Sustainability Report 2020

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Sustainability Report 2020 SUSTAINABILITY REPORT 2020 | SUSTAINABILITY REPORT 2020 ALROSA STRATEGY AND CORPORATE DEVELOPMENT OCCUPATIONAL CLIMATE RISK REGIONAL APPENDICES II GROUP SUSTAINABLE GOVERNANCE OF HUMAN HEALTH AND MANAGEMENT AND DEVELOPMENT 1 DEVELOPMENT AND BUSINESS CAPITAL SAFETY ENVIRONMENTAL ETHICS PROTECTION SUSTAINABILITY REPORT 2020 | SUSTAINABILITY REPORT 2020 ALROSA STRATEGY AND CORPORATE DEVELOPMENT OCCUPATIONAL CLIMATE RISK REGIONAL APPENDICES 2 GROUP SUSTAINABLE GOVERNANCE OF HUMAN HEALTH AND MANAGEMENT AND DEVELOPMENT 3 DEVELOPMENT AND BUSINESS CAPITAL SAFETY ENVIRONMENTAL ETHICS PROTECTION TABLE OF CONTENTS A MESSAGE FROM THE CHIEF EXECUTIVE OCCUPATIONAL HEALTH AND SAFETY 74 OFFICER – CHAIRMAN OF THE MANAGEMENT Management approach to occupational health and safety 77 BOARD 4 Training and developing a culture of safety 81 Prevention of occupational injuries and accidents 83 OUR PERFORMANCE IN 2020 7 Employees’ health and prevention of occupational diseases 86 Prevention of emergencies 87 Our performance in 2020 7 Plans for 2021 and the medium term 87 Key ESG Ratings and Sustainability Awards 8 Key milestones of building sustainability system 10 CLIMATE RISK MANAGEMENT ALROSA GROUP 12 AND ENVIRONMENTAL PROTECTION 88 About Company 14 Approach to climate risk management 91 Mission and strategy 15 Strategy 92 Business model 16 Risk management 95 Geography of assets 18 Management approach to environmental protection 97 Engagement in international organizations and initiatives 20 Energy consumption and efficiency 103 Response to COVID-19 22 Air emissions 105 Use of water resources 108 STRATEGY AND SUSTAINABLE DEVELOPMENT 24 Waste management 112 Sustainability approach 26 Management of tailings dams 114 Contribution to the UN Sustainable Development Goals 28 Land reclamation 115 International industry cooperation 34 Biodiversity conservation 116 Stakeholder engagement 36 Plans for 2021 and the medium term 117 CORPORATE GOVERNANCE REGIONAL DEVELOPMENT 118 AND BUSINESS ETHICS 38 Management approach 121 Corporate governance 41 Contribution to the development of regional economies 122 Sustainability risk management 45 Contribution to the development of regional infrastructure 128 Responsible supply chain 49 Charity and sponsorship projects 130 Requirements for suppliers and contractors 51 Support for indigenous peoples 132 Business ethics and anti-corruption 52 Plans for 2021 and the medium term 135 Human rights 54 Appendices 136 DEVELOPMENT OF HUMAN CAPITAL 56 About this Report 138 Management approach 59 Independent Auditors’ Report 142 Headcount and personnel structure 60 GRI Content Index 145 Employee recruitment and onboarding 63 UN Global Compact and WEF ESG Metrics compliance tables 153 Creation of jobs in regions 64 Glossary 156 Remuneration and appraisal 66 Contact information 160 Motivation and engagement 67 Training and development 67 Social support 69 Activity of the trade union 72 Plans for 2021 and the medium term 73 | SUSTAINABILITY REPORT 2020 ALROSA STRATEGY AND CORPORATE DEVELOPMENT OCCUPATIONAL CLIMATE RISK REGIONAL APPENDICES 4 GROUP SUSTAINABLE GOVERNANCE OF HUMAN HEALTH AND MANAGEMENT AND DEVELOPMENT 5 DEVELOPMENT AND BUSINESS CAPITAL SAFETY ENVIRONMENTAL ETHICS PROTECTION A MESSAGE FROM THE CHIEF EXECUTIVE OFFICER – CHAIRMAN OF THE MANAGEMENT BOARD GRI 102-14 Dear shareholders, partners and colleagues, I am pleased to present to you ALROSA Group's Comprehensive approach to sustainability Sustainability Report 2020. The events of the past year proved our confidence that Last year, the world faced a new coronavirus (COVID-19) a strategic approach to sustainability is a core of successful pandemic. High rates of spread of COVID-19 cause business helping to overcome crisis situations with minimal a number of restrictions in most countries – closing losses. We focus on continuous improvement of work of borders and lockdowns have become unprecedented in this area and enhancing its effectiveness. In order measures in the fight against the pandemic. This, in turn, to create a resource center at the top management level led to dire consequences for the global economy, in 2020, the functions of the Strategic Planning Committee and the diamond industry was no exception. controlled by ALROSA Supervisory Board were expanded to include sustainability issues1. Our response to COVID-19 To address the sustainability issues, the Company From the very beginning of the pandemic, ALROSA created a specialized Working Group at the operational has been responsibly complying with all instructions level, started the development of strategic of Rospotrebnadzor to prevent the spread of coronavirus. objectives and performance indicators on significant We took active participation in anti-epidemiological sustainability aspects. We have identified five strategic activities in Yakutia and other regions of presence. priorities that we will focus on in the coming years: The company invested over 1 billion rubles in various the development of human capital, occupational health measures to fight COVID-19, support hospitals and safety, environmental protection, development and healthcare workers. We paid great attention of the regions of presence, as well as the improvement to protecting and supporting employees as out main Development of international cooperation Development of human capital of the management system and compliance with business resource: we shifted the majority of our office personnel and compliance with leading international standards ethics principles. ALROSA seeks to create a corporate culture to develop to remote working, made observation facilities to prevent ALROSA participates in various industry initiatives the professional potential of employees and ensures equal the spread of COVID-19 in remote areas, purchased PPEs ALROSA intends to further improve the sustainable aimed at developing responsible business practices opportunities for all. We have one of the best indicators and disinfectants and monitored health of our personnel. development management system and increase in the diamond industry, and actively develops international of gender equality in the industry, the share of women participation in international initiatives. In 2021, we We also took a number of anti-crisis measures to maintain cooperation to build responsible supply chains in the structure of the Company's personnel exceeds 30%. took a big step in this direction: the Company joined the Company's leading position and support the global and increase market transparency. The Company is an We create decent working conditions for our employees: the largest international sustainable development initiative rough and polished diamonds market. In April 2020, active participant of the Kimberley Process (KP) as part the average salary in ALROSA Group is more than 2 times – the UN Global Compact, proving its commitment to 10 ALROSA offered flexible terms for the purchase of its membership in the World Diamond Council (WDC) higher than the average salary in Russia. In addition, we fundamental principles and the intention to address global of diamonds to its long-term customers, adhering and is one of the founders of the Natural Diamond Council provide a high level of social guarantees to our employees challenges by contributing to the achievement of the UN to the "price-over-volume" strategy to prevent a sharp (NDC). In the reporting year, we completed a successful and implement corporate social programs in various areas. Sustainable Development Goals (SDGs) until 2030. We plan drop in prices and overstocking in the diamond cutting recertification for compliance with the requirements The personnel management system was highly praised by to disclose our progress in the annual sustainability reports. industry. We streamlined operational activities, restructured of the updated Code of Practices 2019 of the Responsible independent experts – ALROSA was ranked 2nd in the top the procurement process and strengthened the operational Jewellery Council (RJC). Since 2020, ALROSA has regularly 50 best employers of the Russian Federation according efficiency program. All these measures allowed us undergone due diligence procedures throughout to Forbes. to mitigate the consequences of COVID-19 pandemic, the supply chain in accordance with the OECD Due maintain a stable financial situation and strengthen our Diligence Guidance. market position. 1 On 15 February 2021 by the decision of the Supervisory Board, minutes No.01/327-PR-NS, the Strategic Planning Committee under the Supervisory Board of PJSC ALROSA was renamed as the Strategy and Sustainability Committee under the Supervisory Board of PJSC ALROSA | SUSTAINABILITY REPORT 2020 ALROSA STRATEGY AND CORPORATE DEVELOPMENT OCCUPATIONAL CLIMATE RISK REGIONAL APPENDICES 6 GROUP SUSTAINABLE GOVERNANCE OF HUMAN HEALTH AND MANAGEMENT AND DEVELOPMENT 7 DEVELOPMENT AND BUSINESS CAPITAL SAFETY ENVIRONMENTAL ETHICS PROTECTION OUR PERFORMANCE IN 2020 Occupational health and safety Development of the regions of presence Financial and operating indicators The safety and health of our employees has always We are committed to ensuring a decent quality been our priority. ALROSA improves the culture of life, contribute to the social, economic and cultural of safe production, which is based on responsible development of the regions of presence. The Company's Revenue including Investments Dividends paid1 Share of tax and dividend Inventories Rough behavior of employees at all levels and the Company's social investments remain one of the largest in
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