• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 

Our approach to sustainable development management

Our approach to managing aspects of sustainable development is based on the implementation of the following principles of sustainable development:

openness, accountability, transparency, ethical behavior, respect for the interests of stakeholders, legality, respect for human rights, intolerance to corruption, inadmissibility of conflicts of interest, personal example.

KMG strives to build an effective management system in the field of sustainable development, which includes the following elements:

• the Company’s commitment to the principles of sustainable development at all levels of management;
• analysis of the external and internal situation on three aspects of sustainable development: economic, environmental and social;
• identification of risks in the field of sustainable development in the social, economic and environmental spheres;
• interaction with stakeholders and building a stakeholder map;
• definition of goals and efficiency in the field of sustainable development;
• realization of priority areas (initiatives) in the field of sustainable development;
• integration of sustainable development into key business processes;
• professional development of the Company’s employees in the field of sustainable development;
• organization of the annual sustainability reporting process;
• measurement of performance in the field of sustainable development;
• improving the process of sustainable development.

Sustainable Development Management in KMG

The Board of Directors of KMG provides strategic guidance and control over the implementation of the principles of sustainable development and the achievement of the SDGs. Endorses the consolidated annual Report on the sustainable development of the Company.

KMG BoD Committee for HSE and Sustainability reviews and organizes issues of sustainable development, the status of achievement of the SDGs, preparation of recommendations for the endorsement of the sustainable development policy, the annual Report on the sustainable development of KMG, action plans and other internal documents in the field of sustainable development, the endorsement of which falls within the competence of the BoD, the introduction of social, economic and environmental components of sustainable development, formation of a management system in the field of sustainable development, definition of goals and efficiency in the field of sustainable development, monitoring the implementation of sustainable development in KMG, integration of sustainable development into key processes of KMG.

The Management Board of KMG carries out the proper realization and realization of the principles, policies, standards in the field of sustainable development and the action plan in the Company. Monitors activities in the field of sustainable development, assesses the implementation of goals and KPIs in the field of sustainable development and the achievement of the SDGs.

The Deputy Chairman of KMG’s Management Board, who oversees sustainable development issues, coordinates approaches to achieving goals and KPIs for sustainable development initiatives and supervises the realization of corporate standards in the field of sustainable development, supervises the preparation of a report on sustainable development and the achievement of the SDGs.

The Sustainability Sector of KMG’s Strategy and Portfolio Management Department is responsible for initiating, coordinating and implementing the sustainable development management system and achieving the SDGs, assisting in its integration into the Company’s business activities, methodological support on sustainable development issues, annual preparation and endorsement of the Sustainable Development Report, assists responsible structural units in identifying and risk management in the field of sustainable development, in the development of a stakeholder map and interaction mechanisms, as well as training in the field of sustainable development.

KMG’s Business Units implement a system in the field of sustainable development, implement initiatives to achieve the SDGs, analyze the internal and external situation, identify risks in the field of sustainable development, develop a map of stakeholders/stakeholders and interaction mechanisms, implement initiatives in the field of sustainable development, prepare information for a Sustainable Development Report according to international standards.

All KMG employees, each at their own level, implement principles and measures in the field of sustainable development and achieving the SDGs through personal behavior and compliance with relevant policies and standards.

Progress on an integrated system approach to the implementation of ESG principles in the Company’s activities in 2022 was achieved through the following activities:

• KMG has been independently evaluated by the international rating agency “Sustainalytics”. The Company maintained the average risk management level at 28.4 points.
• In order to improve the efficiency of the Company’s activities in terms of sustainable development indicators for 2022, the corporate efficiency – ESG rating was endorsed by the decision of the Board of Directors of KMG. The targets of the endorsed KPI have been achieved.
• In 2022, KMG Board members were assigned corporate KPIs related to the implementation of the activities of the KMG Low-Carbon Development Program for 2022–2031. For subsidiaries that are part of the perimeter of the realization of the Low-carbon Development Program, the efficiency of reducing the carbon footprint in the established volumes has been established.
• In September 2022, the annual Meeting of the Sustainable Development of the Board of Directors of KMG was held. Priority issues in the field of sustainable development were discussed: plans and objectives of the Low-Carbon Development Program of JSC NC KazMunayGas, status of implementation of priority Sustainable Development Goals in JSC NC KazMunayGas, annual reporting in the field of sustainable development.
• The implementation of sustainability system is regularly reviewed by the Health, Safety, Environment and Sustainability Committee of the Board of Directors. In total, 5 meetings of the Committee were held in 2022, at which 40 issues were considered. The main focus of the Committee’s attention in 2022 was the issues of occupational safety, industrial safety and environmental protection, strategic management of ESG (Environmental – Social – Governance) aspects, as well as the implementation of a sustainable development system.
• Reaffirming its commitment to the realization of the principles of sustainable development:
  • – the Policy in the field of sustainable development has been endorsed;
  • - The Policy on Human Rights and Public Relations has been endorsed;
  • - the realization of the Action Plan to improve the ESG rating of KMG is underway;
  • - The Department for Low-Carbon Development has been established in order to develop KMG’s own approaches in the field of decarbonization;
  • - The Action Plan of JSC NC “KazMunayGas” for the realization of the Low-Carbon Development Program for the period 2022–2031 has been developed and endorsed;
  • - The Program on personnel health management in the KMG Group of Companies has been endorsed.

Much attention is paid to improving the culture of sustainable development. On a regular basis, training courses on sustainable development are held for employees of the corporate center and subsidiaries.

MATERIAL topics of the report

The material topics of the Report reveal the Company’s most significant impact on the economy, environment and people, including human rights impacts, as well as ways to manage these impacts. The process of identifying material topics is based on continuous identification and impact assessment involving relevant stakeholders, with HSESC members being informed on material topics to be disclosed in the Report.

To assess and disclose material topics in the Report, data from both external and internal stakeholders (stakeholders) were analyzed. The online survey was prepared on the basis of the Google Forms platform. More than 100 respondents took part in the survey. Based on the procedures’ results, a table of materiality was constructed from 27 topics of the list of potential topics.

In total, 22 sector-specific topics of GRI 11: Oil and Gas Sector 2021 have been identified for consideration, of which 13 topics have been identified as material. The Sustainability Report for 2022 discloses 27 GRI standards as material. In 2021, the Report revealed 24 topics. https://www.kmg.kz/en/sustainable-development/

List of MATERIAL topics