Nornickel’s first document laying out the movement towards sustainable development was released in 2005, based on the GRI standards for reporting. Since then, the methodology, amount of information disclosed, and even the ESG priorities have transformed. Here is why.
The reporting methodology is enhanced annually. This explains the change from almost 20 years ago when GRI accounted for only 40-50% of performance indicators. Today, Nornickel reports under GRI indicators for 90% of its performance, together with 10 Russian and international standards and principles governing sustainable business development.
The 2023 report will be the first to include the IFRS S2 indicators measuring Nornickel’s climate-related performance. From 2024, the methodology will also deploy IFRS S1 setting out requirements to sustainability disclosures. Inessa Chernova, Head of Reporting at the Nornickel Sustainable Development Department, explained the changes in detail.
The 2023 report will be the first to include the IFRS S2 indicators measuring Nornickel’s climate-related performance. From 2024, the methodology will also deploy IFRS S1 setting out requirements to sustainability disclosures. Inessa Chernova, Head of Reporting at the Nornickel Sustainable Development Department, explained the changes in detail.
Standards and principles governing Nornickel’s non-financial reporting methodology
- Recommendations of the Bank of Russia (Information Letter No. IN-06-28/49 dated 12 July 2021)
- Global Reporting Initiative (GRI) Standards
- Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)
- SASB standards for Metals & Mining operations
- IFRS S2 Climate-Related Disclosures
- ICMM’s Mining Principles
- Order of the Russian Ministry of Economic Development No. 764 dated 1 November 2023 (“On Approval of Methodological Recommendations for Sustainability Reporting”)
- UNCTAD’s core indicators for entity reporting on contribution towards implementation of the Sustainable Development
- IRMA Standard for Responsible Mining
- AccountAbility AA1000SES (2015), AA1000AP (2018) standards
Prioritization of ESG disclosure areas
Every year, Nornickel ranks its sustainability topics to describe work on the three most important ones in more detail. For example, at the end of 2022, in addition to the ESG report, two more documents were published: on responsible supply chain and human rights. In December 2023, a report on climate change is set for release.
It is important that prioritisation is not only about the company’s interests. The opinion of external experts, local residents, scientists and researchers is also considered.
Priority areas are identified in five stages:
The company’s 2023 non-financial reporting will dive into the Social component.
It is important that prioritisation is not only about the company’s interests. The opinion of external experts, local residents, scientists and researchers is also considered.
Priority areas are identified in five stages:
- Nornickel ESG Department comes up with a list of 27 impacts that the Company’s operations have or may have on the environment, community and economy.
- The stakeholders participate in a survey to assess the impact using metrics that can be evaluated under the GRI standards. In 2023, 361 people filled out the survey compared to 221 in 2022.
- The survey comprises 13 material topics, the scores in each topic are averaged.
- Material topics are discussed with all stakeholders via an open dialogue to produce recommendations for Nornickel’s Sustainability Report.
- Based on the recommendations, a matrix of 13 topics is developed to enable impact prioritisation by materiality. The top 3 topics are reported in greater detail.
The company’s 2023 non-financial reporting will dive into the Social component.
VLADIMIR ZHUKOV,
Nornickel Vice President for Investor Relations and Sustainable Development:
"It’s great that emissions have gone down by 5 points. This does not mean that environment has now become unimportant. This means that we deliver on our pollution mitigation commitments, primarily through out Sulphur Program”.
SVETLANA BIK,
Head of Infagreen expert analytics platform:
“The Social factors dominate across almost all corporate systems. These are turbulent and challenging times, so social programmes prove very useful. I don’t think that a shift in spotlight downgrades the importance of environmental programs, it’s just about social initiatives becoming more relevant.
Ultimately, the company is not giving up its environmental projects. First of all, I am referring to the Sulphur Program and Nornickel’s public Internet project on the company’s mission to preserve ecosystems. It’s a best-in-class ESG communication”.
Social Sustainability Strategy
The company’s strategic priorities can be split into three groups: safety and environment, development of core operations, upgrades and new process launches. For each group, the company has set several targets to achieve over the 2030+ horizon.
LARISA ZELKOVA,
Nornickel Senior Vice President, Head of HR, Social Policy and Public Relations
“People want to live in clean cities with developed infrastructure. For that reason, environmental action is inherent in the social sustainability strategy. The Company puts a lot of effort into making Norilsk and other cities where it has a presence attractive places to live in. To streamline our work, we have created three territorial development agencies and invest in treatment facilities, upgrades and urban environment improvement”.
Battle against injuries. For several years now, our main goal has been to bring the number of workplace fatalities down to zero. Over the last two years, Nornickel has achieved a threefold FAR reduction.
Fight for talent. A tough goal under the Social component is to attract young and experienced professionals and reduce the talent drain to 8% by 2026. The Company’s plants operate in harsh environments, so Nornickel strives to counterbalance the extreme conditions with a creative corporate setting.
Fight for talent. A tough goal under the Social component is to attract young and experienced professionals and reduce the talent drain to 8% by 2026. The Company’s plants operate in harsh environments, so Nornickel strives to counterbalance the extreme conditions with a creative corporate setting.
Under 34 years old
is the age of 35% of the company’s labour force, or 30,000 employees
Young people who have worked for several years, and gained knowledge and experience, want to continue their development. To retain them, Nornickel offers four learning tracks at the corporate university and, subsequently, a new and exciting career opportunity. So far, 6,000 young professionals have been or are being re-trained for a new job.
Nornickel has a dedicated department to cooperate with the indigenous peoples of Taimyr as part of five-year programs. It works with the Coordinating Council which is composed of representatives from 58 ethnic communities. The current five-year program ends in 2024, its budget is RUB 2 billion.
Key results of Nornickel’s current five-year cooperation program with the indigenous peoples of Taimyr:
Nornickel has a dedicated department to cooperate with the indigenous peoples of Taimyr as part of five-year programs. It works with the Coordinating Council which is composed of representatives from 58 ethnic communities. The current five-year program ends in 2024, its budget is RUB 2 billion.
Key results of Nornickel’s current five-year cooperation program with the indigenous peoples of Taimyr:
- The company was the first in Russia to introduce the FPIC procedure, a free, prior and informed consent, which facilitates compromise between local residents and the business. The FPIC process has been used in the village of Tukhard; now it is being applied on the Kola Peninsula. It is planned to develop a lithium project at the Kolmozerskoye deposit there;
- Complaints from local residents concerning the company’s operations are handled via an independent ombudsman. This speeds up issue resolution and sets a focus on significant problems;
- 15 houses have been built for indigenous families;
- 15 orphans have received apartments;
- 65 students study at the Polar State University through Nornickel’s corporate scholarships.
Sustainability-driven innovations
New technologies created by the company’s R&D centre help address the ESG strategy objectives and goals:
In total, the company has more than 100 R&D projects in its portfolio, including 20 involving the use of palladium. For example, palladium can replace platinum as a catalyst in fuel cells. The Pd-based catalyst has twice the activity capacity than its commercial counterpart.
Nine palladium projects relate to hydrogen energy, three — to solar energy, and three — to chemical synthesis. 14 projects aim to develop ESG products.
In 2023, a scientific base was created for commercial production of cathode materials based on the metals mined by Nornickel. All the solutions will be patented and will help Russia to achieve technological sovereignty. Coupled with lithium mining, the new products will enable import substitution of lithium batteries, establishment of domestic production, and the launch of an electric transport industry in the country.
- Reduce CO2 emissions. Owing to the unique properties of ore, each tonne of tailings and industrial waste has a CO2 capture capacity of ca. 10 kg per year. For the company as a whole, it’s half a million tonnes of CO2 every year;
- mitigate environmental impact;
- ensure industrial safety;
- create new commercially oriented products containing nickel, cobalt and palladium, already produced by the company, and lithium, scheduled for production in 2030. These metals are used in cathodes for batteries which are actively consumed in green technologies.
In total, the company has more than 100 R&D projects in its portfolio, including 20 involving the use of palladium. For example, palladium can replace platinum as a catalyst in fuel cells. The Pd-based catalyst has twice the activity capacity than its commercial counterpart.
Nine palladium projects relate to hydrogen energy, three — to solar energy, and three — to chemical synthesis. 14 projects aim to develop ESG products.
In 2023, a scientific base was created for commercial production of cathode materials based on the metals mined by Nornickel. All the solutions will be patented and will help Russia to achieve technological sovereignty. Coupled with lithium mining, the new products will enable import substitution of lithium batteries, establishment of domestic production, and the launch of an electric transport industry in the country.
VITALY BUSKO,
Nornickel Vice President for Innovations:
“Palladium is an underrated metal. It is more effective and less expensive when used in catalysts. And we already have samples of Pd-based catalysts for hydrogen energy. We were able to replace up to 25% of platinum with palladium in a lab sample. The target is 80%.
We have developed a Pd-based electrode for water disinfection. We will soon begin to test the prototype against commercial counterparts containing ruthenium and iridium.”
Nornickel’s laboratory has become an attraction centre for young chemists. 70% of its workforce are PhD holders under 30 years old.
Environmental protection
Ecosystems conservation and restoration. For two years now, the company has been working closely with the Russian Academy of Sciences (RAS) on a project called the Great Scientific Expedition. The mission of this project is to assess the impact of production on Arctic nature, and to preserve and restore biodiversity. 13 research universities, higher education institutions and nature reserves are involved in the project.
The expedition helped to develop a methodology for calculating an integrated indicator of the ecosystem state. The reference state features conditions recorded 10 km away from the operational site. The methodology enables change assessment and response measures to mitigate losses and restore biodiversity.
The corporate “Preserving Ecosystems” portal offers updates on the RAS-verified scientific research findings in a popular format. From 2023, the portal has been accumulating new and reliable data on the company’s biodiversity and environmental projects.
The expedition helped to develop a methodology for calculating an integrated indicator of the ecosystem state. The reference state features conditions recorded 10 km away from the operational site. The methodology enables change assessment and response measures to mitigate losses and restore biodiversity.
The corporate “Preserving Ecosystems” portal offers updates on the RAS-verified scientific research findings in a popular format. From 2023, the portal has been accumulating new and reliable data on the company’s biodiversity and environmental projects.
STANISLAV SELEZNEV,
Nornickel Vice President for HSE:
“Our strategic target is no net loss of biodiversity and the gradual restoration of disturbed ecosystems. The Great Scientific Expedition is the largest environment and ecology study on the post-Soviet scale. In the USSR, such projects helped estimate the natural resources and their usability, and our goal is to preserve and restore them.
The project has confirmed two important facts. Firstly, operations have a negative impact on the environment within the buffer zones approved by the Russian legislation. In other words, the real conditions are consistent with the regulatory restrictions.
Second, we have a reference state in which the ecosystem quickly regenerates itself. That is, the company’s task is to help the ecosystem reach this threshold condition, and then nature works for itself.”
Sulphur Program Production facility upgrades and treatment plant construction contribute towards the reduction of SO2 emissions. In the Kola Division, emissions decreased by 90% compared to the 2015 baseline. This triggered further unassisted ecosystem regeneration.
In November 2023, the first phase of the Sulphur Program was launched in the Norilsk Division. Emissions have already dropped by 45% from 2015, and the target of 90% is planned to be achieved in the near term.
In November 2023, the first phase of the Sulphur Program was launched in the Norilsk Division. Emissions have already dropped by 45% from 2015, and the target of 90% is planned to be achieved in the near term.
Developments in the 2023 non-financial reporting
The focus on detailed disclosure is shifting from environment to social sustainability, innovations for green growth and responsible supply chain.
The sales landscape has transformed: today, it’s East and Southeast Asia, where buyers often have their own ratings and standards to evaluate ESG factors. Consequently, Nornickel’s non-financial reporting methodology will continue to change in the coming years. The number of factors taken into consideration will increase.
In November 2023, the company surveyed more than 100 ESG experts including employees of Nornickel and other major Russian mining companies, representatives of financial institutions and leaders of local community associations and journalists. 53% of respondents believe that the ESG agenda should be embedded in their business development strategy. 74% believe that businesses need to consider the global changes in their sustainability strategy.
The sales landscape has transformed: today, it’s East and Southeast Asia, where buyers often have their own ratings and standards to evaluate ESG factors. Consequently, Nornickel’s non-financial reporting methodology will continue to change in the coming years. The number of factors taken into consideration will increase.
In November 2023, the company surveyed more than 100 ESG experts including employees of Nornickel and other major Russian mining companies, representatives of financial institutions and leaders of local community associations and journalists. 53% of respondents believe that the ESG agenda should be embedded in their business development strategy. 74% believe that businesses need to consider the global changes in their sustainability strategy.
VLADIMIR ZHUKOV,
Nornickel Vice President for Investor Relations and Sustainable Development:
“Today, half of the electricity the company uses already comes from renewable sources. Nornickel is ranked among the top 10 global mining corporations by the level of ESG information disclosure and strategy scope. That is why Russian and international rating agencies give us high ESG scores.”
November, 2023
