Appendices

GRI content index

Report boundaries^*

102-45 102-46

Definition of material topics

The Company maps out material topics in line with GRI Standards and inputs from external and internal stakeholders. The materiality matrix relies on the following:

• opinion polls on material topics;
• dialogues with stakeholders;
• mass media coverage of the Company;
• benchmarking against major Russian and international mining peers;
• interviews with the Company’s management.

102-46

In 2020, material sustainability topics were defined in four stages. 102-44

At the first stage, the Report’s working group shortlisted topics subject to review based on the best practices and industry analysis.

At the second stage, the Company arranged for the topics to be reviewed by external and internal stakeholders, with 90 taking part in the poll, including around 50 from the regions where the Company operates (Norilsk Industrial District, Kola Peninsula, Trans-Baikal Territory), representing local authorities, environmental organisations, social NGOs, Company employees, the business community and other groups.

At the third stage, the Company held a foresight session^* with experts and key stakeholders to verify the materiality matrix created at the second stage through expert voting and adjust the significance of individual topics. The stakeholders also assessed five additional topics from the list proposed by the poll participants at the second stage.

At the fourth stage, the working group summed up the process results and finalised the map of material topics.

Influence on stakeholder assessments and decisions

The topics were assessed on a scale from 0 to 3, with 0 assigned to insignificant/irrelevant topics, 1 — to moderately (borderline) significant topics, 2 — to significant topics, and 3 — to critical topics.

The sector borders were set according to average rankings from the respondents, with a score above 1.3 to 1.99 corresponding to moderate significance, 2 to 2.49 assigned to significant topics, and 2.5 to 3 meaning high significance. Material topics are those that have a significant impact on both dimensions or rank as highly significant on at least one dimension. Significant topics are those that have a meaningful impact on at least one dimension, for instance, topic No. 5. Other topics, including No. 29, 32 and 33, were deemed insignificant and are either not disclosed in the Report or disclosed in a summary format.

The topics marked blue either had their significance reassessed or were added back to the matrix following the expert voting as part of the stakeholder dialogue^*.

102-47

GRI indicators

Environmental performance

Total water withdrawal

303-3

Water withdrawal by water type in 2020, mcm

303-3

Water sources

303-1 303-2 303-3 306-5

Water recycled and reused

303-5

Total effluents^* and pollutants discharged^*

NO_х, SO_х and other significant air emissions, including their type and weight^*

Total weight of waste by type and disposal method, mt

306-2 MM3

Waste management in 2020 by hazard class and waste type, kt

MM3

Total energy consumption by Norilsk Nickel Group, TJ

302-1

Electric power and heat consumption by the Group companies, TJ

Social performance

Benefits for employees of Polar Division

401-2

Benefits for employees of Kola MMC

Headcount by type of employment, gender and region^*, employees

New and terminated employments (by gender, age and region of operations) in 2020, employees

401-1

Employee outflow ratio by region in 2020, %

Employee inflow ratio by region in 2020, %

Employee outflow ratio by gender and age in 2020, %

Employee inflow ratio by gender and age in 2020, %

Number of employees on maternity and/or childcare leave in 2020

401-3

Assessment of employees in Russia, % of average headcount

404-3

Key occupational injury rates by region and gender in 2020

403-9 403-10

Employees and contractors covered by the corporate Health and Safety Management System (HSMS)

403-8

Fines and non-financial sanctions related to environmental and social impacts in 2020

307-1 419-1

UNCTAD indicators

TCFD disclosures

List of abbreviations

Awards and accolades

Awards of MMC Norilsk Nickel

Investment case

• Nornickel was named one of the Most Honoured European M&M companies by Institutional Investor in its 2020 Emerging EMEA Executive Team ranking. The Company was in the Top 3 in the Best Investor Relations Programme, Best IR Team, Best Investor Days and Best ESG categories. Members of our IR team took the third, fourth, tenth and 20th places in the ranking.

Environment

• The joint project studying the Taimyr Peninsula by Nornickel and the Siberian Branch of the Russian Academy of Sciences won an Eventiada IPRA Golden World Award, a prestigious international award in communications.

Society

• The Company was recognised the most attractive employer in the Russian M&M industry by Randstad Award and ANCOR.
• Nornickel was recognised Russia’s most attractive employer in the M&M sector by Universum and named No. 1 in Russia’s Best Metals and Mining Company category.
• Nornickel was ranked A2 in the first annual assessment of anticorruption effort by the Russian Union of Industrialists and Entrepreneurs (RSPP). This ranking shows that the Company implements extensive and efficient anti-corruption measures and has a business model that poses low levels of threat to investors, creditors, partners, and other stakeholders.
• The Company won the Fostering Corporate Volunteering category at the Champions of Goodness national contest.
• To mark the 85th anniversary of the Company, the Primate of the Russian Orthodox Church Patriarch Kirill of Moscow awarded Nornickel with an Order of Holy Prince Daniel of Moscow (1st class) for its efforts in restoring Russia’s spiritual tradition.
• The Socially Important Initiatives Competition under the World of New Opportunities charitable programme won the 1st prize at the Leaders of Corporate Charity competition in the Best Programme Fostering Sustainability with Grant Competitions (Best Grant Competition) category.
• The School Break educational project for teachers, school students and their parents won the 1st prize at the GRADUATE AWARDS 2020 nation-wide competition in the Best Schoolchildren Engagement Programme category and the 3rd prize at the Leaders of Corporate Charity competition in the Best Educational Programme/Project category
• Nornickel’s film about the FusioNNow project won the Los Angeles Film Award (LAFA) in the Best Documentary category.
• A video clip entitled We Are the City! about the winners of the Socially Important Initiatives Competition took the 3rd place in the LIME. Corporate Social Responsibility category at the LIME international advertising festival.

Non-financial reporting

• AK&M Rating Agency assigned its sustainability reporting rating to Nornickel at RESG 1 for the top quality of ESG disclosures in its reports.
• The Company's 2019 Sustainability Report received gold MarCom Awards in the Best Printed Report and Best Design categories.
• The Company's 2019 Sustainability Report took the 3rd place in the Best Sustainability Report category at the 22nd Annual Report Contest by RAEX (Expert RA).
• The Company's 2019 Sustainability Report was among the Top 100 sustainability reports at the 2020 Spotlight Awards by the League of American Communications Professionals (LACP).

Innovations

• The Company’s project to upgrade four geographically distributed data centres beyond the Arctic Circle won the Best Data Centre and Storage Area Network Solution at the Global CIO 2019 Project of the Year Award.
• Nornickel's project to roll out the automated HR management system in the Norilsk Industrial District won gold at the SAP QUALITY AWARDS 2020 competition as the most ambitious business transformation initiative.
• Nornickel won the Innovative Solution of the Year category at the Russian Mining Excellence Awards 2020, a.k.a. the Mining Oscar. The award was presented at the MINEX Russia industry forum.
• Nornickel received an OpenText Award for the best OpenText-based electronic workflow system in the M&M industry.
• Nornickel's B2B Electronic Workflow project won the Electronic Workflow Rollout of the Year category at the Best Electronic Workflow in Russia and the CIS competition.

Awards of the Group companies

• NordStar was recognised the best air carrier for transportation safety and received the top Russia 2020 Transportation Safety award.
• Rosa Khutor Ski Resort won the World Ski Award once again.

Awards of Nornickel’s employees

• In July 2020, 35 employees of the Group companies received government awards in accordance with the Russian President’s Decree, including.
  20 Medals of the Order for Merit to the Fatherland (2nd class) for achievements in the industry and benefits for the country.
  Four employees received Honoured Metallurgist of the Russian Federation titles, while another ten were named Honoured Miners of the Russian Federation.
  One employee received a Mentorship Badge of Merit.
• Same month, two more Norilsk Nickel employees were awarded Medals of the Order for Merit to the Fatherland (2nd Class) for their contribution to the 29th Winter Universiade 2019 in Krasnoyarsk.
• The President of Russia commended six employees for their professional achievements and many years of dedicated work.
• Two employees received honorary certificates from the President of Russia.
• In 2020, a total of 1,767 employees received internal awards of the Group companies, 580 employees received Nornickel's corporate awards, 1,249 employees received regional and municipal awards, 254 were presented with ministry and agency awards, and 54 with government awards.
• On 15 December 2020, Vladimir Potanin, President of MMC Norilsk Nickel, was awarded the Medal of the Acheiropaeic Image of Christ the Saviour (1st class) by Metropolitan Ignatius of the Saratov and Volsk Eparchy of the Russian Orthodox Church.
• In September 2020, Nornickel executives Vladimir Potanin, Sergey Malyshev, Larisa Zelkova, Vladimir Zhukov, Dmitry Pristanskov, Marianna Zakharova, Anton Berlin, Darya Kryachkova, Pavel Platov, Svetlana Ivchenko and Ravil Nasybullov were named leaders of Russia's Top 1,000 Managers ranking.
• Two Nornickel executives received Russia's Top 1,000 Managers awards. Dmitry Pristanskov, State Secretary – Vice President and Head of GR, won the Best Director for Government Relations award. Ravil Nasybullov, Head of Logistics Department, was named the Best Director for Logistics and Supply Chains.

Glossary

Safe working conditions: working conditions where occupational exposure to harmful and/or hazardous production factors is prevented or controlled within the set limits.

Charitable activities: the Company's voluntary transfer of property, including cash, free works and services, and other support, to legal entities or individuals free of charge or on preferential terms.

Stakeholder engagement: the Company's activities aimed at identifying stakeholders’ expectations and concerns and their engagement in the decision-making process.

Senior executives: President, Vice Presidents, heads of departments in case of the Head Office, and general directors and their deputies in case of entities located in the Norilsk Industrial District and on the Kola Peninsula.

Global Reporting Initiative (GRI): independent organisation developing sustainability reporting guidelines and standards.

Nornickel (Norilsk Nickel) Group: for the purpose of the 2020 Sustainability Report, MMC Norilsk Nickel and the totality of operations forming Nornickel Group. Unless otherwise specified or required by the context, the terms “Company”, “Group”, “Nornickel” or “the Group companies” shall mean Nornickel Group.

Stakeholders: individuals and legal entities or their groups having certain expectations about the Company or affected by its operations, influencing its managerial decisions while being themselves influenced by such decisions. Stakeholders include the Company's shareholders, investors, employees, suppliers, contractors, consumers, trade unions and other public organisations, federal and local authorities, mass media, residents of areas where the Company operates, and others.

HR policy: set of standards, rules, regulations, concepts and goals determining the Company's HR management practices (personnel planning and record keeping, recruitment, adaptation, training and development, remuneration and incentivisation, performance assessment, social security, etc.) in line with its development strategy.

Compliance: conducting business in compliance with the requirements of government authorities, applicable laws, regulations, guidelines and standards, including corporate policies and procedures, and ethical business practices.

Collective Bargaining Agreement: legal instrument governing social and labour relationships within a company or a sole trader business and signed by the representatives of employees and the employer

Corporate culture: combination of standards, values and beliefs that determine the way a company addresses the matters of internal integration and external adaptation, guide and motivate daily behaviour of employees, while also transforming under its influence.

Corporate social responsibility (CSR): corporate behaviour philosophy and concept applied by the business community, companies and company representatives to their activities aimed at meeting stakeholder expectations and ensuring sustainable development.

Local communities: population with Russian citizenship..

Mission: statement of the Company's goals and objectives that distinguish it from its peers.

Young talents: graduates of universities and colleges whose postgraduate experience does not exceed three years.

Incentivisation: tools and methods of boosting staff performance and productivity, motivating an employee or a group of employees to achieve corporate goals.

Sustainability Report (non-financial report): accessible, accurate and balanced description of the main aspects of the Company’s activities and achievements pertaining to its values, goals and sustainable development policy, and addressing the matters of most importance for the key stakeholders. This is a way of publicly informing the shareholders, employees, partners and other stakeholders of the Company's progress towards its goals and objectives set out in its mission statement and strategic development plans with respect to financial and environmental stability, and social security.

Health and safety: occupational health and safety protection system embracing legal, social, economic, organisational, technical, sanitary, hygienic, healthcare, rehabilitation and other activities.

HR management policy: end-to-end integrated HR management system including all stages of employee-employer interaction, from recruitment to retirement and post-retirement support.

Environmental protection and resource efficiency: corporate programmes aimed at minimising the Company's environmental impact.

Occupational disease: health disorder caused by a systematic and lasting exposure to workplace factors or a combination of production-specific working conditions.

Personnel development: set of initiatives aimed at employee recruitment, adaptation, retention, and fully unlocking their professional and creative potential.

Soil thawing: process whereby soil receives heat in a quantity sufficient for its natural negative temperature to increase to 0°С and also for its disseminated ice to turn to liquid.

Risk: negative factor that might result from current processes or future events and have a potential impact on the Company’s ability to achieve its goals.

Top management: President, Senior Vice Presidents, Vice Presidents, members of the Management Board and heads of departments of MMC Norilsk Nickel; directors of branches of MMC Norilsk Nickel and their deputies; sole executive bodies (directors, general directors) of the Group companies and their deputies.

Certification: confirming compliance of qualitative characteristics with quality standard requirements.

Social partnership: framework of relationships among employees (their representatives), employers (their representatives), and federal and local government authorities aimed at reconciling interests of employees and employers on matters pertaining to the regulation of labour relations and other directly associated matters.

Social programmes: voluntary corporate initiatives pertaining to employee development and motivation, creating favourable working conditions, promoting corporate culture and charity, and supporting local communities. These initiatives are implemented on a regular basis in line with the Company's business strategy, and focused on satisfying balanced requests of various stakeholders. From the management perspective, a social programme is a set of initiatives carefully planned in terms of resources, workforce and timeframes, and efficiently addressing the Company’s internal or external social objectives.

Social package: set of benefits, compensations, additional payments, statutory and additional services provided to employees by the employer on top of their salary.

Standard: regulation containing a set of requirements for activities and their products.

Business unit of the Company’s Head Office: department, division or any other unit within the organisational structure of the Company’s Head Office and/or a unit acting in accordance with the staff schedule approved by the President of MMC Norilsk Nickel.

Significant regions of operation: the Norilsk Industrial District, Krasnoyarsk Territory (except for the NID), Kola Peninsula Industrial District (Murmansk Region), Trans-Baikal Territory, Moscow and other Russian regions.

Sustainable development: concept developed by the UN that acknowledges the role of business in ensuring sustainable development of the society; a concept of global community development taking into account interests of both present and future generations.

Payroll budget: total payroll and social payments.

Tailing dump: facility encompassing dedicated structures and equipment designed to store radioactive, toxic or other tailings resulting from the concentration process.

Stakeholder dialogue minutes

102-44

Dialogues with stakeholders are an important part of sustainability reporting in Norilsk Nickel Group. On 3 February 2021, the Company held a foresight session dedicated to definition of the Report’s material topics^*.

Stakeholder foresight dialogue minutes: “Discussing material topics of the 2020 Sustainability Report”

Date and time: 3 February 2021, 12:00—2:00 pm
Format: online conference

Programme:

Item 1. Report: “Nornickel. Focusing on the environment and development of local communities”.

Item 2. Report: “The framework of Nornickel's 2020 Sustainability Report and the results of disclosure materiality surveys”.

Item 3. Verification of the materiality matrix. Expert discussion and voting.

Item 4. Assessment of additional disclosures. Expert voting.

Item 5. Presentations of stakeholders’ representatives: recommendations on the 2020 Sustainability Report and sustainable development efforts of the Company.

ITEM 1. Report: “Nornickel. Focusing on the environment and development of local communities”

SPEAKERS:

• Andrey Bougrov, Senior Vice President for Sustainable Development at MMC Norilsk Nickel
• Larisa Zelkova, Senior Vice President – HR, Social Policy and Public Relations at MMC Norilsk Nickel

Andrey Bougrov presented the key points of Nornickel Group’s Holistic Environmental Strategy, including its key priorities, objectives and targets up to 2030. He also reported on the key results of organisational changes. On top of that, the speaker spoke on the results of elimination of the HPP-3 accident consequences, talked about further clean-up actions, and presented the results of the Great Norilsk Expedition.

Larisa Zelkova spoke about the key ways of the Company’s interaction with indigenous peoples of the North, announced the results of the 2020 ethnological expert review, and presented a comprehensive programme to aid indigenous Taimyr peoples, which had been developed following the expert review. Larisa Zelkova gave an overview of the Company's key objectives during the COVID-19 pandemic and spoke about measures taken to ensure the safety of and support for employees and regions.

The dialogue participants asked follow-up questions to clarify details.

ITEM 2. “The framework of Nornickel's 2020 Sustainability Report and the results of disclosure materiality surveys”

SPEAKERS:

• Svetlana Ivchenko, Head of the Sustainable Development Department of MMC Norilsk Nickel

Svetlana Ivchenko announced the key objectives of the 2020 Sustainability Report, listed the key standards and guidances on which the Report is based, spoke about the thematic content and the priority topic of the Report. The speaker proceeded with the presentation of the Report’s preparation schedule and described the procedure of compiling the materiality matrix. In addition, Svetlana Ivchenko commented on the resulting materiality matrix based on results of the surveys and read out brief results for Polar Division, which demonstrated the highest respondent activity.

The dialogue participants asked follow-up questions to clarify details.

ITEM 3. Verification of the materiality matrix. Expert discussion and voting.

Stakeholders were asked to assess the current materiality matrix and propose changes.

SPEAKERS:

• Igor Radovskiy, Head of the Business Information Support Department of TENEX;
• Ivan Kuzmenkov, Head of Innovative Development Department of MMC Norilsk Nickel.

Igor Radovskiy proposed moving "Supply chain responsibility" topic to the top right box. Ivan Kuzmenkov supported Igor Radovskiy’s proposal.

The participants voted.

Voting results:

FOR: 76%

AGAINST: 24%

• Alexander Stotsky, General Director of the “Project Office of Arctic Development” Expert Centre
• Grigory Dyukarev, Chairman of the Association of the Indigenous Peoples of the Taimyr Peninsula, Krasnoyarsk Territory

Alexander Stotsky proposed to increase the weight of the “Relationships with local communities and indigenous peoples, social and economic impact on the regions of operation” topic on both axes of the materiality matrix. Grigory Dyukarev supported Alexander Stotsky’s proposal.

The participants voted.

Voting results:

FOR: 84%

AGAINST: 16%

• Vladislav Demidenko, Director for Strategic Partners, Skolkovo Foundation

The speaker proposed to increase the weight of the “Corporate security” topic on the “Influence on stakeholder assessments and decisions” axis.

The participants voted.

Voting results:

FOR: 55%

AGAINST: 45%

• Svetlana Gerasimova, Director of CSR Center at MIRBIS

Svetlana Gerasimova proposed to increase the weight of the “Biodiversity and land use” topic on both axes of the materiality matrix.

The participants voted.

Voting results:

FOR: 75%

AGAINST: 25%

Furthermore, the speaker proposed to increase the weight of “Digitalisation of production and management” on both axes.

The participants voted.

Voting results:

FOR: 86%

AGAINST: 14%

• Elena Feoktistova, Managing Director of Corporate Responsibility, Sustainable Development and Social Entrepreneurship at the Russian Union of Industrialists and Entrepreneurs (RSPP)

Elena Feoktistova proposed to increase the weight of the “Responsible business conduct and business ethics” topic on the “Economic, environmental and social impacts” axis.

The participants voted.

Voting results:

FOR: 64%

AGAINST: 36%

In the conference chat, Elena Romanova proposed covering the “Geological exploration and mining” topic more extensively

ITEM 4. Assessment of additional disclosures. Expert voting.

The participants were asked to assess, on a scale from 0 to 3, the additional disclosures of the 2020 Sustainability Report that were proposed during the survey.

Results of the assessment conducted during the foresight session:

Subject 1. Participation in Russian national projects.

• “Economic, environmental and social impacts” axis assessment: 1.9.
• “Influence on stakeholder assessments and decisions” axis assessment: 1.9.

Subject 2. Emergency forecasting and technogenic safety.

• “Economic, environmental and social impacts” axis assessment: 2.4.
• “Influence on stakeholder assessments and decisions” axis assessment: 2.4.

Subject 3. R&D activities.

• “Economic, environmental and social impacts” axis assessment: 2.2
• “Influence on stakeholder assessments and decisions” axis assessment: 2.1.

Subject 4. Organisational changes: division-based structure and its impact on employees.

• “Economic, environmental and social impacts” axis assessment: 1.4.
• “Influence on stakeholder assessments and decisions” axis assessment: 1.3.

Subject 5. Promotion of the healthy lifestyle, fitness and sports among local communities and employees.

• “Economic, environmental and social impacts” axis assessment: 1.7.
• “Influence on stakeholder assessments and decisions” axis assessment: 1.6.

ITEM 5. Presentations of stakeholders’ representatives: recommendations on the 2020 Sustainability Report and sustainable development efforts of the Company.

SPEAKERS:

• Elena Feoktistova, Managing Director of Corporate Responsibility, Sustainable Development and Social Entrepreneurship at the Russian Union of Industrialists and Entrepreneurs (RSPP)

Elena Feoktistova proposed focusing on the response to the COVID-19 pandemic in the 2020 Sustainability Report. Additionally, the speaker proposed providing a detailed disclosure on managing environmental performance, including information concerning the incident at NTEC's HPP-3, and disclosing the Company’s contribution to achieving the top-priority UN Sustainable Development Goals, including the correlation with the national development goals

Svetlana Ivchenko said that these recommendations would be taken into account in the preparation of the 2020 report.

• Vladislav Demidenko, Director for Strategic Partners, Skolkovo Foundation

Vladislav Demidenko raised a question about the Company’s business continuity, which had been foregrounded during the COVID-19 pandemic.

Larisa Zelkova talked about the Company’s core initiatives in this area: implementation of an automated management and data collection system, personnel rotation on industrial sites to avoid additional contacts (including shift workers at GRK Bystrinskoye LLC), testing and medical examinations for everyone who enters the facilities. Additional medical capacities were deployed, as well as additional crews and assignments reserved for use in cases of need.

• Alexander Popov, Chief Editor of the Kislorod.Life blog

Alexander Popov asked if Sulphur Programme 2.0 was in any way revised in light of 2020’s challenges relating to the accident at HPP-3 and the COVID-19 pandemic.

Andrey Bougrov said that the challenges of 2020 did not lead to any changes in the Sulphur Programme 2.0 implementation schedule.

• Viktor Yadukha, Kompaniya Business Magazine

Viktor Yadukha raised a question concerning the Company’s expenses on the clean-up operation following the HPP-3 accident from spring 2020 to February 2021.

Andrey Bougrov said that as at autumn 2020, the Company had spent RUB 12 bn on things related to the clean-up. The Company will allocate additional funds for land rehabilitation and other activities in 2021–2023.

• Natalia Solodovnik, Chairman of the Norilsk Civic Chamber

Natalia Solodovnik asked a question concerning the Company's possible support for Norilsk Civic Chamber initiatives.

Andrey Bougrov said that the Norilsk Civic Chamber is an important partner of the Company and that the Civic Chamber’s ideas and proposals will receive close attention. Andrey Bougrov went on to say that dialogue with the civil society is an important communication and feedback channel for the Company.

Stakeholder recommendations

102-44

Opinion of RSPP Council on Non-Financial Reporting on the Norilsk Nickel Group’s 2020 Sustainability Report for the purposes of public verification

102-56

The Council on Non-Financial Reporting of the Russian Union of Industrialists and Entrepreneurs (the “Council”) established as per the Management Bureau’s Resolution dated 28 June 2007, reviewed, at the request of MMC Norilsk Nickel (the “Company”, the “Group”, “Nornickel”), Nornickel Group’s 2020 Sustainability Report (the “Report”).

The Company requested the RSPP to arrange for the public verification of the Report, with the Council on Non-Financial Reporting providing an opinion on the materiality and completeness of the Report’s information about the Company’s operations from the perspective of the Social Charter of the Russian Business. The Charter sets out key principles of responsible business conduct aligned with those of the UN Global Compact, as well as domestic and international CSR standards.

From 1 to 16 April 2021, the Council members reviewed the content of the Company’s Report and issued this Opinion in accordance with the Council’s Procedure for Public Verification of Corporate Non-Financial Reports.

The Council members possess all the required competencies in corporate responsibility, sustainable development and non-financial reporting, comply with the ethical requirements for independence and impartiality, and provide their personal expert opinion rather than the opinion of organisations they represent.

The Report was assessed based on the below-listed criteria of information completeness and materiality.

Information is considered to be material if it reflects the company’s efforts to implement the principles of responsible business conduct set out in the Social Charter of the Russian Business (see www.rspp.ru).

Completeness implies that the company provides a comprehensive overview of its operations, including the underlying values and strategic benchmarks, governance systems and structures, accomplishments and key results, and the stakeholder relationship framework.

The procedure for the public verification of the Report factors in the Company’s application of international reporting frameworks; this Opinion does not, however, purport to assess the Report’s compliance with such international frameworks.

The Company is responsible for the information and statements provided in the Report. The accuracy of the Report’s information is beyond the scope of the public verification procedure.

This Opinion has been prepared for MMC Norilsk Nickel. The Company may use it for both corporate and stakeholder communication purposes by publishing the original version without any changes.

CONCLUSIONS

Based on the review of the Report and the information publicly available on the Company’s official website, and following a collective discussion of the results of the Report’s independent assessment undertaken by the members of the Council on Non-Financial Reporting, the Council confirms as follows.

Nornickel Group’s 2020 Sustainability Report covers the key areas of responsible business conduct in accordance with the principles set out in the Social Charter of the Russian Business, and provides sufficient information about the Company’s operations in relation thereto.

The recommendations made by the Council following the public verification of Nornickel Group’s 2019 Report were addressed in the 2020 Report. The report covers the Company’s progress on UN SDGs, changes in labour productivity, effectiveness of social investments and integration of digital technology across its production and management processes.

The Company’s 2020 Report contains relevant information relating to the below-listed aspects of responsible business conduct.

Economic freedom and responsibility. The Report presents the key events, the financial and operational results in the reporting year and provides an overview of Nornickel's role in the national economy and its position in the global metals market. It includes key strategic goals until 2030, long-term investment programme targets and the targets and objectives of the Holistic Environmental Strategy and outlines the key elements of Nornickel’s digital transformation. It informs that the Company completed the IT infrastructure upgrades and proceeded to its IT programme 2.0, starting the project to introduce a single integrated document control system. The report tracks the progress of the efficiency improvement programme and describes the corporate governance and risk management frameworks. The map of key sustainability risks, for the first time, includes the epidemiological risk. The Report points out that Nornickel introduced large-scale changes to its governance framework to improve the effectiveness of the management actions to ensure industrial safety and reduce environmental risks. It delves into matters of sustainable development of the Company, providing extensive coverage of Nornickel’s key programmes and initiatives with an indication of their contribution to achieving the UN SDGs. The Report states that in 2020 the Company approved its amended Business Ethics Code. It looks at how corruptionrelated matters are managed, summarising the applicable regulations and specifying the responsible units and focus areas. The Report informs of the annual assessment of corruption risks at the Company’s units and staff training at its regional units.

Business partnerships. The Report outlines the stakeholder engagement mechanisms and stakeholder contribution to the definition of material topics of the Report as part of foresight dialogue. It provides an overview of engagement management activities and the corporate trust line as a permanent tool to handle complaints. The Report states that in relations with suppliers and contractors, the Company focuses on building an open and productive dialogue supported primarily through competitive procurement, feedback via a dedicated Suppliers section on its website and an automated system for supplier relationship management. It informs that the Company continues to maintain active dialogue with investors and ESG rating providers. The Report points out that the Company observed its social partnership commitments, kept unchanged salaries and social benefits, including when the Company shut down its smelting shop in the Nickel settlement. It highlights that to support its employees during the COVID-19 pandemic, the Company set up a response centre, task forces, and a corporate hotline and ran campaigns to discuss remuneration and employee engagement survey results. The Report notes that Nornickel uses advanced digital technology to create a customer-oriented supply chain and has joined the Responsible Sourcing Blockchain Network (RSBN). It indicates that the Company maintains control of non-financial factors in supplier relations and applies to suppliers an essential criterion of readiness to participate in the Company’s alternative energy initiatives. The Report informs that the Company signed agreements with business partners with a view to achieving sustainable development goals and promoting green economy. The Report gives an overview of the Company’s work with government authorities, including the implementation of big infrastructure projects and its engagement with local communities and non-profit organisations aimed at supporting regional development and creating favourable social environment.

Human rights. The Report covers the Company’s efforts to protect human rights, providing the relevant corporate regulations such as its Human Rights Policy. It states that Nornickel’s activities in ensuring respect of human rights and freedoms are aligned with internationally recognised approaches and are in compliance with the laws of the Russian Federation and other countries where it operates. The Report informs that human rights protection is integrated into the Company’s corporate practices including the requirement to conduct human rights due diligence for all new projects. A strong emphasis is placed on human resources management, respect of labour rights and personnel development and support programmes. The Report indicates that the Company adopted a comprehensive five-year programme to aid indigenous northern minorities and support projects aimed at preserving the traditional lifestyle and culture of Taimyr’s indigenous peoples while fostering their social and economic development. It points out that the Company helped conduct a full-scale ethnological review to evaluate the damage caused to the indigenous northern minorities as a result of the fuel spill at HPP-3 and agreed to pay a relevant compensation. The Report highlights the Company’s key achievements on the human rights front in 2020.

Environmental protection. The Report states that Nornickel has developed a new Holistic Environmental Strategy. It outlines its key areas, objectives and targets to be achieved by 2030. The Report sets out the measures the Company took to improve efficiency of sustainable development and environmental protection management, including the reorganisation of the governance bodies and the amendment of their functions, specifically in relation to environmental risk monitoring and internal environmental controls. It informs that the core assets of the Group are certified to ISO 14001:2015 international standard. The Report provides an overview of measures to eliminate damage caused by environmental industrial incidents in 2020 and describes the main stages of the clean-up and environmental reclamation programme. It points out that the Company organised the Great Norilsk Expedition in which researchers took part to conduct a comprehensive study of the environment in the Norilsk Industrial District and develop recommendations that will form the basis for new approaches of doing business in the Arctic. The Report covers the Company’s approaches to climate change, including its commitments in this area, allocation of responsibility, risks and opportunities, 2030 targets based on the outcomes of the planned activity. It informs that Nornickel shut down the When describing its activities in biodiversity conservation, we recommend that the Company rely on best international practice such as the IUCN Guidelines for planning and monitoring corporate biodiversity performance. The Report gives a general overview of the Company’s contribution to the national projects in healthcare, environmental protection, housing and urban environment, productivity, employment, science, and digital economy. It is recommended that the Company expand on this topic and describe specific national projects it believes are worth mentioning. The Company should pay particular attention to the need to include explanations on changes in indicators, especially where these changes are substantial. This improves the quality of disclosures and facilitates the correct interpretation of data. It would be useful if the Company could add the analysis of the social impact to the section relating to social programmes it implements in local communities. It is recommended that the Company disclose data on the social progress, positive shifts in the social environment, improvements in the local labour market and living conditions of people resulting from these programmes. The RSPP Council on Non-Financial Reporting hereby takes a positive view of this Report, supports the Company’s commitment to responsible business practices, notes consistency in developing the reporting process, and confirms that Nornickel Group’s 2020 Sustainability Report has passed the public verification procedure. RSPP Council on Non-Financial Reporting smelting shop, which helped reduce emissions on the Kola Peninsula, continued with its Sulphur Programme 2.0, energy saving and energy efficiency improvement programme and measures to conserve biodiversity taken in cooperation with nature reserves and environmental volunteers. The Report shows the Company’s progress against a wide range of environmental impact indicators such as GHG emissions, share of renewable energy in total electricity consumption, air pollutant emissions, water consumption and wastewater discharge, waste management and rehabilitation of disturbed lands. It also specifies the Company’s environmental expenditures.

Contribution to the development of local communities. . The Report highlights the Company’s contribution to the social and economic development of the regions where it operates (the Krasnoyarsk and Trans-Baikal territories and the Murmansk Region), including as part of cooperation agreements with government bodies and local authorities. It includes information about tax and non-tax payments to budgets of various levels, spending on social programmes and charity, social infrastructure and initiatives aimed at improving the quality of life for people. The Report describes measures Nornickel took to fight COVID-19 and maintain social stability across its footprint. It discloses the amount of funding allocated to support local residents, medical institutions, small and medium-sized enterprises, educational institutions, and non-profit organisations. The Report sets out Nornickel’s key programmes and initiatives aimed at improving the well-being of local communities (Smart City initiative, We Are the City! social technologies forum), declares the extensive adoption of digital technologies and informs that a number of the World of New Opportunities initiatives moved to an online format. It states that the Company is focusing on new areas, expanding platforms for implementing social projects. It also points out that the Company adopted a Comprehensive Support Programme for Indigenous Peoples of the North until 2024 and describes the projects it implemented to support the indigenous northern minorities in 2020. The Report describes volunteering initiatives Nornickel ran during the pandemic along with its usual charitable activities. On top of that, it discloses the effectiveness of social programmes and public-private partnership projects.

Final Provisions

The information contained herein generally describes the Group’s strategy, business practices and results in sustainable development and corporate social responsibility as well as the supporting governance systems. The Report provides a detailed overview of the results of the Company’s efforts to achieve UN SDGs by 2030. It gives extensive coverage of Nornickel’s activities to eliminate damage caused by environmental industrial incidents that occurred in the reporting period and the Company’s response to the pandemic while disclosing a significant number of the Company’s economic, social and environmental performance indicators. It covers the main focus areas and forms of stakeholder engagement, including those used as part of the reporting process.

The Report was prepared using internationally and domestically recognised reporting tools (e.g. the GRI Standards, Comprehensive option, GRI Sector Disclosures), which ensures comparability of the Group’s information with that of other Russian and international companies. In drafting the Report, the Company also relied on the following documents: the UN Global Compact, the UN 2030 Agenda for Sustainable Development, ISO 26000:2010, Accountability Standards AA1000SES (2015) and AA1000AP (2018), the UNCTAD Guidance on core indicators for entity reporting on contribution towards implementation of the UN Sustainable Development Goals, and TCFD recommendations on climate-related risk disclosures.

The 2020 Report is the Company’s seventeenth non-financial report, which demonstrates its determination to consistently develop reporting processes and enhance transparency. The Company uses various forms of independent assessment and confirmation of disclosed information (professional audit and public verification). This reflects the Company’s commitment to maintaining the high quality of disclosures.

RECOMMENDATIONS

While acknowledging the Report’s strengths, the Council calls attention to some aspects of disclosures’ materiality and completeness, which should be addressed in the future reporting cycles.

The Council notes that the recommendations made following the review of the previous reports remain valid and good for use going forward.

This specifically relates to the recommendation to show a more detailed and consistent comparison between planned objectives for the reporting period and the actual results and disclose the next year’s and mid-term targets across all sustainability areas.

It is recommended that, going forward, the Company indicate which of its sustainability regulations and procedures extend to its subsidiaries and how it controls its activities in this area and define the relevant key performance indicators.

It is declared that the Company aims to join the Initiative for Responsible Mining Assurance (IRMA) and the International Council on Mining and Metals (ICMM), as well as develop a plan to bring our reporting standards more into line with the recommendations of the Task Force on ClimateRelated Financial Disclosures (TCFD). To facilitate the adoption of best practice in the metals and mining industry, it is recommended that the Company provide a thorough description of how it achieved its goals.

Digital transformation of the Company is one of the highlights of the Report. The Report contains comprehensive information about the use of digital technology in production, management and stakeholder engagement. It would be appropriate to continue to cover this topic with a particular focus on both immediate and long-term effects across all aspects of sustainability and describe the risk management approach in this area.

It is recommended that the Company add comparable yearly measurable indicators of the effective performance against the targets and objectives of the Holistic Environmental Strategy

When describing its activities in biodiversity conservation, we recommend that the Company rely on best international practice such as the IUCN Guidelines for planning and monitoring corporate biodiversity performance.

The Report gives a general overview of the Company’s contribution to the national projects in healthcare, environmental protection, housing and urban environment, productivity, employment, science, and digital economy. It is recommended that the Company expand on this topic and describe specific national projects it believes are worth mentioning.

The Company should pay particular attention to the need to include explanations on changes in indicators, especially where these changes are substantial. This improves the quality of disclosures and facilitates the correct interpretation of data.

It would be useful if the Company could add the analysis of the social impact to the section relating to social programmes it implements in local communities. It is recommended that the Company disclose data on the social progress, positive shifts in the social environment, improvements in the local labour market and living conditions of people resulting from these programmes.

The RSPP Council on Non-Financial Reporting hereby takes a positive view of this Report, supports the Company’s commitment to responsible business practices, notes consistency in developing the reporting process, and confirms that Nornickel Group’s 2020 Sustainability Report has passed the public verification procedure.

RSPP Council on Non-Financial Reporting.

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