Approach to managing ESG issues

PGE Group is fully aware that reporting on ESG factors is the first step in managing the area of sustainable development in the company. The next step is to define ESG goals and implement them effectively. This is a current challenge for PGE Group.

Incorporating ESG issues into the framework of the organisation’s operations requires remodelling the management system. For this reason, on December 21, 2021, the Management Board of PGE Polska Grupa Energetyczna SA, by means of a resolution, appointed a Management Board Plenipotentiary for ESG issues, as well as the Sustainable Development Committee – headed by Wojciech Dąbrowski, President, and Lechosław Rojewski, Vice-President for Finance.

The Committee’s task is to ensure the integrity of the area of sustainable development at PGE Group by supervising the implementation of processes in the ESG area. The wide range of tasks to be implemented in the Group requires the involvement of many organisational structures, which is reflected in the composition of the Committee, the members of which are directors of organisational units of key importance to the ESG area.

During the meetings, the challenges facing the Group, stakeholder expectations, good market practices as well as ongoing and planned ESG initiatives are discussed.

The development of PGE Group’s ESG system is based on the continuous identification of key expectations of stakeholders and ongoing implementation of regulatory requirements in the area. This encompasses setting short-term and long-term goals consistent with the Group’s strategy. To ensure the achievement of objectives for the entire Group, in the case of new expectations it is necessary to develop detailed management rules, primarily encompassing cooperation between Group companies.

The Committee was directly informed of the work of the dedicated working teams. In the course of this work, workshops were organised in specific ESG areas, with the support of an external advisor, to assist in outlining strategic plans.

Among other things, they made it possible to identify priority actions for the coming years in the area of sustainable development of PGE Group. Information from the scope of the Committee’s work was also presented at meetings of the PGE SA Management Board.

In order to increase the effectiveness of the organisation’s environmental impact management, a dedicated Environmental Department has been created in 2022, which is also responsible for PGE Group’s carbon footprint issues.

As part of social impact management and dialogue with the social side, there is a Dialogue and Social Relations Department in the company. Both of these structures function within the Operations Division, reporting to the Vice-President of the Management Board for Operations.

The operational coordination of the ESG process is carried out by the Investor Relations and ESG Department, which is also responsible for the implementation of ESG communications, stakeholder dialogue and non-financial reporting. The Department functions within the Corporate Communications and Marketing Division, which reports directly to the President of the Management Board.

The basis for development of PGE Group’s ESG area is experience in communication with stakeholders through reporting of non-financial information. In this field, PGE Group already has nearly 10 years of experience and meets the growing expectations of stakeholders on an ongoing basis.

PGE Group’s first social report was developed for the years 2013-2014 and was based on the Global Reporting Initiative (GRI) international reporting standard at the CORE level. The following year, PGE began publishing cyclical integrated reports, also keeping in mind the expectations of investors and other financial institutions.

Since 2016, i.e. one year before the Non-financial Reporting Directive (NFRD) came into force, PGE Group has published information in accordance with its requirements. Continuously since 2011, PGE has been present first in the „Respect Index” and then in the WIG-ESG index, which consists of companies with mature ESG management practices. Participation in the Responsible Companies Ranking earned PGE the title of industry leader in responsible business for three years in a row.

The Non-Financial Report is approved by the Management Board of PGE SA and its contents are also reviewed by the Supervisory Board of the company.

PGE Group cares about disseminating ESG knowledge among Polish companies and its suppliers in order to create an „ESG value chain.” In its brand strategy, PGE has adopted the role of a leading company in green change: in the literal sense of the word, both as a leader of change on the Polish power market, but also as a guardian and advisor in the area of green energy.

For PGE Group, a sustainable company is one that not only meets standards but also consciously selects its suppliers – companies that operate in an ethical manner and monitor their carbon footprint. Through its actions, PGE Group meets the expectations of its customers, not only individual but also institutional ones, who expect green energy supplies, which has a major impact on the carbon footprint of their products and services.

As part of dialogue and experience sharing in the ESG area with the external environment, the Management Board’s ESG Proxy actively participates in debates and conferences related to corporate sustainability. In 2022, a process of educating the Group’s employees in the ESG area has also been initiated, with management as the main subject.

In 2022, key ESG challenges and issues were also presented at a meeting of PGE Group Holding Council, which comprises the Management Board of PGE SA, the Presidents of the Management Boards of key Group companies and the Directors of the PGE SA Divisions.