The case for CSR/ Sustainability Reporting Done Responsibly


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Insights on how you can protect the environment, maintain and increase the value of your company, through a structured process.

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Case study: How KMG creates economic value for its stakeholders

KMG (KazMunayGas) is the Kazakhstan operator for exploration, production, refining and transportation of hydrocarbons, representing the state interests in the oil and gas industry of Kazakhstan. In the course of its operating activities, KMG makes annual substantial contributions to improve the social and economic potential of the country and develop locations within the company footprint, creating economic value for a wide range of stakeholders.

This case study is based on the 2019 Sustainability Report by KMG published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

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KMG is firmly committed to contributing to Kazakhstan’s economy and to generating sustainable economic value for all its stakeholders  Tweet This!, through a number of ways. In order to create economic value for its stakeholders KMG took action to:

  • contribute to the national budget
  • create economic value for employees
  • support Kazakh companies

What are the material issues the company has identified?

In its 2019 Sustainability Report KMG identified a range of material issues, such as employee-management relations, counteracting corruption, occupational health and safety, effluents and waste, non-discrimination. Among these, creating economic value for its stakeholders stands out as a key material issue for KMG.

Stakeholder engagement in accordance with the GRI Standards

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups KMG engages with:

Stakeholder Group
KMG employees
Shareholders
Investment community
KMG’s subsidiaries and associated companies
Local communities, public organisations
Partners, other organisations
Government, local authorities
Suppliers/providers/vendors
Trade unions
Customers
Associations
Mass media

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics KMG engaged with its stakeholders through an online stakeholder survey prepared on the basis of the SurveyMonkey platform.

What actions were taken by KMG to create economic value for its stakeholders?

In its 2019 Sustainability Report KMG reports that it took the following actions for creating economic value for its stakeholders:

  • Contributing to the national budget
  • As one of the largest taxpayers in the covered geography, KMG makes its contribution to the national budget in the form of taxes and other payments. In 2019, KMG paid taxes and made other obligatory payments to the state revenue for the amount of KZT 1,522 billion (USD 4 billion).
  • Creating economic value for employees
  • KMG employs over 70 thousand people in Kazakhstan, providing them with a steady paycheck along with social assistance for them and their families. In 2019, KMG paid KZT 52 billion worth of social and pension contributions for its employees.
  • Supporting Kazakh companies
  • Participation in domestic manufacturer support programmes and increased local content in procurement remain among KMG’s top priorities. In 2019, the KMG Group procured KZT 2,004.7 billion worth of goods, work and services from Kazakh companies, or 94% of the total procurement. The local content in procurement was 81%.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed

Disclosure 201-1 Direct economic value generated and distributed corresponds to:

 

80% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.



FBRH GRI Standards Certified & IEMA recognised Sustainability Course | Venue: London LSE

By registering for the next 2-day FBRH GRI Standards Certified & IEMA recognised course you will be taking the first step in gaining the many benefits of sustainability reporting.

Most importantly, you will gain the knowledge to use the GRI Standards, project manage your own first-class sustainability report and:

  • Identify your most important impacts on the Environment, Economy and Society
  • Begin taking solid, focused, all-round sustainability action ASAP

 

References:

1) This case study is based on published information by KMG, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

Note to KMG: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.