Sustainable Development Management

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Our approach to sustainable development management

KMG is committed to building an effective sustainability management system that includes the following elements:

• commitment to the sustainable development principles at all the management levels;
• analysis of the external and internal situation in terms of the three sustainable development aspects − economic, environmental and social;
• determination of sustainable development risks in economic, environmental and social spheres;
• stakeholder engagement and building a stakeholder map;
• definition of goals and KPIs of sustainable development;
• implementation of priority areas (initiatives) of sustainable development;
• integration of sustainable development into the key business processes;
• advanced training of the Company’s employees in sustainable development;
• organisation of annual sustainable development reporting process;
• sustainable development performance measuring;
• upgrading the sustainable development process.

In its 2022–2031 Development Strategy, KMG has defined the Sustainable Development and gradual reduction in carbon intensity of operations as one of the strategic goals. Based on it, all business and decision-making processes should integrate the principles of sustainable development.

The management of KMG’s sustainable development aspects is based on the implementation of the following sustainable development principles:

• openness we are open to meetings, discussions and dialogue; we strive to build long-term cooperation with stakeholders based on consideration of mutual interests, respect for rights and balance between the interests of the organisation and stakeholders;
• accountability we recognise our accountability for our impact on the economy, environment and society;
• transparency our decisions and actions must be clear and transparent to stakeholders;
• ethical conduct our values such as respect, honesty, openness, team spirit and trust, integrity and fairness underpin our decisions and actions;
• respect we respect the rights and interests of stakeholders, which follow from legislation, concluded contracts or indirectly through business relationships;
• lawfulness our decisions, actions and behaviour comply with the laws of the Republic of Kazakhstan and the decisions of the organisations’ bodies;
• respect for human rights we respect and promote human rights provided for in the Constitution of the Republic of Kazakhstan and international documents;
• intolerance to corruption we declare zero tolerance to corruption in all its manifestations in co-operation with all stakeholders;
• no conflict of interest personal interests of an official or employee should not influence the impartial fulfilment of his/her official or functional duties;
• personal example – every day each of us contributes to the implementation of sustainable development principles in our actions, behaviour and decision-making; officials and employees in management positions should motivate the implementation of sustainable development principles by their personal example.

Sustainable Development Management in KMG

KMG’s Board of Directors provides strategic guidance and oversight for implementation of sustainable development principles and achievement of SDGs, approves the consolidated annual Sustainability Report of the Company.

Health, Safety, Environment and Sustainability Committee (HSESC) of KMG’s Board of Directors considers and manages sustainability issues, the status of SDG achievement, prepares recommendations for approval of the sustainability policy, annual KMG Sustainability Report, action plans and other internal documents on sustainability, the approval of which falls under the authority of BoD, implementation of social, economic and environmental components of sustainability, formation of a sustainability management system, setting sustainable development goals and KPIs, monitoring the implementation of sustainability in KMG, integrating sustainability into KMG’s key processes.

KMG’s Management Board ensures proper implementation and integration of sustainability principles, policies, standards and action plans in the Company. It monitors sustainable development activities, evaluates the achievement of sustainable development targets and KPIs and SDGs.

Deputy Chairman of KMG’s Management Board oversees the sustainability issues, coordinates the approaches to achieving SDGs and KPIs for sustainability initiatives and oversees implementation of corporate sustainability standards, preparation of the Sustainability Report and achievement of SDGs.

The Sustainability Sector of KMG’s Strategy and Portfolio Management Department is responsible for initiation, coordination and implementation of the sustainability management system and SDGs achievement, assistance in its integration into the Company’s business processes, methodological support in sustainable development issues, annual preparation and approval of the Sustainability Report, assistance to responsible business units in identifying and managing the sustainable development risks, in developing a stakeholder map and engagement mechanisms, as well as training in sustainable development.

KMG’s Business Units implement the sustainability system, implement initiatives to achieve SDGs, analyse the internal and external situation, identify sustainable development risks, develop a stakeholder map and engagement mechanisms, implement sustainable development initiatives and prepare information for the Sustainability Report in accordance with international standards.

All KMG employees, each at their own level, implement the sustainability and SDG achievement principles and actions through personal behaviour and compliance with relevant policies and standards.

Progress on a comprehensive systematic approach to the implementation of ESG principles in the Company’s operations in 2023 was achieved by the following activities:

• KMG has passed an independent assessment by Sustainalytics, an international rating agency. The Company received a risk management score of 32.3 points.
• In order to improve the Company’s performance in terms of sustainable development indicators for 2023, the corporate KPIs was approved by the decision of the KMG Board of Directors – implementation of investment projects (the indicator is aimed at sustainable development projects, among others), a comprehensive OHS indicator (the indicator is aimed at reducing the number of labour-related accidents).
• In 2023, members of KMG’s Management Board were set motivational KPIs – implementation of investment projects, implementation of RES projects, ESG rating, implementation of actions under KMG’s 2022–2031 Low-Carbon Development Programme, development of KMG’s internal carbon pricing mechanism, social stability index for KMG Group, reduction of the associated petroleum gas flaring intensity indicator, recovery of historical oil waste, automation of OHS management functions, development of the Water Management Programme, and implementation of the Action Plan “Personnel Health Management programs in KMG Group for 2023–2025“. SDEs within the Low-Carbon Development Programme implementation, were set KPIs for reducing their carbon footprints within the defined volumes.
• The annual Sustainable Development Meeting of KMG’s Board of Directors was held on 6 October 2023. It discussed topical issues on the Company’s sustainable development, action plan to improve ESG risk rating, disclosure of information according to TCFD recommendations, as well as the status of implementation of low-carbon projects.
• The implementation of sustainability system is regularly reviewed by the Health, Safety, Environment and Sustainability Committee of the Board of Directors of KMG. In general, five meetings of the Committee were held in 2023, where 31 issues were addressed. In 2023, the Committee was mainly focused on health, safety and environment, strategic management of the ESG aspects, and implementation of a sustainable development system.
• Confirming its commitment to the principles of sustainable development, KMG has adopted the following documents for KMG Group:
  • Sustainable Development Policy
  • Human Rights and Public Relations Policy
  • KMG Group’s Employee Health Management Programme
  • 2022–2031 Low-Carbon Development Programme
  • Action Plan to Implement the 2022–2031 Low-Carbon Development Programme
  • Site Closure and Land Reclamation Policy for Exploration Sites and Fields
  • Information Disclosure Policy
  • Energy Policy
  • Economic Security Regulations
  • Crisis Management Regulations of JSC NC “KazMunayGas”
  • Rules for Conducting Anti-Corruption Monitoring and Internal Analysis of Corruption Risks
  • Corporate Risk Management System Policy
  • Policy on Conflict of Interest Management for Employees and Officials
  • Confidential Informing Policy
  • Anti-Corruption Standards
  • Anti-Corruption Policy
  • HR Policy 2018–2028
  • Standard Regulations for Interaction of SDEs with Contractors Operating at KMG Facilities
  • Standard Rules of Social Assistance
  • Standard Regulations of the Unified System of Internal Communications
  • Guidelines on Sustainable Development Management System in KMG Group
  • Guidelines on Health, Safety and Environment Management in KMG Group
  • Uniform Occupational Safety Management System
  • Information Security Management System Manual
  • Quality Manual
  • KMG Group Regulations on the Application of Qorgau Card
  • Corporate Regulations for Physical Security and Counter-Terrorism Protection
  • Corporate Standard for PPE Provision
  • Corporate Standard for Process Safety Management in KMG Group
  • Corporate Occupational Health and Safety Standard of KMG Group
  • Corporate Standard to Ensure Health, Safety and Environment Competencies
  • Corporate Standard for Interaction with Contractors
  • Corporate Standard on Water Management in KMG Group
  • Emission Management Policy in KMG Group
  • Policy on Alcohol, Narcotic Drugs, Psychotropic Substances and their Analogues
  • Safe Land Transport Vehicle Operation Policy of JSC NC “KazMunayGas”
  • Environmental Policy of JSC NC “KazMunayGas”
  • Occupational Health and Safety Policy of JSC NC “KazMunayGas”
  • Vital Rules (a set of key requirements for compliance with the Biosafety Regulations)
  • 10 steps to recovery
  • Prevention of heart attacks and strokes
  • Regulations on the Preparation of a Standard Programme of Industrial Sanitary Control in KMG Group
  • Corporate Standard on Organising Mandatory Medical Examinations in KMG Group
  • Action Plan to Improve KMG’s ESG Risk Rating

Every year, the Company pays great attention to improving the culture of sustainable development. Training courses on sustainable development are held on a regular basis for employees of the Corporate Centre and SDEs.