• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 

Our Approach to Sustainable Development Managemen

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. It approves the consolidated annual Sustainability Report of the Company.

KMG BoD Committee for HSE and Sustainability 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 plan 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, who oversees the sustainability issues, coordinates approaches to achieving sustainability goals 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 measures through personal behaviour and compliance with relevant policies and standards.

In its Development Strategy, KMG has defined the Sustainable Development and gradual reduction in carbon intensity of operations as one of the strategic goals aimed at integrating the sustainability principles into key business processes, operations and decision-making.

The strategic goal of sustainable development and reducing carbon intensity of operations should result in creation of a sustainability management system that ensures achievement of high ESG performance, improving the quality of stakeholder relations, implementing of measures to reduce greenhouse gas emissions under tightening carbon regulation, and implementing of social projects to provide water to the regions of operation.

We continue to integrate the ESG criteria into our operations, which are a prerequisite for improving our sustainability performance management and understanding of key ESG risks and opportunities.

We are taking a comprehensive and systematic approach to integrating ESG principles into our operations, thus the following progress was made in 2021:

• For the second year in a row, we have successfully passed an independent assessment by Sustainalytics, an international rating agency. KMG’s ESG rating was upgraded from 69 to 72 and ESG risk rating was significantly reduced from 34.5 (high risk level) to 28.4, a medium risk level.
• Independent audit of Samruk-Kazyna’s corporate governance rating has been completed. As a result of the audit, KMG’s Sustainable Development rating has been upgraded from B (2018) to BBB (2021).
• In order to improve the Company’s sustainability performance, KMG’s Board of Directors for the first time approved ESG rating as a corporate KPI for 2021. Approved KPI targets have been achieved.In 2021, KMG’s department directors’ KPIs were supplemented with indicators related to the approval of the action plan and targets until 2030 for reduction of pollutant emissions, greenhouse gases, water saving and energy saving across KMG Group.
• The annual Sustainable Development Meeting of KMG’s Board of Directors was held on 7 June 2022. It discussed sustainable development priorities: plans and objectives of the Low-Carbon Development Programme of JSC NC “KazMunayGas”, the status of introducing the priority Sustainable Development Goals in JSC NC “KazMunayGas”, and annual sustainable development reporting.
• Issues discussed at the annual special sustainable development meetings are very significant for the Company and help to focus attention on topical sustainable development issues and the associated challenges.
• The implementation of sustainability system is regularly reviewed by the Health, Safety, Environment and Sustainability Committee of the Board of Directors. In general, five meetings of the Committee were held in 2021, where 52 issues were addressed, with 115 decisions and assignments developed following the meetings of the Committee. In 2021, the Committee was mainly focused on health, safety and environment, strategic management of the ESG (Environmental – Social – Governance) aspects, and implementation of a sustainable development system.
• To reaffirm our commitment to the sustainable development principles:
  • The Company’s new Environmental Policy has been approved;
  • An Action Plan to improve KMG’s ESG rating has been developed and approved;
  • A Low Carbon Development Project Office has been established to develop KMG’s own decarbonisation approaches;
  • The Company’s Low-Carbon Development Programme has been developed and approved.
• There is a strong emphasis on enhancing a sustainable development culture. Sustainable development training is conducted on a regular basis for employees of the corporate centre and SDEs.