Transparency and ethics as key principles

At Galp, ethics is a key principle that we live and apply everyday in our activities, reinforcing our commitment for zero tolerance for corruption and other unethical practices in order to maintain our business ethical and trustworthy. We aim to generate trust amongst all our stakeholders by acting ethically and in a transparent manner that shows that both these principles are imperative for Galp.

We are aware of our corporate responsibility, and it is a priority for our management to consolidate the assumed values and principles of loyalty, transparency and integrity. We work continuously to achieve business efficiency, respecting the principles of fair competition, acting in accordance with the external controls (laws and regulations), and the internal controls, preventing corruption and ensuring transparency of our business.

In compliance with chapter 10 of the Directive 2013/34/EU transposed to Portuguese law under the Decree-Law n. 98/2015 and article 245-B of the Portuguese Securities Code, Galp prepares and includes in the Annual Management Report the Payments to Public Entities Report, supporting the concept of transparency in revenue flows from oil and gas activities. It allows citizens to access the information they need to hold Public Administrations (which include any national, regional or local authority of a European Union member State or of a third country, a department, agency or entity that is a subsidiary thereof, which includes a national oil company) accountable for the way they use funds received through taxes and other agreements.

The Payments to Public Entities Report provides an overview of the Payments to Public Administrations made by Galp, and its subsidiaries, covering each full year whenever such companies do so as a result of their activities of exploration, prospection, discovery, development and extraction of oil, natural gas deposits or other materials.

The Report excludes payments made by entities over which Galp has joint control and payments made by entities/joint ventures over which Galp has no operatorship.

For more information, please see the Galp Report on Payments to Governments in 2022.

Galp recognises, through the Tax Policy, the importance of adopting and implementing international best practices in terms of tax transparency.

Zero tolerance for unethical practices

Our Code of Ethics and Conduct is one of the main expressions of Galp´s corporate culture, guiding the personal and professional behaviour of all people of the group, regardless of the position or function they perform, as well as the relationship between employees and shareholders, investors, customers, suppliers, and representatives of the communities with which Galp interacts.

Learn more about how our code of ethics and conduct apply to all our stakeholders.

Embracing ethics

As part of our journey to make Galp the greatest place to work, we are committed to reinforce a culture of ethics, providing a safe work environment, free from discrimination and harassment. across the company and externally.

Conflicts of interest prevention

In accordance with international corporate governance recommendations and practices, Galp established a set of internal control rules and procedures with a view to prevent conflicts of interest. One of them is with respect to related parties relevant transactions. The Audit Board verifies whether there is a conflict of interest in transactions with related parties, and Company´s transactions with related parties is subject to the prior opinion of that body. For more information, please see Transactions with Related Parties Standard. Other measure was the approval and disclosure on the website of the internal standard Management of Conflicts of Interest, applicable to all employees and members of the Group companies corporate bodies, which stipulates the rules of prevention, avoidance, reporting and handling of conflicts of interests ethically and responsibly.

Communicating irregularities

Galp’s Open Talk is a safe, confidential and, if desired, anonymous channel for questions, concerns or reports of breaches within the scope of our Code of Ethics and Conduct. This channel is publicly available to any stakeholder of Galp’s network and is managed by the Ethics and Conduct Committee which is responsible for receiving and handling all the communications made, concerning potential irregularities or breaches of the Code of Ethics and Conduct or of the complementary internal regulations.

In 2021 this channel was renovated in order to guarantee a closer alignment with the European Directive. Open Talk is available 24 hours a day to all stakeholders through an online platform, by phone, post or email. All calls and reports over the Open talk channel are received on behalf of Galp by an independent third-party specialist ethics line provider who is in charge of communicating them to the Ethics and Conduct Committee who ensures that there are no acts of retaliation against anyone who has, in good faith, reported facts deemed to violate the Code of Ethics and Conduct. We believe it is the duty of all employees, particularly the leaders, to ensure compliance with this commitment from Galp towards whistle-blowers on a daily basis.

In 2022, the Ethics and Conduct Committee received 65 reports which were properly investigated, according to the Irregularities Communication Internal Standard. From the reports received, 36 were related to moral harassment in the workplace, 8 to potential conflict of interests, 3 to safety in the workplace, 7 to misappropriation of property and 11 were tests or unsubstantiated reports. Of the 65 cases reported, 11 were archived due to lack of evidence of the facts described, 6 required the adoption of disciplinary measures by the Company, 6 required the adoption of measures by the Company in order to adapt the conduct to the standards established in the Code of Ethics and Conduct, 11 are in progress and 31 are out-of-scope complaints that do not have mitigation measures defined.

Fighting corruption and other unethical practices

At Galp, all corrupt practices are strictly forbidden. In 2022, we continued our efforts to prevent corruption, in all its active and passive forms. For this we have a Corruption Prevention Policy and a Prevention of Money Laundering and Financing of Terrorism Policy that set the tone of our commitments on this topics and which are applicable to all the group and its employees. In addition, we have the commitment to consistently promote full compliance with the provisions of the Code of Ethics and Conduct, aligned with the best practices expressed in several international standards such as the United Nations 2004 Convention to Combat Corruption (UN Global Compact 10 principles).

Galp recorded no cases of corruption in 2022 nor for the preceding four years.

Learn more about our corporate documents.

Increment greater ESG disclosure, clarity, and accuracy

Because part of the transformation is to progressively promote transparency, Galp engages with several internationally established benchmarks and sustainability principles and discloses its non-financial performance aligned with internationally recognised voluntary reporting standards and frameworks. Also, our sustainability journey and world class practices were not unrecognized as Galp has been consistently ranked as one of the most sustainable companies over the last decade by some of the most reputable entities on this field.

We want to continuously increase the transparency of our communications and ESG disclosure in line with the best practices of the sector that demand an increment on clarity, accuracy and reliability of all data.

To achieve that, in 2022, we continued taking steps towards incrementing clarity, accuracy and reliability of all ESG data. For the first time, we conducted an independent Non-Financial Information (NFI) audit that assessed all NFI sources and outputs of information, analysing potential improvements and drawing an action plan to be implemented throughout 2023.

Galp is now an EFRAG Community Sector Group member

In 2022 we joined the European Financial Reporting Advisory Group (EFRAG), as a member of the Community Sector Group for the development of the EU Sustainability Reporting Standards - Sector standards on Oil and Gas, within the scope of the Corporate Sustainability Reporting Directive (CSRD), through joining several workshops along with other peers. We are also now a member of the Taskforce on Nature-related Financial Disclosures (TNFD) Forum, that will give us the opportunity to learn from sharing and to build capacity towards nature-positive outcomes.

EU Taxonomy

The EU Taxonomy regulation for sustainable activities was developed within the scope of the European Green Deal and the framework of Sustainable Finance, to provide a common language and framework for investors, companies, and policymakers to assess the sustainability of economic activities, and to guide investment decisions towards activities that have a positive impact on the environment and society. The EU taxonomy is intended to be a classification system and sets criteria and technical screening factors to define and identify sustainable economic activities that significantly contribute to the environmental objectives and its sustainable growth of the European Union.

The First Delegated Act was published and adopted in 2021 and determines whether the activities contribute substantially to the objectives of adaptation and mitigation to climate change, do not cause significant damage to other environmental objectives and comply with minimum social safeguard established by OCDE and the United Nations.

At the present, the EU Taxonomy only covers two of the six environmental objectives and it is expected that the regulation will be in continuous development in the coming years, in order to include the remaining environmental objectives, as well as other activities that should be considered in the list of sustainable economic activities.

As in the previous year, an eligibility analysis of Galp’s business activities based on the Delegated Acts of the EU Taxonomy Regulation was conducted in 2022.

This year, in addition to the eligibility analysis, we evaluated the compliance with EU Taxonomy technical screening criteria to conclude about the alignment of the eligible activities.

During the evaluation of the alignment, Business Units interactions were promoted to identify the substantial contribution to the environmental objectives, to verify whether do not these activities cause significant damage to other objectives and to ensure the compliance with minimum social safeguards. From these interactions it was concluded that all of Galp's eligible activities comply with all Technical Screening Criteria.

Further information about Galp's EU Taxonomy context, alignment and performance can be found in our 2022 Integrated Annual Report: Part V – Appendices (1. Non-financial consolidated information).

Galp Low Carbon capital allocation

In addition to the activities included on the Delegated Acts of the EU Taxonomy, Galp considers other activities that, so far, are not eligible under the regulation but may contribute significantly to mitigate climate change, such as investments in the battery value chain and CO2 emission reduction projects in the Refinery (which also contribute to improving energy efficiency). Furthermore, Galp includes in its Low Carbon capital allocation definition the renewables and other eligible non-consolidated business under the EU Taxonomy, although these are excluded from a consolidation perspective. Considering our internal classification of sustainable activities, Galp’s strategic plan foresees over 70% of the net capital expenditures planned during 2023-2025 to be allocated to low carbon activities which, from its perspective, reflects the Company’s ambition and commitment to the energy transition and the transformation to a carbon neutral value chain.