ESG risk rating

An ESG risk rating was approved by KMG’s Board of Directors as a corporate KPI for 2022, reflecting the Company’s intent to manage material ESG risks and commitment to sustainability principles in the international oil and gas market. Achievement of the corporate KPI includes addressing the key ESG matters within KMG Group.

Sustainalytics assessed KMG’s ESG risk management at 28.4. The Company’s risk of exposure to ESG factors is medium. KMG maintained the rating despite materialised occupational health risks. The Company got high praise from experts for its engagement with local communities in the regions of operation, tax transparency, and commitment to preserving the environment and biodiversity. Moreover, the expert report recognised KMG Group’s corporate governance and adherence to high standards of business ethics.

KMG will keep streamlining its activities to meet the highest sustainability standards. We will take steps to prevent and eliminate workplace accidents, consistently reduce GHG emissions, and work more to improve social and environmental conditions across our footprint. KMG has developed and approved an action plan to improve its ESG rating, which includes 65 measures that cover and factor in environmental and social risks for the business, as well as corporate governance risks for the Company. In 2023, KMG intends to update the plan based on measures already implemented.

Particular attention is paid to enhancing the sustainability culture. Sustainability training courses are held on a regular basis for employees of the Corporate centre and subsidiaries and associates.

ESG risk rating from Sustainalytics

In 2022, KMG did the following to improve its ESG rating:

  • approved an Action Plan to implement the Low-Carbon Development Programme for 2022–2031;
  • approved KMG’s Sustainable Development Policy;
  • approved KMG’s Human Rights and Public Relations Policy;
  • put in place and run an accessible complaint review mechanism;
  • conducted tax reporting under GRI 207 and BEPS Action 13;
  • disclosed the Report on Payments to Government Bodies for public access on the corporate website;
  • improved gender balance in the Board of Directors by adding an independent director Assel Khairova;
  • disclosed information on fatalities involving contractors in the 2021 Sustainability Report.

Action plan to improve KMG’s ESG rating for 2023:

  • develop and approve a strategic document on sustainable development;
  • approve KMG’s Water Resources Management Programme;
  • complete the Tazalyq project;
  • finish the upgrade and expansion of the Astrakhan–Mangyshlak water pipeline;
  • take measures to eliminate historical oil waste and remediate oil-contaminated lands;
  • conduct tax reporting under GRI 207 and BEPS Action 13;
  • disclose the Report on Payments to Government Bodies for public access on the corporate website;
  • disclose the accomplishments under the Comprehensive Plan of Socio-economic Development of Mangistau Region for 2021–2025 in the Sustainability Report;
  • develop and approve an internal document on area closure and remediation;
  • prepare for initial TCFD disclosure;
  • develop and approve a Charity Policy for KMG and its subsidiaries and associates;
  • keep disclosing information in the Sustainability Report under GRI 2021.