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Case study: How KMG promotes employee development

KMG (KazMunayGas) is a unique vertically integrated oil and gas operator that carries out a full production cycle from exploration and production of hydrocarbons, their transportation and refining to provision of specialised services, representing the interests of the state in the oil and gas industry of Kazakhstan. Within the framework of capacity development, KMG pays special attention to the development of human resources  Tweet This! – both production and administrative personnel.

This case study is based on the 2018 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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On an annual basis, KMG provides training and personnel development and, in 2018, trained 129 thousand people for a total of KZT 5,7 billion, which is 2.5 % higher than in the previous year. In order to promote employee development KMG took action to:

  • apply a new concept of personnel training and development
  • implement the Formula for Success Internship Programme
  • apply executive development programmes
  • train personnel reserve

What are the material issues the company has identified?

In its 2018 Sustainability Report KMG identified a range of material issues, such as investments in infrastructure of the presence regions, air pollutant emissions, staff health and safety, water use. Among these, promoting employee development 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
Subsidiaries and affiliates of the Group
Local communities, community organisations
Partners, other organisations
Government, local government bodies
Suppliers
Trade unions
Customers
Associations

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics KMG carried out an online survey of KMG management and external stakeholders.

What actions were taken by KMG to promote employee development?

In its 2018 Sustainability Report KMG reports that it took the following actions for promoting employee development:

  • Applying a new concept of personnel training and development
  • In order to improve the process of training and development, formation and maintenance of the required level of personnel qualifications, and the effective use of budgetary funds, a new concept of personnel training and development has been implemented in the Group of KMG companies since 2016: “70/20/10 – on-the-job training/internal training/external training”. As part of the introduction of the new training model, the Institute of internal trainers has been introduced as well as distance employee training programmes, an internship programme and executive development programmes for the Group of KMG companies.
  • Implementing the Formula for Success Internship Programme
  • KMG’s Formula for Success Internship Programme is popular among subsidiaries and affiliates in the manufacturing sector. Within the framework of the programme, employees exchange experience with colleagues from other companies of the KMG Group, as well as employees of partner companies. During the programme, more than 50 employees of KMG’s subsidiaries and affiliates passed internships at 5 partner companies, including employees of “Embamunaygas” JSC, “Oil Servises Company” LLP, and “Mangistaumunaygas” JSC. 53 employees from 9 companies completed internships in 6 companies of the KMG subsidiaries and affiliates. Additionally, there is a cooperation with the Corporate University ENI and employees of the KMG Group of companies are trained in production areas based on this university. In 2018, 15 employees of the block explored production and oilfield services underwent training at ENI University within 2 days. For the development of KMG Group employees, internships are also being held at the invitation of partner companies – JCCP, JOGMEC. Each year, these companies accept more than 20 employees of the KMG Group for training in various areas of activity from mining, exploration, processing and marketing to HR and finance management. Training takes place on average from two weeks to one month together with representatives of different countries in related areas, which also allows sharing experience and knowledge. Together with the General Electric company, KMG has also put together a training programme on “Oil and Gas Technologies” at the Oil and Gas University of GE (Florence, Italy). Since 2015, during the cooperation in this area, 7 employees of the KMG Group have been trained. Duration of training is 5 months.
  • Applying executive development programmes
  • KMG pays special attention to executive development programmes. In 2017, by the decision of the KMG Personnel Committee, the development programmes for the top managers of the KMG corporate centre and subsidiaries and affiliates (CEO-1, CEO-2) “Unified Development Program” were approved, as well as for the directors and their deputies and for the participants of the Unified Personnel Reserve “Effective Manager”. The unified development programme was completed in 2018 and received good feedback; 99 top managers from 26 subsidiaries took part in the programme from September 2017 to October 2018. In addition, in 2018, the Human Capital Development Programme of the UPSTREAM block was developed and implemented in pilot mode in the “Kazakhturkmunay” LLP and “Kazakhoil Aktobe” LLP. Within the framework of this Programme, participants developed projects that will raise the companies’ effectiveness. In 2019, this Programme was to be implemented at other UPSTREAM companies. During the passage of the programme, all relevant areas of human resources development were covered such as digital leadership, influence and emotional leadership.
  • Training personnel reserve
  • One of the priorities of the long-term development of KMG is the training of personnel reserve, which includes search and identification of young and promising leaders with the purpose of training managers of new format with modern competencies. The main principle is the purposeful and systematic training of leaders to ensure continuity of management, as well as the provision of employees with opportunities for development and career growth in the Group of KMG companies. In addition to training programmes specifically for reservists, two-diploma EMBA (Executive MBA) programmes are also developed and carried out. In total, over the period of the project implementation, 35 employees of the Unified Personnel Reserve included in the EQF (European Qualifications Framework) completed the EMBA programme and another 14 employees continued their education under a similar programme for 2018–2019. Also, during the EQF project, three meetings of reservists were held, which were team building and training. To enhance personal and business skills, thematic trainings and seminars are also systematically carried out.

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

The GRI Standards addressed in this case are:

1) Disclosure 404-1 Average hours of training per year per employee

2) Disclosure 404-2 Programs for upgrading employee skills and transition assistance programs

 

Disclosure 404-1 Average hours of training per year per employee corresponds to:

 Disclosure 404-2 Programs for upgrading employee skills and transition assistance programs 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 & CIM recognised Sustainability Course | Venue: London LSE

By registering for the next 2-day FBRH GRI Standards Certified, IEMA & CIM 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/

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