Natural capital

Human capital and natural capital interact on several levels:

• through education and training, the Group minimises the risk of events which could have an adverse effect on the natural environment due to human error.
• through development and innovation projects, the Group develops and rolls out solutions designed to reduce the environmental footprint of its operations. A large number of such solutions are developed internally by Group companies.
• from the perspective of extraction of natural resources, competent staff are key to efficient exploration for and production from new deposits, also outside of Poland.

As part of its production operations in Poland and abroad, the Company engages in social dialogue with local communities, experts and environmental organisations, as access to hydrocarbon deposits often depends on their acceptance. The PGNiG Group is firmly committed to building strong partnership-based relations with local communities, public authorities, suppliers and contractors in the pursuit of common goals.

PGNiG Group is an industrial and commodity holding company. PGNiG’s business comprises exploration for and production of natural gas and crude oil. Through its key companies, PGNiG is also active in the area of import, storage, sale and distribution of gas and liquid fuels, as well as heat and electricity generation and distribution. As a result, all areas of our business rely heavily on access to natural capital which determines the Group’s financial performance.

The core business of the Group is hydrocarbon exploration and production. To ensure uninterrupted supply of hydrocarbons to its retail and business clients, the Group invests in:

• exploration for new deposits and acquisition of production licences,
• field development projects.

The Group acquires and sells commodities from its own sources, but also purchases commodities on the market:

• natural gas (including LNG) purchased from third parties,
• hard coal purchased for the Generation segment.

Natural gas and crude oil prices determine the performance of individual segments to a large extent. To secure favourable gas prices in international transactions, the Group enters into short-, mid- and long-term contracts as a guarantee of uninterrupted and market priced supply of natural gas.

Environmental costs are an inherent part of the Group’s operations. Seeking to minimise its adverse environmental impacts, in 2021 the Group purchased emission allowances for 5,905 thousand Mg CO₂ (representing the additional volume of allowances the PGNiG Group had to purchase given its 2021 allocation of 1,358.3 thousand Mg).

The Group also pays costs of certification, environmental software and mandatory environmental measurements.

Interactions between natural capital and manufacturing capital may be analysed on several levels.

• in the Exploration and Production segment, the Group must have access to the necessary facilities and technologies to extract hydrocarbons from various deposits, including small-scale and unconventional deposits. In 2021, PGNiG continued to implement the Digital Field Programme, tools enabling PGNiG to efficiently exploit oil and gas resources. The PGNiG Group has run a hydrogen competence programme since 2020.
• the Generation segment relies largely on coal assets. The Group is currently upgrading its existing generation capacities to bring them in line with the requirements of BAT. New investments rely primarily on natural gas – a fuel which has significantly smaller environmental impacts.