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Gazprom Neft Sustainability Report for 2018

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Gazprom Neft Sustainability Report for 2018 CONTENTS 2 About the Report 6 Message from the Chairman of the Management Board 8 Gazprom Neft today 12 FINANCIAL EFFICIENCY 70 PERSONNEL DEVELOPMENT 86 HEALTH, SAFETY AND ENVIRONMENT, ENERGY EFFICIENCY AND SAVING 12 Performance highlights 72 Management approaches 88 Management approaches 20 Innovations 75 Personnel profiling 92 Contractor management responsibility 23 Import substitution 76 Remuneration and social benefits 94 Health, safety and environment 25 Product quality assurance 79 Collaboration with trade unions 101 Environmental safety 28 Supply chain 80 Personnel training and development 115 Energy consumption and efficiency 84 Talent pool development 30 SUSTAINABILITY STRATEGY 120 REGIONAL POLICY AND DEVELOPMENT OF LOCAL COMMUNITIES 32 Creating value for stakeholders 122 Management approaches 34 Strategy-2030 125 Regional development initiatives 38 Integrating UN Sustainable Development Goals 127 Home Towns programme into the strategy 136 Social initiatives abroad 137 Interaction with indigenous northern minorities 138 Public recognition 40 SUSTAINABILITY MANAGEMENT AND STAKEHOLDER ENGAGEMENT 140 APPENDICES 42 Corporate governance 55 Internal control 140 Appendix 1. Additional information and sustainable 159 Appendix 4. Independent assurance report 48 Approaches to sustainability management 57 Risk management development metrics 161 Appendix 5. Terms and abbreviations 50 Operations management system 60 Stakeholder engagement 142 Appendix 2. Map of material topics 164 Contacts and feedback 52 Disclosure of information 66 Corporate culture 146 Appendix 3. GRI indicators 53 Respect of human rights 67 Corporate communications 54 Ethics and anti-corruption practices ABOUT THE REPORT PERSONNEL DEVELOPMENT MESSAGE FROM THE CHAIRMAN OF THE MANAGEMENT BOARD HEALTH, SAFETY AND ENVIRONMENT, ENERGY EFFICIENCY AND SAVING SUSTAINABLE GAZPROM NEFT GAZPROM NEFT TODAY REGIONAL POLICY AND DEVELOPMENT OF LOCAL COMMUNITIES DEVELOPMENT REPORT FINANCIAL EFFICIENCY APPENDICES 2018 SUSTAINABILITY STRATEGY SUSTAINABILITY MANAGEMENT AND STAKEHOLDER ENGAGEMENT ABOUT THE REPORT Dear readers, The Report discloses the details Identification of the Report’s key topics of management approaches, activities and progress towards achieving economic We are delighted to present Gazprom Neft’s Sustainability efficiency, ensuring occupational In this Sustainability Report, Gazprom Neft In the process of its interaction Report1 for 2018. This is the Company’s 11th non-financial and environmental safety, supporting makes a point of addressing the matters that with stakeholders and identification and developing personnel, and aiding social hold the most significance for its stakeholders. of the Report’s material topics, the Company public report, in which it describes its approaches and economic development across Gazprom analysed the following: to complying with the principles of corporate social Neft’s geographies, as well as upholding In the course of the non-financial reporting, > the results of surveying internal human rights. the Company is guided by the principles and external stakeholders for the purpose responsibility, its contribution to sustainable social and of stakeholder engagement, completeness, of defining the key topics of the Report; economic development, and its environmental initiatives. In preparing the report, the Company materiality, balanced approach, clarity, > interviews with the Company's management relied on the GRI Standards (Core option) sustainable development framework, accuracy, and employees; and ISO 26000:2010 (Guidance on social timeliness, and reliability. > materials relating to Gazprom Neft’s responsibility), as well as the Reference regular interaction with the key group The Report discloses information Performance Indicators of the Russian Union The Report’s disclosures cover business of stakeholders; about PJSC Gazprom Neft as well of Industrialists and Entrepreneurs (RSPP). obligations, including those set out in Russian > recommendations that the Company as its subsidiaries and controlled entities and international documents (the UN Global received from the RSPP's Council on Non- (referred to in this Report as Gazprom The Report underwent external assurance Compact and the Social Charter of the Russian Financial Reporting in the process of public Neft or the Company) for the calendar by PricewaterhouseCoopers Audit. Business). Starting 2017, the Company verification of the 2017 Sustainable year of 20182. The Company’s financial includes the information on its contribution Development Report; and operating performance is presented All of the Company’s The Report contains forward-looking to the achievement of the UN Sustainable > mass media coverage on the Company. sustainability reports can based on PJSC Gazprom Neft's consolidated statements on the Company's mid- Development Goals into the report. be found on its website data. Unless otherwise specified, the data and long-term plans, and their feasibility Based on the identification process, on the Company’s labour relations, social depends, among other things, on a number In order to determine the most material topics the Company mapped out the topics that initiatives and environmental performance of economic, social and legal factors beyond and respective indicators to be disclosed, it and at least one key stakeholder group find relates to PJSC Gazprom Neft as well as its the Company's control. Consequently, actual the Company analyses: the most significant3. There were no significant subsidiaries and controlled entities in Russia results may differ from those plans. > the results of monitoring the scope changes in the list and scope of the Report’s and the CIS. and scale of its impact on the economy, material topics compared to last year. The Report has been approved by Gazprom society and environment; Information provided herein was obtained Neft’s Management Board and Board > stakeholder engagement themes from corporate reports, information requests of Directors. and the information requests; in line with the guidelines contained in the non- > research on Russian and international financial reporting standards, and corporate industry management practices media. in respect of sustainable development and sustainability reporting. 1 Hereinafter the “Report”. 2 The data on changes in the Company’s structure that occurred in 2018 are presented in in the Corporate Governance section of Gazprom Neft’s 2018 Annual Report. 3 The map containing the full list of material topics and their scope can be found in Appendix 3 of the Report. 2 3 ABOUT THE REPORT PERSONNEL DEVELOPMENT MESSAGE FROM THE CHAIRMAN OF THE MANAGEMENT BOARD HEALTH, SAFETY AND ENVIRONMENT, ENERGY EFFICIENCY AND SAVING SUSTAINABLE GAZPROM NEFT GAZPROM NEFT TODAY REGIONAL POLICY AND DEVELOPMENT OF LOCAL COMMUNITIES DEVELOPMENT REPORT FINANCIAL EFFICIENCY APPENDICES 2018 SUSTAINABILITY STRATEGY SUSTAINABILITY MANAGEMENT AND STAKEHOLDER ENGAGEMENT Prioritisation matrix for the Report’s material topics List of topics that were identified to be the most significant for the Company and its key stakeholders1 6 1 1 Strategy 2 2 Investment programme 30 30 Occupational safety and emergency preparedness 3 3 Financial stability 31 Health and safety 4 4 Operational efficiency 5 6 6 Product safety and quality 32 32 Reduction in injury and severity rates 14 14 Compliance 36 36 Personnel training and development 7 7 Innovations 19 19 Anti-corruption 4 21 31 21 Wastewater discharges 13 13 Corporate governance quality 35 35 Fair remuneration and social benefits 39 39 Contribution to social and economic development of regions 16 16 Human rights 3 22 22 Emissions 29 Environmental properties of products Impact on stakeholders' opinions and decisions Impact on stakeholders' 8 Energy efficiency and conservation 23 8 23 Waste generation and management 26 26 Land and vegetation protection 2 43 43 Efficiency of social investments 37 5 37 Labour relations and employment 25 25 Environmental impact of the Company's Arctic operations 40 40 Local community development programmes 17 17 Respect for the rights of indigenous peoples 9 9 The Company’s strategy on climate; greenhouse gas emissions. 1 1 2 3 4 5 6 Materiality of the Company’s impact on sustainable development aspects 1 The numbers assigned to the topics correlate with their numbers in the Material Topics Map (Appendix 3 to the Report). 4 5 ABOUT THE REPORT PERSONNEL DEVELOPMENT MESSAGE FROM THE CHAIRMAN OF THE MANAGEMENT BOARD HEALTH, SAFETY AND ENVIRONMENT, ENERGY EFFICIENCY AND SAVING SUSTAINABLE GAZPROM NEFT GAZPROM NEFT TODAY REGIONAL POLICY AND DEVELOPMENT OF LOCAL COMMUNITIES DEVELOPMENT REPORT FINANCIAL EFFICIENCY APPENDICES 2018 SUSTAINABILITY STRATEGY SUSTAINABILITY MANAGEMENT AND STAKEHOLDER ENGAGEMENT DEAR FRIENDS! of refinery upgrades, we keep implementing our major environmental initiatives, MESSAGE FROM At Gazprom Neft, we remain committed including the construction of Biosfera innovative bio-treatment facilities at Omsk to sustainable development principles. Refinery. We also expand our biodiversity preservation, water management, land Financial and operating results and vegetation protection programmes. Special attention is paid to preserving THE CHAIRMAN OF are not the only measure of our success. the unique nature of the Arctic where we are running several large-scale investment We place a key emphasis on environmental projects. Our initiatives in the Arctic revolve around the zero-waste principle, which THE MANAGEMENT BOARD protection and the responsible
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