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SUSTAINABILITY REPORT 2017 A L L O W FOR A BETTER FUTURE WARNING CONTENTS The information presented in this Sustainability Report Shareholders and potential investors should be About the company 6 Environment protection only reflects the Company’s position during the review aware that the information presented in this Sustainability Land and biodiversity 88 period from 1 January 2017 to 31 December 2017 (the Report (save for this Warning) does not take into account Corporate governance Water resources 92 “Review Period”) pursuant to the requirements of the Rules the OFAC Sanctions or any potential impact, which the Corporate governance system 16 Energy consumption 96 Governing the Listing of Securities on the Stock Exchange OFAC Sanctions may have on the Company or the Group. Management bodies 17 Air emissions 100 of Hong Kong Limited (the “Listing Rules”) (unless oth- Accordingly, the information presented in this Sustaina- Internal control 20 Climate Change 104 erwise specified). Accordingly, all forward-looking state- bility Report (save for this Warning), including but not lim- Risk management system 25 Waste 110 ments, analyses, reviews, commentaries and risks pre- ited to all forward-looking statements, analyses, reviews, Ethics and human rights 30 Investments in environmental protection 116 sented in this Sustainability Report (save for this Warning) commentaries and risks, does not necessarily reflect the are based upon the information of the Company covering latest position (financial or otherwise) of the Group. Given Performance management Work safety the Reporting Period only and not thereafter. the global nature of the business of the Group, the inter- Quality Management System 36 Management system 120 national politico-economic dimension of the OFAC Sanc- Main results in 2017 38 Approach 124 Shareholders and potential investors should be tions, and the potential cross-jurisdictional implications UC RUSAL Business System 42 Actions 130 aware that on 6 April 2018, the Office of Foreign Assets of the OFAC Sanctions, this matter is continually evolving. Supply chain 49 Performance results 132 Control of the Department of the Treasury of the United Occupational medicine 135 States of America (the “U.S. Treasury”) designated, Shareholders and potential investors should Strategy and sustainable development Plan performance for 2017 amongst others, the Company to be added to its Specially exercise extreme caution when making an assessment or Strategy 60 and medium term plans 138 Designated Nationals List (the “OFAC Sanctions”). dealing in the Shares. If in doubt, they are strongly advised Management of aspects to consult their stockbrokers, bank managers, solicitors of sustainable development 64 Employees A press statement issued by the U.S. Treasury in and/or other professional advisers before dealing in the Interaction with related parties 67 Management approach 142 respect of the OFAC Sanctions on 6 April 2018 states that: Shares. Social partnership 143 “All assets subject to U.S. jurisdiction of the designated Scientific and technological development Employee communication mechanisms 144 individuals and entities, and of any other entities blocked Processes and products 76 Staff structure and personnel movement 146 by operation of law as a result of their ownership by a Provision with labour resources 150 sanctioned party, are frozen, and U.S. persons are gener- Education and development 156 ally prohibited from dealings with them. Additionally, non- Motivation and remuneration 161 U.S. persons could face sanctions for knowingly facilitating Social support 163 significant transactions for or on behalf of the individuals or entities blocked today.” Investing in the local community development Management approach 168 Management of social investment in Russia 169 Participation in the development of the territories of operation 171 Implementation of social programmes in the Russian Federation 174 Social investments abroad 186 About the report Appendix 196 5  4 SuStAINAbIlItyREpoRtRuSAl2018  The Company’s most valuable assets are our pro- fessional and highly qualified employees. RUSAL is always DEAR looking to stimulate talent and the Company is focused on the professional and personal growth of its employees, as well as attracting new talent. We always get a lot of inter- est in working at RUSAL and the Company actively works FRIENDS! alongside educational institutions in the field of training qualified personnel for the aluminum industry. The New Generation internship program for young specialists has seen great success and it is aimed at hiring and developing Acting CEO of UC RUSAL new personnel within the business. EVGENY NIKITIN On April 6, the US Office of Treasury included 14 Russian companies, including RUSAL, in the sanctions list. The difficulties that RUSAL faced in the spring of 2018 did not alter the Company’s priorities or long-term strategy. We remain focused on all aspects of sustainable develop- ment in full compliance with current legislation and main- tain full responsibility to our stakeholders. This report has been prepared in accordance with the main version of the Sustainability Reporting Standards of the Global Reporting Initiative, and takes into account I am pleased to present to you the UC RUSAL sustainabil- Climate change remains an important issue for the requirements of the Hong Kong Stock Exchange’s ity report for 2017. any industry involved in sustainable development. Today, Environmental, Social and Governance Reporting Guide- for the aluminum industry, the creation and implemen- lines and Aluminum Stewardship Initiative standards. The We live in an era of rapid change, where new tation of environmentally friendly technologies that sup- report also includes information on the Company’s contri- technologies transform day-to-day life and revolutionise port the transition to a low-carbon economy is key to sur- bution to the achievement of the UN’s Sustainable Devel- the way whole industries operate. The fourth industrial vival. RUSAL already produces aluminum using renewable opment Goals and on its compliance with the principles of revolution presents new opportunities for development energy, with approximately 95% of electricity coming from the UN Global Compact. across all industries whilst also exposing new challenges hydroelectric power plants in Siberia and other non-car- that need to be addressed. Leadership positions in the bon energy sources. In 2017, RUSAL introduced the brand aluminum industry come with additional economic, envi- of low-carbon aluminum ALLOW, which has a significantly ronmental and social responsibilities, and RUSAL is work- lower carbon footprint than the industry average. Acting CEO of UC RUSAL ing hard to adapt quickly to these changing conditions by developing relationships with customers, introducing The Company also pays great attention to the Evgeny Nikitin modern technologies into the production line and improv- social and economic development in the territories in ing management standards. which it has a presence, in Russia and abroad. In 2015, RUSAL built the Centre for Epidemic and Microbiologi- The principles of sustainable development under- cal Research and Treatment (CEMRT) and assisted the pin the Company’s strategy and management decisions. Republic of Guinea to fight the spread of Ebola. In 2017, We continue to invest in the environmental modernization the Company established a unique scientific research lab- of our plants, increase the level of production automatiza- oratory complex to combat highly infectious diseases as tion and improve the safety of both the environment and part of CEMRT. During the reporting period, the same lab- the world’s population. We strive to create materials which oratory began the post-authorisation study of the Russian take into account the growing demand from our custom- vaccine GamEvac-Combi to counter Ebola in the Republic ers for products with a low carbon footprint and discover of Guinea. We hope that the vaccine will take care of the new high-tech applications for aluminum and alloys. Ebola virus in West Africa to become a thing of the past. RUSAL is prepared for the new challenges as is This year the Company initiated and supported reflected in 2017’s updated strategy and the Company’s projects aimed at improving the quality of life across all stable financial performance and strong competitive posi- the countries and regions where our production is carries tion in the global markets. RUSAL is still the largest pro- out. The report gives the description and analysis of these ducer of primary aluminum outside of China, and one of social projects. the industry leaders in environmental performance. ABOUT THE COMPANY 01 ABOUT THE COMPANY In 2017, UC RUSAL accounted for about 5.8% of global production of aluminium and 6.3% of alumina production. RUSAL IS A LOW COST, VERTICALLY INTEGRATED, LOW CO2 ALUMINIUM PRODUCER WITH CORE SMELTING OPERATIONS IN SIBERIA, RUSSIA 1 KEY FACTS ABOUT PARTICIPATION IN OTHER COMPANIES IN 2017, APPROXIMATELY UC RUSAL holds 27.82% of the shares in Norilsk Nickel PJSC, the UC RUSAL ACCOUNTED FOR world’s largest producer of nickel and palladium and one of the leading producers of platinum and copper.1 % UC RUSAL also holds 50% of the 6.3 shares in the coal company Bogatyr of the world’s Komir (Kazakhstan). 5.8% alumina production of the world’s aluminium output TECHNICAL ALUMINIUM ALUMINIUM ALUMINA ENGINEERING & NEW PROJECTS PACKAGING UC RUSAL OWNS AN DIRECTORATE DIVISION CONSTRUCTION
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