Material topics and Stakeholder engagement

MATERIAL TOPICS

The KPO Sustainability Report is one of the important tools for building effective communication with the Company’s stakeholders. The aim of this document is to inform the stakeholders about material topics and solutions of issues related to them, and how the related changes have impacted both the organization and its stakeholders during the reporting period.

It is important for us to maintain a constructive dialogue with our stakeholders and implement mutually beneficial solutions. Decisions are usually made through the engagement process of the two.

While working on this Report we rely on extensive experience of our Parent Companies and follow the requirements of the recognized best practices in non-financial reporting.

For a number of years, we have identified a number of topics material for us, which are reviewed annually in order to disclose the most relevant and critical to our activities. In this Report, we continue sharing the dynamics of the topics progress.

The process of compiling a sustainability report involves the exchange of information and data collection through interaction between various departments within the Company, as well as with stakeholders externally.

To define boundaries of our material topics, we are guided by the Standards of the Global Reporting Initiative (GRI) and their Standards for oil and gas sector. The most critical Key Performance Indicators are disclosed compared to those of the International Association of Oil and Gas Producers (IOGP). We report on the applicable GRI standards taking into account management approaches and Key Performance Indicators of the Company. At the same time, risk and opportunities are assessed, as well as set goals are quantified in comparison with achievements of previous periods.

Regardless of various standards` requirements, we do our best to provide more detailed information about the Company`s activities and material topics in sustainable development. Therefore, the information presented in the Report goes far beyond the GRI indicators alone.

Considered in the Report material topics tend to address issues related to the economic, environmental and social impacts of the KPO’s activities in general, as well as separately in the process of implementation of particular production operations.

At the end of 2021, in order to identify the most material topics for disclosing in this issue, we have conducted a survey amongst the key stakeholders. This survey has helped us analyse our reporting process and prioritise our material topics.

In 2021, all the topics listed in Figure 1 have remained important for KPO and its stakeholders. The evaluation of the materiality of each topic based on the survey results is shown on the diagram in a ranking from 2 to 5 with a “threshold” value of 2.5. According to stakeholders, the key material topics identified include:

• Security practices,
• Occupational Health and Safety,
• Protection of employees health,
• Asset Integrity,
• Emergency response,
• Monitoring of air quality,
• Reduction of GHG and pollutants’ emissions,
• Water conservation.

The degree of value of material topics disclosed in this Report can be seen on Figure 1.

Fig. 1. Material topics of KPO Sustainable development

The topics disclosed for the reporting period are tracked regularly in the process of multilateral interaction with our Parent Companies, the PSA LLP Authority, various regulatory bodies, contractors, industry partners, employees, trade unions, local communities and the media. The stakeholders raise their issues at various sessions, from meetings of the Village Councils to forums, conferences, public hearings, social surveys, audits, and by addressing them directly to the Company.

As part of the Report’s preparation, we aim to continuously raise public awareness of the material topics disclosed in the Report, both internal and external. Inside the printed copies of our Sustainability Reports there are loose-leaf feedback forms for readers to fill in. We have also placed an online feedback form on our website.

STAKEHOLDER ENGAGEMENT

Success of sustainable development depends on effective dialogue between business and its stakeholders. We are bound with our stakeholders by multiple ties and are interested to hear their opinions.

In 2021, despite the impact of the COVID-19, KPO has successfully completed all its operational plans, including implementation of the expansion projects. The consequences of the COVID-19 pandemic continued affecting the processes of engagement with stakeholders, while there was an increase in terms of the dynamics of contacts and, accordingly, the volume of feedback received. During the year, online format of interaction was continued largely, along with the increase in the number of live meetings, mainly at the higher level. Some events were postponed to the next period.

Our interaction with stakeholders is an integral part of the Company`s activities. It is planned, documented and carried out in accordance with the legislation and internal policies. KPO departments determine their stakeholders based on the analysis of risks and material topics, and share their experience of engagement in this Report. Given the scale of the KPO’s activities, our stakeholders are a large number of diverse groups and organizations. The most significant groups of stakeholders and ways of interaction in 2021 are presented on the figure 2.

Feedback on the issued Sustainability Reports is obtained using different channels, including telephone and e-mail communications through Sustainability@kpo.kz address, as well as KPO’s official website www.kpo.kz. All received comments and suggestions are reviewed in preparation of the next Report.

Fig. 2. KPO engagement with stakeholders in 2021