Sustainability
Sustainability is considered to be a fundamental criterion of business success by the largest companies and an increasing number of shareholders. Long-term financial success and good corporate sustainability performance are complementary to each other. For MOL Group, sustainability translates as the balanced integration of economic, environmental and social factors into our everyday business operations.
MOL Group operates strong governance systems (including a Board of Directors-level committee) to oversee its sustainability performance, and has a sustainability strategy to manage it. The overall target to be reached by the end of 2015 has been defined as: “Achieve and maintain an internationally-acknowledged leading position (top 20%) in sustainability performance.” As a key performance indicator (KPI ), we use the total score awarded to us by the Dow Jones Sustainability Index.
MOL Group in 2014 qualified for inclusion in the Sustainability Yearbook 2015 issued by RobecoSAM (the company which conducts the assessment related to the Dow Jones SI ). In order to be listed in the Yearbook, companies must be in the top 15% of their industry. MOL Group was also included in the MSCI Emerging Market ESG index.
MOL Group considers materiality to be a fundamentally important concept in sustainability reporting. We conduct a materiality assessment which we use to rank and classify topics that are relevant to the oil and gas industry according to how important they are to our external and internal stakeholders. To read more about our materiality assessment, please visit our website. Internal factors include potential financial impacts and the existence of internal objectives. The key input is the MOL Group-level risk matrix that is continuously updated and presented to the Board of Directors, and feedback from our employee representatives.
External stakeholder perceptions are surveyed through our public forums and collected using our feedback channels (This email address is being protected from spambots. You need JavaScript enabled to view it.). Special attention is paid to topics that are considered to be relevant to external sustainability analysts and issues which are related to governmental initiatives. The outcome of the materiality assessment is a materiality matrix, an illustration of which is presented in this chapter. We consider all the topics in the matrix to be material except for those located at the bottom left.
The procedure for materiality assessment is not designed to exclude any of the relevant topics from our reporting. The assessment is drawn up with a view to ensuring that the most material topics are highlighted and described in more detail, thereby providing our readers with deeper insight into our sustainability performance.
According to the materiality assessment, the most important sustainability topics for MOL Group operations are GHGs and energy efficiency, prevention and clean-up of spills, future product portfolio, ethics and transparency and also occupational and process safety management. Hereafter, we briefly summarise our performance in each of these areas.
GHG emissions further decreased at Group level through increasing the efficiency of energy consumption. The most significant achievement is that our energy efficiency projects, especially our New Downstream Development program, resulted in an estimated saving of almost 320 thousand tonnes of CO2 emissions compared to the baseline from the year 2011. Of these savings, 85 thousand tonnes is an additional achievement made in 2014. These projects alone helped us make annual financial savings of HUF 13bn. The total reduction in direct CO2 emissions since 2011 is 1.4 million tons, which is equivalent to 0.3 million tonnes on an annual basis (a 5% decrease); however, this reduction is a result of several factors, also including operational changes and divestments.
Spills and leakages are large and unpredictable sources of environmental contamination caused by industry. Managing and preventing spills is of key importance to oil and gas companies but the Company’s impacts are still considered to be moderate. MOL Group is the owner and operator of production and storage facilities and transportation pipelines worldwide. Spills are mostly associated with our aging assets in Central Eastern Europe, while the largest single spill event was due to an attempted theft.
The number of spills with more than 1 m3 hydrocarbon content further decreased in 2014 and all of them happened onshore. In 2014, only five such spills occurred, which is the lowest number in recent years. Even though no major spills occurred in MOL Group’s operations in 2014, the overall amount has increased from 133 m3 in 2013 to 194 m3 in 2014. The increase is the result of two cases in Croatia, one caused by a one-off human error, while the other was the result of attempted theft. Health and safety is a top priority for MOL Group and for the oil and gas industry generally. The company employs 27,499 workers, who perform almost 50 million work hours per year, while our contractors work more than 40 million hours per year. Workers spend a large portion of this time using dangerous technology at operational sites. MOL Group’s safety performance slightly improved in 2014 compared to 2013. The Lost Time Injury Frequency Rate decreased to 1.0 (from 1.5 in 2013) and no own employee fatalities occurred at our controlled operations. Sadly, however, there was one on-site contractor fatality. Moreover, there was an increase in road accident-related contractor and third-party fatalities, which was mostly related to our Upstream international operations where crude oil is transported by road.
Continuously improving our product portfolio is important due to external factors and the potential financial implications it has on MOL Group. Meeting the obligations of the Climate Change Package of the European Union will have a significant impact on the long-term demand for fossil fuels and energy, on refinery product quality, and also on petrochemical operations. However, through its impact, this will also open up new business opportunities for oil and gas companies in the area of “clean fuel/ energy”. To increase the share of low-carbon products and services that we offer, MOL Group has launched and continues to work on a series of R&D projects. The focus in 2014 was on identifying and promoting technologies to further reduce the life-cycle-emissions of our fuels and to be able to comply with regulations. Some project examples include MOL Truck Diesel, a high-quality, CO2-efficient product. Its formula was improved in 2014 to further reduce GHGs. The chemically-stabilised rubber bitumen product of MOL Group launched in 2013, received ECO-label certification in 2014.
Ethics and transparency are key to long-term business success. MOL Group has had a Code of Ethics since 1999 and has been operating an ethics reporting system for all stakeholders since 2002. In 2014, 88 ethics-related complaints were reported to the Ethics Council of MOL Group and the IN A Group, a slight increase compared to the 81 cases reported in 2013. Investigation was necessary in 61 cases. Consequences for ethical misconduct revealed by the Ethics Council included termination of employment in three cases, written disciplinary notices in nine cases and verbal disciplinary notices given in four cases. Awareness-raising and training are continuous throughout MOL Group, and employees spent an estimated 26,490 hours on ethics-related training in 2014.