Risk Management
The Gazprom Group exercises a well-balanced and responsible approach to risk management and internal controls. Responsibilities and powers in risk management are distributed among governance bodies, structural units of PJSC Gazprom, its subsidiaries and entities. PJSC Gazprom has a standalone unit responsible for developing a risk management and internal control system (RMICS) and steered by the deputy Chairman of the Management Committee
PJSC Gazprom’s corporate RMICS complies with Federal Law No. 208-FZ On Joint Stock Companies dated December 26, 1995, instructions and decrees of the Russian President, Russian Government’s directives, recommendations of the Bank of Russia and the Federal Agency for State Property ManagementApproved by resolution of the Board of Directors of PJSC Gazprom No. 3195 dated December 25, 2018., the Corporate Governance Code, and Risk Management and Internal Control Policy of PJSC Gazprom aimed at achieving the Company’s goals.
At PJSC Gazprom, risk management and internal controls are governed by its Risk Management and Internal Control Policy designed to ensure proper operation and development of the RMICS.
The Policy outlines goals and objectives, main principles, approaches to risk management and internal controls, as well as process participants, their roles, and relevant requirements.
Key risks are regularly identified and assessed, with mitigants put in place to maintain identified key risks within acceptable limits.
PJSC Gazprom’s internal controls provide a reasonable assurance of achieving the goals of business processes owned by relevant structural units.
Information on risk management and internal controls is collected and submitted to stakeholders in time to ensure substantiated decision-making by the management.
For more details on the RMICS and its performance in 2023, see PJSC Gazprom Annual Report 2023.
For more details on the Gazprom Group’s regulations on risk management and internal controls, see Appendix.
The Gazprom Group’s Environmental, Process Safety, Procurement, HR, IT and IS, Quality Management, Import Substitution Risks, and Risks Related to Sanctions and Sales Markets
| Risk type | Risk source | Link to section |
|---|---|---|
| IT and IS Risks | ||
| • Information technologies (IT) risks | External and internal risks In the course of a digital transformation, the Gazprom Group identified risks related to new/existing external sectoral IT sanctions seeking to destabilize information, information management and other automated systems. |
For more details on the Gazprom Group’s efforts to mitigate IT and IS risks, see the Digital Transformation subsection. |
| • Information security (IS) risks | External and internal risks The Gazprom Group’s operations may be exposed to information security risks, which, if materialized, may lead to breaches of the integrity, confidentiality, or availability of information resources or assets or computer networks. |
For more details on the Gazprom Group’s efforts to mitigate IT and IS risks, see the Digital Transformation subsection. |
| Environmental Risks | ||
| • Natural and climate-related risks | External risks Potential climate changes, natural disasters, and adverse 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 may be difficult and relatively costly because of climate conditions. |
For more details on the Gazprom Group’s measures to mitigate environmental risks, see the 5 Environment and Environmental Policy section. |
| • Environmental risks | External and internal risks The core hydrocarbon production, transportation, processing and storage operations are exposed to environmental pollution risk. Adverse impacts may include accidents during business operations, damage to ecosystems (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. |
For more details on the Gazprom Group’s measures to mitigate environmental risks, see the 5 Environment and Environmental Policy section. |
| Risks Related to Sanctions and Sales Markets | ||
| • Sanction-related risks | External risks Risks of more sanctions and new sanctions imposed by the USA and EU against Russia and Russian persons due to external factors leading to financial (non-financial) consequences for PJSC Gazprom and its projects. |
For more details on the Gazprom Group’s efforts to mitigate foreign trade risks, see the Foreign Trade subsection. |
| • Price and volume (commodity) risks on external markets | External risks Adverse economic conditions, lower demand for energy commodities, decline in mercantile exchange quotations and/or their long-time stagnation at low levels, which have a negative impact on prices and volumes of gas supplies to external markets. |
For more details on the Gazprom Group’s efforts to mitigate foreign trade risks, see the Foreign Trade subsection. |
| Process Safety Risks | ||
| • Labor risks • Fire safety risks • Occupational safety risks | External and internal risks PJSC Gazprom’s production activities are exposed to risks of adverse impact on employees’ health and safety, as well as risks of accidents and fires |
For more details on the Gazprom Group’s efforts to mitigate process safety risks, see the 3 Process Safety section. |
| Procurement Risks | ||
| • Procurement risks | External and internal risks Procurement is related to potential non-compliance with relevant laws. |
For more details on the Gazprom Group’s efforts to mitigate procurement risks, see the Supplier Relations subsection. |
| HR Risks | ||
| • HR management risks | External and internal risks Performance of Gazprom Group entities depends on the availability of sufficiently qualified personnel, development of professional skills in employees by means of comprehensive training and upskilling programs, and increased employee motivation to learn and develop. |
For more details on the Gazprom Group’s efforts to mitigate HR risks, see the 2 Gazprom Group’s People section. |
| Quality Management Risks | ||
| • Risks of deteriorating quality of products, work and services | External and internal risks The Gazprom Group’s operations are exposed to the risks of deteriorating quality of products, work and services. |
For more details on the Gazprom Group’s efforts to mitigate quality management risks, see the Quality Management subsection. |
| Import Substitution Risks | ||
| • Risks of reduced technological sovereignty | External and internal risks The Gazprom Group’s operations are exposed to the risks of restrictions imposed on Russian companies by the USA, EU, and other countries. |
For more details on the Gazprom Group’s efforts to mitigate import substitution risks, see the Contribution to Strengthening Technological Sovereignty subsection. |