Our report

This integrated report contains a summary of the Grupa Azoty Group’s financial and non-financial performance for 2022, prepared in accordance with the guidelines of the Global Reporting Initiative (GRI Standards).

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TABLE OF CONTENT

[2-1] [2-3] [IR - Basis of preparation and presentation]

Its content and layout are also based on relevant recommendations of the International Integrated Reporting Council (IIRC) and the Task Force on Climate Related Financial Disclosures (TCFD). The report for 2022 was issued in December 2023. Reports are prepared on an annual basis. This integrated report and the financial statements cover the same period from January 1st 2022 to December 31st 2022.

Report scope and boundary, applicable standards and guidelines

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This report describes the non-financial activities and performance of the four key companies of the Grupa Azoty Group:

Grupa Azoty S.A. of Tarnów (the parent),
Grupa Azoty Zakłady Azotowe Kędzierzyn of Kędzierzyn-Koźle (Grupa Azoty Kędzierzyn; ZAK),
Grupa Azoty Zakłady Azotowe Puławy of Puławy (Grupa Azoty Puławy),
Grupa Azoty Zakłady Chemiczne Police of Police (Grupa Azoty Police).

In addition to the companies listed above, the consolidated financial statements of the Grupa Azoty Group cover eight other companies (subsidiaries of Grupa Azoty): COMPO EXPERT Holding GmbH, Grupa Azoty ATT Polymers GmbH (Guben, Germany), Grupa Azoty Polskie Konsorcjum Chemiczne Sp. z o.o. (Tarnów), Grupa Azoty Koltar Sp. z o.o. (Tarnów), Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A. (Grzybów), Grupa Azoty Compounding Sp. z o.o., Grupa Azoty Energia Sp. z o.o. and Grupa Azoty Polyolefins S.A.

The financial data in this report have been taken from the consolidated financial statements of Group companies. The document contains an overview of the value creation model adopted by the Grupa Azoty Group and a section showcasing the Group’s response to risks arising from climate change, including actions taken to further decarbonisation.

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In order to exercise the highest standards of care, we engaged Deloitte’s Sustainability Consulting Central Europe Team to assist in the preparation of this report. Approximately 116 employees of the four key Group companies were involved in the data collection process. The report’s structure and its final version, encompassing critical company information, were authorised by the Grupa Azoty Management Board. The financial statements were assessed by members of the Supervisory Board. Furthermore, the report underwent an independent third-party review by KPMG (Download at -> https://raport2022.grupaazoty.com/files/Report_KPMG_en.pdf). The selection of the external auditor, along with coordinating the audit of non-financial data, involved collaboration between the Corporate Communication and Marketing Department and coordinators from the respective companies. The Management Board and the Supervisory Board were responsible for endorsing the engagement with the selected auditor.

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In the reporting period, there were no changes in the size, structure, ownership, or value chain of the Group. Minor restatements were made to the presented information and figures compared with the previous report for 2021. Details of the restatements are presented below:

GRI 301-1; Grupa Azoty Kędzierzyn
The amount disclosed under ‘Other strategic raw materials (tonne)’ of Grupa Azoty Kędzierzyn for 2021 was restated to include the consumption of oxygen and nitrogen. The restatement was made for the sake of consistency and enhanced data comparability between companies. The data was restated from 26,838 t to 725,330 t.
GRI 302-1;
With respect to all the four companies, an adjustment was made to data on the consumption of non-renewable fuels to produce electricity, with a consistent approach applied to ensure year-on-year comparability. Specifically:
For Grupa Azoty S.A., the data was restated from 2,962,978 GJ to 4,875,297 GJ.
For Grupa Azoty Puławy, the data was restated from 2,864,578 GJ to 14,861,539 GJ.
For Grupa Azoty Police, the data was restated from 2,532,367 GJ to 7,903,499 GJ.
For Grupa Kędzierzyn, the data was restated from 928,301 GJ to 4,386,815 GJ.
GRI 305-2;
With respect to Grupa Azoty Kędzierzyn and Grupa Azoty Police, the comparative data for 2021 was restated by eliminating electricity sold to the grid from the calculation of Scope 2 GHG emissions.
As a result, the data pertaining to Grupa Azoty Police was restated from 284,603 tCO2 to 253,473 tCO2.
The data pertaining to Grupa Azoty Kędzierzyn was restated from 463,388 tCO2 to 230,129 tCO2.
GRI 305-5;
In the case of Grupa Azoty S.A., the amount disclosed for 2021 was restated with 2019 taken as the base year to enhance data comparability between companies. The data was restated from 2,616 tCO2e to 37,925 tCO2e.
GRI 305-7;
The amount disclosed with respect to Grupa Azoty Puławy under ‘carbon dioxide (CO2)’ for 2021 was restated. The previously reported amount of CO2 emissions was based on calculations and measurements taken directly from the installations, an approach differing from the one prescribed under the EU-ETS. In order to maintain data comparability with respect to this disclosure, the amount disclosed for the company under 305-2 was taken into account. As a result, the data was restated from 1,836,010 t to 3,418,516 t.

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We would welcome your feedback on this report. Additionally, we are interested in learning the specific information you would like to see included in its next edition. To share your feedback and to request a copy of the report, please send a message to katarzyna.kapustka@grupaazoty.com

Media enquiries: Grupa Azoty Press Officer rzecznik@grupaazoty.com

Investor enquiries: Investor Relations Team ir.tarnow@grupaazoty.com

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Materiality assessment

The content of this report was determined through a materiality assessment conducted in accordance with the GRI Universal Standards guidelines, aligning with the impact materiality methodology, one of the two components of the double materiality analysis, as stipulated by the draft European Sustainability Reporting Standards (ESRS).The materiality assessment, carried out in May and June 2023, involved the following four steps:

1. Understanding the context of the organisation

Work on this report drew insights from the 2021 report preparation process. GRI-indicated documents, such as the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy and OECD Guidelines for Multinational Enterprises, were scrutinised, accompanied by sectoral and market analyses along with a review of upcoming regulations. Factors considered included the organisation’s structure, external relations, sustainability impacts of its activities, and engagement with both internal and external stakeholders.

2. Identification of actual and potential impacts

In the next step, questionnaire-based surveys were conducted among the Grupa Azoty Group’s employees (covering a total of 380 respondents, including 327 employees and 53 external stakeholders). This step generated a comprehensive list of the Grupa Azoty Group’s sustainability impacts, both social and environmental.

3. Impact severity assessment

The materiality of individual topics was assessed based on inputs from independent experts, considering the nature (positive or negative) and timing (actual or potential) of impacts. The assessment criteria included severity based on the scale and scope of impacts (all categories), their irremediable character (for negative impacts), and the likelihood of occurrence (for potential impacts).

4. Prioritising the impacts

The outcomes of the materiality assessment were prioritised by members of the Grupa Azoty Group’s Corporate Communication and Marketing Department and by coordinators representing the Group’s key companies. Topics identified as material were used to delineate the scope of GRI disclosures presented in the Grupa Azoty Group Integrated Report for 2022.

Relying on the double materiality concept, incorporating impact materiality and financial materiality, and acknowledging both positive and negative impacts across the value chain, we identified the following list of material topics, categorised into three areas: Environmental (E), Social (S), and Governance (G).

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Topics identified as material

	Material topics	Area	Identified impacts and aspects within the area
1.	Sustainable products	E	Development of innovative, green products Development of sustainable solutions based on R&D Use of sustainable production practices
2.	Product quality and safety	S	Ensuring safe products and materials
3.	Food security in Poland	S	Transfer of knowledge on efficient use of fertilizer products to food producers Ensuring food security in Poland
4.	Circular economy	E	Circularity and reuse of raw materials
5.	Social and economic support for the Company’s immediate environment	S	Social contribution and philanthropic activities, donations and sponsorships Development of local markets and businesses Supporting local communities Supporting schools, universities and research institutions
6.	Health & safety	S	Employee training and development Equality, diversity and openness in the workplace Keeping employees healthy and safe (OHS) Ensuring decent working conditions Ensuring fair remuneration Ensuring a transparent performance evaluation system Ensuring a reliable whistleblowing system for employees
7.	Respect for human rights	S, G	Promoting ethical behaviour and respecting human rights in the workplace Respecting human rights in the supply chain
8.	Business ethics	G	Fostering transparency and integrity in business relationships Monitoring of suppliers’ compliance with environmental, social and governance standards Providing a reliable whistleblowing system for suppliers
9.	Air pollutant emissions	E	Reduction of air emissions
10.	Greenhouse gas emissions	E	Calculation and verification of the carbon footprint of products and the entire organisation Reduction of greenhouse gas emissions affecting climate
11.	Biodiversity	E	Protection of biodiversity (including ecosystems, soil and living organisms) Reduction of pollutant emissions affecting the natural environment
12.	Climate risk management	E, G	Physical effects of environmental degradation Regulatory effects relating to environmental protection Effects of transition to a low–carbon economy involving changes in customer requirements and regulatory framework Effects of extreme weather events caused by climate change
13.	Energy and raw material consumption	E	Development of new green technologies for production and logistics Reduction of water consumption Sustainable management of electricity

Certified management systems

Provided below is an overview of the Group’s certified management systems.

List of certified management systems	Grupa Azoty S.A.	Grupa Azoty PUŁAWY	Grupa Azoty POLICE	Grupa Azoty KĘDZIERZYN
Quality Management System conforming to the ISO 9001 standard
Environmental Management System conforming to the ISO 14001 standard
Occupational Health and Safety Management System compliant with the ISO 45001 standard
Energy Management System conforming to the ISO 50001 standard
Food Safety Management System conforming to the ISO 22000 standard
FSSC 22000 system (Food Safety System Certification)
PN-EN ISO/IEC 17025 Management System (general requirements for the competence of testing and calibration laboratories)
Management standard meeting the requirements of the Fertilizers Europe Product Stewardship Standard
ISCC PLUS system (International Sustainability & Carbon Certification Plus)
Information Security Management System conforming to the ISO 27001 standard
Responsible Care® framework management system