SUSTAINABLE DEVELOPMENT REPORT 2020 Head Office: 35 Dzerzhinskogo St., Yuzhno-Sakhalinsk, Sakhalin Oblast, Russian Federation, 693020 Moscow Representative Office: 31 Novinsky Blvd, Moscow, Russian Federation, 123242 Теl.: +7 495 956 1750, fax: +7 495 956 1760 www.sakhalinenergy.com SUSTAINABLE DEVELOPMENT REPORT 2020 CONTENTS 8.2.7. Green LNG Strategy ____________________________________________________________________________________________________________153 9.5.6. Korsakov Sustainable Development Partnership Council _________ 240 8.2.8. Utilisation of Associated Gas in Production _____________________________________________154 9.5.7. Sakhalin Indigenous Minorities Development Plan __________________________241 th 8.2.9. Environmental Protection Costs and Payments 9.5.8. 75 Anniversary of the Victory Project ________________________________________________________ 244 for the Negative Impact ___________________________________________________________________________________________________155 9.5.9. Festival — Pristine Russia: Bound for Sakhalin ________________________________________245 8.3. ENVIRONMENTAL MONITORING 9.5.10. Special Projects for Capacity Building of the Sakhalin AND BIODIVERSITY CONSERVATION ____________________________________________________ 157 Oblast Non-Profit Sector and Developing Volunteering 8.3.1. General Information ____________________________________________________________________________________________________________ 157 in the Region _____________________________________________________________________________________________________________________________ 246 8.3.2. Soil Monitoring ________________________________________________________________________________________________________________________ 158 8.3.3. River Ecosystems Monitoring ___________________________________________________________________________________159 10. THE COMPANY’S PLANS FOR 2020. 8.3.4. Flora and Vegetation Monitoring ________________________________________________________________________ 160 DEVELOPMENT STRATEGY UP TO 2024 ________________________________________248 8.3.5. Monitoring of Protected Bird Species ______________________________________________________________162 1. MESSAGE FROM THE CHAIRMAN OF THE 5.4. RISK MANAGEMENT SYSTEM _____________________________________________________________________________92 8.3.6. Steller’s Sea Eagle Monitoring ________________________________________________________________________________163 11. APPENDIX _____________________________________________________________________________________________________________________ 256 COMMITTEE OF EXECUTIVE DIRECTORS 5.5. CORPORATE CULTURE _________________________________________________________________________________________________96 8.3.7. Monitoring of Marine Biota and its Environment ________________________________165 Appendix 1 ___________________________________________________________________________________________________________________________________ 258 AND CHIEF EXECUTIVE OFFICER _______________________________________________________________ 4 5.6. ETHICS AND COMPLIANCE ___________________________________________________________________________________98 8.3.8. Ballast Water Control ________________________________________________________________________________________________________ 166 GRI Standards Compliance Table 5.7. ANTI-BRIBERY AND CORRUPTION __________________________________________________________ 100 8.3.9. Gray Whale Monitoring and Marine Mammal Protection ___________167 Appendix 2 ____________________________________________________________________________________________________________________________________271 2. ABOUT THE REPORT ______________________________________________________________________________________________ 10 8.4. PIPELINE RIGHT-OF-WAY MAINTENANCE ___________________________________ 169 Comments and Suggestions of Stakeholders 2.1. GENERAL INFORMATION ________________________________________________________________________________________ 12 6. STAKEHOLDER ENGAGEMENT MANAGEMENT ___________________104 8.5. OIL SPILL PREVENTION AND RESPONSE on Individual Aspects, Indicators and/or Programmes 2.2. REPORT PREPARATION STANDARDS ________________________________________________________ 15 6.1. STRATEGY, PRINCIPLES, MECHANISMS PREPAREDNESS ___________________________________________________________________________________________________________________170 and the Company’s Response and Commitments 2.3. REPORTING PRINCIPLES FOR DEFINING REPORT AND ENGAGEMENT TOOLS _______________________________________________________________________________ 106 8.5.1. General Information __________________________________________________________________________________________________________170 Appendix 3 __________________________________________________________________________________________________________________________________ 282 CONTENT AND QUALITY __________________________________________________________________________________________ 17 6.2. STAKEHOLDER ENGAGEMENT IN 2020 ______________________________________________ 108 8.5.2. Oiled Wildlife Rehabilitation ____________________________________________________________________________________172 List of Participants in the Dialogues with Stakeholders 2.4. DEFINING MATERIAL AND PRIORITY TOPICS 6.3. ENGAGEMENT WITH PERSONNEL ____________________________________________________________ 110 8.6. SANITARY PROTECTION AND SAFETY ZONES __________________________173 as Part of Preparation of the 2020 Sustainable TO BE INCLUDED IN THE REPORT _________________________________________________________________18 6.4. LOCAL COMMUNITY ENGAGEMENT THROUGH Development Report 2.5. DEFINITION OF THE REPORT SCOPE _______________________________________________________ 25 COMPANY INFORMATION CENTRES ______________________________________________________112 9. SOCIAL IMPACT MANAGEMENT ___________________________________________________________ 174 Appendix 4 __________________________________________________________________________________________________________________________________ 284 2.6. PUBLIC ENDORSEMENT OF THE REPORT __________________________________________ 25 6.5. ENGAGEMENT WITH SAKHALIN INDIGENOUS 9.1. PERSONNEL: MANAGEMENT AND DEVELOPMENT __________176 Useful links MINORITIES _______________________________________________________________________________________________________________________________115 9.1.1. Approaches to HR Management and HR Policy ___________________________________ 177 Appendix 5 __________________________________________________________________________________________________________________________________288 3. CORPORATE SOCIAL RESPONSIBILITY 6.6. ENGAGEMENT WITH NON-GOVERNMENTAL 9.1.2. General Information __________________________________________________________________________________________________________179 Company’s Information Centres List AND SUSTAINABLE DEVELOPMENT ___________________________________________________ 26 AND NON-PROFIT ORGANISATIONS ____________________________________________________ 118 9.1.3. Recruiting, Hiring and Onboarding New Employees _______________________ 186 Appendix 6 __________________________________________________________________________________________________________________________________ 290 3.1. INTRODUCTION ___________________________________________________________________________________________________________________28 6.7. ENGAGEMENT WITH CUSTOMERS AND SHIPOWNERS 119 9.1.4. Remuneration and Bonus System _________________________________________________________________________191 Feedback Form 3.2. SAKHALIN ENERGY’S CSR SYSTEM _____________________________________________________________29 6.8. ENGAGEMENT WITH STATE AND LOCAL 9.1.5. Social Benefits and Compensations __________________________________________________________________192 Appendix 7 ___________________________________________________________________________________________________________________________________293 3.3. PERFORMANCE STANDARDS ______________________________________________________________________________ 31 GOVERNMENT AUTHORITIES __________________________________________________________________________121 9.1.6. Individual Performance Review ______________________________________________________________________________195 Certificate of Public Endorsement 3.4. SUSTAINABLE DEVELOPMENT POLICY _________________________________________________ 33 6.9. INTERNATIONAL AND REGIONAL COOPERATION____________122 9.1.7. Personnel Training and Development ______________________________________________________________ 196 Appendix 8 ________________________________________________________________________________________________________________________________ 294 3.4.1. Basic Provisions of the Sustainable Development Policy _____________ 33 9.2. LABOUR, ASSETS SAFETY AND PROTECTION _____________________________211 Conclusion on the Results of the Review of Sakhalin 3.4.2. UN Sustainable Development Goals __________________________________________________________________34 7. ECONOMIC IMPACT MANAGEMENT ________________________________________________ 126 9.2.1. General Information ___________________________________________________________________________________________________________211 Energy 2020 Sustainable Development Report 3.5. HSE AND SOCIAL PERFORMANCE MANAGEMENT_______________42 7.1. IMPORTANCE OF THE SAKHALIN-2 PROJECT 9.2.2. Industrial Safety _______________________________________________________________________________________________________________________213