Lotos in ESG rankings

Sustainalytics evaluates sustainable development of stock exchange companies on the basis of their performance in Environmental, Social, and Governance (ESG) domains. As it creates the ESG Risk Rating, it analyses the institution’s exposure to ESG risks and the quality of management of each risk. The ESG risk profile of Grupa LOTOS was assessed as medium risk and received the overall score of 29.1 points (on a scale from 1 to 100 where 1 is low risk; updated most recently on 30 October 2021).

The MSCI ESG Ratings are calculated by the American investment bank Morgan Stanley. Companies are evaluated on a scale from AAA to CCC based on their exposure to ESG risk and how well they manage this risk compared to the competition. Grupa LOTOS has received the ESG Average (BBB) rating from MSCI (as at December 2021). The Group received, among others, the score of 5.6 points (out of 10 possible) in the corporate governance area. Companies are subject to a detailed analysis in key areas: governance, social and environmental.

The S&P Global ESG Score measures the company’s financially significant ESG factors. It is based on SAM Corporate Sustainability Assessment, which is an analysis of the ESG criteria. The S&P Global ESG Score for Grupa LOTOS was 21 points (as at 30 October 2021).

ISS-oekom, the creator of the ESG Corporate rating, carries out ESG research and assigns ratings at the country and company levels. In the analysis conducted in March 2022, Grupa LOTOS was rated C-. The evaluation of the company’s sustainability performance is based on approximately 100 criteria, selected specifically for each industry.

The WIG-ESG Index has been published since 3 September 2019 on the basis of the value of the portfolio of companies that are considered socially responsible, i.e. ones that observe the principles of a socially-responsible business, in particular in respect to environmental, social, economic and corporate governance issues. In the ESG ranking, companies may receive the score from 0 to 100 points and the lower the number of points, the better the company is with observing the principles of socially-responsible business. The company qualified for the index with a co-efficient of 2.2 and in 2021 it was included in the index.

The index includes companies comprised in WIG20 and WIG40 indices. The weights of respective companies in the index depend on the number of free float shares, adjusted based on the ESG ranking and the assessment of the observance of the Best Practices of WSE Listed Companies 2021. As at 19 April 2022, LOTOS’ share in the ESG index was 2.15 and the company’s COMPLY co-efficient measuring its compliance with the Code of Best Practices was 94%.

Grupa LOTOS is also present in the rating prepared by Refinitiv, which is part of the London Stock Exchange Group (LSEG). It evaluates the activity of companies in the ESG engagement and effectiveness area in 10 main topics, based on public auditable data. The rating of Grupa LOTOS was 58 points (with 100 being the maximum score).

ESG activities of Grupa LOTOS are also assessed in the internationally recognized list Bloomberg ESG. The assessment takes into account governance and social issues, including in particular the place of women or employee turnover, as well as environmental issues. The company’s overall performance was 53.3 (as at 30 October 2021).

The CCCA study was carried out by the Reporting Standards Foundation, the Polish Association of Listed Companies and Bureau Veritas in cooperation with supporting partners and Go Responsible and MATERIALITY consulting firms. The data was sourced from annual reports of companies listed on the Warsaw Stock Exchange and included in the WIG ESG index (approx. 60 entities)

The results are allocated to respective macro-sectors and indices on the completion date of the study in a given year.

LOTOS received the score of 5.91, which is high, not only in its sector, but also among all 60 companies, which were evaluated.

The Climate Strategy Benchmark is a broad study of corporate climate strategies, published for the first time in 2021, developed by ESG experts and practitioners from the UNEP/GRID-Warsaw Center and Go Responsible. It should provide support to companies in the fulfillment of rating requirements. The study examines companies listed on the WSE and included in the WIG20 and WIG40 indices.

It assesses the level of awareness of climate and sustainability objectives and whether they are reflected in corporate strategies, the implementation of climate policies, but also how ambitious and specific they are – for example the structures for managing the climate and sustainability area.

In this study, Grupa LOTOS received 5.9 out of 23 possible points.

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