Compliance

Between March and June 2020, the Compliance Department of PGE S.A. carried out “Intellectual Property Protection” monitoring procedures in selected companies of the PGE Capital Group. As part of the monitoring procedures, the following elements were analysed: employment contracts, contracts with contractors, contracts between companies within the group, annexes, statements and other documents that might contain information on a given company’s protection of intellectual property. The examination process was conducted through the analysis of company by-laws, documentation, data and agreements, as well as direct and indirect interviews. The monitoring covered the period from January 2018 to June 2020.

Taking care of the implementation of strategic objectives, the PGE Capital Group manages risks occurring in the course of its activities in accordance with the General Procedure for Corporate Risk Management in the PGE Capital Group.

With respect to the identification and assessment of risks in the area of compliance, the Compliance Department relies on the ERM9 system functioning in PGE S.A. and cooperates with the owner of this system, i.e. the Risk and Insurance Department.

In 2020, the monitoring comprised 24 companies, the process was carried out in 7 companies covered by the ERM system and 17 companies not covered by the ERM system.

The Compliance Department provides opinions on internal regulations and reviews processes to ensure their compliance with the law, the principles of the Code of Ethics of the PGE Capital Group and other compliance regulations as well as to minimise the risk of penalties and abuse (by ensuring transparent rules and adequate supervision).

Moreover, as part of the analysis of the occurrence of factors conducive to abuse of internal regulations, reviews of internal regulations in PGE S.A. in the area of purchases and new projects and investments were carried out in 2020. The purpose of these activities was to assess whether a given regulation clearly defines the division of tasks and responsibilities in the process, to determine whether critical points in the process, where so-called “red flags” should be marked, are indicated and whether activities ensuring risk mitigation, e.g. the rule of four-eye control, strengthened supervision, are defined.

The task was executed in the form of a pilot process in consequence of which solutions to be applied in all PGE CG companies will be developed.

The task was executed in the form of a questionnaire to be completed by Compliance Coordinators in the companies of the PGE Capital Group. The questionnaire contained questions concerning the implemented system for monitoring changes in the law with regard to ensuring up-to-date information on changes, distributing such information to organisational units and obtaining feedback on the necessity to make adjustments or the lack thereof, as well as confirming the implementation of adjustments, if necessary.

Compliance assessment is a regular review of activities with respect to their compliance with the applicable law and internal regulations carried out in the form of self-assessment by particular management boards. The Compliance Department provides support to the PGE CG companies in their performance of compliance assessment. Subsequently, the Compliance Department collects and analyses assessment results and indicates areas requiring improvement in the area of non-compliance risk management.

In 2020, the compliance training was being continued in the companies of the PGE Capital Group, including in particular the following elements:

a) adaptation training, i.e. an element of the process of adaptation of newly hired employees during the first days after the commencement of work,

b) workshops on the PGE CG Code of Ethics,

c) training on the PGE CG Anti-Corruption Policy, in the format of e-learning for the basic thematic scope and the format of on-site workshops for the extended thematic scope,

d) inauguration of refresher training on the PGE CG Code of Ethics.

Training events are conducted by Coordinators and internal trainers appointed in the particular companies. The Compliance Department organises and co-conducts “train the trainer” events that constitute essential preparation for conducting training on compliance. In 2020, 2 such training events were held for a total of 41 employees.

Due to the epidemiological situation, workshops were conducted in the companies partly on a remote basis, by means of electronic communication, on the basis of training materials prepared for this purpose by the Compliance Department.

The building of an organisational culture based on the values of the PGE CG Code of Ethics is one of the tasks supporting the achievement of the PGE CG’s business objectives. Issues related to ethical business are more and more frequently reported to external stakeholders, so their importance is growing (e.g. statements of non-financial information published annually by PGE S.A., WSE standards, as well as surveys conducted/questions asked by financial sector institutions).

In 2020, the process of operationalising the provisions of the PGE CG Code of Ethics was extended to include areas other than those directly related to compliance. These elements may be implemented as part of training events/instructions, taken into account in internal regulations, in communication between employees and both compliance officers and management or representatives of other areas.

In 2020, refresher training on the PGE CG Code of Ethics was inaugurated. According to the regulations in force, it should be repeated periodically in a three-year cycle. Taking into account the feedback received after the previous training events and in order to ensure the highest possible relevance of the content and form of training for their recipients, and thus the best possible effectiveness, refresher training events were planned on the basis of the principle of individualisation and personalisation of both training materials and guidelines concerning the methods of conducting training.

During training events, employees become acquainted with the values they are obliged to pursue under the Code of Ethics.

In addition, the following actions related to the Code of Ethics were taken in 2020:

• Implementing elements of the Code of Ethics in selected training events (in addition to mandatory compliance training) in PGE S.A., e.g. the „Development Network” programme is based on the values of the PGE CG: Partnership, Development, Responsibility. For example, the training entitled “Assertive Relationships – a Workshop for All Employees” was based on the “People-in-Our-Company” principles, especially: “We care about friendly working conditions” and “We improve ourselves, are proactive, and show initiative.
• Sending “The guidelines for practical implementation of the elements of the Code of Ethics in the life of the PGE CG Companies” to Compliance Coordinators.

In 2020, an amendment to the Anti-Corruption Policy of the PGE Capital Group was developed in order to ensure its compliance with the guidelines of the Warsaw Stock Exchange in the area of counteracting corruption, to reflect organisational changes concerning units responsible for counteracting corruption in the PGE Capital Group and to supplement solutions strengthening the prevention of conflicts of interest. The amendment will be implemented in 2021.

In 2020, 25 PGE Group companies were assessed in terms of the risk of corruption, i.e. 100% of PGE Group companies in which Compliance structures operate.

Training in anti-corruption policies and procedures.

In connection with the adoption of the new PGE S.A. strategy in 2020, work is underway to adjust the content of the compliance area and communication activities to the new strategy. An analysis of employee interest in the topics and publications is available under the IPK Compliance tab. As a result of the aforementioned changes, it will also be necessary to carry out actions adjusting the compliance communication materials.

In addition, in 2020 the companies conducted their activities on the basis of the previously prepared communication action schedules. They mainly focused on cyclical mailings and circumstances regarding important events such as the Compliance Day falling in June, the anniversary of the adoption of the Code of Conduct for Business Partners, or the International Anti-Corruption Day in December 2020.