Improvement of sustainability-related corporate governance

During the year, Nornickel focused on strengthening its corporate governance to improve sustainability performance. The Environmental Task Team was set up at the Board level, chaired by Gareth Penny, the independent Chairman of the Board of Directors, and is comprised solely of independent directors. The new team was set up primarily in response to the Board of Directors’ desire to pay closer attention to sustainability in general, and environment in particular.

Significant organisational changes were made at the management level within the Company. Thus, to improve the efficiency of risk management and supplement the existing system of industry committees, was set up a new Risk Committee headed by the President of the Company. The creation of the Committee marks the completion of a vertical risk management structure fully penetrating the Company from the level of blue-collar workers to its President, Management Board and Board of Directors.

The Ecology Department and the Inspectorate for Monitoring Technical, Production and Environmental Risks were also established in 2020 to enable more efficient management of the risks of negative environmental impact, and enhance environment-related industrial safety. We set up the Ecological Monitoring Centre which will create an ecology monitoring system in line with best practices. The Ecology Department cooperates with all units across the Company, being responsible for implementing the strategy aimed at assessing environmental risks and minimising the Company’s adverse environmental impacts, as well as restoring ecosystems in Nornickel’s regions of operation.

Last year, a new position of Senior Vice President for Sustainable Development was created (filled by Andrei Bougrov), and the Sustainable Development Department was set up. The key tasks of the new department are to improve sustainability performance and coordinate the Company’s units in order to bring internal processes and regulations in line with the best international standards, such as ICMM and IRMA. Senior Vice President for Sustainable Development will focus on relationships with all stakeholders and support the Environmental Task Team of the Board of Directors.

In 2021, senior management’s KPIs will include the Zero Environmental Incidents indicator with a weight of 20% (of team KPIs) to ensure a clear link between the implementation of the Company’s environmental strategic priorities and the level of remuneration.

Updated structure of corporate governance in the field of sustainable development and the environment

Environmental strategy

In 2020, the Company completed the development of its Holistic Environmental Strategy in key areas: air, water, land, tailings and waste, biodiversity, and climate change. All six areas of the Strategy follow a single logic in developing a set of initiatives designed to achieve the respective goals.

Holistic Environmental Strategy

Strong performance

NN vs. Peer avg.Peers include Anglo America, BHP Billiton, Vale, Rio Tinto, Freeport where public data is available.
–38% Absolute emissions, Scope 1+2, Mt CO2e. –138x Absolute emissions, Scope 3, Mt CO2eIncl. only downstream part of the supply chain.. 1.0x Renewable electricity shareOf total electricity., %

Targets

Minimize impact on climate change (reduce CO2 intensity emissions) and mitigate physical climate-related risks

Key next steps:

Delivery on energy efficiency, CO2 reduction and physical risks mitigation initiatives

Strong performance

NN vs. Peer avg.Peers include Anglo America, BHP Billiton, Vale, Rio Tinto, Freeport where public data is available.
–80% NOx emissions, K tonnes –65% Solids / Dust, tonnes

Targets

Improve air quality (reduce SO2 emissions) in the areas of operations (Norilsk industrial area and Kola Peninsula)

Key next steps:

Execute on Sulphur Programme 2.0 and other air emissions reduction projects

Strong performance

NN vs. Peer avg.Peers include Anglo America, BHP Billiton, Vale, Rio Tinto, Freeport where public data is available.
–51% Total water withdrawal, M m3 –14% Total water discharge, M m3 1.5x Water recycled and reused ratio, %

Targets

Maintain recycled water ratio and reduce pollution; continue providing clear water to local communities

Key next steps:

Build and run new water treatment facilities, adopt new technical solutions, remediate pollution from environmental incidents in line with GNE recommendationsGreat Norilsk Expedition

Strong performance

NN vs. Peer avg.Peers include Anglo America, BHP Billiton, Vale, Rio Tinto, Freeport where public data is available.
–138x Non-mineral waste recycled and reused ratio, %

Targets

Maintain safe operation of tailings facilities and minimize environmental impact of mineral and non-mineral waste

Key next steps:

Build mass balance model for waste management and prepare for the self-assessment under Global Tailings Standard

Strong performance

NN vs. Peer avg.Peers include Anglo America, BHP Billiton, Vale, Rio Tinto, Freeport where public data is available.
–80% Total land disturbed, K hectares

Targets

Rehabilitate legacy damage and upgrade mine and plant closure plans

Key next steps:

Review asset closure plans in all divisions; follow GNEGreat Norilsk Expedition recommendations in soil recovery; waste collection and land reclamation at Norilsk area

Strong performance

NN vs. Peer avg.Peers include Anglo America, BHP Billiton, Vale, Rio Tinto, Freeport where public data is available.

Legacy focus:

  • Supporting of several nature reserves (Taimyrsky, Putoransky, Pasvik, Laplandsky and other Nature Reserves)
  • Protection of rare animal species and support of the reproduction of aquatic bioresources

Targets

Strengthen biodiversity program

Key next steps:

Biodiversity remediation following recent environmental incidents, launch regular monitoring of impacts on biodiversity and continue support of nature reserves

Environmental Management System

In 2020, the Environmental Management SystemBased on the global GHG intensity curve for the nickel industry by Wood MacKenzie Group (CO2 per tonne of Ni equivalent). (EMS) continued to operate as part of the Corporate Integrated Quality and Environmental Management System (CIMS) providing an opportunity to coordinate environmental and quality initiatives with other initiatives. This approach improves both overall and environmental performance of the Company.

System audit

In line with ISO 14001:2015 and ISO 9001:2015, the Company confirms the EMS compliance with the standard by engaging Bureau Veritas Certification (BVC) to conduct surveillance audits once a year and recertification audits every three years. In December 2020, BVC auditors conducted a desk audit of the Corporate Integrated Quality and Environmental Management System and the Environmental Management System of PJSC MMC NORILSK NICKEL as part of a recertification audit, which confirmed the Company’s compliance with ISO 14001:2015 and ISO 9001:2015. The field recertification audit to be conducted at the Company’s facilities is scheduled for March–April 2021.

During 2020, Nornickel also conducted internal and corporate audits involving specially trained and competent personnel. As a result, audits were conducted at the following sites of the Company:

  • Head Office – 19 audits
  • Polar Division – 20 audits
  • Polar Transport Division –38 audits
  • Murmansk Transport Division – 3 audits
  • Kola MMC – 25 audits