Letter from the Customer care Employee Sustainable Improving product quality Development Report Chairman of the development 2020

CONTENTS and service Management Board Unlocking the potential of 58 Product quality assurance employees 66 Care about consumer health and safety All sustainable development 123 Employer brand 68 Continuous consumer engagement reports on the company’s 125 Human resources development 71 Improvement of digital products and services website Neft 127 Human resources profile 73 Customer personal data protection at a glance 129 Compensation and social benefits for employees 132 Employee training and development About the Report Creating a sustainable future 138 Partnerships with educational organisations Dear readers, Health and safety 142 Talent pool development 8 2020 highlights We are delighted to present to you ’s Sustainable 11 A company committed to sustainable development Working safely Development Report1 2020 .This is the 13th non-financial public report, which details the company’s approaches to responsible business conduct 16 Creating value for the stakeholders 78 COVID-19 response and its contribution to sustainable development. 18 Company strategy and sustainable development 80 HSE management system Social policy The Report discloses information about Gazprom Neft PJSC as well as 22 Strategy 2030 83 Occupational health its subsidiaries and controlled entities (referred to in this Report as Contributing to regional “Gazprom Neft” or the “company”) for the calendar year 2020.2 The 88 Occupational health and disease prevention company’s financial and operating performance is presented based on development Gazprom Neft PJSC’s consolidated data. Unless otherwise specified, 89 Industrial safety information on the company’s labour relations, social initiatives, and 149 The company’s social agenda under environmental performance relate to Gazprom Neft PJSC as well as its Sustainable the COVID-19 pandemic subsidiaries and controlled entities in and the CIS. 152 Gazprom Neft’s social projects development Information provided herein was obtained from corporate reports, Environmental 157 Social and economic agreements with regional requests for information in line with the guidelines contained in non- governments financial reporting standards, and corporate media. management 159 Gazprom Neft’s social projects abroad safety The Report discloses the details of management approaches, activities Conducting our business and progress towards achieving economic efficiency, ensuring Caring about the occupational and environmental safety, supporting and developing responsibly personnel, contributing to social and economic development throughout environment the regions in which the company operates and respecting human rights. 27 Corporate governance Appendices 98 Climate change The Report contains forward-looking statements on the company’s mid 31 Sustainability risk management 162 Sustainable development highlights and long-term plans, and their feasibility depends, among other things, 109 Air protection on a number of economic, social and legal factors beyond the company’s 34 Ethics 167 Identification of the Report’s material topics 112 Preserving biodiversity control. Consequently, actual results may differ from those expressed in 35 Anti-corruption such statements. 170 GRI content index 113 Water resource management 36 Human rights and anti-discrimination 183 Independent Limited Assurance Report 115 Waste management and land use 38 Technology and innovation 186 Terms and abbreviations 42 Supply chain management 189 Contacts and feedback 45 Stakeholder engagement 1 — Hereinafter referred to as the “Report”. 54 Tax compliance 2 — Information on changes in the company’s structure that occurred in 2020 is presented in the “Governance system” section of Gazprom Neft’s Annual Report 2020. Sustainable Development Report 2020

Reporting standards and For more details on how the Report’s material topics were assurance The Report’s material topics identified and prioritised, see Appendix 2.

Gazprom Neft at a glance

Material topic GRI Standard Section of the Report UN Sustainable Development Goals (UN SDGs) This Report has been prepared in accordance with the GRI Standards (Core option) and Sustainable GAZPROM NEFT development Financial stability and operational efficiency GRI 201 ISO 26000:2010 (Guidance on management AT A GLANCE social responsibility), as well as the Reference Performance Indicators of the Russian Supplier engagement GRI 204 Union of Industrialists and Entrepreneurs (RSPP) and Anti-corruption GRI 205 SUSTAINABLE Recommendations of the Customer DEVELOPMENT Task Force on Climate-related care Anti-trust compliance GRI 206 MANAGEMENT Financial Disclosures (TCFD).

Human rights GRI 410 Appropriate disclosure of qualitative and quantitative information prepared in accordance with the GRI Health Product safety and quality GRI 416 CUSTOMER CARE and safety Standards was assured in accordance with International Standard on Assurance Engagements Occupational health and safety, process safety GRI 403 HEALTH AND SAFETY (ISAE) 3000 (revised): Assurance Engagements Environmental other than Audits or Reviews safety of Historical Financial Energy efficiency and energy saving GRI 302 Information. The Independent Limited Assurance Report Water use GRI 303 is provided in the Appendix. PricewaterhouseCoopers Audit Preserving biodiversity GRI 304 ENVIRONMENTAL JSC acted as the independent Employee development auditor. GHG and other pollutant emissions GRI 305 SAFETY

Waste generation, treatment and disposal GRI 306

Environmental compliance GRI 307 Social policy Labour relations and employment, talent pool development GRI 401

Labour/management relations, freedom of association and collective GRI 402 bargaining GRI 407 EMPLOYEE Employee training and development GRI 404 DEVELOPMENT

Equal working conditions for all groups of employees GRI 405 Appendices

Indirect economic impacts GRI 203

Rights of indigenous peoples GRI 411 SOCIAL POLICY

Engagement with local communities GRI 413

4 5 6 LETTER FROM THE CHAIRMAN OF THE MANAGEMENT BOARD “B” engaging withourcontractorsinimproving safety. area, relying onarisk-based approach and proactively committed tobecominganindustryleaderinthis key objectives inourdevelopment strategy. We are High standards inindustrialsafetyformoneofthe are always front ofmind. –andactivitiescentred around preserving this– products. Research intotheuniqueecosystemof production totherefining andsale ofpetroleum all areas ofourbusiness–from oil exploration and conservation programmes, implementedthroughout resources inenvironmental protection andnature in 2020.Every year seesusinvesting significant its greenhouse gasemissionsby 9.7% year-on-year environmental policyallowed thecompanytoreduce remains –apriorityforGazprom Neft.Oureffective Protecting theenvironment hasalways been–and highest ofallRussia’s oilcompanies. responsibility) receiving aCDPrating ofB–the business survey oncompanies’ performanceinclimate involved inthe2020CDPratings (theleading development initiative intheworld. We were also Global Compact–thelargestinternational sustainable company becameasignatory totheUnitedNations practices inthisarea withtheglobalcommunity. The maximum transparency andopennessinsharingbest 2020 saw usmaking several majorstepstowards upon theprincipleofsustainabledevelopment. Gazprom Neft’s work hasalways beencontingent challenge foreveryone onEarth. for future generations –is the overriding while securingahighstandard ofliving planet –andcontinuingtoprotect this Preserving theuniquenature ofour development intoday’s world. the extreme importanceofsustainable COVID-1 The new challengeof2020–the Dearfriends, among Russianoilcompanies CDP score -thehighest 9 pandemic – again confirmed 9 pandemic–againconfirmed government, partners,andallinterested stakeholders. joining forces withrepresentatives from thecommunity, role indrivingasustainablefuture, goingforward, goals. We remain fullycommittedtotakingaproactive crucial role inworking towards sustainabledevelopment league. Gazprom Neft isaware that bigbusinessplays a regional operator toaplayer intheglobalmarket’s top The companyhascomealongway inthat time–from a Gazprom Neftcelebrated 25years inbusiness2020. culture, education andsport. active implementation ofotherCSRprojects –inscience, In addition toallofthis,thecompanycontinuedits more than200,000 litres offree fuelforvolunteers. vehicles, throughout anumberofregions, andprovided We provided free refuelling formedicalandemergency part ofthecompany’s corporate “Antivirus” programme. ventilators) were donated tomedicalinstitutionsas medicines, sanitisersandmedicalequipment(including protective equipment(PPE)fordoctors,aswell as COVID-1 focus onsupportingtheseregions incombatting (CSR) programme. Activities in2020involved amajor through our“HomeTowns” corporate socialresponsibility living standards inthoselocations inwhichwe operate, The Companyhasalways invested heavily inimproving volunteering initiatives. 6,000 Gazprom Neftemployees are actively involved in commitment tochangingtheworld forthebetter:around this, however, Iwould liketohighlightouremployees’ by international companyUniversum. Quiteapartfrom as beingrankedamongthecountry’s topemployers HeadHunter rankingsofRussia’s bestemployers, aswell with Gazprom Neftwinningfirstplaceinthe2020 to behighlyappreciated by employees andjobseekers, Neft’s Corporate University –anapproach that seems and professional development, includingat Gazprom system inplace,togetherwithopportunitiesfortraining towards commongoals.Thecompanyhasa“talentpool” potential, tothegreatest possibleextent, whileworking culture, inwhicheveryone candiscover theirpersonal We are puttinginplaceanemployee-centred corporate Our employees are Gazprom Neft’s mostcriticalasset. the virus. throughout thecompanyinorder tocombat thespread of these. More than70safety“barriers” were putinplace production facilities’ “green” zones withoutfirstclearing zones”, making itimpossibleforanyone toaccessour past year aloneandestablishingmore than140“buffer performing more thanonemillioncoronavirus testsinthe its employees, partnersandclients from COVI D-1 Last year saw Gazprom Neftgoallouttoprotect 9. More than2.7 millionpiecesofpersonal 9, 9, Report 2020 Development Sustainable at aglance Gazprom Neft Appendices policy Social development Employee safety Environmental and safety Health care Customer management development Sustainable 7

Sustainable Development Report 2020 2020 highlights Key priorities in sustainable Gazprom Neft at a glance Gazprom Neft is a vertically integrated oil development company, an important part of Russia’s and a significant player in Gazprom Neft is Care for natural ecosystems Customer care embedding sustainability the global energy market. Improving the quality of life in the Protection of employee health 100 countries where Sustainable in all current and future regions of operation development Gazprom Neft operates operations. management Safe production

REDUCTION OF ENVIRONMENTAL CONTINUOUS RESERVES GROWTH STABLE HYDROCARBON PRODUCTION IMPROVED OCCUPATIONAL SAFETY Customer IMPACT care GAZPROM NEFT AT A GLANCE A AT NEFT GAZPROM

Gazprom Neft continued to actively expand its resource Under the OPEC+ agreement, the company cut The company has committed itself to operate at zero The company made considerable progress towards base. The company is one of the world’s top 10 public oil production but secured an increase in gas and harm to the environment. its Target Zero.1 companies by PRMS proved hydrocarbon reserves,1 and condensate production. Health a leader in terms of reserves replacement. 9.7% reduction in greenhouse gas 0 fatalities among company employees and safety emissions (Scope 1 + Scope 2) 2,123 mtoe of proved hydrocarbon 96.06 mtoe of hydrocarbon production 0 industrial accidents reserves 34% year-on-year Flat year-on-year 28% reduction in internal water consumption

Environmental safety SUCCESSFUL REFINERY FINANCIAL SUSTAINABILITY MODERNISATION PROGRAMME CONTRIBUTION TO REGIONAL A TEAM UNITED BY COMMON DEVELOPMENT VALUES Employee Gazprom Neft continued implementing its programme Despite a difficult economic environment and lower development to develop its refining facilities, aimed at increasing demand for energy in 2020, Gazprom Neft remained refining depth and efficiency, as well as further reducing profitable, allowing the Board of Directors to New social and economic agreements with the The company’s achievements were brought about by the company’s environmental impact. recommend paying an interim to shareholders. governments of constituent entities of the Russian its people. Gazprom Neft once again ranked among Federation have been signed. Despite the difficulties the top Russian employers thanks to its unique 40.39 mt of refining throughput ₽485.2 billion adjusted EBITDA of 2020, Gazprom Neft maintained spending on corporate culture and work environment, which 2.6% year-on-year culture, sports and other events that improve quality empower its people to realise their potential. of life. Many events were held online or postponed Social policy until 2021. 82,960 people employed as at 31 December 2020 ₽6.4 billion of social investments 37,000+ activists participating in Staff turnover down 3.1 percentage company social projects points The company Gazprom Neft Appendices joined the group joined the UN Global of leaders by Compact CDP score

1 — Zero harm to people, the environment, or property in our operations.

1 — Resources Management System. 8 9 Sustainable Development Report 2020

Gazprom Neft is in good shape, and ready for any A company committed to market developments. Gazprom Neft Key challenges in 2020 Major new projects are sustainable development at a glance yet to go into active development – which In 2020 Gazprom Neft and the entire oil industry faced unprecedented challenges: gives us some flexibility Gazprom Neft is consistently integrating sustainability into its strategy and operations. The • COVID-19 pandemic; in decision-making. We goal of the Gazprom Neft Strategy to 2030 is to become a for global industry • lockdowns and restricted mobility of populations; Sustainable went into this period of peers in terms of efficiency, safety and technological advancement. development • global decline in demand for energy; management • falling crude and prices in the global and domestic crisis financially secure, markets; and with a low debt burden. • OPEC+ production cuts.  We produce resources for the future, enriching the world with ESG ratings1 the energy, knowledge, and technology to advance.

ALEXANDER DYUKOV The company generates economic and social benefits for a wide range Gazprom Neft’s responsible business Customer Chairman of the Management Board, of stakeholders, and makes a significant contribution to the economic practices and proper information care CEO, Gazprom Neft PJSC development and improvement in the standard of living for people in disclosure are reflected in expert agency Russia and abroad. In catering for the needs of society, Gazprom Neft ratings. assesses and seeks to minimise any current and future negative impact Amid the COVID-19 pandemic, Gazprom Neft ensured the continuity of from its operations on the social and economic environment and on all operational processes. Its flexibility, human focus, new organisational ecosystems. approaches and active process digitisation helped the comapny protect the CDP Health health of its employees across company offices and sites. B and safety We create new areas of growth in the regions in which we operate, and boost the quality of their development. MSCI Sustainability values have become an integral part of the company’s BB corporate culture. The Gazprom Neft Corporate Code of Conduct, which is based on its Mission, Vision and Values, outlines the priorities for ethical and responsible business conduct. Environmental ANTIVIRUS, Gazprom Neft REFINITIV B safety We think in terms of responsible ownership and careful programme to fight COVID-19 management of our resources. BLOOMBERG 56.8 Employee development GAZPROM NEFT’S CONTRIBUTION TO THE FIGHT AGAINST THE VIRUS Gazprom Neft was the first oil company in Russia to take an open and transparent stance on working under the COVID-19 pandemic. In March 2020, the company launched the ANTIVIRUS programme, with a package of measures to protect employee health and ensure the operational continuity and financial stability of its business. An important feature of the programme was the comprehensive support it provided to health workers and volunteers across Russian regions: , Oblast, , , , , , Social , , , Oblast, Oblast, , policy Oblast, Oblast, , , , , , , Tver Human focus Oblast, Oblast, , , , Chuvash Republic, Republic of , Republic of , Altaisky Krai, , Moscow, and St Petersburg. Gazprom Neft’s sustainability is driven by its commitment to Collaboration and willingness to create value for all. In line with these principles, Gazprom Neft management reduced neither its headcount nor work week, and paid the same The company set up new coordination bodies: the ANTIVIRUS Response Centre headed by Alexander Dyukov, Chairman salaries during the pandemic as before. of the Management Board, took the lead on Health, Production and Finance; while two functional corporate programmes Appendices covered Regions and Communications. The comprehensive Healthy Environment programme was actually launched across Gazprom Neft prior to the pandemic. We built on this to launch the online Caring About You project, combining the best practices in self-development for our remote workers.

For more details on the Antivirus programme, see Gazprom Neft’s Annual Report 2020 1 — Environmental, Social, Governance. As at 30 April 2021.

10 11 Sustainable Development Report 2020

Key practices adopted by the company Supporting initiatives and membership of associations

HSE • Target Zero strategic priority: zero harm to people, the environment, or property in our Gazprom Neft recognises the special role of business in sustainable development. Gazprom Neft operations The company contributes to a sustainable future by joining efforts with the public, at a glance For more details, • Safety Framework, based on key risks and safety barriers government, partners and other stakeholders. see page 74 • Development of a safety culture • Digital platform for operational risk management

Environmental • Environmental management system • Biodiversity conservation programme Sustainable protection development • accounting and monitoring Gazprom Neft is a Gazprom Neft has joined the The company’s approach to For more details, management • Increasing utilisation of (APG) signatory to the UN Global Anti-Corruption Charter of sustainability and corporate see page 94 Compact supporting Russian Business social responsibility is based Personnel development • A single incentive model for employees the UN Sustainability on ISO 26000 (Guidance • Partnership with trade unions Development Goals on social responsibility) For more details, • Training, leadership and career development programmes (UN SDGs) Gazprom Neft and WWF see page 118 have signed a Memorandum Customer of Understanding Gazprom Neft continues its care Customer care • Integrated quality management system The company supports engagements with RSPP and • Comprehensive quality control solution (SMOTR) the implementation of the other NGOs For more details, • Gazprom Neft Neftekontrol digital system see page 56 Paris Agreement and the The company has joined • Integrated Customer Support Centre (ICSC) and actively supports the • The Quality 360˚ integrated programme to engage with customers Concept to Form the System of Monitoring, Reporting and Scientific and Technical Well-being of local • Home Towns social investment programme Verifying Greenhouse Gas Council of the Russian Health communities • Support for health workers and volunteers amid the COVID-19 pandemic Emission Volumes in Russia Federal Service for and safety • Support for the indigenous minorities of the Russian Far North Supervision of Natural For more details, • Import substitution and local sourcing programmes Resources (Rosprirodnadzor) see page 146 • Corporate volunteering Gazprom Neft participates in the Carbon Disclosure Project Corporate governance • A corporate governance system comprised of the core elements intrinsic to public companies (CDP) with good governance practices For more details, • Compliance with legal requirements and the Listing Rules of PJSC Environmental safety see page 27 • Distribution of roles in managing sustainability and related risks among the company’s governing bodies

Technological • Adoption of safety and performance enhancing solutions development • Digitisation of core operating processes • Systemic management through innovation centres For more details, • Active development of import substitution Highest CDP score among Employee see page 82 Russian oil companies development

Gazprom Neft ranks among the leaders of the international Carbon Disclosure Project (CDP) rating – the world’s leading environmental B Participant of the UN Global Compact Social disclosure and performance rating system. According to the results of CDP score (climate change) policy an independent evaluation, Gazprom Neft received a rating of category In October 2020, Gazprom Neft joined the United Nations’ Global “B” (on a scale from “A” to “D”) – the highest among Russian oil and gas Compact – the largest international corporate social responsibility (CSR) The 10 principles of the UN Global companies. Gazprom Neft ranks and sustainable development initiative. Compact are embedded in Gazprom among the leaders by Neft’s business strategy, decision- CDP score The company is aligning its business strategy, decision-making making processes and operations Appendices processes and operational activities with the Global Compact’s 10 principles on human rights, labour relations, environmental protection and fighting corruption, with a particular focus on developing Joining the UN Global partnerships and technological innovation. Compact

12 13 HYDROCARBONHYDROCARBON InternalInternal gas gas consumption,consumption, PRODUCTIONPRODUCTION Crude Crude 9.39 mtoe9.39 mtoe oil production,oil production, Crude oilCrude sales, oil sales, PRODUCTIONPRODUCTION PETROLEUMPETROLEUM PRODUCT PRODUCT CondensateCondensate 59.12 mt59.12 mt Oil inventoriesOil inventories, , 24.94 mt24.94 mt production,production, 0.04 mt0.04 mt OF PETROLEUMOF PETROLEUM BALANCEBALANCE“ “ 1.40 mt1.40 mt PRODUCTSPRODUCTS PetroleumPetroleum products products inventoriesinventories, , Direct Direct Sales ofSales oil, of oil, 0.44 mt0.44 mt wholesale,wholesale, gas andgas condensate and condensate 20.57 mt20.57 mt of JVs, of19.84 JVs mtoe, 19.84 mtoe 96.0696.06 105.63105.63 39.4339.43 43.6343.63 mtoe mtoe mtoe mtoe mt mt mt mt

Gas Gas productionproduction , , Gas sales,Gas sales, 35.54 mtoe35.54 mtoe 11.03 mtoe11.03 mtoe PurchasesPurchases of petroleumof petroleum products products, , For re”ning,For re”ning, 4.64 mt4.64 mt PremiumPremium sales, sales, 40.39 mt40.39 of crude mt of oil crude oil Crude oilCrude oil AviationAviation fuel, fuel, 23.06 mt23.06 mt purchases,purchases, 2.14 mt2.14 mt 9.57 mt9.57 mt

Bunkering,Bunkering, Filling stationsFilling stations 1.77 mt1.77 mt and tankand farms, tank farms, 18.35 mt18.35 mt

BitumenBitumen•, •, 0.49 mt0.49 mt

Oils andOils and lubricants,lubricants, 0.31 mt0.31 mt

BALANCED PRODUCTION MODERN REFINING CAPACITY QUALITY PRODUCTS

• Projects to boost APG utilisation • Refinery modernisation programme to reduce environmental footprint • High-quality services • Tree-saving Green Seismic technology • Enhanced energy efficiency • Environmentally-friendly products that comply • Building infrastructure for safe waste management • Biosphere high-tech treatment facility with the strictest standards • Biodiversity conservation programmes across production regions • Participation in the Clean Air federal project • A wide range of online digital services 1 — Billions cubic metres are converted into millions toe using the factor of 0.825. • Converting refinery energy sources to renewables 2 — Sales through Northgas and Arcticgas joint ventures. • Digital monitoring of process safety and emissions 3 — Including internal consumption and changes in inventories. 4 — Polymer-modified bitumens and bitumen derivatives. 5 — Including NIS. Sustainable Development Report 2020 Creating value SHAREHOLDERS AND INVESTORS ₽93 billion Gazprom Neft at a glance for stakeholders in 2020

Gazprom Neft’s business is driven by its corporate mission and an understanding of its responsibility to current and future generations. Sustainable development management 25 mt crude oil sales

Strategy, forecasts and performance monitoring CONSUMERS Customer care 44 mt petroleum CONTRIBUTION products sales OPERATING OPERATING PERFORMANCE TO SOCIETY’S RESOURCES PROCESSES RESULTS Health DEVELOPMENT and safety

EMPLOYEES ₽140 billion employee costs Environmental Resource management Risk and opportunity management safety

Efficient use of Climate change resources Health, safety and environment GOVERNMENT Employee ₽641 billion development Care for the environment Talent management tax payments

Impact on local communities

Social LOCAL policy ₽6.4 billion COMMUNITIES social investments

Our Mission Our Objective Appendices

“Evolving, to change the world. Creating, to be proud of To become one of the world’s leading industrial companies, our creations.” We are producing resources for the future, driving industry progressive transformation, making the SUPPLIERS ₽204 billion enriching the world with the energy, knowledge, and impossible a reality, and inspiring our peers in Russia and technology to advance. beyond. AND PARTNERS contractual payments

16 17 Sustainable Development Report 2020

Despite the fact that It was not only governments that embraced decarbonisation strategies in Global CO2 emissions by the energy Company many businesses have 2020. Some large , including oil and gas companies, pledged industry (billion tonnes per annum) sustainability strategies, to reduce GHG emissions and become carbon neutral in the long run. Banks and investment funds are curtailing investments in hydrocarbon 40 Gazprom Neft policies and codes of energy and expanding the scope of ESG criteria to cover environmental at a glance strategy and 35 conduct in place, it is no and social aspects of business activities, as well as the quality of 30 guarantee for measurable corporate governance. sustainable 25 impact. Being an impactful Despite the irregular and inconsistent development of the low-carbon 20 sustainable business economy, it is gradually becoming an integrated long-term trend. For the development oil and gas sector, this trend spells tighter environmental requirements 15 Sustainable means fully integrating development for product standards and production chains, more intense competition 10 management sustainability into core in export markets, as well as a need for economically viable technologies 5 business strategy, and regulatory mechanisms to offset and reduce emissions. Why ESG is growing in importance operations, supply 0 2010 2018 2019 2025 2030 2040 chain management and Renewable energy and transport development Actual Society’s demand for businesses to be socially responsible continues stakeholder engagement. Customer to grow. Companies around the world are required to comply with an Despite the challenging environment in 2020, global investments in IEA-2019 reference case care increasing number of requirements and guidelines from regulators to renewable energy remained flat at $300 billion, as in the past few years. be environmentally and socially responsible An increasing number of In 2020, more solar and wind capacity was added in absolute terms, with IEA-2020 reference case

international institutional investors are applying responsible-investment per-unit costs gradually decreasing. Major new wind energy projects in IEA-2019 Sustainable Development Scenario principles and promoting the ESG agenda through participation in various LISE KINGO Europe supported these figures amid sharply falling investments in the initiatives (PRI,1 IIGCC,2 ClimateAction100+, etc.) Executive Director of the UN Global USA and , the latter remaining the undisputed leader in renewable IEA-2020 Sustainable Development Scenario Compact capacity additions. Health The COVID-19 pandemic has reaffirmed the need to join forces to support and safety sustainability. Protecting the health of employees and customers The total size of the global low-carbon energy market, by some has become more important for companies. The crisis caused by the estimates, reached an all-time high of $500 billion, spearheaded by the pandemic has had an impact on corporate margins, with companies growth in electric vehicles (EV). EV sales in major markets forced to optimise their costs or rethink their business models. Human (thousands of units) rights topics such as equal access to healthcare, food, water, sanitation, Various incentives helped global EV sales grow by about 40% in 2020, work, education and entertainment have grown more important while while the overall vehicle market lost about 15% over the year. The climate change challenges remain crucial. share of EVs and hybrids on the new vehicle market grew from 2.5% to Environmental 302 1,189 1,239 344 safety 4%, reaching approximately 1% of the global vehicle fleet. The further 331 461 1,135 298 electrification of the automotive sector will depend on government 361 301 1,110 254 200 217 587 194 Regulation and climate agenda support and the actions of carmakers, many of which announced plans 159 156 336 115 to ramp up EV production or even stop producing internal combustion The lower global energy consumption in 2020 is estimated to have engine vehicles altogether. reduced anthropogenic greenhouse gas emissions by 5%–7%. This offers an opportunity to get closer to the emission curve envisioned by the Employee The World Post development Paris Agreement, provided that other countries also make sustained COVID-19 efforts.

In 2020, the announced that its carbon adjustment mechanism would come into force in the near future, to make sure that importers pay greenhouse gas (GHG) emission taxes comparable to those of European manufacturers. The mechanism is still being finalised, but, Social when adopted, this carbon border tax may not only restrict access of policy Draft Low-Carbon Long-Term USA EU China Other energy-intensive and high-carbon products to the EU market, but also set Development Strategy of the a precedent for the future development of the broader international trade Russian Federation system. 2016

2017

2018 $500 billion – the size of the low- Appendices carbon energy market 2019

2020

1 — PRI – Principles for Responsible Investment. 2 — IIGCC – The Institutional Investors Group on Climate Change.

18 19 Sustainable Development Report 2020

Scenario-based strategy Key sustainability priorities

Gazprom Neft’s Development Strategy to 2030 provides for a scenario-based approach that The company’s key sustainability priorities include ensuring maximum operational safety, Gazprom Neft takes into account uncertainties around the future of global energy. The company assesses reducing the environmental footprint, developing employees and fostering regional at a glance the resilience of its project portfolio under various scenarios and regularly updates its development while catering for the interests of stakeholders. structure.

The company uses alternative scenarios: Sustainable development management

Volatility Gazprom Neft’s priorities and related targets are aligned with global trends and the UN SDGs In the Volatility scenario, oil glut and shortages alternate, leading to large The UN SDGs guide governments, business communities and other VOLATILITY adopted by the UN General swings in oil prices. The saturation of vehicle markets, competition between stakeholders in advancing a sustainable development agenda. Assembly and endorsed by world fuel types and improved fuel efficiency are leading to a gradual slowdown in Gazprom Neft embraces the UN SDGs and strives to contribute to their Volatile oil market and slowdown leaders as the global 2030 agenda Customer oil demand growth. achievements. The company’s activities contribute to all 17 UN SDGs, care in oil demand growth for sustainable development with Gazprom Neft capable of having a direct positive impact on some of them, or mitigating its negative impacts on others, given the nature of its Expansion business.

The Expansion scenario assumes a rapid global economic growth driven by the consumer goods sector. The growing demand for energy cannot be EXPANSION UN SDGs prioritised by the company: Health fully covered by renewables or offset by energy efficiency initiatives, which The company goes and safety warrants a sustained increase in the consumption of conventional energy Sustained economic growth, high beyond simply measuring resources. Strong demand for oil will support consistently high prices and, prices and growing oil demand In developing its HSE practices, Gazprom Neft is focused accordingly, will make developing hard-to-recover reserves more viable. on reducing work-related injury, occupational disease its success through and industrial accident rates and minimising its negative financial and operational environmental impacts. performance and is New World always guided by Environmental NEW WORLD safety The New World scenario assumes a fast-track global transition to low- sustainability principles carbon and renewable energy, with consumption reached in this The company provides access to energy for consumers in in its operations. It sees Rapid low-carbon development, decade and oil prices declining over a long period of time. Russia and in other countries, with a focus on driving energy an intrinsic and long-term accelerated decarbonisation, and efficiency across key business areas while maintaining low oil prices reliability, safety and performance achieved through value in these principles technology innovation. The company builds up renewable for both the company generation capacity at assets where it brings economic and and its shareholders. The Employee environmental benefits. development The company updates the scenarios that will be available in the 2021 company has always Sustainability Report been striving for more and will ensure it remains Gazprom Neft is fostering a unique corporate environment and culture in which employees can unlock their full committed to making a individual potential through working towards common goals. meaningful contribution Social The company seeks to create a working environment free to the environment and to policy from bullying and harassment, and prohibits discrimination on the grounds of ethnicity, gender, age, background and so society. forth.

Appendices Gazprom Neft embraces the goals of the Paris Agreement that supports action against climate change. The company acknowledges that if no decisive action is taken today, then ALEXANDER DYUKOV dealing with the consequences of climate change will require Chairman of the Management Board, significantly more effort and costs in future. CEO, Gazprom Neft PJSC

20 21 Sustainable Development Report 2020 Strategy 2030 Responsible leadership Gazprom Neft Gazprom Neft has made remarkable progress in the last 25 years, and is now a major player at a glance in the global oil and gas sector. Adopted in 2018, the key objective of the company’s new strategy Development Strategy to 2030 (Strategy 2030) is to build a next-generation company and to become a benchmark for both Russian and international industry peers. Strategy 2030 is not confined to achieving financial and operational targets, but is also designed to make the company a leader in terms of safety and reliability, as well as environmental performance, efficiency and the use Sustainable development of advanced technological solutions in production processes. management For more details on Strategy 2030, see Gazprom Neft’s Annual Report 2020

Customer care

SAFETY A responsible attitude to employees, As Gazprom Neft is working to become a leader in industrial safety, it is guided partners and the environment by its Target Zero, which means zero harm to people, the environment, or property in our operations Health and safety

Environmental safety Strategic initiatives in upstream Strategic initiatives in downstream Creating value under any external scenario. This is a key driver of competitiveness in a • improving efficiency in reserves growth; • optimising the product portfolio and improving refinery EFFICIENCY • improving efficiency in production growth; operational efficiency; challenging external environment • improving efficiency in current production. • improving efficiency in sales and distribution. Employee development Maximising the added value of every barrel in any oil market development scenario

Social policy Developing technologies to drive future growth Seizing opportunities for growth and stronger TECHNOLOGICAL operational efficiency by developing and • developing multi-phase deposits and low-permeability reservoirs; • improving the oil recovery factor at mature fields; implementing advanced technological • safe and efficient shelf operations in ice conditions; ADVANCEMENT Appendices solutions, and by continuously developing key • developing the processes and catalysts for the Company’s refineries and third-party consumers. competencies

22 23 Sustainable Development Report 2020

24 25 SUSTAINABLE DEVELOPMENT MANAGEMENT 26 PRINCIPLES RESPONSIBLE BUSINESS GAZPROM NEFT’S reflected initsCorporate CodeofConduct. mission, whichare aninherent partofGazprom Neft’s businessandare The company’s personnelare unitedby acommonsetofvalues and risks andopportunities,inparticularthoserelated toclimate change. social andgovernance (ESG)disclosures, andassessingsustainability Russian andglobalsustainabilityinitiatives, improving environmental, approaches tosustainabilityininternaldocuments,participating in The companyisimplementingadvanced HSEstandards, reflecting employees. sustainable development are includedintheKPIsystemforGazprom Neftmanagersand respective roles tothecompany’s governance bodies.Key performanceindicators (KPI)in Gazprom Nefttakes aconsistentapproach tosustainabilitymanagement,assigning management Sustainable development TERM AND WIDE-REACHING PARTNERSHIPS GOVERNMENT AND COMMUNITY RELATIONS BASED ON LONG- COMPLIANCE WITH ANTIMONOPOLY LEGISLATION INTEREST AND THE USE OF INSIDER INFORMATION ZERO TOLERANCE TOWARDS CORRUPTION, CONFLICTS OF STANDARDS PARTNERS, AND COMPLIANCE WITH BUSINESS ETHICS CLEAR AND EQUAL REQUIREMENTS FOR ALL BUSINESS VALUE EACH OTHER CORPORATE CULTURE WHERE COLLEAGUES RESPECT AND PROPERTY; RESPONSIBLE ATTITUDE TO ASSETS SAFETY OF PEOPLE, THE ENVIRONMENT AND COMPANY operations determine theprinciplesgoverning its shape thecompany’s reputation and guidelines fordecision-making, The corporate values serve as relations. the balanceofpower between various stakeholdersinvolved incorporate shareholders, which includebothindividualsandlegalentities,representing 95.68% ofcompanyshares. Theremaining shares are heldby minority the companyhasasinglemajorityshareholder, Gazprom PJSC, whichowns Corporate governance at Gazprom Neftischaracterisedby thefactthat comprised 152legalentitiesinRussiaandabroad. As at 31 December2020,thecorporate structure ofGazprom Neft Gazprom NeftPJSC istheCorporate Centre oftheGazprom NeftGroup. the ListingRulesof Moscow Exchange. structures andisfullyaligned withapplicablelegalrequirements and elements typicalofpubliccompanieswithestablishedgovernance The company’s corporate governance framework encompassesallkey performance ofgovernance andcontrol bodies,andinsiderinformation. on shareholder engagement,disclosure ofinformation aboutthe the Corporate Governance Codewas revised toincludenew provisions and growing shareholder andinvestor confidence.InDecember2020, shareholders, ensuringthecompany’s stable,long-term development at buildinggoodcommunications between governance bodiesand Gazprom NefthasaCorporate Governance Codeinplacewhichaims customers, andlocalcommunities. responsible engagementandbuildingtrust-basedrelations with its employees, suppliers, enhance theshareholder value inthelongterm.To achieve that, thecompanyisfocusedon Gazprom Neft’s corporate governance isunderpinnedby sustainability andthemissionto Corporate governance Corporate governance principles dealing withthird parties within thecompanyandwhen Preventing corruptionboth Strong businessethics employees stakeholders, including Protecting therightsofall protect shareholder rights Effective mechanismsto accurate information Timely andfulldisclosure of the Board ofDirectors company’s executive bodiesby effective oversight ofthe the company’s businessand Strategic managementof responsibility High level ofsocial FOCUS AREAS: • • • • company’s long-term strategy. practices; compliance withrespective activities andthequalityof the ESGagendaintocompany’s reports by theBoard ofDirectors; and internalcontrol system; management (includingESGrisks) integrate ESG factors into the integrate ESGfactorsintothe increase thelevel ofintegration of annual review ofsustainability establish andmonitortherisk information No misuseofinsider objectives achievement ofthecompany’s provide assuranceregarding the and internalcontrol systemto effective risk management bodies, development ofan to managementby executive Reasonable andfairapproach Report 2020 Development Sustainable Appendices policy Social development Employee safety Environmental and safety Health care Customer management development Sustainable at aglance Gazprom Neft 27

Sustainable Development Report 2020

In 2020, the main changes in corporate governance were related to the Sustainability management structure abolition of the Audit Commission and the Board of Directors’ increased In constantly improving its corporate role in internal control and risk management. The updated versions of the governance framework, the company said internal regulations were brought into compliance with the current closely monitors the development of Gazprom Neft HUMAN RESOURCES at a glance legislation and the company’s corporate governance practices. corporate laws and best practices, BOARD OF DIRECTORS both in Russia and globally In 2020, the Board of Directors approved the Risk Management and • Oversees the implementation of the sustainable AND COMPENSATION Internal Control Policy, which is designed to further develop and improve development strategy Gazprom Neft’s risk management and internal control system. • Approves sustainable development policies and COMMITTEE initiatives In late 2020, the Board of Directors approved a new version of the Sustainable development company’s Dividend Policy Regulation, according to which the target level management of dividend payments is set at no less than 50% of IFRS net profit. AUDIT COMMITTEE A new Policy on Remuneration and Compensation of Expenses of Members 50% of net profit – of the Board of Directors was also approved in 2020 to replace the 2010 version, which no longer complied with the current legislation and the target dividend payout Corporate Governance Code. Customer MANAGEMENT BOARD CEO care The main element of the company’s high-level corporate governance is its highly competent and effective Board of Directors. • Formulates the sustainable development strategy • Manages the sustainable development strategy and The Board of Directors determines the key principles and approaches the implementation of initiatives to HSE matters, HR management, regional policy, risk management and In 2020, new versions of the following internal • Evaluates results internal control, and oversees Gazprom Neft’s executive bodies. documents were approved: ETHICS COMMITTEE Health and safety There are two Board committees, the Audit Committee and the Human • Company Charter; Resources and Compensation Committee. The Audit Committee facilitates • Regulation on the General Meeting of the Board’s involvement in overseeing the company’s financial and business Shareholders; operations by assessin the effectiveness of internal controls and monitoring • Regulation Governing the Board of Directors; RELEVANT DEPARTMENTS AND OFFICES AT THE the risk management and internal control system. The Human Resources • Regulation on the Management Board; and Compensation Committee reviews HR matters, executive succession • Regulation on the Chief Executive Officer; CORPORATE CENTRE AND BUSINESS DIVISIONS planning and remuneration to members of the company’s governance • Corporate Governance Code; Environmental safety bodies. • Dividend Policy Regulation; • Determine sustainable development priorities • Risk Management and Internal Control Policy; • Develop and update corporate programmes • Policy on Remuneration and Compensation • Manage the implementation of corporate programmes of Expenses of Members of the Board of • Oversee the performance of the Corporate Centre, business divisions and subsidiaries Directors. • Stakeholder engagement

Employee development HSE Directorate HSE Professional Board For more details on the work of the Board of Directors in the reporting year, see Gazprom Departments of Energy at business divisions HSE Supervisory Board Neft’s Annual Report 2020 The Board of Directors’ composition and meetings in 2020 Corporate Communications Division Regional Development Department Social 1 1 2 policy Organisational Development and HR Management Directorate

Breakdown 12 Breakdown 12 Number of 56 by role by gender meetings Appendices RELEVANT OFFICES AT SUBSIDIARIES • Implement sustainable development programmes in relevant areas Non-executive directors Men Extramural

Executive directors Women Intramural

Independent directors 28 29 Sustainable Development Report 2020 Matters reviewed by the Board of Directors in 2020 Sustainability risk management Strategy 6 Gazprom Neft at a glance Corporate governance 52

Budget planning and financing 7 The company’s approach to risk management is to integrate risk analysis and management tools into all key processes. Risk management 5 Sustainable development Sustainability 4 management Responsibility for risk management and risk reporting is determined in Other 30 accordance with the system of line and functional management. Risk coordinators among managers are identified at the level of each function Gazprom Neft’s key document on and its key business process, with risk owners assigned to manage each risk management is TOTAL 104 specific risk. • the Risk Management and Customer This approach makes it possible to form areas of responsibility for Internal Control Policy approved care Remuneration of members of the Board of Directors is governed by the risk management and to monitor risks at all levels of the company by the Board of Directors (new Regulation on Remuneration and Compensation of Expenses of Members Matters reviewed by the Board of management. version approved in March of the Board of Directors of Gazprom Neft PJSC, which provides Directors in 2016–2020, by area 2020). transparent mechanisms for determining the amount of remuneration The Board of Directors reviews updates to the company’s key risks, to be paid and regulates the term and procedure for such payment, as preliminarily approved by the Management Board. well as compensation for expenses incurred by members of the Board of Health Directors. 143 112 127 114 104 and safety 80 49 69 34 30 The Management Board’s key functions are to control the 5 3 3 3 4 2 4 4 3 5 implementation of resolutions of the company’s General Meeting of 27 18 15 13 7 Shareholders and the Board of Directors, and develop prospective 25 30 32 53 52 plans and key activity programmes of Gazprom Neft, including in 4 5 4 8 6 Risk management process at Gazprom Neft sustainability. Environmental safety In 2020, Gazprom Neft’s Management Board held 28 meetings, including eight in person. It reviewed matters related to the company’s current operations, including progress on prospective plans and activity programmes covering corporate social responsibility and sustainability, QUALITATIVE AND DEVELOPING RISK- IDENTIFICATION MONITORING OF and to improving corporate governance at the Gazprom Neft Group. QUANTITATIVE MANAGEMENT (REVIEW) OF RISKS ACTIVITIES ASSESSMENT OF RISKS ACTIVITIES Employee development At least once a At least once a At least once a At least once a year year year quarter

For more details on the corporate governance framework, 2016 2017 2018 2019 2020 and the composition, activities and remuneration of highest governance bodies, prevention of conflicts of interest, Strategy changes in the company structure, and corporate governance development, see “Corporate governance” of Gazprom Neft’s Corporate governance Social policy Annual Report 2020 Budget planning and nancing For more details on the risk management system, Risk management When managing HSE risks, the company is guided by the precautionary see Gazprom Neft’s Annual Sustainability principle1 Report 2020 Other

Appendices

1 — The precautionary principle is defined in international documents as follows: “Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation” (Rio Declaration on Environment and Development, 14 June 1992).

30 31 Sustainable Development Report 2020

Health, safety and environment (HSE) risks Risks associated with the impact on local communities

HSE risks include risks of non-compliance with HSE legislation that may result in a temporary suspension of operations at The company’s operations entail environmental and health risks for local residents. Local communities may be negatively facilities and revocation of licenses, as well as risks of accidents (fatalities and health-related workplace incidents, fires/ affected by the company abandoning or optimising its production projects and, consequently, downsizing employee Gazprom Neft explosions/accidents, incidents with federal-level environmental impact). headcount or relocating employees to other regions. at a glance

Risk management measures Risk management measures

The company is fully aware of its responsibility to society As part of implementing the risk-based approach, the To minimise environmental and health risks for local To minimise the risks associated with labour relations and Sustainable development for preserving the environment. It monitors its activities company focuses on the following solutions: residents, the company takes measures to ensure local employment, the company implements employment management to ensure compliance with applicable requirements and • basic barrier – to place barriers in the way of priority industrial and environmental safety. and employee development programmes at its production standards, and implements initiatives in the area of risks throughout the company’s assets and guarantee facilities. industrial and workplace safety. their reliability; • competence barrier – to ensure that only competent The philosophy behind industrial safety risk management personnel have been cleared to work; is predicated on a risk-based approach and the principle • digital barrier management – eliminating the human Customer of integrating the mitigation of industrial safety risks factor where reasonable. care throughout the company’s key business processes. The company implements environmental protection Risks associated with the possible spread of COVID-19 to company employees or contractors The company implements the Safety Framework project measures, including the use of technologies to minimise to manage key industrial safety risks. Under this adverse environmental impact. This work has resulted in project, scenarios of possible catastrophic consequences a significant reduction in the likelihood of environmental have been identified, and risk mitigation measures pollution risks. Risk management measures Health (“barrier setting”) to prevent these consequences are and safety selected and implemented at all Gazprom Neft production The management of this risk is carried out by selecting, consequences of possible undesirable events relating to facilities. implementing and monitoring, at a company-wide level, the spread of COVID-19 among company employees and safety barriers designed to prevent and minimise the contractors.

Environmental safety

Human resources risks For more details on the company’s key risks, see Gazprom Neft’s Annual Report 2020 The company’s business is predicated on highly-qualified key personnel, to which end the insufficient number of qualified workers, particularly in the engineering and technology areas, may give rise to understaffing risks. The company’s Employee success depends to a large extent on the efforts and abilities of key employees, including qualified technical personnel, as development well as the company’s ability to recruit and retain such personnel.

Competition for talent in Russia and abroad may worsen due to limited number of qualified specialists in the labour market. The inability to attract new qualified personnel and/or retain existing qualified personnel may adversely effect the company’s attractiveness as an employer. The demand and associated costs for qualified employees are expected to Climate change risks continue to grow, reflecting significant interest in them from other industries and public projects. Social policy

Gazprom Neft identifies several key climate-related risks. The company accounts for both physical risks associated Risk management measures with extreme weather conditions or irreversible changes to the environment, and for transition risks (market, reputational, technology, political and legal). The company offers safe workplaces and competitive In addition, the company also improves recruitment salaries, participation in large-scale projects and procedures and implements initiatives aimed at reducing Appendices interesting professional tasks, and provides employee employee turnover and stimulating self-development of training based on tailored programmes. personnel. For more details on climate-related risks, see “Climate change” on page 98

32 33 Sustainable Development Report 2020

Should any violations of the Corporate Code of Conduct be identified by Ethics employees, the Committee may order the following disciplinary actions: • recommending relevant corporate bodies and the employee’s KEY TYPES supervisor to take the matter into account when performing an Gazprom Neft Gazprom Neft conducts its business ethically and responsibly. The company expects all of annual performance evaluation; OF MATTERS at a glance its employees to follow the business norms and principles set out in the Corporate Code of • recommending relevant corporate bodies and the employee’s senior REPORTED: Conduct. Our ethics policy applies to both interactions between colleagues and to relations to take the matter into account when deciding on promotions, changes to compensation or inclusion in or exclusion from a talent with the company’s business partners. • relations among employees and pool; between employees and their • recommending the HR function and the employee’s senior to seniors; take disciplinary action against the employee in accordance with Sustainable • interpersonal communication development Ethics Committee applicable labour law and company standards; etiquette; management • escalating the matter to the Chairman of the Management Board or • relatives working together; Due to the importance of matters an executive meeting; • unfair bonus allocation. Gazprom Neft has set up an Ethics Committee as a standing collegial under review, in July 2020, the Ethics • discussing the matter with the employee; body tasked with monitoring compliance with the provisions of the Committee was reshuffled to include • ordering extra training on specific areas of the corporate rules of company’s Corporate Code of Conduct. The Committee reports to the members of the company’s Management behaviour; and Board. In October 2020, the new CEO. • recommending that the individual is restricted from representing the Customer Committee held its first in-person company in the governance and control bodies of its subsidiaries and care The Committee reviews employee reports involving the interpretation of meeting to review employee reports and other organisations, the media as well as official, business and public the Corporate Code of Conduct. If necessary, the matter is investigated the results of the first half of the year events. and a resolution is passed and communicated to the person who and to decide on the format of its future submitted the report. The Committee’s terms of reference include work rewards and disciplinary measures related to compliance or non- compliance with the Corporate Code of Conduct. Health and safety The committee’s resolutions are recommendations for the relevant deputies of the CEO or the immediate senior and line managers of the Anti-corruption employee whose behaviour was reviewed by the Committee. The company has zero tolerance for any form of corruption, including extortion The Ethics Committee’s roles and bribery. Environmental safety • enforcing a uniform corporate ideology and methodology for the 47 reports interpretation and application of the Corporate Code of Conduct received by the Ethics Gazprom Neft has approved a publicly available Anti-Fraud and across the company and its subsidiaries; Committee Anti-Corruption Policy. This Policy defines the concept of fraud and The Deputy CEO for Security reports • monitoring the application of the Corporate Code of Conduct and other terminology, and shapes the approach of the company’s senior regularly to company management on preparing reports on it, promoting the Code and its values, preparing management, who have put in place a single and cohesive ethical standard anti-fraud and anti-corruption issues. proposals for the development of corporate culture, preventing and for zero-tolerance for any type or form of corruption. The Policy lists the The Director of the Internal Audit remedying the consequences of Code violations; key principles of combatting fraud and corruption, as well as the methods and Risk Management Directorate Employee development • reviewing submitted information and materials, giving and procedures used by the company, in particular, the company hotline, regularly reports to the Board of recommendations on whether disciplinary action should be taken internal investigations, and prosecution of identified fraud cases. Directors on the hotline’s performance against employees who violate the Corporate Code of Conduct and rewarding the best performers; The Policy contains a section setting out the basis for implementing those • making decisions on whether company policies, procedures and local of the company’s business processes that are most exposed to fraud risks, regulations may lead to violations of the Corporate Code of Conduct including interaction with officials, receiving and giving gifts, charitable and and require amendment; 22 reports sponsorship activities, and financial affairs with third parties. Social policy • reviewing employee reports on conflicts of interest and advising on led to identified Investigations into reports received via whether the conflict actually exists and further actions; violations of the The Anti-Fraud and Anti-Corruption Policy includes training for company the company hotline in 2020 revealed • reviewing and passing resolutions on cases of direct or functional employees in the zero-tolerance approach to fraud and covers the no instances of corruption1 subordination of employees to their close relatives; Corporate Code underlying applicable legislation. • reviewing suggestions and recommendations for amendments to the Corporate Code of Conduct, as well as for improving corporate of Conduct The following courses have been developed and are used in the corporate culture and employee engagement. training system: Preventing and Combating Corporate Corruption; Appendices Corruption Prevention; Combating Corruption and Fraud. These courses are For more details on the mandatory for all employees newly hired by the company. operation of the hotline, see “Respect for human rights” on page 36

1 — Applicable Russian laws stipulate that investigations into corruption be conducted by law enforcement agencies. Therefore, if any evidence of corruption is found, the relevant materials must be handed over to law enforcement agencies. The investigation of reports received via the company hotline in 2020 showed no need to contact law enforcement agencies. 34 35 Sustainable Development Report 2020 Human rights and Grievance mechanisms

Stakeholders may express their views or submit grievances against Gazprom Neft anti-discrimination human rights violations using a range of feedback channels. at a glance One of these channels is a hotline for countering corruption, fraud and non-compliance with the law and the Corporate Code of Conduct. This hotline is used to share information within the company and receive 230 reports via Gazprom Neft upholds and respects internationally recognised human rights feedback from external stakeholders. the company’s hotline Sustainable and complies with applicable laws. development Several functions in the company are involved in investigating reports: management • human resources; • legal; • HSE.

Gazprom Neft encourages its employees and partners to actively use the hotline and makes sure they are aware of this channel. The results of Anyone can submit a report via the Customer In particular, the company promotes the hotline operation, including statistics on received (processed) reports hotline, and it can be anonymous. All care equal opportunities, creates a Gazprom Neft embraces and identified violations, are reviewed by the Board of Directors on a reports are handled on a case-by-case working environment free from regular basis. basis, and feedback is then provided bullying and harassment, prohibits based on results of the review the principles of: discrimination on the grounds of race, ethnicity, religious belief, gender, background, age or on any other grounds, and expects its employees Health UN Global Compact and safety to treat each other with respect and Universal Declaration of Human Rights dignity

International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work

Social Charter of Russian Business of the Russian Union of Environmental Industrialists and Entrepreneurs (RSPP) Anti-fraud and anti-corruption safety The company’s position on human rights is formalised in the following corporate hotline documents: The company follows a principle of men and women receiving equal pay for equal work. • Corporate Code of Conduct; Employee • Anti-Fraud and Anti-Corruption Policy; Reports can be submitted via several channels: post, e-mail, telephone, suggestion boxes, the intranet portal development Gazprom Neft does not use child or forced labour. The company • Policy on Industrial, Fire, Transport, or the corporate website. All information reported via the hotline remains confidential. acknowledges the legal right of its employees to form voluntary Environmental and Occupational Safety, associations to protect their rights and interests, including the right to and Civil Defence; form or join trade unions. • Policy for Interaction with Indigenous Minority Peoples of the North, Gazprom Neft assesses human rights risks and develops measures to and the Far East; Social prevent them. • Information Policy Regulation. policy

Corporate training includes materials on human rights protection, with 1,087 courses on human rights were held in 2020.

Documents available For more details on our partnerships with trade unions, on the company website see “Employee development” on page 128 Appendices Phone: E-mail: Mail:

8 800 700 6500, [email protected] PO box 516, , 190121, free calls within Russia Russia

36 37 Sustainable Development Report 2020 Technology and innovation Downstream R&D strategy

Gazprom Neft Technological development is a core pillar of Gazprom Neft’s 2030 Strategy. Technology R&D in oil refining follows a long-term R&D strategy. Over 30 projects at a glance advancements will enable the company to efficiently deliver its large-scale upstream are being implemented across the following focus areas: projects and consolidate leadership in strategic areas, including the environmentally safe • increasing oil conversion rate (refining depth); • improving operational efficiency; and reliable operation of equipment. • new product development, including new cat-cracking, 30+ R&D hydrotreatment and hydrocracking catalysts. projects underway in Sustainable oil refining development Priority areas of technological development management

Improving oil recovery factor Production from low- Efficient and safe offshore at mature fields permeability reservoirs development in ice conditions Customer Gazprom Neft partners with the Skolkovo care Multiphased fields Effective catalysts and processes development for refineries Foundation’s GreenTech Startup Booster For each focus area, the company is implementing projects to develop, test and deploy the necessary technologies. Gazprom Neft has partnered with the Skolkovo Foundation’s GreenTech Health Startup Booster – Russia’s first accelerator for tech startups in and safety environmental protection and sustainable development, set up by the Skolkovo Foundation in conjunction with industry leaders and supported The company is currently running an Innovative Development by relevant Russian ministries. Programme. At the core of the programme are technology projects to enhance oil recovery from brownfields, develop hard-to-recover Thanks to its involvement in the programme, Gazprom Neft has been hydrocarbon reserves, continually improve well productivity, as well able to put together an up-to-date database of startups offering Partnership with the as an initiative to develop and produce cat-cracking and hydrogenation environmental technologies, and to select the most interesting solutions Skolkovo Foundation’s Environmental patents safety catalysts. ~40 to develop and implement in collaboration with their developers. accelerator for in environmental environmental startups The Board of Directors approved the updated Innovative Development Programme in 2020. The focus area list has been significantly protection and expanded by adding digital transformation projects, including cognitive industrial safety geology, production project management centres, the Asset of the Future programme, integrated planning and operations and reliability Employee management at refining, logistics and sales enterprises. Technology projects in environmental protection and industrial safety development

Key focus areas: Upstream Technology Strategy • minimising non-productive associated petroleum gas flaring; • upgrading infrastructure and equipment to improve energy efficiency and prevent leaks; Social The Upstream Technology Strategy covers all focus areas of the Upstream Division, including: • implementing processes to make more environmentally friendly Technology development at Gazprom policy • exploration and resource expansion technologies; products; Neft is focused on improving • well drilling and completion technologies; • effective waste utilisation and preservation of natural ecosystems; industrial and environmental safety • and well stimulation; • reduction of water consumption; • development of unconventional reserves; • environmental footprint monitoring. • development of oil rims; • electronic asset development (EAD), etc. Appendices

38 39 Sustainable Development Report 2020

The most important technology projects in environmental protection and industrial safety in 2020 Technology partnerships and import substitution

The Gazprom Neft Department for Technological Partnerships and Gazprom Neft • Miscible gas displacement projects (petroleum gas injection to Import Substitution is tasked with systematically monitoring the at a glance improve recovery) were included in Gazprom Neft’s 2030 Strategy. Russian goods and materials market to find domestically produced Creating new competitive This technology will reduce associated petroleum gas (APG) flaring replacements for imported products. production facilities in the Russian and cut emissions. The company is building infrastructure for Federation, and supporting existing pilot miscible gas displacement projects at Gazpromneft-NNG and Gazprom Neft is testing state-of-the-art Russian-made equipment, and domestic manufacturers is a Gazpromneft-Yamal. million creating unique products to replace foreign counterparts. The company 4.5+ focus area for Russia’s social and Sustainable • Trubodetal (Chelyabinsk) produced the first Russian modular plant also supports developers’ applications for external financing, including trees saved in economic development development for NGL removal from APG (joint development of Gazpromneft STC subsidies from the Industrial Development Fund. management and Bauman Moscow State Technical University). This technology 2016–2020 thanks recovers liquid hydrocarbons (C3+) from APG, which are then Gazprom Neft also seeks to cooperate with foreign companies in order returned to the crude oil stream. The use of “dry” gas after such to the Green Seismic to localise production of their products in the Russian Federation. treatment will significantly reduce air pollution. technology • Since 2014, Gazprom Neft has been developing Green Seismic In 2020, five leading engineering universities of St Petersburg (SPbPU, 1 technology, which, thanks to its more compact size, significantly ITMO University, SUAI, LETI, and SMTU) , with support from Gazprom Customer reduces the number of trees felled for seismic lines and cuts fuel Neft, set up energy clubs – student associations offering career care consumption for seismic surveys, all while improving safety. guidance and support for new high-tech projects. An inter-university • A patent was granted for technology to produce Brit man-made soil accelerator was launched for these energy clubs, with over 15 student 15+ from locally-available materials and treated cuttings. This product projects joining the programme in an attempt to address the technology student projects joined can be used in road construction, and pilot tests have confirmed its challenges faced by the company. high performance. The company intends to put this technology to the inter-university use on a much larger scale in the next few years. In 2020, Gazprom Neft co-founded the Institute for Initiatives in Oil and acceleration 99.9% of Health • A new Euro+ combined oil refining unit (CORU), replacing five older Gas Technologies. The organisation was created to harmonise the efforts and safety units, was commissioned at the Moscow Refinery. The Euro+ CORU pollutants removed of Russian and foreign oil and gas companies to develop and approve programme will reduce the refinery’s environmental footprint. from water using the uniform industry standards for use in engineering, design, procurement • The Omsk Refinery is continuing the construction of Biosphere and the evaluation of potential contractors. Gazprom Neft continued its wastewater treatment complex, which will improve pollutant removal Biosphere complex work under an agreement with the Administration of St Petersburg to efficiency to 99.9%. The Moscow Refinery has been running the develop a world-class R&D and technology centre for the energy sector Biosphere complex for over three years now. The complex recycles in the city. The company also continues to work in joint working groups over 90% of water, with a more than threefold decrease in river with and HMS Group. Environmental safety water withdrawal by the refinery. • The company has developed an environmental monitoring system Gazprom Neft has approved 37 substitution strategies for product for prompt identification and prevention of above-limit pollutant categories where the company relies on imports. These strategies 37 replacement concentrations at a facility’s buffer zone boundaries. It also evaluates should result in about 220 new Russian products. the facility’s contribution to these above-limit concentrations. Legal strategies approved protection for the system was obtained in 2020. It is planned to be Thanks to the progress made by the company so far, including the rolled out to Gazprom Neft’s refineries in the next few years. provision of facilities for piloting (over 130 piloting runs completed), Employee • Gazprom Neft is using and developing unmanned technologies. import substitutions in 60 product categories have already been made development Advanced oil refining Unmanned aircraft are used in exploration, industrial site monitoring, products possible. and cargo delivery. Self-driving vehicle testing is in progress in conjunction with truck manufacturers KAMAZ and GAZ. The use of New import-substituting products include unique exploration, unmanned technologies improves process safety. production and refining equipment as well as cross-functional items (communication equipment, instrumentation and personal protective equipment). Social 60 product policy Unmanned technologies categories with possible import substitution

Testing KAMAZ self-driving Appendices trucks

1 — SPbPU – Peter the Great St Petersburg Polytechnic University; SUAI – Saint-Petersburg State University of Aerospace Instrumentation; LETI – Saint Petersburg Electrotechnical University; SMTU – State Marine Technical University.

40 41 Sustainable Development Report 2020

Gazprom Neft has in place a corporate-wide Central Procurement Office – Gazprom Neft’s Procurement and Capital Construction Supply chain management Directorate. GAZPROM NEFT SUPPLY CHAIN Gazprom Neft To keep the procurement process reasonably competitive, the Central at a glance Procurement Office conducts an open pre-qualification procedure focused on building a list of potential bidders who can perform work, render services or supply goods that meet the company’s requirements Gazprom Neft’s priorities in procurement include transparency, prevention of for production processes, quality, safety and performance. Potential discrimination and the unfair restriction of competition among bidders, and building bidders whose qualifications meet the requirements may then be invited MANUFACTURER/OFFICIAL DEALER to participate in the procurement process. Sustainable long-term relationships with contractors. development management When competitive procurement procedures are initiated and take place, bids are analysed to determine whether they comply with the requirements set out in the competitive procurement documents. The company checks the information about the bidders, including an LOGISTICS OPERATOR (GAZPROM assessment of their legal capacity, solvency and business standing by NEFT PROCUREMENT) WAREHOUSE the corporate security function. These measures enable the company Customer to identify in advance contractors who do not comply with its care Supplier management principles requirements.

In line with the company standards, compliance with the requirements INTERNAL CUSTOMER (SUBSIDIARY) Transparency Equality Confidentiality of the corporate standards by potential suppliers is monitored WAREHOUSE throughout the entire period of the company’s engagements with such Competitiveness Mutual guarantees Access to information suppliers. Health and safety The company assessed compliance of its procurement business processes with the requirements of the Etalon OMS1 in 2020. The INTERNAL CUSTOMER (SUBSIDIARY) Contractor and Supplier Management module was rated as “mature” in PRODUCTION FACILITY OMS terminology.

Gazprom Neft prefers to select suppliers of work, services, materials and The Procurement section on equipment on a competitive basis. the company’s website In 2020, 6,734 potential suppliers participated in our competitive bidding procedures. Contracts were awarded to 2,308 companies from Environmental safety The company publishes information on its open competitive procedures 65 Russian regions and 10 foreign countries (including the CIS), with for approaching and selecting contractors and engaging with the payments totalling ₽204 billion. Local (domestic) suppliers accounted winners of its bidding procedures on its website in the “Procurement” for 98.87% of total procurement. In 2020, there were no notable section. changes in the company’s supply chain.

In addition, Gazprom Neft is committed to increasing the efficiency of its 36.6% share supply chain management.1 The company has in place the Standard on The company has adopted Gazprom of SMEs in total Employee development Performance Assessment of Materials and Equipment Suppliers, and the Neft’s Regulations on Procurement, a 2 Guidelines on Calculating Key Performance Indicators for Materials and fundamental document on planning and Share of procurement costs across key operating regions of the procurement Equipment Suppliers. running procurement procedures, and on company2 in 2020 (₽ million) selecting suppliers. Contractor selection and engagement processes are managed via an 11,312 St Petersburg integrated management system compliant with ISO 9001:2015. 2,976 Social In 2020, the Materials and Equipment Division of Gazprom Neft policy 2,472 Procurement underwent an annual compliance audit of its integrated Tyumen Oblast management system to confirm its compliance with ISO 9001:2015, 2,142 ISO 14001:2015 and ISO 45001:2018. Based on their findings, Tomsk Oblast the auditors concluded that the integrated management system Khanty-Mansi 2,105 Autonomous development was consistent with principles of continuous improvement Okrug–Yugra and that the system was effective and complied with the requirements 102 Oblast Appendices of the relevant standards. Three certificates of compliance were For more details on the Etalon recommended for renewal. Yamalo-Nenets 61 Autonomous Okrug operations management system, see Gazprom Neft’s Annual Report 2020 1 — A supply chain is a combination of organisations cooperating in order to supply enterprises and oversee the movement of goods at all stages from 1 — OMS – Operations Management System. procurement of feedstock and other materials to production, storage and transportation of goods. 2 — Based on results of the competitive selection of materials and equipment suppliers initiated by the company Procurement Directorate and the Materials and Equipment Division of Gazprom Neft Procurement.

42 43 Sustainable Development Report 2020 HSE in supplier management Stakeholder engagement

The company’s standard form of a supply contract outlines the Gazprom Neft at a glance HSE requirements for contractors, including requirements for shipments The company imposes the same of hazardous goods, delivery by road, etc. stringent safety requirements on In engaging with its stakeholders and seeking to understand their values and needs, its suppliers and contractors as Gazprom Neft aims to deliver on its sustainability goals and strategy. Open and In addition, corporate HSE standards require compliance with all those applied across the company’s proactive dialogue, mutual trust and a tailored approach underpin the company’s applicable regulations on industrial safety, environmental safety, operations occupational health, civil defence and road traffic safety regulations stakeholder engagement. Gazprom Neft strictly adheres to the law and takes into applicable at relevant workplaces. Sustainable account legal requirements set out in industry regulations. development management

Customer Mandatory use of personal protective Stakeholder engagement principles care Respect for stakeholder Delivering on commitments interests equipment Transparency of the company’s Productive relations operations

Ongoing engagements Health Supplier employees are required to wear personal protective equipment (PPE) when working at, or visiting the and safety company’s facilities.

Gazprom Neft’s key stakeholder engagement priorities are reflected in Environmental The key stakeholder groups for safety the following corporate documents: Gazprom Neft are those whose interests are most tangibly linked • Corporate Code of Conduct to the company’s activities and • Corporate Governance Code can have a significant impact on • Contractor Engagement Code its ability to deliver on its strategic • Regulation on the General Meeting of Shareholders goals • Dividend Policy Regulation Employee • Information Policy Regulation development • Policy for Charity Work Protective helmet Protective goggles Reflective elements on • Policy on Industrial, Fire, Transport, Environmental and Occupational clothing Safety, and Civil Defence • Policy for Interaction with Indigenous Minority Peoples of the North, Siberia and the Far East Social policy

Leather safety boots (or high boots) Polymer-coated knitted Appendices with a rigid metallic/composite impact- gloves resistant toe box (cold-proof boots in winter)

44 45 Sustainable Development Report 2020

Relations with key stakeholder groups

Key expectations and interests Engagement mechanisms Key expectations and interests Engagement mechanisms Gazprom Neft at a glance SHAREHOLDERS AND INVESTORS GOVERNMENT AUTHORITIES OF THE RUSSIAN FEDERATION AND THE COMPANY’S OPERATING REGIONS

• Increase in shareholder value • General Meeting of Shareholders • Energy security • Social and economic partnership agreements • Fair dividend policy • Meetings, conferences and conference calls • Taxes • Joint working groups, round tables and meetings • Transparency • Investor Day involving senior management • Technological advances in the industry • Commissions and conferences • Respect for shareholder rights • Analyst Data Book • Minimising the company’s environmental footprint • Corporate reporting Sustainable • The Investors section on the corporate website • Legal compliance development • Hotline and email: [email protected] management • Corporate reporting and media SUPPLIERS AND PARTNERS

EMPLOYEES • Fulfilling mutual commitments • Competitive tendering • Support for Russian manufacturers • Contracts and agreements • A competitive compensation package • Internal communications • Transparency, openness and competitive selection of • A system for contractors to evaluate the company Customer • Safe working conditions • Town-hall meetings contractors • Business meetings and forums organised by the company care • Opportunities for professional development • Joint health committees • Ethical business conduct and anti-corruption efforts • External conferences and exhibitions • Social benefits • Meetings with trade unions • Corporate website and procurement portal • Employee engagement survey • Corporate reporting and media • Forums, conferences, cultural and sporting events • Corporate reporting LOCAL COMMUNITIES ACROSS THE COMPANY’S FOOTPRINT

CONSUMERS Health • Enhancing quality of life in local communities • Social projects across the company’s operating regions and safety • New jobs for local communities • Consultations with government authorities, non-profit organisations • High quality, consumer value and environmentally-friendly • Contracts • Human capital development across the company’s footprint and indigenous peoples of the North products • Feedback and services • Developing local manufacturers and suppliers • Public consultations, round tables and debates • Customer experience and performance of sales channels • Gazprom Neft loyalty programmes • Boosting social activities • Corporate reporting and media • Transparent pricing • Business meetings, conferences and forums • Local taxes • Ethical business practices • Corporate reporting and media • Industrial and environmental safety Environmental INDUSTRY PEERS IN RUSSIA AND WORLDWIDE safety

• The company’s contribution to industry development • Cooperation agreements • Responsible business operation • Industry and cross-industry initiatives • Respect for human rights and HSE compliance • Committees of industry associations • Information sharing • Joint projects • Corporate reporting and media Employee Strategic partnerships with contractors development NON-PROFIT AND NON-GOVERNMENTAL ORGANISATIONS

• HSE initiatives at the company • Conferences and exhibitions Gazprom Neft’s engagements with contractors are driven by long- • Company involvement in regional and industry development • Round tables Partnership-based • Openness and transparency of operations • Joint implementation of social projects term partnerships based on the Contractor Engagement Code. The engagements with • Corporate reporting and media Code introduces the concept of strategic partnerships replacing the contractors Social usual customer–contractor approach with a more effective cooperation policy format. The company openly discusses existing issues with contractors to come up with optimal solutions for the most challenging problems.

In 2020, the company set up a pool of strategic partners, which includes the most reliable contractors of Gazprom Neft.

Appendices

46 47 Sustainable Development Report 2020

Transparency and effective media relations Antivirus news feed

Gazprom Neft’s communication policy aims to: New communication formats were launched in 2020: Gazprom Neft • boost and maintain Gazprom Neft’s profile; • online video tours of the company’s facilities for the media; and at a glance • maintain an equal and partnership-based dialogue with federal, Gazprom Neft provides its shareholders • the Antivirus news feed on the company’s website covering the international and regional mass media, press offices of government and other stakeholders with free and implementation of Gazprom Neft’s programme to combat COVID-19, authorities and non-governmental organisations relevant to the unhindered access to information that is protect employees, partners and customers from the virus spread, company’s operations. material to them ensure the continuity of all production processes, and maintain the financial stability of the business. Gazprom Neft’s Board of Directors has adopted the Information Policy Sustainable development Regulation. Gazprom Neft implements its information policy via its management executive bodies. Compliance with the Information Policy is overseen by the Board of Directors.

Information Policy The company quickly and effectively updates its stakeholders on key events Regulation and aspects of its operations in an unbiased manner. Key communication The company’s new website for investors tools used by the company include the official websites of Gazprom Neft Customer and its subsidiaries, the Sibirskaya Neft trade magazine, as well as the care company’s community pages on social media such as Facebook, VKontakte, and shareholders YouTube, and Instagram. The company’s webpage In June 2020, Gazprom Neft launched a new IR website for investors In line with its Regulation on Information Disclosure, the company also uses in the Centre for and shareholders, significantly expanding disclosures on Gazprom Neft’s an Internet page provided by one of the distributors of information on the Corporate Information activities, including sustainability. Disclosure (Interfax-TsRKI) securities market (Interfax Centre for Corporate Information Disclosure). system Health The new IR website was highly praised by investors and analysts and and safety Our media relations are guided by Gazprom Neft’s information policy was also among the winners of the Corporate & Financial Awards in the approved by the Board of Directors and the Corporate Standard on the Best Corporate Website: International category. IR website of the company Procedure for Media Relations and Distribution of Information Materials. In positioning itself in the media space, Gazprom Neft is guided by its Communication Strategy aligned with the company’s business goals. MAJOR EVENTS

Gazprom Neft’s press office promptly responds to requests from Russian AND PROJECTS: Environmental safety and international media to share comprehensive and detailed information on the company’s projects and comment on key topics on the industry’s Events under the spotlight in 2020: agenda. In 2020, Gazprom Neft’s press office continued to develop communication tools, expand its audiences and adopt communication best • the opening of the Euro+ CORU practices to reflect key international trends while also implementing partner at the Moscow Refinery attended projects with leading media outlets. virtually by Russian President Transparency award ; Employee Along with conventional communication tools, the press office worked on • launch of a deep conversion In 2020, Gazprom Neft won the annual award For Active Corporate development digital projects to expand the scope of information about the company’s complex at the Pančevo Refinery Policy on Information Disclosure established by Interfax and AK&M activities and its outreach. This included special multimedia projects with () attended by Serbian news agencies. The jury for this award includes representatives of leading Russian and foreign media to provide comprehensive and detailed President Aleksandar Vučić; Moscow Exchange, the Association of Independent Directors, and the coverage of Gazprom Neft’s efforts to adopt new production and refining • testing of unmanned vehicles Russian Financial Communications & Investor Relations Alliance (ARFI). technology, foster innovation and implement environmental and social at Gazprom Neft’s production facilities; projects. The company also worked on developing visual formats and The award criteria include completeness and timeliness of reporting, Social adapting content for each communication channel. Business and industry • launch of a joint venture with corporate events, information on corporate governance, the concurrence policy media outlets published op-eds and interviews with company executives. Shell to develop a large-scale of disclosures for Russian and international investors, and proactivity hydrocarbon cluster on the and cohesiveness of information policy. Other criteria comprised the In 2020, due to the COVID-19 pandemic, Gazprom Neft’s press office Gydan Peninsula. use of interactive formats, the informational value of news content and Award For Active focused on remote real-time media communications. The traditional press focus on environmental, social and governance (ESG) aspects. Corporate Policy on Information Disclosure conference of Gazprom Neft’s management for key federal and international media outlets on the results of the Annual General Meeting of Shareholders, The jury noted the layout and navigation of Gazprom Neft’s Investor Appendices as well as other press events, moved online. Relations portal, citing its greater depth of archives compared to its peers, and it praised the company’s active involvement in the Single Disclosure Window project.

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Internal communications Five communication campaigns were launched and completed under the comprehensive Antivirus programme to combat COVID-19: • COVID-19: treatment, prevention, employee testing, supporting the Within each COVID-19 communication In 2020, Gazprom Neft managed to maintain a high level of personnel regions; campaign, communication packages Gazprom Neft engagement, loyalty and trust in top management. Many employees • remote work for some white-collar employees; were put together containing a at a glance embraced external pressures and challenges as another opportunity to An Internal Communication Strategy was • continuity of operations during the pandemic; range of materials tailored to target realise their potential. developed and approved in 2020, setting • operation of buffer zones; audiences of particular offices or forth the format and organisational • return to office after remote work. production facilities According to employee feedback, the company was able to successfully methods for communication with internal reorganise work processes to match the new circumstances amid the target audiences, as well as allocation of Communication events and flash mobs were held regularly throughout COVID-19 pandemic, including effective remote-work arrangements responsibilities and a model for internal the pandemic to engage and unite staff in the new working Sustainable communications infrastructure development for white-collar employees and better interaction between units. environment. management Development of electronic communication channels and the increased use of corporate media improved employee awareness. • Antivirus Agitation Team flash mob.Employees used poetry to cope with an avalanche of alarming news from outer world. Employees recorded dozens of motivational videos over the first two months of lockdown. • Staying at Home flash mob for employees working from home. Customer Colleagues shared photos and videos of their home “offices” and care shared with others what helped them remain motivated for work. Internal communication policies during the • #VseVTvoikhRukah (All in Your Hands) flash mob. The issue of hygiene, which was extremely important early in the pandemic, was not forgotten. Company managers, following in the footsteps of COVID-19 pandemic international stars, recorded videos on proper hand washing. • #MyComanDa (We Are a Team) flash mob emphasised the Top priority given to updates Balance between work-related Focus on the speed of Health importance of staying together no matter what. Short videos and safety about the fight against the content and entertainment information dissemination, its featured managers and employees explaining why Gazprom Neft is a coronavirus validity and sufficiency true team. Importance placed on • Say Thank You flash mob.Six virtual postcards reflecting six One place for gathering managers to personally corporate values. Employees were invited to select one of these information from divisions, and regularly reach out to and send it to their colleagues to thank them for working together. subsidiaries, and centres of employees During the same time, visual solutions for corporate values were expertise updated and new motivational messages were created to reinforce Environmental safety the idea that company values remained alive, driving effective teamwork.

In 2020, internal communications were based on the agile approach1. IT products were developed through an iterative process, and cross- functional teams were set up, with increased focus on personal OBJECTIVES interactions, change readiness and employee feedback. Employee Objectives of internal communications development The Agile approach not only enabled communication channels to flexibly during the COVID-19 pandemic: adapt to external changes, but also improved awareness and created an The #NAVAKHTE – rus. #ONSHIFT engaging environment for employees. Thus, internal communications • to promptly inform employees made employee adaptation to new working conditions much faster and about the fight against COVID-19; easier. • to gather regular feedback motivational campaign from employees to maintain Social engagement and loyalty; The biggest corporate flash mob ever in Gazprom Neft took place. It policy • to prevent social tensions between supported fly-in personnel working at continuous production facilities employees. who had to stay in the harsh Arctic conditions for 2–3 months during the first wave of the COVID-19 pandemic, rather than one month as

usual. Thanks for being #NAVAKHTE – rus. Employees would add the #NAVAKHTE – rus. #ONSHIFT hashtag to #ONSHIFT Appendices their avatars on social media to show involvement in company efforts and support fly-in personnel. This show of support was joined not only by Gazprom Neft employees (over 400 people from 32 business units in 15 Russian regions), but also famous athletes, performers and TV personalities. 1 — Agile approach – use of agile-development principles in project management.

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In 2020, thanks to the provision of remote access, the corporate Neftegazeta portal remained the main gateway for communication with white- Sibirskaya Neft is now published in collar workers, although a large fraction of them transitioned to remote In 2020, a new express format was developed for printing issues via electronic format only work. New sections concerned with working in new conditions were office printers and posting on information boards. The functionality Gazprom Neft promptly added: “Antivirus” and “Hotline” with clear and simple answers of the Neftegazeta mobile app was expanded to include the ability to 19 issues of the at a glance to pressing issues. The new sections helped employees to better download and read current and back issues. understand the new reality, build effective work-from-home setups and Sibirskaya Neft corporate Neftegazeta per year to stay in touch with their colleagues. magazine Online communication system Traditional interactive services – contests, celebrating holidays with colleagues – were still available on the portal, allowing employees to use Panel discussions, town-hall meetings, and various other discussions Sustainable development the familiar tools as before. (conferences, round tables) were held online. management The print edition of Sibirskaya Neft corporate magazine was discontinued, the magazine is now available in PDF files and at www. sibneft.ru. Announcements are emailed across the company to notify employees of new issues of the magazine. Employee engagement survey Customer care Internal communication tools In 2020, digital-communication tools were used to enable faster feedback and contactless data acquisition. A total 68% of employees participated in the survey. The survey showed that the company The company runs annual employee Gazprom Neft’s unified system of intranet portals managed to maintain a high level of employee engagement and loyalty engagement surveys (EES) to 40,000+ despite the 2020 challenges. Employees at most production facilities assess employee engagement and The system is used by over 40,000 employees. In 2020, the number of appreciated company measures to preserve jobs, maintain uninterrupted satisfaction, identify Gazprom Neft’s employees using the Health regular users accessing the system at least once a week grew by 11% salary payments and launch numerous health-protection and well-being strengths and weaknesses as an and safety to 17,000. The number of unique users hit an all-time high this year at unified intranet portal initiatives. employer, and identify areas for 22,000 users per day. system improvement

Mobile Newsfeed

A corporate media channel accessible from employees’ personal devices Environmental safety with an option to create and maintain own professional channels. In 2020, the number of registered users exceeded 32,000, with over 1.3 million views of published posts, 86 new channels created, 30 Results of the employee contests held and over 20 live webcasts. The Mobile Newsfeed proved 32,000 to be the fastest communication channel when a large part of employees + were working from home during the COVID-19 pandemic. users of the Mobile engagement survey Employee Newsfeed development Sibirskaya Neft

Due to the pandemic, the magazine has been published only in an electronic format since March 2020, with the number of unique views of the online version growing by 110% to 655,000 in 2020. 80% employee 81% employee Social engagement rate loyalty rate policy Corporate radio

The radio broadcasts to the Moscow and Omsk Refineries, fillings stations and Gazpromneft-Aero. 60,000 people 8% growth in employee 46,000 employees Appendices on average viewing the awareness year-on-year completed the survey Sibirskaya Neft channel questionnaire (+12% year-on-year) on .Zen every month

52 53 Sustainable Development Report 2020 Tax compliance Relations with tax authorities

The company’s relations with tax authorities follow principles of Gazprom Neft transparency and cooperation. In line with this approach, Gazprom at a glance Gazprom Neft follows a balanced tax policy in line with principles of legality and good faith. Neft is steadily transitioning to tax monitoring – a new form of tax Steady transition to a new form of control that provides tax authorities with direct access to the company’s Regulators’ demands are complied with in full and in due time. tax control – tax monitoring accounting and reporting documents without starting a tax audit.

Tax returns and other information are filed with tax authorities through The company’s single tax methodology and internal tax control system electronic channels using specialist software whereby authorised Sustainable development help to establish a uniform approach to tax matters. The company’s approach to taxation employees of the SSC tax units can authenticate the data submitted. management reflects the core values of Gazprom Neft, such as responsibility, efficiency and innovation

Contributing to the development of tax laws and government regulations Customer Gazprom Neft is represented in the Russian Union of Industrialists care Tax management and control system and Entrepreneurs and the Chamber of Commerce and Industry of the Russian Federation; representatives of the company’s tax function are included in expert councils and committees of these business associations, as well as the Expert Council under the Strategic decisions on tax issues are made by the head of the Tax Committee on Budget and Taxes and working groups set up under For more details on the Department, Deputy CEO for Economics and Finance or the CEO the Ministry of Finance, the Federal Tax Service and the Ministry of hotline, see “Human rights Health depending on level of importance. The Gazprom Neft Tax Department Energy to resolve issues related to taxation and legislative actions to and anti-discrimination” and safety is the internal management body charged with ensuring compliance combat the spread of the novel coronavirus. In particular, Gazprom on page 36 with the tax strategy. The tax accounting function is separated into a Neft participates in the development and testing of amendments dedicated Shared Services Centre (SSC). to government regulation, including taxation, and submits its owns proposals and recommendations on changes and amendments to tax Gazprom Neft has a low tolerance to tax risk. The company maintains laws. a register of key and operational tax risks and manages these risks online, including through an open dialogue with the industry, public Environmental safety associations and supervisory authorities (the Federal Tax Service of Russia and the Ministry of Finance of the Russian Federation).

Gazprom Neft tax culture is developed through advising employees of The tax accounting function is separated taxation policies and changes in tax laws, including through training into a dedicated Shared Services Centre events and workshops delivered by the Corporate University, as well (SSC) as by making sure employees comply with the high standards of Employee professional behaviour. development

The company has set up a dedicated hotline to report and respond to unethical behaviour and violations of applicable tax laws.

Total tax claims made by tax authorities following tax inspections of Gazprom Neft companies, which are currently less than 0.1% of taxes Social payable, is a key indicator of compliance with applicable laws and the policy performance of the company’s tax policy and internal control system.

Appendices

54 55 Sustainable Development Report 2020

56 57 CUSTOMER CARE 58 1 — stages). the processes across thedesign,production, construction,installation, adjustment, operation andmaintenance, storage,transportation, saleanddisposal The Technical Regulations are atypeofdocumentthat setsoutmandatory requirements foranyitemssubjecttotechnical regulation (bothproducts and commitments are enforced by These qualitypoliciesand consumer requirements. standards andregulations andmeet with Russianandinternational competitive products that comply policies toproduce andsell adopted qualitymanagement Gazprom Neftenterpriseshave of anoilcompany. A well-designed qualitymanagementsystemisaprerequisite forthesuccessfuloperation wellhead toforecourt. social responsibility across theentire value chain:from product qualityandenvironmental safetyaswell as go theextra mileandtake highercommitmentsin customer needs,Gazprom Neftisalways willingto well asconsumerhealthandwell-being. Guidedby quality control, andcare fortheenvironment as relevant toconsumers,clearproduct benefits, robust should combinedata servicesandfeatures that are the bestvalue proposition. Agoodvalue proposition satisfies abasicneedforproduct butthat alsomakes Nowadays, consumersselectasupplierthat notonly assurance Product quality Customer care requirements fortheprotection of Regulations with allapplicableTechnical All products soldstrictly comply responsible forthese areas. respective headsofbusinessunits sales subsidiaries,aswell asthe the company’s production and the CEOs andDeputyCEOs of 1 , suchasthe consumers. – thedetailsessentialtoour and transportation ofitsproducts documents onthesafeuse,storage Gazprom Neftdulyprovides throughout theproduct lifecycle. consumer health,lifeandsafety AGENDA: OUR CUSTOMER CARE KEY FOCUS AREAS IN protection Consumer personaldata products andservices Improvement ofdigital Retail network expansionи engagement Continuous customer and safety Care aboutconsumer health Product qualityassurance KEY FOCUS AREAS IN QUALITY CONTROL OF PETROLEUM PRODUCTS: • • • • • sales cycle. throughout theentire production and centres andtestinglaboratories monitored by thecompany’s research The qualityofpetroleum products is Quality control ofpetroleum products Russian andforeign peers. practice benchmarksfrom our management by applyingbest seek outnew approaches toquality certification body. We continually including someby anindependent as internalandexternal audits, improvements totheIQMS,aswell monitoring performance,making subsidiaries. Thisinvolves regularly the company’s production andsales evaluated annuallyby theheadsof IQMS performanceisanalysedand system (IQMS). integrated qualitymanagement in placeanISO9001-compliant Gazprom Neftenterpriseshave Integrated qualitymanagement system spot checkstotestthequalityofpetroleum products at Gazprom Neftfillingstations. and saletoendconsumers; quality control ofpetroleum products at oildepots,refuelling complexes and fillingstations duringacceptance,storage quality control ofcommercial products beingshippedtoconsumersandprepared fortransportation; in-line samplingofcomponentandsemi-product streams at refinery process facilities; production at refineries; incoming control ofraw materials, chemicalsandauxiliary materials, catalysts, adsorbentsandadditives usedin 45001:2018 andISO50001:2018. compliance withISO9001:2015, its firstsurveillance auditforIQMS passed venture withSIBURHolding) while Poliom LLC (a50/50joint certification auditforasecondtime, Refineries passedanISO9001:2015 9001:2015. TheOmskandMoscow the strictrequirements ofISO that theirIQMScompliedwith Bitumen BindersPlant,confirmed Gazpromneft-Lubricants andRyazan Gazpromneft MarineBunker, Refinery, NPPNeftekhimia, Poliom, including OmskRefinery, Moscow subsidiaries andjointventures, In 2020,thecompany’s downstream supported by relevant certificates. specific standards (GOST, STO orTU)is relevant Russianandcompany- Product-quality compliancewith requirements the certification’s strict at subsidiariestoward verified by regular audits complies withISO9001,as Gazprom Neftenterprises The IQMSimplementedby Report 2020 Development Sustainable Appendices policy Social development Employee safety Environmental and safety Health care Customer management development Sustainable at aglance Gazprom Neft 59

Sustainable Development Report 2020

Share of environmentally friendly products in total sales between 2016 and 2020 (%)

Product 2016 2017 2018 2019 2020 Gazprom Neft Digital solution - Gazprom Neft at a glance Euro 5 motor fuels 100 100 100 100 100 Euro 4+ motor oils 25 26 27 32 32 Neftekontrol Low-viscosity marine fuel, ultra-low sulphur fuel oil (ULSFO) 23 26 26 30 93 Sustainable 0.1, VLSFO 0.5 development The integrated digital system Gazprom Neft Neftekontrol gathers data management about the quality and quantity of petroleum products throughout the process – from refineries to delivery to end consumers. In 2020, the company connected all its refineries, distribution depots and filling stations as well as airport refuelling complexes within its footprint to Gazprom Neft’s Neftekontrol this system. Big-data predictive analytics enable the system to detect system connects the company’s and manage process deviations – anytime, anywhere. assets, creating an integrated Customer and cohesive information care A more than a twofold decrease in the number of critical and systematic network making it possible to Digital solution - SMOTR deviations over 2020 delivered through the Neftekontrol system has obtain information on petroleum made product output and supplies more stable, ensuring product quality product quantities and quality SMOTR performs online, automated recording of any process deviations from reference operating conditions, and offers and quantity remain within specifications for end consumers. at any point in the value chain, an integrated, cross-functional data interface for a process operator and a Downstream corporate centre staff to team up at any point in time. Complete in correcting deviations. transparency means we have Health been able to further improve and safety SMOTR has delivered a number of benefits: reliability in production and • a significantly higher level of compliance with process procedures; delivery – the benefit of which • process variables stray outside the normal operating range for half as long; is, already, being felt by clients • faster and more effective corrections of any system-detected deviations; Gazprom Neft Neftekontrol – ensures product quality and and customers (particularly • fewer decision making levels (4 vs 14). quantity at refineries, filling stations and airport refuelling under the pandemic) who complexes within the company’s footprint continue to receive our products in the right volumes and at the Environmental safety right time, to our guaranteed quality standards. Production control centres at refineries

A production control centre (PCC), a rolling planning, predictive quality its range of production-management new structural unit, was established control, digital twins of process tools, developed by the PCC project ANATOLY CHERNER at the Omsk and Moscow Refineries units and many more. These enable office and Avtomatika-Servis. These Deputy CEO for Logistics, Employee in 2019 and 2020, respectively. Each the refineries to swiftly respond tools include a digital shift log as Refining and Sales, development PCC promptly reviews asset-reliability to out-of-range deviations, achieve well as event-management, quality Gazprom Neft status, environmental settings, production targets as accurately as control, KPI monitoring, current industrial safety and market demand possible and make the most efficient accounting, and energy conservation for the output product. The PCC uses use of resources. One of the critical systems. cutting-edge solutions, such as daily new features offered by the PCC is Social policy

1,800+ downstream 15 million data points assets equipped with special are processed daily by the measurement systems Neftekontrol system Appendices

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Quality control in fixed and mobile laboratories

The company continuously monitors monitoring: product quality and The Gazprom Neft motor fuel and maintains the quality of its quantity. As an additional safeguard quality control system comprises Gazprom Neft petroleum products through a suite against technical failures at Gazprom Gazprom Neft products make it into at a glance 24 fixed and 9 mobile testing of tools for assessing and predicting Neft filling stations, the meters, laboratories quality metrics at various stages of the including at fuel dispensers, are process, from production and shipment inspected by the Mobile Metrological to transportation and sales. Service. This Service is unique in Russia’s 100 Best Products Russia and acts as an internal auditor All fuel supplied to distribution depots that takes stock of fuel levels, Sustainable development from refineries is tested and supported calibrates station meters and maintains management with certification from certified testing the standard instruments used for laboratories. calibration. Apart from inspections at EVERY YEAR, GAZPROM NEFT REFINERY’S Russia’s 100 Best Products competition filling stations, the Service checks the PRODUCTS ARE SHORTLISTED 2020 saw the launch of a new accuracy of fuel dispensing systems FOR RUSSIA’S 100 BEST PRODUCTS. stationary laboratory at an oil depot at oil depots to prevent short supplies in the operated by to filling stations. This multi-level Customer company partner S.A.S. This is the first monitoring enables the company care time Gazprom Neft has successfully to swiftly detect deviations from placed its laboratory at a partner’s normal performance, and to take The following products made the cut in 2020: oil depot, so that fuel quality can be follow-up actions to ensure accurate – Moscow Refinery’s motor gasolines, environmental class K5 (Euro 5 equivalent), grades AI-92-K5 and AI-95-K5; monitored at a third-party facility. measurements, giving our customers – Omsk Refinery’s G-Drive 100 motor gasoline; an additional level of assurance that – Gazprom Neft – Ryazan Bitumen Binders Plant’s innovative polymer-bitumen binders; The company is using a two-faceted they are getting the amount of fuel – Gazpromneft-Lubricants’ range of lubricants. Health approach to petroleum product they paid for. and safety The following products received honourable mentions: – Moscow Refinery’s jet fuel, liquefied petroleum gases and five of their grades of paving bitumen; – Six types of products by the Omsk Refinery, including Euro 5 diesel fuel, M-grade microspheric zeolite-containing Product compliance with Russian and international quality1 standards bio-zeolite catalyst, and oils produced by the Omsk Lubricants Plant.

All Gazprom Neft products comply for consumers in the market. This is provided by the research and Environmental safety with the requirements of the Technical programme is run by two industry development centre (R&D Centre) Regulations CU TR 013/2011, CU TR organisations: the American Petroleum in asphalt-concrete and bitumen 014/2011 and EAEU TR 036/2016. Institute (API) and the Technical laboratories. The R&D Centre also Association of the European Lubricants monitors the quality of products Motor gasolines and diesel fuels Industry (ATIEL). produced by processing facilities. comply with the requirements set out in European standards for Euro 5 fuel Bitumen products comply with NPP Neftekhimia products meet Employee (EN 228 and EN 590, respectively). Russian and international standards, the requirements of Russian and development such as: GOST 33133, GOST 22245, international quality standards under All bunker fuels comply with ISO GOST 9548, GOST R 58400.1, GOST R ASTM and ISO. The polypropylene 8217:2017 and CU TR 013/2011. 52128, GOST R 52056, GOST 6617-76, produced by Poliom meets the Uniform GOST 2889-80, GOST 30693-2000, Sanitary Epidemiological and Hygienic Products of Gazpromneft-Lubricants GOST 15836-79, EN 12591 and EN Requirements for the Goods Subject Entering the retail market with meet the requirements of CU TR 14023. Bitumen products produced to Sanitary and Epidemiological Social 030/2012 and CU TR 009/2011. by Gazpromneft BM are tested in the Supervision (Control). Poliom policy Motor oils produced by Gazpromneft- laboratories of production assets for polypropylene brands also comply Lubricants are included in the annual quality. On passing the tests, binder with European regulations (EC) No bitumen products international quality monitoring batches receive product quality 1935/2004 and (EU) No 10/2011. programme for the products available certificates. Additional quality control In 2020, Gazprom Neft bitumen-derivative products entered the retail building materials market. The company’s waterproofing materials were made available for retail sale at LEROY MERLIN construction hypermarket stores in Moscow, and other regions of Russia, with the main products being mastics and primers – typically Appendices used in low-rise houses outside the city – from the company’s brand Brit. Autumn 2020 saw the first batches of Brit products hit the shelves of LEROY MERLIN’s MaxiPRO professional construction outlets.

1 — For full names of standards, please see the Glossary.

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Key focus areas for product quality improvement

Focus areas for product quality improvement Progress in 2020 Goals for 2021 Focus areas for product quality improvement Progress in 2020 Goals for 2021 Gazprom Neft at a glance OIL REFINING LUBRICANTS

• Construct and revamp process facilities The Moscow Refinery commissioned a Euro+ • Introduce in-line quality analysers (IQA) Develop the product range of high- • In 2020, 34 Gazpromneft-Lubricants products • Conduct original R&D in the motor oil to improve production processes combined refining unit to increase the yield of to automate quality control at the Omsk performance lubricants and engage were officially licenced by the American segment using the company’s own Group • Develop systems to automate quality high-octane gasolines and high-performance Refinery consumers on new product adoption Petroleum Institute (API), and 32 products II and III (API) base oils and develop new control of process streams winter diesel. Unit’s launch will guarantee 15% • Complete the installation of a diesel fuel were approved by Mercedes-Benz. The platforms (formulations) of premium Sustainable • Develop the system that monitors increase in motor gasolines production, 40% hydrotreating/dewaxing unit at the Omsk company obtained about 500 approvals for motor oils for commercial and passenger development deviations from designed operating increase in motor diesels production and doubling Refinery its product portfolio from Russian and foreign road transport management conditions the amount of produced jet fuel • Complete the installation of a deep equipment manufacturers • Develop motor oil additive packages using processing unit at the Omsk Refinery • The company successfully passed an audit the company’s own additives • Upgrade the catalytic reformer at the confirming compliance with industry Omsk Refinery specifications for a number of its products • Complete retrofitting a visbreaker at the Moscow Refinery • Implement the Digital Production at Customer Refineries and Product Business Units care • Improve product appearance • The company piloted the polypropylene • Streamline feedstock processing at NPP programme (polypropylene pellets) through grades PP H085 CF, PP H031 BF, PP H033 FF Neftekhimia by switching to general and equipment upgrades with customised blends as a substitute for specialty customised blends/additives AERO • Use statistical analysis to improve the individual stabilisers and additives currently • Increase consumer satisfaction with the quality of finished products in use. The pilot products received positive quality of Poliom products. Develop automated systems for product • The company commissioned an automated • Develop a prototype in-line analyser feedback from consumers quality control and timely equipment laboratory information system (LIS). If for quality control of jet fuel. Conduct Health maintenance any abnormal deviations are detected, the R&D and certify the prototype to the BITUMEN MATERIALS and safety system will not allow a quality certificate requirements of the Technical Regulations to be generated for the product and aircraft of the Customs Union Expand the premium range of products and • Gazpromneft Bitumen Materials updated its • Implement the new GOST R 58952.1-2020 refuelled improve consumer engagement internal Technical Regulations at production standards • The company implemented the assets in Ryazan and Vyazma • Conduct cross-industry conferences and 1C:Maintenance & Repair system. The system • The company signed an interlaboratory trainings, including the Tenth Cross- ensures high operational availability of programme involving oil refining companies, Industry Conference “PRO Bitumen refuelling equipment and timely aircraft Environmental the Federal Road Agency, the Russian and PBB. Agenda for 2021”, with the refuelling safety Highways State Company, Rosasfalt participation of government regulators Association and the National Association and the leading players in the Russian BUNKERING of Oil Product Carriers. The programme bitumen market will explore and evaluate the stability of Produce new types of environmentally The company launched its first customised LNG Expand the product mix of marine fuels bitumen during transportation at elevated friendly 0.5% sulphur marine fuels bunker barge for operations at Baltic Sea ports. temperatures Sea trials are underway Employee development

Social policy

Appendices

64 65 Sustainable Development Report 2020

• supported the regional HQs of issuing more than 1,600 free volunteers giving lifts to doctors the Russia-wide #WeTogether fill-up cards worth more than amid soaring demand for health Caring about consumer initiative as well as other civil 200,000 litres of fuel from services and delivering essential society groups, including by Gazprom Neft filling stations to goods to those in need. Gazprom Neft health and safety at a glance

Gazprom Neft cares about the health and well-being of our retail and corporate customers. Health, safety and environmental standards

Sustainable development management Safety of retail consumers during Products subject to Technical Regulations (motor gasolines, jet, diesel the COVID-19 pandemic and bunker fuel, fuel oil, paving bitumen, liquefied petroleum gases) have EAC Declarations confirming compliance with CU and EAEU Environmental safety is Technical Regulations. Every batch of products has its compliance with monitored in accordance with environmental standards verified. product standards, regulations Minimising contact Mobile apps and specifications (Russian Customer In addition to this, the company developed and revised four Safety Data national standards, or GOSTs), care Sheets (SDS) for bitumen materials and 221 SDSs for lubricants in 2020, technical specifications (TUs) SOCIAL DISTANCING CONTACTLESS PAYMENT – WITHOUT HAVING in accordance with the Regulation (EC) No. 1907/2006 of the European and internal standards (STOs). As Parliament and of the Council of 18 December 2006 concerning the part of certification, each batch MARKERS TO LEAVE YOUR CAR Registration, Evaluation, Authorisation and Restriction of Chemicals of commercial products from (REACH). This Regulation was adopted to ensure a high level of protection company refineries is tested for for human health and the environment. The SDS for residual (TSU) and quality in refinery quality control Health CAFES distillate marine fuels (CMT), diesel fuel, and jet fuel were also revised. laboratories, with the actual and safety OFFERING TAKE-AWAY quality profile detailed on a product ONLY 1.6 million Benzene, sulphur and lead levels in Gazprom Neft motor gasolines and certificate for each batch +100% increase diesel fuels conform to the limits set by the European standards EN 228 users per month1 and EN 590. “SNEEZE-GUARD” SCREENS in online payments INSTALLED AT CHECKOUTS during the pandemic2 Environmental ACROSS 620 FILLING safety STATIONS Product labelling

Most of Gazprom Neft commercial products are not labelled. Labelling In 2020, Gazprom Neft launched its Antivirus initiative to curb the spread of the novel coronavirus infection is restricted to accompanying documents (the product certificate and safety data sheet), and the vehicles transporting these products. Employee Shipping labels comply with GOST 31340, GOST 1510 and GOST 14192, Every batch is supported with a set development which set the requirements for the labelling of chemicals. of documents, including a quality certificate, a safety data sheet, Under the initiative, Gazprom Neft filling stations: To make product information more transparent for consumers, and a legally and/or contractually Gazprom Neft products are labelled in accordance with national and required document that certifies • installed anti-bacterial at diesel fuel to ambulances in • extended elite statuses for “On international standards. compliance with standardisation more than 500 Gazprom Neft Omsk as well as in Our Way!” loyalty members requirements or EAEU Technical Social filling stations in Moscow, and Muravlenko in the Yamalo- regardless of fill-up volumes Regulations. Before introducing policy St Petersburg, , ; amid reduced road traffic in new or revised standardisation Omsk and other regions of • provided oil changes free Russia in spring 2020; documents, the company always operation, not only to prevent of charge to almost 1,000 • granted a 45-day grace period provides the consumer with a draft COVID-19 outbreaks at company ambulances (G-Energy Service to corporate customers (OPTI 24 copy for review and approval facilities, but also to reduce the stations); service card holders); risk of other common seasonal • served about 370,000 free • offered an interest-free grace Appendices respiratory infections; coffees to ambulance workers period to small wholesale • supplied more than 510,000 and other first responders; customers, saving them about litres of free gasoline and ₽300 million over six months;

1 — Number of Gazprom Neft retail network and AZS.GO mobile app users 2 — Since 1 April 2020

66 67 Sustainable Development Report 2020 Continuous consumer Engagement with retail customers

Gazprom Neft uses a surveys among end consumers, In 2020, Gazprom Neft built a fully- Gazprom Neft engagement multichannel approach to reach covering the entire service delivery digitised customer activation journey at a glance out to retail consumers of its journey. to enhance its loyalty programme, petroleum products, comprising eliminating the need for a plastic Gazprom Neft is committed to building direct, long-term relations with consumers, communications at filling stations or In 2019, Gazprom Neft launched the loyalty card to be purchased at a driven by transparency and mutual respect. As a responsible supplier, Gazprom Neft in the mobile app, media placement, integrated Quality 360˚ programme filling station. Our digital approach our official social media accounts in its motor fuel sales segment to has paid off: mobile customers with keeps consumers up-to-date on its available products and services, and is continuously (managed by PR), feedback through drive retail customer perceptions of a virtual card in Gazprom Neft retail Sustainable development improving its customer query and complaint management process. social media and via the Gazprom our fuel quality by coordinating the network mobile app accounted for management Gazprom Neft conducts regular customer satisfaction surveys and continuously makes use Neft retail network’s Integrated efforts of PR, Marketing, in-house 42% of new loyalty programme Customer Support Centre (ICSC), and external experts, and filling members in 2020. Customers can of feedback from counterparties, including complaint handling. and face-to-face communication station staff. now tap an “Invite Friends” option in with customers as part of below- the mobile app to send an invite link the-line, conventional and digital Quality 360˚ divides the audience via any messenger app. Relations with corporate and wholesale customers advertising campaigns. into segments by how receptive Customer they are to quality-related By enhancing optionality around care In 2020 fuel quality campaigns information, and tailors content and point earning and redemption, The company uses the following development and implementation • loyalty programmes; initiated by the company’s motor promotion channel mix accordingly. we increased the share of loyal channels to reach its corporate and of standards; • Gazprom Neft hotline; fuel sales segment had a total reach customers in 2020 to 59% (+2 wholesale customers: • customer-facing activities of • direct communication (emails, text of over 118 million across a mix of Gazprom Neft’s efforts to raise percentage points vs 2019). Q1 2020 • information and technical support account managers at Gazprom messages and push notifications); traditional media and social media awareness among retail consumers saw improvements to the basic for our products; Neft offices; • Gazprom Neft partner network: platforms. The ICSC is a 24/7 multi- are focused on: terms of the loyalty programme, and Health • direct dialogue between • published information on the OPTI 24 service card channel service that leverages • raising consumer awareness the introduction of reward points and safety management and customers corporate websites, customers’ processing network, dealers, various conventional and digital by explaining the advantages as a way of saying thank you to the during training and workshops personal accounts, mobile apps agents; communication tools to enable of Gazprom Neft products, customer for choosing Gazprom Neft. for partners and consumers, and publicly-available online • feedback through social media. prompt responses to retail customer dispelling myths and biases, Customers can now also share their meetings and support sessions resources; queries. and integrating quality-related points with friends who are also with authorities, and within • marketing and advertising messages into sport projects and signed up to the programme, or, as industry working groups on the campaigns; All queries are recorded by type federal promotional campaigns; part of our new optionality to drive and subject in an integrated query • engaging the expert community emotional connections, they can Environmental safety management system. The quality of on fuel quality by running donate them to charity, for example customer interactions is monitored educational and expert projects. the search-and-rescue volunteer regularly across all communication team Liza Alert. In just one month channels, and any reported issues “On Our Way!” is one of the largest of being available on the app, are followed up. The company loyalty programmes in Russia. customers donated more than three conducts regular satisfaction million points to Liza Alert. Employee Bitumen distribution development

network development IMPROVEMENTS TO THE PROGRAMME FOCUSED ON Gazprom Neft is building and expanding its distribution network to sell premium bitumen derivatives across Russia. This THREE KEY AREAS IN 2020: network includes 27 partner companies with a proven track record in the regional bitumen markets. Social 1. digitising the customer acquisition and activation process; policy To raise the level of professional, industry and business expertise of distributors and key consumers, the company 2. stabilising the customer base by enhancing optionality around point implemented the Brit Academy training programme. Training takes place in an interactive environment via a mobile app. earning and redemption; Training courses are supported with educational materials, video lessons, technical guides and brochures, and audio 3. boosting emotional connection for higher customer loyalty. recordings. Training can be taken in modules from basic to advanced levels, with certificates issued upon their successful completion.

Appendices Gazpromneft Bitumen Materials is a major producer of bitumen derivatives. The company’s portfolio now includes more than 200 products: from innovative road, bridge and airfield mastics, sealants and emulsions to bitumen joint sealing tapes.

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Engagement with fuel market regulators user engagement through awareness Corporate customer satisfaction is campaigns across its official social assessed through a questionnaire. media channels, coupled with its Feedback for aviation and bunker In 2020, Gazprom Neft continued products, and contribute annually to engines and fuel supply systems, and social and charitable projects, fuel, bitumen materials, lubricants Gazprom Neft to build its relations with the state Direct Line, a federal live-broadcast other aspects of maintenance. such as free fuel for volunteers and petrochemicals shows an at a glance fuel market regulators, including programme focused on the quality and free coffee for medical and increased level of consumer the Federal Agency for Technical of motor fuels in Russia. During this The topics and format of Direct emergency services personnel. satisfaction with product quality, the Regulating and Metrology, and the programme, experts from the Federal Line were well received by both Online educational programmes were reliability of supplies, and the quality Ministry of Industry and Trade of the Agency for Technical Regulating and motorists and the professional media another strong driver behind this of our customer service and value- Russian Federation. Gazprom Neft Metrology and Gazprom Neft, as well community: the programme won the growth, for example Fuel Class and added services. specialists actively participate in the as public and research officials, field MediaTEK-2020 award, Russia’s top Direct Line, a federal programme on Sustainable development interdepartmental working group for questions from motorists about the award for public-awareness efforts in the quality of motor fuels in Russia. management combating the illicit trade of petroleum quality of motor fuels, the servicing of the fuel and energy sector.

Consumer satisfaction surveys Customer care To assess retail consumer satisfaction 0.03% of the total number of queries. The share of positive mentions of the with the quality of motor fuel and Queries include those received by the Gazprom Neft retail network online Improvement of digital products services, the company conducts regular ICSC through voice and other channels, increased from 28.99% to 37.2% (+8.2 surveys, studies feedback given via including the mobile app’s chat, emails percentage points) in 2020. The CRM system touch screens at the and messages sent via the feedback potential reach of positive coverage and services checkout areas of filling stations, form at gpnbonus.ru, as well as all user was up 15.1 percentage points, with Health and analyses comments and queries activities in the Gazprom Neft retail the total audience running into and safety received through its hotline and on network mobile app, and feedback from 537 million people. This growth Gazprom Neft is improving its 2020 saw about 27% of small social media. customers through CRMSensor devices was the result of a surge in online digital products and services for all wholesale transactions made through at filling stations. consumer interactions during the consumer segments of the motor users’ personal accounts, and 1.8 Net Promoter Score (NPS) is the key COVID-19 pandemic, and extension fuel market, including individual million tonnes of gasoline and diesel metric to measure consumer loyalty to The most frequent queries made of “On Our Way!” member statuses. motorists, owners of heavy and light fuel sold through digital channels. 2 million average the Gazprom Neft retail network. by Gazprom Neft retail network The Gazprom Neft retail network commercial vehicles, taxi fleets, and The Gazprom Neft retail network customers in 2020 included: generated a significant amount of OPTI 24 service card distributors. mobile app reached 2 million average monthly active users Environmental safety According to an Ipsos Comcon survey, • the terms and conditions of the While developing these solutions, monthly active users. of the Gazprom Neft the NPS of the company’s filling station loyalty programme, including the company tries to target users network and the whole motor fuel virtual loyalty cards and virtual According to an Ipsos Comcon as accurately as possible and tailor retail network mobile retail market returned to pre-COVID co-branded cards; survey, the Net Promoter Score the experience to them to save time app levels seen in the first half of 2018. • whether contactless payment is and Customer Satisfaction Index and money for our customers and Our NPS score stands at 58 points (+5 possible for fuel, including directly for the Gazprom Neft retail partners. percentage points vs 2019), which is from the Gazprom Neft retail network are higher than the Employee higher than the market average of 49. network mobile app; market average development In 2020, the NPS of the company’s • the measures in place to curb the retail network was surpassed by only spread of COVID-19 at Gazprom two international brands, Shell and BP. Neft filling stations.

Loyalty programme The Customer Satisfaction Index (CSI) All queries are recorded by subject, and other information has also increased and sits at 86 (+2 type and topic in an integrated Open- for Gazprom Neft retail Social percentage points vs 2019), which, Source Ticket Request System (OTRS). network customers policy (Russian) again, is surpassed only by Shell and Unusual queries and complaints that BP’s networks in Russia. require additional information for handling are passed to the relevant

In 2020, the total number of contacts company service to prepare a Support for Gazprom Neft with retail consumers increased 2.5- response, which is then returned to retail network customers fold to 358 million contacts. The the ICSC operator and provided to the Appendices number of complaints remained low at customer.

70 71 Sustainable Development Report 2020 Customer personal data1

Gazprom Neft Digital services protection at a glance

As Gazprom Neft is increasingly focused on digitising customer journeys, it pays great for bitumen sales attention to the protection of its customers’ personal data. Sustainable development In 2020, Gazpromneft Bitumen Materials sold more than one million tonnes of base and premium bitumen through management its digital service, which is twice as much as in 2019. Through this digital service, customers can buy bitumen The company’s personal data their local law), the requirements processing objectives have been from 14 company facilities, including the Moscow and Omsk Refineries. The customer’s personal account, one of processing2 practices comply with of Russian laws, a contract or achieved, or become no longer the key modules of this service, was introduced in 2020 and is constantly updated with new features. In 2021, it the requirements of Federal Law No. other legal documents relevant will enable customers to choose delivery of packaged products not only within Russia but also abroad, and in the 152-FZ of 27 July 2006 On Personal • Personal data are processed • The confidentiality of personal longer term, by rail as well. Data, and also take into account only for specific and legitimate data is ensured by restricting the provisions of the General Data purposes stated in advance, access to authorised employees Customer Protection Regulation (Regulation and are not used for any other only, and by other safeguards care (EU) 2016/679) of 27 April 2016. purposes • The company takes necessary, • Personal data are gathered in the adequate measures to prevent Personal data protection policies: minimum amount necessary to misuse of personal data In 2020, the Gazprom Neft retail company has added new features to customer could need: data analytics, • Personal data are processed in accomplish the stated objectives network mobile app was updated the AZS.GO, and launched a unique a balance checker, limit setting, a lawful, fair and transparent • Personal data must be accurate, Gazprom Neft does not collect with many new features, such as service for professional drivers – bulk driver provisioning, role and manner adequate and up-to-date information relating to race, national Health online fuel payment and a range of online fuel payment for OPTI 24 electronic document management. • Access to personal data is only • Incomplete or inaccurate personal origin, political views, religious or and safety virtual cards, including the Autodrive service card holders. This service is About 90% of all corporate customers possible on legal grounds, such as data are deleted or corrected philosophical beliefs, private life or Start co-branded bank card, and the offered automatically, with ID verified use the OPTI 24 personal account, personal consent or consent of a • Personal data are retained only health status. “On Our Way!” loyalty card. Since by the user’s phone number. Mobile reflecting a high demand for this legal representative for persons as long as required for processing launch, customers have set up about fuel payment is available at 95% service. under 14 years of age (for foreign purposes: they are erased or 1.9 million virtual cards on the app. of Gazprom Neft filling stations in nationals, this age is subject to destroyed either when the It is constantly updated with new Russia. In 2020, Gazprom Neft continued to services, such as the ability to call a actively collaborate with startups as Environmental safety tow truck, pay for a car wash, buy Corporate customers of the Gazprom part of the StartupDrive accelerator. insurance policies, check vehicle Neft retail network holding OPTI StartupDrive tenants are companies history, schedule maintenance 24 service cards have all the tools focused on the development and appointments and much more. The they need to manage fuel costs promotion of high-tech products company enhances its mobile apps directly in their personal account and solutions for haulage, fraud- through partnerships with young and on the OPTI 24 mobile app: prevention, ride-hailing, car-sharing, start-ups focused on the development from quickly topping-up their fuel fintech and retail services. An Employee of mobile apps and services for account and issuing virtual cards accelerator is a business development development Android and iOS. to drivers, to electronic document tool that allows startups to promote management and the ability to plan and refine their ideas for a specific The company’s mobile apps, the out cost-efficient routes. It takes customer or customer segment, and Gazprom Neft retail network mobile only a few seconds to transfer funds expand their sales channels going app and AZS.GO app, offer users new by a number of options, including forward. Accelerator customers, payment options to complete fuel conventional payment orders, bank including our motor fuel sales teams, Social purchases – a bank card, “On Our card payments, or payments through get the opportunity to offer their policy Way!” points, Apple Pay and Google the corporate customer’s linked customers a greater number of Pay, while the AZS.GO app also offers bank account. The OPTI 24 personal user-friendly services comprising a a group account payment option. The account has everything a corporate product ecosystem.

Appendices

1 — Personal data: any information relating directly or indirectly to an identified or identifiable individual (data subject). For example, personal data include surnames, given names, passport data, email addresses and telephone numbers. 2 — Personal data processing: any action performed on personal data, such as collection, storage, adaptation or alteration, use, transmission, and erasure or destruction.

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An effective HSE Health and safety management system relies PROGRESS IN 2020 on a comprehensive and accurate assessment of Gazprom Neft Injury and accident rates safety barriers embedded at a glance • No fatalities involving company employees and 67% less fatalities at in production process. contractor organisations from a 2019 baseline This information is just as Safe operations have always been a top priority for Gazprom Neft. The company always • No industrial accidents at company facilities, 35% less equipment important for management places the safety of its employees, local communities and the environment above incidents against a 2019 baseline as oil production or refining figures. We actively develop financial, technical or any other considerations. The company is committed to providing and incorporate IT tools as Sustainable COVID-19 response development a safe working environment for its people and expects the same from its partners. • Over 1.1 million COVID-19 tests performed on employees part of the digital HSE risk management • Over 140 buffer zones for FIFO personnel management programme, generating information flows

HEALTH AND SAFETY AND HEALTH and promptly analysing Performance against 2020 targets them. Along with operational • According to inspections, the overall operability of key HSE risk improvements, digitisation mitigation barriers under the Safety Framework programme was up carries more and more Customer from 57% to 81%; inspections covered a total of over 45,000 safety weight in our efforts towards care barriers across 57 subsidiaries Target Zero, the company’s Corporate documents • A remote HSE knowledge evaluation system was piloted on a large scale strategic goal. Strategic priorities (over 17,000 testing sessions on the External Knowledge Evaluation • Policy on Industrial, Fire, Transport, platform) Environmental and Occupational Safety, • Under efforts to develop data analytics systems, the consolidation of and Civil Defence HSE data from 15 sources was automated and goals Health ANTON GLADCHENKO and safety • Health, Safety and Environment and Head of the HSE Directorate, Civil Defence Management System: Gazprom Neft STRATEGIC PRIORITY General Provisions and Framework (Corporate Standard)

Target Zero – zero harm to people, the environment, or • Procedure for Management and property in our operations. Organisation of Interaction with PLANS FOR 2021 Environmental safety Contractors on HSE Issues (Corporate Standard) Reduce accident and work-related injury rates at the company STRATEGIC GOAL and contractors by: Gazprom Neft’s strategic goal • Reporting, Registration, Recording and • expanding the risk-based approach to HSE risk management from the is to lead the global oil and gas Internal Investigation of Accidents strategic level (company risks) to the tactical level (subsidiary risks); industry in safety performance 1 To achieve Fatal Accident Rate (FAR) and Tier 1 Process (Corporate Standard) • adopting the PSE Tier 1–4 international classification of industrial by 2030. To this end, the Safety Event (PSE) levels at or below those of the world’s incidents in line with API-754 and IOGP 456; company is strongly focused on Employee 2 top 10 safest liquid-hydrocarbon producers by 2030. • HSE Risk Management (Corporate • rolling out the External Knowledge Evaluation HSE training and improving its HSE management development Standard) controlled knowledge testing system across the Upstream Division; system and risk management • decreasing Auto Accident Rate (AAR), the specific road accident rate, by process, and invests significant KEY FOCUS AREAS: 5% from a 2019–2020 average baseline. resources into advanced technology and asset reliability, all while promoting a safety HSE risk management culture among its employees Social and contractors policy Monitoring and operational control Gazprom Neft’s Policy on Industrial, Fire, Transport, Environmental and Emergency prevention and containment system Occupational Safety, and Civil Defence provides for the implementation management and continuous improvement of an effective safety system, compliant with national and global standards. Developing and deploying new control and safety technology Policy on Industrial, Fire, Transport, Environmental and Appendices Occupational Safety, and Civil Employee training and promoting a safety culture Defence

1 — Fatal accident rate: the number of fatal accidents per 100 million person-hours worked. 2 — HSE requirements include (but are not limited to) requirements for industrial, fire, transport and environmental safety; occupational health and safety; electrical safety and emergency preparedness.

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COVID-19 response IT FOR FASTER AND BETTER MANAGEMENT DECISION-MAKING

Gazprom Neft To enable faster pandemic-response management decision-making, track infection rates and manage employee access at a glance to facilities, the company developed a range of IT solutions. For instance, dashboards1 visually display granular data for each subsidiary and separate facilities and locations, whether a field, refinery, tank farm, filling station or office. The COVID-19 outbreak, which was declared a pandemic in March 2020, was a hard test for Dashboards enable management to monitor data on employee health, the number of tests and coronavirus cases, almost all employers. Early in the pandemic, Gazprom Neft developed and implemented and the implementation of barriers under the Antivirus programme, taking prompt actions as necessary.

Antivirus, a comprehensive programme to curb the spread of COVID-19. Sustainable development management

The Antivirus programme comprises a system of barriers involving technical and organisational measures to counter the virus, with a total of 70 barriers in place to halt the spread, ranging from mandatory Buffer zones temperature checks and wearing personal protective equipment to more Customer sophisticated measures. care To prevent the spread of the infection, the company implemented the COVID-19 response strategy, updating it as new data and technologies In late 2020, the COVID-19 became available. Buffer zones remain one of the most effective measures, vaccination drive got underway for Health management system offering accommodation and medical monitoring for employees before work company employees at oilfields. Medical checks are carried out twice: before stay in a buffer zone and three days prior to fly-in. This procedure ensures personnel are as safe as Health Gazprom Neft rolled out regular mass COVID-19 testing for its HEALTHCHECK SYSTEM possible. In total, 122,000 employees have passed through over 140 buffer and safety employees. As part of Barrier, our corporate testing programme, over zones. The buffer zones helped to protect company and contractor employees More details on Gazprom Neft’s programme to fight one million tests were administered in 2020, covering employees across from the pandemic and to prevent outbreaks of the infection, setting a COVID-19 all oilfields, refineries and offices of Gazprom Neft and its contractors. benchmark for the industry. Mass testing prevented outbreaks of the disease. COVID-19 TESTING In 2020, the company launched its own health monitoring system, PROGRAMME HealthCheck, as well as the Gradusnik (Thermometer) mobile app, which Quarantine Environmental safety work together to enable swift communication between employees and the company’s medical team. These services are also used to Positive test automatically issue e-passes to the company premises depending on COVID-19 test results. PERSONAL PROTECTION FROM THE VIRUS Negative test Employee New shift First test for Second test for development Production continuity management ies in COVID-19 COVID-19

A system of barriers and screens was put in place at our refineries to prevent the spread of the infection. Only employees with a negative COVID-19 test result or antibodies for the virus are admitted to work. 60/90-DAY SHIFTS1 14 days of Health check upon Social Robotic process automation and digital technologies enabled arrival at the terminal quarantine at Flight to the site policy contactless shift handover at company refineries. Backup shifts were the terminal “Clean shift” also introduced in 2020 at refineries for quick handover, should any employee be taken ill in the current shift. BACKUP SHIFTS AT Over 140 ”buffer zones” were set up in oil production regions, offering REFINERIES temporary accommodation and medical monitoring for employees Appendices before work at oilfields. 140+ 10,000+employees pass HEALTH MONITORING buffer zones through every 14 days OF SHIFT EMPLOYEES 1 — Extended shifts of up to 60 and 90 days at remote fields and the Prirazlomnaya oil platform in the Arctic.

1 — A dashboard is a visual representation of data, grouped by subject on a single screen, making it easier to quickly comprehend.

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Gazprom Neft’s company-wide HSE programme, Safety Framework, is Health, safety and environment aimed at mitigating our key risks. The core principle of the programme The company’s HSE activities is to prioritise and introduce, step by step, barriers to prevent events follow a risk-based approach, with catastrophic consequences for the company of which there are hinged on the Plan-Do-Check-Act Gazprom Neft at a glance management system 31 scenarios. The company earmarks financial and human resources to (PDCA) cycle effectively implement the Safety Framework barriers.

The actual quality of barrier implementation at company assets Gazprom Neft management has the ultimate responsibility for effectively managing is verified by independent inspectors. In 2020, the outcomes of operational risks related to potential impacts on employee life and health, as well as on implementing barriers in various areas of the company were added to a corporate dashboard. This lets managers objectively assess the Sustainable equipment, property and the environment. development HSE situation at specific operations and the company’s progress on management mitigating key risks.

The use of key metrics such as FAR and AAR to set KPIs for senior Ka: the accident rate, the number of A total of about 10,000 initiatives were completed across subsidiaries management in managing risks to employee life and health, and Ka under the programme in 2020, at a cost of ₽2.8 billion. An evaluation 10,000 major equipment-related incidents per for equipment, property and the environment, enables company million person-hours worked. of barrier performance showed that breaches in focus areas more than initiatives management to make effective decisions. FAR (Fatal Accident Rate): the number of halved year-on-year. Customer employee fatalities divided by the number implemented care The company’s comprehensive HSE decision system includes collegial of person-hours worked in the reporting The company also works to identify a set of best available practices to under the Safety bodies such as an HSE Professional Board and an HSE Supervisory period, multiplied by 100 million. manage HSE risks specific to each asset. To do this, each asset compiles Board. AAR (Auto Accident Rate): the number of a register of the most significant HSE risks and prepares and implements Framework traffic accidents per million km travelled. plans to minimise them. programme

Health and safety Accident and injury metrics (Ka, FAR and AAR) have been integrated into a set of KPIs for senior management HSE risk management cycle

Environmental safety RISK PRIORITISATION HSE PROFESSIONAL BOARD HSE SUPERVISORY BOARD MANAGEMENT BOARD

Employee The HSE Professional Board is The HSE Supervisory Board Key decisions are reviewed by SELECTION development responsible for consolidated is a collegial body made up of the Management Board at its AND IMPLEMENTATION OF BARRIERS decision-making that supports senior executives of operational meetings. ANALYSIS the development of a company- units. It is tasked with reviewing AND ADJUSTMENT • basic technological barrier wide HSE management system, strategic matters related to • digital barrier as well as for submitting safety improvements across management strategic initiatives to the the company by drawing on • competence barrier Social Supervisory Board and the the expertise of operational policy Gazprom Neft Management functions. Board for review. For more details on Gazprom Neft’s HSE governance bodies, see “Corporate INDEPENDENT INSPECTORS governance” on page 26

Appendices

80 81 Sustainable Development Report 2020 Using IT solutions in HSE Occupational Health

The company continues automating and digitising HSE management Gazprom Neft with advanced data collection and analytics, modelling and monitoring Company management places emphasis on reducing injury rates, implementing safe at a glance technologies. In 2020, the digital HSE risk management programme was technology and creating a safe working environment. Compliance with the relevant approved, serving as a tool to reduce injury rates. The programme is 20 + corporate policy is monitored at all management levels, from the CEO to supervisors, and is focused on collecting accurate and quality data through the company’s digital and R&D HSE key HSE IT projects, including: supported by HSE experts. projects Sustainable development management The company encourages employees to take responsibility for their Dashboard Cause-and-effect Electronic permit to External knowledge own and others safety, while improving knowledge, competencies and In 2020, Gazprom Neft further models work system evaluation awareness in this field, and engaging its employees in occupational reduced fatality rates across health activities. company facilities. There were zero fatalities across Gazprom The company leverages a risk-based approach in its corporate HSE Neft Group, and fatality rates at Customer processes to continue pushing the number of fatal injuries lower, both for contractor organisations declined care company and contractor employees working at Gazprom Neft facilities. The significantly A tool to evaluate A tool enabling any asset A tool for operational risk A training and controlled use of IT monitoring and analytics systems, coupled with promoting a safety strategic risk barrier to model incidents and management, unlocking knowledge testing culture and remote learning among company and contractor employees, operability, covering assess the condition of in particular a more system, supported also had a positive impact on the company’s HSE performance. analytics results from barriers to prevent them than 50% reduction in by remote HSE test 57 company subsidiaries or mitigate their impact. the amount of labour invigilation (AI-driven 1 Health and used in incentives necessary to issue permits technology simulates an Work-related injury rates and safety for all Gazprom Neft to work at hazardous invigilated exam during (Gazprom Neft Group employees) employees. facilities, by accelerating online testing). the approval process. 3.093 3.083 0.744 1.461 0 0.56 0.60 0.64 0.50 0.54 3.5 0.8 3.0 0.6 2.5 0 Environmental 2.0 0.4 safety 1.5 fatalities among The company’s portfolio includes more than 20 company-wide digital and R&D projects for various HSE functions, 1.0 0.2 including the following solutions currently being rolled out: 0.5 company employees 0.0 0.0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

FAR LTIF

Employee The Kontur A HSE video-analytics An automated operational development portal system control system Number of people injured Gazprom Neft makes every effort Gazprom Neft Group employees Contractor employees to prevent fatalities. The company Automated collection of data A project to enhance The new solution collects and analyses data seeks to minimise the risk of similar from risk users and incident risk occupational safety on operating processes aligned with all HSE accidents by investigating their 69 74 85 68 68 64 92 83 prediction based on latest data. at work, enabling requirements, enabling analysis, prediction and 75 80 causes and implementing corrective Social In 2020, Kontur was updated surveillance over adjustments in case of deviations in equipment 4 4 1 2 0 6 6 5 9 3 action plans. The company takes policy with new modules that test the hazardous areas, performance. Transparent monitoring enables preventive measures across all of operability of Safety Framework employee identification, responsible persons to be promptly designated its assets in line with these plans barriers and provide risk monitoring of traffic rule and corrective actions to be monitored online. management and an automated violations, etc. The system will support the company’s operational control system. transition to predictive analytics to improve the reliability of operation at facilities. 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Appendices Accidents Fatalities

1 — In addition to Gazprom Neft assets in Russia, injury rates include joint ventures whose operations are managed by Gazprom Neft, including Gazprom Neft assets overseas (in , , Serbia, Eastern Europe and ). 2 — Fatal accident rate: the number of fatal accidents per 100 million person-hours worked. 3 — Lost time injury frequency: the number of lost-time incidents (including fatalities and temporary or permanent disability) per million person-hours worked.

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Unfortunately, the company was not able to completely eliminate fatal Safety culture accidents among the contractor employees.

In February 2020, as a result of a hard landing of a helicopter carrying The company pays special attention to improving the knowledge, skills Gazprom Neft employees of Gazprom Neft and a contractor, two crew members died. For more details on accident and competencies of its employees and contractor personnel. To this Our safety culture pivots on the at a glance investigation see page 87 end, the Corporate University has a dedicated HSE department, where personal responsibility of each In March 2020, during the cementing of the well casing, a high-pressure training is provided by both external experts and in-house coaches. employee and the engagement of all hose burst. The employee of the contractor organization who was employees and contractor personnel nearby received an injury incompatible with life. In 2020, the External Knowledge Evaluation system was piloted on a in improving safety. large scale (17,000 testing sessions), and the decision was made to roll To investigate these incidents, special commissions were established it out across the Upstream Division. The system makes at-home training With safety being the company’s key Sustainable value, Gazprom Neft employees and development to conduct a detailed analysis of the causes and develop measures to and controlled knowledge tests possible. management minimise the risks of recurrence of accidents. The commission is doing contractor personnel are entitled to everything possible to prevent the recurrence of such tragedies. To practice safe working skills, the Upstream Division successfully refuse to carry out unsafe work launched a modern training centre at Multidisciplinary College and expanded the infrastructure of training facilities in other regions in 2020. Responsible contractor management Customer The company works to foster The Downstream Division, Gubkin University and Omsk State Technical The existing training system was care certain mindsets among contractor University opened the Industrial Safety Academy for operational flexibly adapted to COVID-19 In line with its HSE Policy, the company focuses on safety requirements employees through a system and service staff. Students study global best HSE practices, develop restrictions, with most HSE training when performing operations at its facilities, including those related to of incentives and training, in risk-based thinking and learn production process specifics. Academy that had previously been held in COVID management measures, medical support and the protection of accordance with the applicable graduates receive a retraining certificate, enabling them to engage in person delivered remotely in 2020. employee health during the pandemic. laws of the Russian Federation, as technosphere safety services. Pre-fly-in training in buffer zones well as corporate and international was conducted the same way during Health HSE standards the lockdown, in line with corporate Gazprom Neft is focused on fostering a safety culture at its contractors, and safety which is based on personal responsibility, motivation and engaging each requirements employee in HSE improvement.

Environmental The Safe Production Project safety

Gazprom Neft continues its Safe Production Project, a major initiative Project outcomes: in HSE and operational efficiency aimed at improving the working Productive quarantine: safety conditions and rest breaks of contractor employees. Employee 4% turnover rate decrease development The project helps to improve employee satisfaction and incident 22% increase in employee transparency, as well as significantly reduce turnover, by adjusting training at buffer zones satisfaction operating processes at contractor organisations, unlocking safer and more efficient operations. 40% more effective detection of HSE breaches To help employees stay productive during quarantine, Gazprom Neft The company offers four courses: Development, Gazpromneft-Yamal, Gazpromneft-Zapolyarye and Social Messoyakhaneftegaz offered remote training in HSE at their buffer policy zones. Training in Workplace Safety: Tier 1 The training is delivered via an external provider’s remote learning Safety Framework platform and can be accessed from a PC or mobile phone via a mobile app. Data on completed courses are stored in a single database and held Hazardous Work on e-cards connected to an automated progress tracking system. Appendices Work at Height

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Transport safety

Road transport safety Gazprom Neft Air incident investigation at a glance The company has in place a Vehicle Tracking System (VTS) to monitor road The scale of Gazprom Neft's safety through tracking safe-driving performance, including driving speeds, transportation segment calls for In February 2020, adverse weather conditions caused a helicopter carrying Gazprom Neft and contractor employees sudden acceleration or braking, driving hours and rest breaks, with monthly an increased focus on measures to to land hard 300 m away from Sabetta Airport (Yamal). Two crew members died in the accident; however, the reports on road safety performance generated. The system covers various prevent transport accidents passengers and co-pilot were able to evacuate the helicopter unassisted. All passengers were taken to the local types of vehicles used in operating processes, from cars for personnel to medical aid post, where they were examined and confirmed to have sustained no serious injuries. tank trucks for petroleum products. Sustainable development Bowtie Key barriers in the cause-eect model management A suite of hardware and software solutions monitors key metrics in real time and triggers emergency response mechanisms if necessary. To prevent a potential accident, a traffic controller can contact the driver to change the THE DEATH vehicle’s speed or route. OF AIRCREW WEATHER

Customer Air safety New Support from Rapid response by rescue care air trac services control at the In 2020, Gazprom Neft set up a single competency centre for air transport arrival airport and flight safety, tasked with defining a strategy and methodology, as well Satellite positioning system as conducting audits to ensure flight safety at all company assets. TECHNICAL heliport CONDITION The company fleet of Mi-8T helicopters was retired due to the model’s HELICOPTER Health insufficient thrust and replaced by more advanced Mi-8MTV helicopters. and safety Flying experience requirements have been raised for pilots. All aircraft in the CRASH crews undergo special additional training using mobile simulators. The Aircraft type: No faulty equipment company upgrades heliports at fields and builds new infrastructure Mi-8AMT onboard Use of seatbelts facilities.

Arctic THE DEATH OF Gazprom Neft has centralised air transportation of personnel to fields, including contractor employees. Adequate co-pilot PASSENGERS Environmental ight time safety Gazprom Neft commissioned the CREW TRAINING Arctic heliport at the Varandey AND ACTIONS Simulator training Safety at sea shift camp, deploying cutting-edge for pilots solutions to operate flights in the Crew pre-ight Gazprom Neft has developed and introduced a Marine Operations Safety harsh conditions of the Arctic. The check Management System. In March 2020, the system passed an expert review heliport has a runway, a helipad, a As all passengers were wearing their seatbelts, many more casualties were prevented, despite by the Russian Maritime Register of Shipping and was certified to applicable passenger terminal with a control Safety Framework barrier Employee national and international standards. Requirements for an inland water tower and infrastructure facilities. the nature of the damage sustained by the development helicopter safety management system are under development. The heliport is equipped with the Unavailable Failed Worked out latest radio and meteorological Gazprom Neft is rolling out Kapitan, an intelligent digital logistics equipment, navigation and management system that ensures safe operations in the Arctic. The system approach lighting systems. monitors crude shipments and inventories 24/7, taking into account Actions taken weather conditions, including changes in ice conditions, to identify optimum Crews are transported to the Social logistics solutions for crude transport. Prirazlomnaya platform on • All the company’s assets that • Gazprom Neft set up a single air • A Memorandum of Cooperation in policy ’s fleet of modernised use air transportation were transportation centre, responsible flight safety was signed with Shell Mi-8AMT helicopters. The provided with operational for developing a flight safety • Equipping the helipad of the transport and logistics scheme at information about the incident strategy, providing guidance, Leskinskoye licence block with Prirazlomnaya involves several of and the preliminary causes, as audits and procurement meteorological instruments is these aircraft, specially equipped well as recommendations for • Stricter requirements for aircraft being considered for flights over water in line with the implementation of prompt maintenance, contracted crews • The company is developing a Appendices stringent safety standards. Each measures aimed at preventing the and helicopters were included in standard of psychological support helicopter is fitted with emergency recurrence of such incidents. the standard form contract and as and post-accident rehabilitation lighting, push-out windows and • The contract with the air carrier part of Safety Framework barriers two 25-person life rafts. was terminated

All the company’s employees were informed about the main conclusions of the commission for the investigation of the accident, as well as the measures taken to reduce the likelihood of similar accidents in the future.

86 87 Sustainable Development Report 2020 Occupational health and disease Industrial safety Gazprom Neft prevention The Gazprom Neft industrial safety management system operates in accordance with at a glance applicable local regulations and international best practices.

Gazprom Neft has designed a corporate occupational health and disease prevention system, which encompasses initiatives to manage occupational and work-related risks. In order to prevent major equipment failures, the company leverages advanced technical solutions that ensure the safe operation of Sustainable development production facilities. management

As in 2019, no industrial accidents were reported at Gazprom Neft in In response to the global COVID-19 pandemic, Gazprom Neft deployed a 2020 while the number of equipment incidents decreased. This positive package of anti-COVID measures, medical support and employee health change shows that the company has adopted an effective approach to 0 The company equips its industrial protection from March 2020 under the comprehensive corporate programme sites with modern and accessible asset reliability management. industrial accidents Antivirus. medical facilities. Company Customer 1 vaccination drives help prevent Following a major accident at the CHPP in 2020, Gazprom Neft care During lockdown and the period of remote work, when uncertainty was high seasonal diseases launched an extensive self-assessment programme to inspect a and people needed information support, the company launched new channels total of 1,425 tanks, with a capacity of at least 100 cubic metres. for internal communications and for communication between employees. The inspections particularly focused on assessing the condition of foundations and soils under the tanks, identifying whether operating equipment was compliant with design documentation, determining whether there was scope to extend service life and ensuring diagnostics Health were being followed up with maintenance and repair schedules. The and safety inspections confirmed that tanks inspected do not carry any risk of –35% leak during operation. In addition, proposals were prepared to improve reduction in incidents When every minute counts: field industrial safety during tank operation. For more details on Norilsk emergency response, see page 93 Environmental safety health workers save a human life Incident/accident rates2

At an oil rim of the Chayandinskoye field in Yakutia, a contractor employee showing signs of stroke asked for Number of incidents Number of industrial accidents medical help. The nearest healthcare facility with a specialised neurological department was located in Mirny, more than 250 km away from the field. 1,425 tanks 2,385 2,183 1,068 920 600 2 0 1 0 0 inspected for Employee Through their prompt, expert intervention, the field health workers were able to make a correct diagnosis and development take the necessary measures in time. They thoroughly examined the employee’s health condition and made a compliance with preliminary diagnosis. An air ambulance from the Disaster Medicine Centre of the Republic of (Yakutia) was operational sent to the site for an emergency airlift to hospital. requirements The employee was taken to hospital, where he received planned treatment, as soon as possible after he first requested medical help. Further rehabilitation took place at a healthcare facility back at his home place of Social residence. policy

Appendices

2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

1 — The petroleum product spill at CHPP-3 of NTEK (part of Norilsk Group) in May 2020. 2 — According to the classification of the Federal Environmental, Industrial and Nuclear Supervision Service of Russia (Rostechnadzor).

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Emergency preparedness

Gazprom Neft has put in place an Emergency Prevention and Response System. Safe operation on permafrost Gazprom Neft at a glance The company has in place an annual training and drills plan for employees and managers to learn practical emergency Gazprom Neft develops fields in permafrost zones. These projects rely Risk mitigation measures: response skills, including emergency response and rescue team mobilisation, emergency containment, using special on cutting-edge technologies and state-of-the-art infrastructure. Even at equipment, administering first aid to injured people, etc. the earliest stages of engineering and design, advanced techniques are Continuous geotechnical monitoring considered to improve operational safety in the harsh arctic conditions, with state-of-the-art equipment including extra cooling of support piles, continuous automated monitoring Sustainable development of horizontal movements of structures, continuous measurement of the Building on piles for extra safety management temperature of important steel structures, etc. Foundation deformation monitoring for safe operation of structures Whenever field infrastructure is designed or technical solutions are sought Safety at Prirazlomnaya for construction in permafrost areas, thermal calculations are performed Temperature monitoring for soil to decide in each particular case whether extra measures or technical reliability solutions are necessary to prevent permafrost degradation, stabilise soil The automatic control and safety system of the Prirazlomnaya platform remotely Customer temperature, or otherwise preserve the permafrost. Temperature stabilisation systems to and automatically controls oil production, treatment, storage and offloading, as care prevent permafrost thaw well as electricity generation and distribution, all while monitoring the fire and gas Gazprom Neft evaluates risks and opportunities related to possible climate situation, with safeguards to shut down equipment and processes in an emergency. sensors change scenarios in areas with company facilities. Rooted in an analysis Over 80 sensors track changes in platform operation (including sensors monitoring 80+ of historical and fresh data using advanced technical tools, this work Major projects operating seismic activity, caisson tilt angles, ice loads on the ground, etc.). monitor changes in allows natural and human impacts on the permafrost to be identified, in permafrost zones areas to be demarcated according to the geocryological hazards present, The platform’s evacuation systems include escape corridors with emergency lighting, platform operation Health and the structural design process to be streamlined, cutting the costs of a temporary crew shelter, evacuation bridges and systems with escape chutes and and safety engineering protection measures for structures. Novy Port Messoyakha liferafts to evacuate crew members to a ship, personal flotation devices and fireproof lifeboats.

State-of-the-art infrastructure Preparing the crew for emergencies is a matter of utmost importance on Prirazlomnaya. Each crew member is drilled to follow an emergency response plan. 40 platform crew Cutting-edge technologies An emergency rescue team on the platform consists of about 40 crew members trained in firefighting, gas rescue operations and search and rescue operations. The members make Environmental safety Oil and Petroleum Product Spill Prevention and Response Plan has been developed up its emergency and implemented. Ongoing comprehensive spill response and shoreline protection training is in place. rescue team

Employee development In September 2020, pursuant to an instruction of the Governmental MAIN OBJECTIVES OF THE EXERCISE: Commission for Emergency Prevention and Response and Fire Safety, • carry out a response drill to contain Gazpromneft-Yamal and the Ministry of the Russian Federation for Civil an oil spill from a vertical steel Defence, Emergencies and Elimination of Consequences of Natural tank, collect and dispose of the Disasters conducted the “Oil Gathering and Treatment Station: CGF spill, and return the facility to South of the Novoportovskoye Oil and Gas Condensate Field” simulation, normal operation; Social a comprehensive tabletop exercise involving a hazardous production • carry out the drill in accordance policy facility. The exercise demonstrated that the emergency response teams with the Oil and Petroleum Product were at a high state of readiness. The staffing and resources of the Spill Prevention and Response professional emergency response team and the Novoportovskoye field Plan for the Hazardous Production specified in the Oil Spill Response (OSR) plan were deemed sufficient Facilities of the Novoportovskoye for an adequate response to an oil or petroleum product spill. Overall Oil and Gas Condensate Field, performance was rated as excellent. as well as oil spill response Appendices interactions.

90 91 Sustainable Development Report 2020 It was a cold welcome for us: just 3 °C and very strong winds of 20–25 m per Development of an innovative Norilsk oil-spill second. Not exactly pleasant weather for working Gazprom Neft outdoors! Still, we had all the at a glance necessary infrastructure and excellent equipment to help dispersant to manage spills emergency response us successfully overcome all challenges. We worked as a On 29 May 2020, a major industrial accident – one of the largest ever close-knit and efficient team, seen in the Arctic Circle – took place near Norilsk in the and our contribution to the Sustainable development in ice conditions Krai. A fuel-storage facility failed, spilling over 20,000 tonnes of overall cleanup effort was management diesel fuel onto the ground and into local rivers. The President of quite respectable! Russia requested that companies with a proven track record in oil spill response, including Gazprom Neft, participate in the cleanup. In 2020, the company worked with experts from the Centre for Dispersant for Arctic Engineering and Technology of the Moscow Institute of Physics and seas 1 Technology to develop a specialised formulation of a dispersant able Emergency-response and rescue team Customer to manage oil spills in ice conditions. The technology is tailored to the YEVGENY SABUROV care Arctic sea climate and is currently the only Russian reagent for oil The company mobilised its emergency-response and rescue team in less Deputy Head of the spill management at low temperatures. Laboratory tests suggest that than 24 hours. A total of 85 tonnes of cargo, including special machinery Emergency Management the new dispersant’s effectiveness in ice conditions reaches 80%. and equipment, boom defences, reservoirs for temporary oil storage, and Control Department at tents for a field camp were delivered to the spill area. The Gazprom Neft Slavneft-Megionneftegaz The dispersant was developed with Gazprom Neft’s support at the team included 72 highly qualified and experienced specialists. The team’s St Petersburg Energy TechnoHub. The new product will undergo qualifications and equipment allowed them to operate fully autonomously Health further technical and economic evaluation, with permits and patents 80% dispersant at the spill area. and safety still pending. effectiveness in ice conditions Accident response The company acquired valuable experience: The principal phase of the emergency response operations at the spill area took two weeks. Over this time, the Gazprom Neft specialists involved in the cleanup effort collected more than 8,000 cubic metres The important practical skills Environmental Dispersant operation safety of oil-contaminated fluid, following the installation of 4 km of boom of organising multiple groups defences. The Gazprom Neft team was also successful in cleaning all fuel and team communication were slicks from the riverbed. The response teams worked around built up the clock. The equipment and technologies employed were proved to be effective, with technical limits Employee identified development

The company’s high HSE expertise was confirmed An oil lm The dispersant Oil droplets are forms on the breaks the oil broken down 1 surface of water 2 lm 3 by microorgan- Evgeniy Zinichev, Minister of the Russian Federation for Civil and ice isms Defence, Emergencies and Elimination of Consequences of Natural Social Norilsk spill cleanup: policy Disasters, presented the Gazprom Neft emergency response team how it all happened with a Letter of Acknowledgement for their successful cleanup of the Norilsk spill

Appendices

1 — A dispersant is a complex chemical that breaks down the oil film on the surface of water.

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94 95 ENVIRONMENTAL SAFETY 96 Key focusareas: • • • Strategic objectives operations. Target Zero –zero harmtopeople,theenvironment orproperty inour Strategic priority implementing advanced technologiestomitigate negative environmental impacts. also investing significant resources into various environmental safetyprogrammes and Gazprom Neftassessesandadoptsmeasures tominimiseenvironmental risks,while Environmental safety and goals Strategic priorities safety Consistent adoptionofglobalbestpracticesinenvironmental to minimisetheriskimpact Safe operations through operational riskanalysisandmanagement Consistent reduction ofenvironmental impact(including climate) safety Training employees andfosteringaculture ofenvironmental Developing anddeploying green technology Implementing environmental protection programmes Commissioning resource saving andefficiencyfacilities Commissioning environmental protection facilities Emergency prevention andcontainmentsystemmanagement control Environmental monitoringandoperational environmental Environmental riskmanagement ₽ protection in environmental • • • • • • Corporate documents 8.1 Gas Effective UseofAssociated Petroleum Programme onUtilisation and More Biodiversity Preservation Programme on EnergyEfficiency Downstream DivisionTechnical Policy Development andProduction Energy Policy onOilandGas Monitoring andAccounting Corporate Standard onGHG Emission and CivilDefence Environmental andOccupational Safety, Policy onIndustrial,Fire, Transport,

billion invested Energy efficiency: Environmental safety: Climate: • • • • • • • PLANSFOR 2021 • • • • • • • managerial andinvestment decision-making. stages ofitsoperations, withthisanalysisservingasacore aspectof Gazprom Neftanalyses theenvironmental footprintofitsfacilitiesat all planned operations onecosystemsensures environmental safety. A risk-based approach that takesintoaccounttheimpactofcurrent and PROGRESSIN 2020 Tazovskoye field. Refinery inorder to reduce water withdrawal and wastewater discharge; at remote fields; order toreduce pollutantemissions; utilisation rate. implement theenergy managementsystemdevelopment plan. construct sanitarywastewater treatment infrastructure at the commission state-of-the-art Biosphere treatment facilitiesat theOmsk develop infrastructure forsafeindustrial-waste management,including maintain ahighlevel ofwaste recycling andtreatment; upgrade theOmskRefinery aspartoftheCleanAirfederalproject, in achieve themedium-term goalofincreasing theassociated petroleum gas score (B)amongRussianoilandgascompanies The companywas awarded thehighestCarbonDisclosure Project (CDP) Energy-saving andenergy-efficiency programmes saved 4.5million GJ A totalof99.7% ofwaste was sentfortreatment andrecycling 28.0%, andwater dischargeby 42.0% Water withdrawal decreased by 30.8%,internalwater consumptionby Gross emissionswere down 14.5% at 95.1% Gazprom NeftsubsidiariesinRussiaexcluding low-depleted fieldsstood Associated petroleum gas(APG)utilisation at thecurrent assetsof 9.7% reduction ingreenhouse gasemissions(Scope 1+Scope2)

the following majorprojects: stakeholders were completedfor assessments (EIA)involving In 2020,environmental impact 12 company subsidiaries with separate certificates issuedto Gazprom Neftproduction assets, covers themanagementofkey ISO 14001:2015. Thecertification management systemiscertifiedto The Gazprom Neftenvironmental • • • • • facilities at company refineries. constructing andupgrading fields; at Gazprom Neftsubsidiaries’ constructing multiwell pads Sea ofAzov); South (theBlackSeaandthe of theNorth-West, Arctic and operations intheportwaters Gazpromneft Shipping removed by drilling); cuttings (piecesofrock a man-madesoilbasedon produce anduseYAKHONT, developing new technologyto subsidiary; from NOVA-Brit, acompany BRIT construction sealant transport structures using for paving roads andother developing new technology Report 2020 Development Sustainable Appendices policy Social development Employee safety Environmental and safety Health care Customer management development Sustainable at aglance Gazprom Neft 97 97

Sustainable Development Report 2020 Climate change

Gazprom Neft Gazprom Neft supports the Paris Agreement on climate change and complies with at a glance 1 Highest CDP score among national legislation on measuring GHG emissions. Russian oil companies in 2020 Sustainable development In 2020, Gazprom Neft took part in the CDP climate ranking for the first Gazprom Neft ranks management among the leaders by time and joined the group of leaders by scoring “B” (on a scale from “A” CDP score Global challenge to “D–”). This is the highest score among Russian oil companies.

Climate change is one of the most pressing global challenges today. The Russia announces its first Customer Paris Agreement on climate, signed in 2015, aims to strengthen the global nationally determined care response to the threat of climate change by holding the increase in the contribution to the Paris global average temperature to well below 2 °C above pre-industrial levels. Agreement Climate-related risks and opportunities Nationally determined contributions (NDC) are a key element of the Paris Agreement and its long-term goals. NDCs reflect the individual efforts of specific countries to reduce emissions and adapt to the impacts of climate Health change. In November 2020, the Russian Federation announced its first NDC Gazprom Neft identifies several key climate-related risks and opportunities The company accounts for both physical and safety under the Paris Agreement. risks associated with extreme weather conditions or irreversible changes to the environment, as well as for transition risks (market, reputational, technology, political, and legal).1

The company’s priorities in climate management Environmental Gazprom Neft acknowledges that safety 2 if no decisive action is taken today, Physical risks then dealing with the consequences • Reduction of GHG emissions and increased APG utilisation Acute risks of climate change will require • Increasing the share of low-carbon projects significantly more effort and costs • Launching new renewable energy sources (RES) These risks are related to sudden events, including extreme weather phenomena, such as cyclones, hurricanes and floods. The company continues to implement its Development Strategy Employee to 2030 approved by the Board of Directors, which envisages development developing infrastructure at production assets and upgrading refineries Chronic risks with energy-efficient technology, a move that will reduce resource consumption and GHG emissions. Chronic risks to the company are related to possible long- permafrost degradation, thermal stabilisation of term and mostly irreversible changes in the environment. permafrost soils, etc.). Furthermore, Gazprom Neft aims to increase the share of natural The thawing of permafrost is one of the most important gas production projects in total hydrocarbon production to 45% in 45%gas share chronic risks to the company. The company has also implemented a long-term Social 2024–2026. Developing gas projects will reduce the carbon intensity of in production in technology development programme, which guides policy company products. To minimise systemic physical risks to the company, a continuous cycle of identification, evaluation and 2024–2026 Gazprom Neft particularly focuses on solutions for application of new and effective technical solutions for construction projects for the permafrost (preventing field facility construction.

Appendices

1 — Compliant with the risk classification used by the Task Force on Climate-related Financial Disclosures (TCFD). 1 — Orders of the Russian Ministry of Natural Resources and Environment No. 300 dated 30 June 2015 and No. 330 dated 29 June 2017. 2 — Physical risks are risks related to natural phenomena caused by climate change.

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Transition risks1 Opportunities related to climate change

Policy and legal risks Increasing the gas component Gazprom Neft The applicable Russian laws set strict requirements reviewing potential risks related to a federal law regulating burnt to generate electricity produces almost The share of gas in company production may exceed at a glance to achieve targets for atmospheric impacts. Failure to GHG emissions, which is currently under development. 50% less greenhouse gases than . It will therefore 50% by 2030. With OPEC+ production restrictions, gas comply with these requirements carries the risk of having play a key role in the global energy transformation. Gas production becomes the main opportunity for business additional charges levied by the Government. The company also participates in developing a climate production at Gazprom Neft grew to 41 bcm in 2019 from growth. impact strategy, defining a target vision and GHG emission 30 bcm in 2015. Specific mechanisms for governmental regulation of reduction metrics at the governmental level. GHG emissions are yet to be set, but the company is Sustainable development APG monetisation management

Technology risks The company expects to earn extra operational income Gas infrastructure development and long-term gas-supply from the sale of APG and the products of APG processing. contracts will stimulate this process to achieve higher Technology risks are risks of the company losing In particular, the company is commissioning facilities APG utilisation. its market share because its competitors leverage that utilise APG without flaring by either piping it to a technologies that allow similar or better products to be gas processing plant (GPP), or reinjecting it to maintain Customer produced with much lower GHG emissions. formation pressure or for underground storage. Efficient use of resources care

In order to minimise technology risks, the company The company’s refineries run upgrade programmes to The company expects that more efficient production and • lower losses in electric equipment and transmission continually implements advanced innovative technologies reduce emissions. distribution processes will reduce its operating costs grids; to improve efficiency. through: • better performance of heat exchanger networks and • lower energy consumption by main and auxiliary cooling systems; equipment with given/planned output; • lower heat consumption; Health Market risks • lower hydrocarbon losses and APG flaring. and safety

Market risks are determined by current and future One metric in the new agenda is the carbon footprint changes in supply and demand for specific products, of the entire supply chain, from feedstocks through Clean energy driven by the global push for low-carbon development. intermediates to final products. This information is a prerequisite to entering into sale contracts on international Alternative energy sources will provide additional Additional opportunities can arise from reputational The company is preparing a new agenda to reduce market markets (for example, paraxylene sale contracts). generation for company assets, utilise previously unused benefits, resulting in higher demand for company risks related to product sale on international markets. spaces, and make processes more energy efficient and products, as well as lower electricity procurement costs. Environmental safety environmentally friendly.

Reputation risks

Reputation risks depend on whether the company is Reputation risks are under constant scrutiny due to the Climate management perceived as responsible and responding to climate priority given to climate impact and management. challenges or otherwise. Board of Employee Strategic management of the company, determining the basic principles and approaches around climate change. development Directors

CEO and the Developing and implementing the company’s corporate climate strategy in line with international and global best Management Board For more details on the risk practices and standards. Monitoring the implementation of GHG emission reduction projects. management framework, The company manages its climate and GHG emission risks, as well see “Sustainability risk Social as other significant risks, under an integrated risk management policy management” on page 31 Climate impact strategy development. Overall management of the strategy’s implementation; review of results. Medium framework (IRMF) ESG Steering and long term planning of climate impact mitigation. The committee includes the Management Board members and key Committee company experts.

Head of the Evaluation and management of climate-related risks and opportunities. Their responsibilities include carrying out: HSE Directorate • GHG emissions inventories; Appendices • performance analysis against GHG emission targets; • CDP reporting; • analysis into the mitigation of negative environmental impacts from GHG emissions.

1 — Transition risks are risks related to the transition to a low-carbon economy.

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In 2020, company management continued its efforts towards building the company’s approach to climate change by reviewing the assessment We monitor progress against and management of climate-related risks and opportunities, and drafting the targets set for assets and the an action plan to build an environment and climate management system Corporate Centre, with an annual Gazprom Neft at the company. progress review directly contributing Amendment of the GHG emission at a glance to management performance Targets for specific GHG emissions were set for the company’s appraisals subsidiaries, reflecting the profile of their respective operating regions. accounting standard Sustainable development Strategy sensitivity to various climate scenarios In 2020, the Corporate Standard on GHG Emission Monitoring and Accounting was amended and supplemented management with Scope 3 emission accounting.

The key factors that may impact future scenarios include changes in the Also, regional factors used to calculate indirect energy emissions (Scope 2) were reviewed in line with climate policy and the decarbonisation of global energy. The company The company’s project portfolio is international recommendations and best practices, helping to amend data on these emissions in 2018 and 2019. uses a scenario approach in its Development Strategy to 2030. stress tested against all possible scenarios of how the external Customer Strategic scenarios considered by Gazprom Neft include the New World environment may develop, including care scenario, which assumes harmonised international environmental policy changes in prices, volumes and and intensive decarbonisation of both the energy industry and transport regulation all across the world. GHG emissions by segment

Since the future of energy is extremely uncertain, the company uses a proprietary methodology to monitor and assess the situation for Type of emission 2018 2019 2020 Health various signs of different scenarios playing out. The results of this and safety analysis are taken into account in the annual update of the company’s Direct (Scope 1) GHG emissions, mt of СО equivalent 20.0 22.0 21.7 strategic project portfolio, ensuring its sustainability under any external 2 environment development scenario. Upstream Division 14.09 16.26 15.25

Downstream Division 5.28 5.38 6.17 Accounting for greenhouse gas emissions Environmental safety Energy indirect (Scope 2) GHG emissions, mt of СО2 equivalent 4.5 6.9 4.4

The energy sector is considered one of the main sources of Upstream Division 2.49 5.02 2.57 GHG emissions, including СН4 and СО2. The assessment of GHG emissions is a key element of the climate risk management Downstream Division 1.58 1.64 1.47 system in place across the company. For this purpose, Gazprom Neft has adopted a Corporate Standard on GHG Emission Monitoring and Employee Accounting aligned with applicable Russian laws and international Specific GHG emissions (Scope 1 + Scope 2) development guidelines.

Upstream Division, mt of СО2 equivalent/mtoe 0.219 0.270 0.233 The approaches used in the Corporate Standard are fully aligned with

the GHG Protocol Corporate Standard of the World Business Council Downstream Division, mt of СО2 equivalent/mtoe 0.196 0.207 0.231 for Sustainable Development (WBCSD) and the World Resources Institute (WRI), and ISO 14064-1:2006 (GOST R ISO 14064-1-2007), Social which are widely recognised in the industry and consistent with policy Russian legislation. This methodology also takes into account additional recommendations included in the IPIECA/API/OGP Guidelines for Reporting Greenhouse Gas Emissions, as well as Global Reporting Initiative (GRI) standards. –9.7% reduction in greenhouse gas emissions (Scope 1 + Scope 2) Appendices

102 103 Sustainable Development Report 2020

GHG emissions, mt of СО2 equivalent Key projects to boost APG utilisation in 2020 Gazprom Neft consistently improves APG utilisation. Type of emission 2016 2017 20181 20191 20201 • Underground gas storage commissioning at the Zapadno- We have completed major Messoyakhsky licence block (Messoyakhaneftegaz, a JV). A unique projects to develop gas Gazprom Neft APG utilisation model was implemented at Gazprom Neft: APG infrastructure in the at a glance GHG EMISSIONS (SCOPE 1 + SCOPE 2) 23.8 22.8 24.5 28.9 26.1 produced at the Vostochno-Messoyakhsky licence block is injected company’s key operating into the non-producing gas-bearing formations of the Zapadno- regions in recent years. Direct emissions (Scope 1) 15.4 16.2 20.0 22.0 21.7 Messoyakhsky licence block, preserving the vulnerable polar The overall APG utilisation ecosystem. A total of 1.5 bcm of gas can be injected into storage per level for Gazprom Neft’s

СО2 14.5 14.9 18.8 20.9 20.7 year. current assets is as high as • Commissioning of a gas transmission system at the Urmano- 95% today. We have been Sustainable development Archinskaya group of fields and the Yuzhno-Pudinsky licence block able to achieve this level CH4 (methane) 0.9 0.8 0.9 0.6 0.7 management in the Tomsk Oblast (Gazpromneft-Vostok). The project increased while increasing production Indirect emissions (Scope 2) 8.4 6.6 4.5 6.9 4.4 commercial gas delivery by nine times and improved overall every year, which has APG utilisation. almost doubled over the last • Upgrade of low-pressure gas treatment and utilisation equipment at decade. SCOPE 3 – – – – 198.5 the Vostochny block of the Orenburgskoye oil and gas condensate field. New equipment improved the environmental situation at the Customer field and brought the APG utilisation rate to 98% at the company’s care largest oil producing asset. • Yamal Gas project implementation. The expansion of the Projects to reduce GHG emissions comprehensive gas treatment unit (CGTU) to a fully-fledged GPP GHG emissions fell, mainly as a result is ongoing. In a project that will keep the APG utilisation rate at of lower energy consumption driven 95%, the pipeline across the Gulf of continues to be laid, with VADIM YAKOVLEV The company is constantly searching for technically feasible and by the OPEC+ production cuts and 36 km out of the 56 km onshore section and shore facilities already Deputy CEO for Exploration and changes in the electricity emission Health economically viable tools to reduce GHG emissions, principally by constructed. The company plans to begin supplying gas in to the Production, Gazprom Neft PJSC and safety implementing projects to increase APG utilisation. factor Unified Gas Supply System (UGSS) of Russia in 2022.

Gazprom Neft aims to ramp up its APG utilisation, despite the planned increase in hydrocarbon production.

Gazprom Neft endorses the key provisions and goals of the Zero Routine Flaring by 2030 initiative, which aims to completely eliminate routine Environmental safety APG flaring by 2030. A unique APG utilisation model at Messoyakhneftegaz In 2020, the APG utilisation rate of the company subsidiaries in Russia stood at 91.1% (up 2.1% year-on-year). If low-depleted fields ≥95% (some of which showed 5.4% growth year-on-year) are excluded, APG utilisation rate2 by the APG utilisation rate reached 95.1% through gas infrastructure APG production and utilisation,1 (mcm) construction projects and gas infrastructure reliability improvement 2022 Employee programmes. development 9,561 11,434 14,398 16,641 18,087 7,628 8,708 11,284 14,811 16,473 1,933 2,726 3,112 1,830 1,615 These achievements came on the back of a high on-stream factor for company facilities (over 96%) and ramp-up to full production of new gas infrastructure at a number of fields. The company is pushing ahead with investments into new equipment that improves gas utilisation at producing assets. Social policy The company’s Board of Directors has set the ambition of achieving an APG utilisation rate (including new assets) of at least 95%2 by 2022 despite growing production.

Appendices

2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

APG production APG utilisation Routine APG aring 1 — In 2020, energy emissions (Scope 2) were recalculated with amended regional factors. Recalculation included comparable data for 2018 and 2019. The factor change had no material impact on earlier periods. 2 — Within the Russian Federation, excluding the assets of Gazpromneft-Zapolyarye. 1 — Within the Russian Federation. Excluding JVs.

104 105 Sustainable Development Report 2020

Driving energy efficiency Solar power plants will add generation capacity to ENERGY SAVED THROUGH Gazprom Neft’s refineries, Energy efficiency is one of the key tools to reduce greenhouse gas Energy consumption (million GJ) making them more energy Gazprom Neft emissions and climate impact. ENERGY-SAVING AND ENERGY- efficient and environmentally at a glance 199.3 215.2 226.5 229.2 friendly. Gazprom Neft’s Energy Policy is in place to improve energy efficiency. 230.9 EFFICIENCY PROGRAMMES Certified to ISO 50001, it underpins the company’s energy management system (EMS). The EMS is successfully operated at the Gazprom Neft Corporate Centre and 151 major subsidiaries, as well as upstream and downstream joint ventures. ANATOLY CHERNER Sustainable Upstream Division development Deputy CEO for Logistics, Refining and management The year-on-year growth in energy consumption in 2020 came amid a Sales at Gazprom Neft PJSC larger number of subsidiaries being included in energy use calculations, 1 million GJ the commissioning of a combined oil refining unit (CORU) at the

Moscow Refinery, and the large energy consumption needed for the pre- 2016 2017 2018 2019 2020 commissioning of a deep conversion complex at the Omsk Refinery. Downstream Division Customer The energy management system is continually being updated, by care implementing and amending corporate regulations, training personnel, Energy consumption by type (%) recertifying to the new version of ISO 50001:2018, and certifying new assets. In 2020, the company’s subsidiaries passed a third-party audit and were issued new certificates of compliance with ISO 50001:2018. 3.5 million GJ 6 2 0.3 Furthermore, an ISO 9001, 14001, 45001 and 50001-compliant integrated management system was implemented and certified at 9 Health Noyabrskenergoneft. and safety

Relevant departments at each production division are responsible for Clean energy energy consumption and energy efficiency, namely the Department of Rolling out energy- 55 efficient technologies at Energy of the Upstream Division and the Department of Energy of the filling stations Downstream Division. Gazprom Neft develops renewable energy generation. 28 Key technical energy-saving initiatives at the Upstream Division include The Omsk Refinery completed the first phase pilot operation of a 1 MW Environmental safety replacing electric submersible pumps, using brushless DC electric solar power plant. The first power plant in the region covers an area of motors, switching to short-term or intermittent well operation, carrying Gas 2.5 ha and comprises 2,700 solar panels, including panels made by the Coke Gazprom Neft launched out well interventions to reduce the amount of water used and to Russian manufacturer Hevel. This power plant generated more than solar power generation reinject any that is produced, and introducing energy-efficient pumps. Electricity Fuel oil 1.1 million kWh of electricity in 2020, providing green electricity for 98% at the Omsk Refinery of the energy needs at the Omsk Refinery’s accommodation complex Heat Diesel fuel Key energy-saving activities at the Downstream Division include (houses up to 2,500 people) and reducing CO2 emissions by 455 tonnes. upgrading process furnaces, optimising the recovery system and The plant’s capacity is expected to grow to 20 MW in 2021 through Employee using secondary energy resources in production processes, boosting regional renewable energy support measures. development efficient fuel use in furnaces through advanced technologies, optimising The first filling station steam-condensation systems, improving the performance of heat- Gazprom Neft participates in Russian In 2020, Gazprom Neft commissioned its first solar-powered filling powered by solar panels supply systems, upgrading lighting systems, and adding permeate to campaigns to promote energy- station, located in the Yaroslavl Oblast. In sunlight, the solar power plant condensate. efficient living to its employees and is used as the main source of electricity. to people in its operating regions; for Key organisational energy-saving initiatives include energy audits, an example, the Russian Energy Week Social energy-efficiency monitoring system, optimising the cost of electricity International Forum, the all-Russian policy from external grids, replacing diesel power plants with gas-turbine #VmesteYarche (#TogetherBrighter) power plants, IT projects aimed at energy saving, and certification/ festival, and the worldwide Earth recertification. Hour campaign

Appendices

1 — Gazprom Neft Moscow Refinery, Gazprom Neft Omsk Refinery, Gazprom Neft Orenburg, the Gazprom Neft Ryazan Bitumen Binders Plant, the Gazpromneft Moscow Lubricants Plant, Gazpromneft-Yamal, Gazpromneft-Khantos, Gazpromneft-Noyabrskneftegaz, Gazpromneft-Vostok, Messoyakhaneftegaz ( JV), NIS, Noyabrskenergoneft (since 2020), the Omsk Lubricants Plant, Slavneft-Megionneftegaz, and Slavneft-YANOS ( JV).

106 107 Sustainable Development Report 2020 Air protection

Gazprom Neft Development of renewable The bulk of Gazprom Neft’s pollutant emissions comes from APG flaring; therefore, at a glance energy generation APG utilisation projects cut the company’s environmental footprint. A large-scale programme to modernise and revamp Gazprom Neft’s Gross emissions refineries also aims at reducing emissions. Sustainable (thousand tonnes) development In 2020, the Downstream Division completed feasibility studies for management over 30 potential renewable energy generation sites, with eight sites The 14.5% reduction in gross emissions was driven by an increase in 600.8 474.3 508.3 529.4 452.6 shortlisted for priority review. APG utilisation at the company’s production assets, as well as the 30+ sites decommissioning of some outdated units at the Moscow Refinery • Renewable energy generation project launched in Salsk. The project following the launch of the Euro+ combined oil refining unit (CORU). includes a solar power plant with options to improve the energy analysed efficiency of production facilities. Total power output of the project Coupled with other strategies, decreased flaring of hydrogen-sulphide- Customer is expected to reach 500 kW, with project completion scheduled for containing gas at Gazprom Neft Orenburg’s fields reduced SO2 emissions care 2021. by 52.7% in 2020, as large volumes of gas were transferred to the gas • As part of its contribution to the efforts of a working group on processing plant. renewable energy development, Gazpromneft-Aero plans to develop and launch renewable energy projects using solar panels and solar thermal collectors at several priority sites in 2021. 2016 2017 2018 2019 2020 Health The Badra project in Iraq uses solar batteries on block valve stations and safety (BVS). Solar panels power 13 BVSs on an oil pipeline and four BVSs on a gas pipeline. Gross emissions (thousand tonnes)

2016 2017 2018 2019 2020

TOTAL 600.8 474.3 508.3 529.4 452.6 Environmental safety NIS alternative energy projects Including: Thanks to the geology of the NIS, Gazprom Neft’s subsidiary in Serbia, has over 60 geothermal wells, NO 19.2 22.1 25.6 26.7 28.6 Pannonian Basin, Serbia has some of X which can be used for generating electricity and heat. NIS now operates the greatest potential for geothermal four wells that provide third-party commercial projects with heat and power generation in continental SO2 128.4 69.0 74.8 38.9 18.4 hot water. Employee Europe development Volatile organic compounds (VOCs) 128.3 120.3 96.7 102.1 90.7 Gazprom Neft continued to develop geothermal generation in Serbia in 2020. The company completed a full analysis of Serbia’s geothermal potential and built a 3D model of hot water reservoirs. These efforts resulted in a digital tool for predicting geothermal project potential, unique in the region. Social Local municipalities and foreign partners from France, Iceland and policy voiced their interest in collaborating with NIS on geothermal projects, with active negotiations already underway. The parties plan to –14.5% −52.7% carry out joint evaluation and selection of the best pilot project. 332,000 reduction in gross reduction of SO tonne reduction in CO2 2 Through cooperation with partners, NIS continues the construction of emissions emissions in 2020 the Plandište wind farm, which envisages the installation of 34 wind emissions thanks to the Appendices turbines with a total capacity of 102 MW and an expected annual electricity output of 212 GWh. This wind farm will reduce emissions Plandište wind farm

equivalent to 332,000 tonnes of CO2 per year.

108 109 Sustainable Development Report 2020

Gazprom Neft is consistently implementing a major refinery modernisation programme. The launch of the Euro+ CORU is a Gazprom Neft The Russian landmark event for the refining The Omsk Refinery boosts at a glance industry, and for the people of Moscow and Russia. This advanced facility will make President officially production processes more performance and cuts environmentally friendly. It will produce eco-friendly grades Sustainable development of gasoline, diesel and jet management launches the fuel, while helping to increase environmental footprint product exports. This is fully in line with the tasks set for the refining industry by the In 2020, the Omsk Refinery completed compressor installation at its Omsk Refinery Euro+ CORU President. catalytic reformer. Two new compressors were installed, with another modernisation three upgraded. Customer On 23 July 2020, Russian President Vladimir Putin launched the new care Euro+ CORU at the Gazprom Neft Moscow Refinery. The launch ceremony Cutting-edge technologies will improve performance, while further was attended by , Minister of Energy; Sergei Sobyanin, reducing environmental impacts. The unit upgrade came under an Moscow Mayor; and Alexander Dyukov, CEO and Chairman of the ALEXANDER NOVAK integrated plan to implement the Clean Air federal project. Management Board at Gazprom Neft. Minister of Energy of the Russian Federation The Euro+ CORU is integrated into Moscow’s environmental control system. Health An automated air monitoring system operates around the clock to measure and safety concentrations of hazardous substances in the atmosphere and passes data to the city’s environmental monitoring service. Air quality monitoring technologies

Launch of the Euro+ The company has developed an environmental monitoring system for prompt identification and prevention of above- combined oil refining unit limit pollutant concentrations at a facility’s buffer zone boundaries. It also evaluates the facility’s contribution to these above-limit concentrations. Legal protection for the system was obtained in 2020. It is set to be rolled out Environmental safety across Gazprom Neft’s refineries in the next few years.

A new Euro+ CORU was commissioned at the Moscow Refinery in 2020 Employee to increase the oil conversion rate to 85% and reduce emissions by Air monitoring in the Orenburg development decommissioning outdated units.

Gazprom Neft is involved in the implementation of the Ecology national project, with the Clean Air federal project being part of it. This project ₽100 billion Oblast aims for a 20% reduction in emissions (against a 2017 baseline) by the end of 2024 across 12 major industrial cities with poor air quality, planned to be invested Under a communication agreement between Gazprom Neft Orenburg The Social including Omsk, where one of the company’s refineries is located. and the Ministry of Natural Resources, the Environment and Property policy into the Clean Air project environmental Relations of the Orenburg Oblast, the company shares the latest data monitoring system In order to carry out the Clean Air federal project, the Russian collected on pollutant concentrations from permanent environmental Government has approved integrated action plans designed to reduce monitoring stations every 20 minutes. pollutant emissions. These plans include nine upgrade projects launched at the Omsk Refinery, which involve introducing environmental Other companies with environmental monitoring stations in the technologies and state-of-the-art treatment facilities, building new units Orenburg Oblast entered into similar agreements. Atmospheric air Appendices and decommissioning outdated facilities. Gazprom Neft plans to invest quality data are displayed on a publicly available interactive map. over ₽100 billion in these projects.

110 111 Sustainable Development Report 2020 Preserving biodiversity Reintroduction of aquatic bioresources

The aquatic bioresources reintroduction programme is an important part Gazprom Neft Gazprom Neft strives to minimise its impact on biodiversity in its operating regions. The of field development projects. at a glance company conducts environmental monitoring and assesses its impact on ecosystems while engaging with research institutions and governmental agencies and meeting legal Gazprom Neft subsidiaries and joint ventures (Gazprom Neft Development, Gazpromneft-Khantos, Gazpromneft-Yamal, Gazpromneft- requirements of the Russian Federation as well as internal corporate standards. Zapolyarye, Meretoyakhaneftegaz and Slavneft-Megionneftegaz) work 45 million to restore aquatic bioresources by breeding rare species of fish. Every precious juvenile fish year, millions of juvenile fish are released into the rivers of the Ob-Irtysh Sustainable released into water development Gazprom Neft has in place a corporate programme to preserve biodiversity, basin, composed of the and Severnaya Sosva Rivers and other management based on a list of plant and animal indicator species for healthy Arctic Maintaining environmental balance water bodies. bodies marine ecosystems. and preserving biodiversity are always given special consideration in Under an agreement with the Government of the Khanty-Mansi The programme includes measures implemented by the company Gazprom Neft’s projects, especially Autonomous Okrug-Yugra, the company continues remedial operations around the Prirazlomnaya offshore ice-resistant stationary platform and in offshore and northern onshore by releasing, as a priority, juvenile Siberian sturgeon, sterlet, muksun, projects Gazpromneft-Yamal assets and providing for wildlife monitoring along oil and broad whitefish, all locally bred. Customer transportation routes. care

Gazprom Neft continues to drive a large-scale programme to study a rare Arctic animal listed in Russia’s Red Data Book of protected species – the narwhal (lat. Monodon monoceros, or the “unicorn of the sea”).

Water resource management Health and safety

The company views water stewardship, effective wastewater treatment and preventing Achievement of the Year the contamination of natural water bodies with oil or petroleum products as its priorities.

In 2020, the “Narwhal: Legend of the Arctic” project won in the Video: Environmental safety “Achievement of the Year. Corporate Social Responsibility” category at One year on from the Gazprom Neft’s water resources management projects aim to minimise Internal water consumption (mcm) “Narwhal: Legend of the the prestigious international PR World Awards. The expert panel praised Arctic” expedition water consumption, mitigate environmental risks and improve the the outcomes of the project’s first expedition to the Russian Arctic and ecological condition of water bodies and adjacent lands. 428.9 370.0 316.4 314.2 related communication campaign. 226.3 Internal water consumption decreased, mainly due to the fact that less water was produced from the Cenomanian strata and other groundwaters following a higher water cut in oil produced, coupled with Employee an optimisation of the system for maintaining formation pressure at development company fields.

Building Biosphere biological treatment facilities at the Moscow and Monitoring Arctic marine Omsk Refineries ranks among the company’s key water management projects. Gazprom Neft’s total investment in these projects currently stands at more than ₽28 billion. Social 2016 2017 2018 2019 2020 policy ecosystems These facilities feature a multi-stage wastewater treatment system, which includes mechanical, physical and chemical, biological, filtration Gazpromneft-Yamal has developed a roadmap for implementing the corporate Biodiversity Preservation Programme for and ultrafiltration stages, as well as a reverse osmosis unit. Biosphere 2020–2023 based on a list of plant and animal indicator species for a healthy Arctic marine ecosystem. removes almost 100% of pollutants from wastewater.

In 2020, activities plotted on the roadmap included monitoring the condition of phytoplankton communities, macroalgae, The Moscow Refinery commissioned Biosphere towards the end of 2017. Appendices benthos organisms, ichthyofauna, ichthyoplankton, and avifauna, as well as observing animals (seals, walruses, beluga The facility recycles over 75% of water, with a threefold reduction in –28% whales, and polar bears) along crude transportation routes. total water withdrawal. A similar facility is scheduled for completion at the Omsk Refinery in 2022. reduction in internal Plans for 2021–2023 also include observing mammals and birds (GPS animal tracking and bird ringing). water consumption

112 113 Sustainable Development Report 2020 Water withdrawal and consumption (mcm) Waste management and 2016 2017 2018 2019 2020 Gazprom Neft land use at a glance Water withdrawal 446.1 416.2 372.2 371.2 256.9

Including surface water 36.2 40.1 35.0 31.4 32.6 The two key pillars of industrial waste management and land use at the company are Internal water consumption 428.9 370.0 316.4 314.2 226.3 equipment reliability monitoring and the implementation of new technology. These Sustainable efforts minimise the risk of soil contamination by crude oil and petroleum products. The development Water discharge 43.5 47.5 56.3 57.8 33.5 management company also successfully recycles its production waste. Including surface discharge 2.0 2.0 2.1 1.9 1.8 Waste generation and disposal Total recycled and treated waste Share of recycled and treated (thousand tonnes) (thousand tonnes) waste (%) Customer Gazprom Neft is consistently care 1,376.3 1,476.1 1,564.6 1,790.3 1,310.1 1,298.4 1,517.4 1,720.5 95 88 97 96 and systematically working to 1,849.31,849.3 1,843.7 99.7 improve process performance and environmental Installation of the friendliness at its oil refining assets. The company’s project to deploy biological water Health treatment technologies and safety Biosphere treatment at its refineries through Biosphere facilities is unique in the Russian oil industry, and something that can be facility at the Omsk successfully rolled out at production facilities in other industrial sectors. Environmental safety Refinery 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

In 2020, the Omsk Refinery completed the installation of major filtering ANATOLY CHERNER and physical and chemical treatment equipment for its innovative Deputy CEO for Logistics, Refining and Large quantities of waste are safely disposed of every year, thanks to Biosphere treatment facility. Sales, Gazprom Neft PJSC improved waste recycling and treatment processes across the company. Employee The Omsk Refinery’s efforts to find alternative contractors resulted in development With the Biosphere facility online, the Omsk Refinery will have an increased treatment and recycling of oily sludge, with higher volumes of almost closed-loop water system, reducing the burden on the city’s drilling waste processed by the company’s upstream assets. 99.7% wastewater treatment plants. The Omsk Refinery will slash its water consumption by reusing water that has passed through a multistage The bulk of the company’s waste is drill cuttings produced in the course of waste treated and treatment process. Over ₽19 billion have already been invested in the of and production. The company’s drilling- In 2020, the Moscow Refinery recycled project. waste management framework is designed to reduce environmental won the Moscow Government’s Social risks and standardise waste management requirements. policy environmental award for the The unique environmental project Biosphere is included in the Omsk Best Project Completed Using Refinery’s full-scale development programme and the comprehensive Drilling rigs currently in use across Gazprom Neft are equipped with a Environmentally Friendly and Energy plan of the Clean Air federal project, in turn being implemented as part drilling-waste cleaning and drying system to reuse drilling fluids and Saving Technologies, which once of the Ecology national project. process water in well drilling. again proves the Biosphere project’s strong performance Appendices

Innovative Environmental award water treatment from the Moscow technologies at the Government for the Omsk Refinery Biosphere project

114 115 Sustainable Development Report 2020

In 2020, broader efforts to develop infrastructure for the safe management of waste continued. Waste management projects have been completed at two production sites: Aerial surveillance to monitor the • Slavneft-Megionneftegaz completed an upgrade of the landfill for solid Gazprom Neft municipal and industrial waste at the Aganskoye oilfield; at a glance • Messoyakhaneftegaz ( JV) completed the first phase of a 1,800 ktpa solid 6 waste incinerators municipal and industrial waste sorting, treatment and storage complex at commissioned condition of forests the Vostochno-Messoyakhskoye field.

In 2020, producing subsidiaries of Gazprom Neft commissioned six Gazprom Neft completed aerial laser scanning of 120 ha of state-of-the-art waste incinerators of different types and from different forests at oilfields in the Orenburg Oblast and the Yamalo- Sustainable development manufacturers, with a total capacity of up to 7 ktpa. Nenets Autonomous Okrug, using the data to build digital management models of the areas. The models were used to plot routes for The company seeks out and implements new technologies to utilise waste In 2020, the Upstream Division machinery movements in hard-to-reach forested areas with a low 120 ha of forests scanned in the production of commercial products. In 2020, two public consultations launched a project to develop an environmental footprint that avoided tree felling. Broader use of were held on the following agenda: integrity and reliability strategy. The this approach will enable the company to preserve forests while in the Orenburg Oblast • technical documentation for new technology to produce and use strategy will guide programmes at carrying out future exploration. oilfield infrastructure facilities (well in the Yamalo-Nenets YAKHONT, a man-made soil based on cuttings (pieces of rock removed by Customer drilling); pads, pipelines, treatment facilities, The digital models proved to be highly accurate at identifying the Autonomous Okrug care • technical documentation for new technology to make pavements on and roads) locations of individual trees, as well as their characteristics (species roads and other transport structures using BRIT construction sealant. and dimensions). The new approach further cut our environmental footprint and minimised the costs of seismic surveys and exploration for oil reserves. Aerial scanning of forested areas

Health and safety Waste management Gazprom Neft runs a pipeline reliability and integrity programme, which encompasses pipeline diagnostics, inhibitor protection, corrosion monitoring, repair and upgrade. Environmental technologies safety Green Seismic project

The company has obtained a patent for a technology to produce man- made BRIT soil from locally-available materials and treated cuttings. Gazprom Neft has been developing Green Seismic technology since This product is fit for use in road construction. 2014, which, thanks to its compact size, significantly curbs the number 4.5+ million of trees felled for seismic lines and cuts fuel consumption for seismic trees saved between Employee Field tests at the Gazpromneft-Noyabrskneftegaz and Gazpromneft- surveys, all while improving safety. The first phase (Green Seismic 1.0) development Khantos fields in 2018–2019 demonstrated that this new development reduced line width fourfold. This technology saved over 4.5 million trees 2016 and 2020 boasts a high performance. between 2016 and 2020 over an area of about 3,700 sq km. The current Green Seismic 2.0 project aims to considerably reduce source line width In 2020, the man-made BRIT soil was used to repair roads at the to save even more trees: between 1 and 1.5 million per year. of Gazpromneft-Khantos. The Company intends to put this technology to use on a much larger scale in the next few years. Social policy

In 2020, the Green Seismic project won the Vernadsky National Environmental Award in the Science for the Environment category 1–1.5 million trees saved every year

Appendices

116 117 Sustainability Report 2020

118 119 EMPLOYEE DEVELOPMENT 120 • COVID-1 • • • • • PROGRESSIN 2020 Deliver oncorporate strategic goals by creating apipelineofhighlyqualifiedandengagedtalent. employees canfullyrealise theirpotentialby working toward commongoals. which emphasisestheneedtofosterauniquecorporate culture andenvironment, where Third-party assessmentsregularly listGazprom NeftamongRussia’s topemployers, Employee development KEY FOCUS AREAS: Strategic priority enterprises intheirfightagainstCOVID-1 effective assistancetoGazprom Neft’s operating regions and The Antivirusproject team promptly builtasystemtoprovide Spending ontrainingprogrammes totalled₽1.7 billion Employees tookover 173,000 trainingcourses Employee coststotalled₽140 billion Turnover down by 3.1 percentage pointsto8% to remote work The companymanagedtorapidlymove upto70%ofitsofficestaff and training competency development Talent poolmanagement, programmes and employee rotation Ongoing recruitment 9 response 9 organisational efficiency productivity and Increasing employees’ formats Embedding flexible work • • • Corporate documents standards andlocalregulations Collective bargainingagreements, Gazprom NeftHR Management Strategy Conduct Gazprom NeftCorporate Code of engagement building aculture of programmes and Developing motivation Talent pool Improving hiringeffectiveness young people Enhancing theattractiveness oftheemployer brand among Talent pool • • • • • • • • PLANSFOR 2021 offices and production facilitieswithoutfirstbeingtested for coronavirus. medical supportsystemandhelps supportemployees whohave fallenill,all whilepreventing themfrom accessing One ofsuchdigitalbarrierswas theGradusnik(Thermometer)mobile app.Theappisintegrated withthecompany’s channel, andpulsesurveys toidentifythecurrent needsofemployees duringlockdown. Care foremployees alsoencompassedasupporthotline, consultations withpsychologists, theCaringAboutYou ill orhadcomeintocontactwiththevirus. and partneremployees, controlling theiraccesstoGazprom Neftfacilities,andarrangingmedicalaidtothosewhofell company alsodeveloped adigitalbarriersystem:setofIT products trackingthehealthofover 150,000 company Apart from regular employee testing,safefly-in/fly-out arrangements, and remote workforsomeemployees, the offices andoperations from thespread ofthevirus. As soonastheCOVID-19 pandemic broke out,Gazprom Neftstartedlooking forsolutionstoprotect thecompany pandemic Care forourpeopleduringthe professional skills recruitment capabilities applicant approval processes Specialist Council time” value functional managementdriven by the“right people,rightplace, Developing anin-houseandonlinetrainingsystem Streamlining andautomating theassessment ofemployee Developing asolutiontotargetcandidates andbuildrelevant Accelerating recruitment through automation andoptimisation ofthe Streamlining recruitment, trainingandonboarding ofyoung talent Developing thecompany’s youth policyandsettingupaYoung Adopting asystemofanalysisandpracticesoperational and Improving thetalentmanagementmodel

this testwithflyingcolours. challenges, butwe passed address sometrulydifficult time. In2020,we hadto families inavery short our colleaguesandtheir and protect thehealthof across ouroperations the spread ofthevirus that was necessarytostop mobilise anddoeverything the year, we managedto of thepandemicduring unprecedented challenges Faced withthe PJSC Corporate Affairs, Gazprom Neft Deputy CEO forLegal and ELENA ILYUKHINA Report 2020 Development Sustainable Appendices policy Social development Employee safety Environmental and safety Health care Customer management development Sustainable at aglance Gazprom Neft 121

Sustainable Development Report 2020 Key HR policy principles Employer brand Gazprom Neft Safety Respect and non-discrimination Effectiveness at a glance Gazprom Neft has built an employer value proposition aligned with the company’s strategy and corporate culture. The value proposition consists of a set of key The company puts the safety of Relationships within the company Gazprom Neft strives to maximise parameters that, in the opinion of employees, capture the essence of Gazprom Neft’s its employees at work, the wider are driven by mutual respect and its performance by recruiting the uniqueness as an employer, set it apart from competitors, are a source of pride, and public and the environment above trust. Gazprom Neft values the best-in-class, most motivated and any economic, technical or other uniqueness of every employee and dedicated professionals. serve as a magnet for talent. Sustainable development consideration, by providing a safe their opinion. The company is ready management working environment for employees to undertake ambitious projects by and expecting the same from its leveraging its diversity of talents, partners. cultures, opinions and experiences, Gazprom Neft has been ranked as one the best employers for years on end, confirming the attractiveness of its value all united by a common goal. proposition.

Customer Key achievements in 2020: care Gazprom Neft topped the HeadHunter ranking of Russia’s best Human focus Engagement Integrity employers, becoming the country’s most popular company among jobseekers.

The international company Universum listed Gazprom Neft among All our successes are driven by the Creating value for employees Gazprom Neft has set a goal to The company adheres to the the best Russian employers in 2020. company’s consistent delivery on its HR strategy aimed at attracting Health through achieving corporate goals. become a bechmark in this area by highest ethical standards and and safety All corporate processes are centred 2023. Annual employee engagement treats its employees fairly. Gazprom Neft projects were shortlisted in two categories at the talent, increasing engagement and around people as the holders surveys are the key tool used by WOW!HR 2020 business awards. improving working conditions for of capabilities that are defining the company to obtain feedback for company employees Gazprom Neft’s future. assessing employee engagement and Five managers of Gazprom Neft were listed in the annual satisfaction, identifying Gazprom Top 1,000 Russian Managers ranking by the Kommersant For more details on the Neft’s strengths and weaknesses as Publishing House in the Energy category. company’s employee an employer and outlining areas for Environmental engagement survey, see safety improvement. “Internal communications” on page 50

Employee Equality and non-discrimination WOW!HR 2020 business award development

Gazprom Neft’s HR management system guarantees that employee For more details on human The company’s educational projects, such as the League of Professionals cross-functional tournament and the Social rights are respected and supports a high level of business ethics while rights and the hotline at the Shaping educational ecosystem, were presented at WOW!HR 2020, the top business award for policy preventing corruption, both within the company and in relations with third company, see “Human rights” HR management. The company’s projects ranked among the best, and finished ahead of competitors, including parties, avoiding discrimination, and adhering to high social responsibility on page 36 Nornickel, Otkritie, ROSSETI, Rostec, RusHydro, , Sberbank, Holding, and others. standards.

The company has a hotline in place to prevent fraud, corruption and other violations of the Corporate Code of Conduct, which can be used by any Appendices employee for whistleblowing.

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Gazprom Neft’s consistently high rankings confirm the Human resources development relevance and appeal of the principles and values the Gazprom Neft Gazprom Neft is at a glance company believes in. First In planning its talent management and development, Gazprom Neft aims to become a and foremost, this means focusing on the individual magnet for world-class talent by creating conditions for each and every person to unlock as a partner in achieving their potential and implementing a “right people, right place, right time” approach. among the leaders company-wide goals. We are committed to providing our employees with greater Sustainable development opportunities to unlock This goal is achieved through a four-stage system of company-wide end-to-end talent management processes. management in Universum’s their potential, develop their talents and progress in their career roles. The company places a particular international emphasis on fostering its ANALYSIS AND PLANNING corporate culture, building Customer an engaging environment, 1 care deploying new technology- employer branding driven approaches to work, and ensuring employee • Assessing the company’s demand for talent and availability of resources at each satisfaction. We are delighted point in time that our efforts are striking • Forecasting the demand for resources and skills to address current tasks and future rankings a chord with industry challenges Health professionals. and safety The international company Universum listed Gazprom Neft among the best Russian employers in 2020 based on a survey of the Russian professional community. As in the previous year, Gazprom Neft was ranked among the top five most attractive employers in the KIRILL KRAVCHENKO Engineering/Natural Sciences and Business/Commerce categories. Deputy CEO for Administration, RECRUITMENT, SELECTION AND ONBOARDING Meanwhile, Gazprom Neft ranked second in these categories among Gazprom Neft PJSC 2 energy companies. The company was also ranked among the top five Environmental safety most attractive employers for humanities professionals and top ten for IT talent. • Ensuring a stable inflow of talent and meeting the company’s needs in an effective and timely manner

Gazprom Neft is among the leaders in Universum’s international employer branding rankings Employee 3 PERFORMANCE AND CAREER MANAGEMENT development

• Ensuring comprehensive fulfilment of employees’ potential, helping them to achieve maximum performance and take full advantage of their skills and experience Social NIS () policy 4 TERMINATION is Serbia’s best employer Appendices • Managing demobilisation while retaining critical talent through the creation of a NIS topped the ranking of best employers, according to a TalentX survey conducted by the Serbian online recruitment service to deal with low-performing employees website poslovi.infostud.com (similar to the Russian HeadHunter website).

124 125 Sustainable Development Report 2020 EMPLOYEE DEVELOPMENT IN 2020 Human resources profile • A talent management model is filled through internal promotions. of the company’s human capital. in place to transition from the Over 180 newly appointed This includes professional Gazprom Neft at a glance use of uncoordinated systems managers passed the evaluation, development, comprehensive 1 and approaches to using a improving HR decision quality and employee evaluation, cross- As at 2020-end, Gazprom Neft employed 82,960 people . single cycle and corporate-wide promotion transparency. functional collaboration, best methodologies. • Development of the career portal, practice sharing and employee • The development of personnel a unified information space for recognition. onboarding processes is now career planning and succession • The following information and Headcount by gender and age (people) Sustainable underway, for example, an for company employees and consulting services have been development onboarding app and chatbots have managers, was continued. This launched to increase employee management been developed and launched. resource helps employees with awareness of career opportunities 66,561 67,882 70,648 78,847 82,960 These products enable an adaptive required skills to be quickly found within the company: 40,835 40,254 42,917 49,734 54,210 modular approach to training, and to retain skilled personnel – chatbots for career consulting; 25,726 27,628 27,731 29,113 28,750 with the adaptation of existing within the company perimeter. – one-on-one career consulting programmes and content to suit • The League of Professionals service, with a fully developed different target audiences and cross-functional tournament methodology, 80 certified Customer the development of modular was held, which is the flagship career consultants, 342 career care programmes of varied complexity. corporate training project from consultations delivered, • An internal recruitment process the Downstream Division and including 307 by certified has been launched to improve had a viewership of 3,000 in-house career consultants the objectivity and transparency employees and in its fourth year. (90% of the total); of manager appointment. An The tournament offers contests – two career marathons (IT and evaluation procedure was for 11 professional areas taking HR functions) and a Career Day Health implemented for appointments to the form of a multifunctional (Upstream Division) have been and safety 20+ grade level positions, and for educational solution to a number held. 50% of managerial vacancies to be of challenges for the development

Environmental 2016 2017 2018 2019 2020 safety Headcount Men Women

Career portal development Headcount by gender/age/key region (%) Employee By year end 2020, 25,000 users registered on the portal. The portal contains data on 50% of all MSCs1 in the 15 15 development 19 company. Over 2,500 vacancies have been posted on the portal. 35 4

Social 25,000 2,500+ policy registered users vacancies posted 65 81 66

Men Under 30 Russian Federation

Women 30-50 CIS countries Appendices

Over 50 Non-CIS countries

1 — MSC – managers, specialists and clerks. 1 — The headcount increased as some employees in Serbia needed to be transitioned to full-time employment in accordance with Serbian laws.

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The company uses Robot Vera, an automated employee interview Turnover rate (%) service that conducts phone surveys, to identify and analyse why Compensation and social employees leave the company. 15.2 15.1 12.9 11.1 8.0 Gazprom Neft The procedure used by Gazprom Neft for notifying employees of major 3.1 p. p. benefits for employees at a glance operational changes complies with the Russian Labour Code, which outlines a minimum notice period of at least two months for major operational changes, and at least three months for rightsizing decisions The company operates a uniform employee incentive system to recruit, retain and that may lead to large-scale redundancies. develop talent, and support their career advancement and professional development. The objectives and principles of financial and non-financial incentives for employees are set Gazprom Neft runs an outplacement programme to support employees Sustainable development at projects or enterprises slated for closure. Ahead of the shutdown out in the Unified Corporate Remuneration Policy. management of an enterprise, project or development site, the company sets up a cross-functional team and prepares an outplacement plan followed up

by the Head of the HR and Organisational Development Directorate. 2016 2017 2018 2019 2020 This involves compiling a list of potential vacancies within the company, communicating it to the employees, and arranging individual meetings between the employees and the heads of the business units offering the Customer jobs. In a number of regions, Group care companies that are unable to Principles of the incentive system The Gazprom Neft Group complies with government requirements for meet government quotas due quotas and employment of people with disabilities. Employees with to their business profile enter disabilities are offered benefits guaranteed by the Russian Labour Code into agreements with third- Market competitiveness depending on their individual rehabilitation plans. party organisations to finance Internal fairness the employment of people with Health disabilities to meet these quotas Performance-based remuneration and safety

Objectivity, transparency, extensive use of a range of communication channels to provide convenient access to information for employees

A holistic approach to assessment and development

Responsibility for training and development shared between employees, managers and the company Environmental safety Relations with trade unions Basic additional training available to every employee

The company fosters long-term partnerships with trade unions. Trade union representatives are actively involved in developing a safety culture at the Cumulative compensation model Employee company and discussing improvements to Gazprom Neft’s employee benefits development system. They also attend HR management meetings and contribute to 47% occupational safety initiatives. The company’s compensation and social support programmes are based of employees on a cumulative model, which includes a basic salary, performance- Gazprom Neft is a member of the Russian Union of Oil and Gas Industry are covered by based compensation, opportunities for professional development, Employers and actively participates in the drafting of legislation governing recognition of achievements, and workplace environment (including relations between employers and trade unions. collective bargaining social guarantees and benefits, working conditions and corporate Social culture). ₽140 billion policy agreements Gazprom Neft has a collective bargaining framework in place. Collective employee costs bargaining agreements and local regulations outline the company’s social In 2020, the company continued to develop and implement its approach commitments towards its employees. In 2020, collective bargaining based on the cumulative compensation model. Specific compensation agreements covered 47% of Gazprom Neft employees. components and their respective weights within the overall model are tailored to different employee groups, depending on their motivational profiles. The model enables alignment between the company’s goals Appendices and individual needs of employees, provides an infrastructure for flexible implementation of the HR and business strategies, and improves corporate performance in attracting, engaging, motivating and retaining Gazprom Neft employees.

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In terms of financial compensation within the cumulative compensation Average monthly salary People are Gazprom model, a company-wide project was presented in 2020, which revised (₽ thousand) Neft’s key asset and job grading, the basic salary review process and the system of value. Gazprom Neft contribution evaluation commissions. 104.9 112.9 122.6 134 considers recognising Gazprom Neft 141 People of Progress at a glance the achievements of its In 2021, Gazprom Neft will continue improving its cumulative 5.2% people as fundamentally compensation model, concentrating on developing its Cafeteria important, but until this Plan programme to maintain its human focus and maximise the year, the company did personalisation of approaches to employee compensation and incentives corporate not have an overarching across the company going forward. company-wide recognition programme. The People of Sustainable development Starting from 2020, the Gazprom Neft Group introduced an enhanced Progress award has earned management annual bonus system based on an integrated performance evaluation recognition such a reputation, and its process for business units and employees. The individual contribution of title speaks for itself. Our each employee is assessed by a contribution evaluation commission and company employs people

is taken into account when determining their annual bonus. 2016 2017 2018 2019 2020 who share common values, programme striving for progress and The company analyses labour markets in its operating regions and personal development and Customer regularly reviews wage levels to make sure its remuneration system is who aspire to transform care competitive. In 2020, the average monthly salary at Gazprom Neft was Our highest corporate recognition programme, People of Progress, the world around them. up 5% to ₽141,000, despite a difficult market situation. was launched in the autumn of 2020. 2020 was a difficult The company is developing non- year for all of us, but we The company offers the same basic salary to men and women. financial incentive programmes, overcame all challenges and updating their content and The award is given for with flying colours, The social benefits system in place at the company comprises formats to better align them with successful projects and personal proving once again that its strategic goals contribution to the company’s Health mandatory (basic) and optional (additional) benefits. Social benefits the company can tackle and safety include free and subsidised meals, voluntary health insurance, accident development in line with its tasks of any complexity. insurance, additional sick leave benefits, parental leave allowances, corporate values: vacation packages, a housing programme, and sports and cultural events. Basic social benefits are provided to employees regardless of their employment type. responsibility innovation Individual and team professional skills contests held across all Gazprom Environmental safety Neft production divisions are an important non-financial incentive. +5% growth collaboration ALEXANDER DYUKOV Chairman of the Management in average monthly efficiency Board, CEO, Gazprom Neft PJSC salary determination

safety Employee development Employee costs (₽ million)

Winners included teams working on developing Russia’s most advanced oil refining facility – the Moscow Refinery’s People of Progress Item 2016 2017 2018 2019 2020 corporate recognition Euro+ combined oil refining unit (CORU) – and those involved in the programme local Antivirus programme supporting health workers and volunteers Social Payroll 79,316 86,600 97,865 117,776 135,905 throughout the COVID-19 pandemic. policy

Social benefits 3,260 3,177 3,596 3,743 4,140 The Gazprom Neft emergency response team – the first to respond to the – was also recognised. Total employee costs 82,576 89,777 101,461 121,519 140,045

Appendices

130 131 Sustainable Development Report 2020 Employee training and Developing a green mindset Gazprom Neft development at a glance The Corporate University launched a comprehensive educational portal where employees can learn about climatic and environmental outlooks and their impact on business, politics and society. The project enables the identification of new Gazprom Neft is proceeding with the development of its competency-based continuous business approaches that take care of the environment and encourages a change in participant behaviour through new training programme. Learning paths are based on employee performance and evaluation daily habits that help to preserve the environment. Sustainable of their potential, the selection of promising technologies to be implemented, and the unit development management manager’s vision of personnel training requirements.

Future skills TOP 5 NEW The Gazprom Neft training and development system is open to all employees The Strategic Competencies Department in the Downstream Division COMPREHENSIVE of the company and its contractors, as well as target groups of prospective has been running a future skills programme for two years now. The Customer employees, namely school and university students. programme includes six future skills, 24 topics, 18 development tools, TRAINING PROGRAMMES care including innovations, such as virtual classes, chatbots, training shows, CREATED TO RESPOND TO Average training hours per employee decreased in 2020, as in-person training online tournaments, case games, etc. Over 1,500 employees have taken was halted and some practical training could not be done remotely. ₽1.7 billion the programme. An evaluation found that future skills help employees to BUSINESS’ DEMAND invested in employee perform better in changing environments and to successfully complete various projects. 1. SCRUM Master School training and 2. Practical Ecology School Health Corporate University development 3. Project Management School and safety League of Professionals 4. Remote Team Management 5. Think Big The company’s training function is led by the Corporate University, whose In 2020, a qualifying round was added to the traditional cross- structure consists of faculties subdivided into departments. The university functional tournament, the League of Professionals, which helped develops training programmes according to demand, monitors the to expand the number of participants tenfold from 120 to 1,250. implementation of business development and transformation strategy and Rather than disrupting the tournament, the external conditions creates mechanisms to monitor training results and efficiency. of 2020 catalysed the use of new approaches and formats. New Environmental safety challenges allowed tournament participants to develop a wide range of TRANSFORMATION OF competencies, and with most project activities migrating into a digital Advanced educational technologies leveraged by the Corporate 37 training hours environment, this has facilitated IT skills development. APPROACH TO TRAINING University per employee on REQUESTS IN 2020

• Automated planning of training average Expert programme • Adaptive modular approach, whereby programmes of varied complexity Before Employee are tailored to the needs of target audiences The theme for the annual Expert Platform contest for educational • Generic programmes on offer development • Programme selection in line with individual development plans product developers in 2020 was podcasts. Over 150 employees of the • Repetition of what is offered on the • Uniform and transparent approaches to training cost planning, estimation Training hours per employee Downstream Division – blue-collar workers, specialists, and managers – market and control mastered the new training format which had never been used in the • Feedback monitoring • The University acts as an expert in the accreditation of higher education company before. The contest participants independently scripted, voiced institution programmes, in accordance with industry and business 36 46 33 45 37 and mixed their podcast into a finished product. After requirements, and their subsequent use Social In 2020, the company created 68 new adaptive modular programmes, • Programmes tailored to specific policy The system adaptability is facilitated by feedback from both participants and with over 80% of them delivered with a hybrid approach (in person and requests training organisers within the company. remotely). • Added programmes take into account business development and transformation strategies New training programmes and approaches • Monitoring results and efficiency of training Appendices The company is continuing to improve the role and organisational structure of the University, and create new training programmes and approaches based on its successful practices in order to increase business involvement in

transformation processes and form a system for collaboration. 2016 2017 2018 2019 2020

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The professional department development at the Corporate University

In 2020, the company placed considerable emphasis on developing Gazprom Neft The following new educational the professional departments at the Corporate University. The key at a glance focus areas of the University’s development in 2020 were closer ties The faculty will focus on improving with business; the creation of a system for interaction, training and employees’ digital literacy and skills development; codifying internal and external expertise; better definition by developing uniform training of the institution’s role and organisational structure; growing its impact programmes, as well as providing programmes have been developed on the industry and codifying a system to evaluate the contribution of broader support for the company’s individual departments to the company’s business. Sustainable digital transformation development management The Corporate University opened a Digital Transformation Faculty with to support Gazprom Neft’s seven professional departments. transformation processes: Customer care

EFFECTIVE MANAGER 8 new professional 7 departments 40 university departments opened in Digital departments in total • Motivational Skills • Decision Quality and Problem • Fundamentals of Conceptual • Motivating Others Solving Thinking Transformation Health • The Human Factor in Business • Priority Management • Change Management and safety • “Feedback: Dialogue” • Systematic Management • Focus on Results • Self-development • Think Big • Leadership Skills • Change Sponsorship In-house coach development OPERATIONAL EFFICIENCY In 2020, the company developed uniform approaches to the management, Career path for coaches: Environmental safety • HR Academy • Development of Product • Induction Course development and performance evaluation of coaches, and defined their Capabilities • Routine Management Practices categories and career path. communicating coach;

A package of online and offline training programmes has been prepared for developing coach; DIGITAL LITERACY each category. mentoring coach. • Business Thinking in Digital • SCRUM Master School • Agile Basic Also in 2020, Gazprom Neft created a system to keep records of coaches’ Employee Reality • Product-based Approach and Agile activities on the Knowledge Portal, including the hours spent training development • Digital Literacy • Agile and Scrum in Projects and and coaching, as well as student coverage and responses to feedback • Artificial Intelligence Products questionnaires. New training programmes developed by coaches are included in standard curriculum templates. The In-house Coach Library was launched on the Knowledge Portal, and each coach’s online account now features a widget with their personal statistics. Social policy

The implementation of a new approach to employee training with a redefined manager role commenced in 2020. Managers are now actively involved in training budget planning and control, and approve training chosen by employees Appendices at their respective units. To help drive these changes, the Knowledge Portal functionality was significantly expanded, and 2,186 6,000 105,000 new user interfaces for employee and manager accounts were created in-house coaches training sessions people trained delivered

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Key achievements of the Corporate University in 2020

Two professional standards have been developed as part of the overall effort to create a system of professional Managers who did not participate in the corporate culture Gazprom Neft qualifications at Gazprom Neft: Offshore Oil, Gas and Gas Condensate Field Operation Specialist, as well as Dehydrator transformation events last year took part in corporate culture at a glance and Desalter Operator. A total of 10 professional training programmes have been developed for operational staff, workshops in 2020. These efforts aim to create an information along with an integrated programme to train teaching staff from higher educational institutions and a methodology space for all company managers, with data on the corporate culture document for professional standard implementation across subsidiaries transformation, corporate values and employee engagement management all available. Over 2,000 managers attended Workshop 1.0 173,000+ in 2020. The programme was shifted online for ease of training. Workshop 1.0 materials were integrated into the new manager training courses Sustainable development onboarding programme. delivered to management In 2020, managers started to take training on Workshop 2.01 Engaging employees Corporate Knowledge Portal Leadership Practices. Workshop 2.0 aims to strengthen each manager’s role as an engaging leader and to help them master and regularly Expansion of the corporate Knowledge Portal’s functionality continued practice actions that create an engaging environment. In 2020, Gazprom in 2020. Certificates are now issued automatically upon completion of Neft senior managers took part in Workshop 2.0. Customer training, a new service to evaluate and rank training providers based care on training participant and organiser feedback has been launched, and 156% increase In 2021, the Corporate University will continue consolidating Gazprom data on department activities and employees’ training needs are now in total visits to the Neft’s leadership in corporate training by creating its own, unique collected automatically. The Knowledge Portal’s basic services have Knowledge Portal programmes, both for the company and the external market, while been made more mobile friendly. implementing a comprehensive approach to building up a talent pool, 105 new helping managers grow, using new and innovative methods and digital + services, as well as building a comprehensive system for evaluating online courses Health training efficiency. developed and safety

Environmental safety Awards and recognition Recognition of 8 new departments opened Company projects won in two categories at the prestigious Crystal the Corporate Pyramid 2020 awards: Corporate Training of the Year (for the The Crystal Pyramid Employee 2020 Awards Shaping Our Future innovative educational ecosystem project) and development the Talent Management System of the Year, while coming second in the Corporate University of the Year category. University’s The company’s innovative educational chatbot to develop emotional intelligence has been praised by the expert community: at the Awards for chatbot EdCrunch Award 2020, an international technology project contest, achievements Social it won in the Online Psychology and Self-discovery category, while 250 managers policy being named the Best Online Training at the SMART Pyramid 2020 trained in Workshop Awards. The On Your Marks onboarding and accelerator programme for young specialists won a Trainings award in the More than Just 2.0 The Expert Platform competition for educational product Training category. Trainings is an annual award for companies and developers won a prize at the HR Tech Forum & Award 2020 individuals active in HR management, training and development. for its achievements in business digitisation and human capital The Expert Platform Awards Appendices management. Gazprom Neft’s corporate culture workshops ranked first in a contest for the oil and gas industry project that did the most social impact in 2020.

1 — A programme for senior and top management

136 137 Sustainable Development Report 2020 Partnerships with educational

Gazprom Neft organisations The Shaping Our Future at a glance With the support of major Russian universities, the company continues its corporate programmes in key areas for the oil and gas industry, from conventional exploration and educational conference Sustainable development to capital construction and IT. development management The conference, which was held online for the first time in 2020, focused on identifying new solutions to train professionals amid the digital transformation. Shaping Our Future Partnership programmes and agreements with universities in 2020 The online livestream was joined by over 2,500 representatives of 90 universities and 100 companies from across 25 cities of Russia, Customer Gazprom Neft and Tomsk Polytechnic University as well as from Estonia, Israel, Latvia, Serbia, and care Oil and Gas Well Drilling: a joint educational programme for graduates . who already hold either a first degree (BSc), a specialist degree or a Master’s degree (MSc) in oil, gas, physics or mathematics. Participants study for a year and on completion of the course are qualified to take a job at an oil company. 56 agreements

signed with Health and safety Gazprom Neft and Ufa State Aviation Technical University universities under Digital Technology in Corporate Systems: a joint educational Master’s the cooperation programme. The company and the university train specialists qualified programme to address the industry’s digital transformation agenda. Training unmanned transport

Gazprom Neft and Omsk State Technical University Environmental safety On offer are Information Systems and Technology, a joint educational Master’s programme in Effective Digital Solutions, and Information specialists Systems and Technology, a Bachelor’s programme in Digital Management. Gazprom Neft and Russia’s ITMO University have become the first organisations in Russia to start training specialists in unmanned Training specialists in unmanned transport at vehicles. The programme is designed for students with experience in ITMO University Gazprom Neft and the Saint Petersburg National Research University of 212 graduates IT and machine learning. The Master’s students will study disciplines Employee Information Technologies, Mechanics and Optics (ITMO University) went on to work at such as programming, the management of cyber-physical systems, development An agreement has been signed on developing a Master’s programme control, architecture, information security and the industrial safety of on Functional Safety in Unmanned Transport, the first academic Gazprom Neft unmanned aerial systems, cars and other unmanned machinery. programme of its kind in Russia for training developers and specialists in using unmanned vehicles in the oil and gas industry.

Social Gazprom Neft and the Administration of St Petersburg policy The St Petersburg Energy Clubs are part of a project to create a world-class technology valley in the city – the St Petersburg Energy TechnoHub. Energy Every year, three Russian higher educational institutions (Gubkin Russian State Oil and Gas University, TechnoHub tenants will support student business projects, helping them Omsk State Technical University and Ulyanovsk Civil Aviation Institute) accept students into Gazprom monetise and market successful ideas and inventions. Gazprom Neft became Neft’s specialised departments, which train specialists for the oil and gas industry. the first corporate partner of the Energy Clubs by offering support for student startups and research projects on digital solutions for the oil and gas industry. Appendices

138 139 Sustainable Development Report 2020

Online internships for students The development and were a swift response to active deployment of fundamental changes in the AI technologies is a top learning environment amid the priority for the Russian Gazprom Neft Online internships pandemic. We worked with the AI Alliance Russia economy. This alliance may at a glance country’s leading universities be an effective answer to to promptly develop an Artificial Intelligence Alliance Russia brings together leading technology this challenge. The project unprecedented contactless companies to jointly develop AI capabilities and accelerate the adoption of brings together companies for students training project that ensured artificial intelligence in education, research and business practices. from different industries with the continuity of students’ existing expertise in artificial In 2020, the Gazprom Neft Corporate University launched an online practical training. This type of Alliance members: Gazprom Neft, Mail.ru Group, MTS, RDIF, Sberbank intelligence. We expect Sustainable development internship project for students with the support of Russian universities. training also opens up a range and Yandex. The Alliance’s mission is to become the AI development hub this to create synergy and management of opportunities available to in Russia, making the country and Alliance members leaders in the global unlock new opportunities for Given the COVID-19 restrictions at universities, with all students temporarily students from across various technology market. Gazprom Neft is responsible for the Higher Education promoting this technology shifted to remote learning and no longer able to receive hands-on training, regions of Russia, allowing stream in the Alliance. across the country. the company has developed a new format for internships. Supported by them to get to grips with industry-specific universities, the company’s Corporate University promptly actual oil industry production In 2020, the joint efforts of the Alliance’s experts and the country’s put forward an optimal solution. processes, remotely. leading universities led to the creation of a family of six degree Customer programmes in AI, each broken down into 36 individual skills that are care The project enables students to gain insights into the work of Gazprom Neft taught to various levels depending on the course. ALEXANDER DYUKOV specialists from large production facilities across the country. Chairman of the Management Starting from 2021, the Alliance will conduct corporate accreditation of Board, CEO, Gazprom Neft PJSC ILYA DEMENTIEV educational university programmes against the base model of AI-related Rector of the Corporate professions and skills. University Health and safety Online internships for AI Alliance Russia students

Environmental safety

Key highlights of projects with universities in 2020

Employee development

56 agreements 286 corporate- 3 specialised 212 graduates ₽153 million in charitable

with universities sponsored departments created went on to work at Gazprom Neft support for universities Social university students through partnerships policy

936 students 99 company 5 faculty members 1,849 company employees ₽34 million spent on Appendices undertook employees in training of partner universities completed training under continuing professional internships at the completed internships continuing professional education programmes for company at the company education programmes company employees

140 141 Sustainable Development Report 2020

Thanks to the Digital Talent pool development Transformation Faculty’s new training programmes, Training digital employees can learn about Gazprom Neft The Gazprom Neft approach to talent pool development is to make sure that key positions digital technologies, the at a glance across the company are filled by building a succession pool, with objective selection and product-based approach targeted training of its members. and product data, all transformation while mastering the skills needed to work with digital processes and projects, which will help them unlock Sustainable development leaders better performance and management KEY OBJECTIVES: become the best specialists The first pilot cycle of the Business Thinking in Digital Reality training the industry has to offer. • Identify key positions and employees for succession planning Talent programme was completed in 2020. The programme’s purpose is to • Retain and promote the best performers identify business leaders of digital transformation and build a new The key expected outcome of communication environment. The Higher School of Economics and the programme is to build a Yandex contributed to the programme’s development. pool of digital transformation Customer leaders with a new mindset, care Committee A total of 34 managers from Gazprom Neft and its subsidiaries took ready to drive projects part in the programme, which was delivered online over the course from an idea to a practical EXPECTED IMPACT: The Talent Committee is an of 10 weeks and comprised comprehensive individual and group result, while following indispensable element of the training sessions. Speakers and trainers included over 30 world-class the company’s strategic • Shorter time to fill key vacancies succession management system at experts and managers of major Russian companies: Gazprom Neft, development direction. • Better training of candidates for key positions the company. Committee meetings ABBYY, Absolut Bank, the Internet Initiatives Development Fund Health • Faster employee onboarding after promotion keep key stakeholders up to date, (IIDF), Microsoft, Russian Post, , SIBUR, VTB Bank, X5 Retail and safety • Higher share of existing company employees in new appointments improve talent pool management Group and, Yandex. The participants will be presented with continuing and are an effective mechanism for education certificates from the Higher School of Economics and ANDREY BELEVTSEV decision-making and follow-up. certificates from Gazprom Neft Corporate University. Director for Digital Transformation, Gazprom Neft There are four talent committee levels PJSC Gazprom Neft’s approach to building its talent pool at Gazprom Neft: Environmental safety local Succession management at Gazprom Neft is holistic and cyclic, following an annual talent management cycle. function Talent committee meetings held in 2020 for succession planning Share of employees covered division The talent pool building process is integrated with regular corporate identified over 2,000 “reservists” for key positions. Individual by evaluation in 2020, by employee-evaluation procedures: corporate development plans were created for over 70% of these “reservists” to category (%) • regular performance evaluation; train them for their target roles. Employee • management by objectives – a tailored goal-setting system; development • the contribution evaluation commission – contribution evaluation Committee meetings are held in In 2020, 1,849 employees completed retraining and upskilling Line employees based on employee-driven results; sequence, from the bottom up. programmes at Gazprom Neft partner higher educational institutions Line management • 360° feedback – employee evaluation by their entire working (HEIs). Middle management 7 environment: juniors, peers and clients. Senior management 2 Top management 0.42 Management Board Gazprom Neft also builds a managerial talent pool both for top and 0.03 Social senior management positions, as well as for other levels of management. policy All decisions regarding the talent pool are made by the relevant Division, Business Thinking in Digital Reality won the SMART Pyramid award in 17,170 Function, subsidiary or affiliate. corporate training and human capital development1, as well as the People of Progress 2020 corporate recognition programme’s top prize in the Innovation 48 Informing an employee that they have been added to a talent pool is category for the team’s achievements in implementing the project 42 mandatory and an inherent part of succession management. 39% of

employees took Appendices part in regular performance evaluation 1 — The SMART Pyramid Awards, launched in 2011 by the organising committee of the Russia and CIS HR Directors Summit, have been presented every year to promote the adoption of best practices and to celebrate organisations introducing advanced employee training and development methods and technologies.

142 143 Sustainable Development Report 2020

144 145 Sustainable Development Report 2020 SOCIAL POLICY The “Home Towns” corporate social Gazprom Neft Gazprom Neft initiates positive social change in those locations in which it operates, at a glance supporting local communities and activists, getting involved in the ongoing social and responsibility programme economic development of the regions, and providing the necessary resources and expertise.

The “Home Towns”

SOCIAL POLICY SOCIAL programme Sustainable development management

Strategic priorities Internal regulation governing social policy: This programme is directed at the ongoing improvement of living standards in those locations in which the company operates, by supporting The “Home Towns” programme • “Home Towns” CSR Programme local community initiatives while also developing the programme’s own is the first fully cohesive CSR Customer and objectives communication strategy projects. Ongoing positive change is driven by the company’s multi-level care programme in Russia’s recent engagement in regional development – from getting involved in preparing history Priorities: • Regional Policy Concept Document development strategies, to taking a hand in joint tactical solutions. • to initiate ongoing positive change in those locations in which the company operates, unleashing the potential of local communities; • Policy on Engaging with the Ongoing dialogue with local communities makes it possible to identify • to guarantee the ongoing development of partnerships with the Indigenous Minorites of the and develop those initiatives most urgently necessary in the regions, and regions, providing the expertise necessary to ensure sustainable Russian Far North, Siberia and the most likely to become drivers in promoting development. Socio-cultural, Assessing the effectiveness of Health environmental and social development. Far East environmental and infrastructure projects in the regions are implemented investments in regional social and safety in the interests of current and future stakeholders, bound by a shared development: A company for the regions: • Policy on Charitable and appreciation and mutual interests. • a partner in deploying solutions and practices for a sustainable Philanthropic Activities • marketing and sociological future, while promoting regional competitiveness; All key Gazprom Neft subsidiaries are involved in CSR activities. surveys (of selected target • an expert advisor on identifying local development priorities, audiences and the general balancing the interests of local government with the needs of local Extensive multi-dimensional and social assessments are undertaken public) in those locations in people; to fine-tune target setting in company social policy, with national and which the company operates; Environmental safety • a driver for innovative practices in production and local post- international best practice in sustainable development closely monitored. • independent research into living industrial development; standards in those locations in • a facilitator of strategically-focussed long-term local and regional which the company operates; change, as initiated by local communities. • analysis of feedback The company is committed to full through public hearings, and Objectives: social responsibility, throughout Key areas for social investment: engagement with local residents • supporting local communities and initiatives by sharing and its businesses. Gazprom Neft is • integrated and cohesive urban transformation, while protecting in discussing planned social Employee transferring skills, competencies and other supportive resources; facilitating regional competitiveness, the natural environment; initiatives; development • cooperating in developing residential environments – through sharing skills, competencies and • creating an environment conducive to cultural institutions, • monitoring of mid-term and infrastructure, environmental and social projects – in those expertise in driving effective change humanitarian initiatives and the creative industries;1 final performance benchmarks locations in which the company operates; – resulting in diversified local • supporting talent, and promoting science and sport among young and KPIs on Home Towns- • partnering with local and municipal government and agencies to development and guaranteeing people; programme and standalone improve living standards for local people, while ensuring ongoing a sustainable future for Russia’s • integrating the indigenous minorities of the Russian Far North projects; environmental sustainability; regions into the modern economic landscape, while protecting their • external audits by research Social • ensuring the competitiveness of the regions through targeted cultural identity. agencies, non-profit policy support for talented professionals, ethnic minorities, and young organisations and educational people; institutions with successful • providing informational support for positive social change in those Social investment tools: experience in implementing CSR locations in which the company operates. • the company’s own social projects; projects; • social and economic cooperation agreements with local and • collection and analysis of Social policy is predicated on regional governments and agencies; feedback through Home Towns- Appendices partnerships and strategic support • grant competitions and support for local initiatives; programme media resources. Preserving natural, ethnic and cultural diversity; partnering with local for local initiatives – with the • corporate volunteering. communities to promote positive change; working closely with talented company doing everything possible young people; and promoting best practice in corporate and public to accelerate and disseminate responsibility – these are the foundations on which collective local social, these 1 — Creative industries refers to activities based on individual creativity and having the potential to add value by capitalising on intellectual property. environmental and intellectual development is predicated.

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Total social investment 2020 – PROGRESS AND RESULTS (₽ billion) The сompany’s social agenda 4.1 4.3 6.8 7.4 6.4 Gazprom Neft The overriding priority for the company’s social investment programme under the COVID-19 pandemic at a glance in 2020 had to be helping the regions in responding to the COVID-19 pandemic. The company implemented a range of initiatives in countering the pandemic, providing assistance to employees and partners, health Gazprom Neft was able to ensure the safety of its employees under the pandemic, while professionals, medics and volunteers through its “Antivirus” programme. maintaining continuity in production and transforming its charitable and social activities Scheduled Home Towns-programme projects were adjusted to reflect this change in circumstances, and were either moved online or postponed. in those locations in which it operates. Sustainable development management • The company’s investment in ongoing social-infrastructure and regional development reached ₽6.4 billion – the ₽1.0 billion year-on- year decrease here being the result of major “offline” and international 2016 2017 2018 2019 2020 projects having to be cancelled. Find out more about the • 17 social and economic agreements were entered into with various Antivirus programme here municipalities and constituent entities of the Russian Federation. Customer • A total 1,054 initiatives were submitted for grant-aided support, care from six of Russia’s regions. Selection of winning projects has been postponed to 2021. ₽6.4 billion • More than 37,000 social activists and representatives from the The сompany’s integrated Antivirus programme provided financial and material creative industries took part in the company’s educational, grant-aided total social investments support to medical and social institutions, and to voluntary organisations. The сompany’s Antivirus and voluntary initiatives. The Antivirus programme was active throughout the Omsk, Orenburg, programme has proved one of the • More than 2,500 talented schoolchildren, students and young people Tomsk, Tyumen and Yaroslavl Oblasts, the Yamalo-Nenets and Khanty-Mansi most remarkable humanitarian Health were able to discover their potential and investigate or undertake Autonomous Okrugs, St Petersburg and other cities. The programme was initiatives undertaken by Russian and safety projects with the company’s support. initiated in March 2020, reaching its peak in April–June of that year. • Swift adjustments and operational changes have allowed the company companies in 2020 (SCAN-Interfax to continue supporting initiatives in developing talent, with six key Media Index) projects being implemented. 17 cooperation agreements entered Gazprom Neft for Volunteers Environmental into with constituent safety entities and Volunteers delivered food and medicine to the elderly, people with limited municipalities in the mobility, and health workers and their families. The company donated fuel cards to Russian Federation voluntary organisations, allowing At Gazprom Neft’s initiative more than 1,600 free fuel cards were free refills throughout the Gazprom distributed to volunteers on the Russia-wide #WeTogether mutual-aid Neft filling station network across Employee campaign, with volunteers delivering food and medicines to pensioners, 47 of Russia’s regions development working in hospitals, and helping the disabled, low-income families and PLANS FOR 2021 people living alone. • Research and evaluate the • Launch an updated programme Mathematics and Computer Science

impact of social investments for working with Home Towns at St Petersburg State University. Gazprom Neft supported in Gazprom Neft’s key areas of Ambassadors (i.e., the most • Enter into at least 10 cooperation participants on the #WeTogether operation, and update key areas for proactive partners and participants agreements with municipalities in programme throughout 34 regions, Social policy partnering with local and regional on the programme). key locations in which the сompany providing free fuel for volunteers, stakeholders. • Undertake those activities operates. delivering food and medicines to • Further enhance the сompany’s confirmed in social and economic • Review the outcomes of the 2020 1.6+ fuel cards pensioners, working in hospitals, leading position in CSR, cooperation agreements with grant-award competition and or helping low-income families and environmental education and regional government. Hold initiate a new grant-award cycle, provided to voluntary organisations people living alone environmental protection initiatives, at least six meetings with supporting at least 100 projects. and in supporting the indigenous regional government to review • Increase the number of voluntary Appendices minorities of the Russian Far North. implementation of these initiatives (with new formats, areas • Launch a digital platform for the agreements, and adjust planned of activity and partners), supporting Home Towns programme, offering activities accordingly. at least 50 initiatives involving a media resource and platform to • Continue developing the Russia- Gazprom Neft volunteers. 200 litres of fuel promote engagement between wide “Mathematical Progression” • Establish a professional martial + those leading social change in those project supporting gifted young arts team from the Storm School provided to volunteers locations in which the сompany people by opening a postgraduate of Martial Arts in Omsk, giving operates. course at the Faculty of pupils the opportunity to pursue a professional career in sport. 148 149 Sustainable Development Report 2020

Gazprom Neft for Medics Gazprom Neft’s “Antivirus” Voluntary and charitable activities by Gazprom Neft employees programme covered more than half of Russia’s Procurement of PPE for medical staff Gazprom Neft senior management – as well as subsidiary heads and Gazprom Neft regions. The most difficult Help for children’s cancer at a glance Gazprom Neft funded the procurement of more than three million pieces other employees – got personally involved in a charitable initiative hospitals made available of personal protective equipment (PPE), which were then donated period – at the start of to donate funds to help doctors and patients at children’s cancer from Gazprom Neft to doctors in the Omsk, Orenburg, Tomsk and Yaroslavl Oblasts, the the pandemic – saw us hospitals – which were particularly vulnerable during the pandemic. management Khanty-Mansi and Yamalo-Nenets Autonomous Okrugs, Moscow and St More than 644,000 masks, respirators, hazmat suits, goggles, visors Petersburg. swiftly putting in place a and sanitisers were delivered to medical facilities in Nizhnevartovsk, system for distributing free Omsk, St Petersburg, Tomsk and Tyumen. Medical equipment was Medical equipment and medicines delivered to local hospitals purchased – at Gazprom Neft managers’ own cost – through the Home Sustainable PPE, medicines, medical FROM GAZPROM NEFT’S development Swiss-manufactured ventilators, and 15 different kinds of medication, Towns programme and delivered to medical institutions in need of management were delivered to local hospitals in St Petersburg, Omsk and Novy equipment and sanitisers to help. 40 Gazprom Neft executives were involved in this campaign. EMPLOYEES Urengoy. local hospitals. In doing so we not only minimised the risk Free refuelling of doctors’ cars in Omsk Doctors in the Omsk Oblast, and medics at the Moscow City Clinical of infection for more than Hospital in Kommunarka (Hospital No. 40), had their cars refilled for free 75,000 company employees Customer courtesy of Gazprom Neft, as did visiting teams of anaesthesiologists and partners, but were also care and intensive care specialists. able to support doctors – Free vehicle servicing the real heroes in battling 40 personal donations 644+ pieces of PPE One thousand ambulances and emergency services vehicles, across 29 the pandemic – when they from the company’s senior delivered to medical facilities of Russia’s regions and the Republic of , received free oil changes at G-Energy Service Stations. needed us most. Thanks to management Health their professionalism and and safety Sanitiser production dedication the COVID-19 Gazprom Neft delivered 200 tonnes of its own proprietary sanitisers situation is gradually and antiseptics to hospitals, free of charge. stabilising and we are, step #NAVAKHTE – rus. #ONSHIFT motivational campaign Free coffee by step, returning to normal Thanks to a promotion through the Gazprom Neft filling station network, life. more than 370,000 free cups of coffee helped sustain medics and The first wave of the pandemic saw Gazprom Neft launch a campaign Environmental safety emergency services workers throughout the pandemic. to support those employees responsible for ensuring continuity of Words of encouragement production. to everyone #ONSHIFT

It was for precisely these people that more than 400 employees, across different regions and countries, came together to say “Thank you for 15 different medications and Swiss-made ALEXANDER DYBAL being #NAVAKHTE – rus. #ONDUTY!”, and to whom dozens of well- Member of the Management Board known media personalities – sports stars, film actors, musicians and Employee and Deputy CEO for Corporate famous scientists – made clear their appreciation of those working development ventilators delivered to hospitals #ONSHIFT flash-mob Communications, Gazprom Neft PJSC selflessly in the production and refining industries. Video tributes from Home Towns programme volunteers and ambassadors too found a special place reserved for them on this initiative.

2.7 million pieces of PPE Social + policy donated to medics and healthcare staff 1.5 million video views

Appendices

An integrated and cohesive Letter of thanks from the Support for medics and This campaign delivered the biggest support programme for of the Khanty- healthcare workers in the ever flash-mob in Gazprom Neft’s medics and healthcare Mansi Autonomous Omsk Oblast history workers Okrug in recognition of our contribution to helping fight the 15 regions, 32 businesses involved COVID-19 pandemic

150 151 Sustainable Development Report 2020 Gazprom Neft’s “Mastera (Makers)” This project, on supporting and researching the creative industries, involves Platform: Master Gazprom Neft at a glance social projects holding a series of investigations (research projects), forums, and intensive Craftsmen training – as well as maintaining an online educational platform, “Mastera”.

2020 saw most of the company’s long-term CSR projects being swiftly reformatted and 2020 saw four remote Mastera “camps”, as well as the launch of a special moved online – without any loss in quality or content – while most effort was redirected to project, #SupportLocal, which involved highlighting initiatives by local businesses. A research study, “What Creative Entrepreneurs Live For”, was fighting the COVID-19 pandemic. undertaken on the creative environment in Siberian cities – this being the first Partner: Sustainable development ever systematic analysis of the current state of (and potential for) creative management industries in those locations in which the company operates.

“Mathematical Progression”

The “Mathematical Progression” integrated support programme is a joint Customer initiative managed by the company in partnership with the Chebyshev 33 thousands people trained through care The Mathematical + Mathematical Laboratory at St Petersburg State University. Gifted children from Progression awards the Master Craftsmen platform across the entire country are given the opportunity to study at the university, ceremony with the best students being awarded personal scholarships, young academics given grants and internships, and academic teams receiving research funding. The “Multiplying Talents” school On that basis the company is helping to develop the sort of scientific continuity without which the core sciences – and the innovations in production that arise Health from this – would not be possible. Scholarships and awards Based solely on real-world cases, this intellectual tournament for high Developing Talent 2021 – and safety for young mathematicians school students has been running since 2015. the final In addition to supporting basic scientific enquiry and research, this programme is also providing a stimulus for solving practical tasks. Scientists from the Competitors are charged with solving actual production challenges in oil Chebyshev Mathematical Laboratory, together with specialists from Gazprom and gas, specially adapted for the tournament. 71 high school students, Neft’s Science and Technology Centre, have been involved in creating from those locations in which Gazprom Neft operates, took part in the mathematical field models, as well as helping develop the company’s “Cognitive tournament final in 2020 (held at the Sirius Educational Centre in ), Geologist” project. Young mathematicians are also working on Gazprom Neft’s Partner: tasked with solving challenges based around digitisation in the oil and Developing Talent 2021 – Environmental safety artificial intelligence (AI) projects. As a result of this, the new analytical and gas industry. the launch modelling capabilities made possible through advanced mathematical research are helping discover oil deposits hitherto inaccessible under traditional Department 2,500 participants have registered for the next tournament, scheduled production methods. of Mathematics for 2021. A qualifying round, held online, included an extensive and Computer Science educational programme involving webinars, workshops, an EdTech- 103 personal scholarships (to 99 students and four academics) were awarded St Petersburg State University solutions competition and other cutting-edge training formats – the Partner: under this programme in 2020, with the results being announced through an outcome of which involved participants putting forward their own Employee online awards ceremony. individual project solutions, remotely. The authors behind the best of development these will meet next year at the Sirius Park of Science and Art for the ~ 60,000 people viewed the online finals. popular science lecture series by Stanislav Smirnov, a Fields Medal winner and Academic Supervisor The Alexander Shlemenko Storm MMA (mixed martial arts) School at the Department of Mathematics Social and Computer Science of St. policy 103 personal scholarships The Storm MMA Petersburg State University This mixed martial arts school, founded in Omsk by one of Russia’s most School marks its fifth to programme award winners successful MMA athletes with the company’s support, has celebrated its fifth anniversary anniversary. Public training facilities are already in place at the school, and in 2020 it was decided to create a professional team – Storm – through the academy. On which basis, the Company is facilitating the development of sports centres in the regions, is popularising grassroots sport and, at the same Appendices Public recognition time, is opening up opportunities for young people to pursue a career in sport. The Mathematical Progression programme won the OBJECTIVE Charity photo story contest 400 6–17-year-old athletes for the Invest in Youth category. + training at the Storm MMA School 152 153 Sustainable Development Report 2020 Narwhal Professional recognition A research initiative by Gazprom Neft had previously been directed Gazprom Neft at studying the narwhal (included in the IUCN Red List of Threatened at a glance Species™ and the Red Data Book of the Russian Federation) and Gazprom Neft’s Home Towns and gas industry, nominated for taking bronze for “Corporate Social developing a programme to protect this endangered species. The 2020 programme was among the winners “Solving Social Problems in Areas of Responsibility – Achievement of pandemic, however, meant this project became more focussed on in a competition organised by the Operation”. the Year” and ranked in Category awareness raising and education. The outcomes of the project’s first Ministry of Energy of the Russian A (“Best Practice”) in the Corporate research expedition were categorised and systemised, while publication General partner: Federation for the most socially The programme has also been Philanthropy ratings of socially of the first professional photographs of the narwhal in the Russian responsible company in the oil recognised by the PR World Awards, responsible companies. Sustainable development Arctic (presented at the “The Arctic – Present and Future” forum at the management “Primordial Russia” festival) drew considerable media attention to the project. The second research expedition on this project is scheduled for summer 2021.

MINISTRY OF ENERGY OF RUSSIAN FEDERATION Research partner: Customer care 120 million people – the total audience coverage in the media and on social networks Health and safety

The “Spirit of Fire” Corporate volunteering

Supported by Gazprom Neft, the “Spirit of Fire” international Corporate volunteering has been an integral part of Gazprom Neft’s “With Our Own Hands” cinematography festival for first-time filmmakers has been held in The Spirit of Fire festival culture – and formed a significant part of its social investments – for About voluntary initiatives Khanty-Mansiysk for more than 15 years, becoming a fixture in the website more than 10 years. Almost 6,000 employees have taken part in more at Gazprom Neft Environmental safety region’s cultural landscape and attended by participants from all over than 2,000 voluntary initiatives since 2008, with such voluntary Russia, and abroad. 2020 saw film director Sergei Solovyov, President initiatives covering more than 36 cities, towns and population centres. of the festival and the original mastermind behind it, once again inviting a plethora of famous Russian film actors to the Khanty-Mansi While the COVID-19 pandemic has meant most voluntary initiatives Corporate volunteering Autonomous Okrug-Yugra’s capital city. The second international have had to be temporarily put on hold, the company has, nonetheless, in numbers “Дух огня (Spirit of Fire)” festival supported participants on the Russia-wide #WeTogether voluntary movement in fighting the pandemic, providing free fuel refills at 2,856 287 4,567 282 4,773 350 5,756 675 3,036 126 Employee Gazprom Neft filling stations for volunteers using their own vehicles to development deliver food and medicines to those in need. 70 films, from 17 countries, Several joint initiatives were organised in conjunction with the “Anton were presented at the festival Tut Ryadom (Anton’s Right Here)” centre in St Petersburg in 2020, including: • a new inclusivity project, “There’s a Museum Right Here”, which Social

involved volunteers and students from the centre offering online 2016 2017 2018 2019 2020 policy guided tours of St Petersburg’s museums; • a project at the Primorsky Victory Park, which involved students Number of volunteers involved in voluntary initiatives One of the most outstanding events on the festival programme is the Partners: from the centre decorating four technical buildings with graffiti and street art, covering 300 square metres, in total; annual children’s “Chitalkin” (young readers) literary . 2020 Number of initiatives saw young readers from two of the locations in which the company • a New Year charity auction, with all lots having been made by the centre’s clients and volunteers in online masterclasses and operates enjoying support from Khanty-Mansi Autonomous Appendices Okrug Governor Natalya Komarova, who kindly recorded a video workshops. All proceeds were donated to the centre to be used for featuring extracts from a book by Yugra novelist Ludmilla Koshil – training and counselling for parents with children on the autism demonstrating her own mastery of the art of reading aloud spectrum.

154 155 Sustainable Development Report 2020 The Gazprom Neft grant-award competition Social and economic agreements

Gazprom Neft This key tool in supporting initiatives by local residents and communities, with regional governments at a glance government-funded institutions and NGOs throughout Russia’s regions has Find out more about CSR initiatives and CSR grant facilitated the implementation of almost 620 projects over the past seven awards years. The core objective of the Gazprom Neft grant-award competition is The сompany is making a significant contribution to regional development as a social to give local leaders the tools they need to carry out their ideas to facilitate investor and as an initiator of and participant in various environmental initiatives. positive social change. By entering into social and economic agreements with constituent entities and Sustainable development A total 1,054 initiatives were submitted to the competition in 2020. Due to municipalities of the Russian Federation, Gazprom Neft is developing the infrastructure management the pandemic, winners will be decided in 2021. A series of seven training necessary to improving living standards throughout Russia’s regions. videos on designing and managing social projects was produced during the lockdown, and nine training seminars and 24 orientation meetings held at youth centres and universities. 17 social and economic cooperation agreements have been signed with constituent entities and municipalities throughout the Russian Federation. The positive changes engendered Customer by these social and economic care Agreements signed with regional governments include: agreements range from establishing 6 locations in which Gazprom Neft • a Cooperation Agreement signed with the Orenburg Oblast, 2020–2022; new cultural facilities and sports operates are involved in the grant- • a Cooperation Agreement signed with the Yamalo-Nenets Autonomous centres, to developing educational Okrug, 2021-2025. and awareness-raising programmes award competition to unlock the potential of everyone Agreements have been signed with the following municipal administrations: involved Health • in the Yamalo-Nenets Autonomous Okrug: the Krasnoselkupsky and and safety Yamalsky districts; International CSR projects • in the Khanty-Mansi Autonomous Okrug-Yugra: the Oktyabrsky, Nizhnevartovsky, Surgutsky, Khanty-Mansiysky, and Kondinsky districts; • in the Omsk Oblast: the Tarskiy district; • in the Orenburg Oblast: the city of Orenburg, and the Novosergievsky, Orenburgsky and Pervolotsky districts; The Kustendorf CLASSIC festival of Russian music is held every year by • in the Tomsk Oblast: the Kargasoksky and Parabelsky districts; 52 Russian regions Environmental safety internationally famous director Emir Kusturica, supported by Gazprom • in the Tyumen Oblast: the Uvatsky district. Neft. The organisers have taken the opportunity of the unavoidable where Gazprom Neft hiatus in 2020 to develop a new concert programme, which will be Gazprom Neft’s social investments under social and economic agreements is building roads presented to the public once quarantine restrictions are lifted. reached ₽1.59 billion in 2020.

Gazprom Neft is developing effective transport-infrastructure solutions facilitating the construction of high-quality, durable roads. Under agreements Employee with regional governments the company is supplying innovative bitumen development materials specifically developed for each individual region, in line with its local climate.

The world’s only non-profit international kids’ hockey tournament, the Ten new regions – from the Volga ( Oblast) to the River Lena (Sakha The company’s approach to Gazprom Neft Cup, is the сompany’s key project in supporting children’s Republic (Yakutia) – joined this programme in 2020. working with indigenous minorities and youth sport, with under-11 teams from KHL League clubs taking part is reflected in internal regulation, Social every year. 35 teams, from 12 countries worldwide, took part in 2020. Supporting the indigenous minorities of the Russian Far specifically the “Policy on Engaging policy The tournament will be back once COVID-19 restrictions are lifted. North with the Indigenous Peoples of the Russian Far North, Siberia and the Russian Far East”. An important element in the company’s social policy concerns engaging with the indigenous minorities of the Russian Far North1. When operating in indigenous peoples’ traditional lands Gazprom Neft – Appendices Clubs from Canada, Switzerland and Italy were among the first to submit their applications to attend the Gazprom Neft consistent with United Nations recommendations – makes sure that Policy on Engaging with the Cup International Kids’ Hockey Tournament these people have equal access to today’s opportunities, while, at the Indigenous Peoples of the Russian Far North, Siberia same time, encouraging and supporting the preservation of their ethnic and the Russian Far East culture. Production activities are undertaken with full respect for indigenous peoples’ traditional way of life, and in line with immediate environmental issues. 1 — Gazprom Neft PJSC subsidiaries Gazprom Neft-NNG, Gazprom Neft-Yamal LLC, Gazprom Neft-Khantos LLC, GPN-Razvitiye LLC, Gazprom Neft-Zapolyarye LLC, JSC Messoyakhaneftegaz ( JV), the Bazhenov Technology Centre LLC, Gazprom Neft-Palyan LLC operating in indigenous peoples’ traditional lands.

156 157 Sustainable Development Report 2020 IN ITS COMMITMENT TO RESPECTING THE RIGHTS OF THE Gazprom Neft’s social

INDIGENOUS PEOPLES OF THE RUSSIAN FAR NORTH, THE Gazprom Neft COMPANY: projects abroad at a glance • makes sure the company’s own fully informed as to the Company’s Fund for the Yamalo-Nenets The company operates special social policies in those countries in which it is a major staff (and its contractors’ and planned activities; Autonomous Okrug”, the “Yamal” subcontractors’) are fully up-to-date • partners with municipal organisation, and municipal foreign investor, helping to develop infrastructure, education, medicine, culture, arts and on regulation governing engagement administrations in those locations government departments responsible sports – all of which helps consolidate Gazprom Neft’s reputation as a responsible foreign Sustainable with the indigenous peoples of the inhabited by indigenous peoples; for engagement with indigenous development investor, and a leader in social investment, in the Republic of Serbia and oil-producing management Russian Far North (with materials • engages with community peoples); being updated and disseminated on organisations and associations • No cases alleging any violation of regions of Iraq. an annual basis); for the indigenous peoples of the rights of the indigenous peoples • holds regular meetings and public the Russian Far North (including of the Russian Far North have ever hearings to ensure the indigenous “Yamal for future generations!”, the been brought against the company. peoples of the Russian Far North are “Tazovsky District Development Customer Serbia care

FORMS OF COOPERATION AND SUPPORT FOR THE Work on local community development is at the heart of NIS’ CSR programme. Community development projects are grouped together INDIGENOUS PEOPLES OF THE RUSSIAN FAR NORTH IN under the company’s “Together for the Community” programme. Naftna Industrija Srbije (NIS), part of the Gazprom Neft Group, is Serbia’s largest contributor to Health 2020: The company invests in building parks and playgrounds for children, and safety in renovating kindergartens and schools, in providing equipment for government budgetary revenues, • extensive support has been provided and representatives of indigenous • the company has provided help in maternity hospitals, and in developing education, culture, sports and the and a stable and consistent social to indigenous peoples in the families pursuing their traditional response to ad-hoc requests – for arts. investor. The company topped Russian Far North in combatting the way of life within company license food, fuel and lubricants, building rankings of Serbia’s best employers COVID-19 pandemic. Medical care blocks; materials, and in making available In response to the COVID-19 pandemic Gazprom Neft, as NIS’ majority in 2020 has been provided at field health • assistance with overnight vehicles and machinery (i.e., in shareholder, donated 1,500 tonnes of fuel to public services in the facilities, and medical evacuation accommodation has been made providing assistance in overcoming Republic of Serbia – including the Ministry of Interior, the armed Environmental safety provided in emergencies. Food, fuel available where necessary difficult terrain and crossings during forces, the ambulance service, and the fire brigade. In addition to this, and building materials have been (consistent with epidemiological migration); immediately following the declaration of a state of emergency in the delivered promptly, as requested, restrictions); • the company has provided New Year Republic of Serbia, NIS provided state airline Air Serbia with 270 tonnes and off-road vehicles made available; • assistance has been made available presents for children of indigenous of aviation fuel, facilitating flights to deliver vital medical equipment and • economic agreements have been in transporting local people to their families. supplies throughout Serbia, as well as helping return Serbian citizens entered into on an ongoing basis accommodation and/or places of stranded outside the country to their homeland. 1,500 tonnes between Gazprom Neft subsidiaries residence; of fuel donated to Employee In cooperation with UNICEF, NIS has provided 56 oxygen flowmeters development (used in treating patients with COVID-19) to hospitals. 500 government agencies hazmat suits had been delivered to the Clinical Centre of Serbia in in the Republic of PROJECTS AND INITIATIVES FOR THE INDIGENOUS Batajnica as at end-December 2020. Funds were donated to the Torlak Institute of Virology, Vaccines and Sera and to the Cacak Polyclinic to Serbia PEOPLES OF THE RUSSIAN FAR NORTH UNDER THE HOME buy computer equipment necessary for diagnosing SARS-CoV-2. Social TOWNS PROGRAMME: policy • preventing the spread of COVID-19 – Cape Kamenny. Held online in 2020, first-year primary schoolchildren in procurement of medical equipment, this festival secured an audience the villages of Novy Port and Cape PPE and food for indigenous peoples; of around 250 children and adults Kamenny, who are given backpacks • the “Letter to Father Frost” New (including indigenous children), with and stationery; Year event for pupils at the Tazovsky more than 180 works submitted; • the “Historic Heritage” clean-up residential school, with more than • the “New Year Fairy Tale” project: and reclamation project: three days Appendices 70 board games being purchased for more than 1,000 gifts of sweets of environmental reclamation and donation; and useful presents given to local cleaning-up of the tundra, covering NIS – Serbia’s best employer • the “Breath of the Arctic” creativity schoolchildren and those attending a 15-hectare area in the and arts festival, directed at kindergartens, as well as indigenous around the villages of Novy Port and The TalentX survey by Serbian jobsite Poslovi.infostud.com shows NIS topping the list of Serbia’s best employers. developing the creative potential children at residential schools; Cape Kamenny. of local residents in the remote • the “We’re Going to School!” project Yamal villages of Novy Port and – a traditional annual event for

158 159 Sustainable Development Report 2020

The 1,647 members of the NIS Volunteers’ Club also came together to support health and community agencies in 2020, with club members spending more than 2,000 hours on voluntary activities – mainly directed at supporting the most vulnerable members of the population. Gazprom Neft hours – total CSR projects in the Kurdistan at a glance Despite most work being directed at supporting the fight against the 2,000+ pandemic, NIS has also continued its social activities in other areas, commitments by 1,650 NIS including holding its “Together for the Community - 2020” competition, Region of Iraq (KRI) through which 72 projects have been selected for support in conjunction volunteers giving up their with 12 partnering local authorities. personal time to help the most Sustainable development The company has continued its support of the KK Partizan NIS vulnerable Gazprom Neft’s engagement in the KRI throughout 2020 resulted in: management basketball club, the International Belgrade Dance Festival, and the International Science Festival, Belgrade. The company has continued • construction of additional classrooms in the villages of Kareza and Hasira; its “Energy of Knowledge” programme, collaborating with leading • mobile clinics being used for medical examinations in population centres around and within the Garmian license educational and scientific institutions in Serbia and abroad, and block engaging with talented students in natural and social sciences. • the “Green Teams” environmental initiative, focussed on environmental protection and clearance of plastic and Memorandums of Cooperation have been signed with the University of household waste from fields, local public spaces and roads; Customer Belgrade’s School of Electrical Engineering and the Faculty of Technical • the completion of the Gazprom Neft Middle East Scholarship Programme; care Sciences at the University of . • a culvert (drain) being built in the village of Kareza; • medical equipment (including ultrasound machines, dentistry chairs, air-puff tonometers, medicines, retinoscopes, lenses, etc.) being supplied to hospitals in Kifri and Kalar.

Health Iraq and safety

Gazprom Neft’s social and environmental projects in Iraq are undertaken in close cooperation with local government. Village leadership (anjumans), local mayors, province governors, and representatives from Gazprom Neft is involved in The Gazprom Neft Middle East specific ministries are all consulted on the development of priority projects to develop the region’s Environmental safety projects. education, medical and electricity systems Scholarship Programme The main means of engaging with local government agencies on social, economic and environmental issues is through public–private partnerships, with local government representatives assuming responsibility for coordinating the company’s social investments and The Gazprom Neft Middle East Scholarship Programme was successfully acting as guarantor for the effective and targeted use of these funds. completed in 2020. Initiated in 2013, a total 19 Kurdish students and Employee The company receives integrated strategies from central and local graduates have taken part in the programme. development government on developing cohesive and transparent policy to support 19 school pupils philanthropy and social investments. Following a rigorous selection process, all 19 programme participants successfully completed their studies at some of Russia’s best and graduates from One of the key priorities in social policy in this region is training local universities (three completing postgraduate studies at the Gubkin Kurdish educational professionals for the oil and gas industry. Employment for local people Russian State University of Oil and Gas and 16 graduating from St is always front of mind for the company, which undertakes regular Petersburg University) before returning to the KRI. The majority establishments have Social dedicated recruitment campaigns targeted at Iraqi nationals, and offers of these professionals are now employed at Gazprom Neft Middle East. taken part in the policy professional training for Iraqi employees. programme As at end-2020 the company had received a list of nine CSR projects from the Municipality of Badra, due for implementation throughout 2021. In addition to this, the company provides groceries and provisions to residents of Badra, Jassan and Zurbatiyah once a year by way of Appendices supporting local people in economic difficulty.

160 161 Sustainable Development Report 2020 Sustainable development Health and safety performance1 Occupational safety Gazprom Neft highlights at a glance 2016 2017 2018 2019 2020

APPENDIX 1 APPENDIX FAR2 (Gazprom Neft Group employees) 3.09 3.08 0.74 1.46 0

Economic efficiency 3 Sustainable LTIF (Gazprom Neft Group employees) 0,564 0,601 0,640 0,504 0,539 development management Number of people injured in accidents 69 74 85 68 75 Direct economic value generated and distributed (₽ million) (Gazprom Neft Group employees)

2016 2017 2018 2019 2020 Fatalities (Gazprom Neft Group employees) 4 4 1 2 0

Number of people injured in accidents Customer Direct economic value generated, including: 1,590,796 1,990,191 2,587,503 2,635,619 2,104,722 68 64 92 83 80 care (contractor employees)

revenue 1,545,608 1,934,589 2,489,292 2,485,308 1,999,620 Fatalities (contractor employees) 6 6 5 9 3

Economic value distributed, including: 1,381,069 1,720,514 2,186,561 2,213,531 1,984,089

operating costs, including: 926,160 1,063,140 1,284,850 1,375,946 1,236,448 Industrial safety Health and safety

employee wages and benefits 77,467 86,510 97,557 110,605 110,123 2016 2017 2018 2019 2020

payments to government 430,945 624,449 826,828 748,540 640,832 Incidents 2,385 2,183 1,068 920 600

payments to capital providers 34,282 25,127 21,476 32,772 28,746 Accidents 2 0 1 0 0 Environmental safety Economic value retained 209,726 269,677 400,942 422,088 120,633

Environmental safety Employee development Greenhouse gas (GHG) emissions (million tonnes СО₂ equivalent)

2016 2017 2018 2019 2020

TOTAL GHG EMISSIONS 23.8 22.8 24.5 28.9 26.1 Social direct GHG emissions (Scope 1) 15.4 16.2 20.0 22.0 21.7 policy

СО2 14.5 14.9 18.8 20.9 20.7

CH4 0.9 0.8 0.9 0.6 0.7

indirect GHG emissions (Scope 2) 8.4 6.6 4.5 6.9 4.4 Appendix

Scope 3 – – – – 198.5

1 — Gazprom Neft’s assets in the Russian Federation, joint ventures under the operational management of Gazprom Neft, including Gazprom Neft’s foreign assets in Serbia, Iraq, Italy, Eastern Europe and Central Asia, are included in the accounting of injury and environmental indicators. 2 — Fatal accident rate – calculated as follows: total number of fatalities ÷ total hours worked by all employees × 100 million man-hours. 3 — Lost time injury frequency – calculated as follows: total number of lost time injuries (including fatalities) in the workplace ÷ total hours worked × one million man-hours. 162 163 Sustainable Development Report 2020

GHG emissions breakdown by business Water consumption (million cubic metres)

2018 2019 2020 2016 2017 2018 2019 2020 Gazprom Neft at a glance DIRECT GHG EMISSIONS (Scope 1, million tonnes CO2 equivalent) 20.0 22.0 21.7 Total water withdrawal 446.1 416.2 372.2 371.2 256.9

Including: from surface water sources 36.2 40.1 35.0 31.4 32.6

Upstream 14.09 16.26 15.25 Total water consumption for Company needs 428.9 370.0 316.4 314.2 226.3

Refinery 5.28 5.38 6.17 Total water discharge 43.5 47.5 56.3 57.8 33.5 Sustainable development management 1 INDIRECT GHG EMISSIONS (Scope 2, million tonnes CO2 equivalent) 4.5 6.9 4.4 to surface water 1.7 0.1 0.1 0.1 1.8

Upstream 2.49 5.02 2.57

Refinery 1.58 1.64 1.47 Waste generation and treatment

Customer TOTAL GHG EMISSIONS 1 (Scope 1 + Scope 2, million tonnes CO equivalent) 2 2016 2017 2018 2019 2020 care

Upstream GHG intensity (million tonnes СО₂ equivalent per tonne of oil equivalent 0,219 0,270 0,233 production) Waste generation (thousand tonnes) 1,376 1,476 1,565 1,790 1,849

Downstream GHG intensity (million tonnes СО₂ equivalent per tonne of processed Waste treatment and recycling (thousand tonnes) 1,310 1,298 1,517 1,720 1,844 0,196 0,207 0,231 crude) Waste treatment and recycling (%) 95 88 97 96 99.7 Health and safety

APG production and utilisation2 (million cubic metres) Energy consumption 2016 2017 2018 2019 2020

2016 2017 2018 2019 2020 APG production 9,561 11,434 14,398 16,641 18,087 Environmental safety APG utilisation 7,628 8,708 11,284 14,811 16,473 Energy consumption (million GJ) 199.3 215.2 226.5 229.2 230.9

APG flaring 1,933 2,726 3,112 1,830 1,615

APG utilisation rate (%) 79.8 76.2 78.4 89.0 91.1 Employment data Employee development Headcount (people) Air emissions (thousand tonnes) 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

HEADCOUNT 66,561 67,882 70,648 78,847 82,960 GROSS EMISSIONS 600.8 474.3 508.3 529.4 452.6 Social policy Including:

Including: men 40,835 40,254 42,917 49,734 54,210

NO 19.2 22.1 25.6 26.7 28.6 X women 25,726 27,628 27,731 29,113 28,750

SO 128.4 69.0 74.8 38.9 18.4 Including: 2 Appendix

under 30 years old 15,583 14,647 14,422 15,152 15,437 VOCs 128.3 120.3 96.7 102.1 90.7 30–50 years old 40,464 42,736 45,361 51,740 54,893

over 50 years old 10,514 10,499 10,865 11,955 12,630 1 — From 2020, indirect GHG emissions (scope 2) are recalculated using refined regional coefficients. The recalculation of comparable data was made for the period of 2018 and 2019. The change in the coefficient did not have a significant impact on earlier periods. 2 — In the Russian Federation, excluding joint ventures 164 165 Sustainable Development Report 2020

Employee turnover (%)

2016 2017 2018 2019 2020 Identification of the Report’s Gazprom Neft at a glance Turnover rate 15.2 15.1 12.9 11.1 8.0 material topics APPENDIX 2 APPENDIX Employee costs (₽ million) In presenting information about sustainability activities in the Report, Gazprom Neft seeks to cover the issues most Sustainable development relevant to stakeholders. management 2016 2017 2018 2019 2020

TOTAL 82,576 89,777 101,461 121,519 140,045

Including: Non-financial Reporting Principles: • stakeholder engagement Customer payroll 79,316 86,600 97,865 117,776 135,905 • sustainability context care • materiality social payments 3,260 3,177 3,596 3,743 4,140 • completeness • accuracy • balance • clarity • comparability Health Employee training (hours) • reliability and safety • timeliness

2016 2017 2018 2019 2020 The Report’s disclosures cover business obligations, including those set out in Russian and international documents (the UN Global Compact and the Social Charter of the Russian Business). Since 2017, the Company has included information on its Average training hours per employee 36 46 33 45 37 contribution to the achievement of the UN Sustainable Development Goals in the Report.

In order to determine the most material topics and respective indicators to be disclosed, the Company analyses: Environmental safety • the results of monitoring the scope and scale of its impact on the economy, society and the environment; • stakeholder engagement themes and requests for information; • research on Russian and international industry management practices in respect of sustainable development and Social policy data sustainability reporting.

In the process of its interaction with stakeholders and identification of the Report’s material topics, the Company analysed the following: Employee Social investment (₽ billion) • GRI guidelines; development • the results of internal and external stakeholder surveys for the purpose of defining the key topics of the Report; 2016 2017 2018 2019 2020 • interviews with the Company’s management and employees; • materials relating to Gazprom Neft’s regular interaction with key groups of stakeholders; Amount of social investment 4.1 4.3 6.8 7.5 6.4 • mass media coverage on the Company.

Based on the identification process, the Company mapped out the most material topics. Social policy

Corporate volunteering

2016 2017 2018 2019 2020

Number of volunteers 2,856 4,567 4,773 5,756 3,036 Appendix

Volunteering initiatives 287 282 350 675 126

166 167 Sustainable Development Report 2020

Prioritisation matrix for the Report’s material topics 3 Anti-corruption 3.0 4 Antitrust compliance Gazprom Neft at a glance 5 Human rights

CONSUMER CARE

6 Product safety and quality Sustainable development 2.5 HEALTH AND SAFETY management 1 7 Occupational health and safety

6 ENVIRONMENTAL SAFETY

8

57 13 8 Energy economy and efficiency 7 Customer care 10 9 Water use 11 9 2.0 12 3 10 Land and vegetation protection 4 16 14 2 11 Emissions

15 18 Health and safety 20 12 Waste generation and management

17 13 Compliance with environmental laws and regulations 1.5 19 EMPLOYEE DEVELOPMENT

14 Employee relations Environmental safety 15 Employee-employer relations, freedom of association

16 Employee training and development

Impact on stakeholders’ opinions and decisions 1.0 17 Non-discrimination 1.0 1.5 2.0 2.5 3.0 Employee SOCIAL POLICY development The impact of Gazprom Neft on sustainable development factors

18 Indirect economic impact

19 Respect for the rights of indigenous people

List of topics that were identified to be most significant 20 Development programmes for local communities Social for the Company and its key stakeholders: policy

ECONOMIC PERFORMANCE

1 Financial stability and operational efficiency

ETHICS Appendix

2 Supplier relations

168 169 Sustainable Development Report 2020

GRI IPIECA GRI content index Indicator Indicator description UN SDG Indicator Page Commentary Gazprom Neft Information on employees SDG 8 p. 127-128 at a glance 102–8 No records of part-time employees are kept and other workers SDG 10 p. 165-166 This Report is mostly focused on the Material topics, relevant for the Company and its stakeholders. GRI Standards (Core option) and the Key Performance Indicators (KPIs) of the Russian Union of Industrialists and Entrepreneurs 102–9 Supply chain p. 42-44

APPENDIX 3 APPENDIX (RSPP) were used as the basis for this Report. Significant changes to the Sustainable 102–10 organisation and its supply p. 42-44 development chain management

Precautionary principle or GRI IPIECA 102–11 p. 31-33 Indicator Indicator description UN SDG Indicator Page Commentary approach

GENERAL STANDARD REPORT CONTENTS 102–12 External initiatives p. 26-30 Customer care p. 3-5 102–13 Membership of associations p. 12-13 GRI 101: Foundation (2016) p. 167-169 Strategy GRI 102: General disclosures (2016) Statement from senior 102–14 p. 6-7 Organisational profile decision-maker Health and safety 102–1 Name of the organisation p. 3 Key impacts, risks, and GOV-1 102-15 P. 31-33 opportunities GOV-2 p. 8-17 AR 2020 Ethics and integrity Activities, brands, products, 102–2 p. 6-11 and services AR 2020 Values, principles, GOV-1 Environmental p.62-114 102–16 standards, and norms of SDG 16 p. 34-35 GOV-2 safety behaviour 102–3 Location of headquarters p. 192 Mechanisms for advice and 102–17 SDG 16 p. 34-37 p. 157 concerns about ethics 102–4 Location of operation AR 2020 p.27-30 Governance Employee development Ownership and type of GOV-1 102–5 p. 27-30 102–18 Governance structure p. 27-30 incorporation GOV-2

p. 8-10 Stakeholder engagement 102–6 Markets served AR 2020 p.6-11 102–40 List of stakeholder groups p. 45-53 Social policy Capitalisation (total liabilities and equity)= Collective bargaining p. 8-10 ₽4,259,174 million, current liabilities = 102–41 p. 127-128 102–7 Scale of the organisation p. 127-138 ₽786,223 million, non-current liabilities = agreements p. 162 ₽1,210,504 million, and equity = ₽2,262,447 million. Identifying and selecting 102–42 p. 45-53 stakeholders Appendix

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Gazprom Neft Approach to stakeholder MATERIAL TOPICS at a glance 102–43 p. 45-53 engagement ECONOMIC

Key topics and concerns MATERIAL TOPIC: FINANCIAL STABILITY AND OPERATIONAL EFFICIENCY 102–44 p. 45-53 raised GRI 201 Economic Performance (2016) Sustainable Reporting practice development p. 14 management Entities included in the 103 Management approach p. 18-23 AR 2020 102–45 consolidated financial AR 2020 p. 373-375 statements Direct economic value SDG 8 201–1 P. 162 Defining report contents p. 4-5 generated and distributed SDG 9 102–46 and topic boundaries p. 167-169 Customer The Company and its subsidiaries take care Financial assistance 201–4 p. 173 advantage of tax benefits as allowed by the 102–47 List of material topics p. 167-169 received from government applicable tax law

The Report does not contain any Restatements of MATERIAL TOPIC: INDIRECT ECONOMIC IMPACT 102–48 p. 172 restatements of information provided in information previous reports GRI 203 Indirect Economic Impacts (2016) Health The changes concern Report boundaries and and safety p. 18-23 102–49 Changes in reporting p. 172 calculation methods. The relevant comments p. 27-30 are provided in the notes to the Report 103 Management approach p. 125-143 p. 146-161 102–50 Reporting period p. 172 2020 SDG 5 Infrastructure investments 102–51 Date of most recent report p. 172 June 2019 203–1 SDG 9 p. 146-161 Environmental and services supported SDG 11 safety 102–52 Reporting cycle p. 172 Calendar year SDG 1 p. 8-10 Significant indirect Contact point for questions 203–2 SDG 3 p. 125-143 102–53 P. 192 economic impacts regarding the Report SDG 8 p. 146-161

MATERIAL TOPIC: SUPPLIER RELATIONS Claims of reporting in Employee The Report was prepared in accordance with development 102–54 accordance with the GRI p. 172 the GRI Standards Core option GRI 204 Procurement Practices (2016) Standards

SOC-2 102–55 GRI indicator table p. 170-181 103 Management approach p. 42-44 SOC-14

102–56 External assurance p. 5 Regions of exploration and production Proportion of spending with p. 42-44 Social 204–1 SDG 8 SOC-14 are significant sources of suppliers to the policy local suppliers p. 173 Company’s operations

Appendix

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Gazprom Neft MATERIAL TOPIC: ANTI-CORRUPTION ENVIRONMENTAL at a glance

GRI 205 Anti-corruption (2016) MATERIAL TOPIC: ENERGY ECONOMY AND EFFICIENCY

GRI 302 Energy (2016) 103 Management approach GOV-3 p. 35

p. 26-30 The Company has a corporate risk 103 Management approach CCE-6 Sustainable p. 106-108 development Operations assessed for p.35 management framework in place that 205–1 SDG 16 GOV-3 management risks related to corruption p.174 covers all its business units and operations. The Company routinely assesses all risks. Disclosed except for: Energy consumed on heating or cooling and steam energy consumed; Communication and Amount of electric energy and fuel sold, training about anti- 205–2 SDG 16 GOV-3 p. 35 heating and cooling energy sold and steam corruption policies and energy sold. Customer procedures Total energy consumption disclosed for the care Upstream and Downstream Divisions. Fuel Confirmed incidents of consumption disclosed for the Upstream 205–3 corruption and actions SDG 16 GOV-3 p. 35 Division. taken SDG 7 Energy consumption within the organisation Energy consumption within SDG 8 is disclosed except for renewable energy 302–1 CCE-6 p. 106 MATERIAL TOPIC: ANTITRUST COMPLIANCE the organisation SDG 12 consumed. SDG 13 Calculations of gas consumed in the Health GRI 206 Anti-competitive Behaviour (2016) Upstream Division exclude gas consumed and safety for heat and electricity production and the Company’s non-fuel needs. Calculations of 103 Management approach p. 34-35 gas consumed in the Upstream Division exclude gas used for boilers, gas injections, The Company does not prevent competition. flares etc. Gazprom Neft has approved an Anti- “Methodological guidelines for calculating Legal actions for anti- Policy and has been working the energy mix of the Russian Federation in Environmental competitive behaviour, consistently to prevent and minimise anti- accordance with international practice” were safety 206–1 SDG 16 p. 174 anti-trust, and monopoly trust and monopoly risks. used to convert units of measurement. practices In 2020, Russia’s Federal Anti-Monopoly Service did not initiate any anti-monopoly SDG 7 Disclosed except for indicating the extent proceedings against Gazprom Neft. Reduction of energy SDG 8 302–4 CCE-6 p. 107 of reductions in heating, cooling, and steam consumption SDG 12 consumption. SDG 13 Employee development MATERIAL TOPIC: WATER USE

GRI 303 Water and effluents (2018)

p. 26-30 103 Management approach p. 113-114 Social policy SDG 6 Management of shared 303–1 SDG 12 p. 113-114 water resources SDG 14

Appendix

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Gazprom Neft Management of water SDG 6 MATERIAL TOPIC: EMISSIONS at a glance 303–2 p. 113-114 discharge-related impacts SDG 14 GRI 305 Emissions (2016) SDG 6 Disclosed except for breakdown by sources 303–3 Water withdrawal p. 114 CCE-1 p. 26-30 SDG 14 of water withdrawal 103 Management approach CCE-2 p. 98-111 Sustainable SDG 3 Disclosed except for indicating the quality development SDG 6 Disclosed except for a breakdown by gases 303–4 Water discharge p. 114 of discharge water (except for discharge to management SDG 12 SDG 3 included in direct GHG emissions (N20, HFCS, surface waters) SDG 12 PFCS, SF6 AND NF3). SDG 14 Direct (Scope 1) GHG CCE-4 305–1 SDG 13 p. 103-104 Disclosed except for a breakdown by emissions CCE-5 SDG 14 CO2 emissions from the combustion or SDG 6 303–5 Water consumption p. 114 SDG 15 biodegradation of biomass separately from SDG 14 the gross direct GHG emissions. Customer MATERIAL TOPIC: LAND AND VEGETATION PROTECTION care SDG 3 SDG 12 GRI 304 Biodiversity (2016) Energy indirect (Scope 2) 305–2 SDG 13 CCE-4 p. 103-104 GHG emissions SDG 14 p. 26-30 103 Management approach ENV-3 SDG 15 p. 112-113

SDG 3 Health Operational sites owned, The Company has no production assets SDG 12 and safety leased, managed in, or within the boundaries of specially protected Other indirect (Scope 3) SDG 6 305-3 SDG 13 CCE-4 p. 104 adjacent to, protected natural areas of federal or regional GHG emissions 304–1 SDG 14 ENV-4 p. 176 SDG 14 areas and areas of high significance. No rare or endangered species SDG 15 SDG 15 biodiversity value outside of animals, plants or mushrooms were protected areas identified. SDG 13 However, when planning its economic CCE-3 Disclosed in regard to total emissions 305–5 Reduction of GHG emissions SDG 14 p. 103 activities, the Company thoroughly assesses CCE-7 reduction. SDG 15 Environmental Significant impacts of SDG 6 potential environmental risks and seeks to safety 304–2 activities, products, and SDG 14 ENV-4 p. 176 avoid serious or irreversible environmental violations. Emissions of ozone- SDG 3 The Company does not emit any ozone- services on biodiversity SDG 15 305–6 p. 177 depleting substances SDG 12 depleting substances on an industrial scale.

SDG 6 Nitrogen oxides (NOX), SDG 3 Disclosed except for the emission of Habitats protected and 304–3 SDG 14 p. 112-113 oxides (SOX), and SDG 12 persistent organic pollutants, hazardous restored 305–7 ENV-5 p. 109 SDG 15 other significant air SDG 14 air pollutants, aerosols and other standard Employee emissions SDG 15 categories of air emissions. development International Union for the Conservation of Nature MATERIAL TOPIC: WASTE GENERATION AND MANAGEMENT No rare or endangered species of animals, (IUCN) Red List species SDG 6 plants or mushrooms were identified in 304–4 and national conservation SDG 14 p. 176 GRI 306 Waste (2020) the areas where the Company’s production list species with habitats SDG 15 assets are located. in areas affected by p. 26-30 103 Management approach ENV-6 Social operations p. 115-117 policy

Waste generation and 306–1 significant waste related p. 115-117 impacts

Appendix

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Gazprom Neft Management of significant MATERIAL TOPIC: EMPLOYEE-EMPLOYER RELATIONS, FREEDOM OF ASSOCIATION at a glance 306–2 p. 115-117 waste-related impacts GRI 402 Labour/Management Relations (2016) SDG 3 Disclosed except for breakdown by type of 306-3 Waste generated SDG 6 p. 115 p. 26-30 waste. SDG 12 103 Management approach SOC-6 p. 34-35 p. 120-143 Sustainable development MATERIAL TOPIC: COMPLIANCE WITH ENVIRONMENTAL LAWS AND REGULATIONS management The Company complies with the Russian GRI 307 Environmental compliance (2016) Labour Code which requires a minimum notice period prior to the implementation p. 26-30 Minimum notice periods of significant operational changes (not 103 Management approach p. 32 402–1 regarding operational SDG 8 p. 179 later than two months before the start of p. 96-97 changes relevant changes in general case and not later than three months before the start of Customer relevant changes if the decision to reduce care In all cases of non-compliance with the headcount may lead to major layoffs) Non-compliance with environmental laws and regulations that 307–1 environmental laws and SDG 16 p. 178 occurred during the reporting period, MATERIAL TOPIC: OCCUPATIONAL AND PRODUCTION HEALTH AND SAFETY regulations remedial measures were taken within the time limits set by the supervisory bodies. GRI 403 Occupational Health and Safety (2018)

SOCIAL Health SHS-1 p. 26-30 103 Management approach and safety MATERIAL TOPIC: LABOUR RELATIONS AND EMPLOYMENT SHS-4 p. 76-88

GRI 401 Employment (2016) Occupational health and SHS-1 p. 29 403–1 SDG 8 safety management system SHS-4 p. 80-82 p. 26-30 SOC-4 103 Management approach p. 32 Hazard identification, risk SOC-15 SHS-1 p. 32 Environmental p.120-143 403–2 assessment, and incident SDG 8 SHS-7 p. 81 safety investigation New employee hires disclosed except for SDG 5 a breakdown by gender and age group, p. 29 New employee hire and Occupational health 401–1 SDG 8 p. 127-128 employee turnover disclosed except for 403–3 SDG 8 SHS-1 p. 80-82 employee turnover services SDG 10 a breakdown by age group, gender and p. 85-86 region. Employee participation, Employee development Benefits provided to full- SDG 3 Basic social benefits are provided to consultation and time employees that are not SDG 8 p. 85 401–2 SDG 5 p. 178 employees regardless of the employment 403–4 communication on SHS-1 provided to temporary or SDG 16 p. 138-139 SDG 8 type occupational health and part-time employees safety

Employee training on p. 85 403–5 occupational health and SDG 8 SHS-1 p. 138-139 Social safety policy

Promotion of employee 403–6 SDG 3 SHS-2 p. 88 health

Appendix

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Gazprom Neft Prevention and mitigation MATERIAL TOPIC: EMPLOYEE-EMPLOYER RELATIONS, FREEDOM OF ASSOCIATION at a glance 403–7 of occupational health and SDG 8 SHS-1 p. 83-88 safety impacts GRI 407 Freedom of Association and Collective Bargaining (2016)

p. 36 SDG 3 103 Management approach SOC-6 403–9 Work-related injuries SDG 8 SHS-3 p. 83 p. 128 SDG 16 Sustainable development Operations and suppliers management MATERIAL TOPIC: EMPLOYEE TRAINING AND DEVELOPMENT in which the right to No such operations or suppliers were 407–1 freedom of association and SDG 8 SOC-3 p. 181 identified during the reporting period. GRI 404 Training and Education (2016) collective bargaining may be at risk p. 26-30 103 Management approach SOC-7 p. 125-126 MATERIAL TOPIC: HUMAN RIGHTS p. 132-143 Customer GRI 410 Security Practices (2016) care SDG 4 Average hours of training SDG 5 Disclosed except for a breakdown by gender p. 26-30 404–1 SOC-7 p. 132 103 Management approach per year per employee SDG 8 and employee categories. p. 36-37 SDG 10 Human rights are part of the mandatory Programmes for upgrading Disclosed except for a description of Security personnel trained training programmes that cover 100% Health and safety employee skills and p. 125-126 assistance programmes to support 410–1 in human rights policies or SDG 16 SOC-3 p. 181 employees in the security function 404–2 SDG 8 SOC-7 transition assistance p. 132-143 employees after retirement or termination procedures (including contractors providing services for programmes of employment. the company).

MATERIAL TOPIC: RESPECT FOR THE RIGHTS OF INDIGENOUS PEOPLES Percentage of employees SDG 5 Disclosed except for a breakdown by gender. receiving regular 404–3 SDG 8 SOC-7 p. 142-143 Percentage of employees having received performance and career GRI 411 Rights of Indigenous Peoples (2016) SDG 10 regular performance reviews totals %. Environmental development reviews safety p. 26-30 103 Management approach SOC-10 MATERIAL TOPIC: FAIR REMUNERATION AND SOCIAL BENEFITS p. 157-158

GRI 405 Diversity and Equal Opportunity (2016) Incidents of violations No incidents of violations involving rights of 411–1 involving rights of SDG 2 SOC-10 p. 181 indigenous peoples were identified during p. 26-27 indigenous peoples the reporting period. 103 Management approach SOC-5 p. 36-37 Employee development

p. 28 Diversity of governance SDG 5 Women account for 8% of the members of 405–1 SOC-5 p. 127 bodies and employees SDG 8 the Board of Directors. p. 180

Ratio of basic salary and SDG 5 405–2 remuneration of women SDG 8 SOC-5 p. 130 Social policy to men SDG 10

Appendix

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Gazprom Neft MATERIAL TOPICS: LOCAL COMMUNITIES DEVELOPMENT PROGRAMMES at a glance

GRI 413 Local Communities (2016)

SOC-9 p. 26-30 4 APPENDIX 103 Management approach SOC-13 p. 146-161 Sustainable Independent Limited Assurance Report development Operations with local Local community engagement programmes management community engagement, 413–1 SOC-9 p. 182 are implemented by all key operations of impact assessments, and the Company. To the Management of Public Joint Stock Company Gazprom Neft: development programmes

Operations with significant Disclosed except location of operations with Introduction actual and potential SDG 1 413–2 SOC-9 p. 33 significant current or potential negative We have been engaged by the Management of Public Joint Stock Company Gazprom Neft negative impacts on local SDG 2 Customer effect on local communities. (hereinafter – the “Company”) to provide limited assurance on the selected information described care communities below and included in the Sustainability Report of the Company for the year ended 31 December 2020 (hereinafter – the “Sustainability Report”). The Sustainability Report represents information related to MATERIAL TOPIC: PRODUCT SAFETY AND QUALITY the Company and its subsidiaries and controlled entities (hereinafter together – the “Group”).

GRI 416 Customer Health and Safety (2016) Selected information We assessed the qualitative and quantitative information, that is disclosed in the Sustainability Report p. 26-30 and referred to or included in the GRI Content Index (hereinafter – the “Selected Information”). The Health 103 Management approach SHS-5 p. 58-73 Selected Information has been prepared in accordance with GRI Sustainability Reporting Standards and safety (Core option) (hereinafter – the “GRI Standards”), published by the Global Reporting Initiative (GRI). Incidents of non-compliance In 2020, no cases of non-compliance with The scope of our limited assurance procedures was limited to the Selected Information for the year concerning the health and the international and Russian quality ended 31 December 2020. We have not performed any procedures with respect to earlier periods or 416–2 SDG 16 SHS-5 p. 182 safety impacts of products assurance and authenticity laws were any other items included in the Sustainability Report and, therefore, do not express any conclusion and services identified. thereon. Reporting criteria Environmental safety We assessed the Selected Information using relevant criteria, including reporting principles and requirements, in the GRI Standards (hereinafter – the “Reporting Criteria”). We believe that the Reporting Criteria are appropriate given the purpose of our limited assurance engagement. Responsibilities of the management of the Group Management of the Group is responsible for:  designing, implementing and maintaining internal control relevant to the preparation of the Employee Selected Information that is free from material misstatement, whether due to fraud or error; development  establishing internal methodology and guidelines for preparing and reporting the Selected Information in accordance with the Reporting Criteria;  preparing, measuring and reporting of the Selected Information in accordance with the Reporting Criteria; and

 the accuracy, completeness and presentation of the Selected Information. Social policy Our responsibilities We are responsible for:  planning and performing the engagement to obtain limited assurance about whether the Selected Information is free from material misstatement, whether due to fraud or error;  forming an independent conclusion, based on the procedures we have performed and the evidence we have obtained; and Appendix  reporting our conclusion to the management of the Group.

AO PricewaterhouseCoopers Audit White Square Office Center 10 Butyrsky Val Moscow, Russian Federation, 125047 T: +7 (495) 967 6000, F:+7 (495) 967 6001, www.pwc.ru

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Gazprom Neft at a glance

 reviewed the Selected Information for compliance of the disclosures with the relevant requirements Sustainable This report, including our conclusion, has been prepared solely for the management of the Group in development accordance with the agreement between us, to assist management in reporting on the Group’s of the Reporting Criteria. management sustainability performance and activities. We permit this report to be disclosed in the Sustainability Reporting and measurement methodologies Report, which will be published on the Company’s websitei, to assist management in responding to their governance responsibilities by obtaining an independent limited assurance report in connection Under the GRI Standards there is a range of different, but acceptable, measurement and reporting with the Selected Information. To the fullest extent permitted by law, we do not accept or assume techniques. The techniques can result in materially different reporting outcomes that may affect responsibility to anyone other than the management of the Group for our work or this report except comparability with other organisations. The Selected Information should therefore be read in where the respective terms are expressly agreed in writing and our prior consent in writing is obtained. conjunction with the methodology used by management as described in the Sustainability Report and for which the Group is solely responsible. Customer Professional standards applied and level of assurance care Our conclusion We performed the limited assurance engagement in accordance with International Standard on Assurance Engagements 3000 (Revised) “Assurance Engagements other than Audits or Reviews of Based on the procedures we have performed and the evidence we have obtained, nothing has come Historical Financial Information” issued by the International Auditing and Assurance Standards Board. to our attention that causes us to believe, that the Selected Information for the year ended A limited assurance engagement is substantially less in scope than a reasonable assurance 31 December 2020 has not been prepared, in all material respects, in accordance with the Reporting engagement in relation to both the risk assessment procedures, including an understanding of internal Criteria. control, and the procedures performed in response to the assessed risks. The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a Health reasonable assurance engagement. Consequently, the level of assurance obtained in a limited and safety assurance engagement is substantially lower than the assurance that would have been obtained had 26 June 2020 a reasonable assurance engagement been performed. 11 June 2021, Our independence and quality control Moscow, Russian Federation We have complied with the independence and other ethical requirements of the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code), which is founded on fundamental Environmental principles of integrity, objectivity, professional competence and due care, confidentiality and safety professional behaviour, and the ethical requirements of the Auditor’s Professional Ethics Code and Auditor’s Independence Rules that are relevant to our limited assurance engagement in respect of the A.Y. Fegetsyn, certified auditor (licence No. 03-001436), AO PricewaterhouseCoopers Audit Selected Information in the Russian Federation. We have fulfilled our other ethical responsibilities in accordance with these requirements. Our firm applies International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding Employee compliance with ethical requirements, professional standards and applicable legal and regulatory Audited entity: Public Joint Stock Company Gazprom Neft Independent auditor: development requirements. AO PricewaterhouseCoopers Audit Record made in the Unified State Register of Legal Entities on 21 August 2002 under State Registration Number 1025501701686 Registered by the Government Agency Moscow Registration Chamber on Work done 28 February 1992 under Nо. 008.890 Taxpayer Identification Number 5504036333 We are required to plan and perform our work in order to consider the risk of material misstatement of Record made in the Unified State Register of Legal Entities on 22 August 2002 the Selected Information. In doing so, we: Russian Federation, 190000, St. Petersburg, Pochtamtskaya str., under State Registration Number 1027700148431 3-5, liter A, ch. pom. 1N, kab. 2401. Taxpayer Identification Number 7705051102  made enquiries of the Group’s management, including the Sustainability Reporting (SR) team and those with responsibility for SR management and group reporting; Member of Self-regulatory organization of auditors Association “Sodruzhestvo” Social Principal Registration Number of the Record in the Register of Auditors and policy  conducted interviews of personnel responsible for the preparation of the Sustainability Report and Audit Organizations – 12006020338 collection of underlying data;  performed analysis of the relevant internal methodology and guidelines, gaining an understanding of the design of the key structures, systems, processes and controls for managing, recording, preparing and reporting the Selected Information;

 performed limited substantive testing on a selective basis of the Selected Information to check that Appendix data had been appropriately measured, recorded, collated and reported; and

i The maintenance and integrity of the Company’s website is the responsibility of management; the work carried out by us does not involve consideration of these matters and, accordingly, we accept no responsibility for any changes that may have occurred to the reported Selected Information or Reporting Criteria when presented on the Company’s website.

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IPIECA m3 International Petroleum Industry Environmental Conservation Association – cubic metre Terms and a global non-profit oil and gas industry association promoting environmental and social issues Gazprom Neft Material topics at a glance abbreviations Typically used in the context of economic, IRMF environmental or social value, this term integrated risk management framework – utilised in delivering a continuous is applied to issues that may reasonably

APPENDIX 5 APPENDIX streamlined process used in identifying, assessing, monitoring and be considered important for reflecting an AI GJ responding to risks, at all levels. organisation’s economic, environmental artificial intelligence gigajoule and social impacts, or influencing the Sustainable development decisions of stakeholders. management ISO 14001 APG GRI The international standard specifying the requirements for an effective associated petroleum gas – a mixture of gaseous hydrocarbons dissolved in Global Reporting Initiative – an environmental management system. Motor fuel class oil and released during oil production. international organisation developing Emissions standards introduced and promoting a recognised and credible under Government Decree sustainability reporting framework ISO 26000 No. 118 of 27 February 2008, “Technical Customer CIS that can be applied by all organisations The international social responsibility standard, published in 2010 and regulation on requirements for automotive care Commonwealth of Independent States – currently comprising , regardless of their size, sector or location covering all companies and sectors, providing guidance on the general terms and aviation gasoline, diesel and marine Azerbaijan, , Kazakhstan, , Moldova, Russia, , and principles of corporate social responsibility activities. fuel, jet fuel and heating oil”, similar to , and Uzbekistan. European emissions standards (Euro 1–6). GRI Standards The most recent version of the ISO 8217 COVID-19 internationally accepted sustainability The international standard specifying the requirements for fuels for use in mt Health A severe acute respiratory infection caused by the SARS-CoV-2 coronavirus reporting framework developed by the marine diesel engines and boilers, prior to conventional onboard treatment million tonnes and safety (2019-nCoV). Global Reporting Initiative (GRI). (settling, centrifuging, filtration) before use.

mtoe CSR GWh ISO 9001 million tonnes of oil equivalent corporate social responsibility gigawatt hour The international standard establishing the criteria for a quality management system, with guidance on achieving sustainable outcomes. MW Environmental safety EBITDA HAZID/ENVID megawatt earnings before interest, tax, depreciation and amortisation hazard identification IT information technology NEMS ECG HAZOP National Emergency Management electrocardiogram hazard and operability study ITAT System The Gazprom Neft Information Technology, Automation and Employee Telecommunications department. development EIA HEI NOx environmental impact assessment higher educational institution Nitrogen oxides IUCN International Union for Conservation of Nature and Natural Resources EnMS HR – an international organisation working in nature conservation and the Oilfield services The Gazprom Neft Energy Management System. human resources sustainable use of natural resources. Oil- and gas-field services, including Social well drilling, rig installation, cluster-pad policy installation, well workovers, and the EU HSE km repair of drilling equipment. European Union health, safety and environment kilometre

OMS FAR IIoT kt operations management system Appendix fatal accident rate – calculated as follows: total number of fatalities ÷ total Industrial Internet of Things kilotonne hours worked by all employees × 100 million man-hours. p.p. LTIF percentage point GHG lost time injury frequency – calculated as follows: greenhouse gases total number of lost time injuries (including fatalities) in the workplace ÷ total hours worked × one million man-hours.

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PDCA SPE Plan-Do-Check-Act – a four-step management method used in business for Society of Petroleum the control and continuous improvement of processes and products. Engineersstakeholder Contacts and feedback Gazprom Neft at a glance PHSER Sustainability (non-financial) HSE risk analysis reporting/ We welcome your feedback on this report. Your feedback and suggestions on the information we provide help us improve an individual or entity with a direct the quality of our non-financial reporting - and help improve the company’s effectiveness and efficiency, as a whole. interest in another organisation’s PMAC operations, with the potential to impact If you would like to let us know your views, or if you have any questions on polymer-modified asphalt cement or be impacted by such organisation’s Sustainable anything of interest to you, please get in touch using the contact information development activities and performance. below. management PR We will take all comments and questions on board in preparing next year’s Gazprom Neft Sustainable Development Report. public relations Sustainable development a sustainability report is a report published by a company or organization Investor relations PRMS about the economic, environmental and Customer Petroleum Resource Management System social impacts caused by its everyday Phone: +7 (812) 385-95-48 care activities. A sustainability report also presents the organization’s values and Email: [email protected] PSE governance model, and demonstrates process safety event the link between its strategy and its commitment to a sustainable global Gazprom Neft PJSC Postal address economy. Health R&D Pochtamtskaya ul. d. 3-5, St Petersburg 190000, Russia and safety research and development UN SDGs Phone: +7 (812) 363 31 52, 8 (800) 700 31 52 United Nations Sustainable RBI Development Goals Fax: +7 (812) 363 31 51, 8 (800) 700 31 51 risk-based inspection – an analysis methodology and process involving the qualitative or quantitative assessment of the probability of failure (PoF) and the consequence of failure (CoF) associated with a specific process unit. VHI Environmental safety voluntary health insurance

RCA root cause analysis – a problem-solving methodology used in identifying the VOC root causes of faults or problems. volatile organic compound Contacts page on the company’s Feedback page on the company’s website website Employee RCM VR development reliability-centred maintenance – a structured process for identifying virtual reality problems which, once addressed, improve equipment productivity and/or reduce maintenance costs. VTS vehicle tracking system ROACE Social return on average capital employed policy WBCSD World Business Council for Sustainable Rosprirodnadzor Development Federal Service for the Supervision of Natural Resources (Russian Federation)

WRI Appendix RSPP World Resources Institute Russian Union of Industrialists and Entrepreneurs

WWF

SO2 World Wildlife Fund sulphur dioxide

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