Case study: How LUKOIL promotes employee development

What are the material issues the company has identified?

In its 2019 Sustainability Report LUKOIL identified a range of material issues, such as sustainable development management, ethics and human rights, climate change, safety, environmental protection. Among these, promoting employee development stands out as a key material issue for LUKOIL.

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 LUKOIL engages with: 

To identify and prioritise material topics LUKOIL engaged with its stakeholders through the following channels:

What actions were taken by LUKOIL to promote employee development?

In its 2019 Sustainability Report LUKOIL reports that it took the following actions for promoting employee development:

• Implementing a training system
• LUKOIL’s training system deploys a wide range of tools and methods to train employees, including full-time study at state educational institutions and private centres, corporate professional development programmes, corporate internships and training courses, etc. In addition, LUKOIL uses corporate trainers and mentors. Both training and mentorship methods are used when introducing new management approaches, and also serve to foster a good mutual relationship with employees. Employees can submit a training application to their line manager. After approval under established procedures, the application is incorporated into the Personnel Training Plan. In order to further improve the system in place for continuous corporate training, LUKOIL plans to:
  • Develop criteria for organising employees into groups for training and development purposes
  • Ascertain the professional, technical, managerial, and behavioural requirements that are common to these groups
  • Identify training and development needs
  • Elaborate an integrated corporate training and development programme for various groups of employees

• Applying distance learning
• In 2019, LUKOIL’s corporate Distance Learning System (DLS) marked its 15th year. Over these years, it has been transformed from a service providing a number of online courses into a comprehensive individualised learning system. Today, the DLS is an efficient and cost-effective training tool covering a wide range of employees and a variety of educational programmes. In 2019 employees of 59 entities of LUKOIL Group completed more than 140 thousand person-courses in a distance learning format. The main goal of the DLS is to make sure that employees have the required level of knowledge. This goal is achieved through training and communication, assessment, and testing. The DLS is used to achieve large-scale training objectives, to test employee knowledge for compliance with corporate and statutory requirements, and to develop professional and managerial competencies, as well as the personal effectiveness skills of employees. In 2019, the total number of training hours using distance learning programmes was more than 2 million.

• Creating a management talent pool
• LUKOIL is constantly updating its reserve pool of talent, which consists of the most experienced and promising employees. All workers have equal opportunities to be credited to the pool, provided that they perform professional duties at the appropriate level systematically. An individual development plan is elaborated for each employee included in the pool, in order to gain the necessary competencies. To create the pool of executive candidates capable of taking up leadership positions, management succession planning is carried out. This process includes the following steps:
  • Determining the qualities, characteristics, and competencies of future managers, based on the strategic needs of the business;
  • Identifying employees that have high leadership potential, and conducting a comprehensive assessment of their skills;
  • Preparing tailored programmes for employees, including structured training, internships, rotations, assignments to special projects, and mentoring by a senior employee (top manager).

• Establishing the Centre for Assessment of Competencies
• In accordance with Federal Law No. 238-FZ dated 3 July 2016 “On Independent Appraisals of Competencies” and a related decision from LUKOIL’s President, in 2016 the Centre for Assessment of Competencies was established, and in 2017 it was authorised to conduct independent assessments by the Council on Professional Competencies in the Oil and Gas Complex. The independent assessment of employee capabilities is carried out for key professions and positions. Professional exams are administered by qualified experts who confirm the professional level of employees or identify gaps in their knowledge, skills, and capabilities, including in the area of industrial and occupational safety. Based on the results of these exams, tailored recommendations are elaborated to prepare targeted training programmes. Due to the special training sites now established in the regions, the training of personnel has become practice-oriented. In 2019, over 2 thousand people (and more than 3 thousand in the space of two years) from production, refining, and distribution organisations took part in such assessments. The assessment covered the following professions: oil and gas production operators, process unit operators, and commercial operators. In September 2019, LUKOIL began to assess the capabilities of specialists in oil and gas refinery processing, the maintenance and repair of refinery equipment, and field geology. Also, in 2019 PJSC LUKOIL’s Working Group on Development of the Corporate System of Professional Competencies analysed new and updated professional standards to ascertain whether their application was mandatory: 40 standards turned out to be mandatory and 160 voluntary. Lists of respective standards were sent to Russian LUKOIL Group entities for future reference.

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

3) Disclosure 404-3 Percentage of employees receiving regular performance and career development reviews

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

• Sustainable Development Goal (SDG) 4: Quality Education
• Targets: 4.3, 4.4, 4.5
• Sustainable Development Goal (SDG) 5: Gender Equality
• Targets: 5.1
• Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
• Targets: 8.2, 8.5
• Sustainable Development Goal (SDG) 10: Reduced Inequalities
• Targets: 10.3 

Disclosure 404-2 Programs for upgrading employee skills and transition assistance programs corresponds to:

• Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
• Targets: 8.2, 8.5

Disclosure 404-3 Percentage of employees receiving regular performance and career development reviews corresponds to:

• Sustainable Development Goal (SDG) 5: Gender Equality
• Targets: 5.1
• Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
• Targets: 8.5
• Sustainable Development Goal (SDG) 10: Reduced Inequalities
• Targets: 10.3

78% 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.

7 GRI sustainability disclosures get you started

Any size business can start taking sustainability action

GRI, ISEP, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom  (venue: London School of Economics)

• Exclusive FBRH template to begin reporting from day one
• Identify your most important impacts on the Environment, Economy and People
• Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP. 
• Benchmarking methodology to set you on a path of continuous improvement

See upcoming training dates.
References:

1) This case study is based on published information by LUKOIL, 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 LUKOIL: 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.