Sustainability Report 2020 ALROSA | Sustainability Report 2020 1 Contents A message from the Chief Executive Officer – Chairman of the Executive Committee ............ 4 1 Our performance in 2020............................................................................................ 6 1.1 Our performance in 2020 ................................................................................................... 6 1.2 Key ESG Ratings and Sustainability Awards ........................................................................ 7 1.3 Key milestones of building sustainability system ............................................................... 8 2 ALROSA Group ......................................................................................................... 9 2.1 About Company ................................................................................................................ 10 2.2 Mission and strategy ......................................................................................................... 10 2.3 Business model ................................................................................................................. 12 2.4 Geography of assets .......................................................................................................... 13 2.5 Engagement in international organizations and initiatives ................................................ 14 2.6 Response to COVID-19 ...................................................................................................... 15 3 Strategy and sustainable development ..................................................................... 16 3.1 Sustainability approach ..................................................................................................... 17 3.2 Contribution to the UN Sustainable Development Goals .................................................. 18 3.3 International industry cooperation .................................................................................... 25 3.4 Stakeholder engagement................................................................................................. 26 4 Corporate governance and business ethics ................................................................ 29 4.1 Corporate governance ...................................................................................................... 30 4.2 Sustainability risk management ........................................................................................ 33 4.3 Responsible supply chain .................................................................................................. 36 4.4 Requirements for suppliers and contractors ...................................................................... 39 4.5 Business ethics and anti-corruption................................................................................... 39 4.6 Human rights ................................................................................................................... 42 5 Development of human capital ................................................................................ 44 5.1 Management approach ..................................................................................................... 45 5.2 Headcount and personnel structure .................................................................................. 45 5.3 Employee recruitment and onboarding ............................................................................ 48 5.4 Creation of jobs in regions ................................................................................................ 48 5.5 Remuneration and appraisal ............................................................................................. 50 5.6 Motivation and engagement ............................................................................................. 51 5.7 Training and development ................................................................................................ 51 5.8 Social support ................................................................................................................... 52 5.9 Activity of the trade union ................................................................................................. 54 5.10 Plans for 2021 and the medium term................................................................................. 55 6 Occupational health and safety ................................................................................. 57 ALROSA | Sustainability Report 2020 2 6.1 Management approach to occupational health and safety ................................................ 58 6.2 Training and developing a culture of safety ...................................................................... 60 6.3 Prevention of occupational injuries and accidents ............................................................. 61 6.4 Employees’ health and prevention of occupational diseases ............................................ 64 6.5 Prevention of emergencies ............................................................................................... 65 6.6 Plans for 2021 and the medium term................................................................................. 65 7 Climate risk management ........................................................................................ 66 7.1 Approach to climate risk management ............................................................................. 67 7.2 Strategy ............................................................................................................................ 67 7.3 Risk management ............................................................................................................ 69 8 Environmental protection ......................................................................................... 70 8.1 Management approach ..................................................................................................... 71 8.1.1 Environmental Policy ........................................................................................................ 71 8.2 Energy consumption and efficiency .................................................................................. 76 8.3 Air emissions ..................................................................................................................... 77 8.4 Use of water resources ...................................................................................................... 79 8.5 Waste management ......................................................................................................... 82 8.6 Management of tailings dams .......................................................................................... 84 8.7 Land reclamation .............................................................................................................. 85 8.8 Biodiversity conservation ................................................................................................. 86 8.9 Plans for 2021 and the medium term................................................................................. 87 9 Regional development ............................................................................................ 88 9.1 Management approach .................................................................................................... 89 9.2 Contribution to the development of regional economies ................................................. 90 9.3 Contribution to the development of regional infrastructure .............................................. 93 9.4 Charity and sponsorship projects ...................................................................................... 95 9.5 Support for indigenous peoples ....................................................................................... 96 9.6 Plans for 2021 and the medium term................................................................................ 98 10 Appendices ............................................................................................................ 99 10.1 About this Report ............................................................................................................ 100 10.2 Independent Auditors’ Report ......................................................................................... 103 10.3 GRI Content Index ........................................................................................................... 106 10.4 UN Global Compact and WEF ESG Metrics compliance tables ........................................ 114 11 Contact information ............................................................................................... 119 ALROSA | Sustainability Report 2020 3 A message from the Chief Executive Officer – Chairman of the Executive Committee (GRI 102-14) Dear shareholders, partners and colleagues, I am pleased to present to you ALROSA Group's Sustainability Report 2020. Last year, the world faced a new coronavirus (COVID-19) pandemic. High rates of spread of COVID-19 cause a number of restrictions in most countries – closing of borders and lockdowns have become unprecedented measures in the fight against the pandemic. This, in turn, led to dire consequences for the global economy, and the diamond industry was no exception. Our response to COVID-19 From the very beginning of the pandemic, ALROSA has been responsibly complying with all instructions