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SUSTAINABLE DEVELOPMENT REPORT 2016 CONTENTS SAFE DEVELOPMENT: INDUSTRIAL AND ENVIRONMENTAL SAFETY, OCCUPATIONAL HEALTH AND SAFETY, ENERGY EFFICIENCY AND ENERGY ABOUT THE REPORT 2 SUSTAINABLE DEVELOPMENT STRATEGY CONSERVATION APPENDICES About Sustainable Development Strategy 34 Goals and results in 2016 78 Appendix 1. Policy and management 81 Certification of the report by the non-financial Reporting board of the Russian Union of Industrialists Supply chain responsibility 84 and entrepreneurs 132 Stakeholder engagement 85 Appendix 2. MESSAGE FROM THE CHAIRMAN SUSTAINABILITY MANAGEMENT Industrial and occupational safety 88 Index of standard disclosures 133 OF THE BOARD OF DIRECTORS 6 AND STAKEHOLDER ENGAGEMENT Mitigating negative environmental impacts Appendix 3. and the effective use of resources 93 Definition of key terms and acronyms 143 Energy consumption and energy efficiency 105 Contact information and feedback 145 Corporate governance 40 Goals for 2017 110 Remuneration for members of the Board of Directors and Management Board 42 Information policy 42 MESSAGE FROM THE CHAIRMAN Observance of human rights 43 OF THE MANAGEMENT BOARD 8 Ethics and anti-corruption activities 44 Internal control and risk management 44 Stakeholder engagement 48 Corporate culture 53 Internal corporate communications 54 External communications 55 REGIONAL POLICY AND DEVELOPMENT ABOUT THE COMPANY HUMAN RESOURCE DEVELOPMENT OF LOCAL COMMUNITIES Gazprom neft today 12 Goals and results in 2016 58 Goals and results in 2016 114 Business model 14 Profile of personnel 59 The Company and the regions: cooperation to meet The online version of the company’s Key financial and production results 15 HR management system 60 sustainable development objectives 115 Sustainable Development Report for 2016 is available at: Innovative activities 22 Employer brand 62 Stakeholder engagement 119 csr2016.gazprom-neft.com Product quality control and improvement 26 Remuneration and social support for personnel 63 Social activities 121 Engagement with customers 28 Cooperation with trade unions 65 Interaction with IPNR 129 Supply chain 30 Personnel training and development 66 Corporate volunteering 130 Goals for 2017 31 Professional skills development 68 Goals for 2017 131 Development of management and leadership skills 71 Knowledge management 72 Development of talent pool 73 Goals for 2017 75 KEY THEMES AND ASPECTS ABOUT THE REPORT OF INFORMATION DISCLOSURE ABOUT THE REPORT GAZPROM NEFT IS PLEASED TO PRESENT ITS REPORT The Report details the Company's medium- When managing sustainable development activities and reporting in this area, ON SUSTAINABLE DEVELOPMENT ACTIVITIES (HEREINAFTER – and long-term plans. This information is forward- Gazprom Neft focuses on aspects that are the most significant for the Company Dialogues with stakeholders in the regions where looking in nature. The feasibility of the declared and its stakeholders. The list of these significant aspects and themes defines the Company operates are an important feedback THE SUSTAINABLE DEVELOPMENT REPORT OR REPORT) intentions depends on factors (economic, social, the content of the Report. channel for highlighting significant aspects and themes FOR 2016. THE REPORT HIGHLIGHTS THE COMPANY’S APPROACH and legal) that are beyond the Company’s control of the Report. The Company held such dialogues TO SUSTAINABLE DEVELOPMENT AND SOCIAL RESPONSIBILITY or influence. The actual results may therefore differ When determining significant themesand the corresponding indicators, in Orenburg and Khanty-Mansiysk in 2016. AS WELL AS THE FOCUSES AND RESULTS OF ITS WORK TO MEET from those indicated in the plans. the Company took into consideration the provisions of the UN Global Compact, The roundtable ‘Sustainable Development the Social Charter of Russian Business as well as the following standards of Gazprom Neft and Contribution to the Development PRODUCTION, ECONOMIC, SOCIAL AND ENVIRONMENTAL The Company employs the external assurance and studies: of the Orenburg Region’ was attended by representatives OBJECTIVES. procedure for its Report to enhance the credibility > international and Russian standards in corporate social responsibility (CSR) of the subsidiary Gazpromneft-Orenburg, the Company’s of the presented information and to verify and sustainable development and non-financial report standards (ISO 26000, corporate headquarters, the legislative and executive authorities, big and medium-sized business, whether the approaches selected to highlight GRI–G4, G4 Sector Supplement); the Russian Union of Industrialists and Entrepreneurs, This is the Company’s ninth Sustainable Development Report. Gazprom Neft sustainable development matters are consistent > studies on the industry-wide practice for the management of sustainable the Chamber of Commerce and Industry, universities, publishes its non-financial reportsat the same time as its annual reports so with the principles of responsible business development and reporting in this area; public organisations and the media. The event it can present comprehensive coverage of its activities to solve economic, practices. In 2016, the Report underwent > an analysis of the scope of the Company’s stakeholder engagement. focused on the following themes: the Company’s environmental and social problems in a strategic context. independent public assurance by the Non- approach to doing business in the Orenburg Region, Financial Reporting Board of the Russian Union Principles used to determine the content of the Sustainable Development the main problems and results of activities in industrial For Gazprom Neft, preparing sustainable development reports of Industrialists and Entrepreneurs (RUIE). Report: and occupational safety and the implementation is a tool of corporate governance and a significant componentfor stakeholder The assurance certificate is published in Appendix 1. > materiality; of the ‘Native Towns’ social investment programme engagement. The Company believes it is essential to regularly provide > coverage of stakeholders; in the region. stakeholders with comprehensive information about aspects of its activities that The Report is published in Russian and in English. > context; The roundtable held in Khanty-Mansiysk, titled ‘Activities are significantfor them and obtain feedback about the Report. > completeness; of Gazprom Neft and Sustainable Development > balance; in the Company’s Regions of Operations’, was attended The 2016 Report is prepared in accordance with the basic version of Sustainability The previous Sustainable Development > comparability; by representatives of the subsidiary Gazpromneft- Reports and other documents also available Reporting Guidelines – GRI-G4 – and taking into account the provisions > accuracy; Khantos, the Company’s corporate headquarters, on the Company's website: the legislative and executive authorities of the Khanty- of ISO 26000:2010 (Guidance on Social Responsibility)1. The GRI index of standard www.gazprom-neft.com/social/reports/ > timeliness; Mansi Autonomous District-Yugra, the Russian Union disclosures and ISO 26000:2010 indicators are presented in Appendix 2. > clarity; of Industrialists and Entrepreneurs, public and municipal > reliability. organisations, Yugra State University and the media. The Report presents information about Gazprom Neft PJSC and its subsidiaries The participants discussed the Company’s approach and affiliates (hereinafter referredto as Gazprom Neft or the Company) An analysis of the Company’s engagement with stakeholders was used to doing business, the establishment of lean production for the 2016 calendar year. The Company’s financial position and operating results to determine the themes and aspects that are significant for them as well and the implementation of the social investment are presented using consolidated data from Gazprom Neft PJSC. The Report as their materiality. The following was analysed in the process of identifying programme in the Khanty-Mansi Autonomous District- draws on the management and audited financial accountsof Gazprom Neft PJSC significant themes: Yugra. drafted in accordance with International Financial Reporting Standards > materials from a survey of employees (managers and specialists) as part The roundtables also included a discussion (IFRS). Unless otherwise indicated in the text, data on the Company’s social of the preparation of this Report; of the Company’s Sustainable Development Report and labour relations and its environmental performance include figures > the results of employee feedback; for 2015 and the significant themes and aspects for Gazprom Neft PJSC and its subsidiaries and affiliates based in the Russian > the results of an annual study of the Company’s social and psychological of the 2016 Report. The discussion revealed that Federation and the Commonwealth of Independent States (CIS). climate, minutes of meetings between employees and management, the current structure of the Report takes into account and team meetings; the interests of various stakeholders in a sufficiently balanced manner2. At the same time, a number > materials from Gazprom Neft’s regular interaction with investors, the federal of the participants expressed wishes that were taken into and regional authorities, business partners, non-profit and public account when preparing the Report for 2016. In particular, organisations, experts and local communities; this Report provides wide-ranging information > materials from roundtables and public hearings in the regions; about the Company’s
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