For DTEK, priorities in corporate social responsibility (CSR) are related to the special role of the power sector in socio-economic development and in ensuring the welfare of our fellow citizens, as well as to the special nature of our company:

 

Corporate social responsibility of DTEK is the philosophy of the Company’s long-term development, which enables us to harmoniously integrate successful business with basic human values and national development priorities. A socially-responsible approach to conducting business is about the following: 

 

 

Objectives of our CSR policy are:

 

We are striving to achieve a confirmed status and established reputation of a successful and reliable company, which is preferred by consumers and suppliers and working in which is an aspiration for managers and young specialists; the company, which emphasizes dialogue and interaction in relations with authorities of all levels. Such a status will become a definite competitive advantage of DTEK in today’s complex economic and socio-political conditions.    

 

Our practical activity to achieving those objectives is guided by the following principles:

 

We are firmly convinced that the whole set of corporate principles, programmes and measures related to CSR are of an exceptionally voluntary matter for the companies themselves. Only a successful company, which has no reasons to doubt its own long-term sustainability, can afford an effective social mission, the framework of which exceeds legal requirements. First of all, our social responsibility lies in the success and ethics of our business, since it provides people with work and decent labour conditions and enables them to be confident about their future.  

The sustainable development of business is possible only in a socially favorable environment. For its part, society quite understandably demands that business adhere to human values (environmental protection, legitimate forms of ownership, positive economic and social impact of enterprises, etc.), and not to sidetrack difficult issues. Stakeholders - society groups, with which a business organization interacts either directly or indirectly - form those demands and demonstrate increased activity in setting up channels of communicating and cooperating with business.

 

In order to conduct successful and efficient CSR policy, it is fundamentally essential for us to determine the stakeholders and influence groups of priority importance for the company, clarify their expectations and suggest efficient forms of interaction within the range from dialogue to possible joint actions and programmes. In particular, our stakeholders are the following target groups which share with us particular common interests:

 

Shareholders and investors are directly interested in the long-term and sustainable positive financial performance of the company, in its proven ability to manage and mitigate risks, as well as in openness and ethic principles and practice of corporate governance.

 

State authorities and local self-governmental bodies are interested in the complete and incentive-prone nature of taxation, an adequate role of the company in priority strategies of economic, social and cultural development at national and regional levels and in the imbedding of business approaches and modern managerial techniques into the social sphere.

 

Consumers are interested in the quality of our products, improvements in legal mechanisms for the protection of their own rights and qualitative and quantitative growth in investment and innovations.

 

Employees expect full compliance with labour standards and the provision of individual and collective labour agreements; management’s respect for individual rights and human dignity; daily concern of the company for minimizing health and environmentally harmful impacts of operations; dedicated assistance to the development of their qualifications and direct influence of business success upon labour remuneration and the amount/nature of social benefits. 

 

Business partners are interested in the widest possible application of the principles of transparency, impartiality and fairness as well as  adherence to moral standards supported by legal acts and ethics codes.

 

Non-governmental organizations (NGOs) and civil society organizations are interested in adequate and timely information from the company of the expectations and concerns of local communities, increased transparency and efficiency of state authorities and local self-governments, ensured independence of civil society groups and growth of their expert potential. In view of the importance of the whole range of environmental issues we face, DTEK singles out environmental NGOs as a distinct group of stakeholders. We need to start and develop enhanced dialogue with them, which should make it possible to elaborate a set and sequence of actions to gradually bring the company’s environmental policy and practice to the level of the respective international standards.

 

Development of structured dialogue and efficient interaction with stakeholders are subject to certain conditions and restrictions: stakeholders shall also be aware of their own responsibility before society and adhere to principles of ethics in their relations with business and amongst themselves. The company may take into account only such interests and expectations of theirs that do not contradict the interests and expectations of other stakeholders.

 

Despite a growing influence of political parties and religious beliefs in the current social environment, the principles of CSR determine that DTEK is beyond politics and beyond religion. The political preferences and religious beliefs of employees are their private matter but the company itself holds back from taking part in political life and by no means interferes in religious issues.

When setting up the framework and lines of our social responsibility, we are guided by the following sources:

DTEK is also guided by the key provisions of CSR policies adopted by the SCM Group in June 2007 in the following areas: corporate governance and business ethics; labour conditions; environmental protection; interaction with local communities; social investments and sponsorship and charity.

Large modern companies with a branched structure need the respective systems and processes of corporate governance and efficient control of business, which contribute to reducing risks and ensuring the stability of business for shareholders, managers and employees as well as for communities where DTEK’s enterprises belong. DTEK’s assets and enterprises build their practical work on the basis of our common values: Professionalism, Responsibility, Pursuit of Excellence, Unity, Opennessand principles of ethics, ensuring in such a way responsibility and due diligence in our corporate behaviour. In the area of corporate governance, DTEK is striving to meet the best international standards.

 

The practice of DTEK is based on compliancewith internationalstandardsand values of corporate governanceand continued progress:

 

The tasks of business development impose the necessity to lay principal emphasis upon the issues of attraction and retention of high-quality human resources, personnel training and development, as well as defining the social and labour relations policy. The employees are the key party of interest of DTEK, therefore our policy on labour conditions is regarded as a separate element of our CSR.

 

Objectives of policy on labour conditions:

 

Our business is related to intensive coal production, generation and other sectors and we are aware of the impact of our production cycles upon the environment. Being a socially responsible company, DTEK thinks that business growth and development should be both economically and environmentally sustainable. Environmental care and a reduction in environmental harm from the impact of business are important aspects of DTEK’s activities as a responsible corporate citizen.

 

DTEK is aiming at a minimization of the impact of its own production and processing cycles upon the environment (land, air, water and ecosystems) and a sustainable utilization of resources.

We hold to the following principles:

 

DTEK considers environmental sustainability as a constituent part of the business process and aims at the observation of the above mentioned principles by investing into the improvement of the environmental indicators of its business and sustainable utilization of natural resources. DTEK will do its best to fully make use of its environmental experience and knowledge available at the enterprises and to turn them into a competitive advantage in terms of environmental protection.

 

At the same time, we recognize that in certain aspects the environmental situation in the areas of DTEK’s operation is far from perfect and the mechanisms of gathering, checking and analyzing the environmentally relevant information need further improvement. With this objective in mind, DTEK plans to develop and approve a separate policy of environmental protection.  

 

Systematic relations with the local communities and authorities are very important for us since the well-being of the towns, living conditions of the employees’ families have an immediate influence upon a healthy and constructive atmosphere at the enterprises. Living standards influence the willingness of people to work and live in the towns where our enterprises are located. On this basis, we accept our share of responsibility for the situation in the towns, however we do not aim at substituting the local authorities’ responsibility for the communities’ well-being. The practice of ‘compulsory charity’ is considered non-constructive and unnecessary by DTEK.

 

Being a decent citizen of the local community means for us being responsible for the local communities and working closely with all stakeholders aiming at the improvement of the living standards of communities. DTEK has a systematic and strategic approach to this issue and encourages the local authorities to use the same approach.

 

 

 

Principles of the policy of engagement with local communities:

DTEK, of its own accord, takes the obligation of allocating adequate resources for the implementation of social programmes at country and regional level in the areas in which it operates. The main goal of the social investments of the company is the creation of a favourable social climate as the basis for a stable environment for business performance.

 

DTEK sticks to the following principles of long-term social investment:

 

We shall provide assistance to charities that support local communities and people in need; the nature and forms of our sponsorship and charity activities will be defined by DTEK’s CSR strategy.

 

 

Sponsorship support in the form of financial aid or in-kind aid can be delivered within the following profile: modern education, healthcare and sports, cultural heritage and development.

 

Sponsorship assistance is delivered with observance of  the following conditions:

Within the framework of its CSR strategy, DTEK has developed Regulation on Charity Activities, giving the assets and enterprises a clear vision of the goals and forms of charity, as well as establishing procedures for decision making on requests for charitable assistance.

 

CSR management is an integrated corporate function; senior and profile managers take into account the social aspects of their work both in strategic planning and in day-to-day activities. The basic CSR principles are applied to the following fields and methods of corporate governance: 

 

Ignoring expectations of society and well-grounded concerns of stakeholders may lead to reputational risks and, even sometimes, of direct financial damage to the company. The risks of conflict prone resolutions of some controversial issues (court claims, strikes, negative campaigns in press, etc.) can be substantially reduced if we respond to the alarm signals in an appropriate and timely manner. In this respect, CSR serves as an effective tool and impetus for the prevention of risks and mitigation of their consequences.

 

The social and environmental activities of assets, enterprises and other structural units of DTEK should be based on CSR policy. Thus, CSR policy becomes coordinated with the business as a whole and is integrated into the system of efficiency control. The gradual transition to the implementation of CSR policy into the cycles of business planning should start with the planning and budgeting of charity and social investments.

 

The corporate management of CSR envisages the  involvement of stakeholders’ representatives as partners not only at the stage of the implementation of programmes but also at the stages of planning the activity and the appraisal of efficiency. Joint management of CSR programs will increase the efficiency of our social investments and allow us to overcome the inertia in the acquisitive way of thinking of specific stakeholders.

 

Matching the scale and time-lines of social investments with the level and prospects of business development

The top-priority programmes for us are those, which: 1) allow us to obtain visible and long-term results for the maximum number of stakeholders and people; and, 2) allow us to position the company as a socially-responsible corporate citizen at local, regional, Ukrainian and international levels. Therefore it is important to set the correct balance between the projects aimed at specific local communities in the regions where we operate and the activities related to reputation-building both in Ukraine and abroad. In any case, when designing and implementing specific CSR-related programmes, the main motivation should be ensuring unobstructed business development in the long-term and sustainable prospects in the future.

 

The final text of DTEK’s CSR policy will be published and all interested parties will be provided with detailed and specific explanations of the principal issues they are interested in and concerned about. In the future, a periodical assessment of implementation of the policy and development of recommendations for its adjustment will also become a public process, where an  adequate representation of stakeholders will be ensured.

  

 

One of the basic values of DTEK is openness: we openly inform our employees, as well as shareholders, partners and other external stakeholders of the important issues of our company development which forms a basis for trustworthy cooperation. We perform our activity based on principles which are clear for our employees and partners alike.

 

Social reporting is the most efficient method of communication and the tool of business interaction with stakeholders and society as a whole. Managers of all levels should understand: social reporting is not an attempt to embellish our contribution to the society. Social reporting has become an indispensable attribute and instrument of civilized business performance and long-term sustainability of many major companies in the world. Our choice is not between the options: to engage social reporting or not. Our only option is to ensure the most adequate participation of stakeholders in the process of reporting, to give a complete and correct picture of the processes started in the company and of any remaining problems, to assist enterprises in making their contribution to social reporting the real instrument for an increase in the efficiency of management in the CSR sphere.

 

As an intermediate step in this direction, the company has developed an ‘internal’ version of the social report for 2006, a discussion of which should assist us in the correct formatting of the processes and actions necessary for launching full-scale external social reporting as of 2008.