physical and chemical characteristics checked against GOST 27577-2000. During the reporting period, Gazprom Gazomotornoye Toplivo LLC 5 construction proposals. launched a Hot Line, which received 7,162 queries, including: 3 The quality of natural gas sold in foreign markets at the Gazprom

ustainability 2,898 information queries;

S Group’s CNG filling stations is guaranteed by gas network operators. No complaints about natural gas quality were received from customers. 2,838 queries to the commercial divisions of branches; roup’s roup’s G

2.6.2.

Gazprom NGV Promotion among Customers 4

PJSC Gazprom uses a variety of tools to enhance consumer awareness has been developed for natural gas offered at PJSC Gazprom’s CNG about NGV fuel. Special web sites feature information about the existing filling stations. As a result of marketing programs, 10,296 vehicles were CNG filling station network (www.gazprom-gmt.ru), help customers converted to natural gas in 2019. Another tool to promote NGV fuel is map their route in such a way as to be able to use the stations, or motor rallies held in Russia and abroad. show the NGV model range (www.eco-gas.ru). The EcoGas brand

5 (93) As part of the investment program run by Gazprom Gazomotornoye Toplivo LLC.

95 ppendices A 2.1. Natural Gas Vehicle Fuel Market Development Russia sees an increasing number of natural gas vehicles, which is great as methane allows you to save more while also reducing harmful impacts on air and climate. Alexander Samoylenko Compressor Operator, CNG Filling Station 2 in eport 2019 St. Petersburg, Gazprom Gas-Engine Fuel LLC R

Has been working in the NGV sector for 25 years now. Pays special attention to industrial and occupational safety while providing consumers

with compressed natural gas, and ensures high-quality service. Winner of the Best Compressor Operator at Gazprom Gas-Engine Fuel LLC award. ustainability S roup’s roup’s G Gazprom

96 2.1. Natural Gas Vehicle Fuel Market Development eport ur R O

2 eport 2019 R

3 ustainability S roup’s roup’s G Gazprom 4

97 ppendices A 2.6. Natural Gas Vehicle Fuel Market Development

In 2019, the Gazprom Group and Germany’s Uniper sponsored the Blue Corridor – Gas into Engines rally. The route symbolically connected the starting and ending points of the TurkStream and Nord Stream 2 gas pipelines, spanning Turkey, Bulgaria, Serbia, Croatia, Slovenia, Italy, Belgium, Austria, Germany, and Russia. The participants covered over 8,000 km. The race featured more than 20 cars, trucks and passenger vehicles powered by CNG and LNG. The NGVs proved they are highly reliable and demonstrated the efficiency of natural gas as a vehicle fuel. During the Russian part of the rally, the natural gas refuelling costs were 2–3.5 times lower than those for conventional fuels.

2.6.3. NGV Market Development Plans

In the regions, the implementation of the federal subsidies program co-funding from the government for the construction and reconstruction for investment into the NGV market will be continued. To enhance and of CNG filling stations with the use of public-private partnership streamline the procedures aimed at receiving the government support, agreements. it is planned to establish interaction with the authorities in the regions In order to fulfil its plans for the creation of NGV fuel corridors, PJSC that are home to the cities participating in the Clean Air federal project Gazprom will continue building gas refilling infrastructure along key under the Environment national project94. This should provide additional long-distance federal highways. eport 2019 R

(94) https://нацпроектэкология.рф/proekt/chistyj-vozduh/ ustainability S roup’s roup’s G Gazprom

98 2.7.

Heat and Electricity eport ur R Generation O

the Gazprom Group’s installed 1 4 0 .13 GW electric capacity in 2019

the Gazprom Group’s installed 70,270 Gcal/h thermal capacity in 2019 The Gazprom Group is one of Russia’s largest companies in terms of generating assets, featuring 40.13 GW of installed electric capacity and 70,270 Gcal/h of installed thermal capacity. 2 GRI 102-10 The Group’s power sector assets are managed by Gazprom power generation facilities. With REP Holding now part of Gazprom Energoholding LLC. At the end of 2019, Gazprom Energoholding Energoholding, the customer–manufacturer relations will be acquired 100% of the authorized capital of JSC REP Holding, a streamlined, and production localization projects will be implemented. manufacturer of equipment for gas transmission systems and eport 2019 R Gazprom Energoholding in figures Share in the installed electric capacity of 3 16 % Russia’s UES power plants (38.75 GW) 9.2 % Share in Russia’s total heat generation ustainability S 13.7 % Share in Russia’s electric power generation >80 % of heat is generated by TPPs

roup’s roup’s Share in total electric power supply power were in operation at Gazprom Energoholding as G 17. 2 3 % in the first price zone 79 plants of the end of 2019 Share in total electric power supply Natural gas accounts in the fuel balance 2.25 % in the second price zone 89.55 % structure of Gazprom Energoholding Gazprom Share in the installed thermal capacity of 4 8 % Russia’s generating assets (67,320 Gcal/h )

Gazprom Energoholding is Russia’s largest thermal power producer, supplying heat to about 20 million people. The Group’s generating assets are located in 17 Russian regions

2.7.1. Heat and Electricity 5 Generation and Sales

Gazprom Energoholding generated a total of 143.07 billion kWh of season. In 2019, the companies of Gazprom Energoholding sold 152.83 electric power in Russia in 2019, which is 2.4% less than in 2018, billion kWh of electric power and 110.85 million Gcal of thermal power. as hydro generation decreased and the generating equipment was Gazprom Energoholding also exported electricity to Finland in the optimized. Heat generation amounted to 115.26 million Gcal in 2019, reporting period, with the actual export supply volume amounting to which is 7.3% less than in 2018, due to an unusually warm winter 0.72 billion kWh.

For more details on the electricity and heat generation and sales by the generating companies of Gazprom Energoholding LLC see Appendix 4. 6 .

99 ppendices A 2.7. Heat and Electricity Generation

2.7.2. Relations with Electric Power and Capacity Consumers

Gazprom Energoholding sells electric power and capacity Gazprom Energoholding liaises with major wholesale customers mainly predominantly on the wholesale market. The key customers are major on the platform provided by the Association “Nonprofit Partnership users, energy sale (energy supply) organizations and guaranteeing Council for Organizing Efficient System of Trading at Wholesale and suppliers that procure electric power or capacity for sale to end Retail Electricity and Capacity Market” (Association “NP Market customers, including residential customers. Council”). In 2019, the Association’s Supervisory Board held 16 meetings in absentia and 12 in-person meetings.

2.7.3. Relations with Heat Consumers eport 2019 Interaction with the consumers of heat is based on their category. In most of Gazprom Energoholding’s companies, interaction with R In the heat supply segment, key customers are property and residential customers is a separate business process carried out by a housing management companies (60%), state-funded organizations, relevant structural unit, whose task is to ensure affordable terms and including the Ministry of Defence of the Russian Federation (12%), convenience for consumers. To improve the quality of interaction,

heat supply companies (6%), residential customers (4%) and other remote services such as call centers and personal online accounts are ustainability consumers (18%). being developed and adopted. S roup’s roup’s

In 2019, a large-scale information campaign was launched in the Moscow Metro, aimed at improving consumer awareness about heat G supplies. The campaign featured video clips about the specifics of centralized heat supply, explaining some technical details of heat supply processes in an entertaining and understandable way. A customer survey was conducted across all companies of Gazprom Energoholding in 2019, which showed that the customers are highly satisfied with the services provided. Gazprom

GRI 416-2 No incidents of non-compliance with electric and thermal power quality regulations concerning the health and safety impacts of products and services were recorded in 2019.

2.7.4. Electric and Thermal Power Projects

In 2019, the launch of Power Unit No. 2 (184 MW) of the Grozny TPP turbine units, 5 steam power units, 8 hydroelectric units, and 6 gas marked the completion of the ambitious investment program aimed at turbine units. building new generating capacities under capacity supply agreements Outside of CSAs, key projects in 2019 included the construction of the (CSAs). From 2007 through 2019, PJSC Gazprom brought into operation Svobodny TPP for supplying power to the Amur GPP and the combined 9 GW of new capacities under CSAs, including 18 combined cycle gas cycle TPP in Pancevo (Serbia) with a capacity of about 200 MW.

In 2020–2021, it is planned to bring into operation the Svobodny TPP, as well as the Pancevo TPP in Serbia. More than 2 GW of inefficient capacities are planned to be decommissioned before 2022.

100 2.8.

Contribution to National eport ur R Industrial Development O

value of goods and services procured by the Gazprom Group 1 from Russia-based (resident) share of SME suppliers RUB3,174 . 6 billion companies 59 % among counterparties share of domestic economic benefit from products in centralized supplies import substitution activities 99.5% to PJSC Gazprom RUB 35.5 billion in 2016–2019 The Gazprom Group increases the share of goods procured from suppliers of innovative technologies, thus spurring the country’s domestic manufacturers and actively engages with SMEs and Russian industrial development. 2 2.8.1. Procurement

GRI 102-9 The Gazprom Group companies carry out large-scale procurement of resulted in the signing of 16,900 contracts worth RUB 520 billion, and eport 2019

R goods, works and services, thus supporting regional economies and the savings amounted to RUB 19.6 billion. In 2019, 99.8% of the Group’s creating new jobs. Procurement is part of the Group’s supply chain competitive bidding and market research procedures were performed management. in electronic form. SMEs accounted for more than a half (59%, or 3 The Company’s procurement activities are primarily governed by 13.6 thousand) of the Gazprom Group’s total number of suppliers the Regulation on Procurement of Goods, Works and Services by (22.9 thousand) under the contracts for the provision of goods, works ustainability 95

S PJSC Gazprom and Gazprom Group Companies . In late 2019, the and services signed in 2019. document was amended to include, apart from other things, a requirement For the purpose of streamlining the interaction with entrepreneurs, for the new procurement by-laws adopted by the Gazprom Group PJSC Gazprom offers the web portal of the Single Point of Contact roup’s roup’s companies to comply with the Regulation on a mandatory basis. System (https://www.oknogazprom.ru/) that enables the entrepreneurs G In 2019, PJSC Gazprom developed and adopted PJSC Gazprom’s to submit their innovative proposals to the Company. In 2019, PJSC Program to Improve the Procurement Management with the goal of Gazprom received 93 submissions from SMEs through the Single Point optimizing its uniform procurement system96. One of the Program’s of Contact System.

Gazprom goals is to encourage competition in procurement from SMEs. Small businesses have an opportunity to participate in small- The Gazprom Group is committed to responsible partnership and scale procurement, submitting their bids for contracts worth up to 4 extensive use of electronic information technologies in its relations RUB 1 million, and can also use the GBP ETP’s Small-scale Procurement with all suppliers. To participate in electronic procurement procedures, Trading Portal. As of December 31, 2019, price lists with a total of suppliers need to be registered with the Electronic Trading Platform of 369,000 items were placed on the Portal by over 11,000 suppliers, Gazprombank (GPB ETP). The platform is integrated with the Unified including over 8,500 SMEs. In 2019, the orders placed through the Information System in the sphere of public procurement (www.zakupki. Trading Portal amounted to RUB 3.128 billion, including RUB 2.147 billion gov.ru) and the Automatic Electronic Procurement System of PJSC attributable to the orders placed with SMEs. Gazprom (https://zakupki.gazprom.ru/). Fair competition among Potential bidders have an opportunity to submit suggestions, suppliers is ensured, among other things, through pre-qualification. comments and complaints through the Procurement section of the Most of procurement at the Gazprom Group is performed through Company's official web site (http://www.gazprom.ru/tenders/feedback/). competitive bidding. In 2019, competitive bidding and market research All the feedback received in 2019 was reviewed and addressed. 5

For the Gazprom Group's supply chain chart see PJSC Gazprom Annual Report 201997 For more details on the Regulation on Procurement see98

(95) Approved by resolution of the Board of Directors of PJSC Gazprom No. 3168 dated October 19, 2018 (as amended by resolution of the Board of Directors of PJSC Gazprom No. 3337 dated November 19, 2019). (96) Approved by order of PJSC Gazprom No. 239 dated May 24, 2019. (97) Page 40, PJSC Gazprom Annual Report 2019, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf (98) https://www.gazprom.ru/f/posts/21/053269/2019-11-19-provisions-on-procurement.pdf 6

101 ppendices A 2.8. Contribution to National Industrial Development

GRI 102-44, GRI 414-1 Questions from Stakeholders Are suppliers assessed for As per the Regulation on Procurement, the documentation for the suppliers includes the safety requirements compliance with environmental to products, works and services as set out by the procuring party and provided for by technical regulations in and social criteria? compliance with the legislation of the Russian Federation. Apart from that, PJSC Gazprom carries out the pre-qualification procedure for its suppliers (contractors, vendors) in order to compile the Gazprom Group’s Register of potential bidders who meet the corporate requirements. To verify whether a supplier complies with the requirements (including those related to environmental, industrial and occupational safety), the Company conducts technical audits at the supplier’s production site at the pre-qualification stage. For example, in 2019, Gazprom Neftekhim Salavat assessed its suppliers against social criteria using the “Business Reputation” indicator. Only 266 (26%) out of 1,023 new suppliers passed the assessment.

2.8.2. Import Substitution eport 2019

The Company’s import substitution activities are conducted in that aim at producing a range of goods in accordance with the R accordance with the PJSC Gazprom Corporate Import Substitution Сorporate plan and the List of Priority Products for Import Substitution Plan99. In 2019, the Company drafted an updated Plan for the period and Production Localization to Promote the Technological Development until 2025, covering the gas, oil and power generation businesses of PJSC Gazprom100. In 2019, 20 roadmaps were implemented in 25 and including the information about the results brought about by the constituent entities of the Russian Federation. integration of activities in developing high-tech import substituting Gazprom continued to implement and sign new long-term contracts ustainability S products. The Plan also sets out the set of the activities required for with Russian manufacturers for full-scale production, supply, repair, phased replacement of imported products with competitive Russian servicing and maintenance of import substituting products against

alternatives. guaranteed supply volumes in the future years. In the reporting period, roup’s In 2019, PJSC Gazprom extended its collaboration with the nine long-term contracts were implemented. G constituent entities of the Russian Federation based on the roadmaps Gazprom In 2019, the Company signed a long-term agreement with Almaz–Antey Air and Space Defence Corporation JSC for the supply of import substituting products against guaranteed volumes to be purchased in the future years. Almaz–Antey is to arrange serial production of equipment for offshore hydrocarbon production, as well the delivery of the equipment to PJSC Gazprom and the technical maintenance, support and repair services required for it.

GRI 204-1 According to the information provided by the centralized supplier Gazprom Komplektatsiya LLC, domestic products account for 99.5% of the materials and equipment (M&E) procured.

(99) Approved by order of PJSC Gazprom No. 97 dated February 26, 2018. (100) The third version was approved by order of PJSC Gazprom No. 229 dated June 13, 2019.

102 2.8. Contribution to National Industrial Development eport ur R O

Share of domestic M&E in the supplies by Gazprom Komplektatsiya LLC, 2016–2019, % 1 97.1 99.4 2.9 0.6 2016 2018 99.4 99.5 2 eport 2019 R 0.6 0.5 2017 2019

Domestic M&E Imported M&E 3 ustainability S PJSC Gazprom pays particular attention to research-intensive and high- PJSC Gazprom performs an annual assessment of economic benefits tech areas, such as LNG and offshore hydrocarbon production. delivered by the import substitution measures. The total economic roup’s roup’s To make management decisions regarding the substitution of benefit from import substitution amounted to RUB 35.5 billion in the G imported technology, equipment and materials more grounded, period from 2016 to 2019.

For information on the economic benefit from the implementation of import-substituting technologies see Appendix 4. Gazprom 4

103 ppendices A 2.1. Contribution to National Industrial Development eport 2019 R ustainability S roup’s roup’s G Gazprom

104 2.1. Contribution to National Industrial Development eport

Development ur R is impossible without O embracing changes and

scaling new heights. Innovation 1 spurs progress, improves our efficiency and gives us a more competitive edge. 2 Pavel Shatsky First Deputy Director General, Gazprom Energoholding LLC eport 2019 R

In 2019, Gazprom Energoholding LLC completed a large-scale investment program to build and upgrade electric power facilities for a total of 9 GW. The program included two innovative projects unparalleled in Russia. This helped achieve significant environmental results, namely, reduce fuel 3 consumption, greenhouse gas and pollutant emissions, and wastewater discharges. ustainability S roup’s roup’s G Gazprom 4

105 ppendices A 2.9. Innovations and R&D

R&D results implemented in RUB12 .1 billion investments in R&D in 2019 289 production operations

economic benefit from using R&D RUB10.5 billion results in 2019

2.9.1. Innovation Management

The development of the Gazprom Group is associated with the PJSC Gazprom’s Innovative Development Program until 2025 is the continuous work performed to address technological, economic and Company’s tool for long-term planning and management of innovative other challenges that require application of new knowledge and higher activities. The Program covers gas, oil and electric power businesses of eport 2019

efficiency of innovative activities. the Gazprom Group. R In the reporting period, the innovation management framework has not changed. ustainability

For more details on innovation management at PJSC Gazprom see the Gazprom S Group’s Sustainability Report 2018101 For more details on the Passport of the Program see102 roup’s roup’s The annual R&D Program of PJSC Gazprom and its subsidiaries is the processes were being integrated. In 2019, the following main steps were G short-term planning tool. The R&D Program follows unified principles taken under the Comprehensive Target Program for the Development of and rules set forth for both the parent company and subsidiaries. the IIE: data marts were implemented for seven subsidiaries to transition

The subsidiaries order the R&D activities in order to obtain scientific to a tax monitoring system (a form of tax control), and IMS templates by Gazprom research results required for their own scope of business. PJSC type of activity were introduced at six gas producing subsidiaries, five Gazprom pays particular attention to further implementation of R&D gas transmission subsidiaries, and PJSC TGC-1. results and the results of protected intellectual property that have In 2019, the investment in digitalization at the Gazprom Group proved to be of significant use for PJSC Gazprom, as well as to the amounted to RUB 498.68 million. commercialization of the rights to such results. The transfer to the low-carbon development scenario strengthened PJSC Gazprom’s Patent Strategy until 2025103, part of the Group’s the position of hydrogen as an energy source. The production and use intellectual property management framework, was developed and of hydrogen and methane-hydrogen mixtures is a promising area of approved in 2019 for the legal protection of technical and technological diversification and is a way to a more efficient use of natural gas. solutions developed within the Company. The purpose of the Patent In the reporting period, the following comprehensive R&D projects Strategy is to ensure efficient intellectual property management were implemented: performance. development of innovative technologies to use methane-hydrogen Gazprom is implementing its Informatization Strategy, with the mixtures in production operations (to reduce carbon footprint and Gazprom Group’s Comprehensive Target Program for the Development of the Integrated Information Environment (IIE) for 2018–2022104 being increase the efficiency of Russian gas supplies); fulfilled as part of it. In line with the Program, the Gazprom Group’s business and operational activities should be governed by three fundamental principles: integration, innovation, and import substitution. development of innovative technologies to produce hydrogen from In 2019, the Gazprom Group continued to implement end-to-end methane without greenhouse gas emissions (to pursue diversification digital technologies (robotic systems, neurotechnologies, and artificial and increase the efficiency of pipeline gas use). intelligence technologies applied in big data analysis). Information management systems (IMS) providing automation of basic business

(101) https://sustainability.gazpromreport.ru/en/2018/1-energy/1-5-contribution (102) https://www.gazprom.com/f/posts/97/653302/prir-passport-2018-2025.pdf (103) Approved by order of PJSC Gazprom No. 92 dated March 4, 2019. (104) Approved by resolution of the Management Committee of PJSC Gazprom No. 39 dated October 23, 2017.

106 2.9. Innovations and R&D eport ur R O

In order to promote innovative activities and introduce innovations the InGAS Stream 2019 – Innovations in the Gas Industry specialist into its routine operations, PJSC Gazprom holds an annual exhibition held as part of the 9th St. Petersburg International Gas 1 competition for PJSC Gazprom’s Science and Technology Prize. In Forum. 2019, the competition included 17 projects, with the total number of authors reaching 148. The possibilities and achievements of the corporate science along

with the results of PJSC Gazprom’s cooperation in the sphere of R&D For other examples of innovative and digital solutions implemented by the Gazprom were demonstrated at the Gas Science and Innovations booth within Group in 2019 see PJSC Gazprom Annual Report 2019105

The top place in the corporate Science and Technology Prize competition of PJSC Gazprom went to the paper entitled “Rehabilitative and remedial treatment technology for employees of Gazprom”. The work was developed by Gazprom Transgaz Moscow in close 2 cooperation with the Industry Clinic and Diagnostic Center and the relevant subdivisions of Gazprom. The paper describes a solution for raising worker productivity. The technology combines early disease detection with rehabilitative and remedial treatment based on a new research and methodological framework involving a purpose-built hardware and software package.

GRI 102-44 eport 2019 Questions from Stakeholders R What digitalization projects were In 2019, the Company implemented a number of digitalization projects. successfully implemented at the — While testing the use of digital data models (DDM) for the design documentation development and the 3 Company in 2019? construction of investment projects of PJSC Gazprom, the following DDMs for pilot projects were developed: BCS-3C of the Zapolyarnoye oil, gas and condensate field (OGCF) and pre-development of the Chayandinskoye ustainability

S OGCF. — The project to create a digital twin for the Yuzhno-Russkoye field was under implementation. — A prototype of the Industrial safety remote monitoring system for hazardous production facilities was roup’s roup’s being developed jointly with the Federal Environmental, Industrial and Nuclear Supervision Service of Russia G (Rostekhnadzor) in four subsidiaries of PJSC Gazprom for the purpose of real-time collecting, recording and analysing the parameters of production equipment status and processes. — The project on the digital transformation of the Gas Sales to Russian Consumers business process was

Gazprom launched, implying end-to-end integration of automated systems in gas supplies using advanced digital technologies. Development of a billing system at Gazprom Mezhregiongaz LLC is planned as a pilot project. 4

2.9.2. Innovation and R&D Results

5 spent on digitalization is the planned expenditure RUB498.7million at the Gazprom Group in 2019 RUB1. 2 billion for digitalization in 2020 In 2019, the overall number of R&D agreements in force rose by 30% In the current period, 289 R&D results were implemented at PJSC and amounted to 243 agreements for a total of RUB 6,991.9 million. Gazprom for the amount of RUB 3.147 billion. 44 contractors were working under R&D agreements as ordered by In 2019, R&D financing at the Gazprom Group grew by 34% against PJSC Gazprom. 80% of the main scope of work was performed by the 2018 and totalled RUB 12.1 billion. Gazprom Group entities.

(105) PJSC Gazprom Annual Report 2019, pp. 124–126, https://www.gazprom.com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf 6

107 ppendices A 2.9.

R&D investments and actual economic benefit, 2016-2019, RUB billion 6.3 9.0 9.2 12.3 2016 2018 8.2 12.1 eport 2019 12.3 10.5 R 2017 2019

R&D investments106 Economic benefit from application of R&D results107 ustainability S In 2019, PJSC Gazprom and its subsidiaries received 260 patents on the overall number of patents increased by 5% and amounted to previously submitted applications, including four foreign patents. The 2,674 patents, 35 of them protecting technical and technological economic benefit from using the patented solutions in production solutions abroad (including in the Republic of Belarus). roup’s G operations amounted to RUB 14.5 billion. As compared to 2018,

For more information on the use of patents by PJSC Gazprom’s subsidiaries and affiliates see Appendix 4. Gazprom 2.9.3. Innovations and R&D Plans

The number of implemented R&D results is expected to reach Strategy of PJSC Gazprom is to be developed until the end of 2021 300–330 in the year 2020. In order to determine further strategic along with a roadmap for its implementation. The amount of investment perspectives of digitalization at PJSC Gazprom, a Digital Transformation in digitalization allocated for 2020 stands at RUB 1.2 billion.108

(106) Including pre-investment studies. (107) According to the information provided by the subsidiaries of PJSC Gazprom. (108) The planned amount may be adjusted following the development of the Program’s documents defining the prospects of digital technologies development at the Gazprom Group.

108 Gazprom Group’s Sustainability Report 2019 3 Our Personnel Our 3.11. 3.10. 3.9. 3.8. 3.7. 3.6. 3.5. 3.4. 3.3. 3.2. 3.1. of Qualifications of National a System of Development the in Participation Talent Pool Young Employees Gazprom of Students and Schoolchildren of Future Professionals: Training Employee Development Group’sGazprom Social Policy Employees for Financial Incentives Agreement Collective and Partnership Social Group Gazprom the at Rights to Labour Commitment Group’sGazprom Headcount Group Gazprom the at Management HR

130 138 120 120 132 142 142 125 124 121 141 1 112 111 3. Our personal

Employees are one of the Gazprom Group’s key strategic resources. High-quality performance of duties and responsible approach to work on the part of our personnel is a key to success and confident future for all stakeholders. The Gazprom Group creates jobs in its regions of operation, offers competitive salaries and a safe workplace environment, and pursues a well-balanced social policy. Personnel recruitment and remuneration are based on the principles of equality and non-discrimination. eport 2019 R ustainability S roup’s roup’s G Gazprom

110 3.1. HR Management ur Report O

Traditionally, the Gazprom Group companies are named among the most attractive employers. For example, PJSC Gazprom is among 109 Forbes’ Top 10 Best Employers in Russia. Gazprom was ranked first in Universum ratings in: 1 — Business, Engineering/Natural Science, and Health/Medicine (from students’ point of view); — Business, Engineering/Natural Science (from working professionals’ point of view).

The main goal of PJSC Gazprom’s HR Policy is to retain highly skilled PJSC Gazprom set the following HR management goals for 2019: professionals who can efficiently deliver on day-to-day and strategic control over efficient implementation of the Company’s HR management tasks. policy through the system of KPIs, and identification of comprehensive PJSC Gazprom develops and implements consistent HR approaches to staffing of the Company strategic projects. All the goals management approaches in its subsidiaries and affiliates. PJSC set for 2019 were delivered in full. Gazprom’s key HR management solutions are applied, for instance, Key HR management principles are defined in the HR Management 2 at the Gazprom Neft Group, Gazprom Energoholding, and Gazprom Policy of PJSC Gazprom, its Subsidiaries and Entities. Neftekhim Salavat. The fundamental document aiming to improve HR management activities at the Gazprom Group is the Comprehensive Program for Improvement of HR Management at PJSC Gazprom, its Subsidiaries and Entities in 2016–2020.110 For more details on the Policy, see111 eport 2019 R

GRI 102-12 Legal Regulation of Social and Labour Relations at the Gazprom Group: 3

ustainability the labour and employment legislation of the Russian Federation and the General Collective Agreement of PJSC Gazprom and its S the countries of operation; subsidiaries for 2019–2021;

roup’s roup’s the International Labour Organization (ILO)’s Declaration on the collective agreements and by-laws of the Gazprom Group G Fundamental Principles and Rights at Work; entities;

the United Nations’ Universal Declaration of Human Rights; the HR Management Policy of PJSC Gazprom, its Subsidiaries and Gazprom Entities; 4

the Industry Agreement covering organizations of the oil and gas the Comprehensive Program for Improvement of HR Management at industries and construction of oil and gas facilities for 2020–2022; PJSC Gazprom, its Subsidiaries and Entities for 2016–2020.

the Sectoral Tariff Agreement in the power sector of the Russian Federation for 2019–2021;

The Industry Agreement covering organizations of the oil and gas industries and construction of oil and gas facilities for 2020–2022112 was 5 adopted in 2019. The Agreement was facilitated by the representatives of PJSC Gazprom and the Gazprom Workers’ Union Interregional Organization

(109) https://universumglobal.com/rankings/russia/ (110) Approved by decree of PJSC Gazprom No. 29 dated February 17, 2016 (as amended by decrees of PJSC Gazprom No. 249 dated August 1, 2017 and No. 169 dated July 12, 2019). (111) https://www.gazprom.com/f/posts/42/687423/hr_politics.pdf (112) https://mintrud.gov.ru/docs/agreements/1311

111 ppendices A 3.2. Headcount

thousand the Gazprom Group’s headcount 473.8 people in 2019

GRI 102-7 In 2019, the Gazprom Group’s headcount grew by 7.7 thousand people transportation, as well as by the development of the Group’s production year-on-year and reached 473.8 thousand people. Such increase was activities in the oil and power generation businesses. driven by the implementation of strategic projects in gas production and

Gazprom Group’s headcount as of the end of the reporting period, 2016–2019, thousand people 4 67.4 4 6 6 .1 2016 2018 eport 2019 469.6 473.8 R 2017 2019 ustainability S GRI 102-8

28.5 thousand people are employed by the Group under fixed-term and their deputies or in other cases provided for by the Labour Code of roup’s

contracts, and 445.3 thousand under indefinite-term contracts. Fixed- the Russian Federation113 . G term employment contracts are usually concluded with top executives

Gazprom Group’s headcount as of the end of the reporting period by employment contract type, 2018–2019, thousand people Gazprom 439.0 445.3 2 7.1 28.5 2018 2019

Indefinite-term employment contract Fixed-term employment contract

The overall majority of the Gazprom Group’s employees work on a full- time basis.

(113) No breakdown by gender is made for the data provided on the number of employees working under fixed-term employment contracts. No breakdown by region is made for the data provided on the number of employees working under fixed-term employment contracts.

112 3.2. Gazprom Group’s Headcount ur Report O

GRI 405-1 Employee breakdown by category and gender did not change materially 1 in 2016–2019. The share of employees under 30 years old tends to decrease.

Gazprom Group’s employees by category and gender, 2016–2019 Indicator 2016 2 017 2018 2019 Share of the Gazprom Group’s employees, % Executives 13.9 13.9 14.2 14.4 2 including: male 75.9 75.7 75.0 75.4 female 24.1 24.3 25.0 24.6 including: under 30 y.o. 6.4 5.6 5.0 4.6 eport 2019 R 30 to 50 y.o. 65.4 66.9 68.4 69.3 over 50 y.o. 28.2 27.5 26.6 26.1 3 Specialists and other white-collar staff 31. 6 31. 5 32.4 33.0 ustainability

S including: male 59.0 57.4 56.9 58.4 roup’s roup’s female 41. 0 42.6 43.1 41. 6 G including: under 30 y.o. 18.3 16.1 14.5 13.5 Gazprom 30 to 50 y.o. 63.5 66.0 67.5 68.2 4 over 50 y.o. 18.2 17. 9 18.0 18.3 Workers 54.5 54.6 53.4 52.6 including: male 78.0 77.0 77.5 78.0 female 22.0 23.0 22.5 22.0 including: under 30 y.o. 18.7 17. 3 16.8 15.7 5 30 to 50 y.o. 53.5 54.6 55.9 56.4 over 50 y.o. 27.8 28.1 27.3 27.9

113 ppendices A 3.2. Gazprom Group’s Headcount

GRI 102-8 Gazprom Group’s headcount as of the end of the reporting period, by employment type and gender, 2018–2019, thousand people 2018 Male Female

329.5 Full-time employment 133.7 Full-time employment

0.6 Part-time employment 2.3 Part-time employment

2019 Male Female eport 2019 R 336.4 Full-time employment 134.3 Full-time employment ustainability S

Part-time employment Part-time employment 0.7 2.4 roup’s G

3.2.1. New Hires Gazprom

In 2019, the entities within the Group hired 76.6 thousand new years old, 30.6% are 30 to 40 years old, 19.3% are 40 to 50 years old, employees. The number of new hires by age remained almost the same and 13.2% are 50 or more years old. as in 2018: most of the newly hired employees (36.9%) are under 30

Number of employees hired by the Gazprom Group, 2016–2019, thousand people 65.9 79.0 2016 2018 70.5 76.6 2017 2019 In 2019, most of the new hires were men with a 63% share in the total number of the employees hired.

114 3.2. Gazprom Group’s Headcount ur Report O

Number of employees hired by the Gazprom Group in 2018–2019, broken down by age Age group 2018 2019 1 thousand % thousand % people people under 30 y.o. 28.7 36.4 28.3 36.9 30 to 40 y.o. 24.2 30.6 23.4 30.6 40 to 50 y.o. 15.4 19.5 14.8 19.3 50 y.o. or more 10.7 13.5 10.1 13.2 2

Number of employees hired by the Gazprom Group in 2019, broken down by gender thousand people %

eport 2019 Male 48.2 63.0 R Female 28.4 37.0

3 For more details on the number of the employees hired broken down by federal districts see Appendix 5. ustainability S

3.2.2. roup’s roup’s Quitters G

71.5 thousand people quit in 2019, down by 10.6 thousand year-on-year. Gazprom 4 Quitters headcount at the Gazprom Group, thousand people 57.1 82 .1 2016 2018

71.1 71.5 5 2017 2019

115 ppendices A 3.1. Headcount eport 2019 R ustainability S roup’s roup’s G Gazprom

116 3.1. Headcount

The structure ur Report of Gazprom’s personnel O is well-balanced. Women

account for almost half (48%) 1 of all employees hired for PJSC Gazprom in 2019. They are offered development 2 opportunities within eport 2019 R the Company based on their

ustainability performance and professional S

roup’s roup’s achievements. G Anna Sharapova Gazprom Chief Expert, PJSC Gazprom 4

Responsible for managing social payments, cooperating with Gazprom Trade Union and ensuring compliance with the General Collective Bargaining Agreement of PJSC Gazprom and its Subsidiaries, which provides for equal rights and opportunities for all categories of employees and eliminates conditions for gender inequality and other types of discrimination.

117 ppendices A 3.2. Gazprom Group’s Headcount

Quitters headcount at the Gazprom Group in 2018–2019, broken down by age Age group 2018 2019 thousand % thousand % people people under 30 y.o. 20.2 24.6 19.8 27.7 30 to 40 y.o. 21.1 25.7 19.3 27.0 40 to 50 y.o. 14.6 17. 8 13.1 18.3 50 y.o. or more 26.2 31. 9 19.3 27.0

The share of quitters under 30 years old increased in 2019 versus 2018 (27.7% and 24.6% respectively), while the share of quitters of 50 or more years old decreased (27.0% and 31.9% respectively).

Quitters headcount at the Gazprom Group in 2019, broken down by gender eport 2019 Gender thousand % R people Male 43.4 60.7

Female 28.1 39.3 ustainability S

The number of hired employees and quitters dropped in 2019 versus hiring by Gazprom Pererabotka LLC as part of restructuring initiatives roup’s

2018 due to the dismissal of many employees in 2018 from Gazprom and processing assets spin-off. G Dobycha Astrakhan LLC and Gazprom Dobycha Orenburg LLC and

The turnover rate was 5.8% in the reporting year, slightly up year-on-year114 . subsidiaries undergoing organizational and staffing improvements related to Gazprom The turnover rate growth in 2019 versus 2018 was driven by an increased reorganization (winding-up) in 2019. number of employees who voluntarily resigned from PJSC Gazprom’s

Personnel turnover at the Gazprom Group, 2016–2019, % 4.0 5.6 2016 2018 4.7 5.8 2017 2019 For more details on the number of quitters, personnel turnover rates and personnel loss rates broken down by federal district see Appendix 5.

(114) The turnover rate is calculated as the ratio of the number of employees dismissed under clauses 3, 6, 7, and 9 of Article 77 of the Labour Code of the Russian Federation to the average headcount. No breakdown by gender is made for the data provided on the turnover rates

118 3.2. Gazprom Group’s Headcount ur Report O

3.2.3. Shift Personnel 1

The Group’s operations cover remote regions of Siberia, the Far North, at the fields located in remote areas far away from populated localities, and Russian offshore areas. 50.5 thousand shift workers are employed in harsh weather conditions.

Gazprom Group’s shift personnel115 , 2016–2019, thousand people Indicator As of As of As of As of December December December December 31, 2016 31, 2017 31, 2018 31, 2019 2 Roster of employees of the entities which use the shift system, thousand people, total 161. 3 164.5 165.2 224.7 Headcount of shift staff, thousand people, including: 34.6 35.6 35.2 50.5 people working in the Far North and areas considered equivalent to eport 2019 it, thousand people116 32.8 34.0 33.8 47.8 R

Relative share of shift staff in the organization’s roster, % 21.5 21.6 21.3 22.5 3

ustainability The average headcount of shift workers in 2019 exceeded that of 2018 shift workers from the meeting point to the place of work and back, S by 15.3 thousand people (or 43.5%) because in 2019 there was an offers medical, social and amenity services, and consistently develops increase in the number of the Gazprom Group members who provide the infrastructure of shift personnel camps by building and renovating

roup’s roup’s information in the form of corporate statistical reports. accommodation facilities, canteens, medical aid posts, and sports G Gazprom makes its best to ensure effective work of and comfortable facilities. living for the shift personnel. The Company provides transport to bring Gazprom (115) In accordance with the average headcount data. 4 (116) No information is collected or analysed in terms of gender.

119 ppendices A 3.3. Commitment to Labour Rights

The Gazprom Group respects the labour rights of its employees the United Nations’ Universal Declaration of Human Rights, the ILO and complies with the labour legislation of the Russian Federation, standards, and PJSC Gazprom’s Code of Corporate Ethics.

GRI 406-1 The Gazprom Group tolerates no labour discrimination on the Social benefits are provided to all employees of the Gazprom Group, basis of gender, nationality, religion or other grounds not related to as well as to special categories of employees in accordance with the professional skills. Recruitment to vacancies depends on the presence legislation of the Russian Federation. of relevant skills and excludes any ethnic, gender, or age preferences. If discriminatory behaviour is suspected, the Company’s employees HR decisions are based solely on the assessment of the relevant can apply to the Corporate Ethics Commission to protect their interests. professional skills of applicants. No cases of discrimination were revealed within the Gazprom Group Gazprom also adheres to the ILO standards as related to in the reporting period. daily working hours and labour conditions, occupational safety, No child labour or any forms of forced labour are permitted in the remuneration, social security, and paid holidays. Group. eport 2019 R ustainability S roup’s roup’s G Gazprom

120 3.4. Social Partnership ur Report and Collective Agreement O

trade union organizations people were members of were included in The Gazprom 1 Gazprom Workers’ Union Workers’ Union Interregional 355,276 in 2019 650 Organization in 2019. The Gazprom Group recognizes the freedom of professional association develop the social partnership mechanism; and the right to collective bargaining provided for by the UN and ILO documents, the Constitution of the Russian Federation, the Labour Code of the Russian Federation, and Federal Law No. 10-FZ dated through the performance of mutual commitments, encourage January 12, 1996 “On Trade Unions, their Rights and Guarantees of employees to improve their own performance and achieve the their Activities”. Employer-employee relations in the Gazprom Group planned operational targets of PJSC Gazprom and its subsidiaries; are based on social partnership to ensure the best balance of interests 2 for efficient delivery of PJSC Gazprom’s objectives subject to the performance of the commitments assumed. The key element of social partnership – the system of employer- establish uniform approaches to protecting employees’ interests as employee relations in regulating social and labour relationships – is the related to labour remuneration, employment, creating a safe labour General Collective Agreement of PJSC Gazprom and its Subsidiaries. It is environment, granting benefits, guarantees and compensations. concluded for a three-year period and seeks to achieve the following goals: eport 2019 R Based on the General Collective Agreement, PJSC Gazprom’s bargaining. The organization addresses the matters of collective subsidiaries enter into collective agreements which take into account bargaining, represents and protects employee rights and interests their region-specific features and existing practices. Collective in respect of social and labour relations and occupational safety, 3 agreements govern the matters related to social benefits, guarantees, monitors compliance with labour laws and collective agreements, and ustainability

S and compensations. Subject to the provisions of the existing collective takes action to prevent and resolve labour disputes. agreements and by-laws, subsidiaries can align their social packages The Gazprom Group pursues a consistent policy seeking to set with the specific features of their operational activities. up and consolidate trade union organizations. As of the end of 2019, roup’s roup’s The Gazprom Workers’ Union Interregional Organization, one the Gazprom Workers’ Union Interregional Organization included G of Russia’s largest trade unions, which was created on the basis of 650 organizations and had 355,276 members. the industrial principle, acts on behalf of all employees in collective Gazprom GRI 102-41 4 In 2019, collective agreements covered 100% of employees of PJSC and the companies consolidated under its management, 85% Gazprom and its subsidiaries, 45 % of employees of PJSC Gazprom of employees of Gazprom Neftekhim Salavat, and a total of 73.3% of Neft and its subsidiaries, 99% of employees of Gazprom Energoholding the Gazprom Group’s employees.

GRI 407-1 During the year, the trade union organizations conducted 473 inspections, collective labour disputes, including conflicts pertaining to any violation of including 263 comprehensive inspections on various issues pertaining the human rights to freedom of association and collective bargaining. to the compliance with the labour legislation, and reviewed 1,427 reports Gazprom has a strong focus on sharing its positive social partnership of which 639 were reasoned and 56 partially reasoned. Employees and experience. Social and economic indicators and collective agreements 5 retirees mostly asked questions related to the labour legislation and of PJSC Gazprom subsidiaries and entities are annually presented to the collective agreement. Russian Oil, Gas and Construction Workers Union (ROGWU) to participate PJSC Gazprom’s subsidiaries have labour dispute commissions in in the collective agreements competition, where PJSC Gazprom’s place. subsidiaries are frequent awards winners. In 2019, Gazprom Dobycha In the reporting period, there were no records of conflicts between Urengoy LLC, Gazprom Transgaz Kazan LLC and Gazprom Tsentrremont employees and employers resulting in strikes, suspension of work or LLC won awards in their categories.

121 ppendices A 3.1. Commitment to Labour Rights eport 2019 R ustainability S roup’s roup’s G Gazprom

122 3.1. Commitment to Labour Rights ur Report

We unite and mobilize O hundreds of thousands of people, and develop social

dialogue and cooperation. 1 Ultimately, we create conditions for sustainable and mutually beneficial 2 partnerships at various levels. eport 2019 R Vladimir Kovalchuk

Chairman, Gazprom Trade Union 3 ustainability

S 650 trade union organizations within Gazprom Trade Union not only represent and protect the rights and interests of over 350,000 employees: the existence and activities of the trade union lay the foundation for social partnership and constructive relations between employees, employers, regional authorities and communities across Gazprom’s footprint. roup’s roup’s G Gazprom 4

123 ppendices A 3.5. Financial Incentives for Employees

average monthly salary in 2019 at the entities included into PJSC Gazprom’s budgeting system (including PJSC Gazprom RUB104,900 Administration) The financial motivation system established for employees of The ratio of fixed and variable remuneration is also the same for both PJSC Gazprom is aimed at creating a competitive advantage for genders. the Company as an employer and at increasing each employee’s Salaries and tariff rates take into account qualifications and business commitment to delivering best possible results. skills. Employees receive extra payments and allowances depending on PJSC Gazprom and its entities apply uniform corporate labour labour conditions and workload, and monthly bonuses are paid on the remuneration standards governed by the PJSC Gazprom Employee basis of the performance demonstrated. One-off bonuses are paid for Remuneration Management Policy117 . The purpose of the Policy is to launching new production facilities and construction projects, adoption create conditions for attracting and retaining personnel with the required of new technical equipment, energy resource saving, and discovery of qualifications and incentivize employees to carry out tasks at hand. The new hydrocarbon deposits. PJSC Gazprom also pays its staff year-end Policy applies to the entities included into the Gazprom Group. performance bonuses. The Policy provides for the fixed part of remuneration (salaries / tariff From January 1, 2019, the employees of PJSC Gazprom’s budgeted rates) and the variable part (extra payments, allowances, and bonuses). entities located in Russia saw their salaries and tariff rates increase by Linked to the remuneration system, the fixed part constitutes up to 70% of 4.6% based on the growth of the consumer price index projected by the eport 2019

the remuneration. Ministry of Economic Development of the Russian Federation. R In 2019, an average monthly salary at the entities included into PJSC The tariff rates of employees payable on the basis of the Uniform Tariff Gazprom’s budgeting system (including PJSC Gazprom Administration) System were raised by 15% on October 1, 2019. stood at RUB 104,900. Gazprom ensures equal pay and remuneration for men and women at the positions requiring the same level of professional expertise. ustainability S

(117) Approved by Order of OJSC Gazprom No. 133 dated March 20, 2015 (as amended by Orders of PJSC Gazprom No. 52 dated February 3, 2016, No. 740 dated November 1, 2017, No. 378 dated July 5, 2018, roup’s

No. 432 dated September 27, 2019, and No. 590 dated December 24, 2019). G Gazprom

124 3.6. Social Policy ur Report O

employees were insured under employees were covered voluntary medical insurance by the pension plan of 1 5 51,7 0 0 programs in 2019 151, 8 0 0 JSC NPF GAZFOND in 2019 employees received pension under non-state pension 144,000 agreements in 2019

GRI 401-2 The Group’s social policy seeks to additionally motivate employees for The social policy relies on long-term social programs helping the 2 a strong and effective performance. It relies on the social partnership employer to attract staff with required qualifications and experience and mechanism set forth in the General Collective Bargaining Agreement retain these employees for a long time. of PJSC Gazprom and its Subsidiaries and collective agreements of The key focus areas of the social policy include social payments, Gazprom’s subsidiaries. personal insurance, medical care, housing, and non-state retirement plans.

For more details on benefits provided to full-time employees under an employment contract that are not provided to temporary or part-time employees (GRI 401-2) see Appendix 5. eport 2019 R

3.6.1. Social Payments 3 ustainability S Gazprom makes social payments to all its staff members, as well as North or equivalent areas, young professionals, employees who have certain staff categories (employees of subsidiaries located in the Far multi-child families and children with disabilities, and others). roup’s roup’s G 3.6.2. Personal Insurance Gazprom 4 In addition to compulsory statutory social insurance against accidents, The life insurance program covers executives from PJSC Gazprom the Gazprom Group provides its employees with voluntary insurance Administration and Gazprom’s gas production, processing, storage, against accidents and diseases. transportation and sales subsidiaries.

For statistics on insurance events broken down by accident and disease insurance risks for 2016–2019 see Appendix 5.

3.6.3. Medical Care 5

employees were insured under Gazprom Group’s employees voluntary medical insurance received health resort and 5 51,7 0 0 programs in 2019 5 7, 9 0 0 rehabilitation treatment in 2019

In 2019, voluntary medical insurance programs covered 551,700 people, including 296,700 employees, 89,800 retirees, and 165,200 family members of employees118 .

(118) Data for PJSC Gazprom, its branches, subsidiaries and entities included in Gazprom’s budgeting system.

125 ppendices A 3.6. Gazprom Group’s Social Policy

GRI 403-6, GRI 403-3 Under collective agreements and other by-laws, the Gazprom Group’s As part of voluntary medical insurance programs, the Gazprom Group employees and their families, as well as retirees are subject to arranges for medical check-ups for certain staff categories working in comprehensive prophylactic medical examinations under voluntary harsh, hazardous and/or harmful conditions. medical insurance programs. The Group runs extensive activities to proactively prevent diseases Prophylactic and rehabilitation measures seek to protect health, and reduce morbidity. These activities include annual prophylactic ensure recovery, and preserve long-term professional engagement. medical screenings, vaccination, employee education on risk factors for Medical services are rendered by the leading healthcare centers. the most common diseases causing illness and disability (respiratory, The Gazprom Group’s corporate medical infrastructure is an extensive musculoskeletal and cardiovascular diseases, tumors, and injuries). network of advanced healthcare and rehabilitation facilities, which Employees receive information on preventive measures against these includes 174 health units, 309 first aid posts, 21 outpatient clinics / health conditions. general care outpatient clinics, 83 dental units / rooms, 5 round-the- The Group organizes annual prophylactic medical screenings taking clock inpatient facilities, 18 health resort and rehabilitation facilities, 11 into account the staff gender and age structure. Screenings help medical units, 17 recreational facilities, and 28 facilities of other type. identify symptom-free disease forms and risk factors. Other measures The medical facilities’ headcount is 9,963 employees, including include follow up of patients with chronic illnesses and implementation 1,731 doctors and 3,423 mid-level medical staff. of immunity-strengthening activities, such as flu vaccination. In 2019, Gazprom extended the list of healthcare facilities providing In 2019, 57,900 Gazprom Group’s employees received health resort aid under voluntary medical insurance programs of PJSC Gazprom’s key and rehabilitation treatment. subsidiaries, including those located in remote areas of operation. eport 2019

For more details on payments made by the Gazprom Group’s entities for rehabilitation treatment and targeted preventive initiatives under voluntary medical insurance contracts see Appendix 5. R

3.6.3.1. Cardio-Vascular Disease (CVD) Prevention and Treatment ustainability S

Since 2015, Gazprom has been implementing the Action Plan to Reduce ensuring that Gazprom’s facilities are duly furnished with advanced Workplace Mortality due to Cardio-Vascular Diseases. In 2019, the roup’s and effective emergency care equipment and means for acute com- G Group carried on with its efforts in the following areas: plications and diseases; improving CVD prevention and diagnostics at PJSC Gazprom;

providing training to employees of PJSC Gazprom in emergency self- Gazprom promoting healthy lifestyle across PJSC Gazprom; aid measures and emergency help to others in case of an exacerbation.

increasing personal responsibility for health among employees of PJSC Gazprom;

The Group organizes regular preventive screenings for its staff. As of Throughout the entire time period during which the measures to reduce the end of 2019, 51,275 and 39,319 employees were diagnosed as prone CVD mortality among the staff were implemented, PJSC Gazprom’s to and having CVDs, respectively. Over the year, these employees took subsidiaries purchased the required first aid equipment for acute part in 1,617,000 monitoring initiatives (blood pressure measurements, cardiovascular care. As of the end of the reporting period, there were cholesterol tests, electrocardiograms, etc.). 7,315 units of such equipment (including 381 defibrillators) in operation As part of preventive measures, Gazprom’s subsidiaries furnished at PJSC Gazprom’s subsidiaries. their dedicated classrooms with 717 state-of-the art emergency simulators, with 117,588 employees taking hands-on first aid training for acute CVD care. All in all, 129,908 people received such training.

126 3.6. Gazprom Group’s Social Policy ur Report O

3.6.4. Housing 1

The corporate housing program of PJSC Gazprom serves to retain the by both employees and the employer through bank mortgage schemes Company’s key employees for longer periods. The program is funded (using a co-financing approach).

3.6.5. Non-Governmental

Pension Insurance 2

In accordance with the Long-Term Development Strategy of the Pension The Private pension arrangement covers employees who have worked System in the Russian Federation, the Gazprom Group provides a at PJSC Gazprom’s entities for at least 15 years and by the time of Private pension arrangement for its employees, which offers post- retirement are entitled to receive an old-age pension. As of the end of employment social benefits. The arrangement is run through Non-State 2019, 151,800 employees from 86 entities of PJSC Gazprom took part in Pension Fund GAZFOND JSC. the pension program, and over 144,000 people were granted pensions eport 2019

R under relevant agreements

ustainability GRI 201-3 S Headcount of participating retired employees of the Gazprom Group’s entities, 2016–2019, thousand people roup’s roup’s G 126.8 140.9 2016 2018 Gazprom 133.7 144.5 4 2017 2019

3.6.6. Non-Financial Incentives

5 To drive employee motivation and development, the Company has The Company’s existing remuneration system creates sustainable been holding Labour (Professional Excellence) Festivals since 2018. motivation for the employees to deliver a strong performance. Every During the Festivals, competitions in several professional areas of the year, the Gazprom Group grants various awards to its staff members to key operations of PJSC Gazprom’s subsidiaries take place in even- recognize their achievements. In 2019, awards for remarkable results in numbered years. The reporting year saw the preparation for the 2020 business activities were granted to 4,200 employees. Labour Festival.

127 ppendices A 3.1. Социальная политика Группы Газпром The health of Gazprom employees is key to the high quality of their lives. It is also the cornerstone of the Company’s competitiveness and success. Nikolai Lebedev Chief Physician, OKDC PJSC Gazprom

Under his effective management, OKDC PJSC Gazprom – the Company’s Industry Clinic and Diagnostic Center – annually helps thousands of employees and their family members care about their health and deal with diseases. In 2019, an industrial medicine department was established at eport 2019

Gazprom Corporate Institute thanks to Nikolai Lebedev, who is now in charge of this department. R ustainability S roup’s roup’s G Gazprom

128 3.1. Социальная политика Группы Газпром ur Report O

2 eport 2019 R

3 ustainability S roup’s roup’s G Gazprom 4

129 ppendices A 3.7. Employee Development

managers, specialists, and other white-collar staff of the Gazprom Group received further employees of PJSC Gazprom 236.5 thousand professional training in 2019119 >18 0 thousand received remote training in 2019

GRI 404-2 Highly professional staff is one of the key advantages of PJSC Gazprom, continuous training; which is why it pays a lot of attention to employee training. In line with the existing Continuous Vocational Education and Training System and on the basis of the competitive selection comprehensive and individual approach to staff training; procedure, PJSC Gazprom annually approves the centralized Skills Upgrading and Professional Retraining Schedule for Managers effectiveness of training and education. and Specialists of PJSC Gazprom, its Subsidiaries and Entities. The subsidiaries and entities adopt their own training plans for Continuous education helps each employee develop a positive work-study centers and educational institutions in the regions of motivation for productive work, as well as a higher efficiency and operation. stronger performance. Results are achieved owing to consistent training Skills upgrading and professional retraining are governed by local throughout the professional life of employees based on educational eport 2019

regulations, including the Regulation on PJSC Gazprom’s Continuous programs which are designed in advance and include various learning R Vocational Education and Training System119 , and rely on the following aids, simulators, business games, and training sessions. principles: Training is conducted by the Company’s educational organizations, PJSC Gazprom subsidiaries’ work-study centers, as well as at leading focus on the Company’s goals; Russian universities. ustainability S

Number of employees121 covered122 by the Gazprom Group’s skills upgrading and professional retraining programs,

2016–2019, thousand people roup’s G

161.2 19 6.0 Gazprom 176.3 18 5 .1 2016 2018 169.9 236.5 17 3 . 0 219.7 2017 2019

Total number of managers, specialists, and other white-collar staff who participated in further professional training programs Total number of blue-collar staff who participated in professional development training

GRI 404-1 In 2019, the average duration of training per employee of PJSC collar staff and 46.4 hours for managers, specialists, and other white- Gazprom, its core subsidiaries and entities was 79.4 hours for blue- collar staff.

(119) The number of employees who completed training is shown in man-courses (if one person received training twice, he/she is counted twice). (120) Approved by Order of PJSC Gazprom No. 42 dated January 29, 2016 (as amended by Order of PJSC Gazprom No. 810 dated December 14, 2016). (121) The number of employees who received training is shown in man-courses (if one person received training twice, he/she is counted twice). (122) Including remote-learning programs and off-site training forms.

130 3.7. Employee Development ur Report O

The average duration of training123 per employee of PJSC Gazprom, its core subsidiaries and entities124, 2016–2019, hours 1 36.5 46.3 88.9 75.7 2016 2018 36.6 46.4 2 eport 2019 R 83.7 79.4 2017 2019

Average number of hours for all types of training during the year: managers, specialists, and other white-collar staff Average number of hours for all types of training during the year: blue-collar staff 3 ustainability S During the reporting period, the changes were driven by a more In 2019, over 180,000 of PJSC Gazprom’s employees took remote extensive use of remote-learning and off-site employee training forms. learning courses, which is three times as much as in 2018. roup’s roup’s G

In 2019, the Gazprom Group’s employees received training in the following areas, among others: Gazprom anti-corruption (1,444 people); targeted MBA program on Sustainable Development and Corporate 4 Social Management at St. Petersburg State University of Economics (21 people)125. corporate ethics (4,988 people);

(123) Including advisory workshops (programs of less than 16 training hours). (124) PJSC Gazprom (including branches and representative offices), Gazprom Dobycha Astrakhan LLC, Gazprom Dobycha Irkutsk LLC, Gazprom Dobycha Krasnodar LLC, Gazprom Dobycha Kuznetsk LLC, Gazprom Dobycha Nadym LLC, Gazprom Dobycha Noyabrsk LLC, Gazprom Dobycha Orenburg LLC, Gazprom Dobycha Urengoy LLC, Gazprom Dobycha Shelf Yuzhno-Sakhalinsk LLC, Gazprom Dobycha Yamburg LLC, Gazprom Pererabotka LLC, Gazprom Pererabotka Blagoveshchensk LLC, Gazprom UGS LLC, Gazprom LNG Vladivostok LLC, Gazprom LNG Portovaya LLC, Gazprom Transgaz Volgograd LLC, Gazprom Transgaz Yekaterinburg LLC, Gazprom Transgaz Kazan LLC, Gazprom Transgaz Krasnodar LLC, Gazprom Transgaz Makhachkala LLC, Gazprom Transgaz Moscow LLC, Gazprom Transgaz Nizhny Novgorod LLC, Gazprom Transgaz Samara LLC, Gazprom Transgaz Saint Petersburg LLC, Gazprom Transgaz Saratov LLC, Gazprom Transgaz Stavropol LLC, Gazprom Transgaz Surgut LLC, Gazprom Transgaz Tomsk LLC, Gazprom Transgaz Ufa LLC, Gazprom Transgaz Ukhta LLC, Gazprom Transgaz Tchaikovsky LLC, Gazprom Transgaz Yugorsk LLC, Gazprom Transgaz Grozny LLC, Gazprom 5 Mezhregiongaz LLC (excluding subsidiaries), Gazprom Export LLC, Gazprom Flot LLC, Gazprom Geologorazvedka LLC, Gazprom Transgaz Belarus OJSC, Gazprom VNIIGAZ LLC, Gazprom Nedra LLC, NIIgazeconomika LLC, Gazprom Proektirovanie LLC, Gazprom Geotekhnologii LLC, Gazpromtrans LLC, Gazprom Komplektatsiya LLC, Novy Urengoy Gas Chemical Complex LLC. (125) St. Petersburg State University of Economics has been running the targeted MBA program on Sustainable Development and Corporate Social Management since 2014, with the third group of students admitted in 2019.

131 ppendices A 3.8. Future Professionals: Training of Schoolchildren and Students

By collaborating with schools and universities, the Gazprom Group helps school pupils and university students. This way PJSC Gazprom ensures train young talents for a professional career in the oil and gas industry, the supply of adequately qualified staff to its facilities, while also giving promotes engineering professions, and provides hands-on training for young people a confidence in their future career growth and welfare.

3.8.1. Gazprom Classes

Gazprom Classes seek to train a future talent pool for PJSC Gazprom’s specifics and growth prospects of PJSC Gazprom and its subsidiaries. subsidiaries and entities from among the most talented school students The classes provide additional educational programs and create motivated for a successful professional career. The classes provide a opportunities for personal growth and self-fulfilment. better-quality education, targeted vocational guidance, and support Gazprom Classes have been set up by 20 entities of the Group and throughout the learning cycle at schools and universities. are now active in 24 schools located in five federal districts of Russia. At Gazprom Classes, pupils learn about the importance of engineering professions and get an insight into the history, industry

In 2019, Gazprom Transgaz Samara LLC helped launch a new Gazprom Class in Samara. eport 2019 R

PJSC Gazprom’s subsidiaries and entities which actively contributed career guidance training sessions along with sports and cultural events to the creation of Gazprom Classes arrange various team building and for schoolchildren. ustainability S GRI 102-44

Questions from Stakeholders roup’s G How did the implementation From 2015 to 2019, 245 students completed their internship at the Power of Siberia project, and 103 graduates of of the Power of Siberia project secondary vocational and higher education institutions were employed to fill the newly opened positions. contribute to the development On top of that, every year, in average at least 20 students from Yakutia and the Amur Region selected by

of education and the labour Gazprom Transgaz Tomsk LLC receive higher education. Gazprom market in the Russian Far East?

132 3.8. Future Professionals: Training of Schoolchildren and Students ur Report O

3.8.2. Collaboration with Higher 1 Educational Institutions

students took an internship at the Gazprom Group entities 10,081 in 2019 PJSC Gazprom annually assesses the need of its subsidiaries for Ukhta State Technical University (5 SDs); graduates of secondary vocational educational institutions and higher 2 educational institutions based on 10-year headcount planning, and arranges for proactive targeted training of future talents. Kazan National Research Technological University (1 SD); PJSC Gazprom maintains its collaboration with the anchor universities. The fundamental principles of the collaboration are continuity, systemic approach, and innovations. They are included in St. Petersburg Mining University; the approved University Collaboration Concept and the Regulation on Collaboration with Anchor Universities. eport 2019 Bauman Moscow State Technical University;

R In 2019, PJSC Gazprom had 13 collaboration agreements with anchor universities, including Peter the Great St. Petersburg Polytechnic University. In order to share hands-on knowledge and build additional National Research University Higher School of Economics; competencies in students, specialized departments are established 3 at the anchor universities. The Group’s executives and employees are ustainability Industrial University of Tyumen;

S involved in teaching, supervise graduation papers and internships, and engage students in project and research activities. As of the end of 2019, 13 higher educational institutions had the Ufa State Petroleum Technological University (4 SDs); roup’s roup’s status of anchor universities: G Gubkin Russian State University of Oil and Gas (national research university) (4 specialized departments (SD)); St. Petersburg State Marine Technical University; Gazprom St. Petersburg State University of Economics (1 SD); Lomonosov Moscow State University; 4

National Research Tomsk Polytechnic University; Peter the Great St. Petersburg Polytechnic University (1 SD).

133 ppendices A 3.1. Future Professionals: Training of Schoolchildren and Students eport 2019 R ustainability S roup’s roup’s G Gazprom

134 3.1. Future Professionals: Training of Schoolchildren and Students

At all stages of education — ur Report at schools, colleges and O universities — Gazprom

creates the best environment 1 for nurturing future staff and upgrading skills of existing employees. 2 Sergey Suslov Director, Gazprom College Volgograd eport 2019 R

Every year, the college headed by Sergey Suslov organizes classes for hundreds of future oil and gas specialists, as well as professional retraining for Gazprom employees. One strategic goal is to strengthen ties between the educational institution and the Group’s companies and offer 3 employment opportunities for the graduates. ustainability S roup’s roup’s G Gazprom 4

135 ppendices A 3.8. Future Professionals: Training of Schoolchildren and Students

As of the end of 2019, there were 16 specialized departments at Each year, PJSC Gazprom provides charity support to the anchor the anchor universities and 8 additional specialized departments universities in order to enable them to improve teaching quality, give at universities that do not have the anchor university status. On top better career advice to students, refine the approaches to educating of that, the following organizations had 4 specialized departments: the students who study under targeted education programs, and SevKavNIPIgaz JSC, Bank GPB (JSC), Gazprom Gazoraspredelenie develop the material, technical, laboratory, and training resources of the Saratovskaya Oblast JSC, and NIIgazeconomica LLC. universities. In 2019, PJSC Gazprom was in special partnership with the following In 2019, 10,081 students of higher educational institutions took four universities: an internship at PJSC Gazprom’s subsidiaries and entities, including 4,150 students from the anchor universities. Graduate School of Management of St. Petersburg University; As of the end of 2019, the Group’s companies were sponsoring the targeted education of 2,051 students of higher educational institutions. Admiral Makarov State University of Maritime and Inland Shipping;

St. Petersburg Electrotechnical University “LETI”;

Ammosov North-Eastern Federal University. eport 2019 R Number of the Gazprom Group-sponsored students who studied at higher educational institutions in 2016–2019, persons ustainability 1,812 2,075 S 2016 2018 roup’s roup’s 1,901 2,051 G 2017 2019 Gazprom

136 3.8. Future Professionals: Training of Schoolchildren and Students ur Report O

In 2019, another Student Olympiad of PJSC Gazprom was held to find students interested in engineering and technical professions and capable of technical creativity and innovative thinking with an ambition to start a career in the oil and gas sector. The Olympiad 1 was arranged jointly with 14 partner universities of PJSC Gazprom, with the competition spanning the Company’s key areas of interest: petroleum engineering, electric power and electrical engineering, economics, energy and resource-saving processes in chemical technology, petrochemistry, and biotechnology.

The partner universities of PJSC Gazprom traditionally host Job Fairs of Gazprom Neft Group, in 2019, signed 42 agreements with universities. PJSC Gazprom’s subsidiaries – the Gazprom Days. These events give There are 4 specialized departments, and 182 company-sponsored students extensive information about the Group’s companies, as well as students. Internships at Gazprom Neft were arranged for 1,948 students. the internship and employment opportunities available. Gazprom Energoholding prepares specialists with the necessary Each year, PJSC Gazprom holds a competition for personal qualifications by interacting with educational institutions across the 2 scholarships among the students of secondary vocational and higher entire country. It arranges training programs and practice-oriented education institutions. Thus, the Company-sponsored students are training groups, offers company-sponsored education to students, given an incentive for remarkable academic achievements. and organizes pre-graduation and industrial work placements for PJSC Gazprom collaborates with the anchor universities in the sphere students of secondary vocational and higher education institutions. of research and development (R&D) to solve the current technological In 2019, 1,350 students took an internship at the facilities of Gazprom challenges faced by the Company. The R&D projects include a Energoholding. eport 2019 lithofacies model of reservoir rocks in the Vendian–Riphean sediments Gazprom Neftekhim Salavat has been in cooperation with Ufa State R within the PJSC Gazprom’s license blocks in the Lower Angara Region Petroleum Technological University for over 70 years. The cooperation developed by Gubkin Russian State University of Oil and Gas based on is maintained in a number of areas, from procurement activities and a set of lithological and geophysical data, as well as technologies to maintenance of equipment and technical infrastructure of the University 3 identify and assess geological risks associated with offshore drilling and to training of qualified specialists and upgrading the knowledge of

ustainability construction of offshore oil and gas facilities which are being developed the company’s technical staff. In 2019, Gazprom Neftekhim Salavat

S by Lomonosov Moscow State University. provided financial support for the repairs in the rooms of the laboratory building, as well as the purchase of laboratory furniture and equipment for a total of RUB 5.9 million. roup’s roup’s G Gazprom 4

137 ppendices A 3.9. Young Employees of Gazprom

young specialists were hired 2,896 by the Gazprom Group in 2019 One of the key features of PJSC Gazprom’s HR management policy is In 2019, the Group hired 2,896 graduates of higher education and the recruitment and on-boarding of young specialists. secondary vocational institutions.

Total number of graduates of higher education and secondary vocational institutions hired by the Gazprom Group, 2015–2019, persons Indicator 2016 2 017 2018 2019 Total number of graduates of higher education and secondary vocational institutions hired, including: 2,688 3,190 2,931 2,896 graduates of higher education institutions 1,891 2,206 2,048 2,012 graduates of secondary vocational institutions 797 984 883 884 For reference: eport 2019

PJSC Gazprom Neft 342 432 283 505 R Gazprom Energoholding LLC 307 512 443 433

To attract and retain young specialists, in the year 2019 the subsidiaries ustainability approved the Program for Additional Social Support for Young S Employees126. roup’s roup’s G (126) Approved by Sergey Khomyakov, Deputy Chairman of the Management Committee, on May 17, 2019. Gazprom

138 3.9. Young Employees of Gazprom ur Report O

3.9.1. Young Specialists 1 and Scientific Research

PJSC Gazprom takes active steps to engage the young generation in Gazprom Energoholding involves its young employees in innovation tackling the R&D challenges faced by the oil and gas sector. activities. In 2019, the company’s young employees took part in the In 2019, the Company helped host the 13th All-Russian Conference following events: of Young Scientists, Specialists and Students “New Technologies in the Gas Industry” at Gubkin Russian State University of Oil and Contest for young specialists and innovators held by Gazprom Energoholding LLC; Gas. The event brought together over 350 participants and featured 2 217 presentations. Gazprom VNIIGAZ LLC hosted the 8th International Youth Scientific International contest for scientific, R&D and innovative solutions for and Practical Conference “New Technologies in the Gas Industry: the development of mining and fuel-and-energy industries; Experience and Continuity”. The Young Session of the 14th RAO/CIS Offshore International Conference and Exhibition also took place in 2019, with 88 young A Glance into Future – 2019 international competition for young specialists from PJSC Gazprom’s subsidiaries, as well as undergraduate scientists; eport 2019

R and post-graduate students taking part in the Session. In October 2019, the Work-study center of Gazprom Transgaz Moscow held the Best Young Employee of PJSC Gazprom contest All-Russian conference of young scientists, specialists and students at Gubkin Russian State University of Oil and Gas; designed to maintain the continuous development of talent capacity 3 at the subsidiaries through improved efficiency of interaction with the ustainability

S young employees. All-Russian scientific and practical conference of young specialists at In 2019, young specialists of the Gazprom Neft Group participated All-Russian Thermal Engineering Institute. in national youth events aimed at promoting the fuel and energy roup’s roup’s industry: scientific conference Oil and Gas – 2019, international The council of young specialists of Gazprom Energoholding LLC held G engineering championship CASE-IN, and the Russian Energy Week more than 100 corporate charity, sports, information, and mass cultural International Forum. In addition, young employees of Gazprom Neft events. and the Moscow Refinery were included in the Youth Council under the As of the end of 2019, the council of young specialists of Gazprom

Gazprom Ministry of Energy of the Russian Federation. Neftekhim Salavat included 96 young employees. 4

139 ppendices A Dialogue with an expert

Expanding the list of training areas and topics in sustainable development is our priority.

Alexander Pechenkin Director of Gazprom Corporate Institute

What is the role of Gazprom During the course of 25 years, we have been maintaining the leadership in personnel education and Corporate Institute in the development at Gazprom. Each year, more than 40,000 employees of the Group upgrade their skills at the Continuous Vocational Institute. We are also actively involved in the implementation of innovative HR management projects and are in Education and Training charge of targeted (pro-active) training programs. eport 2019

System of PJSC Gazprom? R

What are the advantages Over the years of our work, we have created a multi-tier corporate education system that covers all staff of studying at the Institute? categories, from young specialists to the talent pool for promotion to the executive positions. The system offers training in over 30 educational areas and 700 programs. We ensure a high standard of education at the Institute by inviting teachers from leading higher education ustainability S institutions, employees from relevant departments of PJSC Gazprom, federal government representatives, and specialists from training and consulting companies.

Of course, we also work closely with our partner universities. For example, in 2019, we collaborated with roup’s St. Petersburg Electrotechnical University “LETI” and Peter the Great St. Petersburg Polytechnic University G on a package of digital transformation programs. Together with Gubkin Russian State University of Oil and Gas and St. Petersburg State University of Economics, we carried out a unique professional retraining project

entitled “Oil and Gas Trading”. Gazprom We center our educational activities on the development of independent creative thinking, as well as around fostering and honing practical skills for further application in professional activities.

To what extent are you making E-learning is being successfully developed at the Institute. Each year, more than 30,000 people receive use of e-learning programs while training with the use of remote learning technologies in the Institute, with many e-courses developed by our training the employees own efforts. We are also actively promoting the webinar format, and widely use a combination of in-person of Gazprom? and remote learning.

What educational programs Our professional development and professional retraining programs, including MBA programs, cover the of the Institute are related issues of sustainable development and corporate social responsibility, ecology and environmental protection, to sustainable development HR management, occupational safety, corruption prevention and countering, as well as risk management. topics? It is a priority for us to expand the list of training areas and topics in sustainable development offered by the Institute.

140 3.10. Talent Pool ur Report O

people were included in the Gazprom Group’s 1 >15,70 0 talent pool in 2019 PJSC Gazprom’s talent pool consists of the employees who are training sessions, meetings with the management, sociological surveys, prepared to carry out management activities in a modern environment. participation in project groups, etc. That ensures succession, continuity and efficiency of the organization The employees included in the talent pool for promotion to the management. executive positions receive training under special corporate programs: In 2019, the talent pool across the Gazprom Group entities was Global Energy Company Management and Gazprom MBA Human 15,747 people, and 68% of staff were appointed to management Resources Management programs at Gazprom Corporate Institute, positions of all levels. Gazprom MBA: Oil and Gas Corporation Management in the Global Talent pool employees are evaluated using a comprehensive Environment program at St. Petersburg State University of Economics, as 2 approach, which supplements traditional formal qualification methods well as programs in other leading higher education institutions of Russia. with new ones, such as the Assessment Center, Development Center, eport 2019 R

3 ustainability S roup’s roup’s G Gazprom 4

141 ppendices A 3.11. Participation in the Development of a National System of Qualifications

professional standards are 453 implemented at PJSC Gazprom Gazprom takes an active part in building a national system of qualifications, PJSC Gazprom implements 453 professional standards, out of which develops and implements professional standards. In 2019, seven draft 113 are mandatory for application as regards the requirements to staff professional standards were developed in line with the PJSC Gazprom’s competence, as is stipulated by the legislation of the Russian Federation Action Plan to Develop (Update) Professional Standards127 . and PJSC Gazprom’s own instructions. In 2019, five draft professional standards developed by PJSC Gazprom In 2019, the issue of implementation of professional standards in the were approved by Orders of the Ministry of Labour and Social Protection operations of PJSC Gazprom, its subsidiaries and entities was considered of the Russian Federation. twice at the meetings of PJSC Gazprom Board of Directors. In the reporting year, PJSC Gazprom, its subsidiaries and entities continued the implementation of professional standards in their operations.

(127) Approved in 2019 by decree of PJSC Gazprom No. 341 dated October 31, 2018. eport 2019 R ustainability S roup’s roup’s G Gazprom

142 Our Workplace Safety

4.1. Labour Safety Management 145 4.2. Gazprom Group’s Occupational Safety Performance 151 4.3. Industrial Safety Performance 155 4.4. Fire Safety Control Performance 157 4.5. Process Safety Culture Development at the Gazprom Group 160 4.6. Staff Training in Process Safety 161 4.7. Control of Contractors in Relation eport 2019 R to Occupational, Industrial, and Fire Safety 162 4.8. International Cooperation ustainability S in Process Safety 164 roup’s roup’s G Gazprom

4 4. Our Workplace Safety

The Gazprom Group companies seek to ensure employee rights for safe working conditions by identifying and analysing risks, investigating the causes of workplace accidents, and reducing the rates of injury and occupational diseases. eport 2019 R ustainability S roup’s roup’s G Gazprom

144 Gazprom Group’s Sustainability Report 2019 4.1. GRI 403-8 PJSC Gazprom’s standardizationsystem,withSTO Gazprom18000. The ISPSM activitiesareregulatedbyasetofdocuments within The Policy setsthefollowinggoals: provisions. include roadsafety all companies oftheGazpromGroup.In2019, thePolicy wasupdatedto PJSC issuesin ensuresaunifiedapproachtoindustrialsafety Gazprom Management ofPJSC Gazprom(ISPSM). culturerelyontheIntegratedprocess safety SystemofProcess Safety and accidentrisksathazardousindustrialfacilities,promotingthe and healthofemployees,eliminatingormitigatingfire,emergency Activities aimedatensuringsafelabourconditions,protectinglives 4.1.1. GRI 403-1 (128) https://www.gazprom.com/f/posts/74/562608/2019-09-17-safety-policy-en.pdf For detailsonthenumberofemployeesinPJSC Gazprom Administration andPJSC forcompliancewithOHSAS Gazprom’s andnotcertified 18000:2007 subsidiariescertified seeAppendix6. plans andriskmitigationofactions. riskmitigation targetssetwithregardtoprocesssafety, performance the internalISPSM auditandthemonitoringofprogressagainst the includedinitsperimeter,and entity withcomplianceensuredthrough The subsidiary requirementsoftheISPSM areimplementedinevery For thefulllistofentitiesincluded intheperimeterofISPSM seeAppendix6. health oftheemployees; to createasafeworkingenvironmentandprotectthelives included intheISPSM’s perimeterisabout319,000 people. and 70entitiesoftheGazpromGroup’s gasbusinessresponsiblefor thefunctioningofgassupplysystem.The totalheadcountofthecompanies The perimeteroftheISPSM coversPJSC Gazprom Administration, storage, 32coresubsidiaries(specializedinproduction,transportation, andprocessing) The Policy Occupational,Industrial,FireandRoadSafety of Management of PJSC Gazprom Management PJSC of Gazprom Safety Process of Integrated System Management Labour Safety Provisions beingthefundamentaldocumentinthisregard. 1-001-2014 Integrated SystemofProcess Management.Key Safety reached 58. forcompliancewithsaidstandard the numberofsubsidiariescertified compliance withOHSAS18001:2007 internationalstandard.In2019, theISPSM year, for Every moreandsubsidiariescertify to ensurefiresafety. to reducetherisksofproduction-relatedroadaccidents; to reducetherisksofaccidentsandincidentsathazardousfacilities;

PJSC see Gazprom For Policy moredetailsontheOccupational,Industrial , FireandRoadSafety of 128 145 1 5 3 4 2 6 Appendices Our Report 4.1. Labour Safety Management

4.1.1.1. ISPSM Improvement

In order to enhance the ISPSM, the PJSC Gazprom Process Safety To achieve the performance targets set out by the Strategy, the Management System Development Strategy until 2021 has been Company has developed and approved the PJSC Gazprom Target developed and is currently implemented. Program for Process Safety Assurance until 202012 9 . The Strategy outlines the following priority development areas: The main objectives of the Program are as follows: commitment and leadership; to develop process safety regulations and procedures;

staff motivation; to establish an efficient process safety management framework;

safety communications development; to develop qualitative and quantitative criteria for process safety assessment; investigation of incidents and micro injuries; to reduce unplanned losses from accidents. management of occupational and industrial safety risks. eport 2019 R

In the reporting year, 33 process safety by-laws and standardization PJSC Gazprom develops and implements measures aimed at improving documents were developed and adopted, and over 30 documents were each separate element and the overall effectiveness of the ISPSM. being drafted. ustainability S

4.1.2. roup’s roup’s Labour Safety Management Framework G at the Gazprom Group Gazprom PJSC Gazprom’s senior manager in charge of the ISPSM is the Deputy The Directorate of PJSC Gazprom authorized to manage process safety Chairman of the Management Committee. The main body coordinating matters coordinates the ISPSM activities at PJSC Gazprom level. The and overseeing the implementation of the ISPSM is the Process Safety Directorate collaborates with other structural units of PJSC Gazprom. Commission led by the senior manager of PJSC Gazprom. The ISPSM is The Board of Directors hears annual report on the status of process functioning in close cooperation with the Gazprom Workers’ Union. safety at PJSC Gazprom’s facilities and makes assessment of the Company’s compliance with the process safety requirements.

For more details on the structure of the Integrated System of Process Safety Management at PJSC Gazprom see130

(129) Approved by order of PJSC Gazprom No. 581 dated October 3, 2018. (130) https://www.gazprom.com/about/production/safety/

146 Gazprom Group’s Sustainability Report 2019 4.1. and powerplantbranches coordinaterelevantactivities. requirements,whilechiefengineersoftheseentities with processsafety and heatsupplyingentitiesareresponsibleforensuringcompliance https://ir.gazprom-neft.com/disclosure/internal-regulations/#policy-on-industrial-and-workplace-health (131) in thesystem. and receivetherequiredinformationaboutpossibilitiestoparticipate the ISPSM improvementthrough representatives theiroccupational safety trade unions.Employeesofsubsidiariesandentitiesmakesuggestionson representativeswithin of subsidiariesandentities,occupational safety by theGazpromWorkers’UnionInterregionalOrganization,trade unions issues. the managementonprocesssafety employeesand communications thatpromoteanopendialoguebetween The GazpromGrouphasputinplaceandkeepsdevelopingcorporate GRI 419-1 Defence and EnvironmentalProtection;FireTransport Safety; andCivil isthePolicy onIndustrialandWorkplace Health,Safety Gazprom Neft at system. The fundamentalby-lawregulatingprocesssafety integrated management Gazprom processsafety hasavertically Neft GRI 403-4 4.1.3. in chargeofprocesssafety. In 2019, sanctions. lawsorregulationsleadingtosignificantfinesnon-monetary theGazpromGroupidentifiednoviolationsofprocesssafety As regards process safety, the interestsofemployeesarerepresented As regardsprocesssafety, At Gazprom Energoholding, themanagingdirectorsofgenerating In 2019, restructureditscollegialdecision-makingbodies GazpromNeft 131 , which is coordinated by the Process Safety Department. , whichiscoordinatedbytheProcess Department. Safety in Occupational Safety Occupational in Employee Engagement Labour Safety Management Safety Labour Environmental, Industrial, and Occupational Safety DirectorateEnvironmental, Industrial,andOccupational Safety bythe isperformed the methodsandprocedurestobeobserved over system.Supervision occupational, industrial,andfiresafety overthefunctioningof overallSalavat LLC supervision performs DirectorGeneralThe Deputy –ChiefEngineerofGazpromNeftekhim SalavatLLC. forallemployeesofGazpromNeftekhim are mandatory OHSAS 18001:2007. The requirementsoftheSystemapplytoand GOST 12.0.230-2007, GOST12.0.007-2009, GOSTR54934-2012 / with therequirementsofOHSAS18001:2007 /ISO45001:2018, ManagementSystemwhichwasdevelopedinline Industrial Safety Gazprom SalavathasinplacetheOccupational and Neftekhim for 2019–2021 The to provideemployeeswithmilkandhotmeals. mentalhealthevaluationofemployees; and mandatory andregularmedicalexaminations(check-ups) to conductpreliminary to investigateaccidentsandcasesofoccupational diseases; personal protectionequipment; to provideemployeeswithspecialclothing,footwear, andother at workplacesforemployees; to ensurehealthandsafety General Collective AgreementofPJSC anditsSubsidiaries Gazprom sets forth thefollowingobligations setsforth

147 : .

1 5 3 4 2 6 Appendices Our Report 4.1. Labour Safety Management

The technical labour inspectors of the Gazprom Workers’ Union regulations containing labour law provisions, as well as the compliance Interregional Organization, as well as trade unions’ officers authorized with the conditions provided for by collective and labour protection to manage occupational safety issues (in total 6,300 people) exercise agreements. control over the compliance with the labour legislation and other

Technical labour inspectors conducted 277 inspections of health and safety conditions, identified 1,247 violations, and issued 80 instructions to eliminate the violations of the labour legislation. Twelve written claims from employees concerning the violation of labour protection rights were reviewed; all of these claims were resolved in favour of employees.

Occupational safety committees (commissions) are functioning in all the employer and representatives of the elected body of a trade union subsidiaries and entities of the Gazprom Group. Representatives of organization are included in them on a parity basis.

4.1.4. Hazard Identification and Risk eport 2019

Assessment. Investigation of Accidents R

GRI 403-2 To prevent or mitigate the impact of hazards on PJSC Gazprom’s The following significant risks were identified:

employees, contractors, visitors and other stakeholders, Gazprom ustainability

the risk of injury to employees exposed to items and parts that move, S has arranged relevant hazard identification, risk assessment and risk fly, or rotate; management procedures aimed at ensuring process safety. They are

set forth in the corporate standard STO Gazprom 18000.1-002-2020 roup’s

Integrated System of Process Safety Management. Hazard Identification the risk of injury in a road accident; G and Risk Management for Process Safety Purposes13 2 . In 2019, the ISPSM requirements were revised to align with ISO 45001:2018 Occupational health and safety management the risk of an industrial safety accident as a result of a loss of systems. Requirements with guidance for use, and corporate containment observed in process equipment and devices at Gazprom standard STO Gazprom 18000.1-002-2014 was amended to hazardous industrial facilities; integrate the procedures of process safety hazard identification and assessment and management of identified process safety risks into the risk of a fire. PJSC Gazprom’s Risk Management and Internal Control System. Apart from that, risk assessment methods were combined and The following insignificant risks were identified: reporting documentation was unified. the risk of an employee being injured when falling on a flat surface: in In 2019, Gazprom identified its process safety hazards and 2019, the risk was reclassified as insignificant due to a 77% decrease assessed its process safety risks. The procedure revealed no critical in the number of cases compared to 2018 as a result of the measures risks. planned and subsequently taken at PJSC Gazprom;

the risk of injury as a result of exposure to an electric arc.

(132) Order of PJSC Gazprom No. 37 dated January 30, 2020.

148 Gazprom Group’s Sustainability Report 2019 4.1. (133) administrative barrierswithinthemanagementprocedures. safer technologiesinsteadoftheexistingones,andimplementing asaresultofaccidents,introducing of consequencesobserved carries outactivitiesaimedateliminatingrisks,reducingtheseverity to reducetheirimpact onemployees,PJSC Gazpromdevelopsand To risks,aswell preventoccupational, industrial,andfiresafety GRI 403-7 ISPSM fortheirreviewbyseniormanagement.Shouldadditional risk onthefunctioningof of activitiesareincludedintheannualreport The resultsofhazardidentification,riskassessmentanddevelopment accidentsandviolations measures topreventprocesssafety The procedurewasadoptedforthedevelopmentandimplementationof determining therootcausesofaccidentsandanalysingthesecauses. and entitiesofPJSC Gazpromintroducedaprocedureaimedat In 2019, thecausesofaccidents,subsidiaries inordertoidentify severity ofconsequences. severity to mitigatetheidentifiedrisksdependingontheirlevelofhazardand included inroadmaps,withconsistentworkbeingcurrentlyperformed arranging thisprocess.The findingsoftheriskassessmentwere Gazprom Energoholdingappointedandtrained personsresponsible of risks.Eachentity assess,andeliminateprocesssafety to identify, actions takenwhichismeasuredastheefficiencyofbarriers. Framework ofthe Safety project,aswelltoanalysetheeffectiveness ofthebarrierscreatedwithin to overseethepresenceandquality Anindependentinspectionpanel wassetup the entireGazpromNeft. and implementbarrierstokeyrisksisnowbeingimplementedacross tobuild creating relevantprotectiveandpreventivebarriers.This effort seeking topreventaccidentswithcatastrophicconsequencesby accidents. ofsimilar measures aimedatpreventingand/orreducingthepossibility about anaccidentanditscauses,todevelopimplement PJSC Gazprom’s structural units,branches, subsidiariesandentities accompanying them.The findingsareusedtoinformtheemployeesof theevents factors contributingtoaccidents,aswellidentify Group companies. solutions designedtoimprovetheISPSM insubsidiaries.The bookseekstoraise awarenessaboutbestpractices adopted attheGazprom In 2019, abookentitledBestProcess Practices Safety of PJSC Gazpromwascompiledtodescribethebestactivities, technologiesand In 2019, Gazprom Energoholding completedalarge-scaleeffort FrameworkThe Safety isaprojectofGazprom primarily Neft The analysisofrootcausesisdesignedtohelprevealallthe approved byorderofPJSC GazpromNo.208datedMay31, 2019. STO Gazprom18000.4-008-2019 Integrated SystemofProcess Management.AnalysisofRootCausesIncidents.Procedure Safety fortheirIdentificationandDevelopmentof Preventive Measureswas Labour Safety Management Safety Labour 133 . overall oftheISPSM. effectiveness carries outactivitiesaimedatenhancingeachseparate elementandthe PJSCTo performance, improveprocesssafety Gazpromdevelopsand protective equipment. order, fromthecompleteeliminationofahazardtousepersonal management measuresberequired,theyareselectedinahierarchical assessment are performed intheeventof: assessment areperformed out onanannualbasis.Unscheduledhazardidentificationandrisk Routine hazardidentificationandrisksassessmentexercisesarecarried STO 18.02.2019-ISO HazardIdentificationandRiskManagement. areregulatedby the purposesofoccupational andindustrialsafety assessment anddevelopmentofrisksmanagementactivitiesfor Energoholding companies. planned undertherepair andinvestmentprograms oftheGazprom and willbefullyeliminatedfollowingtheimplementationofmeasures eliminated withinacalendaryear. The remainingrisksweremitigated Serious risksaretobeaddressedfirst,whilemostother accidents andincidents. changes inworkingconditionsand/orworkprocedures; hazards andrisksand/orrelatedcontrolmeasures; amendments oflegalandotherrequirementsrelatedtoidentified special (non-standard)works; introduction ofchangesintoproductionprocesseswhenplanningany upgrade, overhaulorreplacementofequipment; In Gazprom Salavat,hazardidentification,risk Neftekhim 149 1 5 3 4 2 6 Appendices Our Report 4.1. Labour Safety Management

4.1.5. Process Safety Goals

For 2019, the Gazprom Group set the following process safety goals for The performance against the current goals is monitored on a weekly basis its companies: by the authorized Directorate of PJSC Gazprom. In 2019, the first cycle of implementing a risk-based approach to to create a safe working environment and to protect the lives and process safety was put into practice and tested within the perimeter of health of the employees; Gazprom Neft. Key risks were identified at the corporate level, with 31 scenarios developed for incidents with catastrophic consequences. For all scenarios, cause-and-effect models were developed to reflect to reduce the risks of accidents and incidents at hazardous facilities; the relations between underlying factors, a potential incident and its consequences. to ensure fire safety at the Group’s facilities. All companies of Gazprom Energoholding monitor the progress and effectiveness of the process safety activities on a quarterly basis. 89 subsidiaries and entities of PJSC Gazprom were successful in In terms of process safety, all companies introduce key performance achieving their occupational, industrial and fire safety goals, while indicators as regards total and fatal injuries. In 2019, the target values were 13 subsidiaries did not achieve them. In the companies that failed achieved. Zero fatal accidents occurred at production facilities, and there to accomplish the goals, a variable pay serving as an incentive pay were no accidents at hazardous industrial facilities in the reporting year. eport 2019

was included into their remuneration in line with the Methodology for In 2019, Gazprom Neftekhim Salavat achieved five process safety R Assessing Delivery of Occupational, Industrial and Fire Safety Objectives goals out of seven. At workplaces, no cases of fatal injuries and no injuries at PJSC Gazprom Subsidiaries and Entities134. from falling on a flat surface were recorded. The number of employees PJSC Gazprom developed and implemented the programs aimed at who saw an improvement in their working conditions increased by more achieving the goals set. All subsidiaries carry out programs of actions than 5%. The number of accidents and incidents decreased by 50% ustainability

seeking to improve the labour conditions, as well as plans of actions compared to the medium-term linear forecast over the past five years. S designed to ensure industrial safety at hazardous industrial facilities. No fires were recorded in the reporting year. roup’s roup’s G 4.1.6. Process Safety Plans for 2020 Gazprom Based on the results of the process safety risk assessment and the to create a safe working environment and to protect the lives and analysis of process safety laws, regulations and other requirements health of the Company employees; and possible improvements, the following process safety goals are set at PJSC Gazprom for 2020 (Executive document No. 03-233 dated October 11, 2019): to reduce the risks of accidents and incidents at hazardous facilities;

to ensure fire safety at PJSC Gazprom’s facilities.

(134) Approved by Order of PJSC Gazprom No. 196 dated April 23, 2018.

150 Gazprom Group’s Sustainability Report 2019 4.2. (135) Injured Indicator Indicator Number ofinjuriesandfatalities duetoincidentsin2016–2019, persons processing facilitiesthatdeterminedtherootcausesofincidents, persons atgasandcondensateprocessingfacilities. seven fatalitiesatthecompanies coveredbytheISPSM, includingfour of incidentsin2019 against89personsin2018). number wentdownby47% against2018 (47 personsinjuredasaresult reduce thenumberofemployeesinjuredasaresultincidents;this In 2019, thecompanies coveredbytheISPSM managedtosignificantly Number ofinjuriesandfatalities duetoincidentsin2019 thecompaniescovered bytheISPSM,region, persons Companies coveredbytheISPSM Injured Gazprom Energoholding Gazprom Neft Group Gazprom Neft Gazprom Neftekhim Salavat Gazprom Neftekhim Number ofinjuriesandfatalities duetoincidentsin2019 inthecompanies covered bytheISPSM,gender, persons Injured Audits andinspectionswereconductedatgascondensate year,In thereporting sixincidentswererecordedthatresultedin Including fatalities Including fatalities Injured Injured Including fatalities Including fatalities Including fatalities Injured Including fatalities Indicators for2016–2019 Group’s wereadjustedtakingintoaccount theGazpromNeft foreignassetsinSerbia,Iraq, Italy,EasternEurope,andCentral Asia. 135 Performance Occupational Safety to zeroin2018. injuredpersonsin2019 Salavathadtwo Gazprom Neftekhim compared 68personsinjuredin2019 Groupreported Neft versus85in2018, while of personsinjured:18 injuredin2018 against8in2019. The Gazprom issues. of measuresaimedatsolvingtechnical,organizationalandpersonnel and theresultsofauditsinspectionswereusedtodevelopaset Gazprom Energoholdingalsorecordedadecreaseinthenumber Federation Russian 2016 69 44 77 19 4 4 6 1 1 0 Republic of Belarus Male 017 2 44 16 74 61 7 4 3 6 1 1 2 1

151 Republic of Armenia 2018 85 89 18 1 0 3 0 0 0 0 Republic Female Kyrgyz 2019 2019 68 47 3 0 2 0 8 7 0 0 2 0 1 5 3 4 2 6 Appendices Our Report 4.2. Occupational Safety Performance

The most common causes of employee injuries were road traffic Eight persons, or 17% of the total number of persons injured, received accidents, with 18 injured persons, or 38% of the total number of injuries as a result of falls, including five from stairways, two on a flat persons injured. Notably, all persons were injured in road traffic surface, one with a difference of height. Given that 35 persons were accidents through a third party’s fault. Given that 41 persons were injured due to falls in 2018, the number of injured persons decreased by injured in road traffic accidents in 2018, the number of injured persons 77% year-on-year. decreased by 56% year-on-year. Eight persons, or 17% of the total number of persons injured, PJSC Gazprom is working towards mitigating those risks. Specifically, received injuries due to the impact of moving, flying or rotating items, a set of measures was developed to reduce the number of road traffic parts, or machinery – the same number as in 2018. accidents: traffic safety requirements were established for contractors, In 2019, injury frequency rates declined in the subsidiaries of and regulations were established for all control stages – from trip PJSC Gazprom and Gazprom Energoholding LLC, while lost time planning, pre-trip vehicle approval, monitoring of the vehicles’ speed and injury frequency rates decreased in the subsidiaries of PJSC Gazprom, drivers’ work and rest time to returning vehicles to their parking areas. Gazprom Energoholding LLC, and PJSC Gazprom Neft.

Injury frequency rate, Gazprom Group, 2016–2019 136 Item 2016 2 017 2018 2019 Subsidiaries of PJSC Gazprom (gas business) 0.24 0.19 0.28 0.15

Gazprom Neft Group 0.70 0.52 0.35 0.59 eport 2019 R Gazprom Energoholding 0.52 0.44 0.50 0.21 Gazprom Neftekhim Salavat 0.13 0.25 0 0.24 ustainability

Lost time injury frequency rates (LTIFR)137, Gazprom Group, 2016–2019 S Item 2016 2 017 2018 2019 roup’s roup’s

Subsidiaries of PJSC Gazprom (gas business) 0.16 0.11 0.17 0.09 G Gazprom Neft Group138 0.56 0.60 0.64 0.50 Gazprom Energoholding 0.30 0.25 0.28 0.12 Gazprom Gazprom Neftekhim Salavat 0.07 0.14 0 0.13

Fatality rate (FAR)139, resulting from incidents, Gazprom Group, 2016–2019 Item 2016 2 017 2018 2019 Subsidiaries of the Gazprom Group (gas business) 0.79 1. 17 0.57 1.35 Gazprom Neft Group140 3.09 3.08 0.74 1.46 Gazprom Energoholding 1.56 1.57 0 0 Gazprom Neftekhim Salavat 0 6.97 0 0

(136) Number of persons injured as a result of incidents / average headcount of employees × 1,000. (137) Number of persons injured as a result of incidents where lost time was involved / total man-hours worked × 1,000,000. (138) Indicators for 2016–2019 were adjusted taking into account the Gazprom Neft Group’s foreign assets in Serbia, Iraq, Italy, Eastern Europe, and Central Asia. (139) Number of persons who suffered fatal accidents / total man-hours worked × 1,000,000. (140) Indicators for 2016–2019 adjusted for the Gazprom Neft Group’s foreign assets in Serbia, Iraq, Italy, Eastern Europe, and Central Asia.

152 Gazprom Group’s Sustainability Report 2019 4.2. (142) (141) conditions assessment(SLCA To within theGazpromGroup,speciallabour ensureworkplacesafety 4.2.1. “Look out!”leafletsweredesignedandsentouttosubsidiaries. developed andimplemented. and programs were inthefieldofoccupational, processandfiresafety accidents, fires,etc.)andpreventthemfromhappeningagain, 12 plans In ordertoeliminatethecausesofworkplaceemergencies(incidents, 0.21 0.24 Total recordable frequency injury rate (TRIFR) 34,600 37,180 Physical factorsinclude: hazardous occupational factors(physical,chemicalandbiological). The scopeoflabourconditionscontrolincludesallkindsharmfuland the employees’labourconditionsaredevelopedandimplemented. are categorizedintoClasses,andactivitiesaimedattheimprovement of annually updatedschedules.Basedonitsoutcomes,labourconditions GRI 403-3 vibroacoustic factors(noise,vibration, infrasound, ultrasound); For thepreventionofemergencies(incidents,accidents,fires, etc.), In accordancewithFederal LawNo.426-FZdatedDecember28,2013 “OnSpecialLabourConditionsAssessment”. Total numberofrecordableincidents(alllosttimeinjuries,substitutework,andotherinjuriesrequiringtreatmentbyamedicalprofessional)/totalman-hoursworked×1,000,000. ) 142 is carried out every yearaccordingto iscarriedoutevery

Control over Labour Conditions overControl Labour Performance Occupational Safety assessment in2019 by speciallabourconditions workplaces were covered in 2019 conditions were improved employees working 141 , companiesincludedintheISPSMperimeter, 2016–2019 2016 017 2 .15 0 0.24 7,000 and chiefengineersofsubsidiaries. prevent themwereontheagendaofmeetingswithdirectorsgeneral injuries atPJSC Gazpromandtheimplementationof measuresto Commission.In2019,Safety thesituationconcerningwork-related preventive measuresatthemeetingsofPJSC Gazprom’s Process incident investigationsandtheimplementationofremedial ontheresultsofworkplace The executiveofficersofsubsidiariesreport heat load). indoor climate(airtemperature, environmental speed andhumidity; atworkplaces; illumination ofsurfaces ionizing radiation (radioactive, alpha-,beta-,gamma-,X-ray); non-ionizing radiation (electromagnetic,ultraviolet); 153 were implementedin2019 conditions improvement activities aimedatlabour

2018 2019 1 5 3 4 2 6 Appendices Our Report 4.2. Occupational Safety Performance

Chemical factors are controlled through monitoring and measuring With a total of 7,000 activities carried out during 2019, labour conditions chemicals, compounds and industrial (mostly fibrogenic) aerosols were improved for 34,600 employees. The measures behind these present in the workplace air. results included: Biological factors are controlled through monitoring and assessing repair of buildings and structures at production facilities; concentrations of microorganism producers and their metabolic products potentially hazardous for people and environment. Such concentrations are measured in the workplace air of the staff members purchase, installation and repair of ventilation equipment; who are mainly involved in health services. In 2013–2019, the number of workplaces with harmful and hazardous conditions at the subsidiaries and entities of PJSC Gazprom declined maintenance of ventilation equipment and dust and gas collectors; from 38% to 14% due to the implementation of measures aimed at improving the working environment. purchase and maintenance of personal alarm devices that detect hazardous and harmful chemicals.

Given the specifics of PJSC Gazprom’s activities, key harmful or The Company has developed and adopted the Labour Conditions hazardous occupational factors affecting the employees include hard Improvement Action Plan14 3 , which requires that the causes of harmful physical work and vibroacoustic factors. In 2019, 32 employees were noise and vibration conditions at workplaces must be analysed, and the eport 2019

diagnosed with occupational diseases resulting from the exposure to mitigating measures must be implemented. R vibroacoustic factors (noise). The Gazprom Group companies record and investigate the cases In order to eliminate noise, pressure snubbers were installed in the of occupational diseases as is provided for by the legislation of the pressure control units, noise-proof coating was applied around safety Russian Federation144. relief valves beyond the pressure control units, and the equipment of gas compressor units was upgraded. ustainability S

Occupational disease rate (ODR)14 5 , Gazprom Group, 2016–2019 roup’s G Item 2016 2 017 2018 2019 Subsidiaries of the Gazprom Group (gas business) 0.060 0.045 0.030 0.062

Gazprom Neft Group 0.031 0.009 0.018 0.016 Gazprom Gazprom Energoholding 0.016 0 0.031 0

Number of Class 3 and 4 workplaces and the number of employees working at such workplaces at the companies included in the ISPSM Perimeter, 2019 Indicator Class 3.1 3.2 3.3 3.4 4 Number of workplaces, units 19,821 9,084 615 44 0 Number of employees, persons 42,973 25,922 2,362 88 0

(143) RD No. 03-157 dated July 1, 2019. (144) Russian Government Resolution No. 967 dated December 15, 2000 “On Approval of the Regulation for Investigations and Records of Occupational Diseases”. (145) Number of incident cases of occupational diseases / total man-hours worked × 1,000,000.

154 Gazprom Group’s Sustainability Report 2019 4.3. control system, and organization and performance ofdiagnostics. control system,andorganization andperformance enhancementoftheoperational expertise, to thedevelopmentofstaff In additiontothat,PJSC Gazpromisworkingtoimproveby-lawsrelated causes: to reducethenumberofaccidentsandincidentseliminatetheir facilities. ISPSM perimeteroperated atotalof4,591 hazardousproduction As oftheend2019, PJSC Gazprom’s subsidiariesincludedinthe Information onthenumberofindustrialaccidentsandincidentsacross theGazprom Group, 2016–2019 8 accidentsin2018. 5accidentsin2019,the ISPSM perimeterreported down37% versus production facilitiesoftheGazpromGroupdeclined.Entitieswithin In 2019, incidentsathazardous thenumberofindustrialsafety GRI OG13 Indicator Companies includedintheISPSM perimeter Gazprom Neft Group Gazprom Neft Gazprom Energoholding Gazprom Neftekhim Salavat Gazprom Neftekhim industrial safety; incidents andadjusttheexistingactionplansaimedatimproving and entitiesofPJSC Gazprominordertopreventaccidents and information ontheaccidentrate iscommunicatedtoallsubsidiaries developed andarenowbeingimplemented; management, RemedialandPreventiveMeasuresPlanswere following thepreviousISPSM analysisbyPJSC Gazprom’s top Plans; Activities subsidiaries havedevelopedandadoptedIndustrialSafety The followingmeasuresweredevelopedandarebeingcarried out Accidents Incidents Accidents Incidents Accidents Incidents Accidents Incidents Performance Industrial Safety repair ofthecapitalassetsowned bytheGazpromGroupcompanies. reconstruction, technicalupgrade, diagnostics,maintenance,and costsareincludedintheprogramsIndustrial safety foroverhaul, of incidentsattheGroup’s companies alsodecreased. Salavat,therewas1accidentin2019.Gazprom Neftekhim The number Energoholding, compared to1and0accidents,respectively,in2018. At In 2019, andGazprom noaccidentswereregisteredatGazpromNeft and corporate controlbodiesareremediedinatimelymanner. agencies violations identifiedduringtheauditsbystatesupervisory when schedulingdiagnostics; themosthazardousdefects pipelines undergopiggingtohelpidentify inatimelymanner; performed investigation ofthecausesbehindaccidentsandincidentsis 2,385 2016 176 30 9 2 1 1 2

2,183 017 2 129 21 5 0 0 0 1 155 2018 1,068 99 8 8 1 0 0 9 2019 920 69 5 5 0 0 1 1 1 5 3 4 2 6 Appendices Our Report 4.3. Industrial Safety Performance

Information on occupational and industrial safety spending across the Gazprom Group, 2016−2019, RUB million Companies 2016 2 017 2018 2019 Companies included in the ISPSM perimeter Occupational safety 10,819 10,795 15,450 17,565 Industrial safety 7, 113 11,452 5,576 5,299 Gazprom Neft Group146 Occupational safety 1,291 1,592 7,943 – Industrial safety 5,868 5,964 918 – Gazprom Energoholding Occupational safety 1,438 1,467 1,533 1,626 Industrial safety 522 649 218 467 Gazprom Neftekhim Salavat Occupational safety 186 171 228 187 eport 2019 Industrial safety 5 51 830 478 809 R

Subsidiaries and entities of PJSC Gazprom take the following steps to develop standards for emergency materials and equipment stock

plan measures aimed at containing and eliminating the consequences of ustainability

and make financial provisions for containing and eliminating the S accidents at hazardous industrial facilities: consequences of accidents; establish and operate their own emergency rescue services, as well

as volunteer emergency rescue teams; roup’s set up and upgrade training aids and equipment to prepare G employees for an adequate response to emergencies; sign contracts with professional emergency rescue services (teams) to provide services to ensure well blowout, gas, fire, industrial and occupational safety and to perform scheduled gas hazardous works train their staff at hazardous industrial facilities to contain potential Gazprom and repair and maintenance works; accidents and emergencies and eliminate their consequences, use main protective equipment and safety measures, and provide first aid and self-care in case of injuries; organize trainings and test alerts. set up engineering systems for control and prevention of potential accidents and emergencies, as well as alert, monitoring and communication systems;

The Gazprom Group implements digital technologies and uses innovative solutions to improve industrial safety. In 2019, PJSC Gazprom Science and Technology Prize was awarded to the authors of the projects “Information analysis system for identifying potentially hazardous sections in gas trunklines due to stress corrosion cracking and for planning major repairs” (Gazprom Transgaz Yugorsk LLC) and “Developing and integrating management information systems to improve technogenic and geo-ecological safety at gas production facilities” (Gazprom Dobycha Yamburg LLC).

(146) Starting from 2019, no data is collected on the Gazprom Neft Group’s occupational and industrial safety spending.

156 Gazprom Group’s Sustainability Report 2019 4.4. based on the results of accident investigation and audits by supervisory based ontheresultsofaccidentinvestigationandauditsbysupervisory (147) bytherepresentativesof holds specialtacticalexercisesattended in2019reported (1injuredin2018). 1.7 damage).Noinjuriesresultingfromthefireswere millioninproperty subsidiaries andbranches (versus3firesin2018 thatledtoRUB of RUB7millionwereregisteredatthesitesPJSC Gazprom’s In 2019, damagefortheamount firescausingatotalproperty two PJSC Facilities Gazprom for2019 OrganizationalandTechnologicalA FireSafety ActivitiesPlanfor and Rescue Sports among Ministries and Agencies, as well as in the World Fire and Rescue Sport ChampionshipinVarna(Bulgaria). amongMinistriesandAgencies,aswellin theWorldFireandRescueSport and RescueSports In 2019, aPJSC GazpromteammadeupofemployeesfromtheCompany’s subsidiariestookthefirstplaceinRussianCompetitionFire ofacooperationthe AmurGPPaspart programPJSC between GazpromandCNPC. In October2019, thefirstinternationaldrillsonemergencyresponseandcross-bordermedicalevacuationofinjuredtoChinatookplaceat To preventfiresacrossitsproductionfacilities,theGazpromGroup RD No.03-255datedDecember27, 2018. 147 wasdevelopedandapproved Control Performance Fire Safety in full. bodies. The planprovidedfor49measures,whichwereallimplemented cooperation withthefederal executiveauthorities. practice employeeevacuationintheeventofagashazardorfire. including togetherwiththeMainOfficeofEMERCOM,anddrillsto Situations (EMERCOM)ofRussiaandPJSC Gazprom,firedrills, forEmergency ofRussia(Rostekhnadzor),Ministry Service Supervision Central Officeofthe Federal Environmental,IndustrialandNuclear

In 2019, theGroup’s companies held3,155 fireexercisesanddrillsin 157 1 5 3 4 2 6 Appendices Our Report 4.4. Fire Safety Control Performance By creating a safe working environment, we contribute to maintaining the health of our employees, increasing labour productivity, and supporting consistent sustainable development. Mikhail Yasinsky Deputy Chief Engineer for Occupational Health, Industrial eport 2019 and Fire Safety, Gazprom Dobycha Urengoy LLC R

Boasts over 30 years of experience in process safety. Took part in the Zapolyarnoye field development project and was involved in ensuring

industrial safety of the Prirazlomnaya offshore ice-resistant fixed platform. At present, ensures occupational safety at the unique Urengoyskoye oil ustainability and gas condensate field, one of the top 3 globally. S roup’s roup’s G Gazprom

158 Gazprom Group’s Sustainability Report 2019 4.4. Fire Safety Control Performance Performance Control Fire Safety 159 1 5 3 4 2 6 Appendices Our Report 4.5. Process Safety Culture Development

GRI 403-4 Process safety culture is a significant factor of a company’s process enhanced operational control over compliance with industrial safety safety that helps prevent emergencies, incidents, accidents, and fires at requirements when operating gas and gas condensate processing the production facilities. facilities, gas distribution and consumer networks, oil production, When developing PJSC Gazprom’s Process Safety Management transportation and processing facilities, as well as over compliance System Development Strategy until 2021, PJSC Gazprom conducted with the requirements when operating power generation facilities. initial assessment of the process safety culture. PJSC Gazprom’s Target Process Safety Enforcement Program until 2020 is focused on At Gazprom Neft, employees play the key role in prioritizing the developing process safety culture as a means of achieving the Target occupational safety culture, which is why the company pays special Zero goal when reducing the number of incidents. attention to establishing a dialogue with its staff. Gazprom Neft holds In 2019, PJSC Gazprom carried out the following activities to improve annual Safety Awareness Days attended by its top management, where process safety culture: the company’s employees and contractors exchange knowledge and thoughts on work-related hazards. This yields quality feedback and organized process safety leadership workshops for the executive provides for rapid elimination of workplace safety issues. management of PJSC Gazprom and its subsidiaries; In addition, the staff training system of Gazprom Neft also helps build safety culture. established corporate requirements to behavioural safety audits148; Gazprom Energoholding continues implementing the Safe Operations Culture Project149. It also organizes mandatory training, testing and certification of eport 2019

personnel in occupational and industrial safety. R

(148) R Gazprom 18000.3-009-2019 Integrated System of Process Safety Management. Behavioural Safety Audit. Guidelines. (149) For more details see the Gazprom Group Sustainability Report 2018: https://sustainability.gazpromreport.ru/en/2018/ ustainability S roup’s roup’s G Gazprom

160 Gazprom Group’s Sustainability Report 2019 4.6. further certification bytheCentral ExaminationBoardof certification further PJSC Gazprom. at GazpromCorporatebriefing inindustrialsafety Institutetoprepare for undergo training aswellpre-certification inoccupational safety, certification. industrial safety knowledgeandconducts Board whichtestsoccupational safety Group’s companies, PJSC GazpromhassetupaCentral Examination well asoftheexecutivesandcentral examinationboardmembersofthe competence oftheemployeesatPJSC Gazpromstructural units,as professional training centersandspecializededucationalinstitutions. atbothinternal have beendevelopedforeachemployeecategory PJSC Gazprom. Training andprofessionaldevelopmentprograms via theContinuousVocationalEducationandTraining Systemof Federation, professionalstandardsandby-lawsofGazprom. which arebasedonfederal lawsandregulationsoftheRussian ofactivity, knowledgeandcompetenceineachtype industrial safety The GazpromGroupcompanies setrequirementstoemployees’ 249,600 GRI 403-5 The executivesandspecialistsofPJSC GazpromAdministration For knowledgeand theassessmentofoccupational safety PJSC training Gazpromprovidesoccupational safety toitsemployees occupational safety in2019occupational safety Group received training in people across theGazprom in Process Safety TrainingStaff 47,800 industrial safety. training,occupational safety and7,289 employeesweretrained in 30,188 employeesofGazpromEnergoholdingcompanies underwent ofRussia(Rostekhnadzor). In2019, Service and NuclearSupervision bythecommissionof Federalall certified Environmental, Industrial Gazprom Energoholdingcompanies’ central examinationboardswere Each boardischairedbyachiefengineer. The representativesofthe rules. andenergysecurity offices againsttherelevantindustrialsafety heads andspecialistsofthecompanies’ powerplantsandexecutive andassess(check)theknowledgeof examination boardstocertify andcontractors. Neft corporate educationalprograms fortheemployeesofbothGazprom andin-housecoachesteach whereexternalexperts department certification. andachievedindustrialsafety safety PJSC Gazprom subsidiariesandentitiesweretestedinoccupational and 305executivescentral examinationboardmembersof In 2019, 256employeesofPJSC Gazprom’s structural units All Gazprom Energoholding companies haveinplacecentral Gazprom corporatehasaprocesssafety Neft’s university

161 industrial safety in2019industrial safety Group received training in people across theGazprom 1 5 3 4 2 6 Appendices Our Report 4.7. Control of Contractors in Relation to Occupational, Industrial, and Fire Safety

GRI 403-7 Safety of Gazprom facilities operation depends to a large extent upon Incidents and lack of normal workplace conditions and amenities at contractor companies that provide services and carry out repair and contractor companies create risks of delays in repairs and construction construction works on behalf of the Group. and subsequent risk of late commissioning of production facilities and deter highly qualified professionals.

Gazprom requires that the suppliers and contractors strictly adhere to Prevention of accidents and workplace injuries is one of the key the established occupational, industrial and fire safety standards and conditions for collaboration with contractors. The contractor companies procedures while performing the works at Gazprom facilities. During are notified of and advised on the ISPSM requirements, the identified the bidding and procurement stage, the participants are checked risks and changes affecting the safety during the introductory for availability of the documents certifying their compliance with briefings, as well as when the work permits (safe work permits, occupational, industrial and fire safety requirements. clearance certificates) are issued. PJSC Gazprom, its subsidiaries and The subsidiaries and entities of PJSC Gazprom have developed contractors150 have arranged exchange, collection and analysis of documents regulating the procedures for access to the facilities and statistics of incidents at contractor companies. control of contractors based on the operational and regional specifics. Representatives of the contractor companies participate in The contractual documents were amended to include the new PJSC Gazprom meetings and workshops on implementation of the requirements that contractors need to comply with. process safety policy, process safety culture improvement, and development of management leadership skills. eport 2019 R

Number of injuries and fatalities among the contractor employees as a result of incidents in 2019, persons Indicator PJSC Gazprom subsidiaries Contractor companies

enabling the operation of the which worked at the ustainability Unified Gas Supply System Gazprom Group’s facilities S (subject to the ISPSM)

Injured 23 142 roup’s G Including fatalities 2 13

The control over the activities of contractor companies is performed in Apart from the ISPSM audits, the activities of contractor companies Gazprom line with STO Gazprom 18000.3-004-2020 Integrated System of Process are overseen as part of administrative and production control within Safety Management. Organizing and Conducting Audits151 , based on the subsidiaries. developed program of internal audits of the ISPSM.

All contracts concluded by Gazprom Neft with its contractors include procedures and holds joint meetings to find the best solutions on how to the requirements on compliance with the rules and regulations improve the safety of the works. established in the regions of operations, as well as the corporate As works are carried out, there is continuous monitoring of industrial, occupational, and environmental safety requirements. their compliance with the safety requirements and the contractor Entering into contracts for essential technical operations is preceded performance in terms of safety. If deviations are identified, the parties by an evaluation of the technical condition of the equipment, the cooperate to remedy them. qualification of the personnel, and the implemented process safety Each year, Gazprom Neft’s contractors take part in Safety Days held management systems of the contractor. by the Group.

Gazprom Neft informs its contractors of the applicable rules, norms, and Gazprom Energoholding implements a number of measures to

(150) For PJSC Gazprom subsidiaries that are part of the Unified Gas Supply System (involved in production, transportation, storage and processing), the main contractor organizations are subsidiaries enabling operation of the UGSS, which are covered by the ISPSM. They include, in particular, the subsidiaries and entities performing overhauls, construction, survey and design works, supplying energy resources and providing motor and railway transportation and special machinery and equipment. (151) Approved by order of PJSC Gazprom No. 94 dated March 2, 2020; in effect starting from March 12, 2020 instead of STO Gazprom 18000.3-004-2014.

162 Gazprom Group’s Sustainability Report 2019 4.7. http://www.gpns.ru/sites/default/files/reglament_vzaimodeystviya_storon_pr802.pdf (152) systemforauthorizingcontractors toperform certification voluntary usingtheINTERGAZCERT in2020,itisplannedtostart Committee, Pursuant totheinstructionofPJSC GazpromManagement 4.7.1. Occupational, Fire,RoadTraffic Safety, InternalLabourRulesand Cooperation inRelationtoCompliance withEnvironmental,Industrial, system. to complywiththerequirementsofoccupational safety DaysareanothermeansofencouragingSafety contractors’ employees Occupational training Healthand have receivedsafety andcertification. members issuance ofsafeworkpermits,andcheckswhetherstaff inductiontraining,occupational safety preparation ofworkplaceswith at thefacilitiesofGazpromEnergoholding.These includemandatory procedures working environmentandoccupational healthandsafety amongcontractorspromote responsibility formaintainingasafe Gazprom SalavatincludestheProcedureof Neftekhim interaction with contractors interaction with Plans 2020 for concerning Safety Fire and Industrial, Occupational, to Relation in Contractors of Control inspection tobesubsequentlyremedied. ofhigh-hazardoperations deficiencies arerecordedinacertificate operations carriedoutbycontractor companies. The identified Salavat, asisrequiredbytheProcedureofCooperation. at theplantfacilitiesareavailableonwebsiteofGazpromNeftekhim contracts withcontractors. controlling their compliance with the process safety requirements. controlling theircompliancewiththeprocesssafety atPJSCworks orrenderservices Gazprom’s facilities,aswellfor Regulations, On-SiteandAccessAuthorizationProcedures There isalsoatelephonehotlineinplaceforcontractor employees. Salavatalsoconductsauditsofhigh-hazard Gazprom Neftekhim ofcontractorThe works localregulationsgoverningtheperformance

163 52 15 intoall 1 5 3 4 2 6 Appendices Our Report 4.8. International Cooperation in Process Safety

PJSC Gazprom maintains long-term relationships with foreign partners, evaluating the process safety status; including in the field of process safety. Process safety matters are addressed as part of PJSC Gazprom’s joint R&D work with Wintershall Dea, Shell, ENGIE, and CNPC. Partnerships with foreign businesses exchanging practices on how to increase employee motivation, are aimed at developing long-term and effective cooperation through encourage engagement in occupational safety activities, and the exchange of best practices. By joining forces with foreign partners, strengthen the team spirit; Gazprom seeks to enhance the process safety system and ensure compliance with the relevant requirements at hazardous facilities. Below are the matters that PJSC Gazprom and its foreign colleagues ensuring safe development and operation of fields with hydrogen pay attention to: sulphide content; shaping a corporate safety culture; integrating occupational and industrial safety requirements in the implementation of joint oil and gas projects. improving the process safety management system;

Gazprom’s experience is taken into account by the International Labour Organization (ILO) to develop its documents. Specifically, PJSC Gazprom, having been acting as the operator in the Arctic for a number of years now, played a significant role in advising the ILO on

occupational health and safety matters for Arctic shelf operations. The Company’s representatives were also invited to the Steering Committee eport 2019 R of Vision Zero (an international program that aims to enhance road traffic safety and reduce fatalities from road traffic accidents); the Committee has been established to develop process safety culture aimed at eliminating the causes of accidents, workplace injuries, and occupational diseases. ustainability S roup’s roup’s G Gazprom

164 Our Social Initiatives

5.1. Cooperation with the Regions 167 5.2. Indigenous Minorities of the North and Gazprom: Constructive Collaboration 170 5.3. Charity 172 5.4. Support of Culture and Arts 176 5.5. Revival of Spiritual Values 179 5.6. Development of Sports Programs 180 5.7. Supporting Sports Federations 181 eport 2019 R 5.8. Sponsorship of Business Events 182 ustainability S roup’s roup’s G Gazprom

5 5. Our Social Initiatives

The Gazprom Group is committed to making consistent social investment in more than 80 regions of its operation thus contributing to their sustainable development. eport 2019 R ustainability S roup’s roup’s G Gazprom

166 Gazprom Group’s Sustainability Report 2019 5.1. Russian Federation thatisbasedoncooperation agreements. theCompany andtheconstituententitiesof relations between (154) (153) authorities oftheconstituententitiesRussianFederation, and theinterests oftheGroup’sa balancebetween companies, public The GazpromGroup’s cooperation withRussianregionsisbasedon Policy Concept Gazprom’s relevantactivitiesinthisareaaregovernedbytheRegional wereimprovedandstepstakentofindnewones. partnership and todevelopalegislativeframework forcooperation. Existingforms of Federation tocreateafavourable environmentfortheGroup’s business and municipal authoritiesoftheconstituententitiesRussian In 2019, theGazpromGroupcontinueditsinteraction withpublic GRI 203-2 Hospital. The unsatisfactory state of these hospitals prevented residents of Ukhta, Vuktyl, andSosnogorskfromaccessingmodernhealthcare. Vuktyl, stateofthesehospitalsprevented residentsofUkhta, Hospital. The unsatisfactory RUB 171.1 Children’s millionforanoverhauloftheUkhta Maternity Interterritorial Hospital,andRUB53.26millionforanoverhauloftheUkhta In theKomi Republic,throughout 2019, GazpromTransgaz LLC Ukhta allocatedRUB194.4 Town millionforanoverhaul ofUkhta HospitalNo. 1, branch involvedinimplementingPJSC Gazprom’s NordStream2strategic project. Transgaz SaintPetersburg LLC GasPipelineOperation added256newjobsasrequiredforthedevelopmentofSlavyanskoye Center, anew region, 458 newjobsaretobecreatedintheKingiseppsky,Volkhovsky,andBoksitogorskyDistrictsofLeningrad Region.In2019, Gazprom CSsectionintheNorth-West oftheprojectonexpansion attheGryazovets–Slavyanskaya capacity As part ofUGSS’gastransportation 30%. Power savingsfortheyeartotalledRUB2million. NevskyProspekt oldsodiumlampswerereplacedwithnewLEDones,thepowerconsumptionrequiredtolight wentdownby After lighting. wasupgraded.outdoor lighting For morethantenyears,PJSC inamajorprogram Gazpromhasbeentakingpart forurbanimprovementofthehistoriccenterSt.Petersburg. Except the Magadan Region, Chukotka Autonomous Area, Republic of Crimea, and the city ofSevastopol. Except theMagadanRegion,ChukotkaAutonomousArea,RepublicofCrimea,and city Approved onMay22,2003byresolutionofOJSC GazpromManagementCommittee. In December2019, wereinstalledinNevskyProspekt, LEDstreetlights whichbecamethecity’s firstlargestreetthattransitioned toLED In 2019, asetofimprovementactivitieswascarriedoutinnumberstreetsthePetrogradsky DistrictofSt.Petersburg, anddecorative 153 . The document sets forth amulti-levelsystemof . The documentsetsforth with PJSC Gazprom are covered byagreements Russian regions with theRegions Cooperation In the reporting year,In thereporting theagreementscovered81 Russianregions jobs, improveslocalinfrastructure,projects. andimplementscharity focuses ontheinterestsoflocalresidents:Groupestablishesnew thiscooperationorganizations operating intheregions.Importantly, 10 well as building and repairing facilities of social importance. well asbuildingandrepairing facilitiesofsocialimportance. companies indevelopingregions’infrastructure, arealsototakepart as indigenous peoples.Inaccordancewiththedocuments,Group’s develop businessoperations, protecttheenvironment,andsupport 2019, tennewcooperation agreementsandcontracts weresigned. These documentsprovideforframework conditions,interalia,to

167 Russian regions in2019 and contracts were signedwith new cooperation agreements 154 . In 2 3 4 5 6 1 Appendices Our Report 5.1. gas transportation, gasinfrastructuregas transportation, expansion andgassupplies, regards commercialdevelopmentofhydrocarbonfields,natural PJSC Gazprom’s strategic interestsinrespectiveregionsas The agreementsandcontracts signedtodatetakeintoaccount Russian companies. ItbringstogetherallofGazpromNeft’s social developmentinitiativesrunby successful andrenownedcommunity The HomeTowns program ofGazprom isoneofthemost Neft GRI 413-1 forservices tariffs construction works,timelyreviewoftheutility exploration and ofthemineral resourceblocks,design,surveying assistance totheGroup’s companies, amongotherthingsingeological Pursuant totheagreements,regionalgovernmentswillbeproviding competition. In 2019, theHomeTowns program wontheGrand Prix attheLeaders ofCorporateRussia’s Charity, most widelyrecognizedsocialinvestment infrastructureofYuzhno-Sakhalinsk. facilities,andhousingfortheGazpromGrouppersonnelwillbeerected inthecity and sports Under anagreementofintentfortheimplementationPJSC Gazprom’s investmentprojectintheSakhalinRegion,anofficecomplex,social motor roadsegments.The expendituresofPJSC GazpromamountedtoRUB287.48 million. andfitnesscenters, infrastructure personnel,sports facilitiesinmunicipal districtsoftheautonomousareasuchasdormitoriesforshift program ofGazpromTransgaz Yugorsk LLC) andtheGovernmentofKhMAA–Yugra ofprojectsin2019 tobuildsocialandtransport AutonomousArea–YugraThe agreementwiththeKhanty-Mansi (KhMAA–Yugra) providedforco-financingby PJSC Gazprom(investment Cooperation with the Regions the Regions Cooperation with between theparties. between promotetraditional andmutuallybeneficialrelations partnerships further operations ofPJSC Gazprom’s subsidiaries.The agreementsaimto andprotectionintheareasimpacted by and environmentalsafety residential buildings and sports centers. residential buildingsandsports celebrations andmajorinternational festivalstoconstructionof projects, ranging fromsmall-scalevolunteercampaigns, town-level authorities. procedure forexecutionoflandacquisitiondocumentsbythemunicipal the companies tocustomers,simplifying provided bythesubsidiary 168

Gazprom Group’s Sustainability Report 2019 Gazprom Group’s Sustainability Report 2019 plans for2020? communities? Whatare the out in2019 local tosupport What activitieswere carried project? mechanism inplaceforthis Is there agrievance the project? live inthearea infl uencedby the interests ofthepeoplewho does thecompanydotomeet construction project. What Amur GasProcessing Plant investor andcustomerinthe Blagoveshchensk isthe Gazprom Pererabotka expert an with Dialogue RUB 7million,sameaslastyear. implement proceduresforselecting socialprojectsandmonitoringtheireffi ciency. oncetheAmurGPPisputintooperation, engagementand forward, weplantoexpand ourlocalcommunity interactive lecturesforyoungerpeople, andSvovodny: Local, afestivalofnationalcultures.Going Everyone’s andMeseriesof Councildevelopedandthenimplementedexcitingsocialprojects:Safety the Community organizations, andtheproactiveapproach,whichwasfi rsttriedoutin2019. oftheproactiveapproach, As part approach, whichisbasedontraditional anddistrict processingofrequestsreceivedfromvariouscity bytheflresidents andeducationalinstitutionsaffected ood. summer fl oodanditsconsequencesintheregion.Gazprom Pererabotka BlagoveshchenskLLC alsohelped authorities bymobilizingconstructionequipmentofcontractors engagedintheprojecttodeployitfi the ght Orphanage forChildren,andarehabilitationcenter. The company toregional providedconsiderable support assistance wasextendedtoadedicatedGazpromClass,rural schools,boardingschool,the Svobodny Social In 2019, expensesofGazprom Pererabotka charity BlagoveshchenskLLC totalledRUB7million. Financial partnership. In additiontoquicklyaddressingongoingissues,italsolaysthefoundationpromoteasustainablesocial resolved within3–5businessdays. istobehandledwithin10complaint orquery businessdays.Ourexperienceshowsthat85%ofissuesare improvement. territory by theprojectandconcernsaboutconductofthoseinvolvedinGPPconstruction,aswell offered Queriesfromlocalresidentsfocusedonemploymentopportunities occupational andindustrialsafety. in Svobodnyandatconstructionpersonnelaccommodationsites. construction. Anotheroptionistousesuggestionboxes.Those arelocatedattheproject’s informationcenter This thegeneral canbedonebymail,e-mail,orcallingtheHotLineof NIPIGAZ, contractor ofthe orcomplaintrelatedtoanyaspectoftheAmurGPPconstruction. submitaquery Any stakeholderhastheright socialize, and charity projects. socialize, andcharity the project’s benefi tsforthebudgetandinfrastructure oftheSvobodnytown,toolstohelpforeignworkers construction, certifi cationforlocalresidentswishingtoapplyblue-collarpositionsopen attheproject, Councilalsomet three timesduringtheyear.Community discussedincludedtheprogressinplant Matters and cultural institutions. opinion leadersfromamonglocalresidentsrepresentingthegovernment,non-governmentalorganizations, Councilwasformedwhichincludes20 people relatedtovariousstagesoftheproject.Also,Community themostpressingconcernsandexpectationsof ones.Activities likethesehelpidentify the mosteffective In ourstakeholderengagement,weusearange oftools,withregularpublichearingsandconsultationsbeing Director General ofGazpromPererabotka BlagoveshchenskLLC Yury Lebedev interests. their account into takes and local communities supports GPP Amur the of construction The In 2019, publichearingsfocusedontheamendmentstoAmur GPPdesigndocumentation.The In 2020,fi nancingofactivitiesundertheLocal Communities DevelopmentPlanistoamount In linewiththeLocal Communities approaches: thereactive DevelopmentPlan,thecompany usestwo In general, framework wehavemanagedto buildaconvenientandeffective forstakeholderinteraction. Under theRegulationonGrievanceProcessingofGazpromPererabotka BlagoveshchenskLLC, a In 2018–2019, mostofthegrievances camefromemployeesandwererelatedtotheirlivingconditions 169 2 3 4 5 6 1 Appendices Our Report 5.2. GRI OG9 (156) (155) Gazprom isguidedbythefollowingprinciples: programs beingdeveloped. and howtheindigenouspeoplescurrentlylive,withnorelocation habitats. Gazpromimplementsitsprojectstakingintoaccountwhere tomaintain thetraditional intheirancestralcommunities’ rights lifestyle The ofthelocal Company abideswiththeoverridingpriority GRI OG12 Numbered Peoples SiberiaandFar EastoftheRussian oftheNorth, On AreasofTraditional Natural ResourcesUseofIndigenousSmall- the legislationofRussianFederation, inparticular, theFederal Law Inaccordancewith indigenous small-numberedpeoplesoftheNorth. The GazpromGroup’s regionsofoperation includeareaspopulatedby RUB indigenous peoples. insolvingsocialissuesof –takingpart social responsibility development oftheindigenousminoritiesNorth; –factoringinthespecificsofeconomicandsocial specificity objectives; an equalbasisandshareacommoninterestindeliveringontheir ensuring thatindigenouspeoplesandPJSC Gazprom cooperate on peoples oftheNorth; withtheunionsofindigenous –establishingpartnerships partnership set upinthetownofTazovsky forthelocalstofamiliarizethemselveswithproject. Zapolyarnoye OGCF, Number240056 Inventory liaisonoffice was project,includingitsenvironmentalimpact assessment(EIA).Acommunity Compressor StationatCGTU-3SoftheZapolyarnoyeField(Phase 2).Stage1. Reconstruction oftheSolidDomesticWasteComplexat In June2019, publichearingswereheldattheAdministration oftheTazovsky District(Yamal-Nenets AutonomousArea)todiscusstheBooster When collaborating with the indigenous minorities of the North, When collaborating withtheindigenousminoritiesofNorth, Hydrocarbon FieldDevelopment. ofNatural ResourcesandEnvironmentNo.639datedSeptember 20,2019As isrequiredbytheOrderofRussianMinistry OnApprovalofRulesforPreparing Technical DesignDocumentationfor Federal LawNo.49-FZdatedMay7, 2001 OnAreasofTraditional Natural ResourcesUseofIndigenousSmall-NumberedPeoples SiberiaandFar EastoftheRussianFederation. oftheNorth, 154 million Constructive Collaboration andGazprom: of theNorth Indigenous Minorities indigenous peoplesin2019. to to provide support charity Gazprom Group companies was allocatedbythe peoples bytheproposedconstruction. measure anypotentiallossesinflictedontheunionsofindigenous the nativehabitatandtraditional wayoflifeindigenouspeoples,and ethnological impact, definethestepstoreduceadverseimpacts on areas oftraditional useofnatural resources. inthe and developthelocalculture,aswellmaintainbiodiversity habitat andtraditional wayoflifeindigenousminorities,preserve Federation of indigenouspeoples particular, totheprotectionofnativehabitatandtraditional wayoflife natural resourceusebythelocalcommunities,whichcontributes,in process,and at reducingtheimpact ontheenvironment,resettlement The design of subsoil assets factors in solutions and technologies aimed promotion oftraditional activities. energy saving,natural resources use,aswellthesocialpolicyand andbusinessrelations,capitalconstruction, obligations inproperty reside.These agreementsformalizemutual minorities oftheNorth with administrations ofmunicipal districtswheretheindigenous The GazpromGroup’s entitiesregularlysigncooperation agreements 155 , theGroup’s companies strivetoprotectthenative 156 . These activities seek to identify thepotential . These activitiesseektoidentify 70 17

Gazprom Group’s Sustainability Report 2019 Gazprom Group’s Sustainability Report 2019 5.2. were recorded in the reporting period. were recordedinthereporting No significantdisputeswithlocalcommunitiesandindigenouspeoples GRI OG10 of Sakha(Yakutia), SakhalinRegion,andotherregions: AutonomousArea–Yugra,Autonomous Area,Khanty-Mansi Republic activities undercooperation agreementswiththeYamal-Nenets In 2019, theGazpromGroupcompanies implementedthefollowing identified acrosstheGroup’s licenseblocks. In 2019, ofindigenouspeopleswere noviolationsinvolvingtherights GRI 411-1 Communities’ Day; for ReindeerHerders’Day,Fishermen’s Day,andWorldIndigenous uptheprizefunds organizing traditional nationalholidaysandsetting indigenous peoples’wayoflifeanddevelopnationalcrafts; tonationalcommunitiespreserve providing financialsupport of theindigenousminoritiesNorth; projectsrelatedtothedevelopment implementing sociallyimportant tolocalauthoritieswiththeaimof providing financialsupport where theproductionactivitiesarecarriedout; livingintheterritories the unionsofindigenousminoritiesNorth byrepresentativesof holding seminarsandroundtablesattended arisen andtakemeasurestoresolvethem,organizethe migration process. inspect thecrossingsarranged for reindeerherds,assessthereadinessofcrossingstomigration, discusstheissuesthat mayhave andcontractors, annually toindigenousminoritiesoftheNorth, District Administration, non-profit organizationsrepresentingandpertaining some 10 thousandreindeerduring themigration period. reindeer herdingenterprise.Accordingly,thefield’s infrastructure wasdesignedtoprovidefor22 crossings, eachwithathroughput of capacity funds. holdtraditional promotenationalcrafts, nationalholidays(ReindeerHerders’Day,Fishermen’sservices, Day),andsetuptherespectiveprize year,Every indigenouspeoples’wayoflife,organizehealthcare GazpromDobychaNadymLLC donatesmorethanRUB 8milliontosupport the reindeerherders’campsinTazovsky, Nadymsky,Purovsky, andYamalsky Districts. and weredeliveredtothetundra families, veterans, settlements anddisabledpeople.Gifts boardingschoolstudents,low-income community, In 2019, GazpromDobychaYamburg LLC heldatraditional Father Frost Visitevent,giving4,000NewYear presentstochildrenofthetundra Specialists ofGazpromDobychaNadymLLC, togetherwiththeforemen ofthereindeerherdingbrigades,representativesYamalsky two reindeerherdingbrigades(No.4andNo.8)ofthe The Bovanenkovskoyefieldishistoricallycrossedbytheroutesof Yarsalinskoye Indigenous Minorities of the North and Gazprom: Constructive Collaboration Indigenous and Collaboration of Minorities the Gazprom: North Constructive indigenous peoples. providedbysubsidiaries’medicalunitsto healthcareservices offering peoples’ medicaltreatment; providing financialaidtonationalcommunitiesforindigenous areas byair; nomadicpeoplesand supplying foodtohard-to-reach transporting backbone ofindigenouspeoples’traditional cultureandwayoflife; whichisthe financing thedevelopmentofreindeerherdinginNorth, andtheiraccesstoessentialnatural resources; minorities oftheNorth ofthetraditional habitatofindigenous contributing tothepreservation 171 2 3 4 5 6 1 Appendices Our Report 5.3. (157) 35,020 27,297 PJSC Gazprom’s spending,2017–2019, charity RUBmillion GRI 203-1 of PJSC Gazprom’s is subsidiaries,thedecisiononcharitablesupport by themanagementofGazpromGroupcompanies. Ina number The finaldecisiononthefinancingofsocialprojectsisusually made the RegulationonSponsorshipandCharitableActivities Charitable activitiesandsocialprojectsareimplementedonthebasisof RUB 5.3.1. are informedbythefollowingcriteria: targeted outreach; andpublicrelevanceoftheproject; social significance,importance, Social projectfinancingdecisionsoftheGazpromGroupcompanies Approved byresolutionofPJSC GazpromBoardofDirectorsNo.2775 datedJuly12, 2016. 27.7 billion Charity charity spendingin2019charity PJSC Gazprom’s in the Gazprom Group Gazprom the in Activities Charitable 157 . 2018 017 2 and keyemployees. consistingofthesubsidiaries’managers committees made bycharity 27,724 regional programs for supporting certain areasofsociallife. certain regional programs forsupporting Gazprom Groupcompanies operate;withthestate and conformity authorities oftheRussianFederation andregionswherethe compliance withthesocialpolicyprioritiesofgovernment feedback through projects’ implementation; enhancing Gazprom’s reputationandcreatingpositivepublic PR relevanceintermsofcontributiontowardsestablishingand

172 2019

Gazprom Group’s Sustainability Report 2019 Gazprom Group’s Sustainability Report 2019 5.3. children from low-income families children fromlow-income andveterans ex-servicemen RUB RUB Company’s regionsofoperations forChildrenprogram)Gazprom facilitiesunder the constructionofsports Allocation ofexpensesforPJSC Gazprom’s projects charity in2019 Breakdown ofGazprom Energoholding’s Projects Expenditures onCharity in2019 S S S C S C U upport of sports development(including ofsports upport upport fordisabledchildren,orphansand upport forsport upport forNGOsandreligiousorganizations, upport rban infrastructure improvementinthe ultural projects ulture support .1 3 3 2.6 billion million

1 .8 12 16.2 20.0 30.5 spendingin2019charity Gazprom Energoholding’s agreements totalled under socialandeconomic Gazprom expenditures Neft’s 6.1 30.7 50.5 Charity % %

% % % % in 2019

RUB .5 7. than 1% vulnerable groups,andotheraspects)—less O S E authorities T S S S argeted medicalaid ducation support ducation support piritual values support piritual valuessupport upport forchildrenandyouthinitiatives upport forscienceandeducation upport forpublicinitiativesandmunicipal upport ther (support forhealthcare,science,socially ther (support billion 173 investment madein2019 Gazprom social Neft’s total amountof < 1.7 4.4 1.7 4.3 5.2 9.3 1 % % area each for % %

% % %

2 3 4 5 6 1 Appendices Our Report 5.3. Allocation of expenses for Gazprom Neftekhim Salavat’s charity projectsAllocation ofexpensesforGazprom Salavat’scharity in2019 Neftekhim RUB This isprimarilyduetotheactiveroleNPOsplayinRussia bypulling types. are implementedvianon-profitorganizations(NPO)ofdifferent bytheGazpromGroupcompanies Most ofthesocialprojectssupported S C S upport foreducation upport forNGOs upport monuments honouringfallensoldiers. the gasificationofmemorialcomplexes,transitiongassupply,restoration fromgascylinderstonetwork-based andreconstructionof Russia’s Glory. HeroCitiesandofMilitary year,In thereporting PJSC GazpromproceededwiththeEternalFlameprojecttoprovidefree-of-chargegassupplies memorialslocatedin hildren andyouthprojects Kaliningrad, Pskov, andPyatigorskin 2020. the launchofmultimediasitesinSurgutandChelyabinsk.The projectcurrentlycovers20citiesandistoberolledoutVladivostok, technologies. Ineachoftheregions,PJSCart GazpromentersintoanagreementwithNPOauthorizedtoimplementtheproject.2019 saw the Since 2016, PJSC GazpromandtheconstituententitiesofRussianFederation havebeenco-financingthecreationofhistorical parks under In addition, maintenance services weredeliveredto1,331In addition,maintenanceservices The Company EternalFlamememorialsacrossthecountry. continuedworkingon 39.9 project. In these parks, the history of the country anditsregionsisrepresentedinamultimediaformatusingstate-of-the- ofthecountry project.Intheseparks, thehistory Russia. MyHistory million 29.3 18.7 29.7 Charity charity expensesin2019.charity Gazprom Salavat’s Neftekhim % % %

achieving sociallyusefulgoals. in andengagingthebusinesscommunity together individualefforts

Support forhealthcare Support S S upport forpeoplewithdisabilities upport ocial infrastructure development 174 1.5 3.4 17.4 % % %

Gazprom Group’s Sustainability Report 2019 Gazprom Group’s Sustainability Report 2019 240 5.3. place in2019 andraised someRUB8 million. donations aresentdirectlytospecificfamilies. The tenthmarathon took seeks toraise fundstohelpchildren withseriousgeneticdisorders.All The marathon organized andheldexclusivelythrough volunteerefforts. marathoncharity hostedbyGazpromDobychaYamburg LLC and culture. projects, withsuchinitiativeshavingbecomeingrained inthecorporate The GazpromGroup’s employeesvolunteerinvariouscharitable 5.3.3. yearincluded: projectsofthereporting Major charity 5.3.2. (158) has beenholding Research CenterofPediatric Hematology,OncologyandImmunology. RogachevNational project, whichisbeingimplementedbyDmitry the fromseriousdiseases.In2019, orsuffering support Gazpromsupported Organization RussianVeterans Union. oftheAll-RussiaVeterans annual financialandothersupport and theKrasnoyarsk Territory; route foratranspolar railroad intheYamal-Nenets AutonomousArea a comprehensiveresearchexpeditionin2019 tostudyapotential and Pallada and; oftheFederal (Rosrybolovstvo), AgencyforFishery Lazarev expedition,featuringtraining Sedov, sailboatsKruzenshtern, ofAntarcticabytheBellingshausen– ofthediscovery anniversary round-the-world expeditionin2019–2020 tocelebrate the200th species includedintheRedBookofRussia; andincreasingthepopulationofrare animal aimed atpreserving ofAmurLeopardsCenter forPreservation –whichimplementprojects Population CenterandtheEurasian ResearchandPreservation non-profitorganizations–theAmur Tiger totwo usual support For the fourth yearrunning,GazpromTransgazFor thefourth NizhnyNovgorodLLC The Company tochildrenwithoutparental pays specialattention One ofGazprom’s majorvolunteerprojectsistheDoGoodannual Registration studyofacquiredaplasticanemiaintheRussianFederation Excluding projects implemented by the subsidiaries and the Department inchargeofinformationandcommunicationpolicy. Excluding projectsimplementedbythesubsidiaries andtheDepartment Winners Games for young cancer survivors in Nizhny inNizhny foryoungcancersurvivors by PJSC Gazprom in2015–2019 were carriedout Volunteering Projects Charity Charity charity projectscharity 158

Komi Republic andtheArkhangelsk,Vologda,Yaroslavl Regions. The projectcoveredseveralcompetitive sports. regions,namely,the suchaspick-upgames,educationalquest,and activities wasoffered, ofleisure types according towhichacombinationofdifferent the summerholidays.Acomprehensiveapproachwasapplied, institutions sponsoredbythecompanyinproject during tookpart Transgaz LLC. Ukhta Over500children andteenagersfrom62 implemented in2019 ofthecharitableactivitiesGazprom aspart Another volunteerprojectcalledTerritory ofFriendship was has beenholdingthe have beeninvolvedintheprojectsinceitslaunch. over 20RussianregionsandCISstates.Intotal,morethan5,000children interregional event,withmorethanathousandapplicationsreceivedfrom Breaking Barriers jointly runningasocialprojectentitled havebeen Labour andSocialWelfareoftheRepublicBashkortostan year. intheeventevery time. Over300participants takepart forchildrenwhohavebeenstayinginahospitallongperiodof recovery Novgorod. The competitionfocusesonsocialinclusionandpsychological Administration hasdecidedtoreplicatethismodel spaces forindependentliving.St.Petersburg functioningasapartments City Family UpbringingPromotion CenterNo.8wasequippedwith12 separate on individualdevelopmentperspectivesforfuturelife.For thispurpose, to socializeorphansandbuildanewmodelforanorphanagewithfocus Policy ofSt.Petersburg havebeenimplementingapilotprojectseeking newspaper contest,andacompetitionofdecorative andappliedarts. awall acompetitionintheknowledgeoflocalhistory, show, Spartakiad, art years.The programfestival indifferent ofthefestivalincludesan amateur West Kazakhstan inthe RegionoftheRepublicKazakhstan tookpart Orenburg, Sverdlovsk,Samara andUlyanovskRegions,Moscowthe 249 and400childrenfromorphanagesboardingschoolsofthe about people with disabilities. Every year,about peoplewithdisabilities.Every theprojectisconcluded withthe and physicallychallengedchildren,aswellerasing commonstereotypes healthy with disabilities,breakingdowncommunicationbarriersbetween andensuringsocialadaptationforchildren aimed atdevelopingcreativity Since 2006, Gazprom in Orenburzhye non-commercial partnership Since2006,GazprominOrenburzhyenon-commercialpartnership Since 2013, GazpromTransgaz UfaLLC ofFamily, andtheMinistry Since 2018, GazpromPererabotka LLC forSocial andtheCommittee festival.Overthepast fouryears,ithasevolvedintoan Warmth ofChildren’s Breaking Barriers 175

festival. Between festival.Between Hearts . . The initiativeis 2 3 4 5 6 1 Appendices Our Report park ensembleofOranienbaum andisrecognizedasaWorldHeritage restoration oftheChinesePalace ofthepalace whichformspart and Since2007,and arts. theGrouphasbeenprovidingfinancingfor ofprojectsintherealmculture avariety Gazprom activelysupports reporting period.InApril2019,reporting thechurchwasopenedtovisitors.After continuedinthe Church oftheCatherinePalace; thesejointefforts Heritage SitehavebeenworkingtogethertorestoretheResurrection Since 2015, PJSC GazpromandtheTsarskoe SeloStateMuseumand 5.4. winners intheBestRestoration Project oftheYear Newspaper atthe7theditionofTheRussiaannualaward. Art category In 2019, thepalace andpark ensembleofOranienbaum andtheChinesePalace ofthePeterhof weredeclared (part StateMuseum-Reserve) and Arts ofCulture Support restored andopenedtovisitorsin2019. made significantprogress,withteninteriorsoftheChinese Palace fully site byUNESCO.Overthesepast years,therestoration teamhas in theLyons HalloftheCatherinePalace. fromthat,theworksonrestorationApart ofinteriorswerecompleted painted ceilingpieceand65churchiconsslatedforcompletionin2021. toanewstageofworks–restoration that, theprojectmovedforward ofa

176

Gazprom Group’s Sustainability Report 2019 Gazprom Group’s Sustainability Report 2019 matter? of St. Petersburg, forthat And withothermuseums the Tsarskoe SeloMuseum? continue cooperation with Is Gazprom planningto restoration project unique? Russia? Whatmakesthis the project exclusivelyfrom workingon Were experts of touristsincreased? How muchhasthenumber opening oftheLyons Hall? therestorationafter and Catherine Palace changed How hasthelifeof Tsarskoe Selo? for restoration purposesat funds allocatedbyGazprom What wastheamountof expert an with Dialogue and allocatedRUB3.8millionfor thesepurposes. Rus, oneofthemostsignificant Russian paintings createdbyMikhailNesterovattheturn of the20thcentury, December 2024. restored andopenedtovisitors,withrestoration worksinsevenmorehallsexpectedtobecompleted a uniquemonumentoftheRussian18th architecture.Ten century hallsofthepalace havealreadybeen ofOranienbaum’sthe Peterhof contributingtothepreservation ChinesePalace, StateMuseum-Reserve, panels, mirrorsandfireplaceswithsculpturescandletreestoberecreatedby2021. decoration. The amountoffundingwillbeRUB636million. thatwerelostduringWorldWarIIusedinthe room stained glass,giltbronze,silverandfaienceplaquettes undergo renovationfrom2019 to2023. Allofthesesuitesprovide fineexamplesofclassicistinteriors,with RaphaelRoomandDressingRoom) areexpectedto and SilverStudies,Bedroom,BlueStudy(Snuffbox), Catherine roomsintheZubov II. Eight WingoftheCatherinePalace (theChineseandDomedHalls,Mirror project ofPJSC GazpromandtheTsarskoe SeloStateMuseumandHeritageSiteentitledPrivateSpaceof pointforthenextjoint asastarting Reconstruction oftheResurrectionChurchandLyons Hallserved ofRussiaandFrance. theleadingexperts between things, contributedtothepromotionofcross-bordercooperation intherealmofcultureandstrengthenedties of time.The French ENGIEFoundation, ourold-timepartner, providedfinancingfortheorder. Manufacture Prellespan didanastonishingjob,producing320metersofboutond’orsilkinarelativelyshort fromPrelleold orders.Wewerethereforehappytoentrustexperts withtherestoration oftextiledecorations. bookswith hadpreserved thatworkedfortheRussianImperialCourt, successor ofthetextilemanufactory Surprisinglyenough,wefoundoutthatManufacturePrelle inLyons,small specimenshavingsurvived. the The Lyons Hallwasdecorated withuniqueFrench boutond’orsilk.The fabricwaslostduringthewar, withonly Hall, thatwasonceaprivatesuiteofCatherineII,reopenedtovisitors. technically challengingtasks.Itwasthankstotheirremarkableskillsthat74 WorldWarIItheLyons yearsafter painters,avastamountof andtextilespecialists.Theyincluding stonemasons,metalworkexperts, performed intherestorationMore than100 took ofthe part fieldsofexpertise Lyons Hall, professionalsfromdifferent adornments. braids and andpurchasingcurtain uptextilewallcoversandwindowdrapery, panels, orderingandsetting reconstruct theinteriorofLyons Hallbyrestoringapainted ceilingpieceandlapislazulimosaic Around RUB86.8millionofthisamountweresavedbytheTsarskoe SeloStateMuseumand usedto PJSC GazpromdonatedoverRUB1billiontorenovate theResurrectionChurchofCatherinePalace. Head of Department –Press toChairmanoftheGazpromManagementCommittee Head ofDepartment Secretary Sergey Kupriyanov Site. Heritage and Museum Tsarskoe the heritage in State Selo cultural to of restore pieces unique donated billion Gazprom over 1 RUB In 2019, full-scalerestoration ofHoly theinitiative oftheStateRussianMuseumtostart Gazpromsupported We alsocollaborate of withothermuseums. Since2009,Gazpromhasbeenthepermanentpartner Additional fundswillalsobeallocatedfornewrestoration projectsintheLyons Hall,includinginlaiddoor The restoration oftheCatherinePalace's historicalevent,which,amongother interiorsisanimportant Over 600,000peoplevisitedtheLyons HallfromthedateofitsopeninginJunetoend2019.

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2 3 4 5 6 1 Appendices Our Report 5.4. Russian regions? and cultural heritage of advancing thearchaeological Power ofSiberiacontributeto How didtheconstructionof projects: following cultureandarts in 2019–2020. became oneofthecultural oftheVietnam-Russia CrossYear highlights and theVietnameseGomChuDauCeramic Plant.The exhibition significant contributionsmadebytheRussianImperial Porcelain Factory with Hermitage MuseumandtheVietnamNationalofHistory, oftheState The eventwasarrangedof History. bythejointefforts an exhibitionofRussianporcelainintheVietnamNationalMuseum Gazprom EPInternationalsponsoredThe SoundofaBeautifulPast, now housedintheStateHermitageMuseum. Peter theGreatareanumberofunique17th thatare artefacts century Naval Museum.Amongdiscovereditemsdatingbacktothetimesof Defence ManagementCenteroftheRussianFederation, andCentral oftheRussianGeographical National Society, at theHeadquarters items entitledContraband. Three Centuries Underwater . Itwasexhibited were usedtocompileacollectionof17th Europeanhousehold century recoveredfromtheseabed architectural heritageinRussia.Artefacts ofunderwater focusingontheresearchandpreservation its efforts ResearchCentertocontinuein2019enabled theNationalUnderwater Assistance providedbyGazpromTransgaz SaintPetersburg LLC Questions from Stakeholders GRI 102-44 Stars onBaikal “Rossiya” TVchannel; Blue Bird,the6thNationwideContestofYoung Talents hostedbythe was shottobepremieredatthe7theditionofPristine Russiafestival. morethan30lectures,meetingsandpressconferenceswereheld.Moreover,effort, ofYerofey Portage Khabarov,afullfeaturedocumentary, Mangazeya-on-Taz ofthereconstruction Aspart toNewMangazeya(situatedontheTurukhan River)viaasystemofrivers,lakes,andportages. bytheGazpromGroupwashistoricalandgeographicalOne ofmajorcultural reconstructionoftheancientroutefrom projectssupported In 2019, tothe theGazpromGroupcompanies alsoprovidedsupport In 2019, toexpand thegeography ofcultural inaneffort cooperation, , the14th InternationalMusic Festival heldinIrkutsk; register. them,thelocationofsomestructuresunderdesignwaschanged. Inordertopreserve Gazprom’s expensesunderthisinitiativeamountedtosomeRUB326million. withatotalareaofover60,000hectares. PJSCarchaeological andcultural heritageitemsinaterritory theworkrequiredtoidentify During theimplementationofPower ofSiberiaproject,weperformed Support of Culture and Arts Arts and Culture of Support As aresult,tenheritagesiteswereidentifiedalongthetrunk gas pipelineroutetobeincludedinthestate in the18th Century Treasures oftheGugongImperialPalace: The FlourishingofChina Mariinsky Theatre inVladivostok; theatrical productionsandfestivalbythePrimorsky Stageofthe October 2019; Dobrovidenie 2019 folksongfestivalheldinSt.Petersburg in in theBalticStatesandTurkey; Golden Masktheatrefestival,includingtoursmadebyRussianartists Tsarskoe SeloStateMuseumandHeritageSite; andthe Lyceum attheRussianAcademyofArts, Academic Art sponsored jointlybyPJSC Gazprom,St.Petersburg StateJohansson Children inthePalace, acultural andawareness-raising project an educationalprojectformusicians; totheYoungFrom Arts Talents MastersofWorldPerforming ofRussia, hosted by the Novy Urengoy City MuseumofFineArts. Urengoy City hosted bytheNovy Planet Yamal: Inspiration Kinetics,exhibitions IsBornHereandArt Museums; , anexhibitionhostedbytheMoscowKremlin 178

Gazprom Group’s Sustainability Report 2019 Gazprom Group’s Sustainability Report 2019 5.5. Bodiless Powers inthetownofToksovo tocompleteconstructionand Gazprom alsohelpedtheCathedral ofArchangelMichaelandAllthe oftheCathedral.architectural ensembleofbuildingswithintheterritory church frescoesandrecreatingtheSpiritualEducationCenter the CathedralofGatchinaincompleting oftheHolyVirginincity Who SorrowiconinSt.Petersburg. complex inSvobodny(AmurRegion)andrestoration oftheJoyAll Gazprom continuedtoprovidefinancingfortheconstructionofachurch promote andadvocateforspiritualtraditional values.In2019, PJSC The GazpromGroupparticipates inprojectsandinitiativesaimingto Gazprom Transgaz SaintPetersburg LLC providedassistanceto Revival ofSpiritualValues the largestinAstrakhan Region. span oftime.The short churchranks among landscaping worksinavery Gazprom, whichmadeitpossibletocompletetheconstructionand and thecongregation.In2017, fromPJSC theprojectreceivedsupport on donationsfromGazpromDobychaAstrakhan LLC, itsemployees ofAstrakhan.Church inthecity Itsconstructiontooktenyearsandrelied for thecommissioningofCenter. from OncologyandCerebral Palsy andpurchaseequipmentrequired installation worksintheCenterforPalliative AidtoChildrenSuffering September 2019 sawtheopeningceremonyofLife-GivingTrinity 79 17 2 3 4 5 6 1 Appendices Our Report 5.6. of 164 facilitieswascompleted,including10 and sports sports under theGazpromforChildrenprogram. In2019, theconstruction including thosewithdisabilities. fromvariouscountries.They aregirlsandboysaged12-16,reporters young generation. ofrespecttowardotherculturesamongthe well asfosteringanattitude as children’s promotingahealthyandactivelifestyle, andjuniorsports, implemented byPJSC Gazpromsince2013 withtheaimofsupporting Football forFriendship (F4F)isaninternationalchildren’s socialprogram 5.6.2. activities. sports and teenagerstoengageasmanyofthempossibleinthe ofchildren intellectual andphysicaldevelopmentspiritualgrowth program istocreatetheconditionsrequiredforawell-balanced in theregionsofRussiaforaslong12 years.The purpose ofthe and youth.The GazpromforChildrenprogram hasbeenunderway toprojectsforchildren Gazprompays specialattention prosperity. Healthy youngergeneration isthecornerstoneofRussia’s future 5.6.1. GRI 413-1 course isavailable in10 languages:Russian,English, German,Spanish, groupsandP.E.teaching youth teams, sports classes.The training practicaloffering sessionsaimed atimprovingtheskillsofcoaches Academy waslaunched.Itisa free-of-charge onlinelearningcourse communications. and sports, international andnationalawards insocialresponsibility, of journalistsaroundtheglobe. The projecthasreceivedmorethan45 children’s foundations,hundredsofwell-knownathletes,andthousands and UEFA, OlympicandParalympic footballfederations, Committees, activities oftheprogram worldwide. The byFIFA program issupported educational,andenvironmental insports, 5 millionpeopletookpart and regionsparticipated inFootball forFriendship andmorethan Over thesevenseasons,morethan6,000childrenfrom211 countries involved childrenof57 nationalities. games anewGuinnessworldrecord:thefootballtraining ofthequalifying sessionheldaspart thussetting football training sessioninhistory, During thefinaleventsheldinMadrid,young ofFootball inthemostmultinational participants forFriendship countriestook part fromdifferent Since 2007, 1,821 werebuiltinRussia types facilitiesofdifferent The program participants areyoungfootballplayersand In June2019, theInternationalFootball forFriendship Coaches of Sports Programsof Sports Development Football Friendship for Children for Gazprom the Gazprom forChildren the Gazprom Group under were constructedby facilities sports program in 2019

conditions forahealthylifestyle andfitnessinfrastructure inRussiaandtocreatethe to setupsports Khabarovsk Territory andoneinVoronezh. andfitnesscomplexeswithswimmingpoolsinthe sports well astwo in 2019 includedtheAvangardIceHockeyAcademyinOmsk,as the RussianFederation. construction projects.The program covered34 localitiesin21 regionsof at37construction andinstallationworkswereunderway capital fitness complexesand period, Inthereporting 154 outdoorflatworks. than 150 frominternationalandnationalmedia. reporters activities. The keyeventsoftheseason’s finalswerecoveredby more representing Europe,Asia,Africa,andtheAmericasparticipated inthe of UEFA ChampionsLeague Final.Morethan800childrenandadults oftheofficialprogramin MadridfromMay20through June2aspart 2019 sawtheseventhseasonofprogram. The finaleventswereheld more than4,000peoplecompletedtheAcademy’s course French, Italian,Turkish, Chinese, Arabic, andHindi.Bytheend of2019, participants of different genders and with different physicalabilities. gendersandwithdifferent participants of different World Championshipformatprovides formixedteamsconsistingof communicate andmakefriends withpeers.The Football forFriendship butalsosocialize, with others;andsonotonlydo theyplaysports, enables childrenwithdisabilities toparticipate intheeventsfullparity The accessibleenvironment, which isanintegral oftheprogram, part inFootballdisabled childrenhavebeentaking part forFriendship. firstseason, fromthevery physical abilitiesorfitness.Starting toallpeople,irrespectiveoftheir seen initsabsoluteavailability children’s socialprogram implemented byPJSC Gazpromisfully The program’s goalsfortheforeseeablefutureremainunchanged: projectscommissioned The largestandthemostsociallyimportant The socialimpact oftheFootball forFriendship international

. 180 .

Gazprom Group’s Sustainability Report 2019 Gazprom Group’s Sustainability Report 2019 5.7. Pancevo (Serbia). Gazprom istoensuretheconstructionofafootballpitchforschoolin with theUEFA Foundation forChildren.Together withtheFoundation, Toresponsibility. fuelthisdrive, the Company launchedcooperation andenvironmental promotionofhealthylifestyle, culture, sports, ahostofinitiativesineducation, tosupport activities anditsefforts the Company toefficientlyinformtheaudienceaboutitsproduction The agreementenable instrumentsprovidedforbythepartnership club tournamentinEuropeenablestheCompany toimprove brand ofthemostpopularandprestigioussports status oftheglobalpartner UEFA Youth League. Moscow Regions.The winneroftheYFLwillbeeligibletoplay inthe Moscow, St.Petersburg, Kazan, Krasnodar, aswelltheSamara and matches aretobeplayedby12 bestRussianfootballacademiesfrom Youth Football League (YFL)runby theRFU.In2019–2020, theYFL cooperation withtheRFU.Gazprombecametitlesponsorof competitions, andtraining activitiesforpromisingyoungathletes. events,stagesofinternational ofnationalchampionshipsandsports variety Russian Football Union(RFU). Canoe Federation, Federation OfRussia,andthe OfBilliardSports Swimming Federation, aswelltheRussianBiathlonUnion, Russian Gymnastics Federation, All-RussianVolleyballFederation, All-Russian federations. PJSC Gazprom isthesponsorofRussianRhythmic In 2019, cooperation Gazprommaintainedfruitful withsports the developmentofadaptivephysicaleducation. Pererabotka LLC receivedtheBestPartnerawardfromSt.Petersburg Administration City forthesecondtimeinarowitscontributionto byover2,500participants fromvariousRussianregionsandover5,000spectators.In2019,sailing. The eventsareattended Gazprom ! publicevent,andthecity’sbeach volleyballandfestivalsforphysicallychallengedathletes,theIChooseSport specialOlympicsin Gazprom Pererabotka LLC isthetitlesponsorofeventsheldbySt.Petersburg Federation forPersons ofSports withDisabilities:seated In 2019, PJSC Gazpromcontinueditscooperation withtheUEFA. The yearwasthelaunchofCompany’s ofthereporting A highlight Using thefundsgranted byPJSC Gazprom,thefederations helda Sports FederationsSports Supporting whose shareinthekeyinternationalmarketsisover50%. The strongamongthepeopleinterestedinfootball, trendisparticularly “a company”. company passionate aboutitsmission”and“a trustworthy associations as“an appealingcompany”, “a reliablepartner”, with theUEFA hasapositiveinfluenceonsuchemotionallycoloured brand imageanditsappealremaininvariablyhigh.The partnership Gazprom’swith theassistanceofindependentpublicopinionservices, conductedbyPJSCAccording toregularsociologicalsurveys Gazprom with varioustargetgroups: implement large-scalesocialinitiatives. recognition, enhanceitsreputationinthekeyinternationalmarkets,and League FinalinMadrid. area attheUEFA ChampionsFestival, aneventoftheChampions direct interaction withtheaudience:GazpromHouseofChampions makers, leveraging high-exposureUEFA digitalchannels; Gazprom Football Experience,campaigns involvingpublicopinion Instagram, Twitter, YouTube, promotionalevents:Ticketmania, www.gazprom-football.com andthesocialmedia:Facebook, communicating withtheaudienceviadedicatedwebsite the keymarkets; Football incorporated intheUEFA ChampionsLeague broadcastsin campaign upthe WeLight conducting theinternationalTVadvertising

The Company efficientlycarriesouttheprojectsaimedatinteracting 181

2 3 4 5 6 1 Appendices Our Report 5.8. events in2019 issues. todiscussthetopicalindustry platform was the9thSt.Petersburg InternationalGasForum –theleading participants fromaroundtheglobe. and congresses,featuringthetopstateofficialsofRussiaattracting PJSC Gazpromtraditionally sponsorsanumberofmajorRussianforums 5th EasternEconomicForum inVladivostok; 23rd St.Petersburg InternationalEconomicForum; Russian InvestmentForum inSochi; the Company spanning to2024, inclusive. In themedium-term,PJSC Gazpromintendstocontinue theimplementationofGazpromforChildrenprogram, thebiggestsocialprojectof In addition,theGazpromGroupcompanies backedthefollowing In 2019, businesseventsfortheCompany oneofthemostimportant : of BusinessEvents Sponsorship Russian EnergyWeek2019 InternationalForum inMoscow Development GoalsandGlobalTrends inMoscow; 10th Gaidar Forum RussiaandtheWorld:National Anniversary St. Petersburg. 5th InternationalForum The Arctic:Territory ofDialoguein Global Manufacturing&IndustrialisationSummitinYekaterinburg;

182 ;

Gazprom Group’s Sustainability Report 2019 Our Responsibility to the Planet

6.1. Environmental Sustainability Management and Environmental Control 185 6.2. Combating Climate Change 194 6.3. Environmental Protection 211 6.4. Initiatives to Increase Employee Engagement in Environmental Conservation 228 6.5. Environmental Information eport 2019 R Transparency 229 6.6. International Environmental and Climate Cooperation 232 ustainability S roup’s roup’s G Gazprom

6 6. Our Responsibility to the Planet

Gazprom respects the human right to a healthy environment with clean water, fresh air, and biological diversity and takes steps to preserve access to the natural resources of the Earth for the current and future generations. As an environmentally sustainable power source, natural gas plays an important role in supporting the UN Sustainable Development Goals and the Paris climate accord159, contributing to the low-carbon economy development in Russia and the countries that import Russian gas. eport 2019 Gazprom implements the best available technologies (BAT) R and pays close attention to improving energy efficiency, implementing large-scale water treatment initiatives, ustainability reducing air emissions and the generation and dumping of S roup’s roup’s

production and consumption waste, along with remediating G land and restoring biodiversity. Gazprom (159) https://unfccc.int/files/meetings/paris_nov_2015/application/pdf/paris_agreement_english_.pdf

184 Gazprom Group’s Sustainability Report 2019 6.1. saving policy; to make every effort to preserve theclimate and topreserve effort saving policy;tomakeevery to reduceadverseenvironmentalimpacts; toimplementaresource- as thelawsofcountrieswhereCompany runsitsbusiness; international regulationsrelatedtoenvironmentalprotection,aswell standards andrequirementssetbytheRussianlaws key obligations:toguarantee compliancewiththeenvironmental Gazprom’sthe sustainabledevelopmentprinciples.Itsetsforth company’s subsidiaries a comprehensiveapproachand coordinationoftheactivities for EnvironmentalProtectionwhile theCoordinatingCommittee ensures oversees environmentalprotectionmanagementacrossthecompany, environmental protectionfunctionalunits. covers allstagesoftheproductionprocessandrelieson compliance certificates. fromthat,12 Apart Neft. subsidiariesofthecompany haveindividual scopecoveringthekeyproductionassetsofGazprom the certification the requirementsofISO14001:2015 internationalstandard,with forcompliancewith The EMSinplaceatGazprom iscertified Neft Environmental Policy Environmental protectionatPJSC Gazpromisgovernedbythe 6.1.1. (163) (162) (161) (160) from theCompany’s BoardofDirectorstobranches andproductionfacilities ISO 14001:2015 untilDecember2020. PJSC forcompliancewiththerequirementsof Gazpromwascertified auditheldin2019,for use”.Basedonthere-certification theEMSof “Environmental managementsystems–Requirementswithguidance the requirementsofISO14001:2015 internationalstandard PJSC Gazprom’s operations, andfulfilassumedobligations. pursue environmentalgoals,manageaspectsof of Gazprom’s EnvironmentalPolicy . Itisdesignedtosetand The EnvironmentalManagementSystem(EMS)isthemainstay internal EMSauditprograms ofPJSC Gazpromanditssubsidiaries.The EMSauditprogram ofPJSC Gazpromhasbeencompletedinfull. PJSC GazpromistheonlyRussiancompany thathasanin-houseEnvironmentalInspectorate. In2019, itconducted168 EMSauditsinlinewith In 1995, PJSC Gazprombecamethefirstenergycompany inRussiatoadoptanEnvironmentalpolicy. PJSC Gazprom’s EMSencompasses allmanagementlevelsranging The Officeofthe Production DirectorofGazpromEnergoholding Environmental protectionmanagementatGazprom Energoholding The EMSofPJSC forcompliancewith Gazpromiscertified Operates as a standing committee since2016Operates asastanding committee (updatedOrderNo.112-GEH datedDecember28,2018). Page 9,PJSC 2019, Gazprom EnvironmentalReport https://www.gazprom.com/f/posts/72/802627/gazprom-environmental-report-2019-en.pdf Page 9,PJSC 2019, Gazprom EnvironmentalReport https://www.gazprom.com/f/posts/72/802627/gazprom-environmental-report-2019-en.pdf https://www.gazprom.com/f/posts/39/502580/environmental_policy_en.pdf Environmental Report 2019Environmental Report For detailsonthestructureof PJSC Gazprom’s EMSseePJSC Gazprom thatreflectstheCompany’s commitmentto 163 . 162 System of Management of System and Environmental Control Management Sustainability Environmental and more. andcompensateforpossibleenvironmentaldamage; biodiversity compliance withtheISO14001:2015 requirements. Environmental Policy all theGazpromGroupcompanies. of thecomplianceauditconducted bySAIGLOBAL in2019. the ISO14001:2015 international standard,asisconfirmedbytheresults forcompliancewiththerequirementsof Salavatiscertified Neftekhim legislation atitssubsidiaries. environmental protectionactivitiesandcompliancewith ofGazpromEnergoholdingtoassesstheorganization experts Energoholding companies onacross-company basisenablethe share theirachievementsandtargetsinenvironmentalprotection. meetings oftechnicalandenvironmentalmanagersitssubsidiaries to Gazprom Energoholdingarranges regularannualextendedoffsite condensate, aswellinvestmentprojectmanagementinconstruction. storage,production, transportation, andprocessingofgas owned subsidiariesinvolvedincoreactivities,namely,exploration, Administration, PJSC GazpromEnvironmentalInspectorate, and34 fully- of itssubsidiaries.Itcoversthestructural subdivisionsofPJSC Gazprom As pertheresolutionofBoardDirectorsPJSC Gazprom,the EMSs of 26 subsidiaries of the Gazprom Group are also certified for EMSs of26subsidiariestheGazpromGrouparealsocertified The environmentalprotectionmanagementsystematGazprom Technical conductedbythe Gazprom auditsofenvironmental safety For moredetailsontheEnvironmentalPolicy see Environmental Report 2019Environmental Report For moredetailsonthescope ofPJSC Gazprom’s EMSseePJSC Gazprom

ofPJSC Gazpromisrecommendedtobefollowedby 161 185 160

1 5 3 4 2 6 Appendices Our Report 6.1. Environmental Sustainability Management and Environmental Control

6.1.2. Corporate Environmental Targets and Their Achievement

Within its EMS, PJSC Gazprom sets environmental targets based on corporate environmental targets of the Company are set for a three- significant environmental aspects identified on an annual basis and year period. develops and implements environmental protection programs. The

Achievement of the 2017–2019 Corporate Environmental Targets by PJSC Gazprom in 2019, % № Corporate Environmental Organizations Target Actual performance Baseline (2014) Target in scope of achievement in the reporting the EMS status period application 1. Reduce methane emissions All subsidiaries Reduction by 49.58% In 2014, the actual volume of gas exhausted in the atmosphere (during involved in natural 13.1 p. p. during GTS repairs was 62.7% of the planned eport 2019

repair works at GTS), % gas transportation volume R 2. Reduce specific NOx All subsidiaries Reduction by 4.1 t/mcm In 2014, NOx unit emissions from gas transpor- emissions in the involved in natural 5.0% tation amounted to 4.32 t/mcm of fuel gas atmosphere, t/mcm gas transportation

3. Decrease discharge of All subsidiaries Reduction by 11.94% In 2014, 40.13% of wastewater discharged by ustainability S polluted and insufficiently 28.2 p. p. subsidiaries into surface water bodies was treated wastewater into classified as polluted and insufficiently treated

surface water bodies, % roup’s G 4. Decrease the share of All subsidiaries Reduction by 20.55% In 2014, the share of waste sent for burial was waste sent for burial, % 52.9% 43.6% of the total waste managed

5. Reduce the fees for All subsidiaries Reduction by 8.26% In 2014, the share of the fees for excessive Gazprom excessive impact, % 7.5 p. p. negative environmental impact was 15.8% of the total fees paid 6. Reduce specific All subsidiaries Reduction by 26.93 kg of In 2014, specific consumption of fuel and consumption of fuel and involved in natural 0.4% reference fuel per energy resources (natural gas and electric energy resources for gas transportation mcm•km power) for internal operating needs during gas internal operating needs, transportation via gas trunklines amounted to kg of reference fuel per 27.03 kg of reference fuel per mcmkm mcm•km

In 2019, all of the target values set within the Corporate Environmental Targets of PJSC Gazprom for 2017–2019 were achieved.

For details on the achievement of Corporate Environmental Targets by the Gazprom Neft Group see Sustainable Development Report 2019 of Gazprom Nef164

(164) Page 91, Sustainable Development Report 2019 of Gazprom Neft https://csr2019.gazprom-neft.com/#future-oriented-company

186 Gazprom Group’s Sustainability Report 2019 6.1. 3. 5. 4. Achievement ofthe2017–2019 Corporate Environmental Targets byGazprom Salavatin2019, Neftekhim % Gazprom Salavat Neftekhim 1. 2. № 3. 2. № Achievement ofthe2017–2019 Corporate Environmental Targets byGazprom Energoholding in2019, % Gazprom Energoholding 1. employees capabilities ofthecompany’s Improve environmentalprotection level of2015 made since2017, keepingthem at the facilities emissions ofthestationary Stabilize feesforpollutantair in theatmosphere Reduce hydrogensulphideemissions atmosphere Reduce ammoniaemissionsinthe Environmental target the atmosphere Reduce nitrogendioxideemissionsin by 0.02t/millionkWh baseline levelof2014) the atmospherein2019 (versusthe Reduce specificNOxemissionsin 2014) by8.38% 2019 (versusthebaselinelevelof negative environmentalimpact in Reduce theshareofexcessfeesfor level of2014) by2.11% burial in2019 (versusthebaseline Reduce theshareofwastesentfor indicator performance Target environmental Environmental Sustainability Management and Environmental Control Management and Control Sustainability Environmental Environmental t /millionkWh 0.41 23.6% 95.4% (2014) Baseline 3,517.377 t RUB 3,710,000 9.210 t 73 employees 1,050.459 t Baseline (2015)

t /millionkWh 0.39 15.3% 93.3% (2019) Target Target 1,047.815 t RUB 1,259,577,000 6.714 t 12 employees 945.770 t (2019) Actual, reported t /millionkWh 0.34 11.5% 88.1% (2019) Actual Emissions werereducedby70.2%. Achieved. Fees werereducedby66.05%. Achieved. Emissions werereducedby27.1%. Achieved. Federation compliance withthelegislationofRussian required numberofemployeesweretrained in ofthecompany’sAs part costoptimization,the Achieved. Emissions werereducedby10.0%. Achieved. performed (achieved /notachieved),keyactivities Target year achievementstatusinthereporting The targetwasachieved –3.8% (versusthetargetlevel) –12.1% (versusthebaselinelevel)/ due tolowershareofcoalinthefuelmix. ashwasteproductionwasreduced out. Bottom ash wasteineconomicactivitiesarebeingcarried Measures aimedatthesubsequentuseofbottom The targetwasachieved. 7.3% (versusthetargetlevel) –5.2% (versusthebaselinelevel)/ The targetwasachieved. –0.07 (versusthebaselinelevel) –0.04 (versusthetargetlevel)/ Target achievementstatus 187 . t /millionkWh 1 5 3 4 2 6 Appendices Our Report 6.1. Environmental Sustainability Management and Environmental Control

6.1.2.1. Plans

In 2019, PJSC Gazprom approved its 2020–2022 Corporate that streamlines all actions and activities aiming to boost the efficiency Environmental Targets using the levels of 2018 as the new baseline. of environmental management, ensure environmental safety, and In 2019, the Company developed and approved PJSC Gazprom’s maintain the rational use of natural resources along with energy saving. Comprehensive Environmental Program for 2020–2024 to implement It takes into account the key provisions of the previously adopted BAT the measures aimed at achieving the 2020–2022 Corporate roadmaps of PJSC Gazprom and the GHG emissions management Environmental Targets. The Program serves as a mid-term planning tool systems until 2030 of the Gazprom Group.

2020–2022 Corporate Environmental Targets of PJSC Gazprom No. Corporate Environmental Target Organizations Baseline (2018) in scope of the EMS application 1. Reduce GHG emissions during transportation of natural gas, All subsidiaries involved in natural gas 55.3

t of СО2 equivalent / bcm•km transportation 2. Reduce nitrogen oxide emissions in the atmosphere during All subsidiaries involved in natural gas 4.23

transportation of natural gas, t/mcm transportation eport 2019 R 3. Reduce excessive discharges of pollutants into surface water All subsidiaries 5.29 bodies, %

4. Reduce the share of waste sent for burial in the total waste All subsidiaries 38.28

managed, % ustainability S 5. Reduce the share of subsidiaries whose fees for excessive All subsidiaries 35 negative environmental impact are above 5%, % roup’s roup’s G 6.1.3. Precautionary Principle Gazprom

GRI 102-11 PJSC Gazprom shares the key provisions of the precautionary During the environmental impact assessment performed as part of the principle (Principle 15 of the UN Rio Declaration on Environment and investment projects’ development, the Company identifies the most Development, 1992) and takes steps to minimize potential technogenic vulnerable ecosystems and defines solutions to prevent disturbance of impact on the natural environment, especially when needed to preserve natural balance in the course of the construction and operation of its rare and endangered species of flora and fauna along with unique facilities. Operational environmental monitoring (OEM) is being carried natural areas and sites. out to track various environmental parameters, including the state of flora and fauna. The Company implements compensatory initiatives to preserve natural ecosystems, including measures to restore fish stocks.

188 Gazprom Group’s Sustainability Report 2019 6.1. 2,705.73 2,505.00 Gazprom Group’s expensesforoperational environmental monitoringandenvironmental control, 2016–2019, RUBmillion 6.1.4. > 8,000 RUB environmental control(monitoring). In 2020,theplanistoallocateoverRUB2.2billionforoperational 6.1.4.1. decisions. environmentalmanagement their implementation,andmakeeffective business activities,planenvironmentalprotectionmonitor the currentenvironmentalsituationincourseofproductionand the areainfluencedbythem,conducttimelyengineeringreviewof information abouttheenvironmentalconditionsofitsfacilitiesand wells. hydrological stations,automatedcontrolpoints,andobservation andmobileenvironmentallaboratories, meteorologicaland stationary situation, namely,theparameters ofwater, air, andsoil.Itincludes tocontroltheenvironmental The OEMsystemofGazpromserves The OEMsystemenablestheCompany topromptlyreceivereliable 2,528.35 Environmental Control at the Gazprom Group Gazprom the at Control Environmental Environmental Sustainability Management and Environmental Control Management and Control Sustainability Environmental Environmental Plans million 2016 017 2 million in2019. monitoring andenvironmentalcontrolamountedtoRUB2,528.35 environmental controlin2019. and/or areascanbedulymonitored. provisions intotheOEMprograms sothattheconditionofthesesites the GazpromGroup’s businessactivities,theGroupincludesspecial influencedby environmental statusarelocatedwithintheterritory with regionalenvironmentalmonitoringsystems. In somecases,theOEMsystemsofGazpromGroupareintegrated control in2019 were subjecttoenvironmental of theGazprom Group’s facilities monitoring andcontrol in2019 companies tooperational environmental was allocatedbytheGazprom Group 2,528.35 2,602.79 The GazpromGroup’s expensesforoperational environmental Over 8,000oftheGazpromGroup’s facilitiesweresubjectto If anyspeciallyprotectednatural sitesorareaswithaspecial 189 2018 2019 1 5 3 4 2 6 Appendices Our Report 6.1. Environmental Sustainability Management and Environmental Control

6.1.5. Control by Public Authorities

In 2019, state supervisory bodies held 628 checks of compliance with established timeframes, and the period for remedying 103 breaches environmental requirements by the Gazprom Group’s facilities and did not expire during the reporting year. In total 377 breaches were identified 527 breaches, whereas 388 checks showed no breaches of eliminated in 2019, including 93 breaches identified in the previous environmental requirements. years. Out of 527 breaches identified, 50 breaches (9.5%) were overturned 269 breaches (51%) posed no threat to the environment and did not by courts of law, 284 breaches (54%) were remedied within the entail any penalties for legal entities.

GRI 307-1 In 2019, the penalties paid by the Gazprom Group amounted to RUB 14.63 million, including RUB 2.25 million paid for the breaches identified in the previous years.

Environmental penalties paid by the Gazprom Group (excluding joint operations) in the Russian Federation, 2016–2019, RUB million eport 2019 R 23.7 17.1 2016 2018 ustainability S roup’s roup’s

11. 4 14.6 G 2 017 2019

Gazprom Group’s penalties by company, 2019, % Gazprom

Gazprom Neft 58 % Gazprom Energoholding 14 %

PJSC Gazprom 20 % Other companies of the Gazprom 8 %

190 Gazprom Group’s Sustainability Report 2019 6.1. Indicator Gazprom Group’s environmental protection expenditures, 2016–2019, RUBmillion totalled RUB53.22billion,down22.8%versus2018. In 2019, theGazpromGroup’s environmentalprotectionexpenditures 6.1.6. (165) Page 16–19, PJSC 2019, GazpromEnvironmentalReport https://www.gazprom.com/f/posts/72/802627/gazprom-environmental-report-2019-en.pdf and rational useofnatural resources Investments incapitalassetsaimedatenvironmentalprotection Current environmentalprotectionexpenditures Negative environmentalimpact fees Total environmentalprotectionexpendituresacrosstheGazprom Group implementation ofenvironmentalprotectionactivities. the reductioninexpendituresdidnothaveanegativeimpact onthe Salavat.Ingeneral, accounting methodologyatGazpromNeftekhim expenditures declinedby17.8% versus2018 duetoachangeinthecost Group. investment projectsbytheGazpromNeft as compared to2018 tothecompletionofanumber of isattributable aimed atenvironmentalprotectionandrational useofnatural resources The decreaseintheGazpromGroup’s investmentsincapitalassets In 2019, theGazpromGroup’s currentenvironmentalprotection on Environmental Protection in 2019 in Protection Environmental on Group’sGazprom Spending Environmental Sustainability Management and Environmental Control Management and Control Sustainability Environmental Environmental and offset ofpreviousexcessivepayments. and offset fields,eliminationofmark-up factors, APG flaringattheGazpromNeft recent years.This wasmainlydrivenbylowerpollutantemissionsfrom Gazprom hasseenitsnegativeenvironmentalimpact feesgo downin 22,542 57,470 34,103 2016 825 PJSC 2019 GazpromEnvironmentalReport For moredetailsontheenvironmental protectionexpendituresbreakdownsee 35,585 70,820 34,468 017 2

768 191 165 68,959 29,189 39,154 2018 616 20,421 53,219 32,180 2019

618 1 5 3 4 2 6 Appendices Our Report 6.1. Environmental Sustainability Management and Environmental Control Natural gas is the basis of a low-carbon energy . It represents an effective solution for reducing greenhouse gas emissions in both the short and long term. Konstantin Romanov Head of Division, Secretary of Coordinating Committee for rational use of natural resources , PJSC Gazprom eport 2019

Ensures the implementation of innovative projects to reduce the carbon footprint of production activities, including those related to hydrogen R energy. Coordinates international collaboration on climate issues, including technical dialogues with foreign partners. Participant in UN Climate Change Conferences. ustainability S roup’s roup’s G Gazprom

192 Gazprom Group’s Sustainability Report 2019 6.1. Environmental Sustainability Management and Environmental Control Management and Control Sustainability Environmental Environmental 193 1 5 3 4 2 6 Appendices Our Report 6.2. Combating Climate Change

6.2.1. Corporate Targets for Preserving the Climate

GHG emissions management is part of the Gazprom Group’s corporate indicators of specific GHG emissions until 2030 proceeding from strategy on environmental protection and climate change prevention. different development scenarios. The reduction of specific GHG emissions is the main driver behind 2019 saw work start on developing sustainable development scenarios the improvement of the environmental friendliness of production for PJSC Gazprom through 2050, taking into account the global shift to a processes. The innovative development programs of PJSC Gazprom, low-carbon economy, with respective climate goals to be set. PJSC Gazprom Neft, and Gazprom Energoholding LLC set respective PJSC Gazprom contributes significantly to the low-carbon economy key performance indicators (KPIs) until 2025. The Roadmap of development in Russia and the countries that import Russian gas thanks Greenhouse Gases Emissions Management establishes the estimated to gas infrastructure expansion and conversion of various vehicles to natural gas, thus helping reduce emissions made by energy consumers.

6.2.2.

Reduction of Greenhouse Gas Emissions eport 2019 across the Gazprom Group R

mmt GHG decrease of ustainability S of СО2 the Gazprom Group in 2019, 3.52 equivalent (1. 5 %) comparing to 2018 roup’s roup’s G

6.2.2.1. Direct GHG Emissions Gazprom GRI 305-1 In 2019, GHG emissions of the Gazprom Group’s facilities amounted to

236.5 mmt of СО2 equivalent, 14% of them were methane emissions.

Gazprom Group’s GHG emissions, 2016–2019, mmt of СО2 equivalent 228.2 240.0 2016 2018 233.8 236.5 2 017 2019 Information on the GHG emissions of the Gazprom Group companies is provided in Appendix 7.

194 Gazprom Group’s Sustainability Report 2019 6.2. Underground natural gasstorage Natural gasprocessing Natural gastransportation Natural gasproduction from 0.275 tonsofCO climate targetsundertheSBT initiativewithintheCDP. by 1.5% ascompared to2018, whichcorrespondstothecriteriaof In 2019, absoluteGHGemissionsacrosstheGazpromGroupreduced GRI 305-5 (166) ofNatural ResourcesandEnvironmentNo.300datedJune30,2015. ApprovedbyOrderoftheRussianMinistry Activity Energy indirect GHGemissionsatPJSC Gazprom ofactivities,2018–2019, bytypes mmtofСО of GHGemissionsaccordingtoauniformproceduredescribedinthe business activitieshavebeenmonitoringandcalculatingthequantity of GHGemissions.Since2016, allGroupsubsidiariesregardlessoftheir outcontrolandaccounting All companies oftheGazpromGroupcarry chain, PJSC GazpromdisclosesitsindirectGHGemissions. These are To keepstakeholdersupdatedonemissionsalongtheentireproduction GRI 305-2 6.2.2.2. recommendations oftheIntergovernmentalPanel onClimateChange(IPCC). calculation wasmeanttoprovideamoreaccurate pictureoftheimpacts madebyemissionsontheclimatesystem,takingintoaccount in 2019. able totrace gasleaksfrompipelinesanditsotherproductionfacilitiesmoreefficientlydirectlyspace. remote sensingsatellitethatisplannedtohaveagasanalyserinstalledonboard.Withthelaunchofsatellite,Gazpr om Groupwillbe in2022–2024 facility Shchelkovo (MoscowRegion).The firstspacecraft tobeassembledandtestedatthenewcutting-edge isSmotr-Bearth unmanned aerialvehicles. helicopters orunmannedaerialvehicles.In2017–2019, PJSC pilottestingofthegasleaktracing technologywiththeuseof Gazpromperformed equipmentordetectorsinstalledin isaddressedbyusingeitherstationary The methanedetectionatfacilitiesoftheRussiangasindustry result, theactualcarbonfootprintfromGazprom’s productionactivitiesprovedtobelowerbyanother25.2milliontonsofСО Gazprom wasthefirstRussiancompany tocalculatetheamountofitsemissionsusing 100-year Global Temperature change Potential. Asa The gas business reported areductioninspecificGHGemissions The gasbusinessreported With accountoftheGlobalTemperature changePotential, GHGemissionsoftheGazpromGrouptotalled211.2 milliontonsofCO To makemoreefficientuseofmodernspace technologies, in PJSC Gazpromisimplementingaprojecttobuildspacecraft assemblyfacility 2 equivalentpertonofoilin2014 Combating Climate Change Climate Combating Energy Indirect GHGEmissions

Russian Federation Emissions byEntitiesengaginginBusinessandotherActivitiesthe Methodological GuidanceontheQuantificationofGreenhouseGas or heatingconsumedbyanorganization. GHG emissionsfromthegeneration ofpurchasedoracquiredelectricity to 0.259tonsofCO Program. long termuntil2030andtheEnergySavingEfficiency GroupGHGEmissionsManagementRoadmap inthe Gazprom which wasmadepossiblethankstotheimplementationof 166 2 equivalentpertonofoilin2019, . 2 equivalent 2018 2,98 4,62 0,51 ,10 0 195 2 equivalent.This 2 equivalent 2019 0,06 3,33 0,35 2,34 1 5 3 4 2 6 Appendices Our Report 6.2. Combating Climate Change

In 2019, the Gazprom Neft Group’s indirect (Scope 2) GHG emissions building up its infrastructure needed to produce and treat hydrocarbons within the perimeter of Russian subsidiaries amounted to 5.22 million and transport them to key customers, which results in more facilities

tons of СО2 equivalent (in 2018: 4.38 million tons of СО2 equivalent). generating additional GHG emissions. The growth in indirect GHG emissions in the reporting year is attributable Indirect (Scope 2) GHG emissions by PJSC Gazprom, PJSC Gazprom to the fact that Gazprom Neft is expanding its geography of operations Neft, Gazprom Energoholding LLC, and Gazprom Neftekhim Salavat LLC

through prospecting for and evaluation of hydrocarbon reserves and is stood at 13.8 million tons of СО2 equivalent.

GRI 305-3 2019 was the first year the Gazprom Group assessed indirect (Scope 3) from all types of products sold – natural gas, oil and gas condensate, GHG emissions resulting from the use of products as fuels or feedstock automotive gasoline, diesel and jet fuel, LPG, and fuel oil167. both in Russia and abroad. The calculation included GHG emissions

Gazprom Group’s GHG emissions (Scope 3), 2018–2019, mmt of СО2 equivalent Product sold 2018 2019 Gas 956.15 930.09

Oil and gas condensate 78.71 83.84 eport 2019 R Other energy resources 144.12 140.61 Total 1,178.98 1,154.54 ustainability

GRI 305-6 S The Company does not use ozone-depleting substances on an industrial scale. roup’s roup’s G

6.2.3.

Flaring Reduction Gazprom

was reached by the APG utilization across the Gazprom Group’s assets 9 0 .1% in Russia in 2019168 GRI OG 6 The reduction in APG flaring plays a significant role in decreasing The actual APG utilization at the operating facilities of the Gazprom emissions of pollutants and greenhouse gases and saving resources. Neft Group reached 89.0% in 2019, i.e. increased by 10.6% versus The Gazprom Group is implementing APG utilization investment 2018, with an actual rise in APG production amounting to 2.242 bcm projects at its fields with the aim of achieving an APG utilization level of (up 15.6%). An upward trend in APG utilization is attributable to the at least 95%169. commissioning of facilities under the Gas program of Gazprom Neft In 2019, APG utilization was 98.5% at the fields of PJSC Gazprom’s and organizational and technological activities at the assets with well- gas production subsidiaries (including OJSC Tomskgazprom), 89.0% at developed gas infrastructure. the Gazprom Neft Group, 98.0% at Sakhalin Energy.

(167) To account for all possible emissions when using Gazprom Group products, emission factors were applied in accordance with the Methodological Guidance on the Quantification of Greenhouse Gas Emissions by Entities engaging in Business and other Activities in the Russian Federation approved by Order No. 300 of the Ministry of Natural Resources and Environment of the Russian Federation dated June 30, 2015. (168) Including the share in production of organizations in which Gazprom has investments classified as joint operations. (169) As per Resolution No. 1148 of the Government of the Russian Federation dated November 8, 2012.

196 Gazprom Group’s Sustainability Report 2019 97.8 76.2 98.4 96.3 79.3 6.2. Dynamics ofAPGutilizationattheGazprom Group companies,2016–2019, % level of95%istobeensuredattheassetswithwell-developed gas APGutilization resolution oftheBoardDirectorsGazpromNeft, and anincreaseinoilgasproductionvolumes.Pursuant tothe ofcommercialdevelopmentnew fields utilization alongwiththestart GroupisaimingtoensuretherequiredlevelofAPG The GazpromNeft 6.2.3.1. For moredetailsonhydrocarbon flaringacrosstheGazpromGroupseeAppendix 7. 97.0 investments classifiedasjointoperations) reached90.1% (whereasin2018 itwas 81.8%). In 2019, APGutilizationacrosstheGazpromGroup’s assetsinRussia(includingtheshareproductionoforganizationswhichGazpromhas Group Gazprom Neft Sakhalin Energy PJSC Gazprom(includingOJSC Tomskgazprom) Plans Combating Climate Change Climate Combating 2016 017 2 78.3 97.4 89.0 97.7 implementation ofinvestmentprojectstobuildgasinfrastructure. Utilization andEfficiencyProgram wasdevelopedthatprovidesforthe including newassets,in2022.To achievetheapprovedgoals, APG infrastructure ingeneral, in2020andthroughout GazpromNeft 98.5 98.0

197 2018 2019 1 5 3 4 2 6 Appendices Our Report 6.2. Combating Climate Change

6.2.4. Energy Saving and Energy Efficiency

fuel and energy consumption 1,830.98 million GJ by PJSC Gazprom subsidiaries of reference fuel – fuel and energy savings cost of fuel and energy saved 3.94 million tons by PJSC Gazprom in 2019 RUB7, 3 91 million by Gazprom Energoholding Gazprom’s primary aim is to ensure reliable and efficient supply of The Company’s energy efficiency activities are governed by theEnergy natural gas and other energy resources to consumers, with efficient use Efficiency and Energy Saving Policy of PJSC Gazprom17 0 . of energy and fuel at all stages of the production cycle underpinning its The 2019 Corporate Targets required lower consumption and higher sustainable development goals. savings of fuel and energy resources, as well as measures to prepare for ISO 50001:2018 certification. These goals were met. eport 2019 R

For more details on the Energy Efficiency and Energy Saving Policy of For more details on the energy management system PJSC Gazprom see171 of PJSC Gazprom see172 ustainability S 6.2.4.1. Energy consumption within the organization17 3 roup’s roup’s G Fuel and energy consumption at PJSC Gazprom by energy resource, 2016–2019, million GJ174 Resource 2016 2 017 2018 2019

Natural gas 1,357.30 1,571.21 1,698.57 1,614.72 Gazprom Electric power 101.53 119.03 123.42 121.46 Heat energy 92.01 93.42 94.48 94.80 Total fuel and energy resources 1,550.83 1,783.66 1,916.47 1,830.98

2019 saw changes to the energy conversion formulae as per Rosstat actual calorific values determined as the ratio of the net calorific value of Order No. 713 dated November 28, 2019 which introduced the fuel in an as-received condition to the calorific value of 1 kg of reference requirement to use reference fuel units: “For all types of fuel, physical fuel, i.e. 7,000 kcal/kg”. units shall be converted into units of reference fuel typically using their

(170) Approved by resolution of the Management Committee of PJSC Gazprom No. 39 dated October 11, 2018. (171) https://www.gazprom.com/f/posts/74/562608/2018-10-11-energetic-policy-eng.pdf (172) https://www.gazprom.com/nature/energy-conservation/ (173) Based on corporate reporting forms approved by a relevant order PJSC Gazprom on an annual basis. PJSC Gazprom’s Order No. 348 dated April 11, 2019 approved the following corporate reporting forms for 2019: – 103-gas Fuel and Energy Efficiency Report of a Gas Transmission Subsidiary; – 105-gas Fuel and Energy Efficiency Report of Underground Gas Storage Stations; – 106-gas Fuel and Energy Efficiency Report of Gas, Gas Condensate and Oil Processing Entities; – 107-gas Fuel and Energy Efficiency Report in Gas Distribution and Supply; – 143-gas Fuel and Energy Efficiency Report of a Gas Producing Subsidiary; – 142-gas Progress under the Energy Saving and Energy Efficiency Improvement Program; – Rosstat Order No. 713 dated November 28, 2019 “On Approval of Guidelines for Completing Federal Statistical Monitoring Form No. 4-TER Details of Fuel and Energy Utilization”. (174) Physical units of fuel and energy consumption (mcm, million kWh, thousand Gcal) were converted into units of energy (million GJ) using the following coefficients: 1 mcm ×1.155 = 1,000 tons of reference fuel; 1 million kWh × 0.325 = 1,000 tons of reference fuel; 1,000 Gcal / 7 = 1,000 tons of reference fuel.1,000 tons of reference fuel = 0.0293076 million GJ.

198 Gazprom Group’s Sustainability Report 2019 6.2. sources (solarenergy). Gazprom generated Neft atotalof28.2 MWh energyfromrenewable Energy consumption Energy consumptionbytheGazprom Group, Neft 2016–2019, millionGJ Resource Electric powerandheatenergy consumptionforinternalprocess needsinthecore production activitiesofPJSC Gazprom, 2016–2019 droppedby3.2%. energy intensity volumesdeclinedby1.4% asgastransportation gas transportation and of electricpowerby1.6% onthebackoflowerenergyconsumptionin PJSC Gazpromreduceditsconsumptionofnatural gasby4.8%andthat Total fuelandenergyresources Gas distribution Gas, gascondensateandoilprocessing Underground gasstorage Trunkilne gastransportation Gas production Activity Fuel andenergy consumptionatPJSC Gazprom in2019, bybusinessactivity millionGJ (175) Electric power Electric power, millionkWh Heat energy Heat energy,millionGJ Gas totalled 229.2millionGJ. In 2019, energyconsumptionforinternalneedsatGazprom Neft Diesel fuel Total No separate recordsaremaintainedtotrack steam consumption.Assumingtheoverall bemarginal. consumptionmixanddomains,theshareofsteammight bemarginal. consumption mixanddomains,theshareofenergyconsumedforcoolingmight No separate recordsaremaintainedtotrack energy consumptionforthecoolingofbuildingsandfacilities.Noinformationisavailableonactualenergyconsumedcooling.Assuming theoverall Combating Climate Change Climate Combating processed. caused byan8.5%increaseinvolumesofunstablegascondensate condensate processingattheplantsofGazpromPererabotka LLC Heat consumptionroseby0.3%duetohigherheatutilizationingas 10,659.1 199.3 92.01 2016 2016 43.7 97.7 57.0 0.9 12,496.9 93.42 100.3 215.2 2017 017 2 69.1 43.1 2.7 199 12,958.0 226.5 94.48 2018 2018 112.7 66.7 44.7 2.4 12,886.6 1,830.98 75 17 1,374.61 268.06 141.89 25.95 20.48 229.2 94.80 2019 2019 2019 118.2 66.9 42.4 1.7 1 5 3 4 2 6 Appendices Our Report 6.2. Combating Climate Change

In 2019, Gazprom Energoholding’s energy consumption for internal needs totalled 4.8 million tons of reference fuel (140.85 million GJ).

Energy consumption for internal needs at Gazprom Energoholding, 2016–2019 Indicator 2016 2 017 2018 2019 Total electric power consumption, million kWh 12,229 12,186 11, 815 11,590 Total electric power consumption, thousand tons of reference fuel 3,625 3,597 3,448 3,352 Total heat energy consumption, thousand Gcal 10,327 10,152 11,087 9,907 Total heat energy consumption, thousand tons of reference fuel 1,524 1,491 1,631 1,455 Total gas consumption, mcm 0.64 0.67 0.03 0.02 Total gas consumption, thousand tons of reference fuel 0.75 0.78 0.04 0.02 Total, thousand tons of reference fuel 5,150 5,089 5,079 4,807 eport 2019

In 2019, Gazprom Energoholding’s fuel consumption from non- R renewable resources totalled 51.6 million tons of reference fuel (1,511.85 million GJ). ustainability

Fuel consumption from non-renewable sources at Gazprom Energoholding, 2016–2019, million tons of reference fuel S Fuel type 2016 2 017 2018 2019

Coal 7.5 7.1 5.9 4.9 roup’s G Gas 48.9 47.5 47.7 46.2 Fuel oil 0.4 0.4 0.5 0.5

Diesel fuel 0.0 0.0 0.0 0.0 Gazprom Other fuels 0.0 0.0 – – Total 56.9 55.1 54.1 51. 6

In 2019, Gazprom Neftekhim Salavat’s energy consumption for internal needs totalled 66.251 million GJ.

Energy consumption for internal needs at Gazprom Neftekhim Salavat LLC, 2016–2019 2016 2 017 2018 2019 Electric power, million kWh 1,358 1,336 1,434 1,336 Energy for heating, thousand GJ 1,389 1,403 1,349 1,269 Energy for cooling, million kWh 232 216 245 231 Steam consumption, thousand GJ 34,022 35,105 38,177 37,024 Energy sold for heating, thousand GJ 258 274 273 0 Steam sold, thousand GJ 1,482 1,769 1,749 1,949 Overall energy consumption, including natural gas as a fuel, 66,666 65,075 69,223 66,251 thousand GJ

200 Gazprom Group’s Sustainability Report 2019 6.2. Company Electric powersoldbyGazprom Energoholding, 2016–2019, millionkWh PJSC TGC-1. In2019, itsoldatotalof152,833.80 millionkWh generating companies –PJSC Mosenergo,PJSC OGK-2,and Gazprom Energoholding sellselectricpowerproducedbyits 6.2.4.2. Fuel type Fuel consumptionfrom non-renewable resources atGazprom SalavatLLC, Neftekhim 2016–2019, thousandGJ PJSC Mosenergo Natural gasforproduction PJSC OGK-2 Natural gasasafuel PJSC TGС-1 Total Total amounted to81.27 million GJ. In 2019, SalavatLLC totalenergyconsumptionbyGazpromNeftekhim than selling prices for electricity. than sellingpricesforelectricity. which ismainlycausedbythefactthatenergypricesaregrowingfaster PJSC OGK-2tendstoloweritselectricpowergeneration andsales, Electric PowerSold Combating Climate Change Climate Combating .

164,388.3 60,858.4 30,590.9 72,939.0 34,767.6 18,316.4 16,451.2 2016 2016 162,552.0 60,250.6 30,346.7 69,722.2 32,579.2 15,838.5 14,508.2 017 2 017 2 201 157,757.2 32,579.7 64,982.1 15,733.6 60,195.4 16,041.6 31,775.2 2018 2018 152,833.8 62,096.0 58,389.8 30,252.0 32,348.0 15,232.6 15,019.4 2019 2019 1 5 3 4 2 6 Appendices Our Report 6.2. Combating Climate Change

6.2.4.3. Reduction of Energy Consumption

GRI 302-4 In 2011–2019, PJSC Gazprom saved fuel and energy resources for a In 2019, PJSC Gazprom’s energy saving program helped save fuel total of 26.4 million tons of reference fuel (773.5 million GJ), including: and energy resources in the amount of 3.94 million tons of reference fuel (115.5 million GJ), demonstrating that the Company delivers on 22.4 bcm of natural gas; its commitments to continuously improve the energy efficiency of its production processes and save natural energy resources across its 2.5 billion kWh of electric power; production assets.

2.0 million Gcal of heat.

For more details on fuel and energy cumulatively saved by PJSC Gazprom see Appendix 7. For the full list of entities covered by the PJSC Gazprom Energy Saving and Energy Efficiency Improvement Program see Appendix 7.

At Gazprom Neft, the Downstream and Upstream Divisions’ energy In 2019, Gazprom Neftekhim Salavat’s energy saving programs

saving and energy efficiency programs helped save 4.1 million GJ of helped save fuel and energy resources in the amount of eport 2019

energy and 1.2 million GJ of electric power, respectively, in 2019. 55,199 thousand tons of reference fuel (1.6 million GJ): R In 2019, Gazprom Energoholding’s energy saving programs helped save fuel and energy resources in the amount of 1.61 million tons of natural gas savings: 43.5 mcm; reference fuel (47.33 million GJ):

fuel savings: 1,375.6 thousand tons of reference fuel, including electric power savings: 1.3 million kWh; ustainability 1,172.9 mcm of natural gas; S heat savings: 35.6 thousand Gcal. roup’s roup’s

electric power savings: 670.8 million kWh; G

heat savings: 297.2 thousand Gcal.

The cost of energy resources saved is RUB 7,391 million. Gazprom

GRI 302-4 In all of its business activities, PJSC Gazprom implements energy saving Measures being taken under corporate energy saving programs seek to program initiatives aimed at enhancing (maintaining) energy efficiency save natural gas, electric power and heat. and reducing fuel and energy consumption, including energy losses.

202 Gazprom Group’s Sustainability Report 2019 6.2. Total, thousandtonsofreferencefuel Gas distribution Gas, gascondensateandoilprocessing Underground gasstorage Gas transportation Gas, gascondensateandoilproduction Fuel andenergy savingsresulting from theimplementationofPJSC Gazprom’s energy savingprograms Total, millionGJ Total Non-core business energy atPJSC Gazpromforinternalprocessneeds. andalowertotalconsumptionoffuel trunkline gastransportation previous periodsasaresultofadditionalnatural gassavinginitiativesin The factorvarianceisduetohigheractualenergysavingsin 2019 versus PJSC Gazprom Energy SavingandEnergy EfficiencyImprovement Program implementationoutcomesasof2019 (178) (177) The consumptionreduction resultsarecalculatedwithdueconsideration ofthedataonnatural gas,electricpower, andheatenergyusedbyPJSC Gazpromsubsidiariesforinternalprocessneeds. (176) In thetablebelow,Fr (expressedin%)meansthereductionfactorforfuelandenergyconsumptionresultingfromimplementationofansavingprogram. Period * forthelistofcorresponding subsidiariesseeAppendix7, p.269 Activity* 2016 017 2 2018 2019 and energyconsumption. 2. RGazprom2-1.20-819-2014 MethodologyforCalculatingFuel andEnergySavingsResulting fromtheImplementationofEnergySavingInitiativesatSubsidiaries.The baselineisthepreviousyear’s fuel 1. STO Gazprom2-3.5-113-2007 MethodologyforAssessingEnergyEfficiencyofGas Transportation Facilities andSystems; standardswereusedtocalculatethefuelandenergysavings: The followingindustry Pages 46–49,PJSC 2019, GazpromEnvironmentalReport https://www.gazprom.com/f/posts/72/802627/gazprom-environmental-report-2019-en.pdf Report 2019Report andGazpromEnergoholdingseePJSCGazprom Neft GazpromEnvironmental energysavinginitiativesofPJSCFor thelistofmostimportant Gazprom, 178 2,286.6 3,286.9 3,013.5 2,951.9 mcm Natural gas million GJ Combating Climate Change Climate Combating 102.0 1.3 111. 99.9 77.4 million kWh Electric power 260.0 330.5 364.2 331.5

million GJ 2.5 3.2 3.5 3.1 savings, mcm Natural gas thousand 3,796.38 3,286.91 2,810.36 111.263 392.74 22.56 40.83 254.9 268.4 252.7 235.9 19.76 Heat energy Gcal 0.67 million GJ savings, million Electric power 176, 177 1.1 1.1 1.0 1.1 203 330.48 236.79 0.41 107. 28.67 40.71 3.148 1 4 8 11. kWh 3.57 8.91 million GJ Fuel and energy 106.3 104.4 115.5 80.9 thousand Gcal Heat savings, 252.74 192.15 42.02 1.058 16.37 36.11 0.00 0.48 1.72 5.2 6.9 5.9 6.0 Fr % 1 5 3 4 2 6 Appendices Our Report 6.2. Combating Climate Change

Gazprom Neft’s Downstream Division was implementing energy in terms of reference fuel for power generation across Gazprom saving and energy efficiency programs for 2019–2021 aiming to Energoholding amounted to 10.9 g/kWh, or 3.6%. save 619 million kWh of electric power in the reporting year. In Over the same period, specific consumption in terms of reference 2019, the Upstream Division met its targets set for specific electric fuel for heat generation rose by 0.3 kg/Gcal, or 0.2%. power consumption – namely, 24.57 kWh per ton of liquid, and also The total fuel savings due to changes in specific consumption in exceeded the targets under its Energy Efficiency Program by 39%, and terms of reference fuel were driven by the launch of facilities under achieved energy savings of 330 million kWh (versus the set target of capacity supply agreements (CSAs), as well as by other measures 236 million kWh) across the Division. The values achieved in terms of taken, including the decommissioning of inefficient equipment, specific electric power consumption per ton of produced liquid were shifting of thermal capacity from boiler houses to power plants, and 2.2% below the target level and amounted to 24.78 kWh (versus the implementation of energy saving technologies. target level of 25.34 kWh). The measures provided for by energy saving programs aim to reduce Gazprom Energoholding uses specific consumption in terms of the consumption of fuel and energy resources, including fuel, electric reference fuel for power generation as an industry energy-efficiency power, heat, water, etc metric. In 2016–2019, the overall reduction in specific consumption

Total reduction in energy consumption as a direct result of energy saving initiatives at Gazprom Energoholding, 2016–2019, thousand tons of reference fuel eport 2019 1,1 5 9 1,376 R 2016 2018 ustainability S

1,089 1,615 roup’s 2 017 2019 G

Outcomes of energy saving and energy efficiency improvement programs’ implementation at Gazprom Energoholding in 2019 Gazprom Fuel savings, thousand tons of reference fuel Electric power Heat energy savings, savings, Total Incl. gas million kWh thousand Gcal Total 1,375.6 1,364.6 670.8 297.2 Total, million GJ 40.3 40.0 2.4 1.2

Gazprom Neftekhim Salavat achieved the following results through its energy saving and energy efficiency improvement initiatives.

Results of energy saving and energy efficiency improvement programs’ implementation at Gazprom Neftekhim Salavat LLC, 2016−2019 Indicator 2016 2 017 2018 2019 Natural gas savings, mcm 0.000 49.935 43.783 43.511 Electric power savings, million kWh 0.286 0.880 0.440 1. 311 Heat energy savings, thousand Gcal 4.799 21.503 49.675 35.559 Total, thousand tons of reference fuel 0.779 61.033 57.809 55.761 Total, million GJ 0.023 1.789 1.694 1.634

204 Gazprom Group’s Sustainability Report 2019 6.2. 2020–2022 Corporate Energy Targets ofPJSC Gazprom 6.2.4.4. 1. No. 2. single indicatoreitherforPJSC GazpromortheGroup. indicators,making it impossibletoconsolidatethemintoa intensity energy requiresanindividualapproachwhensetting business activity and distribution,aswelltheGazpromGroupcompanies, each undergroundstorage,in gasproduction,transportation, processing, significantlyacross processes vary PJSC Gazprom subsidiariesinvolved Sinceproduction (tons ofreferencefuel)totheworkbeingperformed. intoreferencefuel of totalenergyresourcesconsumptionconverted through specificenergyconsumption,whichisdefinedasthe ratio PJSC ofitsprocessoperations Gazpromassessestheenergyintensity GRI 302-3 6.2.4.5. 3. Target achieved. The actualreductionin2011–2019 was22.0%. The targetfor2011–2020 isatleast11.4% (compared tothelevelof2011). Decline inspecificconsumptionofnatural gasforinternalprocess needsduringtransportation operations of PJSC Gazprom’s business Improve theenergyefficiency Target processing, anddistribution underground storage, production, transportation, resources innatural gas Save fuelandenergy ISO 50001:2018 (EnMS) inlinewith Energy ManagementSystem improve PJSC Gazprom’s maintainand for certification, Develop, implement,prepare Goals andTargets for2020—2022 production activities fuel andenergyresourcesin Reduce specificconsumptionof (EPI), unitofmeasurement Energy Indicator Performance Combating Climate Change Climate Combating gas savings,mcm Natural million kWh power savings, Electric savings, thousandGcal Heat energy Energy Intensity certificate Gazprom’s EnMS(international the scopeandperimeterofPJSC within ofconformity Certification portation, totalvolumesofgaswithdrawn andinjected(thousandm portation, (mcm•km)ingastransin gasproduction,volumesoftransported - processed (tonsofreferencefuel)ingasprocessing. underground gasstorage, volumes ofgaseousandliquidhydrocarbons energy. processing itfactorsinconsumptionofgas,electricpowerandheat for internalprocessneeds,whileingasandliquidhydrocarbons storage ismeasuredusingnatural gasandelectricpowerconsumption andunderground ingasproduction,transportation, Energy intensity No certificate. The outputisexpressedinvolumesofgasproduced(thousand m Reference period, 2,951.9 235.9 364.2 2018 100 obtained inline with theEnMS scope and Certificate Certificate perimeter. period, 2,096.8 Target 2020 158.2 221.2 –1.2 EPI values

205 and perimeter. EnMS scope confirmed in line withthe Certificate Certificate period, 4,182.5 Target 295.4 2021 407.8 –1.2

and perimeter. EnMS scope confirmed in line withthe Certificate Certificate period, 6,306.4 Target 428.1 2022 613.7 3 –1.2 ) in 3 )

1 5 3 4 2 6 Appendices Our Report 6.2. Combating Climate Change

Energy intensity of the core activities of PJSC Gazprom, 2016–2019 Activity 2016 2 017 2018 2019 Gas production, kg of reference fuel per thousand m3 17.79 17.95 18.99 19.99 Gas transportation, kg of reference fuel per mcm•km 26.30 27.30 27.86 26.97 Underground gas storage, kg of reference fuel per thousand m3 5.68 7.15 6.91 8.20 Gas processing, kg of reference fuel per ton of reference fuel 45.91 46.99 50.52 50.53

In gas transportation, specific energy consumption went down by 3.2% Taz Region. Production volumes started falling across the majority of the as a result of a 1.4% reduction in the volumes of gas transported, as region’s fields, resulting in a higher energy consumption for subsequent well as due to the measures taken under the energy saving program. natural gas compressing. In underground gas storage, specific energy consumption increased Energy intensity is calculated on the basis of the energy consumption due to the fluctuations in natural gas demand that required utilization of within PJSC Gazprom. energy-consuming equipment and a higher consumption of fuel gas. Gazprom Neft’s Downstream Division achieved an energy intensity In natural gas production, energy intensity rose on the back of a higher ratio of 134 kg of reference fuel per ton in relation to its goods (energy consumption of gas as an energy source at the fields in the Nadym-Pur- used per unit of goods). eport 2019 R

Energy intensity across the Downstream Division of Gazprom Neft, 2016–2019 Indicator 2016 2 017 2018 2019

Energy intensity ratio ustainability S based on goods (energy used per unit of goods), kg of reference 137 143 145 134 fuel per ton roup’s roup’s

Metric (denominator) used to calculate the ratio G output, mmt 49 48 50 49 Energy types included in the energy intensity ratio Gazprom fuel 83 85 87 79 electricity 25 24 24 24 steam 33 34 34 32

Figures are based on the energy consumption within the organization.

In 2019, Gazprom Energoholding’s energy intensity was 1.67.

206 Gazprom Group’s Sustainability Report 2019 6.2. 6.2.5. Energy ofGazprom intensity Energoholding’s companies,2016–2019 RUB 11,703,055 Indicator secondary energyresourcestogenerate energy forinternalneeds secondary technologically isolatedareas. inremoteor it iseconomicallyandtechnically feasible,particularly The GazpromGrouprelieson alternativeenergysourceswherever GRI OG2 Power plantbusbaroutput(otherthanHPPs) of intercompany balances) Productive supplyofheatenergytoendcustomers(net Reference fuelconsumptionatsources Third-party heatenergyprocurement Third-party Electric powerconsumptionatboilerhouses Electric powerconsumptionatheatnetworks Power outputbyhydrogenerators atHPPs Busbar outputatHPPs Energy intensity ofTPPs Energy intensity Energy intensity ofHPPs Energy intensity Total energyintensity heat energyareexcluded). and heatenergysupplytoendcustomers(allintragroup balancesof facilities ofthesubsidiariestototalbusbaroutputpowerplants electricpowerconsumedatboilerhousesandheatnetworks parties, bythird subsidiaries, heatenergysuppliedtothesubsidiaries’networks as theratio offuelconsumptionatpowerplantsandboilerhousesthe ofGazprom Energoholding’sThe energyintensity companies isdefined The GazpromGroupusesrenewable energyresourcesand 3.44 billion Energy Resources Energy Renewable Secondary and resources in2019 energyand secondary Gazprom Group inrenewable was investedbythe Combating Climate Change Climate Combating MWh million kWh million kWh million kWh million kWh million kWh reference thousand thousand thousand tons of Gcal Gcal Unit fuel systems, electrochemical protection of pipelines, lighting, etc. systems, electrochemical protectionofpipelines, lighting, forensuring,interalia,routinepowersupplytotelemetry networks at productionfacilities,gastrunkline facilities,andgasdistribution arewidelyused well asgasflowheatandenergy powerconverters consumers.Solarandwindgenerators, as and forsaletothird-party energy resources in2019 renewable andsecondary by theGazprom Group using of electricpowerwasgenerated does not calculate energy intensity ratio.Gazprom Salavatdoesnotcalculateenergyintensity Neftekhim (assumed at0.9)toHPPbusbaroutput. generated multipliedbytheaverage efficiency ratio ofhydroturbineunits ofHPPsThe isdefinedasthe energyintensity ratio ofelectric power 130,801 1 119 , 119 56,863 12,863 12,775 4,105 2016 1.74 .71 1. 1.12 522 946 126,944 116,276 55,066

13,686 13,595

3,259 017 2 1.70 1.73

1.12 969 572

207 124,068 119,048 54,085 12,730 12,819 3,791 2018 1.70 1.67 1.12 556 954 110,749 121,919 51,586 11,585 11,674 3,322 2019 1.70 1.67 1.12 510 971 1 5 3 4 2 6 Appendices Our Report 6.2. Combating Climate Change

Depending on energy consumption modes, standalone complete communications equipment, small-scale gas distribution stations, etc. renewable energy resources-based power units can be effectively used In terms of heat and power generation, secondary energy resources to supply power to various process facilities of PJSC Gazprom. These have a huge energy-saving potential as their use helps reduce the include automatic environmental monitoring stations, rust protection consumption of primary energy resources. systems, warning lighting at communications towers and power line supports, lighting systems of helicopter pads, block valve stations,

Power generation from renewable and secondary energy resources at the Gazprom Group, MWh, 2016–2019 13,036,783 12,84 4,199 2016 2018 13,723,908 11,703,055 2 017 2019 eport 2019 R

In 2019, the Omsk Refinery completed the construction of a 1 MW solar power plant (the first phase of the project). The new station covers an area of 2.5 hectares and consists of 2,500 solar panels manufactured by Hevel, a Russian company. This investment project introducing green energy technologies is unique to the Russian industry and forms part of a large-scale program for the development of the Omsk Refinery. ustainability

This pilot facility fully supplies electricity to all administrative buildings of the Omsk Refinery, including a single amenity building for 2,600 S employees. Based on the results of inspections and measurements, a decision will be made on the construction of a 20 MW solar power plant at the Omsk Refinery which is planned for 2021. roup’s roup’s G

In 2019, PJSC TGC-1 (Gazprom Energoholding) and Nugush hydrogenation. The HPPs of PJSC TGC-1 account for the bulk of power

Hydroengineering Complex LLC (Gazprom Neftekhim Salavat) generation and contribute significantly to the green energy of the Gazprom produced 11.70 billion kWh of electric power by means of Northwestern Federal District of Russia.

Gazprom Energoholding (PJSC TGC-1) plans to put into operation 100 MW of renewable energy resources in 2023–2025.

In 2019, the Gazprom Group operated 2,240 secondary energy thermoelectric generators, solar modules and batteries, and wind resources- and renewable energy resources-based power generation turbines. The total electric power generated by these power units units (other than hydroelectric units) such as turbo expanders, amounted to 686,200 kWh.

For the total amount of renewable energy generated by source see Appendix 7.

208 Gazprom Group’s Sustainability Report 2019 6.2. identifies and evaluates climate-related risks in two keyareas: identifies andevaluatesclimate-relatedrisksin related FinancialDisclosures(TCFD), PJSC Gazpromvoluntarily In accordancewiththerecommendationsofTask Force onClimate- GRI 201-2, GRI102-15 6.2.7. gas, GHGemissionswillgodownby65mmtofСO tonatural According totheestimates,if50%ofvehiclesareconverted times lessGHGemissionsthanconventionalpetroleummotorfuels. production chain.From productiontorefilling,CNGgenerates four emissions bothduringtheutilizationoffuelandalongentire oflife. onthequality of positiveeffects anumber gas asamotorfuelinsteadofgasolineanddieseloffers Thanks totheenvironmentalfriendlinessofmethane,usenatural sustainabledevelopmentprojectsrunbyPJSCimportant Gazprom. The developmentoftheNGVfuelmarketinRussiaisonemost 6.2.6. soot particulates thatareextremelydetrimentaltohumanhealth.Thus,soot particulates changes (physicalrisks). risks relatedtophysicalchangesintheenvironmentdueclimate (transition risks); developmentscenario risks relatedtothetransition toalow-carbon scholarly journals and publications of the Higher Attestation Commission of the Russian Ministry ofScienceandHigherEducation. CommissionoftheRussianMinistry scholarly journalsandpublicationsoftheHigherAttestation technologieswhichis included inthelistofleadingpeer-reviewed development andtheonlypublicationdevotedtoalternativefueltransport research andanalysisinformationontheNGVfuelmarket technical journalwhichistheonlyprintedandonlinesourceinCISoffering Backed byPJSC Gazprom,theNationalGasVehicleAssociation publishestheAlternativeFuel Transport, aninternationalscientificand Conversion ofvehiclestonatural gashelpssignificantlyreduce Most importantly, natural gasdoesnotgenerateMost importantly, emissionsofsolid due to Climate Change Climate to due Gazprom’s Opportunities and Risks Promotion of NGV of Promotion Fuel Change Climate Combating 2 peryear. urgent marketissues. dedicated toproactivelyaddressingthemost discussion platforms events relatedtotheNGVfuelmarket.The Groupalsohelpedestablish shaping aconsolidatedpositiononitsdevelopment. with aviewtopromotingtheuseofnatural gasasmotorfueland brings togetherover120 participants oftheRussianNGVfuelmarket NGOssuchastheNationalGasVehicleAssociation which industry development inRussiacooperation withothermarketplayersand onthehealthconditionofpopulation. has apositiveeffect the useofmethaneasamotorfuelimprovesurbanenvironmentand financial performance. financial performance. simulations toassesstheimpact ofvariousclimatefactorson thefuture The scenarioanalysisalsorecommendedbytheTCFDreports. relieson andsustainabledevelopment inenvironmental reports CDP platform, Company ingeneral anditssubsidiaries.Informationispublishedonthe atthelevelofboth and more).Riskassessmentisperformed medium-term (from1to3years),andlong-term10 years (upto1year), Risk assessmentcoversthree timeperiods:short-term In 2019, theGazpromGroup’s in representativestookanactivepart PJSC Gazprompursuesthelong-termgoalsofNGVfuelmarket 209

1 5 3 4 2 6 Appendices Our Report 6.2. Combating Climate Change

In 2019, the Group developed the draft Program for adaptation of use of extra-durable pipe products in the areas susceptible to climate PJSC Gazprom’s operational activities to changing climatic and change impacts; geocryological conditions taking into account probable scenarios of climate changes in the areas where Company’s facilities are located. Risk assessment was performed in cooperation with the institutions construction of sheltered compressor shops in the areas with adverse of the Russian Academy of Sciences (RAS), such as the Institute of weather and climate conditions; Environmental Geoscience of RAS, the Institute of Petroleum Geology and Geophysics of RAS, etc. The results of this work are based on the analysis of accumulated and new data obtained using hi-tech tools. construction of backup power supply plants at the gas production They helped to identify regularities in natural and industrial evolution facilities located in the permafrost areas; of the permafrost soils, classify territories according to geocryological hazards, and optimize the design of structures and costs of their development of projects for the construction of gas production engineering protection. Moreover, coupled thermo-mechanical facilities with due consideration of weather and climate conditions; calculation methods at different levels of synthesis were developed. The geotechnical monitoring system was improved with the help of the national instrumental base. The conducted investigations contributed to laying pipelines deeper into the ground at their landfall sections to the development of comprehensive measures on adapting Gazprom’s ensure protection of their offshore segments; operating activities to changing climatic and geocryological conditions, including regulatory, methodological, technological, informational and management of geocryological conditions within the construction eport 2019 administrative aspects. R The Gazprom Group companies implement a set of measures to area during the pre-development of fields in the Yamal Peninsula to minimize the negative climate change consequences for its production ensure reliability of foundations and base structures using advanced activities, including: temperature-stabilizing technical aids for permafrost soils, with adjustment made for perennial warming;

climate change assessment in the areas where the Group’s process ustainability facilities are located; S development of comprehensive insurance schemes covering the Group’s environmental risks, including compensation for regular monitoring of machinery and equipment, as well as roup’s environmental damage. G predictability assessment of the production processes in the areas susceptible to climate change impacts; Gazprom

In 2019, PJSC Gazprom also started developing its sustainable development scenarios through 2050, taking into account the global shift to a low-carbon economy.

For more details on Gazprom’s risks and opportunities due to climate change see PJSC Gazprom Environmental Report 201917 9

(179) Pages 52–53, PJSC Gazprom Environmental Report 2019, https://www.gazprom.com/f/posts/72/802627/gazprom-environmental-report-2019-en.pdf

210 Gazprom Group’s Sustainability Report 2019 6.3. (180) 145 .12 9 0 4 11, 6.3.1. andreducewastepollutantemissions. preservation biodiversity protects water, landandforestresourceswhilealsoseekingtoensure ofitssustainabledevelopmentactivities,theGazpromGroup As part 97.3 4 11. EMS ofPJSC GazpromsetstheCorporate EnvironmentalTarget for the government,andinvestors.Inwaterresourcesprotection, the fromotherthings,cooperationfacilitates, apart withlocalcommunities, taken toimplementtheEnvironmentalPolicy oftheCompany, which treatment. waterbodiesandimprovewastewater discharge lesswaterintosurface The maingoalofPJSC Gazprominwaterresourcesmanagement isto GRI 303-1, GRI303-2 6.3.1.1. Pipeline Operation Centers. year.water bodiesinthereporting 27.7 hectaresoflandcleaned,13.2 tonsofwastecollected,and275 treesandshrubs planted. In 2019, over750 in31 peopletookpart ofthePower environmentalactivitiescarriedoutaspart ofSiberiaprojectimplementation,resultingin Efficient water resources management is part ofthemeasures Efficient waterresourcesmanagementis part Operational Skovorodinskoye,andSvobodnenskoyeGas environmentalmonitoringwasconductedattheLenskoye, Neryungrinskoye, At theSvobodnenskoyeGasPipelineOperation Center, morethan245 youngcommoncarpandsturgeonswerereleasedintocommercial gazprom-environmental-report-2019-en.pdf In thissubsection,PJSC Gazpromandgasbusinesscompanies meanthelistofcompanies fromPJSC 2019, GazpromEnvironmentalReport page 6–7, https://www.gazprom.com/f/posts/72/802627/ % % Management ofWater-RelatedImpacts Treatmentand Water: Use Sustainable Environmental Protection mcm in theGroup in2019 regional authoritiesandmajorinvestmentprojects. basisincludedincooperation agreementswith are onacompulsory andvoluntary, Environmental protectionmeasures,bothmandatory for 2016–2020. Resources UtilizationSystemDevelopmentProgram ofPJSC Gazprom achieved. Environmental Target isevaluatedannually.In2019, thetargetwas the baselinelevelof40.13%. The statusofachievingtheCorporate waterbodiesascompared to wastewater dischargedintosurface 2017–2019 toachievealowershareofpollutedandinsufficientlytreated bodies in2019 discharged bytheGazprom Group’s facilities intosurface water treated atpurificationplantsinthetotalvolumeofwastewater clean(untreated)share waterandpartially ofpartially with a daily capacity of0.39thousand m with adailycapacity wastewater treatment plantsandonerecirculated watersystem the Gazprom Group in2019 volume ofrecycled andreused wateracross the Gazprom Group in2019 versus 2018 decrease inwaterdischarges intosurface waterbodiesacross The ofLife”Water Company continuestoimplementthe“Water

211 3 were putintooperation

180 1 5 3 4 2 6 Appendices Our Report 6.3. Environmental Protection

The expected results of the “Water of Life” Program in 2020: decreasing the water intensity of commercial products manufacturing increasing the share of water purification plants that ensure by 6%; conformity to the existing sanitary and epidemiological requirements to the quality of potable water from 70% in 2014 to 90%; increasing the volume of water reused for process purposes by 25%.

increasing the share of wastewater purified at sewage treatment PJSC Gazprom’s Comprehensive Environmental Program for facilities to match the standard parameters in the total volume of 2020–2024 envisages a set of measures to reduce the share of excess wastewater discharged into water bodies from 60.7% in 2014 to 72%; discharges into surface water bodies to 4%.

6.3.1.2. Water Consumption

GRI 303-3 The Gazprom Group companies seek to decrease the negative In 2019, the Group’s companies received 3,921.41 mcm of water for impact on water resources through such measures as lowering water water supply purposes, which is 8.4% less than in 2018. consumption for production purposes and reducing wastewater

discharges into surface water bodies. eport 2019 R

GRI 303-1, GRI 303-3 Water is withdrawn from the surface and subterranean sources solely impact on the environment. None of the regions of the Company’s

in accordance with the effective legislation and pursuant to water use production operations are classified as areas with water stress. ustainability agreements and extraction licenses, without causing any significant S roup’s roup’s

Gazprom Group’s water consumption structure by types of sources in 2019, mcm G Gazprom Group Gas business companies Gazprom incl. PJSC Gazprom Gazprom Neft Group Gazprom Neftekhim Salavat Gazprom Energoholding

Gazprom Gas business incl. Gazprom Gazprom Gazprom Group companies PJSC Gazprom Neft Group Neftekhim Salavat Energoholding Surface sources 3,484.33 58.32 27.66 30.75 33.25 3,362.01 Ground water sources 86.95 30.60 25.06 32.17 0.65 23.53 Public water supply utilities 143.11 26.63 8.79 2.57 3.49 110.42 Other water supply systems 207.02 7.17 6.39 129.08 3.88 66.89

Natural sources account for 91% of the Group’s water withdrawal, with consumption structure by types of sources depends upon specific the shares of surface water bodies and underground water sources features of production operations and location of the facilities. accounting for 97.6% and 2.4%, respectively. The Group’s water

212 Gazprom Group’s Sustainability Report 2019 6.3. Gazprom Group’s wastewaterdischarge intosurface waterbodies, 2016–2019, mcm waterbodiesby16%,into surface clean(untreated)water withpartially In 2016–2019, theGazpromGroupreduceditswastewaterdischarge GRI 303-4 Gazprom Group’s waterresources useindicators, 2016–2019, mcm GRI 303-5 Gazprom Group’s wateruseindicators, 2016–2019, mcm Company Water used,total,includingwaterusedfor: Gazprom Group Water withdrawn andreceived,total (including 1.7% atPJSC Gazprom)oftotalwaterconsumption. consumption, whiletheGroup’s gasbusinessaccountsfor3.1% Gazprom Energoholdingaccountsfor91% oftheGroup’s totalwater Group facilities. duetotheoperationswater dischargesand/orrunoff oftheGazprom by None ofwaterbodiesandrelatedhabitatsaresignificantlyaffected GRI 306-5 6.3.1.3. Group companies into surface water bodies was mainly attributable to water bodieswasmainlyattributable Group companies intosurface The increaseinthevolumesof wastewaterdischargedbytheGazprom household anddrinkingpurposes Gas businesscompanies including waterfromnatural sources production purposes other purposes Gazprom Neft Group Gazprom Neft Gazprom Energoholding Gazprom Neftekhim Salavat Gazprom Neftekhim includingPJSC Gazprom Environmental Protection Wastewater Disposal its total discharges into surface waterbodies. its totaldischargesintosurface treatedatpurificationplantsaccountingfor and waterpartially 97.3% of accordance withPollutants DischargeNorms. Granting WaterBodiesforUseWastewaterDisposalPurposes in The GroupdisposesofwastewaterpursuanttotheDecisions on UGS facility. wastewater dischargedduring the constructionofKaliningradskoye 4,449.27 3,855.45 3,781.85 4,192.10 1.57 217. 4,538 39,60 38.39 4,301 35.10 2016 2016 2016 11.69 .11 0 3,905.26 3,832.00 4,421.11 4,164.84 209.01 39.26 4,523 4,284 33.87 10.74 47.25 017 2 017 2 017 2 0.12 213 4,180.89 3,658.44 3,947.36 3,587.15 170.44 4,280 4,065 63.09 39.38 2018 2018 2018 31.80 9.78 0.11 3,863.11 3,241.79 3,678.12 3,161.88 130.01 54.98 18.89 3,921 2019 2019 2019 37.99 3,571 41.83 0.09 1 5 3 4 2 6 Appendices Our Report 6.3. eport 2019 R ustainability S roup’s roup’s G Gazprom

214 Gazprom Group’s Sustainability Report 2019 6.3. approach inproductionandchemicallaboratories. laboratories timelyundergocompetenceverificationprocedures.Headstheworkinggroupforimplementationandfunctioningofarisk-oriented ofproductionandchemicallaboratories ofthecompany’sOversees performance branches thatmonitorwaterbodies,andensuresaccredited Gazprom EnergoLLC Energy andWaterSupplyFacilities Operation Department, Maria Karpova Environmental Policy. are an integral ofGazprom’s part technologies foritspurification water anddevelopingmodern oflife.Saving and quality impact onourhealth resources. Ithasadirect most precious natural Fresh waterisoneofour C hief Expert, HeatSupplyFacilities Operationhief Expert, Division,

215

1 5 3 4 2 6 Appendices Our Report 6.3. Environmental Protection

Gazprom Group’s wastewater disposal indicators, 2016–2019, mcm Indicator 2016 2 017 2018 2019 Discharges into surface water bodies 3,855 3,905 3,658 3,242 including partially clean and partially treated water 3,691 3,782 3,579 3,153

GRI 306-1 Information on the total volumes of water discharge, including the wastewater quality and the receiving body, is provided in Appendix 7.

The Gazprom Group carried out a large number of environmental companies, 5 plants at Gazprom Energoholding, and 70 plants at gas protection activities to boost the efficiency of water use for production business companies). Out of the total number of the treatment plants and household purposes and improve the wastewater treatment quality. put into operation in 2019, 68 purification plants with an aggregate daily In 2019, the Group put into operation treatment plants with an aggregate throughput capacity of 17,220 m3 were launched at PJSC Gazprom. daily throughput capacity of 26,660 m3 (70 plants at the Gazprom Neft

In 2019, Gazprom Transgaz Volgograd LLC became one of the winners in the contest for the Vernadsky National Environmental Award in the Social and Environmental Initiatives category. The company presented the Day of Joint Action – Clean Shores project, which aims to rehabilitate natural

sites and environments. This spring, its participants cleaned the shores of 15 water bodies and 12 km of waterfronts, removing 68 m3 of waste. eport 2019 R

Information on the volume of formation water produced and its use and the volumes of recycled and reused water at the Gazprom Group is provided in Appendix 7. ustainability S 6.3.2. Land: Preservation and Restoration roup’s roup’s G By performing geological exploration, construction and repair works fertility and environmental functions. If any damage is made to land, the and operating wells, pipelines and other facilities, the Gazprom Group Group’s companies follow the required remediation and rehabilitation affects vegetation and soil. procedures to put it back into economic use, as is provided for by the Gazprom Adhering to precautionary principles, the Gazprom Group companies legislation. use land in ways that ensure preservation and restoration of soils’

GRI 304-3 Gazprom Group’s land protection performance, 2016–2019, hectares Indicator 2016 2 017 2018 2019 Territory of lands disturbed during the year 27,027.45 42,162.29 25,786.97 22,885.37 including polluted lands 71. 31 87.33 111. 2 6 73.16 Disturbed lands remediated during the year 42,450.24 19,600.05 15,767.52 17,670.50 including polluted lands 94.08 89.10 96.13 65.69

In the reporting year, the Gazprom Group companies disturbed the construction of cluster pads at Gazpromneft-Orenburg LLC and 22,890 hectares of land, 11% less than in 2018. The decrease observed Gazpromneft-Vostok LLC. The completion of repair and construction in 2019 was mainly attributable to the completion of a number of works within lands leased in previous periods, including those construction works at PJSC Gazprom’s facilities. At Gazprom Neft, the performed as part of the construction of the Power of Siberia gas area of disturbed lands grew due to gaining legal rights to land plots trunkline’s facilities, resulted in a 12% increase in the area of land for the pre-development of the field of Gazpromneft-Yamal LLC, and remediated in 2019.

216 Gazprom Group’s Sustainability Report 2019 6.3. Component structure ofairemissionsacross theGazprom Group in2019, thousandtons business companies. MainpollutantsinGazprom’s grossemissionsare specifics oftheproductionactivities PJSC Gazprom andothergas lowerthanin2018.which isslightly Gazprom Groupcompanies amountedto2,862.70thousandtons, In 2019, sourcesofthe grosspollutantairemissionsfromstationary GRI 305-7 environmental targetforGazprom. Reducing pollutantemissionsintheatmosphereisapriority 6.3.3. to and monitoring,remediatedsoilsarecheckedforconformity ofoperationalor othercauses.Aspart environmentalcontrol from infiltrating soilsandpreventsoildegradation duetoerosion stabilize landscapes,andrestorevegetationsoil. remediation methodsseektopreventadverseerosiveprocesses, including thosedisturbedorpollutedinpreviousyears.The applied yearsawremediationof17,700The reporting hectaresoflands, Gazprom Group Gazprom Neftekhim Salavat Gazprom Neftekhim Gazprom Energoholding Group Gazprom Neft Gas businesscompanies The structureoftheGroup’s emissionsisdeterminedbythe The Group’s stepstostoppollutants companies takeallnecessary Nitrogen oxides Carbon monoxide (including methane) Hydrocarbons substances Other gaseousandliquid Solids Volatile organiccompounds Sulphur dioxide including PJSC Gazprom

Pollutant Emissions Pollutant Reducing Air: 1,542.64 596.42 221.46 124.76 Gazprom 307.71 67.47 Group 2.24

Gas business 1,478.94 companies 365.70 184.13 59.48 26.40 0.86 3.78

companies. Groupandgasbusiness commonly associatedwiththeGazpromNeft energy segment,whileemissionsofvolatileorganiccompoundsare and sulphurdioxide.SolidemissionscomemostlyfromGazprom’s hydrocarbons (includingmethane),carbonmonoxide,nitrogenoxides, other componentsofthenatural environment. ofsoilsand whichhasapositiveimpact onthepreservation reliability, Gazpromtakessystemicmeasurestoimprovetheir preservation. agrochemical, andothersurveys. of theGazpromGroup’s facilities.This includessoil,geobotanical, environmental standardsduringtheconstructionandreconstruction The reliability ofpipelinesystemsunderconstructioniskeytoland The reliability PJSC Gazprom 1,400.73 344.19 172.34 including 59.29 18.82 0.45 2.41

Neft Group Neft 199.46 Gazprom 62.59 92.97 16.60 37.55 23.18 0.23

217 Energoholding 109.89 Gazprom 46.33 94.42 26.67 0.30 0.24 0.01 Neftekhim Salavat Neftekhim Gazprom 14.54 5.98 4.59 5.09 0.87 0.76 1.15

1 5 3 4 2 6 Appendices Our Report 6.3.

Sulphur dioxide emissions decreased the most because of natural gas replacing coal and fuel oil in the fuel mix of Gazprom Energoholding’s

generating facilities. For more details on pollutant emissions see PJSC Gazprom Environmental Report 2019181

6.3.4. Biodiversity Preservation

was allocated by the Gazprom Group for the preservation of biodiversity, protection of designated natural areas, as well RUB 451.55 million as protection and replacement of fish reserves in 2019 fish were released into water bodies

million in 2019 eport 2019 26 R The Gazprom Group companies contribute to international, Russian The reporting year saw the following activities performed as part of the and local programs on plant and animal life protection in their regions of action plan to implement the Program: operation. studies of bacterial plankton, phytoplankton, zooplankton, PJSC Gazprom subsidiaries provide financing to the projects

ichthyoplankton, and benthos; ustainability

implemented in the Arctic in collaboration with the Russian Geographic S Society, including the monitoring of island ecosystems, preservation of populations of rare marine mammal species and the polar bear within ichthyological research; the designated conservation areas in the north-eastern part of the roup’s Barents Sea. G Gazprom is implementing the Biodiversity Preservation Program observations of marine mammals and bird fauna; Based on the List of Flora and Fauna Species Being Indicators of Marine 182

Ecosystems Stability in the Arctic Zone of the Russian Federation . Gazprom Atlantic and Pacific walrus studies; The Program contains PJSC Gazprom’s biodiversity preservation strategy and Actions plans to be carried out in the course of the Gazprom Group’s projects implementation at the Arctic continental shelf polar bear studies; of the Russian Federation, at inland sea waters, in the territorial waters, and contiguous zone of the Russian Federation. The Program was developed with the participation of leading vegetation studies; research and scientific institutes of the Russian Academy of Sciences, Russian Arctic National Park Federal State Budgetary Institution, and toxicological research. Marine Mammal Council Regional Public Organization.

GRI 304-3 Preservation of biodiversity and habitat of rare and endangered plant The Company takes action in several areas: and animal species is an integral part of the environmental activities modern technological solutions are applied to mitigate the carried out by Gazprom. Preventing damage to marine and terrestrial ecosystems is a precondition for the implementation of Gazprom’s projects. environmental impact of the production operations;

continuous environmental monitoring is performed;

biodiversity preservation programs are implemented both in the Company’s area of responsibility and in other Russian regions.

(181) Page 20–22, PJSC Gazprom Environmental Report 2019, https://www.gazprom.com/f/posts/72/802627/gazprom-environmental-report-2019-en.pdf (182) Developed in furtherance of the Order of the President of the Russian Federation following the meeting on effective and safe exploration of the Arctic held on June 5, 2014.

218 Gazprom Group’s Sustainability Report 2019 6.3. 90,000 fingerlings of Russian sturgeon – into the rivers of the Ob-Irtysh 90,000 fingerlingsofRussiansturgeon–intotheriversOb-Irtysh 580,000 fingerlingswerereleasedintotheKrasnoyarka river, over the Irkutsk,SakhalinandTyumen Regions.Ofthatamount,over sturgeon werereleasedintoseveral commercialwaterbodiesin including highlyvaluablespecies. populations. projects aimedatreplenishingbiologicalresourcesandrestoringfish In 2019, Gazpromcompanies completedanumberofenvironmental 6.3.4.1. operations onvulnerable ecosystemsandbiodiversity. 2019 sawnosignificantdirectorindirectimpact oftheGroupentities’ GRI 304-2 Group’s companies. bythe environmental statuslocatedontheterritoriespotentiallyaffected areasorsiteswithaspecial monitoring ofdesignatedconservation the protectionandreplacementoffishreserves. andprotectionofdesignatednaturalbiodiversity areas,aswellfor In 2019, RUB451.55 of millionwasallocatedforthepreservation Russia’s ArcticZone, determinethe number anddistributionareaof populationinthewesternsectorof study theconditionofnarwhal scale TimeoftheArcticprogram, thisenvironmentalprojecthelped Narhwhal: Legend oftheArcticproject.Partcompany’s large- Gazprom successfullycompletedthefirstexpeditionunder Neft observers onboardtomitigatetheriskofpossiblecollision. observers presenceof andobligatory speed restrictionformarinevessels,determinationofsafedistancesfrommammalstobeobserved, whales westsubpopulationintheRedListfromcriticallyendangered(CR)to(EN). ofNaturechanged thestatusofgrey basis ofdataobtainedthrough manyyearsofmonitoring,theInternationalUnionforConservation discovered. Partiallyduetothemeasurestakenreduceimpact, thenumberofthesewhalesinareaisnowalmost300.On dozengraymid-80s, abouttwo whalesbelonging,accordingtoscientists,theendangeredOkhotsk-Korean (western)population were away,bypassing theareasfrequentedbygiantmammals.In pipelineshadtobelaid30kmfurther facilities,theoffshore offshore tohydrocarbonfieldsfortheirsummerfeeding,andwhenSakhalinEnergycommencedtheconstructionofits use theareasinclosevicinity Sakhalin Energyhasbeenmonitoringgray whalessince2002.In2018, joinedthemonitoringprogram. Gray Gazpromneft-Sakhalin whales Over 1.5 millionfingerlingsofgrayling, Pacific salmon,andRussian In 2019, over26millionfishofvariousspecieswerereleased, The GazpromGroup’s OEMprograms includeenvironmental To preserve protected animal species and perform works safely, the Company takes a set of measures, such as the setting ofcorridorsand workssafely,theCompany takesasetofmeasures,suchasthesetting To protectedanimalspeciesandperform preserve Aquatic Animals Environmental Protection International EnvironmentalInitiativeTo SaveandPreserve . ofthe riveras part 2,000 fingerlings–wasreleasedintotheIrtysh 17th Mansi AutonomousArea–Yugra, thefirstbatchofyoungsturgeons– DistrictoftheKrasnodarMilashevsky basinintheSlavyansky Territory. and 118,000 young-of-the-yearcarpswerereleasedintotheBolshoi Over 170,000 fingerlingsofcarpwerereleasedintothe Zeya river, 27,000 fingerlingsofsterlet–intotheBelayariverinUsolskyDistrict. Water Reservoir, andover111,000 fingerlingsofpeledandgrayling and ofpeled–intotheAannyaakhriverVilyuisk Basin, over38,000larvae passages sothatnottohinderreindeermigration. bird protectiondevices.Linearstructuresareequippedwithspecial fish protectiondevices,andoverheadpowerlinesareequippedwith during springnestingseason,waterintakefacilitiesareequippedwith constructionworksaresuspended biodiversity, In ordertopreserve latitude Arctic. andtheirhabitatinthehigh- studyofnarwhals a program forfurther New dataobtainedduringtheexpeditionwillallowscientistto develop to now,therehasbeennocomprehensiveresearchofthenarwhal. program fortheirhabitat.Up the species,anddevelopaconservation Under thePreservationofSiberianSturgeonprojectinKhanty- 219 1 5 3 4 2 6 Appendices Our Report 6.3. Environmental Protection The development of LNG trade and fields on the continental shelf makes marine ecosystems, including coastal ones, vulnerable to man-made impact. We must minimize our impact on them and use the world’s ocean eport 2019 and subsoil resources rationally R

and with care. ustainability S

Anton Chumakov roup’s Head of Environmental Protection and Energy Saving Division, G Gazprom Flot LLC Gazprom

Ensures compliance of Gazprom Flot LLC’s activities with environmental protection and energy saving laws as regards the operation of ships, floating drilling rigs, and production sites. Co-author of a number of scientific articles on algology.

220 Gazprom Group’s Sustainability Report 2019 6.3. Environmental Protection 221 1 5 3 4 2 6 Appendices Our Report 6.3. Environmental Protection

6.3.4.2. Bird Life

To preserve biodiversity in the northern-latitude areas of its operations, Helicopter routes are set to avoid any harm to nesting sites. the Group uses bird protective devices. Suspension insulators are Bioengineering initiatives proposed by scientists are also in place to equipped with polymeric covers, and their cross-arms are grounded. preserve the bird population, including artificial roost sites and nesting Since 2004, Sakhalin Energy has been studying the population of the tree protection measures. To assess the efficiency of the activities Steller’s sea eagle in the areas of its production activities and has been carried out, the current monitoring results are compared against the protecting these birds of prey starting from the construction stage of its data obtained in previous years, as well as against the values of the facilities. For the duration of the nesting season and the period when same type observed in the control area which is not affected by the nestlings begin flying, the company established buffer zones where production facilities. operations and movement of vehicles were prohibited. Zones of this kind are also used now during the repair works at the facilities.

6.3.4.3. Impact on Designated Conservation Areas

GRI 304-1 eport 2019

The Gazprom Group’s facilities are located, inter alia, in or near Klyazminsky, Nadymsky, Priazovsky, Ryazansky, Saratovsky, Severo- R environmentally vulnerable and designated conservation areas (DCA). Osetinsky, Kurgalsky, Utrish state nature reserves and federal In this regard, mention must be made of the below territories: reservations; Anyuysky, Kislovodsky, Losiny Ostrov, Meshchersky, Nechkinsky,

Orlovskoye Polesye, Pleshcheevo Ozero, Pripyshminskiye Bory, some regional DCAs. ustainability Sochinsky, Ugra, Khvalynsky, Yugyd Va national parks; S The Group performs its activities in DCAs in full compliance with the national environmental protection legislation and land use terms and

conditions specified for a relevant DCA. roup’s G

Gazprom Transgaz Stavropol LLC developed a unique environmental project for the creation of a virtual 3D tour of the Strizhament state nature

reserve. The tour is designed primarily for people with disabilities. The project became the first-degree winner in the Environmental Education, Gazprom Awareness and Culture category of the EcoWorld international environmental competition established by the Russian Academy of Natural Sciences.

222 Gazprom Group’s Sustainability Report 2019 6.3. Gazprom Group’s wastegeneration, 2016–2019, thousandtons tons ofwaste,whichis6.1%lessthanin2018, asGazpromEnergoholding In 2019, theGazpromGroupcompanies produced3,337.08 thousand GRI 306-2 including wastetreatment: impact ontheenvironmentalmanagementsystemofPJSC Gazprom, The MasterPlanaddressesthefollowingkeychallengeswhichhavean 6.3.5. 4,130.29 4,289.81 95.3 for 50%,36%and8%oftotalwaste generated, respectively. andPJSCGazprom Energoholding, Neft, Gazpromaccount Consumption WasteManagementatPJSC Facilities Gazprom’s in achieved. seek toreducetheshareofwastesentforburial.In2019, thistargetwas Among otherthings,theCorporate EnvironmentalTargets for2017–2019 out forthenegativeenvironmentalimpact. waste treatmentlegislation,aswellintostandardsandnormsset amendmentswhichintroduceconsiderable changesinto regulatory East, seashelf)withnowastetreatmentinfrastructure available; natural EasternSiberia,Far andclimaticconditions(theFar North, location oftheCompany’s productioncapacities inareaswithharsh result ofaconsiderable man-causedimpact ontheenvironment; challenging environmentalsituationinsomeregionsofRussiaasa The activitiesaregovernedbytheMasterPlanforProductionand %

Waste Reduction Reduction Waste hazardous waste hazard non- andvirtually production wasteare low- of theGazprom Group’s Environmental Protection 017 2 2016 22

of Hazard Class V bottom ash waste by 22%. ashwasteby22%. of HazardClassVbottom replaced coalwithnatural gasinitsfuelmix,thusreducingthegeneration follows: PJSC Gazprom’s areasofwastemanagementactivitiesareas priority waste disposalandneutralization. regional specificsandleverages thebestavailabletechnologiesin the Groupoptimizesitswastetreatmentactivitiesadaptingthemto Various RegionsofRussia.To reducetheshareofwastesentforburial, ,3. 8 3,337.0 3,555.09 activities. to minimizewastegeneration inthecourseofPJSC Gazprom’s core introducing thebestavailabletechnologiesorzerowastesolutions andrecyclingforsubsequentuseintheproductionprocess; recovery achieving maximumbeneficialuseofgenerated wastethrough waste % 223 in 2016–2019 by theGazprom Group waste reduction 2019 2018 1 5 3 4 2 6 Appendices Our Report 6.3. Environmental Protection

Gazprom Group companies’ share in waste generation, 2019, %

Gazprom Energoholding 50%

Gazprom Neft Group 36% Other gas business 4%

PJSC Gazprom 8% Gazprom Neftekhim Salavat 2%

The majority of waste belongs to Hazard Classes IV and V. eport 2019 R Gazprom Group’s waste production by hazard class, 2019, % ustainability S

Hazard Class V 56.58% roup’s roup’s G

Hazard Class IV 38.75 % Hazard Class II 0.03% Gazprom Hazard Class III 4.63% Hazard Class I 0.01%

Gazprom Group companies’ waste generation trend by hazard class, 2016–2019, thousand tons 2016 2 017 2018 2019 Total waste generated in the reporting period 4,289.81 4,130.29 3,555.09 3,337.08 Hazard Class I 0.21 0.27 0.21 0.24 Hazard Class II 8.81 0.75 0.78 0.83 Hazard Class III 102.11 94.26 84.82 154.59 Hazard Class IV 1,036.46 1,294.65 1,200.48 1,293.21 Hazard Class V 3,142.22 2,740.36 2,268.80 1,888.21 For more details on generation and handling of production and consumption waste by the Gazprom Group see Appendix 7.

At the Gazprom Group, most of the waste are bottom ash waste of 93.96 thousand tons, including 9 facilities at the Gazprom Neft Group Gazprom Energoholding (solid coal combustion products generated by and one facility at PJSC Gazprom (waste thermal treatment facility TPPs), as well as drilling waste and oil sludge mainly generated by oil at Gazprom Energo LLC). OJSC Tomskgazprom put into operation and gas production and processing facilities. one landfill site with an annual capacity of 0.23 thousand tons for the In 2019, the Gazprom Group brought onstream 10 waste disposal, neutralization and dumping of industrial, household and other neutralization and recycling facilities with a total annual capacity of waste.

224 Gazprom Group’s Sustainability Report 2019 6.3. Handling ofoil-contaminatedwasteattheGazprom Group, 2019, % Group Gazprom Neft Oil-contaminated wastegeneration withintheGazprom Group, 2019, % environmentally safetreatmentofoil-contaminatedwaste. The GazpromGroupcompanies tothe pay closeattention 6.3.5.1. disposal andneutralization fortratment,Handed overtothirdparties year,reporting includingstorage facilities Present attheenterpriseasofend production companies. and operation fortheGroup’s ofwellsisatoppriority oilandgas Environmentally safedisposalofdrillingwasteduringtheconstruction 7 GRI OG 6.3.5.2. 216.55 thousandtonsgenerated, and0.13 thousandtonsreceivedfrom (including 74.67 thousandtonspresentatthebeginningofyear, In 2019, atotalof291.35 thousandtonsofoil-contaminatedwaste G as business Oil-Contaminated Waste 5 90 Environmental Protection 33 35 Drilling Waste % % % % of thisvolume),whichismarginally(1.5%) lessthanin2018. Groupaccountingfor90% contaminated waste(withtheGazpromNeft year,In thereporting theGroupproduced216.55 thousandtonsofoil- organizations forutilization,neutralization, andsafedumping. Of thistotalvolume,65%ofwastewashandedovertospecialized other entities)wereincirculationattheGazpromGroup’s facilities. Gazprom Neftekhim Salavat Gazprom Neftekhim Gazprom Energoholding Handed over to third parties fordumping Handed overtothirdparties 225 2 3 32 % % % 1 5 3 4 2 6 Appendices Our Report 6.3. Environmental Protection

Gazprom Group’s drilling waste generation and handling trend, 2016–2019, thousand tons Indicator 2016 2 017 2018 2019 Drilling waste generated 752.12 947.60 748.00 887.85 Received from other business entities 0.00 0.00 9.14 61.83 Treated at the enterprise 0.00 0.00 0.00 0.00 Recycled at the enterprise 121.34 86.84 0.00 0.00 Neutralized at the enterprise 9.75 5.14 1.27 0.00 Handed over to third parties, total, including: 561.34 731.29 688.88 790.43 for treatment 0.00 0.00 0.33 0.00 for recycling 242.80 620.41 596.45 727.32 for neutralization 318.54 110.88 92.10 63.11 for storage 0.00 0.00 0.00 0.00 for burial 0.00 0.00 0.00 0.00 eport 2019 Placed at own storage facilities 2.37 6.80 0.00 61.83 R Disposed at own waste burial facilities 77.00 49.76 59.28 57.03

In 2019, a total of 1,065.9 thousand tons of drilling waste (including were in circulation; of this total volume, 74% (790.4 thousand tons) ustainability S 116.2 thousand tons present at the beginning of the year, 887.9 thousand of waste was handed over to specialized licensed organizations for tons generated, and 61.8 thousand tons received from other entities) recycling and neutralization, as well as for safe dumping. roup’s roup’s G

Handling of drilling waste at the Gazprom Group, 2019, % Gazprom

Handed over to third parties for treatment, disposal and neutralization 74 %

Present at the enterprise as of the end of reporting year, including storage facilities 21% Disposal at own dumping facilities 5%

During the pre-development of fields in the challenging natural and and pit-free drilling method for the construction of wells. The drilling climatic conditions of the Far North, the Gazprom Group actively waste recycling technologies that produce mineral construction implements design solutions to mitigate the impact of drilling operations materials for general construction works in the course of field pre- on ecosystems. The Group develops and uses low toxic drilling muds development are increasingly being used.

6.3.5.3. Transportation of Hazardous Waste

Waste is transported and handed over to third parties for subsequent use, neutralization, or dumping by the forces of specialized organizations licensed for these activities.

226 Gazprom Group’s Sustainability Report 2019 186,894.18 6.50 167,69 7,299.58 17 83,645.63 6.3. oil spillresponsedrillsandexercises acrossitsproductionfacilities. bodies. Eachyear, of Groupconductsawidevariety theGazpromNeft regularly withtheparticipation of therepresentativesstateexecutive classroom trainings, drillsandemergencyresponseexercisesare held To foremergency situationsofvariouscategories, prepare thestaff a 24/7 operates Dispatcher ona24/7 basis.The Service Duty basis. the EmergencySituations(ES)CoordinationTeam on -areonduty and emergencymanagementunits-theCrisisResponseTeam and in constantreadinessatallproductionfacilities.Membersofcrisis Volunteeremergencyresponseteamsaremaintained Gazprom Neft. oftheCleanTerritorywith rustpreventersaspart project. and replaced,6,325kmmonitoredforcorrosion,4,238 kmtreated diagnostics. replacement ofpipelinesectionsproceedingfromtheresults of their preventive the operational lifeofpipelinesystems, aswelltoperform includes themeasuresrequiredtoassess,monitor, forecast,andextend program,reliability includingtheCleanTerritory project.The program place asystemofefficientmeasuresforoilspillresponse. the activitiestobecarriedoutpreventoilspills.The Group alsohasin principle,theGazpromGrouporganizes Adhering totheprecautionary forces (license) transported byown The ofwastesHazard weight ClassesI–VtransportedbytheGazprom Group companiesinRussiatotalled ofwastes(HazardWeight ClassesI–V)transportedbyPJSC Gazprom subsidiariesinRussia,2016–2019 6.3.6. tons bythirdparties, ofwastesHazardClassesI–Vtransported Weight byownforces(license),tons ofwastesHazardClassesI–Vtransported Weight Oil spillmanagementandresponsebodiesarealsoinplaceat 2019 saw3,939kmofpipelinesdiagnosed,110 kmreconstructed continuestheimplementationofitstargetedpipeline Gazprom Neft 40,310.88 Environmental Protection and Response to Oil Spills Prevention of 2016 017 2 tons

149,597.26 253,142.45 230,838.79 37,986.26 parties transported bythird resistant offshore platforms seeksto: platforms resistant offshore Gazprom’s policydesignedforapplicationintheeventofoilspills atice- compensate forenvironmental damagefromoilspills. minimize wastegeneration; than anoilspillwhenaddressingit; minimize environmentaldamageandavoidcausingmore resources andfinancialresources; and manpower;mobilizeadditionalresources,manpower, material make thebestuseofoilspillcontainmentandresponseresources possible; contain anoilspillasfastpossibleandclosetoitssource as stop anoilspillatitssource; protect thelivesandhealthofemployeeslocalcommunities; 103175949 9.4 5 1,7 3 1,0 227 tons 2018 2019 1 5 3 4 2 6 Appendices Our Report 6.4. Initiatives to Increase Employee Engagement in Environmental Conservation

The Company’s responsibility for the health of our planet starts with In 2019, Gazprom Corporate Institute and other educational personal responsibility of each employee. The Gazprom Group takes institutions provided training and professional development courses systemic steps to increase environmental awareness among its to 7,783 employees of Gazprom (2,369 of them received training in the managers and specialists, environmental officers, and employees of EMS), including 5,205 employees of PJSC Gazprom and its subsidiaries the structural units which are not directly involved in environmental (2,250 of them received training in the EMS), 1,553 employees of the protection. Gazprom Neft Group (75 of them received training in the EMS), and 295 employees of Gazprom Energoholding.

Environmental training of the Gazprom Group’s employees, 2016–2019, persons 9,262 8,679 3,769 4,020 2016 2018 eport 2019 9,381 7,78 3 R ustainability 4,383 2,369 S 2 017 2019 roup’s roup’s

Number of employees who received environmental training G Including employees who received training in the EMS

At PJSC Gazprom, managers and new hires received training in the EMS Gazprom and corporate environmental policy.

For more details on training programs completed by the managers and experts of environmental services at PJSC Gazprom subsidiaries and environmental protection courses within the scope of professional development programs see PJSC Gazprom Environmental Report 2019183

GRI 102-44 Questions from Stakeholders What environmental initiatives PJSC Gazprom promotes the strategy of voluntary environmental commitment and for many years has been are run by the Gazprom implementing extensive action plans for additional environmental protection activities across its regions Group? What projects were of operation. These activities include both organization of and participation in environmental contests, implemented in 2019? workshops, meetings, campaigns, and clean-up days. Projects of this kind aim to develop ecological culture, education, training, and help PJSC Gazprom create reputation of a green and socially responsible company. Throughout 2019, employees of PJSC Gazprom subsidiaries jointly with the Vernadsky Non-Governmental Environmental Foundation participated in such projects as the Best Eco-Volunteer Team National Contest, Green Spring 2 019 National Environmental Clean-up, Bike to Work National Days, Environmental Culture. Peace and Harmony International Contest, contest for the Vernadsky National Environmental Award, and #TogetherBrighter All-Russian Energy Conservation Festival. Each year, PJSC Gazprom’s green production initiatives and voluntary environmental commitments win recognition from non-profit organizations and local and regional authorities.

(183) Pages 10–11, PJSC Gazprom Environmental Report 2019, https://www.gazprom.com/f/posts/72/802627/gazprom-environmental-report-2019-en.pdf

228 Gazprom Group’s Sustainability Report 2019 6.5. (184) andimpartiality. promptdisclosure,regularity, reliability, to awiderange ofstakeholdersandisbasedonsuchcriteriaas Information ontheGazpromGroup’s environmentalactivitiesisavailable planet forthefutureofour environmental cultureandpersonalresponsibility generation andhelpRussianpeopleunderstandthesignificanceofan promote environmentalawarenessandeducationamongtheyounger audience interestedinecology.The projectiswell-timedas it looksto from GazpromTransgaz LLC, Ukhta thebookisintendedforabroad or Boomerang inMoscow.Published Effect withthefinancialsupport of theseremoteterritories,manywhichareRedListspecies. uniquelandscapes,andinhabitants history, chapters oftheArcticNorth Governmental EnvironmentalFoundation –andintroducesthe unknown Dobycha Yamburg bytheVernadskyNon- LLC andsupported –aprojectinitiatedbyGazprom the GydanskyStateNatureReserve The bookcontainsabout500picturesshotduringa2016 expeditionto presentedtheUntouchedYamal. WondrousGydanphotoalbum. Arts of prospectivebusinessactivities. discussions basedontheresultsofenvironmentalimpact assessment provides therecommendationsforconductingpublichearingsand legal gapbyadoptingacorporate standardizationdocumentwhich procedure ofsuchdiscussions.In2014, PJSC Gazpromaddressedthis investment projects,althoughtherearenoregulationsstipulatingthe ofPJSC forthemajority discussions aremandatory Gazprom’s Public hearingsanddiscussions.UndertheRussianlaws,public activities. 2019 saw10,657 positivepublicationsinmassmediaandontheInternetassociatedwithenvironmentalaspectsofGazpromGroup’s June 2019 sawpresentationofthebookentitledExcitingEcology Books. InSeptember2019, MuseumofFine UrengoyCity theNovy Pages 70-71, PJSC 2019, GazpromEnvironmentalReport https://www.gazprom.com/f/posts/72/802627/gazprom-environmental-report-2019-en.pdf . Information Transparency Environmental regional, andlocalauthorities,educationalinstitutionsNGOs. ofappreciationfromfederal, ofmerit,diplomas,andletters certificates regions ofoperation havebeenrecognizedbynumerousawards, Information. Environmental Management,Impact, andDisclosure of initsthree sections: WWF Russia),showingstrongperformance of OilandGasCompanies (ajointprojectofCREONGroup and building investmentportfolios. financial institutionsandinvestorsthatrelyonsuchinformationwhen strategy onGHGemissionsandwaterresourcemanagementtoglobal Disclosure Project (CDP),PJSC Gazpromdemonstrates itscorporate by independentexperts. The efficiencyofthecorporate policyinthisspherehasbeenconfirmed companies and7countriesoftheworld. (ESGI-2019), by176 whichwasattended leadingspecialistsfrom94 InternationalConference inGasIndustry the 6thEnvironmentalSafety For instance,inDecember2019,matters. LLC GazpromVNIIGAZ hosted in conferences,forums,androundtablesonenvironmentalprotection events. The representativesoftheGazpromGrouptakeanactivepart Gazprom business presenting itspositionatindustry-specific Gazprom’s efforts toimprovetheenvironmentalsituationinits Gazprom’s efforts Sakhalin EnergytoppedtheEnvironmentalTransparency Rating intheclimateandwaterprogramsBy takingpart oftheCarbon Gazprom’s informationtransparency asviewedbyexperts. Gazprom Environmental Report 2019Gazprom EnvironmentalReport For moredetailsonGazprom’s environmentalinformationtransparency seePJSC

229 184

1 5 3 4 2 6 Appendices Our Report 6.5. Initiatives to Increase Employee Engagement in Environmental Conservation For Gazprom, mitigating negative environmental impacts and preserving precious natural resources is not just a task, but rather a conscious choice. We are responsible for the well-being of the planet. eport 2019 Andrey Teplyakov R Head of PR Service, Gazprom Dobycha Nadym LLC ustainability

In his work, actively implements environmental projects. One of the initiators and organizers of the Ecopark interactive educational platform in S Nadym. Coordinator of Gazprom’s effort to support an environmental expedition to clean up Bely Island in the Kara Sea in 2014. Participant in the Arghish Disappears over the Horizon project to arrange the crossing of the Bovanenkovo oil and gas condensate field’s utility lines by reindeer herds roup’s roup’s

(an award winner of the Peace and Harmony international contest of environmental initiatives). G Gazprom

230 Gazprom Group’s Sustainability Report 2019 6.5. Initiatives toInitiatives Increase Employee Engagement in Environmental Conservation 231 1 5 3 4 2 6 Appendices Our Report 6.6. International Environmental and Climate Cooperation

PJSC Gazprom takes an active part in international events to PJSC Gazprom’s experience in low-carbon development and possible communicate its position on sustainable development to its foreign contribution of natural gas to the EU Green Deal were addressed at peers, and to exchange experience with them. events held by the Global Gas Centre (GGC) in 2019. The role of natural gas in low-carbon development. The Company and its key foreign partners run standing Joint PJSC Gazprom provided information on its nature protection activities Coordination Committees and Joint Working Groups to deliberate on and the role of natural gas in low-carbon development at, inter alia, the role of natural gas in low-carbon development. target meetings with investors and road shows with the participation of Hydrogen technologies. PJSC Gazprom’s activities in the sphere an independent director of PJSC Gazprom. of hydrogen technologies were discussed at the sessions of the Work The 22nd annual General Meeting of the International Business Stream “Internal markets” of the EU – Russia Gas Advisory Council, the Congress (IBC) held in May 2019 in Bonn, Germany, declared “Natural French Gas Association Conference “Hydrogen and Natural Gas — the Gas – Paving the Way to an Ecological Economy” as its key topic. Way towards Low Carbon Economy”, the International Partner Meeting Environmental benefits of natural gas were discussed at the sessions of the Energy Delta Institute “Hydrogen — a Paradigm Shift in the of dedicated IBC committees, namely, the “Industry, Innovations, and Energy Sector, the Future?”, session of the Group “Economy, Trade and Prospective Development”, “Ecology and Healthcare”, and “Energy” Resources” of the Russia – Republic of Korea Dialogue, and at other committees. events. New opportunities for the natural gas market in the context of the Hydrogen production and utilization technologies, using hydrogen low-carbon trend in the global economy were also discussed as part of to decarbonize natural gas, and other hydrogen-related topics are the activities of the International Gas Union (IGU). Among other things, discussed with foreign partners at the meetings of Joint Coordination this dialogue took place at the task force sessions “Long-term strategy in Committees and Joint Working Groups. eport 2019

environment-conscious market” and “Supporting hydrogen economy”. In 2019, negotiations on hydrogen-related issues were ongoing with R The representatives of PJSC Gazprom delivered reports on natural foreign companies and stakeholders, including the negotiations under gas potential to meet climate goals at the following focus events: the R&D cooperation programs with VNG AG, Uniper, Wintershall Dea, the 12th Russian-German Resource Forum, Energy Dialogue at the Gasunie, ENGIE, Shell, Linde, and BASF. Reichstag, Session of the UNECE Committee on Sustainable Energy, Workshop of the International Energy Agency. ustainability S roup’s roup’s G Gazprom

232 Gazprom Group’s Sustainability Report 2019 Appendices 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. Our Report section Report Our Index Content GRI Contacts and Feedback and Contacts Consultations Public Following Issued Opinion Approval by FBK Entrepreneurs and Industrialists of Union Russian the of Assurance Report the in Names used Code and Abbreviations of Glossary section T T T T T o Our Responsibility to Planet the o Our Workplace section Safety section Personnel Our o section Operations Our o Governance Our o section

266 277 234 263 268 253 253 280 250 250 257 278 282 274 Appendix 1. GRI Content Index

GRI 102-55

Standard / Disclosure / SDG Standard name / Disclosure Location in the Report Page name GRI 101 Foundation (2016) Appendix 2. To Our Report section 250

GRI 102: General Disclosures (2016). Organizational profile GRI 102-1 Name of the organization Our Operations / Gazprom Group’s Business Model 63 GRI 102-2 Activities, brands, products, and Our Operations / Gazprom Group’s Business Model 63 SDG 2, 7, 8, 9, 16, 17 services See p. 236–260, Quarterly Issuer’s Report as of Q1 2020 (in Russian): https://www.gazprom.ru/f/posts/05/118974/ gazprom-emitent-report-1q-2020.pdf GRI 102-3 Location of headquarters Our Operations / Gazprom Group’s Business Model 63 GRI 102-4 Location of operations Our Operations / Gazprom Group’s Business Model 63 eport 2019

SDG 7, 17 See p. 32–33, Operations and Marketing Geography, R PJSC Gazprom Annual Report 2019: https://www.gazprom. com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf See p. 95–98, Gazprom in Figures 2015–2019 Factbook, https://www.gazprom.com/f/posts/72/802627/gazprom-in- figures-2015-2019-en.pdf ustainability S GRI 102-5 Ownership and legal form Our Operations / Gazprom Group’s Business Model 63

GRI 102-6 Markets served See p. 25, Quarterly Issuer’s Report as of Q4 2019 (in – roup’s SDG 7, 17 Russian): https://www.gazprom.ru/f/posts/77/885487/ G gazprom-emitent-report-4q-2019.pdf See p. 32–33, Operations and Marketing Geography, PJSC

Gazprom Annual Report 2019: Gazprom https://www.gazprom.com/f/posts/72/802627/gazprom- annual-report-2019-en.pdf See p. 95–98, Gazprom in Figures 2015–2019 Factbook, https://www.gazprom.com/f/posts/72/802627/gazprom-in- figures-2015-2019-en.pdf

234 Gazprom Group’s Sustainability Report 2019 GRI 102-14 GRI 102: General Disclosures (2016). Strategy GRI 102-10 SDG 16, 17 RUIE –3.3.5. GRI 102-13 GRI 102-9 SDG 7, 8,9,17 GRI 102-7 SDG 16, 17 RUIE –3.3.4. GRI 102-12 SDG 8 SDG 8 RUIE –3.1.1. GRI 102-8 Standard /Disclosure /SDG 1.Appendix GRI Content Index GRI 102-11

maker Statement fromseniordecision- organization anditssupplychain Significant changestothe Membership ofassociations Supply chain Scale oftheorganization External initiatives other workers Information onemployeesand name Standard name/Disclosure approach Precautionary Principle or Committee Message fromtheChairmanofGazpromManagement gazprom-emitent-report-1q-2019.pdf (in Russian):https://www.gazprom.ru/f/posts/77/885487/ Issuer’s asofQ12019See p.95,Quarterly Report Management Our Governance/Sustainability gazprom-emitent-report-1q-2020.pdf (in Russian):https://www.gazprom.ru/f/posts/05/118974/ Issuer’s asofQ12020 See p.50–52,Quarterly Report annual-report-2019-en.pdf https://www.gazprom.com/f/posts/72/802627/gazprom- See p.40,PJSC 2019: GazpromAnnualReport Development Our Operations /Contribution toNationalIndustrial annual-report-2019-en.pdf https://www.gazprom.com/f/posts/72/802627/gazprom- See p.23, PJSC 2019: GazpromAnnualReport Our Personnel /HRManagement Achievement ofUNSDGs Group’sContribution /Gazprom tothe Our Report annual-report-2019-en.pdf https://www.gazprom.com/f/posts/72/802627/gazprom- See p.141, Personnel, PJSC 2019: GazpromAnnualReport Our Personnel /Headcount Location intheReport Precautionary Principle tothePlanet/Precautionary Our Responsibility Appendix 4. Our Personnel / Our Operations / Our Operations / Our Operations / gazprom-ifrs-2019-12m-en.pdf 2019: https://www.gazprom.com/f/posts/72/802627/ Standards(IFRS)asofDecember 31,Financial Reporting statements prepared inaccordancewithInternational See p.8oftheBalancesheetinconsolidatedfinancial associated organizationsandjointventures–53. of organizations:subsidiaries–333,jointoperations –7, statements includedtheindicatorsoffollowingnumber As ofDecember31, 2019, theIFRSconsolidatedfinancial T o OurOperations section Headcount Heat and Electricity GenerationHeat andElectricity Group’sBusinessModel Gazprom Contribution toNationalEconomy 235 258–261 1 114 , 112 49–50 P age 5–6 188 101 112 111 22 69 99 63 1 5 3 4 2 6 Appendices Our Report Appendix 1. GRI Content Index

Standard / Disclosure / SDG Standard name / Disclosure Location in the Report Page name GRI 102-15 Key impacts, risks, and Our Report / Gazprom Group’s Contribution to the 22–40 opportunities Achievement of UN SDGs Our Governance / Sustainability Management 49 Our Responsibility to the Planet / Gazprom’s risks and 209–210 opportunities due to climate change Appendix 3. To Our Governance section 253–256 GRI 102: General Disclosures (2016). Ethics and integrity GRI 102-16 Values, principles, standards, and Our Governance / Sustainability Management 42 norms of behaviour Our Governance / Values, Standards, and Norms of 54 Behaviour Our Operations / Mission and Strategy 62 GRI 102-17 Mechanisms for advice and Our Governance / Values, Standards, and Norms of 54, 59 SDG 16 concerns about ethics Behaviour GRI 102: General Disclosures (2016). Governance eport 2019

GRI 102-18 Governance structure Our Governance / Corporate Governance 51 R See p. 170, PJSC Gazprom’s Corporate Governance Model, PJSC Gazprom Annual Report 2019: https://www.gazprom. com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf

GRI 102-19 Delegating authority Our Governance / Sustainability Management 48 ustainability S GRI 102-20 Executive-level responsibility for Our Governance / Sustainability Management 48 economic, environmental, and

social topics roup’s G GRI 102-21 Consulting stakeholders on Our Governance / Corporate Governance 52 SDG 17 economic, environmental, and social topics Gazprom

GRI 102-22 Composition of the highest Our Governance / Corporate Governance 51 SDG 5 governance body and its See p. 187–208, Quarterly Issuer’s Report as of Q4 2019 committees (in Russian): https://www.gazprom.ru/f/posts/77/885487/ gazprom-emitent-report-4q-2019.pdf See p. 41–47, PJSC Gazprom’s Board of Directors and PJSC Gazprom’s Management Committee, PJSC Gazprom Annual Report 2019: https://www.gazprom.com/f/ posts/72/802627/gazprom-annual-report-2019-en.pdf See p. 171–176, PJSC Gazprom’s Corporate Governance Model, PJSC Gazprom Annual Report 2019: https://www. gazprom.com/f/posts/72/802627/gazprom-annual-report- 2019-en.pdf GRI 102-23 Chair of the highest governance The chair of the highest governance body is not an executive – body officer in the organization. GRI 102-24 Nominating and selecting the Our Governance / Corporate Governance 51 SDG 5 highest governance body

236 Gazprom Group’s Sustainability Report 2019 GRI 102-28 GRI 102-32 GRI 102-26 GRI 102-31 SDG 16 GRI 102-25 GRI 102-30 Standard /Disclosure /SDG 1.Appendix GRI Content Index

sustainability reporting sustainability Highest governancebody’s rolein strategy purpose,values,and in setting Role ofhighestgovernancebody environmental, andsocialtopics Review ofeconomic, Conflicts ofinterest processes ofriskmanagement Effectiveness name Standard name/Disclosure body’s performance Evaluating thehighestgovernance Our Report board-of-directors-2020-06-26-en.pdf https://www.gazprom.com/f/posts/74/562608/regulations- PJSC Gazprom See page 4oftheRegulationonBoardDirectors Our Operations /MissionandStrategy Our Governance/Corporate Governance Management Our Governance/Sustainability com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf PJSC 2019: GazpromAnnualReport https://www.gazprom. Gazprom’s DevelopmentinPriority BusinessAreas, See p.177–179, onPJSC BoardofDirectors’Report com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf PJSC 2019: GazpromAnnualReport https://www.gazprom. See p.172, PJSC Gazprom’s Corporate GovernanceModel, Our Governance/Corporate Governance posts/72/802627/gazprom-annual-report-2019-en.pdf 2019:Annual Report https://www.gazprom.com/f/ See p.201–206, PJSC Anti-CorruptionEfforts, Gazprom posts/72/802627/gazprom-ifrs-2019-12m-en.pdf as ofDecember31, 2019: https://www.gazprom.com/f/ See p.62oftheIFRSconsolidatedfinancialstatements gazprom-emitent-report-4q-2019.pdf (in Russian):https://www.gazprom.ru/f/posts/77/885487/ See p.187–208, Issuer’s asofQ42019 Quarterly Report board-of-directors-2020-06-26-en.pdf https://www.gazprom.com/f/posts/74/562608/regulations- Directors ofPJSC Gazprom See clauses5.5and5.7oftheRegulationonBoard of Behaviour Our Governance/Values,Principles,Standards,andNorms posts/72/802627/gazprom-annual-report-2019-en.pdf 2019:Gazprom AnnualReport https://www.gazprom.com/f/ See p.191–193, RiskManagementandInternalControl,PJSC Our Governance/RiskManagementandInternalControls Location intheReport Our Governance/Corporate Governance 237 48–49 P age 62 52 54 52 52 51 9 1 5 3 4 2 6 Appendices Our Report Appendix 1. GRI Content Index

Standard / Disclosure / SDG Standard name / Disclosure Location in the Report Page name GRI 102-33 Communicating critical concerns Our Governance / Corporate Governance 52 See p. 172, PJSC Gazprom’s Corporate Governance Model, PJSC Gazprom Annual Report 2019: https://www.gazprom. com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf See p. 177–179, Board of Directors’ Report on PJSC Gazprom’s Development in Priority Business Areas, PJSC Gazprom Annual Report 2019: https://www.gazprom. com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf GRI 102-34 Nature and total number of critical Our Governance / Corporate Governance 52 concerns See p. 172, PJSC Gazprom’s Corporate Governance Model, PJSC Gazprom Annual Report 2019: https://www.gazprom. com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf See p. 177–179, Board of Directors’ Report on PJSC Gazprom’s Development in Priority Business Areas, PJSC Gazprom Annual Report 2019: https://www.gazprom. com/f/posts/72/802627/gazprom-annual-report-2019-en.pdf eport 2019 GRI 102-35 Remuneration policies Our Governance / Corporate Governance 52 R See p. 180–184, Remuneration of Members of Governing and Supervisory Bodies, PJSC Gazprom Annual Report 2019: https://www.gazprom.com/f/posts/72/802627/

gazprom-annual-report-2019-en.pdf ustainability S GRI 102-37 Stakeholders’ involvement in Our Governance / Corporate Governance 52 remuneration See p. 180–184, Remuneration of Members of Governing

and Supervisory Bodies, PJSC Gazprom Annual Report roup’s 2019: https://www.gazprom.com/f/posts/72/802627/ G gazprom-annual-report-2019-en.pdf GRI 102: General Disclosures (2016). Stakeholder engagement Gazprom GRI 102-40 List of stakeholder groups Our Report 16 GRI 102-41 Collective bargaining agreements Our Personnel / Social Partnership and Collective Agreement 121 RUIE – 3.1.4. SDG 3, 4, 5, 8, 10 GRI 102-42 Identifying and selecting Our Report 15–17 stakeholders GRI 102-43 Approach to stakeholder Our Report 18–21 SDG 16 engagement

238 Gazprom Group’s Sustainability Report 2019 GRI 102-46 GRI 102-51 GRI 102-45 GRI 102: General Disclosures (2016). practice Reporting GRI 102-50 GRI 102-48 GRI 102-44 GRI 102-49 GRI 102-47 Standard /Disclosure /SDG 1.Appendix GRI Content Index Boundaries contentandtopic Defining report Date ofmostrecentreport consolidated financialstatements Entities includedinthe Reporting period Reporting Key topicsandconcernsraised Changes inreporting List ofmaterialtopics name Standard name/Disclosure Restatements ofinformation persons inchargeofmanagingtherespectivetopics. ofeachmaterialtopicwasdefinedbythe The boundary Appendix 2. Our Report Our Report gazprom-ifrs-2019-12m-en.pdf is available):https://www.gazprom.com/f/posts/72/802627/ (IFRS) asofDecember31, 2019 (thelistofmajorsubsidiaries Standards accordance withInternationalFinancialReporting See p.57 oftheconsolidatedfinancialstatementsprepared in Our Report Our Report Employee EngagementinEnvironmentalConservation tothePlanet/InitiativesIncrease Our Responsibility ofCultureandArts Our SocialInitiatives/Support Schoolchildren andStudents Our Personnel /Future Professionals:Training of Our Operations /InnovationsandR&D Development Our Operations /Contribution toNationalIndustrial Resource BaseReplenishment Our Operations /OilandGasCondensate Reserves. Our Operations /GasProduction Our Operations /Contribution toNationalEconomy Our Report previous year. There werenosignificantchangesoftheboundariesversus /ProcedureforDefiningMaterial Our Report Topics Freedom ofassociationandcollectivebargaining Indigenous peoplesinGazpromGroup’s areasofoperations, presence inthelabourmarketandemploymentimpact, GazpromGroup’smanagement, Respectofhumanrights, projects,Quality Implementation ofmajorgastransportation Additional topicsincludedinthelistofmaterialtopics: of stakeholderengagementprocesses. The listofmaterialtopicswasrevisedandupdatedonthebasis Our Report Location intheReport There were no restatements in the reporting period. There werenorestatementsinthereporting T o Our Report section o OurReport 239 250–252 10–12 14–15 P age 228 102 132 107 178 10 76 76 10 13 71 – 9 9 1 5 3 4 2 6 Appendices Our Report Appendix 1. GRI Content Index

Standard / Disclosure / SDG Standard name / Disclosure Location in the Report Page name GRI 102-52 Reporting cycle Our Report 9 GRI 102-53 Contact point for questions Contacts and Feedback 282 regarding the report GRI 102-54 Claims of reporting in accordance This Report has been prepared in accordance 9 with the GRI Standards with the GRI Standards: Core option. GRI 102-55 GRI Content Index Appendix 1. GRI Content Index 234–249 GRI 102-56 External assurance Our Report 9 Appendix 10. Approval by FBK 278–279 GRI 103: Management approach (2016) GRI 103-1 Explanation of the material topic Our Report 10–15 and its Boundary Appendix 2. To Our Report section 250-252 eport 2019 R ustainability S roup’s roup’s G Gazprom

240 Gazprom Group’s Sustainability Report 2019 SDG 1–17 RUIE –1.1. GRI 103-2 Standard /Disclosure /SDG 1.Appendix GRI Content Index

its components The managementapproachand name Standard name/Disclosure submitted in the reporting period. inthereporting submitted No complaintswithregardtotheGroup’s operations were (material topics11, 12, 13, 14, 16) tothePlanet /EnvironmentalProtection Our Responsibility Change (materialtopics9,11, 15) tothePlanet /Combating Climate Our Responsibility ConstructiveGazprom: Collaboration (materialtopic24) and Our SocialInitiatives/IndigenousMinoritiesoftheNorth (material topic23, 25) Our SocialInitiatives/Cooperation withtheRegions (materialtopic29) Occupational, Industrial,andFireSafety /Control ofContractorsOur WorkplaceSafety inRelationto topic 28) Management(material /LabourSafety Our WorkplaceSafety (material topic21) Our Personnel /Commitment toLabourRights (material topic20) Our Personnel /Non-FinancialIncentives /SocialPolicy (material topic19) in theDevelopmentofaNationalSystemQualifications Young EmployeesofGazprom/Talent Pool/ Participation Professionals: Training ofSchoolchildrenandStudents/ Our Personnel /Employeedevelopment /Future (material topic18) Our Personnel /SocialPartnershipandCollective Agreement Cooperation withtheRegions(materialtopic17) Our Personnel /HRManagement / SocialPolicy / Consumers (materialtopic27) Our Operations /GasSalestoRussianandInternational Development (materialtopic26) Our Operations /Natural GasVehicleFuel Market (material topic5) Our Operations /HydrocarbonProductionandReserves Our Operations /Strategic Projects(materialtopic4) Our Operations /MissionandStrategy (materialtopic2) Our Operations /InnovationsandR&D(materialtopic3) Development (materialtopic1) Our Operations /Contribution toNationalIndustrial Behaviour (materialtopic22) Our Governance/Values,Standards,andNormsof Behaviour (materialtopics8,9, 10) Our Governance/Values,Standards,andNormsof (material topic6) Management Our Governance/Quality Location intheReport 241 106–108 185–186 130–142 162–163 167–182 125–127 101–103 145–147 194,198, 170–171 111,125, 94–98 67–68 55, 58 P age 204 120 167 121 88 63 54 60 74 1 5 3 4 2 6 Appendices Our Report Appendix 1. GRI Content Index

Standard / Disclosure / SDG Standard name / Disclosure Location in the Report Page name GRI 103-3 Evaluation of the management Our Governance / Quality Management 60 RUIE – 1.1. approach (material topic 6) Our Governance / Values, Standards, and Norms of 54–59 Behaviour (material topics 8, 9, 10) Our Governance / Values, Standards, and Norms of 55–59 Behaviour (material topic 22) Our Operations / Contribution to National Industrial 101–103 Development (material topic 1) Our Operations / Innovations and R&D (material topic 3) 106–108 Our Operations / Mission and Strategy (material topic 2) 63, 69 Our Operations / Strategic Projects (material topic 4) 67–68 Our Operations / Hydrocarbon Production and Reserves 74–77 (material topic 5) Our Operations / Natural Gas Vehicle Fuel Market 94–98 Development (material topic 26) Our Operations / Gas Sales to Russian and International 88

Consumers (material topic 27) eport 2019 Our Personnel / HR Management/ Social Policy/ 111 – 115 , R Cooperation with the Regions (material topic 17) 125,167 Our Personnel / Social Partnership and Collective Agreement 121 (material topic 18)

Our Personnel / Employee development / Future 130–142 ustainability

Professionals: Training of Schoolchildren and Students/ S Young Employees of Gazprom/ Talent Pool/ Participation in the Development of a National System of Qualifications roup’s roup’s

(material topic 19) G Our Personnel / Non-Financial Incentives / Social Policy 125–127 (material topic 20) Our Personnel / Commitment to Labour Rights 113, 120 (material topic 21) Gazprom Our Workplace Safety / Labour Safety Management 145–161 (material topic 28) Our Workplace Safety / Control of Contractors in Relation to 162–163 Occupational, Industrial, and Fire Safety (material topic 29) Our Social Initiatives / Cooperation with the Regions 167–182 (material topic 23, 25) Our Social Initiatives / Indigenous Minorities of the North and 170–171 Gazprom: Constructive Collaboration (material topic 24) Our Responsibility to the Planet / Combating Climate 194–210 Change (material topics 9, 11, 15) Our Responsibility to the Planet / Environmental Protection 211 –227 (material topics 11, 12, 13, 14, 16) Material topics SDG 7, 8, 9, 11, 12, 17 Innovations and R&D at the Our Operations / Innovations and R&D 106–108 Gazprom Group

242 Gazprom Group’s Sustainability Report 2019 SDG 8,9 1.6., 1.7. RUIE –1.2., 1.3., 1.4., 1.5., GRI 201-1 GRI 201: (2016) Economicperformance SDG 7, 8,9,11, 12, 17 GRI OG1 GRI OG1 GRI OG:Reserves SDG 3,7, 8,9,11, 12, 17 SDG 16 GRI 205-3 GRI 205-2 SDG 3,4,8,11, 17 GRI 203-2 SDG 2,7, 8,9,11, 12, 17 GRI 205-1 GRI 205:Anti-corruption(2016) SDG 13 GRI 201-2 SDG 16 SDG 16 SDG 9 RUIE –1.7. GRI 203-1 GRI 203:Indirect economicimpacts(2016) RUIE –1.8. GRI 201-3 (186) (185) Standard /Disclosure /SDG 1.Appendix GRI Content Index SDG 8,11, 12 GRI 204-1 GRI 204:Procurement practices (2016) corruption policies and methods, data broken down by employee category andregion. corruption policiesandmethods,databroken downbyemployeecategory The followinginformationisnotprovidedbecausenocentralized recordsarekept:databrokendownbyregion,total numberandpercentageofthemembersgovernancebodiestrained onthe anti- Total ofactivities)whichwereassessedfor corruption-relatedrisksarenotprovidedbecausenocentralized numberandpercentageoftheunits(by type recordsarekept.

186 185

transportation projects transportation Implementation ofmajorgas proven reserves andproduction proven reserves ofestimated Volume andtype development Natural gasvehiclefuelmarket and actionstaken Confirmed incidentsofcorruption impacts Significant indirecteconomic in theRussianFederation Gas infrastructure expansion climate change dueto risks andopportunities Financial implicationsandother procedures about anti-corruptionpoliciesand Communication andtraining related tocorruption Operations assessedforrisks services supported services Infrastructure investmentsand and otherretirementplans Defined benefitplanobligations name Standard name/Disclosure suppliers Proportion ofspendingonlocal and distributed Direct economicvaluegenerated Our Operations /Strategic Projects Development Our Operations /Natural GasVehicleFuel Market Salavat LLC in the reporting period. Salavat LLC inthereporting Gazprom Energoholding LLC, andGazpromNeftekhim Gazprom anditskeysubsidiaries,PJSC GazpromNeft, No incidentsofcorruptionwereidentifiedat PJSC Our SocialInitiatives/Cooperation withtheRegions Consumers Our Operations /GasSalestoRussianandInternational Behaviour Our Governance/Values,Standards,andNormsof Behaviour Our Governance/Values,Standards,andNormsof Our SocialInitiatives/Charity Location intheReport Development Our Operations /Contribution toNationalIndustrial Appendix 3. tothePlanet / Our Responsibility Appendix 4. Our Operations / posts/72/802627/gazprom-ifrs-2019-12m-en.pdf (IFRS) asofDecember31, 2019: https://www.gazprom.com/f/ Standards accordance withInternationalFinancialReporting See p.50oftheconsolidatedfinancialstatementsprepared in Our Personnel / Opportunities duetoClimateChange Opportunities T T o OurGovernancesection o OurOperations section Social Policy Hydrocarbon ReservesandProduction Gazprom’s Risksand Gazprom’s 243 209–210 167–182 7 174 – 172 67–68, 94–98 83, 89 54, 59 74–77 P age 258 255 102 127 88 58 – 1 5 3 4 2 6 Appendices Our Report Appendix 1. GRI Content Index

Standard / Disclosure / SDG Standard name / Disclosure Location in the Report Page name GRI 206: Anti-competitive behaviour (2016) GRI 206-1 Legal actions for anti-competitive See p. 69 of the consolidated financial statements prepared in – behaviour, anti-trust, and accordance with International Financial Reporting Standards monopoly practices (IFRS) as of December 31, 2019: https://www.gazprom.com/f/ posts/72/802627/gazprom-ifrs-2019-12m-en.pdf GRI 302: Energy (2016) GRI 302-3 Energy intensity Our Responsibility to the Planet / Energy Saving and Energy 205–207 RUIE – 2.2.1. Efficiency SDG 7, 11, 12 GRI 302-4187 Reduction of energy consumption Our Responsibility to the Planet / Energy Saving and Energy 202–204 SDG 7, 11, 12 Efficiency Appendix 7. To Our Responsibility to the Planet section 268 GRI OG 2 Total amount invested in Our Responsibility to the Planet / Renewable and Secondary 207–208 SDG 7, 9, 17 renewable energy Energy Resources eport 2019 GRI OG 3 Total amount of renewable energy Appendix 7. To Our Responsibility to the Planet section 270 R SDG 7 generated by source GRI 303: Water and effluents (2018)

GRI 303-1 Interactions with water as a shared Our Responsibility to the Planet / Water: Sustainable Use 211–212 ustainability SDG 6, 11, 12 resource and Treatment S GRI 303-2 Management of water discharge- Our Responsibility to the Planet / Water: Sustainable Use 211–212

SDG 6, 11, 12 related impacts and Treatment roup’s G GRI 303-3 Water withdrawal No centralized records are kept to account for seawater and RUIE – 2.3. freshwater in total water withdrawal/discharge. SDG 6, 11, 12 Our Responsibility to the Planet / Water: Sustainable Use 212–213 and Treatment Gazprom GRI 303-4 Water discharge No centralized records are kept to account for seawater and SDG 6, 11, 12, 14 freshwater in total water withdrawal/discharge. Our Responsibility to the Planet / Water: Sustainable Use 213, 216 and Treatment Appendix 7. To Our Responsibility to the Planet section 271 GRI 303-5 Water Consumption Our Responsibility to the Planet / Water: Sustainable Use 213 RUIE – 2.3. and Treatment SDG 6, 11, 12 GRI OG5188 Volume and disposal of formation Appendix 7. To Our Responsibility to the Planet section 271 SDG 3, 6, 11, 12, 14 or produced water

(187) Consolidated data for the Gazprom Group is not provided in the Report because no centralized records are kept. (188) Information on use of produced (formation) water is not provided because no centralized records are kept.

244 Gazprom Group’s Sustainability Report 2019 SDG 3,14, 15 GRI 304-4 SDG 3,14, 15 GRI 304-3 SDG 3,14, 15 GRI 304-2 SDG 3,14, 15 GRI 304-1 (2016)GRI 304:Biodiversity SDG 3,11, 12, 13 GRI 305-6 SDG 3,11, 12, 13 RUIE –2.5. GRI 305-1 GRI 305:Emissions(2016) SDG 11, 12, 13 GRI 305-5 SDG 3,11, 12, 13 RUIE –2.5. GRI 305-2 SDG 3,11, 12, 13 RUIE –2.5. GRI 305-3 Standard /Disclosure /SDG 1.Appendix GRI Content Index

operations by with habitatsinareasaffected listspecies national conservation IUCN RedListspeciesand Habitats protectedorrestored biodiversity on products, andservices Significant impacts ofactivities, protected areas valueoutside high biodiversity protected areasandof managed in,oradjacentto, Operational sitesowned,leased, substances (ODS) Emissions ofozone-depleting Direct (Scope1)GHGemissions Reduction ofGHGemissions emissions Energy indirect(Scope2)GHG emissions Other indirect(Scope3)GHG name Standard name/Disclosure Biodiversity Preservation tothePlanet/Biodiversity Our Responsibility Restoration tothePlanet/Land:Preservationand Our Responsibility Biodiversity Preservation tothePlanet/Biodiversity Our Responsibility Biodiversity Preservation tothePlanet/Biodiversity Our Responsibility Gas Emissions across the Gazprom Group Gas EmissionsacrosstheGazprom tothePlanet /ReductionofGreenhouse Our Responsibility Location intheReport size oftheterritorieswhereGazpromGroupoperates. by its operationshabitats inareasaffected duetothelarge listspecieswith Red Listspeciesandnationalconservation The GroupdoesnotkeepcountofthetotalnumberIUCN Our Responsibility tothePlanet/ Our Responsibility tothePlanet / Our Responsibility posts/72/802627/gazprom-environmental-report-2019-en.pdf 2019:Environmental Report https://www.gazprom.com/f/ See p.60,Greenhousegasemissions,PJSC Gazprom tothePlanet / Our Responsibility tothePlanet / Our Responsibility posts/72/802627/gazprom-environmental-report-2019-en.pdf 2019:Environmental Report https://www.gazprom.com/f/ See p.60,Greenhousegasemissions,PJSC Gazprom Gas Emissions across the Gazprom Group Gas EmissionsacrosstheGazprom Emissions across the Gazprom Group Emissions acrosstheGazprom Gas Emissions across the Gazprom Group Gas EmissionsacrosstheGazprom posts/72/802627/gazprom-environmental-report-2019-en.pdf 2019:Environmental Report https://www.gazprom.com/f/ See p.56–58,Greenhousegasemissions,PJSC Gazprom Appendix 7. Gas Emissions across the Gazprom Group Gas EmissionsacrosstheGazprom T o Our Responsibility tothePlanet section. o OurResponsibility Reduction ofGreenhouseGas ReductionofGreenhouse Reduction ofGreenhouse Reduction ofGreenhouse 245

195–196 194–195 218–219 216–217 P age 222 270 196 195 196 219 – 1 5 3 4 2 6 Appendices Our Report Appendix 1. GRI Content Index

Standard / Disclosure / SDG Standard name / Disclosure Location in the Report Page name

GRI 305-7 Nitrogen oxides (NOX), sulphur Our Responsibility to the Planet / Air: Reducing Pollutant 217–218

RUIE – 2.6. oxides (SOX), and other significant Emissions SDG 3, 11, 12, 13 air emissions See p. 20–22, Atmospheric air impact, PJSC Gazprom Environmental Report 2019: https://www.gazprom.com/f/ posts/72/802627/gazprom-environmental-report-2019-en.pdf GRI 306: Effluents and waste (2016) GRI 306-1 Water discharge by quality and Our Responsibility to the Planet / Water: Sustainable Use 216 RUIE – 2.7., 2.7.2. destination and Treatment SDG 3, 6, 11, 12, 14, 15 Appendix 7. To Our Responsibility to the Planet section 271 GRI 306-2 Waste by type and disposal Our Responsibility to the Planet / Waste Reduction 223–224 RUIE – 2.8. method Appendix 7. To Our Responsibility to the Planet section 273 SDG 3, 6, 11, 12, 14, 15 GRI 306-3 Significant spills See p. 33, Prevention of Accidents, PJSC Gazprom – RUIE – 2.9. Environmental Report 2019: https://www.gazprom.com/f/

SDG 3, 6, 11, 12, 14, 15 posts/72/802627/gazprom-environmental-report-2019-en.pdf eport 2019 R GRI 306-5 Water bodies affected by water Our Responsibility to the Planet / Water: Sustainable Use 213 SDG 6, 11, 12, 14, 15 discharges and/or runoff and Treatment GRI OG6 Volume of flared and vented Our Responsibility to the Planet / Flaring Reduction 196–197

SDG 3, 6, 11, 12, 14 hydrocarbon Appendix 7. To Our Responsibility to the Planet section 272 ustainability See p. 23, Utilization of Associated Petroleum Gas, S PJSC Gazprom Environmental Report 2019: https://www. gazprom.com/f/posts/72/802627/gazprom-environmental- roup’s roup’s

report-2019-en.pdf G GRI OG7 Amount of drilling waste (drill mud Our Responsibility to the Planet / Waste Reduction 225–226 SDG 3, 6, 11, 12 and cuttings) and strategies for

treatment and disposal Gazprom GRI 307: Environmental compliance (2016) GRI 307-1 Non-compliance with Our Responsibility to the Planet / Control by Public 190 RUIE – 2.10. environmental laws and Authorities SDG 11, 12, 14, 15 regulations GRI 401: Employment (2016) GRI 401-2 Benefits provided to full-time Our Governance / Social Policy 125–127 SDG 8 employees that are not provided The social programs mentioned in the Report cover all to temporary or part-time employees on the company’s roster, irrespective of their form employees of employment, except for the benefits listed in Appendix 5. To Our Personnel section 264

246 Gazprom Group’s Sustainability Report 2019 GRI 404-1 GRI 404:Training andeducation(2016) SDG 3, 8 SDG 3,8 GRI OG13 SDG 8 GRI 403-8 SDG 8 GRI 403-7 SDG 3,8 RUIE –1.4. GRI 403-6. SDG 4,8 RUIE –1.4. GRI 403-5 SDG 8 GRI 403-4 SDG 8 GRI 403-3 SDG 8 GRI 403-2 SDG 8 GRI 403-1 (2018)GRI 403:Occupationalhealthandsafety SDG 4,8 GRI 404-2 SDG 8 GRI 402-1 GRI 402:Labour/managementrelations (2016) SDG 4,8 RUIE –3.1.10. (189) Standard /Disclosure /SDG 1.Appendix GRI Content Index No breakdownbygenderisprovidedasnocentralized recordsarekept.

189

by businessactivity events, Number ofprocesssafety management system occupational healthandsafety Workers coveredbyan business relationships impacts directlylinkedby occupational healthandsafety Prevention andmitigationof Promotion ofworkerhealth health andsafety Worker training onoccupational occupational healthandsafety and communicationon Worker participation,consultation, Occupational healthservices investigation assessment, andincident Hazard identification,risk management system Occupational healthandsafety programs skills andtransition assistance Programs forupgrading employee operational changes Minimum noticeperiodregarding per employee Average hoursoftraining peryear name Standard name/Disclosure Industrial Safety Performance /IndustrialSafety Our WorkplaceSafety Appendix 6. Management /LabourSafety Our WorkplaceSafety Occupational, Industrial,andFireSafety /Control ofContractorsOur WorkplaceSafety inRelationto Assessment. InvestigationofAccidents IdentificationandRisk /Hazard Our WorkplaceSafety Our Personnel /SocialPolicy Staff Training /Staff Our WorkplaceSafety inProcessSafety Process Safety CultureDevelopment /ProcessSafety Our WorkplaceSafety Occupational Safety /EmployeeEngagementin Our WorkplaceSafety Our Workplace Safety /Control overLabourConditionsOur WorkplaceSafety Our Personnel /SocialPolicy Assessment. InvestigationofAccidents IdentificationandRisk /Hazard Our WorkplaceSafety Labour Safety Management /LabourSafety Our WorkplaceSafety Our Personnel /EmployeeDevelopment included intheGeneral Collectiveagreement. conditions isatleast2months.The noticeprovisionsare The noticeperiodforsignificantchangesinlabour Our Personnel /EmployeeDevelopment Location intheReport T o Our Workplace Safety section o OurWorkplaceSafety 247 153–154 148–149 125–127 147–148 145–147 130–131 P age 267 155 162 149 160 126 145 131 161 – 1 5 3 4 2 6 Appendices Our Report Appendix 1. GRI Content Index

Standard / Disclosure / SDG Standard name / Disclosure Location in the Report Page name GRI 405: Diversity and equal opportunity (2016) GRI 405-1 Diversity of governance bodies Our Personnel / Headcount 113 RUIE –3.1.12. and employees SDG 5, 8, 10 GRI 406: Non-discrimination (2016) GRI 406-1 Incidents of discrimination and The Group did not detect any cases of discrimination in the 120 RUIE – 3.2.2. corrective actions taken reporting period. SDG 5, 8, 10 GRI 407: Freedom of association and collective bargaining (2016) GRI 407-1 Operations and suppliers in which No breaches of the human right to freedom of association or 121 SDG 8, 10 the right to freedom of association collective bargaining were detected in the reporting period. and collective bargaining may be at risk

GRI 410: Security practices (2016) eport 2019 R GRI 410-1 Security personnel trained Our Governance / Values, Standards, and Norms of 58 SDG 4 in human rights policies or Behaviour procedures

GRI 411: Rights of indigenous peoples (2016) ustainability S GRI 411-1 Incidents of violations involving The Group did not detect any violations of rights of 171 RUIE – 3.2.3. rights of indigenous peoples indigenous peoples in the reporting period.

SDG 10 roup’s G GRI OG9 Operations where indigenous Our Social Initiatives / Indigenous Minorities of the North 17 0 SDG 1, 2, 3, 4, 8, 10, 11 communities are present or and Gazprom: Constructive Collaboration affected by activities and where specific engagement strategies Gazprom are in place GRI 412: Human rights assessment (2016) GRI 412-1 Operations that have been subject Our Social Initiatives / Indigenous Minorities of the North 58 SDG 16 to human rights reviews or impact and Gazprom: Constructive Collaboration assessments GRI 412-2 Employee training on human Our Governance / Values, Standards, and Norms of 58 SDG 4 rights policies or procedures Behaviour GRI 412-3 Significant investment agreements Our Governance / Values, Standards, and Norms of 58 SDG 17 and contracts that include human Behaviour rights clauses or that underwent human rights screening

248 Gazprom Group’s Sustainability Report 2019 GRI 419-1 GRI 419: Socioeconomiccompliance(2016) SDG 3,12 RUIE –3.4.2. 416-2GRI RUIE –3.2.3. GRI OG12 SDG 3,12 RUIE –3.4.2. 416-1GRI GRI 416: (2016) Customerhealthandsafety SDG 10 RUIE –3.2.3. GRI OG10 GRI 413-1 GRI 413: Localcommunities(2016) SDG 8,16 GRI 414-1 GRI 414: Suppliersocialassessment(2016) SDG 1, 2,3,4,8,10, 11 RUIE –3.3.3. GRI 413-2 Standard /Disclosure /SDG 1.Appendix GRI Content Index (190) The share(inpercent)ofoperations engagementprograms inwhichcommunity havebeenimplementedisnotprovidedbecausenocentralized recordsarekept. 190

economic area regulations inthesocialand Non-compliance withlawsand impacts ofproductsandservices concerning thehealthandsafety Incidents ofnon-compliance service categories service impacts ofproductand safety Assessment ofthehealthand peoples communities andindigenous significant disputeswithlocal Number anddescriptionof using socialimpact criteria New suppliersthatwerescreened programs assessments, anddevelopment engagement,impact community Operations withlocal local communities and potentialnegativeimpacts on Operations withsignificantactual name Standard name/Disclosure were affected intheprocess were affected in eachandhowtheirlivelihoods number ofhouseholdsresettled tookplace,the resettlement Operations whereinvoluntary Labour Safety Management /LabourSafety Our WorkplaceSafety Our Operations Generation /HeatandElectricity Development Our Operations /Natural GasVehicleFuel Market Our Operations /SalesofRefinedOilandGasProducts Consumers Our Operations /GasSalestoRussianandInternational Consumers Our Operations /GasSalestoRussianandInternational Management Our Governance/Quality indigenous peoples were recorded in the reporting period. indigenous peopleswererecordedinthereporting No significantdisputeswithlocalcommunitiesand Development Our Operations /Contribution toNationalIndustrial communities was detected in the reporting period. communities wasdetectedinthereporting No significantactualorpotentialnegativeimpact onlocal Location intheReport Gazprom: ConstructiveGazprom: Collaboration and Our SocialInitiatives/IndigenousMinoritiesoftheNorth Our SocialInitiatives/ Our SocialInitiatives/ Development of Sports ProgramsDevelopment ofSports Cooperation withtheRegions 249 P age 100 102 180 168 70 17 147 171 95 93 88 90 60 – 1 5 3 4 2 6 Appendices Our Report Appendix 2. To Our Report section

GRI 102-46

Reporting principles Sustainability context The Report provides information about the Gazprom Group’s production activities and its impact on the country’s economy, as well as about Gazprom’s environmental and climate protection activities, interaction with staff and local communities, and contribution to the UN sustainable development goals. Materiality The Report covers material topics, issues and indicators related to Gazprom’s economic, environmental, and social impact. The materiality of the information in the Report is determined on the basis of the assessment of Gazprom’s performance in the reporting period by its leadership, as well as on the basis of stakeholders’ opinion. Stakeholder inclusiveness Owing to Gazprom’s systemic approach to stakeholder engagement, the Report covers information that is of relevance to stakeholders. Completeness The Report contains information on all areas of Gazprom’s sustainable development activities in the reporting period in accordance with the GRI Standards and the GRI Oil and Gas Sector Supplement. Balance The Report includes both information on Gazprom’s achievements and references to the areas where certain processes need to be improved. eport 2019

Comparability Gazprom’s economic, environmental, and social performance in the reporting period is compared to that in R previous years. The comparison allows stakeholders to evaluate Gazprom’s performance in those areas. Accuracy Gazprom is committed to providing accurate information on its performance results so that they can be objectively assessed by stakeholders. The Report uses both qualitative descriptions and quantitative

information based on financial and statistical reports. ustainability S Timeliness The Report provides stakeholders with relevant information on Gazprom’s operations and activities in the reporting period. roup’s roup’s

Clarity The information presented in the Report is clear and easy to understand for a broad audience: highly G specialized terms are used only where appropriate, with terms and abbreviations explained in the Glossary. Information that requires special knowledge is omitted from the Report. To visualize information, various tables, diagrams, charts, and infographics are used in the Report. Gazprom Reliability The information in the Report is reliable, ascertainable and verifiable. Gazprom’s Sustainability Report has been approved independently by FBK LLC and received public assurance from the Russian Union of Industrialists and Entrepreneurs (RUIE), a national non-governmental organization.

GRI 102-46

* Gazprom Dobycha Yamburg LLC, Gazprom Dobycha Urengoy LLC, Gazprom Dobycha Nadym LLC, Gazprom Dobycha Noyabrsk LLC, Gazprom Dobycha Astrakhan LLC, Gazprom Dobycha Orenburg LLC, Gazprom Dobycha Krasnodar LLC, Gazprom Pererabotka LLC, Gazprom Transgaz Surgut LLC, Gazprom Transgaz Ukhta LLC, Gazprom Transgaz Yugorsk LLC, Gazprom Transgaz Moscow LLC, Gazprom Transgaz Saint Petersburg LLC, Gazprom Transgaz Tomsk LLC, Gazprom Transgaz Tchaikovsky LLC, Gazprom Transgaz Yekaterinburg LLC, Gazprom Transgaz Makhachkala LLC, Gazprom Transgaz Stavropol LLC, Gazprom Transgaz Nizhny Novgorod LLC, Gazprom Transgaz Saratov LLC, Gazprom Transgaz Volgograd LLC, Gazprom Transgaz Samara LLC, Gazprom Transgaz Ufa LLC, Gazprom Transgaz Kazan LLC, Gazprom Transgaz Krasnodar LLC, OJSC Gazprom Transgaz Belarus, Gazprom UGS LLC.

250 Gazprom Group’s Sustainability Report 2019 ** (topic number) Topic Topic BoundariesintheReport Appendix 2. agreements) (18) the coverage bycollective for collectinginformationon collective bargaining(boundaries Freedom ofassociationand structure andheadcount)(17) information onthepersonnel impact (boundariesforcollecting labour marketandemployment Gazprom Group’s presenceinthe by GazpromGroup(16) Disturbed landremediation efficiency atGazpromGroup(15) Energy savingandenergy (14) biodiversity preserve to Gazprom Group’s efforts operations (13) intheGroup’squality areasof maintain acceptablewater toGazprom Group’s efforts at GazpromGroup(12) Waste handling Gazprom Group(11) Emissions managementat Gazprom Group(10) Anti-corruption practices of anti-monopoly laws(9) Compliance withanti-trustand requirements ofthelaw(8) economic, andenvironmental Compliance withsocial, initiatives (7) political activitiesandinternational Gazprom Group’s participation in (QMS boundaries)(6) management Quality (5) reserves replenishment ofhydrocarbon in Gazprom Group’s efforts at GazpromGroup(3) Innovations andR&D JSC Gazpromneft-ONPZ, JSC Gazpromneft-MNPZ, NIS, OJSC Slavneft-YANOS, JSC Gazpromneft MZSM, Gazpromneft-RZBM LLC,JSC Gazpromneft-ONPZ, JSCGazpromneft-MNPZ, NIS,OJSC Slavneft-YANOS, and OZSM. MZSM,Gazpromneft-RZBM JSCGazpromneft LLC , LLC, LLC, LLC,Gazpromneft-Yamal Slavneft-Megionneftegaz Gazpromneft-Orenburg Gazpromneft-Vostok Gazpromneft-Khantos JSCGazpromneft-NNG, LLC, JSCMessoyakhaneftegaz, T o Our Report section o OurReport Gazprom PJSC storage* processing, andunderground gas production, transportation, Key subsidiariesinvolvedin sidiaries Other sub- Neft GroupNeft Gazprom ** 51 2 holding Energo- Gazprom Salavat Neftekhim Gazprom 1 5 3 4 2 6 Appendices Our Report Appendix 2. To Our Report section

Topic Boundaries in the Report Topic PJSC Key subsidiaries involved in Other sub- Gazprom Gazprom Gazprom (topic number) Gazprom gas production, transportation, sidiaries Neft Group Energo- Neftekhim processing, and underground holding Salavat storage* Training and education for employees and prospective employees (19) Social benefits and non-financial motivation of the employees at Gazprom Group (number of the corporate pension program participants insured under voluntary health insurance programs) (20) Equal opportunities for all employees of Gazprom Group eport 2019

(boundaries for collecting R information on cases of discrimination and labour disputes) (21)

Respect of human rights (22) ustainability S Interaction with local communities in Gazprom Group’s areas of operations (boundaries for roup’s collecting information on the G programs for development of local community engagement) (23)

Indigenous peoples in Gazprom Gazprom Group’s areas of operations (boundaries for collecting information on the extent and amount of charitable aid for indigenous minorities) (24) Gazprom Group’s social projects (boundaries for collecting information on the amount of charitable expenses) (25) Occupational health, industrial, and fire safety at Gazprom Group (28) Ensuring safer work of suppliers and contractors (boundaries for collecting information on the requirements for suppliers and contractors to adhere to occupational health, industrial, and fire safety norms and standards) (29) Topics “Implementation of major gas transportation projects” and “Natural gas vehicle fuel market development” are reported on the basis of the data from PJSC Gazprom, South Stream Transport B.V., Gazprom Transgaz Tomsk LLC, Gazprom Gazomotornoye Toplivo LLC, and Gazprom LNG Technologies LLC. Topic “Gas infrastructure expansion in the Russian Federation” covers the Group’s gas business companies. Information on all entities Information on the most significant entities Entities do not have any material impacts on the topic, therefore, no data is collected 252 Gazprom Group’s Sustainability Report 2019 Appendix 3. T Market risk Credit risks Credit, market,andfinancialrisks sources unconventional production from of gas development with the Risks associated transit risks Natural gas risks Sanction-related development economy to theglobal Risks related andregionalCountry risks,competitionrisks Risk PJSC Gazprom’s Approach RisksManagement toSustainability GRI 102-15, GRI201-2 o OurGovernancesection to risksthat,ifmaterialize,canresultinrevenueloss. for gasand/ortheirlong-timestagnationatlowlevelsgiverise Possible declineofoilprices andstockexchangequotations by counterparties. ofthecontractual obligations Late orincompleteperformance markets. PJSC Gazprom,inparticular, intheEuropeanandChinese impact onthedemandforRussianpipelinegassuppliedby production inotherregionsoftheworldmayhaveanegative on therise.Inlongrun,rapid developmentofshalegas sources, primarilyfromtheshaledepositsinUSA,was Since themid-2000s,gasproductionfromunconventional itsobligationsundergassupplycontracts. perform which entailstheriskofGazpromGroupfailingtoproperly is subjecttotheriskofnon-fulfilmenttransit obligations, Natural gastransit ofthirdcountries through theterritory foralongertime. be expanded andwillremainineffect thattherestrictionswill other countries.There isaprobability Russia isunderthesanctionsimposedbyEU,USA,and ratesgrowth forenergycarriers. Adverse economicconditions,deceleration ofdemand Description

counterparties qualifiedforsuchtransactions.counterparties transaction andfinancialinstruments,aswell types to thecurrentmarketenvironment,definingpermitted into newcontracts withtermsand conditionscorresponding The riskismanagedbyadjustingcontract termsorentering credit limitsbytheGazpromGroupentities. and foreigncreditinstitutions,monitorcompliancewith update creditlimits,monitorthefinancialhealthofRussian aretakentoestablishand credit institutions,continuedefforts under thecontracts. Asregardsinteraction withbanksand are takenintoaccountwhiledeterminingthepayment terms The ofcounterparties. results regard tothecreditworthiness bymodellingpotentiallosseswithdue risks isperformed of credit,prepayments). Quantitativeassessmentofcredit securing thepayments (guarantees, ofcounterparties letters activities ismanagedbydeterminingpayment conditionsand internal creditratings. The creditriskexposureofexport withassigningthem ofcounterparties the creditworthiness PJSC Gazpromanditssubsidiariesassessmonitor Gazprom BoardofDirectors. and prospectivemarkets,areregularlyreviewedbyPJSC and itscompetitivepotentialintheCompany’s existing indicators ofgasproductionfromunconventionalsources world. The resultsofthemonitoring,includingeconomic of theshalegassectordevelopmentthroughout the PJSC Gazprommonitors,onaregularbasis,theprogress and developliquefiednatural gas trade. access toundergroundgasstorage facilitiesoutsideRussia, routes,broaden export Company istakingstepstodiversify In ordertoreducedependenceontransit countries,the against Russia. exposure toeconomicrestrictionsimposedonorenacted substitutiontoreducetheCompany’ssufficiency andimport PJSC Gazprompursuesthepolicyoftechnologicalself- expands thescopeofnatural gasuse. PJSC Gazpromdiversifiessalesmarketsandchannels, Seeking toboostrevenuefromsalesofenergycarriers, Risk management/mitigation 253 1 5 3 4 2 6 Appendices Our Report Appendix 3. To Our Governance section

PJSC Gazprom’s Approach to Sustainability Risks Management Risk Description Risk management / mitigation Financial risks PJSC Gazprom’s operating results are exposed to currency To minimize losses arising from currency exchange rate exchange rate volatility along with the multicurrency structure volatility, some of the Gazprom Group companies apply of its revenues and expenditures. Performance of contractual hedging strategies to address the risk of market-driven obligations by banks and financial institutions may be delayed shifts in exchange and interest rates. Transactions with or incomplete. credit institutions stay within credit risk limits, which are revised regularly, in particular with regard to the credit rating calculated by PJSC Gazprom and the Gazprom Group entities. Performance of contractual obligations is monitored. PJSC Gazprom achieves financial stability by optimizing its debt burden. Liquidity risk management measures include enforcing compliance with the instructions of the Bank of Russia as to the asset/debt ratio denominated in foreign currencies, keeping cash available in different currencies based on liquidity forecasts, ensuring the availability of financial resources through credit lines, and control over limits set for counterparty banks. eport 2019 Operational risks R Risks associated Core business operations involving hydrocarbon production, The Unified Gas Supply System ensures overall reliability with the core transportation, processing, and storage are associated with of gas supplies. Its operational stability is achieved through business technological, technical, natural and climate risks, as well as the implementation of up-to-date and innovative diagnostic operations the risk of inappropriate actions by employees or third parties. methods, scheduled major repair and maintenance ustainability S operations, modification and upgrades. Subsidiaries are provided with a property and liability insurance coverage,

which comprises physical property (including offshore roup’s facilities), interruption of operations at gas processing plants, G and contractor liability for construction, repair and operation of production facilities.

Occupational PJSC Gazprom’s business activities are exposed to risks The Gazprom Group has in place the Integrated System of Gazprom health and of adverse impact on employees’ health and safety. The Process Safety Management (ISPSM). The system is part industrial safety risk factors may have a material adverse effect on PJSC of PJSC Gazprom’s integrated management system. It is risks Gazprom’s financial condition, operating results, and designed to manage occupational health and industrial safety reputation. risks, achieve targets and fulfil obligations in the area of occupational health, industrial, and fire safety. Tax risks Risks associated with the assessment and payment of taxes, The key approaches to identifying, assessing, responding to, charges and insurance premiums, incorrect calculation of monitoring, reporting and disclosing tax risk management the tax base, choice of inefficient tax models and schemes, information are defined in the Regulation on Operational Risk transfer pricing risks. Management in the Gazprom Group.

254 Gazprom Group’s Sustainability Report 2019 conditions with climate Risks associated emissions greenhouse gas change and with climate Risks associated Natural risks andclimate-related environment impact onthe with anadverse Risks associated operations business PJSC Gazprom’s associated with incidents accidents/ resulting from damage risk Environmental facilities PJSC Gazprom’s and operation of construction the courseof legislation in environmental compliance with Risk ofnon- Environmental andclimaterisks Risk PJSC Gazprom’s Approach RisksManagement toSustainability 3. Appendix T o Our Governance section Governance o Our relatively costlybecauseofharshclimate. comes fromWesternSiberia,whereproductionisdifficultand ofthenaturalway. Amajorpart gasproducedbyGazprom inasignificant operation itsbusinessperformance affect Climate conditionsintheGazpromGroup’s keyregionsof lines. systemsandservice transportation causing deformationofbuildingsandstructures,pipeline offrozensoil,and adverse weatherconditions sensitivity Some risksstemfromtemperature changes,high species. and lossofhabitatforrare andendangeredplantanimal erosion. This mayleadtodegradation ofnatural ecosystems water pollution,deterioration ofsoilandvegetation, operations giverisetotherisksoflandand Industry-specific applicable indemnitiesforenvironmentaldamage. administrative thatinvolvespayment of orcriminalliability stakeholder, investorandgovernmentrelationsmayentail PJSC Gazprom’s businessoperations mayadverselyaffect Environmental impact ofaccidentsresultingfrom implications. pollution riskthatmayentaillegal,financial,andreputational and storage operations areassociatedwithenvironmental The processing, core hydrocarbon production, transportation, Description operation. systemsandgas transmission and transportation network Programs toboosttheefficiencyofproduction areunderway operating proceduresadaptedto severeclimaticconditions. The Company hasdesignedandimplementedeffective programs arebeingdevelopedand implemented. petroleum gas,andenergyefficiencysaving Steps aretakentoreduce(cease)flaringofassociated change ontheCompany’s operations. measures seekingtominimizetheadverseimpact ofclimate corporate strategy. The Company isimplementingasetof ofPJSCReduction ofGHGemissionsispart Gazprom’s reclamation, andvegetationrehabilitation. ofpipelinesystems,landscapestabilization,soil of reliability includingthose relatedtotheenhancement are underway, zone oftheRussianFederation. Comprehensiveinitiatives ofmarineecosystemswithintheArctic level ofsustainability based onalistofplantandanimalspeciessignallingthe activities preservation Gazprom isimplementingbiodiversity environmental damage. — developmentofactivitiesaimedateliminating and otheremergencies; — environmentaldamageassessmentincaseofaccidents — approvalofrespectivedocuments; prevention, localization,response,andimpact mitigation; — providingsuggestionsonactivitiesforemergency and otheremergenciesattheGazpromGroupentities; and theirimplicationsresultingfromtheidentifiedaccidents — analysisofthepotentialadverseenvironmentalimpacts PJSC Gazpromcarriesoutthefollowingactivities: 14001:2015. forcompliancewithISO management systemscertified and continuouslyimprovetheirrespectiveenvironmental ofsubsidiarieshaveputinplace technologies. The majority activities; obtainsenvironmentalriskinsurance; adoptsgreen environmental footprint;engagesinprotection well asprograms andactivitiesdesignedtoreduceits The Company implementsitsEnvironmentalPolicy, as Risk management/mitigation 255 1 5 3 4 2 6 Appendices Our Report Appendix 3. To Our Governance section

PJSC Gazprom’s Approach to Sustainability Risks Management Risk Description Risk management / mitigation Legal and industry-specific risks Risks of tariff Risks associated with state regulation of wholesale prices for The Company maintains relations with the federal executive (pricing) gas produced by PJSC Gazprom and its affiliates and sold on authorities in order to justify and defend the regulated gas regulation the domestic market, as well as tariffs for gas transportation prices and tariffs for gas transportation services. In order to of natural via trunklines, and affecting PJSC Gazprom’s operations reduce the said risks, PJSC Gazprom maintains an active monopolies and performance of its obligations. If this risk materializes, it dialogue with the federal executive authorities as regards could result in a failure to receive the planned revenue from improvement of gas pricing, including the development of gas sales and gas transportation services on the domestic justified pricing principles enabling the Company to benefit market. from sustainable economic conditions for supplying gas to the domestic market. PJSC Gazprom takes part in the development of laws and regulations governing pipeline-based gas transportation and is engaged in expert examination of draft laws and regulations, while also contributing to the establishment of the regulator’s law enforcement practice and judicial practice. eport 2019

Government Risks of changes in currency regulation and tax laws in the PJSC Gazprom maintains an ongoing dialogue with R regulation risks Russian Federation and other countries of the Gazprom government authorities on improvements of the pricing and Group’s operations still remain. New requirements may be tariff policy, corporate taxation, and customs law. imposed by customs authorities as a result of changes in Amendments to tax and currency legislation are monitored customs rules and export duty payment procedures. on an ongoing basis to ensure strict compliance with their requirements. PJSC Gazprom interacts with government ustainability S authorities for the purpose of timely adjusting its operations to the legislative changes in the Russian Federation and abroad. roup’s roup’s G Gazprom

256 Gazprom Group’s Sustainability Report 2019 Appendix 4. T ADR holders JSC Rosgazifikatsiya Other registeredpersons JSC Rosneftegaz (195) (194) (193) (192) (191) Management Property The RussianFederation representedbytheFederal AgencyforState Shareholder PJSC Gazprom’s share capitalstructure, 2018-2019, % Indicator Indicators oftheGazprom Group’s contributiontotheeconomyofRussianFederation, 2016–2019 Dividend perthegovernment’s stake all levels,RUBbillion Gazprom’s totalpayments tobudgetsoftheRussianFederation, Russian Federation, % Gazprom’s capexinaggregateinvestmentsfixedassetsthe GDP oftheRussianFederation, RUBbillion RUB billion Oil andgasrevenuesofthefederal budgetoftheRussianFederation, other similarpayments), incl.: Payments tobudgetsoftheRussianFederation, alllevels(taxesand Gazprom’s totalvalueadded,RUBbillion RUB billion Revenues oftheconsolidatedbudgetRussianFederation, Gazprom’s shareintheGDPofRussianFederation, % of theRussianFederation, RUBbillion Gazprom’s contributiontotheoilandgasrevenueoffederal budget Investments infixedassetstheRussian Federation, RUBbillion Russian Federation, % Gazprom’s shareintheoilandgasrevenueoffederal budgetofthe Gazprom’s capitalexpenditures Federation, % Gazprom’s shareintheconsolidatedbudgetrevenueofRussian Nominal amountofdividendpershare customs payments, RUBbillion mineral extractionRUBbillion tax(MET), income tax,RUBbillion property tax,RUBbillion property o OurOperations section also holdsa74.55% stakeinJSCRosgazifikatsiya. The cumulativestakeinPJSC GazpromdirectlyorindirectlycontrolledbytheRussianFederation equals50.23% andissecuredbya100% stakeoftheRussian Federation which inJSCROSNEFTEGAZ, Amount ofdividendpersharepaid onthebasisofpreviousyear’s performance. PJSC Gazprom’s tothegovernmentandlegalentitiescontrolled bythegovernment. dividendsattributable oftheconsolidatedfinancialstatementsprepared inaccordancewiththeIFRS. According tothecashflowreport receipts)forPJSCThe issuingbankofADRs(Americandepositary Gazprom’s sharesistheBankofNewYork Mellon. 192 191

193 , RUBbillion 195 194 , RUBbillion , RUB

As ofDecember31, 2018 14,749 28,182 85,616 4,844 3,077 1,369 1,849 2016 1,755 1,219 25.2 7.89 601 618 9.3 3.6 6.6 119 85 94 16,027 91,843 31,047 3,392 25.64 38.37 017 2 1,406 10.97 5,972 1,547 2,315 24.13 2,411 0.89 8.04 25.9 883 664 148 3.7 8.8 211 7.8 96 257 As ofDecember31, 2019 104,630 37,320 17,782 3,055 2,959 2018 4,807 2,077 1,639 9,018 ,45 1,14 8.04 23.0 932 285 158 9.2 4.6 8.2 96 110,046 39,498 19,319 30.07 38.37 19.70 3,020 2,822 4,255 10.97 8,248 2019 1,776 16.61 1,931 0.89 1,141 23.4 790 309 198 151 9.2 3.9 7.6 1 5 3 4 2 6 Appendices Our Report Appendix 4. To Our Operations section

GRI 201-1 Generated and distributed direct economic value, 2016–2019, RUB million Indicator 2016 2 017 2018 2019 Generated direct economic value Sales revenue 6,111,051 6,546,143 8,224,177 7,659,623 Net income (expenses) from trade operations with commodities at liquid European marketplaces 3,382 (16,352) 18,015 (24,957) Financial income (interest income) 93,494 83,721 72,652 90,926 Percentage of the net profit of associated companies and joint ventures 82,872 126,940 232,483 207,127 Total generated direct economic value 6,290,799 6,740,452 8,547,327 7,932,719 Distributed direct economic value Operating expenditure (excl. asset impairment and other reserves, depreciation and exchange rate differences), incl.: 4,619,480 5,114,635 5,539,484 5,564,173 social expenses 35,516 34,461 42,789 45,114 eport 2019 payroll expenses 641,036 682,060 600,812 749,708 R incl. expenses (income) related to estimated post-employment benefits 50,961 48,522 (78,937) 32,241

taxes, excl. income tax 900,397 1,246,059 1,498,278 1,409,248 ustainability S other operating expenses 3,042,531 3,152,055 3,397,605 3,360,103 Financial expenses (interest expenses) 71,556 53,332 50,378 76,426 roup’s roup’s Expenses related to current income tax 218,113 241, 817 278,233 327,618 G Dividends paid to shareholders196 186,099 196,059 192,822 383,060

Total distributed direct economic value 5,095,248 5,605,843 6,060,917 6,351,277 Gazprom Undistributed economic value 1,195,551 1,134,609 2,486,410 1,581,442

GRI 102-7 The Gazprom Group’s gas sales in Russia, 2016–2019 Indicator 2016 2 017 2018 2019 Sales volume, bcm 214.9 229.9 239.7 235.8 Average sales price (net of VAT), RUB per 1,000 m3 3,815.5 3,808.3 3,981.3 4,118.2 Net sales revenue (net of VAT), RUB billion 819.9 875.7 954.5 970.9

The Gazprom Group’s gas sales in the FSU countries, 2016–2019 Indicator 2016 2 017 2018 2019 Sales volume197, bcm 33.2 35.0 38.1 38.7 Average sales price (including customs duties), USD per 1,000 m3 198 153.6 158.4 162.6 157.4 Average sales price (including customs duties), RUB per 1,000 m3

(196) The Declared Dividend indicator from PJSC Gazprom’s IFRS consolidated financial statements for the corresponding year. (197) Sales in the FSU countries include natural gas exports from Russia, as well as sales of natural gas purchased by the Group outside Russia. (198) Calculated on the basis of the average RUB/USD exchange rate.

258 Gazprom Group’s Sustainability Report 2019 Appendix 4. 4. Appendix Indicator The Gazprom Group’s gassalesintheFSUcountries,2016–2019 PJSC Gazprom’s andcustomsduties),RUBbillion Net salesrevenue(lesstheexciseduty RUB per1,000 m Average andcustomsduties), salesprice(includingtheexciseduty Indicator The Gazprom Group’s gassalesinnon-FSUcountries,2016–2019 Net salesrevenue(lesscustomsduties),RUBbillion Average salesprice(includingcustomsduties),RUBper1,000 m Country Austria USD per1,000 m Average andcustomsduties), salesprice(includingtheexciseduty Turkey Sales volume Germany France Italy Hungary UK Poland Netherlands Czechia Slovakia Croatia Finland Belgium Greece Bulgaria Serbia Denmark Romania Slovenia (201) (200) (199) Sales in Europe and other countries include natural gas exports fromRussia,aswellsalesofnaturalSales inEuropeandothercountriesinclude natural gas purchasedbytheGroupoutsideRussia. gasexports trading operations. The 2019 salesvolumesincluderepotransactions foratotalof7.6 bcm. dataarerounded tothree decimalplaces.UnderGazpromExport’s contractsCountry anddirectcontracts SchweizincludingvolumessoldviaGazpromExport’s ofGAZPROM gasauctions andthrough Calculated onthebasisofaverage RUB/USDexchangerate. 199 T o Our Operationssection , bcm 3 3 200

201

suppliestoforeign countries,2016–2019, bcm 3

10,263.1 11,763.3 2,140.0 49.832 24.689 24.755 11.070 7 912 17. 1 471 11. 228.3 309.6 4.536 3.690 0.704 0.520 2.534 6.079 5.728 2.676 3.179 2016 2016 2016 4.218 1.749 1.748 176.0 1.478 – 11,670.5 9,237.0 53.440 2,221.2 29.034 16.263 10.470 12.257 23.811 200.2 242.0 9.136 292.8 292.8 4.650 5.795 2.835 2.360 6.964 2.927 3.327 0.607 017 2 017 2 017 2 4.591 1.752 1.190 2.119 – 259 10,225.9 15,499.5 2,951.2 58.502 23.964 12.922 22.772 14.257 12.313 6.486 5.085 348.6 2018 2018 2018 2.623 0.458 246.4 243.3 2.785 1.320 3.291 7.652 2.145 1.769 9.861 1.723 3.172 7.877 10,175.9 13,613.0 2,490.4 22.100 10.321 16.276 14.072 11.262 15.510 57.014 356.1 8.869 0.336 232.4 0.994 2.387 2019 2019 2019 9.734 2.135 2.821 2.457 7.266 1.670 210.6 2.413 8.112 2.417 1 5 3 4 2 6 Appendices Our Report Appendix 4. To Our Operations section

PJSC Gazprom’s supplies to foreign countries, 2016–2019, bcm Country 2016 2 017 2018 2019 North Macedonia 0.214 0.275 0.254 0.296 Switzerland 0.308 0.334 0.379 0.268 Bosnia and Herzegowina 0.225 0.245 0.245 0.236 European countries, total 179.3 194.4 201.9 199.0 China 0.328

Gazprom Group’s large-scale LNG supplies to foreign countries, 2016–2019202, trillion BTU Country 2016 2 017 2018 2019 Argentina 19.7 – – – China 3.4 29.4 29.2 41. 4

Egypt 3.4 – – – eport 2019 R India 22.7 9.9 36.1 39.9 Japan 78.5 56.9 29.7 19.6 Kuwait 3.3 16.9 20.1 – ustainability

Mexico 6.5 – – – S South Korea 3.3 13.2 26.4 20.2 roup’s roup’s

Spain – 6.5 2.9 10.9 G Taiwan (China) 26.0 19.8 19.3 3.3 Thailand – 3.3 – – Gazprom UAE 6.5 3.1 – – UK – – – 21.4 Supplies, FOB 3.0 – 21.4 23.5 Total 176.5 159.2 185.0 180.1 Total, mmt 3.71 3.34 3.88 3.78 Total, bcm 4.94 4.46 5.18 5.04

Gazprom Energoholding’s electric power generation in the Russian Federation, 2016–2019, billion kWh Indicator As of December 31 2016 2 017 2018 2019 Electric power generation 153.83 150.81 146.56 143.07 PJSC Mosenergo 59.07 57.87 58.31 60.11 PJSC OGK-2 67.09 63.43 58.92 54.69 PJSC TGС-1 27.67 29.51 29.33 28.28 PJSC MOEK 0 0 0 0

(202) Calculated in accordance with the principles used in management reporting. Indicators calculated using the methodologies for consolidated financial and management reporting might be incomparable due to differences in these methodologies. Rounding may cause final figures to deviate from the sums of their respective components.

260 Gazprom Group’s Sustainability Report 2019 Country 2016–2019,Electric powerexports, billionkWh Appendix 4. 4. Appendix Heat energygeneration Norway: PJSC OGK-2 PJSC Mosenergo Indicator Electric powerandheatsalesbyGazprom Energoholding’s generating companies,2016–2019 PJSC OGK-2 PJSC Mosenergo Indicator Gazprom Energoholding’s heatgeneration intheRussianFederation, 2016–2019, millionGcal Total PJSC TGС-1 PJSC TGС-1 anditssubsidiaries Finland: Electric powersales,billionkWh PJSC MOEK PJSC MOEKanditssubsidiaries Heat sales,millionGcal PJSC Mosenergo PJSC OGK-2 PJSC TGС-1 PJSC MOEK Norwegian bordercheckpoints Norwegian Borisoglebskaya HPP-8(Russia), HPP-6Rayakoski(Russia), — via 0.4kVelectricpowertransmission linesfromthe operating modepowerequals28 MW; supplycanbeas high as56MW,butinthenormal electricity cascade, MurmanskRegion)viathe154 kVL-225line.Peak — ofthePazfrom thebusesofBorisoglebskayaHPP(part peak electricity supplyequalsupto70MW peak electricity Murmansk Region)viathe110 kVL-82line.Duringthehigh-waterperiod, ofthePaz— fromthebusesofKaitakoski HPP(part cascade, Vuoksa HPPs, Leningrad Region)viathe110 kVImatra-1 line; ofthecascade ofthe — fromthebusesofSvetogorskayaHPP(part T o Our Operationssection 123.36 164.39 0.637 24.44 1 11 . 119 10.19 60.86 0.059 0.059 30.59 81.83 24.96 10.30 72.94 0.577 2016 2016 2016 77.40 6.90 6.45 0 As ofDecember31 120.77 162.55 79.45 0.861 116.27 60.25 0.104 0.758 32.58 79.70 24.71 69.72 017 2 017 2 017 2 24.91 9.85 6.76 6.35 5.31 0 61 2 124.36 0.977 119.04 82.29 157.76 24.89 60.20 60.20 0.020 0.020 32.58 0.956 25.30 84.32 2018 2018 2018 64.98 10.17 6.70 7.01 2.72 0 115.26 152.83 110.85 0.719 75.37 58.39 32.35 24.49 78.06 62.10 2 .17 24 2019 2019 2019 0.719 6.65 9.07 2.00 6.30 0 0 1 5 3 4 2 6 Appendices Our Report Appendix 4. To Our Operations section

Economic benefit from import substitution by business activity No. Activity Economic benefit by year, Total economic RUB million benefit, 2016–2019 2016 2 017 2018 2019 RUB million % 1. Production 2,595.0 2,596.5 3,704.6 7,465.5 16,361.6 46.0 2. Transportation 2,588.3 3,118.3 4,248.2 4,088.6 14,043.5 39.5 3. Processing 25.4 303.2 95.3 75.5 499.5 1.4 4. UGS 0.3 4.9 4.9 19.1 29.3 0.2 5. Other 131. 4 190.4 1,137.2 3,149.1 4,608.1 13.0 Gazprom Group’s total 5,340.5 6,213.3 9,190.3 14,797.9 35,541.9 100.0

Number of patents held by subsidiaries and affiliated companies, including patents generating economic benefit, over the past four years, 2016–2019 eport 2019

Indicator 2016 2 017 2018 2019 Total patents on the books R as of the end of 2019 Patents received by PJSC Gazprom 26 29 26 26 450 ustainability

Patents received by subsidiaries S and affiliated companies 17 9 202 283 234 2,224 Patents excluded from the books 174 158 96 119 – roup’s roup’s G

Economic benefit from patent utilization over time, 2016–2019

Indicator 2016 2 017 2018 2019 Gazprom Patents held by PJSC Gazprom’s subsidiaries and affiliated companies 406 427 4 41 459 which were used for production purposes, pcs Incl. patents generating economic benefits, pcs 127 114 157 158 Economic benefit generated from the utilization of patents which are 7.1 7.7 10.3 14.5 intended for economic benefit generation, RUB million

262 Gazprom Group’s Sustainability Report 2019 Appendix 5. T To Chapters3.2GazpromGroup’s Headcountand3.2.1NewHires Central Federal District Russia /Foreign countries turnoverbyregion andstaff Headcount ofquitters in2018–2019 FederalNorth-Western District Russia /foreign countries Employees hired in2018–2019 byregion, people Volga Federal District To Chapters3.2GazpromGroup’s Headcountand3.2.2Quitters Total Foreign countries Russia’s continentalshelf Far EasternFederal District CaucasianFederalNorth District Southern Federal District Siberian Federal District Urals Federal District Central Federal District North-Western FederalNorth-Western District Volga Federal District Urals Federal District Siberian Federal District Southern Federal District North CaucasianFederalNorth District Far EasternFederal District Russia’s continentalshelf Foreign countries Total o OurPersonnel section

of quitters, people of quitters, 82,119 20,099 18,293 12,597 13,081 3,884 Total number 2018 4,351 1,643 ,614 7, 546 11

71,471 12,653 13,590 19,023 9,340 3,565 2019 4,765 6,162 1,466 609 298 25,481 turnover, people incl. due to staff incl. duetostaff 3,268 2,254 2018 2,340 3,973 5,127 1,750 6,114 440 212 3

26,401 6,600 5,083 2,495 2019 1,462 2,218 3,841 4,112 402 188 – 263 79,029 10,620 19,028 17,827 11,366 4,356 9,584 3,530 1,556 2018 2018 1,150 turnover, % 5.6 8.1 5.9 4.5 4.1 9.1 5.5 3.6 4.5 6.9 1.0 12 Staff Staff

76,607 12,582 19,736 13,370 2,082 5,582 1 612 11, 1,540 3,780 2019 2019 6,311 5.8 8.8 6.8 4.5 4.0 8.8 6.0 3.3 5.7 3.1 12 – 1 5 3 4 2 6 Appendices Our Report Appendix 5. To Our Personnel section

Personnel loss and hiring ratios by region, 2019 Russia / Foreign countries Personnel Personnel loss ratio, % hiring ratio, % Central Federal District 16.0 17. 0 North-Western Federal District 14.6 18.3 Volga Federal District 15.5 14.3 Urals Federal District 14.4 15.0 Siberian Federal District 18.7 21.9 Southern Federal District 14.5 14.9 North Caucasian Federal District 11. 6 12.2 Far Eastern Federal District 9.3 33.0 Foreign countries 13.8 14.7 Total 15.0 16.1 eport 2019 R To Chapter 3.6 Social Policy

GRI 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees ustainability

Benefits Full-time Temporary Part-time S employment* employment** employment***

Life insurance**** Yes No No roup’s G Medical services Yes No No Injury and disability compensation Yes Yes No

* Including fixed-term employment contracts for a period of more than three years and temporary vacancies. Gazprom ** Fixed-term employment contracts for a period of less than three years with life insurance, fixed-term employment contracts for a period of less than two months with voluntary medical insurance, and secondary employments. *** Civil law contracts for the provision of services for a fee. **** Covering executives of PJSC Gazprom Administration and subsidiaries engaged in core business operations. Note: The above refers to the operations of the Group’s companies in all Russian regions as well as the employees of PJSC Gazprom’s representative offices in twelve countries.

To Chapter 3.6 Social Policy / 3.6.3 Medical Care

Payments made by the Gazprom Group entities for rehabilitation treatment and targeted preventive initiatives under voluntary medical insurance contracts, 2016–2019*, RUB million Indicator 2016 2 017 2018 2019 Rehabilitation treatment 5,228.5 5,040.5 4,972.0 5,077.5 Targeted preventive initiatives 186.9 244.5 278.6 145.7

* Data for the entities included in PJSC Gazprom’s budgeting system (in 2019 – 110 organizations with a total headcount of over 310,000 employees).

264 Gazprom Group’s Sustainability Report 2019 * Appendix 5. Appendix Indicator Statistics oninsurance eventsbroken downbyaccidentanddiseaseinsurance risks,2016–2019* Temporary occupational disability Occupational disability duetoanaccident Occupational disability Permanent occupational disability duetoanillness Occupational disability Workplace mortality Non-work relatedmortality First diagnosedwithacriticalillness Data fortheentitiesincludedinPJSC Gazprom’s budgeting system(in2019– 110 organizationswithatotalheadcountofover310,000 employees). T o Our Personnel section 2016 81 2 213 10 13 4 4 No riskidentified 017 2 286 245 17 5 3 8 265 2018 260 325 13 5 6 4 2019 279 324 32 20 4 4 6 1 5 3 4 2 6 Appendices Our Report Appendix 6. To Our Workplace Safety section

To Chapter 4.1 Labour Safety Management

List of entities included in the Integrated System of Process Safety Management The Gazprom Group subsidiaries (gas business) engaged in core operations (production, transportation, storage, and processing). The total of 32 subsidiaries: Gazprom Dobycha Astrakhan LLC Gazprom Transgaz Kazan LLC Gazprom Dobycha Irkutsk LLC Gazprom Transgaz Krasnodar LLC Gazprom Dobycha Krasnodar LLC Gazprom Transgaz Makhachkala LLC Gazprom Dobycha Kuznetsk LLC Gazprom Transgaz Moscow LLC Gazprom Dobycha Nadym LLC Gazprom Transgaz Nizhny Novgorod LLC Gazprom Dobycha Noyabrsk LLC Gazprom Transgaz Samara LLC Gazprom Dobycha Orenburg LLC Gazprom Transgaz Saint Petersburg LLC Gazprom Dobycha Urengoy LLC Gazprom Transgaz Saratov LLC Gazprom Dobycha Shelf Yuzhno-Sakhalinsk LLC Gazprom Transgaz Stavropol LLC eport 2019 Gazprom Dobycha Yamburg LLC Gazprom Transgaz Surgut LLC R Gazprom Geologorazvedka LLC Gazprom Transgaz Tomsk LLC Gazprom Pererabotka LLC Gazprom Transgaz Ufa LLC

Gazprom UGS LLC Gazprom Transgaz Ukhta LLC ustainability S Gazprom Transgaz Volgograd LLC Gazprom Transgaz Tchaikovsky LLC

Gazprom Transgaz Grozny LLC Gazprom Transgaz Yugorsk LLC roup’s G Gazprom Transgaz Yekaterinburg LLC Gazprom Flot LLC Gazprom The Gazprom Group subsidiaries, entities and branches (gas business) engaged in gas supply network operations. The total of 70 entities: Gazprom Invest LLC Gazprom Mezhregiongaz LLC Gazprom Sotsinvest LLC PJSC Gazprom Spetsgazavtotrans Gazprom LNG Vladivostok LLC Gazprom Telecom LLC Gazprom LNG Saint Petersburg LLC Gazprom Torgservis LLC JSC Tsentrgaz Gazprom Pitanie LLC Novy Urengoy Gas Chemical Complex LLC Gazprom Transservis LLC Gas-Oil LLC Gazprom Energo LLC Gazprom Tsentrremont LLC JSC Gazprom Bytovye Systemy Gazpromavia Aviation Company LLC OJSC Gazpromtrubinvest Gazprom Gaznadzor LLC Gazpromtrans LLC Gazprom Gazobezopasnost LLC Gazprom Geotekhnologii LLC Gazprom Georesource LLC CJSC Gazprom Armenia Gazprom Inform LLC Gazprom Kyrgyzstan LLC Gazprom Komplektatsiya LLC OJSC Gazprom Transgaz Belarus JSC Gazprom Space Systems OJSC Gazprom – South Ossetia Gazprom Export LLC Gazprom Proyektirovaniye LLC Gazprom Svyaz LLC PJSC VNIPIgazdobycha

266 Gazprom Group’s Sustainability Report 2019 ISPSM. OHSAS 18000:2007 is96%ofthe totalheadcountcoveredbythe ascompliantwith The shareofemployeesinsubsidiariescertified ascompliantwith OHSAS Headcount insubsidiariesthatwerenotcertified 18000:2007, people of UGSSsubsidiaries) PJSC GazpromAdministration operations andsubsidiariesengagedinnon-coreoperations (supporting PJSC Gazprom’s subsidiariesengagedincoreoperations (UGSSsubsidiaries) Indicator Headcount inPJSC Gazprom forcompliancewithOHSAS Administrationandnotcertified 18000:2007, andsubsidiaries certified people GRI 403-8 To Chapter4.1.2 ManagementFramework LabourSafety attheGazpromGroup PJSC GazpromBranch BogorodskoyeOfficialReceptionHouse PJSC GazpromBranch AvtopredpriyatiePJSC Gazprom PJSC GazpromBranch forOfficeBuildingsManagement Gazprom CNISPrivate Entity Gazprom EPInternationalB.V ChOP GazpromOkhrana LLC OKDC PJSC GazpromPrivate HealthcareInstitution NIIgazeconomika LLC Gazprom ExpoLLC LLCGazprom VNIIGAZ Gazprom InvestholdingLLC Gazprom Shkola PJSC GazpromONUTC PJSC GazpromTraining Center Gazprom Training SimulatorComputerCenter Urengoy Gazprom VocationalSchoolNovy Gazprom Corporate Institute Gazprom CollegeVolgograd JSC SevKavNIPIgaz JSC Giprogaztsentr JSC GazpromPromgaz (continued): The Gazprom Group operations. subsidiaries,entitiesandbranches The (gasbusiness)engagedingassupplynetwork totalof70entities 6. Appendix

T o Our Workplace Safety section Safety Workplace o Our Gazprom Personal LLC Gazprom InvestprojectLLC Gazprom 335LLC PJSC GazpromBranch 333inSt.Petersburg Okhrany PJSC GazprominKrasnodar PJSC GazpromBranch Yuzhnoye Mezhregionalnoye Upravlenie Upravlenie Okhrany PJSC GazprominYekaterinburg PJSC GazpromBranch Yuzhno-Uralskoye Mezhregionalnoye Okhrany PJSC GazpromintheMoscowRegion PJSC GazpromBranch Tsentralnoye Mezhregionalnoye Upravlenie Okhrany PJSC GazprominTomsk PJSC GazpromBranch SibirskoyeMezhregionalnoye Upravlenie Okhrany PJSC Urengoy GazprominNovy PJSC GazpromBranch Severo-Uralskoye Mezhregionalnoye Upravlenie Okhrany PJSC GazprominSamara PJSC GazpromBranch Privolzhskoye Mezhregionalnoye Upravlenie PJSC GazprominKhabarovsk Branch DalnevostochnoyeMezhregionalnoye Upravlenie Okhrany St. Petersburg PJSC GazpromBranch Glavnoye Upravlenie Okhrany PJSC Gazpromin PJSC Gazprom PJSC GazpromBranch Sluzhba Korporativnoy Zashchity PJSC GazpromBranch Soyuz RecreationHouse PJSC GazpromBranch Morozovka RecreationHouse 267 231,436 74,695 12,945 2019 1 5 3 4 2 6 Appendices Our Report Appendix 7. To Our Responsibility to the Planet section

To Chapter 6.2.4 Energy Saving and Energy Efficiency

GRI 302-4 Fuel and energy cumulatively saved by PJSC Gazprom, 2011–2019 Natural gas cumulatively saved, bcm Electric power cumulatively saved, million kWh 22.4 2,544.3 2019 2019 2,213.8 19.1 2018 2018 1,849.6 15.8 2 017 2 017 1,518.1 12.8 2016 2016 1,258.1 10.9 2015 2015 eport 2019 997.5 R 8.2 2 014 2 014 742.9 6.1 2013 2013 ustainability S 437.0 4.2 2012

2012 roup’s

194.1 G 2.4 2 011 2 011 Gazprom

Heat energy cumulatively saved, thousand Gcal Total fuel and energy cumulatively saved, million tons of reference fuel 2,016.9 26.4 2019 2019 1,764.1 22.5 2018 2018 1,528.2 18.9 2 017 2 017 1,259.8 15.3 2016 2016 1,004.0 12.5 2015 2015 799.9 9.8 2 014 2 014 562.6 7.3 2013 2013 344.7 5.0 2012 2012 102.9 2.8 2 011 2 011

268 Gazprom Group’s Sustainability Report 2019 Gazprom EnergoLLC. Non-core business: Gazprom Mezhregiongaz LLC. Gas distribution: Gazprom Pererabotka LLC. Gas processing: Gazprom UGSLLC. Underground gasstorage: Gazprom Transgaz Saratov LLC; Gazprom Transgaz Samara LLC; LLC; GazpromTransgaz Volgograd LLC; GazpromTransgaz UfaLLC; Gazprom Transgaz SurgutLLC; GazpromTransgaz NizhnyNovgorod LLC; Gazprom Transgaz LLC; Ukhta GazpromTransgaz MoscowLLC; Gazprom Transgaz Yugorsk LLC; GazpromTransgaz Tchaikovsky Gas transportation: Gazprom DobychaNadymLLC; GazpromDobychaNoyabrskLLC; Gazprom DobychaOrenburgLLC; GazpromDobychaKrasnodar LLC; Gas production: of theimplementationenergysavingandefficiencyprograms Saving andEnergyEfficiencyImprovementProgram includetheresults The outcomesoftheimplementationPJSC Energy Gazprom 7. Appendix T o Our Responsibility to the Planet section Planet the to Responsibility o Our Belarus. LLC; GazpromTransgaz MakhachkalaLLC; OJSC GazpromTransgaz LLC; Gazprom Transgaz Tomsk LLC; GazpromTransgaz Krasnodar LLC; Gazprom Transgaz SaintPetersburg LLC; GazpromTransgaz Kazan Gazprom Transgaz Yekaterinburg LLC; GazpromTransgaz Stavropol Gazprom DobychaAstrakhan LLC. Gazprom DobychaUrengoyLLC; GazpromDobychaYamburg LLC; distribution, andprocessingsubsidiaries. of natural undergroundstorage, gasproduction,transportation, 269 1 5 3 4 2 6 Appendices Our Report Appendix 7. To Our Responsibility to the Planet section

GRI 305-1 To Chapter 6.2.2 Reduction of Greenhouse Gas Emissions across the Gazprom Group

Greenhouse gas emissions at the Gazprom Group companies, 2016–2019, mmt of СО2 equivalent 2019 236.5 2018 240.0 2 017 233.8 2016 228.2 2016 2 017 2018 2019 PJSC Gazprom 101.24 113.17 120.09 117.09 Gazprom Energoholding 99.72 96.17 94.06 89.03 Gazprom Neft Group 16.18 13.31 14.33 16.04 Gazprom Neftehim Salavat 4.56 5.75 6.18 6.04

Sakhalin Energy 3.42 3.22 3.25 3.05 eport 2019 R Other companies 3.07 2.21 2.06 5.20

To Chapter 6.2.5 Renewable and Secondary Energy Resources ustainability S OG3

Power generation from renewable and secondary energy resources at the Gazprom Group, 2016–2019 roup’s G Generation type Power generation, MWh Number of units, pcs 2016 2 017 2018 2019 2016 2 017 2018 2019

All types of renewable energy Gazprom sources and secondary energy resources 13,036,783.0 13,723,908.4 12,844,199.3 11,703,054.8 1,907 2,077 2,272 2,358 incl. PJSC Gazprom 297.2 362.4 459.7 557.9 1,329 1,423 1,555 1,585 Turbo expanders 38.5 143.9 93.2 74.7 10 20 17 21 incl. PJSC Gazprom 38.5 143.9 93.2 74.7 10 20 17 21 Thermogenerators and electrochemical generators 0.8 2.7 6.4 257.4 672 719 726 820 incl. PJSC Gazprom 0.8 2.7 6.4 257.4 672 719 726 820 Solar and wind generators 321.2 324.9 483.1 354.1 1,107 1,220 1, 411 1,399 incl. PJSC Gazprom 258.0 215.8 360.1 225.8 647 684 812 744 Hydroturbines 13,036,422.6 13,723,436.9 12,843,616.6 11,702,368.5 118 118 118 118 incl. Gazprom Energoholding 12,863,078.1 13,685,902.1 12,819,013.7 11,673,658.3 115 115 115 115 Gazprom Neftekhim Salavat 28,842.6 37,534.8 24,602.9 28,710.3 3 3 3 3

270 Gazprom Group’s Sustainability Report 2019 Volume ofwaterrecirculated andreused attheGazprom Group, 2016–2019, mcm To Chapter6.3.1Water:SustainableUseandTreatment 7. Appendix Indicator Gazprom Group’s waterdischarge trends bydestination,includingbreakdown bytreatment method, 2016–2019, mcm GRI 303-4,306-1 Indicator Indicator Formation waterproduced bytheGazprom Group, 2016−2019, thousandtons OG5 Water discharge,total,incl.: Volume ofwaterrecirculatedandreused Produced formationwater disposed ofathorizontal flareunitsatthefield orinjectedintoabsorbing theextractionFormation ofhydrocarbonsandmethanol is waterafter Water discharge to surface waterbodies,total,incl.: Water dischargetosurface Water dischargeonland,total,incl.: Water dischargetosubterranean layers,total,incl.: Water dischargetoirrigationsewagefields Water dischargetoabsorptionfields Water dischargetoholdingbasins Water dischargetopublicutilities Water dischargetoothersystems polluted (untreated) polluted (insufficientlytreated) partially clean(untreated) partially partially treated,total,incl.: partially polluted (untreated) polluted (insufficientlytreated) partially clean(untreated) partially partially treated,total,incl.: partially for theformationpressuremaintenance at biologicalpurificationplants at physicalandchemicalpurificationplants at mechanicalpurificationplants at biologicalpurificationplants at physicalandchemicalpurificationplants at mechanicalpurificationplants T o Our Responsibility to the Planet section Planet the to Responsibility o Our part ofthefields having enteredthestageoffalling production. part formations. Anincreaseinproduced formationwaterwasduetoalarge 12,482.12 4,084.29 3,855.45 3,664.06 2,829.3 130.08 99.48 48.93 42.20 32.33 10.80 64.74 2016 2016 2016 16.11 7 17 27. 0.26 8.39 0.66 0.03 0.70 0.52 6.02 0.58 9.77 0.01 0.17 .11 1. 12,006.85 3,905.26 3,754.89 4,141.40 3,210.7 144.15 60.02 63.56 26.79 38.69 45.28 15.92 38.81 017 2 017 2 017 2 10.61 0.25 0.26 0.03 0.88 0.35 0.00 0.52 0.58 0.99 5.15 0.01 1.18 271 11,063.73 3,658.44 3,514.68 3,871.11 3,754.4 134.02 56.56 22.39 36.66 64.80 44.69 25.94 49.67 2018 2018 2018 14.77 0.35 0.00 0.40 5.96 0.52 0.97 0.78 0.37 0.57 0.19 0.01 0.01 11,409.12 3,389.63 3,079.47 3,241.79 4,701.4 49.22 82.92 10.60 45.67 73.24 23.81 2019 2019 2019 21.28 67.80 37.92 0.88 0.46 6.63 0.45 0.19 0.47 0.21 0.01 0.01 0.01 1.10 0.41 1 5 3 4 2 6 Appendices Our Report Appendix 7. To Our Responsibility to the Planet section

To Chapter 6.2.3 Flaring Reduction

OG6 APG resource and utilization across the Gazprom Group as of 2016 Indicator APG resources, Flared, Utilization level, mcm mcm % Gazprom Group 11,386.49 1,968.88 82.7 incl. PJSC Gazprom Neft 9,560.92 1,933.32 79.8 incl. PJSC Gazprom’s fields 1,825.56 35.56 98.1

APG resource and utilization across the Gazprom Group as of 2017 Indicator APG resources, Flared, Utilization level, mcm mcm % Gazprom Group 13,090.97 2,748.62 79.0 eport 2019

incl. PJSC Gazprom Neft 11,434.86 2,726.42 76.2 R incl. PJSC Gazprom’s fields 1,656.11 22.27 98.5

APG resource and utilization across the Gazprom Group as of 2018 ustainability S Indicator APG resources, Flared, Utilization level, mcm mcm % roup’s roup’s

Gazprom Group 16,000.94 3,147.20 80.2 G incl. PJSC Gazprom Neft 14,398.06 3,111.56 78.4 incl. PJSC Gazprom’s fields 1,602.88 35.64 97.7 Gazprom

APG resource and utilization across the Gazprom Group as of 2019 Indicator APG resources, Flared, Utilization level, mcm mcm % Gazprom Group 18,320.07 1,854.45 89.9 incl. PJSC Gazprom Neft 16,640.54 1,829.71 89.0 incl. PJSC Gazprom’s fields 1,679.53 24.74 98.5

272 Gazprom Group’s Sustainability Report 2019 Generation andhandlingofproduction andconsumptionwastebytheGazprom Group, 2016–2019, thousandtons GRI 306-2 To Chapter6.3.5WasteReduction 7. Appendix Indicator Waste present as of the beginning of the reporting year Waste presentasofthebeginningreporting Waste generated during the reporting year Waste generated duringthereporting Waste receivedfromotherbusinessentities Waste processed at the facility Waste processedatthefacility Waste recycled at the facility Waste recycledatthefacility Waste neutralized atthefacility Waste handedovertootherbusinessentitiesforprocessing Waste handedovertootherbusinessentitiesforrecycling Waste handedovertootherbusinessentitiesforneutralization Waste handedovertootherbusinessentitiesforstorage Waste handedovertootherbusinessentitiesforburial Waste placedatoperated (own)storage facilities Waste placedatoperated (own)disposalfacilities 38.8%, respectively,ofthetotalwastegenerated bytheGroup. classesofwastesaccountfor56.6%and safe placement.These two eitherrecycledorhanded overfor andistypically Class IV(low-hazard) Gazprom Group’s wastebelongstoClassV(almostnon-hazardous) or Gazprom Groupareclassifiedashazardous. Under thelegislationofRussianFederation, allwastesacrossthe According totheenvironmentalhazardclassification,bulkof T o Our Responsibility to the Planet section Planet the to Responsibility o Our recycling. generated bytheGroupandishanded overforneutralization or Oil-contaminated wasteaccountsfornearly6.5%ofthetotal waste (thatwithashareofpetroleumproductsgreaterthan15%). share is0.04%ofthetotalwastegenerated bytheGroup. Class IandIIwasteishandedoverforneutralization orrecycling.Its Class IIIisrepresented,interalia,bysomeoftheoil-contaminated 130,350.81 12,798.66 4,289.81 222.90 809.92 438.84 446.20 844.60 267.58 90.60 10.05 2016 0.00 0.00 131,529.72 12,586.78 4,130.29 1,088.33 302.68 652.03 250.97 170.93 13.63 77.99 10.74 017 2 0.00 5.94 273

133,086.46 11,019.34 3,555.09 1,446.31 493.64 338.78 314.82 910.10 2018 75.16 16.12 21.67 0.00 6.83 123,507.35 3,337.08 1,168.68 1,078.95 335.92 383.35 231.90 86.76 2019 94.71 7 41 67. 0.04 1.38 5.21 1 5 3 4 2 6 Appendices Our Report Appendix 8. Glossary of Abbreviations and Code Names used in the Report

Terms and abbreviations Description ADR American depositary receipt APG Associated petroleum gas APR Asia-Pacific Region BAT Best available technologies BCS Booster compressor station boe barrels of oil equivalent CCES Corporate continuous education system CDP Carbon Disclosure Project CIS Commonwealth of Independent States CNG Compressed natural gas CNG filling station Automobile gas-filling compressor station Company PJSC Gazprom eport 2019 CS Compressor station R CSA Capacity supply agreement CVD Cardio-Vascular Disease

DCA Designated conservation area ustainability S DDM Digital data model

EIA Environmental impact assessment roup’s G EMS Environmental management system EnMS Energy Management System

EPI Energy Performance Indicator Gazprom ES Emergency situation ESG Environmental, social and governance criteria ETP Electronic Trading Platform EU European Union FIFA Federation Internationale de Football Association FSU countries Countries located in the former Soviet Union territory other than the Russian Federation Gazprom Energoholding Gazprom Energoholding LLC and companies consolidated under its management (PJSC Mosenergo, PJSC MOEK, PJSC TGС-1, and PJSC OGK-2) Gazprom Neft Group, PJSC Gazprom Neft and its subsidiaries Gazprom Neft Gazprom Neftekhim Salavat Gazprom Neftekhim Salavat LLC and its subsidiaries Gazprom, Gazprom Group, Group A group of companies consisting of PJSC Gazprom (parent company) and its subsidiaries GBP ETP Electronic Trading Platform of Gazprombank Group GCF Gas and condensate field GDP Gross Domestic Product GHG Greenhouse gases GPE Geological prospecting and exploration GPOC Gas Pipeline Operation Center

274 Gazprom Group’s Sustainability Report 2019 Report Refinery RAS R&D QMS PRMS subsidiaries PJSC Gazpromanditskey OHSAS OGCF OEM NPO NPF NGV NGO mcm MET M&E LPG LNG KPI KhMAA –Yugra ISPSM ISO IMS ILO IFRS HPP HIF GTS GS GRI GPP Report the in used Names Code and Abbreviations of Glossary 8. Appendix Gazprom Group’s Sustainability Report Gazprom Group’s Report Sustainability Oil refinery Russian accountingstandards Research anddevelopment ManagementSystem Quality Petroleum ResourcesManagementSystem Transgaz Krasnodar LLC, OJSC GazpromTransgaz Belarus,GazpromUGSLLC LLC, GazpromTransgaz Samara LLC, Gazprom Transgaz UfaLLC, GazpromTransgaz Kazan LLC, Gazprom Gazprom Transgaz NizhnyNovgorodLLC, GazpromTransgaz Saratov LLC, GazpromTransgaz Volgograd Transgaz Yekaterinburg LLC, Gazprom Transgaz StavropolLLC, GazpromTransgaz MakhachkalaLLC, Transgaz MoscowLLC, GazpromTransgaz Tomsk LLC, GazpromTransgaz Tchaikovsky LLC, Gazprom Transgaz SurgutLLC, GazpromTransgaz Yugorsk LLC, GazpromTransgaz SaintPetersburg LLC, Gazprom Gazprom Pererabotka LLC, GazpromDobychaKrasnodar LLC, GazpromTransgaz LLC, Ukhta Gazprom Gazprom DobychaNoyabrskLLC, GazpromDobychaOrenburgLLC, Gazprom DobychaAstrakhan LLC, Gazprom DobychaYamburg LLC, GazpromDobychaUrengoyLLC, GazpromDobycha NadymLLC, PJSC processing,andundergroundstorage Gazpromanditsgasproduction,transportation, subsidiaries: AssessmentSeries Occupational HealthandSafety Oil andgascondensatefield Operational environmentalmonitoring Non-profit organization Non-governmental pensionfund Natural gasvehicle Non-governmental organization million cubicmeters Mineral extraction tax Materials andequipment Liquefied petroleumgases Liquefied natural gas indicator Key performance –YugraKhanty-Mansi AutonomousArea Integrated SystemofProcess Management Safety International OrganizationforStandardization Information ManagementSystem International LabourOrganization Standards International FinancialReporting Hydro powerplant Hazardous industrialfacility Gas transmission system Gas station Initiative Global Reporting Gas processingplant 275 1 5 3 4 2 6 Appendices Our Report Appendix 8. Glossary of Abbreviations and Code Names used in the Report

RES Renewable energy sources RUIE Russian Union of Industrialists and Entrepreneurs Sakhalin Energy Sakhalin Energy Investment Company Ltd. SDG Sustainable development goal SER Secondary energy resources SME Small and medium-sized enterprises Subsidiary Subsidiary company tcm trillion cubic meters Ton of reference fuel Ton of reference fuel (coal equivalent) equal to 877 cubic meters of natural gas, 0.7 ton of oil and gas condensate TPP Thermal power plant UEFA Union of European Football Associations UES Unified Energy System eport 2019

UGS Underground gas storage R UGSS Unified Gas Supply System VAT Value-added tax

VIT Vacuum insulated tubing ustainability S WPP Water purification plant roup’s roup’s G Gazprom

276 Gazprom Group’s Sustainability Report 2019 of IndustrialistsandEntrepreneurs Assurance oftheRussianUnion Appendix 9.

277 1 5 3 4 2 6 Appendices Our Report Appendix 10. Approval by FBK

GRI 102-56

INDEPENDENT PRACTITIONER’S LIMITED ASSURANCE REPORT [TRANSLATION FROM RUSSIAN ORIGINAL]

To the management of PJSC «GAZPROM» We have undertaken a limited assurance engagement of the accompanying Gazprom Group’s Sustainability Report 2019 (hereinafter referred to as the Report) compliance with the requirements of GRI Sustainability Reporting Standards to the report prepared in accordance with the Core option. Responsibility of PJSC «GAZPROM»

PJSC «GAZPROM» is responsible for preparation of the Report in compliance with the requirements of GRI eport 2019

Sustainability Reporting Standards to the report prepared in accordance with the Core option. This R responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the Report that is free from material misstatement, whether due to fraud or error. Our Independence and Quality Control We have complied with the independence and other ethical requirements of the Rules of Independence of the Auditors and Audit Organizations and The Code of Professional Ethics of the Auditors, which are in accordance with International Code of Ethics for Professional Accountants (including International ustainability S Independence Standards) issued by the International Ethics Standards Board for Accountants, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior, and we have fulfilled our other ethical responsibilities in accordance with these requirements. roup’s G The firm applies International Standard on Quality Control 1, Quality Control for Firm that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements, and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory

requirements. Gazprom Our Responsibility Our responsibility is to express a limited assurance conclusion on the Report compliance with the requirements of GRI Sustainability Reporting Standards to the report prepared in accordance with the Core option based on the procedures we have performed and the evidence we have obtained. We conducted our limited assurance engagement in accordance with International Standard on Assurance Engagements 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information. This standard requires that we plan and perform this engagement to obtain limited assurance about whether the Report is free from material misstatement. A limited assurance engagement undertaken in accordance with this standard involves assessing compliance of the Report with the requirements of GRI Sustainability Reporting Standards to the report prepared in accordance with the Core option. A limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both the risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks. The procedures we performed were based on our professional judgment and included inquiries, inspection of documents, analytical procedures, evaluating the appropriateness of quantification methods and reporting policies, and agreeing or reconciling with underlying records. Given the circumstances of the engagement, in performing the procedures listed above we have performed the following activities:  Interviewing the management and employees of Gazprom Group’s companies and obtaining documentary evidence.  Study of information available on the websites Gazprom Group’s companies related to their activities in the context of sustainable development.  Study of public statements of third parties concerning economic, environmental and social aspects of Gazprom Group’s companies activities, in order to check validity of the declarations made in the Report.  Analysis of non-financial reports of companies working in the similar market segment for benchmarking purposes.

TRANSLATION NOTE: Our report has been prepared in Russian and in English. In all matters of interpretation of information, views or opinions, the Russian version of our report takes precedence over the English version. 1 из 2

278 Gazprom Group’s Sustainability Report 2019 Appendix 10. Approval by FBK by 10. Approval Appendix version. English the over precedence takes report of our version Russian the opinions, or views information, of TRANSLATIONNOTE: Our report been has preparedRussianinand in English. allIn September 10, 2020 2020 10, September Moscow Federation, Russian The 2018 17, December of 76/18 No. Attorney of Power under acting Partner Practitioner option. Core with the in accordance report prepared to the Standards Reporting Sustainability of GRI withrequirements aspects, material all in has notcomplied, the Report that tobelieve us to that attention our come causes has and nothing obtained, evidence Basedprocedures performed the on Assurance Conclusion Limited option. Core with the accordance in prepared report the to Standards of requirements the with respects, material all in Report, the of compliance about opinion assurance a reasonable express not do we Accordingly, engagement. assurance a reasonable performed we had haveobtained would been that thanthe assurance lower issubstantially engagement assurance limited a in obtained assurance of level the Consequently, engagement. assurance areasonable for, than in extent and less are from, timing and nature in vary engagement assurance limited ina performed procedures The website. «GAZPROM» on the PJSC indigital form wellas as form ain hard-copy topublished be information includes which Report, the of version Russian the to in relation performed were procedures The preparation. in Report the Standards the of use it the of notify order to in Initiative Global Reporting to sending as well as Entrepreneurs, and Industrialists of Union Russian the of Board Reporting Financial Non- by verification public to subject Report the of version the to inrelation performed were procedures The opinion. expert on based wellas statements as future; the to related actions any totake Group Gazprom of company theas parent PJSC «GAZPROM» of and intentions beliefs opinions, the expressing statements statements; forward-looking to in relation performed not were procedures The performed. was us providedto documents reporting internal and external to conformity its of assessment information this to InIndex”. respect Content 1. GRI “Appendix Report the of tosection the in referred information and option Core with the inaccordance prepared toreport the of Standards withrequirements the compliance to in relation conducted was Report in the on performance the information of reliability of evaluation The 2019. December yearended 31 the for data to in only relation were performed procedures The FBK, LLC FBK, LLC    Analysis of information in the Report for compliance with the requirements of GRI Sustainability GRISustainability of with the requirements compliance the for in Report of information Analysis Study of the existing processes of collection, processing, documenting, verification, analysis and and analysis verification, documenting, processing, of collection, Study of the existing processes Selective review of documents and data on the efficiency of the management systems of economic, of systems management the of efficiency the on data and documents of review Selective Reporting Standards to the report prepared in accordance with the Core option. option. Core with the in accordance report prepared to the Standards Reporting selection of data to be included into the Report. into theReport. included be to data of selection environmental and social aspects of sustainable development in PJSC «GAZPROM». «GAZPROM». inPJSC development sustainable of aspects social and environmental

______matters of interpretation

V.Y.Skobarev V.Y.Skobarev 2 из 2 279 1 5 3 4 2 6 Appendices Our Report Appendix 11. Opinion Issued Following Public Consultations

Introduction

PJSC Gazprom (hereinafter – the Company) proposed that we assess expectations, along with the quality of the Company’s response to the the information disclosed in the Gazprom Group’s Sustainability recommendations and proposals received from stakeholders during the Report 2019 (hereinafter – the Report) for alignment with stakeholder Report preparation.

Report Assessment Procedure

We were given an opportunity to read the draft Report provided by the Report compliance with any Russian and international reporting the Company, ask questions and offer feedback during dedicated and/or operational standards. the Public consultations which were held online. In the course When assessing the Report, we expressed our own opinion of the Public consultations, we were provided with the required as independent experts, not representatives of the company that comments and the table on how the Company took into account our employs us. We confirm our independence and objectivity in respect recommendations and proposals. We provide assessment of the of the Report assessment. We did not receive any remuneration eport 2019

above information only. from the Company for taking part in the Public consultations. R We are unaware of any facts that may compromise the reliability The results of our work are presented in this Opinion issued of information disclosed in the Report. Yet, it should be noted following the Public consultations. The Opinion contains judgements that reviewing the collection and analysis system for the reported on which we have come to an agreement. The Company may information and its reliability is beyond the scope of this assessment. use it for corporate and stakeholder communication purposes by Besides, the assessment does not purport to confirm the extent of publishing the original version without any changes. ustainability S roup’s roup’s Disclosure Alignment G with Stakeholder Expectations Gazprom

The Report presents the list of material topics jointly defined by the The information disclosed in the Report is well-balanced as it presents Company’s representatives and a wide range of stakeholders. We believe both the positive aspects of the Company’s performance and the that the selected material topics reflect the key interests of stakeholders. challenges it faces along with the ways of tackling them. In our opinion, all material information presented in the Report is sufficient for the stakeholders to gain an understanding of the Company’s current state and development prospects.

The Company’s Response to Stakeholder Recommendations as part of the Report Preparation

To take into account information queries from a wide range of representatives to comment on the Report’s contents. The Company stakeholders in the best possible way, the Company surveyed over recorded all proposals and recommendations received during the 2,000 representatives of such stakeholders. The results served as a Public consultations, analysed them and provided the information on basis for the final list of material topics to be reflected in the Report. how they were taken into account in preparing the Report, which proves Additionally, for the first time in its history, the Company held that the dialogue was constructive. public consultations on the draft Report enabling us as stakeholder

280 Gazprom Group’s Sustainability Report 2019 Valery Valery KHUDI, Elena FEOKTISTOVA, Galina TKACHENKO, Maxim REMCHUKOV, Alexander PLAKIDA, Vladimir KOVALCHUK, Aleksey KNIZHNIKOV, Pavel ZAVALNY, Irina ESIPOVA, Svetlana GRISHANKOVA, Sergey BOBYLEV, Valery BESSEL, Igor BELIKOV, Full name Public Consultations:Signatures ofParticipants expectations. documentthatmeetsour informative andwell-structuredreporting its formatandtheextentofdisclosure.The Company prepared an intermsof We areagreedtogiveapositiveopinionontheReport Conclusions 11.Appendix Opinion Issued Following Public Consultations Movement ofIndigenousMinorities “Yamal” Chairman oftheManagementBoardYamal RegionalSocial The RussianUnionofIndustrialistsandEntrepreneurs SustainableDevelopmentandSocialEntrepreneurship, Responsibility, and SustainableDevelopment,ManagingDirectorforCorporate onCorporate SocialResponsibility ChairoftheCommittee Deputy project Region), ChairofthePublic CounciloftheAmurGPPConstruction Chair oftheNGO“Visit”Youth Leisure CenterinSvobodny(Amur Sustainable DevelopmentDirector, SIBUR Compact” oftheGlobal Chair oftheBoardsAssociation“NationalNetwork Chairman oftheGazpromWorkers’UnionInterregionalOrganization WWF Russia Head oftheProgram at fortheBusinessEnvironmentalResponsibility Federation, ChairmanoftheStateDumaEnergyCommittee oftheStateDumaFederalDeputy AssemblyoftheRussian Center General Director, Fuel andEnergy CommunicationsDevelopment RAGmbH CEO, RatingAgenturExpert Lomonosov MoscowStateUniversity ofEconomics, Faculty Head ofEnvironmentalEconomicsDepartment, President ofNewTech Services ofOilandGas,ExecutiveVice at GubkinRussianStateUniversity Professor ofThermodynamics oftheDepartment andThermal Engines Director, RussianInstituteofDirectorsNon-Profi t Partnership Position representatives ofthetargetaudiencesReport. the Company tocontinueclosecooperation onthisissuewith andrecommend Report, stakeholders inpreparing theSustainability We highlyappreciatetheCompany’s initiativeaimedatinteracting with 81 2 Signature 1 5 3 4 2 6 Appendices Our Report Contacts and Feedback

GRI 102-53 Should you have any questions regarding this Sustainability Report, Tel.: +7 (812) 609-34-48 please contact PJSC Gazprom’s Department responsible for the E-mail: [email protected] common information policy. eport 2019 R ustainability S roup’s roup’s G Gazprom

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