Director General's Statement of Continuing Support for the UN Global Compact and its Ten Principles
TATNEFT historically adheres to the principles of corporate responsibility and implements large-scale programs to preserve the natural ecosystem, improve the quality of life and develop social infrastructure in the territories of its operations.
In 2019, the Company joined the UN Global Compact, reaffirming its commitment to 10 Principles on Human Rights, Labor, Environment, Anti-Corruption and 17 Sustainable Development Goals, which are fully interconnected. These principles and Goals are the foundation for a prosperous and inclusive future in line with the 2030 World Agenda. Joining the Global Compact is our deliberate step in the development of our corporate strategy. We have expanded our ESG targets and continue to increase our contribution to the fight against climate change, with the goal of moving towards carbon neutrality by 2050.
The first year of the Company's participation in the Global Compact was marked by significant events. 2020 marked the 20th anniversary of the creation of the Global Compact and the 5th anniversary of the UN's adoption of the Sustainable Development Goals. We checked the level of integration of all aspects of sustainable development into our business processes. Priority SDGs have been selected, in the implementation of which Tatneft can achieve the greatest progress and efficiency, taking into account the specifics of our activities.
Also, 2020 has confirmed the critical importance of joining universal efforts in sustainable development. The COVID-19 pandemic has become a serious challenge to all of humanity. Many people have been affected by the virus. The fundamentals of the economy and social well-being throughout the Earth have been affected. From the first day of the pandemic threat to the present day, Tatneft has been doing everything possible to preserve the health and life of its employees, their families, local population, clients and partners. We have launched a set of actions to prevent the spread of the virus, improve the equipment of medical institutions, and help vulnerable groups of the population. Our enterprises have produced more than 10 million masks and 40 thousand protective suits, which the Company donated to hospitals and ambulance stations in Tatarstan. The production of antiseptics was also mastered at the Company's facilities. To combat the COVID-19 pandemic in 2020, the Company allocated 1.4 billion rubles, in 2021 it is planned to allocate about 400 million rubles. Now TATNEFT participates in the vaccination of its employees. Mobile teams of the Company's medical unit have been set up to vaccinate employees at remote enterprises.
Along with protecting human health, our task was to maintain the continuity of production processes, ensure the economic and social sustainability of the Company, continue to fulfill all planned obligations, including ensuring uninterrupted supplies of energy resources to healthcare institutions, local communities and industrial enterprises. For many management processes, in 2020 the Company switched to a remote format. It was a new experience of working on such a scale. It is worth mentioning that the high organizational level of the corporate center and the quality of digital technologies in our business processes have proven efficient. This allowed us not only to meet all current production goals, but also to look confidently into the future, plan our activities within the framework of Strategy 2030 and find resources to improve sustainability.
Climate Agenda and a Sustainable Energy Future
One of the key areas for sustainable development, the Company considers measures to combat climate change, enshrined in the Paris Agreement. Climate issues have become central to the new three-year strategic plan of the Global Compact for 2021–2023, which calls for increasing the contribution of the global business community to the 2030 Agenda. TATNEFT shares this call. As an energy company, we have a special responsibility towards future generations and contribute to a sustainable energy future. In the global transition to clean energy, it is necessary to join forces and expand the use of green technologies.
We have stepped up our action towards decarbonization in 2019 and 2020. The company announced its transition to carbon neutrality by 2050. The Board of Directors adopted a new environmental policy taking into account climate change and approved a roadmap. The goals have been set to gradually reduce greenhouse gas emissions by 10% by 2025 and by 20% by 2030 from the base year 2016.
In the development of a greenhouse gas emissions management system, we adhere to international standards and guidelines: the GreenHouseGas Protocol (GHG) - on the measurement, control and disclosure of emissions indicators, including value chains; TCFD guidelines - carbon footprint reporting as well as providing data for the CDP climate rating. In assessing the scope of emissions accounting, we intend to expand the application of the World Business Council for Sustainable Development (WBCSD) and World Resources Institute (WRI) Greenhouse Gas Protocol Corporate Standard for Accounting and Reporting.
The most important step was the joining of Tatneft in 2020 to the group of leaders of the international platform for setting science-based SBTi targets in order to prevent the planet's temperature from exceeding 1.5 degrees Celsius.
To reduce greenhouse gas emissions, we innovate throughout the oil production, refining, petrochemical and power generation business processes, expand our low carbon footprint product line and control the supply chain. It is planned to develop production using renewable energy (clean generation of energy with a low carbon content) and biofuels. A promising area is the application of technologies for capturing and storing CO2 (Carbon Capture and Storage, CCS).
We believe that the most important element in reducing climate risks is offsetting CO2 emissions, taking into account the absorptive capacity of forests. In order to create a favorable environment in the area of its activity and increase the absorption of greenhouse gases, Tatneft, since 2000, has been implementing the Greening Program. Since the beginning of the Program implementation more than 12 million trees had been planted by the end of 2020. It is planned to plant 4.8 million trees in 2021.
Climate risk assessment is included in investment decision-making processes, integrated into the creation of the Company's value and into the life cycles of business processes, products and services, including contractors and suppliers.
We consider all these actions as mechanisms in the implementation of the 13th Sustainable Development Goal on climate. This goal has been selected by the Company as one of its priorities. We also consider SDG 3 "Good health and well-being", SDG 4 "Quality education", SDG 6 "Clean water and sanitation", SDG 7 "Affordable and clean energy", SDG 9 "Industrialization, innovation and infrastructure" as priority goals, SDG 11 Sustainable Cities and Human Settlements, SDG 12 Responsible Consumption and Production, SDG 15 Conserve Terrestrial Ecosystems, SDG 17 Partnership for Sustainable Development.
Our work is built on the basis of a responsible attitude towards ensuring the safety, efficiency and profitability of our activities, respecting the interests of stakeholders and contributing to improving the quality of life in society.
Implementing the Growth Strategy, first of all, we set ourselves the task of making our production the standard of safety and environmental friendliness, to become leaders in ensuring labor safety. The main principle of our policy in the field of industrial safety, labor protection and the environment is the priority of preventive measures, the target focus is to ensure continuous improvement of the effectiveness of the integrated management system, the formation of public understanding of the tasks we solve.
We have made significant progress in improving the industrial and environmental safety of our operations since the early 2000s. This is due to the implementation of effective internal standards, safety culture and continuous improvement of working conditions. We set a “zero result” goal aimed at preventing industrial accidents and negative environmental impacts. Unfortunately, isolated incidents do occur. Each incident is dealt with separately and appropriate measures are taken. About 1.5 billion rubles are spent annually on planned labor protection measures. We build our approach to safety in the interconnection of all production processes, the work of our own personnel and contractors, the assessment of "protective barriers", instruction and training. We understand that people can make mistakes and production processes can fail. Therefore, we strive to educate workers to better deal with abnormal situations in order to avoid the risk of serious injury and accidents. For this purpose, we use modern VR simulators.
We are aware of our responsibility to society for the rational use of natural resources and the preservation of a favorable environmental situation. This is one of the basic conditions of our business, which includes reducing the impact on the environment and ensuring the self-healing potential of ecosystems. The Company spends about RUB 13 billion annually on environmental protection. We are concentrating on improving the efficiency of water resources use and cleaning water bodies, reducing waste and developing recycling, increasing energy efficiency, and preserving biodiversity. Particular attention is paid to the efforts to prevent oil spills and pipeline breakthroughs; reliable fiberglass pipes are being commissioned.
One of our priorities is the development of circular production. This will reduce the nature intensity of economic growth with an increase in the rationality of production processes and preserve natural resources for future generations.
Creation of shared value
Our responsible attitude to society is based on the principles and standards of corporate ethics of the Company. We adhere to the position of "creating common value" taking into account the interests of society as a whole. This means that Tatneft in its activities takes into account all the impacts it has on stakeholders and makes commercial choices taking into account social aspects. In the near future, we plan to introduce the concept of "Social License" (SLO) into corporate practice, which will strengthen our interaction with the public environment.
Tatneft provides about 60 thousand jobs, hiring the local population and interacting with local suppliers and contractors, and it is one of the largest taxpayers in the territory of its activity. We are implementing large-scale social infrastructure projects and investing in education programs, the development of spiritual heritage, culture, health care, healthy lifestyles and sports.
Our interaction with society is based on trust and transparency in our actions. Since 2005, we have been preparing a report on corporate responsibility and since 2016 - a report on sustainable development. We also publish a Statement of Payments to Governments in Connection with Extractive Activities, which presents the principles of taxation and other payments and their amounts. Tatneft adheres to the principles of openness in providing information, striving as fully, objectively and timely as possible to reflect all aspects of our activities on the corporate website and in the media. We are always open for contacts with our environment for a constructive dialogue on all significant issues.
While implementing sustainable development programs, we actively interact with a wide range of industry and public associations, educational, environmental, medical centers, with accounting, specialists in various fields. Tatneft is a member of the Governing Council of the National Network of the UN Global Compact in Russia.
In 2020, we initiated a corporate volunteer movement to promote the Sustainable Development Goals among youth. This project will be included in the Volunteer Movement Program of the National Network of the UN Global Compact in Russia. The volunteer movement started at the site of the Youth Forum of TATNEFT Company on the Sustainable Development Goals.
On behalf of the management and staff of the TATNEFT Company, I would like to thank all stakeholders for the constructive cooperation on the important tasks for all of us. Together, united by a single Global Compact, we will strive to achieve sustainable development for a better world.