Remit and extent

A A A

{GRI 3.5., 3.6., 3.7., 3.8., 3.10., 3.11.}

In determining the content of the non-financial sections of the Annual Report, we were guided by the GRI Reporting Framework and the International Integrated Reporting Framework issued by the International Integrated Reporting Committee (IIRC). The information contained in the Report was selected based on the materiality criterion, which we define as having the potential to affect our enterprise's compliance with sustainable development principles, as well as our external stakeholders when looking for reliable, comparable and accurate information with which to inform their decisions.

To determine the content of the Report, we held a workshop with these stakeholders who are key for improving our reporting. In the course of this workshop, a number of issues of particular materiality to the organization and to its market environment were identified.

Determining materiality

Determining materiality

(1) The Company’s role in the national and regional energy security system
(2) High reliability of production units and installations
(3) Acquisition and development of new production licences
(4) Final product quality
(5) New investment projects
(6) Environmental monitoring close to the organization’s operations
(7) Investment activities employing Best Available Techniques (BAT)
(8) Promotion of best practices in the supply chain
(9) Further development of the Ethical Conduct Programme
(10) Further development of the public consultations system
(11) Creating the value of the LOTOS brand
(12) Use of state-of-the-art technical solutions
(13) Providing our employees with professional development opportunities
(14) Building proper relations with our employees
(15) Contributing to the social and economic development of our region

The non-financial information included in this Report was prepared using the majority of core and additional indicators provided for in the GRI Guidelines, to present our economic, environmental and social performance.

Like a year ago, additional industry-specific indicators from the Sector Supplement (GRI Oil & Gas Sector Supplement (OGSS)) were added to enrich this Report.

The methods used to calculate the figures presented in this Report were the same as those used in preparation of the LOTOS Group’s consolidated financial statements for 2013. These methods are in accordance with the IFRS effective as at December 31st 2013.

For a vast majority of topic areas, the facts and non-financial data presented in the Report pertain to Grupa LOTOS, the parent entity. However, all due care and consideration has been given on our part to account for the LOTOS Group’s consolidated data where possible. Regarding areas of key importance to social and environmental responsibility, we have also presented data on the largest commercial companies of the group and, as a natural consequence of using the Sector Supplement, on the LOTOS Petrobaltic Group. In each case, we make a clear distinction by specifically indicating the LOTOS Group entity currently being discussed in the Report.

Whenever we refer to the largest commercial companies of the LOTOS Group (both in terms of revenue and head count), this applies to LOTOS Asfalt, LOTOS Kolej, LOTOS Oil and LOTOS Paliwa. The largest companies of the LOTOS Petrobaltic Group which are active in the exploration and production business include, after the parent – LOTOS Petrobaltic (operating in Poland), – LOTOS Geonafta in Lithuania and LOTOS Norge in Norway. The Report also considers another vital company of the LOTOS Petrobaltic Group, Energobaltic, which is a CHP operator in Władysławowo. Since the reporting for the LOTOS Petrobaltic Group is still in its initial stage, it has not been possible to present all results of the companies covered by the Report in a uniform and consistent manner. However, given the challenges of sustainable development that lie ahead for the production business, we decided to present the collected data anyway.

In the previous reporting period, no material changes or other circumstances occurred with respect to the LOTOS Group’s entities which would affect the overall assessment of the organization, either in terms of its individual activities or in comparison with its domestic peers.

GRI indicators as reported by the LOTOS Group companies: LOTOS Asfalt, LOTOS Kolej, LOTOS Oil, LOTOS Paliwa, and the LOTOS Petrobaltic Group (2) (LOTOS Petrobaltic, LOTOS Geonafta, LOTOS Norge, Energobaltic)
GRI aspects GRI indicators reported
in 2013		 Subsidiaries
Products and
services		 EN26 LOTOS Asfalt, LOTOS Kolej, LOTOS Oil, LOTOS Paliwa, LOTOS Petrobaltic, LOTOS Geonafta, LOTOS Norge
EN27 LOTOS Asfalt, LOTOS Oil, LOTOS Paliwa
Transport EN29 LOTOS Asfalt, LOTOS Kolej, LOTOS Oil, LOTOS Paliwa, LOTOS Petrobaltic (group)
Customer health
and safety		 PR1 LOTOS Asfalt, LOTOS Kolej, LOTOS Oil, LOTOS Paliwa
Process safety OG13 LOTOS Asfalt, LOTOS Kolej, LOTOS Oil, LOTOS Paliwa, LOTOS Petrobaltic
Product and
service labeling		 PR3, PR5 LOTOS Asfalt, LOTOS Kolej, LOTOS Oil, LOTOS Paliwa
Marketing
communications		 PR6 LOTOS Oil, LOTOS Paliwa
PR7 LOTOS Asfalt, LOTOS Kolej, LOTOS Oil, LOTOS Paliwa
Customer privacy PR8 LOTOS Asfalt, LOTOS Kolej, LOTOS Oil, LOTOS Paliwa
Compliance PR2, PR4, PR9 LOTOS Asfalt, LOTOS Oil, LOTOS Paliwa, LOTOS Kolej
     
     
Biodiversity EN11, EN12, EN13, EN14, OG4 LOTOS Asfalt, LOTOS Oil, LOTOS Paliwa, LOTOS Petrobaltic

Emissions,
effluents,
and waste

 EN16, EN17, EN18, EN19, EN20, EN21, EN22, EN23, OG5, OG7 LOTOS Petrobaltic (group)
Indirect economic
impacts		 EC9 LOTOS Asfalt, LOTOS Kolej, LOTOS Oil, LOTOS Paliwa, LOTOS Petrobaltic, LOTOS Geonafta
Local community OG11 LOTOS Petrobaltic (group)
Reserves OG1 LOTOS Petrobaltic (group)
Materials EN1 LOTOS Petrobaltic (group)
Energy EN3, EN4 LOTOS Petrobaltic (group)
Water EN8, EN9 LOTOS Petrobaltic (group)
Market presence EC5, EC6, EC7 LOTOS Asfalt, LOTOS Kolej, LOTOS Oil, LOTOS Paliwa, LOTOS Petrobaltic (group)
Employment LA1, LA2, LA8, LA13, LA14 LOTOS Asfalt, LOTOS Kolej, LOTOS Oil, LOTOS Paliwa, LOTOS Petrobaltic (group), LOTOS-Air BP Polska
LA1, LA2, LA8 LOTOS Paliwa
Human rights HR1, HR2 LOTOS Asfalt, LOTOS Kolej, LOTOS Oil, LOTOS Paliwa, LOTOS Petrobaltic (group)

(2)  Whenever results are reported for all companies, ‘LOTOS Petrobaltic (group)’ is listed. However, when not all companies of this group report the given indicator, the names of individual entities reporting the indicator are listed.

The Annual Report for 2013 accounts for a total of 87 GRI indicators. We decided to discontinue reporting of 9 indicators: HR5, HR9, HR10, HR11, EN2, OG2, OG3, OG9 core indicators, and the HR9 additional indicator, as the issues they cover were deemed immaterial to our organization.

An index for looking up specific performance indicators and descriptive parts relating to specific issues discussed in this Report is included in the GRI and UN Global Compact Content Index (link), in the “Useful information” section of this Report.