24 86 44 70 96 110 122 148
ROSSETI - is the unified center for COVID-19 activities Corporate culture, ethics Approach for stakeholder Approach to the implementation of Approach to management activities Approach to personnel and social Approach to procurement the coordinated operation of the and values engagement the UN Sustainable Development in the field of environmental sphere management management electric grid sector of the Russian Goals (UN SDGs) protection Federation
The ROSSETI Group: The ROSSETI Group is taking Ethical business behavior is at the The ROSSETI Group's work on The understanding of sustainable The ROSSETI Group considers The fundamental principles of the The ROSSETI Group's procurement → core electric grid company of informed and effective steps with heart of the corporate culture and sustainable development takes development of ROSSETI is environmental protection an integral Company in working with personnel procedures are guided by the Russia; the pandemic spread. values of the ROSSETI Group and into account the interests of all consistent with the UN definition: part of its daily work, fully aware of are as follows: principles of informational openness, is a prerequisite for maintaining stakeholder groups. “Sustainable development is the need to maintain environmental strict compliance with legislation, → one of the world leaders of → strict adherence to Russian and trusting and open relationships development that meets the needs equilibrium and our responsibility to international legislation; non-discrimination of suppliers, electric power industry. with stakeholders. of the current generation without future generations. and open access to participation in compromising the ability of future → respect for human rights; procurement. generations to meet their own → mutual respect and needs”. consideration of views of the parties on all matters.
About the Group Sustainable Development Management Sustainable Development Progress Appendices
6 About the Report 44 Approach to Sustainable Development Management 102 Caring for Consumers 158 Appendix 1. Material Topics Management 160 Appendix 2. Calculation of Economic Value Generated 1 9 Disclaimer 2 60 Sustainability Risk Management System 3 110 Caring for the Environment 4 and Distributed 12 About the Group 70 Approach for Stakeholder Engagement 116 Energy Efficiency and Energy Conservation 160 Appendix 3. Information on the ROSSETI Group's 34 Message from the Director General 96 Approach to the Implementation of the UN Sustainable 122 Personnel Employees in 2018–2020 166 Appendix 4. The ROSSETI Group Assets 36 Industry Overview Development Goals (UN SDGs) 142 Occupational Safety Protection 168 Appendix 5. Glossary 40 Business Model 145 Employee Health Protection 169 Appendix 6. GRI Standards Report Compliance Table 179 Appendix 7. Contacts 148 Caring for Our Suppliers 180 Appendix 8. Independent Auditor's Opinion 154 Investment in the Future 183 Appendix 9. Certificate of Public Endorsement of a Corporate Non-Financial Report
4 | ROSSETI Corporate Social Responsibility and Sustainability Report 2020 | 5 Sustainable Development Sustainable Development About the Group Management Progress Appendices GRI 101 GRI 102-46 GRI 103-1 About the Report
GRI 102-54 GRI 102-15 Approach to Preparing the Report The Corporate Social Responsibility and Sustainability Report of The Report is prepared in accordance with the GRI Standards, the PJSC ROSSETI for 2020 (hereinafter referred to as the Report) Core version, as well as the specialized application for companies presents the main non-financial results of operations for 2020, of the electricity sector. A table containing a complete list of Materiality Matrix and also covers plans for the short and medium term in the field topics covered and their location in the Report is in the section GRI of sustainable development for PJSC ROSSETI (hereinafter also Standards Report Compliance Table. The Report also highlights the referred to as the Company) and its subsidiaries and affiliates UN Sustainable Development Goals (SDGs), which are supported by (hereinafter collectively referred to as the ROSSETI Group). the ROSSETI Group. Summary of the Report Sources of Information The Report is prepared on the basis of current data from the distribution of electricity and grid connection to electrical grids1, management and audited financial statements under IFRS, as unless otherwise specified. The coverage of financial disclosure well as data obtained within the framework of interaction with the corresponds to the perimeter of preparation of consolidated 2 relevant divisions of PJSC ROSSETI. A number of sections of the financial statements under IFRS . Significance of Report provide data for prior periods and expectations, forecasts the ROSSETI or future Company plans in order to demonstrate the dynamics of Disclosure Cycle and Significant GRI 102-52 Group’s impact on significant processes. sustainability topics Changes 3.4 GRI 102-45 The Corporate Social Responsibility and Sustainability Report is 3.3 3.1 Report Coverage and Limits 1.1 published annually by PJSC ROSSETI. The previous Corporate 3.2 The Report examines the activities of the ROSSETI Group. Social Responsibility and Sustainability Report of PJSC ROSSETI 3.7 3.5 Our strategic priorities and the goals and prospects of their was published in 2020. Compared to the 2019 Report, no HIGH development are presented from the position of the Group’s significant changes in the coverage or cycle of sustainability parent company, PJSC ROSSETI. The non-financial indicators information disclosure, or in the reformulation of indicators, have 1.2 are consolidated by subsidiaries and affiliates (SDCs) of PJSC 3.8 been made. 3.15 ROSSETI, those leading operating activities for transmission and 1.6 2.7 1.5 1.8 2.2 GRI 102-47 GRI 102-15 Identification of the Report’s Significant Topics 1.3 1.9 The procedure for forming the content of the Corporate Social At the second stage of the questionnaire, the heads of divisions of 3.11 3.6 1.4 Topics found to Responsibility and Sustainability Report of PJSC ROSSETI for PJSC ROSSETI and representatives of interested parties assessed 1.7 3.13 3.10 2.6 3.9 be material and 2020 has been performed in accordance with GRI Standards the materiality of each of the topics of the proposed list on a AVERAGE discussed in the methodology, taking into account the best Russian and "High – Moderate – Low" scale. In the third phase, the responses of 2.3 3.14 2.4 2.5 2.1 Corporate Social world practices. As part of the preparation of the Report, the the heads of the divisions of PJSC ROSSETI and stakeholders were Responsibility Company undertook additional interaction with stakeholders – translated into a point system and the average number of points 3.12 and a questionnaire to identify significant topics for disclosure in the was calculated for each of the topics, characterizing the need for Sustainability text of the Report. its disclosure, and a materiality matrix was formed that clearly Report In the first phase, an open source analysis and preliminary reflects the final choice of topics disclosed in the Report and the consultations with stakeholders were carried out. This allowed extent to which they are disclosed. us to expand the list of significant topics identified for the 2019 A total of 20 topics were selected for disclosure in the Report. Corporate Social Responsibility and Sustainability Report on the Topics found to be material, are those having high significance LOW basis of the standard list of GRI topics, through adding topics to the according to at least one of the criteria (2.5 or more points out Russian power grid industry and specific to the ROSSETI Group. As of 3). a result, a list of 31 topics was formed, reflecting the economic, environmental and social impact of the ROSSETI Group.
LOW AVERAGE HIGH Topic significance for stakeholders
1 The complete list in Appendix 4. The ROSSETI Group Assets. 2 Notes 5 and 8 to the consolidated financial statements of ROSSETI prepared in conjunction with IFRS for the year ended 31 December 2020, pages 34 and 38 – https://www.rosseti.ru/investors/info/financeinfo/reports/msfo/.
6 | ROSSETI Corporate Social Responsibility and Sustainability Report 2020 | 7 Sustainable Development Sustainable Development About the Group Management Progress Appendices Topic materiality Significance of the ROSSETI Group's Significance of topics for Topics proposed to stakeholders to assess materiality impact on sustainable development stakeholders 1. Economic Impact Disclaimer
1.1. Economic performance of the ROSSETI Group's activities. High Moderate This Corporate Social Responsibility and Sustainability Report is prepared using information available to 1.2. Digital transformation of the electric grid sector. High High PJSC ROSSETI at the time of the preparation hereof, including information received from third parties. PJSC ROSSETI reasonably believes that such information is complete and reliable at the time of the publication of this Report; 1.3. Consolidation of electric grid assets. Moderate Moderate however, PJSC ROSSETI does not represent or warrant that any such information will not be adjusted, revised, 1.4. Charitable and social projects, as well as investment in infrastructure in the or otherwise modified in the future. regions of presence. Influence on socio-economic development of the regions of Moderate High presence. The Corporate Social Responsibility and Sustainability Report contains 1.5. Transparency of purchases in the ROSSETI Group. Choosing bona fide suppliers, information about 2020 results and forward-looking data, statements High Moderate attracting local suppliers and representatives of small and medium-sized businesses. regarding intentions, opinions or current PJSC ROSSETI and the ROSSETI Group expectations regarding their performance, financial position, 1.6. Anti-corruption management. High Moderate liquidity, growth prospects, strategy, and social, environmental and 1.7. Combating competition restriction and complying with antitrust laws. Moderate Moderate other indicators, as well as the development of the industry in which the 1.8. Scientific research and introduction of innovative developments. High High Group operates. By their nature, such forward-looking statements are characterized by the presence of risks and uncertainties because they 1.9. Activities of the ROSSETI Group during COVID-19. Moderate Moderate relate to events and depend on circumstances that may not occur in the 2. Environmental Impact future. 2.1. Use of renewable and non-renewable natural resources. Reuse of resources and The words “intends”, “seeks”, “expects”, “estimates”, “plans”, “believes”, Moderate Moderate materials. “assumes”, “may”, “should”, “will”, “continues”, and other similar 2.2. Energy efficiency. High High expressions generally indicate the predictive nature of the statement and may suggest the risk of non-occurrence of said events and actions, 2.3. Improving efficiency of use of water resources. Moderate Moderate depending on various factors. 2.4. Impact on biodiversity (including installation of bird protective devices). Moderate High The Company cautions that forward-looking statements are not 2.5. Reducing emissions of greenhouse gases and pollutants into the atmosphere. Moderate High guarantees of future performance, and does not assume any liability for losses that physical or legal entities may directly or indirectly incur by 2.6. Production waste management. Discharge control. Moderate High acting by relying on forward-looking statements. These entities should 2.7. The ROSSETI Group's services compliance with environmental protection not entirely rely on the forward-looking statements contained in the High Moderate requirements (including fines and sanctions). Report, as they are not the only possible outcome or turn of events. 3. Social Impact 3.1.Ensuring reliable and uninterrupted electricity supply. High High 3.2. Emergency preparedness. High Moderate 3.3. Consumer care. High Moderate 3.4. The ROSSETI Group's care for employees and consumers during the COVID-19 High Moderate pandemic. 3.5. The company's investment in human resources. Reducing turnover of the High High workforce. Attracting qualified employees. 3.6. Facilitating employee participation in negotiations on working condition changes. Prompt employee notification on significant changes in the activities of the ROSSETI Moderate Moderate Group. 3.7. Health and safety in the workplace: occupational injuries; occupational diseases; High Moderate agreements with trade unions. 3.8. Employee training, educational programs, professional development, performance High Moderate assessment and career development. 3.9. Equal career and professional development opportunities for men and women: the composition of the governing bodies and organization personnel disaggregated by Moderate High different characteristics. 3.10. Equal remuneration for men and women: minimum to average salary ratio. Moderate Moderate 3.11. Freedom of association and collective bargaining (incl. Collective Bargaining Moderate Moderate Agreement between the ROSSETI Group and the trade union). 3.12. Respect for the rights of indigenous and small-numbered peoples in the ROSSETI Moderate Moderate Group's regions of presence. 3.13. Compliance with human rights by the companies of the ROSSETI Group and their Moderate Moderate suppliers. Except as required by law, the Company undertakes no obligation to revise 3.14. The ROSSETI Group's use of sustainable development criteria in selecting or confirm expectations and estimates, or to publish updates and changes in Moderate Moderate suppliers and contractors. forward-looking statements of this Report in connection with subsequent events 3.15. Compliance with legislation. Fines and non-financial sanctions imposed on the or the receipt of new information. High Moderate Company due to violation of the law.
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About the Group
6 About the Report 9 Disclaimer 12 About the Group 34 Message from the Director General 36 Industry Overview 40 Business Model
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GRI 102-6 GRI 102-7 EU4 THE ROSSETI GROUP: MONOPOLY MARKET - core electric grid company of Russia POSITIONS - one of the world leaders of electric power industry Responsibility to the state, consumers, shareholders, partners, employees, 80 73.5% and other stakeholders constituent entities of the Russian Federation controlled SUSTAINABLE DEVELOPMENT IS ONE OF THE PRIORITIES market share geography of presence
subsidiaries and affiliates, including: MISSION SERVICE KEY ACTIVITIES 33 UNIFIED CENTER FOR THE CONSUMERS → 1 trunk grid company → Ensuring the reliability and → Transmission and → 11 interregional grid companies COORDINATED OPERATION quality of power supply at distribution of electricity the specified level → Owners of power → 5 regional grid companies OF THE ELECTRIC GRID receivers → Technological connection → 6 regional distribution companies SECTOR OF THE RUSSIAN → Increasing the total → Owners of power to electrical grids FEDERATION returns of the Company's generation capacity shareholders → Electric grid sector → Energy sale organizations development → Ensuring resilience to PJSC ROSSETI IS A STRATEGIC → Suppliers of last resort changes in the global and ASSET OF THE STATE local electricity markets 76% 88.04% of the energy output in 2020 in Russia was transferred through the grids of the ROSSETI Group share of the state in the authorized capital
ONE OF THE WORLD'S LARGEST POWER GRID COMPANIES IN TERMS OF TRANSMISSION COUNTRY LEADER FOR POWER TRANSMISSION AND TECHNOLOGY CONNECTION LINES AND TRANSFORMER CAPACITY Supplied Power* Volume of Power Connections 809 366 19 836.4 837.1 802 803.5 332 2.40 74.9 528 71.8 15 262 765.3 12 792 761.5 517 2.37 734.1 69.4
507 2.35
2018 2019 2020 2018 2019 2020
2018 2019 2020 2018 2019 2020 Power supply to the grid, bn kWh Number of contracts fulfilled, thsd pcs. Electricity supply from the grid to consumers, bn kWh Capacity of contracts fulfilled, kW Number of substations, thsd pcs. Length of power lines, mn km Electricity losses, bn kWh Capacity of substations, hVa
*Data for 2019 is compared to 2020 (recalculated taking into account JSC "VMES", which is part of the ROSSETI Group since 2020).
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ENSURING THE ENERGY SECURITY OF THE COUNTRY RESILIENCE TO CHANGES IN THE GLOBAL AND LOCAL ELECTRICITY MARKETS GRI 102-7
1,029.7 315.6 2.4 10.9 1,021.6 1,001.5 313.9 1.3 288.5 1.2 1.1 9.6 860.9 862.7 9.3 826.2 1.8 1.4
124.7 105.3 61.2
2018 2019 2020 2018 2019 2020 2018 2019 2020 2018 2019 2020
Пsaidi is the system average interruption duration index, h Number of process failures 110 kW, thsd pcs. Total revenue, bn RUB Adjusted EBITDA*, bn RUB Пsaifi is the system average interruption frequency index, pcs. Revenue from electricity transmission, bn RUB Net profit, bn RUB
2,731 2,519 2,650 256.4 238.6 235.4 1,584 1,623 1,495 -3% 1,024 1,065 1,108 decrease in the number of technological violations in the 110 kV grid to the level of 2019 2018 2019 2020 2018 2019 2020
Net cash flow from operation activities, bn RUB Total equity and liabilities, bn RUB Equity, bn RUB Debt, bn RUB
SOCIAL SIGNIFICANCE FOR REGIONS OF ACTIVITY
Investments in the Electric Grid Assets Major Taxpayer Support for Small and Medium Enterprises 32.5 28.3 73 25.2 64 235 209 50 181 12.1 12.4 6.4
2018 2019 2020 2018 2019 2020 2018 2019 2020
Volume of procurement from small and medium businesses, bn RUB Commissioning of transformer capacity, thsd MVA Tax payments, bn RUB Commissioning of power lines, thsd km * Adjusted EBITDA Calculated as earnings before interest expense, taxation, depreciation less net loss on impairment of fixed assets, as well as income from asset exchange with DVEUK (only for 2019). **According to IFRS.
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LARGEST EMPLOYER 6,098.8 CARING FOR THE ENVIRONMENT 182.7 150.4 110.7 In 2020, the ROSSETI Group created 5,679.4 318.4 334.5
247.7 672 new jobs 5,236.7 in the regions of its activities 158.7 155.0 144.8 2018 2019 2020 2018 2019 2020 90.6 Installation of bird protection equipment, thsd units 60.0 Total investment in occupational safety 56.9 65.5 51.1 61.6 55.0 47.9 9.35 6,626.9 43.7 6,484.6
6.51 6.02 4,879.2
2018 2019 2020
2018 2019 2020 2018 2019 2020 Water protection and sustainable use of water resources, bn RUB Average salary, thsd RUB Ambient air protection, bn RUB 2018 2019 2020 LTIFR (number of days of casualties' incapacity for work as a result Average salary in the Russian Federation according to Posstat, of non-fatal accidents per 1 million man-hours worked) Land protection, bn RUB Soil reclamation, ha thsd RUB
INCREASED ATTENTION TO EMPLOYEE TRAINING
of the ROSSETI 87% Group staff participated in training, retraining, and advanced training programs in 2020
Number of Trained Total Cost of Training, Employees, pers. thsd RUB
184,716 829,832.2
115,160 «Leaders of Russia» «Energy Leaders» 487,168.0 > 3,700 > 20 managers finalists and winners
Total managers of the ROSSETI Group took of the 2019 All-Russian contest “Energy Leaders” were assigned Included distant learning part in the contest “Leaders of Russia” to key positions in the technical block of the ROSSETI Group in 2019–2020 in 2020
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Availability for Russian and Foreign Investors
PJSC ROSSETI Listing on Moscow (RSTI, RSTIP), and London (RSTI) Exchanges:
(RSTI, RSTIP) (RSTI)
Presence in Indices: → Moscow Exchange Index → Electricity Index → SMID Index → State-Owned Companies Index → Broad Market Index Attractiveness Presence in Indices: Presence in Ratings: Focus on Сapitalization Growth for socially → FTSE4Good Emerging Index AK&M (sustainability rating on the national scale): A++, the highest degree → Moscow Exchange Responsibility and Openness oriented funds of sustainability, the risk of damaging the Index 356.3 opportunities of future generations is absent → RSPP Sustainability Vector Index 279.8
156.2
2018 2019 2020
Market capitalization of ordinary and preference shares of PJSC ROSSETI, High level bn RUB of corporate governance NRCG 7++ The balanced Board of Directors in terms of competence from the Russian Institute of Directors and share of independent directors to take into account the for the fifth consecutive year balance of interests of all shareholder groups
Credit ratings from top rating BBB- Baa3 ААА agencies at the sovereign Sovereign rating level Sovereign rating level Highest rating level level "Stable" "Stable" "Stable" outlook outlook outlook
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GRI 103-2 GRI 103-3 COVID-19 ACTIVITIES >175,000 Steps of the ROSSETI Group employees with the pandemic spread: were tested for COVID-19
March 5
Moving to remote work:
28% of production staff 70% of administrative staff of employees aged 65 100% and older
March 16
Reorganization of production processes: → flexible working hours; → restriction of access to control rooms; → creation of reserve employees of dispatching services; → implementation of mandatory preventive and disinfection measures, etc.
March 23
Special control of reliability and power supply of: → medical institutions; → call centers of the population; → public service centers; 510 The ROSSETI Group has moved client services that do not require the work of medical institutions → facilities for providing cellular communication and Internet access; specialists in energy facilities to an online format in most regions of presence. → computing equipment of organizations that provide online are supplied from the services to the population (banks, online shops, online cinemas, facilities the companies You can contact the power industry employees through the Unified Portal of messengers, large logistics centers and courier services). of the ROSSETI Group Electric Grid Services (Портал-ТП.РФ) ) and a new mobile application “Rosseti– Personal Account”.
April 14 295 backup energy sources In 2020, despite the restrictions associated with the coronavirus pandemic, the following events were held with the participation of PJSC ROSSETI's representatives: Uninterrupted power supply to medical installed in medical institutions institutions receiving patients with COVID-19: → analysis of reliability of power supply schemes; Global Platform of Leading Electricity 4th Annual Women in → verification and installation of backup sources Distribution Operators 1st Annual Conference Engineering Forum held within the of power supply; 1,439 (#GlobalDSO): “Distribution Complex framework of the International → interaction with the Regional Headquarters contracts Organizations Boosting the Global Energy Council on Large Electric Systems of the constituent entities of the Russian Transition Investments and Resilience to (CIGRE) Session Federation and the medical directors for technological connection Overcome the Covid-19 Aftermath" of medical institutions. of medical institutions executed
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GRI 102-4 GRI 102-6 Operating on the Territories of 80 States of Russian Federation
Federal Districts of the Russian Federation:
Northwestern Federal District Volga Federal District Urals Federal District Southern Federal District Siberian Federal District Central Federal District Far Eastern Federal District North Caucasian Federal District
Regions of the Russian Federation that do not have the Northwestern Federal District | ROSSETI Lenenergo, ROSSETI Yantar, ROSSETI North-West, North-West MES, Center MES presence of the ROSSETI Group: Far Eastern Federal District Volga Federal District | ROSSETI Volga, ROSSETI Center and Volga Region ROSSETI Urals, Volga MES, Urals MES Kamchatka Krai Urals Federal District | ROSSETI Tyumen, ROSSETI Urals, Urals MES 2018 2019 2020 Magadan Region Southern Federal District | ROSSETI Kuban, ROSSETI South, South MES, Mobile GTPP Length of power transmission lines, Sakhalin Region, 2.35 2.37 2.40 Sakhalin Island Siberian Federal District | ROSSETI Siberia, ROSSETI Tomsk, Siberia MES mln km Chukotka Autonomous Region Number of SS and TC, Central Federal District | ROSSETI Moscow Region, ROSSETI Center, ROSSETI Center and Volga Region, Center MES, North-West MES 507 517 528 Northwestern Federal District thsd pcs Far Eastern Federal District | East MES, Siberia MES, ROSSETI Siberia, Mobile GTPP Nenets Autonomous Region Power of SS and TC, GVA 792 802 809 North Caucasian Federal District | ROSSETI Northern Caucasus, South MES
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GRI 102-4 GRI 102-6 PJSC ROSSETI is a Single Electric Grid Sector FGC UES 80.13% ROSSETI Volga 67.97% Management Center 15.1 mln sq. km 403.5 thsd sq. km (79 regions of Russia) PJSC ROSSETI 160.8 thsd km 227.8 thsd km 352,246.5 MVA 36,124.4 MVA
ROSSETI Siberia 57.84% ROSSETI Moscow Region 50.90% 1.93 mln sq. km 47 thsd sq. km 254.8 thsd km 161.4 thsd km 42,899.9 MVA 80,492.5 MVA
ROSSETI Tyumen 100% IDGC of Center 50.23% 1.5 mln sq. km 457.7 thsd sq. km 52.3 thsd km 411.6 thsd km 30,018.0 MVA 54,860.0 MVA
IDGC of Center and Volga Region ROSSETI Northern Caucasus ROSSETI Kuban 50.40% 98.61% 93.44% 408 thsd sq. km 246.4 thsd sq. km 84 thsd sq. km 289.2 thsd km 122.5 thsd km 92.2 thsd km 44,574.3 MVA 16,003.1 MVA 16,544.3 MVA
Tyvaenergo 59.34% TDC 85.77% Chechenenergo 73.65% 168.6 thsd sq. km 314.4 thsd sq. km 16.0 thsd sq. km 7.2 thsd km 20.2 thsd km 15.9 thsd km 488.6 MVA 3,951.3 MVA 2,358.2 MVA
ROSSETI Lenenergo 67.48% IDGC of Urals 51.52% IDGC North-West 55.38% 85.3 thsd sq. km 443 thsd sq. km 1.4 mln sq. km 79.8 thsd km 147.7 thsd km 176.2 thsd km 34,642.2 MVA 37,918.1 MVA 26,986.7 MVA
ROSSETI South 84.12% Yantarenergo 100% 335 thsd sq. km 15.1 thsd sq. km 162.2 thsd km 15.9 thsd km 24,011.5 MVA 4,875.1 тыс. MVA
0.4 821,914.3 110-150 258,535.7 400 428.2 6(10)-20 992,321.6 220 100,390.9 500 43,562.4 Share capital 35-60 330 750-1150 162,737.5 13,206.5 4,723.5 Coverage area Power line length Power of SS and TSS
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2015 History of the ROSSETI Group → Renaming of OJSC ROSSETI to PJSC ROSSETI. 2014 → Introduction of the Corporate Governance Code (CGC) → Beginning of cooperation with the WorldSkills movement Launch of the All-Russian Program for the Development of Charging Infrastructure for Electric Transport and the Project for the Installation of an 2008 2013 Intelligent Electricity System → Completion of the reorganization of OJSC RAO UES → Renaming of OJSC IDGC Holding to OJSC ROSSETI. of Russia, including the separation of the electric grid business. → OJSC ROSSETI becomes the controlling shareholder of OJSC FGC UES. → Establishment of OJSC IDGC Holding to manage distribution grid companies. → Beginning of trading shares of OJSC IDGC Holding on the Russian organized market.
2020 Approval of the consolidated program “Digital transformation of the ROSSETI 2019 Group” for 2019–2030 Approval of the Development Strategy of PJSC ROSSETI and its subsidiaries and affiliates 2018 up to 2030 Approval of PJSC ROSSETI’s “Digital Transformation 2030” Concept 2017 → Inclusion of PJSC ROSSETI securities in the FTSE4 GoodEmerging Index calculation base, based on sustainable development criteria. → Approval of PJSC ROSSETI’s Environmental Policy of the Electric Grid Sector
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Key Events in 2020 and Early 2021 Which Occurred October 2020 The ROSSETI Group was among the winners of the competition “Reliable Partner–Ecology”, held with the support of the Committee of Prior to the Publication of the Report the Federation Council on Agrarian and Food Policy and Environmental Management, the Ministry of Natural Resources of Russia and the Ministry of Energy of Russia, as well as the Department of Nature Management and Environmental Protection of Moscow in the categories “Best project in the field of sustainable development of cities and agglomerations” and “Best project for infrastructure development and support of new energy vehicle and environmentally friendly modes of transport”. Management of Sustainable Development
March 2020 July 2020 July 2020 December 2020 February 2021
PJSC ROSSETI was awarded the title On July 1, 2020, the ROSSETI Group AK&M rating agency assigned The non-commercial partnership For the first time ever, PJSC ROSSETI PJSC ROSSETI was included in the and the main prize of the contest “The began implementing Law 552-FZ on the PJSC ROSSETI an “A++” national scale “Russian Institute of Directors” confirmed set aside the organization of Forbes Top 10 ranking “30 most eco-friend- Best Socially-Oriented Energy Company”. development of intelligent electricity sustainability rating. This rating means PJSC ROSSETI's corporate governance coverage of the ROSSETI Group’s ly companies in Russia”, which became a The competition is held by the Ministry of metering systems. that PJSC ROSSETI belongs to the class rating at the 7++ level–“Developed sustainability activities as a separate task. testament to the Company’s responsible Energy of Russia. Thanks to the introduction of smart of Russian companies with the highest corporate governance practice” on the attitude towards the environment, the metering, consumers will be able to degree of sustainability. There is no risk scale of the National Corporate Governance significance of its contribution to ensure quickly obtain accurate information about of harming the opportunities of future Rating (NCGR®). consumers’ centralized access to afford- electricity consumption, and manage its generations. able and environmentally friendly energy. volumes and cost. It strengthened the Company’s reputation in the eyes of Russian and international environmental organizations.
COVID-19
March 2020
Since March 30, 2020, customer and consumer service centers in all regions As of March 20, 2020, the maximum of presence of the companies of the ROSSETI Group have been fully transferred number of employees of the ROSSETI Group to remote service in order to reduce risks of spreading COVID-19. A full range have been transferred to remote work with of services, including processing applications for technological connection, the maintenance of the current pay conditions redistribution of power and capacity increase, is provided to consumers online. to preserve people’s health in the context of COVID-19 proliferation. The ROSSETI Group has taken special control of the reliability and uninterrupted power supply of such infrastructure facilities as medical facilities, public call centers, public April–June 2020 services, facilities for providing the population with cellular communication and Internet In all regions of activity, the ROSSETI Group provided electricity → the multidisciplinary medical centers of the Ministry of access, computer equipment of organizations to new and operating medical facilities re-purposed for the Defense of the Russian Federation in Volgograd and Nizhny providing online services to the population: treatment of COVID-19 patients, including: Novgorod; banks, online stores, online cinemas, → the Kommunarka infectious disease hospital and the re- → 5 medical institutions in Kostroma; messengers, major logistics centers and purposed buildings of City Clinical Hospital No. 15 named → the re-purposed infectious disease and therapeutic delivery services. after O.M. Filatov in Moscow; department of the city hospital in Yoshkar-Ola; → the mobile hospital of the EMERCOM, the Murmansk region; → the new multifunctional medical center in Voronezh and others.
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Stakeholder Engagement Suppliers and Contractors Investment Community October 2020
August 2020 November 2020 PJSC ROSSETI won the prize for “Best support for small and medium PJSC ROSSETI’s ordinary shares were included in the base The annual and non-financial reports of PJSC ROSSETI and enterprises” in the competition “Leader of calculation of the Main Index of the Moscow Exchange, which seven subsidiaries won corporate governance and sustainability of competitive procurement 2020”. includes the most liquid securities of the largest and dynamically disclosure contests: ARC Awards, XXIII Moscow Exchange Annual The assessment indicates readiness to developing Russian issuers. Report Competition, XXII Expert Rating Agency (RAEX) Annual involve small and medium enterprises Report Competition, etc. The evaluations awarded demonstrate as partners and contractors in excess of a high quality of corporate governance and interaction with the mandatory regulations established stakeholders and support the image of information-transparent for the state. It is a confirmation of the companies. Company’s established reputation as a reliable and responsible business partner.
Regions
February 2020 December 2020
In Vladimir and Voronezh stylized power transmission poles in the A Memorandum with Sberbank PJSC on the construction of form of an ancient Russian hero and a lighthouse were put into operation. a regional data processing center of the company in the Saratov Both sites became new architectural landmarks and increased the tourist Region was concluded. The data center will be built by 2027 and appeal of the regions. will create up to 100 new jobs in the region. The ROSSETI Group is considering creating additional data centers based on grid May 2020 facilities – for its own needs and for commercial use.
In Petrishchevo (Ruzsky District, Moscow Region), electricity for the reconstructed military-historical museum of Zoe Kosmodemyanskaya was provided. December 2020
September 2020 In honor of the 75th anniversary of the Victory The world’s only hyperboloid multi-section power transmission The first memorial to energy heroes in the Russian in the Great Patriotic War pole, designed by the outstanding Russian engineer V. Shukhov and built Federation opened In Tula, including a 14.18 meter-high and the 90th anniversary of in the late 1920s as part of the GOELRO plan, was completely restored. obelisk (according to the number of days of the Great Patriotic the foundation of airborne The object is a unique monument of the Russian architectural avant- War) in the form of a power transmission pole, and the troops, a power transmission garde, recommended for inclusion in the UNESCO World Heritage List Eternal Flame, with the spark taken from Moscow Tomb of pole was introduced in and designated as an object of cultural heritage of federal significance by the Unknown Soldier. Ryazan, stylized under the order of the Government of the Russian Federation. symbolism of airborne troops. October 2020 A regulatory agreement was signed between OJSC IDGC of Urals and the administration of Perm Territory on coordination of February 2021 actions in the adoption of tariff and balance sheet decisions: → the grid company made commitments to develop the The Space Conquerors infrastructure of the region, including the implementation of Park, being built at Yury the program “Digital Transformation 2030”, and to establish Gagarin’s landing site in long-term tariffs and their indexing; Smelovka (Engels District, → the principles of interaction between the parties in Saratov Region), was determining the order and conditions of regulation for a ten- provided with electricity. The year period were established. park will become a unique, The savings achieved by OJSC IDGC of Urals under this multifunctional open-air agreement will be aimed at the development of the electricity grid memorial and educational infrastructure of Perm Territory. complex.
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Consumers
As part of the implementation of the Digital Transformation 2030 Concept, a number of new digital facilities were put into operation by December 2020 the ROSSETI Group in 2020. Each of them became an important element of urban and regional infrastructure, allowing us to increase the The 110 kV University and 110 kV Montazhnaya substations were introduced in the Kaluga region, providing electricity to 23 level of comfort of the population. Each created additional opportunities for industrial development of the regions of operation. settlements and 3.8 thousand residential houses, as well as allowing the grid connection of the Federal state government agency Montage Rosrezerv plant in the Volga Federal District. Grid management centers were put into operation in the Voronezh, Tula, Ryazan and Vladimir Regions, and in the city of Kursk. The facilities were equipped with digital communication channels and state-of-the-art information systems that enabled real-time monitoring The opening of the 110 kV Karpovskaya substation was held in St. Petersburg, which increased the reliability of power supply to of electric grid facilities, analyzing power quality parameters, and managing production personnel. over 130 thousand inhabitants and formed a capacity reserve of 43 MVA for Petrogradsky District and Petrovsky Island, where housing and road construction is actively underway. In Krasnodar Krai, the 110 kV Angarskaya substation was introduced, which has become a source of electricity for the north-eastern parts of the capital of the region with a population of 320 thousand people and 240 socially significant facilities, including the regional clinical hospital. September 2020 In the Khanty-Mansi Autonomous Okrug, the 110 kV Orekhovskaya substation was launched, which has become a key source The 110kV Sputnik substation was launched In Voronezh, which has become a key power center for the of electricity to the enterprises of the oil production industry of the Nizhnevartovsky District. most populous northern part of the city. It made grid connection possible for new industrial, domestic and socially significant facilities, including seven residential complexes with a total area of more than 400,000 square meters. The 110 kV Yasen’ substation was introduced in the Leningrad region, providing Divenskaya compressor station with the necessary capacity to expand the gas supply system of the regions, and to supply gas to the Nord Stream-2 gas pipeline.
October 2020 In general, the introduction of new high-tech facilities allowed improving A digital district of electrical grids began its the reliability and quality of electricity work in Bryansk. The facility provided electricity to consumers, creating a reserve for to the region with a population of more than 1.5 further technological connection, and million people and some large industrial consumers, also contributed to strengthening the including the Lebedinsky and Yakovlevsky mining and controllability and manageability of grid processing plants. facilities in the regions of activity of the ROSSETI Group.
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Sustainable Development Sustainable Development About the Group About the Group Management Progress Appendices
GRI 102-14 GRI 103-2 GRI 103-3 Message from the Director General
apparatus and 28% of the production unit personnel were The connection of a record number of renewable energy sources transferred to remote work. to power grids was also a highlight of the year. This is one of the most promising areas of energy development, which today attracts The ROSSETI Group maintained the employment and income rates special attention from all over the world. Along with the connection during non-working days, and paid incentive bonuses to specialists of new RES stations, the ROSSETI Group is running its own who ensured reliable power supply, safe operation of energy projects in this area. Thus, the Group has begun a comprehensive facilities, and continuity of processes. Testing on COVID-19 has modernization of distribution grids in isolated settlements of the become a mandatory and regular part of the Group’s life, with over Trans-Baikal Territory as part of the project to create autonomous half a million tests performed during the year. All employees were hybrid power plants based on solar modules. provided with the necessary personal protective equipment. Efficient utilization of energy resources is a prerequisite for Thanks to the ROSSETI Group’s prompt action, it was possible sustainable development. It is energy companies with relevant to protect its people and prevent the spread of coronavirus. The competencies that can be the catalyst for the process. The ROSSETI fact that even in such a non-trivial situation the Group continued Group is running a wide range of projects to fulfill this task. For to work steadily and move towards its goals speaks to the high example, the organization of intelligent electricity metering, professionalism and responsibility of the entire team. building "smart" urban lighting systems, and creating a grid of For several years, the companies of the Group have maintained a charging stations for electric vehicles. stable tendency to enhance the reliability of electricity supply. The ROSSETI Group is one of the largest employers in the electricity In adverse weather conditions, the ROSSETI Group restored the industry and the economy of Russia as a whole. Our team brings power supply to their consumers with maximum efficiency and together over 216.5 thsd people1 who work at electricity facilities helped colleagues from other grid organizations or worked on country-wide, from Kaliningrad to Vladivostok. The Group seeks ownerless facilities. Among the most illustrative examples are to attract the most talented and competent specialists, actively the elimination of accidents in the power systems of Krasnodar interacts with relevant universities and institutions, offers Territory. motivational programs, and develops a system of corporate training. In the year under review, the ROSSETI Group delivered several major investment projects, including the construction of many Finally, the last but not least: аctivities of the ROSSETI Group are kilometers of transit in the Far East and North Caucasus, and the inextricably linked with the development of the regions of presence. launching of new electricity supply facilities for the Baikal-Amur In today’s world, reliable electricity is a general condition for and Trans-Siberian highways, and for the Nord Stream-2 and economic and social growth. It is necessary for a comfortable and Power of Siberia pipeline systems. secure living environment. However, projects that aim to preserve Dear readers! Understanding its responsibility to society, the Company makes cultural and historical heritage and ensure intergenerational further efforts to raise the quality and availability of services, We have completed more than 262,000 contracts on grid connectivity are no less significant. connection. We should note the difficult and in some cases round- The ROSSETI Group holds a special place in create safe and decent working conditions, improve operating and investment activities, and minimize the impact on the environment. the-clock work of our electricians to connect new medical facilities. In 2020, such initiatives have been implemented with the support of Russia’s social and economic development, These are equally important components of sustainable In April 2020, the ROSSETI Group's power engineers completed the the ROSSETI Group. In the Tula region, the country’s first memorial to the energy heroes of the Great Patriotic War was opened. Our providing electricity across 80 regions and development, which we have tried to explain in detail on the pages construction of the network infrastructure for the infectious disease of this Report. hospital in New Moscow ahead of schedule. It became the flagship soonest plans include the construction of a monument dedicated working to ensure the country’s energy center of the fight against the coronavirus. In the following months, to the breakthrough of the energy siege of Leningrad, on the site of 2020 was not easy for Russian and global power economy because similar projects were implemented in various corners of the the memorial “The Broken Ring”. security as a whole. of COVID-19 pandemic and negative market trends. Despite the country. In total, the Group provided reliable electricity to more than The ROSSETI Group sets ambitious goals and strives for continuous challenges, the ROSSETI Group showed strong financial and 1.26 thsd medical institutions, including hospitals of the Ministry of production results, and continued its progress in all priority areas. leadership in the industry. This can only be achieved if there are Defense and the EMERCOM of Russia. sustainable development goals on the current agenda that are in Adapting to the challenges required non-standard approaches to the interests of the Group, the community, and future generations. protect the lives and health of our personnel, and we had to act Director General of PJSC ROSSETI Companies of the ROSSETI quickly. The first confirmed case of a Russian citizen contracting the coronavirus became known on March 2. Just three days later A. Ryumin Group completed the ROSSETI Group began introducing a set of measures to keep its employees safe and healthy in the COVID-19 pandemic. thsd contracts on grid connection For the first time in the Group’s history, only those employees >262 who were required to perform urgent tasks were allowed to attend their workplaces. During the most difficult times, when all the restrictions were introduced, up to 70% of the management 1 The ROSSETI Group’s headcount in 2020, taking into account employees of PJSC ROSSETI and electric grid subsidiaries (including JSC ENCE, etc.).
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According to S&P Global Ratings assessment carried out in In accordance with the current forecast of the Ministry of Industry Overview January 2021 as part of the work to confirm the sovereign credit Economic Development until 2023, the medium-term growth rating of the national currency of the Russian Federation, the of the energy sector indicators in 2021–2022 will be 2.3–2.4%, consequences of the economic downturn of 20201 will be offset which will allow electric companies to get back to production and Market Features the ROSSETI Group is Involved in by the economic growth of 2021. And this, in turn, will lead to the financial results equal to or better than in 2019. It is expected that restoration of energy consumption to the level of 2019. until 2026, the annual growth rate of electricity consumption will Electric power industry has a direct impact on the development of average about 1.1% y-o-y, taking into account the activities of the all sectors of the economy, industry, transport and agriculture of national economic recovery plan2. the Russian Federation. It largely determines the country’s export Change in MRR, % potential and the effective development of its territories. The United Power System (UPS) of the Russian Federation is the most Restrictions associated with the spread of COVID-19 clearly confirmed the advantages of the ongoing digital extensive in the world in terms of territorial coverage. The Russian transformation of the electric grid sector. Thanks to the active implementation of its tools capable of providing long- energy market is the fourth largest in the world in electricity term development potential through increased operational efficiency, labor productivity growth, monitoring and 73.8 production and consumption, after China, the United States and timely response to external negative factors, the electric power industry of the Russian Federation has been able to India1. minimize the consequences of a period of severe restrictions and start recovery at a rapid pace. 73.5 PJSC ROSSETI is the basis of the grid segment More detailed information on the current situation in the electricity of the Russian electricity industry. It manages market is presented in PJSC ROSSETI’s 2020 Annual Report. 33 subsidiaries and affiliates, including 16 73.3 distribution and backbone grid companies.
2018 2019 2020 The ROSSETI Group is a natural monopoly entity and transmits about 76% of all the electricity generated in Russia. In Russia and abroad, there are no companies comparable to PJSC ROSSETI in Russia in the World Energy Trilemma Index terms of both activity (presence/ customer base in 80 regions) and types of services provided (backbone and distribution grids). Meanwhile, in 2020, about 1,600 local grid companies (LGCs) According to the results of 2020 Russia climbed 30 positions in the global energy trilemma index, reaching 29th carried out their activities in Russia. place. This is due to the major improvement in the national energy policy achieved since 2018, when the index was The ROSSETI Group is a key operator of the electric grid sector of 73.5% first published with the participation of the Russian Federation. the Russian Federation. In 2020, the share in minimum regulated Total MRR in the regions revenue (MRR) in regions of presence amounted to 73.5%. of presence by the end of 2020 Current Market Situation and Short-Term Prospects of Industry Development Electricity Generation and Consumption3 Electricity generation by the power plants of the Russian UPS in 2020, including power plants of industrial enterprises, 1,080.6 decreased by 3.1% year-over-year (up to 1,047.0 bn kWh), which 1,070.9 corresponds to the level of decline in the main macroindicators in Russia against the backdrop of the COVID-19 pandemic2. 1,059.4 1,055.6 1,047.0 1,033.7
"It is very important for us to get an unbiased assessment of the effectiveness of Russian energy policy from international industry experts. This will help in open dialogues to present our vision of 2018 2019 2020 a "fair" energy transition based on the rules of "technological neutrality" and non-discrimination Generation, bn kWh of energy carriers, provided that the goals of low-carbon development are maintained to create Consumption, bn kWh sustainable energy and solve the global problem of energy poverty", said Head of the Russian Ministry of Energy Nikolai Shulginov.
1 Enerdata data for 2019: https://yearbook.enerdata.net/electricity/electricity-domestic-consumption-data.html. 2 Report on the Operation of Russia’s United Power System in 2020, prepared by the System Operator of the United Power System (SO UPS). 1 Confirmation of the sovereign credit rating of the national currency dated January 15, 2021 2 3 SO UPS data: Reports on the Operation of Russia’s United Power System in 2018–2020. The Order «On approval of the plan and program of Russia’s United Power System development for 2020–2026». 36 | ROSSETI Corporate Social Responsibility and Sustainability Report 2020 | 37 Sustainable Development Sustainable Development About the Group About the Group Management Progress Appendices
The rating is compiled by the World Energy Council (WEC). It → reports from the International Energy Agency (IEA) and the Transformation of the global energy sector leads, in turn, to the → access to the market of energy services, "behind the meter" includes 125 countries. The calculation takes into account 32 World Bank; revision of the priority directions of its development by industry goods and services in segments B2B and B2C (smart cities, performance indicators of the national energy policy, grouped → information from the Joint Organizations Data Disclosure leaders. Among the general trends, we also notice the following: smart homes, distributed energy, energy services, etc.); in three areas - energy security, equitable access to energy, Initiative (JODI); → transition from large investment strategies to strategies → expanding innovative opportunities through the acquisition of environmental sustainability. → public information and responses from the representatives of based on efficiency, customer-centeredness (introduction of companies that have new competencies. The World Energy Trilemma Index is based on open global and the responding countries. new services) and business diversification (access to related For the Russian energy industry, the changes unfolding on a global country data: segments); The main objective of the index is to track the comparative scale are fully relevant. However, due to a number of factors (natural performance of measures taken to form a sustainable energy → redirecting investments to the development of RES (renewable conditions complicating the development of RES, low carbon energy industry, as well as to conduct a comparative performance energy sources) grids; prices, the industrial nature of the economy, etc.) changes are analysis of public policy based on the indicators of other occurring at a slower rate. participants.
Russian Long-Term Development Strategy till 2050
The Government of the Russian Federation is currently approving the Strategy for the long-term development of the Russian Federation with low greenhouse gas emissions until 2050.
It is expected that the implementation of the energy efficiency and environmental projects envisaged in the document with a multiple growth of the economy will ensure a decrease in the carbon intensity of the country's GDP by 8–10% by 2030 and by 40–50% by 2050. The planned measures include the following: → establishing new-generation smart heat, electricity and gas grids, including the possible energy storage, demand management, and widespread implementation of automatic weather-dependent consumption; → transport electrification; → reducing energy losses during transportation; → increasing the efficiency of energy use and metering among consumers.
"We have entered a new energy era. The global energy transition is now driven by 5D factors: decarbonization, decentralization, digitalization, democratization and demand-driven services. Eliminating the social consequences of accelerating the energy transition will contribute to establishing healthy, harmonious and happy energy societies". Secretary General and Executive Director of the World Energy Council (WEC) Angela Wilkinson
At the same time, it is worth noting that a number of major Russian of “smart city” regional projects, development of charging companies, including the ROSSETI Group, are striving to grow in infrastructure, and other projects aimed at energy saving, energy Long-Term Prospects of Industry Development innovative areas of the electric power industry (RES, microgrid, efficiency and consumer services). The current round of global energy development represents a → changing the consumption model – a conscious transition to energy storage systems) and related segments (implementation series of unprecedented changes in the industry based on the a more universal, convenient and environmentally friendly active development of technology. The most relevant and long- energy carrier, the use of energy-saving/ consumption Global warming is one of the key risk factors for the electricity market. Rising temperatures in the autumn-winter term trends are: optimizing technologies; period can lead to a reduction in electricity consumption and, as a result, a decrease in the revenue of power grid → decentralization – development of distributed generation, → transforming consumers from passive to active service users companies. The main way to hedge this risk is by developing new types of business not directly related to heat- distributed storage/ energy accumulation; who want to manage energy consumption through advanced dependent energy consumption, such as electric charging infrastructure, demand management technologies, → digitalization – improvement of grid management and technologies in real time. participation in lighting projects for cities and villages, engineering services, etc. monitoring structure, introduction of smart technologies;
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GRI 102-7 Sustainable Development in Business Model*
STRATEGIC Reliability and quality of power → Improved efficiency Digital transformation Business diversification Balance of interests of the state/ PRIORITIES of the core business supply at the specified level consumers/ shareholders/ investors
Resources Results Contribution to the Value change comparing to the previous year for Stakeholders Achievement of UN SDGs (dynamics)
Length of grids, bn km 1.3% The volume of electrical supply to grid – 2.4 803.5 bn kW•h Sustainable Development Activities Ensuring continuity of operation of Пsaidi – 1.4 h Number of substations, thsd pcs. 528 2.1% the country's electric grid sector Пsaifi –1.1 unit Substation transformer capacity, GVA 809 0.9% 65 digital infrastructure facilities put into operation
PRODUCTIVE CAPITAL 4 OPERATIONAL ACTIVITIES 3 Adjusted EBITDA, 288.5 bn RUB Total capital, bn RUB 1,623.3 2.5% Maintaining financial Net profit,61.2 bn RUB Transmission and Technological 2 Loans, 0.3% stability and creating Increase in capitalization by 27.4 % bn RUB 564.2 2 distribution of electricity connection shareholder value 49.96 bn RUB of taxes paid to budgets of all levels Other liabilities, bn RUB 8% FINANCIAL CAPITAL 543.4 23 bn RUB of dividends paid on the results of 2019 INVESTMENT ACTIVITY 6 Average number of personnel of power grid SDCs, Construction of new Technological maintenance Ensuring respect for thsd people 212.2 0.19% 3 power grid facilities and repair workers' right to professional Salary budget more than 150 bn RUB development, safe work and Share of trained employees – 78% Share of employees under the age of 35, -3.7% fair remuneration HUMAN CAPITAL % 27.4 Digital transformation ENVIRONMENTAL ACTIVITIES Water consumption volume, thsd m3 -3.8% 2,227 Environmental protection costs – Complying with high Rational water 483.2 mn RUB Total consumption of energy resources for own needs, GJ environmental safety standards Waste minimization Reduction of pollutant emissions into the 350.3 -4.9% and land use and preserving biodiversity atmosphere by 3.9% NATURE CAPITAL NATURE Land in use, ha 58.7 -35.0% Biodiversity Energy saving 1 7 8 conservation and energy efficiency 1 Strategic joint-stock company 5 Credit ratings at the level of sovereign ratings of the Russian High-end borrower Climate change mitigation Maintaining the reputation Federation An international issuer with a listing of shares and of a responsible partner and 7++ National Corporate Governance Rating SOCIAL CAPITAL depositary receipts on the Moscow, London and Berlin SOCIAL ACTIVITIES counterparty 35 thsd procurement procedures conducted totaling 635 bn RUB
RELATIONSHIP RELATIONSHIP Exchanges (incl. VAT) Competitive salary Employee social security
Number of partner universities 0% 135 Employee professional Developing and implementing and certificates obtained 4 Taxes 35 patents Number of patents in companies of the ROSSETI Group development advanced technologies CAPITAL to improve efficiency 0.32% of revenue are invested into R&D
INTELLECTUAL 35 75% Charity
SUSTAINABLE DEVELOPMENT RISKS SUSTAINABLE DEVELOPMENT OPPORTUNITIES
* Business model overall 1 Absence or failure of electricity meters 4 Geographical features of a country or region, 7 Involvement of the Company/ employees in 1 Expanded use of electricity meters 3 Opportunities related to the geography of the country including increased risk of natural disasters corruption regions of the Company's presence version is presented in the Annual Report 2020 Violations by the Company/ employees of the Implementation of employees' rationalization 2 Bankruptcy and liquidation of counterparties 5 8 2 4 Climate change main prohibitions and restrictions of antimonopoly New promising counterparties proposals legislation 3 Contractors' failure to comply with the 6 Occupational accidents in the ROSSETI Group deadlines of drafting, supply, construction, and launching of facilities
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Sustainable Development Management
44 Approach to Sustainable Development Management 60 Sustainability Risk Management System 70 Approach for Stakeholder Engagement 96 Approach to the Implementation of the UN Sustainable Development Goals
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GRI 103-2 GRI 103-3 Approach to Sustainable Development Management Code of Corporate Ethics and Employee Conduct
GRI 102-16 The key document regulating the norms and rules of professional employees of the ROSSETI Group, regardless of their position, and Corporate Culture, Ethics and Values ethics and intra-corporate conduct at PJSC ROSSETI is the Code reveals the principles of the Company's work in such important of Corporate Ethics and Employee Conduct (Code of Ethics1). The areas as prevention of corruption, prevention of conflicts of Ethical business behavior is at the heart of the corporate culture Code of Ethics is updated in a timely manner in accordance with interest, ethics of conduct for the management, interaction with and values of the ROSSETI Group and is a prerequisite for current legislation. Similar documents have been approved in all shareholders and investors, occupational safety and employee maintaining trusting and open relationships with stakeholders. subsidiaries. health, and environmental protection. The ROSSETI Group does not deviate from its values for the sake The Code of Ethics defines the Company's work in the field of All employees of the ROSSETI Group are familiarized with the of additional advantages or benefits and expects the same from sustainable development, and contains corporate rules and norms Code of Ethics. For contracting companies and individuals working its partners. of conduct for the Group's employees, consistent with the values under civil agreements with PJSC ROSSETI, the Code of Ethics is a and principles of PJSC ROSSETI. The Code of Ethics applies to all recommendation. Central Commission for Corporate Ethics and Settlement of Conflicts of Interest Major Elements of the The Central Commission for Corporate Ethics and Settlement of In 2020, more than 56,700 audits of legal entities were undertaken Corporate Culture Conflicts of Interest is responsible for enforcing the provisions of in the ROSSETI Group; more than 970 negative opinions were the Code of Ethics. Its area of competence includes resolution of issued; more than 32,000 inspections of individuals were organized pre-conflict situations and settlement of conflict of interest, as well during hiring or transfer to another position, including checking for as examination of possible violations of the norms of corporate conflicts of interest; and more than 1,010 negative opinions were CORPORATE CULTURE ethics and standards of corporate conduct in the Company. PJSC issued. OF THE ROSSETI GROUP ROSSETI's subsidiaries have similar Commissions for Corporate Since 2017, the ROSSETI Group have had a system of electronic Ethics and Settlement of Conflicts of Interest. declaration of conflict of interest, which records and analyzes data for previous years. Its implementation has significantly expanded the reach of workers assessed for possible conflicts of interest. questionnaires
Corporate Values Code of Ethics
Reliability Professionalism • Highly reliable and uninterrupted power supply • Application of professional skills and for the needs of the economic and social competencies sectors of the Russian Federation • Creation of a highly professional production environment
Human Resource Integrity and Responsibility • Importance of each and every employee • Highly responsible performance of duties Number of Employees Who Filled in Declarations in • Equal opportunities for all employees regardless of gender, age, • Elimination of negligence and errors the System of Electronic Declaration of Conflict of ethnicity, nationality and position in the Company In 2020, 52.5 thsd employees participated Interest, pers. • Equal opportunities for professional development and career growth in the declaration of conflicts of interest for • Favorable conditions for development of labor dynasties 52,520 52,543 48,600 • Sharing the knowledge and traditions with young employees 2019, which is 11.8% more than in 2019. In 2021 it is planned to reduce their number to 46,675 48.6 thsd. 39,384 Efficiency Communication and Cooperation • Commitment to continuous improvement of efficiency and • Long-term cooperation with business partners in full compliance with profitability for the benefit of shareholders, investors and the current legislation and corporate rules In 2020, 12 situations of conflict of interest partners and 182 pre-conflict situations were identified by the results of the analysis of data of the Security Image and Reputation electronic conflict declaration system for 2019. • • Strictly regulated and balanced approach to the implementation • Management decisions and actions aimed at maintaining a positive image of the All identified cases have been settled. 2017 2018 2019 2020 2021 of security measures ROSSETI Group (plan) • • Prevention of possible violations • Prevention of the situations that may adversely affect business reputation of the ROSSETI Group 1 The Code of Ethics was developed on the basis of Federal Law No. 273-FZ dated December 25, 2008 “On Combating Corruption”, the Corporate Governance Code approved by the Board of Directors of the Bank of Russia on March 21, 2014, Methodological Recommendations for Development Social Responsibility Confidentiality and Adoption by Organizations of Measures to Prevent and Combat Corruption, approved by the Ministry of Labor and Social Protection of the Russian • Great attention to issues of the environmental and labor protection • Protection of confidential information (trade secrets, insider information, etc.), the loss Federation on November 8, 2013, the Strategy for the Development of the Electric Grid Complex of the Russian Federation, approved by Order of the Government of the Russian Federation No. 511-r dated April 3, 2013 , the Anti-Corruption Charter of Russian Business, and ROSSETI's local regulations. • Implementation of social programs (leakage) of which may undermine the ROSSETI Group’s reputation The Code was approved by decision of the Board of Directors dated February 22, 2017, Minutes No. 252. • Compliance with information disclosure legislation 44 | ROSSETI Corporate Social Responsibility and Sustainability Report 2020 | 45 Sustainable Development Sustainable Development Sustainable Development Management About the Group Management Progress Appendices
Sustainable Development Priorities and Corporate KPI System Successful development of the Company in line with sustainability → calculation of KPIs of PJSC ROSSETI's Director General, taking priorities requires a relevant system of key performance indicators. into account consolidated data on subsidiaries and affiliates; The Company's current KPI system provides: The ROSSETI Group's priorities in the field of sustainable → improving energy efficiency, protecting the environment and → distribution of the Director General's award indicators to development are formed on the basis of the Strategy for combating climate change; → quarterly and annual awards of all senior managers of the other managers of the Company with the establishment of 1 Company depending on the degree of performance of KPIs specific shares and target values of indicators for each of the Development of the Electric Grid Sector and the Development → protecting the rights and considering of the interests of all established by the Board of Directors; managers; Strategy of PJSC ROSSETI and its subsidiaries and affiliates for the stakeholder groups; period up to 20302. These include: → a share of each KPI in the amount of bonuses paid; → possibility of adjusting the composition of the indicators if → caring for staff, including by creating opportunities for the instructed by the state authorities and the Board of Directors of → ensuring the reliability, quality and accessibility of electric professional development of each employee, the development → annual approval of target values of the indicators by the Board PJSC ROSSETI. supply for consumers; of a corporate culture, and compliance with industrial safety of Directors; → improving operational and investment efficiency, technological standards. More information about the KPI system operating in the and innovative development; companies of the ROSSETI Group is disclosed in ROSSETI's 2020 Annual Report, section KPI System. Performance Evaluation (p. 68–70).
Sustainable Development Priorities: Implementation in 2020 and long-term plans
Works carried out in 2020 Results achieved in 2020 Interim targets for 2024 Long-term targets for 2030 Priority 1:
KPIs for 2020: → The total number of technological violations in the grid at a 110 kV level and → achieving the level of the reliability of services of ≤ 1.00; Ensuring the reliability, quality and above was reduced by 3% (to 9.3 thsd). Пsaidi, hour = 2.0; Пsaidi, hour = 1.6; → compliance with the timing of technological connection of ≤ 1.7; accessibility of electric supply for → Пsaidi was improved by 22% (to 1.4 hours). Пsaifi, unit = 1.0. Пsaifi, unit = 0.85. → launching facilities on schedule ≥ 90% of the time; consumers → Пsaifi was improved by 8% (to 1.1 unit). → readiness to work in the heating season.
Accident Rates → Investment projects for the construction and reconstruction of substations and power grids in various regions of the country have been implemented. 1.3 → Maintenance and repair programs have been implemented in all subsidiaries and affiliates. 2.4 1.2 → The planned volumes of the Program for Modernization (Renovation) of Power Grid Facilities in all subsidiaries have been 1.8 1.1 completed. → The ROSSETI Group is ready to prevent and eliminate emergency situations. Special headquarters for prevention and provision of 1.4 quick response to the spread of coronavirus infection was formed and started its activities to monitor the situation on the ground.
2018 2019 2020 Пsaidi, an average duration of interruption in the power supply, hour Пsaifi, an average frequency of interruptions in power supply, pcs.
10.9 9.6 9.3
2018 2019 2020 Number of disturbances (outages) in a 110-kv grid, thsd
1 Approved by Order of the Government of the Russian Federation No. 511-r dated April 3, 2013. 2 Approved by the decision of the Board of Directors dated December 26, 2019, Minutes No. 388.
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Works carried out in 2020 Results achieved in 2020 Interim targets for 2024 Long-term targets for 2030 Priority 2: Improving operational and investment KPIs for 2020: → The CAPEX figures were reduced to 30% by cutting the cost of information transmission → 10% reduction of specific → 10% reduction efficiency, technological and innovative → reduction of unit operating expenses (costs); and grid organization. OPEX (compared to 2018); of specific OPEX development → return on invested capital of ≥ 95.0%; → The OPEX figures were reduced by more than 2% compared to 2019. → Ensuring R&D costs up to (compared to 2018); → efficiency of innovation activity of ≥ 90%; → Enhanced reliability of electricity supply to consumers due to the use of energy storage 0.25% of the revenue. → Ensuring R&D costs → decrease in receivables of ≤ 100%; systems. up to 0.25% of the → completion of all activities under the Subsidiaries and Dependent Companies revenue. Development Plans. → In 2020, the share in MRR in regions of presence grew to 73.5%. A set of measures within the following framework have been taken: → programs of digital transformation of the ROSSETI Group until 2030; → innovative development programs; → policies of innovative development, energy saving and improving energy efficiency; → programs for the development of smart electricity metering; → electricity grid asset consolidation programs. A Smart Electricity Metering Introduction Program was developed by PJSC ROSSETI, aimed at reducing the level of electricity losses in subsidiaries' grids, and a roadmap for its implementation was approved. Projects completed in 2020: → A Smart Electricity Metering Introduction Program was developed by PJSC ROSSETI, aimed at reducing the level of electricity losses in subsidiaries' grids, and a roadmap for its implementation was approved. → Projects completed in 2020: Ongoing projects at the end of 2020: → "Digital Electrician"; → Mobile application for the customers of ROSSETI Moscow Region; → 110-kV digital overhead power line; → "Digital Power Engineer"; → Software method for identifying unaccounted volumes of electricity; → System of calculations based on the blockchain technology, which involves the creation of a united decentralized system of smart accounting and storage of calculations for supplied electrical energy. Priority 3: Improving energy efficiency, protecting KPIs for 2020: 2020 vs. 2019: Power grids losses reduction Power grids losses reduction the environment and combating climate → power loss rate ≤ 8.68%. → water intake decreased by 3.4%; to 7.8%. to 7.34%. change → air pollution decreased by 3.7%; → the volume of soil restoration grew by 35.8%; → the volume of hazardous substances formed decreased by 2.1%; → Works were carried out in accordance with the program documents in the fields of energy efficiency, innovative development, and in accordance with → the number of installed bird protective devices grew by 21.5%; unified technical and environmental policies. → the amount of fines imposed for the year for violation of environmental protection requirements decreased by 39.6%. → The energy management systems of PJSC ROSSETI's subsidiaries are now in line with the requirements of the new edition of ISO 50001:2018 standard. → 13 charging stations for electric vehicles were installed on the M-11 Neva motorway, and 53 ultra-fast charging stations for electric buses were installed Losses reduction in power grids, % in Moscow. 9.0 → 9 projects have been implemented for the installation of small and medium power storage systems at the sites of PJSC ROSSETI’s subsidiaries. → 6% of PCB-containing equipment has been transferred to licensed organizations for destruction. 8.6 8.6
2018 2019 2020
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Works carried out in 2020 Results achieved in 2020 Interim targets for 2024 Long-term targets for 2030 Priority 4: Maintaining stable business relationships KPIs for 2020: PJSC ROSSETI's ordinary shares are included in the main MosExchange Index (IMOEX)1. Growth of capitalization Growth of capitalization with stakeholders, including → total shareholder return ≥ MOEX EU index change for the reporting period; Updated ratings: to 500 bn RUB. to 1 tn RUB. shareholders, investors, creditors, local → growth rate of operating profit (EBITDA) ≥ the average annual growth rate → ACRA (highest level) – AAA (ruAAA), "stable" outlook. communities and other interested parties of regulated tariffs of grid organizations according to the Forecast of Socio- → S&P Global (sovereign level) – BBB- (RU), "stable" outlook. Economic Development of the Russian Federation; → Moody's (sovereign level) – Baa3 (RU), "stable" outlook. → debt/EBITDA actual for all subsidiaries ≤ debt/EBITDA target. → AK&M (sustainability rating on the national scale) – A++, the highest degree of When interacting with stakeholders, our priority is to maintain a reputation as a responsible and reliable business partner. sustainability, the risk of damaging the opportunities of future generations is absent. There is no violation of generally accepted standards of business ethics, and a zero-tolerance policy of corruption, commercial bribery, abuse of authority and fraud → NP “Russian Institute of Directors” (national rating of corporate governance) – NRCG 7++ is observed. “A developed practice of corporate governance”. The issue of BO-001R-02 series bonds in April 2020 at a historically low coupon rate for market issuance for a comparable period among corporate borrowers for the entire period of debt of the Russian capital market was recognized as the “Best Initial Public Offering in the The ROSSETI Group's tax Energy Sector” for 2020. deductions in 2020 (IFRS) 46,509 mn RUB
Debt Investments Attracted under the Bonds of PJSC ROSSETI's Tax Deductions in 2020 (RAS) Subsidiaries, bn RUB 8 5 429.0 10
Total Total 88 1,307 15 bn RUB bn RUB 30 20 877.6
FGC UES, 3 bond issues To the federal budget ROSSETI, 2 bond issues To regional budgets ROSSETI Moscow Region, 2 bond issues ROSSETI Lenenergo, 2 bond issues IDGC of Center and Volga Region, 1 bond issue IDGC of Center, 1 bond issue
Dividend Payable, bn RUB 17,992.2
5,023.3 2,467.9
2018 2019 2020 (for Q1 2018) (for Q1 2019) (for the full year of 2019)
1 According to the results of the Moscow Exchange Index Committee meeting dated August 26, 2020. 50 | ROSSETI Corporate Social Responsibility and Sustainability Report 2020 | 51 Sustainable Development Sustainable Development Sustainable Development Management About the Group Management Progress Appendices
Works carried out in 2020 Results achieved in 2020 Interim targets for 2024 Long-term targets for 2030 Priority 5: Manpower care, including creating KPIs for 2020: → Productivity growth for 2020 totaled 5.441. Increase in productivity by 20% Increase in productivity by opportunities for the professional → increase in productivity ≥ 2.00%. → The average salary of employees totals RUB 60 thsd, 5.4% above the level of 2019. (year-on-year). 50% (year-on-year). development of each employee, the development of a corporate culture, and compliance with industrial safety standards Despite the restrictions caused by the spread of COVID-19, the work on professional development and advanced training of employees continued in 2020: → 2.5 thsd employees' managerial competencies, personal and business qualities were assessed, and received recommendations for career development; → 42 thsd employees have passed certification checks using automated software and simulation trainers; → the talent pool exceeded 20 thsd people; → 73% of vacancies for senior positions are staffed by internal candidates; → 87% of electric grid companies of the ROSSETI Group's staff (over 184.7 thsd people) took part in training, retraining and advanced training programs; → remote training was organized for more than 115.2 thsd workers; → a new center for assessing power grid qualifications in ROSSETI Moscow Region was opened. Work was carried out in accordance with the Injury Risk Reduction Program in subsidiaries and for third parties for 2018–2020. An analysis of industrial accidents was conducted; an action plan aimed at preventing similar incidents has been developed and implemented. During the coronavirus pandemic, a set of measures for maximum protection of personnel were adopted in a timely manner: → as many employees as possible have been transferred to remote work with the same payment conditions; → more than 175 thsd workers have been tested for coronavirus infection; → daily cleaning and disinfection of premises and vehicles is ensured; → all employees are provided with protective equipment; → all rooms are equipped with sanitizers; → meetings, training and other events are held online.
1 For 2020, the expected level of KPI achievement is given, taking into account the timing and procedure for reporting, which is the source of information for KPI calculation. The final actual values are approved by PJSC ROSSETI's Board of Directors.
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GRI 102-18 Corporate Sustainability Management System Key Corporate Governance Bodies for Sustainable Development General Principles of Sustainable Development Effective management of sustainable development is impossible without improving corporate governance. Respect for the rights and legitimate PJSC ROSSETI's key corporate governance bodies are the General Meeting of Shareholders, interests of shareholders, investors the Board of Directors, the Management Board and the Director General, who are responsible and stakeholders of the Company for the approval of decisions affecting all areas of the Company's activities and determining the course of its development.
Information and financial General Meeting of Shareholders transparency of the Company 's activities The General Meeting of Shareholders is the highest governing body of PJSC ROSSETI. Despite the prevailing share of the state in the authorized capital (88.04%), the Company strives to provide the most comfortable conditions for effective participation of all shareholders in the General Meetings. Predictable dividend policy The ROSSETI Group occupies a leading position in the country's electric industry, which defines its key role as a conductor of state policy in the industry and implies its increased responsibility in social matters, and responsibility to consumers. This is reflected in decisions made by the General Meeting of Shareholders.
Efficient and professional Board of Directors, accountable to shareholders Board of Directors The Board of Directors manages the Company in strict accordance with the principles of shareholder rights protection, transparency, and information openness. The Board of Directors determines the Company's directions of development in all areas, including sustainable development, and is responsible Consistency and collegiality of the to shareholders for their implementation. decision-making process The Board of Directors is entrusted with the functions of monitoring and evaluating the effectiveness of the Company's management in priority areas, including those linked to sustainable development. In order to better advance the issues, the Board of Directors has four Committees - Strategy; Audit; Nomination and Remuneration; Investment, Technical Policy, Reliability, Energy Efficiency and Innovation). Zero tolerance for corruption The Board of Director' members are elected by the General Meeting of Shareholders from candidates and fraud proposed by shareholders holding at least 2% of the Company's voting shares, as well as candidates included in the list of candidates by the Board of Directors at its discretion. The Chairperson and individual members of the Board of Directors, as well as representatives of the major shareholder (Rosimuschestvo, on behalf of the Russian Federation) take part in the discussion High standards of business ethics of proposals for candidates to the Board of Directors. The main criteria for selection are the need to and compliance procedures ensure a balanced composition of the Board and the availability of the necessary knowledge, skills, and As part of competencies among candidates. PJSC ROSSETI's The Nomination and Remuneration Committee plays a special role in the consideration of nominations, carrying out an independent assessment and noting the conformity of candidates to the criteria of corporate structure, independence, the availability of special skills to meet regulatory requirements and compliance Minimization and settlement of functions are delegated and provisions (especially in finance and investment, strategic management and industry expertise). corporate conflicts responsibility is redistributed The share of independent directors is ensured at a level that allows us to guarantee the balance of on issues related to sustainable interests of shareholders' representatives on the Board of Directors. development in the economic, Occupational safety and environmental and social spheres. environmental protection Operational management of the Sustainability Management at the Executive and implementation of approved plans Operational Levels and programs, as well as monitoring of For more information on The Board and the Director General manage the Company's current activities and are the governing bodies, their results obtained is carried out at the level of powers and composition, as Developed corporate culture responsible for the development and implementation of plans in all areas, including and practice of corporate social functional subdivisions of the ROSSETI Group. well as the activities in 2020, sustainable development. Each of the Deputies to the Director General oversee see ROSSETI's 2020 Annual responsibility specialized areas of responsibility. Report.
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Sustainable Development Management GRI 102-22 Identification of priority activities and strategies, including in the Members of the Board of Directors field of sustainable development According to the results of the annual General Meeting of As of December 31, 2020, PJSC ROSSETI's Board of Directors Realization and protection of shareholders’ rights Shareholders held in 2020, 12 members of the current Board consisted of a Chairperson (non-executive director), two Ensuring effective operation of internal control and risk management systems Support for decisions made by the Board of Directors of Directors were re-elected for a new term and three new executive directors, seven non-executive directors and five members of the Board were introduced in order to strengthen independent directors (all Board members are citizens of the General Meeting of Shareholders Strategy Committee individual competencies. Russian Federation).
Board of Directors Nomination and Remuneration Committee Information about the Board of Directors' Members and Activities as of December 31, 2020 GRI 405-1 Management of current activities Committee on Investment, Technical Policy, Reliability, Committee on Investment, Technical Policy, Reliability, Energy Efficiency and Innovation Management Board Energy Efficiency and Nomination and Indicator Board of Directors Strategy Committee innovation Remuneration Committee Audit Committee Director General Audit Committee
Number of members 15 10 10 5 4
Formulation of the Development Strategy until Ensuring sustainable development Ensuring sustainable development in the 2030 and the Long-Term Development Program in the social sphere economic sphere 1 non-executive director of PJSC ROSSETI and Its SDCs until 2030 1 independent 8 non-executive 2 independent directors Procurement management 1 member of the Strategy Department Ensuring compliance with ethical corporate conduct Personnel 2 executive Anti-corruption 1 member of the Management Management Board 5 independent 4 independent Central Procurement Commission Board Settlement of conflicts of interest 5 independent 9 others Development of the concepts in the field of 6 others sustainable development Department of Master Planning and Procurement Management Organization of media coverage of the ROSSETI Gender Group’s sustainable development activities Central Commission for Corporate Ethics and composition 15 men 9 men 1 woman 11 men 5 men 4 men Settlement of Conflicts of Interest
Investor Relations Department Total 53: Total 24: Total 10: Total 12: Total 15: Production activity and sales control Number and Security Department structure of 5 in-person 10 in-person 7 in-person 1 in-person 2 in-person Department of Grid Connection Risk management and Infrastructure Development meetings 48 absentee 14 absentee 3 absentee 11 absentee 13 absentee Department of Internal Control and Human resource Department of Service Implementation Age structure Up to 30 – none; Up to 30 – none; Up to 30 – none; Up to 30 – none; Up to 30 – none; Risk Management 30–50 – 8 people; 30–50 – 10 people; 30–50 – 9 people; 30–50 – 2 people; 30–50 – 2 people; Human Resorces Department Department of Technical Policy 50+ – 7 people 50+ – none 50+ – 2 people 50+ – 3 people 50+ – 2 people Stakeholder engagement Staff Training Center Department of Digital Transformation Competencies and education Experience in Work on the Electric Corporate Corporate Governance Department Directorate of Social Programs Directorate of Production Control the industry, Board of Finance, risks power IT/ governance Member of the Board of Directors years Directors, years Strategy and audit industry innovations GR and law Financial administration Novak Alexander Valentinovich Department of Public Relations and Media 8 6 Non-executive Director Labour protection and occupational safety Accounting and Reporting Department Government Relations Department Ashirov Stanislav Olegovich Branch of ROSSETI - Technical Supervision Center 14 7 Department of Finance Non-executive Director Ayuev Boris Ilyich Customer and Market Interaction Department 39 8 Department of Investment Planning and Reporting Non-executive Director Ensuring sustainable development in the environmental sphere Bystrov Maksim Sergeevich Department of International Cooperation 34 2 Internal control Independent Director Protection of the environment and Dmitriev Kirill Aleksandrovich enhancement of energy efficiency Audit Committee Investor Relations Department (from June 1, 2020) 1 Ist year Branch of ROSSETI – Technical Supervision Center Internal Audit Department Non-executive Director Dubnov Oleg Markovich Department of Grid Connection and Infrastructure 7 4 Development Department of Internal Control and Risk Management Independent Director Kalinin Alexander Sergeevich 8 7 Independent Director Livinsky Pavel Anatolievich 17 3 Executive Director Manevich Yuri Vladislavovich Operational management of sustainable development issues 20 2 Implementation and monitoring of sustainability management decisions made at higher levels of management Non-executive Director Murov Andrey Evgenievich 8 8 Functional divisions of the ROSSETI Group Executive Director Rasstrigin Mikhail Alekseevich 17 3 Non-executive Director 56 | ROSSETI Corporate Social Responsibility and Sustainability Report 2020 | 57 Sustainable Development Sustainable Development Sustainable Development Management About the Group Management Progress Appendices
Rogalev Nikolay Dmitrievich GRI 102-12 34 5 Management Systems Used by the ROSSETI Group Non-executive Director Furgalsky Vladimir Vladimirovich In managing the sustainability, the ROSSETI Group is guided by Management of occupational safety and employee health is (from June 1, 2020) 10 Ist year three international standards: ISO 9001:2015, ISO 14001:2015, performed in accordance with PJSC ROSSETI's internal standard, Non-executive Director and ISO 50001:20181. taking into account the state regulatory requirements in this area Sharonov Andrey Vladimirovich and recommendations of the International Labor Organization on (from June 1, 2020) 2 Ist year the system of industrial safety and labor protection. Independent Director Shmatko Sergey Ivanovich 14 8 Non-executive Director Corporate Sustainability Management System
Comment: All members of the Company's Board of Directors have competencies to the experience, or education, Improving the reliability, quality and safety of energy professional knowledge and competencies in key areas such as fullest extent or skills supply and the quality of technological connection strategic management, finance and industry specifics. The assessment services for consumers of competencies in other areas is based on the presence of specialized Biographies of the members of the Board of Directors and education, experience or skills of the Board members recognized by the changes during the reporting year are presented as part of professional community, where the following are present: PJSC ROSSETI's Annual Report.
Preventing the Conflict of Interest of Board Members ISO 9001:2015 and GOST R ISO 9001-2015 The list of cases indicating conflict of interest of members of the of Directors. As part of the organization of work of the Board Quality Management Board of Directors is determined by the Regulations for the Board of Directors, the Chairperson of the Board of Directors and the System of Directors and the Company's Code of Ethics. These documents Corporate Secretary take the necessary measures to form the Occupational oblige members of the Board of Directors to refrain from taking most comfortable and constructive relations between the Board Ensuring part in decision-making on issues in respect to which they have members in order to develop informed and objective decisions. safety management Ensuring occupational system of ROSSETI a conflict of interest, as well as to inform the Board of Directors In 2020, there were no cases of conflict of interest among safety and health, (developed in accordance with environmental including reduction ISO 14001:2015 and safety of about such situations. members of the PJSC ROSSETI Board of Directors. the state regulatory requirements in the total number of occupational safety, Russian GOST R ISO 14001-2016 production Every quarter, the Corporate Secretary monitors the possibility of of occupational and international standards Environmental Management activities conflicts of interest by analyzing the questionnaires of the Board accidents and recommendations of System the International Labour Organization under Changes Introduced to the Company's Sustainability Management System in the OHS system)
2020 ISO 50001:2018 PJSC ROSSETI is constantly improving and developing its In addition to the preparation of the Corporate Social Energy Management System sustainability management system, taking into account advanced Responsibility and Sustainability Report, a number of objectives Russian trends and best international practices. This contributes were set there for analyzing the best practices of socially to enhancing the efficiency of management processes and the responsible investing and opportunities for their implementation transparency of the Company's work for stakeholders. across the ROSSETI Group, for assessing the investment Thus, in December 2020, all issues related to the disclosure, attractiveness of the Company for socially oriented funds; and for analysis and evaluation of information in the field of sustainable helping the Company to obtain ratings and get into sustainable development indices. Improving the energy efficiency of production development of the ROSSETI Group were drawn up as a separate activities task and delegated to the Investor Relations Department of PJSC ROSSETI. In the course of the reporting year, following the results of the → high staff competence; audit, PJSC ROSSETI received certificates of compliance with → good social support; international standard ISO 9001:2015 and national standard Internal Regulatory Documents → improving the effectiveness of the staff training system. GOST R ISO 9001-2015 for the next three-year period, and also 2 PJSC ROSSETI approved the following internal documents → Environmental Policy of the Electric Grid Sector ; confirmed the previously issued certificate of conformity to The synchronization of internal and external audits of our regulating sustainable development issues: → Occupational Safety Policy of the ROSSETI Group3; international standard ISO 14001:2015 and national standard management systems and the organization of audits in the 1 context of restrictions associated with the spread of the → Development Strategy of ROSSETI ; → Partnership Program between the Company and SMEs; GOST R ISO 14001-2016. The audit was carried out by experts of the Russian Register Certification Association. coronavirus received positive evaluation. → Unified Technical Policy in the Electric Grid Sector (including → List of pilot projects within the Digital Transformation 2030 As part of activities to develop and expand the use of sustainable the provision on energy saving and improving energy Concept. The auditors noted the strengths of our management systems: development management systems, PJSC ROSSETI is working efficiency); → focus on increasing the reliability of grid facilities and on the implementation of standard ISO 56003:2019 (innovative improving operational performance; development management system). → providing innovative development, including a course for 1 Approved by the decision of the Board of Directors dated December 26, 2019, Minutes No. 388. digital transformation; 2 Approved by the decision of the ROSSETI Board of Directors No. 422 dated July 20, 2020. 3 Approved by Order of ROSSETI No. 143 dated August 30, 2018. 1 The Occupational Safety Management System of PJSC ROSSETI was developed taking into account OHSAS 18001:2007, OHSAS 18002:2008 and ISO 45001 standards.
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Risk Management System (RMS) Participants
Participants Responsibilities and authorities → Approves the Company’s Risk Management Policy, internal documents that determine the strategy for organizing and developing the Company’s RMS, as well as a preferred risk (risk appetite). Board of → Reviews reports submitted by the executive bodies on RMS organization, operation, and effectiveness, evaluates Directors the system’s operation and prepares recommendations to improve the RMS on an annual basis. → Review of reports submitted by internal and external auditors on RMS quality and efficiency on an annual basis. Audit → Conducts preliminary evaluation of issues related to RMS performance before including them in the meeting Committee of agenda of the Company’s Board of Directors. the Board of Directors
Audit → Prepares proposals and recommendations to improve the RMS based on the results of the audit. Committee
→ Approves the risk register, risk maps, as well as a plan of actions for risk management. → Defines the strategy and plans for developing and improving the RMS. → Submits preferred risk (risk appetite) for the Board of Directors approval. GRI 102-15 Management → Reviews the results of an external and internal independent evaluation of the RMS status and effectiveness. GRI 103-2 Sustainability Risk Management System Board → Submits annual report of the executive bodies on the organization, operation, and effectiveness of the RMS for the Board of Directors examination. Risk Management Approach → Distributes powers and responsibilities for the field-specific procedures of risk management between the heads of the Company's divisions. The Company's activities are subject to risks caused by external The central body for controlling the PJSC ROSSETI RMS is and internal factors. One of the most important tasks of the Board of Directors. It is competent to approve the Risk → Ensures effective risk management as part of ongoing activities. PJSC ROSSETI, one of the factors of the Company's sustainable Management Policy, define the strategy for the organization → Approves internal methodological documents on the organization, RMS functioning, and risk management as Director development is timely identification, forecasting and assessment and development of the RMS, approve the level of preferred well as assessment and management of certain types of risks. General of different types of risks. risk (risk appetite) and review the results of internal and → Submits annual report of the executive bodies on the organization, operation, and effectiveness of the RMS for the Board of Directors examination. The current risk management system (RMS) of the ROSSETI Group external independent assessment of the RMS effectiveness. The contributes to the effective achievement of the strategic goals of PJSC ROSSETI executive bodies ensure the establishment and maintenance of the effective functioning of the Company's RMS. → Perform the functions of timely risk identification and risk assessment. the holding, improvement of labor productivity, ensures the safety → Select methods for risk response. of labor and production processes, improvement of the quality The structural divisions of the Company – owners of risks – carry → Timely development and organization of risk management. of customer service and maintenance of the Company business out operational risk management, including timely identification → Regular monitor risks. Risk owners standing. The PJSC ROSSETI RMS has been developed taking and assessment, selection of response method, development and → Timely inform executive bodies on the results of risk management work. into account current national and international risk management organization of specific risk management activities. If the risk → Interact with the Department of Internal Control and Risk Management in terms of the work with documents and standards1. management process affects the activities of several structural reporting prepared as part of the risk management process. The RMS lays the foundation for the development and units, decisions are made collegiately. The Department of Internal implementation of the Company's strategy in all areas, Control and Risk Management ensures the building of a unified Officers including sustainable development, and is an integral part of the policy and methodology in the field of risk management, as well responsible → Minimize risks in accordance with the official instructions and established regulatory documents. PJSC ROSSETI decision making system at all management levels. as coordinates the risk management process. for risk → Implement measures to manage risks in time and in full. management The ROSSETI RMS key objective is to attain a favorable balance measures between the preferred risk (risk appetite) and the development strategy. Preferred risk assessment takes place at the stage of → Coordinates risk management process. setting goals and developing strategic alternatives, as well as in → Develops methodological documents in the field of ensuring the risk management process. the development of risk management mechanisms. Department of → Trains employees in the field of risk management; Internal Control → Analyzes the risk portfolio and provides proposals for a response strategy with regard to them. The ROSSETI Group has approved methodological documents on and Risk → Generates reports on risks. risk management, including the Risk Management Policy2, the Management → Ensures operational control over the risk management process in the structural divisions of the Company. Risk Management Regulations3, and formed risk registers and → Undertakes control measures in the Company in respect of RMS arrangement and functioning. action plans for SDCs risk management. → Prepares information on the effectiveness of RMS and reports this information to executive bodies. → Makes an internal independent effectiveness evaluation of the RMS and provides recommendations to improve its efficiency and effectiveness. Internal Audit 1 → Informs the executive bodies, the Audit Committee and the Board of Directors on the results of the RMS status GOST R ISO 31000-2019, Risk Management. Principles and guidelines; GOST R 58771-2019, Risk Management. Risk Assessment Techniques; ISO 31010:2019, Risk Management. Risk Assessment Department Techniques, and in accordance with the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Concept of Enterprise Risk Management Integrating with Strategy and Performance, Risk and effectiveness evaluation on an annual basis. Management Standards of the Federation of European Risk Managers Associations (FERMA) and guidelines on risk management of state-owned companies. 2 Approved in the restated version by the decision of the ROSSETI Board of Directors dated November 23, 2020, Minutes No. 440. 3 Approved by the Order of ROSSETI dated March 26, 2020, No. 79r.
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Interaction Between the Participants of the Risk Management System (RMS) Classification and Evaluation of Sustainable Development Risks
Accountability General Meeting of Shareholders and Opportunities
Control divisions Informing about the Decision support The ROSSETI Group aims to meet the highest standards in sustainable development management and minimize possible results of inspections Board of Directors Audit Committee ESG risks. RMS Effectiveness Assessment Report Audit Committee of the Board Risks and opportunities are divided into three materiality levels determining their impact on the ROSSETI Group activities: Internal Audit Department of Directors Report on the organization, functioning and effectiveness of the RMS. Approval of the Risk Action plan to maintain the Management Policy, effectiveness and development of RMS. RMS development RMS Policy. strategy, risk appetite level Risk appetite. Informing about the moderate, risks and opportunities significant, risk or opportunity critical, risk or opportunity occurrence Audit Providing results of inspections do not have a material negative occurrence may lead to significant may lead to failure to achieve the Recommendations information RMS improvement Executive bodies suggestions or positive impact on financial and deviations of key performance goals set by management bodies, or Management Board economic performance, but they indicators, the short suspension their significant change, the prolonged Management require continuous monitoring for or significant change of activities, interruption or significant change of Ensuring operation Director General the timely identification of a possible lower or higher independent ratings, activities, negative media coverage of increase in risk or opportunity negative media coverage of activities; activities, lower or higher market prices materiality; of shares.
Providing information about Risk management divisions the effectiveness of RMS Coordination and methodology Management Department of Internal Control Risk owners - divisions of Officers responsible for risk and Risk Management PJSC ROSSETI and SDCs management measures Reporting and suggestions
More information on the risk management and internal control systems the ROSSETI Group Sustainability Risk Map discloses in the 2020 Annual Report of PJSC ROSSETI. Likelihood
1 6
HIGH
3 2 4 7 8 MEDIUM
LOW 5
Impact LOW MEDIUM HIGH
Dynamics' appraisal
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Classification and Evaluation of Sustainable Development Risks
Risk materiality Sustainable development risk Risk description Risk owners level Risk minimization measures in 2020 Risks associated with energy efficiency and energy saving → Technical Policy Department → Implementation of energy conservation and energy efficiency programs, including programs for reducing electricity losses and programs for promising development of electric power metering systems. 1. Absence or failure of A risk associated with possible losses due to untimely → Digital Transformation Department electric power metering detection of unaccounted consumption or failure of → Implementation and distribution of means of intelligent electric power metering, automated systems for collecting and processing data on the → Directorate of Production Control devices power grid equipment. indications of electric power metering devices, forming of electricity and capacity balances and volumes of electricity transmission services on the → Sales Department basis of these data. Risks associated with procurement and interaction with suppliers and contractors → Monitoring of contractors’ financial stability as well as initiated bankruptcy or liquidation procedures. 2. Bankruptcy → Legal Department → Preparing and timely filing of the Company's claims in debtor bankruptcy cases. and liquidation of → Internal Control and Risk Management → Challenging transactions under the rules of the Bankruptcy Act, Chapter III, Section 1 (if any). A risk associated with the deterioration of contractors’ counterparties Department → Consideration of issues on the balancing of payments to debtors, sale of debt to third parties, conclusion of a settlement agreement as part of debtor financial stability, which leads to delays or poor bankruptcy cases. maintenance of the power grid, delays in the supply 3. Delays in design, of components and materials or implementation of → Claim related work with contractors who violate their contractual obligations. delivery, construction, investment projects. → Design Estimates Control Department commissioning due → Implementing the input quality control of materials and equipment, including through the independent construction control. → Technical Policy Department to contractor-related → Monitoring the construction and assembly works stepwise. performance issues Risks associated with nature and environment → Implementation of a balanced technical policy: construction of facilities providing the necessary supply of grid capacity and the operation of reserve electricity schemes, provision of recovery reserves of materials and equipment, maintenance of necessary reserves, ready-to-use sources of monetary liquidity, etc. Risks associated with possible natural and climatic 4. Geographical features emergencies (impact of hurricanes, heavy rains, → Regular monitoring of power grid facilities technical condition. of a country or region, → Technical Policy Department floods and flooding, heavy snow, icing, power supply → Performance of seasonal technical measures to prepare for autumn-winter, flood, thunderstorm, fire-hazardous periods. including increased risk of interruption in the result of fires, domestic explosions, → Situational and Analytical Center natural disasters → Ensuring that the PJSC ROSSETI subsidiaries and affiliates are ready for the autumn-winter period, subject to the certification of each unit with respect etc.). thereto. → Conducting exercises and emergency training, updating instructions and practicing the rapid response to the impact of adverse weather events on equipment and infrastructure of electrical grids. Global warming risks. On the one hand, it implies a → Development of new types of businesses that are not directly related to heat-dependent energy consumption, such as electric charging infrastructure, gradual redistribution of the demand for electricity demand management technologies, participation in lighting projects for cities and villages, engineering services, etc. and capacity between seasons – the reduced intensity of using heating electrical appliances in the autumn- → Department for Technological Connection → Introduction of measures aimed at increasing the efficiency of operations and preparing for higher demand for electricity and capacity from consumers 5. Climate change winter period and increased intensity of using air and Infrastructure Development regardless of season as well as weather and climate. conditioners in the spring-summer period. On the other → Staff Training Center → Implementation of the Environmental Policy with the purpose of the gradual limitation of the environmental impact of fuel and energy complex by reducing hand, these risks cause tightening of the environmental emissions and production and consumption waste. regulatory requirements for energy efficiency and → Compliance with the environmental management standards ISO 14001:2015 and GOST R ISO 14001-2016. "clean" production by consumers and the public. GRI 403-2 Human factor risks → Implementation of the Integrated Injury Risk Reduction Program for production personnel. → Activities in accordance with the Accident Investigation Acts. → PJSC ROSSETI Branch — Technical → Monitoring of the occupational safety level in branches. 6. Occupational accidents Risks associated with non-compliance of industrial and Supervision Center in the ROSSETI Group occupational safety rules by employees. → Organization of extraordinary inspections of structural units in terms of compliance with the ROSSETI Group’s occupational safety requirements. → Staff Training Center → Unscheduled briefings for the ROSSETI Group’s employees and contractors. → Implementation of the Action Plan for Improvement of Occupational Safety and Reduction of Occupational Risks. → Implementation of action plans to prevent and combat corruption, implementation of Article 13.3 of the Federal Law No. 273 dated December 25, 2008 "On Countering Corruption". Risks associated with violation of anti-corruption laws 7. Involvement of the → Internal Audit and Risk Management → Preventive awareness-raising activities and training following the approved anti-corruption regulatory documents aimed for mitigating the risk of of the Russian Federation, which may result in criminal Company or its employees Department involvement of Company employees in corruption activities. prosecution of the Company's employees, financial in corruption → Control measures to ensure compliance with the Company's Anti-Corruption Policy by employees. losses and reputational damage. → Safety Department → Shaping anti-corruption corporate consciousness and behavior among shareholders, partners, counterparties, members of management and control bodies, and employees.
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Risk materiality Sustainable development risk Risk description Risk owners level Risk minimization measures in 2020 → Control of compliance by the ROSSETI Group’s employees of the main prohibitions and restrictions of antitrust legislation. → Introduction of antitrust compliance. → Case preparation and representation of the Company's interests in arbitration courts on outlawing of decisions and orders of the Federal Antimonopoly → Department for Technological Connection Service of Russia (territorial bodies), including as part of procurement activities. 8. Violation by companies and Infrastructure Development or the ROSSETI Group → Appeal to arbitration courts of the antitrust authority's decisions on holding the ROSSETI Group administratively liable under its core and procurement Risks associated with violation of antitrust laws of the employees of the → Sales Department activities. Russian Federation, which may result in fines, financial main prohibitions and losses and reputational damage. → Master Planning and Procurement → Submittal of the information to antitrust bodies on including bidders to the register of unfair suppliers. restrictions of antitrust Department → Case preparation and representation of the ROSSETI Group’s interests at the meetings in the Federal Antimonopoly Service of Russia (territorial bodies) legislation → Legal Department when considering appeals (complaints) of actions (inaction) of the ROSSETI Group in the course of procurement activities. → Control of submitting the materials and information by the Company's structural units of the executive office and branches to the antitrust authority in a timely manner. → Control of considering the technological connection requests in a timely manner.
Map of Sustainable Development Opportunities
Likelihood
1
HIGH 2 4
MEDIUM
3 LOW
LOW MEDIUM HIGH – Impact (potential benefit)
Assessment of opportunity dynamics
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Classification and Evaluation of Sustainable Development Opportunities
Sustainable development Materiality level of opportunity Opportunity description Opportunity owner opportunity Opportunity maximization measures in 2020 Opportunities associated with energy efficiency and energy saving
The opportunity is due to the mass introduction → Technical Policy Department of intelligent electricity metering systems in the → Implementing energy conservation and energy efficiency programs, including programs for reducing electricity losses and programs for promising regions of presence in connection with the legislative → Digital Transformation 1. Expanding the use of development of electricity metering systems. changes1. Implementation of this opportunity will Department electricity meters → Taking measures under the Digital Transformation 2030 Concept. improve the energy efficiency of the electric grid → Directorate of Production Control → Introducing intelligent electricity metering systems and automated systems for collection and processing of electricity meter readings. infrastructure through the timely detection of losses → Sales Department and unauthorized consumption and action taken.
Opportunities associated with procurement and interaction with suppliers and contractors → Applying the Unified Procurement Standard and Procurement Policy of PJSC ROSSETI when selecting and evaluating suppliers. → Using e-trading platforms for placement of procurement lots. Opportunities related to new counterparties that enter the market or are the Company’s contractors and are → Sales Department → Implementing the Partnership Program between PJSC ROSSETI and small and medium enterprises. 2. New promising able to provide high-quality and timely maintenance → Design Estimates Control → Monitoring and coordinating procurement activities by the Central Procurement Commission of PJSC ROSSETI. counterparties of electric grids, supply components and materials, Department → Cooperating with higher education institutions, research organizations and technological platforms in the regions of presence when placing orders for develop and apply innovative and high-tech solutions → Technical Policy Department scientific and technical developments. increasing the efficiency of work. → Monitoring the construction and assembly works stepwise. → Enhancing the quality of procurement management and preventing corruption on an ongoing basis. Opportunities associated with nature and environment → Implementing a balanced technical policy: construction of facilities providing the necessary supply of grid capacity and the operation of standby The opportunities are mainly due to moderate electricity schemes, provision of emergency reserves of materials and equipment, maintenance of necessary reserves, ready-to-use sources of continental and extreme continental climate in the monetary liquidity, etc. regions of presence with pronounced frosty winter 3. Opportunities related to the → Monitoring the technical condition of power grid facilities on a regular basis. and hot summer, as well as a short light day in the → Technical Policy Department geography of the country or the → Taking seasonal technical measures to prepare for autumn-winter, flood, thunderstorm, and fire-hazardous periods. autumn-winter period. The regions where the ROSSETI → Situational and Analytical Center Company's regions of presence Group operates, due to their natural and climatic → Ensuring that the PJSC ROSSETI subsidiaries and affiliates are ready for the autumn-winter period, subject to the certification of each unit with respect conditions, are characterized by a high volume of thereto. electricity consumption all year round. → Conducting exercises and emergency training, updating instructions and practicing the rapid response to the impact of adverse weather events on equipment and infrastructure of electric grids. Human factor opportunities
Opportunities obtained by means of introducing → Holding annual efficiency proposal contests. → Human Resources Department 4. Opportunities of introducing efficiency, technical, organizational, and managerial → Evaluating staff proposals by the specialized Rationalization Activity Commission. efficiency proposals of proposals of employees that aim to improve the core → Staff Training Center → Involving the employees in enhancing the efficiency of SDC operations. employees performance and create conditions for the introduction → Technical Policy Department of state-of-the-art technologies. → Developing creative potential and increasing employees' interest in the results of their work through moral and material incentives.
1 Federal Law No. 522-FZ of the Russian Federation dated December 27, 2018 “On Amendments to Certain Legislative Acts of the Russian Federation in Connection with the Development of Electric Power (Capacity) Metering Systems in the Russian Federation”
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Approach for Stakeholder Engagement Key Stakeholder Groups For the purpose of preparing the Corporate Social Responsibility → Stakeholders' Impact on a company's operational or and Sustainability Report of PJSC ROSSETI for 2020, the list of key strategic decisions. The criterion shows how much a company GRI 102-40 GRI 102-42 List of Stakeholders and Approaches to Engage groups and the stakeholder map were updated. is exposed to the impact of a shareholder. GRI 102-43 Each and Every One of Them Stakeholders are identified and prioritized based on an expert → Alternative View, or diversity in perception of a situation assessment conducted by the heads of divisions who actively that can lead to a different understanding of processes engage with them to estimate the degree of their impact on the and, as a result, to finding new opportunities and/or risks. The ROSSETI Group's work on sustainable development takes into ROSSETI Group as well as the Group's impact on the stakeholders. The criterion shows how much stakeholders' perception, account the interests of all stakeholder groups. The first step was the analysis of lists and maps of the experience and knowledge may differ from a company's stakeholders of PJSC ROSSETI subsidiaries and dependent established view of both the external and internal companies (SDCs) that helped to draw up a preliminary list of environment. An alternative view (a different perception) of a interested parties. The second step involved an expert assessment situation is highly valued by companies when they shape their The specific nature of PJSC ROSSETI's activities includes continuous interaction with of stakeholders to meet the five criteria in accordance with strategies and make important decisions on essential issues. a wide range of stakeholders (interested parties). Open constructive dialogue and Standard AA1000SES: Each stakeholder group was assessed according to the five above consideration of our stakeholders' interests in decision-making - are the necessary → Dependence of Stakeholders on a company's activities given criteria on a scale from 0 to 4 (0 – no correlation, 4 – the elements for successful achievement of PJSC ROSSETI's strategic goals and and services. The criterion shows how much a stakeholder is strongest correlation). maintaining the Company's positive image in the business environment. impacted by a company; At the third step, an average score was calculated for all The ROSSETI Group informs the investor community about key aspects of its → Responsibility towards Stakeholders (by law and due stakeholder groups that reflects the materiality of mutual impact in operations on a regular basis in line with PJSC ROSSETI's Uniform Communications to business, operational, ethical or other circumstances/ the ROSSETI Group, and a map of key stakeholders was prepared. Policy and the principles of efficiency, reliability, completeness and availability of motives). The criterion shows how closely a company has to The assessment of PJSC ROSSETI's impact on stakeholders was information provided. All relevant information subject to mandatory disclosure interact with a stakeholder because of agreements or external made based on averages against the Dependence of Stakeholders following the standards of disclosure by wholesale and retail electricity market objective rules, laws, etc; and Relevance indicators; the assessment of stakeholders' participants is published on the ROSSETI Group's official websites and news feeds → Relevance. The criterion shows the degree of stakeholders' impact – Responsibility towards Stakeholders, Stakeholders' of media outlets in due course and in full. need to interact with a company in all business aspects, Impact, and Alternative View. and also reflects how much immediate communication is important for them;
The key groups of stakeholders that have an impact on the ROSSETI Group's activities and vice versa include:
1 2 3 4 5 6 ROSSETI's Top Veterans Personnel Shareholders Investors SDCs management (pensioners)
7 8 Professional 9 10 11 12 associations and Regional Customers organizations, Suppliers and Partners State authorities and local (consumers) including authorities international ones contractors
13 14 15 16 17 18 People Public, social Scientific Educational Environmental in the regions organizations and charitable Media of presence community institutions organizations
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Stakeholder Map
Social environment
Business environment Influence of the 4 stakeholders on the 2 ROSSETI Group 3 5 11 6 7 1 12 10 3 8 Internal stakeholders 16 9 14 PJSC ROSSETI 15
2 18 4 13 Top management 17
1 Personnel (employees, trade unions, councils of young professionals)
1 2 3 4 Veterans Influence of the ROSSETI Group on stakeholders
Investment community Customers (shareholders and investors) (consumers)
Partners (suppliers, contractors, business The state partners, professional associations, (federal, regional and local and industry organizations, including authorities) international ones)
Society (public, social, charitable and environmental organizations; scientific and educational institutions, including universities; the population of the regions of the ROSSETI Group's presence (non-consumers), mass media)
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Ongoing Stakeholder Engagement
INTERNAL STAKEHOLDERS BUSINESS ENVIRONMENT
Interests of stakeholders Forms of regular engagement of stakeholders Interests of stakeholders Forms of regular engagement with stakeholders PJSC ROSSETI's → Unified development strategy → Management and control bodies of the SDCs Investment → Total shareholder return, including dividend → General Meeting of Shareholders SDCs → Integrated corporate culture, ethics and values → Organizational and executive documentation community yield and long-term capitalization growth → Representation in governing bodies → Alignment and incorporation by the ROSSETI Group → Joint business, social, environmental, (shareholders and → A clear path for growth → Regular meetings with PJSC ROSSETI's management of the best corporate governance and sustainability scientific and other activities of the ROSSETI investors) → Giving consideration to the interests of all and SDCs management practices Group shareholder groups → Disclosure channels (the Annual Report, the Corporate → Unified technological, educational, environmental → Communication on current issues in → Information transparency and open dialogue Social Responsibility and Sustainability Report, and other standards standard business processes, including → Effectiveness of production and activities in corporate websites, and others) → The unified Procurement Policy and effective reporting the field of sustainable development allocation of the ROSSETI Group's resources → High-quality corporate governance → The ROSSETI Group's single brand architecture and a positive image of each SDC
Customers → Reliable power supply → Customer service centers (consumers) → High-quality service → Joint information center PJSC ROSSETI's → Implementation of the ROSSETI Group's → Performance assessment based on financial → Fast and simple procedure of technological → Single federal hotline top management Development Strategy and achievement of KPIs and management reporting data connection to the grids → Corporate website (Internet reception) → Opportunities for personal and professional growth, → Interaction within standard business accomplishment of extraordinary tasks, self- processes fulfillment and building credibility in the professional (suppliers, → Mutually beneficial and long-term → Procurement procedures community Partners contractors, business cooperation → Negotiation → Competitive remuneration partners, professional → Sound financial standing → Corporate website → Work in a sustainable company associations, and → Timely and accurate fulfillment of → Media → Personal contribution to the development of Russia's industry organizations, contractual obligations electric grid sector → Dedicated forums, workshops and conferences including international → Transparency of procurement ones) → Zero tolerance for corruption Personnel → Attractive business culture → Collective bargaining agreements (employees, → Competitive salary → Councils of young professionals trade unions, → Social and health care → Public organization "All-Russian Electric The state (federal, → Provision of reliable and sustainable → Expert discussions within the framework of round councils of young → Opportunities for personal and professional growth Trade Union" regional and local operation of the power system tables organized by the State Duma of the Russian professionals, → Occupational safety → Talent Pool Program authorities) Federation, parliamentary hearings, conferences and veterans) → Discussion and analysis of government → Higher status of an energy worker → Targeted projects for the assessment and projects and decisions on industry forums development of human resources regulation → Working meetings and joint events with representatives → Employee training and professional → Cooperation on planning and delivery of of regional authorities advancement territorial development programs in the → Tariffs for regulated activities → System of onboarding and mentoring for regions of the ROSSETI Group's presence → Coordination of investment programs and reports on new employees → Participation in the implementation of their progress → Meetings of management representatives Russia's Energy Strategy and Strategy for → Working groups on the preparation of plans and the with employees Development of the Electric Grid Sector Program of Electric Power Industry Future Development → Professional competitions → Meeting electricity demand in the medium → Cooperation agreements on the electric power industry → Cultural and sporting events and long run development in regions → Attraction of additional investment in the → Submission of reports to the authorities and information regions and creation of new jobs disclosure in accordance with the Russian law → Tax deductions → Transfer of tax payments → Representation and participation in the work of relevant international organizations
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SOCIAL ENVIRONMENT
Interests of stakeholders Forms of regular engagement of stakeholders Society (public, social, → Reliable, uninterrupted and high-quality power → Charity charitable and environmental supply → Federal and regional media publications organizations; scientific and → Provision of employment of the population → Press conferences, press releases, promo educational institutions, → Socio-economic development of the regions of campaigns, dedicated workshops, forums, including universities; the presence and competitions population of the regions → Environmental safety and environmental protection → Meetings and special events for veterans, of the ROSSETI Group's → Energy security and enhanced energy efficiency students, schoolchildren, etc. presence (non-consumers), → Placement of materials on official websites mass media) → Implementation of social and charitable programs → Development of science and education in the regions of PJSC ROSSETI and its SDCs of activity → Measures to prevent electrical injuries → Introduction of advanced scientific technologies among the population → Demand for young and promising people → Research and educational projects, → Available and regular disclosure of information including conferences and competitions for related to the Company's activities students and schoolchildren → Student teams
GRI 103-2 Interaction with Investment Community GRI 103-3
PJSC ROSSETI performs ongoing work aimed at increasing shareholders: most of the in-person meetings were held as the capitalization, liquidity and corporate transparency of the online conferences and calls; some events were cancelled. ROSSETI Group, protects the rights and legitimate interests However, we adapted and continued to actively communicate of its shareholders and investors, and discloses information with our shareholders, striving to provide them with the to representatives of the investment community on a regular most detailed information in a timely manner. basis in accordance with the law and best Russian and international practices in the area. In 2020, the ROSSETI Group observed the growing interest of socially responsible investors in the matters In the face of extraordinary volatility and uncertainty of of approaches for sustainable development. Investors' financial markets associated with the COVID-19 pandemic, attention is increasingly turning to the ROSSETI Group's the ROSSETI Group has managed to maintain a continuous social and environmental responsibility. In this regard, dialogue with the financial and investment community. In the cooperation with Russian and international rating agencies, course of the year, the ROSSETI Group promptly responded socially responsible funds and investors who are guided to numerous questions from shareholders about the effects by ESG factors when making investment decisions, as well of the coronavirus pandemic on its operational and financial as disclosure of information in the area of sustainable performance. To mitigate the spread of the infection, the development are deepened. Company switched to a new format of interaction with its
As a result of work At the end of the period, the consensus carried out in 2020, 8 forecast of the analysts was major investment companies 3 out of 8 – ATON, BCS, VTB Capital, Gazprombank, RUB 1.50 RUB1.37 investment banks and Renaissance Capital, Sberbank CIB, SOVA Capital, and Finam – provide analytical coverage (+63.04% year-over-year) (+7.03% year-over-year) companies upgraded their on ordinary shares on preferred shares recommendations and of PJSC ROSSETI (the analytical coverage was PJSC ROSSETI's stock price resumed in June 2020). targets
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GRI 103-2 Though face-to-face communication is now limited, the ROSSETI GRI 103-3 Interaction with Consumers Group ensured a high level of services provided in time, as well as received applications from its consumers online or via the hotline. Effective interaction with consumers is a fundamental principle of the ROSSETI Group's In the reporting year, the work of our call center was strengthened: operation. It is built on a customer-focused approach, continuous improvement of service over 400 operators received calls from consumers regarding the reliability and quality of power supply along with technological availability and quality as well as increased customer loyalty. connection. In 2020, the ROSSETI Group took drastic measures to improve → the Portal of Electric Grid Services and the mobile application The Group's systematic work to create and develop interactive its consumer interaction system and prevent the spread of for consumers; solutions provided a high level of consumer distance service amid coronavirus infection. Consumer service has been translated into → the Svetlaya Strana portal focused on the issues of quality and the COVID-19 pandemic. a remote format; remote provision of services is organized through reliability of power supply; centralized services of the ROSSETI Group: In 2020, 9.5 million applications were received by the ROSSETI → a single call center. Сonsumer Applications Structure, % Group through the channels of interaction with consumers (in person, by phone, via the Internet), which is an increase of 47% year-over-year. At the same time, the proportion of complaints 0.5 decreased and amounted to less than 1% of the total number of 1 applications. 52 In the context of the pandemic, the most popular channels were Developing the Portal of Electric Grid Services 1 our call centers: telephone calls accounted for 77%. The number of electronic applications submitted through the SDCs' official websites 1 In the year under review, as part of the development of remote → an online payment service; and centralized services of the ROSSETI Group grew more than twice. services, the functionality of the Portal of Electric Grid Services was → services for submitting applications on electricity metering (in 1 improved to include a number of interactive solutions: accordance with No. 552-FZ); 4 → a service for calculating the price of technological connection; → recorded announcements (notification of applicants, grid The main consumer communication channels in 2020 → a calculator of required capacity for technological connection; operators and state-owned enterprises); 4 were as follows: → an interactive load map of main substations with a voltage of → announcement of routine outages; 30 → telephone: 7.3 million applications; 38 kV and above; → a consumer feedback service; 6 → personal accounts for consumers allowing for interaction → personal accounts for grid operators (automated workplace); → Internet: 1.47 million applications; and electronic exchange of documents signed by electronic → personal accounts for suppliers of last resort (automated → service offices: 370 thsd applications. signature; workplace). Concurrently, there were 3.68 million visits to the Portal of Electric Grid Services, and the mobile application was downloaded 58 thsd Power outages times. Over 180 thsd applications for technological connection were Technological connection submitted through these channels in 2020, 12 times more compared Others to 2019. Commercial electricity accounting The application structure was mainly represented by questions Complementary services about power outages (52%) and technological connection (30%). Electricity supply Maintenance of electric grid facilities Service quality Contact details Power sales In 2020, the Portal's mobile app was released in Google Play and AppStore Applications by Communication Channel, mln pcs. for consumers of the 1.8 2.7 0.2 0.1 ROSSETI Group. 2017 4.8 It provides for smart electricity metering and electronic 2.0 4.4 0.4 0.4 interaction with applicants as 2018 7.2 Received by service offices part of technological connection. 1.4 4.2 0.6 0.3 2019 6.5 Received via the call center Received in writing 0.4 7.3 0.3 1.5 Received via the Internet 2020 9.5
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GRI 103-2 GRI 103-3 Interaction with International Partners PJSC ROSSETI's activities on the The ROSSETI Group delivers various projects in the key Despite the restrictions associated with the coronavirus In addition, four new agreements have been concluded with areas of international presence: pandemic, several major international events were held with international partners: international arena serve as a tool the participation of the ROSSETI Group’s representatives: → Long-term Strategic Cooperation Agreement on the → expansion and building of electric power relationships → Global Platform of Leading Electricity Distribution Operators development of electric grid sectors of Russia and Uzbekistan of achieving the global indicators of between Russia's United Power System and power systems of 1st Annual Conference (#GlobalDSO): “Contribution of between PJSC ROSSETI and JSC «National Electric other countries; technological development using the distribution operators to energy transition: investment and Grid of Uzbekistan»; world's best practices; they aim to promote → interaction with global industry leaders in terms of innovative crisis resilience in the post-pandemic era”; development (sharing experiences and technologies); → Strategic Cooperation Agreement between PJSC ROSSETI and the interests of the Russian Federation, → Women in Power Industry 4th Annual Forum held within the the Eurasian Development Bank (EDB). → harnessing of technological and economic benefits of framework of the International Council on Large Electric develop the Group's business abroad, create international power systems’ synchronous operation; → Memorandum of Understanding in the development of the Systems (CIGRE) Session; Bangladesh electric grid sector between PJSC ROSSETI and additional value for shareholders and acquire → parallel operation of Russia's United Power System and power → session High-Level Dialogue on the Transition to Clean National Electric LLC; systems of other countries; new knowledge and competencies. Energy, part of the World Economic Forum Fostering Effective → customs support for foreign power flows; → Memorandum of Understanding in the development of electric Energy 2020: Sustainable Development in a Post-Covid Era. grid sectors of Russia and Uzbekistan between PJSC ROSSETI → establishment and development of common power markets; and O'zelektroapparat-Electroshield JSC. → international projects to create power corridors; → evolution of own lines of business in foreign countries.
GRI 102-13 Membership in International Organizations and Associations
Organization/ association Information about organization/ association Role of the Company Membership fee
PJSC ROSSETI oversees WEC Russia's operational activities. WEC is one of the largest international non-profit organizations in the energy sector, representing PJSC ROSSETI's annual the interests of over 3,000 energy organizations from about 100 countries around the globe. It is Since 2017 the Company has been a patron of WEC, which allows it to actively participate in discussions and formation membership amounts to 30,000 accredited by the UN. of key trends in the development of power systems transformation. US dollars (VAT exempt). Patronage fee in 2020 is 110,000 Fuel and energy industry association the In 2020, the Head of PJSC ROSSETI's Department of International Cooperation joined WEC's international working Participation in the World Energy Council is possible through national committees. British pounds (VAT exempt). Russian National Committee of the World group on hydrogen energy development as a representative from Russia. Energy Council (WEC Russia)
GEIDCO is an international organization composed of willing firms, associations, institutions, and PJSC ROSSETI is a GEIDCO Board member (the organization's executive body). It is responsible for: individuals who are dedicated to promoting the sustainable development of energy worldwide. → carrying out joint activities; Its main goals are to meet the global demand for electricity by means of alternative energy PJSC ROSSETI’s annual → participating in global energy integration processes; sources, to promote the UN goal Affordable and Clean Energy, and to fight climate change. membership fee amounts to → maintaining development and transfer of new technologies with the development of unified interstate technical 30,000 US dollars (VAT exempt). Global Energy Interconnection Development GEIDCO members work on the creation of a scientific standardization system, jointly introduce standards; and Cooperation Organization (GEIDCO) technical innovations, conduct scientific research, cooperate in the implementation of engineering projects and provide consulting services. → reducing energy cooperation barriers in the Asia-Pacific and other regions.
The EAEU is an international organization for regional economic integration that unites Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan as its members, as well as Moldova and Uzbekistan as observers, ensures the free movement of goods, services, capital and workers, and implements coordinated, coherent or unified policies in the sectors of the economy. The ROSSETI Group's representatives have been participating in the formation of the regulatory framework for the Eurasian Economic Union (EAEU) EAEU common electricity market in terms of development and coordination draft relevant mechanisms of interaction - In accordance with Article 81 of the Treaty on the Eurasian Economic Union dated May 29, 2014, and international normative legal acts on a permanent basis since 2014. the EAEU members have a common electricity market based on the parallel work of the member states' electric power systems tailored to the models of their domestic electricity markets. Eurasian Economic Commission (EEC) The EEC ensures the functioning and development of the EAEU.
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Organization/ association Information about organization/ association Role of the Company Membership fee
The BRELL Energy Systems Committee was founded on the basis of the Agreement on Parallel Work of Belarusian, Russian, Estonian, Latvian and Lithuanian Energy Systems (BRELL) dated February 7, 2001.
The member states inform each other about their development plans and prospects affecting The ROSSETI Group's representatives take part in the BRELL Energy Systems Committee's activities. - the parallel operation of the national energy systems, agree on governance principles of joint work, as well as develop and harmonize legal, technical and technological documents regulating synchronous operation of the BRELL energy systems, etc. within the BRELL Energy Systems BRELL Energy Systems Committee Committee. PJSC ROSSETI representatives participate in: → meetings of working groups and other activities of the CIS EPC;
The CIS Electric Power Council (CIS EPC) is an intergovernmental branch of the CIS established → development of normative legal acts on the functioning of electric power industry. by the Agreement on coordination of the interstate relations in the field of power industry dated PJSC ROSSETI representative leads the working group on meteorological support of the CIS power industry. February 14, 1992. It includes Armenia, Russia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan as full members, and Turkmenistan as an associate member. The CIS EPC includes: Delivering the CIS member states' strategy of engagement and cooperation in energy, and of → the working group on meteorological support of the CIS power industry; - communication with the CIS member states' electricity operators is the main goal of the CIS EPC. → the Commission for Operational and Technological Coordination of Joint Work of the CIS and Baltic Power The interests of the countries in working groups, coordination councils and task forces of the CIS Systems; CIS Electric Power Council (CIS EPC) EPC are represented by heads of relevant public authorities and national electricity companies of → the working group on formation of the CIS member states' common electricity market; the member states vested with the respective powers. → the working group on update and harmonization of regulatory and technical framework for regulating the CIS electric power industry; → the working group on ecology, energy efficiency and RES.
Founded in 1906, the International Electrotechnical Commission (IEC) is the world’s leading By order of Rosstandart (Russia's national committee in the IEC), SC-2 on Electric Grids (Main and Distribution) of organization for the preparation and publication of consensus-based international standards and TC-16 on Electric Power Industry was created in the IEC in 2014 on the basis of PJSC ROSSETI, with subject areas of determination of the conformity assessment system (process) that certifies whether electrical standardization in and electronic products, systems and services conform to its international standards. The IEC is → electrical engineering (29,020); recognized by the World Trade Organization (WTO). → electrical wires and cables in general (29,060.01); - International standards in electrical engineering prepared and published by the IEC serve as a The International Electrotechnical basis for national standardization and are used as recommendations in drafting international → wind turbine energy systems (29,180); Commission (IEC) includes: treaties. → power transmission and distribution grids (29,240). Subcommittee-2 (SC-2) and Russia is a full member of the Commission. National committees represent countries in the IEC SC-6 on Power Electronics in Electric Power Industry of TC-16 on Electric Power Engineering also operates on the Subcommittee-6 (SC-6) of the Technical (the Russian Federation is represented by Rosstandart). basis of PJSC ROSSETI's subsidiaries and affiliates. Committee-16 (TC-16)
Founded in 1921 at the request of the IEC, the International Council on Large Electric Systems (CIGRE) is one of the largest and most authoritative scientific and technical associations, which The ROSSETI Group's enterprises are the basic organizations for the National Research Committees in the following brings together more than 15,000 scientists and energy professionals and 1,300 organizations research fields: equipment for trunk and distribution electric grids (A3), overhead lines (B2) and substations (B3). The across 100 countries. ROSSETI Group's experts are the authors of numerous reports of the CIGRE Sessions and regular participants of the It is dedicated to coordination of research, exchange of experience and scientific and technical working groups. - information on the functioning of electric power systems. Development, creation and operation of International Council on Large Electric The ROSSETI Group takes part in the work of the Youth Section of the Women in Power Industry Discussion Club of the energy equipment, planning and operation of power systems, development and implementation of Systems (CIGRE) RNC CIGRE. new technologies for collection and information processing and control systems are in the center of its attention.
NPP RIAC is a Russian non-profit organization dedicated to strengthening peace, riendshipf and harmony among peoples, preventing international conflicts and ensuring crisis regulation. PJSC ROSSETI's annual PJSC ROSSETI is an NPP RIAC member. membership amounts to Key areas of activity are as follows: research, international assessment, communication, publicity 1,000,000 rubles (VAT exempt). Non-profit Partnership “Russian and international activities. International Affairs Council” (NPP RIAC)
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Organization/ association Information about organization/ association Role of the Company Membership fee
Global DSO is a platform set up on PJSC ROSSETI's initiative supported by Enel, European industry associations E.DSO and Eurelectric, and America's Electric Power Research Institute (EPRI). Global DSO's goals are strategic dialog, mutual assistance, exchange of best practices, accelerated implementation of digital transformation, comparison of results achieved, review of technological decisions applied at partner organizations in order to ensure the most reliable and secure energy supply to consumers. The main areas of cooperation withing Global DSO: The initiator and key sponsor of Global DSO is PJSC ROSSETI. The Company organized the first international → digitalization and cybersecurity; conference of Global DSO on January 26–27, 2020 (with more than 550 registered participants from America, Europe - Global Platform of Leading Electricity and Asia). Distribution Operators (Global DSO) → evolution of smart metering; → retraining and new necessary competencies; → stability and circularity; → resiliency and climate change; → flexibility and integration of RES; → retraining and new necessary competencies.
B20 is an informal grid of business associations and companies of the Group of Twenty (G20) countries cooperating with the state member governments of the group and relevant international institutions. B20 is a permanent and reliable participant in the process of achieving strong, In 2020 PJSC ROSSETI representatives took part in the preparation of recommendations for G20 leaders in the field of sustainable and balanced growth in the global economy. - digitalization (Digitalization Policy Paper 2020). Representing the interests of relevant national business communities in the dialog with G20 and Business Twenty (B20) ensuring the reflection of the contribution and concept of the business community in the decisions of G20 leaders and their subsequent implementation are one of the most important tasks.
BRICS is an interstate association of the Federal Republic of Brazil, the Russian Federation, the Republic of India, the People's Republic of China and the Republic of South Africa. BRICS association creation date: June 2006. The Russian side initiated the creation of association. In 2020, representatives of PJSC ROSSETI took part in the work of the BRICS Energy Research Cooperation Platform. - BRICS BRICS makes a significant contribution to the global agenda, including within the rameworkf of the UN SDGs.
The organization brings together scientists and specialists to build intellectual capacity in the field of research, construction and operation of electrical distribution grids, and assists in the organization and conduct of important research and development, the creation of new Russia has been an associate member of CIRED international association since 1999. technologies and the exchange of experience with specialists from various countries within the - framework of the CIRED International Conference. Representatives of PJSC ROSSETI take part in the work of the Joint Committee of CIRED Russia. CIRED The purpose of creation: to increase relevant business competencies, skills and knowledge of CIRED participants. Russia has been a member of CIRED organization since 1999.
Prime Alliance AIBSL is an international association officially established in 2009 in Belgium, aimed at ensuring transparency and harmonization of data transmission standards in electric grid sector systems. The main functions of this international association are the development, promotion and provision of technical support in the world according to a single standard of data transmission for electricity Interaction in the field of intelligent electricity metering is carried out. metering devices in electricity transmission line developed on the basis of communication profiles Pilot and industrial operation of Individual Measuring Devices using Prime technology at the site of PJSC ROSSETI - Prime Alliance of the physical layer of power grids rated 0.4 kV (PLC). Moscow Region has been completed. To solve the tasks, the association has established frameworks for cooperation in the form of technical working groups on measuring instruments, telecommunication protocols, and carried out large-scale inspections of the concept (laboratory and field), selected independent certification agencies, and implemented pilot projects.
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GRI 103-2 Impact of COVID-19 Pandemic on the ROSSETI Group's International Cooperation GRI 103-3 Development Interaction with Personnel The ROSSETI Group adheres to the principles of social partnership and constructive cooperation in its interaction with personnel The crisis phenomena associated with the COVID-19 pandemic The Company turned pandemic challenge into new opportunities, and trade union organizations. prompted the Company to develop global dialog. Owing to the and launched GlobalDSO Platform to maintain continuous dialog of All PJSC ROSSETI's subsidiaries and affiliates are involved in the professional association of electric power employers – All- restrictive environment, to save the main value of the company – major international distribution power grid companies' executives. Russian industrial association of employers in energy sector «Employers Russian Association of Energy» (ERA). its employees, to preserve the reliability and uninterrupted power Sustainable development of the industry, improvement of efficiency supply of the country was extremely important. and safety of processes, reliable uninterrupted power supply to At the local level, there is interaction between the primary trade union organizations of the All-Russian Electric Trade Union Public Association and the management bodies of the subsidiaries and affiliates of PJSC ROSSETI. The experience of foreign colleagues from China and Italy was consumers are its main objectives. studied, and their measures to prevent the spread of COVID-19 This work would be welcome in the future. It is essential to see PJSC ROSSETI supports open constructive dialog between its employees and management. Regular meetings of employees with were improved within a short time frame. As early as April 2020, what practical steps of foreign colleagues bring the desired the management, monitoring of employee satisfaction with working conditions, remuneration, benefits and other compensations a meeting of heads of the State Grid Corporation of China, TEPCO result, what barriers arise in the way of implementing innovative are ensured. Director generals of the subsidiaries and affiliates, heads of the branches and production departments take part in Power Grid, KEPCO, Enel and Terna was organized to share technologies, what tools are involved for overcoming complexities. meetings organized for employees and representatives of trade unions. experience and best practices under the circumstances, where Open discussion allows replicating best practices, ensuring The Company seeks to maintain a high level of personnel involvement and develop the corporate culture of the ROSSETI Group the parties discussed the organization of energy supply during the comprehensive assessment of risks and comparing the results through social programs. COVID-19 pandemic, exchanged views on measures of financial achieved. support of the industry, interaction with consumers, introduction In the post-COVID-19 period, GlobalDSO will continue of new practices in the usual business processes when quarantine to play a key role in developing professional industry period ends. Foreign colleagues highly appreciated the power In addition to trade unions, there are also Young Professionals Boards which involve young experts proposals for legislative initiatives, including ones on in solving corporate tasks, increase their loyalty to the ROSSETI Group and promote their interests. supply sources reserve park created by the ROSSETI Group, used to support of national manufacturers. improve the reliability of health facilities. Representatives of the ROSSETI Group's Young Professionals Boards are members of the Youth Council of the Electric Power Industry of Russia's Ministry of Energy, established in 2018 and headed by a PJSC ROSSETI representative. The Young Professionals Boards assist their members in respect of the following issues: → professional and innovative development of young people; → initiation and participation in cultural and mass events; → development of sports culture among young people; → cross-sector interaction.
In total, 1,158 meetings of representatives of trade union organizations with heads of PJSC ROSSETI's SDCs were held in 2020. Some of the main issues discussed at the meetings are the following: → development and implementation of Collective Bargaining → organization and holding of festive, sports and cultural Agreements; events; → social protection and safety during the spread of coronavirus → congratulation of Power Industry Veterans on anniversary infection; dates and professional holiday; → preservation of wages and the establishment of allowances, → bonus payment, provision of material assistance to as well as guarantees and compensations under the employees, consideration of personnel complaints, Collective Bargaining Agreement during the spread of disciplinary penalties; coronavirus infection; → support for participants of the Great Patriotic War and → organization of rehabilitation and recovery treatment for homefront workers, celebration of the 75th anniversary of workers who have suffered coronavirus infection; the Victory in the Great Patriotic War; → labor compensation, occupational safety and compliance, → development of social partnership; working conditions, provision of workers with overalls and → holding of report-and-election conferences of chairmen in PPE; the primary trade unions.
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GRI 103-2 GRI 103-3 Cooperation with Educational Institutions and Engagement of Talented Youth The ROSSETI Group understands that engaging, training and attracting young promising professionals is a prerequisite for long-term sustainable development of the Company, and therefore it works consistently on attracting young talents to the electric power industry.
Working with Students The ROSSETI Group continuously cooperates with more Group for qualified young professionals focused on long- than 300 higher and secondary vocational education term successful work and career development in the organizations located in all regions of its presence to holding companies. promote technical specialties, support labor and social The ROSSETI Group implements scholarship programs adaptation of youth and attract young qualified specialists. for students whose education is financed from the State The traditional mechanism for attracting young specialists budget, and finances education for students studying on a is the conclusion of contracts of targeted training of paid basis. students. This allows addressing the need of the ROSSETI
Every year, more than 10,000 students are engaged for production and pre-graduation internships followed by the trainees' employment or insertion of their data into the information base of the external personnel reserve of candidates for possible future employment.
In 2020, due to the COVID-19 restrictions, the number of students In 2020, organization of the student teams season in the ROSSETI received the opportunity to undergo production and pre-graduation Group was substantially limited by the restrictions associated with practice in the ROSSETI Group declined to 5.3 thsd people. In the spread of coronavirus infection. The decisions on admission of 2021, the Company plans to develop and expand activities on students to summer jobs were made considering the epidemiological targeted training and attracting higher and professional educational situation in the regions of presence. Five SDCs arranged work for organizations' students for internship. 19 student teams totaling 296 people from 18 universities and 5 Every year since 2010 student teams are arranged to work on the vocational education institutes. base of the ROSSETI Group's power grid facilities. They participate in In 2021, it is planned to hold an appropriate student teams season in public, sports, cultural and other events held by the ROSSETI Group all electricity grid companies of the ROSSETI Group. In eleven years of existence together with the Youth All-Russian Public Organization "Russian Student Squads" during the working season. thsd In 2018–2019, the total number of students who worked as part of >13.3 students the student teams at the ROSSETI Group electric facilities amounted to at least 2,000 people per year. were part of the student teams
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In 2020, 70 specialized universities, more than 7,000 students, Working with School Children postgraduate students and young scientists, as well as more than 500 Since schools lay the foundation for the development of most Since 2018, the ROSSETI Group holds the All-Russian Olympiad for experts from leading enterprises of the electric power industry took competencies required in the digital world, the ROSSETI Group Schoolchildren aimed at identifying students gifted with creative part in the RNC CIGRE Youth Section activities. Due to the spread of works with schoolchildren through forums and olympiads in the and innovative thinking in technical design. Up to 5,000 school and COVID-19, the key activities of the RNC CIGRE Youth Council were held field. lyceum students of grades 9 and 10 take part in the olympiad each in a remote mode, which ensured that the number of participants was year, and only top 60 students become its winners and prize- not reduced compared to 2019. winners. Together with the RNC CIGRE Youth Section Organizing Committee, the ROSSETI Group has also been holding the All-Russian Contest of Bachelors and Masters Graduate Qualification Works of Technical Universities on the Electric Power and Electrical Subjects Olympiad for Schoolchildren during the Pandemic since 2015. Winners and prize-winners of this competition are The selection stage of the All-Russian Olympiad for Schoolchildren The winners and prize-winners of the All-Russian Olympiad for offered employment in the ROSSETI Group and provided assistance is traditionally held in an in-person format across 69 regions of Schoolchildren got the opportunity to take part in the ROSSETI for the period of studying for a master's degree. the ROSSETI Group's presence. But 2020 was an exception. Owing Group's Energy Project Shift, organized on the basis of the All- In 2020, 350 graduation theses of students from 32 technical to restrictions on holding mass events, the subject stage was Russian Children's Center "Orlyonok" in the summer. Some project universities were presented at the All-Russian Contest of organized remotely. teams participated remotely. Graduation Theses. In light of the restrictions for mass events, the Schoolchildren completed their tasks at home, which was Projects created by Energy Project Shift participants were presented final of the contest was held as an online conference and live- controlled using modern surveillance tools. Thanks to this format, at the Faces of Science student contest of design and research, the streamed on YouTube. the geography extended to 177 cities and towns, including those Duty on the Planet technological competition for schoolchildren located in remote regions. and university students, the NTI all-Russian engineering Olympiad, the Rukami all-Russian competition of technical creativity, the #BrighterTogether all-Russian competition of creative, design and research works of students and many others. As part of the Professional Training 2.0 project implemented by “Russia – the Land of Opportunities” ANCO in cooperation with PJSC ROSSETI, students can try their hands at solving cases on the topics of relevance for the Company. Those who offered the best solutions are enabled to undertake an internship or become Looking forward, the ROSSETI Group intends to expand work with employees of the ROSSETI Group. talented schoolchildren by creating specialized energy classes in all big cities of the ROSSETI Group's presence and organizing PJSC ROSSETI regularly participates in the Forsage young energy groups and workshops for elementary students. specialists communities forum organized by the Association of citizens and organizations for corporate education MAKO to develop managerial competencies and project work skills of young specialists of the ROSSETI Group's personnel reserve. Implementing Youth Projects
Ensuring the regular exchange of experiences and the best Asian national energy companies. It is a competition of projects practices between the younger generation, their senior colleagues presented by youth teams representing the world's leading energy and colleagues of the same age from other companies and systems. Their projects reflect key industry trends, in particular, abroad, is equally important. The ROSSETI Group is an organizer energy system integration, power supply of remote areas and Forsage Forum is a Unique Platform of a number of youth projects and themed regional, industry industry digitalization. for Communication and Knowledge and international events for schoolchildren, students and young The ROSSETI Group is also a member of the Youth Section professionals. of the Russian National Committee of the International Exchange The Company is a key partner of a range of scientific projects, both Council on Large High Voltage Electrical Systems – CIGRE1, The event has been held since 2011 and is supported by the In September 2020, Forsage was held in a hybrid format, which federal and regional. The International Youth Energy Forum (IYEF) one of the largest global non-governmental and non-profit Ministry of Energy of the Russian Federation, the Federal Agency is a mix of online and offline modes. The forum was devoted to held under the auspices of PJSC ROSSETI since 2014 is the main organizations in the electric power industry. for Youth Affairs (Rosmolodezh) and the Coordination Council sustainable development and responsible leadership. annual summit of the best young specialists from European and for the Development of Communities of Young Specialists at the A team of 134 young specialists represented the ROSSETI Group. Civic Chamber of the Russian Federation. Key partners of the Forum are leading Russian and global companies from various economic sectors operating in the territory of Russia. The main target audience is talented young people from different Russian regions and other countries, winners of established competitions and professional awards as well as representatives of youth 1 Conseil International des Grands Réseaux Electriques (CIGRE). associations.
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GRI 103-2 GRI 103-3, Interaction with Federal Authorities Interaction with Regions former EU8 The ROSSETI Group implements a large-scale investment program that aims to develop, PJSC ROSSETI constructively and effectively cooperates with federal authorities to achieve modernize and make the electric grid infrastructure more available for consumers in the targets of the Strategy for Development of the Electric Grid Sector, increase the trust in the Company's regions of presence. The investment program of the ROSSETI Group is the Company and be supported by the authorities. formed in accordance with the development plans for the regions of presence and ensures compliance of the Company's assets with current requirements of the domestic economy. PJSC ROSSETI takes an active part in elaborating proposals for Thanks to its membership in public organizations, the Company is optimization and development of the legislation and regulatory constantly engaged in shaping the topical agenda on developing Despite the quarantine restrictions caused by the coronavirus pandemic, the investment framework on the issues related to the Company's operations. the infrastructure and strengthening the domestic economy in The Company is represented in more than 80 deliberative bodies, general, which, in turn, is reflected in the legislative initiatives program of the ROSSETI Group was implemented in full in 2020. including committees, commissions, working groups, and expert being promoted. councils that were established by the state authorities as well Representatives of PJSC ROSSETI regularly participate in the field- as business communities and public organizations to implement oriented events of the Federal Assembly of the Russian Federation, socially important projects. the Government of the Russian Federation as well as federal and Volume of Commissioning across the ROSSETI regional bodies, business communities, public organizations and Group expert councils on the electric grid sector development. 32.5 28.3 25.2 The Innovative Development Program of PJSC ROSSETI for 2020–2024 with an outlook for 2030 provides for the 12.1 12.4 9.2 assessment of innovation potential of the resident companies in territorial clusters in order to consider whether 2018 2019 2020 it is possible to engage them in the supply of innovative Transformer capacity, thsd MVA technologies and products as well as in R&D. Electricity transmission lines, thsd km
Companies of the ROSSETI Group are located in regions with high → Territorial Innovative Cluster for Nuclear Physics and scientific and technological potential, among other things. Clusters Nanotechnologies In Dubna, Moscow Region; have been created in these regions where the resident companies → Cluster “PhysTech XXI”, Moscow Region (Dolgoprudny, Khimki); develop and produce innovative products. → Innovative Territorial Cluster “Energy Efficient Lighting PJSC ROSSETI's SDCs monitor the innovative solutions and the Engineering and Intellectual Lighting Control Systems”, the current developments offered by the resident companies of the Republic of Mordovia; territorial clusters that can be implemented in the electric grid → Cluster for Innovation Development in the Electric Power sector. Resident companies receive requests for technical solutions Sector and Industry, Saint Petersburg; in key areas of the ROSSETI Group's innovation-driven growth being → Cluster for the Development of Information Technologies, developed. Furthermore, joint business meetings, sessions and Radioelectronics, Instrumentation, Communications, and seminars are held. Telecommunications, Saint Petersburg; One of the main interaction formats is bilateral agreements with → Innovative Territorial Cluster of New Materials, Laser and resident companies from clusters that provide for: Radiation Technologies, Troitsk (Moscow); → joint developments; → training and professional advancement; → Innovative Electrical Territorial Cluster of Chuvash Republic. → joint communication events. In the coming years, as part of the Innovative Development Program PJSC ROSSETI regularly invites companies from the field-oriented of PJSC ROSSETI for 2020–2024 with an outlook for 2030, it is clusters to participate in procurement procedures and the relevant planned to: sales and exhibition events. → develop long-term cooperation programs and involve the The Company regularly cooperates with the following regional companies that are part of innovative territorial clusters in the innovation clusters: implementation of the Innovative Development Program of PJSC ROSSETI; → Cluster of Innovative Technologies, Closed Administrative- Territorial Unit, Krasnoyarsk Territory, Zheleznogorsk; → implement investment projects related to innovations in field- oriented territorial clusters including the creation or siting of new → Zelenograd Innovation Cluster, Moscow; production, innovative infrastructure facilities, and government- linked companies.
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GRI 103-2 GRI 103-3 ранее EU8 Interaction with Technological Platforms
Technological platforms are associations of a large number of leading organizations working together on specific areas of scientific and technological development. Technological platforms are aimed at providing communication and coordinating all stakeholders, including scientific and educational organizations as well as industrial enterprises, at the pre-competitive stage of research and development.
The ROSSETI Group interacts with technological platforms in PJSC ROSSETI regularly informs participants of relevant line with its strategic priorities and including increasing the technological platforms about the current and future needs of the effectiveness of the Company's operations in the long term. ROSSETI Group in innovative technologies and products.
Participation of the ROSSETI Group in Technological Platforms
Environmentally Friendly Vehicle “Green Car”
Russian Intelligent Power System Key tasks of the technological platform (Established at the Initiative of PJSC ROSSETI) → development and testing of pilot infrastructure projects for the maintenance of environmentally friendly vehicles; → interaction with electric grid facilities in terms of developing electric Key tasks of the technological platform vehicles; → development of standard technical solutions for charging and filling → formation of a community engaged in innovation development and stations and battery swap stations for electric vehicles. modernization of the Russian power sector based on intelligent technologies; Cooperation of the ROSSETI Group with the technological platform → provision of a new client-oriented industry with reliable, quality, and PJSC ROSSETI Moscow Region is a participant of the MOESK-EV project cost-effective power supply to consumers; for Moscow Region. → provision of systemic and consistent development aimed at creating an intelligent power system in the Russian Federation. Cooperation of the ROSSETI Group with the technological platform Representatives of the corporate participants of the platform are Small-Scale Distributed Power Generation members of the Scientific and Technical Council of PJSC ROSSETI and the Advisory Body to Improve the Efficiency of Procurements Made by PJSC ROSSETI (including small and medium enterprises). Key tasks of the technological platform → innovative and technological support of structural adjustment of the Russian power sector, namely, the transition from the centralized system with a predominance of large generation sources to a variety of types and forms of generation sources; → development of the small-scale distributed power generation facilities Main interaction formats of the companies of the ROSSETI Group with technological platforms: based on different generation types, local grids, control and automation tools, energy storage systems, etc. Cooperation of the ROSSETI Group with the technological platform PJSC ROSSETI is a participant in the “Use of Energy in Local Power Systems” projects that include the development of: synchronization of events of pooling resources for the information for the partners on the priorities of → energy storage systems (chemical, inertial, etc.); the companies participating in implementation of large-scale projects the Innovative Development Program of PJSC → energy control automation systems (Microgrid); technological platforms requiring significant investment and ROSSETI for 2020–2024 with an outlook for 2030 → new technologies for constructing local electric grids. competences
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GRI 103-2 GRI 103-3 Interaction with the Media Number of PJSC ROSSETI’s Followers in Social Press Releases about the ROSSETI Group’s Media, thsd pers. Activities, thsd pers.
The ROSSETI Group strives to ensure a high level of information disclosure and transparency 2019 39.3 2019 287.9 of its operations by implementing the principle of active dialog with all interested media. 2020 47.3 2020 248.0
The companies of the ROSSETI Group directly cooperate with The companies of the ROSSETI Group are active users of such media and information agencies in 80 regions of presence, communication channels as a website and social media accounts including industry-specific and corporate media. Media events are (Facebook, VK, Twitter, Instagram, YouTube and Odnoklassniki). One of the pivotal innovations of 2020 was the launch of regularly held at the federal level and in all SDCs of PJSC ROSSETI, More than 47 thsd people are subscribed to PJSC ROSSETI's social the official Telegram channel @rosseti_official in April, including study visits to the Company's facilities. In 2020, given the media, and the total media outreach amounted to 5 million users. whose audience grew to 21 thsd subscribers in a few challenging epidemiological situation, the format of interaction with Compared to 2019, the number of subscribers increased by 20%, months. PJSC ROSSETI's Telegram channel is one of media was adjusted: most of the meetings, conferences, and round and media outreach – by 14%. In 2020, PJSC ROSSETI put out more the largest corporate channels in Russia. tables were held online. than 1.5 thsd posts in total, and more than 88 thsd publications mentioning PJSC ROSSETI were posted on social media and in the In 2020, more than 248 thsd publications on the ROSSETI Group's blogosphere. operations were posted in media, and 40% out of them – at the From April to December 2020, more than 1 thsd messages were In order to assess the effectiveness of the ROSSETI Group's federal level. posted in PJSC ROSSETI's Telegram channel, including photos and activities in the information space media monitoring is carried out videos, with more than 13.5 million views. In total, PJSC ROSSETI on a regular basis, using Scan Interfax - a system for analyzing was mentioned in more than 7 thsd messages in different Telegram the media environment. According to the results of the monitoring, channels in 2020. PJSC ROSSETI ranked 1st in the media presence rating among Russian power companies in 2020.
GRI 102-12 GRI 103-2 GRI 103-3 Approach to the Implementation of the UN Sustainable Development Goals (UN SDGs)
Management of sustainable development issues at PJSC ROSSETI PJSC ROSSETI shares the principles of the UN Global Compact as Taking into account the specifics of the business, the ROSSETI is carried out taking into account the global agenda and the best the largest existing business initiative in the field of sustainable Group in the course of its production activities and activities in the world practice in this area. The understanding of sustainable development and, among other things, plans and evaluates its own field of sustainable development, contribute to the achievement of development of PJSC ROSSETI is consistent with the UN definition: work in this area in terms of its contribution to the achievement of 9 out of 17 UN SDGs on a daily basis. “Sustainable development is development that meets the needs of the UN SDGs. the current generation without compromising the ability of future generations to meet their own needs”.
ROSSETI Group's contribution to the achievement of the UN SDGs UN SDGs Program documents of the ROSSETI Group aimed at achieving the UN SDGs Report sections with detailed disclosure of the topic Activities Main results and achievements for 2020 → Occupational safety and compliance with safety regulations GRI 403-6 → Social security of employees, → RUB 6.1 bn - expenses for occupational safety of employees - Personnel. Motivation and Engagement of Employees including voluntary health insurance → Voluntary personal insurance program (VPI), including voluntary health - Occupational Safety and health resort treatment → 100% of the ROSSETI Group's employees are provided with voluntary health insurance (VHI) and accident and illness insurance (AaII) - Employee Health Protection → Ensuring the energy facility safety insurance for persons who are not employees of the Company
→ 184.7 thsd people, which is 87% of the total headcount of the ROSSETI Group’s Educational programs for advanced training of managers and specialists: electric grid companies, were trained at the expense of the Company → on the course of Environmental Management in accordance with the - Personnel. Recruitment, Attraction and Professional Development → RUB 829.8 mn - expenses of the Company for occupational training and → Cooperation with specialized requirements of the international standard ISO:2015; of Personnel universities and secondary advanced training of employees - Personnel. Employee Training and Professional Advancement → on the topic: "Ensuring environmental safety at power grid facilities"; vocational educational institutions → 5,258 students of universities and secondary specialized colleges who - Approach to Stakeholder Engagement. Cooperation with Educational completed practical training in the companies of the ROSSETI Group → on providing first aid in case of accidents at work; Institutions and Engagement of Talented Youth → 296 students who worked as part of student teams at the facilities of the → on the basics of industrial safety. ROSSETI Group companies
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→ Unified Technical Policy in the electric grid sector - Caring for Consumers → Energy Saving and Energy Efficiency improvement Program → Ensuring uninterrupted power supply → Compliance of PJSC ROSSETI with the requirements of the international standard - Approach to Stakeholder Engagement. Interaction with Consumers. to consumers at a minimum tariff → Innovative Development, Energy Conservation, and Energy Efficiency - Energy Efficiency and Energy Conservation ISO 14001:2015 level relative to other countries Enhancement Policy - Approach to Sustainable Development Management. Management Systems Used by the ROSSETI Group → Program for the development of smart electricity metering → Provision of jobs in the regions of operation → The SDCs and sub-subsidiaries of PJSC ROSSETI employ 220 thsd people → Corporate Code of Ethics and Business Conduct (Code of Ethics) - Personnel in 80 regions of Russia - Approach to Stakeholder Engagement. Interaction with Personnel → Competitive salary → Occupational Safety Policy of the ROSSETI Group → RUB 60 thsd - average salary - Approach to Sustainable Development Management. Corporate → Social Security → Personnel and Social Policy Culture, Ethics and Values → Employee professional development → RUB 159.4 bn - expenses for employees' remuneration
→ Digital transformation → 2.39 mn km - length of power transmission lines - Caring for Consumers. Consumer Technological Connection → Program of digital transformation of the ROSSETI Group until 2030 - Caring for Consumers. Digital Transformation of the Electric Grid → R&D and implementation of scientific → 12.4 GW of connected capacity research results → Innovative development program Sector and Innovative Development → 262 thsd completed contracts for technological connection → Innovative Development, Energy Conservation, and Energy Efficiency - Approach to Stakeholder Engagement. Interaction with Regions → Connection of new facilities - Approach to Stakeholder Engagement. Interaction with Technological → RUB 1.9 bn - R&D costs Enhancement Policy → Construction of new power grids Platforms → 38 - digital Electric Grid Districts launched (including 34 - in 2020)
→ 1.4 – SAIDI → Development Strategy of the ROSSETI Group and its subsidiaries and - Approach to Sustainable Development Management. Sustainable affiliates up to 2030 Development Priorities and Corporate KPI → 1.1 – SAIDI → Program of digital transformation of the ROSSETI Group until 2030 - Caring for Consumers. Consumer Technological Connection → Development of the country’s → RUB 73.4 bn - costs of repairs and maintenance of grids - Caring for Consumers. Digital Transformation of the Electric Grid → Maintenance and repair programs of PJSC ROSSETI SDCs regions through the investment → RUB 46,509 mn - the amount of tax charges for the ROSSETI Group according Sector and Innovative Development program implementation to IFRS → Programs for Modernization (Renovation) of Power Grid Facilities of - Approach to Stakeholder Engagement. Interaction with Regions PJSC ROSSETI SDCs → The share of purchases from SMEs amounted to 70% (at the value established - Approach to Stakeholder Engagement. Interaction with Technological by the decree of the Government of the Russian Federation of December 11, 2014 No. → Program of Partnership Between PJSC ROSSETI and Small and Platforms 1352 of at least 20%) Medium-Sized Businesses - Caring for Our Suppliers
→ Energy efficiency improvement → – savings in fuel and energy resources in 2020 compared to RUB 842.34 thsd → Development Strategy of the ROSSETI Group and its subsidiaries and 2019 → Compliance with international affiliates up to 2030 - Energy Efficiency and Energy Conservation standards in terms of quality → Development of an energy management system in the ROSSETI Group that meets the - Management Systems Used by the ROSSETI Group → Electric Grid Complex Environmental Policy management requirements of ISO 50001:2018 → Electric Grid Complex Environmental Policy → Unified Technical Policy in the electric grid sector → 182.7 thsd - the number of installed bird protection devices → Biodiversity Conservation → Energy Saving and Energy Efficiency Improvement Program - Caring for the Environment. Biodiversity Conservation → RUB 483.2 mn - environmental protection costs → All-Russian program for the development of charging infrastructure for electric transport
→ Representation of Russia in the WEC and CIGRE Associations was ensured → Contributed to the regular strategic and case studies of WEC on behalf of Russia “Review of Global Challenges and Opportunities (Issues Monitor 2020)”; World Energy Trilemma Index 2020; “The Role of Electricity Grid Companies in the Energy Transition”; "Scenarios of Post-COVID Development" → Development Strategy of the ROSSETI Group and its subsidiaries → Representation in international and affiliates up to 2030 - Approach to Stakeholder Engagement. Interaction with International associations and organizations → 62 international and 10 national working groups have been created Partners and are functioning with the participation and leadership of RNC CIGRE members; → Digital Transformation Concept up to 2030 → Participated in the development of recommendations for digitalization in the framework of the "Business Twenty (B20)" → GlobalDSO platform launched (Global Platform for Interaction of the Heads of Energy Distribution Companies)
1 In the ROSSETI Group, taking into account PJSC ROSSETI — 221 thsd people.
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Sustainable Development Progress
102 Caring for Consumers 110 Caring for the Environment 116 Energy Efficiency and Energy Conservation 122 Personnel 142 Occupational Protection 145 Employee Health Protection 148 Caring for Our Suppliers 154 Investment in the Future
100 | ROSSETI Corporate Social Responsibility and Sustainability Report 2020 | 101 Sustainable Development Sustainable Development Sustainable Development Progress About the Group Management Progress Appendices Technological Connection Service Indicators GRI 103-2 GRI 103-3 Number of Applications Submitted and Contracts Capacity, GW GRI 201-3 Caring for Consumers Concluded, thsd pcs Consumer Technological Connection 486 49 44 431 449 43 Providing reliable, high-quality and affordable energy supply for consumers is 380 343 323 PJSC ROSSETI's most important strategic objective. 366 332 19 15 262 12 17 14 12 Doing Business 2021 Rating 2018 2019 2020 2018 2019 2020 Number of applications submitted Capacity of applications submitted The World Bank's annual Doing Business rating reflects the degree of the favorable business environment in 190 countries across the world, based on 10 main criteria. Number of contracts concluded Capacity of contracts concluded Number of contracts executed Capacity of contracts executed These include the complexity and cost of the process of technological connection to the electric grid and reliability of electricity supply. In 2021, thanks to the implementation of several reforms, the total duration of the technological connection Since July 1, 2020, the procedure of technological connection to electric grids for individuals, private entrepreneurs, 1 procedure was reduced to 25 days. The number of procedures necessary and the cost remained unchanged. and small and medium-sized businesses has been simplified . The interaction of the applicant and the grid company has been completely transferred to electronic format, and payment of the invoice issued by the grid company constitutes the signing of the contract. The period of performance of obligations for technological connection begins from the moment of payment that the client can make online. Now, applicants can also work independently on technological connection to the connection point specified in the technical conditions at the level of 0.4 kV and lower. Grid companies provide applicants with instructions to carry out a self-secure connection.
GRI 103-2 GRI 103-3 Ensuring the Reliability of Energy Supply for Consumers former EU6 former EU21 The ROSSETI Group is constantly working to improve the reliability In 2020, the ROSSETI Group reduced and safety of consumers' electricity supply. This work is based on a the number of technological disruptions risk-oriented approach and is done in accordance with external and internal regulatory requirements2. in the 110 kV grid and above Reliability targets for the ROSSETI Group as a whole are set by the In addition to electricity transmission activities, PJSC ROSSETI's In 2020, PJSC ROSSETI received more than 449 thsd applications Strategy for Development of the Electric Grid Sector, and those of electric grid companies provide comprehensive services for for electricity connections provided for power-receiving each of the grid companies of the ROSSETI Group are set by the by % by % relevant decisions (resolutions) of the tariff regulatory bodies. 3 15 technological connection of consumers and electricity producers equipment, which is 4% more than in 2019. The increase in the against 2019 against 2018 to electric grids1, ensuring the continuous development of number of applications for technological connection was mainly customer services and creating the most comfortable conditions due to the entry into force from July 1, 2020, of the federal law2 for consumers. transferring obligations for the installation of electricity metering Accident Rates With the usual working procedure, you can apply for devices to grid companies. 223 thsd technological connection technological connection, conclude a contract and monitor the contracts with consumers and power generation facilities are 10.9 2.4 process of technological connection both in one of the ROSSETI planned for 2021, with a total capacity of 12.4 GW. 9.6 9.3 1.3 Group's service centers and on the specialized official website At the same time, due to quarantine restrictions in 2020 and 1.2 1.1 https://портал-тп.рф/ in your Personal Account. Also on the the impossibility of timely fulfillment of obligations on the part 1.8 1.4 Company's website, you can conduct a preliminary calculation of of applicants, primarily for individuals, the largest category of the fee for technological connection using a special calculator, applicants, the number of contracts concluded for technological 2018 2019 2020 2018 2019 2020 find out the schedule of planned power outages, and assess the connection and the number executed decreased by 6% and 21%, quality and availability of technological connection to electric respectively. Number of violations (accidents) in the 110 kV grids, thsd pcs Пsaidi – system average interruption duration index, hours grids. Пsaifi – system average interruption frequency index, pcs.
1 1 In accordance with the Order of the Government of the Russian Federation No. 147-r dated January 31, 2017 “On target models for simplifying procedures of doing business and increasing the investment In accordance with the Decree of the Government of the Russian Federation No. 262 dated March 10, 2020. attractiveness of the constituent entities of the Russian Federation”. 2 Order of the Ministry of Energy of the Russian Federation No. 123 dated February 19, 2019, and orders on the ROSSETI Group No. 382r “On approval of standard technical specifications” dated September 2 Federal Law of the Russian Federation No. 522-FZ dated December 27, 2018. 18, 2019, and No. 260r/534r “On approval of the standard technical specification for automation of the functional selection of control effects (technical upgrading and rehabilitation/maintenance and repair) on the items of the prioritized list, taking into account predictive analytics” dated September 10, 2020.
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Most of the technological disturbances that occurred in the last In 2020, the total Accident Prevention and Elimination three years were associated with externalities – natural impact (35%) and interference of third parties and organizations (38%). accident rate was The ROSSETI Group’s activities in the field of prevention and → 2,926 crews of 21,539 people and 10,404 units of equipment reduced against 2019 by 9% elimination of accidents are carried out in accordance with from contractors under cooperation agreements; the requirements of the Unified Rules for the Prevention and → 6,107 backup power supply sources with a capacity of Elimination of Consequences of Technological Disruptions 489 MW. Main Causes of Technological Disturbances, % (Accidents) at Power Grid Facilities of PJSC ROSSETI SDCs, approved by Order of PJSC ROSSETI No. 395 dated December 30, In 2020, PJSC ROSSETI subsidiaries and affiliates conducted In 2020, Пsaidi and Пsaifi indicators improved 2019. 140 trainings to work out interaction in eliminating emergencies in the electric grid sector with other subsidiaries and affiliates, Round-the-clock readiness for emergency recovery is ensured. The administrations of the constituent entities of the Russian 9 available resource of manpower and means of subsidiaries and Federation, territorial executive authorities and local self- 38 by and respectively dependent PJSC ROSSETI companies includes: 22% 8% government bodies, housing and utility organizations, subdivisions → 9,861 crews, 47,861 repair personnel, 23,913 units of of the Russian Ministry of Emergency Situations, Russian During the coronavirus pandemic, the ROSSETI Group took all GRI 103-2 GRI 103-3 equipment (of which 600 mobile crews numbering 4,139 meteorological service, contractors, and territorial grid operators. necessary measures to ensure reliable electricity supply to people and 1,844 units of equipment); 18 consumers: → reliability of energy supply to consumers and the situation 35 on the ground since the beginning of the epidemic have GRI 103-2 Digital Transformation of the Electric Grid Sector and Innovative GRI 103-3 been controlled by specially formed Headquarters for the former EU8 Prevention and Rapid Response to the Spread of Coronavirus Interference of third parties and organizations Infection; Development Natural phenomena → all PJSC ROSSETI subsidiaries and dependent companies The ROSSETI Group has a long length of transmission lines, the reliability of which is impossible without the use of proven and highly Resource depletion (aging) (SDCs) have implemented in advance the necessary set efficient innovative technologies. Other causes of measures for the prevention of disease and maximum protection of production personnel remaining in the workplace. Digital Transformation is the Basis of Sustainable Development Repair, Maintenance and Modernization of the Power Grid Infrastructure The main trend in the electricity sector today is the transition to sustainable development through digital transformation and 1 In 2020, the ROSSETI Group completed all planned measures to ensure reliable electricity supply to consumers . By the beginning of the innovative development. Companies that have been able to quickly scale up digital technologies and integrate them into all areas of heating season, the repair work on the main electric grid equipment was complete. their business have gained significant competitive advantages, including increased reliability of equipment. Such companies are the most effective in overcoming the global challenge of the coronavirus and will be able to develop apidlyr after the pandemic. Works Carried out by the ROSSETI Group in 2020 to Ensure the Reliability of Power Supply
Implementation of the Program for Modernization (Renovation) of Power Grid Facilities of ROSSETI SDCs1 Implementation of Maintenance and Repair Programs of PJSC ROSSETI SDCs
Clearing the paths of Replacing the ground Repairing transmission Replacing Replacing Replacing overhead power lines wire lines power circuit breakers with thsd transformers voltage class 35 kV hectares 46 248 439 157.4 2.0 thsd km 174.3 thsd km switches and above (105% of the annual plan) (106% of the annual plan) (109% of the annual plan) Replacing Renovating Repairing power Repairing Repairing transformer substations transformers switches (CTS, PTS, and DP): thsd thsd 528 8,932 km pieces pieces pieces distribution points and transformer of 0.4 kV and higher 754 19.2 40.4 substations 0.4/ 6-35 kV power lines (125% of the annual plan) (103% of the annual plan) (104% of the annual plan)
1 PJSC ROSSETI Order No. 1, “On the results of the work of electric grid facilities of branches of PJSC ROSSETI's SDCs in 2019 and the main measures to improve the reliability of operation and repair of power grid facilities, introduce new equipment, automate and mechanize production processes as well as preserve the health of employees of branches for 2020” dated January 9, 2020. 1 Approved by the resolution of the PJSC ROSSETI Management Board dated November 25, 2020, Minutes No. 1038.
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PJSC ROSSETI has been steadily increasing its investment in Dynamics of R&D Costs, mn RUB All selected pilot projects have the following characteristics: research and development (R&D) in recent years – in 2020, 0.3% of revenue or 1,689.2 mn RUB were allocated to R&D. This enables us → the term of the project does not exceed three years; → solutions and approaches used in the implementation of pilot not only to purchase advanced innovative technologies but also to → the payback timeframe of the project is no more than 10 years; projects can be replicated in other PJSC ROSSETI SDCs. ensure their development. 1,689
In 2020, PJSC ROSSETI received 35 titles of protection for R&D 980 1,190 deliverables. 13 R&D deliverables were transferred to test 893 It is also planned to implement a number of projects → organizing remote control of substation equipment; 692 operation to third-party organizations, and 18 were implemented in together with JSC SO UPS, the main directions of which → organizing digital remote control of the equipment and relay PJSC ROSSETI subsidiaries. 2016 2017 2018 2019 2020 will be: protection (RP) devices of electrical switchgear at substations → establishing an independent system for generating of electricity distribution grids. commercial accounting data to ensure industrial consumers participate in demand management programs; R&D cost structure by core activity, mn RUB Activities and their costs 2018 2019 2020 Pilot Projects within "Digital Transformation 2030" Concept Transition to smart substations of a 35–110 (220) kV voltage class 147.0 211.5 422.5
Transition to active-adaptive grids with a distributed intelligent automation and control system 186.0 214.5 337.0 Project name SDC Transition to comprehensive efficiency of business processes and automation of control systems 313.0 334.5 321.0 Projects of the ROSSETI Group of companies Application of new technologies and materials in the electric power industry 333.0 429.5 473.0 PJSC IDGC of Center (Smolenskenergo Software method of loss detection using Big Data branch of Smolenskiy electric grid district (EGD)) Prediction of probability and consequences of equipment failures based on Big Data ROSSETI Lenenergo
Testing of a new approach to the interaction of retail electricity market participants based on blockchain IDGC of the Urals technology in the territory of Yekaterinburg and the Kaliningrad Region Yantarenergo PJSC ROSSETI Digital Transformation 2030 Concept Target model main principles Power transmission management using Big Data technologies ROSSETI Lenenergo
Pilot operation of LoRaWAN data transfer technology at the facilities of IDGC of the Urals in order to Data flow to unified grid control centers in the amount develop solutions for the transfer of technological information necessary for the implementation of project IDGC of the Urals Complete transformation of the energy grid infrastructure of 100% data flow to technological and corporate information necessary and sufficient for operational-technological and digitalization in the management of the electric grid sector the ROSSETI Group grids situational management Automated mobile team management system (Subsystem of monitoring the activity of mobile team ROSSETI Moscow Region employees) ICGC of the North-West
Mobile application for clients of ROSSETI Moscow Region ROSSETI Moscow Region Interconnection of all information digital streams based on Platform solutions, creation of a unified digital environment cloud technologies and implementation of information security technologies 110 kV digital overhead power line ICGC of the North-West
IDGC of Centre Application of electricity storage systems in electric grids At the end of 2018, PJSC ROSSETI adopted the Digital → predictive analytics; IDGC of Center and Volga Region 1 Transformation 2030 Concept that aims to completely change the → blockchain; ROSSETI Group and JSC SO UPS join projects existing logic of business processes in the power grid companies Establishment of an independent system for generating commercial accounting data to ensure industrial → Big Data and machine learning; IDGC of the Urals of the ROSSETI Group by 2030 due to the introduction of digital consumers participate in demand management programs technologies that allow for rapid analysis of large amounts of data. → wireless data transmission systems for industrial Internet; Organization of digital remote control of the equipment and RP devices of electrical switchgear at To effectively implement the Digital Transformation 2030 Concept, → "Digital Electrician"; substations of electricity distribution grids of the Moscow High-Voltage Grids branch (ROSSETI Moscow ROSSETI Moscow Region a roadmap has been formed and approved in the ROSSETI Group2, Region) → new services for consumers; according to which, in 2020–2021, the companies of the ROSSETI Implementation of remote control of the equipment of the SS 110 kV Haranor and SS 110 kV Dauria from Group selected a number of pilot projects in the following areas: → increased observability and controllability of electric grid the NCC of the Chitaenergo branch of ROSSETI Siberia and Branch of SO UPS Zabaikalsk Regional Dispatch ROSSETI Siberia equipment; Office → electricity accumulation systems. Implementation of remote control of the equipment of the SS 220 kV Sredniy Balyk, SS 110 kV Pobeda, and SS 110 kV Chernyi Mys from the grid control center (NCC) of ROSSETI Tyumen and Branch of SO UPS ROSSETI Tyumen Out of 9 pilot projects launched, 4 have been completed (electricity Tyumen Regional Dispatch Office accumulation systems, Lorawan technology testing, mobile Implementation of remote control of the equipment of SS 110 kV Beregovaya from the Baltic Regional Yantarenergo application for clients, and a blockchain settlement system for Dispatch Office and the NCC of Yantarenergo clients). More information on implementing the Digital Transformation 2030 Concept in the ROSSETI Group is presented in the 2020 Annual Report of PJSC ROSSETI. 1 Approved by the resolution of the Board of Directors dated December 21, 2018 (Minutes No. 336). 2 Order No. 56 dated March 20, 2019.
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Electric Grid Sector Digital Transformation Effects
The Russian grid sector showed high resilience to challenges during the pandemic largely due The Company is guided by the Digital Transformation (DT) to the fact that digital transformation had become an unconditional priority of the ROSSETI 2030 Concept to carry out large-scale transformations Group in recent years
Capitalization DT Concept increase
Technological changes Social responsibilities
Organizational changes Services quality and → Improvement of labor productivity, personnel safety, responsiveness, availability improvement reduction of losses in electrical grids → Team workers tablets for the real-time tracking and managing of performance Energy efficiency parameters of all participants in improvement the process of transmission and consumption of electric energy New infrastructure formation Digital Substation
Digital Transformation Results for 2017-2020: "Digital Electrician" → Advanced technological solutions that digital digital digital network provide observability and remote control of 84 substations 38 areas 22 control centers equipment operation of unmanned operation of electrical grids → Automated control systems handling up to (34 of which in 2020) 3,500 signals → Information exchange moved to the digital domain on the basis of 61850 charging IEC Protocol "Digital Electrician" → Multifunctional measurement and mln stations Project 2.9 263 accounting devices implemented in ROSSETI Moscow “smart” meters for electric vehicles opened Region and ROSSETI North-West. implemented within the area covered by In 2021, its replication begins ROSSETI (the plan before 2030 is to reach rates of 16.2 million appliances)
digital transformation Common Information Model of 35 kV 30 standards CIM grid and above created developed
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Sustainable Development Sustainable Development Sustainable Development Progress About the Group Management Progress Appendices
GRI 103-2 GRI 103-3 Caring for the Environment Approach to Management Activities in the Field of Environmental Protection The ROSSETI Group considers environmental protection an → decommission of equipment containing polychlorinated integral part of its daily work, fully aware of the need to maintain biphenyls (PCBs) by 2024, with subsequent transfer of environmental equilibrium and our responsibility to future said equipment to specialized licensed organizations for generations. The Company ensures compliance with the highest destruction; requirements aimed at reducing the impact on the environment → conservation of biodiversity, including measures to prevent and has all the necessary mechanisms to minimize possible the decline in the number of birds listed in the Red Book of environmental risks. In the process of production activities, Russia; the ROSSETI Group complies with the requirements of Russian → continuous improvement of the environmental management legislation in the environmental sphere, as well as international system in order to improve the ROSSETI Group's obligations in the field of environmental protection. environmental performance. Strategic objectives of the ROSSETI Group in the field of environmental protection and environmental safety are:
Achieving Strategic Goals in the Field of Environmental Protection Environmental Protection Cost Structure, Penalties Imposed on the ROSSETI Group for Violation Goals identified in the 2019 Corporate Social mn RUB thsd RUB Responsibility and Sustainability Report Results achieved in 2020 Goals for 2021 of Environmental Protection Requirements, 555.0 538.7 483.1 318.4 334.5 730.0 Transfer for destruction of at 6% of PCB-containing equipment has been 247.7 Transfer for destruction of at least 10% of least 12% of all PCB-containing transferred to licensed organizations for destruction all PCB-containing equipment located at the equipment located at the ROSSETI Failure to meet the indicator is due to the over- ROSSETI Group sites as of December 31, 440.5 Group sites as of December 31, implementation of the plan for disposal of PCB- 2020. 2019. containing equipment in previous years. 90.6 61.0 65.5 144.8 158.7 155.0
Certificates of conformity were obtained based on Certification of the Environmental the results of an external audit of the Environmental 2018 2019 2020 2019 2020 Management System of PJSC Management System: Improvement of the Environmental ROSSETI's subsidiaries for IDGC of Center1 certificate No. 20,0892,026 valid Water resources protection and rational use Management System. compliance with the requirements until July 3, 2023 Air protection of the ISO 14001:2015 standard. Yantarenergo2 - certificate No. ROSS RU.FK11. K00524 valid until June 29, 2023 Land resources protection, including land reclamation and management of production and consumption wastes
GRI 103-2 Biodiversity conservation, Violations and Fines GRI 103-3 In order to ensure the ornithological safety of power Continued work on GRI 307-1 including measures to prevent grid facilities, 182,676 bird protective device were biodiversity the decline in the number of birds In 2020, 19 inspections of the companies of the ROSSETI Group → exceeding the standards of pollutants discharged into a water installed in 2020. conservation listed in the Red Book of Russia. were carried out by environmental control and supervision bodies, facility with sewage. as a result of which the following were identified: The total amount of penalties imposed for violation of → violations in the field of waste management; environmental protection requirements by the ROSSETI Group in → exceeding the maximum permissible level of physical impact 2020 amounted to 440.5 thsd RUB, which is 39.6% lower compared on atmospheric air from electrical equipment; to the previous year.
2018 2019 2020 Number of non-financial sanctions imposed (orders received), pcs. 21 13 15 1 The audit was carried out by the Russian Register Association for Certification. 2 The audit was conducted by ROSTEHCERT LLC (official representative of Quality Austria, part Total amount of penalties imposed, thsd RUB 875.0 730.0 440.5 of the IQNet international certification grid). The number of cases that had been the subject of legal proceedings, pcs. 8 6 6
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GRI 303-1 GRI 303-2 Protection and Responsible Use of Water Resources GRI 103-2 GRI 303-3 Atmospheric Air Protection GRI 103-3 The ROSSETI Group implements activities aimed at protecting Regulatory legal acts of the Russian Federation: Reducing the negative impact on atmospheric air is one of the Gross emissions of pollutants into the air for 2020 amounted to water bodies and promoting the rational use of water resources on → Water Code of the Russian Federation; ROSSETI Group's directions in the field of environmental activities. 1,465.6 tons, which is 3.7% lower than in 2019. The decrease in this an ongoing basis. indicator is due to the results of the inventory of stationary sources → Law of the Russian Federation No. 2395-1 On Subsoil dated During production activities, the ROSSETI Group ensures of pollutant emissions. The volume of water consumption of the ROSSETI Group amounted February 21, 1992; compliance with the requirements of Russian legislation in the field 3 to 2,227.0 thsd m in 2020, which is 3.7% lower than in 2019. The of atmospheric air protection, as well as takes measures aimed → Federal Law No. 416-FZ On Water Supply and Wastewater main reason is the transfer of most of the personnel to the remote at reducing emissions of pollutants into the air from stationary Disposal dated December 7, 2011. mode of work due to the spread of the coronavirus infection. sources of emissions. At the same time, water withdrawal from underground sources Internal regulatory documents and standards in the companies of in 2020 decreased by 16.9%, and water withdrawal from surface the ROSSETI Group have not been developed and are not applied. sources decreased by 16.4% compared to the level of 2019. Fresh The amount of water disposal to surface water bodies increased by Emissions of Pollutants into Atmospheric Air, t GRI 305-7 water is 100% of the water withdrawal of the ROSSETI Group. 12.9% due to an increase in precipitation. The main factor when choosing a source of water withdrawal is Measures in the field of protection and rational use of water 2018 2019 2020 the presence of centralized water supply grids – they are given resources, carried out from 2018–2020: Gross emissions of harmful substances into the atmospheric air, total 1,519.1 1,522.3 1,465.6 priority. In the absence of the possibility of connecting the facility → construction, reconstruction and maintenance of local including: to centralized water supply grids, groundwater is extracted from treatment facilities designed to purify wastewater from artesian wells, surface water bodies, and imported water is pollutants contained therein so that they comply with the Solids 167.0 160.8 154.2 also used. Water is used for drinking and household needs of established standards; personnel, as well as for production needs: filling fire tanks, fire of which → swelling of the well for the extraction of groundwater of the extinguishing and cooling electrical equipment. - furnace bottom ash 44.9 22.2 23.0 Voronezhenergo branch of IDGC of Center. The ROSSETI Group also operates in water-stressed region Gaseous and liquid substances 1,352.1 1,361.5 1,311.4 (the Republic of Kalmykia (water withdrawal in the region - Water Withdrawal Structure in the Republic of 4.9 thousand m3). Companies of the ROSSETI Group have an of which: Kalmykia, a Water Stressed Region, in 2020 insignificant impact on water resources in the regions of operation, - sulfur dioxide 56.5 57.5 57.3 including water-stressed regions. Interaction with stakeholders in terms of water withdrawal and water consumption is carried out - carbon monoxide 606.0 588.0 596.4 85.7% within the framework of legal regulation in the field of protection 14.3% 3 - nitrogen oxides (in terms of NO ) 208.6 261.8 258.8 of water resources, and the volumes of water consumption are 0.7 thsd m3 14.2 thsd m 2 established on the basis of a Water Consumption Agreement, - hydrocarbons (without volatile organic compounds) 42.6 23.0 22.0 License for Subsoil Use for Groundwater Extraction, Cold Water - volatile organic compounds 411.6 397.5 354.6 Supply Agreement, Hot Water Supply Agreement. - other 26.8 33.7 22.3
Public grid Activities in the field of atmospheric air protection implemented in Other sources1 Emissions of Pollutants into Atmospheric Air, t 2020: → at the Mezenskaya DPP (Arkhangelsk Branch of IDGC of 1,519.1 1,522.3 1,465.6 thsd m3 North-West), two diesel generator sets (DGS) were replaced Water Withdrawal Sources, Water Withdrawal from Surface Water Bodies, 1,361.5 thsd m3 by ADMi-1000 6.3 kV Mitsubishi (1000 kW) high-voltage diesel 1,352.1 1,311.4 generators equipped with an exhaust gas purification and 2,438.4 2,312.0 2,227.0 15.7 removal system; 18.4 18.3 116.1 → monitoring of compliance with established standards for 1,711.2 1,572.0 1,608.6 pollutant emissions was carried out at stationary sources with 69.9 the involvement of accredited laboratories. 167.0 160.8 154.2 61.9 626.7 635.0 527.7 2018 2019 2020
84.8 86.6 72.4 Solids 2018, 2019, 2020 2018 2019 2020 Gaseous and liquid substances
Surface waters Public water grid Underground sources Other sources1
1 *Other sources include bottled water for drinking needs of personnel, as well as imported water In the absence of the possibility of connecting the facility to centralized water supply grids and own water withdrawal wells (remote sites). Seawater and associated water are not used by the ROSSETI Group.
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Protection of Land Resources Total Amount of Land Restored, ha Number of Bird Protective Devices Installed, pcs GRI 103-2 Biodiversity Conservation GRI 103-3 6,626.9 GRI 304-2 The ROSSETI Group is implementing 6,484.6 The ROSSETI Group's production activities in terms of transmission 182.7 measures aimed at restoring and distribution of electricity are inevitably linked to negative impacts on biodiversity. 150.4 damaged lands. 4,879.2 This occurs mainly during construction of power grid facilities 110.7 and the use of production facilities and transport infrastructure. The main factors of negative impact are cutting of green spaces, The total amount of land restored by the damage to the state of aquatic bioresources and their habitat, ROSSETI Group in 2020 amounted to harm to birds by electric shock or other reasons related to 2018 2019 2020 overhead lines and equipment of substations. 2018 2019 2020 ha In order to ensure the ornithological safety of power grid facilities → ROSSETI South installed 1,260 bird protective devices on 6,626.9 in 2020, 182,676 bird protective devices (BPDs) were installed, the supports of overhead lines located in the Astrakhanskiy including: State Biosphere Reserve, Bogdinsko-Baskunchakski State Nature Reserve, the Viazovskaya Dubrava Wildlife Sanctuary, GRI 103-2 → ROSSETI Volga installed 4,405 bird protective devices on GRI 103-3 Waste Management Approach power lines passing through the territories of the Khvalynsky the Ilmenno-Bugrova Nature Reserve, the Sands of Burley GRI 306-1 Wildlife Sanctuary, the Oryol Forest Nature Monument, and GRI 306-2 National Park, the Guberlin Mountains State Nature Reserve, GRI 306-3 The activities of the ROSSETI Group in the field of production and The total amount of waste generated during production and the Zhigulevsky State Reserve, the Samarskaya Luka National the Zabuzansky Spawning Array Nature Monument. We also consumption waste management are carried out in accordance economic activity of the ROSSETI Group in 2020 decreased by 2% Park, and the Chavash Varmane National Park; installed 1.8 thsd bird protection devices during connection with the requirements of the current environmental legislation per year to 85 thsd tons. to the grids of Salynskaya and Tselinskaya wind farms in the → FGC UES installed 14,233 bird protective devices in order to of the Russian Federation, including the arrangement of waste- Waste generation is mainly related to office activities, cleaning of Tselinny district, Republic of Kalmykia. preserve the habitats of the Far Eastern stork, and monitored accumulation sites and the transfer of production and consumption production areas, and repair and maintenance work on electric grid the state of the environment in the passage zone of the 500 In 2020, ROSSETI Moscow Region saved 60 pine trees in Kratovo wastes to specialized organizations. facilities. kW high-voltage lines on the territory of the Federal State suburban settlement thanks to work on cabling – strengthening University Smolny National Park, including an assessment of trees with the help of a special system of synthetic stretchers, Volume of Waste Generation by Hazard Class, thsd t species diversity, number and spatial distribution of birds; which prevents trunks from falling on the power lines and softens Transfer of Wastes to Third-Party Organizations their shocking and jerking in a strong wind. 2018 2019 2020 by Hazard Type, thsd t Hazardous 37.4 43.2 44.3 I hazard class 0.6 0.3 0.2 102.3 86.6 86.0 II hazard class 0.2 0.2 0.2 27.2 III hazard class 1.9 1.5 2.2 33.5 33.2 IV hazard class 34.7 41.2 41.7 75.1 Virtually non-hazardous1 65.4 43.6 40.7 53.1 52.8 V hazard class 65.4 43.6 40.7 Total: 102.8 86.8 85.0 Participation in Competitions in the Field of Ecology and Environmental Protection The ROSSETI Group has organized separate collection of production 2018 2019 2020 and consumption waste. In particular, we are working on In 2020, the ROSSETI Group became the winner of the All-Russian collecting waste paper, office equipment, etc. separately. Within Transfer to neutralization and disposal (I–IV hazard classes) competition Reliable Partner – Ecology: the environmentally oriented activities, the Company carries out a Transfer to placement (IV–V hazard classes) separate accumulation of spent batteries and subsequently transfers → ROSSETI Siberia in the nomination “Best project in the field of them for disposal. sustainable development of cities and agglomerations” with a project to replace (modernize) obsolete equipment containing Hazardous and Non-Hazardous Waste Management Methods Used, thsd t resistant organic pollutants at power grid facilities located on the territory of the Omsk region; 2018 2019 2020 → ROSSETI Moscow Region in the nomination “Best project for Virtually non- Virtually non- Virtually non- Management methods used Hazardous hazardous Hazardous hazardous Hazardous hazardous the developing infrastructure and support of a new energy vehicle and eco-friendly modes of transportation” with the Neutralization 0.77 - 0.48 - 0.38 - project to create infrastructure for electric vehicles on the Disposal 1.85 - 1.54 - 2.21 - territory of Moscow and the Moscow region. Placement/ disposal 34.66 65.36 41.22 43.61 41.72 40.7
1 In accordance with Art. 4.1 No. 89-FZ dated June 24, 1998.
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GRI 103-2 GRI 103-3 Energy Efficiency and Energy Conservation The ROSSETI Group is already working on the synergy of urban outdoor lighting systems and grid infrastructure in 29 regions of operation. Being introduced at the same time, smart load Reducing electricity consumption is one of the essential tasks The work on energy conservation and energy efficiency of the ROSSETI Group, both in terms of reducing the negative improvement in the ROSSETI Group is performed in accordance control systems can significantly improve the energy efficiency and quality of street lighting, impact on the environment and in terms of increasing production with the Innovative Development, Energy Conservation and Energy and, as a result, comfort and safety in cities. efficiency. Efficiency Improvement Policy. The Company annually takes part in events aimed at promoting As part of the implementation of the Policy, Energy Conservation 1 energy conservation and energy-saving lifestyles, presents and and Energy Efficiency Programs have been formed for Consumption of Energy Resources GRI 302-1 implements innovative solutions in energy efficiency. PJSC ROSSETI SDCs1. One of the key goals set by the Programs is Consumption in universal Consumption volume in Consumption, mn RUB to maintain the share of LED lighting devices in the total volume Consumption by volume terms, thsd tfe2 universal terms, TJ of lighting devices used at a level of at least 75%2. As of the end of 2018 2019 2020 2018 2019 2020 2018 2019 2020 2018 2019 2020 2020, this figure was 77%. Thermal power consumption, 474,212 446,388 420,194 68 64 60 1,992 1,875 1,758 751 731 715 Gcal Electric power consumption, 967 933 908 116 112 109 3,399 3,282 3,194 3,345 3,474 3,520 mn kWh Key areas of innovative development, energy conservation and energy efficiency Total fuel consumption, enhancement policy - - - 200 193 180 5,860 5,655 5,274 5,638 5,899 5,526 incl.: - Gasoline, thsd l 94,851 86,213 77,404 107 97 87 3,135 2,842 2,549 3,208 3,146 2,814 2,658 - Diesel fuel, thsd l 66,287 68,118 67,022 80 84 82 2,344 2,461 2,403 2,372 2,697 Development and application of new technologies in Reduction in fuel and energy consumption for business Development and improvement of electricity metering the field of energy efficiency needs systems - Natural gas, thsd m3 11,047 10,262 9,828 13 12 11 381 352 322 58 56 54 Total – – 9,828 384 368 349 11,251 10,782 10,226 9,734 10,104 9,761
Reduction in fuel and lubricants consumption for road Introduction of lighting devices using LEDs transport Plans for 2021
EU12 Number of Lighting Devices Using LEDs The Level of Losses in Electricity Grids, % at the End of 2020, % Program of Energy Conservation and Energy Efficiency Enhancement of Development of the energy management 15.56 PJSC ROSSETI's SDCs system 14.88 14.31 The consumption of energy resources 8.95 8.58 8.64 → organization of inspections to detect non-contractual and for economic needs in 2020 amounted to 23.1 unbilled consumption; 4.40 4.15 4.30 → implementation of projects to improve energy efficiency; → introduction of lighting devices using LEDs; thsd tfe 76.9 → implementation of measures to reduce motor fuel 181.61 2018 2019 2020 consumption by motor and special-purpose vehicles.
Lighting devices using LEDs Along the ROSSETI Group, total, % Other lighting devices Along the distribution grids (0.4-20 kV networks of the SDCs of the distribution grid) Along the transmission grids (networks over 20 kV, PJSC FGC)
The main changes in 2020 in energy efficiency and energy сonservation management in the PJSC ROSSETI Group companies: The decrease in the volume of electrical energy → development of the Register of energy efficient equipment losses during transmission and distribution through project; electric grids in 2020 relative to the fact of 2019 → ensuring the compliance of the energy management system amounted to operating in a number of PJSC ROSSETI SDCs with the requirements of the new edition of ISO 50001:2018 on the basis of a previously developed package of documents. 3.37% 1 Other types of energy resources (other than those specified in the table) were not consumed or used in the reporting year. The consumption of electricity for the needs of substations is included in the technological losses of electricity during transmission, whose existence is caused by physical processes occurring during the transmission of electricity via electrical grids and does not relate to resources 1 Approved by the Board of Directors of PJSC ROSSETI on May 29, 2014, Minutes No. 156. consumed by the company. 2 In accordance with the Decree of the Government of the Russian Federation dated September 27, 2016 No. 971. 2 Ton of fuel equivalent (tfe) is a unit of energy equal to 2.93·1010 J.
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Promising Directions for the Development of Energy Conservation and Increasing Energy Efficiency Ongoing work on expanding the use of renewable energy sources in Russia Reduction Losses in Power Grids
The ROSSETI Group has developed and is now implementing → disconnecting power grid equipment (transformers and State support for microgrid development Optimization of the electrical grids operation a set of measures to reduce electricity losses in grids. This overhead lines) in low load modes; includes: → optimizing schemes and operating modes of the grid → introducing and developing an intelligent electricity through operational management. → development of measures for maintaining demand; → reduction of capital expenditures in the construction of grid facilities due to the metering system; → development of measures for stimulating supply including abandonment of long linear solutions in favor of local. renewable energy sources and import; → introducing new technologies, equipment, materials, and energy storage systems; systems to ensure the reduction of technological losses of → identification of import substitution targets; → optimization of investment costs by synchronizing plans for the construction of consuming centers and the electrical grid infrastructure with an increase m electricity; → determination of sources, forms and volumes of financing in the framework of state support measures (subsides, capital investment time for the period of absence of the need for significant amounts of development grant); additional capacity; → approval of a priority R&D plan; → decommissioning of low performing generating facilities and reduction of construction volumes of new generating capacities; → approval of measures to support microgrid scientific field, including personnel training. → increased reliability of power supply to consumers through alignment of consumer toad and wider use of energy storage systems; → integration of renewable energy sources (RES) into the networks; On July 1, 2020, the ROSSETI Group has started implementing Law 552-FZ on the development of intelligent electricity → development of the internal market of demand aggregators in the retail market as a metering systems, which involves the installation of smart meters in all regions of the Group's operations. tool for balancing the networks; In accordance with the adopted law, the obligation to purchase and pay for the installation of meters is transferred from → transition to a low carbon economy; consumers to grid companies and last resort suppliers. Starting from January 1, 2022, an accounting system will be → increased efficiency of generation in remote areas and isolated systems; obligatorily built only on the basis of "smart" meters. → transition to the infrastructure that requires minimal involvement of people to manage and maintain. With the introduction of smart metering, consumers will be able to quickly obtain accurate information about electricity consumption, and manage its volumes and cost. Reduction in losses and operating costs, an increase in payment discipline, and an increase in labour productivity will be a significant advantage for grid companies. Advantages of Microgrid Development
The territory of ROSSETI Siberia, having no centralized power supply, hosts more than 80 settlements, the costs The Use of Renewable Energy Sources and the Development of Microgrids of technological connection of which through the construction of power transmission lines and substations will amount to more than 22 billion rubles, through the construction of an automatic power plant, i.e. less than 2 billion In recent years, the development of renewable sources based and distributed generation initiatives development complicates rubles. energy (RES) has been rapidly developing. For the first half the current grid topology in an environment where resource- More than 60 contracts for technological connection of remote facilities (located at a distance of more than 3 km of 2020, the generation of renewable energy in Europe for intensive construction and unnecessary burden on the industry from the nearest power center) are required on the territory of the Zabaykalsky Krai only. The planned costs for the first time exceeded the generation of traditional thermal could be avoided. the construction of power transmission lines and substations are 0.6 billion rubles, while the costs of connecting power plants and amounted to 40%1. In some countries, Other difficulties limiting the use of renewable energy sources consumers through the construction of an automatic power plant will be less than 0.1 billion rubles. green generation already provides up to 90% of all electricity in Russia include: generation. ROSSETI Siberia concluded a concession agreement with the Zabaykalsky Krai for modernizing infrastructure in → difficult-to-predict return on projects due to the lack of the Tungokochensky District (19 facilities), the total investment will amount to more than 600 million rubles. 5,000 Russia today lags significantly in the development of an experience in application in grids; important innovation area, which is renewable energy. Although inhabitants will receive a reliable power supply. When constructing classical grids, the costs would have amounted electricity supply in modern Russia is largely centralized, it is → regulatory restrictions on the use of renewable energy to nearly 3 billion rubles. clear that with enhanced decentralization, the need for non- sources by grid companies; traditional renewable energy sources will increase. → absence of a market for reliability and quality of electricity Commonly, the production of electricity from renewable sources (tariffs differentiation); is highly dependent on seasonal and climatic factors and is → lack of services in the retail market for organizing work not stable throughout the year, which makes their use most with prosumers. efficient within microgrids. The lack of support for microgrid
1 RES in Russia: the first move has been made, what's next? Forbes, October 2, 2020 - https://www.forbes.ru/partnerskie-materialy/410301-vie-v-rossii- pervyy-shag-sdelan-chto-dalshe
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Use of Energy Storage Devices Developing Charging Infrastructure for Electric Vehicles The competitive enhancement of energy conversion technologies → electricity demand management; in recent decades, as well as the decline in the cost of accumulator → increasing consumer categorization; PJSC ROSSETI began to develop charging infrastructure within the framework of measures batteries, has led to the establishment of new energy storage systems. The proposed solutions have sufficient technical → applying renewable energy sources in places of installation; to increase non-tariff revenue in 2013 – at the initial stage of the formation of a global trend parameters to ensure their effective use at the facilities of the → reduction of capital costs when using energy storage systems for the transition to electric vehicles, when there was no experience of long-term operation electric grid sector. instead of reconstruction or new construction of capacities. of both electric vehicles and charging infrastructure both in Russia and abroad. PJSC ROSSETI is actively engaged in the development and PJSC ROSSETI, along with the Ministry of Industry and Trade of implementation of advanced energy storage technologies at its Russia, the Ministry of Energy of Russia, LLC MC RUSNANO and facilities in order to transition to a new technological mode with State Corporation Rosatom, takes part in the implementation Advantages of large-scale implementation of electric vehicles and charging infrastructure in Russia qualitatively new characteristics of reliability, efficiency and of the Interdepartmental Plan for the Development and In terms of ecology and life quality Improving the environmental situation in large cities of the Russian Federation. customer focus of the electric grid sector. Implementation of Accumulation Systems. This involves a improvement The current Regulation on the Unified Technical Policy of joint study of the issues of a technical and economic model for Ensuring a wide range of electric vehicle and plug-in hybrid owners with the necessary charging In terms of social welfare PJSC ROSSETI today already provides for the introduction of installing energy storage systems in electrical grids and the infrastructure. energy storage systems at the facilities of the ROSSETI Group creation of a unified interdepartmental standard that makes this technology more accessible and efficient by unifying the Support for the implementation of autonomous electric vehicles in public transportation and large companies, formed using various types of storage batteries - corporate parks. requirements for storage systems. In terms of energy efficiency lithium-ion (Li-ion), sodium-sulfur (NaS), vanadium -redox (VRB), Mass introduction of autonomous electric vehicles for own production needs of the companies of lead-acid (Pb) and zinc-bromide (ZnBr). In 2020, 9 pilot projects were implemented to install low and the electric grid sector. medium capacity energy storage systems at the facilities of Introducing energy storage systems will provide for the following: Increase in the volume of electricity transmission. PJSC ROSSETI subsidiaries and affiliates. Based on the results In terms of enhancing the efficiency of using Establishing technological management of the charging infrastructure and its integration into an → load redundancy during peak hours; of the work done, the optimal technical and economic model the existing infrastructure of electrical grids active-adaptive grid (Smart Grid). → providing power supply to isolated and remote regions for installing energy storage systems for replication at the (microgrids); facilities of the electric grid sector was selected. In particular, In terms of developing domestic production Encouraging innovation and commercialization of R&D results of the electric grid sector. and import substitution Encouraging the creation of competitive domestic samples of charging infrastructure. → establishing an emergency power reserve; the implementation of another 30 similar projects is planned for 2021. Development of new applied research and energy storage technologies based on batteries, methods → frequency regulation; In terms of the scientific sphere development and systems for batteries charging and electric drive technologies.
An essential element that stimulates the development of demand for An example of implemented projects are 13 charging stations electric vehicles is the availability of charging infrastructure. At the installed on the M-11 "Neva" highway, which ensure the smooth moment, the density of its placement in Russia is extremely low and movement of electric vehicles from Moscow to St. Petersburg. does not allow for the free movement of electric vehicles across the In 2020, with the active participation of PJSC ROSSETI, a project was country. launched to install 53 ultra-fast charging stations for Moscow electric In 2020, PJSC ROSSETI approved the Concept for the development buses. A special feature of charging stations for electric buses is that of charging infrastructure for the period 2020-2025. As part of its they are 6 times more powerful than their counterparts designed implementation, the Company plans to build up its own charging for passenger cars. The experience gained will be replicated in infrastructure with a target of more than 1,300 electric charging other regions and for related types of public transport, such as the stations by 2025. It is planned to install charging stations in cities construction of a grid of charging stations for river electric ships. with a population of over one million and cities with a population of over 500 thousand inhabitants, as well as to provide the infrastructure of highways connecting these cities. By the end of 2020, the companies of the ROSSETI Group have commissioned more than 260 charging stations and it is planned to provide a grid of mono-brand charging stations in the 30 largest cities of Russia and on 30 main highways in the near future.
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Sustainable Development Sustainable Development Results of sustainable development About the Group Management Progress Appendices
GRI 103-2 GRI 103-3 Personnel Employees are the most valuable asset of the ROSSETI Group, as programs, social programs and youth policy projects, and develops the work of each of them influences the achievement of operational the system of corporate training. efficiency and strategic goals of the whole Company. The fundamental principles of the Company in working with That is why the ROSSETI Group's Personnel and Social Policy is personnel are as follows: entirely aimed at ensuring safe working conditions, professional → strict adherence to Russian and international legislation; growth and development of competencies. The Company guarantees protection of employees' rights, observes the principles → respect for human rights; of equality and non-discrimination, implements staff motivation → mutual respect and consideration of views of the parties on all matters. Personnel Management Approach Personnel and Social Policy The strategy of the ROSSETI Group in personnel and social The personnel management system in the ROSSETI Group spheres focuses on the formation of a cohesive team of is based on PJSC ROSSETI's Personnel and Social Policy1 employees whose professional competence, responsibility, and the program documents of subsidiaries developed on its mutual respect and honesty are inalienable conditions for the basis in strict accordance with the requirements of Russian effective work and sustainable development of the Company, as legislation, the Sectoral Wage Rate Agreement in the Electric well as on the creation of a positive working environment and Power Industry and Collective Bargaining Agreements between atmosphere of trust and cooperation in the ROSSETI Group's employees and employers. labor collectives. The provisions of the Personnel and Social Policy regulate the Responsible for management, evaluation, development issues of organizational design, management of employees and social support of employees is the Human Resources numbers, personnel development, motivation, social support, Department of the management company and subsidiaries of safety culture and shall apply to all employees of the ROSSETI PJSC ROSSETI. Group without exception.
Core principles of the ROSSETI Group's Personnel and Social Policy
Ensuring the efficiency of employees and Planning operational and anticipated, Timely recruitment of staff with the required better performance in the companies of the numerical and qualitative staff requirements qualifications power grid complex
Core principles of the ROSSETI Group's Personnel and Social Policy: → provision of equal opportunities for employees and non- → a unified approach to personnel management taking into discrimination; account the regional specifics of companies; → ensuring conditions for revealing the potential of employees, → compliance with the best Russian and foreign practices and their professional growth and development; standards in the field of work with personnel; → ensuring the transparency and unity of conditions of career → fast and effective adaptation to corporate and external development with a focus on expertise, efficiency, professional changes; development and corporate values; → increasing the efficiency of human resources and reducing → attracting highly qualified employees by means of costs through the use of unified technologies and information strengthening the image of PJSC ROSSETI as a socially resources; responsible employer.
1 Approved by the decision of the Board of Directors of PJSC ROSSETI on June 17, 2014, Minutes No. 158.
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Employees
Headcount and Personnel Structure GRI 405-1
The average number of the ROSSETI Group employees1 in 2020 → consolidation of power grid assets with the inclusion was 216.5 thsd people, and of power grid subsidiaries and of Kurortenergo and Tsarskoye Selo Energy Company affiliates – 212.2 thsd persons, which is 0.19% higher compared to employees into ROSSETI Lenenergo, and of Dagestan Grid 2019. The change in 2020 is due to the following factors: Company staff into ROSSETI Northern Caucasus; → beginning of fulfillment by ROSSETI Northern Caucasus of the functions of supplier of last resort at the territories of the Republic of Dagestan and the Republic of North Ossetia- Alania.
Number of Employees of Power Grid SDCs of PJSC ROSSETI, thsd people
28.7
21.7 21.4 21.2 19.8 15.5 14.2 14.1 13.7 13.6 9.0 7.6 7.4 2.2 1.5 0.7
2 TDC FGC UES Tyvaenergo IDGC of Urals Yantarenergo IDGC of Center ROSSETI Volga ROSSETI South ROSSETI Kuban ROSSETI Siberia ROSSETI Tyumen IDGC of North-West ROSSETI Lenenergo ROSSETI Moscow Region ROSSETI Northern-Caucasus IDGC of Center and Volga Region
The ROSSETI Group's personnel structure did not change → nearly half of the employees have higher education, and the significantly in the reporting year in any category: proportion of such employees is growing; → more than half of the employees are workers; → women accounted for 22% of the total headcount. → 43 years is the average age, and about a third of employees are young people under 35;
The ROSSETI Group’s Personnel Structure in 2020 Proportion of Women in the ROSSETI Group in 2020 with a Breakdown by Category in 2020, % with a Breakdown by Category, %
16.0 51.5 90.6 52.3 87.1
As of December 31, 2020, an 47.7 average headcount of the ROSSETI Group1 was 32.5 9.4 12.9 Workers Workers Specialists Managers 221.1 Specialists thsd people Managers Women Men 1 Taking into account the headcount in PJSC ROSSETI, electric grid subsidiaries (including ENCE, etc.). 2 1 Taking into account the headcount in PJSC ROSSETI, electric grid subsidiaries Data taking into account Chechenenergo (including ENCE, etc.) 124 | ROSSETI Corporate Social Responsibility and Sustainability Report 2020 | 125 Sustainable Development Sustainable Development Sustainable Development Progress About the Group Management Progress Appendices
The ROSSETI Group’s Personnel Structure with a Breakdown by Age, % Staff Assessment, Prevention of Discrimination and Equal
8.3 34.6 29.7 27.4 Opportunities 2020 Working pensioners 8.2 33.8 29.0 29.0 The ROSSETI Group traditionally focuses on systemic staff assessment at all stages. From 45 up to pension age 2019 Assessment procedures cover the primary selection in recruiting, rotation and career 35–45 8.0 32.9 28.1 31.0 promotion, as well as in the selection of high-potential employees for the talent pool. 2018 Up to 35
The Company's multi-stage personnel assessment system allows to improve the efficiency, reliability and safety of all The ROSSETI Group’s Personnel Structure with a Breakdown by Educational Background, % categories of employees: specialists, managers and production personnel who carry out maintenance and operation of power 48.2 38.6 13.0 facilities. 2020 48.1 38.7 13.2 2019 Higher education Staff Assessment Projects Delivered 47.6 38.7 13.7 Elementary/ secondary professional education in 2020 2018 Basic/ general/ secondary education In the reporting year, the ROSSETI Group took a number of measures to evaluate its employees, and the following corporate measures of assessment were carried out, namely: The staffing level in 2020 was 96.5%. The labor turnover in 2020 was 4.4%. All companies of the ROSSETI Group are working to → assessment of competencies of heads of investment unit reduce this indicator. Onboarding and mentoring programs are divisions; implemented for young professionals. → assessment of competencies in the framework of updating the talent pools; → knowledge testing for chief engineers of PJSC ROSSETI subsidiaries of affiliates. Labor Turnover in 2020, % 9.9 7.9 The assessment of technical unit managers took place as part of 6.2 6.6 Digital Transformation 2030 Concept implementation. 4.8 4.9 4.0 4.0 4.1 4.2 4.2 4.3 4.4 The testing of 143 chief engineers of the Group's executive offices and 3.0 3.4 3.7 2.0 branches took place as part of Digital Transformation 2030 Concept implementation with the purpose of identifying the level of awareness of the technical unit's heads about the goals and objectives of the 1 TDC Concept and innovative development and digital transformation FGC UES Tyvaenergo IDGC of Urals Yantarenergo programs, verifying their basic knowledge in terms of design and ROSSETI Volga ROSSETI South IDGC of Center ROSSETI Kuban ROSSETI Group ROSSETI Tyumen ROSSETI Siberia IDGC North-West 2,552 ROSSETI Lenenergo operation of equipment of digital substations, and introducing ROSSETI Moscow Region employees information security technologies in the electric grid sector. Results ROSSETI Northern-Caucasus IDGC of Center and Volga Region of the assessment became the basis of corporate training programs passed the assessment developed for technical unit employees. of knowledge of managerial 8.1 In total, 2,552 employees passed the assessment of knowledge of 2 competencies, personal and business Recruited in 2020, thsd people managerial competencies, personal and business qualities. All of them qualities received individual development recommendations.
2.2 2.6 1.8 1.9 1.3 1.3 1.4 1.5 1.6 0.8 1.0 1.2 The ROSSETI Group has transparent and non-discriminatory position. No other criteria, including gender, age, nationality, 0.1 0.1 0.3 procedures for personnel selection and promotion. When marital status, religion, etc., shall apply when deciding to recruit, TDC making decisions about recruiting or promoting employees to terminate or transfer employees to another position. FGC UES Tyvaenergo higher positions, only results of a comprehensive assessment Yantarenergo IDGC of Urals The ROSSETI Group is constantly improving its tools to ensure ROSSETI South ROSSETI Kuban ROSSETI Volga IDGC of Center ROSSETI TyumenIDGC North-West ROSSETI Siberia of candidates' professional and personal qualities are taken into ROSSETI Lenenergo equal opportunities for all staff of the Group and to prevent ROSSETI Moscow Region account. The manner in which the comprehensive assessment ROSSETI Northern-Caucasus discriminatory practices in its divisions. IDGC of Center and Volga Region is conducted depends on the position or category of a staff member, as well as on a particular stage: recruiting, qualification The main tools for preventing discrimination and ensuring equal assessment, inclusion in the talent pool or promotion to a higher opportunities for employees of the ROSSETI Group companies are 1 Data taking into account Chechenenergo. More detailed information on the headcount, structure, recruiting and labor turnover in the as follows. 2 Consolidation-based data. ROSSETI Group is provided in Appendix 3.
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Model of Corporate Competencies Power Grid Qualifications Assessment Centers Tool Description Tool Description
The model of corporate competencies is used by the ROSSETI Group to comparer employees from different business segments and The extensive geography of the ROSSETI Group requires active work on the establishment of qualification assessment build both vertical and horizontal career trajectories. It allows to ensure transparency and objectivity of decision-making regarding centers and examination sites to test the knowledge and skills of employees in the regions of the Group's presence. The personnel, and makes personnel management processes more transparent for employees. One of the model's tasks is the formation companies are working to establish a grid of power grid assessment centers to conduct professional examinations of and development of the talent pool for systematic replacement of vacant managerial positions by competent candidates from divisions candidates for employment in the Group's companies and for regular (once every five years) confirmation of the qualifications with related or similar specialization. of present employees. Experience in Tool Application in the Reporting Year Experience in Tool Application in the Reporting Year
The model of competencies is integrated into existing HR tools: evaluation, training, decision-making in recruiting and transfer of In 2020, an independent assessment of qualifications based on professional standards received a new round of development. employees. The Council for Professional Qualifications in the Electric Power Industry approved the procedure of independent evaluation of qualifications in remote format for 22 different qualifications of the electric grid sector. This made it possible to organize examinations using modern digital technologies and telecommunication facilities. With the help of remote technologies, the professional qualifications of more than 200 employees were assessed in November–December 2020. The total number of employees who completed an independent qualification assessment in 2020 exceeds 2,200 people. In the course of cooperation with the Council for Professional Qualifications in the Electric Power Industry on the incorporation of professional standards into activities of the ROSSETI Group, three professional standards were brought up to date: → “Employee for maintenance of electrical grid substations' equipment”; → “Employee for maintenance and repair of equipment of relay protection and automation of electrical grids”; → “Employee for maintenance and repair of equipment of automated process control systems in electrical grids”. In 2020, a new assessment center was opened in ROSSETI Moscow Region. Thus, the number of qualifications assessment centers increased to 5, and the number of sites for professional examinations increased to 16. At the moment, they cover all regions of the Company's presence.
Professional Standards Tool Description
Since 2017, a project has been implemented to introduce professional standards in the companies' activities, which are used to assess the conformity of education and practical experience of employees to their positions as well as professional competencies. With PJSC ROSSETI's participation, 10 professional standards have been developed on the key types of activities in the electric grid sector, representing the tools for introduction of professional standards in HR processes. At the management company level, recommendations and a schedule have been prepared, which include activities for updating staffing tables, documents defining the functional structure, evaluation and development of employees competencies. Experience in Tool Application in the Reporting Year
In 2020, the results of the implementation of the schedule for introduction of professional standards, tailored for the period until January 1, 2020, were summed up. The application of professional standards has become a regular practice – rules defined by professional standards for the activities carried out in the Group, including ongoing, are taken into account in the formation of applications for selection, update of staffing tables, regulations on divisions and job descriptions of employees. ainingTr programs for production personnel, implemented on the basis of corporate training centers, have been finalized considering the provisions of professional standards.
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of Personnel The Personnel Mobility and Rotation Program is targeted at providing skilled personnel to areas where they are scarce. As part PJSC ROSSETI actively attracts young professionals with specialized professional education, of this Program, the ROSSETI Group is involved in the formation of the unified corporate data bank of vacancies and candidate cooperating with universities and institutions located in the regions of activity. resumes within the power grid sector. The Group's companies actively interact with regional employment mechanisms not only allow vacant positions to be filled in a timely services, participating in joint career guidance projects and manner by qualified personnel, but also provide current and future retraining programs for persons registered in the employment staff with additional opportunities and motivation for professional service, including at the expense of employment services. development, personal and career development. Within the electric grid sector, a single corporate data bank of vacancies and candidate resumes is regularly updated. Information about vacancies is published on the corporate and specialized websites to attract potential candidates. new To assist employees in building their careers in the ROSSETI Group, there are programs of management and youth talent pools, 672 jobs as well as a pool for key positions. A system of onboarding and mentoring is organized for new employees, and for students were created by the Group ROSSETI in the regions there is a program of targeted training and practice. All these of its operation in 2020 Onboarding and Mentoring for New Employees Talent Pool The established system of onboarding in the ROSSETI Group ensures the rapid entry of new employees into a position and allows them to reach the set standards for performance of The formation and development of talent pools1 are one of the key tools for ensuring the work during the first months. succession of managers in the Group ROSSETI. Mentoring allows for shortening the period of professional and → passing of specialized training programs (e.g. the onboarding social adaptation in the new team and accelerating the transfer of course “Energy for non-energy employees”) by new staff Systematic work with the talent pools allows us to realize the exceptional cases to the best experts in the industry, attracted on a professional skills. It also helps in the assimilation of rules and members; potential of our employees and motivate them to keep growing competitive basis. regulations adopted in the Company along with gaining practical professionally and build intra-corporate careers. Besides, it helps → summing up the results achieved during the onboarding Effectiveness of the talent pools depends directly on the conditions knowledge for students. In the medium term, the ROSSETI Group period (preparation of a report on implementation of the to meet the Group's needs for skilled employees who are familiar created for the development of succession candidates and their plans to continue its active work in this area. with corporate values, culture and other important aspects of its onboarding program). preparation for work in new environment. For each member of The standard process for onboarding of new employees includes: operation. the talent pool, target positions are defined, a mentor is appointed Each new employee is required to get acquainted with the Labor The formation of talent pools takes place at all management at the place of work from among experienced employees or → development and implementation of an onboarding program Rules and internal regulatory documents describing their duties, levels and covers all positions: from line managers to heads of managers in the direction of the target positions, an individual and/or an entry plan for each new staff member; and also undergoes training on occupational safety protection, subsidiaries. According to the data for the end of 2020, the total development plans is created, and an opportunity is provided to → appointment mentors for new employees; production control, mobilization and civil defense. number of employees in talent pools amounted to 20,552 people. undergo specialized trainings, training programs and internships in When selecting staff for vacant management positions, priority the management company on a regular basis. is given, first of all, to current employees, including young professionals with specialized professional education, and only in Targeted Training of Students and Internship The ROSSETI Group aims to fill The traditional mechanism for attracting young specialists is the In 2020, In 2020, conclusion of contracts of targeted training of students. This allows to fulfil the need of PJSC ROSSETI in qualified young professionals focused on long-term successful work and career development in at least 70% 73% the Group's companies. >1, 000 students The ROSSETI Group implements scholarship programs for students of senior management positions of the total number of senior position appointments whose education is financed from the state budget, and finances were trained under targeted contracts with by internal candidates were staffed by internal candidates, more than half education for students studying on a paid basis the companies of the Group ROSSETI of whom were nominated from the talent pool
1 It is established in accordance with the Regulations on Working with Talent Pools of the ROSSETI Group approved by Order of PJSC ROSSETI No. 325p dated July 31, 2014.
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Overall, more than 184.7 thsd people participated in the training, This allowed carrying online training for more than 115.2 thsd GRI 404-2 Personnel Development and Training retraining and advanced training programs in 2020, representing employees, of whom the share of production personnel was 93.5%. 87% of the total headcount of the ROSSETI Group electric grid At the same time, tuition costs decreased by 11.5%. companies. former EU14 Employee Training and Professional Advancement Most of the educational programs were implemented using online technologies: more than 400 training programs have been moved Implementation of the ROSSETI Group's strategic priorities in the face of constantly changing into an online format. external challenges requires focused work in development of human resources.
The system of personnel development has been a key element of The ROSSETI Group companies continuously interact with state the Personnel and Social Policy of PJSC ROSSETI for many years. It institutions, the educational community, public and professional is based on the principles of continuity, expediency and validity. associations, as well as with employees themselves. All available The well-established system of personnel training allowed to formats of full-time and online learning are used, as well as their respond quickly to the challenges of 2020 and to transfer training combination. to the online format in a short time. This made it possible not only to implement plans for training and certification of employees in accordance with the requirements of Rostekhnadzor, but also to improve the qualification of employees within the framework of the Number of Trained, Cost of Training, “Rules of work with personnel in power industry organizations of people thsd RUB the Russian Federation”. Maintenance and development of professional competencies of 184,716 employees is stipulated by the corporate system of personnel 829,832.2 training and provides for various training formats: → educational programs; → webinars; 115,160 → targeted projects; 487,168.0 → mandatory training programs for production personnel; → retraining of employees on the basis of universities, secondary Indicators of Partnership Effectiveness in Terms of Advanced Training specialized educational institutions, and partner centers of and Re-training of the ROSSETI Group Group Employees in Universities additional professional education. 442 Every employee of the ROSSETI Group is involved in the system of 382 13,833 continuous training. The corporate system of training, retraining 363 and professional development of employees is a general element 5,976 9,228 of the Group's Personnel and Social Policy and is built on the following principles: Total → unconditional fulfillment of the requirements for compulsory training and certification of personnel; Including remote 2018 2019 2020 2018 2019 2020 → priority of training programs supporting the introduction of new equipment, technologies and activities and the Number of the Company's employees re-trained in Financing of re-training of the Company's employees in universities, development of innovative competencies of staff; universities, people thsd RUB → priority of training in development programs for managers and of the ROSSETI successors; Group staff 2,969 → balance between costs of working and personal time in the 87% 33,003 organization of training. participated in training, retraining, 1,918 28,756 32,093 The implementation of modern technologies, including under the and advanced training programs 1,780 Digital Transformation 2030 Concept, increases the requirements in 2020 for the level of qualification of production and administrative staff of the ROSSETI Group.Thereby, advanced training of personnel is carried out for work on newly introduced facilities and the familiarization with new equipment, as well as the scientific 2018 2019 2020 2018 2019 2020 activities are being integrated into educational and production process. Number of employees who received advanced training Financing of advanced training of employees in universities, in universities, people thsd RUB
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Intra-Corporate Training Practical training of production personnel during 2020 was carried out in the workplace due to the impossibility of its implementation in training centers during the epidemiological restrictions. The well-established system of the ROSSETI Group's The ROSSETI Group companies actively use the format of intra-corporate training, regularly staff training allowed in 2020 to transfer training conduct briefings and topical workshops in different areas of activity, and implement the into an online format in a short time and not only to implement plans for training and certification of Knowledge Day corporate educational project. “Technical training” for production personnel employees in accordance with the requirements of is organized. Rostekhnadzor, but also to improve the qualification of employees under the “Rules for working with personnel in the organizations of the electric power The use of AR and VR technologies in the industry of the Russian Federation". 1 training of technical personnel will allow "Knowledge Day" Educational Project to train production personnel without The Knowledge Day corporate educational project is carried significant capital expenditures in To implement the strategic priorities of the ROSSETI Group and out within the framework of intra-corporate training and conditions as close as possible to reality the adopted Digital Transformation 2030 Concept, it is planned in provides for the following: and take into account the specifics 2021 to focus on the development of online forms of employee → lectures/ presentations are held by expert employees of individual energy facilities. training. With this purpose, new online training programs will be of PJSC ROSSETI and SDCs and allow participants to further developed and created, including for production personnel, get acquainted with industry and corporate regulatory in line with the development of the electronic educational resource documents and share experience; "Educational portal of the ROSSETI Group". → workshops are held by invited experts and allow 100 In the coming years, the main lines of intra-corporate training participants to acquire new competencies and skills. 100 100 87 growth will be: 67 → digitalization of planning processes and contractual support of 61 training; → large-scale implementation of the online modular training format; A significant part of the training of employees of the ROSSETI equipped, technical computer means for training and conducting Group (70% of the total number of trained employees – 128.4 thsd videoconferencing, etc. 2018 2019 2020 → active implementation of virtual and augmented reality people) is carried out on the basis of corporate training centers, technologies (AR, VR technologies) in the training process; The year 2020 has significantly adjusted the work of corporate Number of employees who received intra-corporate training, % that have everything necessary for training, namely, laboratories, training centers and stimulated the development of new online → use of cloud solutions to form a single educational space. Number of employees who received external training, % classrooms, electric grid training grounds, separate workplaces forms of transmission and verification of theoretical knowledge.
GRI 103-2 Introduction of New Intra-Corporate Training Forms is a Response to Pandemic GRI 103-3 Challenges
2020 was a year when new online training and knowledge check formats were developed in the ROSSETI Group's corporate training centers. Theoretical parts of training programs for production personnel have been digitized using specialized software, online courses, webinars, and other online training tools. As part of this process, the following activities have been successfully implemented: → work was carried out on the development of the electronic educational resource “Educational portal of the ROSSETI Group” - education.rosseti.ru; → access to an electronic library with business literature on the ROSSETI Group's key competencies was organized; → a corporate online course on mass training programs was developed: • “Determination of consumers' obligations to pay for electricity transmission services taking into account the payment of the reserved maximum capacity”; • “Information security in the ROSSETI Group".
1 It is implemented in the ROSSETI Group in accordance with the Regulations on holding the Knowledge Days in PJSC ROSSETI approved by Order of PJSC ROSSETI No. 84r dated February 13, 2019.
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Professional Competitions
Power Industry Leaders Competition
In order to form a managerial talent pool that meets the current needs of the electric grid sector, the ROSSETI Group holds the All-Russian Competition, Power Industry Leaders. By the end of 2020, more than 20 finalists and winners of 2019 were assigned to key positions in the technical unit of the ROSSETI Group.
"Energy Breakthrough" Competition All-Russian Competitions of
To stimulate and support innovative activity, PJSC ROSSETI Professional Skills together with the Skolkovo Foundation annually holds the All- In order to improve productivity and exchange of best practices Russian competition of innovative projects and developments between employees of the production unit of the ROSSETI Group, in the field of smart energy "Energy Breakthrough". The professional skill competitions are regularly held. competition is intended to combine efforts and knowledge of representatives of different fields of science and technology The largest of them is All-Russian competitions of professional skills to create the energy industry of the future. The competition of personnel on repair and maintenance of electrical grid equipment. program is organized in the following areas: “Breakthrough All-Russian competitions among employees of the electric grid sector Technologies”, “Improving Technologies”, “Future of Energy traditionally include professional competitions. Industry”.
"Leaders of Russia" Competition The ROSSETI Group is a partner of the "Leaders of Russia" competition that basically aims to create a talent pool of executives from among the most professional and motivated industry specialists of the country, ready to carry out large-scale tasks of development of the Russian electric grid sector. In 2019–2020, the "Leaders of Russia" competition registered a record number of participants – more than 3,700 managers of the ROSSETI Group. Such interest is a real confirmation of the effectiveness of the social elevators and the interest of the Company's management in the development and career promotion of high-potential and motivated specialists. The winners of the Competition headed the digital transformation direction in the management company, and a number of nominations of winners and finalists of the Competition were held in subsidiaries.
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Number of employees of the Motivation and Engagement of Employees awarded Type of award employees ROSSETI Group State awards of the Russian Federation 6 5,858 A uniform and transparent system of remuneration of all categories of employees enables were granted state awards, incentives of the Departmental awards of the Ministry of Energy of 1,445 the Company to attract and retain highly qualified personnel, as well as motivate employees Russia President and the Government of the Russian Federation, departmental, industry and corporate Awards of the All-Russian Industrial Association of to achieve the best results. 1,394 Employers in Energy Sector awards for great merits and special contribution to the development of the Russian electric grid sector The main provisions of the remuneration system and conditions Corporate awards of PJSC ROSSETI 3,013 for providing social benefits and guarantees are enshrined in the аt the end of 2020 Sectoral Wage Rate Agreement in the Electric Power Industry for 60.0 55.0 56.9 2019–2021, the Regulation on Remuneration, and also in collective 51.1 GRI 401-2 47.9 Protection of Rights and Social Support of Employees bargaining agreements. 43.7 The ROSSETI Group companies provide employees with a high → assistance to employees in improving housing conditions; General principles of remuneration of employees are: level of social guarantees by implementing social protection → organization of sanatorium-resort treatment of employees, → time-bonus system of remuneration; and corporate support programs for full-time employees. These children's recreation, etc. → remuneration for improving labor productivity; programs include: Social benefits for the ROSSETI Group employees are governed by → surcharges and bonuses for achieving corporate goals and key → voluntary health insurance (VHI) and accident and illness the Sectoral Wage Rate Agreement in the Electric Power Industry performance indicators. insurance, as well as VHI for family members of employees on for 2019–2021, the Collective Bargaining Agreements, and local preferential corporate terms; The Company provides a competitive remuneration level. At the end 2018 2019 2020 regulations of SDCs. of 2020, the average pay in the ROSSETI Group amounted to 60 thsd → provision of targeted financial assistance; The social security of the ROSSETI Group employees does not Average salary, thsd RUB RUB, which is 5.4% higher than in 2019 and 17% higher than the → provision of special offers for financial services of insurance depend on whether they work full-time or part-time and includes, Average salary in the Russian Federation according to Rosstat, average wage in Russia overall. Total expenses for remuneration of companies and partner banks; among other things, accident and health insurance, voluntary employees amounted to 212.2 bn RUB in 2020. thsd RUB → non-state coverage provision, support for former employees medical insurance, cash compensation for temporary disability, of electric power grid companies; non-governmental pension benefits, etc.
Sectoral Wage Rate Agreement in the Electric Power Industry and Collective Bargaining Agreements The key document enshrining the principles of social partnership → providing one-time financial assistance to employees in case in the ROSSETI Group is the Sectoral Wage Rate Agreement in the of marriage registration, the birth of a child, as well as in GRI 103-2 Electric Power Industry for 2019–2021. It applies to all companies connection with the death of a close relative; GRI 103-3 Motivation and Support of Employees During the Pandemic of the ROSSETI Group and is the basis for collective bargaining → paying one-time remuneration in case of anniversaries and In 2020, a significant part of the expenses was aimed at providing additional motivation for employees and social agreements between the Group's companies and employees. holidays; support during the spread of coronavirus infection. Collective bargaining agreements include remuneration, length of → carrying out payments in accordance with housing Employees of the production units of the ROSSETI Group, whose labor function was to be carried out at production working time and rest, provision of additional benefits, guarantees improvement support programs; facilities during the pandemic, were given surcharges of up to 30% of the official remuneration. and compensations in excess of the standards provided by the legislation of the Russian Federation and the Sectoral Wage Rate → compensating expenses for trips to health camps for children In addition, in the ROSSETI's SDCs, there are collegial bodies that make decisions on providing financial Agreement in the Electric Power Industry. They include: of employees and expenses for sanatorium treatment support to pensioners, veterans and employees who are in a difficult life situation due to the spread of (partially); → providing employees with a competitive social package; new coronavirus infection. → providing non-state pension coverage for employees. → promoting physical culture and sports among employees; → providing financial assistance to employees during an annual paid leave;
In order to effectively assess the performance and motivation As a reward for their merits and special contribution to the The Key Principles of the ROSSETI Group in the Area of StaffM otivation: of employees, the ROSSETI Group companies have a system of development of the Russian electric grid sector, employees of the key performance indicators (KPI) that is directly related to the ROSSETI Group are nominated for industry, state and corporate → ensuring employees with competitive wages; Company's strategic objectives. awards. PJSC ROSSETI regularly holds competitions “best in → increasing employee remuneration on a regular basis, depending on labor productivity growth; profession”, “best division” and “best company” in the electric grid Individual KPIs are defined for each structural unit and each → providing a high level of social guarantees. executive officer, and, following their achievement, decisions are sector. made on the bonuses for employees. KPIs of production staff and specialists are tied to current tasks, while the bonus pays for senior and middle managers are related to the achievement of medium- and long-term goals of the Group companies.
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Support for Veterans
PJSC ROSSETI traditionally supports veterans of the electric grid sector. Annually, it congratulates them on Victory Day, Power Engineers' Day and other holidays as well as provides targeted assistance.
GRI 403-6 Life and Health Insurance
The ROSSETI Group provides health and life insurance for Corporate employee voluntary accident and illness insurance employees under corporate voluntary health and accident and programs guarantee the payment of insurance reimbursements illness insurance programs. In addition, employees are given the to employees or their relatives in the event of death, illness, opportunity to purchase VHI for family members on preferential injury, disability, or diagnosis of occupational diseases. Insurance corporate terms. protection of employees of the ROSSETI Group operates around the In 2020, special attention was paid to industry veterans clock worldwide. in connection with the celebration of the 75th anniversary Corporate VHI programs provide a wide range of medical services of the Victory in the Great Patriotic War. More than 6,000 in the best state, industrial and commercial medical institutions congratulatory letters and gifts were sent to veterans throughout the Russian Federation. Energy industry employees of IDGC of Urals and ROSSETI of the Great Patriotic War, home front workers, and the Siberia assisted the soldiers of the Central Military District energy industry veterans. in organizing mini-parades at the homes of veterans of the Non-State Pension Coverage Great Patriotic War, providing electricity supply to sound The ROSSETI Group implements the Non-State Pension Coverage concluded, and employees who reach pension grounds can count and video equipment. Mobile TV screens were installed Program that provides for effective resolution of personnel issues on non-state pension payments in addition to state benefits. near veterans' homes, where veterans saw a concert and the march-past of the platoon from the squadron Energy industry employees of IDGC of Urals, on the basis of related to the involvement, retention and motivation of staff. The Non-State Pension Programs at subsidiaries are financed program aims to ensure the financial stability of employees when of the honor guard of the Central Military District archival materials, created a multimedia project Voices depending on their financial results. A number of subsidiaries (CMD). Came Alive – stories based on the memories of energy they reach retirement age and terminate the employment contract and affiliates also provide for various one-time payments upon upon retirement. industry veterans who worked in wartime at the power retirement, payments to pensioners for holidays, and one-time enterprises of the Urals. Under the Non-State Pension Coverage Program, the ROSSETI financial assistance. Group regularly transfers pension contributions to non-state pension funds with which non-state pension coverage contracts are
GRI 404-2 Yantarenergo together with the Employment Center of the employment both in their previous jobs and in new jobs according Kaliningrad region participates in organizing vocational training to their professional skills and physical abilities. A total of 39 pre- for employees over 50 years of age as part of the regional project retirement employees of Yantarenergo have received advanced called the Development and Implementation of the Program Aimed training and professional retraining since 2019. to Provide Structured Support for and Improve the Quality of Life TDC’s pre-retirement employees also took part in the Tomsk of Senior Citizens. The project allows employees of pre-retirement region administration's program Social Support of the Tomsk age to acquire or develop their existing knowledge, competencies Region Population and underwent advanced training in and skills and helps them to maintain and resume their Accounting and Taxation.
140 | ROSSETI Corporate Social Responsibility and Sustainability Report 2020 | 141 Sustainable Development Sustainable Development Sustainable Development Progress About the Group Management Progress Appendices At the end of 2020, the number of occupational injuries in the ROSSETI Group dropped by 18% GRI 103-2 GRI 103-3 year-over-year. former EU16 Occupational Safety Protection GRI 403-1 In the year under review, the Group ROSSETI recorded 28 cases of GRI 403-9 Electric power is one of the industries that are highly exposed to Employee Injuries, pcs. Delivering the occupational injury, 18% down compared to 2019. 36 employees the risk of injury, that is why PJSC ROSSETI puts emphasis on were injured in the accidents, which is a 3% decline year-over-year. ensuring occupational safety protection. 14 11 "Vision Zero" concept The ROSSETI Group pays careful attention to the quality of Thus, the ROSSETI Group pursues the creation of a safe working is the Group's key strategic goal of the occupational accidents investigation1. A comprehensive environment and the preservation of lives and health of its ROSSETI Group assessment of circumstances, causes and violations of labor employees, as well as the reduction of occupational risks to the protection requirements that have led to an accident is mandatory, health of the Group's and contractors' staff to the minimum. as well as the development of effective measures aimed at preventing similar incidents. Control over the implementation of instructions received is monitored at all management levels. 11 Executive officers who have committed violations of labor protection requirements and regulations that resulted in an Fatal outcome Establishment and functioning of occupational safety management → Promotional Framework for Occupational Safety and Health accident are brought to justice, including criminal liability. system in companies is defined by the requirements of Art. 212 Recommendation 197 of the International Labor Organization Severe injuries “On Employer's Obligations to Ensure Safe Conditions and Labor dated June 15, 2006; Minor injuries Protection” of Federal Law No. 197-FZ dated December 30, 2001 → Standard Provision on Occupational Safety Management “Labor Code of the Russian Federation”. System, approved by Order of the Ministry of Labor and Social GRI 403-8 By Order of PJSC ROSSETI No. 334r dated July 21, 2018 Protection of the Russian Federation No. 438n dated August Internal and External OSMS Audits 19, 2016; "On Approval of the Company Standard", the Regulation on Internal audits of the occupational safety management system An external audit on the analysis and evaluation of OSMS the Occupational Safety Management System – a Company → ILO-OSH 2001, Guide on Occupational Safety and Health (OSMS) are conducted pursuant to the mandatory documented implementation in the ROSSETI Group was scheduled for 2020. For standard – has been approved. When drawing up the Regulation, Management Systems (Geneva, International Labor procedure: Assessment of Conformity of Occupational Safety this purpose, financial resources and necessary documentation were PJSC ROSSETI was guided by requirements of the following Organization, 2003); Activities with Legislative and Other Regulatory Legal Requirements. provided. During the competitive procedures, 7 companies applied for regulatory documents: → OHSAS 18001:2007, Occupational Health and Safety Internal OSMS Audit, approved by Order of PJSC ROSSETI No. 54 the bidding, but none of them appeared to meet the qualifying criteria. → Federal Law No. 197-FZ dated December 30, 2001 “Labor Management Systems. Requirements; dated February 7, 2020 on approval of standards. The bidding for the contract was called off and the OSMS audit was Code of the Russian Federation”; → OHSAS 18002:2008, Occupational Health and Safety postponed until 2021. → Federal Law No. 101-FZ dated June 3, 2009 "On Ratification Management Systems. Guidelines for the Implementation of of the European Social Charter (Revised) of May 3, 1996"; OHSAS 18001:2007; → ISO 45001, Occupational Health and Safety Management GRI 403-2 → Federal Law No. 265-FZ dated October 4, 2010 “On Interaction with Employees on Occupational Safety Protection GRI 403-4 Ratification of the Promotional Framework for Occupational Systems. Requirements with Guidance for Use. Safety and Health Convention (Convention No. 187)”; In the Group, conditions are created for ongoing interaction between authorized persons among employees of PJSC ROSSETI's subsidiaries and affiliates, representatives of trade unions and the management on issues related to occupational safety protection.
Information about the cases of occupational injuries, investigations Moreover, PJSC ROSSETI has the Occupational Safety Protection and measures taken is provided in information letters, immediate Commission which evaluates the condition of occupational health reports of accidents and quarterly injury reviews. All these system in companies of the Group on a regular basis and takes According to Art. 214 "An Employee's Obligations in the Field of (via the phone, in person, by submitting an administrative note or in GRI 403-2 b documents are brought to the attention of employees during measures to prevent occupational injuries. Labour Protection" of Federal Law No. 197-FZ dated December 30, other ways). occupational safety trainings. Requirements for the compliance with safety regulations are 2001 “Labor Code of the Russian Federation”, every employee shall PJSC ROSSETI's SDCs are guided by the Occupational Safety Policy In 2020, the Company carried on with the implementation of the imposed not only on personnel, but also on contractor employees immediately notify their direct or superior manager of any situation of the ROSSETI Group in line with occupational safety instructions Injury Risk Reduction Program in subsidiaries and for third parties carrying out work at the ROSSETI Group's power facilities. These that poses a threat to life and health, every accident that has occurred developed and approved both for occupations and types of work. 1 for 2018–2020. The program included the following activities: requirements are binding and specified in contracts concluded with in the workplace or deterioration of their health, including the signs of Officers authorized for occupational safety chosen by employees acute occupational disease (poisoning). → replacement of equipment that can lead to injuries; contractors. In case of violation of these requirements, penalties monitor preventing response measures by the management in case are applied against such a contractor in accordance with the terms In accordance with the Regulation on the Occupational Safety of their refusal to work in an environment that may be harmful to → purchase of modern protective equipment, special of the contract. Management System approved by Order of PJSC ROSSETI No. 334r their health or when they informed of the hazardous situation. The equipment, transport and devices for working at heights; Monitoring and registration of violations of occupational safety and dated July 27, 2018, employees and their representatives take an ROSSETI Group has a hotline with the First Deputy Director General of → provision of simulator complexes for training SDC employees; health requirements are undertaken during special assessment active part in events and procedures of the company, planning and PJSC ROSSETI – Chief Engineer, and employees of the PJSC ROSSETI → bringing of internal regulatory documents in line with the of working conditions, industrial control over dangerous and implementation, assessment and actions to improve the Occupational Group or third parties may call on any issues of concern. All appeals current labor protection legislation; harmful factors affecting the health of employees, as well as Safety Management System. are processed and effective measures are taken on them, with no labor protection days, unannounced inspections of personnel, and appeal ignored. Besides, following the labor legislation of the Russian → ongoing monitoring of safe work in electrical installations; If safety requirements are violated and hazardous production examination of the workplace of subordinate staff by the heads of factors are detected, employees of PJSC ROSSETI's subsidiaries and Federation, each employee can contact the State Labor Inspectorate to → regular unscheduled inspections of personnel. management teams. dependent companies (SDCs) are able to use any means available to solve disputes with an employer or appeal against the actions of the inform their manager and the structural unit for occupational safety employer in court.
1 Approved by Order of PJSC ROSSETI No. 55 dated March 29, 2018. 1 The procedure for investigating industrial accidents in companies of the ROSSETI Group is set by the Labor Code of the Russian Federation. Document formats required for investigations and registration of production accidents are approved by Resolution of the Ministry of Labor of the Russian Federation No. 73 dated November 24, 2002. 142 | ROSSETI Corporate Social Responsibility and Sustainability Report 2020 | 143 Sustainable Development Sustainable Development Sustainable Development Progress About the Group Management Progress Appendices
A hotline with the First Deputy Director General – Chief Engineer In particular, in 2020, this amount was spent on a set of measures of PJSC ROSSETI with employees of PJSC ROSSETI's SDCs and aimed at preventing accidents and work-related ill health, In 2021, the ROSSETI Group is to implement a number of measures → automation of reporting on injury indicators, including the individuals is held on a regular basis, dedicated to occupational improving working conditions, and providing employees with to improve occupational safety management, prevent work-related accounting of all detected violations and minor injuries; safety issues. In 2020, the hotline received 92 messages on 118 personal protective equipment, namely, conducting a special injuries and achieve "zero injuries", namely: issues, with all the issues analyzed and resolved in a timely assessment of working conditions, preliminary (when hiring) and → external audit of the current OSMS and its improvement in manner. Most issues are related to providing employees with regular medical examinations, acquiring special work clothes, → participation in the Russia Health and Safety Week (VNOT – accordance with the results; personal protective equipment and sanitary conditions. shoes, personal protective equipment, detergents, and first aid itsk 2021); → update of comprehensive injury risk reduction programs for as well as training employees in the field of occupational safety, → participation in the Safety and Labour Protection exhibition employees and third parties taking into consideration the etc. (BIOT – 2021); results of the hotline and meetings of the electric grid district → development of an effective system of motivating employees teams. to work safely;
GRI 403-2 c In accordance with Article 219 "The Employee's Right to Work → prevent the injuries of third parties on the territory of power in Conditions That Meet Labour Protection Requirements" of the grid facilities of the ROSSETI Group; Training in the Field of Occupational and Industrial Safety GRI 403-5 Federal Law No. 197-FZ "Labour Code of the Russian Federation" → identify hazards in the workplace, assess and effectively dated December 30, 2001, every employee shall be entitled to manage occupational risks, taking into account the Competent and professional workers are the ultimate resource to create an effective occupational safety management system. The refuse to perform work if there arises a threat to his life or health peculiarities and specifics of operations. ROSSETI Group provides ongoing training of employees on occupational safety protection both in the workplace and in training centers. In due to a violation of the workplace safety requirements, except 2020, 55,200 people were trained on these topics. where provided by federal law until such threat is removed. By Order of PJSC ROSSETI No. 143 "On approving the Activities carried out in training centers include: PJSC ROSSETI's occupational safety documents" dated August 30, → implementation of advanced training programs in occupational safety; 2018, the ROSSETI Group approved the Occupational Safety Policy, → implementation of advanced training programs in the areas of activity controlled by Rostekhnadzor; in line with which the ROSSETI Group undertakes to: → implementation of pre-certification training programs in the field of industrial safety; → ensure the priority of saving life and health of employees in the course of their work activities over achieving performance → training in practical techniques for releasing a victim from live electric current and giving first aid. results; Knowledge in the field of occupational and industrial safety is inspected following the pre-established schedules in accordance with the Occupational Safety Protection requirements of the Rules of Work with Personnel in the Electric Power Industry Companies of the Russian Federation1. Those who failed → demonstrate the commitment of top managers and managers Expenses, mn RUB of all levels to occupational safety issues; 6,098.8 the occupational safety testing are not allowed to work. → provide compliance of operations with the state regulatory occupational safety requirements as well as the requirements of international agreements and local regulatory acts in the 5,679.4
field of occupational safety; GRI 103-2 5,236.7 GRI 103-3 → ensure safe working conditions on the power grid facilities Employee Health Protection GRI 403-3 and prevent work-related injuries and deterioration of the GRI 403-6 employees' health; To ensure the safety of employees in the course of their work, as well as to ensure their
2018 2019 2020 rights to workplaces that meet state regulatory requirements for occupational safety, a special assessment of working conditions was carried out in all subsidiaries and dependent companies (SDCs) and in the executive office of the ROSSETI Group2.
Employees whose work is associated with special tension and In 2020, the ROSSETI Group registered two cases of occupational- GRI 403-10 severity of the labor process or harmful working conditions (for related employee sickness. In this regard, in 2021, the ROSSETI example, electricians who repair overhead lines, electricians Group is planning a number of activities aimed at preventing Knowledge Testing Project who operate distribution grids, and electrical fitters who repair occupational diseases, namely: Digital transformation of the electric grid sector involves, among other things, the use of high-tech in respect of occupational switchgear equipment), compensation is paid, additional vacation → reducing the impact of harmful factors on workers; days are provided, and milk or other equivalent products are and industrial safety of employees. → improving technological processes and equipment used; given. Also, in accordance with the requirements of the Ministry of Namely, in 2020, ROSSETI Siberia — Omskenergo commenced implementation of the Knowledge Testing pilot project Health and Social Development of the Russian Federation3, such → applying additional equipment of individual and collective as part of the "zero injuries" concept. employees undergo mandatory pre-shift and periodic medical protection; examinations, and if necessary, on the basis of recommendations → on an ongoing basis, providing production control over With its help, daily monitoring is carried out via computers with installed MOODLE software aimed at checking of a medical institution, are sent for in-depth examination, harmful and dangerous factors affecting the health of the knowledge of occupational health and safety among production personnel (dispatchers of the integrated dispatching outpatient, inpatient and sanatorium-resort treatment. employees. group in the electric grid district, on-call electricians at substations, masters and electricians of the electric grid district). The testing results in making lists of employees to be submitted to an unscheduled briefing, technical studies or training in the relevant center. 1 Approved by Order of the Ministry of Fuel and Energy of the Russian Federation No. 49 dated February 19, 2000. 2 In accordance with Federal Law No. 426-FZ “On a special assessment of working conditions” dated December 28, 2013. 3 Order of the Ministry of Health and Social Development of the Russian Federation No. 302n dated April 12, 2011.
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GRI 103-2 GRI 103-3 Support and Preservation of Employee Health During the COVID-19 Pandemic
Since March 5, 2020, due to the spread of new coronavirus infection, the ROSSETI Group has implemented a number of preventive measures aimed at preserving employee health, Promotion of Sports and Healthy Lifestyle among Employees including: Creating comfortable work and relaxation conditions for employees Due to restrictions related to the spread of COVID-19, some of the and promoting a healthy lifestyle are an important area of the sporting events were held online, including the traditional open ROSSETI Group's social policy. chess tournament of power engineers dedicated to the memory Transfer to remote work of a maximum Regular testing for coronavirus infection. Every year, the ROSSETI Group employees participate in company- of Mikhail Botvinnik. In addition, the teams of 11 companies of number of employees while maintaining Regular staff testing allowed for timely organized sports tournaments and industry-wide and all-Russian the ROSSETI Group took an active part in online competitions in their remuneration. identification of coronavirus carriers. We were sports events. The plan of corporate sports events for the year is running, walking, cycling, and skiing Vmarafone, supported by the Admission to on-site jobs was retained only for able to ensure their isolation and the isolation approved by organizational and executive documentation of the Ministry of Energy of the Russian Federation. those employees of PJSC ROSSETI and SDCs whose of workers who were in contact with them, thus ROSSETI Group and SDCs. In 2021, we plan to offer the ROSSETI Group employees corporate labor functions cannot be carried out outside of preventing the spread of infection among the and industry competitions in skiing, mini-soccer, volleyball, ice ROSSETI Group employees. In 2020, teams of the ROSSETI Group companies took part in office buildings or production facilities. industry tournaments in skiing, mini-soccer, volleyball, ice hockey, hockey, basketball, track, swimming, table tennis, and chess, and and chess, supported by the Ministry of Energy of the Russian continue to participate in online competitions. Federation.
Provision of personal protective Informing about prevention measures. equipment. Informational materials on measures to prevent All workers were provided with means of the spread of the coronavirus in accordance with personal protection (masks, disinfectants). the recommendations of the Ministry of Health and A stock of protective equipment was also Rospotrebnadzor were posted on each floor in the formed. public areas of the office and production premises of our SDCs. The floor was also marked to ensure social distancing between employees.
Cleaning and disinfection. Daily monitoring of staff body Cleaning and disinfection of premises and vehicles temperature. have been intensified, and all rooms are equipped Workers with high temperature and symptoms with antiseptic agents. of ARVI were not allowed on the territory of the companies of the ROSSETI Group.
Daily monitoring of the situation. The ROSSETI Group management monitored the spread of the coronavirus in our SDCs specifically and in the regions where they operate in general. Weekly meetings of the Headquarters for Prevention and Rapid Response to the Spread of Coronavirus were held with the participation of the directors general and chief engineers of SDCs. This made it possible to ensure the timely adoption of the necessary measures to prevent the spread of infection in our SDCs.
Minimization of contact. In 2020, depending on the epidemiological situation in the ROSSETI Group's regions of presence, restrictions were imposed on employee travel, meetings, gatherings, and large cultural, sports, and training events. The necessary meetings and gatherings were held via videoconferencing. The training of employees was transferred mainly to a remote format for both corporate and open programs.
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GRI 102-9 GRI 103-2 GRI 103-3 Caring for Our Suppliers 1 GRI 103-2 Changes Made to the Unified Procurement Standard of PJSC ROSSETI in 2020 : GRI 103-3 The ROSSETI Group is constantly working to improve its procurement activities, creating In order to further support its suppliers in the context of the spread of the coronavirus, the ROSSETI Group decided not to apply conditions for equal and fair competition. Interaction with product suppliers is based on fee penalties in cases of violation by the supplier (contractor, executor) of obligations stipulated by the contract in 2020. The possibility was also considered of changing the timeframe and/or price of the contract if circumstances beyond the control of transparency, long-term partnership and trust relationships. the parties to the contract arose during its performance, which entail the impossibility of its performance.
The ROSSETI Group's procurement procedures are guided by Information about all planned and carried out procurement the principles of informational openness, strict compliance with procedures is mandatorily posted on the official website of the legislation, non-discrimination of suppliers, and open access to Unified Information System (www.zakupki.gov.ru), PJSC ROSSETI's participation in procurement. The company ensures transparency of website (www.rosseti.ru), and the following electronic trading Selection of suppliers is carried out in strict accordance with the → formal (compliance by the participant of the procedure all procedures and efficient spending of funds, as well as ensuring platforms: requirements of procurement documentation. The criteria for and rules of application, filing deadlines, composition and evaluating participants' applications, those proposed by the initiator procedure of application documents); the personal responsibility of colleagues. → JSC Unified Electronic Trading Platform of the procurement procedure, are approved by the procurement → financial (assessment of participant's financial condition); The formation and implementation of a unified procurement policy (http://etp.roseltorg.ru); commission depending on the method and type of purchase, as in the ROSSETI Group is carried out by PJSC ROSSETI's Central → LLC RTS Tender (https://www.rts-tender.ru/); well as the subject of the contract. → legal (legal capacity, contract terms); Procurement Commission. At the same time, the companies of the → commercial (commercial terms of the application); ROSSETI Group have their own structural units responsible for the → ETP Auction House of the Russian Federation Compliance of the application with the established selection criteria organization and conduct of procurement. (https://tender.lot-online.ru). shall be considered by the members of the procurement committee → technical (compliance of the technical proposal); and experts in the following main categories: → qualification (experience with similar contracts, reliability and Procedure for Selection and Evaluation of Suppliers business reputation, personnel and logistical resources). The ROSSETI Group selects and evaluates suppliers using the criteria of the Unified Procurement Standard. It includes the Anti- corruption Standart of Procurement, the requirements of which apply to all participants in procurement. The Company checks counterparties for affiliation, conflict of interest, and other abuses.
INVESTMENT TARGETED REPAIR PROGRAM PROGRAM PROGRAMS
Budget Procurement plan Procurement Procurement Decision of the Contract Contract documentation procedure Procurement execution Commission
1 In accordance with the resolution of the Board of Directors of the PJSC ROSSETI Group dated May28, 2020 , Minutes No. 417,within the framework of fulfillment of the requirements of the Directives of the Government of the Russian Federation dated April 3, 2020, No. 2850p-P13kv.
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Supply Chain According to the results of 2020 PJSC ROSSETI and its SDCs carried out 35,000 procurement procedures totaling 635 bn RUB including VAT.
For the ROSSETI Group, the main products purchased are electric ROSSETI Group cooperates with more than 24,000 electrical grid grid equipment. The ROSSETI Group's work with manufacturers of equipment suppliers and contractors from 80 constituent entities electrical equipment is carried out mainly in the form of long- of the Russian Federation. There are no suppliers or contractors term (three-year) contracts and framework agreements. The registered outside the Russian Federation in the company.
Directions and Volumes of Purchases
NEW CONSTRUCTION ELECTRICITY TRANSMISSION (247,106,879.08 thousand rubles/ 39% of the total volume of purchases) RECONSTRUCTION (161,302,673.99 thousand rubles/ 25% of the total volume of purchases) TERRITORIAL GRID ORGANIZATIONS MAINTENANCE AND REPAIRS (43,127,367.11 thousand rubles/ 7% of the total volume of purchases)
IT PROCUREMENTS (17,536,096.23 thousand rubles/ 3% of the total volume of purchases) CONSUMERS
OTHER PROCUREMENTS (166,464,790.77 thousand rubles/ 26% of the total volume of purchases) TECHNOLOGICAL CONNECTION
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Structure of Procurement Procedures According to the Methods of Their Implementation, %
0.1 43.2
0.6 Data on the ROSSETI Group Actual data for 2020 6.4 8.7 70 70 65 58 13.7 28.2 52
23 29 30 29 31 18 20 Bidding Procurement from a single source 2016 2017 2018 2019 2020 2020 Request for proposals Closed RFQ/RFP upon signing of the framework agreement The mandatory Auction Proportion of direct procurement from SMEs resulting from tenders where share of purchases from small and only SMEs are eligible to participate, % medium enterprises established by Request for quotation Total proportion of procurement from SMEs, including subcontracting, % Government Decree for 2020 Procurement through participation in procedures organized by product sellers
Procurement from Local Suppliers GRI 204-1 Local suppliers and contractors of the ROSSETI Group are defined they account for 19–80%. To perform highly specialized work, as the winners of procurement procedures with a TIN belonging organizations that perform work throughout the Russian Procurement from Small and Medium Enterprises to one of the regions where respective subsidiaries and affiliates Federation may be involved. The ROSSETI Group cooperates with of the Company operate: PJSC FGC UES, PJSC Rosseti Moscow more than 24,000 suppliers from 82 subjects of the Russian Since 2013 the ROSSETI Group, together with JSC SME Corporation, In 2020, the ROSSETI Group's annual volume of purchases from Region, PJSC ROSSETI Lenenergo, PJSC IDGC of Center, PJSC IDGC Federation on a regular basis. has been taking an active part in the development of a set of SMEs amounted to 181.2 bn RUB (or 69.7% of total purchases). At of Center and Volga Region, PJSC Rosseti Kuban, PJSC ROSSETI measures aimed at expanding access to the procurement of the same time, 30.8% of the total amount of purchases (or 80.1 Siberia, OJSC IDGC of Urals, PJSC Rosseti South, PJSC ICGC of In procurement in each region infrastructure monopolies and companies with state participation bn RUB) were made with mandatory observance of the conditions North-West, JSC Rosseti Tyumen, PJSC Rosseti Volga, PJSC participate up to for small and medium enterprises. according to which only small and medium enterprises can become ROSSETI Northern Caucasus, JSC Yantarenergo, and PJSC TDC. participants of procurement. The ROSSETI Group is trying to simplify small businesses' access The share of local suppliers by total amount of purchases made of local suppliers and to procurement procedures as much as possible. In particular, by the ROSSETI Group is 39%. As for subsidiaries and affiliates, contractors the set of documents required from procurement participants 75% has been minimized. Applications are accepted exclusively in electronic form by placing them on an electronic trading platform. Regular conferences and seminars are held for small and medium enterprises. In October of 2020, the ROSSETI Group Use of Electronic Trading Platforms Since 2014, the ROSSETI Group operates a Consultative Body on won the prize for “Best support for small Ensuring the Effectiveness of Procurement Procedures of the and medium enterprises” in the annual PJSC ROSSETI pays great attention to increasing the information electronic form. In 2018–2020, each year, 99% of competitive Group's Companies, which includes representatives of public competition “Leader of competitive transparency and participants' access to purchases of all Group purchases of the ROSSETI Group were carried out using electronic organizations. The deliberative body develops proposals aimed procurement” for contributing to expanding companies, including by conducting purchases primarily in trading platforms. at improving the efficiency of procurement activities, including access for small and medium enterprises to increasing access of small and medium enterprises to the the procurement procedures of the ROSSETI procurement procedures of the ROSSETI Group. Group. Dynamics of Procurement Using Electronic Trading Platforms Despite the difficult economic situation due to the spread of the coronavirus, according to the results of 2020, the normative1 99.0% 99.0% 99.0% level for the proportion of purchases from small and medium enterprises has been executed in full by the ROSSETI Group. In 2020, the ROSSETI Group was awarded the highest award “Guaranteed Transparency” based on the results of participation in the National Procurement Transparency Rating.
2018 2019 2020 1 In accordance with the Decree of the Government of the Russian Federation No. 1352 dated December 11, 2014.
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Investment in the Future
GRI 203-1 GRI 103-2 GRI 103-3 Charity and Sponsorship Realizing social and charitable projects aimed at solving the socially significant problems of local communities is one of the main forms of social responsibility of the ROSSETI Group.
The main directions of the ROSSETI Group in providing charitable increase the unique population of the Amur tiger, as well as to assistance are: restore its natural habitat, PJSC ROSSETI provides annual support → support for projects in the fields of education, science, culture, to the Autonomous Non-Commercial Organization “Amur tiger.” arts and instruction; In 2020, in order to counter the spread of the new coronavirus → promoting the development of physical culture and popular infection, charitable assistance was provided for the construction sport; and equipping of an infectious disease hospital in Saratov. → social support and protection of citizens, including assistance PJSC ROSSETI subsidiaries and affiliates implement charitable to low-income people and rehabilitation of disabled people; projects every year in the field of education, science, culture, and art, contributing to the social development of the territories of → protection and proper maintenance of facilities and areas of presence. The amount of charitable assistance in 2020 totaled cultural and environmental importance; 3,617.4 mn RUB. → social rehabilitation of orphans, abandoned children, and The companies of the Group also actively cooperate with sports and children in difficult situations. recreational associations of the Russian Federation, educational The ROSSETI Group continuously cooperates with the Foundation organizations, and cultural and arts institutions. for Support for Deaf-Blind “Co-Unification”, participating in the The ROSSETI Group actively interact with sports and recreation implementation of programs aimed at support and rehabilitation for societies of the Russian Federation, educational organizations, and people with simultaneous loss of hearing and vision. cultural and artistic institutions. A great deal of attention is paid to assistance to orphans Furthermore, in the year of the 75th anniversary of the Victory in and children in difficult situations, and support is provided to the Great Patriotic War, a documentary called “The Thread of Life. Tax Policy of the ROSSETI Group orphanages and children's centers. The Defense of Tula" has been produced with the sponsorship of Projects in the field of education and science are being ROSSETI Center (PJSC IDGC of Center) to memorialize the feats of implemented, and support is provided to educational organizations power industry workers, both frontline soldiers and home front of secondary and higher vocational education. workers. Tax monitoring is a form of tax control that allows the tax authority to check the correctness In addition, the Company is implementing an important project in The amount of sponsorship in 2020 totaled 314.4 mn RUB. of calculations, the completeness and timeliness of payment (transfer) of taxes, fees, and the field of environmental and animal protection. To preserve and insurance premiums in real time. The obligation to pay (transfer) these, in accordance with the Tax Code of the Russian Federation, lies with the taxpayer.
According to the IFRS consolidated statements of On January 1, 2020, PJSC ROSSETI began tax monitoring. Tax monitoring PJSC ROSSETI, the amount of tax payments for 2020 is a way of enhanced information interaction in which an organization amounted to 46,509 mn RUB. provides the tax authority with real-time access to accounting and tax data, and receives the right, in case of doubt, to request a reasoned opinion Tax Payment, mn RUB from the tax authority on the tax consequences of transactions. The tax monitoring regime significantly accelerates the resolution of disputed situations on the application of tax legislation, and also reduces the costs 59,162 of supporting tax control measures. The experience of interaction with the Federal Tax Service in 2020 demonstrated the efficacy of the tax monitoring regime: the number of 50,827 Claims received for in-house and on-site audits on telecommunications 46,509 channels was significantly reduced, which provides cost savings due to the synergistic effect of digitalization of tax administration and a focus on methodological aspects of tax risk management.
2018 2019 2020
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Appendices
158 Appendix 1. Material Topics Management 160 Appendix 2. Calculation of Economic Value Generated and Distributed 160 Appendix 3. Information on the ROSSETI Group's Employees in 2018–2020 166 Appendix 4. The ROSSETI Group Assets 168 Appendix 5. Glossary 169 Appendix 6. GRI Standards Report Compliance Table 179 Appendix 7. Contacts 180 Appendix 8. Independent Auditor's Opinion 183 Appendix 9. Certificate of Public Endorsement of a Corporate Non-Financial Report
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GRI 102-12 GRI 103-2 GRI 403-1 Appendix 1. Material Topics Management
Regulatory Documents Regulatory Documents Responsible Responsible Material topics Divisions External Internal Material topics Divisions External Internal Economic Impact Social Impact Development Strategy of PJSC ROSSETI and Its Subsidiaries 3.1. Ensuring reliable and uninterrupt- Department for Energy Strategy of the Rus- and Dependent Companies (SDCs) up to 2030 ed electricity supply Technological Energy Strategy of the Rus- sian Federation Until 2030 Regulation of PJSC ROSSETI for the Uniform Technical Policy in Connection and sian Federation Until 2030 3.2. Emergency preparedness. Strategy for Development of 1.1. Economic performance of the the Electric Grid Sector Infrastructure Strategy for Development of the Electric Grid Sector of Development Strategy of PJSC ROSSETI and Its Subsidiaries ROSSETI Group's activities All divisions Economic Policy Development the Electric Grid Sector of the Russian Federation and Dependent Companies (SDCs) up to 2030 Innovative Development, Energy Conservation and Energy Department of Ser- the Russian Federation Russian Government's Regulation of PJSC ROSSETI for the Uniform Technical Policy in Efficiency Program vice Implementation Decree No. 147-r "On target the Electric Grid Sector Investment Policy Technical Policy models for simplifying Innovative Development, Energy Conservation and Energy Development Strategy of PJSC ROSSETI and Its Subsidiaries 3.3. Consumer care Department Digital Transforma- business procedures and Efficiency Program Energy Strategy of the Rus- and Dependent Companies (SDCs) up to 2030 Directorate of Pro- tion Department enhancing investment ap- Investment Policy sian Federation Until 2030 Digital Transformation 2030 Concept duction Control 1.2. Digital transformation of the Innovative Devel- peal of the Russian regions" Strategy for Development of Innovative Development Program of PJSC ROSSETI Customer and electric grid sector opment Unit of the ISO 9001:2015 the Electric Grid Sector of Innovative Development, Energy Conservation and Energy Market Interaction Technical Policy GOST R ISO 9001-2015 the Russian Federation Efficiency Program Department Department Investment Policy Recommendations of the The headquarters on Ministry of Health and the the prevention and 1.4. Charitable and social projects, as Federal Service for Surveil- Personnel and Social Policy 3.4. The ROSSETI Group's care for rapid response to well as investment in infrastructure in lance on Consumer Rights Investment Policy employees and consumers during the the spread of coro- the regions of presence. Influence on All divisions – Protection and Human Procurement Policy of PJSC ROSSETI COVID-19 pandemic navirus infection socio-economic development of the Wellbeing (Rospotreb- Strategy Department regions of presence nadzor) on the prevention of Command Center coronavirus infection 3.5. The company's investment in Human Resources human resources. Reducing turnover Department Central Procurement Uniform Procurement Standard of PJSC ROSSETI of the workforce. Attracting qualified Staff Training Center Personnel and Social Policy of the ROSSETI Group 1.5. Transparency of purchases in the Federal Law No. 223-FZ Commission Procurement Policy of PJSC ROSSETI employees. Directorate of Social Schedule of Adopting HR Decisions Concerning Managers of ROSSETI Group. Choosing bona fide “On Procurement of Goods, Department of Program of Partnership Between PJSC ROSSETI and Small and Programs PJSC ROSSETI's Subsidiaries and Dependent Companies and suppliers, attracting local suppliers Works and Services 3.7. Health and safety in the Master Planning Medium-Sized Businesses Unit for Occupa- Their Own SDCs and representatives of small and by Certain Types of workplace: occupational injuries; Labour Code of the Russian and Procurement Regulation on the Central Procurement Commission of tional and Industrial Schedule of Working with Talent Pool of the ROSSETI Group medium-sized businesses Legal Entities” occupational diseases; agreements Federation Management PJSC ROSSETI Safety of Technical Schedules of registering recruitment, promotion and dismissal with trade unions. Federal Law No. 273-FZ Supervision Center, of employees and procedure for passing the tests in the course "On Combating Corruption" 3.8. Employee training, educational a branch of PJSC of recruitment or mentoring Corporate Governance programs, professional development, ROSSETI, at PJSC Recommendations on introducing professional standards into Code Federal Law No. 273-FZ performance assessment and career ROSSETI’s level the ROSSETI Group’s activities Sectoral Wage Rate Agree- 1.6. Anti-corruption management Security Department "On Combating Corruption" Corporate Code of Ethics and Business Conduct development. Departments for Corporate Code of Ethics and Business Conduct ment in the Electric Power Industrial Safety and Collective Bargaining Agreement Industry Energy Strategy of the Rus- Digital Transformation 2030 Concept 3.9. Equal career and professional Supervision at SDCs’ Occupational Safety Policy of the ROSSETI Group sian Federation Until 2030 Innovative Development Program of PJSC ROSSETI development opportunities for men 1.8. Scientific research and introduc- Technical Policy level Regulation on the Occupational Safety Management System in Strategy for Development of Innovative Development, Energy Conservation and Energy and women: the composition of the tion of innovative developments Department Central Commission the ROSSETI Group the Electric Grid Sector of Efficiency Program governing bodies and organization for Corporate Ethics 15 Organization Standards (OS) the Russian Federation Investment Policy personnel disaggregated by different and Settlement of Environmental Impact characteristics. Conflicts of Interest Energy efficiency 3.15. Compliance with legislation. Allied management 2.4. Impact on biodiversity (including Electric Grid Complex Environmental Policy Fines and non-financial sanctions Legislation of the Russian of all relevant – installation of bird protective devices) Measures to complete the task under the Environmental imposed on the Company due to Federation departments 2.5. Reducing emissions of green- Branch of PJSC Policy of the Electric Grid Sector to decommission 100% of the violation of the law. ROSSETI – Technical equipment containing polychlorinated biphenyls (PCBs) house gases and pollutants into the ISO 14001:2015 Supervision Center Guidance on the Environmental Management System of PJSC atmosphere GOST R ISO 14001-2016 Technical Policy ROSSETI 2.6. Production waste management. ISO 50001:2018 Department Innovative Development, Energy Conservation, and Energy Discharge control Efficiency Enhancement Policy 2.7. The ROSSETI Group's services Program of Energy Conservation and Energy Efficiency compliance with environmental pro- Enhancement of PJSC ROSSETI's SDCs tection requirements (including fines and sanctions)
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GRI 102-7 ROSSETI South 13.6 13.7 13.7 0.0 -0.2 GRI 201-1 Appendix 2. Calculation of Economic Value Generated IDGC of the North-West 15.6 14.6 14.1 -0.5 -3.3 1 and Distributed TDC 1.5 1.5 1.5 0.0 -0.6 Yantarenergo 2.2 2.2 2.2 0.0 -1.9 Direct Economic Value Generated, mn RUB ROSSETI Tyumen 7.4 7.3 7.4 0.1 1.7 2018 2019 2020 Total 212.7 211.8 212.2 0.4 0.2 Revenue 1,021,602 1,029,654 1,001,517 Financial income 17,617 21,741 19,510 GRI 102-8 Personnel by Gender and Occupational Category, % GRI 405-1 Share of the profit of associates and joint ventures (less profit tax) 337 192 144 2018 2019 2020 Change 2020/2019, pp Other income, net 23,355 27,106 15,908 Share of women in the staff on the payroll 23 23 22 -1.0 Total direct economic value generated 1,062,911 1,078,693 1,037,079 Share of managers in the staff on the payroll 16.0 16.0 16.0 0.0 Of which: Share of managers among women 13.7 13.0 12.9 -0.1 Economic Value Distributed, mn RUB Share of managers among men 86.3 87.0 87.1 0.1 2018 2019 2020 Share of specialists in the staff on the payroll 33.0 33.0 32.5 -0.5 Operating costs (excluding employee benefits; taxes (less profit tax); contributions to charities Of which: 643,382 622,403 627,266 and sponsorship) Share of specialists among women 47.5 48.0 47.7 -0.3 Employee wages and benefits 187,386 201,274 212,208 Share of specialists among men 52.5 52.0 52.3 0.3 Share of workers in the staff on the payroll 51.0 51.0 51.5 0.5 Financial expenses (payments to capital suppliers) 29,978 36,708 50,529 Of which: Payments to government 73,215 63,512 49,961 Share of workers among women 9.7 9.0 9.4 0.4 GRI 203-1 Community investments (contributions to charities and sponsorship) 3,366 3,764 3,931 Share of workers among men 90.3 91.0 90.6 -0.4 Total economic value distributed 937,327 927,661 943,895 Personnel by Age, thsd people GRI 405-1 Economic Value Retained, mn RUB Change 2020/2019 2018 2019 2020 thsd people % 2018 2019 2020 Under 35 years old 67.3 62.4 60.1 -2.3 -3.7 Total direct economic value generated 1,062,911 1,078,693 1,037,079 35–50 years old 88.4 89.8 93.6 3.9 4.3 Total economic value distributed 937,327 927,661 943,895 Over 50 years old 61.6 62.6 65.4 2.8 4.4 Economic value retained 125,584 151,032 93,184 Personnel by Age and Occupational Category as of December 31, 2020, % GRI 405-1
Occupational categories Appendix 3. Information on the ROSSETI Group's Total Managers Specialists Workers Under 30 years old 12.6 6.4 12.2 14.8 Employees in 2018–2020 30–50 years old 57.5 66.3 64.9 50.2 Staff on the Payroll by SDC, thsd people Over 50 years old 29.9 27.3 22.9 35.0 Change 2020/2019 Employees Recruited (by SDC of PJSC ROSSETI), thsd people 2018 2019 2020 thsd people % Change 2020/2019 FGC UES 22.1 22.0 21.7 -0.3 -1.5 2018 2019 2020 thsd people % ROSSETI Moscow Region 14.6 14.4 14.2 -0.1 -1.0 FGC UES 2.3 2.6 1.8 -0.8 -31.7 ROSSETI Lenenergo 7.1 7.3 7.6 0.3 4.6 ROSSETI Moscow Region 1.6 1.5 1.4 -0.1 -5.6 ROSSETI Siberia 19.8 20.0 19.8 -0.2 -0.9 ROSSETI Lenenergo 1.2 1.1 1.5 0.5 41.8 Tyvaenergo 0.7 0.7 0.7 0.0 -0.7 ROSSETI Siberia 3.8 3.8 2.6 -1.2 -32.7 Tyvaenergo 0.1 0.1 0.1 0.0 -32.1 ROSSETI North Caucasus 8.5 8.5 11.2 2.8 32.9 ROSSETI North Caucasus 0.8 0.8 7.7 6.8 806.5 Chechenenergo 2.3 2.4 2.4 0.0 0.1 Chechenenergo 0.6 0.6 0.5 -0.1 -21.0 ROSSETI Kuban 8.6 8.6 9.0 0.3 3.6 ROSSETI Kuban 1.3 1.5 1.3 -0.1 -8.0 IDGC of Center and Volga Region 22.3 22.3 21.4 -1.0 -4.4 IDGC of Center and Volga Region 2.1 2.1 1.2 -0.9 -43.4 ROSSETI Volga 21.2 21.2 21.2 0.0 -0.2 ROSSETI Volga 2.3 2.3 1.9 -0.5 -20.4 IDGC of the Urals 3.3 3.3 1.6 -1.7 -51.3 IDGC of the Urals 15.5 15.8 15.5 -0.2 -1.5 IDGC of Centre 3.1 2.4 2.2 -0.2 -6.9 IDGC of Centre 29.7 29.4 28.7 -0.7 -2.2 ROSSETI South 1.7 1.5 1.3 -0.2 -13.8
1 The calculation is performed in accordance with the GRI Standards methodology based on the consolidated audited financial statements prepared under IFRS.
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IDGC of the North-West 3.0 1.8 1.0 -0.8 -45.8 Personnel by Region, Gender, and Type of Employment Contract (Permanent/ Fixed-Term), people GRI 102-8 TDC 0.2 0.2 0.1 -0.1 -33.9 For PJSC ROSSETI'sSDCs (less PJSC FGC UES) Yantarenergo 0.4 0.4 0.3 -0.1 -31.4 2020 ROSSETI Tyumen 0.6 0.8 0.8 0.0 3.1 Total 28.3 26.7 27.1 0.4 1.6 Permanent contract Fixed-term contract Region Men Women Men Women Altai Territory 2,997 567 23 38 GRI 102-8 Personnel by SDC of PJSC ROSSETI, Gender and Type of Employment Contract (Permanent/ Fixed-Term), people Arkhangelsk Region 1,787 382 2 21 2018 2019 2020 Astrakhan Region 1,642 557 44 47 Type of employment contract Men Women Men Women Men Women Belgorod Region 3,105 996 4 12 Permanent contract 18,347 3,464 18,471 3,476 18,105 3,362 FGC UES Bryansk Region 1,540 278 18 10 Fixed-term contract 230 261 240 245 235 230 Vladimir Region 1,483 439 2 10 Permanent contract 11,341 3,471 10,971 3,315 11,097 3,403 ROSSETI Moscow Region Volgograd Region 3,353 797 39 71 Fixed-term contract 88 156 152 218 117 176 Vologda Region 2,223 414 5 24 Permanent contract 5,067 1,983 5,118 2,005 5,512 2,204 ROSSETI Lenenergo Voronezh Region 2,716 646 10 14 Fixed-term contract 100 157 105 184 101 155 Trans-Baikal Territory 1,835 508 10 31 Permanent contract 15,524 3,985 15,611 4,127 15,465 4,023 ROSSETI Siberia Ivanovo Region 1,166 274 7 1 Fixed-term contract 310 499 291 458 295 472 Kabardino-Balkarian Republic 1,330 277 10 9 Permanent contract 468 190 463 191 464 196 Tyvaenergo Kaliningrad Region 1,295 776 9 25 Fixed-term contract 9 17 10 18 5 17 Kaluga Region 1,786 627 6 9 Permanent contract 6,512 2,008 6,582 2,008 11,065 3,144 ROSSETI North Caucasus Karachay-Cherkess Republic 762 160 7 8 Fixed-term contract 58 72 65 78 129 160 Kemerovo Region 1,911 667 19 41 Permanent contract 1,892 486 1,912 465 1,919 472 Chechenenergo Kirov Region 2,060 349 23 11 Fixed-term contract 16 42 17 51 24 52 Kostroma Region 1,627 287 4 11 Permanent contract 6,364 2,319 6,499 2,317 6,727 2,345 ROSSETI Kuban Krasnodar Territory 6,151 2,190 47 132 Fixed-term contract 62 155 61 171 51 151 Krasnoyarsk Territory 3,273 915 24 95 Permanent contract 17,801 4,670 17,517 4,345 17,044 4,064 IDGC of Center and Volga Region Kursk Region 1,905 474 4 7 Fixed-term contract 43 104 35 71 68 102 Leningrad Region 2,074 518 17 26 Permanent contract 16,761 4,572 16,686 4,649 16,596 4,639 ROSSETI Volga Lipetsk Region 1,748 392 4 12 Fixed-term contract 69 145 65 140 50 154 Moscow 5,652 2,163 76 90 Permanent contract 11,464 3,363 11,359 3,640 11,720 3,806 IDGC of the Urals Moscow Region 5,628 1,389 44 90 Fixed-term contract 578 1,229 521 379 134 207 Murmansk Region 873 243 6 6 Permanent contract 24,105 5,989 23,276 5,905 22,883 5,925 IDGC of Centre Nizhni Novgorod Region 4,233 934 12 25 Fixed-term contract 170 222 150 182 170 185 Novgorod Region 1,119 392 3 9 Permanent contract 10,369 3,204 10,430 3,221 10,413 3,197 ROSSETI South Omsk Region 2,222 527 73 47 Fixed-term contract 167 260 159 256 136 230 Orenburg Region 3,619 814 14 35 Permanent contract 11,749 3,049 11,383 3,008 11,115 2,935 IDGC of the North-West Oryol Region 1,365 330 3 10 Fixed-term contract 44 132 63 124 45 132 Penza Region 2,233 754 6 23 Permanent contract 1,297 266 1,287 262 1,284 255 TDC Perm Territory 3,829 1,002 55 53 Fixed-term contract 9 20 10 18 5 20 Pskov Region 1,681 440 12 28 Permanent contract 1,412 884 1,383 867 1,295 776 Yantarenergo Republic of Adygeya 576 155 4 19 Fixed-term contract 14 27 10 34 9 25 Republic of Altai 441 112 5 6 Permanent contract 5,561 1,684 5,600 1,710 5,724 1,772 ROSSETI Tyumen Republic of Buryatia 1,905 546 20 38 Fixed-term contract 79 107 81 103 57 100 Republic of Dagestan 4,007 842 47 49 Total Permanent contract 166,034 45,587 164,548 45,511 168,428 46,518 Republic of Ingushetia 475 112 13 14 Fixed-term contract 2,046 3,605 2,035 2,730 1,631 2,568 Republic of Kalmykia 981 340 14 49 Republic of Karelia 1,088 263 4 6 Komi Republic 2,195 561 7 23 Republic of Marij El 782 149 0 1
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Republic of Mordovia 1,394 278 4 8 Personnel Turnover by SDC of PJSC ROSSETI, % Republic of North Ossetia-Alania 1,019 608 26 33 Republic of Tuva 464 196 5 17 2018 2019 2020 Change 2020/2019, pp Republic of Khakassia 878 180 121 176 FGC UES 4,6 5,1 4,8 -0,3 Rostov Region 4,437 1,503 39 63 ROSSETI Moscow Region 5,7 6,1 3,7 -2,4 Ryazan Region 1,684 432 8 15 ROSSETI Lenenergo 6,6 6,7 6,2 -0,5 Samara Region 2,537 754 15 37 ROSSETI Siberia 4,1 3,9 4,2 0,3 Saint Petersburg 3,587 1,926 90 144 ROSSETI North Caucasus 5,2 5,6 5,8 0,2 Saratov Region 4,009 1,131 9 38 ROSSETI Kuban 7,0 7,9 6,6 -1,3 Sverdlovsk Region 4,086 1,644 59 101 IDGC of Center and Volga Region 0,9 1,1 2,0 0,9 Smolensk Region 2,400 705 27 35 ROSSETI Volga 4,0 4,4 3,0 -1,4 Stavropol Territory 3,472 1,145 26 47 IDGC of the Urals 4,7 5,3 4,0 -1,3 Tambov Region 1,619 281 10 12 IDGC of Centre 3,9 5,6 4,3 -1,3 Tver Region 2,413 682 66 30 ROSSETI South 4,2 4,1 4,2 0,1 Tomsk Region 1,284 255 5 20 IDGC of the North-West 4,1 5,1 4,9 -0,2 Tula Region 1,739 605 5 13 TDC 3,5 6,0 3,4 -2,6 Tyumen Region 2,044 465 26 42 Yantarenergo 11,5 7,7 9,9 2,2 Udmurtian Republic 2,196 393 6 19 ROSSETI Tyumen 3,9 4,1 4,1 0,0 Ulyanovsk Region 1,581 509 0 8 Total 4,5 4,8 4,4 -0,4 Khanty-Mansijsk Autonomous District 2,707 1,053 30 48 Chelyabinsk Region 3,805 1,160 20 53 Personnel by Type of Employment and SDC of PJSC ROSSETI as of December 31, 2020, thsd people Chechen Republic 1,919 472 24 52 Type of employment Chuvashi Republic 1,223 399 2 5 Full-time Part-time Yamalo-Nenets Autonomous District 973 254 1 10 FGC UES 21,908 24 Yaroslavl Region 2,180 568 16 26 ROSSETI Moscow Region 14,778 15 ROSSETI Lenenergo 7,846 126 For PJSC FGC UES ROSSETI Siberia 20,247 8 2020 Tyvaenergo 680 2 Permanent contract Fixed-term contract ROSSETI North Caucasus 14,442 56 Region Men Women Men Women Chechenenergo 2,374 93 Executive arm of PJSC FGC UES 295 345 9 9 ROSSETI Kuban 9,217 57 Volga MES 1,910 277 2 14 IDGC of Center and Volga Region 21,247 31 East MES 1,888 330 9 8 ROSSETI Volga 21,408 31 North-West MES 1,931 336 52 47 IDGC of the Urals 15,532 335 Siberia MES 2,978 433 19 23 IDGC of Centre 29,056 107 Urals MES 3,474 641 87 59 ROSSETI South 13,965 11 Center MES 3,188 631 49 53 IDGC of the North-West 13,965 11 South MES 2,441 369 8 17 TDC 1,561 3 Total 18,105 3,362 235 230 Yantarenergo 2,068 37 ROSSETI Tyumen 7,632 21 Total 218,015 1,130
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Main Production Assets (Length of Transmission Lines, Number and Capacity of Substations) EU4
Length of power Including overhead Including cable Number of SS and Power of SS and transmission lines, km lines, km lines, km TSS, pieces TSS, MVA GRI 102-45 Appendix 4. The ROSSETI Group Assets FGC UES 160,825.6 160,093.0 732.6 945 352,246.50 Main subsidiaries of PJSC ROSSETI Country of incorporation ROSSETI Moscow Region 161,437.1 78,709.3 82,727.8 43,926 80,492.50 1 FGC UES The Russian Federation ROSSETI Lenenergo 79,753.7 48,999.1 30,754.6 25,270 34,642.20 2 ROSSETI Moscow Region The Russian Federation ROSSETI Siberia (including Tyvaenergo) 262,024.8 254,902.9 7,121.9 56,729 43,388.50 ROSSETI Northern Caucasus (including 3 ROSSETI Tyumen The Russian Federation 138,413.0 134,567.8 3,845.2 30,684 18,361.30 Chechenenergo) 4 ROSSETI Lenenergo The Russian Federation ROSSETI Kuban 92,226.1 89,535.3 2,690.8 24,186 16,544.30 5 IDGC of Centre The Russian Federation IDGC of Center and Volga Region 289,203.7 276,644.5 12,559.2 68,523 44,574.30 6 IDGC of the Urals The Russian Federation ROSSETI Volga 227,778.1 225,952.7 1,825.5 48,718 36,124.40 7 IDGC of Center and Volga Region The Russian Federation IDGC of the Urals 147,657.0 136,195.4 11,461.6 36,670 37,918.10 8 ROSSETI Siberia The Russian Federation IDGC of Centre 411,643.9 390,778.1 20,865.8 104,425 54,860.00 9 ROSSETI Volga The Russian Federation Grid companies ROSSETI South 162,225.5 159,419.4 2,806.1 32,981 24,011.50 10 IDGC of the North-West The Russian Federation IDGC of the North-West 176,225.1 167,819.4 8,405.7 39,086 26,986.70 11 ROSSETI South The Russian Federation TDC 20,218.1 19,720.8 497.2 3,390 3,951.30 12 ROSSETI North Caucasus The Russian Federation Yantarenergo 15,866.0 13,135.6 2,730.5 4,844 4,875.10 13 ROSSETI Kuban The Russian Federation ROSSETI Tyumen 52,322.9 51,408.1 914.8 7,881 30,018.00 14 Chechenenergo The Russian Federation Total 2,397,820.6 2,207,881.4 189,939.2 528,258 808,994.70 15 TDC The Russian Federation 16 Yantarenergo The Russian Federation Length of Power Transmission Lines by Voltage Class 17 Tyvaenergo The Russian Federation 18 Karachaevo-Cherkesskenergo The Russian Federation Length of power Including Including Voltage class, kV transmission lines, km overhead lines, km KL, km 19 Kalmenergosbyt The Russian Federation 0.4 821,914.3 757,835.4 64,078.9 20 Kabbalkenergo The Russian Federation 6(10)–20 992,321.6 870,430.1 121,891.5 21 Tyvaenergosbyt The Russian Federation 35–60 162,737.5 161,291.1 1,446.4 22 Sevkavkazenergo The Russian Federation 110–150 258,535.7 256,697.0 1,838.6 220 100,390.9 99,829.5 561.4 330 13,206.5 13,115.3 91.2 400 428.2 428.2 - 500 43,562.4 43,531.3 31.2 750–1150 4,723.5 4,723.5 - Total 2,397,820.6 2,207,881.4 189,939.2
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SDG United Nations Sustainable Development Goals Appendix 5. Glossary SME Small and medium entrepreneurship Term SO UES System Operator of the Unified Energy System (abbreviation) Meaning SSA Sub-subsidiary and affiliate ANO Autonomous noncommercial organization SSEI Specialized secondary education institution BPD Bird protective devices TGO Territorial grid organizations BRELL Electric ring: Belarus — Russia — Estonia — Latvia — Lithuania UN United Nations Conseil International des Grands Reseaux Electriques Haute Tension (International Council on Large Electric Systems) (RNC SIGRE UNESCO The United Nations Educational, Scientific and Cultural Organization CIGRE — Russian National Committee CIGRE) VAT Value-added tax DPP Diesel power plant VHI Voluntary health insurance EBITDA Earnings before interest, taxes, depreciation and amortization ZTP Closed transformer substation EMERCOM Ministry of the Russian Federation for Civil Defense, Emergencies and Elimination of Consequences of Natural Disasters Units of ESG Environmental, Social, Governance measurement Meaning FAS Russia Federal Antimonopoly Service of the Russian Federation GVA Gigavolt-ampere FEC Fuel and energy complex GW Gigawatt FSBEI HE Federal State Budgetary Educational Institution of Higher Education u Unit G20 A group of governments and central bank governors from the world's most developed and developing economies kV Kilovolt GOST State standard kWh Kilowatt-hour GRI Global Reporting Initiative km Kilometer HEI Higher education institution MVA Megavolt-ampere IDGC Interregional distribution grid company MW Megawatt IEC International Electrotechnical Commission mn Million IFRS International Financial Reporting Standards bn Billion ISO International Organization for Standardization subpara., p.p. Subparagraph, percentage point ISO 14001:2015 ISO 14001:2015 "Environmental management systems. Requirements with guidance for use", IDT. RUB Russian ruble ISO 50001:2018 ISO 50001:2018 " Energy management systems. Requirements with guidance for use". t Ton ISO 9001:2015 ISO 9001:2015 "Quality management systems. Requirements", IDT. toe Ton of oil equivalent KTP Complete transformer substation tn Trillion Lost Time Injury Frequency Rate (abbreviated as LTIFR), reflects the frequency of injuries leading to the loss of labor capacity, thsd Thousand represents the ratio of the number of cases of loss of working time and the total amount of time worked in the organization for the pc. Piece LTIFR reporting year, normalized to 1 million man-hours: LTIFR = total work time lost due to injuries x 1 million man-hours / total labor time worked. GRI 102-55 MC Management company Appendix 6. GRI Standards Report Compliance Table Media Mass media A local energy grid operating in a particular area, that has its own generation sources and can operate autonomously from the Common Standard Disclosures Microgrid centralized power supply system. Page Indicator Report section Comment Ministry of Energy The Ministry of Energy of the Russian Federation of Report OHS Occupational health and safety GRI 101 (2016) OJSC Open Joint-Stock Company 101 Principles/Grounds (2016) About the Report 6 - General indicators (GRI 102) (2016) OSMS Occupational safety management system Organization Profile PCB Polychlorinated biphenyls 102-1 Name of the organization - Public Joint-Stock Company ROSSETI (ROSSETI) PJSC Public Joint-Stock Company According to the consolidated revenue structure (IFRS for PL Power line 2020): A market participant who both consumes and produces a particular commodity or a service in different periods (for instance, a buyer - electricity transmission – 86%; Prosumer - sale of electricity and capacity – 8%; of electric power in case of its shortage and a seller — if it is excess). Major brands, products and/or 102-2 - - - technological connection to electrical grids – 4%; services Пsaidi Coefficient of average duration of the termination of electric power transmission to the point of supply - other revenue – 2% (other revenue mainly includes Пsaifi Coefficient of average frequency of the termination of electric power transmission to the point of supply maintenance and repair services, diagnostics and testing, R&D Research and development construction services, consulting, organizational and technical services). REG Regional electric grids Location of headquarters of the 102-3 - - 4 Belovezhskaya St., Moscow, 121353 RES Renewable energy source Company RMS Risk management system Geographic Presence of the About the Group. Presence in 80 Regions 102-4 22-25 - Rosatom The State Atomic Energy Corporation Company of the Russian Federation Rostechnadzor Federal Environmental, Industrial and Nuclear Supervision Service of Russia Type of ownership: OKFS (41) - Mixed Russian ownership with a share of federal ownership. Relay protection is a set of devices designed to quickly trip a circuit breaker when a fault is detected in order to separate the 102-5 Ownership and legal form - - RP Organizational and legal form: Public Joint-Stock damaged elements of an electrical system from that system and protect the entire system from damage (Federal Environmental, Company (PJSC). Industrial and Nuclear Supervision Service of Russia (Rostechnadzor)) SDCs Subsidiaries and dependent companies
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Page Page Indicator Report section Comment Indicator Report section Comment of Report of Report About the Group. The ROSSETI Group: Management - mainstay of the electric grid sector of Decision-making on economic topics is the responsibility Russia; 12-13 - of the Strategy Committee, the Committee on Investment, 102-6 Markets served - one of the world leaders in the electric Technical Policy, Reliability, Energy Efficiency and power industry. Innovation and the Audit Committee. Approach to Sustainable Development About the Group. Presence in 80 Regions The Strategy Committee and the Committee on 22-25 - 102-18 Governance structure Management. Corporate Sustainability 54-58 of the Russian Federation Investment, Technical Policy, Reliability, Energy Efficiency Management System About the Group. The ROSSETI Group: and Innovation are responsible for making decisions on - mainstay of the electric grid sector of environmental topics. Russia; 12-15 The staff on the payroll of PJSC ROSSETI's electric grid The Nomination and Remuneration Committee is - one of the world leaders in the electric SDCs as of December 31, 2020 is 220,000 people. responsible for making decisions on social issues. 102-7 Scale of the organization power industry. The staff on the payroll of the ROSSETI Group (including Information on the number of other significant positions PJSC ROSSETI) as of December 31, 2020 is 221,000 Business Model 40-41 and obligations of each executive officer, as well as the people. Appendix 2. Calculation of Economic Structure of the highest Approach to Sustainable Development nature of these obligations, is presented in section 5.2.1. 160 Value Generated and Distributed 102-22 governance body of the Management. Corporate Sustainability 57-58 "Composition of the Board of Directors (Supervisory About the Group 12 Company and its committees Management System Board) of the Issuer" of the Quarterly Report for the 4Q EU4 Length of Power Lines Appendix 4. The ROSSETI Group Assets 167 2020, (page 64), https://www.rosseti.ru/investors/info/ Information on employees and Appendix 3. Information on the ROSSETI The share of work performed by employees of contractors quarter/doc/qr0420.pdf 102-8 160-165 workers of the Company Group's Employees in 2018–2020 is not significant. Stakeholder Engagement 102-9 Supply chain description Caring for Our Suppliers 148-153 - Approach for Stakeholder Engagement. In 2020, the powers of the sole executive body of FGC 102-40 List of stakeholders List of Stakeholders and Approaches to 70-76 - UES were transferred to the management company, PJSC Engage Each and Every One of Them Significant changes in the ROSSETI. All employees of PJSC ROSSETI and electric grid SDCs are covered by Collective Agreements or the Sectoral Wage 102-10 Company during the reporting - - Share of th Company employees Rate Agreement in the Electric Power Industry for 2019 - period There were no other significant changes in the scale, 102-41 covered by collective bargaining - - 2021 (in those organizations that do not have an individual structure, or ownership of the organization or its supply agreements chain in the reporting year. collective agreement, the sectoral agreement is directly The ROSSETI Group, in accordance with the Precautionary applicable). Approach for Stakeholder Engagement. Precautionary Principle or Principle, strives to avoid the alleged harm to the Stakeholder identification and 102-11 - - 102-42 List of Stakeholders and Approaches to 70-76 - approach environment, even if there is no proven scientific evidence selection principles that one or another type of activity causes such harm. Engage Each and Every One of Them Approach to the Implementation of the As part of the preparation of the Report, a special Economic, environmental and UN Sustainable Development Goals (UN 96-99 The ROSSETI Group adheres to international standards - interaction with stakeholders was carried out - a social charters, principles or SDGs) ISO 9001:2015, ISO 14001:2015, ISO 50001:2018. Approach for Stakeholder Engagement. questionnaire survey of representatives of stakeholders other initiatives developed Approach for stakeholder 102-12 Appendix 1. Material Topics Management The ROSSETI Group follows a voluntary initiative of 102-43 List of Stakeholders and Approaches to 70-76 in order to identify material topics. In addition to the by external parties to which 158-159 engagement economic, environmental and social data disclose in Engage Each and Every One of Them questionnaire, stakeholders were asked to indicate the the organization has joined or issues that they would like to find coverage in the text of Management Systems used by ROSSETI accordance with the GRI principles. supported 59 the Report. Group In the course of interaction within the framework of the Additional information on the Company's participation Membership of the organization preparation of the Report, the stakeholders raised and in banking groups, banking holdings and associations is in associations, industry and/ reflected in the text of the Report the following issues: 102-13 Interaction with International Partners 80-85 disclosed in p. 3.4 of the Issuer's Quarterly Report for 4Q or national and international - low-carbon development and alternative energy 2020 (page 33 of the Report) - https://www.rosseti.ru/ advocacy organizations (section "Industry overview", subsection "Long-term investors/info/quarter/doc/qr0420.pdf prospects for the development of the industry"; section Strategy "Energy efficiency and energy conservation", subsection Statement from senior decision- 102-14 Message from the Director General 34-35 - "Use of renewable energy sources and development of maker microgrids"); Identification of the Report's Material Brief analysis of major risks and 6-8 - - participation in the regulatory development of the 102-15 Topics opportunities Key topics raised by electric grid sector (section "Approach for Stakeholder Sustainability Risk Management System 60-69 stakeholders in the course Engagement", subsection "Interaction with federal Ethics and Integrity 102-44 of interaction and their - - authorities"); Approach to Sustainable Development Values, principles, standards consideration when preparing - contribution to the achievement of the UN SDGs (section 102-16 Management. Corporate Culture, Ethics 44-45 - and norms of behavior the Report “Approach to the Implementation of the UN Sustainable and Values Development Goals (UN SDGs)); - biodiversity protection (section "Caring for the environment", subsection "Conservation of biodiversity"); - dynamics of data on emissions and discharges for 3 years (section "Caring for the environment", subsection "Air protection" and "Approach to waste management"); - partnership with NCOs (section “Approach for stakeholder engagement”, subsection “Interaction with international partners”; section “Investment in the future”, subsection “Charity and sponsorship”);
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Page Page Indicator Report section Comment Indicator Report section Comment of Report of Report About the Report. Summary of the 102-52 Reporting cycle 6 - - climate change (section “Sustainable development Report. priorities and corporate KPI”, Priority 3 “Improving energy Contact point for questions 102-53 Appendix 7. Contacts 179 - efficiency, protecting the environment and combating regarding the report climate change”; section “Sustainability risk management Claims of reporting in About the Report. Approach to Preparing system”, risk 5 “Climate change”); 102-54 accordance with the GRI 6 - the Report - cooperation with universities (section “Personnel”, Standards subsection “Personnel development and training”; List of headings/GRI content Appendix 6. GRI Standards Report 102-55 169-179 - section “Approach for stakeholder engagement”, index Compliance Table subsection “Cooperation with educational institutions and The Report received public assurance from the Council engagement of talented youth”); 180-183 for Non-Financial Reporting of the Russian Union of - independent assessment of employees' qualifications Industrialists and Entrepreneurs (RSPP). at the initiative of the employer (section “Personnel”, 184 External independent confirmation of the Report was Appendix 8. Independent Auditor's subsection “Staff assessment, prevention of 102-56 External assurance carried out by LLC FBK. The external auditor is selected on Opinion discrimination and equal opportunities”); the basis of tender procedures. - waste sorting (section “Caring for the environment”, Public assurance and external independent audit are subsection “Waste management approach”). carried out pursuant to the Order on the preparation of the Accounting practice Report signed by the Executive Director of PJSC ROSSETI. Appendix 4. The ROSSETI Group Assets 166 - Due to the peculiarities of Russian regulation, the The non-financial indicators are consolidated by EU5 Greenhouse gas quotas - - ROSSETI Group's companies do not take part in the use subsidiaries and affiliates (SDCs) of the ROSSETI Group, and transfer of greenhouse gas quotas. those leading operating activities for transmission and Management approach (GRI 103) (2016): specified separately for each substantive topic distribution of electricity and grid connection to electrical MATERIAL TOPICS Entities included in the grids, unless otherwise specified. The coverage of Economic performance (GRI 201) (2016). Material topic: Economic performance of the ROSSETI Group's activities 102-45 consolidated financial About the Report. Summary of the financial performance disclosure corresponds to the 6 Explanation of the material topic statements 103-1 About the Report 6 Report. perimeter of preparation of the consolidated financial and its boundary The approach to economic performance management statements under IFRS (Notes 5 and 8 to the consolidated (implementation of the strategy, performance assessment The management approach and Approach to Sustainable Development 44-58 financial statements of PJSC ROSSETI prepared in 103-2 based on KPI, etc.) is detailed in the text of the PJSC its components Management accordance with IFRS for the year ended December 31, ROSSETI Annual Report 2020, p. 68-70 –Annual Reports Evaluation of the management Appendix 1. Material Topics Management 158-159 2020, pages 34 and 38–https://www.rosseti.ru/investors/ 103-3 (rosseti.ru) info/financeinfo/reports/msfo/). approach Economic value generated and Appendix 2. Calculation of Economic In defining the content and preparing the text of the 201-1 160 - Report, the Company relied on the Principles for distributed Value Generated and Distributed determining the content and quality assurance of the Indirect economic impact (GRI 203) (2016). Material topic: Charitable and social projects, as well as investment in infrastructure in the regions of presence. report, enshrined in the GRI Standards Sustainability Influence on socio-economic development of the regions of presence Explanation of the material topic Reporting Guidelines: 103-1 About the Report 6 - principles of stakeholder engagement; and its boundary - principle of result presentation in the context of Message from the Director General 34-35 Approach to Sustainable Development sustainable development; 44-58 - principle of materiality; Management Defining report content and topic 102-46 About the Report 6 - principle of completeness; Sustainability Risk Management System 60-69 boundaries - principle of reliability; Approach to the Implementation of the - principle of balance; The management approach and UN Sustainable Development Goals (UN 96-99 - principle of clarity; 103-2 its components SDGs) - principle of comparability; 103-3 Evaluation of the management Approach for Stakeholder Engagement. 93 - principle of reliability; approach Interaction with Regions - principle of relevance. Consumer Care. Consumer Technological 102-103 PJSC ROSSETI considers these principles to be effective Connection and mandatory in any disclosure of information to Investment in the Future. Charity and 154 stakeholders, not only in the preparation of the Report. Sponsorship About the Report. Identification of 102-47 List of material topics 6-8 - Appendix 1. Material Topics Management 158-159 Material Topics Investment in the Future. Charity and 154 A recalculation of the distributed and undistributed Infrastructure investments in Sponsorship 203-1 economic value for 2018–2019 was carried out due to the regions of presence Appendix 2. Calculation of Economic 160 102-48 Restatements of information - - refinement of the calculation methodology. Value Generated and Distributed There were no other significant restatements of the Procurement practice (GRI 204) (2016). Material topic: Transparency of purchases in the ROSSETI Group. Choosing bona fide suppliers, attracting local suppliers indicators in previous Reports. and representatives of small and medium-sized businesses The list of material topics has undergone significant Explanation of the material topic changes due to the mainstreaming of material topics 103-1 About the Report 6 - Significant changes in and its boundary in the preparation of the Report. Material topics of the previous reporting periods Approach to Sustainable Development Report are defined in the subsection “Identification of 44-58 102-49 in the coverage, boundary or - - Management the Report's significant topics” of the section “About the The management approach and measurement methods applied Approach to the Implementation of the Report”. 103-2 its components in the report UN Sustainable Development Goals (UN 96-99 There were no significant changes to the boundary of 103-3 Evaluation of the management SDGs) topics. approach Overview of the Report Caring for Our Suppliers 148-153 158-159 102-50 Reporting period - - January 1, 2020–December 31, 2020 Appendix 1. Material Topics Management Previous publications of the 102-51 - - May 2020 sustainable development report
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Page Page Indicator Report section Comment Indicator Report section Comment of Report of Report The share of local suppliers in the total volume Approach to Sustainable Development 44-58 of purchases made by the ROSSETI Group is 39%. Management Proportion of spending on local Supplier Care. Procurement from Local Local suppliers and contractors mean the winners 204-1 153 Approach to the Implementation of the suppliers Suppliers of procurement procedures with the affiliation of UN Sustainable Development Goals (UN 96-99 TIN to one of the regions of the presence of PJSC The management approach and SDGs) 103-2 its components ROSSETI'scorresponding SDCs. Caring for the Environment. Approach 103-3 Evaluation of the management Anti-corruption (GRI 205) (2016). Material topic: Anti-corruption to Management Activities in the Field of 110-111 approach Explanation of the material topic Environmental Protection 103-1 About the Report 6 and its boundary Caring for the Environment. Biodiversity 115 Approach to Sustainable Development Conservation The management approach and 44-58 Management Appendix 1. Material Topics Management 158-159 103-2 its components Sustainability Risk Management System 60-69 Company's impact on Caring for the Environment. Biodiversity 103-3 Evaluation of the management 304-2 115 - Caring for Our Suppliers 148-153 biodiversity Conservation approach Appendix 1. Material Topics Management 158-159 Emissions (GRI 305) (2016). Material Topic: Reducing emissions of greenhouse gases and pollutants into the atmosphere In 2020, PJSC ROSSETI received and considered 215 Explanation of the material topic 103-1 About the Report 6 applicant appeals, including 20 appeals about potential and its boundary corruption and violations of the Corporate Code of Ethics Approach to Sustainable Development 44-58 and Business Conduct. According to the facts stated in Management the appeals, internal investigations and the assessment Approach to the Implementation of the of possible signs of corruption offenses in the actions of UN Sustainable Development Goals (UN 96-99 executive officers were carried out. The fact of corruption The management approach and SDGs) 103-2 its components was confirmed for 1 appeal (FGC UES). Caring for the Environment. Approach 103-3 Evaluation of the management In 25 cases, various violations were identified, including to Management Activities in the Field of 110-111 approach the facts of unaccounted consumption, unreasonably Environmental Protection inflated charges for the supplied electricity, violations of Caring for the Environment. Atmospheric Confirmed incidents of the terms of contracts by contracting organizations, etc. 113 205-3 - Air Protection corruption and actions taken At the same time, no corruption offenses–wrongful acts Appendix 1. Material Topics Management 158-159 (actions or omissions) possessing signs of corruption, for In 2020, the Company produced no persistent organic which the law establishes disciplinary, criminal, civil or Caring for the Environment. Atmospheric 305-7 Air emissions 113 pollutants (POP) and hazardous air pollutants (HAP) into administrative liability–were identified in PJSC ROSSETI in Air Protection the atmosphere. the reporting year. Waste (GRI 306) (2020). Material topic: Production waste management. Discharge control No court proceedings were brought against PJSC ROSSETI Explanation of the material topic or its employees during the reporting period. 103-1 About the Report 6 In total, law enforcement agencies initiated 12 criminal and its boundary Approach to Sustainable Development corruption cases against employees of the ROSSETI Group 44-58 on the initiative of security blocs in 2020. In 5 cases, court Management verdicts have entered into force (including two previously Approach to the Implementation of the initiated). UN Sustainable Development Goals (UN 96-99 The management approach and SDGs) ENVIRONMENTAL DISCLOSURES (300) 103-2 its components Caring for the Environment. Approach Energy efficiency (GRI 302) (2016) and the topic “System efficiency” of the GRIustry ind application for the electric power industry. Material topic: Energy 103-3 Evaluation of the management to Management Activities in the Field of 110-111 efficiency approach Explanation of the material topic Environmental Protection 103-1 About the Report 6 Caring for the Environment. Waste and its boundary 114 Message from the Director General 34-35 Management Approach Approach to Sustainable Development Appendix 1. Material Topics Management 158-159 44-58 Waste generation and significant Caring for the Environment. Waste Management 306-1 114 The management approach and Sustainability Risk Management System 60-69 waste-related impacts Management Approach Management of significant Caring for the Environment. Waste 103-2 its components Approach to the Implementation of the 306-2 114 103-3 Evaluation of the management UN Sustainable Development Goals (UN 96-99 waste-related impacts Management Approach Caring for the Environment. Waste approach SDGs) 306-3 Waste generated 114 - Energy Efficiency and Energy Management Approach 116-121 Conservation Environmental Compliance (GRI 307) (2016). Material topic: the ROSSETI Group's services compliance with environmental protection requirements (including Appendix 1. Material Topics Management 158-159 fines and sanctions) Energy Efficiency and Energy Explanation of the material topic 302-1 Energy consumption 117 - 103-1 About the Report 6 Conservation and its boundary Electric power transmission and Energy Efficiency and Energy Approach to Sustainable Development EU12 116 44-58 distribution losses Conservation Management Water withdrawal and waste water discharge (GRI 303) (2018). The topic is not included in the number of those selected as material–the information is Approach to the Implementation of the disclosed additionally. UN Sustainable Development Goals (UN 96-99 The management approach and SDGs) Interactions with water as a 103-2 its components 303-1 Caring for the Environment. Approach shared resource Caring for the Environment. Protection 103-3 Evaluation of the management 112 to Management Activities in the Field of 110-111 303-2 Water Management and Responsible Use of Water Resources approach Environmental Protection 303-3 Water withdrawal by sources - Caring for the Environment. Violations Biodiversity (GRI 304) (2016). Material topic: Impact on biodiversity (including installation of bird protective devices) 111 and Fines Explanation of the material topic 103-1 About the Report 6 Appendix 1. Material Topics Management 158-159 and its boundary Fines and sanctions for non- Caring for the Environment. Violations 307-1 compliance with environmental 111 - and Fines laws
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Page Indicator Report section Comment Page of Report Indicator Report section Comment SOCIAL AREA (400) of Report Employment (401) (2016). Material topic: The company's investment in human resources. Reducing turnover of the workforce. Attracting qualified employees The OSMS covers 100% of the employees of the ROSSETI Explanation of the material topic Group. The OSMS applies to the activities of contractors 103-1 About the Report 6 and its boundary and suppliers performing work at electric grid facilities Message from the Director General 34-35 Employees under the of the ROSSETI Group. The OSMS requirements apply to Approach to Sustainable Development 403-8 corporate Occupational Safety Occupational Safety Protection. 143 employees and third parties located on the territory of the 44-58 Management System electric grid facilities of the ROSSETI Group. The management approach and Management No internal and external audits of the OSMS were carried 103-2 its components Approach to the Implementation of the out in 2020. As of December 31, 2020, there were no valid 103-3 Evaluation of the management UN Sustainable Development Goals (UN 96-99 results of previous internal and external OSMS audits. approach SDGs) Training and Education (GRI 404) (2016). Material topic: Training and education, training programs, advanced training, performance and career development Personnel 122-141 reviews. Appendix 1. Material Topics Management 158-159 Explanation of the material topic 103-1 About the Report 6 Programs for skills and its boundary development and education in Approach to Sustainable Development the course of a lifetime aimed to Personnel. Motivation and Engagement 44-58 401-2 139-140 - Management maintain personnel's ability to of Employees The management approach and Approach to the Implementation of the employment and support them 103-2 its components UN Sustainable Development Goals (UN 96-99 upon retirement 103-3 Evaluation of the management SDGs) Personnel. Personnel Development and approach 132-137 - 122-141 formerly Programs and activities aimed Training Personnel EU14 at attracting highly skilled labor Recruitment, Attraction and Professional Appendix 1. Material Topics Management 158-159 130-131 Programs for skills Personnel. Employee Training and Development of Personnel 132-137 Programs and activities aimed development and education in Professional Advancement the course of a lifetime aimed to formerly at ensuring the safety and 404-2 Personnel. Motivation and Engagement Occupational Safety Protection 142-145 - maintain personnel's ability to EU16 health of employees of the of Employees. Non-state Pension 140 employment and support them Company and contractors Coverage upon retirement Occupational health and safety (GRI 403) (2018). Material topic: Occupational health and safety: work-related injuries; work-related ill health; agreements with labour unions Diversity and Equal Opportunity (GRI 405) (2016). Material topic: Equal career and development opportunities for men and women: the composition of the governing bodies and personnel of the organization, broken down by various criteria Explanation of the material topic 103-1 About the Report 6 Explanation of the material topic and its boundary 103-1 About the Report 6 and its boundary Message from the Director General 34-35 Approach to Sustainable Development Approach to Sustainable Development The management approach and 44-58 44-58 Management Management 103-2 its components The management approach and 103-3 Evaluation of the management Personnel 122-141 Sustainability Risk Management System 60-69 103-2 its components approach Appendix 1. Material Topics Management 158-159 Approach to the Implementation of the 103-3 Evaluation of the management UN Sustainable Development Goals (UN 96-99 Personnel. Employees. Headcount and approach 125-126 SDGs) Personnel Structure Composition of the governing Appendix 3. Information on the ROSSETI Occupational Safety Protection 142-145 161 405-1 bodies and employees by Group's Employees in 2018–2020 Appendix 1. Material Topics Management 158-159 gender and age Corporate Sustainability Management Occupational and Industrial Occupational Safety Protection 142-145 403-1 System. Members of the Board of 57-58 Safety Management System 158-159 Appendix 1. Material Topics Management Directors Occupational Safety Protection 142-145 - Compliance with the legislation (GRI 419) (2016). Material topic: compliance with the legislation. Fines and non-financial sanctions imposed on the Company Hazard identification, risk Occupational Safety Protection. due to violation of the law. 143-145 403-2 assessment and accident Interaction with Employees on Explanation of the material topic 103-1 About the Report 6 investigation Occupational Safety Protection and its boundary Sustainability Risk Management System 64-65 - The management approach and Approach to Sustainable Development 403-3 Occupational Health Employee Health Protection 145-147 44-58 - 103-2 its components Management Employee participation, advice Occupational Safety Protection. 103-3 Evaluation of the management Sustainability Risk Management System 60-69 403-4 and communication on health Interaction with Employees on 143-145 approach Appendix 1. Material Topics Management 158-159 and safety issues Occupational Safety Protection. In the reporting year, the ROSSETI Group did not receive Material fines and non- Training of employees in any material fines and was not subject to significant non- 145 financial sanctions imposed 403-5 the field of occupational and Occupational Safety Protection. 419-1 - financial sanctions in social and economic areas. There due to violation of the law and industrial safety are no cases against the ROSSETI Group initiated using regulatory requirements. Approach to the Implementation of the the dispute settlement mechanisms. 96-97 UN Sustainable Development Goals Material topic (in addition to the list of GRI Standards): Digital transformation of the electric grid sector 403-6 Promotion of worker health (UN SDGs) Explanation of the material topic Personnel. Motivation and Engagement 103-1 About the Report 6 145-147 and its boundary of Employees Approach to Sustainable Development Prevention and mitigation of 44-58 The ROSSETI Group does not impose labour protection Management health and safety impacts 403-7 - - requirements on suppliers and contractors, except for Approach to the Implementation of the directly related to business The management approach and those employed at the Group's facilities. UN Sustainable Development Goals (UN 96-99 relationships 103-2 its components SDGs) 103-3 Evaluation of the management Consumer Care. Digital Transformation approach of the Electric Grid Sector and Innovative 105-109 Development Appendix 1. Material Topics Management 158-159
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Page Page Indicator Report section Comment Indicator Report section Comment of Report of Report Material topic (in addition to the list of GRI Standards): Scientific research and introduction of innovative developments Message from the Director General 34-35 Explanation of the material topic Approach to Sustainable Development 103-1 About the Report 6 44-58 and its boundary Management Approach to Sustainable Development About the Group. Activities Amidst 44-58 20-21 Management COVID-19 Sustainability Risk Management System 60-69 Approach for Stakeholder Engagement. 77 Approach to the Implementation of the Interaction with Investment Community UN Sustainable Development Goals (UN 96-99 Approach for Stakeholder Engagement. 78-79 The management approach and SDGs) Interaction with Consumers 103-2 its components Consumer Care. Digital Transformation Approach for Stakeholder Engagement. 80-86 103-3 Evaluation of the management of the Electric Grid Sector and Innovative 105-109 Interaction with International Partners approach Development Approach for Stakeholder Engagement. 87 Approach for Stakeholder Engagement. The management approach and Interaction with Personnel 93 103-2 its components Interaction with Regions Approach for Stakeholder Engagement. 103-3 Evaluation of the management Approach for Stakeholder Engagement. Cooperation with Educational Institutions 88-91 94-95 approach Interaction with Technological Platforms and Engagement of Talented Youth Appendix 1. Material Topics Management 158-159 Approach for Stakeholder Engagement. 96-97 Consumer Care. Digital Transformation Interaction with the Media of the Electric Grid Sector and Innovative 105-109 Consumer Care. Ensuring the Reliability Research and introduction of 103-105 innovative developments aimed Development of Energy Supply for Consumers formerly at providing reliable electricity Approach for Stakeholder Engagement. Personnel. Motivation and Engagement EU8 93 138 and promoting sustainable Interaction with Regions of Employees development in the future Approach for Stakeholder Engagement. Personnel. Personnel Development and 94-95 132-137 Interaction with Technological Platforms Training Material topic (in addition to GRI Standards): Ensuring reliable and uninterrupted electricity supply Employee Health Protection 146 Explanation of the material topic Caring for Our Suppliers 148-153 103-1 About the Report 6 and its boundary Appendix 1. Material Topics Management 158-159 Message from the Director General 34-35 Approach to Sustainable Development 44-58 Management The management approach and Approach to the Implementation of the 103-2 its components UN Sustainable Development Goals (UN 96-99 103-3 Evaluation of the management SDGs) GRI 102-53 approach Appendix 7. Contacts Consumer Care. Ensuring the Reliability 103-105 of Energy Supply for Consumers Investor Relations Department of PJSC ROSSETI Appendix 1. Material Topics Management 158-159 [email protected] Management approach to formerly ensure short and long-term Consumer Care. Ensuring the Reliability +7 (495) 995-53-33, ext 5470, 3834 103-105 EU6 electricity availability and of Energy Supply for Consumers reliability Material topic (in addition to the list of GRI Standards): Readiness to emergencies Explanation of the material topic 103-1 About the Report 6 and its boundary Approach to Sustainable Development 44-58 The management approach and Management 103-2 its components Sustainability Risk Management System 60-69 103-3 Evaluation of the management Consumer Care. Ensuring the Reliability 103-105 approach of Energy Supply for Consumers Appendix 1. Material Topics Management 158-159 formerly Emergency/disaster Consumer Care. Ensuring the Reliability 103-105 EU21 preparedness of Energy Supply for Consumers Material topic (in addition to the list of GRI Standards): Consumer care Explanation of the material topic 103-1 About the Report 6 and its boundary Approach to Sustainable Development 44-58 Management The management approach and Approach to the Implementation of the 103-2 its components UN Sustainable Development Goals (UN 96-99 103-3 Evaluation of the management SDGs) approach Consumer Care 102-109 Appendix 1. Material Topics Management 158-159 Material topic (in addition to the list of GRI Standards): Care of the ROSSETI Group about employees and consumers amidst the COVID-19 pandemic Explanation of the material topic 103-1 About the Report 6 and its boundary
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GRI 102-56 Appendix 8. Independent Auditor's Opinion
→ Compliance of PJSC “ROSSETI” stakeholder engagement in the course of sustainability activities implementation with the principles of AA1000 AP 2018 - Inclusivity, Materiality, Responsiveness and Impact. → Compliance of the Report with the requirements of GRI Sustainability Reporting Standards to the report prepared in accordance with the Core option. A limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both the risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks. The procedures we performed were based on our professional judgment and included inquiries, inspection of documents, analytical procedures, evaluating the appropriateness of quantification methods and reporting policies, and agreeing or reconciling with underlying INDEPENDENT PRACTITIONER’S LIMITED ASSURANCE REPORT records. [Translation from Russian original] Given the circumstances of the engagement, in performing the procedures listed above we have undertaken the following activities: → Study and selective testing of systems and processes implemented by PJSC “ROSSETI” to ensure and analyze the compliance of the To the management of Public Joint stock company “ROSSETI” activities with AA1000 AP 2018 principles; collection of evidence confirming practical implementation of these principles. We have undertaken a limited assurance engagement of the Public Joint stock company “ROSSETI” (hereinafter referred to as → Interviewing the management and employees of PJSC “ROSSETI” and obtaining documentary evidence. PJSC “ROSSETI”) stakeholder engagement in the course of sustainability activities implementation compliance with the principles of the → Study of information available on websites of companies of the ROSSETI Group related to their activities in the context of sustainable AA1000 Accountability Principles 2018 (hereinafter referred to as AA1000 AP (2018)1 as well as of the accompanying Corporate Social development. Responsibility and Sustainability Report 2020 (hereinafter referred to as the Report2) compliance with the requirements of GRI Sustainability → Study of public statements of third parties concerning economic, environmental and social aspects of companies of the ROSSETI Reporting Standard3 to the report prepared in accordance with the Core option. Group activities, in order to check validity of the declarations made in the Report. Responsibility of PJSC “ROSSETI” → Analysis of non-financial reports of companies working in the similar market segment for benchmarking purposes. PJSC “ROSSETI” is responsible for its compliance with the principles of AA1000 AP 2018 in stakeholder engagement in the course of → Selective review of documents and data on the efficiency of the management systems of economic, environmental and social aspects sustainability activities implementation as well as for preparation of the Report in compliance with the requirements of GRI Sustainability of sustainable development in PJSC “ROSSETI”. Reporting Standards to the report prepared in accordance with the Core option. This responsibility includes the design, implementation and → Study of the existing processes of collection, processing, documenting, verification, analysis and selection of data to be included into maintenance of internal control relevant to the preparation of the Report that is free from material misstatement, whether due to fraud or the Report. error. → Analysis of information in the Report for compliance with the requirements of Criteria. Our Independence and Quality Control The procedures were performed only in relation to data for the year ended 31 December 2020. We have complied with the independence and other ethical requirements of the Rules of Independence of the Auditors and Audit The evaluation of reliability of the information on performance in the Report was conducted in relation to compliance with the requirements Organizations and The Code of Professional Ethics of the Auditors, which are in accordance with International Code of Ethics for of Standards to the report prepared in accordance with the Core option and information referred to the GRI Content Index (section of the Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Report “GRI Standards Report Compliance Table”). In respect to this information assessment of its conformity to external and internal Accountants, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and reporting documents provided to us was performed. professional behavior, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The procedures were not performed in relation to forward-looking statements; statements expressing the opinions, beliefs and intentions The firm applies International Standard on Quality Control 1, Quality Control for Firm that Perform Audits and Reviews of Financial of PJSC “ROSSETI” as the parent company of the ROSSETI Group to take any action related to the future; as well as statements based on Statements, and Other Assurance and Related Services Engagements, and accordingly maintains a comprehensive system of quality expert opinion. control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. The procedures were performed in relation to the version of the Report subject to sending to Global Reporting Initiative in order to notify it of the use of the Standards in the Report preparation. Our Responsibility The procedures were performed in relation to the Russian version of the Report, which includes information to be published in a hard-copy Our responsibility is to express a limited assurance conclusion on PJSC “ROSSETI” stakeholder engagement in the course of sustainability form as well as in digital form. activities implementation compliance with the principles of AA1000 AP 2018, as well as on the Report compliance with the requirements of GRI Sustainability Reporting Standards to the report prepared in accordance with the Core option based on the procedures we have We had no chance to verify that the annual report of PJSC “ROSSETI” for 2020, which is referred to in the Report, is published as well performed and the evidence we have obtained. We conducted our limited assurance engagement in accordance with International Standard as that the procedure of public verification of the Report by Non-Financial Reporting Board of the Russian Union of Industrialists and on Assurance Engagements 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information, as Entrepreneurs was performed due to the fact that the date of signing this Assurance Report preceded the planned dates of the procedures well as in accordance with AA1000 Assurance Standard v34 (type 2, as defined by АА1000AS v3). These standards require that we plan and completion. perform this engagement to obtain limited (moderate as defined by АА1000AS v3) assurance about whether PJSC “ROSSETI” stakeholder The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable engagement in the course of sustainability activities implementation complies with the principles of AA1000 AP 2018 and whether the assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than Report is free from material misstatement. the assurance that would have been obtained had we performed a reasonable assurance engagement. Accordingly, we do not express a A limited assurance engagement undertaken in accordance with these standards involves assessing the following criteria (hereinafter reasonable assurance opinion about compliance, in all material respects, with the requirements of Criteria. referred to as Criteria):
1 AA1000 AccountAbility Principles. 2 The report discloses the results of the activities of the ROSSETI Group: non-financial indicators are given in consolidated form by subsidiaries of the PJSC “ROSSETI”, that conducts operations related to the transmission and distribution of electricity and connection to electric networks (unless otherwise specified); financial indicators are given according to the consolidation boundaries of the IFRS consolidated financial statement. 3 GRI Sustainability Reporting Standards. 4 AA1000 Assurance Standard v3.
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Appendix 9. Certificate of Public Endorsement GRI 102-56 Limited Assurance Conclusion on compliance of PJSC “ROSSETI” stakeholder engagement in the course of sustainability of a Corporate Non-Financial Report activities implementation with the principles of AA1000 AP 2018 Based on the procedures performed and evidence obtained, nothing has come to our attention that causes us to believe that PJSC “ROSSETI” stakeholder engagement in the course of sustainability activities implementation has not complied, in all material aspects, with the criteria of AA1000 AP 2018 in respect to adherence to the principles (Inclusivity, Materiality, Responsiveness and Impact). Limited Assurance Conclusion on Compliance of the Report with the GRI Sustainability Reporting Standards (Core option) Based on the procedures performed and evidence obtained, nothing has come to our attention that causes us to believe that the Report has not complied, in all material aspects, with requirements of GRI Sustainability Reporting Standards to the report prepared in accordance with the Core option. Recommendations → Based on the results of the limited assurance engagement we recommend: → It is reasonable to disclose GRI indicators in relation to planned values for the reporting period and for the future. → Improve the quality of disclosure of information on evaluation of management approaches. → Consider increasing the extent of disclosure of information on material topics concerning contractors. The recommendations are not intended to detract from the practitioner’s conclusions. Our conclusions are not modified in respect of the matters referred to in the recommendations.
АА1000 Licensed Report 000-240/V3-Z50KV
Practitioner Partner ______V.Y.Skobarev acting under Power of Attorney No. 76/18 of December 17, 2018 The Russian Federation, Moscow April 30, 2021
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