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Integrated Annual Report 2012
The Culture of Values


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Grupa LOTOS S.A. - Integrated Annual Report 2012

Stakeholders’ involvement


Discussions with stakeholders of issues relating to the social and environmental impact of our business are valuable opportunities for learning how to improve our performance. We also engage in extensive communications and public consultations in order to improve our corporate practices.

In 2011, a number of diverse stakeholder engagement methods were used in an in-depth manner and on a large scale during the public consultations in course of the work on the updated LOTOS Group’s Corporate Social Rersponsibility Strategy. The process itself as well as the conclusions to be drawn from it were presented in detail in the 2011 Integrated Annual Report

In 2012, we created an opportunity to meet with stakeholders using a variety of means at our disposal. These included:

  • Public consultations,
  • Knowledge-sharing workshops,
  • Conferences promoting good practices,
  • Multi-directional communication,
  • Opinion polling.

Public consultations with employees

One of the key objectives of the LOTOS Group’s CSR strategy is the improvement of management processes by ensuring ethical conduct and transparency of business processes. Achievement of this goal is dependent on the implementation of a significant project - our comprehensive Ethical Conduct Programme. In mid-2012, the Company’s Board resolved to appoint a special team to formulate assumptions and develop the process and organization-related solutions necessary for successful implementation of the Ethical Conduct Programme.

The need to improve ethical standards at the LOTOS Group was confirmed by our employees, not only in the course of the work on the CSR Strategy, but also in an opinion poll on ethical issues conducted in the spring of 2012. Over 170 respondents indicated a risk of corruption and conflict of interests, the maintenance of professional secrecy and the transparency of business partner selection processes as issues which needed to be addressed in the Code of Ethics. Equal employment, advancement, and career development opportunities were identified as being equally important.

As the Code of Ethics is one of the most important elements of the Ethical Conduct Programme, in 2012 we began work on formulating its contents.

Ethical Conduct Programme

The programme is a means of implementing and monitoring ethical standards at the company, facilitating proper conduct and supporting the moral behaviour of employees. Ethical Conduct Programmes typically comprises a number of solutions and functions, such as a Code of Ethics, tools for reporting breaches of the Code, an Ethics Officer, and education on ethics-related issues.

Code of Ethics

A set of standards and principles of conduct applicable across the organization, based on adopted core values and issues identified by employees as needing regulation. As the foundation of the Ethical Conduct Programme, the Code of Ethics provides a kind of moral compass guiding employee’s actions and motivations in their everyday work.

The LOTOS Group’s Code of Ethics is addressed to all employees, regardless of their place within the organization, job title or type of work performed. Therefore, we decided to ensure the possibility of participating in the public consultations of the draft document to every one of our over five thousand employees, in Poland, Lithuania and Norway. Needless to say, these were the most extensive consultations on a document in the company.

Staff meetings were preferred as the means of sharing the contents of the draft Code, and we spent three weeks at the end of 2012 arranging the meetings. Over 400 members of the management were responsible for carrying out the consultations.  At the staff meetings, we:

  • Explained the importance of the Code of Ethics and its role as the key component of the Ethical Conduct Programme,
  • Presented the drafting methodology for the document,
  • Shared the contents of the Code of Ethics,
  • Elicited comments, questions and amendment proposals from the employees,
  • Clarified any doubts raised by the employees.

During the consultations, employees raised over 300 questions and comments, and made proposals for amendments to some of the provisions. The main page of the Ethical Conduct Programme sub-service was visited more than 2,300 times in its first three weeks. The letter posted on our intranet from the President of the Grupa LOTOS Board, encouraging active participation in the discussion on the document, received over 1,500 hits. 1,500 copies of a special publication accompanying the consultations were handed out. Such active, two-way communication ensured that all our employees had a strong influence on the final version of the Code of Ethics.

Once the consultation period had ended and the submitted comments taken into account, in December 2012 the Board of Grupa LOTOS finally adopted the LOTOS Group’s Code of Ethics. The document became effective in January 2013 and is publicly available on our website.

Link to the Code of Ethics

Beata Ossowska-Lango

Head of the Internal Audit Office, Representative of the Board for Ethics, Grupa LOTOS S.A.

Broad-based public consultation with the involvement of people representing various areas and jobs was essential to the development and subsequent implementation of our Code of Ethics. It is one of the key conditions that needs to be met in order for the Code to prove an effective tool for developing the desired ethical corporate culture. 

The objective behind the consultations was to convince those to whom the Code of Ethics applies that thanks to their influence on the wording of the document, they were also co-authors. This sense of contribution is, in the case of the Code, crucial to the quality of its future functioning at the organization. It should also be emphasised that the Code is not a document imposed by the Board, a move which would be alien to the employees and the corporate culture. It is instead a code of ethical standards, consistent with the values adopted by the organization, created to aid employees to the benefit of the whole LOTOS Group.

Successful implementation of the Code is also conditional upon creation of a comprehensive Ethical Conduct Programme, fostering the desired corporate culture and supporting the development of employees' knowledge and practices through an ethical education system. Such a broad, comprehensive approach is indispensable if the Code is to prove effective in helping with difficult or doubtful situations arising in the workplace.

Initiating the work on the Code of Ethics in 2012, the Board of Grupa LOTOS was guided by the conviction that the employees – having read and accepted the Code of Ethics – would have precise information on the attitude expected of them and the behaviour which the organization won’t tolerate. The experience of numerous organizations shows that a Code of Ethics helps create a positive, encouraging atmosphere that mobilises employees around the pursuit of common goals, as well as increasing their commitment to their duties. It also strengthens their conviction of that they have a real opportunity to pursue their individual goals and professional plans.

Business benefits following from the establishment of an Ethical Conduct Programme are also a significant factor. Successful implementation of these kinds of programmes enables companies to consolidate the belief amongst its contractors and other partners that the company is worth working with, without the need to be concerned about the security of their own interests and reputation.

In the coming period, the LOTOS Group will be introducing a set of useful solutions, particularly organizational ones, in support of the effective implementation of its own Code of Ethics. It should be noted, however, that the document is also addressed to our environment: our customers, trading partners, and local communities. We encourage everyone to read the document, not only because it is a declaration by the company on its conduct in external relations, but also because it provides clear information on our expectations of our working partners in various areas.

Knowledge sharing

In 2012, in cooperation with a renowned NGO – Fundacja Sendzimira (Sendzimir Foundation), we became part of the Summer Academy "Challenges of Sustainable Development" project, one of the key training events on sustainable development in Poland. The Academy's lecturers and trainers include many specialists representing various fields of sustainable development, working in scientific and consulting partner institutions and organizations, both in Poland and abroad. The course is targeted at students, PhD candidates, members of NGOs, as well as representatives of local government and businesses. The Academy teaches how to put knowledge into practice, in accordance with the learning by doing concept that combines the transfer of knowledge with implementation of hands-on projects, and Grupa LOTOS became a partner in one such project. Together with a group of Academy trainees, we took part in workshops aimed at finding the best solution to one of the problems we identified during our work on the CSR Strategy of the LOTOS Group until 2015. The participants, supported by a team of trainers, analysed our company's performance from the perspective of sustainable development and came up with several possible solutions to the problem.

The aim of the project was to develop a joint proposal for a systematic approach to community relations management with Grupa LOTOS' local communities, based on best practice and in accordance with the principles of social dialogue. As part of our work with Fundacja Sendzimira, a report was developed by five members of the working group, invited to visit Grupa LOTOS. The document discusses recommended models for community relations and suggests a number of tools for their implementation.

Conferences focusing on the promotion of good practices

We take every opportunity to share good practices in corporate social responsibility with other businesses and NGOs, and in 2012 we took part in a number of important projects.

Last year, we co-hosted the "Development of Responsible Business" conference as part of the CSR Academy, under the auspices of the Ministry of the Treasury. The project, implemented in cooperation with the Puls Biznesu daily, was a reaction by Polish business circles to the need to promote the idea of corporate social responsibility, especially among SMEs. This joint effort between the state administration, businesses, and NGOs in organizing the CSR Academy increased the substantive value of the project and also served as an example of an effective CSR measure – integrating representatives of different sectors of the economy to achieve a common goal.

The uniqueness and outstanding quality of the project was quickly recognised – earning, for instance, a distinction in the XVI edition of Raport Społeczna Odpowiedzialność Biznesu (Corporate Social Responsibility Report) published by the Gazeta Finansowa weekly.

The conference was also attended by Paweł Olechnowicz, President of the Board of Grupa LOTOS. He made it very clear that CSR is no longer an option that may, but need not be, applied by a company. Instead, it is a standard and a necessity for companies that want to continue to develop. Jowita Twardowska, the Company's Communication & CSR Director, put the spotlight on the fact that CSR needs to be implemented as a corporate management method in order to be effective and productive. Beata Ossowska-Lango, Director of the Internal Audit Office, discussed our approach to business ethics, presenting the progress of works on the comprehensive Ethical Conduct Programme and abuse prevention system, which are also related to the CSR Strategy.

About 100 representatives of businesses, NGOs, and tertiary education institutions in the Pomerania region took part in the conference and workshops. The conference also included the first-ever study of the level of implementation of CSR standards in Polish companies, based on measures conforming to the ISO PN-26000 standard.

In 2012, we were involved in the Fifth World Business Ethics Congress, organised by the International Society of Business, Economics and Ethics (ISBEE), and by Akademia Leona Koźminskiego (Kozminski University). The Congress brought together a number of leading experts representing scientific and business circles from all around the world, and served as a forum in which we shared our first experiences in the implementation of the integrated reporting model based on the Global Reporting Initiative in Poland. The panel session, with the participation of a GRI representative, created an opportunity to share good practices in non-financial reporting – an important element of transparent and responsible business.

As the leading business in the Pomerania region, Grupa LOTOS is always willing and ready to exchange good CSR practices with other companies. One example of this was its participation in the "Dialogue with Shareholders as a Tool of Sustainable Development" discussion forum, organised in 2012 by the pharmaceutical corporation Polpharma. The goal of the meeting was to share knowledge and experience with regard to dialogue with stakeholders, to disseminate good examples, and to promote sustainable development.  The list of participants included representatives of a number of businesses and institutions operating in the Pomerania region, and we took the opportunity to present our good practices in terms of responsible employee relations.

Multi-directional communication with the capital market

Grupa LOTOS is keen to ensure that its relations with stakeholders representing the capital market are forged and fostered based on the values of equality and dialogue to find solutions satisfactory to both parties. We are always open to new communication tools, and we constantly strive to perfect the form and content of our communications.

We present investors with a precise, reliable, transparent picture of the Company's operations and financial standing. We provide them with up-to-date information in compliance with the principles of involvement, availability, and equal treatment of all investors. To communicate that information to the investors, we use a broad range of IR tools, including mailing, shareholder conferences, conference calls, as well as open-house days for analysts and investors. 

We also participate in Akcja Inwestor (Investor Campaign) organised by the Puls Biznesu daily. The goal of the Campaign, held under the auspices of Stowarzyszenie Inwestorów Indywidualnych (Association of Individual Investors), is to encourage the involvement of capital market participants and enhance their communication with listed companies. Investors can visit a dedicated website to send their questions to listed companies, with the task of the editorial team being to make sure that those questions are correctly forwarded to the addressee and answered.

In 2012, our Investor Relations Team supported the Company's Board in organizing meetings with investors and maintaining regular relations with analysts. On October 15th, the annual Analyst's Day was organised in Gdańsk, with the development of the LOTOS service station chain being its leading theme, taking into account the recent changes in our offer resulting from the dynamic growth of our new LOTOS Optima brand economy segment.

Grupa LOTOS' Internet Investor Relations Service is dedicated specifically to shareholders and investors and is published in Polish and English, with a view to reaching a broader range of investors and analysts.

Additionally, the corporate events calendar, including the publication of quarterly reports, the activities of the General Meetings and other events in the LOTOS Group which might influence the price of the Company's shares is also published on the site, on the 'Investor's Calendar' page. The calendar links to various supplementary materials, such as periodic reports, Board presentations, .mp3 files with recordings of the Board's conference calls with analysts, and all documents relating to the organization and conduct of General Meetings.

In line with our CSR strategy, we attach great importance to the dissemination of information on all aspects of our operations connected with CSR among capital market participants. In 2012, as part of the Civic Ownership (Akcjonariat Obywatelski) campaign held by the Ministry of the Treasury, we organised a workshop with an analyst from the Parkiet daily on how to carry out technical analyses of listed companies to quickly obtain information, on them. The focus here was specifically on information concerning a company's ranking in the WSE's RESPECT Index, and the idea of corporate social responsibility.

Opinion polling

The opinions of key stakeholders are a valuable source of information. We make efforts to conduct opinion polls on a regular basis, with a view to improving our management processes, and the same applies to our reporting model. Since the adoption of the on-line reporting system, every single publication comes with tools for readers to share their opinions, give feedback, or ask questions regarding both the operations of the LOTOS Group and the reporting model itself. We make every effort to inform as many of our publications' readers as possible of the possibility of sharing their feedback with the Company, which could potentially improve the quality of our future reports.

Employees of the LOTOS Group, investors, the company's business partners, as well as representatives of academic circles (university teachers and students) are the largest group of stakeholders that have used on-line reports to share their opinions with us.

According to the feedback received to date, the most useful functionalities of Grupa LOTOS annual reports include the ability to download selected chapters of the PDF, listen to recorded content, the social networking functionalities for the sharing of information with others, as well as a content browser facilitating easier access to information of particular interest to the reader. Readers also appreciated the interactive Table of Contents of GRI Performance Indicators and charts that can optionally compare selected data. All these functionalities are also offered in the current Integrated Annual Report.



In addition to on-line opinion polling tools, we also conduct regular real-world polling.  Prior to the preparation of this current report, we invited the following key stakeholders to share their opinions and expectations of the Company's reporting model:

  • External stakeholders: representatives of public administration authorities, NGOs, the local government in our main business location, academic circles, beneficiaries of the social programmes of Grupa LOTOS, and CSR experts;
  • Internal stakeholders: employees of the LOTOS Group involved in the collection and analysis of data and information for the purposes of annual reports.
Assessment of previous Grupa LOTOS annual reports

Scoring on a five-point scale (1 – lowest, 5 – highest).

Assessment criteria Internal stakeholders - average score External stakeholders - average score
Was the information useful? 4.27 4.22
Was the language comprehensible? 4.53 4.33
Was the ratio of positive and negative information well balanced? 4.03 3.78
Was the report visually attractive? 4.44 4.44

According to opinions received by the Company, readers of the annual reports focus mainly on the actual results of the organization's social and environmental activities, its financial standing, and prospects for growth, as well as the degree to which the company meets the needs of its clients.

Information about the activities of Grupa LOTOS expected by readers of annual reports

Scoring on a five-point scale (1- least expected, 5 – most expected).

Information category Internal stakeholders - average score External stakeholders - average score
Information about the impact of climate change on the Company's operations 3.00 3.78
Information about the situation of the Company's employees 3.86 3.44
Information about feedback from the local community and their needs in the Company's location 3.63 4.33
Information about the Company's relationships with its suppliers and subcontractors 3.75 4.33
Information about the effectiveness and efficiency of the Company's social and environmental activities 4.00 4.44
Information about the social and environmental risks inherent in the Company's operations 3.92 4.22
Information about the Company's financial standing and business prospects 4.71 4.33
Information about the measures adopted by the Company to ensure the involvement of its stakeholders, and the outcomes of such measures 3.77 4.22
Information about the Company's response to the needs of its clients 4.19 4.44

Feedback from our stakeholders is one of the arguments for the continuous improvement of the financial and non-financial reporting model adopted by the Company.




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