Message from the Chairman of the Board of Directors
Dear stakeholders,
It is my pleasure to present 2023 Sustainability Report of JSC NC “KazMunayGas”, which highlights our achievements and strategic course.
Despite the challenges and difficulties of recent years, we continue to move towards the set goals and implement initiatives in accordance with the KMG 2022–2031 Development Strategy. At the centre of our efforts is the Strategic Goal ‘Sustainable Development and Gradual Carbon Emission Reduction’ implemented through three main Initiatives: ‘Energy Transition and Carbon Footprint Reduction’, ‘Personnel Health Management’, and ‘Sustainable Development in All Business Areas’. The implementation of these Initiatives includes the integration of sustainability principles into all key business processes, operations, and decision-making processes.
In 2023, as part of the environmental aspect of the ESG agenda, the Company implemented 60 significant activities under KMG’s Low-Carbon Development Programme to reduce its carbon footprint. Active implementation of decarbonisation projects is an important step in our pursuit of sustainable development and reduction of environmental impact.
Moreover, the Company has developed a Water Management Programme aimed at preventing water scarcity, maintaining ecosystem stability, and improving water management system for the long term. Through such processes as implementing effective internal standards, enhancing environmental culture and maintaining management system, KMG endeavours to improve the environmental and process safety of its operations.
As part of the social aspect, KMG Group has approved and is implementing a Programme of Activities aimed at managing personnel health, which includes a new Corporate Standard on Organising Mandatory and Periodic Health Checkup. In addition, a Unified Standard Programme of Industrial Sanitary Control is being implemented to improve the level of occupational health and safety of employees at all Company facilities. These activities will make it possible to create a more transparent process of personnel health management, improve the system of medical and preventive care, and strengthen industrial sanitary control in the Company.
The Company strictly respects the rights of employees of its subsidiaries and contractors and makes efforts to improve their living conditions and well-being, which is reflected in a social stability index of 75 %.
Moreover, KMG fulfils its social commitments in a timely manner through the allocation of significant funds for the development of the regions where it operates and for charitable purposes. Thus, in 2023, KMG subsidiaries allocated more than KZT 1.1 bln for charitable assistance to local communities.
Going forward, the Company intends to implement programmes aimed at promoting diversity and inclusiveness, developing local communities, and protecting human rights and gender equality.
In terms of corporate governance, special attention is paid to accountability, transparency, ethical behaviour and compliance with accepted International Standards. To this end, the Company actively reviews its ESG indicators and integrates relevant targets into the system of strategic and medium-term KPIs for managers. In particular, KMG has implemented a Risk Management System that allows it to effectively identify and assess risks, make reasoned decisions and take actions to mitigate risks that include ESG issues.
KMG’s ESG risk rating for 2023, which was 32.3 according to Sustainalytics, shows the quality of our ESG management. Ranked 40th among 315 oil and gas companies in the global rating, we demonstrate our commitment and performance towards sustainability. To further improve our ESG rating and mitigate the impact of potential ESG risks, the ESG Plan was updated with 42 actions to improve ESG risk management.
KMG’s Board of Directors gives high priority to sustainability issues. During the reporting year, the Health, Safety, Environment, and Sustainability Committee held five meetings where more than 30 items related to these issues were discussed. It is worth noting separately that the Board of Directors’ annual special meeting on sustainable development was held for in-depth analysis of the Company’s ESG aspects. This meeting covered key aspects of the ESG Plan, implementation of TCFD recommendations, and analysis of the current status and progress of our Low-Carbon Initiatives.
KMG’s efforts in applying ESG practices demonstrate its commitment to the Ten Principles of the UN Global Compact, the Sustainable Development Goals, and the UN Guiding Principles on Business and Human Rights.
In conclusion, I would like to note that good ESG practices are an integral part of high engagement of all KMG managers and employees, which directly affects production and financial performance, and forms the Company’s value and reputation.
