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0Sustainable Development Report DEVELOPMENT REPORT DEVELOPMENT SUSTAINABLE DEVELOPMENT REPORT SUSTAINABLE 20 20 20 20 # CONTENTS About the Report 2 Message from MTS PJSC President 6 Message from the Chairperson of the ESG Committee 8 Message from the Chairperson of the Sustainable Development and CSR Committee 10 WeAreTogether# COVID 12 MTS Ecosystem Sustainable Development Management 18 Management 40 Business Model 19 Sustainable Development and CSR Strategy 42 Our Markets 22 Sustainable Development Network Infrastructure and ESG Management System 54 Development 32 MTS’s Corporate Responsibility Open Innovations 36 Principles 62 Financial Results 38 1 Responsibility Contacts 171 and Priorities 78 For Shareholders – Openness Appendices 173 and Transparency 80 Achievements 174 For customers – Systematic Approach and Consistency 84 Membership of Associations and Organizations 178 For Personnel – Responsiveness and Care 100 Public Certification of the Report 179 For Partners and Suppliers – GRI Content Index 180 Trust and Cooperation 122 For the State – Reliability and Scale 128 For Local Communities – Support and Development 132 Environmental Responsibility 158 [102-43] [102-44] [102-46] [102-47] [103-1] MTS Group presents its 13th Industrialists and Entrepreneurs obtained in the framework of public Sustainable Development certification of the 2019 Report were used. Report. The business strategy of MTS Customer Lifetime Value MTS runs regular surveys of key stakeholder groups to identify 2.0, focused on building long- the most relevant topics to be addressed in greater detail. The term, sustainable relationships final assessment of the significance of the topic for inclusion in with customers and partners, the Report is also influenced by a comprehensive analysis of the including through the provision Company’s representatives service on public and state committees, of better customer service management decisions, strategic priorities approved by the Board of and the development of an Directors, and the issues raised during regular IR events. Thus, when ecosystem of digital solutions, drafting a Report concept, the working group has the fullest possible identified the priority areas information on the preferences of all key stakeholder groups. of the Report for 2020: the company’s contribution to In addition, the company traditionally conducts a spot measurement of the formation of a sustainable the preferences of the main audiences interested in obtaining detailed society in part of the creation information about the company’s activities aimed at sustainable of socially significant digital development. From January to February 2020, we conducted an online products and the development survey of the main stakeholder groups (over 5,000 respondents). of infrastructure that reduces The survey covered 36 topics across three core dimensions: economic, the level of inequality in society, environmental and social. the creation of jobs and care for employees, as well as direct The most relevant aspects for respondents in both groups are investments in social initiatives, presented in the materiality matrix (pp. 4–5). Top 10 topics relevant to work with communities in the all stakeholder groups: territories of the company’s operations, environmental and • service quality; socio-cultural programs. • information security and data protection; • consumer privacy; 3 The Report has been prepared • consumer health and safety; in accordance with the GRI • responsible business conduct; Sustainability Reporting • job creation in the regions of operation; 2 Standards (Core option) and • development of innovative services; national and international • compliance with legislative requirements; best practices. In addition, • telecommunication infrastructure development; when developing the • respect for human rights. Report, the comments and recommendations of the Board As a digital company, MTS has no significant environmental footprint. on Non-Financial Reporting At the same time, given the relevance of global climate change for MTS, we # ABOUT of the Russian Union of included environmental safety aspects within the boundary of the Report. About the Report THE REPORT 2020 Sustainable Development Report Sustainable Development Report Top-10 topics MTS customers Corporate Authorities relevant to all stakeholder (retail consumers) consumers groups Service Quality of products Quality of products quality /services /services • service quality 80% 84% 63% • information security and data protection • consumer privacy Consumer health Information security and Information security and • consumer health and safety and safety data protection data protection • responsible business conduct 73% 81% 62% • job creation in the regions of operation • development of innovative services Health-saving products Health-saving products Consumer privacy /services /services • compliance with legislative requirements 72% 58% • telecommunication infrastructure 71% development Respect for • respect for human rights human rights Consumer privacy Consumer privacy 1 67% 70% 57% Safer Internet Introduction of innovative Introduction of innovative development technologies technologies 67% 63% 55% 5 4 Local Non-governmental Personnel (MTS MTS Partners MTS Shareholders Communities organizations employees) Health and safety Responsible business Development of innovative Information security and Information security and of operations conduct services (5G, IoT, М2М) data protection data protection 82% 88% 71% 82% 89% Information security and Statutory compliance data protection Service quality Consumer privacy Consumer privacy 80% 86% 68% 77% 84% About the Report Training and career development Quality of CSR management Respect for human MTS Group financial system for employees and social reporting rights Service quality performance 2020 76% 77% 63% 77% 79% Implementation of projects Labor conditions of high social and/or environmental Health and safety (labor protection system) significance Consumer privacy of operations Service quality 75% 70% 61% 74% 79% CORE SOCIAL CORE REQUESTS STAKEHOLDER Information security and The Company's MTS Group financial Responsible business Responsible business data protection environmental initiatives performance conduct conduct 70% 68% 59% 72% 79% Sustainable Development Report Sustainable Development Report 1 The factors relevant to MTS and considered or called important by >50% of respondents. MESSAGE FROM MTS PJSC PRESIDENT [102-14] Dear friends and colleagues! creating new entities using the possibilities of the also our social programs aimed digital world. at developing the creative and My colleagues at MTS and me are intellectual potential of the country’s lucky to work in the industry and in a Today, the MTS portfolio includes a wide range of population, especially the young company that is not only one of the digital and media products related to key social areas: generation, which in a few years first to respond to the surrounding education, culture, ecology, fintech, security, tourism, will become a full participant in reality, but also independently sets leisure, entrepreneurship and small businesses. Our economic and social life of our trends, helping to solve global social mission is to bring new technologies to these areas. society. Together with regional problems with its own services, Therefore, we are actively launching projects based on communities, we identify the needs innovations and expertise. the Internet of Things, Artificial Intelligence, Big Data, of people in different territories and 5G and NB-IoT networks, which can give a new impulse involve the population in the creation Remember how dramatically the to the qualitative development of smart cities in Russia, of joint projects in the field of culture, life of society has changed over their social infrastructure, industry and culture. education and environmental the past year, when the pandemic education, offering our digital literally «pushed» the world We pay special attention to social entrepreneurship technologies as a resource for 7 into the river of transformation. and small business. For this audience, MTS has created solving significant social problems. Remote work, virtualization of a special online platform of digital products: from More than 6,000 MTS volunteers in communications with a decrease advertising tools for promoting products and services different territories are involved in 6 in the overall mobility of the based on big data to online cash registers and cloud such activities. Often our employees population, changes in patterns services. We also help startups to develop their projects are the initiators of social projects of behavior and consumption within MTS 5G Center and the corporate accelerator, for the local communities. MTS is - many processes that were where there is a social track for startups in the area of building up around the company the expected to occur only in a few eco-tourism and eco-education. We have launched the community of not indifferent public, years, occurred in a matter of first Development Kit in Russia to create prototypes including B2B customers, partners, Vyacheslav Nikolaev, months. And it is precisely the of devices for the Internet of Things networks, and representatives of local authorities Рresident & CEO capabilities of digital ecosystem such sets of equipment are already available in many and the media. companies, such as MTS, that Russian universities. In 2020, MTS and its partners in the new circumstances have launched several R&D laboratories
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