Appendices

GRI content index

102-55

Map of material GRI topics (aspects)

102-46

103-1

Economic^*

1. Economic performance

2. Market presence

3. Indirect economic impacts

4. Anti-corruption practices

Environmental^*

5. Energy

6. Water

7. Biodiversity

8. Sulphur dioxide and solid emissions

9. Greenhouse gas (GHG) emissions

10. Emissions of ozone-depleting substances (ODS)

11. Emissions of other substances

12. Effluents

13. Waste

14. Supplier environmental assessment

15. Environmental compliance

Social^*

16. Employment

17. Occupational health and safety

18. Training and education

19. Freedom of association and collective bargaining

20. Human rights: rights of indigenous peoples

21. Local communities

22. Supplier social assessment

23. Public policy

24. Socioeconomic compliance

25. Emergency preparedness

26. Closure planning

The Company maps out material topics in line with GRI SRS and with input from external and internal stakeholders. The materiality matrix is based on the following:

• opinion polls on material topics;
• dialogues with stakeholders;
• mass media coverage of the Company;
• interviews with the Company’s management.

In 2019, the list of material topics of the Report was reconfirmed following polling, with no significant changes compared to the 2018 report.

For information on our stakeholder dialogues, see Appendix Stakeholder Dialogue Minutes. The proposals put forward during the dialogues will be considered for integration into the Company’s practices.

GRI indicators

Environmental performance 303-1

Total water withdrawal

Water sources

306-5 303-2

Water recycled and reused

303-3

The Group’s total reused and recycled water is 367.0% of its water withdrawal. This percentage is largest for Polar Division (600.5%) and Kola MMC (537.1%), while at Norilsk-Taimyr Energy Company it stands at 229.8%.

Total effluents^* and pollutants discharged

306-1

NO_х, SО_х and other significant air emissions, including their type and weight^*

305–7

Total weight of waste by type and disposal method, mt

306-2

Waste management in 2019 by hazard class and waste type, kt

MM3

Total energy consumption by Norilsk Nickel Group, TJ

302-1

Electric power and heat consumption by the Group companies, TJ

Social performance

Benefits for employees of Polar Division

401-2

Benefits for employees of Kola MMC

Headcount by type of employment, gender and region, employees

New and terminated employments (by gender, age and region of operations) in 2019, employees

401-1

Employee outflow ratio by region in 2019, %

Employee inflow ratio by region in 2019, %

Employee outflow ratio by gender and age in 2019, %

Employee inflow ratio by gender and age in 2019, %

Employees on maternity and/or childcare leave in 2019

401-3

Occupational disease and injury rates in 2018–2019^*

UNCTAD indicators

TCFD disclosures

List of abbreviations

Glossary

Business unit of the Company’s Head Office: department, division or any other unit within the organisational structure of the Company’s Head Office and/or a unit acting in accordance with the staff schedule approved by the President of MMC Norilsk Nickel.

Certification: confirming compliance of qualitative characteristics with quality standard requirements.

Charitable activities: the Company’s voluntary transfer of property, including cash, free works and services, and other support, to legal entities or individuals free of charge or on preferential terms.

Collective Bargaining Agreement: legal instrument governing social and labour relationships within a company or a sole trader business and signed by the representatives of employees and the employer.

Compliance: conducting business in compliance with the requirements of government authorities, applicable laws, regulations, guidelines and standards, including corporate policies and procedures, and ethical business practices.

Corporate culture: combination of standards, values and beliefs that determine the way a company addresses the matters of internal integration and external adaptation, guide and motivate daily behaviour of employees, while also transforming under its influence.

Corporate social responsibility (CSR): corporate behaviour philosophy and concept applied by the business community, companies and company representatives to their activities aimed at meeting stakeholder expectations and ensuring sustainable development.

Employee performance management framework: combination of methods, processes and procedures designed to boost employee performance in line with Norilsk Nickel Group’s corporate strategy. The framework also covers employee performance assessment and competency review.

Environmental protection and resource efficiency: corporate programmes aimed at minimising the Company’s environmental impact.

Global Reporting Initiative (GRI): independent organisation developing sustainability reporting guidelines and standards.

Health and safety: occupational health and safety protection system embracing legal, social, economic, organisational, technical, sanitary, hygienic, healthcare, rehabilitation and other activities.

HR management policy: end-to-end integrated HR management system including all stages of employee-employer interaction, from recruitment to retirement and post-retirement support.

HR management strategy: principles, regulations and approaches to personnel management focused on efficient implementation of the Company’s business strategy and providing conditions to unlock human potential in order to achieve corporate goals.

HR policy: set of standards, rules, regulations, concepts and goals determining the Company’s HR management practices (personnel planning and record keeping, recruitment, adaptation, training and development, remuneration and incentivisation, performance assessment, social security, etc.) in line with its development strategy.

Human Capital Development Programme: set of priority measures focused on bringing human capital to a new level in line with the Company’s strategic goals and objectives.

Incentivisation: tools and methods of boosting staff performance and productivity, motivating an employee or a group of employees to achieve corporate goals.

Local communities: population with Russian citizenship.

Local community development programmes: corporate social programmes implemented voluntarily and intended to contribute to the development of local communities.

Mission: statement of the Company’s goals and objectives that distinguish it from its peers.

Nornickel (Norilsk Nickel) Group: for the purpose of the 2019 Sustainability Report, MMC Norilsk Nickel and the totality of operations forming Nornickel Group. Unless otherwise specified or required by the context, the terms “Company”, “Group”, “Nornickel” or “the Group companies” shall refer to Norilsk Nickel Group.

Occupational disease: health disorder caused by a systematic and lasting exposure to workplace factors or a combination of production-specific working conditions.

Payroll budget: total payroll and social payments.

Personnel development: set of initiatives aimed at employee recruitment, adaptation, retention, and fully unlocking their professional and creative potential.

Risk: negative factor that might result from current processes or future events and have a potential impact on the Company’s ability to achieve its goals.

Safe working conditions: working conditions where occupational exposure to harmful and/or hazardous production factors is prevented or controlled within the set limits.

Senior executives: President, Vice Presidents, heads of departments in case of the Head Office, and general directors and their deputies in case of entities located in the Norilsk Industrial District and on the Kola Peninsula.

Significant regions of operation: the Norilsk Industrial District, Krasnoyarsk Territory (except for the NID), Kola Peninsula Industrial District (Murmansk Region), Trans-Baikal Territory, Moscow and other Russian regions.

Social package: set of benefits, compensations, additional payments, statutory and additional services provided to employees by the employer on top of their salary.

Social partnership: framework of relationships among employees (their representatives), employers (their representatives), and federal and local government authorities aimed at reconciling interests of employees and employers on matters pertaining to the regulation of labour relations and other directly associated matters.

Social programmes: voluntary corporate initiatives pertaining to employee development and motivation, creating favourable working conditions, promoting corporate culture and charity, and supporting local communities. These initiatives are implemented on a regular basis in line with the Company’s business strategy, and focused on satisfying balanced requests of various stakeholders. From the management perspective, a social programme is a set of initiatives carefully planned in terms of resources, workforce and timeframes, and efficiently addressing the Company’s internal or external social objectives.

Stakeholder engagement: the Company’s activities aimed at identifying stakeholders’ expectations and concerns and their engagement in the decision-making process.

Stakeholders: individuals and legal entities or their groups having certain expectations about the Company or affected by its operations, influencing its managerial decisions while being themselves influenced by such decisions. Stakeholders include the Company’s shareholders, investors, employees, suppliers, contractors, consumers, trade unions and other public organisations, federal and local authorities, mass media, residents of areas where the Company operates, and others.

Standard: regulation containing a set of requirements for activities and their products.

Sustainability Report (non-financial report): accessible, accurate and balanced description of the main aspects of the Company’s activities and achievements pertaining to its values, goals and sustainable development policy, and addressing the matters of most importance for the key stakeholders. This is a way of publicly informing the shareholders, employees, partners and other stakeholders of the Company’s progress towards its goals and objectives set out in its mission statement and strategic development plans with respect to financial and environmental stability, and social security.

Sustainable development: concept developed by the UN that acknowledges the role of business in ensuring sustainable development of the society; a concept of global community development taking into account interests of both present and future generations.

Top management: President, Senior Vice Presidents, Vice Presidents, members of the Management Board and heads of departments of MMC Norilsk Nickel; directors of branches of MMC Norilsk Nickel and their deputies; sole executive bodies (directors, general directors) of the Group companies and their deputies.

Young talents: graduates of universities and colleges whose post-graduate experience does not exceed three years.

Stakeholder dialogue minutes

Dialogues with stakeholders are an important part of sustainability reporting in Norilsk Nickel Group. We hold regular stakeholder dialogues and take their results into consideration when determining report contents and monitoring progress in achieving sustainability goals.

While preparing the 2019 Sustainability Report, we engaged in dialogues with stakeholders as part of the We Are the City! social technologies forum in Zapolyarny. The events attended by Nornickel employees, local authorities and community representatives helped identify the UN Sustainable Development Goals (SDGs) and targets most relevant for the Company and the regions where it operates.

We held the dialogues in the form of a quiz session, inviting the participants to study cases related to Nornickel’s digital transformation (industrial innovation and safety, including comprehensive cyber protection of transport infrastructure, creating advanced IT architecture powered by blockchain technology, industrial automation, digitalisation, digital technologies and solutions, environment and biodiversity, and exchange of best international practices). Each team had to link their case to a specific SDG and come up with recommendations on how to improve the Company’s performance in the given area or in the context of each particular case. The conclusions were presented by speakers representing each discussion panel.

Dialogue minutes, Zapolyarny

Venue: Zapolyarny, We Are the City! social technologies forum

Date: 15 February 2020

Industrial innovation: the panel speakers discussed Nornickel’s presentation of exoskeletons, which featured a crash course in and testing of these machines at a dedicated site to showcase their capabilities. According to the speakers, this case could be linked to three SDGs: Good Health and Well-being, Decent Work and Economic Growth, and Industry, Innovation and Infrastructure. They also highlighted industrial exoskeletons’ efficiency in solving occupational health and safety issues and recommended that the Company keep working in this area.

Industrial safety and comprehensive cyber protection of transport infrastructure: the panel speakers noted Nornickel’s progress with its digital projects, including automation of mining and underground operations and development of a smart mine at Severny (Zapolyarny). The team linked the case to the following SDGs:

• Good health and well-being. An unmanned mine will help minimise human exposure to hazardous and harmful working conditions;
• Gender equality. Remote mine monitoring solutions will make it possible for the Company to engage women and disabled people;
• Decent work and economic growth. The team recommended that Nornickel provide its staff affected by redundancy as a result of mine automation with employment opportunities by training and retraining them so that they could pick up new skills;
• Industry, innovation and infrastructure.

In conclusion, the speakers stressed the need to employ the most effective solutions to protect automated systems from cyber attacks and server access failures. They also highlighted the importance of uninterrupted power supply to prevent emergencies and production shutdowns.

Creating advanced IT architecture powered by blockchain technology, industrial automation, digitalisation, digital technologies and solutions: the panel speakers noted the important role these technologies play in implementing complex projects, improving the production efficiency, reducing ore losses and optimising production processes.

The team linked these objectives to the following SDGs:

• Industry, innovation and infrastructure. To pursue this goal, the Company was advised to further promote lean manufacturing by automating shift assignment and to partner with a global digital commerce platform;
• Quality education. The speakers recommended that the Company automate the selection of employees who need training and professional development and include relevant employee obligations in employment contracts;
• Clean water and sanitation. To pursue this goal, the Company was advised to recirculate mineralised waste water from the concentration process to reduce costs and promote sustainable use of resources;
• Responsible consumption and production.

Environment and safety: the panel speakers focused on the controversial effects of the smelting shop shutdown at Nickel site, which will help improve the environmental situation while also leading to job losses.

This case is linked to the following SDGs:

• Quality education. The team suggested that the Company support environmental education at universities, vocational and secondary schools and kindergartens;
• Clean water and sanitation. The speakers proposed automating the collection of data on potable water conditions across the Company’s regions of operation;
• Affordable and clean energy. The Company was advised to consider using alternative or renewable power sources to improve energy efficiency and achieve environmental goals;
• Sustainable cities and communities. In this area, the speakers recommended that Nornickel consider arranging for or creating automated collection points for recyclable waste and fully transition from printing hard copies to electronic document flow;
• Responsible consumption and production;
• Life on land.

The exchange of best international practices: the panel speakers noted Nornickel’s participation in the 2019 General Conference of the United Nations. The Conference focused on promoting inclusive and sustainable industrial development to achieve three key goals: creating shared prosperity, advancing economic competitiveness, and safeguarding the environment. The dialogue participants presented the discussion outcomes and proposed that the Company introduce new environmental initiatives, such as clean-up days, and streamline relevant internal requirements based on the highest international standards.

Dialogue minutes, Norilsk

МеVenue: Norilsk, We Are the City! social technologies forum

Date: 28 February 2020

The exchange of best international practices: the panel speakers singled out the following SDGs as the most relevant for the case:

• Partnerships for the goals,
• Sustainable cities and communities.

Cleaning the city from metallurgical waste was named a number one priority. To address the issue of removing ferrous and non-ferrous metal scrap and waste, the Company should consider partnerships between its sites and SMEs.

Additionally, the Company needs to look into technical solutions to process sulphur waste into sulphur concrete and asphalt.

The environment and biodiversity: the panel speakers suggested introducing smart water management in Norilsk and creating a closed loop water system relying on water filtration and reuse.

Additionally, the team made a number of proposals related to smart controls for various resources and waste, and using alternative energy sources.

Creating advanced IT architecture powered by blockchain technology, industrial automation, digitalisation, digital technologies and solutions: the panel speakers linked the case to the following SDGs:

• Industry, innovation and infrastructure;
• Climate action.

In pursuance of the Climate Action goal, the Company should consider using advanced horizontal cooling technologies to prevent the permafrost thawing and rehabilitate the soil cover of the tundra. The speakers also recommended that the Company carry on with joint projects on landscaping and tundra soil rehabilitation.

In the context of the Industry, Innovation and Infrastructure goal, the speakers noted the Company’s strong effort in creating new jobs and staff retraining to promote new skills and competencies.

Industrial safety and comprehensive cyber protection of transport infrastructure: the panel speakers gave a positive assessment of Nornickel’s leadership in certifying management systems for cyber security. The team noted that Nornickel’s key ports have put in place specially designed systems to monitor the safety of cargo (including environmentally hazardous goods) handling and transportation.

The team proposed organising a foresight session in Norilsk with various stakeholders contributing to the creation of an atlas of emerging jobs relevant for the Company. In future, the Company should set up a civil university for the youth and people in need of retraining to master new technological solutions.

Industrial innovation: the panel speakers highlighted the importance of the industrial exoskeleton project and the use of exoskeletons in Nornickel’s operations. Going forward, the Company may also sell the solution to other Russian and international industry players.

This case is linked to the following SDGs:

• Good health and well-being. To pursue this goal, the team recommended that the Company consider, among other things, using this solution in social projects, e.g. to support people with limited mobility;
• Quality education. In this context, the team proposed that the Company and the South-West State University in Kursk expand their cooperation and set up a joint tech competency centre based in Norilsk;
• Industry, innovation and infrastructure;
• Partnerships for the goals.

Stakeholder recommendations

102-44

Opinion of RSPP Council on Non-Financial Reporting

102-56

The Council on Non-Financial Reporting of the Russian Union of Industrialists and Entrepreneurs (the “Council”) established as per the Management Bureau’s Resolution dated 28 June 2007, reviewed, at the request of MMC Norilsk Nickel (the “Company”, the “Group”, “Nornickel”), Nornickel Group’s 2019 Sustainability Report (the “Report”).

The Company requested the RSPP to arrange for the public verification of the Report, with the Council on Non-Financial Reporting providing an opinion on the materiality and completeness of the Report’s information about the Company’s operations from the perspective of the Social Charter of the Russian Business. The Charter sets out key principles of responsible business conduct aligned with those of the UN Global Compact, as well as domestic and international CSR standards.

From 20 March to 03 April 2020, the Council members reviewed the content of the Company’s Report and issued this Opinion in accordance with the Council’s Procedure for Public Verification of Corporate Non-Financial Reports.

The Council members possess all the required competencies in corporate responsibility, sustainable development and non-financial reporting, comply with the ethical requirements for independence and impartiality, and provide their personal expert opinion rather than the opinion of organisations they represent.

The Report was assessed based on the below-listed criteria of information completeness and materiality. Information is considered to be material if it reflects the company’s efforts to implement the principles of responsible business conduct set out in the Social Charter of the Russian Business (www.rspp.ru).

Completeness implies that the company provides a comprehensive overview of its operations, including the underlying values and strategic benchmarks, governance systems and structures, accomplishments and key results, and the stakeholder relationship framework.

The procedure for the public verification of the Report factors in the Company’s application of international reporting frameworks; this Opinion does not, however, purport to assess the Report’s compliance with such international frameworks.

The Company is responsible for the information and statements provided in the Report. The accuracy of the Report’s information is beyond the scope of the public verification procedure.

This Opinion has been prepared for MMC Norilsk Nickel. The Company may use it for both corporate and stakeholder communication purposes by publishing the original version without any changes.

CONCLUSIONS

Based on the review of the Report and the information publicly available on the Company’s official website, and following a collective discussion of the results of the Report’s independent assessment undertaken by the members of the Council on Non-Financial Reporting, the Council confirms as follows.

Nornickel Group’s 2019 Sustainability Report covers the key areas of responsible business conduct in accordance with the principles set out in the Social Charter of the Russian Business, and provides sufficient information about the Company’s operations in relation thereto.

The recommendations made by the Council following the public verification of Nornickel Group’s 2018 Report were implemented in the 2019 Report. In particular, the Report provides more information on the Company’s updated strategy and its progress towards the UN 2030 Agenda for Sustainable Development, covers the Group’s participation in the Digital Economy national project, and provides additional references to information sources, including the annual report.

The Company’s 2019 Report contains relevant information relating to the below-listed aspects of responsible business conduct.

Economic freedom and responsibility. The Report covers Nornickel Group’s core lines of business, highlights its contribution to the Russian economy and the industry, and describes the Company’s production assets, resource base potential and strategic priorities, which Nornickel mainly pursues through innovations bringing digital technology to production, automation projects, and the efficiency and safety improvement programme. It traces changes in key financial and operational results as well as performance highlights. It notes the commissioning of Bystrinsky GOK, one of the Company’s most advanced facilities, among its key non-financial results. It describes the Company’s business prospects in the context of its sustainability strategy to 2030 and the UN Sustainable Development Goals (the UN 2030 Agenda for Sustainable Development), specifying key objectives and targets. The Report outlines the Company’s priorities and corporate programmes with respect to the SDGs. It describes the Group’s core products which will support the low-carbon transition going forward. The Report discloses the Company’s corporate governance framework and approaches to sustainable development management. It mentions that key performance indicators are aligned with the remuneration payable to members of the senior governance bodies.

It informs that the Group companies were subject to external audits for compliance with QHSE ISO standards. The Report describes the risk management framework, including with respect to sustainable development. It provides details on the Company’s anti-corruption efforts, corporate documents and procedures. The Report informs that corruption risk assessment covers virtually all the Group’s business units in addition to mandatory anti-corruption briefings for all new employees.

Business partnerships. The Report contains a stakeholder map, specifying engagement mechanisms based on an ongoing dialogue in line with international standards and corporate documents. It also covers relations with shareholders, including the dividend policy, and investors, including those focused on responsible investment. The Report describes changes in the shareholding structure and the Company’s efforts to diversify the shareholder base and attract new shareholders. It provides details on the key focus areas in HR management, including those promoting social partnership. It discloses information about the incentive system and pay scale as well as corporate programmes covering social security, staff training, occupational health and safety, corporate culture, and personnel engagement. The Report describes the Company’s efforts to implement the principles of responsible business and sustainable development in the supply chain and control of such non-financial factors in supplier relations as quality of products, works and services, HSE, and compliance. It informs that the Group’s contractors implemented the workplace safety standard and monitoring procedures. The Report also covers procurement, including key forms of customer interaction, quality assurance initiatives, customer satisfaction monitoring based on regular surveys. It describes the Company’s cooperation with government authorities on a variety of matters, including its participation in building the regulatory framework of the Digital Economy national project. It provides details on the Group’s interaction with small and medium businesses as well as non-profit organisations.

Human rights. The Report highlights the Company’s commitment to human rights in line with the generally accepted international principles and the applicable laws of Russia and other countries of operation. It provides information about the Company’s by-laws, including the Human Rights Policy, and the procedures for the protection thereof relating to the HR, environmental, social and other matters. The Report also focuses on the respect of labour rights. It mentions that the Company regularly assesses the potential impact of its operations on human rights and rolls this practice out to all new projects. The Report declares respect for the rights of indigenous northern minorities, including examples of cooperation with a view to preserving national languages and traditional activities and improving living and working conditions.

Environmental protection. The Report includes information on the environmental initiative launched as part the Company’s updated development strategy which focuses on transition to green production in line with best global practices, including SO2 capturing techniques. It mentions that the Company is developing the programme tracking climate changes which provides, inter alia, for assessment of investment projects for climate risks with their possible adjustments It provides information about the Sulphur Programme roadmap for 2020–2030 and the Roadmap to Reduce Air Pollutant Emissions at Polar Division in 2018–2023. It also mentions that the Group assessed GHG emissions of its facilities. The Report presents details on the environmental management system as well as water body protection, waste management, biodiversity conservation, including land rehabilitation, cooperation with nature reserves, and reproduction of aquatic bioresources. It includes a great number of gross and per-unit environmental impact indicators of the Group’s operations. The Report covers the Company’s efforts to enhance the reliability of power generating equipment, grid and gas transportation infrastructure, boost gas output, and save energy. It also specifies the Company’s environmental expenditures.

Contribution to the development of local communities. The Report highlights the Company’s contribution to the social and economic development of the Krasnoyarsk and Trans-Baikal territories and the Murmansk Region, providing more details on tax and non-tax payments to budgets of various levels, and on the financing of social, infrastructure and employment programmes. It discloses information about the Company’s relations with regional and municipal authorities under partnership agreements with a view to implementing investment and social projects. It describes the activities of the Norilsk Development Agency established by the Company. The Report covers the details of fostering cooperation with local producers, including small and medium businesses, in the regions of operation. It mentions the Company’s plans to promote tourism on the Kola Peninsula. The Report provides the list of key social and environmental projects and programmes, including those supporting culture, sports, social entrepreneurship, and volunteering. It mentions that the Company updated the World of New Opportunities long-term programme and deployed online tools for interaction with local communities and implementation of the programme. It includes details on a framework for managing social projects and assessing their performance.

Final provisions

The information contained herein generally describes the Group’s strategy, business practices and results in sustainable development and corporate social responsibility as well as the supporting governance systems. The Report elaborates on how the Company’s focus areas and projects are aligned with and contribute towards the UN 2030 Agenda for Sustainable Development, while disclosing a significant number of the Company’s economic, social and environmental performance indicators. It covers the main focus areas and forms of stakeholder engagement, including those used as part of the reporting process.

The Report was prepared using internationally and domestically recognised reporting tools (e.g. the GRI Standards, Comprehensive option, GRI Sector Disclosures), which ensures comparability of the Group’s information with that of other Russian and international companies. In drafting the Report, the Company also relied on the following documents: the UN Global Compact, the UN 2030 Agenda for Sustainable Development, ISO 26000:2010, AccountAbility Standards АА1000SES (2015) and AA1000AP (2018), the UNCTAD Guidance on core indicators for entity reporting on contribution towards implementation of the UN Sustainable Development Goals, and TCFD recommendations on climate-related risk disclosures.

The 2019 Report is the Company’s sixteenth non-financial report, which demonstrates its determination to consistently develop reporting processes and enhance transparency. The Company uses various forms of independent assessment and confirmation of disclosed information (professional audit and public verification). This reflects the Company’s commitment to keeping stakeholders informed and maintaining the high quality of disclosures.

RECOMMENDATIONS

While acknowledging the Report’s strengths, the Council calls attention to some aspects of disclosures’ materiality and completeness, which should be addressed in the future reporting cycles.

The Council notes that the recommendations made following the review of the previous 2018 Report remain valid and good for use going forward.

The Report elaborates on the Company’s input to the implementation of the UN Sustainable Development Goals. The same approach should be used to highlight the Company’s contribution towards national projects and objectives which corporate projects seek to achieve, including results vs targets. If included, such information would enhance the public relevance of corporate reports and results achieved and serve as additional evidence of the Company’s social responsibility.

While acknowledging the Report’s partially implemented approach to disclosing the Company’s performance based on plans vs actual results vs targets for the next period, we recommend that going forward the Company roll out this practice to the main focus areas and the most critical programmes.

The report mentions the efficiency and safety improvement programme as one of the Company’s strategic priorities. It also aims to increase labour productivity. It is advised that future reports cover changes in labour productivity, which is key to understanding performance both nationwide and company-wise. This is one of key metrics used by the Russian Union of Industrialists and Entrepreneurs (RSPP) and the Moscow Exchange in their ESG indices, specifically the RSPP Sustainable Development Vector index.

The Report covers the Company’s efforts to reduce the impact of its sea transportation operations on the Arctic ecosystems. Given its relevance, it is recommended going forward to disclose such performance indicators as solid (soot) emissions from sea transportation.

The Report describes how the Company implements digital solutions in its production and management processes. Assuming the strong potential as well as opportunities and risks related to information technologies, it is advised that future reports reflect the results thereof both in terms of higher output and labour productivity and in the context of a broader range of sustainable development matters (better labour quality, environmental safety, etc.).

The Report gives account of the Company’s framework for assessing the performance of social programmes. Given its importance for stakeholders, such information deserves a more detailed disclosure.

It is advisable to include specific examples of assessments performed as well as results and takeaways, especially for the most critical programmes.

To ensure the consistency of information contained in consecutive reports, it would be useful to keep covering the Company’s participation in major domestic and international initiatives announced in the previous periods. In particular, this applies to disclosing the nature of the Company’s cooperation with BASF to develop the green economy and the development status of the Charter for Suppliers, with updates to be included in the next report.

The Report provides sufficient information about the Company’s management approaches to sustainable development and its achievements across the main focus areas. In future reporting cycles, it is desirable to pay more attention to areas of concern, too. In particular, this applies to issues related to occupational health and diseases. To ensure a more complete disclosure, it would be useful to describe the Company’s specific initiatives to reduce injury and disease rates among its employees and contractors.

The Company holds regular stakeholder dialogues, customer satisfaction polls and personnel engagement surveys. The Report highlights that these efforts translated into management decisions. It would also be appropriate to add a description of how the management uses feedback from stakeholders, including the examples of decisions made thereon.

The RSPP Council on Non-Financial Reporting hereby takes a positive view of this Report, supports the Company’s commitment to responsible business practices, notes consistency in developing the reporting process, and confirms that Nornickel Group’s 2019 Sustainability Report has passed the public verification procedure.

RSPP Council on Non-Financial Reporting

Independent assurance report^*