Climate and ESG Risk Management

KMG’s Approach to Managing ESG and Climate Risks

The Company manages ESG and climate-related risks within the framework of the Corporate Risk Management System (hereinafter — CRMS), which operates on a consolidated basis. Climate-related and other ESG risks are integrated into the Company’s overall risk management system and are considered alongside production, financial, strategic, and operational risks.

Climate risk management is carried out in accordance with the provisions of KMG’s Low-Carbon Development Program until 2060, approved by the Board of Directors in 2024, as well as with the requirements of the national environmental and climate legislation of the Republic of Kazakhstan.

Climate risks at KMG are identified in the Risk Register as material risks, including:

physical climate risks;
energy transition and carbon-regulation risks;
risks associated with greenhouse gas emissions, methane, and flaring;
reputational and financial implications of climate-related factors.

Corporate Management of Climate and ESG Risks

Responsibility for managing ESG and climate risks is allocated within the existing corporate governance model of KMG:

Board of Directors provides general oversight of the risk management system, approves key strategic documents, including LCDP-2060, and reviews information on material risks.
Management Board ensures the implementation and functioning of the Corporate Risk Management System and oversees the execution of activities related to climate and ESG risk management.
Risk Owners and Functional Units are responsible for identifying, assessing, monitoring, and implementing measures to manage risks within their areas of competence.

KMG’s CRMS operates based on the following principles:

regular updating of the Risk Register;
assignment of risk owners;
monitoring of key risk indicators (KRIs);
reporting at the corporate level.

KMG’s risk management system is an integral part of corporate governance and is aimed at ensuring business resilience and the achievement of strategic and operational objectives. The system covers all management levels and applies to KMG, including its subsidiaries and affiliates, ensuring a unified approach to identifying, assessing, monitoring, and mitigating risks on a consolidated basis.

Risk management processes are implemented in accordance with international practices and principles, including the “three lines of defense” model, which provides for a clear distribution of roles and responsibilities among operational units. This structure enhances the transparency of processes, ensures the timely identification of risks, and strengthens the effectiveness of the internal control system.

Line	Coverage	Roles and Responsibilities
Operational Management (First Line)	Managers and employees of KMG business units and subsidiaries who make decisions within operational, production, and investment activities	Identification and preliminary assessment of climate and ESG risks, including physical and transition risks Integration of climate-related factors into operational activities, project planning, and investment planning Implementation of risk-management measures at the asset and business-process level Monitoring of key risk indicators within the respective areas of responsibility
Risk Management and Internal Control Function (Second Line)	Specialized functions of the corporate center that provide methodological support, coordination, and monitoring of the risk management system at the Company level	Development and updating of regulatory documents on risk management, including climate-related and ESG risks Consolidation and analysis of information on climate risks at the KMG Group level Assessment of the potential financial and operational impacts of climate risks Preparation of reporting and analytical materials for the Management Board and the Board of Directors
Internal Audit (Third Line)	The Internal Audit function of KMG, which provides an independent assessment of risk management and internal control processes	Independent assessment of the effectiveness of the risk management system, including climate-related and ESG risks Review of the adequacy of risk identification, assessment, and monitoring processes Evaluation of the effectiveness of measures for managing climate risks Providing the Board of Directors with independent assurance regarding the reliability of the risk management system

This model ensures the integration of climate-related and ESG risk management into business decision-making processes, enhances transparency and accountability, and supports the timely identification and effective management of risks that may have a significant impact on KMG’s strategy, financial performance, and overall resilience.

Risk management issues, including climate-related risks, are regularly reviewed by the Management Board and the Risk Committee, while monitoring results are submitted to the Board of Directors on a quarterly basis.

Sustainable development and the management of ESG factors are integrated into KMG’s Development Strategy for 2022-2031 and are regarded as key elements of the Company’s long-term resilience and competitiveness.

Processes for Identifying and Assessing Climate Risks

The identification of climate-related and ESG risks is carried out within the framework of the Company’s regular risk management processes, including:

annual updating of the Risk Register;
quarterly monitoring of material risks;
analysis of realized risk events.

Physical Climate Risks

As part of LCDP-2060, KMG conducted an assessment of physical climate risks using the Intergovernmental Panel on Climate Change (hereinafter — IPCC) scenarios (RCP 2.6, 4.5, 8.5). The analysis covers:

increases and decreases in temperatures;
droughts and water scarcity;
extreme weather events (floods, storms, high winds);
long-term climate changes affecting asset resilience.

The results of the assessment are used to develop asset-level adaptation measures but are not integrated as a standalone formalized assessment tool within the Corporate Sustainability Management System.

Transition Climate Risks

Transition risks are assessed with consideration of:

tightening environmental and climate regulations;
changes in the emissions trading system;
potential increases in costs associated with emissions and energy;
shifts in product demand and technological requirements.

Under LCDP-2060, NGFS scenarios were used to assess potential impacts of the energy transition; however, these scenarios are applied for analytical and strategic purposes and are not used as a mandatory element of the corporate risk assessment process.

KMG facility in the context of climate risk management

Management, Monitoring, and Response Measures

Climate-related and ESG risk management includes:

Integration into Planning Processes

Climate factors are considered when developing strategic and investment decisions, including planning measures to reduce emissions and improve energy efficiency.

Risk and Indicator Monitoring

As part of the Corporate Risk Management System (CRMS), key risk indicators reflecting environmentally and climate-significant factors are used, including:

emissions and flaring indicators;
incidents and environmental accidents;
fines and financial consequences related to environmental violations.

Implementation of Measures

Key measures for managing climate-related and ESG risks include:

energy efficiency improvement programs;
development of renewable energy sources (RES) and reduction of carbon intensity;
methane emissions management programs (LDAR);
CCUS pilot projects and offset initiatives;
adaptation of infrastructure to physical climate risks.

Reporting and Transparency

KMG ensures the disclosure of information on climate risks and related actions through:

annual reporting on the implementation of LCDP-2060;
corporate ESG reporting;
participation in international voluntary disclosure initiatives.

KMG’s risk profile during the reporting year was shaped by significant external influences, including macroeconomic and geopolitical volatility, regulatory and sanction-related constraints, as well as increasing environmental and social requirements. These factors underscore the growing importance of proactive risk management and the adaptation of business processes to the conditions of the low-carbon transition.

During the reporting year, the Company updated the consolidated Risk Register and enhanced the regulatory framework for risk management, including the approval of:

The Risk Management System Policy for KMG and its subsidiaries and affiliates;
The Instruction on organizing the risk management process, including procedures for identification and assessment for KMG subsidiaries and affiliates.

Additionally, the monitoring of sanctions-related and regulatory risks was strengthened, and a pilot project on the automation of key risk indicators was launched.

The key climate-related and ESG risks, along with the corresponding management measures, are presented in the table below.

Climate Risks and Low-Carbon Development

Risk Description	Risk Mitigation Measures
Environmental Aspect
Climate risks for KMG are associated with the transition to a low-carbon economy and with the physical impacts of climate change. These include: Transition risks – tightening regulatory requirements, technological changes, market and reputational risks. Physical climate risks – extreme weather events (floods, droughts) and chronic climate changes (water stress, rising temperatures). Potential Impact Climate risks may lead to increased operational and capital expenditures (quotas, fines, compliance), suspension of operations in case of violations, reduced profitability of certain assets, reputational risks, and impacts on ESG ratings and access to capital. Climate-related opportunities may influence demand for the Company’s products and the long-term resilience of the business.	KMG is actively working to reduce climate risks, including: Continues the implementation of LCDP until 2060, carrying out regular monitoring of the implementation of action plans of subsidiaries and affiliates. Keeps records of energy consumption and greenhouse gas emissions, participates in the OGMP 2.0 initiative, conducts regular instrumental, aerial, and satellite measurements of methane emissions, develops the LDAR system, trains personnel, and implements the corporate standard for methane emissions management. Low-carbon projects and technologies. Projects in the field of renewable energy sources (including the launch of an SPP as part of the hybrid project), CCUS (with a transition to the consideration of small-scale pilot solutions), sustainable aviation fuel (SAF – transition to the FEED stage), as well as the development of hydrogen energy (green, blue, and natural hydrogen, including pilot projects) are being implemented and worked out. Partnerships and international cooperation: Agreements and memorandums have been signed with international and regional partners in the field of decarbonization, methane management, and sustainable initiatives. Capacity building and knowledge exchange: Training events, practical workshops, and technical sessions with the participation of international experts (IFC, OGCI, IMEO, INPEX, etc.) are conducted for employees of the corporate center and subsidiaries and affiliates. KMG continues to improve adaptation measures to climate change, reducing the impact of climate risks on the Company’s operations.

Risk Description

Risk Mitigation Measures

Environmental Aspect

Climate risks for KMG are associated with the transition to a low-carbon economy and with the physical impacts of climate change.

These include:

Transition risks – tightening regulatory requirements, technological changes, market and reputational risks.
Physical climate risks – extreme weather events (floods, droughts) and chronic climate changes (water stress, rising temperatures).

Potential Impact

Climate risks may lead to increased operational and capital expenditures (quotas, fines, compliance), suspension of operations in case of violations, reduced profitability of certain assets, reputational risks, and impacts on ESG ratings and access to capital.

Climate-related opportunities may influence demand for the Company’s products and the long-term resilience of the business.

KMG is actively working to reduce climate risks, including:

Continues the implementation of LCDP until 2060, carrying out regular monitoring of the implementation of action plans of subsidiaries and affiliates.
Keeps records of energy consumption and greenhouse gas emissions, participates in the OGMP 2.0 initiative, conducts regular instrumental, aerial, and satellite measurements of methane emissions, develops the LDAR system, trains personnel, and implements the corporate standard for methane emissions management.
Low-carbon projects and technologies. Projects in the field of renewable energy sources (including the launch of an SPP as part of the hybrid project), CCUS (with a transition to the consideration of small-scale pilot solutions), sustainable aviation fuel (SAF – transition to the FEED stage), as well as the development of hydrogen energy (green, blue, and natural hydrogen, including pilot projects) are being implemented and worked out.
Partnerships and international cooperation: Agreements and memorandums have been signed with international and regional partners in the field of decarbonization, methane management, and sustainable initiatives.
Capacity building and knowledge exchange: Training events, practical workshops, and technical sessions with the participation of international experts (IFC, OGCI, IMEO, INPEX, etc.) are conducted for employees of the corporate center and subsidiaries and affiliates.

KMG continues to improve adaptation measures to climate change, reducing the impact of climate risks on the Company’s operations.

Risk of Negative Environmental Impact

Risk Description	Risk Mitigation Measures
Environmental Aspect
KMG is exposed to the risk of negative environmental impact, including emissions of pollutants into the air, water and soil contamination, as well as increasing environmental regulatory requirements. Noncompliance with environmental standards may lead to stricter sanctions, additional financial costs, and damage to the Company’s reputation. Potential Impact The realization of environmental risk may lead to fines, excess payments, environmental remediation costs, and legal liability. Furthermore, a decline in environmental performance may negatively impact investment attractiveness and the long-term sustainability of the business.	To minimize environmental impact, KMG implements a comprehensive set of actions: Implementation and development of automated emission monitoring systems with online data transmission to state authorities and the use of unified emission calculation methodologies. Implementation of measures to reduce pollutant emissions, including reducing the volumes of raw gas flaring and participation in international initiatives (Zero Routine Flaring). Improvement of the water resources and waste management system, including the development and implementation of corporate standards and programs in subsidiaries and affiliates. Carrying out work on the disposal of “historical” oil waste and the remediation of oil-contaminated lands. Conducting environmental audits and monitoring followed by the implementation of corrective actions. Application of best available techniques (BAT), obtaining integrated environmental permits, and participation in the development of industry BAT reference documents. Preventive management of regulatory environmental risks through interaction with government authorities and industry associations. Enhancement of environmental risk management through regular meetings, training of subsidiaries and affiliates, and engagement of stakeholders. KMG continues to improve environmental protection measures, ensuring compliance with environmental requirements and reducing the impact of its operations on the environment.

Risk Description

Risk Mitigation Measures

Environmental Aspect

KMG is exposed to the risk of negative environmental impact, including emissions of pollutants into the air, water and soil contamination, as well as increasing environmental regulatory requirements.

Noncompliance with environmental standards may lead to stricter sanctions, additional financial costs, and damage to the Company’s reputation.

Potential Impact

The realization of environmental risk may lead to fines, excess payments, environmental remediation costs, and legal liability. Furthermore, a decline in environmental performance may negatively impact investment attractiveness and the long-term sustainability of the business.

To minimize environmental impact, KMG implements a comprehensive set of actions:

Implementation and development of automated emission monitoring systems with online data transmission to state authorities and the use of unified emission calculation methodologies.
Implementation of measures to reduce pollutant emissions, including reducing the volumes of raw gas flaring and participation in international initiatives (Zero Routine Flaring).
Improvement of the water resources and waste management system, including the development and implementation of corporate standards and programs in subsidiaries and affiliates.
Carrying out work on the disposal of “historical” oil waste and the remediation of oil-contaminated lands.
Conducting environmental audits and monitoring followed by the implementation of corrective actions.
Application of best available techniques (BAT), obtaining integrated environmental permits, and participation in the development of industry BAT reference documents.
Preventive management of regulatory environmental risks through interaction with government authorities and industry associations.
Enhancement of environmental risk management through regular meetings, training of subsidiaries and affiliates, and engagement of stakeholders.

KMG continues to improve environmental protection measures, ensuring compliance with environmental requirements and reducing the impact of its operations on the environment.

Risk of Oil Spills During Offshore Operations

Risk Description	Risk Mitigation Measures
Environmental Aspect
Oil spills may occur due to violations of technological procedures, pipeline accidents, equipment failures, and challenging natural conditions in the Caspian Sea. Risk factors include shallow waters, high reservoir pressure at the fields, the presence of hydrogen sulfide, and seasonal freezing of the surface. Potential Impact Oil spills can cause severe environmental damage, halt production processes, and result in significant financial costs for response and compensation efforts.	To minimize the risk of oil spills during offshore operations, KMG implements a set of preventive measures, including: Continuous monitoring of technological processes and the condition of equipment. Scheduled preventive maintenance of pipelines and equipment. Personnel training and oil spill response drills. Effective functioning of the North Caspian Environmental Response Base. Monitoring of abandoned wells. Participation in working groups on accident prevention. Based on the results of 2025, no cases of oil spills during offshore operations were recorded. Considering the absence of incidents and the preservation of process controllability, the risk of oil spills in 2025 is assessed as stable, without deterioration compared to 2024. KMG continues to improve its oil spill prevention and response system, reducing potential environmental and financial risks.

Risk Description

Risk Mitigation Measures

Environmental Aspect

Oil spills may occur due to violations of technological procedures, pipeline accidents, equipment failures, and challenging natural conditions in the Caspian Sea. Risk factors include shallow waters, high reservoir pressure at the fields, the presence of hydrogen sulfide, and seasonal freezing of the surface.

Potential Impact

Oil spills can cause severe environmental damage, halt production processes, and result in significant financial costs for response and compensation efforts.

To minimize the risk of oil spills during offshore operations, KMG implements a set of preventive measures, including:

Continuous monitoring of technological processes and the condition of equipment.
Scheduled preventive maintenance of pipelines and equipment.
Personnel training and oil spill response drills.
Effective functioning of the North Caspian Environmental Response Base.
Monitoring of abandoned wells.
Participation in working groups on accident prevention.

Based on the results of 2025, no cases of oil spills during offshore operations were recorded. Considering the absence of incidents and the preservation of process controllability, the risk of oil spills in 2025 is assessed as stable, without deterioration compared to 2024.

KMG continues to improve its oil spill prevention and response system, reducing potential environmental and financial risks.

Equipment inspection at a KMG production facility

Risk of Industrial Accidents and Technogenic Disasters at Production Facilities

Risk Description	Risk Mitigation Measures
Environmental Aspect
KMG’s production activities involve a high level of hazard, creating the risk of accidents, explosions, fires, and other industrial disasters. Potential causes include equipment wear and tear, violations of technological processes, human error, and adverse external factors. Potential Impact Accidents at production facilities may lead to injuries and fatalities of employees, destruction of equipment and infrastructure, significant financial recovery costs, and environmental damage.	To prevent accidents, KMG implements a comprehensive set of measures: Preventive actions during well drilling operations. Regular maintenance and diagnostics of equipment. Industrial safety assessments and identification of potential hazards. Ensuring compliance with optimal technological operating modes of equipment, as well as regular certification and expert inspection of technical devices at hazardous production facilities. Briefings and training of personnel on the safe operation of equipment, industrial and fire safety, including the issuance of permits and qualification certificates. Monitoring the implementation of industrial safety enhancement measures. Property insurance contracts to cover potential damages. KMG continues to improve its systems for preventing and responding to technogenic risks, ensuring robust protection of personnel, equipment, and the environment.

Risk Description

Risk Mitigation Measures

Environmental Aspect

KMG’s production activities involve a high level of hazard, creating the risk of accidents, explosions, fires, and other industrial disasters. Potential causes include equipment wear and tear, violations of technological processes, human error, and adverse external factors.

Potential Impact

Accidents at production facilities may lead to injuries and fatalities of employees, destruction of equipment and infrastructure, significant financial recovery costs, and environmental damage.

To prevent accidents, KMG implements a comprehensive set of measures:

Preventive actions during well drilling operations.
Regular maintenance and diagnostics of equipment.
Industrial safety assessments and identification of potential hazards.
Ensuring compliance with optimal technological operating modes of equipment, as well as regular certification and expert inspection of technical devices at hazardous production facilities.
Briefings and training of personnel on the safe operation of equipment, industrial and fire safety, including the issuance of permits and qualification certificates.
Monitoring the implementation of industrial safety enhancement measures.
Property insurance contracts to cover potential damages.

KMG continues to improve its systems for preventing and responding to technogenic risks, ensuring robust protection of personnel, equipment, and the environment.

Occupational Injury Risk

Risk Description	Risk Mitigation Measures
Social Aspect
The risk of occupational injuries is associated with non-compliance with occupational safety rules, violations of workplace discipline, and exposure to hazardous and harmful production factors. This may lead to accidents, loss of working capacity, and threats to employee life. Potential Impact Occupational injuries may result in serious consequences, including: Deterioration of employee health, temporary or permanent disability; Reduced production efficiency and unplanned downtime; Financial losses related to compensation, fines, and legal claims Reputational risks for the Company.	To prevent workplace injuries, KMG implements a systematic approach to occupational health and safety: Ensuring safe working conditions and introducing new technologies. Strengthening production control by line managers (foremen/department heads) at hazardous facilities with the mandatory involvement of senior management. Preventive training and instruction of employees, including the courses “Effective On-the-Job Instruction”, “Danger Zone: Principles of Safe Interaction with Equipment”, and “Defensive Driving”. Comprehensive inspections of subsidiaries and affiliates with the identification of systemic non-conformities in the field of industrial safety. Implementation of the behavioral safety observation program and the Near Miss reporting system using the “Qorgau” card. Integration of the process safety management (PSM) system, replication of the “Trip Management”, “TUMAR”, and electronic work permit systems, and implementation of the “STOP Road Accidents” campaign. Implementation of a labor safety culture development program with the involvement of all levels of personnel, based on compliance with life-saving rules in day-to-day production activities, and holding HSE Forums with the participation of managers of subsidiaries and affiliates, contractors, and HSE departments. Updating the corporate standard on interaction with contractor organizations. KMG is committed to reducing injury rates by ensuring safe working conditions and fostering a strong safety culture among employees.

Risk Description

Risk Mitigation Measures

The risk of occupational injuries is associated with non-compliance with occupational safety rules, violations of workplace discipline, and exposure to hazardous and harmful production factors. This may lead to accidents, loss of working capacity, and threats to employee life.

Potential Impact

Occupational injuries may result in serious consequences, including:

Deterioration of employee health, temporary or permanent disability;
Reduced production efficiency and unplanned downtime;
Financial losses related to compensation, fines, and legal claims
Reputational risks for the Company.

To prevent workplace injuries, KMG implements a systematic approach to occupational health and safety:

Ensuring safe working conditions and introducing new technologies.
Strengthening production control by line managers (foremen/department heads) at hazardous facilities with the mandatory involvement of senior management.
Preventive training and instruction of employees, including the courses “Effective On-the-Job Instruction”, “Danger Zone: Principles of Safe Interaction with Equipment”, and “Defensive Driving”.
Comprehensive inspections of subsidiaries and affiliates with the identification of systemic non-conformities in the field of industrial safety.
Implementation of the behavioral safety observation program and the Near Miss reporting system using the “Qorgau” card.
Integration of the process safety management (PSM) system, replication of the “Trip Management”, “TUMAR”, and electronic work permit systems, and implementation of the “STOP Road Accidents” campaign.
Implementation of a labor safety culture development program with the involvement of all levels of personnel, based on compliance with life-saving rules in day-to-day production activities, and holding HSE Forums with the participation of managers of subsidiaries and affiliates, contractors, and HSE departments.
Updating the corporate standard on interaction with contractor organizations.

KMG is committed to reducing injury rates by ensuring safe working conditions and fostering a strong safety culture among employees.

Risk of Occupational Diseases

Risk Description	Risk Mitigation Measures
Social Aspect
KMG’s production activities involve exposure to adverse factors such as intoxication, pollution, vibration, noise, and significant physical strain. Prolonged exposure to these factors can lead to occupational diseases. There is also a threat of infectious disease outbreaks, including new virus strains, which may impact employee health and the stability of production processes. Potential Impact Development of occupational diseases, temporary or permanent loss of employees’ working capacity. Increase in the level of morbidity and growth of costs for medical and social support. Potential workforce reduction and decreased production efficiency. Risk of infectious disease spread affecting operational activities.	To reduce the risk, KMG implements a set of measures aimed at protecting employees’ health and preventing occupational diseases: Regular workplace certification on working conditions. Mandatory medical examinations of employees and monitoring of their health status. Occupational sanitary control and improvement of working conditions. Implementation of the Employee Health Improvement Program for 2025-2027, including disease prevention, comprehensive health improvement measures, and sanitary and educational activities. Training in first aid skills; in 2025, 1,193 employees were trained to reduce the risk of fatal incidents at work. Implementation of the automated medical examination system (hereinafter — AMES); in 2025, 69 units were installed at KMG subsidiaries and affiliates. Use of portable medical devices for early detection of risk factors for chronic diseases, reduction of unplanned hospitalizations, and increased motivation for a healthy lifestyle. A working group of specialists from the KMG Corporate Center and subsidiaries and affiliates has been established to conduct audits and verify compliance with corporate standards. Conducting medical emergency drills at production facilities, including the participation of contractors; in 2025 – 1,633 drills. KMG continues to enhance its occupational health and safety system, minimizing the risks of occupational diseases, the threat of infectious disease spread, and ensuring safe working conditions.

Risk Description

Risk Mitigation Measures

KMG’s production activities involve exposure to adverse factors such as intoxication, pollution, vibration, noise, and significant physical strain. Prolonged exposure to these factors can lead to occupational diseases. There is also a threat of infectious disease outbreaks, including new virus strains, which may impact employee health and the stability of production processes.

Potential Impact

Development of occupational diseases, temporary or permanent loss of employees’ working capacity.
Increase in the level of morbidity and growth of costs for medical and social support.
Potential workforce reduction and decreased production efficiency.
Risk of infectious disease spread affecting operational activities.

To reduce the risk, KMG implements a set of measures aimed at protecting employees’ health and preventing occupational diseases:

Regular workplace certification on working conditions.
Mandatory medical examinations of employees and monitoring of their health status.
Occupational sanitary control and improvement of working conditions.
Implementation of the Employee Health Improvement Program for 2025-2027, including disease prevention, comprehensive health improvement measures, and sanitary and educational activities.
Training in first aid skills; in 2025, 1,193 employees were trained to reduce the risk of fatal incidents at work.
Implementation of the automated medical examination system (hereinafter — AMES); in 2025, 69 units were installed at KMG subsidiaries and affiliates.
Use of portable medical devices for early detection of risk factors for chronic diseases, reduction of unplanned hospitalizations, and increased motivation for a healthy lifestyle.
A working group of specialists from the KMG Corporate Center and subsidiaries and affiliates has been established to conduct audits and verify compliance with corporate standards.
Conducting medical emergency drills at production facilities, including the participation of contractors; in 2025 – 1,633 drills.

KMG continues to enhance its occupational health and safety system, minimizing the risks of occupational diseases, the threat of infectious disease spread, and ensuring safe working conditions.

Shortage of Qualified Personnel

Risk Description	Risk Mitigation Measures
Social Aspect
This risk is associated with employee turnover, a shortage of specialists with the required competencies, and potential challenges in attracting and retaining qualified personnel. The shortage may be driven by a competitive labor market, workforce migration, and evolving professional requirements. Potential Impact Decreased efficiency and productivity of the Company. Increased workload on existing staff, risking process disruptions. Delays in the implementation of strategic projects. Higher costs for recruitment, training, and onboarding of new employees.	KMG implements a comprehensive approach to attract, develop, and retain talent: Regular monitoring of turnover reasons and exit surveys. Conducting employee surveys to identify needs, assess satisfaction with working conditions, and increase engagement. Improvement of motivational programs and working conditions. In 2025, the updating and approval of internal regulatory documents aimed at ensuring employee rights and supporting sustainable development were carried out, including the KMG Human Rights Policy, the KMG Youth Policy and that of its subsidiaries and affiliates, the Rules of Labor Regulations and Labor Relations Management, the Rules for Search and Selection, Coordination of Appointment (Election) and Early Termination of Powers of Heads of Executive Bodies of Legal Entities of the KMG Group of Companies, and other internal regulatory documents. Implementation of the KMG HR Policy Action Plan for 2025-2026. Development of corporate culture, internal communications, and team building initiatives. Creation of career opportunities and professional development programs. KMG continues to reduce human capital risks by creating attractive conditions for professional growth, engagement, and long-term retention of employees.

Risk Description

Risk Mitigation Measures

This risk is associated with employee turnover, a shortage of specialists with the required competencies, and potential challenges in attracting and retaining qualified personnel. The shortage may be driven by a competitive labor market, workforce migration, and evolving professional requirements.

Potential Impact

Decreased efficiency and productivity of the Company.
Increased workload on existing staff, risking process disruptions.
Delays in the implementation of strategic projects.
Higher costs for recruitment, training, and onboarding of new employees.

KMG implements a comprehensive approach to attract, develop, and retain talent:

Regular monitoring of turnover reasons and exit surveys.
Conducting employee surveys to identify needs, assess satisfaction with working conditions, and increase engagement.
Improvement of motivational programs and working conditions.
In 2025, the updating and approval of internal regulatory documents aimed at ensuring employee rights and supporting sustainable development were carried out, including the KMG Human Rights Policy, the KMG Youth Policy and that of its subsidiaries and affiliates, the Rules of Labor Regulations and Labor Relations Management, the Rules for Search and Selection, Coordination of Appointment (Election) and Early Termination of Powers of Heads of Executive Bodies of Legal Entities of the KMG Group of Companies, and other internal regulatory documents.
Implementation of the KMG HR Policy Action Plan for 2025-2026.
Development of corporate culture, internal communications, and team building initiatives.
Creation of career opportunities and professional development programs.

KMG continues to reduce human capital risks by creating attractive conditions for professional growth, engagement, and long-term retention of employees.

Terrorism Risk

Risk Description	Risk Mitigation Measures
Social Aspect
The risk is associated with the possibility of terrorist and other violent acts directed against the Company’s personnel, contractors, and assets. KMG’s operations cover regions where there is a likelihood of security threats, and the use of modern technical means increases potential vulnerability, which requires the implementation of systematic measures to protect employees and facilities. Potential Impact Threats to the life and health of employees. Disruption of operational activities, damage to the Company’s assets. Increased costs for security and infrastructure restoration. Reputational and legal risks.	KMG implements a comprehensive set of safety measures: Inspection of the condition of security systems, engineering and technical protection equipment, monitoring of video surveillance systems, access control systems, and evacuation schemes. Personnel training on anti-terrorism protection. Cooperation with law enforcement agencies. Emergency response drills and training. Organization of security and regulatory measures, access control, prevention of threats from visitors, foreign nationals, and contractors. Certification of facilities vulnerable to terrorism, in accordance with counterterrorism legislation. Conducting internal inspections and corrective actions when violations of access control and on site security procedures are identified. KMG continues to enhance the physical security and anti-terrorist protection system, ensuring the safety of employees and assets.

Risk Description

Risk Mitigation Measures

The risk is associated with the possibility of terrorist and other violent acts directed against the Company’s personnel, contractors, and assets. KMG’s operations cover regions where there is a likelihood of security threats, and the use of modern technical means increases potential vulnerability, which requires the implementation of systematic measures to protect employees and facilities.

Potential Impact

Threats to the life and health of employees.
Disruption of operational activities, damage to the Company’s assets.
Increased costs for security and infrastructure restoration.
Reputational and legal risks.

KMG implements a comprehensive set of safety measures:

Inspection of the condition of security systems, engineering and technical protection equipment, monitoring of video surveillance systems, access control systems, and evacuation schemes.
Personnel training on anti-terrorism protection.
Cooperation with law enforcement agencies.
Emergency response drills and training.
Organization of security and regulatory measures, access control, prevention of threats from visitors, foreign nationals, and contractors.
Certification of facilities vulnerable to terrorism, in accordance with counterterrorism legislation.
Conducting internal inspections and corrective actions when violations of access control and on site security procedures are identified.

KMG continues to enhance the physical security and anti-terrorist protection system, ensuring the safety of employees and assets.

Social Climate in Regions of Operation

Risk Description	Risk Mitigation Measures
Social Aspect
The social situation in the regions of presence of KMG’s subsidiaries and affiliates may be characterized by increased sensitivity to issues of wages, working conditions, employment, and social guarantees, which under certain circumstances may lead to social tension, labor conflicts, and unauthorized strikes by employees of subsidiaries and affiliates. In 2025, no strikes or protest actions were recorded in KMG’s subsidiaries and affiliates. At the same time, 9 strikes were recorded in contractor organizations in the Mangystau Region, which were resolved within the legal framework in cooperation with the relevant government authorities. Potential Impact Reputational risks and reduced public trust in the Company. Potential disruptions to operations. Increase in operational costs related to resolving labor disputes. Impact on the Company’s investment attractiveness.	KMG is taking a comprehensive approach to stabilize the social climate: Implementation of Roadmaps for improving working conditions, social and living infrastructure in KMG subsidiaries and affiliates (renovation of accommodation facilities, dining facilities, sanitary and household premises, and employee recreation areas). As of the beginning of 2026, 190 out of 275 facilities have been completed. Conducting regular reporting meetings of management with labor collectives and trade unions, development of the internal communications system and feedback mechanisms. IR screening of contractor organizations, control over compliance with legislation and working conditions. Support for the development of the sociocultural component of the city of Zhanaozen, interaction with local executive and supervisory authorities. Support for local employment, including the development of digital and transparent employment tools in the city of Zhanaozen. Development and implementation of action plans of KMG subsidiaries and affiliates based on the results of measurements of the Social Stability Index (SRS). Automation of the contractor organizations database for prompt monitoring of the social situation and early detection of risks. Despite the continuing sensitivity of the social agenda in the regions of presence, the implemented system of monitoring and preventive response enables KMG to effectively manage this risk and maintain a stable social environment.

Risk Description

Risk Mitigation Measures

The social situation in the regions of presence of KMG’s subsidiaries and affiliates may be characterized by increased sensitivity to issues of wages, working conditions, employment, and social guarantees, which under certain circumstances may lead to social tension, labor conflicts, and unauthorized strikes by employees of subsidiaries and affiliates.

In 2025, no strikes or protest actions were recorded in KMG’s subsidiaries and affiliates. At the same time, 9 strikes were recorded in contractor organizations in the Mangystau Region, which were resolved within the legal framework in cooperation with the relevant government authorities.

Potential Impact

Reputational risks and reduced public trust in the Company.
Potential disruptions to operations.
Increase in operational costs related to resolving labor disputes.
Impact on the Company’s investment attractiveness.

KMG is taking a comprehensive approach to stabilize the social climate:

Implementation of Roadmaps for improving working conditions, social and living infrastructure in KMG subsidiaries and affiliates (renovation of accommodation facilities, dining facilities, sanitary and household premises, and employee recreation areas). As of the beginning of 2026, 190 out of 275 facilities have been completed.
Conducting regular reporting meetings of management with labor collectives and trade unions, development of the internal communications system and feedback mechanisms.
IR screening of contractor organizations, control over compliance with legislation and working conditions.
Support for the development of the sociocultural component of the city of Zhanaozen, interaction with local executive and supervisory authorities.
Support for local employment, including the development of digital and transparent employment tools in the city of Zhanaozen.
Development and implementation of action plans of KMG subsidiaries and affiliates based on the results of measurements of the Social Stability Index (SRS).
Automation of the contractor organizations database for prompt monitoring of the social situation and early detection of risks.

Despite the continuing sensitivity of the social agenda in the regions of presence, the implemented system of monitoring and preventive response enables KMG to effectively manage this risk and maintain a stable social environment.

Compliance Risks

Risk Description	Risk Mitigation Measures
Corporate Governance
Compliance risks are associated with potential instances of corruption, violations of legislation, and internal regulatory documents, which may result in financial losses, reputational damage, and legal consequences. Ensuring transparency in business processes and adherence to ethical standards is a key priority for KMG. Potential Impact Financial losses and fines. Erosion of trust from investors and partners. Legal liability for the Company and its employees. Reputational risks affecting the sustainable development of the business.	KMG implements a range of measures to prevent compliance risks: Conducting internal analysis of corruption risks followed by the development of corrective actions. Regular anti-corruption monitoring and compliance audits. Updating and implementing internal compliance policies and action plans on anti-corruption. Promoting a corporate culture of integrity and ethics, including the “Compliance Ambassador” initiative. Operation of the hotline and response to identified violations and conflicts of interest. Organization of seminars, trainings, and explanatory work on the anti-corruption policy, including working with insiders and informing about closed periods. KMG continues to improve its compliance control system, ensuring transparency of business processes and minimizing the risk of legal violations.

Risk Description

Risk Mitigation Measures

Corporate Governance

Compliance risks are associated with potential instances of corruption, violations of legislation, and internal regulatory documents, which may result in financial losses, reputational damage, and legal consequences. Ensuring transparency in business processes and adherence to ethical standards is a key priority for KMG.

Potential Impact

Financial losses and fines.
Erosion of trust from investors and partners.
Legal liability for the Company and its employees.
Reputational risks affecting the sustainable development of the business.

KMG implements a range of measures to prevent compliance risks:

Conducting internal analysis of corruption risks followed by the development of corrective actions.
Regular anti-corruption monitoring and compliance audits.
Updating and implementing internal compliance policies and action plans on anti-corruption.
Promoting a corporate culture of integrity and ethics, including the “Compliance Ambassador” initiative.
Operation of the hotline and response to identified violations and conflicts of interest.
Organization of seminars, trainings, and explanatory work on the anti-corruption policy, including working with insiders and informing about closed periods.

KMG continues to improve its compliance control system, ensuring transparency of business processes and minimizing the risk of legal violations.

Continuous Improvement of the System

KMG’s system for managing ESG and climate risks is subject to regular review and updating, taking into account:

changes in the external environment and regulation;
results of monitoring and realized risks;
accumulated practical experience in implementing LCDP 2060.

KMG considers the management of climate and ESG risks as an element of ensuring the long-term sustainability of the business, while the goals and tools for their management are adjusted as the regulatory framework, technologies, and corporate priorities evolve.

MSCI Assessment

According to the assessment of the international financial company MSCI, KMG maintained an ESG rating of “BBB” in the reporting year, which corresponds to an average level within the industry. This reflects balanced management of environmental, social, and governance risks.

According to the MSCI methodology, a “BBB” rating reflects the Company’s moderate exposure to material ESG risks and its ability to manage them at a level comparable to industry peers.

Environmental Component (E)

In the environmental pillar, MSCI notes KMG’s strong performance on biodiversity and land use, where the Company demonstrates efforts to reduce its negative environmental impact and implement land reclamation activities for disturbed areas.

In the area of climate change and carbon emissions management, MSCI notes the integration of climate aspects into the Company’s development strategy and risk management system. KMG’s practices in the field of energy efficiency, the use of cleaner energy sources, and the reduction of greenhouse gas emissions are assessed at an average level, while MSCI classifies KMG’s emission reduction targets as moderate.

At the same time, MSCI indicates high exposure to risks related to pollutant emissions and waste, due to the specifics of the Company’s operations. The further development and formation of a comprehensive program to reduce pollutants with established targets and a formalized management system is viewed as an additional opportunity to strengthen the Company’s performance in this area.

Social Component (S)

In the social sphere, KMG demonstrates an average level of indicators compared to international industry peers. In the area of engagement with local communities, MSCI notes a high share of the Company’s operations that may potentially affect ecosystems and living conditions of the population, as well as the need for further development of a systematic approach to assessing and managing social risks.

At the same time, the Company demonstrates relatively strong performance on the key issue of occupational health and industrial safety. In the “Health and Safety” category, KMG’s performance in 2025 reflects a well-developed occupational health and safety management system and compliance with industry standards.

Corporate Governance (G)

In terms of corporate governance, MSCI notes the presence of an independent majority on the Board of Directors, which contributes to effective oversight of the Company’s activities. At the same time, MSCI identifies areas for improvement, including issues of gender diversity in the composition of the Board of Directors, remuneration disclosure, and risk management in the area of business ethics.

International financial company MSCI (New York, USA)

MSCI Inc. is an American financial services company that provides global equity, bond, and real estate indexes, ESG and climate products, and portfolio analytics. MSCI Inc. assists investors worldwide in making informed investment decisions by providing data and analytical tools for assessing risks and opportunities across various asset classes.

MSCI Assessment Methodology

The MSCI ESG Rating represents an industry-comparable assessment of companies’ management of material environmental, social, and governance (ESG) risks and opportunities. The assessment is conducted taking into account factors that may impact the sustainability of financial performance, reputation, and value creation of a company. Ratings are assigned on a seven-point scale ranging from AAA (highest level of ESG risk management) to CCC (lowest level), with the analysis focused on peer comparison within the same industry and taking into account financially material ESG factors.

For reference

The ESG Rating constitutes an evaluation of a company’s environmental, social, and corporate governance risks. It represents a strategic instrument leveraged by investors in the investment decision-making process, enabling the identification of a company’s risks and opportunities with a view to determining its long-term sustainability and resilience.

Strategy and Sustainable Development