Sustainable development management

In its business, LUKOIL focuses on the sustainable development goals as laid out in the UN Declaration “Transforming Our World: the 2030 Agenda for Sustainable Development”, and seeks to integrate them into its business objectives, corporate culture and decision-making system.

Устойчивое развитие

The Company shares the understanding that sustainable development requires a balanced combination of economic growth with mandatory solutions of social and environmental problems, accompanied by continuous improvement of corporate governance.

The achievement of seventeen global goals to secure the future for humanity and our planet, is expected to be fulfilled by means of a global action program in which a significant role is played by business. LUKOIL is already implementing programs and providing assistance to the initiatives that meet sustainable development goals. With the adoption of the sustainable development policy and strategy, the Company’s related activities will grow in focus and scale.

“In Russia, sustainable development and corporate social responsibility are firmly on the agendas of major companies. Today these issues are directly tied to efficiency and competitiveness, and influence the assessment of company activities by financial institutions and various state and social structures.

LUKOIL is undoubtedly one of Russia’s business leaders, as evidenced, in particular, by the rank it holds in the Sustainable Development Indexes compiled by the RUIE. This is the only independent Russian scoring system that has been included in the international database of sustainable development rankings. The Company that is a party to the United Nations Global Compact and the Social Charter of Russian Business, has been consistent in its progress in responsible business and transparency and the promotion of public accountability.

Development of a corporate sustainable development strategy is a logical move for LUKOIL. Its implementation can be expected to contribute to the achievement of UN goals, the fostering of Russia’s economic competitiveness, and a strengthening of the Company’s position in the Russian and global markets.”

E. Feoktistova, Managing Director for Corporate Responsibility,
Sustainable Development and Social Entrepreneurship, RUIE

LUKOIL’s sustainable development model seeks to meet the need of society for energy in an economically, environmentally and socially acceptable manner. The approach to sustainable development is based on the harmonization of the Company’s short- and long-term interests with universal human values and national development priorities.

While developing and approving plans, budgets and investment programs, the Board of Directors considers whether it is feasible to achieve the goals outlined in the Environmental Safety Program of the LUKOIL Group entities, as well as the Policy and Functional Strategy for Personnel Management and charity and sponsorship programs. Thus, sustainable development objectives are integrated in the general business strategy of the Company and they are attained through implementation of targeted programs and development plans across business segments.

Control over sustainable development implementation is carried out at both strategic and operational levels.

Elements of the sustainable development management system G4-42 G4-46
Management level Functions
Board of Directors
  • Identify priority activities
  • Approve strategic long and medium-term plans and development programs
  • Control the implementation of strategic goals, development plans and programs in the area of sustainable development
Board Committees:
Strategy and Investment Committee
  • Prepare recommendations to set strategic goals
  • Prepare recommendations to identify the Company’s priority areas of business
  • Assess the Company’s long-term performance efficiency
Human Resources and Compensation Committee
  • Development of the main lines of the Company’s human resources activities
  • Supervise the introduction and implementation of the Company’s policy on remuneration and various motivation programs, in particular, programs of long-term incentives for the employees of the Company and its subsidiaries
  • Plan appointments, prepare recommendations regarding candidates for the position of the Company’s Corporate Secretary, Management Committee members and the Company’s President
Management Committee
  • Approve target programs
  • Develop and adopt budget and investment programs in the sphere of sustainable development
  • Exercise operational control over the implementation of target programs and development plans
PJSC LUKOIL Health, Safety and Environment Committee (HSE)
  • Develop the LUKOIL Group Entities’ HSE policy and key performance indicators
  • Assess the implementation efficiency of HSE activities
  • Prepare proposals on the improvement of the LUKOIL Group HSE Management System, including efficient distribution of resources to meet the HSE requirements
  • Consider the measures to manage considerable HSE risks, environmental aspects, including HSE action programs
PJSC LUKOIL Central Office:
heads of Divisions and structural subdivisions Develop target programs and control their implementation
LUKOIL Group entities:
heads of entities Implement target programs
Note. The in-house documentation regulating sustainable development is listed in relevant chapters of the present Report

The list of KPIs includes a comprehensive indicator that characterizes performance in a number of aspects of sustainable development – Ensuring the Required Level of Occupational Safety, Health and Environmental Protection in the LUKOIL Group Entities. The indicator is used to guide the work of the PJSC LUKOIL employees and managers and executives of the LUKOIL Group entities.

Key Performance Indicators
Specific KPI components Criteria of the Ensuring the Required HSE Management Level Indicator
Health, Safety and Environment (HSE) Indicators:
presence of fatal accidents for which the employer is held responsible absence of fatal accidents for which the employer is held responsible in the period assessed
presence of fatal accidents as a result of work conducted by contractors, service providers or subcontractors absence of fatal accidents as a result of work conducted by contractors, service providers or subcontractors
accident frequency rate the accident frequency rate does not exceed the limit set by the decision of PJSC LUKOIL Management Board
emergency (incident) at a LUKOIL Group entity’s facility, which has caused material damage absence of an emergency (incident), which has caused material damage
execution of planned activities complete execution of planned activities in order to meet strategic goals
violations of regulatory requirements absence of violations of HSE regulatory requirements traced by supervisory authorities
compliance of the HSE management system with ISO 14001:2004 and OHSAS 18001:2007 absence of significant flaws in the Management System as evidenced by auditing reports in the period assessed
Environmental impact is assessed by the following indicators:
  • specific indexes of air pollutant emissions;
  • specific polluted water discharges into surface water bodies;
  • ratio of the waste disposed during the reporting period to the newly generated waste.
meeting the environmental impact targets for the reporting period to ensure consistent impact reduction
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