KazMunayGas

KMG set a target to reduce its scope 1 and 2 GHG emissions intensity by 10% by 2031 compared to 2019 and zero routine flaring by 2031. The company also aims to reduce scope 1 and 2 carbon dioxide emissions by 15% by 2031 compared to 2019. This target does not include any other greenhouse gases (GHG) such as methane. The company should develop a long-term target that aligns with its 1.5°C pathway and covers its scope 1, 2 and 3 emissions and disclose relevant metrics to allow the evaluation of its progress towards the goals. Additionally, the company should set intermediate targets at gaps of no more than five years to incentivise near-term action on longer-term goals.

KMG does not disclose its investments in low-carbon technologies. By 2031 the company aims to achieve a 10% allocation of capital expenditure (CapEx) to low-carbon projects, although this is still significantly lower than the sector requirement of 77%. KMG’s scope 1,2 and 3 emissions intensity between 2019 and 2021 has increased. 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 between 2021 and 2026, and scope 1 and 2 emissions intensity needs to be decreased by almost 8% per year between 2021 and 2027.

While KMG expresses its support for the Paris Agreement, it has opposed various climate-related legislation in Kazakhstan. KMG lobbied for maintaining the target of reducing greenhouse gas emissions by 15% from the 1990 level by 2030, instead of the proposed 25% reduction. Additionally, KMG disagreed with a suggestion to decrease the amount of carbon credits by 26% in 2022 compared to 2021, proposing instead to maintain a reduction factor of 1.5% from the previous year. KMG’s stances were taken into consideration. KMG lacks a process to ensure that its policy positions align with the goals of the Paris Agreement.

KMG is in the early stages of exploring low-carbon business models and potential collaborations. However, the company does not yet have any projects in the development stage. KMG is considering hydrogen filling stations and hydrogen/ammonia production using fossil gas or electrolysis water as feedstock. Feasibility studies and agreements are planned for a hydrogen from renewable sources and ammonia production project in Kazakhstan. KMG has partnered with Shell Kazakhstan for the development of carbon capture, utilization and storage (CCUS) technology. Discussions are also ongoing for the development of around 300 megawatt (MW) of renewable energy capacity by 2031.

KMG aims to reduce scope 1 and 2 carbon dioxide emission by 15% by 2031 compared to 2019. This target excludes other GHG gases such as methane. The company also set a target to reduce its scope 1 and 2 greenhouse gas (GHG) emissions intensity by 10% by 2031 compared to 2019 and zero routine flaring by 2031.

KMG plans to implement energy efficiency measures and construct 300 MW of renewable energy sources by 2031 to increase the share of its renewable energy consumption from 0.17% in 2021 to 15% in 2031. By 2031 the company aims to achieve a 10% allocation of CapEx to low-carbon projects, this is far below the sectoral expectation of 77%. Long-term low-carbon development strategy includes such programs as blue hydrogen production, mobility program, as well as reforestation projects.

KMG plans to grow reserves both organically and inorganically through further exploration of existing fields and new exploration. The company has not disclosed its low-carbon expenditures in the reporting year or investments in research and development of climate change mitigation technologies.

KMG’s scope 1,2 and 3 emissions intensity between 2019 and 2021 has increased. 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 between 2021 and 2026. KMG’s carbon budget between 2022 and 2050 is currently projected to exceed its total 1.5°C carbon budget for the period by over 40% partly due to significant projected expansion in its gas production.

KMG has begun to consider how it can reduce its operational emissions, but it does not have a decarbonisation vision beyond 2031. KMG has not set any scope 3 reduction targets. The lack of ambitious long-term targets, an increase in emissions intensity between 2019 and 2021, as well as the company’s goal to grow its traditional oil and gas business and continue exploration of new oil fields suggest that KMG is not committed to transition.

The company publicly discloses a commitment to engaging in social dialogue with workers and unions. However, no relevant disclosure was found regarding the categories of stakeholders it engages with on a just transition. Nor was there any evidence 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.

The company discloses the actions it takes to create jobs, including its Future Growth Project and Wellhead Pressure Management Project, which both work to create job opportunities. However, 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. The company discloses the actions it takes to provide training and educational opportunities for workers and affected stakeholders. For instance, it has training programs for students and young specialists, as well as staff development programs. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders or a public commitment to help workers displaced by the transition to re- or up-skill.

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. However, 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. Moreover, 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. The company discloses some statistics about the diversity of its workforce as well as the share of employees that are covered by collective bargaining agreements. However, the company can strengthen its disclosure on these topics as well as on its living wage practices.

The company has a policy prohibiting bribery and corruption and describes its process to identify bribery risks in its own operations. Additionally, the company states that it does not make political contributions. However, the company can strengthen its disclosure on these and other ethical business topics, including personal data protection, tax and lobbying.