RUEN
2019 Interactive Sustainability Report

Risk management in sustainable development

We adhere to the position that any actual and potential risks associated with our activities are risks in the field of sustainable development of the Company and require an integrated management and internal control system. We regard any impact as factors that can, to one degree or another, affect our activities and share such factors as acceptable and unacceptable risks.

In 2020, the Board of Directors approved the Policy of PJSC TATNEFT in the field of an integrated risk management and internal control system, including ESG risk management.

Risk assessment is included in the investment planning of key projects.

Main risks in the field of sustainable development

Risks of human rights violations

In the course of our business, there are potential risks associated with human rights violations: harm to human health as a result of environmental pollution, industrial accidents, pollution of water sources used by local communities, as well as risks associated with the supply chain - violation by suppliers, contractors partners of key human rights, incl. discrimination against workers, for example, on the basis of race, gender or other criteria of diversity.

Company Measures

The company implements comprehensive programs and measures to eliminate the possibility of these risks, including the supply chain and interaction with contractors and suppliers. All areas of the Company's activities include monitoring the observance of human rights. The company provides training for personnel on human rights, including the security department.

Risks in the field of industrial safety, labor protection and the environment

At the facilities of the Company there are risks associated with the shutdown of the technological process, the release of hazardous products, damage to the environment, accidents, fires and accidents, which in turn may lead to the shutdown of the Company's production facilities.

Company Measures

To minimize these risks, an integrated safety management system has been created and is successfully operating, the following measures are being taken:

  • Targeted corporate programs in the field of industrial safety, labor protection and the environment;
  • Production control over the operation of hazardous production facilities;
  • Diagnostics (non-destructive testing) and control of equipment parameters;
  • Repair and timely replacement of equipment;
  • Ensuring compliance with the requirements in the field of industrial safety, labor and environmental protection for contractors at all stages of interaction with them;
  • Development of leadership and safety culture;
  • Ensuring the qualifications of personnel of all levels;
  • Special assessment of working conditions, improvement of working conditions for workers;
  • Development of action plans for the containment and elimination of the consequences of accidents at hazardous production facilities, plans for the elimination of oil and oil products spills, the formation of a reserve of forces and means of response to emergencies and emergencies, training of personnel serving a hazardous production facility and emergency rescue teams to prevent liquidation of emergency situations;
  • Other measures to reduce accidents and injuries at work in the organizations of the TATNEFT Group.

Risks associated with climate change

Stricter regulation due to climate change and its physical consequences may have a negative impact on the activities of TATNEFT Company as a major producer of fossil fuels and an emitter of greenhouse gases in the form of increased costs and reduced efficiency. In addition, the Company operates in various regions where the potential for physical impact from climate change is highly unpredictable and can have a significant negative impact.

Company Measures
  • Accounting and planning of measures to regulate greenhouse gas emissions;
  • Constant monitoring of changes in legislation in this area and measures to obtain information about such changes at the stage of their preliminary discussion, as well as for the participation of representatives of the Company in such discussions in order to clarify in detail the position of the Company in relation to these issues, risks and uncertainties that carry new legislative initiatives;
  • Integration into the value chain and supply chain of accounting for the climatic impact of production activities, products manufactured, energy consumed and produced, taking into account scope 1, scope 2, scope 3.
  • Implementation of comprehensive programs to reduce the impact on the environment, including water resources and forests. Implementation of compensatory measures, including planting forests with high absorption capacity.
  • Development and implementation of low-carbon green technologies and decarbonization of production processes within industry capabilities.
  • Development of renewable energy

Cyber ​​risks

In the context of the globalization of digital transactions and electronic communications traffic, the risks of cyber intrusions into corporate information systems are significantly increasing, which entails a threat to the safety of assets, operational and financial activities, and the interests of shareholders and investors. At the same time, the requirements for the protection of personal data are increasing: in 2018, the European Global Directive on the Protection of Personal Data (GDPR) came into force. Adherence to advanced cyber security standards forms a high competitive advantage for the Company.

Company Measures

The company provides a highly secure internal cyber security system and strives to convey confidence in its quality to all stakeholders. The company in its corporate practice identifies cyber security as an independent area that integrates the digitalization of business processes and security regulations, including: the presence of a corporate cyber security operations center, blockchain, artificial intelligence and robotization, biometrics, the Internet of Things. The cyber risk management system is multi-layered and is built taking into account the international ISO standards in this area. Currently, the Company is developing a Cyber ​​Security Policy of TATNEFT Group and a program of measures to further improve and increase the reliability of procedures for controlling cyber risks.

Risks associated with corporate fraud and corruption

Based on the scale of operations, the wide range of stakeholders and territories of the Company's operations, we assess the severity of the consequences associated with corporate fraud and corruption. This risk is associated in general with the supply chain. We also assess the risks associated with conflicts of interest.

Company Measures

The company adheres to the principle of unacceptability of corruption in any form. The Company has an Anti-Corruption Policy and relevant corporate regulations, as well as control mechanisms to prevent incidents of corruption and conflicts of interest. At the level of the Office of the Corporate Secretary, work is underway to raise the level of awareness of the members of the Board of Directors and the Management Board about conflicts of interest.

To detect situations that are dangerous from the point of view of corruption, as well as to understand them, the Group's enterprises periodically assess corruption risks and map the processes that are most dangerous from the point of view of corruption, and propose solutions, as well as prepare an overview of the situation for the Board of Directors. In this work, the Company follows the legal norms, as well as the UN Risk Assessment Guidelines. To build its ability to prevent bribery, the Company applies the provisions of the ISO 37001 anti-bribery standard published by the International Organization for Standardization.

In the course of tenders, the Company gives preference to such transaction partners who proclaim the principles of honesty and decency, for example, who have a code of ethics; which follow the relevant ISO standard