2.2. Sustainability Management System

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Sustainability management is integrated into the corporate governance system of PJSC Gazprom. Responsibilities in this area are assigned in accordance with the legislation of the Russian Federation and internal documents to governance bodies, structural units of PJSC Gazprom, and its subsidiaries.


The Board of Directors of PJSC Gazprom engages in strategic governance and is responsible for considering and approving high-level internal documents on matters that fall within its competence, including sustainability.

The Sustainable Development Committee of the Board of Directors is responsible for preliminary consideration of sustainability matters and develops recommendations for the Board of Directors to adopt resolutions.

Overall management of sustainable development aspects fall within the competence of PJSC Gazprom’s Management Committee.

At PJSC Gazprom, overseeing the implementation of the Sustainable Development Policy of the Gazprom Group is the responsibility of the Chairman of PJSC Gazprom’s Management Committee, while at subsidiaries this is among the duties of their Directors General.

Structural units of PJSC Gazprom and its subsidiaries perform day-to-day management of various sustainable development aspects falling within their competence, as well as implement the Sustainable Development Policy of the Gazprom Group. Coordination of sustainable development activities of PJSC Gazprom’s structural units and subsidiaries is the responsibility of PJSC Gazprom’s information policy unit.

Board of Directors and Management Committee Report

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Activities of PJSC Gazprom Board of Directors, its committees and the Management Committee in 2021
Indicator Board of Directors Audit Committee Nomination and Remuneration Committee Sustainable Development Committee Management Committee
Number of directors 11 3 3 3 14
incl. independent directors 3 2 2 0 n/a
Number of meetings 63 12 12 2 25
In person 10 15
In absentia 53 12 12 2 10
Number of items addressed 167 13 12 2 56
Number of items related to sustainability 42 1 0 2 11

In 2021, the Board of Directors, its committees and the Management Committee considered 56 items related to sustainability.

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In particular, the Sustainable Development Committee of the Board of Directors considered the results of an external audit and an independent public assurance of the Gazprom Group’s Sustainability Report 2020. It was recommended that the Board of Directors continue its efforts to improve the quality of reporting.

In 2021, the Board of Directors also discussed the results of measures to streamline the relationship with the shareholders and investors of PJSC Gazprom.

The information obtained as a result of communications with stakeholders is taken into account when corporate standards are further improved and developed.

PJSC Gazprom regularly engages in a comprehensive independent audit of its corporate governance system. Part of the audit process is external experts assessing the maturity level of PJSC Gazprom’s Board of Directors and its committees.

As part of an independent assessment of PJSC Gazprom’s governance quality, the Expert RA rating agency evaluated the performance of its collegial bodies for 2021. The experts recognized the exceptional quality of the way collegial bodies are organized, citing their competence and stable composition; position of a senior independent director; existence of dedicated committees of PJSC Gazprom’s Board of Directors; election of a senior independent director to chair the Audit Committee of the Board of Directors; and liability insurance for the Board of Directors with large insurance amounts.


(highest) management quality rating of PJSC Gazprom assigned by the Expert RA rating agency


In line with recommendations of the Bank of Russia’s Corporate Governance Code, the Company conducts a regular internal assessment of the performance of PJSC Gazprom’s Board of Directors and its committees (in the form of self-assessment through a questionnaire). The key focus areas of the internal assessment are the composition and structure of the Board of Directors and its committees, organization of their activities, and their key functions.

In the 2021 questionnaire, all the Board members, just like in previous years, ranked the current maturity level of PJSC Gazprom’s Board of Directors and its committees as excellent (4 points out of 4).

For more details on the composition of PJSC Gazprom’s Board of Directors, its committees and the Management Committee, see PJSC Gazprom Annual Report 2021


Independent assessment of Gazprom’s sustainability efforts
Index Score as of the end of 2020 Score as of the end of 2021 Assignment date
Responsibility and Transparency index (RUIE) Above 0.75 (leader group) А (leader group) December 27, 2021
Sustainable Development Vector index (RUIE) Above 0 (leader group) А (leader group) December 27, 2021

Overview of Sustainability Risks

Risk Management System

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Documents regulating risk management

  • Federal Law No. 208-FZ On Joint Stock Companies1 dated December 26, 1995
  • Corporate Governance Code of the Russian FederationLetter of the Bank of Russia No. 06-52/2463 dated April 10, 2014
  • Bank of Russia’s recommendations to set up risk management, internal controls, internal audit and the work of the board of directors’ audit committee in public joint stock companiesLetter of the Bank of Russia No. IN-06-28/143 dated October 1, 2020
  • Methodological guidelines of the Federal Agency for State Property Management on developing regulations on a risk management system, approved by order of the Government of the Russian Federation No. ISh-P13-4148 dated June 24, 2015.
  • 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

The Gazprom Group has in place a risk management and internal control system (RMICS) which provides reasonable assurance that the Group will achieve its goals. The Company has established a dedicated unit (Directorate 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 RMICS is an integral part of the corporate governance system of the Gazprom Group, which is embedded into the planning system and the financial reporting, project management and process safety management systems. PJSC Gazprom’s RMICS performance in 2021 was confirmed by the top score from the Expert RA rating agency

For more details on the RMICS and its performance in 2021, see PJSC Gazprom Annual Report 2021


PJSC Gazprom’s Approach to Material Sustainability Risks Management
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Risk group


Risk management/mitigation

Risk factors (internal/ external)

Operational risks

Production risks of core operations

Core business operations involving hydrocarbon production, transportation, processing and storage are associated with potential technological, technical, natural and climate risks, as well as the risk of inappropriate actions by employees or third parties.

The Unified Gas Supply System ensures overall reliability of gas supplies. Insurance covers property, interruption of operations at gas processing plants, and contractor’s liability for construction, repair and operation of industrial facilities.

Internal and external

Environmental risks

Environmental risks associated with business operations

The core hydrocarbon production, transportation, processing and storage operations are associated with potential risk of environmental pollution. Environmental impacts from potential accidents resulting from the Company’s business operations, potential impacts on ecosystems resulting in land and water pollution, deterioration of soil and vegetation, and erosion. This may lead to degradation of ecosystems and loss of habitat for rare and endangered plant and animal species.

As part of the Environmental Policy, environmental protection activities are implemented, environmental risk insurance is provided, green technologies are adopted, and programs and activities designed to reduce environmental footprint are carried out.

The following activities are carried out:

  • analysis of the potential adverse environmental impacts and their implications resulting from the identified accidents and other emergencies;
  • emergency prevention, localization, response, and impact mitigation;
  • assessment of environmental damage caused by accidents and other emergencies.

Comprehensive initiatives are underway for enhancement of reliability of pipeline systems, landscape stabilization, soil reclamation, and vegetation rehabilitation.

Internal and external

Climate-related risks

Climate change

Potential climate changes and adverse natural phenomena and weather conditions that may cause damage to buildings and structures, pipeline transportation systems and service lines.

A major part of the natural gas produced by Gazprom comes from Western Siberia, where production is difficult and relatively costly because of climate conditions.

Reductions in GHG emissions are part of PJSC Gazprom’s corporate strategy. Measures are taken to minimize climate change consequences for the Company’s production activities. PJSC Gazprom is developing and implementing energy efficiency and energy saving programs and effective operating procedures adapted to various climatic conditions; programs to boost the efficiency of production and transportation systems and gas transmission network operation; and a program for adapting PJSC Gazprom’s business activities to climate and geocryological changes.


For more details on the financial implications and other risks and opportunities due to climate change as disclosed under TCFD recommendations, see Appendix 4

Market, financial and credit risks

Market price and volume risks

Adverse economic conditions, lower demand for energy commodities, decline in mercantile exchange quotations and/or their long-time stagnation at low levels, which may have a negative impact on prices and volumes of gas supplies to external markets.

Sales markets and channels are diversified, and the scope of natural gas use is expanded. Contract terms are adjusted in line with the current market environment, and permitted transaction types and financial instruments are defined.


FX risks

Currency exchange rate volatility, which affects revenues and expenditures denominated in foreign currencies.

The Company maintains an optimal balance of FX-denominated assets and liabilities, projects its revenue taking into account the FX risk, and forecasts currency exchange rates to develop a balance sheet forecast. Hedging strategies are used to address the risk of market-driven shifts in exchange and interest rates, and the debt profile is optimized.


Credit risks

Counterparties’ default on or failure of timely or completely fulfillment of their financial obligations.

The creditworthiness of counterparties is assessed and monitored. The payment terms are determined and payments of counterparties (guarantees, letters of credit, prepayments) are secured. Credit limits are established and compliance with them is monitored across PJSC Gazprom and Gazprom Group entities.


Internal and external

Country and regional risks

Sanctions-related risks

Russian companies are exposed to restrictions imposed by the USA, EU, and other countries.

The policy of technological self-sufficiency and import substitution is pursued. Efforts are made to monitor sanctions, including the likelihood of new sanctions by the USA and the European Union against Russia and Russian persons.


Natural gas transit risks

Natural gas transit through the territory of third countries is subject to the risk of default on transit obligations.

Steps are taken to diversify export routes, broaden access to underground gas storage facilities, and develop liquefied natural gas trade.


Corporate governance

No significant corporate governance risks were identified

Ethical Business Principles

Documents Regulating the Gazprom Group’s Corporate Ethics

  • Corporate Governance Code of PJSC Gazprom
  • Code of Corporate Ethics of PJSC Gazprom
  • Anti-Corruption Policy of PJSC Gazprom

Corporate Ethics

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The Company has in place the Code of Corporate Ethics of PJSC Gazprom developed in 2012 (Code of Ethics). Its revised version has been in effect since 2014 (as subsequently amended). The Code of Ethics reflects the best corporate practices.

The document sets forth PJSC Gazprom’s corporate values and defines the key rules of business conduct regarding the prevention of conflicts of interest and corruption, in particular restrictions on joint work of relatives, employee engagement with PJSC Gazprom’s competitors and their serving on elected government bodies, and gift acceptance. In accordance with the Code of Ethics, PSJC Gazprom shall not engage in political activities or finance political organizations.

PJSC Gazprom’s corporate values

The Code of Ethics contains guidelines for employees on handling conflicts of interest and declares zero tolerance to corruption. Managers and workers must inform the employer of any corruption proposals they receive. The Code also sets forth the principles of environmental protection and zero discrimination towards employees, and mechanisms for implementing and monitoring the corporate ethics rules.

The Code is mandatory for all of PJSC Gazprom’s employees. Since 2019, it also applies to the members of the Board of Directors. Every year, the Company’s executives make formal written commitments to comply with the Code.

In addition, the Code of Ethics applies to the employees of the entities controlled by Gazprom, which use it as the basis for developing and adopting their own codes of corporate ethics. As at the end of the reporting period, all of the entities controlled by Gazprom have undertaken to comply with the corporate ethics principles.

In accordance with the Code of Ethics, it is also recommended for individuals working for the Company under civil law contracts, as well as contractors and consultants.

The universal values of the Code enable PJSC Gazprom’s corporate ethics system to continuously evolve, including by expanding its scope to new entities. Following the best practices and in order to promote PJSC Gazprom’s corporate values among its counterparties, in 2021 the Company continued to include ethics-related provisions into its agreements with counterparties and developed an addendum template on the Code of Ethics for existing agreements.

The Company organized a regular e-learning Corporate Ethics course for employees of PJSC Gazprom’s Administration, its branches and subsidiaries, with subsequent assessment tests. In 2021, 229,891 employees completed the course.

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Ensuring the implementation of the Code of Ethics is the responsibility of PJSC Gazprom’s standing Corporate Ethics Commission (Ethics Commission). The Commission consists of at least five members appointed by PJSC Gazprom’s order.

Sole executive bodies of entities controlled by PJSC Gazprom who have conflicts of interest are required to bring the issue to the Ethics Commission’s attention.

In 2021, the Commission held nine meetings to review 19 inquiries, twice as much as in 2020.

The majority of employee inquiries are related to the interpretation of the Code of Ethics’ provisions on combining the job at the Company with other activities, joint work of relatives and accepting gifts.

The Ethics Commission receives messages by e-mail at ethics.comission@adm.gazprom.ru, by phone at the Hot Line number +7 495 719-11-71 or by regular post.

The entities controlled by PJSC Gazprom have in place local ethics commissions reviewing inquiries from their employees in line with the local codes of corporate ethics.

Key focus areas of the Ethics Commission

Advising employees on the interpretation and implementation of the Code of Ethics


Reviewing inquiries in a timely manner and based on the applicable laws of the Russian Federation, with assistance from dedicated structural units and subsidiaries, if necessary


Identifying potential conflicts of interest involving sole executive bodies of entities controlled by PJSC Gazprom and providing recommendations on eliminating and mitigating negative implications of identified conflicts of interest


Arranging for the Company’s executives, including members of PJSC Gazprom’s Board of Directors and Management Committee, to submit formal written commitments to comply with the Code of Ethics on an annual basis

The Ethics Commission’s performance is reported to the Chairman of the Management Committee of PJSC Gazprom on an annual basis.

The Board of Directors also receives regular reports on the corporate ethics activities when reviewing the matters of corporate governance and shareholder/ investor relations.

For interpretation of the provisions of the Code of Ethics and issues related to its application or violation of ethics rules, the Company’s employees can contact their immediate supervisor or the Ethics Commission. In case of a conflict of interest, employees are required to contact their immediate supervisor, or report directly to the Commission under certain circumstances.

If the immediate supervisor fails to take measures to prevent or eliminate the conflict of interest or the measures taken are insufficient, employees are to inform the Commission thereof.

Ethics Commission’s inquiry review procedure


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The Anti-Corruption Policy of PJSC Gazprom1 reflects the commitment of the Company’s management and employees to the ethical standards of conducting legal, open and honest business, improving the corporate culture, following the best corporate governance practices and maintaining a good business reputation.

Key principles of the Anti-Corruption Policy:

  • Compliance with applicable laws;
  • Leadership by example;
  • Employee engagement;
  • Proportionality between anti-corruption procedures and corruption risks;
  • Efficiency of anti-corruption procedures;
  • Responsibility and inevitability of punishment;
  • Business transparency;
  • Permanent control and regular monitoring

Anti-corruption management

Board of directors
  • General management of the Group’s anti-corruption activities
  • Review of anti-corruption reports by executive bodies
Chairman of the Management Committee
  • Distribution of authority, obligations and responsibilities in anti-corruption among Deputy Chairmen of the Management Committee and the Group’s business units
  • Organizing initiatives to implement the Anti-Corruption Policy (including by appointing managers in charge of developing, implementing and monitoring anticorruption procedures)
Audit Committee of the Board of Directors

Developing proposals on the improvement of the Group’s anti-corruption internal control procedures

In the reporting period, the Gazprom Group had no confirmed cases of corruptionBased on the definition of “Corruption” as stipulated by Article 1 of Federal Law No. 273-FZ On Combating Corruption dated December 25, 2008 (as subsequently amended), and rulings by courts of the Russian Federation.

The Gazprom Group organizes in-person and remote anti-corruption training for its employees in the form of courses developed by Gazprom Corporate Institute, the Center for Entrepreneurial Risks, the Russian Presidential Academy of National Economy and Public Administration, and other institutions.

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2,970 Gazprom’s employees

in 2021 underwent anti-corruption training