matters
Sustainability Report 2018 Positive
En+ Group Sustainability Report 2018 EN+ GROUP | 2 on thisarea. to sustainability to reflect theBoard's focus to publishaseparate Report dedicated entirely Report, the Company hasnow madethedecision on SustainableDevelopment inits2018 Annual Whilst En+ Group includedasection in sustainabledevelopment. of the Company’s progressandachievements or the “Report”) isacomprehensive review referred to asthe “Sustainability Report” The 2018En+Sustainability Report (hereinafter GRI ABOUT THEREPORT 102-51 102-48 102-5 102-52 102-49 102-32 102-54 102-50 102-45 et al such asJSC EuroSibEnergo, PJSC Irkutskenergo (represented by theCompany’s power assets Metals (represented by RUSAL)andPower information aboutEn+Group’s two segments The Sustainability Report 2018discloses statements. detailed intheGroup’s consolidated financial subsidiaries, theeconomic resultsof whichare information includedintheSustainability relationships basedontrust. is central to buildingstableandsustainable stakeholders, andreceiving theirfeedback, of itsbusinessto internal andexternal governance, socialandenvironmentalaspects regular information ontheeconomic, The Company understandsthatproviding (“ESG”) issues. material environmental, socialandgovernance stakeholders andinvestors aroundthemost its commitment to transparency withallits this Sustainability Report, En+Grouphighlights information onanannualbasis. By publishing non-financial disclosure of important to transparency by providing acomprehensive which demonstrates En+Group's commitment since listingontheLondon Stock Exchange This istheCompany’s firstSustainability Report forms shallmeanEN+GROUP IPJSC “we”, “the Company” and “the Group” in various In thisReport theterms “En+”, “En+ Group”, of theReport Boundaries Report About the 3. 2. 1. 31 December 2018https://www.enplusgroup.com/en/investors/results-and-disclosure/ . For alistof significantsubsidiariesplease refer to Consolidated Financial Statements for the year ended For moredetailedinformation aboutEn+Group's segments pleaserefer to pp.22-23, At aglance Before 9July 2019 — EN+GROUP PLC. 3 ). Unlessotherwiseindicated, financial 1 and its andits 2 : correspond withthesumof segmental results. anddiagramsinthis Report maycharts not Due to rounding, sometotals inthetables, Group’s business units, unlessstated otherwise. Performance managementdatacovers allEn+ Standards (IFRS). with International FinancialReporting of 31December 2018, preparedinaccordance on theconsolidated financialstatements as Report 2018ispresented andcalculated based relevant to theCompany’s operations. and theBoardconsiders theGRIstandards standard for sustainability worldwide reports supplements, asthisisthemostwidely used the Mining& MetalsandElectric UtilitiesSector Standards: Core option, including (“GRI”) with theGlobalReporting Initiative of 2019. Ithasbeen preparedinaccordance sustainability events duringfirstsix months and, instances, incertain disclosessignificant from 1January 2018to 31December 2018 This Sustainability Report covers theperiod material topics have been covered. the Sustainability Report to ensurethatall the Boarditselfhave reviewed andapproved (the “HSE Committee”) of theBoardand The Health, Safety, andEnvironmentCommittee
3 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 En+ Group’s sustainable development activities are based on global best activities sustainable development En+ Group’s standards and principles, and Russian international in this area, practices Goals. Nations Sustainable Development including the United sustainable Company's of the outcomes key the reflects The Report and activities and describes its management approaches development achieved. as the results as well measures, Sustainability Context Completeness
The Report reflects positive and negative aspects of the organisation’s performance to enable a reasoned performance of the organisation’s aspects and negative positive reflects The Report performance. overall assessment of analyse changes to in a manner that enables stakeholders The reported is presented information other organisations possible. to comparison and makes time, over performance in the organisation’s to assess the organisation’s for stakeholders and detailed accurate The reported is sufficiently information performance. En+ Group will report is available in time on an annual basis so that information Startingyear, this decisions. informed make to stakeholders for with stakeholders to in a manner that is comprehensible is presented in this Report The information the organisation and its activities. a reasonable understanding of contents of its veracity to establish the Report can be checked that the confidence should have Stakeholders Principles. applied Reporting which it has appropriately to and the extent Description:
Report quality Report Principles for defining Balance Balance Principle: Comparability Accuracy Timeliness Clarity Reliability En+ Group assessed material topics based on stakeholders’ based on stakeholders’ topics En+ Group assessed material and management priorities. expectations Materiality The Company strives to meet or exceed expectations of a wide range of expectations or exceed meet to strives The Company its operations. by who are affected stakeholders of Stakeholder Inclusiveness Stakeholder The following principles were used to define used to principles were The following quality. the Report’s We were guided by the following principles the following guided by were We Report: the during the production of of the Report The principles The principles EN+ GROUP | 4 any otherentitiesblocked by operationof law the designated individualsandentities, andof that: “All assetssubject to U.S. jurisdictionof the OFAC Sanctionson6 April 2018stated issued by theU.S. Treasury inrespect of List (the “OFAC Sanctions”). A pressstatement added to itsSpecially Designated Nationals designated, amongstothers, theCompany to be States of America (the “U.S. Treasury”) of the of theDepartment Treasury of theUnited April 2018, theOffice of Foreign Assets Control potential investors shouldbeawarethaton6 only andnotthereafter. Shareholdersand the Company covering theReporting Period specified) arebasedupontheinformation of (save for thissection, orunlessotherwise presented inthisSustainability Report analyses, reviews, commentaries andrisks Accordingly, allforward-looking statements, to 31December 2018(the “Review Period”). the review periodfrom1January 2018 reflects the Company’s positionduring presented inthisSustainability Report only Unless otherwiseindicated, theinformation of Liability Limitation ABOUT THEREPORT before dealingintheShares. solicitors and/orotherprofessional advisers to consult theirstockbrokers, bank managers, shares. Ifindoubt, they arestrongly advised an assessmentordealingintheCompany’s should exercise caution whenmaking lifted. Shareholders andpotential investors On 27 January 2019, theOFAC Sanctionswere position (financialorotherwise) of theGroup. and risks, doesnotnecessarily reflect thelatest statements, analyses, reviews, commentaries including butnotlimited to allforward-looking Sustainability Report (save for this Warning), Accordingly, theinformation presented inthis may have hadontheCompany ortheGroup. potential impact, whichtheOFAC Sanctions into account theOFAC Sanctionsorany Report (save for this Warning) doesnottake the information presented inthisSustainability potential investors shouldbeawarethat or entitiesblocked today.” Shareholdersand transactions for oronbehalfof theindividuals sanctions for knowingly facilitatingsignificant Additionally, non-U.S. personscould face generally prohibited fromdealingswiththem. party, arefrozen, andU.S. personsare as aresultof theirownership by asanctioned The Company’s namewaschangedasfollows: Shareholder Meeting andtheBoard. the scope of theauthority of theGeneral the authority to actonany matters outside (the “Board”) andprovides thattheCEO Shareholder Meeting andtheboardof directors establishesauthoritythe Charter of theGeneral corporate-documents/ (the “Charter”). Inter alia, https://www.enplusgroup.com/en/investors/ on theCompany’s website at are supersededby thatisavailable thecharter of associationgovernedarticles by Jersey laws the Company’s memorandum of association and With effect fromtheContinuance Date Federation. State Register of Legal Entitiesof theRussian as aninternational company intheUnified Date”), theCompany hasbeen registered With effect from9July 2019(the “Continuance 1. • • • • Continuance disclosures madeby the Company. is usedinterchangeably with theterm “CEO” inpublic usestheterm The Charter “General Director” which EN+ GROUP IPJSC. nameinEnglish: The short International public joint-stock company; The fullnameinEnglish:EN+GROUP МКПАО «ЭН+ГРУП»; nameinRussian: The short общество «ЭН+ГРУП»; компания публичное акционерное The fullnameinRussian: Международная
1 has has 5 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018
Email: [email protected] PR Department 495 642 7937 +7 Tel: Tel: +7 495 642 7937 +7 Tel: Email: [email protected] IR Department For media • • • • • For investors • To provide your feedback, suggest a comment a comment suggest feedback, your provide To a question please contact: or ask information Contact Continuance EN+ GROUP | 6 Contents 6 Contact information Continuance Limitation of Liability Report quality Principles for defining The principlesof theReport Boundaries of theReport About theReport Contents
2 5 4 4 3 3 2 Ethics andintegrity Risk managementsystem Internal control risk management Internal controland En+ GroupCommittees The Barker Plan composition highlights The managementbodies The Board’s Matters Corporate governance system Corporate governance Business model Corporate overview Market presence financial results Group’s key economic and At aglance Key highlights About En+Group Message fromHSECommittee Chair Message fromtheCEO Chairman of theBoard Message fromtheExecutive Statements 11 overview Company's
41 33 19 49 44 42 38 38 36 35 34 30 28 26 24 22 20 16 14 12 Association membership Stakeholder engagement Identification of material topics with theSDGs Our challengesandalignment Strategy andsustainability management approach Our sustainability
64 63 62 56 57 7 | EN+ GROUP
150 152
COMPANY’S OVERVIEW COMPANY’S APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018
162 Additional information Index GRI Content Glossary 119 137 142 143 148 120 122 125 126 128 129 134 136 138
Socio-economic contribution contribution Socio-economic period 2019 and midterm Goals for Management approach Management approach change Climate projects Forestry Energy Air emissions conservation resources Water tailings management and safe Waste rehabilitation Land Biodiversity community Local development 141 Environmental protection Goals for 2019 and midterm period 2019 and midterm Goals for 82 86 92 93 98 99 72 75 79 107 108 109 110 114 100 103 105 115 116
Health and safety Management approach program Monitoring performance Health and safety culture development Safety occupational of Prevention injuries and diseases Employees 91 Management approach Scientific and technological development 81 and development Research Modernisation structure Personnel and inclusion Diversity acquisition Talent development and Learning Social benefits period 2019 and midterm Goals for period 2019 and midterm Goals for Performance management 71 Business System 2018 Performance Supply chain Supply Quality EN+ GROUP | 8 STATEMENTS 9 | EN+ GROUP
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COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 CORPORATE GOVERNANCE GOVERNANCE CORPORATE • ABOUT EN+ GROUP GROUP EN+ ABOUT • INTERNAL CONTROL AND RISK MANAGEMENT RISK AND CONTROL INTERNAL STATEMENTS STATEMENTS
SUSTAINABILITY REPORT 2018 REPORT SUSTAINABILITY
overview
Company's EN+ GROUP | 10 11 | EN+ GROUP
2018
Message from HSE Committee Chair Message from HSE Committee Message from the Executive Chairman of the Board Chairman of Message from the Executive Message from the CEO Statements SUSTAINABILITY REPORT REPORT SUSTAINABILITY • • • IN THIS SECTION EN+ GROUP | 12 of En+Group Executive Chairmanof theBoard Lord Barker of Battle, GRI STATEMENTS 102-14 102-14 Chairman oftheBoard Message fromtheExecutive
to our future. as bothintrinsic to ourgrowth andintegral strongly emphasises sustainabledevelopment is consistent withourbusinessstrategy, which progress year on year. Publishing thisReport will enableourstakeholders to benchmark our governance, environmental andsocialfocus. It improved level of transparency ontheGroup’s This Report aimsto provide adramatically and allinterested stakeholders alike. a London listed company to bothshareholders to presentourfirstSustainability as Report significant. ItisinthatspiritIampleased more to doandthechallengesaheadare we arealsocritically aware thatthereismuch considerable achievements to date. However position onthese vital issuesandproudof our of En+Group. We areproudof ourleading and prioritiesof thenew independentBoard emissions of ourGroupiscentral to theaims drivedetermination down to thecarbon further sustainability agendaandafierce A strongcommitment to aprogressive Dear stakeholders, three timesbelow theindustry average our aluminiumproduction ismorethan estimates. Butthecarbonfootprint of GHG emissionsaccording to Carbon Trust responsible for approximately 1%of global Overall, thealuminiumindustry is currently aluminium industry as verified by KPMG. which isamongthebestlevels intheworld’s aluminium produced atsmelters (Scope 1and 2) footprint islower than4tCO₂e/t of primary a verified low carbon footprint. ALLOW’s carbon brand for low carbonaluminium – ALLOW with In 2017, we launchedanew market leading the low carbontransition. buildings; allessentialbuildingblocksof in thedevelopment of moreenergy efficient aerospace andpackagingindustriesaswell as already usedextensively intheelectric vehicle, carbon globalfuture. Itisfully recyclable, and a material central to thedrive for alow largest producer of low carbonaluminium, to whatwe doasabusiness. We aretheworld’s box tickingexercise. Sustainability iscore But thisfocus isnotapassingfadorboard fight dangerousman-madeclimate change. to face upto theresponsibility we have to help transition to alow carboneconomy, allowing us ability to helpleadour sector intheglobal markets. enhance our These measuresfurther the Groupupto new andnew opportunities strengthened ourbusinessandopened governance reforms thathave further This Report alsobuildsonthemajor on theGroupearlierthis year. to theUS Treasury whensanctionswere lifted on independentgovernance thatwe made than,much further therobustcommitments This disclosureisconsistent with, butgoes reducing carbonemissions. the Company andourprogressinfurther linked to thesustainability performance of (KPIs) for management(includingme!) also includeKey Performance Indicators Our corporate strategies goingforward will 13 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 Smelters’ direct emissions (scope 1) and indirect emissions (scope direct Smelters’ 2). emissions (scope energy 1. En+ Group’s re-invigorated Health, Safety and Safety Health, re-invigorated En+ Group’s As current Chair of Environment Committee. Board Advisory the Group and of The Climate Europe and of Coalition Energy the New of and in both the private with a background is experience her exceptional sectors, public will help us set Ms MacNaughton invaluable. sustainability but achievable, an ambitious, take to like I would the business. for course the invaluable her for thank to this opportunity made that she has already contribution the Group. to our business and the nature of Given En+ ambition, the Board’s the scale of a meaningful play to Group is determined a change in business role in helping drive The Climate change. climate attitudes towards see We crisis is real but so are the solutions. be a meaningful in our Group to the potential but there is a long road part that solution, of but I journey This will be a challenging ahead. sharing our progress with all of to forward look our stakeholders. Battle, of Barker Lord the Board Chairman of Executive Growing our business in a responsible way also our business in a responsible way Growing means enhancing our social and environmental Africa, From Siberia to contribution. a global have we Jamaica, from Ireland to diverse touching footprint geographical Our day-to-day and ecosystems. communities understand and address their challenge is to impact negative minimise any needs, evolving possible repair, where ever from our operations, the environment we and improve safeguard generate we while still ensuring in, operate invest to continue to the returns necessary a sustainable future. for new of Our leadership in the development our sustainability to is key technologies of is at the centre Innovation progress. It is through tireless do. we everything reduce to will continue that we innovation our operations the environmental impact of our products. of and the carbon footprint evaluating to approach Through a scientific our will intensify our natural surroundings we and ecosystems, efforts sustain and enhance to support our local communities. reform As part our governance of appointed 2019 we of at the beginning experienced independent, of a majority directors and high-calibre non-executive Board is working The new Board. the Group’s to diversity with senior management and the well is a huge strength. talent and experience of your draw to like particularly I would However Joan MacNaughton the role of to attention influential figure a highly CB Hon FEI, After policy. and climate energy in international taking up her appointment as an independent Chair of she also assumed the role of director, per tonne of of per tonne 1 drive for a low carbon global future ". drive for a low carbon aluminium, a material central to the aluminium, a material largest producer of low carbon largest producer of We are the world’s are the world’s We as a business. Sustainability is core to what we do is core to what Sustainability However such ambitious progress within En+ However all on the talent and will depend most of Our employees our people. of commitment invest We the Group. of are the driving force our of the development into considerably continents across five 98,000 employees over supportto and their their personal growth The health in the business. shared success is our number employee every of and safety been has and our HSE Committee one priority and strengthened enhanced considerably more meets It now Board. the new by and our performance review to regularly class benchmarks as with world processes, up our drive to the norm and a determination health and safety against key performance Through our operations. across all of indicators enhancing health and a self- developing we culture across our global business, safety our performance improve significantly aim to in this area. In Russia, the heart of our operations, the heart our operations, of In Russia, decision the recent welcome greatly we the Paris ratify to the government by driving the necessary keep and to Agreements It targets. against COP21 deliver changes to is critical that the global metals and mining gets behind this initiative. industry aluminium and substantially lower than than lower aluminium and substantially aluminium the typical Chinese produced But global production. which dominates in our sector that lowest recognise we goal is Our new is not good enough. and reduce example by lead the industry to our products even of the carbon content further. of 12.3 tonnes of CO₂ of 12.3 tonnes of " EN+ GROUP | 14 the CEO Message from STATEMENTS to minimisetheimpactof ourcoal assets. at themomentwe areworking onastrategy there isalotmorethatwe cando. Therefore, clean renewable power. However, we recognise Metals segment’s aluminiumoutputuses shift. Today, morethan90%of En+Group's aluminium meanwe arewell-placed for this Our hydropower assetsandlow-carbon sourced andproduced materials isgrowing. and socialimpact, thedemandfor sustainably increasingly conscious of theirenvironmental As businessesaroundtheworld become period. reporting Report thatwillbepublishedfor thenext independent assurance for theSustainability therefore, madeastrategic decision to obtain our internal sustainability system and reporting This year we focused ontheimprovement of projects andperformance resultsinthisReport. sustainability objectives andto presentourkey continued to make material progressonits thattheGrouphas I amproudto report Dear stakeholders, duty of carefor Lake Baikal, theUNESCO A core focus for thebusiness is ourongoing solar cells. at improving thecharacteristics of perovskite and continued work ontheproject aimed scandium oxide fromwaste bauxite residue, to establishapilotsite for extracting valuable the development anodetechnology of inert and tech engineering to continue progressing in-house andexternal inhigh- expertise against a2014benchmark. We have usedour from electrolysis operationsby 7.5 percent we have reduced direct GHGemissions Overall, Iampleasedto say thatby 2018 the technology outbetween 2018and2022. expects to invest USD250millioninrolling Centre inKrasnoyarsk, andtheCompany developed atourEngineering and Technology efficiency. innovation was Thisimportant emissions whileincreasingproduction cells, enablingusto significantly cut We continued to transitionto Eco-Søderberg electricity. to lower theaverage carbonintensity of demonstrates ourcommitment to continuing by 2.3milliontonnes per year by 2022and the Group's greenhouse gasemissions The programwillalsoallow to reduce amount of water passingthroughtheturbines. electricity generationby 2 TWh, fromthesame HPPs are expected to increasetheirclean of theprogram, from2022ourSiberian starting to analmost20%increaseinpower. As aresult efficiency andimprove cavitation, leading which hasalready enabledusto enhance investment inourHPP modernisationprogram, A key of thisachievement part hasbeen energy andfuelmoreefficiently. at ourCHPs for hydropower outputandusing substituting condensation modegeneration the efficiency of ourhydropower turbines, and socialprograms. We areincreasing to pushforward withbothitsenvironmental 2018, IamproudthatEn+Grouphascontinued Despite unprecedented headwindsduring and we areputtingin place heightened safety accidents hasbeen thoroughly investigated facilities. Every oneof theseworkplace there were someinjuriesatourproduction standards andtraining, unfortunately, in2018 an unfaltering focus onhighhealthandsafety for our businessisouremployees. Despite communityThe mostimportant and resource-saving solutions. entrepreneurs withenvironmentalinnovations only schemefor championingregional Entrepreneurship SchoolProject — Russia’s the Republic of Buryatiato theEnvironmental across theregion — andwelcomed platform to enhance volunteer efforts for Corporate Volunteering—an important the Irkutsk branchof theNationalCouncil 30 companies together to establish In Siberia, En+Groupsucceeded inbringing support. have been ableto offer themsomemeaningful tragic, andIamonly gladthat asabusinesswe have hadto suffer throughthisdiseaseis program. The factthatourlocalcommunities and hashelpedthecountry’s mass vaccination complex for combating dangerousinfections, the disease, developed a modern laboratory operation of aspecialist centre for treating theestablishmentand The businesssupported suffered fromtheoutbreak of theEbola virus. around itsoperationsinGuinea, whichhave the work withcommunities ithas undertaken as ecosystems. The Company isproudof communities aswell means supporting Caring for theplaces inwhichwe operate the lake thatwillunderpinthisapproach. scientists to researchthekey issuesfacing assembling amulti-disciplinedteam of the humanimpactonLake Baikalandis for amulti-stakeholder strategy for addressing Russia. En+Groupcontinues to push which attracted 16,500 volunteers fromaround the success of ourProject 360lake clean-up, hydro operations. In2018, we continued world heritagesite thatprovides water to our 15 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018
Vladimir Kiriukhin, Officer Chief Executive As businesses around the world become increasingly conscious of their environmental and social impact, the demand for sustainably sourced and produced materials is growing. Our hydro power assets and low-carbon aluminium mean we are well-placed for this shift ". "
Vladimir Kiriukhin, Officer Chief Executive Looking ahead, En+ Group remains committed En+ Group remains committed ahead, Looking most the world’s produce ensuring we to this will achieve We sustainable aluminium. innovation—both to through a commitment and in our day every work in the ways we I am changing solutions. industry pursuit of offered the expertise and experience by excited with that, Board and am confident our new by our corporate made to the enhancements is the Company year, the past over governance with both push ahead in a stronger position to strategies. our operational and sustainability is one in which economy the green believe We that and are confident En+ Group can thrive will a more sustainable business the path to and our employees, benefit our shareholders, the planet. measures to ensure that they do not happen ensure that they measures to at En+ Group everyone of The safety again. and I will personally personal priority is my in our efforts cease never ensure that we accidents. workplace prevent to EN+ GROUP | 16 Environment Committee Chair of theHealth, Safety and Joan MacNaughton, Committee Chair Message fromHSE STATEMENTS
in theseareas. we arecommitted to continuous improvement inclusion agendaarekey prioritiesfor En+and respect for humanrights, andthediversity and and robustenvironmentalprotection policies, we have visited. Employee healthandsafety the committee aswell asfromstaff at thesites theworkfrom colleagues supporting of and depthof information we have received its remit. This istestament to thequality already reviewed allof thekey issueswithin " governance of ourcommitmentas part to bestinclass In thebriefperiodsince itwasestablished I feel of privileged thisjourney. to be part of aluminiumto combat climate change, and in behaviourbothproducers andconsumers has ambitiousplansto helpdrive achange of theirbusiness.at theheart The Board of companies thathave putsustainability Committee. En+isoneof theselect group and Chairof itsHealth, Safety andEnvironment earlier this year asanIndependentDirector I was delighted to jointheBoardof En+Group Dear stakeholders, business ". sustainability attheheartof their of companiesthathaveput En+ isoneoftheselectgroup
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En+’s HSECommittee has
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production facilities. an HSEmanagementsystem attheGroup’s now developed andadopted anHSEPolicy and actively working onimproving safety. We have were eightfatalitiesinourGroupbutwe are accidents. We deeply regret thatin2018there the Groupstrives to prevent alloccupational The life of every personmustbeprotected, and contractors atallstagesof itsoperations. the healthandsafety of itsemployees and En+ Groupistotally committed to ensuring to minimiseitsenvironmentalimpact. portfolio energy wherewe canandreviewing ourasset treatment facilities, moving towards renewable wasteremediation andstate-of-the art range of pollutants, investing into land substantialreductioninawider a further work isaheadof us, includingtargeting footprints intheworld. However, muchmore facilities have amongthelowest carbon power generationandaluminiumproduction the En+strategy andcurrently theGroup’s we operate. Sustainability of isattheheart of theuniquenaturalecosystems inwhich our businessandcrucialstewardship responsibilities interms of theimpactof We take extremely seriously our 17 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018
Our sustainability commitments include commitments Our sustainability supporting where En+ and the communities operations and contributing have RUSAL In this context, life. social and economic to assets heat and power combined our legacy burning in Siberia represent a major challenge, local communities heat to provide to coal where no heat alternatives in a region these responsibilities take We exist. currently a roadmap and are developing seriously very 2 1, on GHG emissions (including Scope as and reduction as well and 3) monitoring older equipment of replacement the eventual to local commitment our reflecting and assets, improving on us for who rely communities, water En+ reduced In 2018, life. of their quality 2008 level, to compared 36% by consumption and reused reach 100% recycled aim to we the main production processes for supply water 2022. by across the entire Company the significant risks posed are aware of We manage to are determined We our business. by our for those risks with scrupulous regard and sustainable ensure a safe impact and to our operations and the people En+, future for serve. we and communities Joan MacNaughton, and Environment Safety the Health, Chair of Committee , with , 1 The "New energy" modernisation program envisages energy" "New The TWh annually. 2 generation by power an increase of TWh. 58.3 output, 2018 HPP — baseline Comparison 1. We also have clear targets for the future. the future. clear targets for also have We 95% of cover to hydropower Our aim is for aluminium production the Metals segment's segment The Power 2025. by needs energy generation from its increase power aims to 2022 3.4% by assets by hydropower In terms of environmental performance, environmental performance, of In terms our operations was of the carbon footprint further in 2018 with the emissions reduced 7.5% our aluminium smelters 1) of (Scope implement to continue We than in 2014. lower state-of-the-art technology environmental which have some of across our operations, limiting heat transmission for developed been and some segment losses from the Power cycle introducing a closed water for the Metals segment. for In 2018, the Group paid close attention paid close attention the Group In 2018, among culture a strong safety developing to a number of and introduced its employees while large-scale standards and procedures, management personnel and top training of Safety was organised under the Conscious through the Group’s program, development and with external University Corporate was our LTIFR In 2018, support. consultancy illnesses occupational 0.14 and our employee was 0.214. per one hundred employees rate continue and we here continues Our work and safety these and other health improve to indicators. corresponding reductions in emissions per unit reductions in emissions per corresponding produced. power of EN+ GROUP | 18 19 | EN+ GROUP D
LIFE ON LAN TION AC N RESPONSIBLE CONSUMPTION AND PRODUCTIO 2018
H ORK AND CONOMIC GROWT DECENT W E
Y ABLE AND AFFORD CLEAN ENERG N R TIO TE TA WA ANI CLEAN AND S
G
H BEIN LT L-
Group’s key economic and financial results and financial economic key Group’s presence Market overview Corporate Key highlights Key a glance At AND WEL GOOD HEA
About En+ Group En+ SUSTAINABILITY REPORT REPORT SUSTAINABILITY • • • • • IN THIS SECTION EN+ GROUP | 20 decline innetdebt2018 vs 2017 increase innetprofit 2018 vs 2017 En+ Grouprevenue USD financial results Key economicand Key highlights ABOUTEN+ GROUP 8.8 32.7 12.4 % % bn
was appointed Chief ComplianceOfficer disciplinary actions resulting indismissalsandother audit procedures were conducted 127 was changed management Approach torisk are independentdirectors The majorityoftheBoard were created new committees 2 governance Corporate risk management Internal controland
Key SDGs 7 approach Sustainability established inFebruary 2019 HSE Committee AND WEL GOOD HEA AND PRODUCTIO CONSUMPTION RESPONSIBLE L- LT BEIN H G N AND S CLEAN AC TION ANI WA TA TE TIO R N CLEAN ENERG AFFORD ON LAN LIFE
ABLE AND D Y
E DECENT W CONOMIC GROWT ORK AND H
21 | EN+ GROUP
% % COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 mn 650 16,500 800 7.5 36 ~ clean to part in the eco-event took volunteers shoreline Baikal’s up Lake OVER participated entrepreneurs have young in the Environmental Entrepreneurship Local community community Local development 21 businesses joined and federal regional the National Council branch of the Irkutsk Volunteering Corporate for ~ festival children participatedin RoboSib School Project young peled-fish were released into the Angara the into released peled-fish were young years the past five basin over river "ALLOW" footprint low-carbon brand of aluminium 1.2 reduction of direct GHG emissions of GHG emissions of direct reduction of vs 2014 operations 2018 electrolysis consumption in fresh water decline 2008 to compared the Metals segment by (tCO₂e/tAl) Environmental Environmental protection
% % female representation in female En+ Group in 2018 93 have employees permanent contracts 26 Employees 98,401 employed people 0.214 illness rate occupational employee per 100 employees in 2018, 4,969 safety completed employees 8 fatal incidents in 2018 0.14 in 2018 LTIFR Health and safety 4,000 flashcards outlining safe produced were practices working culture trainings
mn
kV % 67.3
55%
110 increase to control line temperature power supply electricity of the reliability >17 solar the perovskite of factor efficiency reduction of estimated cost of scandium oxide scandium oxide of cost estimated reduction of production cells test samples test cells Scientific and technological development The Tender Committee The Tender was established total cost saving of the Metals segment the Metals segment saving of cost total Business System the implementation of since measures in 2018 USD 638 participants in 250 program Business System Performance Performance management EN+ GROUP | 22 • GRI • ABOUTEN+ GROUP 102-3 102-1 prolonged contact withmoisture. to corrosion andrusting, even after and durable, makingitresistant on thesurface of aluminiumisstrong The oxide membraneformed used in various industries; has goodconductivity andiswidely Aluminium isalightweight metalthat Al total aluminiumcapacity 3.9 mtpa 102-2 102-7
At aglance was registered asalegal entity underthelaws of theRussian Federation. On 25 August 2005theCompany wasregistered asalegal entity underthelawsof Jersey. On9July 2019theCompany energy generation. aluminium productionandrenewable stock companyisagloballeaderin En+ Groupinternationalpublicjoint- Kaliningrad Region, Russia on 9July 2019 from Jersey to Oktyabrsky Island, Kaliningrad, The Company moved itsregistered office advantage. segments isEn+Group’s mainbusiness facilities. The fullintegration of thesetwo of world-class portfolio aluminiumproduction power plantsprovide cleanelectricity for its Power andMetalssegments. The Group’s hydro strategic synergiesthroughitscomplementary resources companies. The Groupachieves En+ Groupisuniqueamongglobalnatural over 98,000 people. across five continents. En+Groupemploys generation withawell-established presence in aluminiumproductionandrenewable energy Company (EN+GROUP IPJSC)isagloballeader EN+ GROUP International Public Joint-Stock 1. outside China aluminium producer No. On30 April 2002theCompany wasregistered asalegal entity underthelawsof theBritish Virgin Islands. 1
production of globalaluminium 5.8 1 . % tenth incopper production. producer, thethirdlargestinnickel outputand the world’s largestplatinumgroupmetals also owns a27.8% stake inNorilsk Nickel, smelting operationslocated inSiberia. RUSAL integrated aluminiumproducer with core by RUSAL. RUSAL isalow cost, vertically En+ Group’s Metalssegment isrepresented Western Europe, JapanandSouthEast Asia. aluminium markets includingtheUnited States, to efficiently access andoperate inall key diversified salesplatform thatallows it The Group’s Metalssegment hasawell- The Metalssegment
producer hydro power global independent No. 1
23 | EN+ GROUP
W G
3 COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 19.6 electricity installed Group’s total capacity Hydroelectric power generation power Hydroelectric from renewable electricity produces and does not release harmful energy the atmosphere; emissions into plants in Russia power Hydroelectric all the country’s about 18% of produce virtually for accounting electricity, electricity renewable Russia’s all of generation. • •
with installed capacity of of with installed capacity 2 The Power segment The Power is the leading independent segment The Power the largest one of in Russia, producer power capacity installed power of in terms globally and the biggest independent hydro power segment The Power in the world. generator value chain: sector the full energy encompasses and heat electricity the production and sale of energy and heat transmission, electricity energy, and engineering. end consumers, sales to heat and hydro, comprises segment The Power energy Renewable generation. solar power plants) (hydro power HPPs five — sources and one SPP 15.1 GW of capacity with total plant) (solar power 5.2 MW— accounted for 77% of the Group’s the Group’s 77% of for accounted 5.2 MW— in 2018. capacity installed electricity En+ Group remained the largest In 2018, contributing in Siberia, producer electricity capacity. installed total the region’s 36.4% to quarters the Group’s three of over Furthermore, is hydro power. capacity Aluminium production— we use the process use the process we Aluminium production— aluminium extract to electrolysis of cryolite dissolving alumina in a molten by The Group increased primary electrolyte. 1.2% in 2018 aluminium production by 3.753 million tonnes. to Alumina production — we produce produce we — Alumina production name given alumina (the common from bauxite. aluminium oxide) to attributable alumina output total RUSAL’s in 2018 and million tonnes was 7.774 in 2017; million tonnes 7.773 Extraction and refinement of bauxites — we — bauxites of Extraction and refinement alumina for materials raw mine the key tropicalvarious in production from topsoil the Group In 2018, and subtropical regions. self-sufficient 75% was approximately and nepheline production; in bauxite Including Onda HPP, with an installed power capacity of 0.08 GW and a production level of 0.4 TWh in 2018 (located 0.4 of a production level and 0.08 GW of capacity with an installed power Including Onda HPP, RUSAL of venture joint (a 50:50 HPP Boguchany RUSAL); excluding leased to in the European part Russia, of Photovoltaic (PV). Photovoltaic and RusHydro). 2. 3. • • • Our production model: EN+ GROUP | 24 and joint ventures by anincreasedshareof profit fromassociates financial results Group’s key economicand elimination upto The capitalexpenditures before intersegmental as at31December 2017) of 31December 2018(USD12,164mn decline innetdebtto USD11,094mnas rise innetprofit to En+ Groupadjusted EBITDA, USD (by USD206mn) increase inaluminaandbauxite sales 26.48 Revenue up En+ Grouprevenue USD year-on-year year-on-year increase year-on-year ABOUTEN+ GROUP 2.5 8.8 32.7 2.3 3.3 12.4 (USD 284mn) % % % USD 1,015 mn USD 1,015mn
USD 1.9bn, driven
% % bn
bn a 2.0% a 2.0%
Other key economicresultsin2017-2018: Net debt Net profitmargin Net profit Adjusted EBITDA margin Adjusted EBITDA Revenue USD mn(except%) 3. 2. 1. Free cashflow After consolidation adjustments. settlement of derivative instruments plusdividendsfromassociates andjoint ventures. Calculated asoperatingcashflow lessnetinterest paidandless capital expenditure adjusted for paymentsfrom Irkutskenergo (the Group’s subsidiary) shares less total cash and cash equivalents as at the end of the relevant period. Net debt — thesumof loansandborrowings bondsoutstandinganddeferred liability for acquisition of PJSC Other Heat sales Electricity sales sales Alumina andbauxite and alloys sales Primary aluminium 2
3
1
26.60% 12,378 11,094 2018 8,165 1,862 1,439 1,329 3,287 15% 461 984 877 26.60% 12,094 12,164 2017 8,169 1,403 3,223 1,366 1,319 1,258 12% 462 778 Change, % -30.30% 32.70% 26.48% -0.05% -0.20% -8.80% 2.00% 5.34% 0.80% +2.3% +3pp - 25 | EN+ GROUP
2017 4,385 Total 17,414 12,094 13,029
2018 5,402 17,679 12,277 12,378 - 12,378 12,094 2017 (1,110) (4,563) (4,563) COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 3,147 - 3,235 adjustments Intersegmental 2018 (1,049) (4,608) (4,608)
2017 3,235 9,054 4,550 4,504 Power Power segment 2018 3,147 8,792 3,991 4,801
2017 9,969 8,479 4,444 12,923 Metals segment 2018 8,286 5,209 10,280 13,495 Power segment Power
Metals segment
9,969 10,280
2017 2018
4 including borrowed capital (loans capital including borrowed including bonds) and borrowings, including equity After consolidation adjustments. consolidation After 4. Revenue dynamics in 2017-2018, Revenue USD mn Total net sales and capitalisation in 2017-2018, USD mn net sales and capitalisation in 2017-2018, Total Total net sales for the year year the net sales for Total Capitalisation at the end of the year the at the end of Capitalisation EN+ GROUP | 26 sector. supply market andaregionalleaderinthepower The Companyisaglobalplayerinthealuminium power producerwithcoreassetsinSiberia,Russia. En+ Groupisaverticallyintegratedaluminiumand GRI (one mine), Guyana(one mine) andGuinea in four countries: Russia (two mines), Jamaica The Metalssegment’s bauxite minesarelocated the Power segment’s electricity. segment isoneof thelargestconsumers of the segment’s mainconsumers. The Metals and municipalitiesinregions of presence are in Russia. Industrialenterprises, households and distributes electricity andheating The Company’s Power segment generates America. to theaviationindustry in EuropeandNorth packaging andconstruction sectors, aswell as of aluminiumto theauto, consumer goods, markets. The Metalssegment isakey supplier Power andaluminiumaretheCompany’s core to customers primarily located inSiberia, Russia. and distributionof electricity andheating The Power segment focuses onthegeneration Western Europe, JapanandSouthEast Asia. aluminium markets includingNorth America, it to efficiently access andoperate inall key a well-diversified salesplatform, whichallows aluminium sales. The Metalssegment has are aluminiumandbauxite productionand The core areasof theCompany's Metals segment ABOUTEN+ GROUP 102-4 102-7 102-6 presence Market segment owns 10 (QAL), analuminarefinery in Australia. TheMetals equity stake inQueensland Alumina Limited plant). Inaddition, theCompany holdsa20% (one plant), Russia (three plants)andGuinea(one Jamaica (one plant), Italy (one plant), Ukraine refineries insix countries: Ireland (one plant), (three mines). The Groupalsohaseight alumina 1. and transmission. engineering services, andelectricity distribution heat distribution;retailenergy tradingandsupply, generation, electricity, capacity andheatsales, the Russian power industry:electricity andheat one solarplantandisengagedinallkey areasof 16 combined heatandpower plantsaswell as the Company operates five hydropower plants, in theEastSiberianand Volga regions. Currently, The Power segment’s assetsarelocated primarily from aluminiumandaluminium-basedalloys. the efficiency of producing value-addedproducts in February 2018to develop andimprove segment establishedaDownstream division a widerangeof otherproductlines. The Metals as well asproductionfacilitiesfor wheels and The Groupoperates foil andpackagingassets and Sweden (one plant). smelters intwo countries: Russia (nineplants) Ten aluminiumsmelters currently inoperation. 1 operational aluminium operationalaluminium by regionin2018 En+ Group’s revenuesplit
CIS
9% 7% Jamaica 14% USA USD 12.4bn Total revenue 33% Europe Guyana Others 36% Asia Ireland Guinea Nigeria Sweden Italy Ukraine Moscow Armenia Kazakhstan Krasnoyarsk HPP Krasnoyarsk AS Abakan SPP Krasnoyarsk Khakass AS Sayanogorsk AS Russia Khakass utilityservices Taishet AS Boguchany AS Irkutsk Boguchany HPP Ust-Ilimsk CHP Bratsk AS Australia Irkutsk HPP CHP-6 Irkutsk AS CHP-10 Ust-Ilimsk HPP Bratsk HPP CHP N Novo-Ziminskaya CHP CHP-9 CHP-12 ovo-Irkutsk CHP-11 CHP-16 Baikalenergo 27 | EN+ GROUP
Baikalenergo COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 CHP-16 CHP-11 ovo-Irkutsk CHP-12 CHP-9 Novo-Ziminskaya CHP N CHP Bratsk HPP 12 Countries 60+ Sites En+ Group is an independent global aluminium and power producer Ust-Ilimsk HPP CHP-10 Irkutsk AS CHP-6 Irkutsk HPP Australia Bratsk AS Ust-Ilimsk CHP
Boguchany HPP Irkutsk
Boguchany AS Taishet AS Khakass utility services TWh
Russia Sayanogorsk AS
2 Khakass AS mn Gcal TWh Krasnoyarsk Abakan SPP Krasnoyarsk AS Krasnoyarsk HPP GWh GWh 27.9 Heat production 58.3 Hydro power 14.9 Thermal power 6 Solar The Power segment The Power Total production Total in 2018 Kazakhstan Armenia Moscow
mt Ukraine mt
mt
Italy
Sweden
Nigeria
13.8 Bauxite 7.8 7.8 Alumina
3.8 Aluminium
Excluding Onda HPP with installed power capacity capacity with installed power Onda HPP Excluding TWh in 2018 0.4 of level and production 0.08 GW RUSAL). leased to in European part Russia, of (Located 2. The Metals segment production Total in 2018 Two business segments: business Two
Guinea Ireland Asia 36% Others Guyana Europe 33% T US 12 USA 14% Jamaica
7%
9% CIS EN+ GROUP | 28 Total Subsidies, includingsubsidiesfor R&D Tax reliefandtax credits from thegovernment Financial assistancereceived GRI category Financial assistance ABOUTEN+ GROUP 102-5 overview Corporate
(MOEX). The Company madesubstantial Exchange (LSE)andtheMoscow Exchange (EN+ GROUP IPJSC) an international public joint-stock company Since 9July 2019, En+Grouphasbeen Metals segment, 2018 10 5 5 USD, mn 2017 1 23 19 listed ontheLondon Stock 4 2018 Power segment, 4 3 1 standards of corporate governance strong andongoingcommitment to thehighest throughout 2018, whichreflect the Company’s changes to itscorporate governance practices 2. 1. USD, mn Annual Report 2018. Corporate governance andpp.96-123, For moredetailedinformation pleaserefer to pp.33-39, Before 9July 2019 — EN+GROUP PLC. 2017 6 3 3 2018 14 14 8 6
EN+ Group, 2 . USD, mn 2017 29 29 22 22 7 29 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 Voting rights Independent trustee 14.33% Independent trustee 7.35% VTB 9.95% Independent trustee 35.00% B-Finance Independent trustee 6.64% Independent trustee 6.75% Independent trustee Institutional and retail 9.42% investors 10.55% Glencore 10.55% 1 Shareholding Former family members 6.75% Former family 4.88% Institutional and retail investors Citi (Nominess) 4.54% B-Finance 44.95% B-Finance VTB 21.68% VTB Citi (Nominess) GDRs issued as part of a Glencore swap transaction. issued as partGDRs a Glencore of Other shareholders 3.42% Delo 3.22% Volnoe 1. Note: percentages may not add up to 100% due to rounding. Voting and shareholder structure and Voting 2019 as at 26 January EN+ GROUP | 30 1. to theGroup’s coal andcoal-fired power assets. a fullreview of strategic optionswithrespect and ambition, theBoardhascommissioned down itscarbonfootprint withgreater urgency In linewithGroup’s commitment to drive broadens itsstrategic opportunities. holding diversifies itsrevenue streamsand producers of platinumandcopper. The Group’s nickel producer andoneof theleading largest palladiumproducer, thesecond-largest Nickel (27.8%). Norilsk Nickel isthe world’s The Grouphasastrategic stake inNorilsk processes. social considerations into ourdecision-making incorporating economic, environmentaland andlong-term interests whilstalways short environmental impact. We strive to balance of metalsandenergy andreduce our core, aimsto responsibly boosttheproduction by itssustainablebusinessmodel, which, atits Sustainability atEn+Groupisunderpinned model Business ABOUTEN+ GROUP Table asat31December 2018. & INPUT OUR RESOURCES Business modelstructure PEOPLE RA Hydro capacity 1 Electricity capacity 1 Al capacity 3 A capacity Alumina production 1 capacity Bauxite production 2 Employees c. SSET 5 9 0 98, . 0 W MA 9 . . . S 1 . 6 4
6 m
S G
0 m G t TERIALS
m W
W tpa 0 tpa 0 1
RA self-sufficient incoalresources. and coalforthermalgeneration.TheGroupisfully The Groupuseswaterforhydropowergeneration self-sufficient inbauxitesandnephelines. In 2018,theGroupwasapproximately70% for aluminaproduction. Bauxites andnephelinesarethekeyrawmaterials Yenisei River. hydrological regimeofLakeBaikalandthe region withaminimalimpactonthe in ordertosupplycheapelectricitythe the AngaraandYeniseihydropowercascade operations wereconductedbeforecreating Meticulous calculationsofhydropower raw materialforalumina. aluminium, canalsobeusedas that usuallypresentsas Nepheline, ahexagonalmineral equator. Thebauxiteismined found inabeltaroundthe with therawmaterialbauxite, Aluminium productionstarts production in2018 1 En+ Group’sCHPs. Coal ismainlyusedtopower W MA 6 Water . Coal Bauxite Nepheline 2 TERIALS
m t 13.8 in 2018 production m 4 in 2018 production m t t . 3 POWER GENERATION REFINING 1 TW production of electricity regions ofoperation. is suppliedtothepowermarketsinits with thermalpowergeneration,which The Group’sHPPportfolioisbalanced alumina processingfacilities. amounts oflow-carbonenergytopower energy businessandgeneratesmassive Hydro powerisakeypartoftheGroup’s 5 the nephelineprocess. Alumina canalsobeextractedvia and lime. using ahotsolutionofcausticsoda separated fromthebauxiteby refining wherealuminais extracted fromthebauxitethrough Alumina, oraluminiumoxide,is production in2018 of electricity third-party aluminasales. favourable marketconditionsthrough allows ustotakeadvantageof aluminium productioncapacityand the prospectiveexpansionofour capacity helpssecureamplesupplyfor En+ Group’slongpositioninalumina production in2018 7 4 . 8 h . 8 power generation Thermal 9 generation Hydro power Alumina .
3
m t TW 2 of heat m production in 2018 h 7 n . Gcal 9
GENERATION PROCESSING/ distribution transmission and – –
intended finalproduct. foundry alloys,dependingonthe into extrusioningots,sheetor and formsCO₂.Liquidaluminiumiscast which reactswiththeoxygeninalumina a positiveanode(bothmadeofcarbon), is runbetweenanegativecathodeand process ofelectrolysis,whereelectricity Aluminium isproducedthroughthe – – – 3 Key products: investment resources Efficient managementof capacity tothegrid Seamlessly connectingnew production in2018 Billets aluminium) low-carbon ALLOW (certified aluminium Primary Electricity . 8 value addedproducts Primary aluminiumand
m t – – – – – Powder Foil Ingots Wire ord Slabs MARKETING S ALES & end-users. products anddirectsalesto regions, focusingonvalue-added key customersinmajorgrowth aiming tofurtherdevelopsales marketing opportunities.Weare China opensupextensive aluminium produceroutsideof En+ Group’spositionasthelargest 1 VAP salesin2018 3 Total salesin2018 – – sales in2018 18. , ,67 6 Direct accesstoconsumers margin Capturing additional and retail Electricity Trading 6 6 4 1
TW kt k t h GL CREA U at 31.12.2018 Investment marketvalue OBAL V aluminium Low-carbon Renewable energy S shareholder value Income and the Group’sstrategicopportunities. earnings aswellbroadeningof for significantdiversificationof copper. TheGroup’sholdingallows leading producersofplatinumand nickel producerandoneofthe palladium producer,thesecond Nornickel istheworld’slargest in Nornickel(27.8%) Strategic investment D For moreinformation Modernisation. ALLOWbrand technological development. please seep.88Scientificand TING Generation program Modernisation. TheNewEnergy technological development. please seep.90Scientificand For moreinformation aluminium industry footprint oftheglobal Reducing thecarbon Community engagement conservation Environmental
For moreinformation Group. Corporateoverview please seep.30AboutEn+ 8 initiatives protection. RUSAL’sClimate please seep.124Environmental For moreinformation community development please seep.143Local protection. Biodiversity please seep.139Environmental For moreinformation For moreinformation , 2 AL 8 UE
6 | | |
| m | | n 31 | EN+ GROUP
n | | m |
|
| | 6
UE 8 AL 2 , For more information For more information please see p. 139 Environmental protection. Biodiversity please see p. 143 Local community development For more information please see p. 124 Environmental protection. RUSAL’s Climate initiatives 8 please see p. 30 About En+ Group. Corporate overview For more information
Environmental conservation Community engagement Reducing the carbon footprint of the global aluminium industry For more information please see p. 90 Scientific and technological development. Modernisation. The New Energy Generation program TING please see p. 88 Scientific and technological development. Modernisation. ALLOW brand For more information D Strategic investment in Nornickel (27.8%) Nornickel is the world’s largest palladium producer, the second nickel producer and one of the leading producers of platinum and copper. The Group’s holding allows for significant diversification of earnings as well as broadening of the Group’s strategic opportunities. Income and shareholder value S Renewable energy Low-carbon aluminium OBAL V Investment market value at 31.12.2018 U COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 CREA GL h t k kt TW
1 4 6 6 Electricity Trading and retail Capturing additional margin Direct access to consumers 6 ,67 , 18. sales in 2018 – – Total sales in 2018 3 VAP sales in 2018 1 En+ Group’s position as the largest aluminium producer outside of China opens up extensive marketing opportunities. We are aiming to further develop sales to key customers in major growth regions, focusing on value-added products and direct sales to end-users. ALES & S MARKETING Slabs Wire ord Ingots Foil Powder – – – – – t m
Primary aluminium and value added products 8 . Electricity Primary aluminium ALLOW (certified low-carbon aluminium) Billets production in 2018 Seamlessly connecting new capacity to the grid Efficient management of investment resources Key products: 3 – – – Aluminium is produced through the process of electrolysis, where electricity is run between a negative cathode and a positive anode (both made of carbon), which reacts with the oxygen in alumina and forms CO₂. Liquid aluminium is cast into extrusion ingots, sheet ingots, or foundry alloys, depending on the intended final product.
– – transmission and distribution PROCESSING/ GENERATION
9 Gcal . n 7 h in 2018 m of heat production 2 TW t m
3
. Alumina Hydro power generation 9 Thermal power generation 8 . h 8 . 4 7 production in 2018 of electricity production in 2018 En+ Group’s long position in alumina capacity helps secure ample supply for the prospective expansion of our aluminium production capacity and allows us to take advantage of favourable market conditions through third-party alumina sales. 5 Alumina, or aluminium oxide, is extracted from the bauxite through refining where alumina is separated from the bauxite by using a hot solution of caustic soda and lime. Alumina can also be extracted via the nepheline process. Hydro power is a key part of the Group’s energy business and generates massive amounts of low-carbon energy to power alumina processing facilities. The Group’s HPP portfolio is balanced with thermal power generation, which is supplied to the power markets in its regions of operation. of electricity production TW 1 REFINING POWER GENERATION 3 . t t m 4 m production in 2018 production in 2018 13.8 t m
TERIALS 2 Nepheline Bauxite Coal . Water 6 W MA Coal is mainly used to power En+ Group’s CHPs. 1 production in 2018 Aluminium production starts with the raw material bauxite, found in a belt around the equator. The bauxite is mined Nepheline, a hexagonal mineral that usually presents as aluminium, can also be used as raw material for alumina. Meticulous calculations of hydro power operations were conducted before creating the Angara and Yenisei hydro power cascade in order to supply cheap electricity to the region with a minimal impact on the hydrological regime of Lake Baikal and the Yenisei River. Bauxites and nephelines are the key raw materials for alumina production. In 2018, the Group was approximately 70% self-sufficient in bauxites and nephelines. The Group uses water for hydro power generation and coal for thermal generation. The Group is fully self-sufficient in coal resources. RA 0 tpa 0 tpa W
W m
TERIALS t G m 0
G S
m 6
4 6 . 1 S . . . 9 W MA 0 . 98, 0 9 5 SSET c. Employees 2 Bauxite production capacity 1 Alumina production capacity 3 Al capacity 1 Electricity capacity 1 Hydro capacity RA PEOPLE A OUR RESOURCES OUR RESOURCES & INPUT EN+ GROUP | 32 33 | EN+ GROUP
The majority of the Board 2 committees new created were are independent directors
The Barker Plan The Barker En+ Group Committees Transparency; Open and clear decision-making; including clear compliance, Legal with and robust compliance the Company for the requirements and remain free be, to Sanctions; from OFAC the Company’s grow to Continuing of all the benefit value for stakeholders. • • The following corporate governance governance corporate The following our principles are fundamental to operations: • • • • 2018
H
ORK AND
The management bodies highlights composition Corporate governance system governance Corporate matters The Board’s CONOMIC GROWT E DECENT W
governance Corporate SUSTAINABILITY REPORT REPORT SUSTAINABILITY • • • IN THIS SECTION Our corporate governance system system governance Our corporate outlines the relationship between shareholders the Company’s the Board, well as and the management team, the Board as the remit and duties of committees. En+ Group is a global company with GDRs listed with Group is a global company En+ Exchanges. Stock and Moscow on the London the highest international to is committed Company The Adherence governance. corporate standards of governance corporate the most rigorous standards of to fresh investment, attracting to standards is the key and position, competitive Group’s strengthening the is based Good governance value. enhancing shareholder ensure aim to we and on clear roles and responsibilities, all areas of cover procedures that our governance Group. across the decision-making EN+ GROUP | 34 GRI to theCompany. make decisions onallkey issuesrelated in themanagementof theCompany and shareholders withanopportunity to participate the highestmanagementbody, whichprovides Company. The GeneralShareholderMeeting is is crucialfor thelong-term success of our We recognise thatrobust corporate governance CORPORATE GOVERNANCE 102-36 102-23 102-18 102-24 102-19 405-1 102-20 102-26 102-22 102-27 and for creatingtheconditions necessary responsible for leadershipof theBoard and met. The Chairmanof theBoardis and otherstakeholders areunderstood ensures thatitsobligationsto shareholders the Company’s values and standardsand its overall management. The Boardalsosets for providing leadershipto theGroupand performance. The Boardisresponsible objectives andreviewing theCompany’s are inplace for theCompany to meet its the necessary financialandhumanresources the Company’s strategic aims, ensuringthat in include, amongotherthings, setting The matters thattheBoardshouldbeengaged success ofourCompany. governance iscrucialforthelong-term We recognisethatrobustcorporate system governance Corporate the implementationof theBarker Plan Management Team throughout2018following implemented anumberof strategic changesto its (the “Management Team”). The Company performed by executive Directors andOfficers The day-to-day operationof theCompany is decisions madeby theBoardareimplemented. business andensuringthatthestrategic for theday-to-day managementof theCompany’s to operate effectively. The CEOisresponsible and individualdirectors Board the allow to committees. system withaseparate boardof directors and RUSAL hasitsown corporate governance 1. The Barker Plan. For moredetailedinformation pleaserefer to p.38, 1 .
35 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 Conducting performance evaluation of of evaluation performance Conducting and members its committees the Board, of compliance of evaluation the Board, of the Board with members of non-executive criteria; independence Board that require items of Approval Charter. under the Company’s approval • • Recommendations to shareholders to Recommendations of changes in the structure approve to including share capital, the Company’s of reduction in the capital and acquisition maintain their market shares to treasury value; issue securities, resolutions to of Approval additional resolutions on any of approval prospectuses; of approval securities, issue of Approval of consolidated annual budgets consolidated of Approval amendments made thereto; and material business core the Company’s over Control its business of evaluation and regular long-term the Company’s of in the context discharge and and objectives strategy and law by obligations contemplated of the Charter; • • • •
Day-to-day control over implementation over control Day-to-day and strategy long-term the Company’s of objectives; Approval of the Company’s long-term long-term the Company’s of Approval and its overall and objectives strategy management mechanism; Determination of priority areas of areas of priority of Determination including approval activities, the Company's and long- mid-term the annual budget, of and strategies development budgets, term amendment the Company, programs of of consideration these documents, of their implementation; the results of • • • The matters specifically reserved reserved specifically The matters inter under the Charter the Board for include, the following: alia, Matters The Board’s The Board’s EN+ GROUP | 36 and itscommittees Composition oftheBoard Anastasia Gorbatova Elena Nesvetaeva Ekaterina Tomilina Vadim Geraskin Andrey Sharonov Joan MacNaughton CB HonFEI Igor Lojevsky Nicholas Jordan Carl D. Hughes Alexander Chmel Hon Christopher Bancroft Burnham The Rt HonLord Barker of Battle PC highlights bodies composition The management CORPORATE GOVERNANCE being theExecutive Chairmanof theBoard. executive directors, andone executive director, independent non-executive directors, four non- Report, theBoardcomprises 12directors: seven social development. As of thedate of this in economics, environmentalprotection and diversity, independence andtheirexperience were elected basedontheprinciplesof directors ontheEn+GroupBoard, who As of 31December 2018, therewere nine 1 Executive Officer (CEO) of En+Group Vladimir Kiriukhinwasappointed Chief of theBoardsince February 2019. since October 2017 andasExecutive Chairman Barker hasserved astheChairmanof theBoard annual generalmeeting on29May 2019. Lord by theCompany’s shareholdersattheCompany of Lord Barker, were re-appointed/appointed All of thecurrentdirectors, withtheexception Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director, SeniorIndependentDirector Executive Chairmanof theBoard external stakeholders. development, andcooperation withkey the Company’s long-term strategy, business in November 2018. As CEO, heoversees 1. board-of-directors/. https://www.enplusgroup.com/en/explore-enplus/ For moredetailedinformation, pleasefollow thelink 37 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 >50 25% 75% 30-50 33% Female 67% Male
2 As of the date of issuance of the Report. of issuance of date the As of 2. Board diversity by gender Board diversity by and age EN+ GROUP | 38 Plan The Barker • • • • Timeline of corporate governance changes: governance. international standardsof corporate remains committed to upholdingthehighest January 2019. Nonetheless, theCompany successful, withsanctionslifted on27 governance mechanisms. The planwas and strengtheningtheCompany’s corporate on theCompany on6 April 2018by overhauling to lift theOFAC sanctionsimposed known astheChairman’s plan), aroadmap the implementationof theBarker Plan(also On 18May 2018theBoardbegan CORPORATE GOVERNANCE alia, new requirements for theBoard; EuroSibEnergo, andOFAC, resultingin, inter the Terms of Removal by En+, RUSAL, JSC 19 December 2018:fulfilment of by theBoard; Interest policy andRisk Managementpolicy 15 November 2018:approval of aConflict of by theBoard; Officer andtheChairman of theBoard authorities between theChiefExecutive 26 July 2018:approval of thedivisionof reference of theBoardcommittees; 20 June2018:amendmentof theterms of 1. • • companies andfinancialinstitutions executives fromleadinginternational energy MacNaughton CBHonFEI, aswell assenior of theNew Energy Coalition of Europe, Joan The Climate Groupandthe Advisory Board Christopher Bancroft BurnhamandChairof Cambridge GlobalCapital co-founder, Hon its effectiveness. The new membersinclude, of experience andpromote thatwillsupport balanced to includethequality andabreadth The Board’s composition hasbeen carefully Directors arenow servingontheBoard. All thenewly appointed Non-Executive En+ Group. ensure thecontinued strongperformance of the BoardandCompany’s managementand increasecooperationaims to between further the Company's procedures. The appointment over thecorporate governance system and the Boardto streamlinetheBoard's control appointed asanExecutive Chairmanof On 8February 2019, Lord Barker was https://www.enplusgroup.com/en/explore-enplus/board-committees/. For moredetailedinformation pleasefollow thelink and Compliance Committee. Environment Committee and(ii)Regulation Board committees: (i)Health, Safety, and 8 February 2019:establishmentof two new EuroSibEnergo; and itssubsidiaries, RUSAL andJSC of OFAC SanctionsfromtheCompany independent directors following thelifting 27 January 2019:appointmentof new 1 .
amended on14February 2019. the Company’s existing Boardcommittees was on 27 January 2019. The composition of reorganised following thelifting of sanctions The composition of thecommittees hasbeen Committee. to theCorporate Governance andNominations members. The Boardmay delegate thisfunction setting theterms of service for committee for constituting, assigning, co-opting, and on behalfof theBoard, whichisresponsible All committees perform theirduties committees to assistitsactivities. The Boardof Directors hasestablishedfive Committees En+ Group 39 | EN+ GROUP
Christopher Bancroft Bancroft Christopher Burnham as Chairman Barker Lord Hughes Carl Igor Lojevsky Joan MacNaughton Regulation and Regulation Compliance Committee COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 is a newly formed committee following following committee formed is a newly
as well as the results of any health, safety, safety, health, any results of as the as well identifying any and environmental audit; and whether the aforementioned risks to is managing such risks executive the appointed effectively. (the Committee Compliance and The Regulation “RCC”) SDN from OFAC’s removal the Company’s members and at least three It comprises List. The primary year. times a at least four meets establish and is to the RCC of responsibility and accountability, maintain transparency, keep as to as well governance, good corporate and Corporate regulatory, all legislative, under review, developments Governance the Board to recommendations and make in relation thereto. Battle of Barker The Right Honourable Lord the Independent Chairman was Barker”) (“Lord year. the 2018 financial the Board for of
Joan MacNaughton Joan MacNaughton as Chair Barker Lord Chmel Alexander Geraskin Vadim Health, Safety, and Environment Committee
1 Christopher Bancroft Bancroft Christopher Burnham Chmel Alexander Igor Lojevsky as Chairman Nicholas Jordan Remuneration Remuneration Committee The Remuneration Committee (the “RemCom”) (the Committee The Remuneration at least half members, three at least comprises Non-Executive whom shall be Independent of times at least three and meets Directors, alia, inter is responsible, The RemCom year. a the Company’s and reviewing determining for and compensation remuneration policies, and including incentives benefits plans, equity-based and any compensation executive due consideration having given plans, the applicable laws and regulations. to and Environment Safety, The Health, is a newly Committee “HSE (the Committee”) established following committee, formed SDN from OFAC’s removal the Company’s members and at least three It comprises List. The primary year. a times at least three meets the HSE Committee responsibilities of of the effectiveness include reviewing and environmental safety health, the Group’s and practices, policies, systems, strategies,
Corporate Governance and Nominations Committee Carl Hughes Carl Nicholas Jordan Joan MacNaughton Andrey Sharonov Sharonov Andrey as Chairman 2
For more detailed information please follow the link please follow For more detailed information April 2019. in Committee Audit and Risk the Board and the Philippe Mailfait left . https://www.enplusgroup.com/en/explore-enplus/board-committees/ Christopher Bancroft Bancroft Christopher Burnham Chmel Alexander Sharonov Andrey 2. 1. Carl Hughes Carl as Chairman Composition of the Board and its committees and Risk Audit Committee The Audit and Risk Committee (the “ARC”) (the Committee Risk Audit and The The Corporate Governance and Nominations Governance The Corporate at least comprises Committee “CGNC”) (the shall whom of at least half members, three and Directors, be Independent Non-Executive The CGNC’s year. a times at least three meets and annually recommend role is to primary guidelines governance the corporate review and its consolidated the Company for corporate oversee subsidiaries and to matters. governance comprises at least three members, all of all of members, three at least comprises Non-Executive whom are Independent year. times a at least four and meets Directors, inter considering, is responsible for ARC The consolidated the Group’s of the integrity alia, of appointment terms the financial statements, the independent auditors, and remuneration of the effectiveness of and ongoing monitoring independent auditors. of and objectivity EN+ GROUP | 40 41 | EN+ GROUP was changed 127 conducted were audit procedures resulting in dismissals and other actions disciplinary Chief Compliance Officer was appointed Approach to risk management 2018
H
ORK AND
Ethics and integrity Internal control Internal management system Risk CONOMIC GROWT E DECENT W
risk managementrisk Internal control and control Internal SUSTAINABILITY REPORT REPORT SUSTAINABILITY • • • IN THIS SECTION We have introduced and rigorously maintain an effective maintain an effective and rigorously introduced have We our assets, aimed at protecting control internal of system and of business processes the efficiency improving and financial activities are ensuring that our economic with the applicable laws and regulations. compliant fully EN+ GROUP | 42 GRI • • • • and Risk Committee, which: En+ Group’s Boardhasestablishedthe Audit the higheststandardsof corporate governance. “ICS”) andrisk managementinaccordance with of theCompany’s Internal Control System (the for maintainingandreviewing theeffectiveness activities. The Boardisalsoresponsible the Company’s financialand economic The Boardoversees theefficiency of INTERNAL CONTROL AND RISK MANAGEMENT 102-30 102-29 to the ARC by theBoard. commissions andinstructionsgiven regulates theperformance of other oversees theauditprocess; control andrisk managementsystems; supervises theefficiency of theinternal the Company’s financialstatements; helps theBoardindependently assess control Internal control andrisk managementmeasures. economic activities, andimplementinternal the Boardoversee theCompany’s financialand independent frommanagementandhelps plans to meet theCompany’s targets. Itis that managesbothlongandshort-term (the “Directorate for Control”) isastructure The Directorate for Control andInternal Audit with alltheapplicablelawsandregulations. prevent fraudandmaintaincompliance the safety andefficiency of itsassets, development dependsonitsability to ensure The Company’s stableandsustainable already been putinto practice. recommendations, themajority of whichhave actions against224employees and1,011 conducted in2018, resultingindisciplinary A total of 127 internal auditprocedures were internal control processes: aimed atinstillingconfidence inthe Company’s The Company has set long and short-term goals • • • • • • issues inagiven calendar year; assignments andanalysingcurrentbusiness Executing unscheduledmanagement once ortwice per year); and divisions(on-site auditsarecarriedout maximum auditcoverage of theenterprises and divisions. These plansareto ensure plans for theCompany’s enterprises Forming andimplementingannualaudit processes. solutions to automate andimprove business Developing andimplementingcritical to selltheCompany’s non-core assets, etc.); additional income (supervisingaproject focused onreducingcosts andgenerating projects for commercial activitiesthatare Developing andimplementingmonitoring and thetender commissions of enterprises); of activitiesof the a part Tender Committee the Company’s commercial activities(as Setting uponlinemonitoring of throughout the year; and conducting quarterly risk monitoring the Company's enterprises andbusinesses drawing upannualrisk mapsof risk Supporting managementactivities: 43 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 Full employee training on En+ Group’s anti- training on En+ Group’s Full employee and anti-fraud procedures. corruption Government Contracting Procedure; Contracting Government “Agreement clauses or the Anti-corruption requirements” anti-corruption observe to with counterparties; contract in every annex • • • The following anti-fraud and anti-corruption anti-fraud and anti-corruption The following part the Company’s policies are an integral of business processes: : 1 Compliance control. control. Compliance Development and implementation of and implementation of Development the internal improve aimed to projects system; control Risk management; Risk process; business of Regulation Operational and financial control; Operational and financial For more detailed information please refer to p.89, p.89, to please refer For more detailed information 2018. Annual Report The Chief Compliance Officer, Officer, The Chief Compliance and the Directorate Control for the Directorate a leading play Resources of the Protection for corruption. role in preventing The Company has a comprehensive set of set of comprehensive has a The Company and bribery prevent to measures in place of form any to opposed is fundamentally or payments. unethical incentives • • • • • The Directorate for Control provides assurance assurance provides Control for The Directorate and shareholders that management to and assets are safeguarded the Company’s following the It employs profits are maximised. accounting maintain proper to mechanisms with and ensure compliance records laws regulators, external of the requirements and regulations 1. EN+ GROUP | 44 development. a risk-based approachto sustainablebusiness standards whileconsistently applying compliance withitscorporate governance any potential threatsto theCompany’s Our risk managementsystem aimsto reduce System andcorporate governance framework. component of theCompany’s Internal Control The risk managementsystem isanessential GRI INTERNAL CONTROL AND RISK MANAGEMENT 102-11 102-30 102-15 system Risk management assesses mitigationmeasures. scenario, estimates thepossibleimpactand businesses. These mapsdetaileachrisk event risks to theGroup's operatingcompanies and Risk mapsareusedto illustrate potential on climate change. whereitcanreduce itsimpact opportunities climate risks. The Groupregularly assesses overall risk managementprocess alsocovers in thenext calendar year. The Company’s that could threaten theCompany’s objectives a comprehensive listof allthepotential risks in theGroup’s risk map, whichincludes Control System. All identifiedrisksareincluded risks andany flawsdetected by the Internal onrisks,reports theprojected impactof these measures. The Directorate for Control also recommendations andimplementingcorrective are taken into account whendeveloping audits onaregular basis. These results the resultsof bothscheduledandunscheduled to the ARC, informing theCommittee about The Directorate for Control directly reports process Risk management and corporate governanceframework. Company’s InternalControl System an essentialcomponentofthe The riskmanagementsystem is involves: process throughouttheCompany, which We employ amultilevel risk management • • • • • • • • Corporate University website. as adistance learningcourse ontheGroup’s in 2018, whichisavailableto allemployees developed anonlinerisk managementcourse approach throughouttheGroup, En+Group To ensureaconsistent risk management developing mitigationmeasures; Choosing arisk managementapproachand assessment, potential damage); Risk assessment(probability, financial Identifying risks; Determining risk appetite; (KPIs). process againstkey performance indicators the effectiveness of therisk management Instructing theBoardto evaluate monitoring; the Boardaboutresultsof quarterly risk Informing themanagementand quarter; Monitoring risk managementresultsevery Mapping potential risks; 45 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 Risk maps for enterprises and the Company and the Company enterprises maps for Risk standardised A transformed. been have meaning that introduced, has been format damage changes in risks and possible risk year; throughout the can be tracked set; each unit has been of appetite The risk unit heads and risk was held for seminar A boosted This meeting in Irkutsk. owners among participantscommunication and priorities define development helped to management processes. in risk The Risk Management Regulation had not Management Regulation The Risk 2013 and previously since updated been bodies and procedures included corporate or are no longer in use; that no longer exist included risks are now All the Company’s operational, only maps (previously in risk separately); considered risks were strategic identified; areas are risk Potential been have indicators assessment risk New probable damage and risk introduced: severity; • • • • • • • The structure of risk management risk The structure of documents was overhauled: regulatory and approaches objectives all principles, assessment are laid out in the Risk risk to while all actions Management Policy, under the Risk and responses come with an emphasis Management Regulation on practical issues with a minimum of questions; theoretical Probable damage; Probable groups). (five severity Risk Risk probability; Risk estimation; Financial risk Risk analysis is a core element of element of analysis is a core Risk management system. risk the Company’s integrated vertically a takes The Company risks Any management. risk approach to levels all at assessed are operations business to account taking into throughout the Group, documents and the responsibilities procedural management in the risk involved everyone of process. Management Regulation the Risk to Updates in 2018: • • • • • The Company uses the following risk risk uses the following The Company assess risk: management metrics to Corporate risks; Corporate risks. Project Market and financial risks; Market Operational risks; • • • • The Group-wide approach to risk management risk The Group-wide approach to The Board approved was changed in 2018. Policy Management first Risk the Company’s public any document for This is a key in 2018. main risk It defines the Group’s company. We management principles and approaches. Management Regulation, our Risk also updated ambitious targets and establishing setting new Innovative assessment methods. risk advanced introduced been have assessment tools risk damage potential that will help us evaluate risk also introduced We severity. and risk The updated in 2018. statements appetite Management Regulation the Risk of version of risks and a detailed classification provides En+ Group has identified assessment tools. risk groups: risk key four Risks assessment EN+ GROUP | 46 GRI and safety regulations Environmental andhealth Operational hazards Operational assets personnel Key seniormanagement Interest rates Foreign currency fluctuations Group dividendstructure Leverage and Metalssegment Interdependence of thePower segment Sanctions Risk The Company hasdetermined thefollowing key risks INTERNAL CONTROL AND RISK MANAGEMENT 102-15 key risks En+ Group’s
1 : legislation health andsafety lawsandregulations of international and Russian environmental This risk includescompliance by theGroup’s subsidiarieswithenvironmentaland to hazardsandrisksthatcould leadto property damageorpersonalinjury ordeath The Group’s power generation, aluminiumandotheroperations aresubject to extend theiroperatinglives The Group’s assetsrequire regular maintenance andmodernisationinorder managerial decisions orleave theCompany, affecting businesscontinuity The risksthattheGroup’s top managementmay adoptincorrect andinefficient potentially leadingto alargeincreaseininterest cost A significantamount of theGroup’s total borrowings have variableinterest rates, denominate theirrevenues and/orcosts inRUB, EURand/orUAH itsfinancialresultsinUSD,The Groupreports subsidiaries while certain the Group’s subsidiariesto distribute dividendsto theCompany sufficient fundsfromitssubsidiaries, andthe Company isreliantontheability of The Company’s ability to meet itscommitments largely dependsonreceiving secured andsubject to covenants The Grouphashighleverage andasubstantialamountof itsborrowings are There isahighlevel of interdependence between thesetwo segments of similarseverity sanctions listagain, orthatothersanctionsmay beimposedwithpotential damage There isarisk thattheCompany anditssubsidiariesmay beputontheOFAC Description 1. Annual Report 2018. For moredetailedinformation pleaserefer to p.91, 47 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 The operational licences and permits that the Group’s subsidiaries require require subsidiaries that the Group’s and permits The operational licences suspended, be invalidated, and agencies may entities various government from that and conditions terms onerous contain or may not be issued or renewed, or may compliance substantial operations or lead to conduct to ability restrict the Group’s penalties or administrative costs skilled labour of and availability changes in the cost any to The Group is exposed of industry in every increased competition to subject become The Group may operation adversely could statements and other public claims, media speculation, Adverse its GDRs value of reputation and the the Company’s affect social, the multi-jurisdictional regulatory, risks relating to to The Group is exposed where it operates and political environment in all countries tax, legal, in particular: (i) capacity to, rules related reform to Authorities continue (ii) transmission and distribution tariffs; and modernisation and decommissioning; future, in the and may, generators, power certain types of for prices (iii) capacity area in any rules and regulations additional new impose unforeseen, status under natural monopoly have companies the Group’s number of A imposed on such with regulations compliance of There is a risk law. the Russian companies sell certain amounts of to required subsidiaries are currently power The Group’s contracts households) under regulated to output (primarily their planned electricity outside the Group’s which are therefore regulator, the relevant at tariffs set by control Description
Labour disruptions, skilled labour shortages, shortages, skilled labour disruptions, Labour inflation and labour cost Competition media Adverse operation of Countries the of reform Regulatory market power Natural monopolies and regulation Tariff fluctuations price and permits Reliance on licences on licences Reliance Risk EN+ GROUP | 48 Mineral Resources Ore Reserves and Anti-monopoly laws Risks of Metalssegment Customer default Technological advances Fuel supply electricity andheat Fluctuations indemandfor Power output Relations withthirdparties Risk INTERNAL CONTROL AND RISK MANAGEMENT
inherently uncertain Ore Reserves andMineralResources dataareonly estimates and aretherefore The Groupissubject to requirements certain underRussian anti-monopoly laws adverse effect ontheGroup’s performance andfinancialresults price anddemand volatility, whichhashad, andmay continue to have, amaterial The Metalssegment operates inacyclical industry thathasrecently experienced the applicableregulations not beableto terminate thecontract orsuspendthesupply unilaterally under If acustomer isunableto pay for thepower suppliedto them, theGroupmay changes inthemarket on thesupply sideandonthedemandside, whichcould inturnleadto structural The energy market issubject to far-reachingtechnological change, both or increasesinprices operations, andtheGroupistherefore exposed to any disruptionsinsupply A of theGroup’s portion power operationsrequire gasandfueloilintheir The demandfor electricity andheat varies seasonally andfrom year to year revenues thanplannedfromelectricity andcapacity sales flows, which could resultindecreased power generationandsubsequent lower The Group’s hydropower generationfacilitiesaresubject to fluctuationsinwater in thewholesaleelectricity market, suchastheSystem Operator The Group’s thatprovide power services operationsaredependentonthirdparties Description 49 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 Accountability; in employees; Trust and transparency; Honesty maximum results achieve to Drive do; in all that we Fairness and impartiality; Care; ongoing to Commitment development. Respect for the individual rights and for Respect all employees; of interests • • • • • • • • cases of unethical behaviour and manage internal unethical behaviour and cases of aware are made fully Employees communications. and raising concerns the critical importance of of if they specialists with compliance consulting doubts about ethical behaviour within any have the Company. commit companies En+ Group’s of All employees in the Code: values outlined ethical the key to Share Dealing Code. Conflicts of Interest Policy; of Interest Conflicts Ethics; Corporate of Code Ethical Standards; of Code In 2018, En+ Group updated its Code of Corporate Corporate of its Code En+ Group updated In 2018, drafted Ethical Standards, of Ethics and Code and Policy of Interest its Conflict and approved disciplinary for recommendations developed employees. measures against non-compliant its procurement also updated The Company the entire Group. for regulations Ethical of Ethics and Code Corporate of The Code Standards are the main documents that regulate beenhave ethics at En+ Group and corporate the Board. by approved ensure to Ethics strives Corporate of The Code with in compliance that business is conducted standards and ethical the highest possible legal monitor to specialists designating dedicated by about employees consult conduct, employee • • Ethics and integrity • • Key documents include: Key 205-2 102-25 103-2 102-17 103-1 102-16 Our commitment to upholding the highest to Our commitment standards is the foundation and ethical legal wastes Corruption do business. we how of undermines trust and valuable resources, full see therefore We harms communities. laws and with anti-bribery compliance our essential to as absolutely regulations as a sustainable company. survival and success the regulations adheres to The Group strictly including operation, of its countries of Corruption”, Preventing “On Law the Russian Foreign Corrupt US Act, Bribery the UK the Group and where possible, Act, Practices and beyond go above to endeavours be a global to the law of the requirements We corruption. leader in the fight against and human individual freedoms respect opportunities equal all provide to rights, of form any and do not tolerate employees this end, To discrimination or child labour. all labour laws and respects the Company En+ its employees. obligations to contractual Code Labour the Russian Group adheres to and pledges Constitution and the Russian human child labour and provide combat to has The Company all. to rights protections corporate of set drawn up a comprehensive ethical compliance. regulate documents to GRI EN+ GROUP | 50 of Corporate Ethicsateachoperatingasset. Ethics Officers oversee compliance withour Code suspicious, disturbingorunethical. anystakeholders to report issuethey find measures. En+Groupencourages all followed upwiththeappropriate remedial principles areidentified, investigated and Any major violations of corporate ethics remuneration procedures andleave provision. labour regulations, theallocationof duties, aspects of businessethics, including We educate ouremployees about various INTERNAL CONTROL AND RISK MANAGEMENT to provide targeted, innovate solutions. working closely withemployees ontheground Code violations andusetheirexperience of management. EthicsOfficers alsohandleEthics and resolve thesituationincollaboration with Committee andtradeunionsto deescalate the headof theenterprise, theLabour Dispute Officers quickly initiate interaction with employment attheCompany, corporate Ethics feel unhappy ormistreated duringtheir implementing solutions. Ifemployees about any concerns they may findand communicating directly withemployees Ethics Officers’ mainroleinvolves business. is thefoundationofhowwedo highest legalandethicalstandards Our commitmenttoupholdingthe
• • ethical misconduct via thededicated hotline: to EthicsOfficers. Stakeholders canalsoreport In 2018, 16ethics violations were reported stakeholders to report anystakeholders to report concerns. a channelfor bothinternal andexternal The hotlineoperates atalltimesandis [email protected]. E-mails canbesentto theaddress: charge; 8-800-250-10-58. All callsarefree of Calls canbemade via thehotlinenumber: 51 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 The Company analyses, and where necessary necessary and where analyses, The Company reports all incoming and develops investigates, GroupThe solutions. and responses appropriate their contact individuals who leave informs their reportdetails about the status of and any actions taken. ensures that Control for The Directorate and the system all incidents are added to the root causes, determine to investigated remedial measures the appropriate develop approach and ensure a best-in-class issues. resolving ethics and compliance to The hotline promotes a culture of transparency transparency a culture of The hotline promotes everyone and makes among employees Reports reporting for violations. accountable and the hotline can be made anonymously to of the confidentiality guarantees the Company registered are cases All received. information all specialists and are handled by in the system In 2018, a particularassigned to case. 21 messages about cases the hotline received of conflicts employee fraud and corruption, of violations during and power abuse of interest, human of No complaints procedures. tender against local violations or offences rights reported. were communities
Our sustainability approach
SUSTAINABILITY REPORT 2018
STRATEGY AND SUSTAINABILITY MANAGEMENT • OUR CHALLENGES AND ALIGNMENT WITH THE SDGS • IDENTIFICATION OF MATERIAL TOPICS • STAKEHOLDER ENGAGEMENT • ASSOCIATION MEMBERSHIP EN+ GROUP | 54 55 | EN+ GROUP
HSE Committee established in 2019 February 7 SDGs key D
LIFE ON LAN TION AC N RESPONSIBLE CONSUMPTION AND PRODUCTIO 2018
H ORK AND CONOMIC GROWT DECENT W E
Y ABLE AND AFFORD CLEAN ENERG N R TIO TE TA WA ANI CLEAN AND S
G
H BEIN LT L-
Identification of material topics of material Identification engagement Stakeholder Association membership Strategy and sustainability management and sustainability Strategy Our challenges and alignment with the SDGs AND WEL GOOD HEA
Our sustainabilityOur approach SUSTAINABILITY REPORT REPORT SUSTAINABILITY • • • • • IN THIS SECTION As a global producer of aluminium and of As a global producer are committed we power, renewable the sustainable development integrating to operations. our daily values into principles and EN+ GROUP | 56 in sustainabledevelopment Employees’ involvement sustainable andattractive dividends. overall shareholderreturnsby payingout preserve itsstrongfinancialpositionandboost high marginandlow-risk productioncapacity, products), maintainandexpand theCompany’s chain (energy, raw materials andfinished sufficiency acrosstheentirealuminium value to achieve integration vertical andself- of En+Group’sAs part strategy, we aim GRI Top management Staff category Employees Management OURSUSTAINABILITY APPROACH 102-16 102-11 102-29 management Strategy andsustainability Function • • • • • • • • • • • • Seek new throughsustainability growth opportunities initiatives; Define sustainability targetsandgoals for theGroup; Operate inlinewithallapplicablelawsandregulations. Provide feedback onsustainability issues; Take inimplementingsustainability anactive part initiatives; Collect feedback andanalyse it. Ensure compliance withallapplicablelawsand regulations; Provide guidance andconsultation onsustainability activities; Build asustainableworkforce; Adopt concepts of sustainability development; Implement sustainability initiatives; Ensure thatcorporate sustainability objectives aremet. The Group’s objectives arethefollowing • • • • • • generation; payments throughstrongfree cashflow Deleverage soliddividend andsupport the Group’s environmentalperformance; Ensure continuous improvement of development opportunities; Actively explore power industry margins; production efficiency andoperating in theglobalaluminiumindustry by raising Reinforce theGroup’s leadership Focus oncost control below inflation; Power segments; balance by integrating theMetalsand Optimise theelectricity supply-demand 1 : • • • • 1. • • priorities are: En+ Group’s top sustainabledevelopment Annual Report 2018. For moredetailedinformation pleaserefer to pp.14-15, Health andSafety); to pp. 91-105, Employees andpp. 107-117, Responsibility for employees (pleaserefer pp. 19-31, About En+Group); Economic efficiency (pleaserefer to development projects. to theGroupthroughresearchand Constantly introduce new technologies Operate sustainably; Local community development). development (pleaserefer to pp. 141-149, Contribution to localcommunities to pp. 119-139, Environmentalprotection); Environmental protection (pleaserefer
57 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 challenges concern the Company’s day-to-day day-to-day the Company’s challenges concern with regards especially business operations, social impact, and the Company’s employees to threats. economic as general potential as well The main challenges are summarised below En+ manages these and further details on how throughout this challenges can be found Report. Nations Sustainable Development The United governments, for a framework Goals provide organisations and civil society companies, genuine help them drive to communities are currently We the future. for improvements seven to our contribution towards working identified manage the vital goals to these of challenges. En+ Group recognises the many En+ Group recognises ensure challenges facing the world to that we are able to combat climate preserve our ecosystems, change, provide a healthy environment and communities sustainable. make Our challenges and Our challenges with alignment the SDGs En+ Group recognises the many challenges the many En+ Group recognises as a global ensure that, to facing the world climate combat are able to we community, provide our ecosystems, preserve change, communities environment and make a healthy come. generations to sustainable for opportunities increase to new As it explores En+ faces its activities, of the sustainability sustainable various challenges in meeting is aware The Company targets. development both are segments that its Metals and Power takes and intensive, and energy resource when developing consideration this into objectives. sustainability address the issues and challenges En+ aims to These its stakeholders. that are essential to The Group strives to implement the precautionary the precautionary implement to The Group strives all the operations on En+ Group’s principle for — supporting the UN Global Compact assets by has RUSAL by represented the Metals segment while the Group a participant 2002, been since in 2019. joined this initiative A Company-wide corporate strategy is currently is currently strategy corporate Company-wide A Board’s the new to according being overhauled instructions. Due to significant changes that have taken taken changes that have significant Due to management within the Company's place the strategies bodies as part Plan, the Barker of employee areas (personnel, focus key for and industrial safety labour protection training, stages of various are still at and climate) development. EN+ GROUP | 58 U Environmental impactofoperations OURSUSTAINABILITY APPROACH N SDG CLEAN ENERG AFFORD AND S CLEAN AC TION ANI WA ABLE AND TA TE TIO R Y N
Challenge change change Climate Energy Air quality management waste water Water and temperatures. Agreement to limittheriseof global contributing to theaimsof theParis production facilities, thereby footprint’ of itsmetalandenergy goal isto decrease the ‘carbon En+ Group’s primary sustainability energy. Siberia withlow-cost, sustainable the residentsandbusinessesof aluminium plantsandto provide (emission-free) energy to power our an ongoingsupply of renewable We areworking to ensure of it. the rivers thatflow into andout of water inLake Baikaland Our goalisto preserve thequality Our commitment projects. by implementingcommunity improvement through changesto ouroperationsand some of themindifferent ways — for example as aconsequence, we areworking towards (SDG). The UNgoalsareinter-related and, any given SustainableDevelopment Goal do notfully alignwithalltheaspects of Group’s activities andsustainability initiatives Like for many otherorganisations, En+ • • • • • • • • • • • • • Our focusareas Gaseous andsolidfluorine Nitrogen andsulphuroxides Total emissionsof pollutants GHG emissions Corporate carbonfootprint — waste Treatment of usedwater and and freshwater ecosystems Impact onnaturalwater bodies during production Total freshwater consumption Total water consumption Coal-fired generation sources Use of otherrenewable energy Hydroelectric power stations Energy savingtechnologies Total energy consumption discharge discharge areas: areas: We addressourchallengesinthree broad • • • stretching goals. In eachof theseareas, we have setourselves standards ingovernance. Developing and upholdingworld-class affect; employees andthecommunities thatwe Improving thelives andwell-being of our and protecting theenvironment; Minimising theimpactof ouroperations
Disclosure intheReport Air emissions Environmental protection, Climate change Environmental protection, Water resources conservation Environmental protection, Energy Environmental protection,
59 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 Environmental protection, Land Land Environmental protection, Biodiversity rehabilitation, Environmental protection, Environmental protection, tailings and safe Waste management Disclosure in the Report Rehabilitation Rehabilitation disposal landfills Waste areas Protected conservation Biodiversity Impact on natural habitats Emergency preparedness Emergency Overburden disposal and storage Tailings Closure and rehabilitation of tailings analysis and risk Monitoring Disturbed land Our focus areas • • • • • • • • • • • En+ Group focuses on the controlled, En+ Group focuses on the controlled, rational and effective use of natural resources. Our commitment The Company's goal is to develop develop goal is to The Company's land restoration programs for conservation and biodiversity where the Company in the regions is present. En+ Group focuses rational and on the controlled, natural resources. use of effective We are committed to reducing all to are committed We on what back cutting by waste and reusing and recycling use, we possible. wherever Biodiversity Waste and Waste tailingssafe Challenge N N D
RESPONSIBLE CONSUMPTION AND PRODUCTIO RESPONSIBLE CONSUMPTION AND PRODUCTIO LIFE ON LAN N SDG U EN+ GROUP | 60 U Our peopleandcommunities OURSUSTAINABILITY APPROACH N SDG E DECENT W AND WEL GOOD HEA AND WEL GOOD HEA CONOMIC GROWT ON LAN LIFE
D L- L- ORK AND LT LT BEIN BEIN H H G G H
Challenge safety Health and engagement and management Employee communities Local and localcommunities. improve thehealthof ourworkers of programsto maintainand and have implemented anumber on thewell-being of ourpeople At En+Group, we arefocused careers for itspeople. and to provide safe, fulfilling to reduce unemployment levels the areaswhereitoperates, the economic productivity of En+ Groupisfocused onincreasing and cooperate withthem. environment for localcommunities We areworking to create apositive Our commitment • • • • • • • • • • • • • • • • • • • • • • • • Our focusareas Occupational diseases on occupational H&S Information andadvice Preventative measures Occupational H&Straining occupational H&S Monitoring compliance with system Occupational H&Smanagement Diversity Social support Employee turnover Fair recruitment Employee incentive system Salaries measurement systems Employee performance employee skills Programs to upgrade Employee training economic development planning National andregional socio- Complaints procedure project completion communities afterSupporting communities impact of operationsonlocal Minimising thepotential communities Interaction withlocal communities Ensuring thewellbeing of local Social development programs management Knowledge andexpertise Incident investigation
Disclosure intheReport Employees Local community development Health andsafety 61 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 Corporate governance, Corporate approach Our sustainability Internal control and risk and risk control Internal and Ethics management, integrity Performance management, management, Performance technological and Scientific community Local development, Additional development, information and risk control Internal Employees, management, Environmental protection Disclosure in the Report
Institutional strengthening bodies in governance Diversity structure Governance documents Governance approach Strategic Directors the Board of of Role performance in sustainability Non-discrimination and equal Non-discrimination and equal opportunities anti-competitive Combatting practices Conduct of Code Corporate collective trade unions, Right for of bargaining & freedom association local cultures for Respect and procedures Policies legal employees’ Improving awareness fulfil Helping employees compliance regulatory responsibilities Social compliance Environmental compliance Anti-corruption system control Internal Transparency Direct economic value generated value generated economic Direct value economic Indirect generated opportunities Economic stakeholders for Operational efficiency values Company compliance ensure regulatory to Our focus areas • • • • • • • • • • • • • • • • • • • • • • • • Our commitment We are committed to ensuring to are committed We in all areas. compliance We focus on implementing best on focus We and ethics. business practices implement to are working We practices governance corporate that support the achievement sustainable development of principles. We are committed to ensure to are committed We performance sustainable economic and supportto future success including social and progress, environmental aspects. Compliance Business ethics Corporate governance Economic results Economic Challenge
H H H H ORK AND ORK AND ORK AND ORK AND CONOMIC GROWT CONOMIC GROWT CONOMIC GROWT CONOMIC GROWT E DECENT W E DECENT W E DECENT W DECENT W E N SDG U Our governance EN+ GROUP | 62 on: in theReport was compiled andassessedbased 1. A complete listof topics to becovered the following processes were conducted: influences decisions of stakeholders, significant impactonandthatsubstantively topics thattheCompany has the most In orderto identify andevaluate thematerial GRI • • • • • • • • • were ranked by: 2. Sustainabledevelopment topics OURSUSTAINABILITY APPROACH 102-29 102-47 Review by executive officers of theGroup. rating systems (includingRobecoSAM); Analysis of thekey sustainabledevelopment Standard); by industry associations(includingthe ASI Factoring intopics recognised asmaterial mining andpower companies; by international andRussian metals & Reviewing thematerial topics identified stakeholders; Surveying of external andinternal engagement. responsible for ESGissuesandstakeholders Interviews withtheCompany employees and globaltrends; Review of publicly availableopensources Industry benchmark analysis; Standards Board(SASB); GRI Standards, Sustainability Accounting recommendations (including for reporting International standardsand 102-44 103-1 102-46 and 10 — “the topic is very significant’. not appearmaterial/significant to therespondent” from 1to 10, where1standsfor “the topic does and managementforesights usingthescale topics inlinewithitsstrategy, risk assessments The Company determines, listsandranks material cooperation.for further the stakeholders whotook andhope part identified asmaterial. We arethankful to all Based ontheresponses, 13topics were were later usedby theGroupfor analysis. in anonlineform. Results of thissurvey topics identificationprocess by filling Our key stakeholders contributed to material and were collated inamateriality matrix. 3. topics wereThirteen recognised asmaterial Materiality matrix material topics Identification of Influence on stakeholder assessments and decisions 6,0 6,5 8,0 8,5 9,0 7,0 7,5 Environment Significance of economic, environmentalandsocialimpacts 6,0 6,5 7,0 Social 7,5 is used. the Power segments, theemployee breakdown to weight theresultsfor theMetalsand of thematrix.in theupperrightpart Inorder the mostsignificant topics arelocated topic may beindifferent areasof importance; Depending onthesurvey results, asignificant The matrix representsthekey material topics. 8,0 Economic 8,5 9,0 63 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 and/or employee organisations is part of and/or employee stakeholders between process the consultation body. and the highest governance engagement stakeholder principles of The key corporate internal are set out in the Company’s of These include the Conflicts documents. of Code Conduct, of Code Policy, Interest Ethical Standards, of Code Ethics, Corporate Policy. and Corruption Anti-Bribery . 1 Stakeholder Stakeholder engagement Stakeholder engagement Stakeholder of and quality service customer of improvement transparent pricing, trade relations, Long-term of fulfilment timely tenders, participation equal in competitive the supplied products/services, standards. with ethical compliance activities, anti-corruption mutual obligations, the remuneration of improvement and living conditions, social of improvement safety, Workplace and training. education the social partnership system, system, sponsoring sports and cultural events. and social initiatives, programs community Employment, with all applicable compliance facilities, public of construction development, Strategic health and safety, occupational legislation, protection including environmental regulations obligations. of tax fulfilment consumer increased transparency, joint solutions and documents that provide of Development of development of initiatives, preparation and implementation in the industry, confidence environment. the industry programs aimed at improving key of setting the implementation measures, strategy financial performance, Improving management system. risk governance, corporate indicators, performance Making recommendations to the Board to Making recommendations co-operation possible participation, regarding on HSE issues with and consultation other companies NGOs, governments, To ensure that all groups are covered by our by are covered ensure that all groups To and engagement approach stakeholder various En+ Group uses feedback, can give annual including channels, communication financial results presentations, reports, corporate website, official the media, with communication face-to-face newspapers, investors suppliers, customers, employees, and a corporate leaders, and local community hotline
102-42 102-44 102-40 102-21 102-43 pp. 49-51, Ethics and integrity. 49-51, pp. For more detailed information please refer to please refer For more detailed information GRI 1. Stakeholder groups Stakeholder Key stakeholder groups stakeholder Key Clients and suppliers and labour unions Employees communities Local authorities National and regional Organisation Non-Governmental and analysts investors Shareholders, Stakeholder groups were identified and groups were Stakeholder to En+ based on their significance selected their involvement of the frequency Group, processes. and their impact on the Company’s is criterion significance stakeholder The key and the Group have stakeholders the influence on each other. En+ Group strives to retain an effective retain an effective to En+ Group strives and build system sustainable development beneficial partnership with our a mutually communication The Company’s stakeholders. is and engagement with stakeholders business respect, based on the principles of on commitments. and delivery cooperation EN+ GROUP | 64 long-term emissioncuts. to showcase whatthey aredoingto ensure campaign to give industriesaplatform and haslauncheditsMissionPossible Summit’s (UNCAS) Industry Transition track for theUNClimate that supports Action Organization for Public-Private Cooperation Economic Forum(“WEF”), theInternational industry of the affiliationpartner World En+ Grouphasbecome astrategic and GRI (“WEF”) of theWorld EconomicForum En+ Groupisastrategicpartner (“ETC”) Transitions Commission En+ GroupjoinedtheEnergy energy transitionstrategies. private stakeholders to advocate ambitious policy insights, andencourages public and decisionmakers withresearch, analytics and and academiaworking to provide leaders fromthebusinessworld, NGOs The ETC isanalliance of global Commission (“ETC”). En+ GroupjoinedtheEnergy Transitions a global shift towards low carbon aluminium, In July 2019, of itsstrategy asapart to lead OURSUSTAINABILITY APPROACH 102-13 102-12 membership Association drive aglobalshift towards low carbonmaterials. researchandinitiatives that programs to support use itsexperience fromongoingsustainability greenhouse gasreductiontargets. Itwillalso to identify new waysitcanwork towards its on theinternational of expertise itsmembers By joiningtheETC, En+Groupaimsto draw the latest IPCC findings. emissions inlinewiththeParis Agreement and of aluminiumproductionandcuttingGHG includes reducingtheenvironmentalimpact going to meet ourclimate targets. This we stillneed to domuchmoreifwe are processes andincreaserecycling. However, to combat climate change, improve production at theforefront of industry-wideefforts Various aluminiumassociationshave been organised by theClimate Partnership of Russia. within theframework of climate-related events carbon economy andenergy efficiency, also different countries ontheissuesrelatingto low- En+ Groupinteracts withtheembassiesof and enforcement of environmentalregulation. legislative initiatives, emissions trading systems in thefollowing areas:environmental to combat environmentalpollution En+ Groupisstudyingworldwide efforts promote agreener economy. to launchlow carbonproductionprocesses and Russia, aninitiative thatencourages companies Russian companies intheClimate Partnership of the Group’s Metalssegment, have joinedother En+ GroupandRUSAL, whichrepresents Change andSustainableDevelopment. conferences, includingtheUNforums onClimate ininternational En+ Groupisaregular participant Russian business, academiaandthecivil society. representatives of theRussian government, industry organisationsandwork closely with We of localandinternational areactive partners change acrossthesectors inwhichwe operate. own sustainability objectives andto drive real associations andglobalbodies — to achieve our collaboration andpartnership — withpeers, En+ Grouprecognises of theimportance 65 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018
En+ Group will focus on reducing carbon En+ Group will focus This emissions from aluminium production. vast amount of the due to can be achieved our by generated energy renewable clean, which is then used plants, hydro power aluminium production. power to
the Company’s 2025 sustainability sustainability 2025 the Company’s and engaging in collaborative commitments a more sustainableefforts create to aluminium industry. We have pledged to publish annual reports pledged to have We on our ongoing efforts implement to the Global Compact of the 10 Principles and peers with industry and collaborate these progress towards drive to stakeholders values. fundamental Engagement activity En+ Group became a partner of the World Economic Forum to accelerate the net accelerate Forum to Economic World a partnerEn+ Group became the of sector. transition in the aluminium zero carbon change, on climate recommendations preparing policy are among companies En+ Group and RUSAL 20 (G20), the Group of the leaders of transition for energy and green sustainable development pricing, and the European Union. 19 countries for forum an international Energy included in the change were and climate development proposals on low-carbon En+ Group's In 2018, Recommendations Policy Communiqué of the Final B20 Adaptation sections Change and Climate Efficiency the G20. to the OECD (BIAC). to Committee Advisory the Business and Industry are members of En+ Group and RUSAL including climate design, on environmental policy the OECD work to members contribute En+ Group and other BIAC management. and sustainable materials efficiency resource circular economy, change, partnership of under the auspices voluntary a CPLC, members of Russian two are the only En+ Group and RUSAL carbon pricing on the global scale. advance to initiated Bank World the Group at the BRICS Business Working Economy and Green partEn+ Group chairs the Russian the Energy of emissions. GHG of reduction and efficiency expertiseits energy shares on Group En+ member, council a As Council. in BRICS Business transition is reflected energy production and green En+ Group on low-carbon The position of BRICS leaders. for Recommendations Council
En+ Group joined the United Nations Global Compact In August 2019, En+ Group joined August 2019, In Nations Global Compact, the United demonstrating its commitment the 10 principles on human rights, to environment and anti-corruption. labour, UN Secretary-General to In a letter Group stressed En+ Guterres, António reducing continue to its determination achieving its environmental impact by Business 20 (B20) Committee Advisory Business and Economic the Organisation for to and Development Cooperation at OECD) (BIAC Leadership Pricing Carbon (CPLC) Coalition BRICS Business Council World Economic Forum (WEF) Economic World Association/Initiative En+ Group Membership of associations Membership of associations EN+ GROUP | 66 Initiative (ASI) Aluminium Stewardship (CDP) Carbon DisclosureProject Industry Association (CNIA) The ChinaNonferrous Metals Compact (UNGC) United NationsGlobal Institute International Aluminium (represented by RUSAL) The Metalssegment (ETC) Energy Transitions Commission Compact (UNGC) United NationsGlobal on Climate Change(UNFCCC) Framework Convention to theUnited Nations Conferences of theParties Business Association (CERBA) Canada EurasiaRussia OURSUSTAINABILITY APPROACH standards. RUSAL’s Technical Directorate areinvolved inthe Working Groups, inpreparationof the whicharetakingpart ASI chain, which focused onresponsibleproduction, sourcingandstewardship, wasconducted in2019. Members of the world. Certification against ASIstandards of RUSAL’s anditsthree facilitieswithinthe Headquarters value Chain of Custody Standard), whichisnow appliedacrossthealuminium manufacturing andsupply chainallover society by inthedevelopment takingpart andlaunchof the ASI standards(ASIPerformance Standard and ASI stakeholders inthealuminium value chainto maximisethesector’s contribution to buildingasustainable RUSAL joinedthe Aluminium Stewardship Initiative (ASI)to work withproducers, customers andother facilities. committed itselfto fully disclosingitsgreenhouse gasemissionsfromitsaluminium, alumina, bauxite andother implementation of itsclimate agenda(carbon footprint, climate risksassessments, climate targets). Ithasalso RUSAL hasbeen involved intheCarbon DisclosureProject since 2015andinforms stakeholders about a long-term strategy for thealuminiumindustry, environmentalprotection andotherissues. In 2012, RUSAL became amemberof theChinaNon-FerrousMetalIndustry Association to work inthefield of a price oncarbon(includinginternal) asanecessary andeffective measureto tackleclimate change. In 2018, RUSAL advocated for theUNGlobalCompact’s BusinessLeadership Criteria onCarbon Pricing by promoting initiative in2008. To the21stsessionof theConference support of theParties to theUNFCCC inParis. RUSAL became amemberof theUnited NationsGlobalCompact, Caring for Climate: The BusinessLeadership Platform as amemberof theInternational Aluminium Institute since 2002. RUSAL hasbeen exchanging bestpractices anddeveloping methodologiesto beappliedinthealuminiumsector its greenhouse gasreductiontargets. In July 2019, En+Groupjoined ETC to identify new waystowards achieving environment andanti-corruption. In August 2019, En+GroupjoinedUNGC to promote itscommitment to 10principlesonhumanrights, labour, of theParties to theUNFCCC (COP24) inKatowice, Poland. presentations onclimate andsustainabledevelopment strategies intheRussian pavilionof the24thConference En+ GroupandRUSAL regularly attend UNClimate ChangeConferences. In2018, En+Groupmadeseveral Group’s New Energy Hydropower Plantsmodernisationprogram. with theinternational businesscommunity. In2018, theCERBA Newsletter publishedinformation aboutEn+ information to theCERBA Newsletter to shareitsachievements insustainabledevelopment andclimate change En+ Groupisamemberof theCanada EurasiaRussia Business Association (CERBA). En+Groupregularly submits
67 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 for aluminium industry. RUSAL Headquarters RUSAL aluminium industry. for compliant certified as been recently have including in its three ASI standards, with mining), (bauxite Timan Bauxite plants: (alumina refining)Aluminium Smelter Urals (primary Aluminium Smelter and Irkutsk bars aluminium alloys, wire rod, aluminium, met the requirements which have and strips), ASI Chain Standard and ASI Performance of company, Norwegian A Standard. Custody of an independent external conducted GL, DNV obtain plans to RUSAL In the future, audit. for its other operations. ASI certification . 1 As En+ Group aspires to be a leaderAs En+ Group aspires to several it has joined in sustainability, organisations global sustainability RUSAL (En+ Group’s Metals (En+ Group’s RUSAL segment) is a member of the Initiative Aluminium Stewardship (ASI) In 2015, RUSAL joined The Aluminium The joined RUSAL In 2015, which focuses (ASI), Initiative Stewardship on responsible aluminium production, aluminium between cooperation and global efforts worldwide companies corresponds change, climate mitigate to ASI The business. line of with En+ Group’s organisations Standard requires Performance with principals of in accordance operate to and best practices Sustainable development The Group’s expert representatives participate in the IPCC on various issues, e.g. on update of the IPCC guidelines the IPCC of on update e.g. various issues, on participate expert representatives in the IPCC The Group’s 2017-2019. of the period for GHGs evaluation for 2017, Since Recommendations. TCFD that supported in Russia company was the only RUSAL Up until 2019, useful information disclose decision to system up an effective on building working voluntarily has been RUSAL the stakeholders. to ICC-Russia, of Change and Sustainable Development Climate of on Economics the Commission As a member of financing and green carbon growth low on sustainable development, recommendations provides RUSAL makers. the chamber members and policy to the global hydro for strategy shape the sustainable development EuroSibEnergo helps to JSC member, As an IHA projects hydropower of aimed at ensuring the sustainable development are generally projects IHA industry. power gas emissions greenhouse estimate methodologies to as developing as well and environmental protection, surfaces. from reservoir June 2015. (GSEP) since Partnership the Global Sustainable Electricity a member of EuroSibEnergo has been JSC The International Hydropower Hydropower The International Association (IHA) Intergovernmental Panel Panel Intergovernmental (IPCC) Change on Climate on Climate-related Force Task Financial Disclosures (TCFD) Chamber of International ICC-Russia Commerce, (represented segment The Power EuroSibEnergo) JSC by The Global Sustainable (GSEP) Partnership Electricity EN+ GROUP | 68 69 | EN+ GROUP • LOCAL COMMUNITY DEVELOPMENT COMMUNITY LOCAL • SCIENTIFIC AND TECHNOLOGICAL TECHNOLOGICAL AND SCIENTIFIC • HEALTH AND SAFETY SAFETY AND HEALTH • EMPLOYEES EMPLOYEES • ENVIRONMENTAL PROTECTION PROTECTION ENVIRONMENTAL PERFORMANCE MANAGEMENT MANAGEMENT PERFORMANCE DEVELOPMENT DEVELOPMENT
SUSTAINABILITY REPORT 2018 REPORT SUSTAINABILITY
Performance
2018 2018 EN+ GROUP | 70 71 | EN+ GROUP mn 67.3 USD 638 total cost saving of the Metals saving of cost total the implementation of since segment measures in 2018 Business System The Tender Committee was established participants in the Business 250 program System 2018 N RESPONSIBLE CONSUMPTION AND PRODUCTIO
H
ORK AND
Quality Business System chain Supply CONOMIC GROWT DECENT W E
management Performance SUSTAINABILITY REPORT REPORT SUSTAINABILITY • • • IN THIS SECTION At En+, we are always looking to boost to are always looking we En+, At and our operations. our people of the performance and outstanding results, reward properly To has Company our improvement, areas for identify Management a robust Performance introduced angle from every that assesses our business system and at all levels. EN+ GROUP | 72 Business System department. segment works together withEn+Group’s Business System intheCompany’s Metals suppliers. processes for interacting withcustomers and production managementandlogisticswith TPS offers theuniqueadvantageof integrating serves astheblueprintfor BusinessSystem. and strives to maintainoptimalefficiency, promotes arapidresponseto customer needs continuous operationalimprovement, Production System (TPS), whichencourages system throughouttheCompany. The Toyota the implementationof acoherent production to efficiency optimisationandpromotes En+. Itensuresasystematic approach a cultureof continual improvement within for developing personnelandcreating Business System isanenvironment System Business PERFORMANCE MANAGEMENT • • • Business System. Their achievements include: launched in2018to improve theGroup’s A total of 15managementcommittees were the Group’s activity. suppliers asthey account for lessthan20%of by theCEO. BusinessSystem doesnotinclude System Committee, whichischaired governing body istheManagementBusiness for BusinessSystem development. The highest andgroupsresponsible System department supervised by En+ManagementLLC’s Business System departments, allof whichare lead. EachbusinessunithassimilarBusiness in 2018, following theMetalssegment’s Business System into itsbusinessprocesses The Power segment only introducing started within En+. a cultureofcontinualimprovement for developingpersonnelandcreating Business Systemisanenvironment throughout theprocess flow. Involving managersindecision-making of bestpractices between Groupcompanies; Creating new approachesandtheexchange making process; Conducting reviews expert of thedecision- include: the implementationof BusinessSystem En+ Group’s key policy documentsregulating • • • • • • including thefollowing: general businessdevelopment objectives, Business System targetsalignwithEn+Group’s in the “Operational Development” function. Regulation for interactions Improvement) Proposals Regulation; the Japanese — Principle of Continuous The Submissionof Kaizen (from The OperationalDevelopment Regulation; Reducing electricity andheatloss. Decreasing theuseof raw materials; Increasing theefficiency of equipment; 73 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 1. Business System 250 250 program is a crucial The Business System performance the Company’s element of The Metals segment management strategy. followed launched the program in 2015, System Business 2018. in segment Power the by and motivate train employees 250 aims to inefficiencies out and resolve seek them to The program throughout the production chain. about employees train and teach is designed to future industry and identify Business System lasts stages, The program has four leaders. model five and covers years and a half two for then is and experience Knowledge platforms. (model sectors other business to transferred has 230-260 usually The program grounds). The program had 230 participants at one time. and segment participants in 2018 in the Power 408 participants in the Metals segment. (both segments) En+ is constantly working to develop the best develop to working En+ is constantly help our employees to programs and initiatives is Business System their full potential. unlock delivering development, employee to central skills and upgraded increased productivity, Our programs include: fulfilment. employee Russian Railways (RZD) is one of of is one (RZD) Railways Russian Business external segment’s the Power The joint partners. development System an effective “Implementation of project all participants for engagement process involves in the transportation process” and En+ Group belonging to companies this En+ Group initiated Railways. Russian inefficiencies and eliminate identify to project En+ transportation processes. in the Group’s methodological supportGroup is also providing employees. RZD to Business System key the Group’s One of is close cooperation initiatives development educational vocational with higher and in our with universities Working institutions. produce operation ensures that they of regions that talent with the skills and knowledge We our business forward. drive to need we two launched an educational program for College Energy students at Irkutsk streams of and practical both theoretical covering in 2017, students in total. and taught 267 courses, Centre Research Corporate The Irkutskenergo will we In 2019, trained 31 students in 2018. students on training and developing focus and metallurgy geology studying in energy, is also looking into The Company faculties. departmentestablishing a separate at INRTU University) Technical National Research (Irkutsk the skills that in teaching that will specialise in future employees. for look we The Power segment’s key Business System Business System key segment’s The Power of saving a cost make goal in 2018 was to LLC at least USD 32 mn (USD 22 mn excluding LLC Metallurgical Plant (KraMZ), Krasnoyarsk and Mining and Metallurgical Complex, Sorsk saving in 2018 was The actual cost logistics). mn. USD 27 The Metals segment achieved achieved The Metals segment million USD 67.3 saving of cost a total Business System from the implementation of measures in 2018. In 2018, the Metals segment launched the Metals segment In 2018, (Lead the production cycle reduce to a project chain, a backup supply and create LT) — Time conducted as part which the Company of transhipment at the sea an experimental Primorsky in the south of Zarubino port of (north-western part Russia the Sea of of Krai, shipped and successfully The project Japan). slabs and cut of 3,000 tonnes handled nearly also The Metals segment 63 days. from 90 to LT with the Sea Port held joint training initiatives share its expertise to JSC Saint Petersburg of implementation. on Business System Results in 2018 Results EN+ GROUP | 74 in March2019. at theendof 2018withanother40joining and LLC VostSibUgol. We had28participants available for employees of JSC EuroSibEnergo logistics andeconomics. The programhasbeen technological processes, suchasprocurement, business problemsbeyond manufacturingand identify leaderswhowillbeableto handle aims to develop managementskillsand specialists, economists andmanagers. It engaged intheprocurementprocess, including This programwasdeveloped for employees (the Power segment) 4. Kommersant projects. implement personalBusinessSystem and TIPS to three years. The program’s must participants Inventive Problem Solving), andlastsfor two Change, Quality, People and TIPS (Theory of of seven modulessuchasOutlook, Training, worked with32employees intotal. Itconsists managers and chief engineers. The program has for positionssuchasstationdirectors, to trainmembersof thecandidate pool This isafast-track development program (the Power segment) 3. Technical Academy the New Projects Directorate. Alumina andDownstream Divisions, aswell as of theMetalssegment inthe Aluminium, workshops operate at10productionfacilities to implementproposedimprovements. Kaizen giving employees thecapabilitiesthey need standardising technological operationsand for optimisingproductionprocesses, Kaizen workshops areaneffective tool (the Metalssegment) 2. Kaizen workshops PERFORMANCE MANAGEMENT
• • • • initiatives plannedfor 2019: The Metalssegment hasthefollowing 2019 development plans Business System operational efficiency; to improve equipment operability andboost Launching aproject atRUSAL-Achinsk JSC and BusinessCoordination (DCIABC); the Directorate for Control, Internal Audit will bedelivered inconjunction with employees by theendof the year and The programaimsto trainatleast500 for procurementpersonnelin2019. Implementing atrainingprogram in linewiththe2019schedule; at theCompany's productionfacilities of BusinessSystem implementation Organising andconducting audits level; at individualplantsandthecorporate the Improvements of the Year 2019contest Organising andconducting • • • • • • development for 2019 include: The Power segment’s plansfor BusinessSystem for thecandidate poolin2019. for interdivisional internships program Organising methodologicalsupport centre; with theRUSAL Laboratory youth initiatives Directorate (HRD), aswell asajointprogram in collaboration withtheHumanResources department), BusinessSystems training Design program(opening theSFU Organising theFundamentalsof Industrial in theGroup. Launching six BusinessSystem projects employees; course for 68En+commercial service Conducting aBusinessSystem training National Research Technical University); atINRTUSystems department (Irkutsk Implementing andlaunchingaProduction them for managementpositions; and candidate poolmembersto fasttrack of the participants Transformation program Coordinating trainingfor the388 75 | EN+ GROUP
68% Total 9,319.42
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018
1 70% 491.48 Excluding LLC Krasnoyarsk Metallurgical Plant (KraMZ) Metallurgical Plant (KraMZ) Krasnoyarsk LLC Excluding (SMR). PLC Mining and Resources and Strikeforce 1. The Company’s key principles are key The Company’s competitive and equal transparent provide to opportunities suppliers. all potential for enhanced has been The procurement process these principles. to ensure strict adherence to the 2018 procurement budget of The percentage from local suppliers and companies sourced presence of regions in En + Group's registered regions Novgorod Nizhny Irkutsk, (Krasnoyarsk, Khakassia): of and the Republic Power segment Power 68% 8,827.94 Metals segment Attracting alternatives, broadening alternatives, Attracting the supplier base; Optimising inventory. Maximising transparency; Maximising transparency; Expanding competition; • • • • itself the following key goals to further goals to boost key itself the following chain: its supply responsible sourcing in Supply chain 204-1 414-1 102-10 308-1 102-9 En+ Group comprises multiple companies multiple companies En+ Group comprises contractors of with a large number that work and an effective Promoting and suppliers. chain is a crucial step responsible supply ensure this, To sustainability. achieving towards comply to all its contractors the Group needs environmental, and Russian with international that are requirements health and safety The agreements set out in our agreements. best worldwide to are drawn up according as and include HSE requirements practices The Group has set as social obligations. well Total purchases, USD mn purchases, Total Percentage of the procurement budget used for significant locations of of the procurement budget used for significant Percentage local to that operation in 2018 operation that is spent on suppliers GRI Percentage of products and services and services products of Percentage locally sourced EN+ GROUP | 76 for instance, supply chainmanagementhasbeen its own suppliersandcontracts. InRUSAL, business unitisalsoresponsiblefor checking supply chainmanagementsystem, eachindividual To ensureacomprehensive, vertically integrated the supply chainpoliciesapproved by theBoard. The CEO’s role isto oversee theimplementationof when interacting withsuppliers. the principlesthatCompany mustobserve the BusinessPartner Code, whichestablishes by corporate codes andpolicies, including to sustainability andESGissuesisgoverned The Metalssegment’s managementapproach links inoursupply chain. collaboration: we cannotafford to have any weak Complex productionprocesses require seamless operate attheCompany’s productionfacilities. well asservices, includingcontractors that and feedstock, equipment andtechnology, as electricity andfuelproducts, raw materials works withalargenumberof suppliersof aluminium, En+Group’s Metalssegment As oneof theworld’s largestproducers of segment The Metals PERFORMANCE MANAGEMENT but notlimited to: delegated to anumberof businessunitsincluding, • • • agreements. requirements that aresetoutinour environmental, healthandsafety comply withinternationaland Russian the Groupneedsallitscontractors to achieving sustainability.To ensurethis, supply chainisacrucialstep towards Promoting aneffectiveand responsible human rightsandanti-corruption laws procedures andchecks for adherence with the reliability of compliance of suppliersaspart The Compliance verifies Department the supply chain. safety programsandrisk managementacross well astheimplementationof healthand and climate changerisk management, as Policy, HealthandSafety Policy, environmental management. Itoversees theEnvironmental Committee isheavily involved insupply chain The Health, Safety andEnvironmental Partner Code. with theESGstandardssetoutinBusiness regulations. The auditsalsoassesscompliance compliant withallcorporate andlegal all entitiesintheGroup’s supply chainare conducts supplierauditsto ensurethat The Company’s procurementdepartment Procurement Unitsof Aluminium Smelters. Division; Commercial of the Department Aluminium Directorate;Business Support • • • • • • • • documents: The framework consists of thefollowing main products to arigoroussystem of requirements. of raw materials andfeedstock for core The Metalssegment subjects allsuppliers from publicly-availableinformation. conducts anin-depthanalysisof theirprofile by reviewing thecounterparty’s documentsand monitors alltheCompany’s transactions during contract reviews. The Department Quality agreement; materials andfeedstock; Accounting methodsfor non-compliant raw suppliers; Guidelines for thedevelopment of QMS of Supplier ratingassessmentmethod; Regulation onSupplier Accreditation; Raw Materials andFeedstock; Regulation for Auditing Manufacturersof Suppliers of Raw Materials; Regulation for theQuality Certification of Procurement regulations; 77 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 Implementing new procurement approaches Implementing new within the Group; methodological support Providing the procurement process; for chains; and optimising supply Monitoring Initiating the procurement process goods and services; for and assets. with illiquid items Working Tender and Competition Committee Committee and Competition Tender Regulation; Bodies Regulation. Collegiate Moreover, the Tender Committee was Committee Tender the Moreover, coordinate established in 2018 to The Company is introducing additional is introducing The Company activities guide its commercial principles to an efficient supplier selection and develop (including goods and services for procedure and installation works). construction savings cost maximise goal is to The ultimate Tender participating in the (including by of and supervising the work Committee Committees). Tender business units’ and Commercial The Department Price for was launched in 2018 as Operations control (the Committee Audit and Risk a part the of It is responsible for: “ARC”). • • • • • • • Internal procurement standards for supplier procurement standards for Internal surplus selection, contractor selection, management; The Procurement Process Policy (publicly- Policy Process The Procurement and website available on the corporate procurement website); state • • The Power segment is fully Segment in the En+ Power Procurement House Trading at EuroSibEnergo centralised “Trading as the to referred (hereinafter LLC House Trading the the moment, At House”). material supplier of is the main centralised all for and contractors equipment resources, segment. in the Power companies in the Power companies the Group’s All of with a standardised must comply segment all purchases of that covers procurement policy as the assessment as well goods and services, proposals. commercial incoming of aims procurement process The Company’s legislation with state ensure compliance to of on the Procurement Act and the Federal in particular. and Services Construction Goods, continuously effortsare improvement Extensive of on the digitalisation focusing ongoing, use the following We the procurement process. and regulate documents to internal key standardise procurement in the Power segment: Regulation on the Supplier Accreditation Accreditation the Supplier on Regulation System. Regulation on Contractor Management on Contractor Regulation Fire and Health and Safety, in the area of Environmental Safety; The vertical management system for health, health, vertical for The management system all employees covers industrial and fire safety and processes in its core and contractors all encouraging culture by a safety reinforces example. lead by to and contractors employees The Company not only investigates all investigates not only The Company efforts concerted but also makes incidents, manage risks proactively. to The main criteria for the assessment of of the assessment for The main criteria qualifications, are professional contractors equipment personal protective of the provision safely. work to and the ability Interaction with contractors is another with contractors Interaction chain important supply element of both hold The Metals segment management. the same strict to and employees contractors requirements. The Company considers maintaining a close considers The Company relationship with suppliers as a critical working cooperation. long-term in successful factor develop help suppliers to En+ Group strives number A sustainable and ethical practices. requirements of suppliers use our system of supplier audits as and see as a benchmark their development identifying for a useful tool priorities. • • EN+ GROUP | 78 • • • • • • • • • • to theachievement of KPIssuchas: and managers). Managers’ remunerationistied with highKPIrates (for bothbusinessunits The Company hashitallitstargetsin2018 procurement unit, whichhasitsown KPIs. processed throughthecentralised Around 95%of allprocurementswere construction work. purchasesof materials,important services and the decision-making process for themost describe therequirements for suppliersand The Regulations for Auditing Suppliers The Power segment’s quantitative KPIsinclude: PERFORMANCE MANAGEMENT Launching employee trainingprograms. the approved deadline; Selection Process project andmeeting Implementing theSpeeding UptheSupplier procurement process by 10%; the average numberof suppliersfor each Increasing thesupplierbase, increasing 3 mn; Achieving adelivery volume fromChinaof USD for atleast59%; The shareof manufacturersamongsuppliers investment programs; Completing atleast90%of maintenance and Net working capitalnolower thanUSD -7.6 mn; Consolidating procurementprocesses. the procurementprocess; Incorporating feedback fromsuppliersinto Providing materials andequipment ontime; in theCompany’s procurementprocesses: are three typesof materials andequipment According to theCompany’s regulations, there three years. are found. An obligatory check isheldevery materials suppliedincreases, orinconsistencies technological processes change, theamountof mayexisting partners alsobeaudited iftheir contractors. All new suppliersareaudited and • • • • • and ensurequality control, we have centralised To boosttransparency, standardisepractices system to: En+ Groupsetupthisthree-tier procurement in theFederal Antimonopoly Service’s black list. can receive negative reviews andbeincluded no need for aratingsystem; however, suppliers the procurementprocess meansthatthereis set outincontracts. The transparency of and safety requirements thatareusually if they failto comply withthehealth Suppliers andcontractors willbefined to preliminary assessments. and otherspecified goodsarealsosubject purchased before, potentially dangerousgoods Complex products, productsthathave notbeen processes to reduce corruption risks. different people responsiblefor different Separate decision-making stages, making bodies andcollegial bodies; procedural requirements of allprocurement Standardise themembership, remitand Unique (extra complex). Complex; Simple; contractors isensuredby: Data confidentiality andsecurity of suppliersand a very uniqueindustry). suppliers (except for rolledproducts, whichis The Company doesnotgenerally select thesame is connected to repairandmaintenance services. Most procurementactivity inthePower segments on thedisposalof non-core andilliquidassets. an additionalcentralised unitto focus processes inthe Trading House. We created our contractor andservice provider selection • • • sensitive databy thetender hasbeen closed. Restricting access to folders containing to protect dataaboutprocurements; Engaging thecybersecurity department Requiring employees to signNDA documents; 79 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 production processes that focus on meeting on meeting that focus production processes The Focus requirements. customer basic improve aims to Program Improvement with customers with key communication and cooperation expanding the goal of strengthening relationships. Variability a also formed The Metals segment the problem- monitor to (VRT) Team Reduction remedial and the results of solving process also launched a Digital The segment measures. management and competency project Quality processes. A quality management system (QMS) has been has been (QMS) management system quality A create to in the Metals segment implemented standardised business processes efficient, the Company In 2018, and operations. the transition completed successfully the standard of version 16949 IATF the new to regulate We industry. the automotive for our production facilities of the compliance and guidelines regulations with standards, which management policy, using the quality management quality regular is supported by and process (QMS, audits and internal meetings product). launched the Perfect The Metals segment developing with the aim of initiative Process
various assets and industries. business and is a priority across our business and is a priority to expect from us is crucial to our to expect from us is our customers have come quality our customers have Ensuring and delivering the consistent Ensuring and delivering To ensure best practices and offer concrete concrete and offer ensure best practices To made have we clients, to guarantees obtained have sure that our companies certification. management systems quality that these This certification guarantees standards international adhere to companies management systems and that their quality and KraMZ RUSAL integrated. are properly Quality — with ISO 9001 are both compliant Management System. Ensuring and delivering the consistent the consistent Ensuring and delivering expect to come have our customers quality our business and is from us is crucial to various assets and across our a priority industries. Quality EN+ GROUP | 80 81 | EN+ GROUP
kV % % 17 > perovskite of the factor efficiency samples test solar cells 110 55 power line temperature control control line temperature power of reliability increase the to supply electricity reduction of estimated scandium estimated reduction of production costs oxide 2018 TION AC N RESPONSIBLE CONSUMPTION AND PRODUCTIO
H ORK AND CONOMIC GROWT DECENT W E
Y ABLE AND
Research and development Research Modernisation AFFORD CLEAN ENERG development technological Scientific andScientific SUSTAINABILITY REPORT REPORT SUSTAINABILITY
• • IN THIS SECTION Research and technology advancement is advancement and technology Research and improving growth continued the backbone of to implement the best-available and aims efficiency Company The on an ongoing basis. technologies wide-ranging research and development conducts resource-saving harness cutting-edge activities to its production into technologies and cost-cutting our efforts focus on creating innovative We cycles. long and short-term the challenges for solutions faces. our Company EN+ GROUP | 82 engineers andindustry professionals. the Company’s project leaders, experienced and others. The committee ismadeupof renewables, robotics, automation, grids smart approaches to energy efficiency, digitalisation, of projects andbetter define technological the responsibleselection andassessment in 2018asanall-new structureto ensure was launchedinEn+Group’s Power segment The Committee for Strategic Development of finalproducts. implementation effectiveness andthequality were updated in2018to improve planning, implementing andmonitoring of R&Dprojects technologies. The Regulations for planning, has successfully created andimplemented new conducts researchanddevelopment (R&D)and technological development. The Centre business unitfocusing onscientific and Technology Centre istheCompany’s main The Metalssegment’s Engineering and development Research and SCIENTIFIC ANDTECHNOLOGICAL DEVELOPMENT projects andassessingtheirresults. Council responsiblefor approving R&D The Company hasestablisheda Technology over thenext few years. samples orprototypes thatwillbescaledup meaning thattherearealready laboratory readiness level (TRL)4indexes andhigher, currently conducts projects withtechnology developed for long-term solutions. En+Group efficiency issues, whilestrategic projects are focuses ontargeted projects to quickly resolve innovation priorities. The Company mostly projects thatserve theCompany’s long-term to quickly resolve efficiency issueorstrategic projects requested by subsidiary enterprises conducts targeted The R&Ddepartment and machinelearning. technologies, condition monitoring, bigdata research initiatives includephotovoltaic intellectual property (IP)management. Ongoing scouting, energy-related appliedresearchand department, whichspecialises intech The Company alsohasanin-houseR&D universities and theRussian state researchinstitutes and the mosttechnologically advanced companies a platform for knowledge sharingbetween the Innovation Group, whichwasfounded as Trade andtheMinistry of Energy of aspart with theRussian Ministry of Industry and In terms of cooperation, En+Groupworks fromresearchinstitutes.experts from theCompany’s businessunitsandindustry The council’s membersincluderepresentatives by dedicated regulatory documents: R&D iscoordinated acrosstheCompany 1. • • • • pp. 100-102, Learning anddevelopment, Employees. with theCorporate University, pleaserefer to For moredetailedinformation onthecollaboration The Patent Policy. for Strategic Development; Regulations issuedby theCommittee The IP ManagementStandard; Procedure; The Scientific and Applied Research 1 .
83 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 expansion of the product line and the product of expansion wire rod types of new of development wire; products and welding electrical for uses cost-effective new of development scandium-containing innovative for aluminium alloys. One of the Metals segment’s key strategic strategic key the Metals segment’s One of at its VAP share of is increasing the objectives 2020. 55% by to production facilities Russian the Metals the sanctions prevented However, of VAP its target from achieving segment vs sales total was 45% of 50-52% in 2018 (VAP 47% in 2017). Innovations in aluminium production harness to R&D conducts The Metals segment it that give and processes technologies new industry. edge in the aluminium a competitive the Metals segment's the same time, At the precautionary are guided by specialists assessing any comprehensively principle, pose may danger an innovation potential the environment or human health. to • • development of a line of casting alloys that casting alloys a line of of development heat treatment; do not require aluminium new and launch of development equipment; railway for materials aluminium- new creation and launch of technologies additive for based materials 3D printing of and the development technologies; • • • Value-Added Products Value-Added development innovative The Metals segment's the following driven and R&D have strategy value- breakthroughs in the production of added products (VAP): Aluminium casting alloys aluminium innovative of The development area, focus is another key casting alloys continue to spurring the Metals segment Asian market. on the casting alloys new testing is also implementing The Metals segment European with major in collaboration a project and partscar makers create manufacturers to large and critical for aluminium materials partsautomobile heat that do not require The proposed solutions will produce treatment. at a significantly structures lightweight strong, simplifying the production by cost reduced the finished product. of cycle ) and 3 O 2 reduce the consumption of critical reagents. critical reagents. of the consumption reduce producing of cost estimated the As a result, an impressive by was reduced scandium oxide These results were USD 480/kg. 55% to Kamensk- at RUSAL project a pilot by confirmed is still being enhanced The technology Uralsky. and cut additional improvements create to The findings from laboratory further. even costs throughout 2019. verified will be testing Waste project Waste a technology is testing The Metals segment product generated a waste red mud, process to valuable which contains alumina production, by mud Red including scandium. metal oxides, at alumina production technologies processing to increase modified in 2018 facilities were (Sc scandium oxide of the extraction The Metals segment The Metals projects EN+ GROUP | 84 electric gridequipment. and extend theoperationallife of primary will increasethereliability of electricity supply to identify existing vulnerabilities. The project in realtime. Analytical work isnow underway the temperature andcollecting data of theproject focusedpart onmonitoring maintenance-free wirelesssensors. The second to IrkutskayaNo. 1)wasequipped withpassive of 220kV power line(Novo-Irkutsk CHP During thepreliminary stage, a test section equipment to optimize network loadbalancing. This project aimsto findthebestdiagnostics temperature control 110 kV powerline projects The Power segment SCIENTIFIC ANDTECHNOLOGICAL DEVELOPMENT
user-clustering algorithmswere tested andfour on conscious electricity consumption. Three we willbeableto develop recommendations characteristics andprofile. Withthis forecast, levels for every userdependingontheir scenario. The aimisto forecast consumption users basedonanelectricity consumption big dataandmachinelearningto profile En+ launchedaproject in2018thatuses User profiling the work. and theselection of acontractor to perform the development of arequest for proposal of machine-learningmodelarchitecture, pre-project planning, theconceptualisation achievements were thecompletion of data andmachinelearning. Among the2018 The project involves theextensive useof big power resourceusers measures influencingdefaulting Improving theefficiencyof coal plant. waste have already been shown attheCHP-9 iron-containing concentrate fromashandslag benefits of usingthe technology to extract in Irkutsk and Angarsk. The economic The project hasbeen implemented atfacilities from ashandslagwaste Extracting commercialproducts stage. The project willcontinue in2019-2020. a contractor wasselected to perform thenext a request for proposalwasdeveloped and The modelsselected were shown to work, regression algorithmswere assessedin2018. journals. in NatureNanotechnology andotherscientific than 17%. The researchresultswere published of solarcells showed anefficiency of more a potentially unlimited size; thetest samples for producingperovskite solarcells of scientists proposedauniquemethod next-gen perovskite solarpanels. The Russian University continued thedevelopment of researchers fromLomonosov Moscow State Using thefinancialbacking of En+Group, technology Solar cells
85 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 were filed as part of the project in 2018. filed as part in 2018. were of the project published The research results were one of in Nature Nanotechnology, leading journals in the area of the world’s nanoscience. the next over will be continued The project hit all its it successfully after years few Research will targets in the first stage. and on raising the efficiency concentrate The project cells. perovskite of lifespan has and is generating significant interest support Science from the Russian received will be engaged Partners Foundation. facilitate while research is still ongoing to and prototype a commercial the creation of market. to help bring the technology The Power segment continued to work work to continued segment The Power solar module on a hybrid perovskite generation project the distributed for as part and Education realized the Russian of Program Target Federal Ministry’s Science Science Russian the of Areas “R&D in Priority Sector”. Tech and aims project Solar Cell The Perovskite photovoltaic type of a new create to as an active modules with hybrid perovskite producing unique method of A component. unlimited a potentially of layer a perovskite and a laboratory developed area has been Laboratory created. has been prototype sample have on the laboratory tests as high as factors efficiency demonstrated applications and patent Russian Three 17%. applications patent PCT international three Perovskite Solar Cell project The research project makes use of machine use of makes The research project calculate analytics to learning and predictive in advance HPPs the operating schedules of and optimise their main production processes. Long-term forecasting of Lake Lake forecasting of Long-term water levels Baikal’s The program aims to increase the efficiency increase the efficiency The program aims to upgrade production facilities, existing of environmental impact and reduce equipment, power-generating of the sustainability improve power coal-fired in particular, facilities and, involved is proactively The Company plants. of which (2019- the first stage in the program, Ust-Ilimsk of 2024) implies the reconstruction system. ash handling CHP’s Russian Federal Best Available Russian Federal Best Available distribution program Technologies En+ Group’s action plan for 2019 includes action plan for En+ Group’s R&D projects: and ongoing new a number of EN+ GROUP | 86 statements andshipsworldwide. independently verified carbon footprint industry. The ALLOW brandoffers the bestlevels intheglobalaluminium aluminium, whichisconsidered one of ALLOW brand 1. in СО four tonnes of greenhouse gasemissions strategy. The brandgenerates lessthan in 2017 of itslow-carbon production aspart brand of low-carbon footprint aluminium The Metalssegment launchedits ALLOW Modernisation SCIENTIFIC ANDTECHNOLOGICAL DEVELOPMENT emissions (scope 2). Smelters’ direct emissions (scope 1) and indirect energy 2 equivalent 1 for every tonne of improve environmentalsafety. gas fromtheelectrolyte potcells willfurther per day. A new technical solutionto remove able to process morethanfour tonnes of metal than theprevious model(RA-300) andwillbe equipment willbe50-80%moreproductive boost itsenvironmentalcredentials. The new cut thecost of aluminiumproductionand the RA-550 electrolyte potcells aimsto further and tested atpilotsites. The creationof anodesarebeingdevelopedoperate oninert efficiency (RA-400 and RA-550). Potcells that next-generation potcells withhigh-energy production system istherolloutof step inthedevelopment of theautomated and acentral distributionsystem. The next an automated aluminafeeding system main initiatives wastheinstallationof impact. Oneof theMetalssegment’s processes thathelpreduce itsenvironmental to improvefor opportunities theefficiency of The Company iscontinuously looking RA-400 andRA-550potcells its modernisationprograms. the efficiency of itsoperationalassetsthrough En+ Groupismakingevery to boost effort modernisation The Metalssegment’s 87 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 Self-propelled pot treatment vehicles production RUS- branch of the Krasnoyarsk In 2018, mass produce to continued Ltd Engineering as vehicles self-propelled pot treatment special project, Vehicles’ Treatment ‘RUSAL part the of vehicles the number of which helped reduce In 2018, abroad. be purchased from to needed manufactured and were vehicles 43 treatment operation. put into vehicles 173 the project, of the beginning Since operation and the design put into been have The Group developed. has been vehicles 34 of its protect applications to has made 52 patent in 2018. including five property, intellectual obtained in Russia, were 42 patents of total A in 2018. including four Treatment ‘RUSAL the the main aims of One of design and in 2019 is to project Vehicles’ locally- manufacture environmentally-friendly ensure to vehicles diesel treatment produced at least of life reliable operation with a service 15,000 machine-hours. Plans to install these pieces of equipment equipment of these pieces install Plans to provided in place, at all ECD branches are and operational trials are that industrial tests 1,191 pots were out of 42 In 2018, a success. of relining with their lifetime for disconnected number on record. the lowest 36 months, up to A batching hopper for BROCHOT ramming BROCHOT hopper for batching A of the quality improve machine to set maintain a controllable operations (to ramming batch and to temperature material while ramming automatically) paste avoid seams and to cathode bottom hazardous impact on the personnel. A gantry cathode relining and metal gantry A improve machine to structure assembly quality manufacturing and conditions labour spending on metal structures (as a result, shorten suppliers declined), from third-party optimise production pot rebuild periods, auxiliary areas and the number of equipment. • In 2018, the Krasnoyarsk pot-rebuilding pot-rebuilding the Krasnoyarsk In 2018, manufactured and department developed, equipment: of pieces installed the following • Krasnoyarsk pot rebuilding department development new low loaders with a carrying capacity of of capacity loaders with a carrying low new In 2018, transport to 160 tonnes transformers. the Sayanogorsk of the needs ‘Separation of the which the goal of project, Aluminium Smelter’ reliability, supply increase power was to The expert opinion received was completed. and a tender was positive about the project was started purchase the required to procedure equipment. and construction purchases equipment In 2019, In 2018, are scheduled. works and assembly launched competencies of centre the Bratsk efficiency increase maintenance to a project shorter achieving by and optimise costs and better transformers time for maintenance in-house resources. use of
Every year, including in 2019, we plan we including in 2019, year, Every such of old-style transformers two replace to In June 2018, a design at aluminium smelters. RUS- branches of and Krasnoyarsk the Bratsk purchased and commissioned Ltd Engineering In August 2017, a high-voltage transformer was transformer a high-voltage August 2017, In on the main stepdown installed and tested For the first smelter. substation 2 at the Bratsk aluminium wiring was used high-voltage time, supply ensure a stable power in its design to smelter. the Bratsk 3 and 4 of 2, potrooms 1, to transformers such high-voltage two In 2018, and Krasnoyarsk installed at the Bratsk were smelters. Smelter electrical equipment reliability improvement Eco-Søderberg technology program technology Eco-Søderberg aluminium smelters at the Metals segment's were 254 potcells of total A is ongoing. and another smelter upgraded at the KrAZ The pilot smelter. at the BrAZ 66 potcells adapt to 20 potcells to was expanded project The gas smelter. the NkAZ for the technology have KrAZ potrooms at ducts under five with state-of-the-art automated fitted been The deployment impulse cleaners. pneumatic reduces process the Eco-Søderberg of with that comply levels pollutant emissions to while also reducing environmental regulations and significantly consumption electricity cells. reduction of life increasing the service The full-scale implementation the Eco-Søderberg technology program EN+ GROUP | 88 on investment rate withacertain of return. the price methodology thatprovides thereturn a capacity supply periodof 16 years with 39 GW of capacity intotal. Eachproject has in 2031. The programaimsto modernise 2025, of capacity withthestart supply byprojects isscheduledto start 1October 130 mn. The lastroundof modernisation with total expected CAPEX for CHPs of USD 795 MW of itsCHP capacity (17.7% of thetotal) the Groupwillimprove reliability andsafety of in 2022-2024. According to itsresults, of capacityprojects withthestart supply in March — April 2019for themodernisation The program’s firstselection round took place Wholesale Electricity Market (WEM). thermal power plantsconnected to theRussian aim isto increasetheoperatingefficiency of to Modernise Thermal Power Plants, whose The Company theState Program supports modernisation program The ThermalPower Plants modernisation The Power segment’s SCIENTIFIC ANDTECHNOLOGICAL DEVELOPMENT units willbereplaced by 2023. As aresult, Four outof Irkutsk HPP’s eight hydropower transformers andopen-typeswitchgear. hydroelectric turbinesandreplace runners, The programwaslaunchedto modernise safety of allitsHPPs. projects thataimsto improve thereliability and program isoneof theGroup’s key investment increasing water flow rates. TheNew Energy quality andboostthereliability without leading levels, provide improved power supply to raisetheefficiency of turbines to world- on modernisingtheGroup’s HPPs. Itsaimis The programisprimarily focused modernisation program The NewEnergy • • • of theprogram: En+ Grouphassetthefollowing targetsaspart by 9,300tonnes per year. and reduce emissionsof otherpollutants emissions by 69,000tonnes of CO₂ per year equipment. This shouldcutgreenhouse gas of boilers, turbinesandashremoval by modernising and increasing the efficiency Improving environmentalperformance that have exceeded theirnormallifecycle; turbines, boilerequipment, andgenerators equipment by replacingthecomponents of Boosting thereliability of existing equipment; Improving theefficiency of existing program include: Future plans for The New Energy modernisation TWh by 2022fromthesame volume of water. possible to boostelectricity generationby 2 The upgradesof HPP equipment willmake it output. energy fromcoal-fired power plantswithHPP will cutGHGemissionsby partially replacing mitigating related cavitationrisks. The program the Company’s environmentalimpactand The modernisationisalsoaimedatreducing (Russia). (Czech Republic), asubsidiary of Tyazhmash JSC turbines laboratory of ČKDBlansko Holding acceptance tests performed by thewater These resultshave been confirmed by profile and increasespower capacity by almost20%. improved efficiency andbetter cavitation The hydraulic profile of thenew impeller offers to increasefrom82.8MW to 105.7 MW. the capacity of eachunitisexpected • • at theKrasnoyarsk HPP. Replacing thenext six runners to increaseinstalledcapacity by 91.6MW; units atIrkutsk HPP in2019-2023 Replacing four hydropower generating 89 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 En+ Group is making every En+ Group of effort to boost the efficiency through its operational assets programs. its modernisation En+ Group is planning to change how it change how En+ Group is planning to fluctuations in water temperature regulates testing The hydraulic in 2019. networks method will also be changed in 2019 troubleshoot possible malfunctions over to ensure a reduced which should the summer, failures in winter. number of Automated systems were introduced into into introduced were systems Automated all CHPs of the operational processes and increase fuel consumption reduce to operational efficiency. Dry ash handling systems were modernised were ash handling systems Dry ash extracted dry of volume increase the to CHP. at the Novo-Irkutsk • • • The Company is also continuing its is also continuing The Company the efficiency modernisation efforts improve to operations at plants across the Group of production better achieve and costs decrease to quality. Other projects EN+ GROUP | 90 91 | EN+ GROUP
401 , % % employees female representationfemale Group in 2018 in En+ 93 98 26 of employees have have employees of permanent contracts Social benefits period 2019 and midterm Goals for • • 2018
H
ORK AND
Talent acquisition Talent and development Learning Management approach structure Personnel CONOMIC GROWT E DECENT W Employees SUSTAINABILITY REPORT REPORT SUSTAINABILITY • • • • IN THIS SECTION Our global workforce is at the heart of what we do. As do. we is at the heartwhat of workforce Our global production, as being a global leader in aluminium well in Russia the largest employers Group is also one of En+ Group operates where the as in other countries well as Ireland Jamaica, including large industrial complexes, 98,000 over employs currently Company The Guinea. and and in 12 countries business segments across two people with our people the importance providing of recognise we environment and supportingworking well- a safe their are and human resources our people Therefore, being. depends Our success priorities. top Company’s among the where environment and diverse on building an inclusive can thrive. our employees EN+ GROUP | 92 corporate environment. rights, diversity andinclusionthroughoutits unwavering commitment to upholdinghuman The strategy alsooutlinestheCompany’s recruitment andbusinessprocesses. standardisation of allprocesses, including thinking, andincreasetheintegration and the quality of training, encourage innovative to develop people andtheirskills, enhance are now beingreviewed. The strategy aims drawn upandlaunchedin2018theresults The five-year HRmanagementstrategy was and retaininghighly skilledpersonnel. The Group’s HRpoliciesareaimedatrecruiting in theGroup’s socialandoperationalactivities. and encourage theiractive involvement thewell-being of theirfamilies support advance theirprofessional development, with favourable employment conditions that The Company aimsto provide allitsemployees GRI EMPLOYEES 405-1 103-2 102-8 102-41 103-3 401-1 103-1 Our achievements in2018: recommendations. corporate governance matters andprovides its consolidated subsidiaries. Italsooversees governance guidelinesfor theCompany and is responsiblefor reviewing thecorporate any equity-based plans. The CGNC committee incentive andexecutive compensation and compensation andbenefitsplans, including review theCompany’s remunerationpolicies, The RemCom’s roleisto determine and and NominationsCommittee (the “CGNC”). (the “RemCom”) andtheCorporate Governance regulated by theRemuneration Committee personnel managementfunction, whichis En+ Grouphasa vertically integrated • approach Management training modules; develop additionaltechnical competence development acrosstheCompany and to establishauniqueapproachto employee Developing transformation program • • • completed the TIPS onlinecourse; employees inthePower segment have 147 employees on TIPS in2018, and128 segments. The Metalssegment trained to complex problemsin various business more organisedandefficientsolutions Solving (TIPS)methodsandtools to pioneer Introducing Theory of Inventive Problem 230 employees inthePower segment; 439 employees intheMetalssegment and processes. In2018, thisprogramtrained skills andknowledge onindustrial development process, to improve employees’ program, acontinuous employee Integrating theBusinessSystem 250 in 2018; on-site internships whostarted participants 100 candidates were whittleddown to 30 engineers andstationmanagers. A total of which focuses ondeveloping senior Launching the Technical Academy program, 93 | EN+ GROUP
Personnel Personnel structure COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 102-8 GRI En+ Group is one of the biggest employers employers the biggest En+ Group is one of countries, and other regions in multiple Russian across 98,000 people over jobs for providing The personnel operation. of all its regions structure remained almost unchanged in 2018. the nature of are male due to Most employees of The percentage operations. the Company’s type was with full-time employment workers 99.53% in 2018. Launching the Metals segment General segment the Metals Launching April 2019, in (GSC) Centre Service services recruitment which provides production facilities the Company's for functions into all relevant and centralises organisation. a single service The Company’s main personnel management The Company’s eight with goal is human development, with professional 10 KPIs connected out of hit all its targets The Company advancement. all its achieve to in 2018 and is determined years. the coming KPIs over stated • Launching the Kommersant program the Kommersant Launching and on evaluating which focuses in 2018, employees; Services Commercial developing Redesigning all talent pool coaching all talent pool coaching Redesigning the integrated programs and relaunching program under talent pool development The revamped Transformation. the name program is based on the best practices and brings development in employee and expertise of the resources together Business System University, the Corporate TIPS department department, Development The pilot group specialists. and technical has 68 participants expanded and will be in 2019; 300 people to operational activities. involvement in the Group’s social and social involvement in the Group’s their families and encourage their active development, support the well-being ofdevelopment, support that advance their professionalconditions that advance their employees with favourable employmentemployees with favourable The Company aims to provide all itsThe Company aims • • EN+ GROUP | 94 (permanent andtemporary)in2017-2018 Percentage ofemployeesbyemploymentcontract and Power segmentsin2017-2018 Average numberofemployeesintheMetals EMPLOYEES
96 93 95 94 62,020 64,057 1 2. 1. EuroSibEnergo Plc), CJSC MAREM+. LLC EuroSibEnergo — Hydrogeneration, ANO CPD Corporate University EuroSibEnergo, En+HoldingLimited (ex. engineering, LLC En+Digital, LLC Accounting Service Center EuroSibEnergo, LLC EuroSibEnergo Trading House, PJSC Irkutskenergo, EnSer, OJSC Irkutsk Electric GridCompany, Volgaenergo, Baikalenergo, LLC EuroSibEnergo- Hereinafter inthesection “Emloyees - Personnel structure” the Power segment isrepresented by: JSC EuroSibEnergo, the 2018isdueto theclarification of thenumber Annual report of employees inGuyana. The difference inthenumberof employees intheMetalssegment in2017 incomparison withits value disclosedin 2
34,687 34,344 7 6 5 4 96,707 98,401
718 74 76 739 415 396 26 24 1,133 1,135 95 | EN+ GROUP
1,135
1,133
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 24 26 396 415 739 76 74 718
Gender diversity of employees Gender diversity in 2017-2018, % Employee wages in 2017-2018, USD mn 98,401 96,707 4 5 6 7 34,344 34,687 64,057 62,020
94 95 93 96
EN+ GROUP | 96 in 2017-2018 New hiresbysegment GRI EMPLOYEES 401-1 5,493 5,228 MM4 the union, BCGI reinstated theworkers. After reachingarenewal agreement with to swiftly deescalate andresolve theconflict. Workers Union(GB&GWU), inaconcerted effort organisers, theGuyanaBauxite andGeneral The Company negotiated withtheprotest Inc. (BCGI) protested to demandhigherwages. segment facility Bauxite Company of Guyana In February 2019, workers attheMetals 4,724 4,228 the reporting period. the reporting strikes orlockouts inthePower segment within of BCGI to businessasusual. There were no resolution of theconflict andtheswift return This approachledto thefastandamicable faithful to theprinciplesof humanrights. on globalbestpractices andremaining concerns extremely seriously, basingdecisions The Company took theprotests andworkers’ 9,721 9,952
4,273 4,757 4,041 4,647 8,314 9,404 97 | EN+ GROUP
9,404
8,314 COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 4,647 4,041
4,757 4,273
Outgoing employees by segment Outgoing employees in 2017-2018 personnel. recruiting and retaining highly skilled recruiting and retaining The Group’s HR policies are aimed at The Group’s 9,952 9,721 4,228 4,724 5,228
5,493
EN+ GROUP | 98 and inclusion Diversity • • • • • • • • the following priorities: environment. The Company hasdefined are constantly strivingto buildaninclusive We seek to buildadiverse workforce and EMPLOYEES Improvement of trainingprograms. Enhanced employee engagement; opportunities; Development of career growth ambitious staffandinterns; Attraction andretention of proactive and Human rights; Socio-economic diversity; Guarantee of equal pay; Workplace safety andequal opportunities; in general. partners, government authoritiesandsociety to interact witheachother, ourbusiness standards, andhow we expect employees times. The Code setsoutourethicalconduct of Ethicsandfollow itsprinciplesatall Our employees mustbefamiliarwiththeCode the appropriate working conditions. disabilities, providing allouremployees with across hostjurisdictionsfor people with We comply withrelevant legal obligations creating leadersof thefuture. and leadershipskillsof ouremployees, we are performance. By developing thecompetencies andreward excellentopportunities environment, provide equal employment We make every to create effort afairworking labour discrimination. everyone anddoesnotallow any rights, grantsequalopportunities to personal freedomandhuman and employmentcontracts,respects requirements oflabourlegislation the Companycomplieswithall In itsrelationswithemployees, form of labourdiscrimination. to allanddoesnottolerateopportunities any freedoms andhumanrights, grantsequal relations withemployees, respects personal of labourlawsandemployment contracts inits The Company complies withalltheobligations success. orientation ordisability asessentialto its religion, sex, age, ethnicity ornationality, sexual or bullyingonthebasisof race, skincolour, of allforms of discrimination, persecution The Company sees thecomplete elimination 99 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 The New Generation program is another The New attract aims to 2019 that for major initiative the Company to specialists young talented The program paid internships. offering by on 142 interns. taken has already Competitions for young people, challenging people, young for Competitions and effective innovative create them to There have fields. in a range of projects years in the last three contests five been more than 3,500 entrants. involving Industry the Power of The Laboratory will be and was held in 2018, competition accelerator a corporate into transformed in 2019; projects innovative for school students to guide them through school students to National Irkutsk University the Energy application (INRTU) University Technical includes additionalThe program process. maths and Russian physics, for courses learning and along with workplace facilities; power to excursions • • The Power segment has developed a special a special has developed segment The Power about its high school students for course pathways; career operations and potential has organised an exam The Company year high final preparation program for The Internal Talent Pool program, which program, Pool Talent The Internal promising a group of create aims to managerial all types of for employees positions; Russia. of outside Recruitment The Power segment works closely with closely works segment The Power The Company training centres. government-run main higher education partners:has two and Engineering Power of the faculty (BrSU), University State at Bratsk Automation employees about 45-50 new which provides are We University. State and Irkutsk year, per also partnered college vocational with a in Irkutsk. of ways find new striving to are constantly We En+ employees generation of inspiring the next and attracting the best local talent: • • • •
The “RUSAL to the Russian Schools” project, project, Schools” the Russian to “RUSAL The progression students’ which facilitates and college vocational from school to in our industrial employment to ultimately production facilities; Educational programs for international international Educational programs for students; Targeted selection and scholarships selection Targeted young skilled encourage students to for university and study for apply to engineers a career that will set them up for courses at En+; • • • The Metals segment runs the following joint runs the following The Metals segment with specialised programs and initiatives mining and metallurgical institutions, promising source which helps the Company its talent pool: for candidates As talented and highly skilled professionals skilled professionals highly and As talented we success, our continued are essential for talent into time and resources significant invest We programs. and development acquisition effort find and retain the people to every make our business forward. who will drive acquisition acquisition Talent EN+ GROUP | 100 GRI the Company’s objectives. new programs, specially tailoredto achieve constantly developing withtheadditionof The educationalandtrainingsystem is commitment to professional development. programs andreinforce theCompany’s created to provide comprehensive training Both En+segments have aCorporate University in thecountries wheretheCompany operates. and courses, includingsessionsrequired by law programs. Itprovides various typesof training a variety of high-quality trainingtools and their professional skillsandprovide themwith aspires to attractthebesttalent, enhance toimportance En+Group. The Company and trainingof employees isof paramount development intheindustry. The development and pioneering long-term technological meeting highstandards, ensuringsafety on thedevelopment of professional skills, En+ Group’s entiretrainingsystem focuses EMPLOYEES 404-2 403-6 and development Learning • • • • • • development activitiesareregulated by: The Metalssegment’s personneltrainingand values andethicalprinciples. and growth of allitsemployees, emphasising to achieve itsgoalof drivingthedevelopment tools andprogramsfor alltypesof positions The Company usesa variety of training The Metalssegment • • • training system andcovers: University, whichdirects thecomprehensive The Metalssegment hasitsown Corporate Youth education; Distance learningsystem; Training centres atproductionfacilities; for professions andtrades); Professional academies(trainingprograms Officers); and theInstitute of Corporate Ethics Corporate culture(industrialcompetition Talent pool(training programs); motivation. Regulation onnon-monetary (non-material) Provision ontheCorporate EthicsSystem; Company personnel; Regulation onthetrainingandeducation of • • • • • • • in theMetalssegment: Below aresomeexamples of specific projects the Company); for futurerelocationandrotationwithin ofexpertise high-potential candidates to enhance theprofessional skillsand System 250 program, whichaims program, anadd-onto theBusiness (including theBusinessSystem 250+ Modular vocational trainingsystem Assessment of staffknowledge. Professional guidance; Collaboration witheducationalinstitutions; management andoffice management). time planning, presentations, stress management, logistics, foreign languages, more than300e-courses (topics include Distance Learning System (DSL)with on-one sessions, etc.; on-site andonlinetraining, groupandone- with courses in various formats, including on upgradingpracticalandtechnical skills Functional academies, whichfocus divisions); as thealuminium, aluminaandpackaging divisionsandtrades,for particular such technological knowledge andskillsrequired to provide employees withthefundamental Technological MinimumProject (aims 101 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 Conducting regular psychophysiological psychophysiological regular Conducting health prevent staff to relevant of check-ups risks. and safety Running core curriculum courses; core Running of development Ensuring the professional including project staff members, existing management and hard skills training; staff members and forming new Training pool; a candidate research centre; a corporate Developing The Company has training and development and development has training The Company ranging experience, of all levels programs for technical from high school students to 150 has around The university managers. issue to has a license training programs, and possesses certificates recognised nationally training providing for license an unlimited services. culture is one a safety-oriented Developing number of A priorities. top the Company’s of developed been have standards and procedures safety raise employees’ to and implemented trainings awareness and Company-wide personnel and top organised for been have Safety management as part the Conscious of the Group’s led by program, development company. and a consulting University Corporate • • • • • The key aims of the Power segment’s Corporate Corporate segment’s the Power aims of The key are: University Corporate Research Centre at INRTU and at INRTU Centre Research Corporate BrSU; (if training centres vocational External programs are not available the required University). at the Corporate Corporate University; Corporate Department; Development Business System Solving)/ Problem Inventive of TIPS (Theory TIPS Department; The Power segment’s Corporate University University Corporate segment’s The Power its educational centralising by was created and professors teachers, resources, The Irkutsk- in one place. psychologists as a separate based institution is treated geared towards organisation and is mainly The university’s client. servicing the internal skills and up employees’ drive mission is to promoting an integrated by qualifications world-class learning and spreading approach to educational practices. • • • • • The Power segment The Power can take employees segment All Power multiple training programs, advantage of on developing focused which are primarily health and improving skills, professional industry and long-term control quality safety, development. and training employee segment’s The Power bodies: the following by education is directed Launching the Training 100 Guinean Training the Launching Students program. Training 147 employees on TIPS; on employees 147 Training Opening a special departmentOpening a special with talented working for in Sayanogorsk students; Accepting 142 new interns onto the New the New onto interns new 142 Accepting Generation program; Opening its first centre focused centre Opening its first RUSAL people, young for on initiatives at Siberian Federal University; Laboratory, Training 1,923 people in its professional in its professional 1,923 people Training academies; • • • • • • The Metals segment’s key training and key The Metals segment’s in 2018: achievements development A competency assessment centre was assessment centre competency A allowing university, established alongside the leadership skills and personal qualities, be assessed to knowledge professional started using a personal We remotely. as tests questionnaire with cognitive all provide We in 2018. an assessment tool vocational and with internal employees full funding offer and even training, provided training courses advanced for organisations. third-party by EN+ GROUP | 102 responsible for reducingindustrialaccidents. and helpthemunderstandthateveryone is employee attitudestowards healthand safety managers. These courses aimto change “Efficient safety management” for technical employees, and “Leadership insafety” and culture: “Cognitive safety” for operational a majorinitiative to develop asafety-oriented conducted for employees of alllevels of aspart qualifications) methodology arebeing provides health, safety andenvironmental on theNEBOSH(aglobalorganisation, which Several educationalcourses based EMPLOYEES in 2018include: areasof study.in particular New courses added specialists whohave practicalexperience been created withthehelpof theCompany’s and onlinecourses. Mostof thecourses have University withmorethan100 video lectures called has itsown internalVirtual onlineportal The Power segment’s Corporate University also • • • • • • orientated culturefor a video competition. filmsthatencouragesubmitted asafety- short competitions. Forexample in2018, 450people in 2018. The platform alsohostsonline segment employees completed thesecourses Code of Conduct. A total of 2,970Power industry, information security andtheCorporate as thefundamentalsof themodernPower for new employees, covering topics such of amandatory inductionsystem Another update in2018wastheintroduction Total Productive Maintenance (TPM). Standardised work; Production analysis; Risk management; Investment project management; TIPS; at any onetime. Around 1,000employees canbeassessed levels by rate monitoringvariability. theirheart measures employees’ generalhealthandstress 2018. BioMouseisacomputer mousethat technologies andsolutions” conference inMay approaches to ensureemployee wellbeing: discussed how itworks atthe “Comprehensive En+ presented theirBioMousetechnology and from various industries. which broughttogether morethan50experts by theCivic Chamberof Russian Federation, of nightshift employees inMarch2018, hosted included aroundtableonprotecting thehealth that promote employee wellbeing. This The Company alsoattends various conferences 103 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 Other social expenses (subsidised transport, (subsidised transport, Other social expenses vacation under additional paid social bargaining agreement the collective and compensation and local regulations, accidents). workplace for Medical services (including voluntary voluntary (including Medical services medical insurance); Sports activities; meals at work; Free Subsidised housing; employees’ for services Social security children; Support pensioners; for • • • • • • • 76 90 Financial aid; health resorts; at Recreation planning; Retirement • • • Negotiations and dialogue with labour Negotiations bargaining in collective resulted unions have social support for agreements that packages These our employees. of the welfare enhance programs(vacation program childcare a include sportsevents, for children), and benefits training facilities and healthcare programs. focused is mainly Although the Company on social programs such as health resorts and leisure also provide we treatment centres, social key the full list of children, activities for benefits includes: Social benefits 401-2 92 76 403-6 102-41 Employees covered by collective agreements, % Beyond offering employees opportunities employees offering Beyond En+ is also skills, and learn new develop to with its workers providing to committed to help improve the best social benefits and living their working of the quality and to create aim These benefits conditions. motivation employee maintain long-term all full-time and to equally and are provided improve to strive We En+ employees. part-time trade see and relations with our employees striking collective partners, unions as key our businesses, at all of bargaining agreements small service of with the sole exception structures. GRI EN+ GROUP | 104 • • • • to employees who: Compensation isalsoavailable to thethreatof strikes, lockouts andstoppages. workers areunionised, theCompany isexposed and availability of thiskindof labour. As many therefore vulnerable to any changesinthecost that itisdependentonaskilledworkforce, and Group’s specific operationalprocesses mean labour cost inflationaremajorrisks. En+ skilled andprofessional labour, strikes and The Company recognises of thatshortages EMPLOYEES six months. Are on parental leave until the child reaches Have three ormorechildrenunder18; minimum wage; Have anincome below theregional Have justhadachild;
for theRussian miningandmetallurgical of theIndustry Tariff Agreement (ITA) RUSAL, of En+Group, asapart isamember children). financial assistance andbenefits foremployees’ and otheradditionalbenefits(free meals, (time-based bonussystem), incentive programs includes multiplewageandsalary benefits The remunerationandmotivationsystem also based onskills, performance andgrade. for itsemployees aswell asremuneration salary andcomprehensive socialbenefits En+ Groupprovides astablecompetitive meetings withemployees. seminars, indexation of salariesandregular strategies, suchasspecialised trainingfacilities, or hasalready launchedemployee retention industry players. The Company isimplementing about 7%, whichputsitonparwithother The Company’s employee turnover rate is conditions. quality oftheirworkingand living social benefitstohelpimprove the providing itsworkers withthebest new skills,En+isalsocommittedto opportunities todevelopandlearn Beyond offeringemployees for benefits, guarantees andremuneration. constantly improving itsinternal regulations to alltherequirements of theITA andis Trade Unionof Russia (MMTUR). RUSAL adheres represented by theMiningandMetallurgical of Russia (AMROS), andemployees are the MiningandMetallurgicalComplex by the Association of Industrialistsof industry inwhichemployers arerepresented 105 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 Implementing a range of commercial commercial Implementing a range of training and procurement programs with (in conjunction in the Metals segment Assurance Quality the Sales Directorate, Internal Control, for Directorate Department, (DCIABC) Audit and Business Coordination and other departments). University in 2019-2020 to automate automate in 2019-2020 to University management such as the processes and generate pool the candidate of operational reports how that can track time; changes over University the Corporate These goals will uphold the Company’s social These goals will uphold the Company’s develop to values and commitment corporate its employees. • Implementing the Business System 250+ Implementing the Business System selected modular training program for in the Metals segment; employees reporting system Introducing the 1C Corporate segment’s the Power for Improving interaction with the Siberian interaction Improving National Irkutsk Federal University, and Siberian University Technical Research opening by Industrial University State departmentsspecialised and including programs and QMS Business System TIPS, (the Metals segment); at the universities Discussing the conditions of the Industry the Industry of Discussing the conditions with the Mining (ITA) Agreement Tariff Russia Union of Trade and Metallurgical (MMTUR) and signing it again in December 2019; various kinds of social supportvarious kinds of that are of cost such as the inflation, by affected travel for compensation medical services, of vacations and the maintenance and social housing facilities; • • • •
Increasing the Metals segment’s social Increasing the Metals segment’s fund 4% to 2019 by programs budget for Holding training seminars that use real life Holding training seminars that use real life TIPS instruments operational cases and and 200 with at least 16 teachers participants; Fully implementing the New Generation implementing the New Fully attract to created an initiative program, the Company to specialists young talented paid internships; offering by Expanding existing programs and those Expanding existing creating new as as well launched in 2018, Safety programs such as the School for School; Managers and the Financial Director Analysing employee satisfaction levels levels satisfaction Analysing employee online running a comprehensive by contentment about their overall survey training in upcoming and involvement programs; • • • • • The Group’s key goals for the next year and year the next goals for key The Group’s are: the mid-term midterm period midterm Goals for 2019 and Goals for EN+ GROUP | 106 107 | EN+ GROUP
000 969 , , flashcards outlining safe working flashcards outlining safe were produced practices employees completed completed employees culture trainings safety 8 4 4 fatal incidents in 2018 in 2018 LTIFR occupational employee 2018, in illnesses rate per 100 employees 0.14 0.214 Prevention of occupational injuries occupational of Prevention and diseases period 2019 and midterm Goals for • • 2018
G H BEIN LT L-
Health and safety performance Health and safety culture development Safety Management approach program Monitoring
GOOD HEA AND WEL Health and safety and Health SUSTAINABILITY REPORT REPORT SUSTAINABILITY • • • • IN THIS SECTION En+ Group strives to be an Occupational Health and Safety Health and Safety Occupational be an to Group strives En+ constantly are we this end, To leader in its industry. andOHS management system our existing overhauling ways of innovative new, developing are continuously among our employees. conditions working promoting safe Safeguarding the health and safety of our employees and our employees of the health and safety Safeguarding Group at En+ priority top has always taken contractors is Company The facility. at every focus and is the primary its health and safety improving constantly to committed workplace and comfortable and ensuring a safe system its employees. for EN+ GROUP | 108 standard. with therequirements of thenew ISO45001 OHS procedures anddocumentsto alignthem its OHSmanagementsystem andreview its in 2018, theGroupinitiated plansto update and securing employee safety. To thisend, its healthandsafety management system The Groupiscommitted improving to further Veritas ascompliant withOHSAS18001. of thePower segment iscertified by Bureau Veritas, whiletheOHSmanagementsystem the Metalssegment iscertified by DetNorske and safety (OHS)management system of production facilities. Ouroccupational, health system have been introduced atalltheGroup’s An HSEPolicy andanHSEmanagement safeguards allemployees andcontractors. a foundation for asafe productioncycle that the occupational safety culture, building to strongexecutive leadershipandimproving The Company attention paysparticular GRI HEALTH ANDSAFETY 403-2 103-2 403-7 403-3 103-3 403-6 403-1 are underpinnedby thefollowing principles: The Company’s OHSandfiresafety activities unturned. behavioural safety check to leave nostone scheduled andspotaudits, inspections and up OHSandfiresafety standards andcarry out segment. We arecontinuously seeking to drive inspections intheenterprises of theMetals OHS supervisory authoritiesconducted 251 and four atunitsinthePower segment. State four auditsatunitsintheMetalssegment external auditswere carriedoutin2018: the effectiveness of ourOHSmeasures. Eight internal andexternal auditsto monitor We arecommitted to conducting regular • • • • • approach Management • • to ourstandardsof safety. Suppliers andcontractors mustcommit encouraged; and Safe behaviourmustbesupported safely; the necessary skillsandtrainingto work Each employee (musthave) has in class; OHS legislation, andwherepossiblebebest An unwavering commitment to comply with operations; integrated into all business andproduction Safety managementshould befully Any incidentcanbeprevented; performance; than productionresultsandeconomic Human life andhealtharemoreimportant • • • • • • and firesafety documentframework: En+ Groupisregulated by thefollowing OHS and allcorporate policy principles. and firesafety legislation, itsinternal policies En+ Groupstrives to comply withalllocalOHS to theOccupational Safety Department. ontheir performance and annualreports and safety information, aswell asmonthly Policy to prepareandsubmit thelatest health ventures (JVs) andsubsidiarieswillusethis process for allitsbusinessunits. Ourjoint regulating theoccupational safety reporting The Company iscurrently updatingthePolicy the legislation of itsregions of operation. documents to keep theminlinewith En+ Groupregularly amends itscorporate HSE andFireSafety Role Matrix; Guidelines; OHS andFireSafety Management System OHS andFireSafety Policy Statement; Incidents. and Analysis of Occupational Safety Regulation for theReporting, Investigation Incidents andtheirConsequences; Policy for thePrompt Communication of Core occupational safety rulesand values; 109 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 Ethics Officers; Incident alert executives; for system Hotlines; Boards. Problem-Solving Boards that are Problem-Solving feedback collecting of way an effective ensuring and ground the on employees from their a rapid response from management to concerns. As for other initiatives within the monitoring within the monitoring other initiatives As for launched segment the Metals program, a comprehensive create to an initiative “Automated system information automated safety”, production of system information create is to objectives its key One of in 2018. between system information an integrated handle issues related to all departments, measures. and Industrial Safety Occupational to and monitoring enables remote The system methodology a single end-to-end integrates business processes. all core for communication can use several En+ employees highlight operational hazards and channels to minimise risks: A response is considered rapid if the issue is response is considered A is made within a week. or a decision resolved capture information is designed to This process risks and ensure that employees on potential management. in OHS risk voice a have • • • • • Prevention of occupational illnesses. occupational of Prevention OHS and fire safety compliance compliance OHS and fire safety assessments; with regulations; Compliance incidents; of investigation Swift engagement and participationEmployee minimisation; in risk as the quick as well assessments, Risk of issues; identification and elimination Communication with employees. Inductions, Inductions, with employees. Communication etc.; trainings, tests, knowledge We have been installing closed-circuit been have We at our facilities systems (CCTV) television employee monitor in order to 2017 since systems CCTV with OHS rules. compliance preparation and worksite check are used to on electrical work authorisation for access how monitoring are continuously We systems. how inducted, been have our employees well well risk risks are identified and how quickly minimisation is implemented. manage risks are used to recordings Video when investigating employees and educate This incidents and accidents. the causes of safety approach is fundamental to risk-based Business unit management at En+ Group. role in identifying an active heads play risks and promoting health and safety potential management engagement in the risk employee process. • • • • • • Monitoring Monitoring program monitoring has a rigid safety The Сompany which includes a number of in place, framework and assesses OHS indicators performance key areas: key in the following performance • In 2018, the Company developed a regulation a regulation developed the Company In 2018, working flashcards outlining safe create to more than 4,000 Group created En+ practices. descriptions in 2018. workflow flashcards with also We these efforts in 2019. En+ is continuing the incident investigation reform plans to have procedure establish a standardised to Policy minor reporting the swift accidents, for of dangerous illnesses and potentially injuries, in injury, resulted have incidents that could these investigating for as a procedure as well the lessons incidents and communicating employees. learned to EN+ GROUP | 110 and Power segmentsin2017-2018 Work-related employeefatalitiesintheMetals GRI contractor performance. form of anintegral ouroversight part of Compliance withtheserulesandstandards to adhereto ourrulesandstandards. All contractors we work witharerequired data for contractor injuries. contractors. OurLTIFR figuresdonotinclude every incidentinvolving bothemployees and contractors. En+Groupthoroughly investigates accidents, includingthoseinvolving external We keep comprehensive records of all HEALTH ANDSAFETY 403-10 403-6
403-9 4 7 performance Health andsafety on thelessonsfromsuchincidents. Key findings employees sothateveryone canreflect We alsoshareourfindingswithall a fatality. onanyreport incidentthathasinvolved Group. The HSECommittee considers adetailed Eliminating fatalincidentsisapriority for En+ units. across thecompany andinindividualbusiness implementing healthandsafety initiatives accident, conducting a risk assessmentand To thisend, En+groupinvestigates each to achieving ourgoalof zero fatalincidents. We remainunwavering inourcommitment from occurring again. every possiblestep to prevent similarevents to thefamiliesof the victims andtakes En+ Groupprovides allthenecessary support investigated by adedicated team of experts. incident isunacceptable andisthoroughly colleagues diedatwork in2018. Every We thateightof regret our to report Fatalities 4 4 • • • to theaccidents included: The majorrisksthatcontributed with theBoardandHSECommittee. from fatalincidentsarereviewed anddiscussed • • in individualbusinessunits. and safety initiatives acrosstheCompany and a risk assessmentandimplementinghealth includes investigating eachaccident, conducting to prevent thesefatalities happeningagain. This 2018 by focusing onallthemeasuresneeded We strengthenedoursafety culturethroughout Personal negligence; and hazardousfactors by staff; Inadequate assessmentof industrialrisks issues; Inadequate leadershipinproductionsafety unassigned work. by employees andtheperformance of Unauthorised expansion of work scope environment; Unsatisfactory organisationof safe work 111 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 Occupational diseases diseases increased occupational The number of This was 184 in 2018 from 173 in 2017. to following increased detection due to mainly medical check-ups high-quality a series of conducted the Metals segment, at facilities of and Scientific in partnership with the Moscow Medicine, Occupational of Institute Research miners as the hospitalisation of as well in-depth for disease clinic the occupational to and treatment. examinations managing approach to a proactive take We our improving continuously by health risk As programs. disease prevention occupational or contractor no employee there were a result, ill health work-related of fatalities because in 2018. 0,14 0,16 0,12 Exchanging best safe working practices with practices working safe best Exchanging leaders. other industry Targeted programs and initiatives programs and initiatives Targeted dangerous areas; potentially for personnel, training for safety Extended training on the Company’s including remote system; new In 2018, our LTIFR remained almost at the our LTIFR In 2018, slight increase is A as in 2017. same level both man-hours with a small rise of associated injuries. and work-related are aware that our operations can affect We every and take our employees the health of their current and protect to possible precaution future well-being. • • •
1 Investigations into all injuries, root cause all injuries, into Investigations actions; analysis and corrective Zero tolerance by management to health management to by tolerance Zero violations; and safety The Lost Time Injury Frequency Rate, calculated by the by calculated Rate, Frequency Time Injury The Lost Group as lost time injuries per 200,000 man-hours. 1. Lost time injury frequency rates per 200,000 hours time injury frequency rates per 200,000 Lost in 2017-2018 worked • • En+ Group reduced LTIFR to 0.14 in 2018 0.14 to LTIFR En+ Group reduced has set The Company from 0.16 in 2015. to OHS and fire safety ambitious KPIs for fatalities, Zero furtherdrive improvements. technological to serious injuries related zero executive are goals for LTIFR and lower process making management across all our enterprises, management at all for concern OHS a primary The Group has developed the group. of levels further LTIFR: an action plan to reduce Work-related Work-related injuries 4 4 7
4
EN+ GROUP | 112 Employee occupationaldiseasesin2017-2018 in theMetalssegment,2018 Lost-time accidents’ typesofworkdistribution HEALTH ANDSAFETY
153 148 1 4 4 7 14 24 31 25 31 85 173 184 113 | EN+ GROUP
0,250 0,126 0,214 COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 29 6 6 4 4 4 3 2 Violation of traffic moving traffic rules traffic moving traffic Violation of Lost-time accidents’ types of work distribution types accidents’ Lost-time segment, 2018 in the Power Occupational disease rate (per 100 employees) in 2017-2018 Occupational disease rate (per 100 184 173 85 31 25 31 24 14 7 4 4 1 148 153
EN+ GROUP | 114 GRI • • defines the Company’s five key culture values: self-suspensions in2018. Safety Culture program has been runningsince 2016. There were 226 the risk of injury inthefuture. This program self-suspension isanalysedindetailto minimise to refusework thatposestherisk of injury. Each which grantseachemployee theguaranteed right have implemented aSelf-Suspensionprogram, management approachacrosstheboard. We is to promote thehighestpossibleOHS in thesafety managementprocess. The program culture andbetter employee engagement an initiative aimedatbuildingastrongersafety We improved theSafety Culture programin 2018, International GeneralCertificate (ICG). and includedtrainingfor theNEBOSH in collaboration withtheCorporate University the Group. These programswere launched to embedrobustpractices atevery level within towards buildingaresilientsafety culture The Company devotes considerable effort HEALTH ANDSAFETY 403-8 403-2 Leadership; Safety; 404-2 403-5 403-7 development Safety culture • • • management andinjury prevention initiatives. investigations, staffengagementinrisk risk assessments, workplace inspections, implemented: inductions, knowledge testing, how well thefollowing measuresarebeing monitoring. Performance monitoring tracks with therequirements of performance in LTIFR acrosstheGroupandcompliance include atarget10% year-on-year reduction our safety cultureinitiatives. These KPIs safety KPIsfor seniorexecutives of aspart numbers, we have implemented healthand To declines inaccident ensurefurther prevent workplace accidents. aware of whatthey need to doreduce and core safety rulesmake allemployees keenly on therequirements for safe behaviour. Our with easy-to-understand information for thecore safety rulesandprovide employees These values serve asthefoundation Engagement. Professionalism; Risk-based approach; for specific tasks. personal protective equipment andteamwork skills andmethodsfor working atheight, using functional trainingcentres andacquire practical employees withtheopportunity to traininmulti- Both En+Group’s businesssegments provide and courses offered by theCorporate University. of thedistanceprovided aspart learningsystem programs includebothonlineself-study materials professional development programs. These industrial safety. The Company offers regular pass knowledge tests for occupational and complete OHStraining. Employees mustregularly the inductionprocess, eachemployee must unscheduled trainingsessions. of As apart and complete introductory/refresher/targeted/ Our employees aregiven safety inductions OHS training 115 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 also held every year to mark World AIDS Day. AIDS World mark to year also held every alleviate to with employees work Psychologists Our stress and other mental health issues. relaxation rooms can rest in special employees with massage chairs and other that are fitted help them unwind. to calming devices employees culture program provides Our safety health insurance voluntary with health resorts, centres. at fitness discounts and corporate surgeries for expenses The Group also covers and other medical procedures. En+ Group launched a program to monitor monitor to En+ Group launched a program enter as they employees of levels the alcohol and heat combined facilities at two power roll is planning to The Company plants. power at all high-pressure thermal out this system stations. power stations and hydroelectric that has health centres segment The Power with employees provide to are equipped care. outstanding treatment and preventive medical professionals top by are staffed They and post-shift pre-shift first aid, who provide and preventive tests alcohol medical check-ups, must All employees medical examinations. medical examinations undergo the mandatory and conditions undetected diagnose any to offers The Company treat them quickly. against flu and tick-borne vaccinations year. every encephalitis about the general health of En+ deeply cares organised the Company In 2018, its employees. where employees awareness day a diabetes situation at industriallearned about diabetes are prevention about HIV events Awareness sites. Prevention of occupational of occupational Prevention diseases injuries and 403-9 403-6 403-10 them. all our employees should they require all our employees should they require providing rehabilitation services for prevention and diagnosis, as well as prevention and diagnosis, as well as diseases. Our initiatives are aimed at decrease risk of occupational We are constantly working to We To reduce the impact of potentially harmful potentially the impact of reduce To equips the Company operations on employees, has the Company For example, them with PPE. require where employees workplaces identified employees and has provided noise protection art headsets. with state-of-the communication The most commonly reported occupational The most commonly andvibration disease illnesses were En+ Group sensorineural hearing loss. illnesses targets these occupational specifically assessments and health in its health risk The Metals segment management plans. approach effective a highly has developed vibration risks and from workers protect to illnesses vibration-related has reduced and use select to on how educating workers by equipment anti-vibration personal protective (PPE). We are constantly working to decrease risk risk decrease to working are constantly We are Our initiatives diseases. occupational of as as well and diagnosis, aimed at prevention our all for rehabilitation services providing them. require should they employees GRI EN+ GROUP | 116 midterm period Goals for2019and • • • • • • safety andfiresafety objectives: has setthefollowing occupational healthand its healthandsafety performance. En+Group In 2019, improve theGroupseeks to further HEALTH ANDSAFETY work posingan injury risk (self-suspension); that they have therightto refuseto perform Ensuring thatallemployees understand for employees onaregular basis; Providing healthandsafety trainings environment; to ensurethemostrobustsafety Exceeding regulatory OHSrequirements Reducing occupational diseases; Reducing LTIFR; process; related injuriesrelated to technological Achieving zero fatalities, zero seriouswork- • • • • • • objectives for 2019: The Metalssegment hassetthefollowing key training environments; Introducing atrainingusingsimulators and Bauxite Mine; promote safety Urals cultureattheNorth employee motivationto reduce injuriesand better industrialsafety andstronger Continuation of theprogram to ensure at Krasnoyarsk Aluminium Smelter; Implementation of thesafe potlineproject Refinery‘s hydrochemicaltreatmentfacility; Repairing thespillway at Achinsk Alumina system of productionsafety”; Introducing an “Automated information by international bestpractices. the OHSmanagementsystem, guided Continuously improving • • • • • • • initiatives for 2019: The Power segment isplanningthefollowing of eachwork shift; Implementing toolbox meetings atthestart safety; Implementing core rulesfor occupational training programs. Behaviour project anddeveloping related Launching theDiagnosingDangerous Developing a VR-based training; across theGroup; issues by usingproblem-solvingboards Ensuring thebottom-up resolutionof safety safety monitoring system; Continuing to improve theoccupational for occupationalinformation portal safety; Continuing to improve thecentralised 117 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 In 2019, the Group seeks to further Group seeks to the In 2019, and safety improve its health Group has set a set En+ performance. and safety and of occupational health fire safety objectives.
Introducing a company-wide colour colour Introducing a company-wide dangerous areas and designate to system parts.equipment Monitoring the use of safety flashcards safety the use of Monitoring dangerous operations and potentially for changeovers; Adding visualisations of risk factors risk of visualisations Adding to safety guidelines; safety to New technologies are also helping to reduce reduce are also helping to technologies New En+ Group is illnesses. occupational of the risk measures technical implementing constantly possible) or reduce (where eliminate aimed to In cases when such risks cannot such risks. the art of state personal eliminated, be fully workers. to is provided equipment protective • • • EN+ GROUP | 118 119 | EN+ GROUP
mn % % e/tAl) 2 36 water in fresh decline the Metals by consumption 2008 to compared segment 1.2 "ALLOW" 7.5 reduction of direct GHG emissions of GHG emissions of direct reduction of vs 2014 operations 2018 electrolysis (tCO young peled-fish were peled-fish young Angara river the released into years the past five basin over footprint low-carbon brand of aluminium D
LIFE ON LAN Waste and safe tailings management and safe Waste rehabilitation Land Biodiversity period 2019 and midterm Goals for 2018 • • • • TION AC N RESPONSIBLE CONSUMPTION AND PRODUCTIO
Y ABLE AND AFFORD CLEAN ENERG
N
R TIO TE TA WA ANI
Energy Energy Air emissions conservation resources Water Management approach change Climate CLEAN AND S
protection Environmental SUSTAINABILITY REPORT REPORT SUSTAINABILITY • • • • • IN THIS SECTION We will achieve this by adhering to and surpassing basic surpassing basic and adhering to this by will achieve We launch our to and taking the initiative requirements legal projects. environmental protection own Our sustainable development focus is set focus Our sustainable development We change. and climate on environmental protection an impact have inevitably understand that our operations we and and biodiversity, air quality land, water, on our footprint and minimise mitigate to strive therefore do. we in everything EN+ GROUP | 120 • • • protection goalsare: The Company’s primary environmental processes. improving waste recycling andprocessing the useof renewable power resources, and operations. We arecontinuously increasing and reduce theenvironmentalimpactof its equipment to enhance productionefficiency of new technologies andthemodernisationof The Company isinvesting in thedevelopment projects onenvironmentalprotection. its legal obligations, runningmany voluntary environmental issuesmeansthatitsurpasses leader inaddressingclimate changeand En+ Group’s commitment to beingaworld GRI ENVIRONMENTAL PROTECTION 103-2 103-1 its uniqueecosystem andculturalheritage. Developing programsto protect Lake Baikal, species; in programsaimedatprotecting threatened En+ Groupoperates andparticipating Conserving biodiversity inplaces where the Company’s productionfacilities; Enhancing theenvironmentsurrounding 103-3 approach Management by thefollowing principles: The Group’s decision-making process isguided • • • • and followed upwithcorrective measures. independent auditchecks arequickly resolved issues identified by government agenciesand govern environmentalrisk management. Any rigorous policiesandprocedures inplace that environment protection. The company has voluntary internal policiesregulating the Company hasalsoadopted itsown While adheringto allstate legislation, measured consideration of theiropinions. Regular interaction withstakeholders and environment andclimate; preventing risksthatmay affect A commitment to minimisingand and bestpractices; the countries whereEn+Groupoperates Compliance withallthenecessary lawsof climate risks; and assessmentof environmentaland The swift andcomprehensive identification 1. comply withlocalstate legislation andtake a widerangeof stakeholders, allof which use public hearingsto communicate with for Supervisionof NaturalResources. We also direct contact withtheFederalService of theGroup’s businessunitsareinregular making process. EnvironmentalManagers the guidingprinciplesof theGroup’s decision- respecting theiropinionsareamong Communicating withstakeholders and from reservoir water surfaces. methodologies to assessGHGemissions of hydroelectric facilities anddeveloping aimed atensuringthesustainabledevelopment of cooperation withtheIHA involve projects Association (IHA). The Company’s mainareas is amemberof theInternational Hydropower to mitigate climate change. JSC EuroSibEnergo management of aluminiumproduction Standard, responsible whichaimsto support a roleintherolloutof the ASI Performance Stewardship Initiative (ASI), RUSAL played management. As memberof the Aluminium of ourapproachto environmental areessentialelements among departments Sharing knowledge, skillsandresources pp. 82-85, Scientific and technological development. For moredetailedinformation, pleaserefer to
121 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 En+ Group’s commitment to being a commitment En+ Group’s climate in addressing world leader issues change and environmental its legal means that it surpasses many voluntary obligations, running protection. projects on environmental , 1 There are a number of ongoing R&D projects There are a number of En+ Group sets specific environmental goals En+ Group sets specific reportingThe period saw year. itself each for including the restructuring changes, many system governance corporate En+ Group’s of and Safety the Health, of and the formation The Committee, Environment (HSE) Committee. has with managers companywide, together with ensuring sustainable growth, tasked been environmental the Company’s decreasing a comprehensive impact and developing and targets. strategy sustainability place under the supervision of a government a government of under the supervision place such as the Main Department State of body Expertise. such as testing red mud (alumina waste) red mud (alumina waste) such as testing new developing treatment technologies, researching innovations value-added products, in aluminium production and other initiatives natural use of more rational facilitate aimed to safety. environmental and improved resources EN+ GROUP | 122 GRI ambitious climate policiesof theirown. are intheprocess of drawingupdetailedand by 2025. The En+Group’s othercompanies strategy, includingseven targetsto beachieved RUSAL already hasanestablishedGHGreduction strategicimportant aims. As detailedbelow, processes have onclimate isoneof ourmost businesses, minimisingtheimpactproduction Due to theenergy-intensive natureof our global policy andtheindustry’s response. toworking enhance withawiderangeof partners for waysto reduce ourcarbonfootprint andare facing ourplanet. We areconstantly looking Climate changeisoneof thegreatest challenges ENVIRONMENTAL PROTECTION 305-2 305-1 305-5 change Climate • • achieved by 2025: for greenhouse gas emissionsto be introduced seven strategic targets and climate change. In2016, RUSAL impact ontheenvironment, airquality focuses onminimisingtheCompany’s Safe FutureStrategy Initiative, which mitigation schemesandlaunchedits in theGroupto implementclimate RUSAL wasthefirst company and otherdownstream processes. aluminium smelting, aluminaproduction mobile combustion, anodeproduction, gases. These includestationary and primary aluminiumgenerate greenhouse Various activitiesintheproduction of initiatives RUSAL’s climate aluminium smelters; existing the at reductionprocesses at emissions by 15%compared to 2014 To reduce direct specific greenhouse gas other carbon-free power generating; from hydroelectric power plantsand purchased by aluminiumsmelters comes To ensurethatatleast95%of electricity • • • • • the company. aligned withthe strategic goals of carbon prices aslongthey are climate changeandsupporting advocating active actionsto prevent initiatives andassociations To Russian andinternational support from2017; decisions starting making strategic andinvestment To useinternal carbonprices when exceeding 2.7 tof CO at thealuminiumsmelters not emissions fromreductionprocesses energy related greenhouse gas of specific direct andindirect To achieve theaverage level as compared to 2011; smelters power consumption by 7% To reduce thespecific aluminium refineries; to 2014attheexisting alumina gas emissionsby 10%compared To reduce direct specific greenhouse 2 e/t Al 1 ; 123 | EN+ GROUP
, which is one which is one , 2 COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 of the best levels in the global aluminium in the global aluminium the best levels of with brand comes ALLOW The industry. footprint carbon verified independently and ships worldwide. statements for every tonne of aluminium of tonne every for e/tAl 2
2.2 2.28 2.11
Smelters’ direct emissions (scope 1) and emissions (scope direct Smelters’ 2). emissions (scope energy indirect emissions energy indirect and 1) (scope direct Smelters’ 2). (scope of the initiative, aims to be transparent be transparent aims to the initiative, of about its GHG emissions and plans release a report to its environmental on guidelines the CDP to according performance in the nearest future. brand ALLOW launched its RUSAL In 2017, as part aluminium footprint low-carbon of production strategy. its carbon-free of of tonnes less than four The brand produces equivalent gas emissions in СО₂ greenhouse Dynamics of GHG emissions reduction in Dynamics of GHG emissions reduction the Metals segment, tCO 1. 2. Both En+ Group and RUSAL are members are members Both En+ Group and RUSAL Coalition Leadership Pricing the Carbon of aimed initiative Bank World a (CPLC), collaboration sector at facilitating private on reducing carbon emissions (https:// www.carbonpricingleadership.org/partners). involved has also been RUSAL 2015, Since Disclosure Project in the global Carbon and that helps companies (CDP) initiative cities disclose their environmental impact. along with other participants RUSAL, En+ Group companies are striving to comply comply are striving to En+ Group companies with both national and international En+ Group and change regulations. climate Partnership joined the Climate have RUSAL help that aims to an initiative Russia, of climate businesses mitigate Russian more environmentally change and become Partnership The Climate responsible. carbon launch low to companies encourages a greener and promote production processes http://climatepartners.ru/en/ economy. In 2018, RUSAL’s greenhouse gas gas greenhouse RUSAL’s In 2018, subjected 3) were 2, 1, emissions (Scope certification verified an independently to of the requirements to KPMG according by Aluminium Carbon the ISO 14064-2016, Support Document Technical Footprint For National Guidelines and 2016 IPCC Previously, Gas Inventories. Greenhouse 1, gas emissions (Scope greenhouse RUSAL’s and BSI. QUANTIS by verified 3) had been 2, One of the Metals segment’s strategic goals goals strategic the Metals segment’s One of a 15% reduction in direct achieve is to gas emissions at its existing greenhouse 2025 compared by aluminium smelters GHG emissions Direct 2014 levels. to 7.5% by fell from aluminium smelters 2.11 to (down 2014 to in 2018 compared from 2.28 tCO₂e/tAl). EN+ GROUP | 124 by 2022. from thesame volume of water by 2 TWh it possibleto increaseelectricity generation The upgradesof HPP equipment willmake without increasingthewater flow. boosting theamountof electricity generated improving theefficiency of theirturbines, Krasnoyarsk andUst-Ilimsk, arecontinuously En+ Group’s four HPPs, located inBratsk, Irkutsk, СО thereby reduce GHGemissions). 1.8mntonnes of coal-powered generationintheregion (and generation efficiency, allowing us to substitute The modernisationof ourSiberianHPPs increases by 9,300tonnes per year. and reduce emissionsof otherpollutants emissions by 69,000tonnes of CO₂ per year These measuresshouldcutgreenhouse gas boilers, turbinesandashremoval equipment. modernisation envisageshigherefficiency of ENVIRONMENTAL PROTECTION 2 e were avoided in2018. 1 Inaddition, thermalPower Plants gases inktCO Total directandindirectemissionsofgreenhouse 3. 2. 1. industry response. to enhanceglobalpolicyandthe working withawiderangeofpartners reduce ourcarbonfootprintandare We areconstantlylookingforwaysto Scope 2inPower segment isnotapplicable. Volgaenergo, Baikalenergo. segment: Enser, PJSC Irkutskenergo, LLC EuroSibEnergo — Hydrogeneration, Krasnoyarsk Hydro-Power Plant, Metals segment: Aluminium smelters, aluminarefineries, bauxite andnephelinemines, silicon production. Power For moredetailedinformation, pleaserefer to p.88, Scientific and technological development.
23,865 26,010 2 e 2 in2017-2018 3 1 ,995 3,037 22,792 20,893 48,652 49,940 125 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 As part of its contribution to the UN to As part its contribution of Goals related Sustainable Development and preservation ecosystem terrestrial to pilot is launching two RUSAL change, climate and aerial planting in 2019: tree projects Absorption will be primarily protection. forest Guidelines 2006 IPCC on the basis of calculated Inventories Gas National Greenhouse for in the Russian and recorded methodology Anthropogenic of National Cadastre Sinks by and Removals Sources Emissions by Gases not controlled all Greenhouse of and other reporting the Montreal Protocol, by the UNFCCC. to Russia by documents submitted
The Company consistently implements best consistently The Company and governance available technologies and reducing preventing aimed at practices residual set off To gas emission. greenhouse of the Metals segment impact, negative ecosystem the Group implements forest projects and restoration conservation and public with academic in conjunction of and representatives organisations, The forest NGOs and local communities. contribution a significant make projects boreal and preservation of the development to a critical that play natural complexes forests, balancing and which CO₂ role in atmospheric binding in effective times more 7 are 6 to carbon. atmospheric
En+ Group has started to implement a new En+ Group has started a new implement to project and restoration conservation forest leading global aluminiumAs the in 2018. Metals segment En+ Group’s producer, and water. energy large amounts of requires which involves aluminium, The production of fuel combustion carbon anode production, releases a substantial and the anode effect, emissions GHG Decreasing GHGs. amount of main priorities. the Company’s is one of the physical and chemical due to However, GHG aluminium, produce to required processes Therefore, eliminated. emissions cannot be fully several introduce to has decided the Company with a particular projects, carbon offset compensate to on reforestation, focus during GHG emitted the unavoidable for production. projects Forestry communities. representatives of NGOs and local and public organisations, and in conjunction with academic conservation and restoration projects conservation and restoration projects implements forest ecosystem the Metals segment of the Group the Metals segment To set off residual negative impact, set off residual negative impact, To EN+ GROUP | 126 energy sourcein2018 Electric poweroutputby GRI updating regulations. processes (reducingheatloss, for example) and improving equipment designandtechnological technologies, optimisingenergy usage, These includeimplementingenergy-saving the Company’s power generationfacilities. energy efficiency projects areunderway atall generated on-site. Target programsand transmission lossandusemoreenergy from hydropower plants, minimiseelectricity efficiency strategy aims to increaseoutput The Group’s power generationandenergy ENVIRONMENTAL PROTECTION 302-1 EU2 ydropower Oi produ ts
302-4
1 Energy ,% oa
o ar
generated 14.9 TWh of electricity. 16.2 mtwhiletheGroup’s thermalpower plants parties. In2018, total coal productionreached covers internal coal demandandsellsto third from theGroup’s coal segment, whichfully combined heatandpower plants(CHPs) iscoal The mainfuelsource for theCompany’s way possible. plans to produce ouraluminiuminthecleanest reason, hydropower playsthecrucialroleinour requires vast amountsof electricity. Forthis to industry lows. Aluminium production saving measures, willcutitsGHGemissions by 2025, whichcoupled withotherenergy- its aluminiumusingrenewable hydropower En+ Groupplansto produce atleast95%of Gas io ass energy sourcein2018 Thermal energyoutputby Oi produ ts oa
kWh peratonne of aluminiumproduced. aluminium produced andamounted to 16,211 production decreased by 23kWhperatonne of specific energy consumption atthealuminium to technological measuresin2018. The average in thefield of energy efficiency, namely due implementation of policiesandinitiatives reduced by 86,911,354kWhasaresultof Energy consumption ataluminiumproduction 160.3 millionkWhof electricity per year. electrolysers atourplants, savingasubstantial was theinstallationof 626energy-saving efficiencyimportant initiative in2018 reduction inenergy consumption. The most efficiency innovations to ensureasustained developing andintroducingnew energy in 2018. The Metalssegment isconstantly electricity consumption intheMetalssegment Additional capacity, addedinmid-2017, boosted sources Non-renewable 2
,%
Gas
io ass 127 | EN+ GROUP
0 1 1 8 1 1 COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 1 1 1 028 10 8 0 11 8 in 2017-2018 1
3
2 80 2 0 2 808 2 8 8
Coal, kt Heavy oil, kt Gas, mn m
LLC KraMZ, Enser, Volgaenergo, Baikalenergo, PJSC Irkutskenergo, LLC Eurosibenergo — Hydrogeneration, Baikalenergo, Baikalenergo, Hydrogeneration, — Eurosibenergo LLC Irkutskenergo, PJSC Baikalenergo, Volgaenergo, Enser, KraMZ, LLC Plant. Hydro-Power Krasnoyarsk JSC Baikalenergo. Volgaenergo, Enser, Irkutskenergo, PJSC segment: Power LLC KraMZ, Enser, Volgaenergo, Baikalenergo, PJSC Irkutskenergo, LLC Eurosibenergo — Eurosibenergo — LLC Irkutskenergo, PJSC Baikalenergo, Volgaenergo, Enser, KraMZ, LLC Plant. Hydro-Power Krasnoyarsk JSC Baikalenergo, Hydrogeneration, Fuel consumption from non-renewable Fuel consumption fuel sources by type of 3. 1. 2. io ass
Gas
oa Oi produ ts io ass Gas
o ar oa
Oi produ ts ydropower EN+ GROUP | 128 carbon monoxide emissions),tonnes air emissions(excluding greenhousegasesemissionsand Nitrogen oxides (NO GRI pollutant emissions. are responsiblefor themajority of En+Group’s Irkutskenergo, of En+Group, whicharepart where we have apresence. RUSAL andPJSC and government regulations inallcountries to complying withallthenecessary internal its operationalemissions. We arecommitted En+ Groupisconstantly working to reduce businesses spreadacrossfive continents, As amajorindustrialholdingwith various ENVIRONMENTAL PROTECTION 305-7 Air emissions X ), sulphuroxides (SO NO 1 x in2017-2018 airemissions, initiatives in2018: The Metalssegment’s key emissionsreduction • • 2. 1. segments have been implementing Since 2018, En+Group’s MetalsandPower For moredetailedinformation onairemissions, pleaserefer to p.151 Appendices. JSC Krasnoyarsk Hydro-Power Plant, Volgaenergo, Baikalenergo, OJSC Irkutsk Electric GridCompany. Power segment: Enser, PJSC Irkutskenergo, LLC EuroSibEnergo — Hydrogeneration,
21 47 68 Alumina Refinery). Silicon, RUSAL Silicon Urals, and Achinsk plants atBrAZ, IrkAZ, NkAZ, KUBAL, UAZ, Building andmodernisinggastreatment technology atKrAZ, BrAZ, IrkAZ, andNkAZ; Implementing theEco-Søderberg kt X ), andothersignificant 20 51 71 2 SO x airemissions, 36 190 226 kt 36 212 248 in 2018comparison with2017. due to increasingpower andheatgeneration Emissionsgrowth inthePower segment is a common 20%reductiontarget. in thecitiesshalldevelop programswith to 2017. Selected someof thebiggestpolluters in thesecitiesby atleast20%in2024compared program aimsto reduce airpollutantemissions Project andClean Air FederalProgram. This Novokuznetsk, of theNationalEcology asapart Russian cities, includingKrasnoyarsk, Bratsk and a comprehensive planto reduce emissionsin12 Particulate matter(PM),
42 56 98 kt 38 61 99 129 | EN+ GROUP
in 2018. 3 COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 in 2017 and 25.5 mn m in 2017 3 Water withdrawal Aluminium the only In the Metals segment, was 22.9 intake Total Division uses seawater. mn m The main sources of water intake in the Metals intake water of The main sources underground water, are: surface segment and seawater systems water public sources, production facility at the KUBAL (only castings and air emissions cooling for treatment discharges). in the Power intake water of The main sources underground water, are: surface segment systems. water and public sources, The Power segment the impact the operations of recognise We resources. on water have segment our Power intake, our water are reducing we In response, loss reduction processes, implementing water water with local and federal closely working the quality improve management agencies to treatment and installing new wastewater of equipment. water-efficient EnSer and - our business units of Two in high-water-risk operate - Volgaenergo (KPIs) indicators performance Key regions. in those units include branch directors for environmental negative penalties for “avoiding conducting are currently We impact”. resource the boost to program comprehensive a equipment and of the efficiency and water Irkutskenergo. at PJSC operational processes Water resources resources Water conservation The Metals segment evaluates annually Metals segment The Group’s resources its activities on water the impact of through industrial environmental monitoring. its for resources used water RUSAL In 2018, Aluminium Division, in the production needs and Directorate Projects New Alumina Division, does not The Company Division. Downstream regions. from high-water-risk water consume
303-3 306-3 306-1 303-2 per year. per 3 per year; per year; per 3 3 Technical upgrades to Irkutskenergo Irkutskenergo upgrades to Technical consumption reducing water facilities, 212.2 m by Installing a mist eliminator at Novo- Installing a mist eliminator consumption reducing water Irkutskaya CHP, 170 m by Installing a water recycling system at system recycling Installing a water consumption reducing water CHP-16 plant, 171 m by Increasing water recycling. Increasing water Decreasing the amount of waste water water waste the amount of Decreasing of and the concentration produced in it; hazardous substances Decreasing the amount of fresh water used fresh water the amount of Decreasing in operational processes; 303-5 303-1
In the Power segment the En+ Group’s key key the En+ Group’s segment In the Power in 2018 were: saving initiatives water En+ Group facilities retrieve water from both water En+ Group facilities retrieve its for and underground sources surface Alumina operational and production needs. are the Group’s facilities refineries and power their due to consumers biggest water and processes. requirements technological from water suffers rarely The Company shortages are at its facilities and there risks (water no critical water-related currently and disposal) in place. consumption Minimising the Company’s impact on water impact on water Minimising the Company’s En+ of focuses the main is one of resources that strategy environmental protection Group’s envisages: • • • • • • GRI
38 61 99
kt 42 56 98
Particulate matter (PM),
248 36 212
kt 226 36 190 air emissions, x
SO
51 20 71
kt 47 21 68 air emissions, x NO EN+ GROUP | 130 industrial waste water by 0.6mnm segment increasedwater dischargeof to surface bodiesof water. The Metals RUSAL only dischargeswaste water Company by 2022. production processes acrosstheentire recycled andreusedwater supply for themain to achieve itsstrategic goalof reaching100% less thanin2008. The Company isstriving consumption to 82.6mnm In 2018, The Metalssegment cutfreshwater Water consumption ENVIRONMENTAL PROTECTION 3 , whichis36% 3 , or2%, protection strategy. focuses ofEn+Group’s environmental water resourcesisoneofthemain Minimising theCompany’s impacton has been lowered by 62%, or55mnm in 2018compared to 2017. Water discharge segment ensuresthatrisk management periodintheGroup.the reporting The Metals There were nosignificantspillsduring RUSAL recorded nosuchcases in2018. on unplanneddischargesdueto accidents. The Metalssegment only collects data since 2008. 3 , generation in2018comparison with2017. segment isdueto increasingpower andheat Water consumption growth inthePower and managetheirconsequences. processes areinplace to minimisespillrisks 131 | EN+ GROUP
789,943 720,032 COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 , which is 36% 3 564,915 642,433 3 1
147,510 155,117
Power segment: Enser, PJSC Irkutskenergo, LLC LLC Irkutskenergo, PJSC Enser, segment: Power Volgaenergo, Hydrogeneration, — EuroSibEnergo Grid Company. Electric Irkutsk OJSC Baikalenergo, Company by 2022. main production processes across the entire main production processes across the recycled and reused water supply for the recycled and reused water supply for achieve its strategic goal of reaching 100% achieve its strategic goal of reaching less than in 2008. The Company is striving to less than in 2008. The Company is striving 1. consumption to 82.6 mn m In 2018, The Metals segment cut fresh water In 2018, The Metals segment cut fresh water consumption from all sources Total m in 2017-2018, thousand EN+ GROUP | 132 Lake Baikal • • unique ecosystem: todirecting conserve itsefforts Baikal’s focuses onthefollowing areaswhen at someof theGroup’s HPPs. The Group from Lake Baikal, drives power generation The Angara River, theonly river thatflows on thelake andhelpconserve itshabitats. initiatives to minimisetheimpactof humans environmental protection. The Grouphasled in 1996. We arepassionate aboutits declared aUNESCO World HeritageSite largest freshwater body. The lake was Lake Baikalistheworld’s deepest and ENVIRONMENTAL PROTECTION − − − − − a listof theFWRA’s regulatory priorities: cascade’s daily operationalmode. Below is regulates and strictly monitors the HPP the Group’s HPPs operate. The FWRA bodies, includingthe Angara River, where (FWRA) regulates theuseof allwater The Federal Water Resources Agency Water resource regulation atBaikal. rivers; 50%), whichreceive theirwater fromother by theBratsk andUst-Ilimsk reservoirs (30- In additionto Baikal, theHPPs arealsofed with annualelectricity output of 36.8 TWh. construction began in1958, isnow 9GW HPPs (Irkutsk, Bratsk andUst-Ilimsk), whose capacity of theGroup’s cascadeof three Hydropower plants(HPPs). The combined − − − − − Electricity generation. Environmental conservation; Water transportation; supply, irrigation); the localpopulation(water thewell-being of Support (flood control); Safety of thelocalpopulation settlements. tracks floodingand thesafety of waterfront influence onBaikal’s hydrologicalregime, The Group’s HPPs constantly monitor their waters inasustainableandresponsibleway. The Company iscommitted to usingBaikal’s level changesontheecosystem. (RAS) in2016to assesstheimpact of water Institute of theRussian Academy of Sciences research conducted by the Water Problems range. This limitwassetfollowing extensive is allowed to fluctuate withinaonemetre is valid until2020, the lake’s water level Under thecurrentgovernment decree, which for fluctuationsin Lake Baikal’s water levels. the maximumpermissiblelimitsset authorities. The Groupcarefully monitors set by theRussian government andlocal the regulatory requirements andlaws The Company haspledgedto meet all • • that thealgaeblooming wasoccurring to pollution(eutrophication). Research found indicates thatBaikal’s ecosystem isreacting themselves arenotharmful, theirpresence the researchers’ attention. While thealgae on thelake’s surface that initially caught It wasamassive bloomof filamentous algae on thekey issuesfacingBaikal’s ecosystem. and MSUinitiated aseriesof studies State University (MSU). In2016, En+Group Joint researchconducted with theMoscow affecting the lake; to proactively addressthemainissues for natureandcooperation withNGOs responsible behaviourandconsideration awareness campaignsto promote shoreline; thecreationof environmental a majorannualclean-upof thelake’s involving localcommunities, including environment. Volunteering initiatives Commitment to conservation of thenatural 133 | EN+ GROUP
. COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 1 For more detailed information please refer to please refer For more detailed information development community Local 146-147, pp. 2018 Annual Report and p.83, 1. environmental initiatives together with together environmental initiatives with a local are also collaborating We NGOs. which Together”, Baikal “Protect organisation, children about educate helps the Company and unique ecosystems Region’s the Irkutsk En+ nature lovers. generation of inspire a new Trail” Baikal “Great Group is partners with the the Siberian of “Revival organisation and the RUSAL Charitable Foundation. Youth Land” such organises and participates in events environmental clean-up Day Yenisei as the grant contest, Wave marathon and the Green which are outstanding opportunities En+ for its engage with a wide range of Group to stakeholders for System Dynamics and Control Theory Theory and Control Dynamics System for the RAS) the Siberian Branch of of (all three and field carried out laboratory jointly and assess the GHG emissions research to and Krasnoyarsk the Irkutsk absorption of The analysis was also reservoirs. HPP calculating a method for develop used to GHG emissions in collaboration reservoir with researchers from the MSU. A scientific research and a monitoring expedition research and a monitoring scientific A will unique ecosystem Baikal’s aimed at protecting will monitor expedition The be launched in 2019. and will period, a three-year Baikal over Lake data. include historical with its En+ Group cooperates In addition, on environmental protection stakeholders issues through joint environmental projects. (a program 360 Project For instance, Baikal) around Lake the ecosystem protect to implement many EN+ Group to allows Measuring GHG emissions from reservoirs. Measuring GHG emissions from reservoirs. change about climate Rising concerns assess to initiatives new prompted have of as sources reservoirs HPP the impact of the Limnological In 2017, GHG emissions. Atmospheric of the Institute Institute, Institute Optics and the Matrosov all over the lake. The research project will project The research the lake. all over the reasons uncover in order to continue also We have of algae. behind this flare-up polymer contamination studied synthetic content measuring the microplastic by and looking into water Baikal’s Lake of In 2016, ecosystems. on aquatic its effect water of layer sampled the surface we and western trawling along Baikal’s by analysing are still We shores. eastern monitor to the samples and are continuing the causes of identify to water the lake’s its mitigate ways to pollution and develop impact. negative • EN+ GROUP | 134 segment. of ashandslagwaste produced by thePower our Metalssegment generates andtheamount bauxite andnephelineresidue(aluminawaste) we arealsoworking to reduce how much the amountof waste stored inthesefacilities, with thenecessary regulations. To minimise our waste managementsites arecompliant waste isdisposedof andstored safely. All modernising existing facilitiesto make sure management sites, aswell asrenovating and the Groupisactively developing new waste safe disposalandstorage. To achieve this, target isto increaseitsshareof recycling, En+ Group’s mainstrategic waste management GRI ENVIRONMENTAL PROTECTION 306-2 MM3 management Waste andsafetailings 2017-2018, excluding overburden(frommining),mt Non-hazardous wastegeneratedbyeachsegment in and solutions. implement waste managementtechnologies and manufacturingcompanies to develop and cooperating withleadingresearchcentres disposal management. The Company is to reduce theamountof landusedfor waste slag disposalandrecycling processes and working intensively to improve itsashand the Power segment’s waste. The Groupis burning, account for the vast majority of Ash andslagwaste, generated by coal waste Ash andslag though itisconsidered non-toxic. generated duringsmeltingandrefining, even and implementinnovative methodsto cutwaste RUSAL isworking withR&Dcentres to develop created fromaluminaandaluminiumproduction. which account for around87%of allthewaste by RUSAL arebauxite andnephelineresidue, The mostsubstantialtypesof waste generated production waste Alumina andaluminium 2. 1. Power segment: Enser. Volgaenergo, OJSC Irkutsk Electric GridCompany, Baikalenergo. Power segment: Enser, PJSC Irkutskenergo, LLC EuroSibEnergo — Hydrogeneration,
13.8 14.8 in 2018. InthePower segment in theMetalssegment was28,658,486tonnes The total amountof formed overburden to 60%. the Cheremukhovskaya-Glubokaya mine, by up the waste generated atcoal facilities, suchas in coal refiningprocesses reduced The implementationof new technologies environmentally safe waste disposalmethods. influenced by theamount of coal extracted and at itsproductionfacilities, whichisdirectly are to reduce theamountof waste generated The Group’s waste managementpriorities reclamation. unused miningareasfor subsequent land using anashandslagwaste mixtureto fill-in by decreasing thenumberof landfillsand to reduce theirimpactontheenvironment the Group’s companies aremakingevery effort retrofitting of existing sites. Inaddition, facilities aswell asthereconstruction and in theconstruction of new waste disposal The Company isinvesting significantresources in 2018. 114,404,232 tonnes of overburden generated 2 2.8 2.9 1 , therewere 16.6 17.7 135 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 Persistent organic Persistent pollutants commitments In line with the government’s on Persistent Convention under the Stockholm En+ has developed (POPs), Pollutants Organic polychlorinated manage plan to a long-term 2022. by waste biphenyl-containing waste Metals segment The Group’s achieve management activities are designed to goals: increasing the share strategic key specific storage safe waste, and reuse of recycling of eliminating completely waste, and disposal of biphenyl) (polychlorinated PCB the use of waste. PCB of disposal and the safe equipment Modernising the dry ash discharge plant Modernising the dry volume increase the to CHP at Novo-Irkutsk ash disposal; fly of iron extract Installing a pilot plant to at CHP-9; concentrate of manufacturers to Selling ash waste materials. construction • • • The Company is working on strategic plans on strategic is working The Company and ash mud of development the future for while storage maintain safe dumps in order to been Studies have production levels. expanding the dry of the effectiveness prove carried out to press filters which uses mud disposal process, significantly the liquid phase, eliminate to We mud disposal areas. reducing the impact of improve to implementing projects are already by: treatment processes our waste storage. share of recycling, safe disposal and share of recycling, safe disposal and management target is to increase its En+ Group’s main strategic waste main En+ Group’s The monitoring process involves involves process The monitoring of bauxite violations of any the identification All tailing mud and ash disposal procedures. and technical dams undergo annual internal potential identify environmental audits to risks. safety The Company’s business units use a highly business units use a highly The Company’s ensure the safety approach to systematic their life tailing dams at all the stages of of reduce to strives En+ Group constantly cycle. tailing dams the environmental impact of their and monitors cycle throughout the life basis. a regular on safety As part its its efforts reduce of to conducts the Company environmental impact, sure all the staff makes inspections, regular gives operating tailing dams are certified, training and studies specialised technicians and nepheline residue stacking bauxite the dry harmful liquid the potentially avoid to process phase at mud disposal areas. Tailing dams dams Tailing 17.7 16.6 2.9 2.8
14.8 13.8
EN+ GROUP | 136 management initiatives Aughinish AluminaLtd waste GRI and screening programshave been mud farmingprocess. Vegetation to treattheresidueby usingindustrial implemented bestavailabletechnology at Aughinish, Ireland. Aughinish has the Bauxite Residue Disposal Area (BRDA) rehabilitation isthemanagementof practices inwaste managementandland One example of En+Group’s best ENVIRONMENTAL PROTECTION MM1 rehabilitation Land polymer for construction materials. use, for example asanengineered inorganic technology to preparebauxite residue’s re- in Europeanprojects to develop andtest residue. Aughinish isactively participating is to develop ways to re-usethebauxite perspectives. Oneof theCompany’s priorities in place for many years to improve visual ash dumpsandlandfills. finished andwaste disposalfacilitiessuchas land after open-pitminingactivitiesare on disturbed focuses itsrehabilitationefforts from itsoperations. The Company’s mainly contaminated ordisturbedlandresulting En+ Groupaimsto rehabilitate any resource requirements. to identify theirspecific risks, scope and individual rehabilitationplansfor eachsite to restore andrehabilitate. We develop detailed we recognise ourlegal andsocialresponsibility Mining, refiningandsmeltingdisturbland decommissioning ashandmuddumps. the endof theirservice lives andwhen reclamation schemesastailingsapproach dams by developing comprehensive land operations. We ensurethesafety of tailings the rehabilitationof thelandwe useinour responsibilitiesis One of ourmostimportant 1. please refer to p.151, Appendices. the landdisturbedand rehabilitated, For moredetailedinformation about 1 137 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 the current condition of the environment, the environment, of the current condition activities protection adjust our environmental the potential reduce and design solutions to industrial development. the region’s impact of the research results represent a unique Moreover, database scientific and regularly-updated northern regions. Russia’s of on the ecosystems segment The Power has segment Power the years, the past five Over restore program to running a successful been artificially biological resources, aquatic reproducing and releasing more than 1.2 million northern peled (a type of young whitefish) Angara the of a tributary the Belaya River, into The peled were Reservoir. and the Bratsk River, Plant in 2018 Fishery released from the Belsky Environmentalas part the Baikal Interregional of with Life Reservoirs Filling Office’s Prosecutor’s raise awareness aimed to This initiative event. industrial organisations and among the public, conserving facilities about the importance of BaikalLake and replenishing fish populations in water Yenisei Angara and the of and rivers basins. ecologically on breeding focused we In 2018, important with almost 290 thousand fish species to be released in 2019. fish due juvenile For many years, the Company has been an active been has the Company years, For many project, Monitoring the Environmental member of areas located protected specially which monitors Monitoring facilities. industrial near the Group’s in partnership withactivities are conducted National Foundation, Zapovednaya the Strana and Bor National Park, the Shushensky natural and Sayano-Shushensky the Khakassky districts administrative in several reserves Karatuzsky, Kuraginsky, Yermakovsky, (Shushensky, and Territory the Krasnoyarsk of and Minusinsky) Khakassia. of the Republic of southern regions in 18 pine forests conducted Field studies were our within the emission impact area of located Our research and beyond. aluminium smelters concentrations fluorine that shown findings have and soil do not exceed cover vegetation in the levels. permitted Centre’s Research Scientists at the Komi the Russian (Ural Branch of Institute Biology populations fish monitor Sciences) of Academy Timan bauxite around the River Vym in the The resulting area. deposit development and water of that the quality data shows exposed not been the natural environment have However, significant industrial pollution. to a sustained decline the research did uncover the main commercial in the populations of although this is unrelated fish species, Monitoring mines. the Group’s the operation of to assess data that can be used to provides
We use a comprehensive approach to analyse approach to use a comprehensive We various substances of the chemical composition pollutants extrinsic potential and identify fumes, exhaust (industrial air pollution, distinguish us to allowing fuels), burning fossil them from the natural chemicals endemic the Reserve. to During the reporting year, we conducted a wide conducted we During the reportingyear, at maintaining aimed projects long-term range of of and preserving the biological diversity near Krasnoyarsk. Reserve Nature the Stolby the Stolby in 2014, signing an agreement Since jointly been have and KrAZ Nature Reserve bodies water in snow, pollution levels monitoring monitoringThis at the reserve. vegetation and of and condition the quality program also surveys snow bed sediments and water, plants, local soils, cover. The Metals segment
En+ Group’s production facilities are located production facilities are located En+ Group’s However, and the world. across Russia Siberia, in main assets are located the Group’s with rare plant and animal a unique ecoregion Conserving in this area. found only species sustainability, principle of is a key biodiversity En+ Group is leading long-term which is why this goal. achieving aimed at projects regional Biodiversity EN+ GROUP | 138 policy developments canalsopromptchanges. improvement reviews andotheressential changes orgovernment instructionsProcess regularly updated to reflect any legislative The Company’s legal documentsare to environmentalandclimate risk assessments. risk strategy andastandardisedapproach is currently working onanenvironmental a risk managementpriority. The company Environmental risk assessmentsareconsidered cover thewholeof En+Group. environmental andclimate strategy thatwill it isalsoplanningto draw upanintegrated environmental policiesacrossits various units, While theGrouphasalready introduced new midterm period Goals for2019and ENVIRONMENTAL PROTECTION include: main focus andimprovement areasin2019 for reducingtheirenvironmentalimpact. Our companies to give themaclearframework targets andlong-term strategy for theGroup’s En+ Groupisplanningto setsustainability that could leadto subsequent risks. nor were thereany environmental violations countries of operationorinitsinternal policies, to environmentallegislation intheGroup’s In 2018, therewere nomajoramendments • • on landrehabilitation; mines have ontheenvironment, including Easing theeffect waste disposalsites and waste utilisation/recycling; water sources andincreasingtheshareof of airpollutants, easingburdenonfresh Techniques (BATs) related to theemissions Implementation of Best Available • • • • • • the Company’s impactontheenvironment. reduce from 2019onwardsto further Specific KPIshave alsobeen established the Group's productsandservices; Verification of thecarbon footprint of onclimate change; reporting for thegroupandstandardisedpublic Inventory of greenhouse gasemissions environmental reporting; Standardisation of corporate andpublic equipment; Removal andrecycling of allPCB-containing power turbines. Improvement of theperformance of hydro and ASI aluminium; Expansion of thetargetmarket for ALLOW 139 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 that will cover the whole of En+ Group. environmental and climate strategy environmental and climate strategy planning to draw up an integrated across its various units, it is also introduced new environmental policies While the Group has already EN+ GROUP | 140 141 | EN+ GROUP 500 , 650 ~800 ~16 over participated entrepreneurs have young in the Environmental Entrepreneurship School Project children participated festival in the RoboSib volunteers took part in the eco-event part in the eco-event took volunteers shoreline clean up Baikal’s to regional and federal businesses joined and federal regional the National branch of the Irkutsk Volunteering for Council Corporate 21 2018 D
ON LAN LIFE
G
H BEIN LT L-
Goals for 2019 and midterm period 2019 and midterm Goals for Management approach contribution Socio-economic GOOD HEA AND WEL
development Local communityLocal SUSTAINABILITY REPORT REPORT SUSTAINABILITY • • • IN THIS SECTION En+ Group aims to improve cooperation and partnership cooperation improve Group aims to En+ and non- local authorities groups, across community to provide strives Company The profit organisations. social support initiatives wide range of implement a and social development, in areas such as infrastructure and arts, culture and living, sports and healthy volunteering, and social entrepreneurship. education, EN+ GROUP | 142 based onrespect, understandingandtrust. a positive socialclimate andrelationships life andresilience of localcommunities builds Our commitment the quality to supporting of raise theirchildren. account whendeciding whereto live, work and These arethecrucialfactors people take into education andfutureemployment prospects. wages, socialguarantees, access to good budgets, theavailability of jobs anddecent in theregion, tax contributions to local of ourproductionfacilities, economic situation the state of theenvironmentandinfluence activities. Their mainconcerns areabout sites andareaffected insomeway by our are thepeople wholive nearourcompany's andassistance.of support Local communities to offer localcommunities awidespectrum the impactandreachof itssocialprojects The Company isfocused onmaximising life of alltheregions wherewe operate. contribution to thewell-being andsocial communities andaspireto make apositive We arededicated to thedevelopment of local GRI LOCAL COMMUNITYDEVELOPMENT 403-6 103-1 413-1 103-2 103-3 Committee. make recommendations to The SocialPolicy assistance fromlocalcommunities and that review allrequests for charitable production facilitiesarecollegial bodies The socialproject committees of our projects withinaspecific region of operation. and determines strategies to positionsocial project committees of productionfacilities, funding applicationssentby thesocial and financingareas, approves budgetsand determines socialinvestment priorities Security Service departments. The Committee of fromtheFinancial, experts PR, GR, HRand each segment meets monthly andconsists segments. The SocialPolicy Committee of the SocialPolicy Committees created inboth The Executive functionisperformed through and discussingfuturedevelopment plans. communities, overviewing annualresults overall strategic approachto working with Group play essentialrolesindetermining our The BoardandtheManagementteam of En+ approach Management managed by: formalised by theSocialPolicy of RUSAL and The Metalssegment community initiatives are • • • • • • • • • areas: communities andfocus onthefollowing key programs arebasedontheneeds of thelocal The Company’s community development investments. robust governance framework for itssocial in 2019withtheaimto buildamore Investment Regulation. Itcameinto effect The Power segment hasdeveloped aSocial for development of socialentrepreneurship. that runstheeducationalprograms an autonomous non-profitorganisation The Centre for Innovations inSocialSphere, (CSP) corporate charity fund; The Centre for SocialPrograms healthcare. population groups; assistance to socially vulnerable corporate volunteering; volunteering, including social entrepreneurship; sports, healthy lifestyles andrecreation; education; social infrastructure and urban environment; 143 | EN+ GROUP
35
31 COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 work to improve and resume these projects and resume these projects improve to work representsThe chart below in the future. investment data on En+ Group community segments. in the Metals and Power 11 9 Socio-economic contribution We are dedicated to the development are dedicated We and aspire to of local communities positive contribution to the a make life of all the well-being and social operate. regions where we Despite significant external challenges external significant Despite En+ of the inclusion most notably in 2018, list, sanction Treasury’s Group on the US on functioning our social programs kept our with our obligations to in full accordance budget Although unavoidable stakeholders. will we on hold, our projects cuts put some of 22 24
Community investment in 2017-2018, USD mn Community investment in 2017-2018, The Company plans to continue enhancing its continue plans to The Company assessing their impact initiatives, community maximise programs to and launching new on the regions have impact they the positive presence. of The Metals segment carries out an impact The Metals segment programs the community assessment of are used indicators number of A executed. and sustainability. their relevance determine to developed RUSAL In the reporting period, implemented of system monitoring an internal winning projects. competition Territory RUSAL was integrated system This monitoring and includes methodological and tested, documents, and regulatory recommendations managers and for including a checklist provide to on how grantees instructions to reportsrealisation. on project EN+ GROUP | 144 segment Projects oftheMetals of theseprojects. theimplementation USD 11,928mnto support onthegroundandinvested atotal partners of local residents. We closely collaborated with social infrastructurefor morethanhalfamillion 230 socialfacilities, enhancingthequality of small towns. Ithashelpedbuildandrenovate social andinfrastructureprojects in22citiesand in2011,Starting 636 theprogramhassupported events.sports facilities andorganisingcultural, educationaland cultural spaces, renovating socialinfrastructure urban development, creatingnew public and where theMetalsegment operates by supporting on improving thequality of life intheregions The RUSAL Territory programisprimarily focused Infrastructure projects LOCAL COMMUNITYDEVELOPMENT a new playground. to city centre spaces andtheconstruction of with theadditionof modernarchitectural design visitors alike. This initiative willcontinue in2019 safe environmentfor thecity’s residentsand renewed, creatingamodern, comfortable and in thehistorical centre of Krasnoyarsk were In 2018, anumberof public spaces obligations toourstakeholders. functioning infullaccordancewithour in 2018oursocialprogramskept on Despite significantexternalchallenges (Krasnoyarsk, Irkutsk, Abakan, andBratsk). and select futurestudentsinfour Siberiancities the schoolto holdauditionsfor young people events andworkshops, theCompany helped RUSL’s support. Inadditionto assistance with Ukhta, andKrasnoyarsk) Syktyvkar with cities (Sayanogorsk, Bratsk, Achinsk, Shelekhov, Art Theatre StudioSchooltoured seven Russian In 2018, studentsandgraduates of theMoscow scientists andinnovators. and cultureinspirethenext generationof The event aimsto stimulate interest inlocalart across thetowns wheretheCompany operates. project encompassing awiderangeof events RUSAL FestivAL isamajorsocialandcultural RUSAL FestivAL project formats doneincollaboration withpartners. by individualinstitutionsto larger, city-wide currently moving away fromsmallevents hosted on environmentalissues. The Company is lectures, creative workshops andseminars Yenisei Day, whichincludesadventure games, which involved morethan1,100 volunteers, and major events, suchas The New Year Marathon, The ‘Helping isEasy’ programfeatures other in co-financing. USD 41,461andprovided anotherUSD23,920 out 55grantsto volunteer initiatives totalling projects. Following thecompetition, we gave for awiderangeof community andcharitable we operate to allow entrantsto bidfor grants a competition in16citiesandregions where to encourage volunteering. We held We launchedour 'Helping isEasy' program The 'HelpingisEasy'program 145 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 with local volunteers, gave hope to people people hope to gave volunteers, with local solution Africa that a long-term West across virus can be the Ebola threat of the deadly to testing As part RUSAL-funded the of found. of in the Republic 2,000 people program, vaccinated. been Guinea have We conducted one of our most important one of conducted We where Guinea, of in the Republic initiatives the largest foreign is not just one of RUSAL but also mining, in bauxite investors a leading supporter development. social of helped fight the spread The Company organising quickly virus by the Ebola of medical infrastructure of the construction develop funding to and providing The launch of vaccine. the GamEvac-Combi starting program in Guinea, vaccination a Combating highly infectious highly infectious Combating diseases (Guinea) In 2018, the program held 119 events costing costing the program held 119 events In 2018, 3,128 USD 61,872 and involving of a total 79 experts from St Petersburg, participants, Yekaterinburg, Novosibirsk, Tyumen, Moscow, and 66 partners. Barnaul, The School of Urban Change was created in 2017 in 2017 created Urban Change was The School of competition Territory as part the RUSAL of focused and train action teams form to In 2018, on tackling pressing social issues. a separate Urban Change became the School of independent social and educational program, target groups on all training to providing the Company. the social programs of School of Urban Change EN+ GROUP | 146 project A collaborativetwo-segment Mounting theSkiesEveryone! in theinitiative. in 15Russian citieshave been involved years, fans about50,000winter sports junior teams andchildren. Inthepastthree taken by 402skiing coaches working with launch of educationalcourses whichwere teams, thepreparationand andsupported 940 unitsof skiingequipment to juniorski administrations,regional sports provided the Company with formed partnerships junior skiteams. Undertheproject, talent in youth and skiing andnurture Country SkiFederation, areto promote Group, RUSAL, andtheRussian Cross goals of theproject, jointly runby En+ ‘Mounting theSkiesEveryone!’. The main andhealthy sports lifestyles is supporting One of theCompany’s largestprojects LOCAL COMMUNITYDEVELOPMENT development program. the Baikal-Energy hockey club andits youth En+ Groupisthegeneralsponsorof where itoperates. infrastructureintheregions winter sports Group intends to continue projects developing rolling tracksfor crosscountry skiing. En+ in Russia of snow-sealing machinesto prepare thedevelopmentsupported andpilotlaunch the project’s educationalcourse. Ithasalso distance-learning platform to promote the Groupdeveloped andlaunchedanonline host summerbiathloncompetitions. In2018, and rollerskitrack intheregion andcan The centre now hastheonly floodlitskiing at the Angarsky skiingandbiathloncentre. In 2018, En+Groupupgradedtracks activity onthefragileBaikalecosystem. trails andreducingtheimpactof human eco-tourism intheregion, creatingsafe tourist development, responsible En+Group supports on environmentaleducationandsustainable Great Baikal Trail, anorganisationfocused around us. with Through itspartnership and assesstheimpactof humansontheworld nature, understandenvironmentalprocesses, ecosystems. Childrenaretaughtto observe about theIrkutsk Region anditsunique enables theCompany to educate children a localorganisation, Protect Baikal Together, withNGOs.undertaken Cooperation with environmental initiatives thatarejointly Project 360bringstogether En+Group’s other of citybacking andsupport authorities. launched inIrkutsk andBratsk withthefull environmental awarenesscampaignswere sites allaroundthelake. of theproject,As part Region andBuryatia. There were 328clean-up to ordinary people fromacrosstheIrkutsk Philip Morris, Alfa Bank, and Tele2, inaddition and regional companies suchasNestle, from30international including participants brought together about16,500 volunteers, the world’s largestfreshwater lake. The project of itsconservation to protectas part efforts event to cleanupLake Baikal’s shoreline, En+ continues to conduct Project 360, aneco- Project 360 Power segment Projects ofthe 147 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 Irkutsk branch of the National CouncilIrkutsk branch of the for Corporate Volunteering the National branch of the Irkutsk En+ founded (NCCV), Volunteering Corporate for Council 21 nationalan association that brings together corporate promote to companies and regional building channel for as a key volunteering sustainable relationships with local communities. variety represent a The member companies NGOs, energy, including FMCG, sectors, of transport etc. retail, oil, telecommunication, have we are proud that the experience We volunteer implementing 2011 by since accumulated other participantsprograms can be useful to of joining that by This means branch. Irkutsk NCCV’s and the region more for even can do we our forces the local community. volunteer joint organise to plans council the 2019, In report. in the next will cover which we actions,
RoboSib RoboSib En+ Group held the sixth RoboSib In 2018, in Irkutsk. main Siberian event, festival, competitions year, For the first time that but also robotics, to not limited were united contests, included other professional the Future program. of the Professionals by participants allow set up to were Competitions their professional of envisage the trajectory to stages from the early advancement: that have projects of the development to in real life. be implemented to the potential targeted of a system The program creates considering people young training for encouraging by in engineering a career of competencies key of the development the future and immersing the participants in real business environment and identifying areas. development regional priority schoolchildren by was attended The festival as students of as well and preschoolers, from the Irkutsk, schools and colleges technical Samara and Sverdlovsk Leningrad, Kemerovo, Transbaikal and the Krasnoyarsk regions, Khakassia Buryatia, of the republics territories, about 800 people of total A Tyva. and 212 teams representing the event, attended from 20 cities. festival the project educated people about eco-friendly about eco-friendly people educated the project artisans, also meet shoppers could Local living. The project skills. questions and learn new ask a real make to locals residents a chance gave the Baikal of the conservation to contribution Nature Reserve.
The project is a continuation of of is a continuation The project supported that has been project the EESP On the New years. many for the Company by provided were 30 eco-entrepreneurs eve, Year’s the public sell their goods to to with a platform included taiga berry Their produce in Ulan-Ude. handicrafts, wooden herbal tea, fruit chips, juice, boots and traditional Buryat toys, knitted addition In dolls in national Buryat costumes. shopping experience, an interesting to The “Made in Baikal” eco-fair School Project (EESP) the 14th semester The School met for Experts in environmental in autumn 2018. consulting, finance, business, protection, development and socio-economic marketing helped students organise their ideas into green how showing a real business plan by business more any make could technologies of the partnershipcourse the Over profitable. entrepreneurs young 650 than more 2012, since participated and pitched have in the project business ideas. 250 new over The Environmental Entrepreneurship School (EESP) is a partnership En+ between Project the Siberian Land of Group and the Revival It is the first and Charitable Foundation. Youth develop to project educational Russian only Its main environmental entrepreneurship. ideas and support new identify goal is to and the Irkutsk small businesses in Irkutsk saving and are resource that enhance Region responsible. environmentally The Environmental EntrepreneurshipThe Environmental EN+ GROUP | 148 for society. that have long-term impactandbenefit the Company isto focus onlarge-scaleprojects of Company’s presence. The key aimof impact onthedevelopment of theregions the projects thatwillhave thebiggest the new corporate socialstrategy anddefine In 2019, En+Groupplansto finalise midterm period Goals for2019and LOCAL COMMUNITYDEVELOPMENT Company’s presencedevelopment. the biggestimpactonregionsof and definetheprojectsthatwillhave the newcorporatesocialstrategy In 2019, En+Groupplanstofinalise • • The main2019goalsfor theMetalssector are: residents of theregions of operation. of employees of enterprises and broad involvement in volunteer activities Development of corporate volunteering, modern public andrecreational spaces; of socialinfrastructurefacilitiesand the construction andreconstruction urban environmentby supporting Participation increatingacomfortable The main2019goalsfor thePower sector are: • • • in theregions of operation. for urbaninfrastructureprojects Implement anew community program regulation mechanisms; the creationof morerobustinternal to community investment, including Enhance managementapproach community strategy andtargets; assess theirefficiency to define new Review thecurrentsocialprojects and 149 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE 2018 EN+ GROUP | 150 value generated i. Direct economic value distributed’ generated’ less ‘economic ‘direct economic value iii. Economic value retained: including income tax by country Payments to government including financial expenses including dividendspaid of capital Payments to providers Community investments Retirement costs including employee wages Operating costs ii. Economic value distributed Interest income onloans and joint ventures Share of profits of associates Revenue GRI and distributed,USDmn Direct economicvaluegenerated APPENDICES 305-7 MM1 201-1 information Additional (8,202) (9,234) 10,280 11,267 2,033 2018 (305) (336) (501) (501) (173) (739) (22) 955 32 0 Metals USD mn (9,053) 10,606 (7,766) 1,553 9,969 2017 (299) (140) (180) (587) (886) (197) (718) (24) 620 17 (1,806) (2,609) 3,151 3,147 2018 (157) (236) (415) (483) (396) (68) (75) 542 (7) (9) 11 USD mn Power (1,915) (3,138) 3,241 3,235 2017 (350) (179) (253) (529) (879) (415) (11) (80) 103 1 5 (10,795) (8,959) (1,135) 13,368 12,378 2,573 2018 (462) (572) (917) (985) (248) (68) (31) 948 42 (10,938) USD mn (8,571) (1,117) (1,622) (1,133) 12,736 12,094 2017 Total 1,798 (505) (319) (433) (277) (35) 621 21 151 | EN+ GROUP 7
1 17 68 98 226 2017 Total
9,777.82 2,893.71 12,671.53 7 17 71 99 248 2018 rehabilitated as of 31.12.2018 as of rehabilitated Total land disturbed and not yet yet land disturbed and not Total COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 3 7 47 56 190 2017 (0.00) (53.47) (53.47) during 2018 Power segment Power newly rehabilitated newly Total amount of land amount of Total to the agreed end use the agreed to 7 51 61 212 2018 2018 448.73 244.10 204.63 Total amount Total of land newly land newly of 7 disturbed during 21 36 42 10 2017 ), and other significant air emissions ), and other significant air emissions X 9,533.72 2,742.55 12,276.27 Metals segment of 01.01.2018 of 7 20 36 38 10 2018 not yet rehabilitated as rehabilitated yet not Total land disturbed and Total
), sulphur oxides (SO ), sulphur oxides X 2 Power segment is represented by Enser, PJSC Irkutskenergo, LLC EuroSibEnergo — Hydrogeneration, JSC Krasnoyarsk Krasnoyarsk JSC Hydrogeneration, — EuroSibEnergo LLC Irkutskenergo, PJSC Enser, by is represented segment Power Grid Company. Electric Irkutsk OJSC Baikalenergo, Volgaenergo, Plant, Hydro-Power Total land disturbed and not yet rehabilitated as of 31.12.2018 = Total land disturbed and not yet rehabilitated as of rehabilitated yet land disturbed and not Total 31.12.2018 = as of rehabilitated yet land disturbed and not Total during rehabilitated land newly amount of Total - disturbed during 2018 land newly amount of Total 01.01.2018 + end use. the agreed 2018 to Irkutskenergo. PJSC Enser, segment: Power NOx SOx Total fluoride (gaseous (gaseous fluoride Total and solid fluoride) Particulate matter (PM) matter Particulate Other standard categories Other standard categories emissions into of the atmosphere Total 3. 1. 2. Power segment Power Nitrogen oxides (NO Nitrogen oxides Metals segment Amount of land disturbed or rehabilitated, hectares (excluding greenhouse gas and carbon monoxide emissions), kt greenhouse gas and carbon monoxide (excluding EN+ GROUP | 152 102-13 102-12 102-11 102-10 102-9 102-8 102-7 102-6 102-5 102-4 102-3 102-2 102-1 1. Organisational profile GRI Indicator GRI ContentIndex GRI APPENDICES 102 General disclosures 102 General Membership of associations External initiatives Principle orapproach Precautionary its supply chain to theorganisationand Significant changes Supply chain and otherworkers Information onemployees Scale of theorganisation Markets served Ownership andlegal form Location of operations Location of headquarters products, andservices Activities, brands, Name of theorganisation Disclosure
Association membership, p. 64 Association membership, p. 64 management, p. 57 Strategy andsustainability Risk managementsystem, p. 44 Supply chain, p. 75 Supply chain, p. 75 Personnel structure, p. 93 Market presence, p. 26 Personnel structure, p. 93 At aglance, p. 22 Market presence, p. 26 Corporate overview, p. 28 About theReport, p. 2 Market presence, p.26 At aglance, p. 22 At aglance, p. 22 About theReport, p. 2 At aglance, p. 22 Page number(orlink) is to beimproved period. inthenext reporting issued for thefirsttime. Disclosure of thisindicators not standardisedintheCompany astheReport is Partially disclosed dueto datacollection processes com/en/investors/results-and-disclosure/ ended 31December 2018https://www.enplusgroup. to Consolidated FinancialStatements for the year For alistof significantsubsidiaries, pleaserefer Comments 153 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 Comments
Page number (or link) number Page Message from Executive Message from Executive 12 p. the Board, Chairman of 44 p. management system, Risk and sustainability Strategy 56 p. management, 49 p. Ethics and integrity, 49 p. Ethics and integrity, governance Corporate 34 p. system, governance Corporate 34 p. system, governance Corporate 34 p. system, Stakeholder governance Corporate 34 p. system, governance Corporate 34 p. system, governance Corporate 34 p. system, engagement, p. 63 p. engagement, Disclosure Statement from senior Statement decision-maker structure Governance Key impacts, risks, and risks, impacts, Key opportunities standards, principles, Values, behaviour and norms of and advice for Mechanisms about ethics concerns authority Delegating responsibility Executive-level environmental, economic, for and social topics stakeholders Consulting environmental, on economic, and social topics the highest of Composition and body governance its committees the highest Chair of body governance Nominating and selecting body the highest governance 102-18 4. Governance 4. 102-14 2. Strategy 2. 102-16 GRI Indicator 102-15 Ethics and integrity 3. 102-17 102-19 102-20 102-21 102-22 102-23 102-24 EN+ GROUP | 154 102-44 102-43 102-42 102-41 102-40 5. Stakeholder engagement 102-36 102-32 102-30 102-29 102-27 102-26 102-25 GRI Indicator APPENDICES Key topics andconcerns raised engagement Approach to stakeholder stakeholders Identifying andselecting agreements Collective bargaining List of stakeholder groups remuneration Process for determining in sustainability reporting Highest governance body’s role management processes Effectiveness of risk and socialimpacts economic, environmental Identifying andmanaging highest governance body Collective knowledge of values, andstrategy body insettingpurpose, Role of highestgovernance Conflicts of interest Disclosure topics, p. 62 Identification of material Stakeholder engagement, p. 63 Stakeholder engagement, p. 63 Stakeholder engagement, p. 63 Approach, p. 92 Employees — Management Social benefits, p. 103 Stakeholder engagement, p. 63 system, p. 34 Corporate governance About theReport, p. 2 Internal control, p. 42 Risk managementsystem, p. 44 topics, p. 62 Identification of material Internal control, p. 42 management, p. 56 Strategy andsustainability system, p. 34 Corporate governance system, p. 34 Corporate governance Ethics andintegrity, p. 49 Page number(orlink) Partially disclosed Comments 155 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 Comments Report first Sustainability This is the Company's Exchange Stock listing on the London since Report first Sustainability This is the Company's Exchange Stock listing on the London since numeric (excluding events Significant 2019 disclosed until 1 July indicators) Report first Sustainability This is the Company's Exchange Stock listing on the London since Annually assurance external For the reporting period (2018), En+ Group focused year This was not carried out. sustainability internal of on improvement The Group made a strategic reporting system. obtain independent assurance to decision reporting the next period. for the Report for Page number (or link) number Page Boundaries of the Report, p. 2 p. the Report, Boundaries of of material Identification 62 p. topics, of material Identification 62 p. topics, 2 p. About the Report, 2 p. About the Report, 2 p. About the Report, 2 p. About the Report, 2 p. About the Report, 5 p. information, Contact 2 p. About the Report, 152 p. Index, GRI Content — Disclosure Entities included in the consolidated financial statements Defining report content Boundaries and topic topics material List of information of Restatements Changes in reporting period Reporting report most recent of Date cycle Reporting questions point for Contact the reportregarding reportingClaims of with in accordance the GRI Standards index GRI content assurance External 102-45 6. Reporting practice Reporting 6. GRI Indicator 102-46 102-47 102-48 102-49 102-50 102-51 102-52 102-53 102-54 102-55 102-56 EN+ GROUP | 156 103-3 103-2 103-1 GRI Indicator GRI APPENDICES 103Managementapproach the managementapproach Evaluation of and itscomponents The managementapproach topic anditsboundary Explanation of thematerial Disclosure Management approach,p. 142 Local community development — Management approach, p. 120 Environmental protection — Management approach, p. 108 Health andsafety — Approach, p. 92 Employees — Management Ethics andintegrity, p. 49 Risk managementsystem, p. 46 approach, p. 142 development —Management Local community Management approach, p. 120 Environmental protection — Management approach, p. 108 Health andsafety — Approach, p. 92 Employees — Management Ethics andintegrity, p. 49 approach, p. 142 development —Management Local community Management approach, p. 120 Environmental protection — Management approach, p. 108 Health andsafety — Approach, p. 92 Employees — Management Ethics andintegrity, p. 49 topics, p. 62 Identification of material Page number(orlink)
Comments 157 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 Comments disclosed Partially disclosed Partially disclosed Partially disclosed Partially disclosed Partially Page number (or link) number Page Additional information, p. 150 p. Additional information, 28 p. overview, Corporate 75 p. chain, Supply 44 p. Ethics and integrity, 126 p. Energy, 126 p. Energy, resources Water 129 p. conservation, resources Water 129 p. conservation, resources Water 129 p. conservation, Disclosure Direct economic value economic Direct and distributed generated consumption Energy within the organisation Financial assistance received received Financial assistance from government spending of Proportion on local suppliers and training Communication about anti-corruption policies and procedures energy of Reduction consumption with water Interactions as a shared resource withdrawal Water consumption Water 201-1 GRI 201 Economic performance GRI 201 Economic 302-1 GRI 200 Economic 204-1 205-2 GRI 302 Energy 303-1 GRI Indicator 201-4 practices GRI 204 Procurement Anti-corruption GRI 205 GRI 300 Environmental 302-4 and effluents Water GRI 303 303-3 303-5 EN+ GROUP | 158 305-7 305-5 305-2 305-1 GRI 305Emissions GRI Indicator 308-1 GRI 308Supplierenvironmentalassessment 307-1 GRI 307 Environmentalcompliance 306-3 306-2 306-1 GRI 306Effluentsand waste APPENDICES Nitrogen oxides (NO Reduction of GHGemissions 2) GHGemissions Energy indirect (Scope Direct (Scope 1)GHGemissions oxides (SO environmental criteria were screened using New suppliersthat and regulations environmental laws Non-compliance with Significant spills disposal method Waste by typeand and destination Water dischargeby quality significant airemissions Disclosure X ), andother X ), sulphur Climate change, p.122 Climate change, p.122 Climate change, p.122 Page number(orlink) Supply chain, p. 75 conservation, p. 129 Water resources management, p. 134 Waste andsafe tailings conservation, p. 129 Water resources Additional information, p. 151 Air emissions, p.128 Partially disclosed Partially disclosed Partially disclosed Comments Partially disclosed Partially disclosed Partially disclosed Segment Total (USD) Power (USD) Metals (USD) Partially disclosed Partially disclosed 21,283 17,582 3,700 2018 36,605 35,920 2017 685 159 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 Comments disclosed Partially disclosed Partially Page number (or link) number Page Personnel structure, p. 93 p. structure, Personnel 103 p. Social benefits, — Health and safety 108 p. Management approach, Health and safety 105 p. performance, — Health and safety 108 p. Management approach, culture Safety 114 p. development, — Health and safety 108 p. Management approach, culture Safety 114 p. development, Disclosure New employee hires and employee New turnover employee Benefits provided to full- Benefits provided that are time employees temporary to not provided employees or part-time health and Occupational system management safety Hazard identification, and assessment, risk incident investigation health services Occupational training Worker on occupational health and safety 401-1 GRI 401 Employment GRI 400 Social 403-1 GRI Indicator 401-2 health and safety Occupational GRI 403 403-2 403-3 403-5 EN+ GROUP | 160 404-2 GRI 404 Training andeducation 403-10 403-9 403-8 403-7 403-6 GRI Indicator APPENDICES assistance programs employee skillsandtransition Programs for upgrading Work-related illhealth Work-related injuries safety managementsystem by anoccupational healthand Workers covered by businessrelationships safety impactsdirectly linked of occupational healthand Prevention andmitigation Promotion of worker health Disclosure development, p. 100 Learning and development, p. 114 Safety culture injuries anddiseases, p. 117 Prevention of occupational performance, p. 110 Health andsafety injuries anddiseases, p. 115 Prevention of occupational performance, p. 110 Health andsafety development, p. 114 Safety culture development, p. 114 Safety culture Management approach, p. 108 Health andsafety — performance, p. 105 Health andsafety Management approach, p. 108, Health andsafety — Social benefits, p. 103, injuries anddiseases, p. 115 Prevention of occupational development, p. 100 Learning and Page number(orlink) Partially disclosed Comments 161 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 Comments disclosed Partially disclosed Partially disclosed Partially was segment in the Power Installed capacity in 2018 and 31,229 MW in 2017 32,253 MW Page number (or link) number Page Corporate governance governance Corporate 34 p. system, Management — Employees 92 p. Approach, community Local 141 p. development, 79 p. chain, Supply 136 p. rehabilitation, Land p.151 Additional information, tailings and safe Waste 134 p. management, 93 p. structure, Personnel 126 p. Energy, 126 p. Energy, Disclosure Diversity of governance governance of Diversity bodies and employees Operations with local engagement, community and impact assessments, programs development suppliers that were New using social criteria screened land disturbed Amount of rehabilitated of overburden, amounts of Total and sludges tailings, rock, risks and their associated and strikes Number of one exceeding lock-outs country by duration, week’s broken Installed capacity, source energy primary by down regime regulatory and by output broken Net energy source energy primary by down regime regulatory and by 405-1 GRI 405 Diversity and equal opportunity and equal GRI 405 Diversity 413-1 414-1 MM1 EU1 GRI Indicator communities GRI 413 Local GRI 414 Supplier social assessment GRI Metals and Mining Supplement Indicators MM3 MM4 Utilities Supplement Indicators GRI Electric EU2 EN+ GROUP | 162 m kWh kV kt GWh GW Gcal bn Units ofmeasurement Glossary UAH USD TWh t, tonne RUB MW mtpa mt mn APPENDICES 3 Kilowatt-hour, aunitof measurementfor produced electricity Kilovolt Thousand metric tonnes Gigawatt-hour (one millionkilowatt-hours) Gigawatt (one millionkilowatts) Gigacalorie, aunitof measurementfor heatingenergy Billion Ukrainian hryvnia United States dollar Terawatt-hour (one billionkilowatt-hours) One metric tonne (one thousandkilograms) Rouble Megawatt (one thousandkilowatt), aunitof measurementfor electrical power capacity Million tonnes perannum Million metric tonnes Million Cubic metre 163 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 Aluminium Committee Audit and Risk (ASI) Initiative Aluminium Stewardship Alumina Limited, Aughinish or Alumina, Aughinish Alumina Refinery, Aughinish in Ireland incorporated RUSAL of subsidiary owned a wholly 2004 under an agreement in December founded Guyana, of Company Bauxite (10%) Guyana of (90%) and the Government RUSAL between the Company of Directors Board of of subsidiary owned a wholly Bratsk, RUSAL or PJSC Smelter Aluminium Bratsk Federation the Russian under the laws of incorporated RUSAL Business System Officer Chief Executive Disclosure Project Carbon and Nominations Committee Governance Corporate plant heat and power Combined Coalition Leadership Pricing Carbon dioxide Carbon equivalent CO₂ Audit and Internal Control for The Directorate financial the consolidated whose results are included in and its subsidiaries, IPJSC EN+ GROUP Standards Financial Reporting with the International prepared in accordance statements assets its power En+ Group managing of a 100% subsidiary EuroSibEnergo, JSC receipt Global depositary ARC ASI Aughinish BCGI Board BrAZ BS CEO CDP CGNC CHP CPLC CO₂ CO₂e Control for Directorate En+ Group, En+, EN+ GROUP, the Group the Company, we, EuroSibEnergo GDR Al Terms and abbreviations Terms EN+ GROUP | 164 Metals segment LTIFR KUBAL KrAZ ISO 45001 ISO 9001 IrkAZ Irkutskenergo IPCC HSE Committee HSE HPP GHG emissionsScope 2 GHG emissionsScope 1 GHG APPENDICES power assetsareincludedinto theMetalssegment The segment comprising of RUSAL (50.1%owned by En+Group). RUSAL’s of fatalitiesandlosttimeinjuriesper200,000man-hours The Lost Time Injury Frequency Rate, calculated by theGroupassum Kubikenborg Aluminium AB, awholly owned subsidiary of RUSAL incorporated inSweden of RUSAL incorporated underthelawsof theRussian Federation Krasnoyarsk aluminiumsmelter orJSC RUSAL Krasnoyarsk, awholly owned subsidiary setting thecriteria for healthandsafety management systems andcanbecertified to with guidance for use” standarddeveloped by theInternational Organisationfor Standardisation ISO 45001:2018, aninternational “Occupational healthandsafety managementsystems — Requirements management systems andtheonly standardinthefamily thatcanbecertified to developed by theInternational Organisationfor Standardisationsettingthecriteria for quality ISO 9001:2015, aninternational “Quality managementsystems — Requirements” standard Irkutsk aluminiumsmelter, abranchof RUSAL Bratsk inShelekhov, Russia company controlled by En+by more than30%of Irkutskenergo’s issuedsharecapital Irkutsk Public JointStock Company of EnergeticsandElectrification, apower generating Intergovernmental Panel onClimate Change The Health, Safety andEnvironmentCommittee Health, safety andenvironment Hydro power plant Scope 2emissionsphysically occur atthefacility whereheatandelectricity aregenerated electricity thatispurchased orotherwisebroughtinto theorganisationalboundary of thecompany. of purchasedheatandelectricity consumed by acompany. Purchased heatandelectricity isdefinedas Indirect energy greenhouse gasemissions. Scope 2accounts for GHGemissionsresultingfromthegeneration Protocol, suchasCFCs, NOx, etc., arenotincludedinScope 1andmay separately bereported are notincludedinScope 1, asthey separately. arereported GHGemissionsnotcovered by theKyoto in owned orcontrolled process equipment. Direct CO₂ emissionsfromthecombustion of biomass from combustion inowned orcontrolled boilers, furnaces, vehicles, etc.; emissionsfromchemicalproduction Direct greenhouse gasemissionsfromsources owned orcontrolled by theCompany, e.g., emissions Greenhouse gasemissions 165 | EN+ GROUP
COMPANY’S OVERVIEW COMPANY’S OUR SUSTAINABILITY APPROACH SUSTAINABILITY OUR 2018 PERFORMANCE PERFORMANCE 2018 A concentration or occurrence of material of intrinsic economic interest in or on the earth’s crust in or on the earth’s interest economic intrinsic of material of or occurrence concentration A extraction. economic eventual for that there are reasonable prospects and quantity, quality, in such form, are known, resource a mineral of continuity and characteristics geological grade, quantity, The location, are subdivided, Mineral resources and knowledge. evidence geological from specific or interpreted estimated categories and measured indicated inferred, into confidence, increasing geological in order of Company of the and Officers Directors Executive and environmental qualifications safety health, which provides organisation, global A liability as deferred and bonds outstanding as well borrowings, loans, The sum of subsidiary) shares less total (the Group’s Irkutskenergo PJSC of the acquisition for period the relevant as at the end of cash and cash equivalents Federation the Russian under the laws of incorporated NICKEL, NORILSK MMC PJSC owned a wholly Novokuznetsk, RUSAL or JSC Aluminium Smelter Novokuznetsk Federation the Russian under the laws of incorporated RUSAL of subsidiary Treasury of the US Department of the Control (OFAC) Assets of Foreign The Office or deemed which are controlled certain persons and certain of companies OFAC The designation by Nationals List Designated the Specially these persons into some of by be controlled to (OHSAS) 18001 Specification Health and Safety Occupational It includes diluting mineable part mineral Resource. a measured and/or indicated of The economically assessments Appropriate is mined. when the material occur which may losses, for and allowances materials realistically by and modification of and include consideration carried out, been and studies have and governmental social, environmental, legal, marketing, economic, metallurgical, assumed mining, be reasonably reporting could at the time of These assessments demonstrate that extraction factors. probable and proved into confidence of increasing are sub-divided in order Ore reserves justified. biphenyl Polychlorinated Treaty Cooperation Patent engages segment The Power En+ Group. by assets owned power of comprising predominantly The segment and supply trading, power generation, power including electric industry, the power of in all aspects Photovoltaic Mineral Resource Net debt Management Team Management National Examination Board Safety in Occupational and Health (NEBOSH) Nickel Norilsk NkAZ OFAC Sanctions OFAC OHSAS 18001 Ore Reserves PCB PCT segment Power PV EN+ GROUP | 166 WINDALCO Electricity Market) WEM (theRussian Wholesale VAP UNFCCC UAZ TIPS Timan Bauxite SDGs Designated NationalsList SDN List, Specially RusHydro RUSAL, theMetalssegment RemCom RCC R&D QMS QAL RUSAL APPENDICES Silicon Urals West Indies Alumina Company, acompany incorporated inJamaica, inwhichRUSAL indirectly holdsa100%stake electricity producers andconsumers arealsoestablishedby theRussian Government the Russian FederalLaw “On theElectric Power Industry”. The criteria for determining large consumers thathave thestatusof wholesalemarket objects, confirmed infullaccordance with System andunified economic space, of largeelectricity withtheparticipation producers and Market for theturnover of electric energy andcapacity withinRussia’s UnifiedEnergy Value-added products. Includeswirerod, foundry alloys, billets, slabs, highpurity, andothers United NationsFramework Convention onClimate Change Urals Aluminium Smelter, abranchof JSC RUSAL Ural Theory of Inventive Problem Solving RUSAL incorporated underthelawsof theRussian Federation Joint Stock Company “Boksit Timana”, anon-wholly owned subsidiary of Sustainable Development Goals to theU.S. jurisdiction, subject to exemptions certain andexclusions setoutinlicenses issuedby OFAC generally prohibited from dealingwiththeassetsof personsdesignated intheSDNListwhicharesubject The Listof Specially Designated NationalsandBlocked Persons, publishedby theOFAC. U.S. personsare organised underthelawsof theRussian Federation, anindependentthirdparty PJSC RusHydro (Public Joint-Stock Company FederalHydro-GeneratingCompany — RusHydro), LLC RUSAL Silicon Urals(formerly LLC SU-Silicon), anindirect, non-wholly-owned subsidiary of RUSAL with limited liability (50.1%owned by En+Group) United Company RUSAL Plc, incorporated underthelawsof Jersey Remuneration Committee Regulation andCompliance Committee Research andDevelopment Quality managementsystem Australia, inwhichRUSAL indirectly holdsa20%equity stake Queensland Alumina Limited, acompany incorporated in Queensland,