Environmental transparency rating

The oil and gas industry in Russia is one of the most environmentally «dirty», however, this sector makes up the backbone of the Russian economy today and in the medium-term perspective. Therefore, efforts of the entire society are needed to make it green. In order to reduce the negative environmental impact of this industry, consumers and lenders should give preference to companies causing less environmental damage and striving to green their activities. To make their choice ultimate consumers and credit organizations need to get objective information about the degree of environmental responsibility that a particular oil and gas company takes.

Earlier in Russia there was no rating providing either objective and comparable information concerning the level of environmental responsibility of oil and gas companies or the scale of their environmental impact. In 2014 WWF Russia and CREON Energy initiated a project to compile the environmental ranking of oil and gas companies. Based on an objective comparison and assessment of the companies' environmental responsibility and management, this rating will help consumers and banks to give preference to the products of a particular company and to evaluate various corporate risks, including reputational ones.

Moreover, the rating will contribute to improving the quality of environmental risk management during the extraction, transportation, and processing of hydrocarbon fuels. It should be noted that the reduction of negative environmental impact, in addition to its direct nature protection effect, produces an important social effect: the negative impact on the health of personnel and local communities is reduced, while traditional use areas are prevented from destruction. We also hope that the rating will become a significant incentive for the companies to increase the level of their transparency, to interact with stakeholders (civil society, local communities and indigenous peoples), whereas it will ensure openness when discussing future projects. Ultimately, the rating will encourage the companies to improve their policies and practices of corporate social responsibility.

The purpose of the rating is to promote the effective use of hydrocarbon resources, environmental protection and socially responsible business practices in Russia.

Tasks of the rating:

1. To identify key indicators of the environmental performance of oil and gas companies in Russia.
2. To compare the main players of the Russian oil and gas sector according to:
   • the level of environmental impact per unit of output;
   • the degree of openness and accessibility of environmentally relevant information;
   • the quality of environmental management (compliance of a company’s activities with the state internal and environmental policies, with the best standards and practices);
   • the frequency of a company’s environmental legislation violation in the project implementation area;
   • the efficiency of mineral resources use.
3. To monitor the companies’ interannual dynamics on the above-listed indicators.

Basic principles of the rating:

• The rating is primarily based on the criteria formulated in the Joint Environmental NGO Requirements to the oil and gas sector.
• The methodology is discussed with all stakeholders.
• The assessment is performed as regards all segments from production to processing, with numbers given separately for production and processing.
• The rating is based on data about Russian companies’ activities, located in public space, such as documents posted on the Internet on the official websites of the companies (including subsidiaries), as well as interviews of their official representatives for federal and regional media. The rating organizers annually will send requests to oil and gas companies suggesting that relevant information should be placed in the public space. If no information appears in the public space, the company will be assigned the lowest score on a particular criterion, which will decrease the company’s overall rating.
• The rating is calculated by a professional rating agency, selected on the basis of a tender or a competition. WWF and CREON make the decision regarding the agency by consensus.
• The companies are included in the ranking according to the volume of their oil and gas production. The lower limit is the oil production of 1.5 million tons (2013).
• The rating is published once a year. The first rating was carried out with a three-year retrospective (2011–2013). Thus, we can assess the dynamics of environmental indicators.
• Results of the first rating were announced on December 9, 2014.
• The first rating of openness in the sphere of environmental responsibility of oil and gas companies in Kazakhstan was presented in Astana on February 22, 2018. The project was initiated by WWF Russia and CREON Group with the support of the Ministry of Energy of the Republic of Kazakhstan. The project was carried out in partnership with UNEP Central Asia, CREON Capital and National Rating Agency.