Integrated Annual Report 2020

LOTOS in ESG rankings

Sustainalytics assesses the sustainable development of listed companies on the basis of their performance in terms of Environmental, Social and Corporate Governance (ESG). When creating the ESG Risk Rating, it analyses the institution’s exposure to the risk associated with ESG and the quality of risk management. The ESG risk profile of the LOTOS Group was assigned medium risk rating and received a total of 28.8 points (on a scale of 1 to 100, where 1 signifies low risk; October 2020 report).

MSCI ESG Ratings are calculated by the American investment bank Morgan Stanley. Companies are rated on a scale of AAA to CCC” according to their exposure to ESG risk and how well they manage this risk compared to their competitors. The Grupa LOTOS received an Average (BBB) ESG rating from MSCI (as of December 2020). The Group obtained, among others, a score of 5.6 points (out of 10 possible) in the area of corporate governance. Companies are analysed in detail in key areas: management, social and environmental.

The S&P Global ESG Score provides measurement of the company’s financially significant ESG factors. It is based on the SAM Corporate Sustainability Assessment, an analysis of ESG criteria. The S&P Global ESG Score for the Grupa LOTOS was 19 points (as of February 2021). The Grupa LOTOS received 15 points in the environmental area, 21 points in the social area and 20 points in the area of corporate governance and financial results.

ISS-oekom, the author of the ESG Corporate Rating, carries out ESG surveys and ratings at the country and company level. In the analysis conducted in 2018 by ISS-oekom, the Grupa LOTOS was rated C.

The index includes companies participating in WIG20 and WIG40 indices. The weights of companies in the index depend on the number of free-float shares, adjusted on the basis of the ESG ranking and assessment of the application of the principles of Best Practice of GPW Listed Companies 2016. As of 30 November 2020, our ESG ratio was 0.7 and the Code of Best Practice ratio was 1.00.

In 2020, the Grupa LOTOS maintained its position in the FTSE4Good index. It is a global compilation of companies that attach great importance to responsible business. The series of FTSE4Good indices measures the performance of companies that can boast good practices in the ESG area. Since 2018, the shares of the Grupa LOTOS have been included by the global rating agency FTSE Russel in the London index of socially responsible companies, FTSE4Good. In 2020, the Grupa LOTOS was given a score of 3.5 points (on a scale of 0 to 5). In individual categories, we received the following scopes: environmental area — 3 points, social area — 2.9 points. In the area of corporate governance, we received a high score of 4.5 points.

The Grupa LOTOS also appears in the Refinitiv rating, which is part of the LSEG (London Stock Exchange Group). It evaluates the company’s activities in the area of ESG engagement and effectiveness in 10 main topics based on publicly available and auditable data. The Grupa LOTOS’s rating amounted to 60 (with the maximum obtainable score being 100).

The Grupa LOTOS’s ESG activity is also evaluated in the internationally valued Bloomberg ESG rating. The rating takes into account corporate governance and social issues, including in particular the presence of women or employee turnover, as well as environmental issues. The overall result of the company was 51.7.

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