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ЕВРАЗ. Годовой отчет за 2021 год - часть 4

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RESPONSIBLE BODY

CLIMATE-RELATED RESPONSIBILITIES

Occupational health and safety

Board of Directors (BoD)

•The BoD oversees the process of identifying and managing climate-related risks and opportunities and

approves the Group’s risk appetite.

•The BoD’s agenda includes matters related to climate change, such as governance, strategy, risk

management and environmental targets.

2021 HIGHLIGHTS

•The BoD meets 10-12 times a year to review and guide strategic decisions, budgeting, investment

decisions, including climate-related issues and the Company’s progress against sustainability targets

such as emissions reduction.

Sustainability Committee

•The Sustainability Committee oversees group-level policies, processes and strategies designed to

1.21x

(previously HSE Committee)

manage risks and opportunities related to health, safety, the environment, socio-economic issues, the

Group LTIFR

fatal incidents

supply chain and climate change.

•The committee assists the BoD in monitoring the implementation of climate-related matters and

determines the strategic actions needed to respond to particular market trends, as well as the

acceptable level of risk exposure to climate change.

•It meets at least four times a year at set times or as otherwise required. Members of the Sustainability

Committee also makes a site-visits.

Audit Committee

•The Audit Committee oversees the Internal Audit Directorate and monitors the implementation of

climate change measures in compliance with applicable policies, plans, procedures, laws and regulations.

Safety culture and health

Performance in 2021

All accidents in the Company are subject

•It supports the BoD in monitoring risk exposure against risk appetite and reviews the effectiveness of

and safety training

to a mandatory investigation. Prompt

the risk management system, as it relates to climate change.

identification of critical factors and root

Chief executive officer

EVRAZ strives to foster a safety culture among

LTIFR

causes of incidents helps to identify

•The CEO has ultimate responsibility for risk management and ensures that the risk management system

(CEO)

is well organised, covering climate-related issues.

its employees. This is made possible through

systemic shortcomings and develop the

•The CEO leads the process of developing a decarbonisation pathway and monitors the achievement of

ongoing occupational safety initiatives such

EVRAZ annually assesses working conditions

necessary measures to minimise dangerous

group-level climate-related targets, which are then reported to the Sustainability Committee and BoD

as the Risk Management Project and the

in its production sites. The leading indicator

factors more accurately. The Sustainability

after the CEO’s approval.

innovative Risk Hunting application. These

that reflects the effectiveness of HSE

Management Committee is responsible

Sustainability Management

•The Sustainability Management Committee oversees various issues related to climate change, including

programmes aim to encourage employees to

management systems is the lost-time injury

for the implementation of such initiatives,

Committee

decarbonisation (involving the analysis of available technologies and options for their application),

take an increasing level of interest in their own

frequency rate (LTIFR).

both within the Group and in individual

specific asset-oriented measures aimed at helping enterprises to achieve emissions goals, and analysis

safety. An assessment of the Risk Management

divisions. Each initiative implemented by

of automated emissions accounting systems.

Project performed in late 2021 revealed

the Sustainability Management Committee

•The committee is composed of the CEO, corporate strategy and performance management vice

president, HSE vice president, technologies development vice president, representatives of the Risk

that most business unit heads consider the

Lost-time injury frequency rate¹

is regularly monitored and assessed to

Management Working Group, and in some cases heads of departments and production divisions, who

project an integral component of the HSE

determine its effectiveness.

report key findings and results to inform the committee when it takes strategic decisions.

management systems. We are pleased to see

•The committee monitors Company’s sustainability performance and progress against climate-related

our employees perceive risk management

targets and reports its findings to the CEO.

1.21

tools as a part of standard daily operations.

Main types of high-consequence work-

•The committee meets at least once a month.

2021

1.21

related injuries and fatalities (including

We view this as an example of how all EVRAZ

Corporate strategy and

contractors), %

•The CSPM vice president chairs the Sustainability Management Committee and is responsible for

facilities are successfully implementing

2020

1.35

performance management

aligning its agenda with the Company’s strategy, as well as sustainability and climate goals. CSPM vice

2190

2.04

dynamic risk assessment measures.

(CSPM) vice president

president reports to the CEO.

HSE vice president

•The HSE vice president oversees health, safety and environmental issues arising in relation to physical

We empower all employees to suspend

and transitional climate risks. The HSE vice president reports to the CEO.

any operation that poses a potential risk

Fatalities

Technologies development

•The technologies development vice president is responsible for the technology side of the carbon

for people’s health and safety. The Risk

vice president

neutrality transition. Technological development vice president reports to the CEO.

Management Project has helped to improve

EVRAZ thoroughly investigates any fatal

Energy and climate

•The energy and climate management director represents the Company’s interests in the field of climate

employee satisfaction by changing the

incidents that occur at its operations and

management director

regulation and is responsible for:

management’s perception of the right to

makes every effort to prevent fatalities

-Participating in working groups under governmental bodies, industry associations, committees and

refuse unsafe work as a risk for production

among its employees and contractors.

commissions.

process disruption. In 2021, we revised the

-Monitoring climate regulation and decarbonisation initiatives.

approach to motivating safe behaviour by

-Forming the Company’s position concerning climate-related issues.

modifying both the criteria and process for

Work-related employee fatalities

-Implementing decarbonisation measures, developing an energy management system and increasing

bonus payment.

the energy efficiency of production.

2021

The director reports all findings to the Corporate strategy and performance management (CSPM) vice

During the reporting period, EVRAZ trained its

Moving, rotating equipment, mechanisms

president.

2020

and flying object

production personneland line managers under

Hitting by external object

Environmental

the Risk Management Project. In addition,

•Support for greenhouse gas inventory methodology, data collection, consolidation and reporting.

2019

Dropped objects

management director

employees of contracting organisations

Fire or smoke exposure

Risk Management Working

began to undergo risk management training

Fall from height

•The Risk Management Working Group consolidates all results and plays a key role in identifying,

Group

assessing and monitoring climate-related risks and mitigation measures within the Group.

with the help of specially developed internal

EVRAZ employees

Traffic accident

programmes.

Contractors

Electric shock or arc flash

HSE function and safety

•The HSE function and safety representatives at the operational level implement and control activities in

Extremal temperature exposure

representatives for all

compliance with the Company’s general strategy and the Climate Action Plan in day-to-day operations.

EVRAZ operations

•They report to the division directors and management.

1. The values of the indicator have been recalculated to include contractors and are different from those presented in the Annual report 2020 and

the Sustainability report 2020.

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Climate change and GHG emissions

EVRAZ GHG emissions⁴, 2019-2021, million t CO2e

Decarbonisation pathway

2019

2020

2021

To make our business strategy more resilient

Direct (Scope 1)

40.76

41.21

40.17

to the consequences of climate change

and identified climate-related risks, we

Consisting of:

2021 HIGHLIGHTS

continuously assess how our business may

CO2

28.22

28.06

27.55

improve to become more sustainable. At

Total GHG emissions

GHG emission intensity

Total energy consumption

Energy intensity

CH4

12.48

13.09

12.57

the end of 2021, our risk reassessment

N2O

0.06

0.05

0.06

demonstrated that climate-related issues

require greater attention at the Group

PFC and HFC

0.00002

0.00012

0.00003

42.13

1.90

347.5

23.0

level due to increasing regulatory changes

MtCO2e

tCO2e/tcs

million GJ

GJ/tcs

SF6

—

and increased stakeholder attention. By

NF3

—

addressing and analysing how climate

change affects our Company, we can

Indirect (Scope 2)

2.38

2.27

1.96

plan and design measures to mitigate the

Total GHG emissions

43.14⁵

43.48⁵

42.13

Our approach

by climate-related risks, GHG emissions

An important accomplishment for EVRAZ in

consequences of potential issues in the future.

targets and methodologies used to

reducing greenhouse gas emissions is evident

We believe that our decarbonisation pathway

The Group is fully aware of the necessity

calculate them.

in its efforts to utilise emitted methane to

shall be cost-effective. Our short-term

of taking steps to mitigate its impact on

lessen its impact on the climate. The Group

EVRAZ GHG emissions by segment

Scope 1 and 2 GHG intensity from

sustainability focus is based on substantial

Read more on pages 54-57 in the Sustainability

in 2021, million tCO2e

steel production (Steel and Steel, North

climate change and takes continuous

is implementing pilot projects on introducing

side effects yet does not compromise our

management section, on pages 58-70

America segments)⁶, tCO2e/tcs

measures to reduce greenhouse gas

in the Health, safety and environment section,

installations for thermal utilisation of methane

ability to create long-term value.

emissions (GHGs). EVRAZ supports both

and pages 84-96 in the Principal risks section

at the Raspadskaya Coal Company. It enables

-20% vs 2019

global and national programmes and

the transformation of methane into CO2 thus

We have started developing a

EVRAZ total

40.17

1.96

2021

1.90

projects for combating climate change.

reducing GHG effect, since methane has a

Steel segment

26.14

0.97

decarbonisation pathway for the Group

Being a member of the World Steel

greater global warming potential and a higher

Steel, NA

0.72

0.63

2020

1.95

that will be integrated into our daily

segment

Association, the Russian Steel and the

GHG emissions

impact related to the increase in average

Coal segment

13.32

0.36

operations, strategic and financial planning,

2019

1.94

UN Global Compact initiative, EVRAZ

global temperatures. If the pilot projects are

which will also help us to avoid climate-

Direct emissions (Scope 1)

prioritises decarbonisation issues. GHG

In 2021, the Group accomplished the

successful, the Group will scale them up. The

Indirect energy emissions (Scope 2)

EVRAZ steel segment (incl. NA)

related risks and meet climate targets. Read

emissions management is included in

upgrade of the CDP (Carbon Disclosure

Group evaluates the practicability of energy

EVRAZ target

more on pages 84-96 in Principal risks

the Environmental Strategy as one of

Project) climate change rating to level

generation to improve the efficiency of

section. In the next 3-4 years, our priority

the key activities and climate-related

C. EVRAZ achieved the result due to

methane using.

will be to maximise energy efficiency

risk management is integrated into the

the increase in the scope of information

This year it was decided to disclose one more intensity figure that better reflects

and develop measures that will decrease

corporate risk management system.

disclosure and the improvement in the

EVRAZ discloses data in tCO2e using IPCC

performance of the steel segment and takes into account volumes of pig iron produced by

the Group's volumes of greenhouse gas

quality of reporting, identification and

global warming potentials for its calculations.

steel mills and sold to 3rd parties.

emissions in order to provide the market

In its pursuit of decarbonisation, the Group

assessment of climate-related risks.

The methodology for calculating Scope 1

with reduced CO2 steel products.

focuses its efforts on maximising energy

and 2 GHG emissions complies with the

EVRAZ Carbon intensity of GHG emissions per t, tCO2e

efficiency, using secondary and low carbon

All emissions are calculated, however

requirements of the IPCC Guidelines for

2019

2020

2021

energy, and technical re-equipment. One

targets are set on specific processes.

National greenhouse gas inventories and

crucial area is improving energy efficiency

EVRAZ intends to reduce specific Scope 1

GHG Protocol Corporate Accounting and

Scope 1 carbon intensity

and enhancing energy management. EVRAZ

and 2 GHG emissions from steelmaking²

Reporting Standard. Scope 2 GHG emissions

per tonne of crude steel and sold pig iron

1.80

1.75

has a uniform methodology for internal

operations by 20% and reach 75%-utilisation

were measured using official data of Russian

per tonne of crude steel

1.85

1.87

1.82

audits of the energy management system.

of methane (CH4) emitted while degassing

energy exchange. Evaluation of Scope 3

Energy consumption and energy efficiency

coal mines by 2030 compared to 2019.

GHG emissions is in process and will be

Scope 2 carbon intensity

management of plants and production

Our goal is to achieve the GHG intensity

performed for all relevant categories.

per tCO2e of crude steel and sold pig iron

0.09

0.08

0.07

workshops is measured for compliance

ratio of 1.55³ tCO2e/tcs (tonnes of carbon

per tonne of crude steel

0.09

0.08

against criteria in special checklists

dioxide equivalent per tonne of crude steel),

In the current year, GHG emissions have

Scope 1+2 carbon intensity

developed according to ISO 50001.

which complies with the Paris Agreement

decreased by 3.1%. This was a result of lower

(PA) pledges and is calculated based

steel production at EVRAZ ZSMK, decrease

per tonne of crude steel and sold pig iron

1.88

1.83

EVRAZ follows TCFD requirements in

on the Transition Pathway Initiative (TPI)

of methane emissions at some coal mines,

per tonne of crude steel

1.94

1.95

1.90

describing risks and opportunities for

methodology for steel producers "Carbon

modernisation of equipment and the success

the short, medium, and long term;

performance assessment of steel makers: note

of the energy efficiency policy. In 2021, the

management’s role in assessing and

on methodology". To meet the goal, EVRAZ is

steel segment accounted for the largest part

managing climate related risks, where

considering promising technologies.

of GHG emissions (68% from EVRAZ' total

the Group’s strategy may be affected

GHG emissions).

Read more on page 63 in the Decarbonisation

pathway section

1. Or 96,555.5 million kWh and 6,402.8 kWh/tcs

4. Scope 1 data includes emissions in tonnes of carbon dioxide equivalent from the combustion of fuel and from other sources that are owned or controlled

2. All enterprises from the steelmaking segment in North America and Russia are involved in the process of achieving this goal.

by the Company.

3. Base year (2019) results were recalculated due to the updated values of global warming potentials from the IPCC's Fifth Assessment Report and Russia's new Scope 2

5. Results of 2019 were recalculated: Change of Scope 2 EFs for Russian mills (-1.91MtCO2e), data quality improvements (+0.26 MtCO2e), GWPs update acc. to AR5

emission factors. In addition, the quality of primary data gathering in the Company has improved, which resulted in the decrease of base year GHG intensity to 1.94

(+1.43MtCO2e).

tCO2e/tcs vs. previously reported 1.97 tCO2e/tcs. The goal (-20%) was recalculated accordingly and reduced to 1.55 tCO2e/tcs vs previously indicated 1.58 tCO2e/tcs.

6. Tonnes of CO2 equivalent (Scope 1 and 2 GHG emissions) divided by tonnes of crude steel. Оnly steelmaking enterprises are included into the calculation.

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Some of these measures should have an

Energy, the project supports the Colorado

methodology for establishing the metric

economic effect on the Group and foster

Energy Plan, helping Xcel Energy provide 55%

is being revised. EVRAZ plans to disclose

technological advances in production:

renewable energy by 2026.

information upon this metric in future

METHODOLOGY CHANGES

•

Implementing measures to increase

disclosures.

energy efficiency and better utilise

We have made several upgrades of our methodology in 2021:

secondary energy resources.

Circularity of resources

•Global Warming Potential values for 100-year time horizon are taken from the IPCC Fifth

Recycling secondary waste stemming from

Regulatory changes

•

assessment report (AR5) instead of values from the Fourth assessment report (AR4) previously used.

our own production.

EVRAZ recognises economic trends such

•

Scope 2 emission factors for entities in the Russian Federation are taken from the official source

•

Involvement in the coking charge of

as the EU's green deal climate policy and

EVRAZ is assisting in developing

of Russian energy exchange (https://www.atsenergo.ru/results/co2) which, in our opinion,

carbon-containing industrial and domestic

clear focus on resource efficiency. Such

a decarbonisation strategy for the steel

reflect more realistic energy balance of the country energy systems than previously used

waste.

developments directly address the increasing

industry in Russia by 2060. The project

factors from the baseline study report "Development of the electricity carbon emission factors

cost and scarceness of materials in the

will involve all key steel producers within

for Russia" by EBRD&Lahmeyer (https://www.ebrd.com/downloads/sector/eecc/Baseline_

EVRAZ is developing a detailed roadmap

future, as well as the lifecycle of constituent

the Russian Steel Association.

Study_Russia.pdf).

and estimated the potential decrease

alloys within steels. The Group is working on

•

Improvements in data quality which cover double-counting issues and more precise data

of tCO2e/tcs intensity. Until 2030,

developing technologies and procedures to

In addition, EVRAZ interacts with government

on material flows.

decarbonisation initiatives will be mainly

prolong the lifecycle of raw materials.

bodies to develop CO2 legislations in Russia,

In the upcoming year we'll continue to improve our methodological approach in order to align it

focused on energy efficiency, technological

assist in setting up a defined system for

with best practices.

upgrade of equipment, and higher

reporting CO2 emissions in the country, and

•Secondary use of carbon-containing

productivity while we continue to review

coking waste

work to develop state support measures.

the economic feasibility and decarbonisation

potential of other technologies

The Group is set to determine by end of 2022

the possibilities of involving the charge

National targets

In line with the international and local climate agenda, and as an element of the transition to a low-carbon economy, EVRAZ is

EVRAZ has already launched several

for coking carbon-containing waste

developing a roadmap with the following initiatives, as well as a preliminary decarbonisation plan for EVRAZ ZSMK and EVRAZ

initiatives in order to comply with its

and determining the potential for reducing

EVRAZ has considered Russia's national net

NTMK to be achieved by 2060.

decarbonisation goals. It has also started

the carbon footprint by replacing coal

zero target by 2060 while developing the

researching long-term possibilities. Below are

with other components.

decarbonisation pathway.

some examples of climate-related initiatives

2022-2025

2025-2035

After 2035

integrated into the business strategy. These

•Processing CO2 into products.

Monitor regulatory changes and

should help the Group mitigate climate risks,

•

•Increase the share of scrap and EAF.

•Implement CCUS (Carbon capture

launch the development of a

pursue opportunities, improve resilience and

EVRAZ began identifying new products

Energy management

•Examine the possibility of DRI (direct

and utilisation/storage technology.

decarbonisation strategy for the

reduced iron) usage.

stimulate innovation within its operations:

from CO2 processing, energy intensity,

•Use hydrogen in the BF-BOF route

industry in consort with the state.

and DRI.

•Consider using alternative energy.

and application possibilities. In addition,

All the Group's employees are involved

•Energy efficiency.

•

Improve energy efficiency by 18%

•Consider upgrading production

•Practice smart carbon usage.

EVRAZ will assess the feasibility of CO2

in energy efficiency issues and practices.

by 2025¹.

facilities.

•Circularity of resources.

entrapment with subsequent disposal/

EVRAZ is constantly striving to improve

Use waste as coal and coke substitutes.

•Climate-related KPI's.

•

Use of low-carbon energy purchased.

utilisation and transfer to the Group's

the energy management system within

•

•Internal carbon price.

Develop renewable energy generation

steelmaking facilities from hydrocarbons

the Group. One of the goals of the Group

•

•Sustainable Development Training

on site.

for Employees.

to methane-hydrogen fuels to reduce GHG

is to pass the certification procedures

emissions. The Group views hydrogen

for compliance with the ISO 50001

as a high-potential green energy source.

requirements at the factories, and,

Energy efficiency

in 2021, EVRAZ ZSMK and EVRAZ KGOK

accomplished this goal. In 2021, the Group

In December 2021, the Group developed

Climate-related KPIs

developed and approved a policy for the use

OTHER ACTIVITIES COMPLETED IN 2021:

a schedule to implement initiatives

of energy efficient transformers for EVRAZ.

and changes for 2022-2023.

The Group is currently aligning its

The goal of the policy is to improve

•Conducted a CO2 price forecast.

remuneration process with decarbonisation

activities to reduce the loss of energy

•Launched the revision of the CO2 calculation methodology. The goal is to align internal

goals and targets. In 2022, we are planning to

resources. In 2021, a standard was developed

•Energy efficiency measures.

methodology with best practices and future government requirements.

include climate-related and decarbonisation

containing requirements for the energy

•Initiated a study of a DRI usage at EVRAZ NTMK including an analysis of vanadium extraction

Measures include increasing and capturing

KPIs for the vice presidents of EVRAZ.

efficiency of the applied technical solutions

potential.

steam generation from the dry coke

when designing production facilities.

•Testworked Timir’s metallurgical iron ore (with further analysis of DRI).

quenching plant to generate electricity,

The Group is aiming to organise the process

•Initiated research on carbon capture and storage technologies.

replacing an electric motor with a turbo drive

Internal carbon price

of implementing the document by designers

•Researched alternative energy possibilities. At this point, preliminary research indicates that

at the Siberian Division and purchasing low-

in 2022.

using solar and wind energy at EVRAZ ZSMK and EVRAZ NTMK would not be efficient

carbon energy for the Group.

EVRAZ has set an internal carbon price

enough economically.

to be able to more accurately budget and

In 2021, the Group held many events

plan its operations within a continuously

to generate ideas in the field of improving

•Electricity generation.

changing environment of climate regulation.

the energy efficiency of production, such

EVRAZ Pueblo plans to use a 240 MW solar

The carbon price will be an additional metric

as “Energy Session” and “Growth Points.

power plant as its primary energy resource.

during investment project assessments

Decarbonisation”. Also, EVRAZ provided

With 2018 as baseline year.

In partnership with Lightsource BP and Xcel

and mitigate regulatory risks. Currently, the

educational events for employees, such

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as “Production energy efficiency” trainings

Over the past few years, EVRAZ has been

energy consumption or installed capacity

Environmental management

on energy consumption and energy

reducing total energy consumption. Sound

of equipment. The full operability

efficiency management and "Energy

energy efficiency policy brings tangible results.

of reactive power compensation devices

Transition 4.0" on the growing importance

The Group manages to consistently reduce

at Erunakovskaya-VIII mine was restored.

of climate change and environmental

energy intensity year on year. In 2021, total

sustainability issues, changing public opinion

energy consumption decreased by 1.3%.

2021 HIGHLIGHTS

and new government policies regarding

climate and energy.

The divisions implement different measures

to reduce energy consumption. In Urals

2.9

105

In 2021, EVRAZ implemented 280 energy

Division equipment was modernised

EVRAZ total energy consumption¹,

2019-2021

reduction of total air

non-mining waste recycling

efficiency activities, and consequently,

for additional power generation by switching

emissions

and reuse rate

it managed to make energy savings

on the right flow of the left discharge duct.

in the amount of 7.8 million GJ

Also, the Group has developed digital model

2021

347.50

and US$43 million. Those activities include

of the thermal power plant and compressor

2020

351.77

equipment modernisation, analytics

station. The change in the specific yield

advancements and improvements

of gross coke due to baking allowed saving

2019

372.00

of the monitoring system. In 2021, we

a large amount of money and energy. The air

Energy consumption, million GJ

provided inter-shop metering for energy

heater was replaced with an additional stage

Our approach

the rules on registration, evaluation,

and manage them through engagement

flows worth more than US$25 million

of the water economiser on the steam boiler.

authorisation and restriction of chemicals

with local stakeholders, including

and reduced unmetered inter-shop energy

One of the Group’s strategic goals is to

(REACH) for products supplied from or

regional authorities, enterprises and host

flows from 25% to 15%, which will increase

The Siberia Division increased the efficiency

ensure sustainable business activities. Our

manufactured in the European Economic

communities.

the transparency of energy consumption

of vacuum filters due to the use

Energy intensity of EVRAZ' steelmaking

approach to environmental management

Area by the Group’s assets.

2.3.4

operations, 2019 - 2021, GJ/t

at each stage and the ability to manage

of a dehumidifier. A notable event was also

is defined in the EVRAZ Business Strategy

To maintain a high level of environmental

energy-intensive processes.

a change in the chemical composition of cast

and HSE Policy. All of our enterprises use

When developing new projects

awareness and competence among our

iron. EVRAZ started using lump shungite

23.05

an environmental management system

and operations, we perform special

employees, we provide training on waste

2021

25.85

The installation of a gas top pressure recovery

in blast furnace production. The content

based on the plan-do-check-act model.

environmental and social impact

management approaches, HSE practices

23.30

2020

turbine at EVRAZ NTMK and the renovation

of MgO in blast furnace slag was lowered.

25.60

assessments that evaluate possible indirect

and other relevant topics.

of oxygen production at EVRAZ ZSMK

24.50

The Group strives to ensure compliance

and direct effects of our activities on the

2019

27.50

were completed in 2021. This helped reduce

In the Coal division were implemented 5

with all relevant environmental

local environment and communities. We

energy intensity.

projects in installation of frequency control

EVRAZ

requirements. We strictly comply with

also develop plans to reduce these impacts

EVRAZ NTMK and EVRAZ ZSMK

systems and 19 projects in reduction

CASE STUDY

ENVIRONMENTAL STRATEGY

RENEWAL OF THE THERMAL POWER PLANT AT

EVRAZ has developed an environmental strategy based on the sustainable business and environmental protection principles,

which are integrated into all stages of our value chain. The following key indicators were achieved in 2021:

EVRAZ NTMK

AREA

GOAL (2019-30)

2021 STATUS

In 2021, the thermal power plant at EVRAZ NTMK was successfully modernised. Following the

renewal, greenhouse gas emissions into the atmosphere decreased by 7.5 thousand tons per

Water

Zero wastewater discharges from steel production

63.5 million m³

year. At the same time, the plant's own electricity generation increased by 1.5% per year. A

Waste

Utilise 95% of waste from metal production and general waste

105%

boiler installation was upgraded, two smoke pumps with reduced energy consumption were

Recycle 50% of mining waste

30.9%

installed on boiler No. 9. The consumption of resources by each smoke pump reduced by

23%. This significantly facilitated the increase in their performance efficiency. In addition, the

Air emissions

Reduce total atmospheric emissions from steel production by 33%

2.9% reduction

year-on-year

consumption of blast furnace and coke oven gases as fuel for steam boilers increased.

Reduce dust emissions from coal mining by 1.5 times

10.8% increase due to

higher production volumes

1. The figure of total energy consumption comprises data on enterprises of the steelmaking segment (EVRAZ NTMK, EVRAZ ZSMK, EVRAZ Nikom, EVRAZ Caspian

Steel, EVRAZ Inc. NA, EVRAZ Inc. NA Canada, EVRAZ Vanady Tula) and the mining and coal segment (EVRAZ Kachkanarsky Mining-and-Processing Integrated

Works (EVRAZ KGOK), Raspadskaya Coal Company, Evrazruda).

2. The figure of energy intensity includes data on the Steel segment (EVRAZ ZSMK, EVRAZ NTMK) and Steel, North America segment (EVRAZ Portland, EVRAZ

Pueblo, EVRAZ Regina, EVRAZ Camrose, EVRAZ Calgary, and EVRAZ Red Deer).

3. EVRAZ energy intensity in kWh: 6,387 in 2021, 6,472 in 2020 and 6,805 in 2019.

4. EVRAZ does not have any production facilities in the UK, only the office. Data for UK office as well as data for offices located in Russia and North America were not

included in the graphs, since the volumes of consumed power are not material in terms of overall energy consumption within the Group.

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Lowering air emissions

EVRAZ total air emissions (including key

Balancing water supply

emissions), 2019-21, kt

EVRAZ uses best available technologies

include sulphur oxides (SOx), nitrogen

The mining and steel industries require

and regularly updates equipment to

oxides (NOx), volatile organic compounds

significant amounts of water. As a part

lower air emissions and reduce their

(VOCs) and particulate matter (dust). In

of our climate risk assessment, we have

370.69

potential impact on human health and

2021, total key air emissions fell by 2,85%

recognised that circular water use within

the environment. The primary emissions

YoY.

2021

370.69

our facilities allows us to manage physical

resulting from our business activities

2020

381.57

risks like water scarcity, droughts and the

2019

396.22

increasing frequency of extreme weather

events.

In 2021, total water consumption at the

Group’s facilities was 219.99 million m³, of

which freshwater accounted for more than

CASE STUDY

90%. Total freshwater consumption for

production purposes was 199.42 million m³,

which is 6.77 million m³ less than in 2020.

CLEAN AIR PROJECT

EVRAZ freshwater intake for production

As part of the implementation of the Clean Air

needs, 2019-21, million m3

federal project, which forms part of the Ecology

national project in Russia, EVRAZ undertakes

significant measures to improve its gas treatment

systems.

199.42

2021

199.42

As of the end of 2021, EVRAZ ZSMK had decreased

2020

206.20

its total emissions by 16.9 thousand tonnes. To reduce

2019

205.32

emissions of sulphur dioxide (SO2) and specific coke

production , EVRAZ ZSMK plans to implement the

following measures in 2021-24:

CASE STUDY

The total volume of water discharged

•Constructing a modern facility for flue gas

in 2021 was 121.49 million m³, which is

desulphurisation at the sintering plant, which

3.77 million m3 less than in 2020.

will contribute to a 62% reduction in emissions

ZERO DISCHARGE

of key pollutants for Novokuznetsk by 2024.

•Decommissioning the cooling tower for the final

Total water discharged, million m3

EVRAZ implements measures to mitigate water-related

cooling of coke gas at the coking plant, which

risks across its assets. In 2021, EVRAZ ZSMK completed

will reduce emissions in hazard classes 1 and 2

2021

58.01

the first stage of the circulating water supply system

from coke production by 76%.

63.48

modernisation project.

56.68

2020

EVRAZ NTMK is also involved in the Clean Air

68.58

The implementation of the second stage is planned for

57.01

project. The initiatives that it has implemented have

2019

2022 and will consist of the installation of filters. The

68.9

made it possible to reduce emissions by 7.4 thousand

project is expected to be completed in 2023. As a result,

Mining

tonnes. To reduce emissions of harmful pollutants

it will be possible to end the discharge of wastewater

Steel

and address public concerns, the following measures

into Lake Uzkoe and to use treated water in production.

are planned for 2021-24:

•Decommissioning the cooling tower for the final

cooling of the coke gas at the coking plant.

•Constructing a new biochemical facility at the

coking plant.

•Introducing new technology for pitch

production (replacing old equipment).

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Waste stewardship

Protecting biodiversity

Rehabilitating disturbed land

and landscaping

OUR PEOPLE

In its business activities, EVRAZ produces

We assess impacts on biological diversity

large volumes of general and metal

at all stages of our production projects and

The Group takes its obligations to restore

production waste (not related to mineral

acknowledge our responsibility to conserve

disturbed land during mining operations

extraction), as well as mining waste, such as

biodiversity in general and local species and

seriously. To achieve this, we undertake

overburden, tailings and barren rock. The

their habitats in particular. Our assets are not

environmental activities and rehabilitation

2021 HIGHLIGHTS

Group uses the best available practices of

located in specially protected natural areas

projects. In 2022, the plan is to assess

waste management methods in this area to

or areas of high biodiversity value.

disturbed land, update the financial model

make rational use of natural resources and

and evaluate the economic feasibility of

71,591

12.4

reduce waste generation.

The Group aims to ensure a rational and

reclaiming land.

Employees at the end of the year

Employee turnover rate

prudent approach to conserving biodiversity.

The total amount of waste and by-products

We are also actively engaging with local

generated at our enterprises in 2021

communities on biodiversity issues.

Restoring aquatic biodiversity

equalled 195.7 million tonnes, including 8.6

million of non-mining waste.

In 2022, we plan to implement several

EVRAZ regularly releases various species

measures, in accordance with the

of fish into water bodies to compensate

EVRAZ strives to increase the amount of

Biodiversity Roadmap:

for its potential impact on bioresources.

recycled and reused waste in accordance

•Introduce biodiversity screening and

Our approach to conserving biodiversity

Our approach

Recruitment policy and

Breakdown of employees by age,

31 December 2021, %

with its environmental strategy. In 2021, 66.8

risk assessment procedures, as well as

involves a commitment to the maintaining

remuneration system

million tonnes of waste (including mining

develop and monitor biodiversity-related

the quality of aquatic ecosystems and

At EVRAZ, people are our key asset. As

waste) were recycled. Non-hazardous

indicators.

existing biodiversity. In 2021, the Group

such, we consider it vital to provide a

5.7

0.4

13.4

mining waste is used for land restoration

took part in a programme to research

positive and healthy working environment

Recruitment policy

•Identify the main directions of

and the construction of dams and roads. In

biodiversity conservation and measures

taimen fish in the Khabarovsk region.

where our employees have the opportunity

and attracting people

the 2021, 57.8 million tonnes of waste of this

to reduce risks to biodiversity.

to realise their professional potential. Our

20.3

kind were reused, accounting for 86.6% of

programmes and initiatives are based on

Our goal is to ensure that our hiring

•Develop and adopt a policy/standards on

the total amount of waste reused.

biodiversity conservation.

internal principles focusing on investing in

process is consistent with the principles

people and maintaining health and safety.

of equal opportunity and is entirely non-

Through implementing the roadmap, we

All of our human resources (HR) activities

discriminatory. EVRAZ adheres to the

29.9

Mining and non-mining waste recycling

expect to obtain an assessment of the

are governed by our Supplier Code of

laws of the countries in which it operates,

and reuse rate, 2019-21, %

current impact on biodiversity, determine

Conduct, Diversity and Inclusion Policy,

including regulations governing labour

the goals on biodiversity conservation, and

Human Rights Policy and other internal

protection, minimum wage levels, annual

30.9

2021

find ways and actions to achieve them.

documents.

paid and parental leave, and collective

105.0

30.3

28.5

bargaining agreements.

2020

102.7

In 2021, the Group’s HR policy focused on

38.0

<20

2019

the following areas:

105.2

20-29

CASE STUDY

Number of employees, 31 December

•Improving employee recruitment

Mining

30-39

2021, thousand people

processes.

Non-mining

40-49

•

Implementing corporate training

50-59

programmes.

>60

PROTECTING BIODIVERSITY

•Making remuneration more transparent

EVRAZ considers the safety of tailings

by implementing a targeted pay system.

71,591

storage facilities (TSFs) a priority, as their

2021

In 2021, the Group contributed to landscaping and

•Implementing initiatives for attracting

71,591

use poses significant environmental risks.

and retaining employees.

2020

69,619

biodiversity support through several measures.

The Group owns three metallurgical TSFs

2019

71,215

•Automating processes and integrating IT

located at EVRAZ ZSMK and EVRAZ KGOK.

•EVRAZ KGOK planted 750,000 conifers in the forests

systems.

of Sverdlovsk region.

The dam safety management system

•Regularly collecting feedback through

ensures compliance with the relevant

•EVRAZ released more than 375,000 fish fry into the

various communication channels,

rivers of the Ob-Irtysh basin in Siberia.

legislation and covers all stages of TSF

including engagement survey.

service life: design, construction, operation

and closure. Safety is continually monitored,

and our TSFs are regularly reviewed by

both internal and external specialists and

regulators.

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To retain its reputation as one of the

Staff Remuneration and Motivation - the

Our managerial and operational functions

In addition, we resumed training courses

an employee engagement survey in 2021.

The Group took all of the necessary

best employers in the regions where it

document describing remuneration systems

are responsible for the implementing

for newcomers after a break related to

The share of employees who took part in

precautionary measures, such as regularly

operates, the Group participates in various

concerning the annual review.

the Human Rights Policy and report

COVID-19. Welcome training helps new

the engagement survey was 70%.

sanitising premises, workplaces and

employer contests and hackathons each

to the Board of Directors. The policy’s

employees to familiarise themselves

vehicles, and monitoring the health status

year to demonstrate social responsibility

effectiveness and efficiency is monitored

with the Group and cultivates a sense of

In addition, EVRAZ developed a site called

of employees and contractors. In addition,

and responsiveness. In addition, we have

and reviewed regularly.

belonging.

Idea Factory 2.0, where employees can

in January 2021, we opened a department

numerous student programmes. In the

Human rights and diversity

report any work issues online and share

for treating employees with COVID-19 at the

reporting period, over 2495 students

EVRAZ is committed to diversity, equality

ideas about improving production processes.

Vladislav Tetyukhin Ural Clinical Treatment

completed an internship at EVRAZ, and

EVRAZ complies with international human

and inclusion. Our Diversity and Inclusion

Sustainable development

After pilot testing was conducted, the site

and Rehabilitation Centre.

some are now working at the Group.

rights laws, policies and standards. Its Human

Policy expresses zero tolerance for any

training for employees

was rolled out to all entities.

Rights Policy aligns with the United Nations

kind of discrimination. When selecting

EVRAZ makes every effort to prevent the

EVRAZ is constantly improving its employee

Guiding Principles on Business and Human

a candidate, we consider only their

At present, sustainable development training

To monitor and address any alleged

spread of the disease among employees and

recruitment processes, and in 2021 we

Rights and strictly prohibits any form of

professional skills and qualities. We believe

is implemented under the New Leaders of

violations or concerns at entities, the Group

contractors.

developed and introduced the Staff

slavery (known as modern slavery), such as

that building a diverse environment is

EVRAZ (NLE) programme. In 2021, delivery

operates an anonymous 24/7 hotline.

Attraction and Recruitment Standard,

child labour and forced labour, across all

vital for driving inclusion and improving

was mostly online, and the practice was

Employees and other stakeholders can use

aimed at simplifying and stripping away the

EVRAZ subsidiaries and their suppliers. In

productivity across the business.

introduced of inviting representatives of

it to receive answers to questions, make

bureaucracy from the hiring processes.

addition, we take the process of contracting

companies that provide environmental

suggestions and report alleged violations

Interaction with trade unions

with partners seriously. The Group policies

technologies. The sessions considered issues

regarding corruption, bribery, human rights,

require sections covering the prevention

including legislative changes, environmental

alcohol or drug intoxication and so on.

The Group signs collective bargaining

Overall and voluntary employee

of corruption and human trafficking to be

Learning and development

strategy, environmental and climate risks,

agreements with trade unions with a view

turnover by segment, 2021, %

included in all contracts concluded with

and environmental technologies (gas

In 2021, we received 1197 requests through

to building long-term mutually beneficial

partners.

The Group has a multi-level system of

cleaning, water).

the hotline. The most frequent issues are

arrangements. In 2021, such agreements

Steel

7.3

HR management aimed at enhancing

related to labour relations, including the

covered 87% of the workforce and Tariff

segment

11.1

Coal

9.9

We perform due diligence throughout the

the professional and personal skills of

quality of labour relations (879) and health

Agreements. A large proportion of workers

segment

13.5

lifecycle of our operations and regularly

its people and fostering collaboration

and safety (165).

received benefits as members of trade unions.

Steel, North

14.7

America

identify actual and potential risks regarding

with universities and other educational

Employee interaction

segment

18.5

human rights violations, including those

institutions.

The process of implementing a target pay

12.6

Other

16.6

related to recruitment and working

Listening to feedback and maintaining

system includes negotiations with trade

conditions. We are also monitored by

In 2021, EVRAZ continued its Top 300

transparent communication is vital for

COVID-19: protecting our

unions regarding all changes to collective

Voluntary

trade unions and representatives from

and Top 1,000 corporate management

preserving a positive working climate

people

bargaining agreements. In the year, all such

Overall

Russia's Presidential Council for Civil

programmes, which focus on developing

and developing the business successfully.

changes were in compliance with the law and

Society and Human Rights and other public

managerial and leadership skills and

To identify and address issues, we aim

COVID-19 remained the overriding concern

principles of social partnership. As a result,

In 2021, staff turnover increased by 2.7%

organisations with the purpose of reducing

competencies. In the year, the Top 3,000

to interact with our employees regularly

in 2021, and we undertook extensive

there were no conflicts or collective labour

compared with 2020. Despite this, EVRAZ

the risks of legal violations. In addition, we

programme was launched at our Siberia

through various communication channels,

measures to combat it. The main priority

disputes at Group facilities in Russia.

managed to achieve its recruitment targets

remedy potential risks by using grievance

and Urals divisions as an extension of

such as the corporate intranet and website,

for us was the health and wellbeing of our

in the reporting period.

mechanisms for affected stakeholders such as

existing ones. Employees in more junior

corporate publications, social networks, web

employees and contractors, and we strictly

a 24/7 hotline and two separate confidential

positions were coached by graduates of the

conferences and hotlines. For example, we

followed the recommendations of the World

whistleblowing lines in Russia, Kazakhstan

Top 300 and Top 1,000 programmes.

organised a Vaccination Awareness Day and

Health Organization throughout the year.

and North America.

Remuneration system

Diversity of employees and senior managers by gender, 2021,¹ %

EVRAZ endeavours to reward its employees

Employees

Senior management

above and beyond the minimum wage

requirements. We are also continuously

improving our target pay system to ensure

clarity and transparency. In 2021, it covered

most of our enterprises except for coal

assets (EVRAZ NTMK and EVRAZ ZSMK).

We strive to implement a set of rules and

71,210

376

principles for the process of remuneration

people

and establish fixed and variable pay

depending on the level of performance

across all Group entities. In 2021, we

introduced an annual review of the

remuneration system for each employee

specifically in terms of the target pay

Men

system and updated the Regulation on

Women

1. For 5 employees gender is stated as “not declared”.

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Community engagement

to help orphans and taught them crucial

•providing medical equipment (five

COMMUNITY RELATIONS

ventilators, 20 patient monitors,

skills such as how to run a household, cook

19 functional beds, 160 thousand units of

The Group regularly engages in regional

and sew.

PPE) and X-ray diagnostic and portable

and federal conferences and initiatives,

complexes for hospitals in Nizhny Tagil.

as well as partners with and organises

numerous cultural and social activities,

2021 HIGHLIGHTS

EVRAZ encourages employees, their

including environmental protection and

Other new projects

families and individuals of nearby

sport projects.

communities to engage in sport as part of a

US$35

US$217

healthy lifestyle. We invest in improvements

In 2021, EVRAZ took part in various

Focusing on environment in

earmarked for social and social

awarded to winning projects of the annual “EVRAZ:

to sport infrastructure, support amateur and

regional events. These included the

communications

infrastructure maintenance expenses

City of Friends - City of Ideas” grant contest

professional teams and sponsor federal and

sixth cross-divisional risk management

regional sport activities.

symposium for risk managers from

In 2021, EVRAZ together with Forbes,

the Urals, Siberia and Coal divisions;

launched the "Industry of the Future"

In 2021, activities under the EVRAZ for

the Minute of Techno Flame contest

initiative, showcasing our cutting-

Sports programme included:

of innovative ideas for students and

edge technologies and commitment to

supporting the seventh High-Five!

undergraduates from top universities

protecting the ecosystems in Siberia and

•

Approach

Our major priorities include supporting

improve their lives: for example, through

corporate race across the Urals and

in the Urals; and the 59th EVRAZ “Your

the Urals.

families in need, orphanages and veterans;

rehabilitation programmes for children

Siberia, which attracted around 2,000

Challenge” Scientific and Technical

EVRAZ aims to continuously contribute

financing educational, sport and cultural

with cerebral palsy.

adults and 700 children.

Conference, to name but a few.

to the prosperity of its local communities.

projects; and subsidising healthcare

Becoming a more valued

We stimulate economic growth in our

activities and environmental protection

In 2021, key activities supported by the

One major element of the Group’s

We also participated in the following

employer

regions of operation by employing people

programmes.

EVRAZ for Kids programme included:

contribution to local communities is the

events at the federal level:

responsibly, contributing significant tax

•supporting the Live baby outreach

annual “EVRAZ: City of Friends - City of

•The Innoprom 2021 international expo,

EVRAZ has risen in the rankings of

revenue and investing in social projects.

rehabilitation project in the Sverdlovsk

Ideas” grant contest. It aims to provide

which took place in Yekaterinburg in

top employers. In 2021, in a rating by

The Group maintains numerous productive

region, which organises rehabilitation

activists with the resources and skills to

July 2021.

HeadHunter, we were among Russia's top

and stable relationships, both with local

Key Projects of 2021

classes at home;

implement various meaningful social and

50 employers, while in an evaluation of

•The WorldSkills Hi-Tech Championship

and federal authorities and with other

environmental projects, such as:

2021.

Russia's best employers by Forbes and

•buying modern equipment for adaptive

stakeholders, including non-governmental

physical education, including the

•the “Health at Home” programme, under

•The RAISE RANEPA All-Russian

KPMG, we placed in the Gold category.

organisations, the media, and business

Charity and sponsorship

Stabilomer complex for children with

which elderly and disabled residents of

accelerator for social initiatives.

Notably, that rating took into account our

and cultural communities. We believe

projects

disabilities in Nizhny Tagil;

Novokuznetsk's Central district receive

ESG policies.

•The CompTech 2021 winter school.

that the success of our local communities

physiotherapy and rehabilitation at their

•sponsoring the 18th All-Russian Open

•The St Petersburg International

has an enormous impact on our business

The Group has several major programmes

Field Olympiad for Young Geologists,

homes.

Economic Forum.

sustainability prospects. To this end, we

that invest in local communities, including

which was held online for teams

•the "Ecology of Industrial Heritage With

•The Community Forum organised by

Creating a single corporate

make every effort to contribute to the

EVRAZ for Kids, EVRAZ for Cities and

from Russia, Kazakhstan, Kyrgyzstan,

Good Hands and Modern Technology"

the Russian Civic Chamber.

media ecosystem

growth and wellbeing of the cities and

EVRAZ for Sports. In addition, we promote

Tajikistan, Uzbekistan and Belarus.

grant project, which volunteers will

towns where we operate, guided by the

various other initiatives, such as the

implement at the Old Demidov

The Group’s unified online and offline

fundamental principles of corporate social

EVRAZ “City of Friends - City of Ideas”

The Group’s investments have significantly

Plant eco-industrial techno-park at

Volunteering

media platform continued to grow in 2021.

responsibility. In 2021, EVRAZ earmarked

grant contest, as well as regular volunteer

improved urban infrastructure in the cities

Gornozavodskoy Ural in Nizhny Tagil.

The main events included:

US$35 million for social and social

activities within the EVRAZ volunteers

and towns where it operates. We have

The EVRAZ volunteers project has

•Publishing “EVRAZ News” electronically,

infrastructure maintenance expenses.

project.

supported the development of medical,

The contest has been running since

established a positive tradition of assisting

which allows employees to personalise

educational and cultural infrastructures

2017 and takes place in Novokuznetsk,

vulnerable individuals and social entities,

their information stream.

The Group’s Sponsorship and Charity

In addition, EVRAZ supports various

in our local communities, leading to a

Mezhdurechensk, Nizhny Tagil and

as well as organising sport and cultural

•Updating the EVRAZ corporate app for

Policy governs all aspects of its sponsorship

federal youth programmes by

noticeable improvement in the quality of

Kachkanar, as well as Tashtagol. In 2021, 197

activities in local communities. It operates

employees by creating a new platform

and charity efforts. Guided by this, we

collaborating with academic institutions,

life there.

applications were submitted in Siberia and

and develops without any special policies

and adding functionality.

strive to support low-income or physically

purchasing essential school supplies and

165 in the Urals. A total of56 projects were

and on an entirely voluntary basis.

•Launching a Group Telegram channel,

challenged individuals. All applications

sports equipment, awarding scholarships,

In 2021 activities as part of the EVRAZ for

chosen, and EVRAZ awarded certificates to

which helped to promote 2,000 official

are meticulously reviewed in terms of

providing vocational guidance for

Cities programme included:

the winners amounting to US$217 thousand.

For almost 70 years, the Group’s employees

publications, increasing coverage to

legitimacy and transparency of purpose,

students, offering training under the

•Planting 300 trees in Novokuznetsk's

Notably, 104,000 people voted for the

have supported two orphanages: No. 95

around 28 million subscribers, up four-

amount requested and reputation of the

WorldSkills methodology, and organising

Zavodskoi and Central districts as

projects and 140,000 people visited the

and Island of Hope. In 2021, they continued

fold from 2020.

potential counterparty.

study sessions for students and internships

part of the region's 300th-anniversary

“City of Friends - City of Ideas” website.

for graduates. Current projects include

celebrations.

In addition, during the project selection

providing support to children with special

•Allocating US$3.1 million for the

process, the Group’s charity funds in the

needs and those in orphanages to

construction of the Bessonenko City

Urals and Siberia take into account the

Infectious Diseases Clinic No. 8 in

EVRAZ Social Investments Guidelines.

Novokuznetsk.

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KEY GROUP POLICIES TO REGULATE ANTI-CORRUPTION

ANTI-CORRUPTION AND ANTI-BRIBERY

AND ANTI-MONEY LAUNDERING EFFORTS

CODE OF CONDUCT

Policies and regulations

HOTLINE POLICY

AND WHISTLE-BLOWING

OUR APPROACH

PROCEDURES

In 2021, EVRAZ reviewed two key documents

Anti-corruption policy,

Rules on securities dealings

to complete its full set of policies, which

EVRAZ has always considered corruption and bribery as a major obstacle

Anti-corruption Compliance System

define the norms of ethical and responsible

to economic and social development around the world. Principle 10

behaviour for employees in particular

of the UN Global Compact states that “Businesses should work against

circumstances. Updated in the previous two

corruption in all its forms, including extortion and bribery”. In following it,

years, the policies were now joined by those

EVRAZ strictly complies with the Law of the Russian Federation No. 273

Anti-

Sponsorship

Gifts

Candidates’

Conflict

Contractors/

on the Anti-corruption Control System

“On Preventing Corruption”, the UK Bribery Act, the US Foreign Corrupt

corruption

and charity

and business

background

of interest

suppliers due

Practices Act and other relevant local legal equivalents. EVRAZ considers

and on Business Gifts and Entertainment.

training

policy

entertainment

and criminal

policy

diligence

consistent anti-corruption efforts an important integral part of its strategy,

These further strengthened the position

policy

record check

check

sees it as a priority and pays full attention to the development of anti-

of compliance and defined roles of various

corruption compliance.

levels of management in mitigating risks

The Group has a developed system of well documented procedures

of corruption, bribery and fraud. All relevant

that define the day-to-day routines of managers appointed to monitor

policies are available on the corporate

ANTI-CORRUPTION RISK MANAGEMENT CYCLE

compliance with applicable anti-corruption laws. Compliance specialists

intranet and employees bear personal

scrutinise all tender procedures, check potential and existing business

responsibility for full compliance with them.

partners, vet prospective new candidates and ensure that the principles

Determine or update list of risks for

Inform senior vice president for business

set forth in the Anti-corruption Policy, Code of Conduct and other relevant

all business processes

support and interregional relations

All anti-corruption policies and procedures

internal regulations are followed conscientiously and fully. EVRAZ has been

Oct

Mar-Oct

are integral throughout the Group. Together

making consistent effort to develop its own platform for learning, dialogue

Input from legal, internal audit

and action to combat bribery and all unethical practices. The Group

and security departments

with online training courses, they encourage

demonstrates to its employees, customers and suppliers that it has zero

all employees to seek guidance from

tolerance of bribery and corruption, including actions that impede business

Prepare comprehensive list of risks

Monitor how risks are being mitigated

compliance managers if there are questions

growth, escalate costs, undermine fair competition, pose serious legal

Oct-Nov

Mar-Oct

about the expected course of action

and reputational risks, and distort development priorities.

Risk owners

in difficult situations. EVRAZ urges everyone

Compliance team

to voice concerns about any known or

Discuss results with risk owners

Check events for signs of risk

and top managers

suspected violations.

Nov-Dec

Input from internal audit

Top managers

Today, managers responsible for monitoring

compliance with applicable anti-

Compliance officer presents

corruption laws work at every asset. They

Analyse and draft risk reports

reports to the Audit Committee

Dec-Jan

ensure that all possible non-compliance

with policies receive proper attention

Employees have access to a summary

Risk analysis

immediately; monitor charity payments

of relevant anti-corruption policies,

and hospitality spending; and act

as well as links to the full texts of top-

At the end of each calendar year,

As the Group’s business processes are

In January 2022, the compliance managers

on whistleblower allegations of possible

level documents on the corporate intranet.

compliance managers analyse potential

stable and consistent from year to year,

involved in the abovementioned processes

no significant violations of anti-corruption

violations. They then present their findings

Compliance managers discuss the essence

anti-corruption risks across all assets.

compliance managers typically examine the

assessed the risks based on their own

statutes or cases of non-compliance with

and recommendations to local top

of the adopted rules and procedures

For this purpose, they consider every

same following processes for signs of risk:

statistics from checking tenders, approving

EVRAZ policies. Nor did the risk register

managers, the Group’s compliance manager

with management, employees and third

business process and redefine key risk areas

•Purchases of goods and services.

contracts, monitoring purchases, conducting

change significantly from the previous year.

and specialists reporting to the vice

parties. Newcomers are obliged to familiarise

as necessary. Each area is then evaluated

inventory checks and so on. The compliance

At the same time, one particular situation,

•Payments.

president for compliance and asset

themselves with the Code of Conduct

to ensure that the existing controls

managers routinely meet with the managers

where compliance was actively involved,

•Sales of goods, works and services.

protection. The latter reviews investigation

and the Anti-corruption Policy on their

and procedures mitigate the associated

responsible for each asset to inform them of

showed that however much attention is

•Business gifts, hospitality, entertainment

results and liaises with senior management

first day of work. They are also briefed

risks effectively.

and travel expenses.

known or newly revealed risks and threats,

paid to areas prone to risk, there is always a

as necessary.

about other relevant internal documents

•Charity and sponsorship.

as well as to recommend further actions.

possibility of violations.

and procedures that pertain to the Group’s

The Group investigates carefully all signals

The compliance managers then monitor

•Conflicts of interests.

The Group’s compliance manager

anti-corruption efforts.

suggesting potential violations of applicable

any corrective measures undertaken to

In March 2021, the company conducted an

•Interaction with government authorities.

coordinates anti-corruption compliance

law and internal anti-corruption policies.

mitigate the risks discussed. If the necessary

annual Conflict of Interest Survey in which

•Vetting contractors or customers.

work on sites, develops EVRAZ’ own training

follow-up is lacking or inadequate, the

managerial and other key employees must

•Contract approval.

system, maintains the corresponding risk

matter is raised to the vice president for

disclose any circumstances that may pose

EVRAZ knows the risks and prepares for

compliance and asset protection for action.

a possible conflict of interest. After every

progress of all ongoing efforts to the Audit

them, striving to recognise opportunities to

such survey the compliance and asset

Committee, always striving for continuous

improve business processes.

In February 2022, the Group compliance

protection team investigates any positive

improvement.

manager presented the analysis along with

responses to analyse and ensure no conflict

the updated anti-corruption compliance risk

exists.

Meet EVRAZ

EVRAZ in figures

STRATEGIC REPORT

Corporate governance

Financial statements

Additional information

ANNUAL REPORT & ACCOUNTS 2021

Key developments in 2021

several investigations. In 2021, there were

Today, almost 3,000 managers from

five cases of evidently fraudulent intent:

contractor and would-be partner

SUSTAINABLE

In 2021, the Group’s compliance function

lobbying for money and/or kickbacks.

companies passed this special course,

initiated one investigation into signs

The employees involved were dismissed.

which also became an important condition

of corrupt practices involving a state

Vendors were either banned or they

for participating in EVRAZ tenders. This

R&D

official. It was launched after it became

agreed to compensate company losses.

work will continue in 2022.

known that an employee of Raspadskaya

The compliance function considers

Coal Company LLC (“RCC”) had been

ongoing preventive efforts, various existing

The key learning objectives of all internal

allegedly offering illegal monetisable

controls, the constant tone from the top

courses remain to:

services to a state official who was serving

and employees’ adherence to the anti-

In 2021, EVRAZ R&D centres stepped up

steel scrap as a raw material, EVRAZ

EVRAZ can improve production parameters

•Confirm the Group’s position and ensure

with the Russian Federal Environmental

corruption requirements as fully adequate

full compliance with applicable anti-

work to support the Group’s activities by

produces rails with a substantially lower

more quickly, thereby accelerating product

and Industrial Service. The said official

for the existing risks.

corruption laws.

utilising their global network of experts to

CO2 footprint compared with traditional

development.

responsible for overseeing coalmines

create innovative steel products that better

steelmaking at integrated mills, as this

•Explain existing controls to manage the

operations is suspected of soliciting and

In 2021, the Group continued the transition

risk of bribery and corruption.

benefit customers.

requires less steel to extend product life

Processes with a lower carbon footprint

accepting bribes from representatives of

to its own anti-corruption courses run

under harsh conditions and enhance

and accelerated deployment of product

•Raise awareness about the damaging

various coal companies in the Kemerovo

from its internal Learning Management

effects of bribery and corruption.

Today, simply producing better products

material performance.

innovations contribute to greater

region. The internal investigation

System. All employees are being gradually

is not enough. To meet customer needs,

sustainability.

•Draw attention to red flags and warnings

revealed that one RCC director-level

signed up for EVRAZ training modules to

about possible illegal payments or other

the entire product life cycle needs to be

Product development using virtual design

employee decided to establish a personal

refresh knowledge of the Anti-corruption

corrupt activities.

taken into account. For example, using the

has become increasingly important. Using

relationship with the suspect. For this, the

Policy and the Code of Conduct. The

electric arc furnace process with ferrous

data-driven AI models and digital twins,

employee, who had the necessary level

new approach is leading to the further

of responsibility, provided to the public

development of a full-scale internal training

EVRAZ R&D centres

official the use of a company vehicle and

programme on anti-corruption. In 2021,

a fuel card, both of which were paid for

over 2,200 managers throughout the

by RCC. This lasted for over two years and

Group completed online anti-corruption

amounted to a benefit of approximately

and/or ethics training. In addition,

RUB1 million (equivalent to approximately

vendors continued to learn the anti-

£10,150). RCC (and employees other than

corruption principles of EVRAZ while taking

For additional information, see the EVRAZ

the said director) had been unaware of the

a specific standalone course launched

Sustainability Report for 2021, which is to be

illegal arrangement until the Russian police

in December 2020.

published in May 2022

started an investigation into extortion and

other corrupt practices by the state official.

The RCC employee admitted his guilt and

EVRAZ

was demoted for violating internal key

NTMK

Tula

EVRAZ

policies, but remains at RCC. He is fully

ZSMK

cooperating with the police and has been

OUTLOOK FOR 2022

Moscow

questioned, but as a witness. An internal

EVRAZ

Office

East Metals

North America

compliance check conducted immediately

AG, Switzerland

In 2022, more relevant policies (for example, on anti-corruption training

after the situation showed that there are

and on compliance investigations) will be updated to reflect existing and

no such or similar arrangements anywhere

best practice, as well as the changes implemented within the compliance

else in EVRAZ. Managers of RCC were all

system since its launch. The policies related to the functioning of

required to take an online course on the

the Group hotline and on the rules and principles of dealing with

government officials are also set to be renewed.

Anti-corruption Policy. Vice presidents

once again held extensive discussions with

The lesson learned at RCC will now result in regular checks of how

managers in different Group companies

Group property is used. Such a practice will become a routine task of

about ethical principles and zero tolerance

compliance managers across EVRAZ.

to corruption and bribery. Together with

The Group compliance function plans to develop new training modules

compliance managers, they explained the

and tests to make anti-corruption courses more specific and relevant to

risks and the personal responsibility one

life at EVRAZ. In addition, compliance is set to extend its educational

reach and is working on a series of publications for the internal

would face should a violation of EVRAZ’

electronic newspaper. These articles will refer to various aspects of anti-

strict requirements occur.

corruption activity, provide more guidance on correct behaviour in

challenging situations and help to develop a Group-wide platform for

In addition, compliance managers’ own

learning and dialogue.

leads regarding potential fraudulent

schemes among unscrupulous managers

and suppliers/providers also led to

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