1.1. Sustainability Management

The Gazprom Group’s mission when it comes to sustainable development is to make a positive contribution to the social and economic development of Russia and other regions of operation in line with environmental and social responsibility standards, so as to preserve and enhance the opportunities for future generations while meeting the needs of today.

Sustainability management is integrated into the corporate governance system of PJSC Gazprom.

The Management Committee and the Chairman of the Management Committee administer the Company’s day-to-day operations, including economic, environmental and social matters, based on separation of powers pursuant to the Articles of Association of PJSC Gazprom and other applicable regulations. The Management Committee and the Chairman of the Management Committee report to the General Shareholders Meeting and the Board of Directors of the Company.

The Chairman of the Management Committee may delegate authority to other employees of the Company, including by issuing orders concerning distribution of responsibilities, powers of attorney to represent the Company before third parties. 

PJSC Gazprom has established organizational units in charge of various activities, including finance, strategy, environmental protection, occupational safety, HR management, etc. Their heads report to the Chairman of the Management Committee either directly or indirectly.

Unlocking economic potential:

• Long-Term Development Program of PJSC Gazprom;
• Innovative Development Program of PJSC Gazprom until 2025.

Shaping management approaches:

• Corporate Governance Code of PJSC Gazprom;
• Anti-Corruption Policy of PJSC Gazprom;
• Dividend Policy of PJSC Gazprom;
• Risk Management and Internal Control Policy of PJSC Gazprom;
• Quality Management Policy of PJSC Gazprom;
• Regulation on Hot Line for Fighting Fraud, Corruption, and Embezzlement at Gazprom Group;
• Regulation on Procurement of Goods, Works, and Services by PJSC Gazprom and Gazprom Group Companies.

Environmental protection:

• Environmental Policy of PJSC Gazprom;
• Comprehensive Environmental Program of PJSC Gazprom for 2020–2024;
• Energy Efficiency and Energy Saving Policy of PJSC Gazprom;
• Energy Saving and Energy Safety Improvement Program of PJSC Gazprom.

HR, social policy, and human rights:

• HR Management Policy of PJSC Gazprom, its Subsidiaries and Entities;
• Comprehensive Program for Improvement of HR Management at PJSC Gazprom, its Subsidiaries and Entities;
• General Collective Labor Agreement of PJSC Gazprom and its Subsidiaries;
• Code of Corporate Ethics of PJSC Gazprom;
• Regional Policy Concept of PJSC Gazprom;
• PJSC Gazprom’s Occupational, Industrial, Fire and Road Safety Policy;
• Process Safety Management System Development Strategy of PJSC Gazprom.

• Risk Management and Internal Control Policy of PJSC GazpromApproved by resolution of the Board of Directors of PJSC Gazprom No. 3195 dated December 25, 2018;
• Risk Index of PJSC Gazprom, its Subsidiaries and EntitiesApproved by order of PJSC Gazprom No. 848 dated December 15, 2017 (as amended by orders of PJSC Gazprom No. 8 dated January 16, 2020 and No. 376 dated September 14, 2020);
• Regulation on Credit Risk Management at PJSC Gazprom, its Subsidiaries and EntitiesApproved by order of PJSC Gazprom No. 559 dated December 11, 2019;
• Regulation on Operational Risk Management at the Gazprom GroupApproved by order of PJSC Gazprom No. 291 dated July 11, 2019;
• Regulation on Liquidity Risk Management at the Gazprom GroupApproved by order of PJSC Gazprom No. 390 dated July 10, 2018;
• Regulation on Foreign Exchange Risk Management at the Gazprom GroupApproved by order of PJSC Gazprom No. 390 dated July 10, 2018;
• Regulation on Interest Risk Management at the Gazprom GroupApproved by order of PJSC Gazprom No. 390 dated July 10, 2018;
• Risk Management Guidelines Based on Qualitative AssessmentApproved by decree of PJSC Gazprom No. 149 dated June 20, 2019.

The Gazprom Group has in place a robust risk management and internal control system (RMICS) which provides reasonable assurance that it will achieve its goals. The Company has established a dedicated unit (Department of PJSC Gazprom) in charge of risk management and internal controls which implements the single risk management and internal control policy and uniform guidelines across PJSC Gazprom and Gazprom Group entities. The Risk Management and Internal Control Policy of PJSC Gazprom was developed and approved.

The year 2020 saw changes in PJSC Gazprom’s approach to sustainability risk management, with the following risk management regulations and guidelines developed and introduced.

• Risk Ranking Guidelines Based on Pairwise ComparisonApproved by decree of PJSC Gazprom No. 163 dated May 8, 2020;
• Guidelines for Risk Management System Self-Assessment at the Gazprom GroupApproved by decree of PJSC Gazprom No. 164 dated May 8, 2020;
• Guidelines for Developing Key Risk IndicatorsApproved by decree of PJSC Gazprom No. 168 dated May 13, 2020;
• Guidelines for Risk Reporting at the Gazprom GroupApproved by decree of PJSC Gazprom No. 176 dated May 19, 2020;
• Regulation on Insurance of Construction, Renovation and Overhaul Projects at PJSC Gazprom, its Subsidiaries and EntitiesApproved by order of PJSC Gazprom No. 511 dated December 10, 2020.

In 2020, the Gazprom Group’s list of sustainability risks was expanded to include sanitary and biological (epidemiological) risks associated with the global spread of the COVID-19 coronavirus infection. The Plan to Counter the Potential Negative Consequences of the Coronavirus Pandemic, including Measures to Protect Employees and Ensure Business ContinuityApproved by resolution of the Board of Directors of PJSC Gazprom No. 3403 dated March 19, 2020was developed and approved.

Risk management activities are governed by the Risk Management and Internal Control Policy of PJSC Gazprom and other local regulations of PJSC Gazprom.

• risk assessment and monitoring;
• development, implementation and monitoring of risk management measures;
• risk reporting.

• analyze internal and external factors;
• forecast potential changes in the external and internal environment;
• identify interrelationships between risk factors;
• rank risks to determine risk management measures and internal controls.

The management of risks identified in 2020 includes, among other things, the development and implementation of action plans to prevent and control the spread of infections among employees.

The Gazprom Group’s sustainable development goals underpin its operations and are integrated into its strategic, medium-term and short-term planning systems.

The Gazprom Group’s sustainability progress is monitored against a set of key performance indicators (KPIs) used in planning PJSC Gazprom’s operations or assessing the performance of executives at PJSC Gazprom, its subsidiaries and entities.

• economic profit growth;
• return on capital employed;
• integrated KPI for innovation.

• total shareholder return;
• customer satisfaction index in Russia (gas business, power generation business, NGV business).

• reduction in unit greenhouse gas emissions (in CO₂ equivalent), including methane;
• reduction in specific consumption of fuel and energy resources for internal process needs and transportation losses.

average hours for all types of training per year by employee categoryManagers, specialists and other white-collar staff; blue-collar staff;

share of employees who participated in professional development (for blue-collar staff), skills upgrading and retraining programs by employee category.

• reduction in workplace accidents rate;
• reduction in workplace incidents rate.

The Company’s commitment to sustainable development principles is evidenced by its membership in Russian and international organizations and support of sustainable development initiatives, which enables exchange of information and best practices, as well as dialogue on relevant topics.

The Gazprom Group companies are part of the management bodies of and contribute to the work of international and national industry associations and organizations, such as the International Business Congress (IBC), the International Gas Union (IGU), the Global Gas Centre (GGC), the World Energy Council (WEC), the Natural & bio Gas Vehicle Association (NGVA Europe), the German-Russian Forum, the Boao Forum for Asia (BFA), the United Nations Economic Commission for Europe (UNECE), the Gas Exporting Countries Forum (GECF), the Asia-Pacific Economic Cooperation (APEC), the Russian Union of Industrialists and Entrepreneurs (RSPP), the Corporate Owners Club (Non-Commercial Partnership for Efficient Management of Corporate Properties), the Russian Gas Society (Union of Oil and Gas Industry Organizations), etc.

In 2020, the Gazprom Group companies continued to participate in key economic and energy forums and landmark events of international standing, including the European Gas Conference, the Sakhalin Oil & Gas international conference and exhibition, the 26th Annual Flame Gas & LNG Conference (FLAME 2020), the Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC 2020), the Strong Ideas for a New Time forum, the Budapest Energy Summit, the World LNG Summit, the World Energy Week, etc.

The international economic and energy agenda in 2020 mainly focused on global and regional energy and climate strategies, gas industry development amid the spreading coronavirus infection, energy transition strategies, prospects of the global gas and LNG market, and insights into the gas market in Europe and the Asia-Pacific Region (APR).

PJSC Gazprom seeks to raise awareness among foreign authorities about the importance of gas for sustainable development both directly by participating in meetings and public events and indirectly by communicating the Company’s opinion through targeted consultations.

In 2020, PJSC Gazprom took part in the public consultations announced by the European Commission to present its position on such matters as the EU Hydrogen Strategy, the EU strategy to reduce methane emissions, and the EU laws governing sustainable investment.

PJSC Gazprom consistently strengthens its relationships with rating agencies and expands the number of its international ratings. The ESG ratings of PJSC Gazprom reflect the Company’s sustainability progress and its assessment by the Russian and international communities.

In 2020, PJSC Gazprom (B for Climate Change and B— for Water Security) and PJSC Gazprom Neft (B for Climate Change) were named the best Russian oil and gas companies according to CDP’s international rating.

The Company also holds top positions in Russian ratings. It has been ranked among the leaders of the “Responsibility and Transparency” and “Sustainable Development Vector” indices of the Russian Union of Industrialists and Entrepreneurs. In 2020, the Gazprom Group was among the Top 5 in RAEX-Europe’s annual ESG ranking in the Environmental category. Gazprom also ranked among the Top 10 in the environmental transparency rating of Russian oil and gas companies conceived by WWF Russia and CREON Group. In the reporting year, Gazprom placed 12^th in the Sustainable Development ranking of the Expert magazine.

In 2020, Gazprom Energoholding companies ranked among the Top 10 in the environmental transparency rating of Russian power generating companies conceived by WWF Russia. In particular, PJSC Mosenergo and PJSC OGK-2 came in second and third out of the 18 possible positions.