E. Tsotsoros                           G. Stergioulis
Chairman of BoD                     Chief Executive Officer

Dear Stakeholders,

2015, for HELLENIC PETROLEUM Group, was a year of specific  challenges and difficult decisions, of  reorientation and adaptation to conditions shaped by the rapid global changes, the international situation and the continued (into its seventh year) economic crisis and deep recession in our country.

The global socioeconomic environment is being radically reshaped by the powerful driving forces of change: a) the technological innovation of the digital and post-digital era, b) the increased demands for interventional actions and implementation of programs to address climate change and rising numbers of environmental disasters, c) the ever growing role of the financial markets and their domination, with obvious consequences being the deregulation of national economies and widening socioeconomic inequalities, and d) the permanency of minimum development conditions in the world’s stronger economies with obvious negative impacts on the  development plans of the weakest economies.

In Greece, the business environment was further aggravated due to the negative impacts of the seven-year economic crisis. The deterioration and prolonged instability of the Greek financial system and the reduced demand for petroleum products (in excess of 40% during this period) made strengthening international activities and exports, resulting in continuous competitiveness improvement, the only solution with which to ensure for the Group’s sustainable operation and development.

In the context of our strategy regarding both sustainable development and competitive profitable operation, the following main objectives were chosen: furthering extroversion,  immediate adoption of innovative methods and technologies, developing international cooperation for the dissemination and consolidation of up-to-the-minute know-how, continuous staff training, and finally, monitoring and adapting to changes in the international financial system and energy markets.

It is of no doubt that profits and positive financial results (the Group recorded the highest adjusted EBITDA on record amounting to €758 mil. in 2015) both support and have propelled the company going forward. That being said, solely pursuing positive financial results - without taking other parameters associated with the environment and society into account - is not sustainable in the long term and cannot support the future development of a company. And if the growth of a company is not sustainable, any discussion regarding development is also futile.

Today, the global deployment of energy resources, exploring energy options from resources with reduced environmental impacts, specifically from the use of renewable resources, is a top strategic priority for the HELLENIC PETROLEUM Group, and is inextricably linked to the prosperity of its customers, employees, local communities and society as a whole. The key to this strategic option is sustainable development, which is an integral part of daily operations with significant performance, implemented:

• In Society, through increasing local employment and offering targeted corporate social responsibility programs
• In the Environment through the continuous improvement of environmental performance and promoting activities and investments to address climate change
• In the Economy, through the implementation of significant investments and increased exports, with a consequent positive knock on effect on the competitiveness of Greek economy

The Group, focused to its strategy for sustainable development, achieved integrated operation in 2015, reaching particularly positive results, not only in terms of economic indicators but also in the key areas of environmental protection, social solidarity and local communities, despite the negatively affected operating framework.

The incident that negatively marked the year was undoubtedly the accident of 8 May at the Aspropyrgos refinery, which resulted in the painful loss of four colleagues. The incident provided the main reason to focus even further on of Health & Safety issues and redesign procedures to ensure for the target of zero accidents such as the design and gradual implementation of the new and ambitious "Holistic Safety" program in the Group's refineries.

The health and safety of all of our employees, partners and neighbours remains our top priority, a priority that is expressed in the Group's Policy on Health, Safety, Environment and Sustainable Development, which is implemented through targeted interventions in the organization, training employees and partners in this regard and the implementation of significant relevant investments (which, in 2015, amounted to €15.6 mil. while the training man-hours exceeded 44,000).

Regarding the environment, we invest in preventing and minimizing our environmental impact by implementing appropriate measures and Best Available Techniques throughout the entire product life cycle, that is from the initial production design and the possible implementation of clean technology, through to the final consumption of the fuel products we produce. Indicatively, in 2015, the Group’s three refineries managed to either significantly reduce the most significant air emissions for the oil sector (emissions of nitrogen oxides  - NOx - and volatile organic compounds - VOC – were reduced up to 13%) or maintain them at the same low levels (emissions of sulfur dioxide, SO2) seen in previous years.

Our contribution to minimizing climate change impacts is focused on the optimization of energy management, energy saving and the utilization of renewable energy sources. In addition, the Group also monitors direct CO2 emissions (Scope 1) and indirect CO2 emissions (Scope 2 and 3) to the maximum extent of its activities and in accordance with international guidelines and European regulations.

The global climate agreement which was signed by 195 countries at COP21 in Paris in December 2015, concerning the adaptation and addressing of climate change proved to be particularly important. In this context, climate change already determines our long-term energy strategy, the main features of which are:

• Reducing dependency on imported fossil fuels
• Broadening energy resources’ diversification
• Continuously reducing greenhouse gas emissions in order to achieve relevant reduction goals as well as adaptation to climate change impacts, and
• Using renewable resources, especially domestic biomass, in order to promote regional and rural development, job creation, better power generation services and improved health conditions.

During 2015, the Group’s social solidarity and responsible attitude towards society, given the ongoing recession in Greece, was directed towards two key areas: socially vulnerable groups and youth. These actions were mainly addressed to local communities, which neighbor the Group’s installations, and society as a whole. In 2015, the Corporate Social Responsibility actions in Greece and abroad amounted to €3.6 million.

The implementation of our actions in local communities is supported by ongoing communication and dialogue with the authorities and bodies from our neighboring regions, as well as public opinion surveys and debates in order to listen to people residing in the areas where we operate. The results of these practices are assessed and redefine our future actions.

In the near future we will focus on areas where there is a greater social demand, such as the refugees’ issue, thereby contributing to solidarity, mutual help and volunteerism, as a response to the changing mentalities plaguing our society.

Another crucial area in which we have systematically invested in recent years is the new generation/youth element, demonstrated via the implementation of scholarship programs and the provision of employment opportunities. In this context, we were one of the first companies to sign the “European Pact for Youth” (Pact4youth), through which businesses, social partners, educational institutions, youth organizations, public and private services are mutually engaged in their endevour to develop or consolidate partnerships supporting youth employability and inclusion. 

The Group’s performance, in the above mentioned areas, is presented in detail based on the performance indicators of the Global Reporting Initiative (GRI-G4 initiative), UN Global Compact’s criteria and the Greek Sustainability Code. In 2015, the Group, as a Sustainability Ambassador, actively participated in the creation of the Greek Code of Sustainability and – through this initiative - contributes to its dissemination and the further promotion and adoption of good sustainable development practices in the Greek economy.

The external verification, given by a third independent body, provides an objective certification that the present Report complies with all requirements under the GRI-G4, “Comprehensive Option”, and satisfies the criteria of the UN Global Compact, Advanced Level, and the 20 criteria of Compliance Level A of the Greek Sustainability Code.

HELLENIC PETROLEUM possesses a high sense of responsibility to all stakeholders, employees, society, the environment and the economy. We, the Group’s management, are committed to supporting an ambitious and creative entrepreneurial culture, are conscious of our social responsibility and are focused on the development and prosperity of future generations.

Finally, we would like to thank our employees for their significant contribution to the implementation of all the aforementioned sustainable development actions, particularly their voluntary participation, along with residents from neighboring areas, in social solidarity and mutual help activities. We call upon them to cooperate and support us, once again, so that we can realize our sustainable development vision and maximize the benefits for society as a whole.
 

 E. Tsotsoros                           G. Stergioulis
Chairman of BoD                     Chief Executive Officer