sveza.com SUSTAINABILITY 2019 REPORT CONTENTS About Sveza 4 Sustainable Development and 16 Governance 38 Green Production 54 1 2 CSR Strategy 3 4 Governance Structure 40 Sustainable Forest Management 56 Key Achievements in Sustainable Development in 2019 6 Managing Sustainable Development Issues 18 Business System 41 Lowering Environmental Footprint 71 Key Events in the Company History 8 Stakeholders Engagement 23 Innovation Management 43 Responsible Consumption 77 Our Values 10 Quality Management 46 Industrial Safety And Labor Protection 85 Location of Operations 11 Customer-Oriented Approach 48 New Development Strategy 12 Ethical Business Conduct and Information Transparency 50 Markets Served 13 Activities, Brands, Products and Services 14 5 Local Communities 98 6 Employees 114 7 About the Report 138 Economic Impact on the Regions of Presence 100 Staff Structure and Personnel Policy 116 Appendices 143 Social Projects 104 Recruitment and Promotion System, Respect for Human Rights 118 Motivation and Remuneration 121 Evaluation of Employees Performance 123 Training and Development 124 Social Support for Employees 127 Corporate Culture and Volunteering 129 2 Sveza Sustainability Report for 2019 1 SUSTAINABLE GREEN LOCAL ABOUT THE ABOUT SVEZA DEVELOPMENT AND CSR GOVERNANCE EMPLOYEES PRODUCTION COMMUNITIES REPORT STRATEGY It is worth noting that we have added value to customers, Our priority is to create a culture Dear friends! successfully advanced in all improve customer service in key of safe behavior for employees. MESSAGE FROM CEO these areas. In 2019, we started industries, and work to reduce This year, we joined the United our own procurement of raw delivery times. Therefore, the next step Nations Global Compact, an materials, discovered new markets, was a project that we international initiative whose strengthened our positions in We follow the previous course named as epidemiological participants strive to conduct previously developed areas, towards innovation both in the mini‑transformation. At the first and finished the year with good stage, we analyzed best practices their business for the benefit field of creating new types of financial results in general. and quick solutions to ensure of nature, society and future More than 7.6 billion rubles products, improving production safety during the epidemic. generations. Today this global have been spent on expansion technology and in improving The second stage is training of movement of responsible top and modernization of existing business processes. managers in the field of effective companies unites more than production facilities, as well as on management in crisis situations. 13 thousand participants from environmental, energy, and quality The coronavirus pandemic The third stage is aimed at nearly 160 countries of the world. improvement programs. will not affect the fulfillment maintaining sustainability. The Thus, we have pledged certain of our commitments task is to involve all employees in commitments in the field of However, the COVID‑19 coronavirus regarding responsible forest the process of security measures corporate social responsibility pandemic has dramatically utilization and minimization of improvement, following these and sustainable development. affected the situation in the environmental impact. measures and consolidate the world, in the industry and at our results achieved. enterprises. Business plans for We always paid great attention However, this does not mean 2020, made at the end of last year, to the safety of workers, but in We also, of course, maintain our that we are starting to move have lost their relevance. Sveza, the context of the pandemic, obligations to ensure the financial in a new direction with a clean being an export‑oriented company, this issue has become literally security of our employees. Despite slate. Responsible attitude largely depends on the dynamics vital. Sveza is included in the economic situation, salaries towards environment, concern of global demand. Therefore, we the list of system‑forming were indexed in April this year. for the well‑being and safety of are closely monitoring not only organizations of the Russian employees, assistance to local the Russian restrictive measures Federation economy, which is During this difficult time, our communities in the regions introduced due to the pandemic, why the production process companies hand over personal where we operate have been the but also the situation in other does not stop even during protective and disinfection basis of our activities since the countries of the world. the pandemic. The Company equipment to medical institutions, establishment of Sveza Group. has already allocated about law enforcement agencies We conducted stress tests of our 50 million rubles to ensure and volunteers, and help to In the present report we business development, taking anti‑epidemic safety measures. heat the homes of production summarize the results of our into consideration the possible Since the announcement of veterans, elderly residents and work in the field of sustainable duration and consequences the pandemic, the Company disabled people. development in 2019. of restrictive measures due to took steps by equipping all of coronavirus in different countries. its industrial areas with special Today, an open dialogue with In the reporting year, the Although we assume the marking system to maintain social society is more important Сompany launched a long-term possibility of production volumes distance, providing personal than ever. reduction, all the scenarios protective equipment and development strategy aimed considered are ultimately aimed at contact‑free temperature Therefore, I am pleased to at strengthening its leadership protecting production, preserving check for employees. For this present you the first report on position and finding new workers associations and stability purpose, 7.3 million rubles were corporate social responsibility and growth points. of the Company. allocated for the installation of sustainable development of the thermal imagers at entrance Sveza Group. We challenged ourselves to Regardless of the development checkpoints. Enterprises have make the most efficient use of of the situation, nothing should intensified the disinfection of renewable forest resources, to change for our clients. premises and equipment, installed Chief Executive Officer improve the quality of service air recirculators, introduced Аnatoliy Frishman and to produce more and more They should still receive the additional routes for corporate products that meet a wide range products they need. We continue buses to reduce the number of of our customers’ requests. to produce products that bring passengers, and much more. 2 Sveza Sustainability Report for 2019 3 SUSTAINABLE GREEN LOCAL ABOUT THE ABOUT SVEZA DEVELOPMENT AND CSR GOVERNANCE EMPLOYEES PRODUCTION COMMUNITIES REPORT ABOUT SVEZA STRATEGY ABOUT SVEZA 1 Economy People Environment were planted 1.1 KEY ACHIEVEMENTS IN SUSTAINABLE 6 MILLION as part of in the world in production reforestation DEVELOPMENT IN 2019 No 1 of birch plywood 7,000 employees >1 TREES process Lost Time Injury 1.2 KEY EVENTS IN THE COMPANY HISTORY 8 production Frequency Rate (LTIFR) 7 production mills 2.23 in 2019 have been spent 1.3 OUR VALUES 10 on environmental MILLION of products MILLION investment in MILLION projects over the 3 1.4 11 1.4 M per year 72 RUBLES training >240 RUBLES past three years LOCATION OF OPERATIONS product sizes and proportion of female 1.5 NEW DEVELOPMENT STRATEGY 12 200+ thicknesses options 43 % managers 1.6 MARKETS SERVED 13 countries‑customers on employee 90+ five continents 67 % engagement rate 1.7 ACTIVITIES, BRANDS, PRODUCTS AND SERVICES 14 4 Sveza Sustainability Report for 2019 5 SUSTAINABLE GREEN LOCAL ABOUT THE ABOUT SVEZA DEVELOPMENT AND CSR GOVERNANCE EMPLOYEES PRODUCTION COMMUNITIES REPORT ABOUT SVEZA STRATEGY KEY ACHIEVEMENTS IN 1.1 SUSTAINABLE DEVELOPMENT Winning two categories in the Eco Best IN 2019 Awards contest, the independent public award for the best products and practices in the field of ecology, energy and resource conservation Mill Sveza in Verhnaya Sinyachiha was ranked the best in the category “Charity Activities of Timber Industry Enterprises” in 2019 under Days of Mercifulness of the Sverdlovsk Region 1st position among companies in the timber industry in HeadHunter portal rating “100 Best Employers in Russia”, 3rd position among all companies in St. Petersburg and 36th position in Russia Sveza Active team in Uralskiy (Perm Region) received an award in The Company enterprises in Kostroma “Important Business” category of the and Uralskiy became winners in district competition “Youth–2019” the “Big Business” category of the Mill Sveza in Manturovo won 1st place all‑Russian award “Exporter of the Year” in nomination “Labor Protection” at the regional stage of the All‑Russian competition “Organization of High Social Efficiency”. They also won 3rd place in the competition “The Best Specialist in the Fieldof Labor Protection of Kostroma Region” 295th position in the RBC‑500 rating (+49, 2018 — 344) Sveza mills in Uralskiy and Verkhnyaya Sinyachiha are included in the Federal Sveza mills in Kostroma and Manturovo register of the all‑Russian book of became winners in the “Social Partner honor. The Book of honor includes the of the Year” category in the regional most worthy organizations of various forms of ownership and areas of activity competition “The Best Industrial Enterprise ЕЖЕГОДНЫЙ РЕЙТИНГ КРУПНЕЙШИХ