Strategy
As part of the updated strategy,
Nornickel plans to cut SO2 emissions
by 85% at Kola MMC by 2021
and by 90% at Polar Division by 2025.
The key drivers behind Nornickel’s updated strategy are our new ambitious long-term targets for production growth to address increasing demand in our core markets and facilitate the shift to clean mobility.
Achievements
Horizons
In 2019, we extended our sustainability strategy to 2030, highlighting the key trends for the coming decade. These include unlocking the potential of our unique resource base through continued development of Tier I assets, support of global shift to clean mobility, and an ambitious green modernisation of facilities on the Taimyr and Kola Peninsulas.
Standarts
To enable a deeper SDG integration into our strategy, in 2019, we performed an in-depth analysis of SDGs and matched them, among other things, against our current strategy, material risks, goals and commitments, investments in relevant projects and best peer practices.
Projects
Investments in SDG-related projects accounted for 22.1% of the Group’s consolidated revenue for 2019.
Mission and values
The Company seeks to foster a group-wide corporate culture of mutual respect, trust and openness shared by every employee. This will help us effectively implement our strategy based on sustainable development principles.* 102-16
Our mission
Through the efficient use of natural resources and equity, we supply mankind with non-ferrous metals, which make the world a more reliable place to live in and help people realise their aspirations for development and technological progress.
Nornickel’s corporate values
Reliability
Ability to address any challenges
to ensure success for the business
Growth
Effective production ramp-up and upgrade,
leverage of groundbreaking technologies
and development of our people
Collaboration
Commitment and ability of our employees
to achieve goals and objectives through teamwork
Professionalism
Ability to ensure a sustainably strong performance
Responsibility
Desire to honour our commitments
and take on responsibility for our decisions
Efficiency
Delivering against our targets
in due time and at minimum cost
Corporate strategy
Adopted in 2013, our growth strategy primarily aims to unlock the resource potential of the Taimyr and Kola Peninsulas, improve the Company’s operating efficiency and raise the quality of investment and capital management.
In 2013–2017, we ran a number of strategic initiatives that fundamentally changed the Company’s technological landscape.
In 2017, we completed the first cycle of our development strategy. As a result, Polar Division upgraded dramatically its concentration facilities and reconfigured its metal production processes, with Nickel Plant shut down. This significantly reduced the Company’s environmental footprint in the region.
In 2018, we reaffirmed our ambition to grow further as an advanced, efficient and environmentally responsible company and presented Nornickel’s strategic priorities in sustainable development and growth areas for the medium and long terms.
In 2019, we extended our sustainability strategy to 2030, highlighting the key trends for the coming decade. These include unlocking the potential of our unique resource base though continued development of Tier I assets, support of global shift to clean mobility, and an ambitious green modernisation of facilities on the Taimyr and Kola Peninsulas*.
Strategic priorities
The next development stage will centre around an unprecedented environmental initiative seeking a staged adoption of the best SO2 capturing practices and transition to green production. We are developing a programme to take into account climate change. In particular, it will help us select climate scenarios, develop approaches and assess risks and opportunities affecting our operations, design relevant management initiatives, evaluate our climatic impact, and embed key non-financial risks into strategic planning. We will also continue working towards the migration to new international sustainability reporting standards and enhancing the quality of climate change-related disclosures.
The Board of Directors reviews climate risks while discussing the Company’s Environmental Development Framework and progress reports on major investment projects and treats them as a priority in setting Nornickel’s targets and development strategy.
1. Production growth
Strategic goals:
- accelerated output growth
- expanding the long-term investment programme
Targets:
- a 75–150%* increase in mining volumes on the Taimyr Peninsula
- stepping up metal output (2030+)*
2. Comprehensive environmental programme
Strategic goals:
- dramatic reduction of sulphur dioxide emissions
- maintaining the lowest-in-class carbon footprint
Targets:
- Reduction of SO2 emissions*
Polar Division
By 2023 by 45%
By 2025 by 90%
By 2030 by 95%+
Kola site
By 2021 by 85%
Contribution to the global agenda for sustainable development
The key driver behind Nornickel’s updated strategy are our new ambitious long-term targets for production growth to address increasing demand in our core markets and facilitate the shift to clean mobility. The Company will continue to expand its presence in new market segments and industries that are likely to generate demand for its products in the future. One of such fast growing industries is production of materials for electric vehicles and batteries.
Thanks to our diligent focus on strategy execution over the last six years and favourable commodity market trends, we were able to deliver one of the industry’s highest shareholder returns. Now is the time to take the next step towards realising even greater ambitions, both in terms of business growth and environmental protection. We are confident that Nornickel will play a vital role in global transitioning to green economy, in particular to clean vehicles. In this context, we are set to make our own assets increasingly green to respond to this new mindset.
Vladimir Potanin
President and Chairman
of MMC Norilsk Nickel Management Board
Clean mobility 2030
megatrends
- Growing manufacturing of autocatalyst-loaded vehicles (including hybrids)
- Tightening of emission standards.
- Growing number of electric vehicles
Nornickel’s potential to support the advance
of low-carbon economy through 2030
Supplying sufficient resource to produce:
- 25–40 mln PGM-loaded autocatalysts*
K
Potential reduction of air pollutants by 170—270 mt*
3.5–5.5 mln nickel-rich EV battery packs*
K
Potential reduction of CO2 emissions by 50—100 mt*
Efficiency programme
Our mid-term strategic priority is the efficiency and safety improvement programme rolled out across the entire production chain.
The programme aims at boosting performance, increasing labour productivity, enhancing industrial safety and transforming corporate culture.
In 2018–2019, the Company implemented a number of milestone projects:
- roll-out of advanced mine planning, including simulation modelling;
- improving equipment utilisation rates;
- full-scale roll-out of digital control centres;
- continuous improvement programme in action with initiatives to increase equipment utilisation rates, debottleneck existing assets across the value chain, etc.
Key non-financial performance highlights in 2019:
- obtaining permission to launch Bystrinsky GOK, one of the Company’s most advanced, hi-tech eco-friendly facilities;
- replacing the fifth of the seven turbines at the Ust-Khantayskaya HPP as part of green modernisation;
- maintaining injury rates below the average among global mining peers and the Company’s five-year average.
Sustainability approaches
When working towards its strategic goals, Nornickel seeks to align its approaches with the key sustainability principles:
- unconditional respect for human rights;
- comprehensive measures to support indigenous peoples of the North;
- lower impact on the climate;
- support of low-carbon economy.
Nornickel considers social responsibility and commitment to the principles of sustainable development as key operational priorities for business development, community and investor relations, and environmental impact management. 103-2
The Company became one of the first Russian companies to sign up, in 2005, to the Social Charter of the Russian Business adopted by the Russian Union of Industrialists and Entrepreneurs (RSPP). In 2016, MMC Norilsk Nickel joined the UN Global Compact, which marked the transition to a new strategic development cycle.
Nornickel’s support for sustainable development initiatives and standards 102-12 102-13
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Standard/initiative |
Nornickel |
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UN and the International Labour Organisation conventions |
Declaring support and aligning its by-laws accordingly |
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UN Global Compact |
Supporting officially |
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National Global Compact Network Association (Russia) |
Member |
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Sustainable Development Goals of the UN 2030 Agenda |
Declaring support and aligning governance practices accordingly |
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ISO 14001:2015 |
Compliance of MMC Norilsk Nickel, Gipronickel Institute (ISO 9001:2015), Kola MMC, and Norilsk Nickel Harjavalta management systems with the standards |
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OHSAS 18001:2007 / ISO 45001:2018 |
Compliance of MMC Norilsk Nickel and Norilsk Nickel Harjavalta management systems with the standard |
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ISO 26000:2010 |
Declaring support and providing reports |
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GOST R ISO 26000-2012 |
Declaring support and providing reports |
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AA1000AP, AA1000SES |
Declaring support and providing reports |
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International Platinum Group Metals Association (IPA) |
Member, co-chair of the IPA Security Committee |
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International Information Security Research Consortium |
Member |
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Nickel Institute |
Member Since 2017, Nornickel’s Head of Marketing has been chairing the Institute’s Board of Directors. |
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World Wildlife Fund (WWF) |
Ranking among the leading environmentally responsible mining companies in Russia according to the WWF |
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National Association of International Information Security |
Member and supporter |
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Security Charter for Critical Industrial Facilities |
Charter developer, member and signatory |
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FTSE4Good Index |
Inclusion in the FTSE4Good Emerging Index |
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Sustainalytics |
Assigned independent ESG ratings |
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Social Charter of the Russian Business |
Member and signatory |
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Anti-Corruption Charter of the Russian Business |
Member and signatory |
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RSPP Responsibility and Transparency index and Sustainable Development Vector index |
One of the index leaders (in 2014–2019) |
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RSPP Committee on Corporate Social Responsibility and Demographic Policies |
Member |
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Environmental Charter of the Krasnoyarsk Territory |
Signatory |
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GRI Community 
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Organisational member |
Nornickel and UN Sustainable Development Goals
In 2015, the United Nations adopted the 2030 Agenda for Sustainable Development setting 17 Sustainable Development Goals (SDG) for the global community and 169 associated targets. Since the SDGs cannot be achieved by the efforts of only governments or public organisations, the UN encourages businesses to focus on the SDGs in their operations and report on their progress.
We fully support the 2030 Agenda for Sustainable Development and the UN SDGs, consistently integrating them into our by-laws and everyday practices. In our public and non-financial reports for 2016–2019, we disclosed key sustainability targets and performance against relevant UN SDGs. 103-2
Nornickel’s products as enablers of achieving UN SDGs
Nornickel is a leader of the Russian metals and mining industry. In this role, we meet Russia’s and global economy’s growing need for materials to manufacture products that can boost the quality of life. 102-15
Supplied to 37 countries, our products are in strong demand in power generation, electronics, transportation, mechanical engineering, construction, consumer goods, healthcare, food, chemical and other industries.
Platinum group metals (PGM) are used as catalysts to manufacture key chemicals, including agricultural fertilisers, which are essential for supplying the planet’s growing population with foods. Platinum and palladium along with their co-metals are widespread in medicine, particularly in its forefront areas such as oncology and production of pacemakers and other implants. The majority of our metals can be found in the most common electronic products, and PGM plays a vital part in reducing air pollutant emissions. It will be impossible to reduce air pollution as planned or combat climate change as set out in the Paris Agreement unless hybrid cars with PGM catalysts gain popularity in the coming decades.
Development of renewable energy is also contingent on stainless steel, nickel alloys and fibreglass as key structural materials used in wind and solar farms, as well as on conductive pastes for solar cell surfaces. That said, high-quality stainless steel cannot be made without nickel, and no conductive paste for solar batteries is produced without silver. Apart from renewable generation, metals produced by Nornickel allow for an eco-friendly energy storage. The technology uses nickel- and cobalt-based batteries or gases (hydrogen or methane) whose storage and processing are dependent on PGM.
Hence, our products make a great contribution to the green economy worldwide, which, apart from propelling us towards sustainable development goals, creates new opportunities and advantages for Nornickel as a leading PGM producer.
Nornickel’s contribution towards the achievement of the UN SDGs
In 2018, we reviewed our key projects and initiatives, aligning them with the UN SDGs. The review included a survey of stakeholders, which identified 12 SDGs of the greatest importance for the Group and linked them to the most relevant projects and programmes. In 2019, we strengthened our effort to enable a deeper SDG integration into our strategy. To this effect, we performed an in-depth analysis of SDGs and matched them, among other things, against our current strategy, material risks, goals and commitments, investments in relevant projects and best peer practices. As a result, we identified 6 most relevant SDGs:
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Goal 3. Good health and well-being; Goal 8. Decent work and economic growth; Goal 9. Industry, innovation and infrastructure; Goal 11. Sustainable cities and communities; Goal 12. Responsible consumption and production; Goal 13. Climate action. |
Nornickel’s key projects linked to SDGs in 2019
SDGs |
Projects |
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Correlation between current costs and capital expenditures associated with SDG projects in 2019
Share of current costs and capital expenditures associated with SDG projects in consolidated revenue for 2019
Number of SDG projects
Investments in SDG-related projects accounted for 22.1% of the Group’s consolidated revenue for 2019.
Nornickel’s contribution towards the achievement of UN SDGs 103–2
| UN SDG | By-laws related to SDG integration | Key results and plans | Report sections describing specific SDG-related projects and initiatives |
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Relevant targets: 3.4. 3.6. 3.9. |
Occupational Health and Safety Policy Environmental Impact Assessment Policy Collective bargaining agreement Insurance Policy Interregional cross-industry agreement for the key players of the copper and nickel and supporting industries |
Achievements of 2019: ca. 24,000 employees and their family members covered by health improvement and wellness programmes 71,500 employees of the Group companies covered by voluntary health insurance plans Plans for 2020: 24,200 employees and their family members to be covered by health improvement and wellness programmes 73,800 employees of the Group companies to be covered by voluntary health insurance plans |
For more details, please see the Labour Relations section. |
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Relevant targets: 4.4. |
HR management strategy Equal Opportunities Programme |
Achievements of 2019: 90,814 employee-sessions held as part of Nornickel’s staff training, retraining, professional development and improvement initiatives 350 university students covered by Nornickel’s corporate scholarship programmes 71 educational projects supported under the World of New Opportunities programme (with a grant fund of RUB 242.5 mln) Plans for 2020: 430 university students to be covered by Norilsk Nickel’s corporate scholarship programmes 56 educational projects to be supported under the World of New Opportunities programme (with a grant fund of RUB 208.5 mln) |
For more details, please see the Labour Relations section and the Regional Development section. |
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Relevant targets: 6.3. |
Environmental Policy |
Achievements of 2019: 56.3% of wastewater treated to standard quality at treatment facilities 87.2% of total used water recycled and reused |
For more details, please see the Environment section. |
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Relevant targets: 7.1. 7.3. |
Mission and values Strategy Renewable Energy Sources Policy |
Achievements of 2019: 3,184 TJ fuel and energy savings resulting from energy consumption reduction and energy efficiency improvement initiatives 10 MW increase in installed generation and/or transformer capacities Plans for 2020: 10 MW increase in installed generation and/or transformer capacities |
For more details, please see the Environment section. |
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Relevant targets: 8.2. 8.4. 8.5. 8.8. |
Human Rights Policy Working Conditions Policy Occupational Health and Safety Policy Freedom of Association Policy Policy Regarding Support for Small and Medium Enterprises Environmental Policy Environmental Impact Assessment Policy |
Achievements of 2019: RUB 118,800 average monthly salary 83% of employees covered by collective agreements 26 social facilities commissioned after renovation 0.32 LTIFR Plans for 2020: 89 social facilities to be commissioned after renovation At least a 67% reduction in total injuries vs the 2013 level |
For more details, please see the Labour Relations section. |
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Relevant targets: 9.1. 9.4. 9.5. |
Mission and values Strategy Local Community Relations Policy Environmental Policy Environmental programme |
Achievements of 2019: 2.2 t of air pollutant emissions / RUB mln of consolidated revenue (down 16% y-o-y) |
For more details, please see the Environment section, the Innovations section, and the Regional Development section. |
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Relevant targets: 10.7. |
Equal Opportunities Programme |
Achievements of 2019: RUB 398.4 mln of complementary corporate pensions paid to former employees 496 apartments purchased to relocate people to regions with better climate and socioeconomic conditions 352 people covered by the new employee relocation assistance programme Plans for 2020: RUB 521,2 mln of complementary corporate pensions to be paid to former employees 542 apartments to be purchased to relocate people to regions with better climate and socioeconomic conditions |
For more details, please see the Labour Relations section and the Stakeholder Engagement section. |
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Relevant targets: 11.6. |
Environmental Policy Environmental programme Environmental Impact Assessment Policy |
Achievements of 2019: RUB 1.5 bn invested in the Sulphur Programme Plans for 2020: RUB 21.6 bn to be invested in the Sulphur Programme |
For more details, please see the Environment section. |
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Relevant targets: 12.2. 12.4. 12.5. 12.6. |
Information Policy Regulation Biodiversity Conservation Policy Environmental Policy Environmental programme |
Achievements of 2019: 36 mt of waste generated in 2019, with 97% of non-hazardous class 5 waste 62.5% of waste recycled in-house |
For more details, please see the Environment section. |
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Mission and values Strategy Renewable Energy Sources Policy |
Achievements of 2019: Volume of GHG emissions (Scope 1 and 2) — 9.9 mt of CO2 equivalent (down 1.7% y-o-y) Share of renewable energy in total electricity consumption — 44.5% (up 0.9 p.p. y-o-y) Plans for 2020: Volume of GHG emissions (Scope 1 and 2) — 10 mt of CO2 equivalent |
For more details, please see the Environment section |
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Relevant targets: 15.1. 15.5. |
Environmental Policy Environmental Impact Assessment Policy Biodiversity Conservation Policy |
Achievements of 2019: RUB 11 mln of financial aid allocated to nature reserves across the Company’s footprint Plans for 2020: RUB 9.6 mln of financial aid to be allocated to nature reserves across the Company’s footprint |
For more details, please see the Environment section. |
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Relevant targets: 16.5. |
Anti-Corruption Policy |
Achievements of 2019: No confirmed incidents of corruption* 100% of operating business units are implementing anti-corruption activities 100% of the Norilsk Nickel Group’s employees are made aware of its anti-corruption practices Plans for 2020: The Company is committed to preventing corruption 100% of operating business units will be implementing anti-corruption activities 100% of the Norilsk Nickel Group’s employees will be aware of its anti-corruption practices |
For more details, please see the Anti-corruption section. |
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Relevant targets: 17.16. |
Environmental Policy Environmental Impact Assessment Policy |
Achievements of 2019: 23 working bodies (committees, expert and working groups, etc.) established by public organisations and government authorities where Norilsk Nickel Group is represented 18,000 volunteers supported by the Norilsk Nickel Group Reporting on the progress resulting from accession to the UNGC Plans for 2020: Reporting on the progress resulting from accession to the UNGC |
For more details, please see the Statement of the President and Chairman of the Management Board section and the Regional Development section. |