Lukoil

Lukoil has set targets to reduce its scope 1 and 2 emissions by 20% by 2030 compared to 2017. This target does not align with its 1.5°C pathway and the target could not be assessed as they include an unknown level of carbon offsets. Lukoil has not set any scope 3 emissions reduction targets. The company should set long-term targets which cover all scopes and set intermediate targets at gaps of no more than five years to incentivise near-term actions on a longer-term goal. Reducing emissions related to its operations and products should remain the company’s priority. Furthermore, the company should disclose the proportion of each target that will be met through direct action, rather than including offsets.

Lukoil’s scope 1 and 2 emissions intensity marginally decreased between 2017 and 2021. This does not align with the company’s 1.5°C pathway, which requires it to reduce its scope 1 and 2 emissions intensity by about 7% per year between 2021 and 2026. Lukoil reports investing about 0.5% of its total CapEx in low-carbon and mitigation technologies in 2021, but no information is available regarding its CapEx on carbon removal technologies. To meet the sectoral-level expectation, at least 77% of the company’s total R&D investments should be dedicated to low-carbon technologies.

Lukoil reports investing in low-carbon mitigation research and development (R&D), such as filtration capture technologies, forest restoration, electric vehicles (EV) infrastructure commercial renewable energy systems and the production and sale of biofuels and hydrogen. However, it is unclear what proportion of this hydrogen is created using low-carbon production methods. Lukoil does not disclose its R&D expenditure on low-carbon and mitigation technologies. To meet the sectoral-level expectation, at least 77% of the company’s total R&D investments should be dedicated to low-carbon technologies.

Lukoil’s scope 1, 2 and 3 emissions intensity decreased marginally between 2017 and 2021. This does not align with the company’s 1.5°C pathway, which requires it to reduce its scope 1, 2 and 3 emissions intensity by about 4% per year between 2021 and 2026. The company does not disclose its expected revenues over the next five years, or the share of revenues originating from low-carbon products. Reporting this information will enable the company to demonstrate its financial commitment to transitioning to a low-carbon future.

Lukoil has set a target to reduce its combined scope 1 and 2 emissions by 20% by 2030, compared to 2017. Lukoil aims to expand its solar power generation capacity by 2.35 MW in its hydropower generation capacity by 1.5 MW in 2022. Lukoil’s client engagement program aims to foster the concept of a low-carbon economy among clients and suppliers, but the company does not quantify the level of GHG emissions reductions required from its client and the timeline of this objective.

Lukoil reports elements of a transition plan, discussing the expansion of its renewable energy capacity by 3.85 MW, its participation in the World Bank’s Zero Routine Flaring by 2030 initiative and its commitment to end routine flaring of associated petroleum gas (APG) by 2030. Despite this, Lukoil does not report any supporting financial content. Most of Lukoil’s Decarbonization Program for 2022–24 priorities focus on improving the energy efficiency of its fossil fuel business activities.

In 2021, Lukoil increased its installed solar power plant capacity to 41 MW, established a new decarbonization and climate change adaptation business process and began supporting the Task Force on Climate-Related Financial Disclosures (TCFD). Lukoil also developed its Framework for Financial Assessment of Climate-Related Risks and the Decarbonization Program for 2022–24, along with approving its Technical Policy on Energy Efficiency and Reduction of Greenhouse Gas (GHG) Emissions in Russia.

Between 2017 and 2021, Lukoil’s scope 1 and 2 emissions intensity marginally decreased. To align with its 1.5°C pathway Lukoil needs to decrease its scope 1 and 2 and emissions intensity by about 6% annually. Additionally, between 2017 and 2021 Lukoil’s scope 1, 2 and 3 emissions intensity also marginally decreased annually. To align with its 1.5°C pathway the company needs to decrease its scope 1, 2 and 3 emissions intensity by about 4% annually.

Lukoil has achieved 92% of its 2030 scope 1 and 2 emissions reduction target, a target that only aims to achieve a 20% reduction and is unclear on the use of offsets. Its emissions intensities have only marginally decreased. Lukoil lacks long-term commitments to decarbonise, emissions reduction targets beyond 2030 or consider its scope 3 emissions and incentivises hydrocarbon production. In the short term, Lukoil prioritises improving the energy efficiency of its fossil fuel activities.

The company publicly discloses a commitment to engaging in social dialogue with workers and unions. However, no relevant disclosure was found outlining the categories of stakeholders it engages with on a just transition. No evidence was found to show the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the low-carbon transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. No public commitment by the company was found stating its intention to reskill and up-skill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company reskills and upskills workers in a way that ensures gender balance and inclusion of vulnerable groups.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. No evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and supply chain. No evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. No evidence was found of a time-bound target for paying all workers a living wage. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of the company’s required working hours. The company the gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. No evidence was found that the company commits to gender equality and women’s empowerment.

No evidence was found that the company commits to protecting personal data and that it has a privacy statement regarding the collection, sharing and access to personal data. While the company discloses its global tax strategy, no relevant disclosure was found of the corporate income tax paid for each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. The company has a lobbying and political engagement policy, and it specifies that it does not make political contributions. Moreover, the company discloses its expenditure on lobbying activities.