Rushydro Group's Corporate Sustainability and Social
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2011 RusHydro Group’s corporate sustainability and social responsibility report © 2011 JSC RusHydro About the Report This report reflects the essential facts and results of the operations of the RusHydro Holding in 2011 in three main areas of sustainable development achievement: ensuring the safety and reliability of the power supply, natural resources and environmental conservation and the responsible management of social impacts on the personnel of the Holding’s companies and local communities. Official site of the RusHydro Holding: www.rushydro.ru Central Office Address: 51 Architect Vlasov Street, Moscow, Russia, 117393. Forward-Looking Statements Data relating to the future provided in the Report based on forward-looking information. Such words as “believes,” “anticipates,” “expects,” “estimates,” “intends,” “plans” and similar expressions indicate that in this case these are forward-looking statements. Actual results may differ significantly from the plan and target indicators, expected results, estimates and intentions contained in the forward-looking statements. Forward-looking statements are only valid at the date of the Report. The Company does not guarantee that the expected results of operations contained in the forward-looking statements will actually be achieved, so they should not be considered as the most likely or standard scenario. The Method of Report Preparation The Report was prepared using the Electric Utility Sector Supplement of the Global Reporting Initiative (GRI) Guidelines. Compliance level with the GRI C C+ B B+ A A+ Self-declaration Third party verification GRI verification Table of Contents © 2011 JSC RusHydro 1. The Company in 2011 4 Industry Context and Strategy 13 The State of and Prospects for the Hydro-Power Industry in Russia 13 About the Report The Electricity and Power Market 15 This report reflects the essential facts and results of the operations of the RusHydro Holding in 2011 in three Interconnection of the Company’s Strategy main areas of sustainable development achievement: ensuring the safety and reliability of the power supply, with Sustainable Development Objectives, Declared by the UN 16 natural resources and environmental conservation and the responsible management of social impacts on the Implementing the Company’s Strategy personnel of the Holding’s companies and local communities. and Sustainable Development Objectives 17 Сorporate Governance 26 Highest Management Bodies 26 Official site of the RusHydro Holding: www.rushydro.ru Improving Corporate Governance Quality 27 Central Office Address: 51 Architect Vlasov Street, Moscow, Russia, 117393. 2. Ensuring the Reliability and Safety of Hydro-power Facilities and Infrastructure 30 Reliability Control System 33 Forward-Looking Statements Supply Chain: Interacting with Equipment Data relating to the future provided in the Report based on forward-looking information. Such words as and Service Suppliers 38 “believes,” “anticipates,” “expects,” “estimates,” “intends,” “plans” and similar expressions indicate that in this case these are forward-looking statements. Actual results may differ significantly from the plan and target indicators, expected results, estimates and intentions contained in the forward-looking statements. 3. Energy Efficiency and New Generation 42 Forward-looking statements are only valid at the date of the Report. The Company does not guarantee that the Energy Efficiency Management 44 expected results of operations contained in the forward-looking statements will actually be achieved, so they should not be considered as the most likely or standard scenario. 2011 Program Implementation 44 New Generation 46 The Company’s Contribution to International Cooperation on Addressing Climate Change 49 The Method of Report Preparation The Report was prepared using the Electric Utility Sector Supplement of the Global Reporting Initiative (GRI) 4. Natural Resources and Environmental Conservation 52 Guidelines. Responsible Water Usage 54 Long-term Effects of Hydro-power Facilities 57 Compliance level with the GRI Construction of Hydro-power Facilities 59 Environmental Policy Implementation 60 C C+ B B+ A A+ 5. Social Responsibility 68 Employee Description 70 Occupational Safety and Health 72 Self-declaration Human Resources Development 74 Employee Motivation System and Social Policy 75 Social Support for Families of Employees That Lost Their Lives or Were Injured in the Sayano-Shushenskaya HPP Accident 78 Third party Regional Support 80 verification 6. Appendices 84 Appendix 1. About the Report and the Reporting Process 86 GRI verification Appendix 2. GRI Content Index 88 Appendix 3. On Electricity and Capacity Markets 96 Appendix 4. Reference Information 98 1 RusHydro Holding RusHydro Group’s corporate 2011 sustainability and social responsibility report Message from the Chairman of the Management Board Dear Colleagues, I present to you the Company’s fourth advanced international experience and works report on social responsibility and corporate with leaders in the equipment manufacturing sustainability. In business, RusHydro field. traditionally pays special attention to the Using the latest technology ensures maxi- social and environmental components. For mum environmental protection and rational the Company’s management team, this part water resource usage in Russia. of work is no less important than increasing market capitalization or constructing new However, the environmental component is generating facilities. necessary, but not the only condition for the successful execution of social obligations The past year has been a major landmark for assumed by RusHydro. Charity is one of the the Company. In 2011, by purchasing RAO most important directions of the Company’s ES of the East, RusHydro’s installed capacity activities. In all operating areas, RusHydro increased one-third to 35.2 GW. Prior to takes an active part in supporting low- 2015, the Company also plans to introduce income citizens, the disabled and pensioners, 10.4 GW of new capacity. Of course, the providing sponsorship to educational and creation of new generating facilities provides medical institutions, as well as scientific and a strong impetus to regional development in sporting organizations. those regions where our facilities are located and makes a significant contribution to Of course, the main value of the Company strengthening Russian energy security and is its employees. Caring for the Company’s addressing socio-economic development. staff, their social protection and providing them with the most comfortable working During the construction of new facilities and environment possible is a key factor in the upgrading of existing ones, RusHydro implementing RusHydro’s social policy. most carefully worked out issues related to reliability and safety. Last year, the Company Building a dynamic development strategy adopted a comprehensive modernization of RusHydro, the Company’s management program, under which up to 50% of the total team works closely with all stakeholders: hydro-generators park would be replaced. the government, shareholders and the In this work, the Company uses the most public at large. One of the Company’s main 2 IndustryMessage fromContext the Chairman RusHydro Group’s corporate 1.0 ofand the Strategy Management Board sustainability and social responsibility report priorities is searching for and maintaining balanced interests. I think that the most important condition for effectively resolving this problem is work based on the principles of maximum transparency and openness. The Company’s entire management team adheres to these principles and we hope that in the future RusHydro`s contributions to Russia’s socio-economic development will increase in proportion with its business success. Sincerely, Yevgeny Dod, Chairman of RusHydro’s Management Board 3 The Company 1.in 2011 The Company in 2011 Industry Context and Strategy The State of and Prospects for the Hydro-Power Industry in Russia The Electricity and Power Market Interconnection of the Company’s Strategy with Sustainable Development Objectives, Declared by the UN Implementing the Company’s Strategy and Sustainable Development Objectives Сorporate Governance Highest Management Bodies Improving Corporate Governance Quality The Company 1.in 2011 The Company in 2011 Industry Context and Strategy The State of and Prospects for the Hydro-Power Industry in Russia The Electricity and Power Market Interconnection of the Company’s Strategy with Sustainable Development Objectives, Declared by the UN Implementing the Company’s Strategy and Sustainable Development Objectives Сorporate Governance Highest Management Bodies Improving Corporate Governance Quality RusHydro Holding RusHydro Group’s corporate 2011 sustainability and social responsibility report 1. The Company in 2011 The RusHydro Holding1 is one of the largest The Company’s shares are traded on the energy companies, occupying a leading highest quotation list of Russia’s leading position in Russia’s hydro-power sector. The stock exchange – CJSC MICEX and traded Company’s generating facilities are located outside the Russian Federation in the form in 18 Russian regions, as well as abroad (in of Global and American Depository Receipts Armenia). The main hydro-generating assets (GDRs and ADRs) on the Main Market of the are united in 19 branches of RusHydro2. London Stock Exchange (LSE) and on the US OTC market (OTCQX). As of the end of 2011, the installed capacity3 of objects under the Holding’s control was Since listing in 2008, the