SUSTAINABILITY REPORT FOR 2016- 2017 GOOD ENERGY OF THE LIGHT COMPANY 1 CONTENTS 1. Address of General Director………………………………………………………………………..4 2. About the report……………………………………………………………………………………..6 2.1. Reporting system and determination of material topics………………………………………….…6 3. About the company………………………………………………………………………………….7 3.1. Key figures……………………………………………...………………………………………..…7 3.2. Geography and core activities……………………………………………...……………………….9 4. Strategic objectives and tasks in the field of sustainable development…………………………10 4.1. Priorities in the field of sustainable development……………………………………………...….10 5. Management………………………………………………………………………………………..10 5.1. Corporate governance……………………………………………...……………………………...10 5.2. Risk management……………………………………………...…………………………………..11 5.3. Procurement activities……………………………………………...…………………………..….12 5.4. Innovative activity……………………………………………...………………………………….13 5.5. Interaction with stakeholders……………………………………………...………………………17 6. Economic performance…………………………………………………………………………….19 6.1. Operating and financial results……………………………………………...……………………..19 6.2. Dividend payout……………………………………………...……………………………………22 6.3. Contribution to development of regions. Implementation of an investment programme………....23 7. Ensuring reliable and uninterrupted power supply……………………………………………...30 7.1. Elimination of failures and technological disturbances…………………………………………...30 7.2. Increase in reliability of electric grids……………………………………………...……………...33 7.3. Safety of the population, customers and information promotion of electric safet………………...35 8. System of customer service………………………………………………………………………...40 8.1. Ensuring high-quality and available services for customers……...……………………………….40 8.2. Results of interaction with customers of services and development plans ……………………….44 9. Environmental protection………………………………………………………………………….46 9.1. Preserving biodiversity and protection of land resources…………………………………………46 9.2. Protection and rational use of lands, use of environmentally safe technologies and solutions, decrease in energy consumption……………………………………………...………………………..52 9.3. Cooperation with nature protection structures and environmental organisations…………………55 9.4. Observance of the environmental legislation and normative requirements……………………….56 10. Personnel and social policy………………………………………………………………………56 10.1. Wage system and motivational programmes…………………………………………….............56 10.2. Labour protection and safety in a workplace…………………………………………….............61 2 10.3. Formation of corporate culture and creation of non-material incentives for employees………...65 10.4. Sponsorship and charity……………………………………………...…………………………..69 10.5. Cooperation with trade union and public organisations………………………………………….69 11. Anti-corruption……………………………………………………………………………………71 12. Table of correspondences of the Report to requirements of the GRI Standards……………………………………………………………………………………………...74 13. Contact information………………………………………………………………………………77 14. Glossary……………………………………………………………………………………………79 15. Annex. Extract from Minutes No. 01/18 from 7 Nov. 2018 of Public hearings on the draft of the Sustainability Report of IDGC of Center and Volga Region, PJSC for 2016-2017…………..83 Management of IDGC of Center and Volga Region, PJSC is carried out in accordance with the requirements of standards ISO 9001, OHSAS 18001, ISO 14001, ISO 50001 3 1. Address of General Director 102-14 103-2 Dear colleagues and friends! On behalf of IDGC of Center and Volga Region, PJSC I present to you the Sustainability Report of the Company for 2016 - 2017. In 2017, powers of the sole executive body of IDGC of Center and Volga Region, PJSC were transferred to a managing company – IDGC of Centre, PJSC, and this Sustainability Report actually is summing up the efforts made by both Companies on implementation in practice of the principles of sustainable business. Consolidation of management of two largest grid companies of Central Russia allowed not only to increase efficiency of operating activities to the level of advanced international standards, but also to make a worthy contribution to social and economic development of regions of operations, to improve quality of life of people residing in these regions. As a socially focused company, IDGC of Center and Volga Region, PJSC as strategic priorities always defined reliability and availability of power supply, increase in customers’ confidence, social responsibility and environmental safety. Thanks to timely and high-quality execution of repair and investment programmes, and also application of comprehensive measures for elimination of causes of technological disturbances in 2016 - 2017, the Company managed to achieve essential decrease in failure rate indicators. Implementing plans for ensuring availability of power supply and advancing development of grid infrastructure, the Company, acting for the benefit of, first of all, its customers, significantly reduced terms of grid connection and continued implementation of a system of electronic customer service on the Internet. IDGC of Center and Volga Region, PJSC pays a close attention to questions of environmental protection. So, at reconstruction and construction of power grid facilities, the Company uses modern equipment with advanced technical characteristics making the minimum environmental impact: oil receivers for protection of the soil were installed, at construction of overhead power lines bird guards were mounted, compensation events for planting of trees after clearing and expansion of ROWs of power lines were everywhere held, and others. As a result, IDGC of Center and Volga Region, PJSC took the fifth place in the rating of 150 largest companies of the country with the highest indicators of technology and environmental and energy efficiency. In addition, within its corporate social policy the Company systematically conducted its course on providing safe conditions and labour protection, social security and professional growth of 4 employees, and also implementation of different social projects, including cultural, sports, patriotic and information provision. Especially, the project on prevention of electric injury rate, first of all, of children should be mentioned. So, in 2016 specialists of the Company conducted over 2 thousand lessons of electric safety for more than 61 thousand pupils, and in 2017 – already for 70 thousand children. Without being satisfied with what has already been achieved, IDGC of Center and Volga Region, PJSC, publishing the report, confirms the commitment to the principles of social responsibility and sustainable development, hopes for further constructive dialogue and interaction with all stakeholders. General Director of IDGC of Centre, PJSC - the managing company of IDGC of Center and Volga Region, PJSC Igor Makovskiy 5 2. About the report 2.1. Reporting system and determination of material topics Confirming the commitment to the principles of social responsibility and sustainable 102-1 development, IDGC of Center and Volga Region, PJSC submits the fourth Sustainability 102-46 102-47 Report (hereinafter - the Report) for 2016-2017, besides, the Report included the main 102-50 indicators for 2015. The previous report, published in July 2015, is posted on the official 102-51 102-52 website of the Company (http://www.mrsk- cp.ru/stockholder_investor/disclosure_reporting_info/sotsialnye-otchety/) and covers the period of 2013-2014. The Company is also going to adhere further to a two-year reporting cycle. Our Report is prepared according to the principles and methodology of the Guidelines of the Global Reporting Initiative (the GRI Standards version), including its customised application for the electric utility sector. While preparing the Report, the Company was guided by the Core reporting level. In the Report activity of IDGC of Center and Volga Region, PJSC in all regions of operations is provided. Within this Report information on subsidiaries is not disclosed as they do not make material impact on the Company’s results in the field of sustainable development. For determination of material topics for disclosure in the Report of IDGC of Center and Volga Region, PJSC, according to the GRI recommendations, along with questioning of stakeholders, monitoring of mass media was carried out, regarding identification of topics connected with the Company, which caused the greatest public response. As a result of the conducted research, the following most material topics of the Report were revealed: - economic performance; - ensuring reliable and high-quality power supply, including readiness for emergency situations; - customer service. Besides, according to the Company, questions of labour protection, social policy, environmental safety and fight against corruption are not less essential to the Company’s activity in the field of sustainable development and are also disclosed in this Report. In this Report data of financial and management statements of IDGC of Center and Volga Region, PJSC, and also data, which are subject to disclosure according to recommendations of the GRI Reporting Guidelines in the field of sustainable development of the GRI Standards, are used. 6 3. About the company 3.1. Key figures IDGC of Center and Volga Region, PJSC is a subsidiary of the power company 102-2 PJSC ROSSETI, the largest in the Russian Federation, the main supplier of services in 102-3 102-4 electricity transmission and connection to electric grids in the Vladimir, Ivanovo, Kaluga, 102-6 Kirov, Nizhny Novgorod, Ryazan, Tula regions,