Stakeholder engagement

We cooperate with a wide range of organizations and private individuals (stakeholders), with whom the Company endeavors to establish successful long-term relationships, taking into account their expectations and positions on a number of issues. Key stakeholder engagement principlesThe above principles are set forth in the corporate document Social Code of PJSC LUKOIL. comprise:

  • partnerships
  • achieving long-term and efficient development
  • transparency of operations and information

State legislative and executive authorities. We actively interact with Russian legislative and executive authorities at all levels. Experts from PJSC LUKOIL and LUKOIL Group entities take part on an ongoing basis in discussing legislative initiatives and in the work of advisory groups and expert forums, discussing issues that are topical for the Russian oil and gas industry.

Shareholders and investors. Our investors and shareholders comprise Russian and foreign organizations and individuals pursuing various investment strategies. We consider the following to be stakeholders: investment funds and individual investors, investment banks, professional securities market participants (brokers and traders), industry analytical agencies, stock exchanges, rating agencies, as well as non-profit organizations that provide analytical and research services in the sphere of sustainability.

We continually strive to raise the level of information transparency, regularly provide using various channels information to representatives from the investment and financial communities, and react promptly to incoming queries.

In 2018, over 50% of the Company's publicly traded shares were under the control of funds which take ESG factorsESG – environment, social responsibility, corporate governance. into account when making investment decisions. Considering the wishes of the investment community, we refine our sustainability activities, build internal management processes, and enhance the quality of information disclosure. When identifying material topics for disclosure, a systematic analysis of requests from the investment community and rating agencies on the subject of sustainable development is carried out, and the most popular topics are determined. These requests are communicated to the Company's management, which then takes respective management decisions. Thus as part of the analysis of feedback from investors, an issue was identified regarding treasury shares that were on the balance sheet of a Company subsidiary. The presence of these shares was perceived very negatively by investors in terms of corporate governance standards and the risk of selling shares in the market. The necessary corporate procedures were prepared and implemented in a short time, which made it possible to redeem the treasury shares in 2018. The Department for Interaction with Investors replies to questions from ESG analysts and rating agencies. LUKOIL takes part in the largest ESG ratings.

Issues that are significant for the investment community were taken into account when updating the Company's internal documents.

Employees and trade unions. Social partnership forms the basis of the Company's relationships with its employees and trade unions. The Company has built a social partnership system that is based on agreements between the employer, trade unions, and employees. Trade union organizations process queries from employees: in 2018, around 650 queries were received, and around 270 expert reviews of collective contracts and agreements conducted. Trade unions also hold surveys of employees in order to study their opinions and make assessments of social and labor issues, including observance of labor rights.

Meetings between employees and management representatives of PJSC LUKOIL and LUKOIL Group entities are held on a regular basis.

Clients. Our clients comprise large and medium-sized organizations operating in various sectors of the economy and private individuals. We provide our clients with high-quality products and services, and develop innovative products that take into account the requirements of regional markets and the individual needs of consumers. Our goal is to reinforce our reputation as a responsible and reliable producer and supplier of energy products.

Suppliers and contractors. LUKOIL supply chain consists of companies with diverse types and scales of operations: large companies, small- and medium-sized enterprises, individual entrepreneurs, and social entrepreneurs. We are open to collaboration and offer equitable and competitive terms that are designed to facilitate the unbiased and effective selection of suppliers and contractors in key areas of the Company's activity.

Local communities. Social investment programs are implemented in constant contact with stakeholders, including local authorities and municipal and non-government organizations. Significant attention is paid to interacting on environmental protection issues with the environmental community and the residents of the regions where we operate.

Demonstrating its transparency, the Company interacts with the media on a regular basis, providing it with information that is of interest to the general public. In 2018 the Company had over 100 print media mentions and TV appearances, both in Russia and abroad.

LUKOIL is also a participant, organizer, and sponsor of forums, single-topic conferences, roundtables, and other events within which it interacts with other companies of the industry and the above stakeholder groups on a wide range of issues.

Stakeholder engagement in 2018

Stakeholders Events in 2018 Engagement-related issues within the framework of events
State and local legislative and executive authorities
Government representatives from the countries in which we operate Activities associated with the start-up of Kandym GPP (Uzbekistan). The Oil and Gas Uzbekistan Conference The development outlook for the gas industry, the social importance of investments in the country
Government representatives from the countries in which we operate, international companies, and organizations The Offshore Northern Seas International Conference (Norway) The responsible development of offshore resources
The Asia-Europe Business Forum (Belgium) The role of business in creating a positive international agenda
Legislative authorities of the Russian Federation 108 draft laws underwent expert review A public dialog on environmental protection, the regulation of greenhouse gas emissions, charity, and labor relations
Government representatives from Russian regions A series of roundtable discussions "Responsible interaction between business and government to facilitate the development of the Republic of Kalmykia" Social and economic cooperation between PJSC LUKOIL and the Republic of Kalmykia and the Volgograd Region administration was summarized
Shareholders and investors
Institutional investors Over 250 group and face-to-face meetings Presenting the Company's operating and financial results, as well as development plans
Investment community Participation in 10 investment conferences and forums. Organizing road shows in the UK, the USA, and a number of European countries Presenting the Company's operating and financial results, as well as development plans
Employees and trade unions
Managers of HR units and chairmen of trade unions A training seminar at the ILO International Training Center in Turin (Italy) Sharing experience in holding collective negotiations and social dialogues, resolving occupational health and safety issues, and fostering gender equality
Trade unions The 106th ILO Session "Work in a Changing Climate: The Green Initiative" (Switzerland) The influence of global climate change on the labor market
Trade unions The International Conference "Topical Remuneration Issues in the North: International and Domestic Aspects" (Russia) The efficacy of existing guarantees and compensation for workers of the North, questions relating to remuneration levels
Local communities
Industrial enterprises in Russian regions PJSC LUKOIL Supplier’s Day (Nizhny Novgorod Region, the Republic of Tatarstan, Russia) An opportunity to participate in PJSC LUKOIL public tenders
Local residents, experts, and environmental specialists The visit of a delegation of experts and scientists to the industrial sites of LLC LUKOIL-Nizhegorodnefteorgsintez (Nizhny Novgorod Region, Russia) The environmental responsibility of refineries
Local residents and municipal authorities Working group meetings (Komi Republic, Russia) Building a solid and liquid slurry processing landfill
International organizations 17th Session of the UN Permanent Forum on Indigenous Issues (USA) Presenting LUKOIL projects "Red Chum" and "Preserving the Native Languages and Literature of Indigenous People of the North"
Regional and local authorities, non-government organizations in the Russian regions A series of roundtable discussions "Responsible Interaction Between Business and the Government to Develop the Region" (the cities of Naryan-Mar and Usinsk in Russia) Interaction between large businesses, government, and society
Expert community The conference "Sustainable Development and the Social Responsibility of Business" (Moscow, Russia). "Russian Business and Human Rights" Roundtable Discussion (Moscow, Russia). Roundtable discussion: Global Non-Financial Reporting Trends in the Fuel and Energy Complex (Belgium) UN Sustainable Development Goals and non-financial reporting. Human rights
Local authorities and non-government organizations in foreign countries A series of public dialogues PETROTEL LUKOIL (Romania) The Company's corporate social responsibility programs in the Prahova (Romania) Region, territorial development priorities
Public Council meetings at refineries in Burgas (Bulgaria) Presenting the Sustainability Report for 2017
The media Press releases, press conferences Share buy-back program, field development in the Northern Caspian area and Uzbekistan, environmental safety, raising the retirement age in Russia, RES projects, and social programs in Russian regions
Scientific community The Project "Antarctica. 200 Years of Discoveries" The development of Antarctica