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SUSTAINABLE DEVELOPMENT REPORT 2015 Contents SUSTAINABLE DEVELOPMENT REPORT 2015 Contents ABOUT THE REPORT 1 HUMAN RESOURCE DEVELOPMENT 52 Key themes and aspects of information disclosure 2 Goals and results of activities Significant themes and aspects of the 2015 Report 3 to develop human resource potential in 2015 54 Employee demographics 56 MESSAGE FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS 4 HR management system 57 Employer brand 59 MESSAGE FROM THE CHAIRMAN OF THE MANAGEMENT BOARD 6 Remuneration and social support for personnel 60 Cooperation with trade unions 62 ABOUT THE COMPANY 8 Personnel training and development 62 Mission 10 Development of the talent pool 67 Gazprom Neft values 10 Work with graduates and young professionals 68 Strategic goal 10 Goals for 2016 69 Core businesses and structure of Company 11 Geography of operations 12 SAFE DEVELOPMENT: INDUSTRIAL AND ENVIRONMENTAL SAFETY, Gazprom Neft in 2015: OCCUPATIONAL HEALTH AND SAFETY, ENERGY EFFICIENCY key financial and production results 13 AND ENERGY CONSERVATION 70 Policy and management 72 ECONOMIC PERFORMANCE AND INNOVATIVE DEVELOPMENT 14 Supply chain responsibility 75 Exploration and production 16 Stakeholder engagement 76 Oil refining 18 Industrial safety and occupational health and safety 78 Sale of oil and petroleum products 19 Goals and results of industrial and occupational Sale of petroleum products by the filling safety activities in 2015 80 station network and by product business units 20 Mitigating the negative environmental impact Petrochemistry 23 and the effective use of resources 82 Innovation 24 Key goals and performance results Product quality control and improvement 27 in environmental protection in 2015 84 Engagement with customers 29 Energy consumption and efficiency 95 Supply chain 30 Goals and performance results in 2015 95 Goals for 2016 31 Goals for 2016 100 SUSTAINABLE DEVELOPMENT STRATEGY 32 REGIONAL POLICY AND DEVELOPMENT OF LOCAL COMMUNITIES 102 Company’s priorities for strategic development 34 The Company and the regions: cooperation Value chain 34 to meet sustainable development objectives 104 Company’s impact on the regions where it operates 105 SUSTAINABILITY MANAGEMENT AND STAKEHOLDER ENGAGEMENT 36 Social activities 107 Corporate governance 38 Engagement with stakeholders 110 Information policy 40 Results of the “Native Towns” social investment Ethics and anti-corruption activities 41 programme in 2015 113 Internal control and risk management 41 Social activities abroad 119 Stakeholder engagement 44 Corporate volunteering 119 Corporate culture 50 Goals for 2016 121 Internal corporate communications 50 External communications 51 APPENDIX 1. CERTIFICATION OF THE REPORT BY THE NON-FINANCIAL REPORTING BOARD OF THE RUSSIAN UNION OF INDUSTRIALISTS AND ENTREPRENEURS 122 APPENDIX 2. INDEX OF STANDARD DISCLOSURES 123 APPENDIX 3. NAVIGATING Link to the Sustainable PUBLIC HEARINGS IN THE REGIONS OF OPERATION 130 THE REPORT Development Report page APPENDIX 4. DEFINITION OF KEY TERMS AND ACRONYMS 134 Link to the website CONTACT INFORMATION AND FEEDBACK 137 page ABOUT THE REPORT Gazprom Neft is pleased to present its report on sustainable development activities (hereinafter – the Sustainable Development Report or Report) for 2015. The Report highlights the Company’s approach to sustainable development and social responsibility, the results of its activities in this area and the practices it employs to meet environmental and social objectives. For Gazprom Neft, publishing annual sustainable development from Gazprom Neft PJSC. The Report draws on the management reports is a major component in stakeholder engagement and audited financial accounts of Gazprom Neft PJSC drafted that allows for obtaining feedback as well as presenting in accordance with International Financial Reporting Standards comprehensive information about significant aspects (IFRS). Unless otherwise indicated in the text, data on of the Company’s activities for stakeholders, its position the Company’s social and labour relations and its environmental at the time the Report was prepared and its development performance include figures for Gazprom Neft PJSC and its prospects. subsidiaries and affiliates based in the Russian Federation and the Commonwealth of Independent States (CIS). The Report is prepared in accordance with the basic version of Sustainability Reporting Guidelines – GRI-G4 – The Report details the Company's medium- and long-term plans. and taking into account the provisions of ISO 26000:2010 This information is forward-looking in nature. The feasibility (Guidance on Social Responsibility) . The reporting principles, of the declared intentions depends on factors (economic, social, the GRI index of standard disclosures and ISO 26000:2010 and legal) that are beyond the Company’s control or influence. indicators are presented in Appendix 2. The actual results may therefore differ from those indicated in the plans. Gazprom Neft has published sustainability reports since 2007. Since 2008, these reports have been published at the same The Company employs the external assurance procedure time as the Company’s annual reports, thereby enabling for its Report to enhance the credibility of the presented the Company to present comprehensive coverage information and to verify whether the approaches selected of its activities to solve economic, environmental to highlight sustainable development matters are consistent and social problems in a strategic context. with the principles of responsible business practices. In 2015, the Report underwent independent public assurance The Report presents information about Gazprom Neft PJSC by the Non-Financial Reporting Board of the Russian Union and its subsidiaries and affiliates (hereinafter referred of Industrialists and Entrepreneurs (RUIE). The assurance to as “Gazprom Neft”, “the Company” and “the Group”) certificate is published in Appendix 1. for the 2015 calendar year. The Company's financial position and operating results are presented using consolidated data The Report is published in Russian and in English, and is also available on the Company's website. The online version of the Company’s Sustainable Development Report for 2015 is available at: http://csr2015.gazprom-neft.com/ 1 Adopted in the Russian Federation as GOST R ISO 26000-2012. www.gazprom-neft.com 1 About the report Key themes and aspects of information disclosure The contents of the Report describe a range of significant themes and aspects that may be reasonably important for reflecting the Company’s impact on the economy, environment and society or influencing stakeholders. When determining significant themes and the corresponding indicators, the Company took into consideration the provisions of the UN Global Compact, the Social Charter of Russian Business as well as the following standards and studies: ↗ international and Russian standards in corporate social responsibility (CSR) and sustainable development and non-financial report standards (ISO 26000, GRI–G4, G4 Sector Supplement); ↗ studies on the industry-wide practice for the management of sustainable development and reporting in this area; ↗ an analysis of the scope of the Company’s stakeholder engagement. The analysis of internal stakeholder engagement utilised surveys of Company employees (executives and specialists) conducted as part of the preparation of this Report, the results of annual research on the social and psychological climate at the Company and the minutes of meetings between employees and management as well as workforce meetings. When identifying themes that are significant for external stakeholders, Gazprom Neft utilised materials from its regular interaction with investors, the federal and regional authorities, business partners, non-profit and public organisations, experts and local communities. Materials from roundtables that Gazprom Neft organises in the regions to inform stakeholders about the Company’s approaches and performance results in sustainable development were also employed. In 2015, special roundtable sessions were devoted to a discussion of the Company’s sustainable development reporting. A detailed breakdown of these meetings is presented in Appendix 3. The Company also took into account the recommendations and comments it received as part of the public assurance of its 2014 Sustainability Report by the Non-Financial Reporting Board of the RUIE. These measures made it possible to outline the range of themes that are significant in terms of the Company’s values and strategy as well as from the standpoint of stakeholders. 2 GAZPROM NEFT // SUSTAINABLE DEVELOPMENT REPORT 2015 Significant themes and aspects of the 2015 Report Themes and aspects Priorities of internal Priorities of external stakeholders stakeholders ECONOMIC PERFORMANCE Company’s strategy Investment programme Financial stability Production efficiency Product quality Innovative activities INDUSTRIAL AND OCCUPATIONAL SAFETY Safety of production processes Emergency preparedness Occupational health and care for employee health ENVIRONMENTAL SAFETY Industrial environmental monitoring Compliance with environmental legislation requirements Environmental impact of the Company’s activities at the Prirazlomnoye field Utilising energy and energy efficiency Sustainable use of natural resources Greenhouse gas emissions HUMAN CAPITAL Equitable remuneration and social support for personnel Employee training and development Labour relations and employment COMPANY’S IMPACT ON THE REGIONS WHERE IT OPERATES Local community development
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