Management Approach
NOVATEK places a high strategic importance on upholding the highest sustainability standards and monitoring the impact on its stakeholders.
The Company ensures effective oversight of its approach to and performance on sustainability through dedicated Board of Directors committees, with top management’s motivation system containing relevant sustainability-linked key performance indicators.
Sustainability management is seamlessly integrated into the corporate governance system, ensuring comprehensive attention is paid to these matters across different levels, from the Board of Directors — the highest strategic management body — to the executive bodies and heads of specific business units.
Within the executive bodies, responsibility for each sustainability dimension is assigned to the respective Deputy Chairman of the Management Board.
To drive the implementation of management decisions, corporate documents have been developed to regulate internal sustainability and related risk management practices.
Sustainability Corporate Governance System
| Board of Directors |
Function:
- defining the Company’s sustainability agenda and strategy
|
| Remuneration and Nomination Committee |
Functions:
- establishing effective and transparent remuneration of members of the Company’s governance bodies and building up their expertise;
- planning HR management activities; and
- reviewing reports on industrial safety, environmental protection, climate impact, corporate governance, and social activities, as well as the Company’s sustainability reports on an annual basis.
|
| Strategy Committee |
Functions:
- defining strategic goals and overseeing the implementation of the sustainability strategy;
- making recommendations on the dividend policy; and
- evaluating the long-term effectiveness of the Company’s operations.
|
| Audit Committee |
Functions:
- overseeing the internal and external audit functions; and
- supervising the performance of the risk management, internal control, and corporate governance systems.
|
| Subcommittee on Climate and Alternative Energy under the Strategy Committee |
Function:
- providing recommendations to the Board of Directors on matters related to NOVATEK’s climate and decarbonization strategy, renewable development, and low-carbon fuel production.
|
Risk Management and Internal Control System
Effective risk management is an integral part of our business model, enabling NOVATEK to mitigate risks for all stakeholders while successfully achieving operational and strategic objectives.
NOVATEK has in place a multi-tier risk management and internal control system (RMICS), which is subject to continuous improvement and is structured in accordance with international and Russian best practices.
The main principles, approaches, goals, objectives, participant obligations, and engagement procedures of the RMICS are governed by PAO NOVATEK’s Regulations on Risk Management and Internal Control System (the Regulations), approved by the Board of Directors.
To implement the Regulations, the Company has developed internal documents governing various aspects of the RMICS functioning, including risk management, internal audit, combating corruption, compliance with business ethics, control over insider information, processing and use of personal data, etc.
NOVATEK regularly identifies and assesses risks and defines actions to manage risks at all levels of corporate governance, including stress testing, developing business continuity plans and taking out insurance.
The Company utilizes a Risk Map to categorize and describe risks, including those related to sustainability that may threaten the achievement of the Company’s Targets on a planning horizon from one to three years. The Company’s Risk Map undergoes annual updates and is subject to review by both the Management Board and the Audit Committee of the Board of Directors.
The list of key sustainability risks is given in the Company’s Sustainability Report 2022.
