PJSC LUKOIL Sustainable Development Concept:
In its activities the Company pursues the sustainable development principles and aims to ensure a good balance between socio-economic and environmental development. The Company's Sustainable Development Concept includes the following:
Closer attention to the environmental consequences of major activities, mitigation of environmental impact and negative climatic effects;
Introduction of technological, managerial and scientific innovations to business processes;
Search for solutions and engineering processes to secure energy and resource saving;
Search for alternative energy sources;
Production of environmentally-friendly products.
LUKOIL upholds the principles of the Global Compact and of the Social Charter of Russian Business, which is reflected in the Company's activities that contribute to sustainable economic growth and social responsibility enhancement.
Social Responsibility
LUKOIL is a responsible member of the civil society and a bona fide player on the market. While realizing its responsibility towards all the stakeholders in the regions of its presence, the Company pursues a socially responsible policy in the area of environmental protection and environmental management system, handles labor and employment issues, organizes large-scale charitable events and sponsorship campaigns.
LUKOIL develops the Company's responsible business practices in the field of charity, social partnership, environment, and support to indigenous minor nations of the North.
Sustainable Development Objectives
Sustainable development objectives are integrated into the general business strategy and achieved as part of the target programs and development plans developed for specific business segments.
While developing and approving plans, budgets and investment programs, the Board of Directors takes into account the objectives outlined in the Environmental Safety Program of the LUKOIL Group Organizations, as well as in the Policy and Functional Strategy for Personnel Management, and in the charity and sponsorship programs. Achievement of strategic objectives is monitored at the strategic and operative levels.
Relations with Stakeholders
Relations with stakeholders is one of the key components of the business process management system.
The key groups of stakeholders are defined in a number of the Company's regulations, including:
PJSC LUKOIL Code of Business Conduct;
Social Code of PJSC LUKOIL;
PJSC LUKOIL Health, Safety, and Environmental Policy in the XXI Century;
PJSC LUKOIL Human Resources Management Policy.
Relations with stakeholders are in place at every level of the Company's management; a wide range of mechanisms and forms of cooperation are used; they correspond to the nature of issues and the scope of joint interests.
Apart from the forms of interaction that are required by the law or market environment, LUKOIL applies various mechanisms to work with this stakeholder group. PJSC LUKOIL has a Policy on Stakeholder Relations in place. It sets out the Company’s commitments with regard to the protection of shareholders’ rights, identification and analysis of challenges, as well as improvement of the existing and development of new forms of interaction. Meetings with shareholders in the regions have become one of the new forms of interaction. The Department of Investor Relations acts as a responsible subdivision.
| Permanent interaction mechanisms (including mandatory ones) | Periodical interaction mechanisms | Feedback and results |
|---|---|---|
| Annual and extraordinary shareholders’ meetings and reporting. | Meetings with minority shareholders in the Russian regions, meetings with investors, participation in investment conferences, interaction with bank analysts, presentations, visits to the regions, capital days, etc. | Feedback system: a special phone number, application to the Division of Investor and Shareholder Relations, etc. |
In 2014, the 2015-2017 Agreement between the Employer and the Trade Union Association was signed. The Company pays special attention to the terms of employment that are fully compliant with the legitimate rights of employees and ensure best practice sharing. Programs that maintain and improve the efficient health and social protection program are under way. Despite the challenging economic environment, the Company was able to avoid mass layoffs. The Company continuously keeps an eye on the efficiency of its incentive program.
| Permanent interaction mechanisms (including mandatory ones) | Periodical interaction mechanisms | Feedback and results |
|---|---|---|
| Collective bargaining agreement. Agreement with the trade union. Intranet portal, corporate media. | Meetings with work teams. | Reports on performance of the collective bargaining agreement. Feedback system: hotline. |
The key form of relations at the regional level is socio-economic cooperation agreements (for more details refer to “Interaction with the Regions” page).
| Permanent interaction mechanisms (including mandatory ones) | Periodical interaction mechanisms | Feedback and results |
|---|---|---|
| Socio-economic cooperation agreements with the Russian regions and municipalities. CSR presentations and reports on sustainable development. Presentations dedicated to adoption of the next. Environmental Program. | Participation in regional and federal programs, conclusion of supplement agreements and cooperation memoranda. | Eleven agreements were signed with the Russian subjects, 25 supplementary agreements and 14 cooperation memoranda. Systematic assessment of cooperation performance following agreement expiration. |
LUKOIL cooperates with major Russian and international companies. For example, the Company has a long-term partnership with PJSC Gazprom. The Company’s products are supplied to major mechanical engineering, transportation, and industrial companies in Russia and abroad.
| Permanent interaction mechanisms (including mandatory ones) | Periodical interaction mechanisms | Feedback and results |
|---|---|---|
| Partnership agreements, participation in industry-specific conferences and business summits, participation in various ratings and contests. | Cooperation agreements. | Agreement performance. |
The concept of a Customer-Focused Gas Station was adopted. It is used to implement the mechanisms of customer surveys, and to plan the customer appeal and satisfaction improvement activities.
| Permanent interaction mechanisms (including mandatory ones) | Periodical interaction mechanisms | Feedback and results |
|---|---|---|
| Customer surveys. | Marketing and social events. | Hotline, accepting applications through an authorized officer. |
The Company interacts with a wide range of public, business, and municipal organizations making use of various cooperation frameworks. In addition to the Social and Cultural Projects Competition – a common interaction mechanism in all of the Company's regions of presence – the Company also makes use of other forms. For example, for many years it has been member of the Russian Union of Industrialists and Entrepreneurs and other business associations. LUKOIL also provides assistance to the leading Russian institutions, including the Russian Geographical Society with whom the Company has a cooperation agreement to promote R&D and popularize science.
The Company also acts as a member, host and sponsor of forums, discipline-related and regional conferences, round tables and other events. In particular, LUKOIL is a regular sponsor of major economic forums in Saint Petersburg and Sochi, large-scale sporting events (such as regional and national competitions in different kinds of sport, etc.), theatrical performances, exhibitions, tours, and other important events for the country.
| Permanent interaction mechanisms (including mandatory ones) | Periodical interaction mechanisms | Feedback and results |
|---|---|---|
CSR presentations and reports on sustainable development. Presentations dedicated to adoption of the next Environmental Program. Social and cultural projects competition (held in 19 Russian subjects). Agreements with the right holders of indigenous minor nations (IMN). | Participation in the events organized by associations. Public dialogs in the regions as part of preparation of the sustainable development reports. Public hearings on facility construction and reconstruction projects Joint projects. | Participation of the public in the competitive bidding process. Proposals received as part of dialogues. Participation in IMN coordination councils and congresses. |
