Trends

ESG targets are considered in Nornickel’s upgrade projects

The development strategy that spans the period until 2030 sets out ESG targets. The company takes account of them in its enterprise upgrade programs. For example, a focus on safety is an integral part of any project. The requirements to factor in climate change are integrated in assignment designers and the design documentation.
The company is running several large-scale upgrade programs in parallel. Sustainability principles are built into the metrics of these projects at the planning and implementation stages.

The company complies with national legislation and industry standards applying to sustainable development in the metals and mining industries.
In the course of upgrading facilities, compliance with the targets falls within the responsibility of the following persons:

  • project team manager;
  • head of the business unit that supervises the investment program implementation;
  • corporate environmental and sustainability departments; and
  • top managers within a single system of corporate reporting indicators.
INESSA CHERNOVA,
Head of Reporting at Nornickel’s Sustainable Development Department

“We are in charge of implementing specific projects. For example, among the KPIs, apart from the customary ones for all companies by timing and budget, we have injury-related indicators, including those of contractors.”

Two facets of climate change

The company’s climate change reporting enables looking at the issue from two major perspectives.

  1. What steps Nornickel takes to reduce its own impact on climate change. This means Nornickel’s carbon footprint reduction.
  2. How does the business adapt to climate change? To assess physical risks, the company has compiled a list of climate factors until 2050 and identified key risks and opportunities associated with global energy transition. An initial assessment of their impact on the company’s operations is already available.

Assessment and reduction of carbon footprint

To mitigate the risks of carbon regulation, Nornickel has commenced testing of the internal carbon price in the assessment of investment projects, including upgrades of production facilities.

Nornickel’s GHG emissions, which are calculated in Scope 1 and Scope 2, are among the lowest in the global industry. Nornickel’s carbon footprint is one of the lowest in the global nickel sector for both nickel metal and nickel sulfate. This is an important competitive advantage in the context of tightening carbon regulation.

Estimates of Nornickel’s carbon footprint by the end of 2022

The company has low GHG emissions mainly because 51% of electricity consumed by its enterprises comes from renewable sources. The rest of the energy it uses is generated from a low-carbon fuel source – natural gas.

Climate change adaptation

To take more direct control over how warming affects production processes, the company has established a foundation monitoring system in the Norilsk Industrial District. There are 950 monitored objects on site at 17 company facilities. 218 objects are equipped with automated sensors. Data from the sensors is fed into an information and diagnostics system and then to a special dispatch center.

The development of a monitoring system for the foundations of buildings and structures is one of the climate change adaptation priorities until 2028. By implementing the monitoring system, the company improves the reliability of its assets in the permafrost zone.
VLADIMIR POTANIN,
Nornickel CEO

“In 2022, a total of 8.9 bn rubles was invested in climate-related activities, including improving energy efficiency and deploying a monitoring system for the foundations of buildings and structures.”

Adjustment of projects to reflect the opinion of local residents

If indigenous peoples lack understanding of the company’s plans, they may put forward their own proposals. For this purpose, the company has a special Department for Indigenous Peoples’ Affairs.

Since 2023, all new projects involving Nornickel, such as the development of the Kolmozersky lithium deposit in the Murmansk region, have been discussed with the community through the FPIC (Free Prior and Informed Consent) procedure. This procedure has been approved by the UN and enables finding a balanced solution that takes account of the interests of all parties. An example of a project where local consultation and FPIC may be factor would be building a road so that it does not impede the migration of reindeer.

Environmentally friendly disposal

A prominent example of how ESG metrics are integrated in upgrade projects is the development of tailings facilities. These are artificially created landfills where waste broken rock is dumped.

Management standards. Nornickel manages tailings facilities in accordance with the Global Industry Standard on Tailings Management, or GISTM. Tailings facilities of the Norilsk Division’s enterprises are being equipped with monitoring points; the work is scheduled for completion in 2024.

Waste disposal. At the same time, the company is constantly searching for ways to reduce and efficiently use waste. Nornickel makes use of waste to backfill mined-out spaces and open pits, fill roads, and build tailings dams. In this way, waste is recycled, and the volume of landfills is reduced. As a result, the negative impact of tailings facilities on the environment is lowered.
Long-term storage issues. The key issue with tailings facilities is that long-term storage of waste may trigger deep contamination of the ground and groundwater. Unpleasant air can also be carried by the wind over long distances.

In addition the reclamation process, when a landfill is closed, is expensive and complicated. . Therefore, one of Nornickel’s sustainability targets is to extend the service life of landfills by reducing the amount of waste.

Innovations in disposal. When waste rock is exposed to the open air for a long time, minerals interact with carbon dioxide to generate secondary carbonates. The process is called mineralization. The Department of Innovation assesses how effectively carbon dioxide can be captured from waste rock and how to accelerate mineralization. In this way, decarbonization of the company’s operations may be improved.

Thinking differently

Sustainable development is not just a strategy but a lifestyle and mindset. Therefore, for several years already, Nornickel has been communicating with its employees and local communities on how ESG pillars fit into the company’s projects and affect the regions where it operates. For example, participants of the third Siberian Perspective summit played ESG by planning how to deal with real-life problems and balancing the interests of business, locals and environmental conservation.
January, 2024
2024-01-09 01:35 Governance Russia Environment