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ORLEN Group 2016 Integrated Report

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Outlook CSR 2017+


Since 2015, PKN ORLEN has been rolling out its CSR strategy,which is based on the following philosophy: 'In pursuing its business strategy, the Company is always guided by the principle that value growth should be aligned with the interests of external stakeholders and rely on the sustainable and responsible use of resources.'



PKN ORLEN’s CSR strategy is closely connected with it corporate business strategy. Based on the ‘Core Values and Standards of Conduct’ of PKN ORLEN, it seeks to motivate employees to look for new ideas and innovative solutions. While supporting business, it builds a sense of shared responsibility for implementing CSR objectives within the organisation and promotes the idea of responsibility and stakeholder engagement. Therefore, the Company’s future CSR initiatives will be based on the assumptions of the new ORLEN Group Strategy for 2017–2021 announced in December 2016, with Value Creation, People, and Financial Strength as its keystones.

2017 is the last year of the implementation of the CSR Strategy for 2015–2017. This means that the work on the new CSR strategy is well underway. The new strategy will draw on the Company’s business strategy and CSR trends, and, most importantly, it will respond to the needs of the ORLEN Group and expectations of its Stakeholders. The United Nations’ Sustainable Development Goals announced in 2015 will also be given priority. In addition, the Company will need to satisfy the requirement to report non-financial data.

Business strategies are expected to address the challenges posed by civilisational changes, progress and advancement, and evolving stakeholder expectations. Responsible leadership and, consequently, the sustainable growth of a business, is a way to mitigate risks, build trust in the brand and enhance its reputation. Responsible management across the ORLEN Group is driven by our awareness of the Company’s impact on its immediate and more distant environment and predictions of its short-term effects and the burden to be borne by future generations. Profit is no longer the measure of success; the key is to build long-term value, that is, to ensure effective value management.

In the near future, corporate social responsibility will be shaped by a number of trends. SDGs, or Sustainabilty Development Goals,announced by the United Nations in September 2015, will definitely be one of them. The Agenda contains 17 general sustainable development goals and 169 specific targets focusing on the elimination of poverty, combating inequalities, and preventing climate change over the horizon of the next 15 years. The United Nations calls on local parliaments and governments, civic societies, as well as companies and entrepreneurs, to work towards the achievement of these goals and targets. PKN ORLEN is actively involved in the implementation of SDGs in Poland as a partner of workshops organised for fuel sector operators. The Company has already identified a number of such projects, and takes into account SDGs when planning future actions.

The ORLEN Group also takes into consideration the UN Guiding Principles on Business and Human Rights: Implementing the UN ‘Protect, Respect and Remedy’ Framework adopted in June 2011 by the United Nations, and the related reporting framework. Those Guiding Principles define the existing obligations of States to protect human rights, and point out the responsibility of business enterprises to respect human rights and improve the access of those affected to effective remedies, which is of particular importance to business. The Guiding Principles should apply to ”all States and to all business enterprises.

Development of social capital is another major trend. Here, success will depend mainly on social dialogue based on trust, and sustainable relations built on that foundation will bring benefits to all Stakeholders involved in the process. The protection of human rights invariably remains one of key trends in that area.

In Poland, individualism still prevails over socially-oriented attitudes. However, this can change through educational campaigns and transparency of business activities, one element of which is open and reliable communication. Here, expectations are running high, but also obligations are rising. As a result, effective reporting of non-financial data is another big trend. Up until now, non-financial reporting was a voluntary initiative on the part of business enterprises; however, on entry into force of the EU Directive 2014/95/UE on disclosure of non-financial and diversity information, as of 2017 it will be mandatory for all public companies, banks and investment funds which have more than 500 employees, a balance sheet total of at least EUR 20 million, or a net turnover of at least EUR 40 million. TThe provisions of the Directive are reflected in the amended Accounting Act published on December 15th 2016. It may be expected that the importance of non-financial disclosures for analysts and investors will increase accordingly, as companies will be required to disclose non-financial information such as environmental impacts, diversity policies, respect for human rights, risk assessment, and information about many other areas. Importantly, the disclosure of such information is based on the comply or explain rule.

There is no doubt that integrated reporting which covers both financial and non-financial information will allow for a better evaluation of the entity’s situation in comparison with financial disclosures alone, as reports based on the new standards will include information on social, personnel, and environmental policies, anti-corruption measures, and the protection of human rights

PKN ORLEN has published its CSR reports since 2003, and since 2008 they have been drawn up according to the Global Reporting Initiative standard. In 2015, the Company published its first Integrated Report, and all full-year reports have been based on this formula ever since.

The sustainable supply chain is another trend gaining in importance in recent years. Obviously, the adoption of high standards across the entire supply chain is becoming a prerequisite. A responsible employer must always consider the expectations of its employees as to having respect for their rights, health and safety, and adherence to core values.

Foundations of responsible business
The overriding objective of the ORLEN Group’s CSR efforts is to create value both for the Group companies and for its Stakeholders. Ethical, social and environmental considerations are not only ingrained in our CSR strategy, but are, first of all, part and parcel of the Group’s day-to-day operations.

The ORLEN Group’s social initiatives are driven not only by the Company’s internal needs and the Stakeholders’ expectations. First and foremost, they reinforce our business position and send a signal of the Company’s awareness of its large-scale impacts. Therefore, the strategy considers the challenges faced by Polish businesses according to the ‘Vision of Sustainable Development of Polish Businesses until 2050‘, which assumes active involvement of the business community to support Poland’s social and economic development. The document draws on the international initiative of the World Business Council for Sustainable Development, and highlights key challenges and actions to be taken to achieve sustainability targets. Six priority areas identified by the World Business Council for Sustainable Development are: social capital, human capital, infrastructure, natural resources, energy, as well as the quality of the state and public institutions.

Future operations of companies will be also driven by the CSR standards that socially responsible businesses are expected to apply. Those standards certainly include the Global Compact principles, which are reflected in documents such as the ‘Core Values and Standards of Conduct’ of PKN ORLEN S. A., and the Group’s current CSR strategy. However, they also include reporting standards such as the Global Reporting Initiative, industry guidelines such as IPIECA (the International Petroleum Industry Environmental Conservation Association), or OECD guidance for international businesses. Both our activities and reporting practice also take account of the seven priority areas set out in the ISO 26000 standard, which contains guidelines on social responsibility.

CSR activities translate into the business dimension, and socially responsible companies are included in dedicated stock exchange indices, such as the Dow Jones Sustainability Group Indexes or FTSE4GOOD, and Poland’s RESPECT Index. Since 2009, when the RESPECT Index was launched, PKN ORLEN’s shares have been its constituent every single year, following a difficult qualification procedure. In December 2016, a new FTSE4GOOD Emerging Index was created, featuring PKN ORLEN stock. The Company was therefore qualified as an entity driven by high standards of environmental protection, social responsibility, and good business practices.

Considering the growing number of investors who find it important that a company is managed in a socially responsible and sustainable manner, takes care to ensure a high quality of investor relations, and reports its financial data on a regular basis, inclusion in the RESPECT Index serves as a reference for potential investors looking for attractive and safe investments.

Selected areas of our activities
The ORLEN Group has been consistently building its image as a socially responsible company focusing on stakeholder engagement and social commitment.

The Company is engaged in a number of social sponsorship projects, which will be continued in future years. Of all the CSR initiatives across the ORLEN Group, environmental protection, sports sponsorship, health and safety, social commitment, charity and patronage of culture are the areas where the Group’s involvement is the strongest.

The Company’s long-term support for the third sector also deserves a mention. The corporate ORLEN – GIFT FROM THE HEART Foundation is developing. The number of cross-sectoral partnership programmes carried out by the Grant Fund for Płock Foundation and the Good Neighbourhood Grant Fund for Ostrów Wielkopolski Association is also growing. And the new Museum of Oil and Gas Industry in Bóbrka Foundation brings together the many years of tradition and new directions of growth under one roof.

New initiatives focusing on the promotion of Poland and our national identity have been launched. On the one hand, they are related to the sponsorship of Polish sports; on the other, they open up the Company to the positive influence of high culture. An important initiative is PKN ORLEN’s participation in the Polish National Foundation, whose goal is to promote and protect the image of the Republic of Poland and the Polish economy abroad, to support the development of new technologies, inventions and innovation, and to disseminate and implement new technologies in practice, to support Polish culture, art, protection of national heritage, and the promotion of knowledge concerning Polish history, economy and culture, as well as patriotic attitudes. The protection of Poland’s natural environment is also one of the key objectives of the Foundation, as is the support for the promotion and implementation of corporate social responsibility principles.

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