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.
Gazprom’s goals and commitments in sustainability and the approaches to delivering them are set out in the Gazprom Group’s Sustainable Development PolicyApproved by resolution of the Board of Directors of PJSC Gazprom No. 3576 dated April 30, 2021.
Compliance with the Policy is mandatory for all entities of the Gazprom Group.
In 2022, the Company approved the Action Plan for Sustainable Development PolicyApproved by order of PJSC Gazprom No. 333 dated September 1, 2022.
One of the Action Plan’s initiatives is the plan to quit using disposable plastic items in the Gazprom Group’s officesApproved by order of PJSC Gazprom No. 8 dated January 12, 2023. A set of measures was developed to reduce the use of disposable plastics.
Also, in line with the above Action Plan and the Board of Directors’ order, the Company is developing indicators to assess its progress in sustainable development, which will lay the foundation for the Group’s shared sustainability assessment system that reflects Gazprom’s contribution to the social and economic development of Russia. The indicators are expected to be finalized and approved in 2023.
Sustainability management is integrated into the corporate governance system of PJSC Gazprom. Responsibilities in this area are assigned in accordance with legislation of the Russian Federation and internal documents to governance bodies, structural units of PJSC Gazprom, and its subsidiaries.
(1) Since 2022, the name of the report has been changed to the Gazprom Group’s Social Impact Report.
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 composition of the Board of Directors is well-balanced so as to achieve targets that benefit the shareholders and the Company at large.
The members of the Board of Directors possess a broad range of competencies to fit the scale and nature of the Company’s operations, including corporate governance and sustainable development. Independent directors take an active part in the Board of Directors’ activities and propose for discussion matters related to corporate governance and sustainability.
Two out of 11 members of the Board of Directors are independent. The Chairman of the Board of Directors is not an executive officer at the Company.
|Indicator||Board of irectors||Audit Committee||Nomination and Remuneration Committee||Import Substitution and Technological Development Committee||Sustainable Development Committee||Management Committee|
|Number of directors||11||3||3||3||3||14|
|incl. independent directors||2||2||2||0||0||n/a|
|Number of meetings, incl.||70||8||11||4||3||24|
|Number of items considered||177||10||11||7||3||63|
|incl. items related to sustainability||52||1||1||3||3||24|
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.
The Import Substitution and Technological Development Committee of the Board of Directors prepares recommendations for the Board of Directors to adopt resolutions on import substitution and technological development.
Among other things, the Audit Committee of the Board of Directors monitors the reliability and performance of the risk management and internal control system and compliance with the Code of Corporate Ethics of PJSC Gazprom.
The Nomination and Remuneration Committee of the Board of Directors is in charge of an effective HR management policy, as well as incentive and remuneration system.
PJSC Gazprom also has in place a Coordinating Committee for Rational Use of Natural ResourcesCreated by order of PJSC Gazprom No. 215 dated May 14, 2020.. Its main goal is to coordinate the efforts of PJSC Gazprom’s units and entities in rational use of natural resources, energy efficiency, environmental protection and sustainable development.
To insure a comprehensive approach to environmental and energy management and coordination of relevant efforts of PJSC Gazprom’s structural units, the Company has standing Environmental Management Improvement Task ForceCreated by order of PJSC Gazprom No. 16 dated January 14, 2021. and Energy Efficiency (Energy Management) Improvement Task ForceCreated by order of PJSC Gazprom No. 547 dated December 23, 2022..
The Coordinating Committee for Shareholder and Investor RelationsCreated by order of OJSC Gazprom No. 292 dated November 17, 2008. is tasked with the development and implementation of a unified and consistent shareholder and investor engagement policy.
Overall management of sustainable development aspects is within the remit 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 manage various sustainable development aspects and implement the Sustainable Development Policy of the Gazprom Group.
For more details on the composition of PJSC Gazprom’s Board of Directors, its committees and Management Committee, see Gazprom Annual Report 2022.
In accordance with recommendations of the Russian Corporate Governance Code (Clause 2.9), PJSC Gazprom regularly conducts comprehensive independent assessments of corporate governance practices and internal assessments of the activities of the Company’s Board of Directors and its committees. Assessment findings are taken into account in preparing measures for further development of corporate standards.
In 2021, the Expert RA rating agency assigned the highest governance quality rating to PJSC Gazprom. In 2022 and 2023, the agency reaffirmed this highest score.
Governance quality was assessed by experts in the following key areas:
- positioning (business reputation, development strategy, etc.);
- governance and control bodies;
- transparency of information;
- rights of shareholders and other stakeholders;
- support factors (additional positive changes);
- stress factors (factors that have a significant adverse impact on the rating).
The methodology to assess governance quality has been approved by the Expert RA rating agency’s methodology committee. According to the methodology, corporate governance best practices mean approaches recommended by the World Bank and the Organization for Economic Cooperation and Development. It also factors in guidelines from national market regulators (e.g. Corporate Governance Code of the Bank of Russia) and requirements of stock exchanges where the rated entity’s securities are listed (e.g. requirements for Level 1 and Level 2 issuers established by the Moscow Exchange).
The methodology provides for a systematic application of all the analysis methods and tools, models, key factors, and benchmarks as a unified framework. The methodology is used only systematically. The rating is assigned to PJSC Gazprom based on the analysis of all key indicators used in the methodology.
Expert RA’s methodology for governance quality ratings is available on the agency’s website at www.raexpert.ru.
In late 2022 and early 2023, as part of an independent assessment of corporate governance, the Company’s Board of Directors was again assessed by external experts based on the following criteria: composition and structure, organization of their activities, and key functions.
Apart from that, in 2H 2022, the Board of Directors of PJSC Gazprom, the Audit Committee, the Nomination and Remuneration Committee, and the Sustainable Development CommitteeThe Sustainable Development Committee was set up in 2021 (resolution No. 3627 of the Board of Directors of PJSC Gazprom dated July 13, 2021). conducted a regular self-assessment (through a questionnaire) of the Directors’ performance in the corporate yearCorporate year of 2021–2022 means the period from June 25, 2021 to June 30, 2022. of 2021–2022.
All members of PJSC Gazprom’s Board of Directors ranked the current maturity level of PJSC Gazprom’s Board of Directors and its committees as excellent (four points out of four). The results of the self-assessment were presented to the Nomination and Remuneration Committee of the Board of Directors (minutes No. 64 dated October 14, 2022) and were considered at the meeting of the Board of Directors in November 2022 (minutes No. 11472 dated November 17, 2022).
In early 2023, the Expert RA rating agency's website published a press release once again confirming PJSC Gazprom’s highest governance quality rating.
The following factors positively influenced the experts’ conclusions:
- well-organized activities of PJSC Gazprom’s collegial governance bodies, namely:
- activities of the bodies clearly regulated by internal documents;
- high workload of the Board of Directors and its committees (a lot of meetings);
- four dedicated committees of the Board of Directors;
- Audit Committee of the Board of Directors chaired by an independent director;
- liability insurance for the Board of Directors with large insurance amounts;
- involvement of collegial governance bodies in the ESG agendaEnvironmental, Social, Governance.;
- system of Company-wide key performance indicators for assessing the performance of the Management Committee and other executives, incentives for the Board of Directors;
- robust risk management system;
- strong protection of the rights of PJSC Gazprom’s shareholders, other stakeholders and employees;
- Corporate Secretary function;
- effective system for preventing and resolving conflicts of interest;
- anti-corruption system compliant with all major international and Russian laws and regulations;
- robust organization of strategic planning.
|[Translate to en:] Focus area of the assessment (self-assessment)||Average score of the assessment (self-assessment)|
|I. Composition and structure of the Board of Directors||4||4|
|II. Organization of activities of the Board of Directors||4||4|
|III. Key functions of the Board of Directors||4||4|
|I. Composition and structure of the Audit Committee||4||4|
|II. Organization of activities of the Audit Committee||4||4|
|III. Functions of the Audit Committee||4||4|
|I. Composition and structure of the Nomination and Remuneration Committee||4||4|
|II. Organization of activities of the Nomination and Remuneration Committee||4||4|
|III. Functions of the Nomination and Remuneration Committee||4||4|
|I. Composition and structure of the Sustainable Development Committee||4||4|
|II. Organization of activities of the Sustainable Development Committee||4||4|
|III. Functions of the Sustainable Development Committee||4||4|
Members of PJSC Gazprom’s Board of Directors who represent the interests of the Russian Federation undergo self-assessment on the Interdepartmental Portal of the Federal Agency for State Property Management at the end of each quarter and corporate year.
Gazprom Group’s sustainability progress is monitored against key performance indicators that are used for planning PJSC Gazprom’s operations or assessing the performance of executives at PJSC Gazprom, its subsidiaries and entities. One such KPI is the Integrated KPI for Innovation. Its assessment includes the criterion of reduction of per unit greenhouse gas emissions (CO2 equivalent). This KPI is included in the list of Company-wide indicators influencing the remuneration of the Company’s Board of Directors and executives.
|Russian business’ sustainability index (by RBC and the NCR rating agency)||–||–||Category 1 (high)(1)|
|Sustainability ranking of industrial Russian companies by the National Rating Agency (NRA)||–||–||0.814 (group 1, advanced)(2)|
|Sustainable corporate governance rating by Yes-Strategy, a non-profit agency for corporate development||A+ level||A level||A level(3)|
|AK&M ESG Reporting Rating||Highest level of disclosure||Highest level of disclosure||Highest level of disclosure(4)|
|Responsibility and Transparency Index (MOEX–RUIE)||Above 0.75 (leader group)||А (leader group)||А (leader group)(5)|
|Sustainability Vector Index (MOEX–RUIE)||Above 0 (leader group)||А (leader group)||А (leader group)|
(1) Data for 2020–2021, https://ratings.ru/files/research/macro/NCR_ESG_Oct22.pdf
The Company was among the finalists of Our Contribution, the National Ranking for Assessing Social Investments by Businesses and NPOs in Achieving National Goals (https://рэнкинг.национальныепроекты.рф) published in 2022.
The Gazprom Group has in place a risk management and internal control system (RMICS), which is a part of PJSC Gazprom’s corporate governance framework and provides reasonable assurance that the Group will achieve its goals. The RMICS covers all activities of both PJSC Gazprom and the Gazprom Group entities, includes all management levels and types of activities and all risks of PJSC Gazprom and the Gazprom Group entities. PJSC Gazprom’s RMICS performance in 2022 was confirmed by the top score from the Expert RA rating agency.
Responsibilities and powers in the area of risk management and internal control are assigned in accordance with legislation of the Russian Federation and internal documents to governance bodies, structural units of PJSC Gazprom, and its subsidiaries and entities. In accordance with Federal Law No. 208-FZ On Joint Stock Companies dated December 26, 1995 and directives No. 3984p-P-13 for representatives of the Russian Federation dated June 24, 2015, a dedicated unit of PJSC Gazprom for risk management and internal control (Directorate of PJSC Gazprom) responsible for implementing the single risk management and internal control policy of PJSC Gazprom and the Gazprom Group entities was established; its activities are coordinated by a Deputy Chairman of the Management Committee.
PJSC Gazprom and the Gazprom Group ensure timely identification of risks and evaluation of potential events, circumstances, and internal and external factors influencing the achievement of PJSC Gazprom’s targets and goals, and develop risk management measures and internal controls. Setting targets for PJSC Gazprom and the Gazprom Group entities is a prerequisite for identifying and assessing risks and subsequently exercising internal controls. When identifying risks, internal and external events that may affect the achievement of targets are detected.
For more details on the risk management and internal control system and its performance in 2022, see Gazprom Annual Report 2022
(1) Approved by resolution of the annual General Shareholders Meeting of PJSC Gazprom dated June 30, 2017, minutes No. 1; https://www.gazprom.com/f/posts/74/562608/kodeks_korporativnogo_upravleniya_eng_30.06.2017.pdf.
(2) Approved by resolution of the Board of Directors of PJSC Gazprom No. 2309 dated February 25, 2014, as subsequently amended; https://www.gazprom.com/f/posts/74/562608/2014-02-25-codex-of-corporate-ethics-en-2019-08-20-edit.pdf.
(3) Approved by resolution of the Board of Directors of PJSC Gazprom No. 2846 dated November 15, 2016; https://www.gazprom.com/f/posts/74/562608/anti-corruption-policy-2016-11-15-en.pdf.
(4) Approved by order of OJSC Gazprom No. 423 dated September 4, 2014; https://www.gazprom.com/f/posts/74/562608/2014-09-04-regulation-hotline-en.pdf.
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.
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.
In addition, the Code of Ethics applies to the employees of the entities controlled by PJSC Gazprom, which used it as the basis for developing and adopting approved the own codes of corporate ethics.
Since 2019, the Code of Ethics has also applied to the members of the Board of Directors prohibiting them from taking advantage or allowing others to take advantage of their position or information that comes to their knowledge about the operations of PJSC Gazprom. They are also required to refrain from any actions that will or can result in a conflict of interest.
Every year, the Company's executives, including members of the Management Committee, make formal written commitments to comply with the Code of Ethics.
Members of the Management Committee must not take advantage or allow others to take advantage of their position or information that comes to their knowledge about the Company’s operations, and must refrain from any actions that will or can result in a conflict of interests.
Management Committee members are also subject to restrictions imposed by the Code of Ethics on the joint work of relatives, engagement with competitors and serving on elected government bodies, gift acceptance, and others.
In addition, they are not allowed to hold management positions at other companies without the consent of the Company's Board of Directors.
In 2022, the Ethics Commission did not receive information about any conflict of interest existing for any members of the Board of Directors or the Management Committee, or the Chairman of the Management Committee of PJSC Gazprom. Besides, Board members did not notify the Chairman of the Board of Directors about any conflict of interest arising with respect to the agenda items considered by this governance body.
PJSC Gazprom takes steps to identify and prevent conflicts of interest in the sole executive bodies of its controlled entities. According to an established practice, all sole executive bodies of controlled entities, on a regular basis (at least once every three years), submit information on the presence or absence of signs of a conflict of interest (through questionnaires) for further analysis. For newly appointed investee managers, questionnaires are filled after their appointment to the post.
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.
Starting from 2021, efforts have been made to hold the Group's suppliers and contractors to similar ethical business standards by inserting a clause requiring them to comply with the Code of Ethics into the contracts.
Employees of PJSC Gazprom’s Administration, as well as its branches and subsidiaries, receive regular training by taking a Corporate Ethics e-learning course with a test-based knowledge assessment.
In 2022, 30,865 employees completed the course.
In 2022, a remote learning course titled Corporate Ethics at PJSC Gazprom for Suppliers was developed for third-party employees. The course will be rolled out in 2023.
PJSC Gazprom's Corporate Ethics Commission
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.
The Ethics Commission’s performance is reported to the Chairman of the Management Committee of PJSC Gazprom on an annual basis.
The Gazprom Group is committed to becoming more efficient in preventing and managing conflicts of interest in line with the national policy to combat corruption and improve business climate in Russia. In the reporting year, the Code of Corporate Ethics was supplemented with a provision requiring that information on the Company's compliance with corporate ethics be submitted to PJSC Gazprom’s Board of Directors on a regular basis, and in either case at least once every three years.
For the clarification of the Code's provisions and issues related to its application, or for details on the known violation of ethics rules, as well as in case of a conflict of interest, the Company’s employees can contact their immediate supervisor or the Ethics Commission
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.
In 2022, the Ethics Commission held ten meetings to review 19 inquiries. The majority of inquiries received in 2022 were related to the interpretation of the Code of Ethics’ provisions focusing on the prevention and management of potential conflict-of-interest situations, and requirements to personal behavior in the workplace.
The Ethics Commission receives messages by e-mail at firstname.lastname@example.org, by phone at the Hot Line number +7 495 719 1171 or by regular post.
The Anti-Corruption Policy of PJSC Gazprom 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. This document outlines the goals and competencies of governance bodies in preventing and combating corruption, while also introducing comprehensive anti-corruption measures and liability for non-compliance with policy requirements.
|Indicator||2020||2021||2022||Change 2022/2021, %|
|Average duration of anti-corruption training per employee per year, hours||0.2||0.1||0.2||+100|