Sustainable Development Strategy
102-16Metalloinvest carries out its business activities, including sustainable development activities, in accordance with its Development Strategy. The Company takes a flexible approach to shaping the Development Strategy: it goes through four stages of development with a detailed analysis of the Company’s effectiveness and market trends and is updated annually. This makes it possible to effectively manage risks when planning activities and implementing projects as well as optimise budget planning.
In 2018, an independent consulting company was involved in updating the Strategy based on instructions from the Board of Directors. Updates were made to the Company’s development priorities as well as its long-term goals and objectives in the document taking into account key trends and current changes on the global market for iron ore, metallised, and steel products, modern technological trends in the global steel industry, and Metalloinvest’s competitive advantages.
For more details on the Company’s strategy, see the 2018 Annual Report.
As a supplier of high-quality iron ore and metallised products, Metalloinvest believes its strategic mission is to support global technological development with a responsible approach to environmental protection and a responsible social policy. Through efforts to improve the efficiency, innovativeness, and safety of production, the Company contributes to sustainable development by enhancing trust, reliability, and transparency in matters of occupational health and safety and environmental protection.
The principles of responsibility and sustainability are also integrated into strategic comprehensive programmes that support the Development Strategy. The strategic comprehensive programmes aim to make the Company’s business more customer-oriented, improve product quality and develop a responsible approach to environmental protection. During the reporting period, Metalloinvest created four main strategic integrated programmes:
- Ural Steel: a project to modernise the enterprise using technologies that are innovative for the Russian market, in particular the introduction of Flexible Modular Furnace (FMF) technology and the modernisation of a blast furnace plant with a transition to pellets produced by Mikhailovsky Mining and Processing Plant, which together reduces the production facility’s environmental impact.
- Oskol Electrometallurgical Plant (OEMK): a project to improve customer focus and the Special Bar Quality (SBQ) of premium high-quality long products. The project involves modernising the existing production facilities while simultaneously enhancing the environmental friendliness of the process as well as installing additional capacity, in particular for the heat treatment of rolled products.
- Lebedinsky Mining and Processing Plant (Lebedinsky GOK): a project to improve the quality of premium products – pellets and HBI. The main objectives of the project are to increase the strength of briquettes in order to reduce the negative environmental impact as well as boost the iron content in products.
- Mikhailovsky Mining and Processing Plant (Mikhailovsky GOK): a project is planned to improve the quality of iron ore products in order to increase the iron content therein and reduce the proportion of harmful impurities.
In its operations, the Company strives to meet the quality standards of foreign markets, where both the final product and its production process are subject to strict requirements, in order to reduce the carbon footprint within the product life cycle. Metalloinvest tries to apply these requirements to all types of products regardless of their sales markets. By offering products that meet the highest quality standards, Metalloinvest encourages positive environmental initiatives across the Russian market.
In 2019, the Company plans to develop energy efficiency metrics that will not only make it possible to track changes in its own economic performance indicators, but also compare them with the results of other market players. Assessing the efficient use of energy resources will enable Metalloinvest to competently transform and constantly improve business processes.
EcoVadis Business Sustainability Rating
During the reporting period, Metalloinvest was recognised in the EcoVadis Business Sustainability Rating for the first time in response to the growing interest among investment funds in the management of ESG risks (environmental, social responsibility, and corporate governance risks). When compiling the rating, experts conducted a comprehensive assessment of the Company’s impact on the environment, its compliance with human rights and legislation, anti-corruption measures, and the organisation of sustainable supply chains. Based on the results of the assessment, Metalloinvest was among the top 100 (11%) of the world’s best producers of metal resources and steel recognised in the EcoVadis Rating (more than 900 companies). The Company was also in the top 7% of the world’s most environmentally friendly metals and steel producers.
Being part of the rating enabled the Company to identify its strengths and areas for improvement in the Strategy and activities that were outlined in the roadmap.
In 2019, once this Report has been published, we will have opened a green credit facility and have signed a loan agreement with ING. The interest rate on this loan (Sustainability Improvement Loan) may be reduced if assessments show that the Company has improved its corporate social responsibility indicators.
More details on the results of the green financing project will be presented in the 2019 report.
