Q&A

Leonid Fedun
Leonid Fedun
  • Vice President for Strategic Development PJSC LUKOIL

A.

To ensure the resilience of the business model, it is important that various divisions of the Company, including various LUKOIL entities and the Board of Directors, take part in managing sustainability. The Board of Directors is provided with strategic analysis of key trends in the oil&gas sector annually. During 2018, a report on the Company’s prospects in the low-carbon economy was presented, targets were set for 2019 and plans were prepared to continue incorporation of sustainability matters into the planning and performance review processes. The Management Committee approves environmental and industrial safety programs, while the Board of Directors evaluates their implementation, reviews information on measures to reduce such risks in the future setting high safety, ethical standards and level of accountability. In 2018, the Board of Directors reviewed and approved activities to improve the level of security in those felds and measures to further enhance the management system. Direct involvement of management enables to create an effective sustainability management system.

A.

This is an important development and naturally it has to be taken into account. Such indices already exist on a number of the world’s stock exchanges. It is possible that at present sustainability exchange instruments will have no signifcant impact on company valuations. However, the situation could change in the future. That is why we believe the Strategy, Investment, and Sustainability Committee of LUKOIL PJSC may face major challenges to develop further in this area.

The Company has programs in place that help resolve the Sustainability Development Goals (SDGs) and have development potential. We understand that the SDGs require us to further develop a corresponding non-fnancing reporting methodology. This is a challenging, but useful, objective. The quality of the reporting system in future will to a large extent be contingent on our ability to integrate formalized requests from various stakeholders into this system.

How do you see the role of management and the Board of Directors in boosting the resilience of LUKOIL’s business model to changes occurring in the world?

A.

To ensure the resilience of the business model, it is important that various divisions of the Company, including various LUKOIL entities and the Board of Directors, take part in managing sustainability. The Board of Directors is provided with strategic analysis of key trends in the oil&gas sector annually. During 2018, a report on the Company’s prospects in the low-carbon economy was presented, targets were set for 2019 and plans were prepared to continue incorporation of sustainability matters into the planning and performance review processes. The Management Committee approves environmental and industrial safety programs, while the Board of Directors evaluates their implementation, reviews information on measures to reduce such risks in the future setting high safety, ethical standards and level of accountability. In 2018, the Board of Directors reviewed and approved activities to improve the level of security in those felds and measures to further enhance the management system. Direct involvement of management enables to create an effective sustainability management system.

How does the emergence of Russian sustainability stock indices affect the Company’s plans to bolster its sustainability plans?

A.

This is an important development and naturally it has to be taken into account. Such indices already exist on a number of the world’s stock exchanges. It is possible that at present sustainability exchange instruments will have no signifcant impact on company valuations. However, the situation could change in the future. That is why we believe the Strategy, Investment, and Sustainability Committee of LUKOIL PJSC may face major challenges to develop further in this area.

The Company has programs in place that help resolve the Sustainability Development Goals (SDGs) and have development potential. We understand that the SDGs require us to further develop a corresponding non-fnancing reporting methodology. This is a challenging, but useful, objective. The quality of the reporting system in future will to a large extent be contingent on our ability to integrate formalized requests from various stakeholders into this system.