Carbon Disclosure Project 2009 Russia 50

On behalf of 475 investors with assets of US $55 trillion

Carbon Disclosure Project [email protected] +44 (0) 20 7970 5660 www.cdproject.net Carbon Disclosure Project CDP Signatories 2009

Carbon Disclosure Project 2009 CDP Members 2009 CDP Signatories 2009 BlackRock US DB Advisors Deutsche Asset Management Generation Investment Germany Blue Marble Capital Management Limited Canada Management UK 475 institutional investors with assets DEFO – Deutsche Fonds für BMO Financial Group Canada This report and all of the public of over US$55 trillion were signatories Immobilienvermögen GmbH Germany responses from corporations are Grupo Santander Brasil Brazil BNP Paribas Investment Partners France to the CDP 2009 information request DEGI Deutsche Gesellschaft für available to download free of charge MEMBER 2009 Boston Common Asset Management, LLC US Immobilienfonds mbH Germany ING Netherlands dated 1st February 2009, including: from www.cdproject.net. BP Investment Management Limited UK Deka FundMaster Investmentgesellschaft mbH Germany ABRAPP - Associação KLP Insurance Norway Brasilprev Seguros e Previdência S/A. Brazil Deka Investment GmbH Germany Brasileira das Entidades Aachener Grundvermögen British Columbia Investment Management Legg Mason, Inc. US Kapitalanlagegesellschaft mbH Germany Corporation (bcIMC) Canada DekaBank Deutsche Girozentrale Germany Fechadas de Previdência Aberdeen Asset Managers UK Libra Fund, L.P. US BT Financial Group Australia Deutsche Bank Germany Complementar Brazil Acuity Funds Canada BT Investment Management Australia Deutsche Postbank Privat Investment Kapitalanlagegesellschaft mbH Germany London Pensions Fund Addenda Capital Inc. Canada Busan Bank South Korea Aegon N.V. Netherlands Development Bank of Japan Japan Advanced Investment Partners US CAAT Pension Plan Canada Authority UK Development Bank of the Philippines (DBP) AIG Investments US Advantage Asset Managers (Pty) Ltd South Africa Caisse de dépôt et placement du Québec Canada Philippines Mistra, Foundation for Aegon N.V. Netherlands Caisse des Dépôts France APG Investments Dexia Asset Management France Aeneas Capital Advisors US Caixa de Previdência dos Funcionários do Banco Strategic Environmental DnB NOR ASA Norway Netherlands AGF Management Limited Canada do Nordeste do Brasil (CAPEF) Brazil Research Sweden Domini Social Investments LLC US AIG Investments US Caixa Econômica Federal Brazil ASN Bank Netherlands DPG Deutsche Performancemessungs- Caixa Geral de Depósitos Portugal Mitsubishi UFJ Financial Alberta Investment Management Corporation Gesellschaft für Wertpapierportfolio mbh Germany (AIMCo) Canada California Public Employees’ ATP Group Denmark Group (MUFG) Japan East Sussex Pension Fund UK Alberta Teachers Retirement Fund Canada Retirement System US Economus Instituto de Seguridade Social Brazil Aviva Investors UK Morgan Stanley Investment Alcyone Finance France California State Teachers Retirement System US ELETRA – Fundação Celg de Seguros e California State Treasurer US AXA Group France Management US Allianz Group Germany Previdência Brazil Calvert Group US Altshuler Shacham LTD Israel Environment Agency Active Pension fund UK National Australia Bank Canada Pension Plan Investment Board Canada Bank of America Corporation AMP Capital Investors Australia Epworth Investment Management UK Canadian Friends Service Committee US Limited Australia AmpegaGerling Investment GmbH Germany Erste Group Bank AG Austria (Quakers) Canada APG Investments Netherlands Essex Investment Management, LLC US BBVA Spain Neuberger Berman US CAPESESP Brazil ARIA (Australian Reward Investment Alliance) Ethos Foundation Switzerland Australia Capital Innovations, LLC US BlackRock US Newton Investment Eureko B.V. Netherlands Arkitekternes Pensionskasse Denmark CARE Super Pty Ltd Australia Management Limited UK Eurizon Capital SGR Italy BP Investment Artus Direct Invest AG Germany Carlson Investment Management Sweden Evangelical Lutheran Church in Canada Pension Carmignac Gestion France Management Limited UK Northwest and Ethical ASB Community Trust New Zealand Plan for Clergy and Lay Workers Canada Catherine Donnelly Foundation Canada Investments LP Canada ASN Bank Netherlands Evli Bank Plc Finland Caisse de dépôt et Catholic Super Australia ATP Group Denmark F&C Management Ltd UK Cbus Superannuation Fund Australia placement du Québec Pictet Asset Management SA Australia and New Zealand Banking Group Faelba Brazil Limited Australia CCLA Investment Management Ltd UK Canada Switzerland FAELCE – Fundação Coelce de Seguridade Social Australian Ethical Investment Limited Australia Central Finance Board of the Brazil Methodist Church UK California Public Employees’ Rabobank Netherlands AustralianSuper Australia Fédéris Gestion d’Actifs France Ceres, Inc. US Retirement System US Robeco Netherlands Aviva Investors UK First Affirmative Financial Network US Cheyne Capital Management (UK) LLP UK Aviva plc UK First Swedish National Pension Fund (AP1) Sweden California State Teachers CI Mutual Funds’ Signature Advisors Canada Russell Investments UK AXA Group France FirstRand Ltd. South Africa CIBC Canada Retirement System US Baillie Gifford & Co. UK Fishman & Co. Israel Schroders UK Clean Yield Group, Inc. US Calvert Group US Bakers Investment Group Australia Five Oceans Asset Management Pty Limited Second Swedish National Banco Sweden ClearBridge Advisors, Socially Aware Investment Australia US Catholic Super Australia Banco Bradesco S.A Brazil Florida State Board of Administration (SBA) US Pension Fund (AP2) Sweden Close Brothers Group plc UK Banco de Galicia y Buenos Aires S.A. Argentina Folksam Sweden Colonial First State Global Asset Management CCLA Investment Fondaction CSN Canada Sompo Japan Insurance Inc. Banco do Brazil Brazil Australia Management Ltd UK Fonds de Réserve pour les Retraites – FRR France Japan Banco Santander, S.A. Spain Comite syndical national de retraite Bâtirente CIBC Canada Banesprev – Fundo Banespa de Seguridade Canada Fortis Bank Nederland Netherlands Standard Chartered PLC UK Social Brazil Commerzbank AG Germany Fortis Investments Belgium Daiwa Asset Sun Life Financial Inc. Bank of America Corporation US CommInsure Australia Forward Management, LLC US Management Co. Ltd Japan Bank Sarasin & Co, Ltd Switzerland Companhia de Seguros Aliança do Brasil Brazil Fourth Swedish National Pension Fund, (AP4) Canada Sweden Bank Vontobel Switzerland Compton Foundation, Inc. US Frankfurter Service Kapitalanlagegesellschaft Essex Investment Swiss Reinsurance Company BANKINTER S.A. Spain Connecticut Retirement Plans and Trust Funds US mbH Germany Management, LLC US Barclays Group UK Co-operative Financial Services (CFS) UK Switzerland FRANKFURT-TRUST Investment Gesellschaft BayernInvest Kapitalanlagegesellschaft mbH Corston-Smith Asset Management Sdn. mbH Germany Ethos Foundation Switzerland Germany Bhd. Malaysia The RBS Group UK Franklin Templeton Investment Services Gmbh BBC Pension Trust Ltd UK Folksam Sweden The Wellcome Trust UK Crédit Agricole Asset Management France Germany BBVA Spain Credit Suisse Switzerland Frater Asset Management South Africa Fortis Investments Belgium Zurich Cantonal Bank Bedfordshire Pension Fund UK Daegu Bank South Korea Friends Provident UK Switzerland Beutel Goodman and Co. Ltd Canada Daiwa Securities Group Inc. Japan Front Street Capital Canada

2 3 Carbon Disclosure Project CDP Signatories 2009

Fukoku Capital Management Inc Japan Infrastructure Development Finance Company MEAG Munich Ergo Asset Management GmbH Northern Trust US SEB Asset Management AG Germany The Joseph Rowntree Charitable Trust UK Ltd. (IDFC) India Germany Fundação AMPLA de Seguridade Social – Northwest and Ethical Investments LP Canada Second Swedish National Pension Fund (AP2) The Local Government Pensions Insitution (LGPI) Brasiletros Brazil ING Netherlands MEAG Munich Ergo Sweden (keva) Finland Kapitalanlagegesellschaft mbH Germany Oddo & Cie France Fundação Atlântico de Seguridade Social Brazil Inhance Investment Management Inc Canada Seligson & Co Fund Management Plc Finland The Presbyterian Church in Canada Canada Meeschaert Gestion Privée France Old Mutual plc UK Fundação Banrisul de Seguridade Social Brazil Insight Investment Management (Global) Ltd UK Sentinel Funds US The RBS Group UK Meiji Yasuda Life Insurance Company Japan OMERS Administration Corporation Canada Fundação CEEE de Seguridade Social – Instituto de Seguridade Social dos Correios e SERPROS Fundo Multipatrocinado Brazil The Russell Family Foundation US ELETROCEEE Brazil Telégrafos- Postalis Brazil Merck Family Fund US Ontario Teachers Pension Plan Canada Service Employees International Union The Shiga Bank, Ltd. Japan Opplysningsvesenets fond Fundação Codesc de Seguridade Social – Instituto Infraero de Seguridade Social – Mergence Africa Investments (Pty) Limited Benefit Funds US FUSESC Brazil INFRAPREV Brazil South Africa (The Norwegian Church Endowment) Norway The Standard Bank of South Africa Limited Seventh Swedish National Pension Fund (AP7) South Africa Oregon State Treasurer US Fundação de Assistência e Previdência Social do Insurance Australia Group Australia Meritas Mutual Funds Canada Sweden The Sustainability Group at the Loring, BNDES – FAPES Brazil Orion Asset Management LLC US Internationale Kapitalanlagegesellschaft mbH Metzler Investment Gmbh Germany Shinhan Bank South Korea Wolcott & Coolidge Office US Fundação Forluminas de Seguridade Social – Germany Midas International Asset Management Pax World Funds US FORLUZ Brazil Shinhan BNP Paribas Investment Trust The Travelers Companies, Inc. US Investec Asset Management UK South Korea PBU – Pension Fund of Early Childhood Teachers Management Co., Ltd South Korea The United Church of Canada – General Council Fundação Promon de Previdência Social Brazil Denmark Itaú Unibanco Banco Múltiplo S.A. Brazil Miller/Howard Investments US Shinkin Asset Management Co., Ltd Japan Canada Fundação São Francisco de Seguridade Social J.P. Morgan Asset Management US Mirae Investment Asset Management Pension Fund for Danish Lawyers and Economists Brazil Shinsei Bank Limited Japan The University of Edinburgh Endowment Fund UK South Korea Denmark Janus Capital Group Inc. US Fundação Vale do Rio Doce de Seguridade Social Siemens Kapitalanlagegesellschaft mbH Germany The Wellcome Trust UK Mistra, Foundation for Strategic Pension Protection Fund UK – VALIA Brazil Jarislowsky Fraser Limited Canada Signet Capital Management Ltd Switzerland Third Swedish National Pension Fund (AP3) Environmental Research Sweden Pensionskassen for Jordbrugsakademikere FUNDIÁGUA - Fundação de Previdência da Jubitz Family Foundation US Sweden Mitsubishi UFJ Financial Group (MUFG) Japan og Dyrlæger Denmark Skandia Nordic Division Sweden Companhia de Saneamento e Ambiental do Jupiter Asset Management UK Threadneedle Asset Management UK Distrito Federal Brazil Mitsui Sumitomo Insurance Co.,Ltd. Japan PETROS – The Fundação Petrobras SMBC Friend Securities Co., LTD Japan de Seguridade Social Brazil Tokio Marine & Nichido Fire Insurance Co., Ltd. K&H Investment Fund Management/K&H Smith Pierce, LLC US Gartmore Investment Management Ltd UK Mizuho Financial Group, Inc. Japan Japan Befektetési Alapkezelö Zrt Hungary PFA Pension Denmark SNS Asset Management Netherlands Generation Investment Management UK Mn Services Netherlands Toronto Atmospheric Fund Canada KB Kookmin Bank South Korea PGGM Netherlands Social(k) US Genus Capital Management Canada Monega Kapitalanlagegesellschaft mbH Germany Trillium Asset Management Corporation US KBC Asset Management NV Belgium Phillips, Hager & North Investment Gjensidige Forsikring Norway Morgan Stanley Investment Management US Société Générale France KCPS and Company Israel Management Ltd. Canada Triodos Bank Netherlands GLG Partners LP UK Motor Trades Association of Australia Sompo Japan Insurance Inc. Japan KDB Asset Management Co., Ltd. South Korea PhiTrust Active Investors France TrygVesta Denmark Superannuation Fund Pty Ltd Australia Goldman Sachs & Co. US Souls Funds Management Limited Australia Kennedy Associates Real Estate Counsel, LP US Pictet Asset Management SA Switzerland UBS AG Switzerland MP Pension – Pensionskassen for Magistre Governance for Owners UK SPF Beheer bv Netherlands KfW Bankengruppe Germany og Psykologer Denmark Pioneer Alapkezelö Zrt. Hungary Unibanco Asset Management Brazil Government Employees Pension Fund (“GEPF”), Sprucegrove Investment Management Ltd Canada Kibo Technology Fund South Korea Munich Re Group Germany Pioneer Investments UniCredit Group Italy Republic of South Africa South Africa Kapitalanlagegesellschaft mbH Germany Standard Chartered PLC UK KLP Insurance Norway Mutual Insurance Company Union Asset Management Holding AG Germany Green Cay Asset Management Bahamas Pension-Fennia Finland PKA Denmark Standard Life Investments UK Korea Investment Trust Management Co., Ltd. Union Investment Institutional GmbH Germany Green Century Funds US Portfolio 21 Investments US State Street Corporation US South Korea Natcan Investment Management Canada Union Investment Privatfonds GmbH Germany Groupe Investissement Responsable Inc. Canada Portfolio Partners Australia Statewide Superannuation Trust Australia KPA Pension Sweden Nathan Cummings Foundation, The US Union Investment Service Bank AG Germany GROUPE OFI AM France Porto Seguro S.A. Brazil Storebrand ASA Norway Kyobo Investment Trust Management Co., Ltd. National Australia Bank Limited Australia Union PanAgora Asset Management GmbH GrowthWorks Capital Ltd. Canada South Korea National Bank of Canada Canada PPM Premiepensionsmyndigheten Sweden Strathclyde Pension Fund UK Germany Grupo Banco Popular Spain La Banque Postale Asset Management France National Bank of Kuwait Kuwait PRECE Previdência Complementar Brazil Stratus Group Brazil UniSuper Australia Grupo Santander Brasil Brazil La Financiere Responsable France National Grid Electricity Group of the PREVI Caixa de Previdência dos Funcionários Sumitomo Mitsui Banking Corporation Japan Unitarian Universalist Association US do Banco do Brasil Brazil Gruppo Monte Paschi Italy LBBW – Landesbank Baden-Württemberg Electricity Supply Pension Scheme UK Sumitomo Mitsui Card Company, Limited Japan United Methodist Church General Board of Germany Principle Capital Partners Limited UK Pension and Health Benefits US Guardian Ethical Management Inc Canada National Grid UK Pension Scheme UK Sumitomo Mitsui Finance & Leasing Co., Ltd LBBW Asset Management GmbH Germany Guardians of New Zealand Superannuation National Pensions Reserve Fund of Ireland Ireland PSP Investments Canada Japan United Nations Foundation US New Zealand LD Lønmodtagernes Dyrtidsfond Denmark Natixis France QBE Insurance Group Limited Australia Sumitomo Mitsui Financial Group Japan Universal Investment Gesellschaft mbH Germany Hang Seng Bank Hong Kong Legal & General Group plc UK Needmor Fund US Q Capital Partners South Korea Sumitomo Trust & Banking Japan Universities Superannuation Scheme (USS) UK HANSAINVEST Hanseatische Investment GmbH Legg Mason, Inc. US Nest Sammelstiftung Switzerland Railpen Investments UK Sun Life Financial Inc. Canada Vancity Group of Companies Canada Germany Lend Lease Investment Management Australia Neuberger Berman US Rathbones/Rathbone Greenbank Investments UK Superfund Asset Management GmbH Germany VERITAS SG INVESTMENT TRUST GmbH Germany Harrington Investments US Libra Fund, L.P. US New Alternatives Fund Inc. US Real Grandeza Fundação de Previdência e Svenska Kyrkan, Church of Sweden Sweden Vermont State Treasurer US Hastings Funds Management Limited Australia Light Green Advisors, LLC US Assistência Social Brazil New Jersey Division of Investment US Swedbank Sweden VicSuper Pty Ltd Australia Hazel Capital LLP UK Living Planet Fund Management Company S.A. Rei Super Australia New Mexico State Treasurer US Swiss Reinsurance Company Switzerland Victorian Funds Management Corporation Health Super Fund Australia Switzerland Rhode Island General Treasurer US Australia New York City Employees Retirement System US Swisscanto Holding AG Switzerland Helaba Invest Kapitalanlagegesellschaft mbH Local Authority Pension Fund Forum UK RLAM UK Visão Prev Sociedade de Previdencia Syntrus Achmea Asset Management Netherlands Germany New York City Teachers Retirement System US Complementar Brazil Local Government Superannuation Scheme Robeco Netherlands TD Asset Management Inc. and TDAM USA Inc. Henderson Global Investors UK Australia New York State Common Retirement Fund Waikato Community Trust Inc New Zealand (NYSCRF) US Rose Foundation for Communities and Canada Hermes Fund Managers UK Local Super SA-NT Australia the Environment US Walden Asset Management, a division of Boston Teachers Insurance and Annuity Association – Newton Investment Management Limited UK Trust and Investment Management Company US HESTA Super Australia Lombard Odier Darier Hentsch & Cie Switzerland Royal Bank of Canada Canada College Retirement Equities Fund NFU Mutual Insurance Society UK (TIAA-CREF) US Warburg-Henderson Kapitalanlagegesellschaft Hospitals of Ontario Pension Plan (HOOPP) London Pensions Fund Authority UK RREEF Investment GmbH Germany für Immobilien mbH Germany Canada NH-CA Asset Management South Korea Tempis Capital Management South Korea Lothian Pension Fund UK Russell Investments UK West Yorkshire Pension Fund UK HSBC Holdings plc UK Nikko Asset Management Co., Ltd. Japan Terra Forvaltning AS Norway Macif Gestion France SAM Group Switzerland Hyundai Marine & Fire Insurance Co, Ltd Nissay Asset Management Corporation Japan WestLB Mellon Asset Management (WMAM) Macquarie Group Limited Australia TfL Pension Fund UK South Korea Sanlam Investment Management South Africa Germany Nordea Investment Management Sweden Magnolia Charitable Trust US The Bullitt Foundation US IDBI Bank Limited India Santa Fé Portfolios Ltda Brazil Westpac Investment Management Australia Norfolk Pension Fund UK Maine State Treasurer US The Central Church Fund of Finland Finland Ilmarinen Mutual Pension Insurance Company Sauren Finanzdienstleistungen Germany Winslow Management Company US Norges Bank Investment Management (NBIM) Finland Man Group plc UK The Collins Foundation US Norway Savings & Loans Credit Union (S.A.) Limited. WOORI BANK South Korea Impax Group plc UK Maple-Brown Abbott Limited Australia Australia The Co-operators Group Ltd Canada Norinchukin Zenkyouren Asset YES BANK Limited India Schroders UK The Daly Foundation Canada Industrial Bank China Marc J. Lane Investment Management, Inc. US Management Co., Ltd Japan York University Pension Fund Canada Scotiabank Canada The Dreyfus Corporation US Industry Funds Management Australia Maryland State Treasurer US North Carolina State Treasurer US Youville Provident Fund Inc. Canada Scottish Widows Investment Partnership UK The Japan Research Institute, Limited Japan McLean Budden Canada Northern Ireland Local Government Officers’ Zurich Cantonal Bank Switzerland Superannuation Committee (NILGOSC) UK SEB Sweden

4 5 Carbon Disclosure Project CDP Signatories 2009

4 5 Carbon Disclosure Project

Foreword by Evgeny Shvarts, WWF-Russia Ten years ago WWF-Russia came to the then revolutionary conclusion that big businesses could play a bigger role than the state in promoting environmentally responsible principles in the post-Soviet era. Despite the fact that this was in contrast with the general public opinion, WWF Russia expressed that businesses could in certain cases even be the champions and accelerators of green economic development. Such corporate leadership can be motivated by the fundamental market principle of supply and demand: Companies can only succeed and continue to exist if consumers buy their products. With consumers growing increasingly aware of the environmental properties of the products they buy – par- ticularly in the important developed markets – companies are compelled to respond and adjust. The development and growth of the Carbon Disclosure Project (CDP) is another illustration of the trend for environmentally responsible business development. As a voluntary collaboration of international investors, CDP requests corporate data on carbon performance. This data allows investors to analyze and discriminate good carbon management practice, and helps inform investment decisions by CDP’s signatory investors. WWF applauds the first Russian companies that participated in the CDP process in 2009. Their leadership in comprehensive disclosure of GHG emissions data and climate strategy is encouraging for investors and inspiring for other Russian companies. This first step in carbon reporting in Russia is very important. Looking at WWF-Russia’s ten years of ex- perience in working with big businesses it will presumably take another three to five years until the majority of Russia’s top companies will pick up on the trend and recognize low-carbon development and ecological responsibility as a corner stone of competitiveness. This competitiveness relates to attracting and retaining both, consumers/clients as well as investors. Companies with a responsible strategy and a sound environmental approach will in the long run be rewarded as winners. Participating in and col- laborating with environmental initiatives can provide significant benefits to forward-looking businesses. In turn, companies that ignore the signs of our times risk to fall behind and be at a disadvantage in the medium- to long-run. In support of broad-based corporate carbon disclosure, the World Wildlife Fund (WWF) has become a global partner to CDP. For the Russian project we have great hopes that the number of companies responding to CDP will increase considerably in 2010, and trust that this new, progressive model of disclosure and corporate culture will further increase Russia’s ability to attract investments.

Evgeny Shvarts, Ph.D., Dr.Sc. Director of Conservation Policy WWF-Russia

6 Carbon Disclosure Project Executive Summary

As global understanding of climate Among the 50 Russian companies by management and work towards change and the associated risks and CDP approached, six responded emissions reductions. Among the opportunities continues to grow, submitting a completed question- respondents, four say they already investors are increasingly demanding naire, and another three provided have a GHG emissions and/or energy corporate disclosure on carbon perfor- other information (see Table 1). This reduction plan in place, though only mance. The Carbon Disclosure Project result is very positive in the first year of two disclosed an established emis- (CDP) requests such information on CDP in Russia and shows that some sions and/or energy reduction target. behalf of investment institutions and leading companies are already engag- As companies around the world awake provides an established and reputable ing with carbon issues. Environmental to the opportunities related to more international process of corporate and carbon reporting in Russia can be carbon-efficient processes, it can be reporting on climate change impacts. expected to grow in prominence from expected that more and more Russian In 2009, backed by 475 signatory in- here on as has been experienced by companies will follow the example of vestors managing assets worth US$55 CDP in many other major economies these two leaders. trillion and with the support of WWF- over the last ten years. Russia’s Trade & Investment team, Carbon reporting provides an oppor- CDP wrote to Russia’s leading com- In their submissions to CDP 2009, tunity for companies to systematically panies for the first time. The Russian four of the six Russian respondents review their carbon performance and CDP covers the largest 50 companies indicated that they considered climate identify strategic challenges presented on the Russian Trading System (RTS) change to present some form of op- by climate change. Companies around stock exchange (RTS 50). The results portunity for their businesses. In turn, the world have in this way benefited and company responses are sum- only three companies felt that they from CDP’s global system for car- marised in this first CDP Russia report, were exposed to risks from climate bon reporting, while at the same time together with a contextual review of change. The respondents mainly providing key information to investors climate change trends in Russia. referred to physical and other com- that consider corporate carbon perfor- mercial risks, while regulatory risks are mance in their investment decisions. The CDP 2009 information request not currently perceived as significant. Considering the trends of this first itera- focused on four primary areas of cor- For opportunities, on the other hand, tion of CDP in Russia, Russian com- porate climate change strategy: the most frequently identified type was panies appear to appreciate the value regulatory. behind this process. An increased • Risks and opportunities associated participation rate among Russia’s lead- with climate change Three of the six Russian respondents ing companies is expected for 2010 provided GHG emissions data and and future years. • Greenhouse gas emissions ac- proved to have a good understanding counting of their direct climate impact. Measur- • Carbon Performance ing emissions is generally considered the first step for a company in ad- • Governance dressing its climate impact, followed

Table 1 - Companies answering the CDP 2009 information request or providing other information

Companies answering the CDP 2009 information request Center Telecom Federal Grid Company of Unified Energy System Gazprom Irkuts Power Generation and Distribution Company (Irkutskenergo) Novatek Tatneft Companies providing other information in response to the CDP 2009 information request Polyus Raspadskaya OJSC Rosneft

7 Carbon Disclosure Project

CDP Members & Contents Signatories 2009 2 Foreword by Evgeny Shvarts, WWF Russia 6 Executive Summary 7 1 Overview of CDP 9 2 The Russian perspective on international climate change developments 12 3 CDP in Russia – Background & Results 14 Appendix 26 Glossary of Terms

8 Carbon Disclosure Project 1 Overview of CDP Overview of CDP of CDP

Table 1: Key trends snapshot3 11 This table outlines some of the key findings from CDP 2009 by geography and industry data-set.4 5

The turmoil in the financial markets This year has seen considerable CDP now works with more than 55 and the global economy over the last growth in responses from emerging organizations including Dell, Unilever, year has highlighted the importance economies such as China, South Africa Wal-Mart Stores and departments of effective disclosure and high-quality and Korea, and CDP expanded in of the British Government to measure risk management. The financial crisis Russia in 2009 where major companies and assess climate change risk and of 2008 suggests we need to better such as Gazprom and Novatek opportunity through the supply chain. understand systemic risks that can reported. CDP’s reach continues to More than 800 companies report their cause significant de-stabilizing impacts grow with the launch of the first CDP climate change strategies through in the global economy. Climate change Europe report, covering the largest 300 the CDP system to their customers Sample: geography/

number of companies % of sample answering CDP 2009 % of sample answering CDP6 (2008) level with Board % of responders for climate change responsibility seeing % of responders risks regulatory seeing regulatory % of responders opportunities seeing physical risk % of responders seeing physical % of responders opportunities disclosing % of responders Scope 1 emissions disclosing % of responders Scope 2 emissions externally % of responders verifying emissions disclosures engaged/considering % of responders participation in emissions trading with an emissions % of responders plan reduction reduction/energy engaging with policy % of responders makers on climate change has the potential to cause disruption European listed companies, as well as and as a result we have seen a 6 in the form of unforeseen, high-impact expansion into countries within Central significant increase in the use of CDP Asia-ex JICK 100 31 [35] 76 55 76 66 55 66 69 31 17 59 62 events (such as extreme weather) as and Eastern Europe. We have also data in procurement operations. Australia 200 52 48 80 79 81 82 56 81 83 46 50 67 73 well as a longer term re assignment opened new offices in Germany and Now procurement professionals can Brazil 80 76 [83] 49 61 73 73 53 61 55 22 25 61 49 of value across countries, industries Brazil, both key economies in the fight understand how their supply chains Canada 200 49 55 70 57 68 56 46 81 76 27 34 49 61 and corporations. against climate change. may be impacted and as a result begin Central & Eastern Europe 100 8 - 75 50 50 75 25 75 25 75 50 100 50 to future-proof their procurement China 100 10 5 56 67 78 67 44 22 22 22 11 67 44 The Intergovernmental Panel on While the quantity and quality of data systems against climate change. Europe 300 82 - 85 80 90 75 63 91 85 77 58 89 79 Climate Change (IPCC) predicts that available has increased significantly, so France 120 58 63 77 69 84 66 61 79 77 63 47 81 66 ‘future climate impacts show that has the use of the data, which is acting The process of measuring emissions is Germany 200 51 55 65 58 70 44 47 63 57 45 33 63 55 the consequences could vary from as a catalyst for changing business central to emissions management and disruptive to catastrophic’1. So it is behavior. CDP data is increasingly being reduction. As regulatory frameworks Global 500 81 77 80 78 84 78 63 85 80 63 54 80 74 vital that policymakers, companies and integrated into mainstream financial develop to mandate emission Global Electric Utility 250 49 52 71 79 84 75 62 81 50 61 57 60 77 investors have a full understanding of analysis, is available through Bloomberg reductions, CDP’s role will expand. We Global Transport 100 67 58 84 81 84 79 50 79 68 50 43 72 74 the associated risks and opportunities. Professional Services, and used to will continue to work with corporations, India 200 18 19 52 14 66 62 48 48 48 17 17 55 38 According to HSBC research2, provide sector based analysis to CDP policymakers and information users to Ireland 40 33 - 71 71 71 64 43 71 50 50 43 57 43 governments around the world have signatory members. A recent report produce practical and robust results Italy 60 35 [46] 52 67 86 67 48 81 62 71 33 67 57 allocated US$430 billion in fiscal produced by Mercer supports this view. that complement the development of Japan 500 37 [72] 85 87 83 80 64 77 72 33 90 49 49 stimulus to key climate change themes. mandatory reporting rules. Korea 100 50 [32] 61 67 76 69 57 55 55 33 35 63 55 Some CDP signatories, such as Those providing the low carbon Latin America 50 50 [52] 58 79 79 58 47 79 68 37 26 47 58 solutions are very well positioned to CalSTRS are going a step further, In order to continue to provide the using shareholder resolutions to global hub for carbon reporting, CDP Netherlands 50 62 52 97 74 90 65 61 90 90 58 42 81 71 benefit, while those who ignore the New Zealand 50 52 50 65 69 77 69 65 58 54 35 27 58 54 risks gamble on being left behind. encourage companies to report is currently undergoing a significant through CDP and implement climate systems upgrade, designed to Nordic 200 65 [58] 77 76 81 63 54 83 77 46 33 78 59 By convening the collective power of change management strategies. We improve data comparability, facilitate Portugal 20 38 - 75 88 75 88 63 100 88 88 25 63 75 the investment community, represented are also working with the Principles benchmarking services and ultimately Russia 50 13 - 33 0 33 33 33 33 33 0 33 33 33 in 2009 by more than 475 investors, of Responsible Investment (PRI) to deliver data that is appropriate for South Africa 100 68 58 86 73 86 89 68 83 86 38 33 68 65 with US$55 trillion in assets under drive awareness and improve climate investment analysis and regulatory Spain 85 41 [71] 80 66 77 63 54 91 83 86 34 80 74 management, CDP motivates more change reporting. CDP has recently submissions. In countries like the Switzerland 100 56 57 74 44 72 48 48 72 67 35 19 65 43 than 1800 companies globally to report entered a new partnership with financial US and UK, where mandatory UK FTSE 100 95 90 83 89 91 83 66 98 95 73 77 88 79 their climate change strategies and information services company Markit carbon reporting is on the horizon, UK FTSE 250 57 58 79 78 76 72 53 81 80 36 43 61 49 greenhouse gas emissions. This global to build a suite of indices based on the CDP’s systems will help companies US S&P 500 66 64 68 70 77 70 52 77 74 41 31 65 61 system provides the market, investors, Carbon Disclosure Leadership Index, prepare for such requirements policymakers and procurement which will be licensed to exchange- and will eventually integrate with directors with a clear understanding of traded fund (ETF) and structured existing national registries to enable how companies are positioned as we product providers. corporations to disclose more detailed 3 The numbers in this table are based on the total move towards a low carbon economy and standardized data. Climate change respondents at 10th July 2009. They may therefore vary from numbers in the rest of the report which are based and ensures corporations provide full is a global problem, which requires on the number of companies who responded on time transparency on climate change. a global solution and by bridging the (e.g. 30th June for Global 500). gaps between national governments 4 In some cases, the number of responses analyzed is slightly less than the number answering CDP 2009 due to and international businesses across takeovers, mergers and acquisitions. the globe, CDP will help to connect 5 Percentages in square brackets reflect a different sized sample in 2008, e.g.: in 2008 we wrote to 75 companies 1 http://unfccc.int/essential_background/feeling_the_heat/ the national and international climate in Brazil, not 80; and in Japan we wrote to 150 companies items/2905.php change ecosystem. in 2008, not 500. A dash (-) shows that sample was not in 2 HSBC Global Research: A Climate for Recovery The colour CDP6 (2008). of stimulus goes green. 6 Asia excluding Japan, India, China and Korea.

2 9 3 Carbon Disclosure Project 1 Overview of CDP Overview of CDP

Table 1: Key trends snapshot3 1 This table outlines some of the key findings from CDP 2009 by geography and industry data-set.4 5

number of companies % of sample answering CDP 2009 % of sample answering CDP6 (2008) level with Board % of responders for climate change responsibility seeing % of responders risks regulatory seeing regulatory % of responders opportunities seeing physical risk % of responders seeing physical % of responders opportunities disclosing % of responders Scope 1 emissions disclosing % of responders Scope 2 emissions externally % of responders verifying emissions disclosures engaged/considering % of responders participation in emissions trading with an emissions % of responders plan reduction reduction/energy engaging with policy % of responders makers on climate change has the potential to cause disruption European listed companies, as well as and as a result we have seen a 6 in the form of unforeseen, high-impact expansion into countries within Central significant increase in the use of CDP Asia-ex JICK 100 31 [35] 76 55 76 66 55 66 69 31 17 59 62 events (such as extreme weather) as and Eastern Europe. We have also data in procurement operations. Australia 200 52 48 80 79 81 82 56 81 83 46 50 67 73 well as a longer term re assignment opened new offices in Germany and Now procurement professionals can Brazil 80 76 [83] 49 61 73 73 53 61 55 22 25 61 49 of value across countries, industries Brazil, both key economies in the fight understand how their supply chains Canada 200 49 55 70 57 68 56 46 81 76 27 34 49 61 and corporations. against climate change. may be impacted and as a result begin Central & Eastern Europe 100 8 - 75 50 50 75 25 75 25 75 50 100 50 to future-proof their procurement China 100 10 5 56 67 78 67 44 22 22 22 11 67 44 The Intergovernmental Panel on While the quantity and quality of data systems against climate change. Europe 300 82 - 85 80 90 75 63 91 85 77 58 89 79 Climate Change (IPCC) predicts that available has increased significantly, so France 120 58 63 77 69 84 66 61 79 77 63 47 81 66 ‘future climate impacts show that has the use of the data, which is acting The process of measuring emissions is Germany 200 51 55 65 58 70 44 47 63 57 45 33 63 55 the consequences could vary from as a catalyst for changing business central to emissions management and disruptive to catastrophic’1. So it is behavior. CDP data is increasingly being reduction. As regulatory frameworks Global 500 81 77 80 78 84 78 63 85 80 63 54 80 74 vital that policymakers, companies and integrated into mainstream financial develop to mandate emission Global Electric Utility 250 49 52 71 79 84 75 62 81 50 61 57 60 77 investors have a full understanding of analysis, is available through Bloomberg reductions, CDP’s role will expand. We Global Transport 100 67 58 84 81 84 79 50 79 68 50 43 72 74 the associated risks and opportunities. Professional Services, and used to will continue to work with corporations, India 200 18 19 52 14 66 62 48 48 48 17 17 55 38 According to HSBC research2, provide sector based analysis to CDP policymakers and information users to Ireland 40 33 - 71 71 71 64 43 71 50 50 43 57 43 governments around the world have signatory members. A recent report produce practical and robust results Italy 60 35 [46] 52 67 86 67 48 81 62 71 33 67 57 allocated US$430 billion in fiscal produced by Mercer supports this view. that complement the development of Japan 500 37 [72] 85 87 83 80 64 77 72 33 90 49 49 stimulus to key climate change themes. mandatory reporting rules. Korea 100 50 [32] 61 67 76 69 57 55 55 33 35 63 55 Some CDP signatories, such as Those providing the low carbon Latin America 50 50 [52] 58 79 79 58 47 79 68 37 26 47 58 solutions are very well positioned to CalSTRS are going a step further, In order to continue to provide the using shareholder resolutions to global hub for carbon reporting, CDP Netherlands 50 62 52 97 74 90 65 61 90 90 58 42 81 71 benefit, while those who ignore the New Zealand 50 52 50 65 69 77 69 65 58 54 35 27 58 54 risks gamble on being left behind. encourage companies to report is currently undergoing a significant through CDP and implement climate systems upgrade, designed to Nordic 200 65 [58] 77 76 81 63 54 83 77 46 33 78 59 By convening the collective power of change management strategies. We improve data comparability, facilitate Portugal 20 38 - 75 88 75 88 63 100 88 88 25 63 75 the investment community, represented are also working with the Principles benchmarking services and ultimately Russia 50 1213 - 33 0 33 33 33 33 33 0 33 33 33 in 2009 by more than 475 investors, of Responsible Investment (PRI) to deliver data that is appropriate for South Africa 100 68 58 86 73 86 89 68 83 86 38 33 68 65 with US$55 trillion in assets under drive awareness and improve climate investment analysis and regulatory Spain 85 41 [71] 80 66 77 63 54 91 83 86 34 80 74 management, CDP motivates more change reporting. CDP has recently submissions. In countries like the Switzerland 100 56 57 74 44 72 48 48 72 67 35 19 65 43 than 1800 companies globally to report entered a new partnership with financial US and UK, where mandatory UK FTSE 100 95 90 83 89 91 83 66 98 95 73 77 88 79 their climate change strategies and information services company Markit carbon reporting is on the horizon, UK FTSE 250 57 58 79 78 76 72 53 81 80 36 43 61 49 greenhouse gas emissions. This global to build a suite of indices based on the CDP’s systems will help companies US S&P 500 66 64 68 70 77 70 52 77 74 41 31 65 61 system provides the market, investors, Carbon Disclosure Leadership Index, prepare for such requirements policymakers and procurement which will be licensed to exchange- and will eventually integrate with directors with a clear understanding of traded fund (ETF) and structured existing national registries to enable how companies are positioned as we product providers. corporations to disclose more detailed 3 The numbers in this table are based on the total move towards a low carbon economy and standardized data. Climate change respondents at 10th July 2009. They may therefore vary from numbers in the rest of the report which are based and ensures corporations provide full is a global problem, which requires on the number of companies who responded on time transparency on climate change. a global solution and by bridging the (e.g. 30th June for Global 500). gaps between national governments 4 In some cases, the number of responses analyzed is slightly less than the number answering CDP 2009 due to and international businesses across takeovers, mergers and acquisitions. the globe, CDP will help to connect 5 Percentages in square brackets reflect a different sized sample in 2008, e.g.: in 2008 we wrote to 75 companies 1 http://unfccc.int/essential_background/feeling_the_heat/ the national and international climate in Brazil, not 80; and in Japan we wrote to 150 companies items/2905.php change ecosystem. in 2008, not 500. A dash (-) shows that sample was not in 2 HSBC Global Research: A Climate for Recovery The colour CDP6 (2008). of stimulus goes green. 6 Asia excluding Japan, India, China and Korea.

2 10 3 Carbon Disclosure Project

Highlights in carbon In Australia, further work has pro- While the financial accounting system regulation gressed on the detail of the Carbon has taken several hundred years to Pollution Reduction Scheme (CPRS) develop, carbon accounting is in its 2009 has witnessed significant prog- despite political challenges over pos- infancy. In order to achieve a coherent ress in the global approach to climate sible competitive impacts in the face of global system CDP is leading the work change. The Obama administration the economic downturn. The Scheme of the Climate Disclosure Standards has introduced a new era in climate covers around 75% of total Australian Board (CDSB), working with Deloitte, change policy in the US. China is set emissions. Ernst & Young, KPMG and Pricewa- to meet ambitious renewable energy terhouseCoopers to develop robust and energy efficiency targets and hosts Given the multinational nature of many accounting standards to enable carbon some of the world’s largest renewable companies, the evolution of these reporting through annual financial energy companies. Brazil entered 2009 policies is likely to have significant reports. CDP and CDSB will also work with a new National Plan on Climate implications on strategic direction and with the World Economic Forum to Change and national governments in operations and many of the world’s advise the G20 group of nations on industrialized countries including Japan largest companies want to seize early climate change accounting in 2010. and Australia are introducing new legis- mover advantage. Of course, the role lation to reduce emissions. of government is crucial in providing The CDP process demonstrates that the regulatory frameworks. But inves- corporations can lead the way in taking Whilst the July G8 meeting agreed tors and businesses will also play an action that can be Measured, Reported to prevent global temperatures ris- essential role by driving capital flows & Verified (MRV). It also shows how ing beyond 2° Celsius (3°-4° Fahren- towards the technologies which will al- international companies can reduce heit) against pre-industrial levels, and low economies to flourish and innova- their emissions across the entirety of agreed on aims to cut greenhouse gas tion to thrive as we transition to a low their operations on a global basis, even emissions by between 50 and 80% by carbon economy. when subject to a range of differ- mid-century they disappointed many ent regulatory requirements. As more by ducking the issue of medium term Already these same investors and and more countries introduce climate targets. Although the multilateral archi- businesses are being directly affected change regulation, the CDP system tecture still needs work, there is much by climate change. Many companies supports companies by bridging the to report on at a regional level. report to CDP the material impacts of gap between international business climate change on their operations, and national reporting requirements In Europe, the Energy and Climate through increased flooding, water and helps reduce the reporting burden Change package was approved in De- shortage, spread of disease and on companies. cember 2008 which sets out the policy changing local weather patterns. framework and accompanying mea- Within the public sector, cities report- The CDP 2009 Global launch marked sures to reduce emissions through the ing through CDP also explain how they the opening event of the NY Climate continuation (and expansion) of the EU are planning to adapt to changes in Week when business leaders, heads of Emissions Trading Scheme (EU-ETS); weather patterns such as extreme heat state and the world’s major investors targets for non-ETS sectors and new and extreme precipitation. congregated in New York to prepare targets for the promotion of renewable for the negotiations at COP15. Dis- energy. Investors, policy makers, procurement appointment followed the weeks in directors and other stakeholders need Copenhagen when the international In the US, the Obama administration to build up the necessary comparable climate negotiations did not result moved early to set out its ambitions datasets in order to monitor and analyze in the hoped-for agreement under around climate change mitigation: “We changes; both in terms of the response UNFCCC, but in the Copenhagen Ac- will harness the sun and the winds and to mitigation measures (such as carbon cord. The Accord takes a “pledge and the soil to fuel our cars and run our regulation) and adaptation policies and 1 review” approach to national action factories”. programmes. Integral to the success of and includes an active role for the key an international climate deal will be the The Waxman-Markey bill was finally emerging economies. However, lack availability of this accurate reported data: put before the House of Representa- of clarity over its legal status and level if businesses don’t measure current tives in June and passed by a narrow of ambition means that uncertainty emissions now, it will be impossible for margin. The proposed legislation would about international action will continue them to manage and reduce them in the commit the US to reduce greenhouse through 2010. An international climate future. This is where CDP’s role is crucial. gas emissions by 17% below 2005 lev- agreement remains a vital step towards els by 2020 through a cap-and-trade Progress on reporting standards success. In that sense it is important system beginning in 2012. However, While CDP has set the tone on matters to look beyond Copenhagen and to progress of a related bill through the of disclosure over the years and, for build the global systems required to US Senate appears to have stalled and the first time this year, is now widening combat climate change. CDP remains at the time of writing it is very uncertain its approach to encompass perfor- focused on and dedicated to this work whether any climate change bill will be mance, there are other valuable and and thanks all of the organizations that passed by the Senate in 2010. complementary initiatives underway to work with us to help realize this goal. address the clear requirement for the creation of a global carbon measurement and reporting system. 7 Obama inauguration speech (January 21st, 2009) 11 Carbon Disclosure Project The Russian perspective on international climate change developments 2 by Alexey Kokorin, WWF Russia

The scientific evidence for anthropo- Russia and the UNFCCC Russia’s legislative genically induced climate change and negotiations framework and climate its potential detrimental effects are change overwhelming. Yet, Russia’s govern- Russia ratified the Kyoto Protocol to ment, businesses, media and public the United Nations Framework Con- Climate protection is not established as are still hesitant when it comes to cli- vention on Climate Change (UNFCCC) a primary goal in the Russian legislative mate protection and emissions reduc- in 2004, thereby committing to limit framework, but some crucial climate- tions in Russia. emissions to 1990 levels. Due to an friendly decisions have been made economic crisis in the 1990’s, Russia’s over the past couple of years: Examples of the negative impacts from GHG emissions had collapsed to only climate change are the melting of per- circa 60% of 1990 levels by 1998 (see • In June 2008, the President mafrost, spread of diseases, restricted Figure 1). The agreed target is there- mandated a 40% reduction in the winter transportation in the North, and, fore effortless for Russia, and leaves energy intensity per unit of GDP of course, threatened survival of the the country with generous surplus (tonne of oil equivalent (toe) per polar bear. Positive local and tempo- Assigned Amount Units (AAUs) – or million dollar of GDP) by 2020 rary impacts of climate change can be emissions allowances. Hence there is (Decree 889, 4 June 2008). Further observed in agriculture, heat supply currently little incentive or urge for Rus- legislation has been adopted and and North Route shipping. At the mo- sian businesses to focus on emissions is currently being implemented. ment, the negative and temporary pos- reduction if it is not directly linked with • The government passed a directive itive effects are perceived to keep each energy efficiency measures. Without to increase associated gas utiliza- other in balance. The largest part of the committed reduction efforts, Russia’s tion to 95% by the middle of the negative impacts from climate change overall GHG emissions are expected to 2010s; yet, the implementation has is not expected until the second half of rise significantly over the next 25 years been delayed twice so far. the 21st century – so not for the near (see Figure 1). future. But it is now that further global • In January 2009, the Prime Min- The UNFCCC’s 15th Conference of warming needs to be prevented by re- ister confirmed a policy that calls the Parties (COP 15) in Copenhagen in ducing and carefully managing carbon for an increase in the share of December 2009 was a disappointment emissions in Russia and worldwide. renewable energies in the Russian to many who had hoped for an agree- energy mix from 0.9% to 4.5% by In April 2009, the Minister of Natural ment with binding targets to follow on 2020. Questions persist, however, Resources and Ecology, Yury Trutney, from the Kyoto Protocol in 2012. Rus- as to how renewable energies declared that climate change will cause sia pledged to limit the increase of its should be defined. an estimated loss of 2-5% in gross GHG emissions by 2020 to 25% below domestic product (GDP) if no action is 1990 levels. While this is not very far • At the G8 Summit in July 2009, taken. This estimate is not taking into from the business as usual scenario, Russia firstly agreed to the global account missed opportunities that may this was a very good step forward and goal of limiting the rise in tempera- arise for Russian businesses on newly Russia played a constructive role dur- ture to 2°C, and accepted the de- developing low-carbon markets, both ing the negotiations. President Medve- veloped countries’ ambitious target national and international. Not taking dev attended the conference together of reducing emissions by 80% by action may therefore cost the Russian with many other global leaders. While 2050. The President sees Russia economy even more dearly. Russia climate change is not yet a priority contributing to this cut by cutting has large potential to reduce emissions issue in Russia’s domestic politics, emissions by 50% by 2050 on a through no-cost or low-cost measures. it is positive that the political leader- 1990 baseline. Such reductions In view of the importance to limit global ship acknowledges the importance can only be achieved if govern- warming and prevent the most severe of the topic in the international con- ment creates a suitable framework consequences of climate change, text, sympathizing with the concerns with incentives for carbon efficient many countries around the world have and exposure of other countries. The technologies and products. already started to work towards drastic competitiveness as well as the image cuts in current and future greenhouse of the Russian economy in the context gas (GHG) emissions. For Russia’s of international carbon agreements and growing economy to stay ahead of the taxes are of great interest for Russia’s game it is important the business com- leaders. munity and government promote new, progressive climate change solutions.

12 Carbon Disclosure Project

In addition several governmental stud- General levels of awareness for the From an investor and business per- ies have been conducted on climate impacts of climate change are grow- spective, a considerable number of change over the past few years. Ex- ing among the Russian population. At stakeholders are disappointed by the amples include: the same time – for purely economical government’s passive position on reasons – companies have started to climate change. Under current condi- • A Russian Assessment Report invest in improved energy efficiency, tions only very progressive Russian has been prepared to very high which means that the energy and businesses consider climate impacts in scientific standards and provides carbon intensity of Russia’s GDP are strategic decisions. Nonetheless, some evidence for climate change and slowly decreasing. companies have taken the lead and recognizes the associated threats. started assessing their GHG emissions The report was set out similarly However, combined with economic – as for example the participants of to Vol. 1 & 2 of the fourth Assess- growth Russia’s overall GHG emissions CDP 2009. ment Report by the Intergovern- are expected to rise by 1-2% per year mental Panel on Climate Change in a business as usual approach after Russia as a country is taking its first (IPCC). Yet, the report neither the financial crisis. The government steps towards climate protection. On addresses the economic impacts initiatives mentioned above together an international level, recent commit- climate change may have nor does with a comprehensive set of additional ments signal a willingness to strategi- it discuss the scale of potential measures – including international cally engage the issue, but these still losses in comparison to the cost of carbon finance mechanisms – can have to translate into the necessary adaptation and mitigation. slow down or even revert the trend: A legislative framework and tangible recent study by McKinsey suggests results. Consolidated and coordinated • Government has adopted a Rus- that Russia’s GHG emissions in 2030 efforts of governments together with sian Climate Doctrine in December could be as low as 46% of 1990 levels businesses and investors worldwide 2009. The Doctrine acknowledges (compared to 65% in 2005) if a broad are required to overcome persist- the global challenge of climate range of economically viable measures ing barriers and ensure an active and change and calls for Russian are taken.8 This scenario is, however, widespread Russian participation in the mitigation and adaptation mea- only possible if supported through fight against climate change. Initiatives sures. It has great value from an a comprehensive new government such as the Carbon Disclosure Project educational and awareness raising framework that favors low-carbon will help inform this debate through the perspective, but no actual actions developments. open dialogue it facilitates between will follow until related plans and stakeholders. measures are agreed.

Figure 1 - Development of Russia’s total GHG emissions in Mt CO2-e (historic and forecast)

3,500 3,317 2,991 3,000 2,621 -21% -10% 2,424 2,500 2,289 -31% 2,147 2,029 -27% 2,000 1,939 -35% -39% -42% 1,526 1,500 -54%

1,000

500

0 1990 1995 2000 2005 2010 2015 2020 2025 2030

-20% Reduction bellow 1990 (%) Actuals Reference case forecast After total abatement After economically attractive abatement Total greenhouse gas emissions in Russia

8 McKinsey & Co. (2009): Pathways to an energy and carbon efficient Russia.

13 Carbon Disclosure Project The Carbon Disclosure Project in Russia – 3 Background and Analysis

On behalf of its signatory investors, Overall Response Trends CDP “Companies and inves- CDP has been gathering corporate Russia carbon data internationally for seven By the end of June, six companies tors that are able to years. In 2009 for the first time, CDP had completed the CDP questionnaire, assess risks and seize sent the annual investor information and an additional three had provided new opportunities will request to a group of Russia’s 50 larg- other relevant information. For a full list be ahead of the curve est companies by market capitalisation of the Russia 50 companies and their (RTS 50). Environmental and carbon final CDP 2009 response status see in terms of global com- reporting is still a young discipline in Table 3. For most of the responding petitiveness. Converse- Russia, but the overall response dem- companies 2009 was the first year of ly, those businesses onstrated that climate change is now participation in CDP. Only Gazprom that fail to have a strat- also on the radar of Russia’s leading (2005) and Irkutskenergo (2006) had companies. participated before when they received egy in place to deal the CDP questionnaire as two of the with climate change will As the world’s largest country and 500 largest companies in the world.11 be on the losing side of one of the most significant economies, With six companies responding, the Russia undoubtedly has an important new CDP Russia project achieved a re- history.” role to play in addressing the climate sponse rate of 12%. This encouraging change challenge. Despite severe Ban Ki Moon, result in the first year is extremely posi- cuts in emissions until 1998 due to the tive for the future of CDP in Russia and UN Secretary General economic crisis, Russia remains the indicates that Russian companies have third largest emitter worldwide and is already started to engage the issues of responsible for more than 1,580 million climate change and GHG emissions. tonnes of greenhouse gases (GHG) “The CDP Question- emissions every year.9 Currently there is little data available on how Rus- naire can be used as an sian companies address the risks and aid to finding out what opportunities associated with climate you can do as a com- change or where they see their respon- pany to improve your sibilities in cutting carbon emissions. To fill this gap the Carbon Disclosure climate footprint, and Project (CDP) Russia was born. consequently, reputa- This chapter summarizes the trends tion. As the CDP ques- from the first year of CDP Russia tionnaire includes all based on the received company re- relevant climate ques- sponses. tions, it can be used as The CDP process a process tool to iden- The CDP 2009 information request tify your climate impact was signed by 475 international investors with US$57 trillion of assets under in your organisation.” management, and sent to the 50 Anne Gadegaard Lars- largest Russian companies by market capitalisation on 1st February 2009.10 en, Novo Nordisk Active engagement with the companies took place between February and June, and an open workshop was hosted in Moscow in April. The final 9 2007 data, CO2 Emissions from Fuel Combustion. Source: International Energy Agency (2009), IEA Statistics: CO2 submission deadline for responding Emissions from Fuel Combustion Highlight. companies was 30 June 2009. 10 For a full listing of the public CDP 2009 signatories view pages 1 to 4. The CDP information request consists of a letter to the Chairman and the CDP questionnaire.

11 Since 2003, CDP has been sending the annual CDP information request to the largest 500 companies by market capitalisation worldwide.

14 Carbon Disclosure Project

Table 3 - List of RTS 50 companies and their final response status “We do not consider Company Name Response Status our company to be Acron Declined to participate exposed to regulatory Aeroflot No response Bashneft No response risks. (…) The Russian Center Telecom Answered questionnaire legal framework on Federal Grid Company of Unified Energy System Answered questionnaire greenhouse gas emis- Gazprom Answered questionnaire sions imposes neither Gazprom Neft Declined to participate limitation nor prohibition GMK Norilsk Nickel Declined to participate Irkuts Power Generation and Distribution Company Answered questionnaire on the implementation (Irkutskenergo) of any economic ac- JSC Ufaneftehim No response tivities. Any greenhouse Lada No response Lukoil No response gas emitting company Magnit No response determines on how the Magnitogorsk Iron & Steel Works Declined to participate emissions will be re- Mechel No response duced or limited on its Mosenergo OAO No response MTS Declined to participate own.” North-West Telecom Declined to participate CDP Russia 2009 Novatek Answered questionnaire Novolipetsk No response Respondent Novorossiysk Commercial Sea Port No response (non-public response) OGK-2 No response OGK-3 No response Opin Investment and Development Group No response Polymetal No response Polyus Information provided Raspadskaya OJSC Information provided RBC Information Systems No response Rosneft Information provided Rostelecom No response RusHydro No response Sberbank No response Seventh Continent Declined to participate SeverStal No response Sibir Telecom No response Silvinit No response Sistema Declined to participate Sollers No response Surgutneftegas No response Tatneft Answered questionnaire TMK No response Transneft Declined to participate Uralkali No response Uralsvyazinform No response Volga Telecom No response VSMPO AVISMA No response VTB Bank Declined to participate Wimm-Bill-Dann Foods No response

15 Carbon Disclosure Project

Participating companies What is the CDP information “Within its risk man- The six established leaders that re- request? sponded to CDP 2009 have good or The CDP process enables companies agement system, NO- reasonable tracking systems in place to respond to a single investor informa- VATEK will consider for monitoring and managing their tion request that CDP coordinates on legislative risks having climate change performance. Table 4 behalf of 475 institutional investors. to do with the adop- summaries the names of the disclos- The CDP questionnaire is revised an- ers and the permission status of their nually to reflect latest insights in the tion of new legal acts response: NOVATEK, Irkutskenergo, area of carbon management. Together and regulations relating and Federal Grid Company of Unified with an individualised letter to the to the Russian Federa- Energy System made their submissions companies’ chairmen the questionnaire tion’s involvement in the publicly available. These responses are forms the CDP information request. In accessible from the CDP website.12 2009 it covered questions in the follow- Kyoto Protocol and the Gazprom, Tatneft and Center Telecom ing four key areas of carbon reporting procedures for its im- on the other hand preferred to submit and climate change strategy: non-public responses (i.e. the submis- plementation. All newly 1. Risks and Opportunities adopted legal acts and sions are exclusively available to CDP’s signatory investors). Companies that 2. Emissions Accounting regulations of the Rus- chose to make their submission non- sian Federation with public often reference concerns about 3. Performance the commercial sensibility of data as respect to issues relat- 4. Governance ing to the Kyoto Proto- the key reason. col, the inventory and Among the six responders there were The questions were developed by CDP four Energy companies, as well as in cooperation with its global advisor control of greenhouse one Utilities and one Telecommunica- PricewaterhouseCoopers (PwC), as gas emissions, and tions Services company. Despite the well as contributions from CDP’s sig- fact that the Energy sector is generally natory investors, the World Resources those having a potential Institute (WRI), the Global Reporting impact on NOVATEK’s strong in Russia and was hence well represented in the CDP 2009 Russia Initiative (GRI) and other stakehold- business, shall be iden- 50 sample, this result also illustrates ers. The CDP questionnaire is widely tified and complied with how the topics of energy efficiency recognised as the gold standard of in a timely manner.” and climate change management carbon reporting. are often interlinked. Russia’s Energy NOVATEK companies in particular are therefore likely to monitor and report their carbon performance.

Table 4 - Responding Companies by Sector and Permission Status

Company Sector Public Response? OJSC Gazprom Energy Not public OJSC Novatek Energy Public OJSC Tatneft Energy Not public OJSC Irkutsk Power Generation and Distribution Energy Public Company (Irkutskenergo) JSC Federal Grid Company of Unified Energy Utilities Public System JSC Center Telecom Telecommunication Not public Services

12 To view public responses to CDP go to: www.cdproject. net/en-US/Results/Pages/Responses.aspx?Search=True

16 Carbon Disclosure Project

RISKS AND OPPORTINITIES RISKS “We believe that cur- Climate change is likely to impact the Regulatory risks business operations of many com- Regulatory risks generally arise from rently our Company’s panies worldwide in the short- to current or expected national and operations are not ex- medium-term. Key factors are current global governmental policy on climate posed to any risks or and future regulatory changes, physical change. This includes for example the effects of climate change and other, imposition of emissions limits, energy have any additional commercial risks. In response, compa- efficiency standards, and product stan- opportunities related nies have started to adjust and actively dards or restrictions. to climate change. manage climate change related risks However, in the future and opportunities. Among the participating Russian companies only one publicly responding if destructive climate In the first section of the CDP 2009 Russian company reported to consider change persists (includ- questionnaire, respondents had an itself exposed to such regulatory risks. opportunity to explain how they assess This suggests that Russian legislation ing in relation to such risks and opportunities associated with on climate change and energy efficiency natural hazards which climate change in three areas: is not perceived as a considerable occur more and more impact on the responding companies’ • ‘Regulatory’ frequently as sharp business operations. Companies are changes in outside • ‘Physical’ aware of current legislation, and generally assess and monitor new policies in temperature, strong • ‘Other’ line with their overall risk management winds, fogs and rains), procedures. An example of forward- its impact may seriously Signatory investors generally pay looking regulatory risk management particular attention to this part of a quoted by NOVATEK is the upcoming threaten the social and company’s response, as good climate legislation calling for the reduction in as- financial stability both change risk management is often seen sociated petroleum gas (APG) flaring. as a proxy for good general risk man- of the global economy agement practices. Noticeably there was no comment in general and of [our on how international legislation might The Russian respondent companies Company’s] operations impact business operations despite in particular.” have taken varying approaches to the fact that several of the responding assessing the risks and opportunities companies have operations outside CDP Russia 2009 facing them from climate change. Only of Russia. Only some respondents three companies felt that they were acknowledge that the ratification of Respondent facing certain risks from climate change, the Kyoto Protocol by Russia could (non-public response) and four respondents considered that lead to changes in national legislation climate change presented some form of connected with CO2 emissions, but opportunity for their businesses. note that thus far there have been no indications by government that these are forthcoming.

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Physical Risks Other Risks “In case of substantial Climate change will have physical ef- ‘Other’ risks are those associated with fects that can impact business opera- climate change apart from regulatory climate change with in- tions. Commonly identified related risks action or physical changes. ‘Other’ tensified winds, surface include: risks may include but are not limited ice and more extreme to energy and/or resource scarcity, • Small changes in temperature and price changes prompted by scarcity, temperatures, [our com- precipitation pany’s] technologies changes in consumer attitude and • Shifts in species distribution demand, reputational risk, as well as have to be adapted to production and supply chain or supply the new environmental • Droughts and/or floods process disruption. The type of risk involved will vary depending on the circumstances.” • Increased storm and hurricane business concerned. activity Federal Grid Company of Two of the six respondents consider Unified Energy System • Rising sea levels ‘other’ risks to be significant (NO- • Higher incidence of disease VATEK, and one non-publicly responding company), quoting for example in- Russia is a large country with many surance risks, price risks, market risks “The main climate- areas being remote and snow covered and reputational risks. The fact that not specific physical risks for many parts of the year. Changes in more companies identify ‘other’ risks is climate and increased average tempera- an indication that the Russian market include the possibility tures could lead to melting of permafrost, is not yet perceived as providing a of permafrost thaw, the increased flooding and other negative compelling argument for companies to warming effect on the impacts. Two of the six respondents with turn low-carbon. operations in the far northern regions cryogenesis process, consider that they are exposed to physi- occurrences of slump- cal risks for these reasons. ages and frost thaws, The other four respondents do not and intensified solifluc- currently consider that their operations tions (soil flows).” would be negatively affected by such conditions. NOVATEK

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OPPORTUNITIES Physical and Other Opportunities Physical opportunities may arise from “The legal framework While it is recognised that climate subtle changes in the climate, such change can represent significant risks as longer growing seasons, or from of the Russian Fed- to companies, there are also related larger, sudden events such as storms eration does not specify opportunities for companies that or floods. any officially published adapt to the changing conditions best and quickest. Among the Russian ‘Other’ opportunities are those associ- techniques (guidance) responding companies, the identi- ated with climate change apart from established by law for fied opportunities are primarily in the regulatory action or physical changes. emission inventory and regulatory area. They may include, but are not limited to, actual or potential demand for new measurement, including Regulatory Opportunities or modified goods and services and direct GHG emissions Regulatory opportunities generally arise enhanced reputation. generated as a result of from current and expected national or international governmental policy One respondent identified possible business operations of on climate change. This may include, physical opportunities through de- economic entities.” but is not limited to, the introduction velopment of new, cleaner and more of emissions trading programmes, efficient infrastructure, as well as new CDP Russia 2009 availability of technology incentives opportunities through the development Respondent and imposition of process or product of innovative finance and insurance (non-public response) standards. activities related to the Kyoto Protocol. The majority of the respondents, how- Regulatory opportunities identified by ever, reported no physical or ‘other’ three of the respondents cover a wide opportunities. range, from opportunities for develop- Responsibility to cut ing new, more efficient forms of ener- emissions and advance gy, to possibilities to participate in Joint low carbon innovations Implementation (JI) projects, or other means to introduce cleaner and more nationally rests with Rus- efficient technology. The intention of sia’s leading companies developed countries with self-imposed to a large extent. GHG emissions restrictions to switch from coal and other fossil fuels to gas present market opportunities as Russia is a leading producer of natural gas. The rationale behind carbon reporting is that only what gets measured can get managed: carbon reporting is an important first step for every company in taking action to improve their carbon performance.

19 Carbon Disclosure Project

EMISSIONS REPORTING follows the terminology of Scope 1, Figure 2: Russian primary green- 2 and 3 emissions as defined in the house gas emissions in In order to prevent dangerous climate Greenhouse Gas Protocol reporting Mt CO2-e change, human-induced emissions standard (GHG Protocol) – see Figure need to be significantly reduced in the 3: The key scopes in carbon reporting short- and long run. Every part of soci- and management are direct Scope 1 ety and all countries have to contribute and indirect Scope 2 emissions. Indi- 177 to this effort. Industry has a critical rect Scope 3 emissions are less well 83 role to play as it is directly or indirectly defined and therefore more difficult to 52 responsible for the largest proportion assess and compare. of relevant GHG emissions. Figure 2 illustrates how the Power & Heat and Scope 1 Emissions Reporting and Petroleum & Gas sectors make up Methodologies 370 890 more than 50% of Russia’s overall Among the Russia 50 respondents, GHG emissions, jointly being respon- three of six disclosed their direct Scope sible for nearly 1,200 million tonnes of 1 GHG emissions (NOVATEK, and two carbon dioxide equivalent (Mt CO2-e) non-publicly responding companies), emissions (2000 data). Both these sec- while Federal Grid Company of Uni- 300 tors are well represented in the CDP fied Energy System states that “direct sample of Russia’s top 50 companies. emissions are practically absent” from 300 Responsibility to cut emissions and their operations, and another non-pub- advance low carbon innovations na- lic respondent remarks they were not tionally rests with the country’s leading reporting GHG emissions “as yet”. companies to a large extent. Powet & Heat Reporting boundaries set out by the Petroleum & Gas The second part of the CDP 2009 three disclosers included companies Other Industries questionnaire requested companies over which financial control is exer- Transport to disclose their direct and indirect cised, and companies in which an Buildings GHG emissions. With climate change equity share is held. Waste continuously gaining weight on the The disclosing companies referred to Agriculture corporate agenda, more and more different methodologies for calculat- companies have started to investigate ing their emissions. In particular the their carbon footprint. The rationale Greenhouse Gas Protocol (GHG Pro- behind this trend is that only what gets tocol), ISO 14064-1, and the Intergov- measured can get managed: carbon ernmental Panel on Climate Change reporting is hence an important first (IPCC) sector-specific Guidelines were step for every company in taking action mentioned. This use of internationally to improve their carbon performance. accepted methodologies greatly aids in In terms of emissions disclosure CDP the transparency and comparability of the emissions that were reported. Of the three respondents that did not provide information, two cited a lack of reporting guidelines, or methodologies or requirements by the Russian Federation, and one company stated they were currently collecting this data for future reporting.

20 Carbon Disclosure Project

Indirect Emissions Reporting ing Scope 3 emissions by just focusing Indirect Scope 2 GHG emissions re- on one particular area, such as em- “There is a plan in place lated to purchased electricity and heat ployees’ business travel. When aiming supplies were provided by the same to provide a comprehensive report on for the reduction of three companies that also disclosed Scope 3 emissions even very experi- energy consumption. Scope 1 emissions. The compre- enced companies often struggle. There is no plan for the hensiveness of provided detail and reduction of emissions, analysis shows that carbon measure- Assurance remains an aspiration ment within these companies is at an None of the respondent companies as capacities available advanced level. had external assurance provided on are not subject to any their emissions data, and only two One of the three non-publicly report- provided information as to sources review by controlling ing companies is preparing to measure of uncertainty in their data calculation bodies.” and report Scope 2 emissions in the techniques. These factors may discon- future, one refers to the lack of official cert interested investors, but are com- CDP Russia 2009 government guidance on measurement mon for many companies that are only Respondent techniques, and the third company starting out with their carbon reporting. (non-public response) provides no explanation. Indirect Scope 3 emissions such as those related to employees’ business travel and external distribution/logis- None of the respondent tics were not reported by any of the companies had external responding companies. While Scope 3 assurance provided on can make up an important proportion of the overall emissions a company their emissions data, and is responsible for, this type of emis- only two provided infor- sions is the most difficult to assess mation as to sources of accurately and comprehensively. Most uncertainty in their data responding companies begin address- calculation techniques.

Figure 3 - GHG Protocol: Definition of Scope 1, 2 and 3 emissions

Scope 2

Scope 1 Electricity indirect Scope 3 GHG emissions Direct GHG Other indirect emissions GHG emissions

Direct GHG emissions occurring Indirect GHG emissions associated with Indirect GHG emissions associated with from sources thet are owned or the generation of purchased electricity the generation of purchased electricity controlled by the company consumed by the company. consumed by the company.

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CARBON PERFORMANCE 51% by 2030, compared to a situation “NOVATEK reduced its without intentional reduction efforts The next step after measuring emis- (the ‘reference case’). The identified GHG emissions at the sions is to identify emissions reduction abatement potential by sectors is following production potentials. Among the six responding summarised in Figure 4. A key sector facilities: companies, four responding compa- can be Buildings, but also Power & nies indicate to have a GHG emissions Heat and Agriculture and Forestry have • Khancheyskoye and and/or energy reduction plan (incl. Ir- a significant role to play in reducing kutskenergo and NOVATEK). Yet, only carbon emissions. East-Tarkosalinskoye two have an established emissions Fields – improved and/or energy reduction target (NO- In order to implement the necessary gas transportation VATEK and one non-publicly respond- measures investments of ca. €150 bil- system resulting in ing company), and NOVATEK did not lion (approximately RUB6 trillion) would state their absolute or relative target be required over the next twenty years. a reduction in the in their CDP response. Nonetheless, Yet, a potential average internal rate of amount of 61,750 NOVATEK was able to give examples return (IRR) as high as 30% illustrates tons of СО2/equiv./ of how they cut their GHG emissions that attractive economic benefits are in 2008. associated with these energy efficiency year (for the period and carbon reduction efforts. In the of 2008-2011); Carbon reductions researched scenario, McKinsey&Co and financial benefits expect that the programme would • Cogeneration gas- That emissions reductions and im- bring overall savings equivalent to ca turbine power stations proved energy efficiency are not only €345 billion (approximately RUB13.8 in the interest of the environment but trillion) by 2030.13 – applying the tech- also economically relevant has recently nology of using ex- been emphasised in a research report These projections are a clear business haust gases in waste by McKinsey & Co.: The authors found case for improving Russia’s carbon heat boilers, resulting that with a set of economically viable and energy intensity. The authors of measures Russia’s energy consump- the report warn, however, that “a timely in a reduction in the tion could be reduced by 36% and its and targeted government effort would amount of 12,500 tons carbon emissions could be reduced by be required to support the private of СО2/equiv./year; sector in overcoming the substantial existing barriers, such as high upfront • Improving a process investments, limited information, and scheme for the dis- misaligned incentives”.14 posal of flash gases Company engagement with policy by switching a part makers The private sector may have a role to of the flow to a com- play in engaging the government to pressor Conden- work together towards a framework sate Deethanizing that enables progressive climate and Unit (CDU), reduc- energy management. Only two of the six Russian respondents indicated to tion in the amount currently have conversations with poli- of 148,370 tons of cymakers about possible responses СО2/equiv./year.” to climate change including taxation, regulation and carbon trading (Federal NOVATEK Grid Company of Unified Energy Sys- tem, and one non-publicly responding company).

13 McKinsey & Co.: Pathways to an energy and carbon efficient Russia (2009), p.5, 18f.

14 McKinsey & Co.: Pathways to an energy and carbon efficient Russia (2009), p.6.

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GOVERNANCE COMMUNICATIONS Addressing climate change through Good external communications and Four responding com- effective corporate carbon and en- transparency can be an indication of panies indicate to have ergy management requires high-level the company’s confidence in their own a GHG emissions and/or leadership within companies and for- performance and general endorsement energy reduction plan. ward looking strategists that push for of active stakeholder engagement. increased efficiency efforts. In view of Asked about their external communi- the magnitude of the expected impacts cations on e.g. their company-specific from climate change a growing number risks and opportunities presented by Emissions reductions of business scholars and practitioners climate change, four respondents said advocate that responsibility for corpo- they published such information, while and improved energy rate climate change strategies should two companies did not respond. Two efficiency are not only be assumed by the most senior man- of the former detailed that they includ- in the interest of the agement level. Among the Russia 50 ed relevant information in their Annual environment but also respondents three – including Federal Reports and in their Environmental / Grid Company of Unified Energy Sys- Sustainability reports. economically beneficial. tem and NOVATEK – say that a Board However, significant Committee or other executive body carbon reductions can have overall responsibility for climate change within their company. Center only be achieved if gov- Telecom, on the other hand, pointed ernment supports the out that their company “has no person industry’s efforts with an responsible” for climate change related appropriate legislative issues. This is likely to be the case for many Russian companies at this point framework. in time when climate change is often misunderstood by management as a pure environmental – rather than a strategic – topic. “The requirements for boosting the power efficiency and reducing greenhouse gas emissions are set out in Figure 4 - Abatement potential by sectors (in Mt CO -e)15 2 NOVATEK’s Policy for Health, Safety, and En- 43 1 25 7 vironment, approved by 77 304 the Company’s senior 223 25 4 124 management.” 149 217 NOVATEK 228 80 321 99 93 149

321 228 80 34 55 47

Повышение Меры Изменение Управление и Изменение Общий энергоэффект в области структуры хранение CO2 производствен потенциал ивности лесного топливного ных процессов сокращения и сельского баланса выбросов при хозяйства реализации комплекса мер, 2030 г. Power and Heat Petroleum and Gaz Agriculture Forestry Other industries Buildings Transport Waste Source: McKinsey

15 McKinsey & Co.: Pathways to an energy and carbon efficient Russia (2009), p.21.

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Environmental and CSR reporting Concluding Comments and “Information on risks and trends Outlook for CDP 2010 In addition to the six company re- opportunities is pub- sponses that CDP received in 2009, As the United Nations’ Secretary lished in NOVATEK’s three more companies provided other General, Ban Ki Moon, put it, “no is- Report on Sustainable information, as mentioned earlier. This sue is more fundamental to long-term Development in the Rus- indicates that more Russia 50 com- security and sustained global prosper- panies than just the six CDP 2009 ity” than climate change.17 Carbon sian Federation. The re- respondents have carbon or energy disclosure via CDP fosters collabo- port is audited in accor- efficiency data available, and may ration, measurement and action on dance with the АА1000 already manage the risks associated climate change by bringing together with climate change. businesses and investors worldwide. Standard.” Despite certain obstacles such as An independent review of the reporting NOVATEK the lack of Russian carbon report- practices of Russia’s top 50 compa- ing standards, some of the country’s nies shows that even though few com- leading companies participated in the panies directly report climate change inaugural CDP in Russia in 2009, and related information, a majority already Levels of environmen- thus prove to the investment commu- has mechanisms in place to moni- nity and other stakeholders that they tal and CSR reporting tor and disclose environmental and are taking climate change seriously. As 16 among Russia’s leading sustainability results (see Table 5). the government’s stance on climate companies are relatively Interestingly, no Corporate Social Re- change and related issues continues sponsibility (CSR) or Environmental Re- to develop, corporate commitment to high and promising for port could be found for the responding proactive carbon management can be an increased CDP Rus- companies Center Telecom and Irkuts expected to gather further momentum. sia response rate in Power Generation and Distribution CDP will provide the global platform 2010. Company, while several companies that enables companies to strategically that did not participate in CDP 2009 investigate their carbon performance publish emissions related data in dif- and communicate the results to the ferent reports and/or on their websites investment community and other in- (e.g. Lukoil, Magnitogorsk Iron & Steel terested stakeholders. The CDP 2010 Works, Mosenergo, OGK-2, OGK-3, information request went out to the and Raspadskaya). Chairmen of Russia’s top 50 compa- This relatively high level of environmen- nies by market capitalisation (RTS 50) tal reporting among Russian compa- in February 2010. Company responses nies is encouraging for CDP’s signa- are expected back by the end of June tory investors who are hoping for an 2010. There is reason to hope that a increased rate of participation among rising number of Russian companies Russia’s top companies in CDP 2010. will take the opportunity to participate in CDP and help push the expected increase in overall respondents to more than 2,000 companies worldwide.

16 The review was conducted in February 2010 and is based on information available on the websites of the companies in the CDP 2009 Russia sample.

17 Ban, Ki Moon (2009): Foreword to the Carbon Disclosure Project 2009 – Global 500 report.

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Table 5 – Review of Environmental and Sustainability Reports by Russia 50 companies

“Company name Environmental / Corporate Social Responsibility GHG emissions reporting? (CDP 2009 responding companies in bold)” (CSR) reporting? Acron Annual Report includes environmental information n/a Aeroflot CSR Report n/a Bashneft n/a n/a Center Telecom n/a n/a Federal Grid Company of Unified Energy Sustainability Report n/a System Gazprom Environmental Report GHG emissions mentioned but no figures published Gazprom Neft Sustainability Report n/a GMK Norilsk Nickel Sustainability Report n/a Irkutsk Power Generation and Distribution n/a n/a Company (Irkutskenergo) JSC Ufaneftehim n/a n/a Lada Annual Report includes environmental information n/a Lukoil Sustainability Report Describing GHG emissions reduction activities Magnit n/a n/a Magnitogorsk Iron & Steel Works Sustainability Report (available via national database Information available of corporate sustainability reports) Mechel n/a n/a Mosenergo OAO Company website Information available MTS CSR Report n/a North-West Telecom Sustainability Report n/a Novatek Sustainability Report n/a Novolipetsk CSR Report n/a Novorossiysk Commercial Sea Port n/a n/a OGK-2 Sustainability Report Information available OGK-3 Company website Information available Opin Investment and Development Group n/a n/a Polymetal CSR Report n/a Polyus Sustainability Report n/a Raspadskaya OJSC Company website and Annual Report Describing emissions reduction activities RBC Information Systems n/a n/a Rosneft Sustainability Report n/a Rostelecom n/a n/a RusHydro n/a n/a Sberbank n/a n/a Seventh Continent n/a n/a SeverStal CSR Report n/a Sibir Telecom n/a n/a Silvinit Company website includes environmental n/a information Sistema CSR Report n/a Sollers n/a n/a Surgutneftegas n/a n/a Tatneft Sustainability Report n/a TMK n/a n/a Transneft n/a n/a Uralkali n/a n/a Uralsvyazinform n/a n/a Volga Telecom Sustainability Report n/a VSMPO AVISMA Annual Report and company website include n/a environmental information VTB Bank CSR Report n/a Wimm-Bill-Dann Foods n/a n/a

25 Carbon Disclosure Project Appendix Glossary of Terms

AAU Assigned Amount Unit (emissions allowances under Kyoto) APG Associated petroleum gas CDP Carbon Disclosure Project COP15 UNFCCC’s 15th Conference of the Parties, Copenhagen December 2009 CSR Corporate Social Responsibility e.g. for example (exempli gratia) GDP Gross domestic product GHG Greenhouse gas GHG Protocol Greenhouse Gas Protocol – A Corporate Accounting and Reporting Standard by WRI and WBCSD GRI Global Reporting Initiative i.e. that is (id est) incl. Including IPCC Intergovernmental Panel on Climate Change IRR Internal rate of return JI Joint Implementation (Kyoto mechanism)

Mt CO2-e million tonnes of carbon dioxide equivalent PwC PricewaterhouseCoopers RTS Russian Trading System RTS 50 Russia’s top 50 companies as listed on the RTS stock exchange toe Tonne of oil equivalent UNFCCC United Nations Framework Convention on Climate Change WBCSD World Business Council on Sustainable Development WRI World Resources Institute WWF World Wildlife Fund

26 Report Sponsor:

Acknowledgement of contributions The development of the CDP Russia report 2009 is a collaborative effort to which many people have contributed. Special thanks go to the following people and institutions:

WWF Russia Alexey Kokorin (guest contribution) Evgeny Shvarts (foreword) Lada Progunova Ekaterina Levitskaya

British Embassy Moscow

PricewaterhouseCoopers Douglas Grier

Report Writing: Carbon Disclosure Project Friederike Jebens Sue Howells Ekaterina Tarasova

Translation: Ekaterina Tsvetkova Central European University, Hungary [email protected] CDP Contacts

Paul Dickinson Sue Howells Carbon Disclosure Project Chief Executive Officer Head of Global Operations www.cdproject.net [email protected] [email protected] [email protected]

Paul Simpson Friederike Jebens 40 Bowling Green Lane Chief Operating Officer Global Partnership Manager London EC1R 0NE [email protected] [email protected] United Kingdom Tel: + 44 (0) 20 7970 5660/5667 Ekaterina Tarasova Fax: + 44 (0) 20 7691 7316 Russia Project Officer [email protected]

CDP Trustees

Chair: Robert Napier The Met Office

Alan Brown Christoph Schroeder James Cameron Schroders TVM Capital Climate Change Capital

Jeremy Smith Takejiro Sueyoshi Tessa Tennant Berkeley Energy

WWF Russia Contacts

Evgeny Shvarts Director of Conservation Policy [email protected]

Lada Progunova Coordinator, Trade & Investment Programme WWF [email protected]

Important Notice The contents of this report may be used by anyone providing acknowledgement is given to Carbon Disclosure Project (CDP). CDP prepared the data and analysis in this report based on responses to the CDP 2009 information request. CDP does not guarantee the accuracy or completeness of this information. CDP makes no representa- tion or warranty, express or implied, concerning the fairness, accuracy, or completeness of the information and opinions contained herein. All opinions expressed herein are based on CDP’s judgment at the time of this report and are subject to change without notice due to economic, political, industry and firm-specific factors. Guest commentaries where included in this report reflect the views of their respective authors. CDP and its affiliated member firms or partners, or their respective shareholders, directors, officers and/or employees, may have a position in the securities discussed herein. The securities mentioned in this document may not be eligible for sale in some states or countries, nor suitable for all types of investors; their value and the income they produce may fluctuate and/or be adversely affected by exchange rates. Carbon Disclosure Project’ and ‘CDP’ refers to Carbon Disclosure Project, a United Kingdom company limited by guarantee, registered as a United Kingdom charity number 1122330. © 2010 Carbon Disclosure Project.