Social strategy

Contribution to the UN SDGs

Nornickel is playing an important role in the Russian economy. Due to its geography and financial strength, the Company has a strong impact on the social and economic life in the regions in which it operates. With its enterprises located mostly in single-industry towns, Nornickel seeks to foster a favourable social climate and comfortable urban environment, providing its employees and their family members with ample opportunities for creative pursuits and self-fulfilment.

The core principle behind this social contribution is a partnership involving all stakeholders in the development and implementation of social programmes based on the balance of interests, cooperation and social consensus.

The harsh climate faced by Nornickel employees in life and at work, the remoteness of the Company’s key industrial facilities and the increasing competition for human capital across the industry call for a highly effective, human-centred social policy that would promote Nornickel’s reputation as an employer of choice.

2022 saw a decrease in social spending, primarily due to the high base effect of 2021, when significant reserves were accumulated to finance the Comprehensive Plan for the Social and Economic Development of Norilsk.

Support for indigenous peoples

Indigenous peoples of the North, such as Nenets, Dolgans, Nganasans, Evenks, and Enets, currently residing on the Taimyr Peninsula, count over 10 thousand people. The Company also engages with the Kola Sámi in the Lovozersky Municipal District of the Murmansk Region.

Nornickel respects the rights and protects the ancestral lands, traditional culture and trades, historical heritage and interests of indigenous peoples within the Company’s footprint and delivers on its commitments to enhance and foster good neighbourly relations.

Nornickel adopted the Indigenous Rights Policy, which defines Nornickel’s key related commitments. Nornickel compiles with all applicable international standards and regulations regarding the support for indigenous peoples of the North and recognises the rights of local communities to preserve their traditional lifestyle and indigenous trades. The Company’s metals and mining assets are located outside indigenous territories in the Taimyrsky Dolgano-Nenetsky Municipal District. The Company’s voluntary commitments and arrangements with the indigenous peoples of Taimyr are formalised by agreements and minutes of meetings with representatives of indigenous family communities.

To support the indigenous peoples of Taimyr, Nornickel implements a programme to promote the social and economic development of the Taimyrsky Dolgano-Nenetsky Municipal District in 2020–2024, with a total funding of RUB 2 billion. The programme comprises over 40 activities across a number of areas such as support for traditional trades of indigenous peoples; infrastructure development, e.g. construction of housing and social facilities in Taimyr villages; improved accessibility of medical care; promotion of education, culture, sports, and tourism.

In 2022, the annual World of Taimyr project contest continued, aimed at supporting social-impact projects and fostering the sustainable development of indigenous territories on the peninsula. The contest features a grant financing system and only accepts project from representatives of indigenous peoples of Taimyr and non-profit organisations acting in the interests of the indigenous peoples. The winners started implementing their projects in June 2021 and completed them in November 2022. A total of 28 social projects received the grants. The success of the first contest, with projects implemented in 2021–2022, proved the popularity and relevance of this initiative.

The Company not only consistently fulfils its obligations to support and develop the indigenous peoples of Taimyr as part of its five-year support programme but also provides additional assistance on matters relevant for indigenous communities, including:

• strengthening the infrastructure of indigenous communities and helping them prepare for autumn and winter (the hunting and fishing seasons)
• transporting passengers and cargo to Taimyr villages by helicopter; supporting holidays that resonate with the indigenous peoples of Taimyr – the Reindeer Herder’s Day, the Fisherman’s Day, etc.

In 2022, the Company continued the Taimyr Students targeted programme launched in 2020 to provide education at the Fedorovsky Polar State University for representatives of indigenous peoples living in the Taimyrsky Dolgano-Nenetsky Municipal District. At the moment, 40 indigenous students are studying at the university under the targeted programme. The Company finances tuition fees, accommodation in Norilsk during the study period, round-trip travel expenses, and a scholarship of RUB 20 thousand (monthly for full-time students and during exams requiring full-time attendance in Norilsk for part-time students).

In 2022, Nornickel completed projects under a cooperation agreement with the Kola Sámi Association which represents the interests of the indigenous peoples of the North of the Murmansk Region. The Company supported the Sámi people in developing their culture and preserving their traditional lifestyle, leveraging the best practices tried and tested in Taimyr. In particular, Nornickel financed a project to create a single Sámi alphabet and the publication of pre-school Sámi language textbooks and supported the establishment of an open-air Sámi museum in Murmansk.

Youth programmes

Shine art festival

In 2022, Nornickel supported the first Shine public art festival held in Monchegorsk. The festival’s key message was that we can and should improve the environment we live in, and public art is an excellent tool to do just that.

The city’s residents and guests had the opportunity to express themselves creatively in the urban environment. During the festival, more than 2 thousand city residents attended creative laboratories, masterclasses and workshops. The programme covered several arts: street art, singing, music, and dance. In the run-up to the festival, a campaign was held to collect scrap metal, which the festival participants later turned into unique art objects to decorate the city. The festival was open for everyone, and the most active participants received prizes.

Add Colours to Your Town project

For nine years, Nornickel has been holding its annual Add Colours to Your Town art contest for children and youth living in Norilsk and Monchegorsk. The main idea of the project is to engage the younger generation in transforming cities through art, foster their feeling of attachment to the city and build a vision of their future intertwined with the city’s.

Early career guidance for children

On 1 September each year, the Company provides all first-graders in its host cities with A Book on How Metals Helped Build Cities presenting metals and mining jobs in a compelling and informative way. Systematic career guidance efforts build up children’s patriotism and instil a sense of pride and ownership in the metals and mining champion while introducing them to cultural heritage, promoting science and boosting its appeal to the younger generation by telling them about the Company’s production processes.

Green Brush online camp

Nornickel supported the Green Brush online children’s camp aimed at fostering green behaviours and a safety culture among the younger generation and offering early career guidance.

The project lays a foundation for training future environmental engineers and H&S professionals by teaching school students to be environmentally responsible and considerate and conscious of their own safety and the safety of those around them.

Over 500 schoolchildren aged between 8 and 14 participated in webinars, creative workshops and online quizzes hosted by practicing environmental engineers, geologists, occupational safety specialists, and education experts. Guided by professional consultants, students developed projects that helped them practise the new knowledge and hands-on skills.

Let’s Roll environmental drive

Run since 2016, the annual Let’s Roll environmental drive includes environmental awareness initiatives in addition to urban development activities. The event is divided into four stages focused on communication, projects, nature reserves, and partnerships. In 2022, 184 volunteer teams and 1.2 thousand employees took part in the drive, completing over 200 environmental projects. The environmental volunteering programme focuses primarily on the Arctic: Nornickel employees joint forces to implement projects aimed at preserving the harsh but beautiful and vulnerable nature of the Far North.

Arctic Lessons

In 2022, to highlight the value of the Arctic nature and draw public attention to the problems of its conservation, the Seven Wonders of the Arctic interactive lesson was developed as part of the Let’s Roll environmental drive.

The lesson was designed as a universal educational tool to be used by the Company employee volunteers at educational institutions or online, easily adapting it to different ages: the tasks and lesson plans are different for elementary and middle school students. The lesson contributes to the UN Sustainable Development Goals.

The Arctic is one of the few places on Earth with almost pristine nature, but also one of the most vulnerable regions of the world. When the global average temperature rise by 2 °C is mentioned, it means a rise by 5 °C in the Arctic, or even 10 °C in some places. Such changes have huge consequences: accelerated melting of sea ice and permafrost, changing sea currents and destroyed shores, animal habitats and engineering infrastructure facilities.

With its footprint extended as far as the Arctic Circle, Nornickel contributes to preserving this region by supporting and organising monitoring and research, promoting landscape and species conservation initiatives and engaging its employees to provide volunteer assistance.

Charity programmes

To incorporate and promote the sustainability agenda across its operating regions, Nornickel runs the World of New Opportunities charity programme focused on supporting community initiatives and fostering sustainable development in local communities.

In 2022, the projects and initiatives under the World of New Opportunities programme were integrated into an ecosystem of related elements: education – expert community – support for initiatives. A systematic approach to engaging local communities ensures sustainable results: stronger competence of non-profit organisations, introduction and adoption of new social technologies, support for public initiatives as well as rolling out successful practices across national and regional expert community platforms.

In 2022, about 30 thousand people from across the Company’s regions of operation took part in the World of New Opportunities events.

Socially Responsible Initiatives Competition

To support public initiatives that lay fertile ground for sustainable development of local communities, the Company holds the annual Socially Responsible Initiatives Competition for non-profit organisations. In 2022, 114 socially beneficial initiatives were implemented in Nornickel’s regions of operation. In 2021–2022, the Company tended to focus on mutually beneficial regional and cross-regional partnerships among the competition applicants. Pandemic-driven constraints and the new reality drove closer cooperation within the non-profit sector. The non-profit sector set an example of achieving positive social impacts by joining efforts and pooling resources.

The contest-winning projects span various social activities: a new interactive children’s climbing wall, a modern environmental awareness and tourism centre, a robotics olympiad for children, career guidance clubs and assistance in choosing a professional path, collection and recycling of waste and litter in the tundra.

The programme experts and staff note the positive impacts of the established ecosystem supporting non-profit and municipal organisations. Travel grants enabled applicants to improve their professional skills during internships and bring fresh ideas to the regions where Nornickel operates. The social technology forum enables experience sharing and serves as a platform to present successful practices. The Social Engineering Bureau and other educational initiatives provide an opportunity to educate new contestants and pass on the values and principles. All in all, the ecosystem drives the project resilience and teams’ professional competence, thus contributing to meaningful results and positive social impacts.

2022 saw a lot of career guidance projects helping school students choose their professional paths.

Peremena: Change Starts with You education project

In 2022, the Company continued the Peremena: Change Starts with You education project aimed at facilitating communication between children, their parents, teachers and other stakeholders in a joint effort to improve the education process. In early 2022, the project experts held a series of in-person trainings for teachers and school students from remote areas. The main topics were gamification tools and managing motivation in education. In the reporting year, the education project covered more than 2 thousand people from 13 communities.

In 2022, the Peremena: Change Starts with You project won the GRADUATE AWARDS as the Best Schoolchildren Engagement Programme. In 2021, it received international recognition and, along with Nornickel’s other education programmes, was included in the compendium of best practices following the UN’s open call.

IMAKE League project

This is a club for aspiring, seeking, thoughtful young makers, future engineers and scientists. Through this project, Nornickel supports a system of scientific and educational activities to promote a culture of scientific creativity among children and teenagers. The project comprehensively involves children in the R&D process, stimulating their interest, motivation and development in this area.

2022 saw such key initiatives under the project as yet another IMAKE Camp shift in Vladivostok, the IMAKE engineering marathon (intensive courses and workshops in different cities, consultations for participants, online presentations of inventions and prototypes), IMAKE.May Day (maker family weekend), and participation in inventor forums. In 2022, more than 3.5 thousand school students from the Company’s regions of operation took part in the project events.

Members of the IMAKE League presented their scientific and engineering inventions at various online presentations and meetings. Young League members (children and teenagers aged between 8 and 17) as well as their parents, experts and invited specialists are gradually becoming ambassadors for the IMAKE League project. In 2022, the LIGA IMAKE: Producers of Ideas project was praised by experts and won the first prize in the GRADUATES & INTERNS category of the HR IMPACT competition.

IN’HUB project

Nornickel co-organised the IN’HUB international innovations salon aimed primarily at supporting and promoting inventors and innovators. As part of this project, an innovative project competition was held in 2022, with projects such as Interval Train Traffic Control System, Stereotech Hybrid 5D Printer, BIO Industrial Air Cooling System, and others named among the winners. As part of the IN’HUB series of events, 1,300 applications were submitted for the competition in 2022, of which 490 were formally reviewed and 204 were presented at the Forum and posted on the marketplace. Projects by 30 foreign inventors from Switzerland, Austria, Israel, Egypt, Iran, Indonesia, Kazakhstan, and Belarus were presented at the IN’HUB International Forum, along with Russian inventions and developments from 42 regions.

The Company’s social investments are aimed, first and foremost, at encouraging the development of our children while also developing the human capital in regions and thus contributing to their sustainable development.

For more details on the World of New Opportunities programme, see Nornickel’s 2022 Sustainability Report.

Responsible supply chain

Approach to management

Nornickel’s procurement system focuses on timely and fully meeting the Company’s needs for required materials and services of specified quality and at an acceptable price.

Nornickel takes a responsible approach to sourcing, prioritising partners who comply with applicable laws and regulations, ensure safe working conditions and care for the environment. The Company expects its suppliers to comply with international best practices and standards in sustainability and environmental stewardship.

The following key documents guide supply chain management at Nornickel:

• Business Ethics Code;
• Human Rights Policy;
• Supplier Code of Conduct;
• Responsible Sourcing Policy;
• Internal corporate procurement standards

Procurement

Procurement process

Nornickel’s procurement process is certified to international standards ISO 9001 and ISO 14001.

The Company procures over 40 aggregated purchasing categories, from heavy industrial equipment to food. In doing so, the Company provides equal competitive opportunities for large, medium and small businesses alike, guided by generally accepted standards of fair business practices and the principles of avoiding conflicts of interest. To maximise procurement effectiveness and transparency, the Company’s procurement activities are mostly centralised at its Head Office through automated systems and electronic trading platforms.

Depending on the budgeted cost, procurement can follow a tendering, simple or simplified procedure. Based on the materiality and parameters of purchases, the qualification results and the winning bidder in the procurement process are approved by the collective procurement body composed of representatives from various functions of Nornickel. The contract with the winning bidder is signed in accordance with the approved results of the procurement procedure. All details of the Group's centralised procurement transactions are published on the website.

As the Company aims to work with reliable suppliers who will meet their obligations regarding delivery dates and the quantity and quality of products supplied, during the procurement procedure all suppliers undergo mandatory qualification screening against formalised criteria and rules.

Nornickel gives preference to local suppliers to provide social support to its operating regions. Along with saving jobs, this policy supports unique enterprises whose continuous operation is essential to both the well-being of their employees and the social fabric of local communities.

Supplier engagement

The Company’s supplier engagement efforts are focused on establishing effective feedback mechanisms. The SAP SRM automated management system gives suppliers anytime access to information about the Company’s procurement procedures.

Sign-up for the supplier relationship management (SRM) system is free of charge and does not impose any obligations on users.

+7 (495) 783–00–45, ext. 6 (for calls within Moscow);
8 (800) 700–59–11, ext. 6 (toll-free federal number).

As at 2022-end, over 10 thousand potential suppliers had registered in the system, of which over 9.5 thousand had been accredited.

ESG factors in the supply chain

Nornickel seeks to create a common information space and set of values with its suppliers. The Company employs a proprietary multi-tier system to evaluate its suppliers. The criteria for selection, evaluation and re-evaluation of external suppliers have been determined in line with the requirements of ISO 9001:2015 Quality management systems. Nornickel is particularly focused on building relationships with suppliers whose equipment is unique and critical for the stable operation of the Company’s production facilities.

In 2021, the Company approved its Responsible Sourcing Policy covering all of the Company’s activities related to supplier selection in the supply chain of raw materials, goods and services. The purpose of the Policy is to define the Company’s approach to responsible sourcing and declare standards and principles to be followed by the Company and its suppliers.

Together with the Policy, the Company approved its Supplier Code of Conduct, which encourages the Company and its business partners to introduce procedures for responsible sourcing in accordance with ESG requirements in all of Nornickel’s supply chains.

In the reporting period, the Company also developed and deployed a due diligence management system (DDMS) for mineral suppliers, focused on identifying potential risks affecting the sustainability of business processes in the mineral supply chain while also minimising risks of human rights violation, corruption and misinformation about minerals, as well as risks relating to illegal control of mines and support for non-state armed groups.

The OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and a five-step model for risk-based due diligence on supply chains provide a methodological framework for developing the DDMS.

The DDMS is driven by the following requirements and recommendations:

• London Metal Exchange responsible sourcing policy
• Standards and principles of leading sustainable development initiatives in the industry: ICMM, IRMA, RMI, and JDDS, as well as the Chinese Due Diligence Guidelines for Responsible Mineral Supply Chains of the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (CCCMC)
• Requirements of the Company’s customers

In 2022, Nornickel conducted due diligence of metallic mineral suppliers to the Polar Division and Kola MMC, having inspected 100% of relevant suppliers, with zero risks confirmed.

Contracts with suppliers were supplemented with an anti-corruption clause and a clause on ESG compliance, which, in particular, provides for access to Nornickel’s Corporate Trust Line. In 2022, the ESG compliance clause was included in 1,313 contracts and master agreements with suppliers.

The Company plans to roll out due diligence to all categories of suppliers, including those not involved in supplying minerals. To this end, a new tool within the DDMS will be launched in 2023 – a supplier self-assessment questionnaire covering environmental, social and governance (ESG) aspects. Its objective is to assess compliance of suppliers of minerals, goods, works and services with the requirements of the Supplier Code of Conduct.

In 2022, the Norilsk and Kola Divisions as well as Nornickel’s Head Office underwent annual RSBN audits. The audits assessed the maturity of the DDMS and its compliance with the OECD guidance. As a result, in 2022, the Company improved its performance by 35% year-on-year.

Given the risk of potential negative environmental impact of cargo in transit, the Company’s master agreement sets explicit requirements for cargo packaging. Goods to be shipped must meet the cargo standards and requirements of GOST 26653-2015 Preparation of general cargoes for transportation and GOST 15846-2002 Production for transportation to the areas of the Far North and similar regions. Packaging, labelling, transportation and storage. Mandatory requirements are established for the transport containers and product packaging that should ensure cargo integrity during multiple transshipments and transportation to the Far North.

Environmental impact is assessed throughout the life cycle of procured products: production, transportation, storage, use, and disposal. Nornickel requires its contractors to have a functioning environmental management system in place and to ensure that all services and products delivered by them comply with local environmental laws.