Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainable Development
• Health, Safety and Environmental Protection
• Social Responsibility
• Corporate Governance

Environmental Achievements

• Implementation of an integrated management system for industrial safety, labor and environmental protection in accordance with ISO 14001:2004, OHSAS 18001:1999 and ISO 19011:2002
• Reduced overall accident rate per one million man-hours to 0.34, a drop of 32% compared to 2005
• Reduced the total number of incidents and breakdowns by 30.8% compared to 2005

Social Achievements

• Allocated 7.5 billion rubles to social programs
• Provided its employees with 47,500 square meters of housing
• 645 employees participated in Rosneft’s long-term mortgage lending program

Governance Achievements

• Adoption of a Company Code of Corporate Conduct
• Establishment of three committees of the Board of Directors: the Audit Committee, the HR and Remuneration Committee and the Strategic Planning Committee
• Completed a consolidation program, whereby 12 subsidiaries joined the Company

Climate Goals & Targets

Environmental Challenges

• Legal risks arising from amendments to currency regulations, tax legislation, customs regulations and duties, licensing requirements, and judicial practice
• Financial risks including inflation risk, interest rate risk, and currency risk
• Industry-related risks such as price risks, competition risk

Mitigation Strategies

• Monitoring amendments to legislation and evaluating their potential effect on Company activity
• Pursuing a balanced policy in using own and borrowed funds, securing favorable ratings
• Optimizing important performance indicators, reducing capital and operational costs
• Modernizing refineries to increase refining volume and depth
• Developing a network of Company-owned fuel stations

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Recognition for high level of corporate and social responsibility at a Russian government competition

Environmental Metrics

ESG Focus Areas

• Health, Safety, and Environment (HSE)
• Employee Relations
• Socio-economic development of the regions of operations
• Innovation

Environmental Achievements

• Reduced overall air emissions while expanding oil production and refining.
• Remediated 849 ha of oil-contaminated land and eliminated 100 sludge pits.
• Achieved power savings of 514 GWh and heat savings of 61 thousand Gcal.

Social Achievements

• 2.9-fold reduction in the number of fatalities and 15% decrease in occupational injuries.
• Continued implementation of corporate housing programs.
• Expanded coverage of the corporate pension program to over 120,000 employees.

Governance Achievements

• Implemented a new system for determining annual bonuses based on KPIs for senior managers.
• Adopted a corporate Regulation on Workplace Assessment with regard to Working Conditions.
• Continued promoting and implementing the Code of Business Ethics in subsidiary companies.

Climate Goals & Targets

Environmental Challenges

• Increased oil production at the Vankor field resulted in a lower APG recovery rate (56.2%).
• Increased number of occupational injuries (including fatalities) in contractor organizations.
• Differing scope and size of social benefits across subsidiaries.

Mitigation Strategies

• Implemented the corporate Gas Program to achieve a 95% APG recovery rate (with planned completion in 2013).
• Implemented a corporate standard defining key requirements for contractors in HSE.
• Undertook efforts to standardize the scope and size of social benefits across subsidiaries.

Supply Chain Management

Responsible Procurement

• Procuring over 90% of goods and services from domestic suppliers.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G3.0 Guidelines, IPIECA/API Guidance, UN Global Compact, RUIE Basic Performance Indicators

Certifications: ISO 14001

Sustainable Products & Innovation

• High-quality gasolines compliant with Euro-4 and Euro-5 standards.

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Signed a declaration with ExxonMobil and Statoil on protection of the environment and biodiversity during exploration and development of shelf oil and gas resources.
• Investments and current spending on environmental measures totaled RUB 22.1 billion (a 26.3% increase from 2011).
• Reclaimed contaminated land and processed oil and drill sludge at various subsidiaries.

Social Achievements

• Spending on social programmes increased by 10.3% to RUB 22.4 billion.
• Number of pensioners and veterans receiving corporate pensions increased by 36.6% to 54,500.
• Implemented a consistent youth policy, including Rosneft classes in schools and student festivals.

Governance Achievements

• Consistently improved the efficiency of its corporate governance system.
• Implemented the Regulation on the General Meeting of Shareholders.
• Established Board Committees for Audit, HR and Remuneration, and Strategic Planning.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to railway oil supply disruptions at Komsomolsk Refinery.
• Depletion of resource base in North Caucasus and Southern Federal Districts, leading to decreased oil production.
• Complex geology, remoteness, and lack of transport infrastructure at Yurubcheno-Tokhomskoye field.

Mitigation Strategies

• Implemented cost-saving initiatives to keep production and operating costs below inflation.
• Implemented highly efficient well intervention programmes at fields in Central Russia and West Siberia.
• Developed a pilot programme with ExxonMobil for hard-to-recover oil in the Achimov and Bazhenov formations.

Supply Chain Management

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001:2004, OHSAS 18001:2007

Third-party Assurance: Ernst & Young LLC

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• First place in ‘Best annual report in the oil & gas sector’ at the 15th Annual Reports Competition.
• Prize winner in ‘Best Annual Reports in 2011’ competition for ‘Best level of information disclosure on corporate governance’.

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Increased associated petroleum gas utilization to 87.9%, while cutting gross emissions by 2.7%
• Reduced drilling waste by 38% from 463 to 336 tonnes per thousand meters
• Completed major upgrades across its refining facilities to allow the production of cleaner Euro 5 gasoline and diesel fuels

Social Achievements

• Confirmed its status as one of Russia’s major employers, with the number of employees exceeding 258,800
• Social spending totaled RUB 6.4 billion
• Average monthly salary stood at RUB 69,900

Governance Achievements

• Adopted a new version of the Code of Business and Corporate Ethics
• Implemented 88% of the Bank of Russia’s Corporate Governance Code recommendations

Climate Goals & Targets

Environmental Challenges

• Plummeting hydrocarbon prices
• Risks related to prices for crude oil, gas and petroleum products
• Risks related to the reliance on monopoly providers of oil, gas and petroleum products transportation
• Risks related to geography and climate
• Risks related to the sale of gas produced
• Risks related to the amount of actual reserves
• Risks related to competition
• Risks related to adverse environmental effects, occupational safety and health
• Risks related to HR and social policies
• Country and regional risks
• Financial risks
• Legal risks

Mitigation Strategies

• Reduction in lifting costs to US$2.6 per boe
• Re-distributing commodity flows and managing operating costs and capital expenditure
• Risk management and internal control system
• Enhanced hazard identification and risk assessment processes
• Various activities set down in its HR policy for recruiting and retaining highly qualified personnel
• Natural hedging
• Comprehensive approach to managing credit risk
• Ongoing monitoring of changes in laws and regulations

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Preference given to local bidders, all other factors being equal

Climate-Related Risks & Opportunities

Physical Risks

• Extremely low temperatures in winter may impede the operation of its oil and gas producing entities in northern regions

Transition Risks

• Changes in laws and regulations

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI G4, UN Global Compact, IPIECA/API (2010)

Certifications: OHSAS 18001, ISO 14001

Third-party Assurance: EY

Sustainable Products & Innovation

• Euro 5 gasoline and diesel fuels

Awards & Recognition

• Award for “Contribution to Improving Environment and Raising Environmental Awareness”
• Rosneft’s 2014 Annual Report was recognized as best annual report among companies with the market cap above RUB 200 billion

Environmental Metrics

ESG Focus Areas

• Climate action and carbon management
• Preserving the environment for future generations
• Occupational health and safety
• Emergency risk management
• Personnel
• Supporting social and economic development
• R&D and digital transformation
• High standards of business ethics

Environmental Achievements

• Reduced non-GHG emissions by 14% through the implementation of the Gas Investment Program.
• Reduced per unit emissions from operational processes by 8% compared with 2019.
• Remediated 519 hectares of oil-contaminated land.
• Reduced the total area of contaminated land by 10% compared with the previous year.
• Achieved an APG utilization rate of over 95% at RN Vankor.
• Reduced the volume of ‘fresh’ water consumed by 2% against 2019 volumes.

Social Achievements

• Launched contactless payment solutions at its filling stations.
• Rolled out a corporate vaccination programme for employees.
• Provided support to healthcare facilities across its footprint, including direct allocation of funds as well as donations of necessary medical and personal protective equipment.
• Delivered 760 thousand man-courses across all business lines (138% of the 2020 target) through distance learning.
• Allocated RUB 27.6 bln to support private pension schemes, promote healthy lifestyles, and provide healthcare and social guarantees for its employees.

Governance Achievements

• Renamed the Strategic Planning Committee to the Strategy and Sustainable Development Committee, expanding its tasks and functions.
• Approved the Carbon Management Plan for the period until 2035.
• Improved its score to 71.83 in Bloomberg’s ESG Disclosure rankings, achieving an “A” rating.
• Implemented the Regulations on Coordinating Anti-Fraud and Anti-Corruption Processes.

Climate Goals & Targets

Environmental Challenges

• Business challenges in 2020 due to the impacts of the pandemic and temporary cuts in oil production under the OPEC+ agreement.
• Lag time in commissioning associated gas utilization infrastructure for greenfield developments, leading to increases in greenhouse gas emissions.
• Increase in the volume of spilled oil due to an incident on the pipeline of RN-Sakhalinmorneftegaz LLC.
• 7% increase in the volume of industrial wastewater discharge compared to 2019, primarily due to an increase in the volume of third-party wastewater.

Mitigation Strategies

• Developed a Carbon Management Plan for the period until 2035, outlining a framework for the Company’s transition to a low-carbon economy.
• Implemented large-scale carbon reduction initiatives, including APG utilization projects.
• Implemented a five-year Pipeline Reliability Program 2020–2025 to reduce the incidence of pipeline failures.
• Implemented a number of investment projects for the modernization and reconstruction of treatment facilities at the Company's refineries to improve wastewater treatment and reduce discharge quantities.

Supply Chain Management

Responsible Procurement

• Consistently high volumes of procurement of goods, works and services from small and medium enterprises (SMEs)
• Implementation of category management
• Improvement of contractors’ competencies, including in terms of occupational health and safety
• Organising workshops and round tables for suppliers and contractors
• Company’s health and safety requirement apply to counterparties

Climate-Related Risks & Opportunities

Physical Risks

• Unfavourable weather that may lead to changes in output and supply of oil and petroleum products
• Climate change in certain regions and the need to adapt the business accordingly

Transition Risks

• Vehicles electrification and decline in petroleum product demand
• Hydrocarbons getting gradually replaced by alternative energy sources
• Business restrictions stemming from climate and environmental initiatives
• Changes in hydrocarbon demand and its structure, as well as in consumer preferences

Opportunities

• Development of the gas segment of the Company’s business
• Implementation of the Program of innovative development to ensure transition to cleaner fuels
• Modernization of the structure of generation and consumption of energy resources in the Company
• Digitalization and accelerated technical development in all areas of the Company’s activities

Reporting Standards

Frameworks Used: GRI Standards (core option), UN Global Compact principles, International Financial Reporting Standards (IFRS), recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), 2020 IPIECA voluntary guidance for the oil and gas industry, International Integrated Reporting Framework

Certifications: ISO 14001:2015, ISO 45001:2018

Third-party Assurance: EY

UN Sustainable Development Goals

• Goal 3
• Goal 6
• Goal 7
• Goal 11
• Goal 12
• Goal 13
• Goal 14
• Goal 15
• Goal 17

Rosneft works to ensure the environmental sustainability of its operational activities by identifying, assessing and avoiding potential environmental impacts, or where not possible to avoid, the Company works to minimize these impacts.

Sustainable Products & Innovation

• “blue” hydrogen
• biofuels
• eco-friendly aviation fuel
• LMF-ТМС type A (low-viscosity marine fuel)

Awards & Recognition

• Prize at the 23rd Annual Report Competition
• Award from the Federal Service for Intellectual Property

Environmental Metrics

ESG Focus Areas

• Climate action and carbon management
• Preserving the environment for future generations
• Ensuring occupational health and safety
• Emergency risk management
• Personnel management
• Research and innovation development
• Supporting social and economic development
• High business standards

Environmental Achievements

• Reduced greenhouse gas emissions from its activities by 10% vs the 2020 base.
• Reduced absolute methane emissions by 60% and Scope 2 greenhouse gas emissions by 13% over four years.
• Energy Saving Programme saved over 2.8 mmtce of fuel and energy resources.
• Green investments amounted to RUB 55 bln.
• Fuel and energy savings amounted to 372 thousand tonnes of reference fuel.

Social Achievements

• Achieved herd immunity level of 95% at Rosneft and 90% across Group Subsidiaries.
• Over 40 thousand pensions were raised by 4% as part of the Active Longevity Programme.
• >76 thousand employees completed a training course on Golden Rules of Safety.
• 1,078 employees improved their living conditions under the corporate mortgage programme.

Governance Achievements

• Rosneft-2030: Reliable Energy and Global Energy Transition Strategy approved, aiming for net carbon neutrality by 2050.
• Rosneft was the only Russian oil and gas corporation to be recognised as a leader in sustainable development and included in the Global Compact LEAD initiative.
• Updated its approach to determining the materiality of topics disclosed in sustainability reports.

Climate Goals & Targets

Environmental Challenges

• Climate change in the regions where the Company operates (rising temperature and sea level, permafrost thawing, and extreme weather events)
• Business restrictions stemming from climate initiatives (global adoption of requirements of international and regional climate and environmental initiatives)
• Changes in corporate governance standards and regulations
• HR and social risks
• Tighter industry regulation and requirements
• Accidents and environmental damage

Mitigation Strategies

• Implementation of the Rosneft-2030: Reliable Energy and Global Energy Transition Strategy
• Regular monitoring of recommendations of international and regional climate and environmental initiatives
• Active interaction with stakeholders on ESG agenda
• Implementation of initiatives to reduce carbon footprint
• Regular monitoring of requirements and recommendations of international and regional regulators
• Implementation of the Rosneft-2030: Reliable Energy and Global Energy Transition Strategy
• Implementation of the Energy Saving Programme
• Adoption and regular revision of the Innovation Development Programme

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Code of Suppliers of Goods, Works, and Services in the Area of Human Rights Observance

Climate-Related Risks & Opportunities

Physical Risks

• Climate change in the regions of Company operations
• Extreme weather conditions

Transition Risks

• Business restrictions stemming from climate initiatives
• Regulation of GHG emission reduction
• Changes in the structure/volume of energy consumption

Opportunities

• Development and (or) expansion of low-emission offering of products and services
• Natural gas production and sales
• CNG retail sales
• Improved motor fuels
• Greener motor oils
• EV charging stations
• APG utilisation
• Enhanced oil recovery due to APG and prevention of methane emissions
• Energy efficiency and energy saving

Reporting Standards

Frameworks Used: GRI Standards, Core option, UN Global Compact principles, TCFD recommendations, IPIECA/API voluntary guidance, SASB industry topics, UNCTAD indicators

Certifications: ISO 50001 (Energy Management Systems), ISO 14001:2015 (Environmental Management System)

Third-party Assurance: TSATR – Audit Services LLC

UN Sustainable Development Goals

• SDG 3
• SDG 6
• SDG 7
• SDG 11
• SDG 12
• SDG 13
• SDG 14
• SDG 15
• SDG 17

The report details how Rosneft's initiatives contribute to these goals.

Sustainable Products & Innovation

• Euro 6 gasoline
• AI-100 gasoline
• Low-sulphur marine fuel RMLS 40
• Blue hydrogen
• Biofuels
• Eco-friendly jet fuel

Awards & Recognition

• Global Compact LEAD Participant status
• Leader of the RSPP Responsibility and Transparency and Sustainability Vector indices

Environmental Metrics

ESG Focus Areas

• Carbon management
• Biodiversity conservation
• HSE (Health, Safety, and Environment)
• Sustainable Development Goals (UN SDGs)

Environmental Achievements

• 11% reduction in absolute GHG emissions vs 2020
• 2.8 mmt of CO2-equiv. reduction in emissions as part of green power purchases
• 0.9 mmt of CO2-equiv. reduction in emissions as part of the Energy Saving Programme
• 100% waste disposal and remediation of legacy lands
• 16% reduction in the area of legacy lands
• Processed more than 4 mmt of drilling waste and around 1.2 mmt of oil-contaminated waste
• Remediated over 470 hectares of contaminated land
• Reduced gross air pollutant emissions by 2% year-on-year, while also halving its excess emissions

Social Achievements

• Launched an ambitious forest and carbon management project with a potential absorption capacity of 10 mmt of CO2-equiv.
• Planted more than 18 million seedlings and young trees over the past three years
• Provided ca. RUB 43.7 bln in OHS spending in 2022
• Zero road fatalities through the fault of its employees in 2022

Governance Achievements

• Improved ranking in the Net Zero Company Benchmark, ahead of all Russian peers
• Set a target of achieving net carbon neutrality by 2050 with respect to Scope 1 and 2 emissions
• Resumed the Company’s Open Market Share Buyback Programme
• Engaged JSC Kept (KPMG before 1 July 2022) for external assessment of the Board of Directors’ performance

Climate Goals & Targets

Environmental Challenges

• Higher electricity prices
• Increased tariffs for transportation of oil and petroleum products
• Volatile macroeconomic and geopolitical environment
• Economic constraints imposed by the USA, EU and some other countries
• Increased sanctions pressure

Mitigation Strategies

• Tight expense management
• Implementation of the Import Substitution and Equipment Localisation Programme
• Expanded cooperation with companies from friendly countries
• Redistribution of commodity flows
• Continuous monitoring of existing constraints to minimize their adverse effects

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters
• Climate change in the regions where the Company operates

Transition Risks

• Advance of alternative energy and green technologies and improvements in energy efficiency
• Changes in the structure of energy consumption
• Stricter regulation and requirements related to climate change

Opportunities

• Development of energy-saving, carbon capture and storage technologies
• Promotion of natural absorption

UN Sustainable Development Goals

• Good Health and Well-Being
• Affordable and Clean Energy
• Decent Work and Economic Growth
• Climate Action
• Partnership for Sustainable Development

Rosneft’s operating and strategic priorities conform to the 17 UN Sustainable Development Goals.

Environmental Metrics

ESG Focus Areas

• Environmental safety
• Carbon management
• Biodiversity conservation
• Health, safety, and environment (HSE)
• Sustainable Development Goals (UN SDGs)

Environmental Achievements

• 5% reduction in absolute GHG emissions vs 2020
• 1 mmt of CO2 reduction in emissions as part of the Energy Saving Programme
• Planted more than 10 million seedlings of various tree species in 2023, with a total of around 26 million seedlings and trees planted over the past three years
• −40% reduction in land contamination from pipeline oil spills vs 2022
• −20% reduction in land contamination vs 2022
• −11% reduction in legacy contaminated lands from pipeline oil spills vs 2022
• Over 480 hectares of land remediated (ca. 80% owing to the efforts of internal ecological services established by key Group Subsidiaries)
• More than 230 hectares of land contaminated with legacy waste remediated, including over 80 hectares in 2023

Social Achievements

• Continued implementation of targeted programmes to prevent falling and traffic accidents
• Zero road fatalities through the fault of its employees in 2023
• More than 83 thousand employees completed the updated Carbon Management course
• Number of Rosneft individual shareholders increased by more than a quarter and reached 1.14 million people

Governance Achievements

• Maintained shareholder rights to participate in corporate governance and receive dividends
• Did not suspend dividend payments in 2022 and 2023
• Provided adequate disclosure of its financial and operating performance and corporate governance
• Implemented measures aimed at maintaining financial stability helped the Company reduce its net financial debt and advance payment arrears by RUB 0.7 trln compared to the beginning of 2023

Climate Goals & Targets

Environmental Challenges

• Attempts by unfriendly states to step up sanctions, which are basically illegitimate pressure on the energy sector
• High volatility of the macro environment

Mitigation Strategies

• Strengthening partnerships with businesses from Asia and other regions
• Developing its cooperation with key international partners
• Implemented measures aimed at maintaining financial stability

Supply Chain Management

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters
• Climate change in the regions where the Company operates

Transition Risks

• Advance of alternative energy and green technologies, and improvements in energy efficiency
• Changes in the structure of energy consumption
• Stricter regulation and requirements related to climate change. New climate initiatives

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 45001, ISO 14001

Third-party Assurance: TSATR – Audit Services LLC

UN Sustainable Development Goals

• Good Health and Well-Being
• Affordable and Clean Energy
• Decent Work and Economic Growth
• Climate Action
• Partnership for Sustainable Development

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed