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The Warsaw Voice » Special Sections » August 29, 2012
Special Section - LOTOS
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CSR—Sustainable Business Approach
August 29, 2012   
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In its business operations Grupa Lotos is guided by responsibility. The corporation consistently strives to not only grow its business in the long term in a responsible way, but also to help improve the quality of life in its social environment.

The corporation is aware that its own successful development brings economic and social benefits to the entire community. This is possible because Lotos skillfully blends its business strategy with social, environmental, ethical considerations as well as human and consumer rights.

Uninterruptedly since Nov. 19, 2009 Grupa Lotos has been a part of Central and Eastern Europe’s first index of socially responsible companies—the Warsaw Stock Exchange’s Respect Index. The index encompasses companies that apply the highest standards of corporate social responsibility. Why is this important? Because practice shows that a strategic approach to social responsibility brings benefits not just to a company but also its environment, including investors. These are benefits in areas such as risk management, cost cutting, access to capital, customer relations, human resources management, environmental protection, and innovation.

As of 2011, the WSE’s Respect index is updated twice a year. This means that in 2011 and the first half of 2012 the company was subjected to three external evaluations. These confirmed that Lotos meets the criteria to be included in the index. The aim behind the index is to highlight companies that are managed in a responsible and sustainable way. At the same time, it puts a strong emphasis on the investment attractiveness of listed companies.

Lotos is one of 20 companies that have successfully passed the evaluation as part of the fifth round of the index.

The analysis encompasses companies listed on the WSE except those from the New Connect alternative market, foreign companies and dual-listed companies. After a preliminary classification of companies in terms of liquidity, based on the principles of corporate governance, information policy and investor relations, the companies are assessed for their practices and how these reflect the approach to corporate social responsibility in the organization as well as environmental, social and employee-focused activities. The process is overseen by the evaluation’s auditor, the Deloitte company.

It is an unquestionable fact that the value of socially responsible investing (SRI) in the world is growing steadily. This is due to the growing awareness of investors, analysts and managers that corporate practices involving ESG (environment, social, governance) factors have an impact on long-term returns on investment. A transparent and open information policy that confirms an organization’s credibility in the eyes of its stakeholders and creates wide-ranging possibilities for its evaluation is an important element of the Grupa Lotos’ CSR strategy as a listed company.

The first CSR indices were established in the United States. The pioneer in this kind of endeavor was Dow Jones: the company began publishing its Sustainability Index (SI) in September 1999. Ten years later, in 2009, the WSE was the 10th stock exchange in the world to introduce this kind of tool for evaluating companies.

The first measurable effects of a systemic approach to CSR are already visible in Poland. Comparing the results of two stock market indices in which Grupa Lotos is included—the Respect index of socially responsible companies and the WIG20 index of the WSE’s 20 biggest companies—it is clear that responsible business adds to company value. Grupa Lotos has many years of experience and many achievements in responsible business to its credit, which are especially valuable because they serve society—both the local communities and the country as a whole. All these endeavors, however, have to be justifiable in a business sense as well.

Grupa Lotos’ CSR strategy includes commitment to implementing an open and transparent information policy. In recent years this has not only enabled the company to improve the quality of its dialog with external organizations interested in working with the corporation in different areas of social life, but has also facilitated the company’s communication with prospective partners such as nongovernmental organizations, by clearly defining mutual needs and capabilities. Thanks to this, cooperation for the benefit of local communities or the natural environment has centered on social issues that are key for the company’s strategy and are mutually beneficial.

For some years now Grupa Lotos has been implementing its Good Neighbor program whose primary aim is to counteract social problems by equalizing opportunities in the closest environment of the company’s Gdańsk refinery. Lotos also conducts campaigns aimed at reducing traffic accidents across the country. Improving road safety in Poland, especially the safety of children and teenagers, is a special focus for the company and its long-term interest. A similar approach is reflected in the company’s commitment to cooperation with leading social partners on preserving the biodiversity of the Baltic Sea and the quality of protected areas around the Bay of Gdańsk. Lotos is doing its best to make a comprehensive contribution to environmental improvements in the areas where it operates. As a result, it is active not only in protecting the fauna and flora of the Baltic but also in ecological education campaigns addressed to the public.

Grupa Lotos has a strategic approach to investments serving to improve the quality of engineering education in Poland. Several years ago the corporation began supporting selected university-level schools in improving their capacity in terms of development of young academic staff. These efforts have resulted not only in a growing number of scholarship holders and traineeships at the company, but also in growing scientific research collaboration focused on jointly solving socially and environmentally important problems—including work to reduce carbon dioxide emissions and seeking cleaner technologies for the processing of oil derivatives.

Lotos attaches great importance to continual improvement in its practices in the area of corporate social responsibility. In this, the group follows the principles of the U.N. Global Compact. Lotos is also a partner of the Responsible Business Forum. Grupa Lotos is one of few Polish companies to have pledged to provide regular reports on progress in implementing its CSR strategy in accordance with the standards of the Global Reporting Initiative (GRI). The group was the first business organization in Poland to include social and environmental aspects in comprehensive, integrated reports on the results of its operations. Three such reports have been compiled so far. Grupa Lotos’ reports meet the requirements of the highest GRI level, A+, which means the company’s commitment and the quality of its CSR management can be evaluated in a broad, measurable and objective way, confirmed by external audits.
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