Slide 1: Leadership in sustainability
1 Leadership in sustainability November 2020
Slide 2: Disclaimer
DISCLAIMER 2 This document is confidential and has been prepared by NLMK (the the industry in which the Company operates. By their nature, forwarding- “Company”) solely for use at the presentation of the Company and may looking statements involve risks and uncertainties because they relate to not be
Slide 3: Key highlights agenda
3 • Key highlights • Corporate governance • Health & Safety • Environment • Tailings dam management • Social • ESG Ratings
Slide 4: Leadership in sustainability - key highlights
LEADERSHIP IN SUSTAINABILITY - KEY HIGHLIGHTS 4 NLMK’s key principles of sustainable development: NLMK IS THE UN GLOBAL COMPACT’S PARTICIPANT – Creating long-term shareholder value – Caring about health, wellbeing and development of employees ENVIRONMENT HEALTH & SAFETY – Treating environment respon
Slide 5: Corporate governance
5 • Key highlights • Corporate governance • Health & Safety • Environment • Tailings dam management • Social • ESG Ratings
Slide 6: NLMK adheres to high corporate governance standards
NLMK ADHERES TO HIGH CORPORATE GOVERNANCE STANDARDS 6 The Group’s governance structure and THE MAJORITY OF THE THE MAJORITY OF THE COMMITTEES practices are aligned with G20/OECD BOARD IS INDEPENDENT ARE CHAIRED BY INDEPENDENT DIRECTORS Principles of Corporate Governance, Independent directors Indepe
Slide 7: NLMK's board oversight of key sustainability aspects
NLMK’S BOARD OVERSIGHT OF KEY SUSTAINABILITY ASPECTS 7 NLMK’s approach to Corporate governance sustainability BOARD OF DIRECTORS Business ethics & management is countering corruption governed by Sustainable Development Policy (SDP) approved by the Board in STRATEGIC PLANNING HR, REMUNERATION & AUDIT
Slide 8: Health & Safety
8 • Key highlights • Corporate governance • Health & Safety • Environment • Tailings dam management • Social • ESG Ratings
Slide 9: Safety is a top priority for the Group
SAFETY IS A TOP PRIORITY FOR THE GROUP 9 NLMK’s governing document: Integrated Management System Policy in Quality, LOST TIME INJURY FREQUENCY RATE (LTIFR*) Environmental Protection, Energy Efficiency, Occupational Health and Safety OHSAS 18001:2077 certified; 1.60 NLMK Group World** ISO 45001:2018
Slide 10: Environment
10 • Key highlights • Corporate governance • Health & Safety • Environment • Tailings dam management • Social • ESG Ratings
Slide 11: Reducing carbon footprint – 2023 target
REDUCING CARBON FOOTPRINT – 2023 TARGET 11 Measurable target to reduce CO2 DIRECT & INDIRECT CO2 EMISSIONS DYNAMICS emissions by 2023 t/t NLMK Group (Scope 1+2) NLMK’s (Lipetsk site) CO2 intensity will be close to 30% of the most efficient 2.04 mills in the world by 2023 1.98 1.91 NLMK joined Worlds
Slide 12: Improving air quality
IMPROVING AIR QUALITY 12 NLMK has reduced air emissions AIR EMISSIONS INTENSITY intensity by more than two times since kg/t, NLMK Group 2000 The Group operates more than 500 modern dust and gas purifying facilities 20.1 20.2 20.0 ISO 14001:2015 standard implemented 19.5 at 14 of the Group’s faciliti
Slide 13: Increasing energy efficiency
INCREASING ENERGY EFFICIENCY 13 ISO 50001:2011 certified ENERGY INTENSITY GCAL/t, NLMK Lipetsk (recertification under ISO 50001:2018 is underway) -0.4% Improved energy intensity was 5.7 5.6 5.6 5.5 5.5 5.80 achieved via equipment upgrade and 5.60 BAT 5.40 better processes 5.20 5.1 5.00 4.80 Higher s
Slide 14: Case study: integrated production chain - energy self-sufficiency
CASE STUDY: INTEGRATED PRODUCTION CHAIN - ENERGY SELF - SUFFICIENCY 14 ENERGY SELF-SUFFICIENCY TARGETS, NLMK LIPETSK Captive energy generation Secondary fuel gas recovery 110% 100% 90% 80% 70% 94% 100% 60% 89% 50% 65% 40% Captive energy seconda ry recovery 2019 2023 2019 2023 Target Target Strategy
Slide 15: Case study: electrical steel for low carbon future
CASE STUDY: ELECTRICAL STEEL FOR LOW CARBON FUTURE 15 NLMK targets to increase production of TARGET ELECTRICAL STEELS SALES, m t electrical steel (GO and NGO) at its Russian facilities for global markets to +35% benefit from growing energy demand and shift to low carbon economies: 0.8 0.8 0.6 0.7 0.
Slide 16: Case study: premium plates for low carbon future
CASE STUDY: PREMIUM PLATES FOR LOW CARBON FUTURE 16 NLMK’s Dansteel (Denmark) is a leading TARGET PREMIUM PLATES SALES BY DANSTEEL, m t producer of steel plates used for wind energy equipment in Northern Europe 3.6x 0.3 The wind energy market trends in the EU: – Steel consumption by the wind energy
Slide 17: Minimizing the use of water resources
MINIMIZING THE USE OF WATER RESOURCES 17 NLMK has substantially reduced water WATER CONSUMPTION & USE INTENSITY consumption in relative (per tonne of Water сonsumption, m m3 Specific consumptive water use, m3/t of steel steel produced) and absolute terms 5.7 5.5 5.3 4.9 100 6 The Group doesn’t opera
Slide 18: Minimizing waste generation and reusing by-products
MINIMIZING WASTE GENERATION AND REUSING BY-PRODUCTS 18 NLMK targets lower waste WASTE RECYCLING generation and higher share of %, NLMK Russia, excl. mineral waste waste reuse in its operations to 96% 96% 98% by 2023 94% 96% 92% 94% Briquetting plant launched in May 92% 2019: 90% 89% 87% ? 88% – All
Slide 19: Tailings dam management
19 • Key highlights • Corporate governance • Health & Safety • Environment • Tailings dam management • Social • ESG Ratings
Slide 20: NLMK's tailings dam – safety is number one priority
NLMK'S TAILINGS DAM – SAFETY IS NUMBER ONE PRIORITY 20 DAM SAFETY is ensured by multi – level checks REGULAR EXTERNAL CHECKS NLMK’s tailings dam was put into operation in 1984 (weekly, monthly and annual checks by state bodies) Tailings dam development plan was independently audited Emergency prepar
Slide 21: Social
21 • Key highlights • Corporate governance • Health & Safety • Environment • Tailings dam management • Social • ESG Ratings
Slide 22: Developing our team
DEVELOPING OUR TEAM 22 NLMK Group employs NLMK GROUP’S EMPLOYEE TURNOVER RATE 52.8 thousand people 8.8% Employee turnover rate 5.6% increased in 2019 due the 4.7% 4.4% 4.7% implementation of the program to increase labor productivity ? 2015 2016 2017 2018 2019 Regular staff satisfaction surveys are
Slide 23: Developing local communities & supporting employees
DEVELOPING LOCAL COMMUNITIES & SUPPORTING EMPLOYEES 23 Tools for community INVESTMENTS IN SOCIAL PROGRAMMES IN 2019 engagement: - Assessment of existing social 10% Monetary support and benefits programmes 3% 25% - Direct engagement via 6% Medicine and health improvement dedicated channels Transport
Slide 24: Respecting human rights
RESPECTING HUMAN RIGHTS 24 Adhering to UN Global FUNDAMENTAL HUMAN RIGHTS PRINCIPLES AT NLMK Compact principles on human rights and labor Fundamental principles Areas of activity – Human Rights Policy and Prohibition of forced and NLMK only signs employment contracts with individuals that meet the m
Slide 25: ESG Ratings
25 • Key highlights • Corporate governance • Health & Safety • Environment • Tailings dam management • Social • ESG Ratings
Slide 26: Recognition of NLMK's results in the area of sustainability
RECOGNITION OF NLMK’S RESULTS IN THE AREA OF SUSTAINABILITY 26 Continuous improvements across the board resulted in Out of 100 Out of 100 NLMK’s ESG ratings upgrades 90 77 83 by the leading research 45 80 36 53 50 33 70 agencies in the area of 45 60 40 22 35 50 sustainability 30 40 25 30 20 15 20 10
Slide 27: The Company's IR contacts
THE COMPANY’S IR CONTACTS 27 Dmitriy Kolomytsyn, CFA Director, IR, Capital Markets Address 40, Bolshaya Ordynka Str., Bldg. 3 Moscow, 119017, Russia IR E-mail Address ir@nlmk.com Phone Number Office: +7 495 504 05 04 nlmkonair nlmk_group nlmk group