The Certificate on public verification of the Corporate Social Responsibility Report of the Norilsk Nickel Group issued by the Council on Non-Financial Reporting of the RUIE
Opinion of the Council on Non-Financial Reporting of the RUIE concerning the results of the review of the 2013 Corporate Social Responsibility Report of the Norilsk Nickel Group for the purpose of public endorsement
The council on Non-Financial Reporting of the Russian Union of Industrialists and Entrepreneurs (hereinafter – the Council), which was created in accordance with the decision of the Bureau of the Board (Resolution dated 28.06.2007), has considered the 2013 Corporate Social Responsibility Report of the Norilsk Nickel Group (hereinafter – the Report) at the initiative of OJSC MMC Norilsk Nickel (hereinafter – the Company).
The Company requested that RUIE provide the Company with a public endorsement, consisting of an opinion on the completeness and relevance of the information presented in the Report on the Company’s activity in light of the Social Charter of Russian Business, which lists the principles of responsible business practices.
Between 11-27 June 2014, members of the Council studied the content of the Report submitted by the Company and drafted this opinion in accordance with the Rules of Public Endorsement of Corporate Non-Financial Reports, which were approved by the Council itself. Board members have the necessary competence in the field of corporate responsibility, sustainable development and non-financial reporting, and they comply with the ethical requirements for the independence and objectivity of evaluations. They express their personal opinions as experts, and not the opinion of the organisations they represent.
The Report was evaluated on the basis of the following criteria for the completeness and relevance of information presented in the Report:
Information is considered to be relevant insofar as it reflects the Company’s activities to implement the principles of responsible business practices as disclosed in the Social Charter of Russian Business (www.rspp.ru).
Completeness means that the company presents its activities comprehensively in its report, including the values and strategic guidelines that underlie them;
the systems and management structures, achievements, and key results of operations, as well as the system for cooperating with stakeholders.
The Company’s use of international reporting systems is also taken into account as part of the procedure for public endorsement of the Report. However, this opinion provides no confirmation of how well the Report complies with international reporting systems.
The Company assumes responsibility for the information and declarations contained within the Report. The reliability of the actual data contained in the Report is not the subject of this public endorsement.
This opinion was prepared for OJSC MMC Norilsk Nickel. The Company may use this opinion for both internal purposes and for purposes of communication with stakeholders by publishing it without any changes.
Based on an analysis of the Report, as well as public information posted on the official corporate website of the Company and a joint discussion of the results of the independent evaluation of the Report carried out by members of the RUIE Council on Non-Financial Reporting, the Council confirms the following:
The 2013 Corporate Social Responsibility Report of the Norilsk Nickel Group contains relevant information that covers all the key areas of responsible business practices in accordance with the principles of the Social Charter of Russian Business. It discloses information about Company results during the reporting period in sufficient detail.
The recommendations that the RUIE Council on Non-Financial Reporting made (to expand the number of disclosed target indicators and provide better coverage of cooperation practices with stakeholders when preparing reports) as part of its social endorsement of the 2012 Corporate Social Responsibility Report of the Norilsk Nickel Group were addressed in the 2013 report.
The 2013 Company Report contains relevant information regarding the following aspects of responsible business practices:
Economic Freedom and Responsibility: The Report highlights the key trends and geographical areas of presence of the Company in 2013, as well as its main operating and financial results for the reporting period. It presents the updated company strategy that was accepted in 2013 and which aims to improve the Company’s economic efficiency and ensure stability under any economic conditions by developing its mineral resources and modernising its steel-making capacity. It covers investment policy and provides information about projects to rebuild and reconstruct its facilities.
The Report provides details about the Company’s corporate governance in terms of sustainable development. It presents its system of operational management in the area of corporate social responsibility. The Report includes information about the Company’s active corporate policies, Code of Ethics and other documents that reflect the Company’s guidelines regarding responsible business practices. The Report briefly touches on the development of a risk management system and approaches to preventing corruption. Special attention is paid to product quality and safety issues, as well as to compliance with the norms of business ethics.
Business Partnership: The Report highlights the Company’s business partnership practices, including its cooperation with government at both the federal and regional levels, municipal authorities, employees, shareholders, business partners, and non-governmental organisations. The Report claims that the principles and procedures of cooperation are reflected in the Code of Conduct, which was approved in 2012. An overview of the forms and methods of cooperation that have been applied in this area is presented on the basis of the Company’s information openness policy, which addresses issues related to shareholders and investors. The Report provides detailed information on cooperation with Company staff, including issues of social partnership, the development of staff potential, social support of employees, the recruitment of young specialists, and the creation of staff reserves.
Coverage is given to a set of measures aimed at developing and increasing the quality of business partnerships, including by expanding the use of tender procedures for the procurement of goods and services, the development and implementation of anti-corruption mechanisms and the holding of workshops for suppliers, monitoring customer satisfaction, etc. The Report details the Company’s participation in industry associations, including international ones, and its partnership with non-profit organisations across various areas of the Company’s activity. Information is presented about the dialogues it held with stakeholders during the preparation of the Report.
Human rights: The Report declares that the Company respects human rights and does not tolerate any form of discrimination. It highlights how it guarantees the social and economic rights of workers. The Report provides information on collective bargaining and measures to improve the work environment and increase occupational safety in accordance with international standards. It provides evidence of declining industrial injuries at the Company’s facilities. The Report highlights the Company’s approach to respecting the rights of indigenous peoples living in the Far North in areas where the Company operates.
Environmental protection: The Report presents the main areas of corporate environmental policy, information about the environmental protection management system, data about resources allocated to environmental protection programmes, and about the fact that the Corporate Integrated Management System successfully passed its annual audit. The Report reveals a set of environmental impact indicators. The Report covers measures aimed at reducing the burden on the environment, including measures to reduce emissions of sulphur dioxide, which are one of the most significant impacts that the Company’s operations have on the environment.
Projects for the modernisation of production and the improvement of environmental safety at the Company’s main enterprises are presented. It reports on programmes aimed at preserving the biodiversity of areas where the Company’s facilities are active. It describes the risks posed by climate change and presents measures to prevent their negative consequences. It presents data on energy consumption and energy efficiency. Special emphasis is paid to cooperation with stakeholders on environmental protection issues.
Participation in fostering a local community: The Report reflects the Company’s contribution to the socio-economic development of the regions of operation. It includes information on how the Company has implemented agreements for social and economic cooperation with regional and municipal authorities. It presents the Company’s social policy management system in the regions, and it reports on the new corporate philanthropy strategy aimed at increasing the effectiveness of social investments and stimulating the development of the potential of local communities in solving social problems. It reports on the development of competitive practices for selecting projects that require the Company’s financial support. Measures aimed at helping to develop social infrastructure, education, and sports and at preserving the national traditions and cultures of the indigenous peoples of the North are all given coverage in the Report. Details about the Company’s related costs during the reporting period are also presented.
Generally speaking, the Report reflects the consistent efforts undertaken by the Company to implement the principles of sustainable development and corporate social responsibility in the Company’s operations. It presents new priorities for the Company’s business strategy, which was updated during the reporting period, to address sustainable development. It discloses information in a comprehensive fashion, including performance indicators covering the economic, environmental and social aspects of responsible business practices.
In preparing the Report Russian and international recommendations were used in the field of corporate responsibility and accountability (IAS, GRI-G3.1, including elements of the Industry Supplement for the Mining and Metallurgical Industries and the Base Performance Indicators of the RUIE), which ensures that the information presented is comparable with reports released by other companies both inside the country and abroad.
It should be noted that the provisions of the international standard ISO 26000:2010 guided the selection of the scope of topics presented in the Report. Handbook on Social Responsibility, which is also consistent with the provisions of the Social Charter on Russian Business. The Report covers the main topics of social responsibility outlined by these documents.
The 2013 Corporate Social Responsibility Report of the Norilsk Nickel Group is the ninth non-financial report that the Company has filed, and it demonstrates the Company’s adherence to information openness and its consistent efforts to develop public non-financial reporting.
Noting the merits of the Report, the Council wishes to draw attention to certain substantial aspects relating to the relevance and completeness of the disclosed information, which are recommended to be taken into account in future reporting cycles.
It should be noted that a number of the recommendations made by the Council on the basis of an analysis of the Company’s 2012 Report remain valid; they should be considered as the Company prepares future reports.
The Report consists of information about the priorities of the Company’s updated development strategy, including the identification of measurable parameters for some of its components. Given the importance of this information to interested parties, it would be useful to expand the list of benchmarks, include quantitative parameters for the achievement of strategic objectives, and, if possible, indicate the expected deadlines for the completion of steps.
Noting the importance of the information presented in the Report on the implementation of goals in the field of sustainable development in 2013 and plans for 2014, attention should be paid to the fact that information on measures and planned and achieved results should be accompanied by quantitative as well as measurable indicators. This will provide an opportunity in the future to better understand and adequately assess achieved progress in relation to target indicators. It is also advisable that the results of the reporting period be presented in conjunction with planned parameters.
An important characteristic of the Report is that the disclosed information be balanced. Pursuant to this, it is recommended that special attention be paid in the Report to coverage and analysis of problematic issues in the Company’s activity and approaches to solving them, including those that arise when collaborating with stakeholders.
It is proposed that the volume of information about cooperation with business partners be increased, including on matters relating to observing the requirements of business etiquette and the standards of conducting business in the delivery chain, which is particularly relevant in light of modern international trends in the area of social responsibility and corporate reporting.
Along with information presented in the Report on energy efficiency and conservation issues relating to the Company’s direct and indirect use of energy, it would be advisable to also provide information on corporate regulations and the management system in this area, as well as indicators for the main productive assets. It is recommended that the Company’s use of resource-saving technologies be given fuller coverage.
It would be useful in the future to provide more detailed information about external social programmes in the context of the Company’s new strategy and include information in the Report about the evaluation of the effectiveness of social programmes, their impact on changing the situation in the Company’s operations regions, and the approaches of management to participating in community development.
In the next Report, it is recommended that the Company report on the results of the work that it has begun to formulate an anti-corruption policy, including a set of inter related principles, procedures and specific measures aimed at combating corruption. This information is relevant in light of increased attention that is being paid to this topic by government and society.
Attention should be paid to defining the boundaries of the Report and providing explanations of the criteria for selecting Company facilities that are included and not included within the scope of reporting. This applies to both Russian and foreign assets, particularly if information about them was presented in previous reports.
The Company has developed a reporting system and accumulated a wealth of factual material over many years across all aspects of responsible business practices. It would be useful if the next report were to include deeper coverage of the Company’s main results and achievements than a two- to three- year period. A wider range of years would be of greater use when conducting a comparative analysis. In addition, it is recommended that quantitative indicators accompany and support comments on factors influencing changes.
In noting the usefulness of the Guidelines on Social Responsibility ISO 26000:2010 (ISO 26000:2012) when selecting the social responsibility topics covered in the Report on Social Responsibility, it is recommended that the application of these guidelines be expanded to the Company’s self-analysis (self-testing) of its activities in accordance with the provisions of this standard, gradually including all management and accountability levels. It would be appropriate to highlight progress in this area in reports.
RUIE Council on Non-Financial Reporting, in providing a positive evaluation of the Report, supports the commitment of OJSC MMC Norilsk Nickel to responsible business practice principles and notes its consistency in developing the reporting process. It hereby publicly endorses the 2013 Corporate Social Responsibility Report of the Norilsk Nickel Group.
Chairman of the RUIE Council
on Non-Financial Reporting
Deputy Chairman of the
RUIE Council on Non-Financial Reporting