RESPECT Index companies - PGNiG

RESPECT Index companies - PGNiG

Michał Szubski, PGNiG CEO answers the questions about RESPECT Index and his company’s participation in the project:

What initiatives enabled your company to become one of the 15 top companies? Please list some examples as an inspiration for others.
I could list many sustainable development and corporate responsibility initiatives of PGNiG. I think that the break-though which directly determined the direction of these initiatives and our presence among the 15 stocks in the RI portfolio was the adoption of the Sustainable Development and Corporate Responsibility Strategy. Our company has pursued the Strategy since July 2009. This means that we strive for both social responsibility, by getting engaged with the local community through charity and sponsoring activity, and responsibility towards the environment, employees, and business. We had been very active in these areas before but the adoption of the Strategy made them more strategic.
Concerning our environmental commitment, more than three-fourths of our units have environmental management systems in place, which helps us to monitor and manage our environmental impact; we are seeking and implementing new innovative technologies which are environment friendly. I cannot possibly list all initiatives of PGNiG Group companies in Poland and abroad so I would refer you to our CSR report. I should stress that we are very keen to co-operate with other companies in the sector because we can do more if we join our forces. Hence PGNiG’s initiative to organise an annual Responsible Energy Conference and draft the energy industry’s Sustainable Development Declaration which has been signed by several major players including:

  • EDF Polska
  • Enea
  • GAZ-System
  • GDF SUEZ Energia Polska
  • PGNiG
  • Tauron
  • Vattenfall Poland
  • PSE Operator
  • Lotos
  • Fortum Heat&Power
  • Dalkia Polska
  • PKN Orlen

Does the specificity of your sector facilitate or hinder CSR initiatives?

I believe that the specificity of our sector certainly impacts our understanding of our commitment to the environment, the community, the employees – these areas are naturally very important to us due to the profile of our sector. However, this does not mean that we are indifferent to other aspects of sustainable development. Due to its specificity, each sector has a different impact on internal and external stakeholders. I wouldn’t say that the gas industry or the energy industry particularly favours CSR initiatives. However, due to the specificity of our sector, our environmental protection commitments or occupational health and safety standards should certainly be much higher and more restrictive than for example in the financial sector.

What prompted your company to take part in the RESPECT survey? What are the benefits of participation in the project?

As a public company which pays great attention to corporate social responsibility, we could not pass the opportunity to take the test. Participation in the Respect survey is a good occasion to undergo external assessment and validation and to identify areas for improvement in comparison with other companies engaged in corporate social responsibility. It is a chance to evaluate our strategy and the resulting rules and procedures in the light of solutions applied by other companies operating in Poland.

It is also important that this is the first initiative of its kind in this part of Europe. It seemed obvious that we should take part in the survey in order to support initiatives which raise the bar of corporate social responsibility in Poland.

One year of index history is too short to clearly identify increased interest in our company driven by our participation in the RESPECT Index. However, the results of the Deloitte audit are a valuable indication of the areas we should look into more closely.
In addition, it is quite clear that our participation in RI has had a positive impact on our corporate image. Participation in the RESPECT Index is a rank of distinction as the group of 15 participating companies is quite an elite.

Does you company note a correlation between the development of a CSR strategy and increased investor interest?

It is rather hard to say in our case because our company’s free-float shares increased by 12% in 2010 following the allocation of shares to employees. However, a company’s participation in such rankings certainly strengthens its image and attracts the attention of those investors whose strategies focus is on corporate social responsibility. The coming years of index performance will enable a better assessment, yet we believe that CSR initiatives will remain important to investors. Surveys conducted among investors and analysts are univocal: they care about companies’ CSR activity. This may not be the most decisive factor in buy decisions, but it certainly improves the company’s image among investors.
However, it should be noted that investors who invested in RESPECT Index stocks have earned 32% over the past year while the broad market grew much less by 19%.

How do you evaluate the development of CSR and responsible investment in Poland?

Opinion polls indicate that a fraction of Poles understand the term “Corporate Social Responsibility” – only 3% according to last year’s survey conducted by Pracodawcy RP. This ignorance certainly affects the capital and the financial markets. On the other hand, Poland is the only country in this part of Europe to have a CSR index: RESPECT Index; thus, we are certainly on track and abreast of our neighbours. The biggest stock exchanges of the world have published CSR indices for years, including FTSE 4 Good and Dow Jones Sustainability Index, which rank stocks by their sustainable development performance to help interested investors select the best stocks for their portfolios; the sector of CSR funds is also growing. Poland has a long way to go; however, important institutions like the Warsaw Stock Exchange are sending a clear message: this topic is important and will become even more important.