UC RUSAL Sustainability report 2016


Stakeholder relations

Interaction with stakeholders

Management approach

The Company seeks to accommodate the expectations of a wide range of stakeholders, including individuals or entities influencing, or directly or indirectly affected by, the Company's activity. The key stakeholder groups for UC RUSAL are: G4-24

          shareholders and investors;

          customers and suppliers;

          employees and trade unions;

          federal and regional authorities;

          local communities.

The main documents regulating the relationship of UC RUSAL and the stakeholders are the Code of Ethics and the Business Partner Code. The Company maintains effective channels of communication that meet the needs of stakeholders. Please see the table below on the methods of interaction applied on a continuous basis and the defined areas of interest. G4-25

Participation in industry organisations and international initiatives

Being one of the largest producers of aluminium in the world, UC RUSAL takes part in a number of international organisations, including: G4-16

          International Aluminium Institute;

          European Aluminium Association;

          China Nonferrous Metals Industry Association (CNIA);

          Russian National Committee for the United Nations Environment Programme (UNEPCOM).

The Company also participates in the Russian Union of Industrialists and Entrepreneurs.

In addition, the Company participates in international projects and initiatives, including the environmental ones, which include:G4-15

          UN Global Compact;

          Initiatives for responsible planning and management of aluminium;

          CDP (Carbon Disclosure Project).

In 2015, UC RUSAL became one of the initiators of a unique Russian initiative, the Climate Partnership of Russia. At the end of 2016, 21 Russian companies were members of the partnership.

The aim of the partnership is to encourage Russian companies to move towards more environmentally friendly ways of production, to work towards the introduction of balanced support measures that will ensure the cost-effectiveness of investments in clean technologies. G4-14

The content of the initiative is in line with the objectives of the climate agreement reached at the XXI session of the Conference of the Parties to the United Nations Framework Convention on Climate Change and Sustainable Development Goals – 2030 (for more details please see http://climatepartners.ru)

A Memorandum of Intent defining the objectives of creation and the principles of operation of the Partnership, as well as the Action Plan, were developed and adopted in 2016.

In April, the Partnership became the venue for a round table on the theme 'Low-Carbon Future: First steps and Perspective.' It was attended by the representatives of state, major business, academic community and international organisations; the participants discussed effective mechanisms for reducing greenhouse gas emissions and the possibility of establishing a platform to record greenhouse gas emissions at global level. And in September together with the Ministry of Economic Development of the Russian Federation another round table entitled 'How did the world come to the concept of 'carbon price'?' was held.

In June, the representatives of the Partnership presented their position at the meeting of the Supreme Environmental Council of the State Duma of the Russian Federation on 'Legal regulation of greenhouse gas emissions in the Russian Federation' and in November at the Clean Energy 2016" conference.

In July, Partnership representatives participated in the 360 Carbon Forum in Marrakesh, a major work event, which represents a stage of preparation for the 22nd session of the United Nations Framework Convention on Climate Change.

In August, the expert seminar 'Sustainable Business Development in Russia: cooperation directions and formats' was held at the Moscow School of Management SKOLKOVO, which included students from the school, among others.

Industry development

In December 2015, the official opening of the Aluminium Association (combination of producers, suppliers and consumers of aluminium) took place. The Association supervises more than 30 large-scale projects aimed at expanding the consumption of aluminium in Russia, increasing the share of domestic aluminium products in the domestic market and increasing the export potential of Russian aluminium companies. A programme to increase the demand for aluminium has been developed, which will increase GDP by 1% and create more than 20,000 new jobs. UC RUSAL became one of the initiators and participants of the Association and was joined by more than 60 companies and more than 20 partners – federal and regional authorities, regulators, all-Russia business and industry associations.

Regional development

In late 2015, the Company presented a project for the creation of a special economic zone in the Krasnoyarsk Territory for the metallurgical plants of Krasnoyarsk and Divnogorsk. Project objectives: the social and economic development of the Krasnoyarsk Territory, the development of the processing industry and the production of high value-added products, the improvement of the competitiveness of the aluminium industry in Russia, the creation of favourable conditions for new investments and production development, the reduction of investor risks, the creation of new jobs and the increase of exports. In June 2016, at the St. Petersburg Economic Forum the administration of the Krasnoyarsk Territory, UC RUSAL and the Aluminium Association signed a protocol of intent. Further, the parameters of the project of the special economic zone in the Krasnoyarsk Territory has been developed, and iit was named 'Krasnoyarsk Technology Valley'. The possibility of implementation of such projects in the Volgograd region and the Republic of Khakassia is being assessed.

Participation in forums

Economic forums provide opportunities for interaction with business partners, and serve as sites for the discussion of issues of interest to the business community and public authorities. Every year, UC RUSAL participates in a number of major regional and federal events that discuss issues that have a direct impact on the sustainable development prospects of the country and the regions.

In February 2016, the XIII Krasnoyarsk Economic Forum became the site for the discussion of the main theme 'Russia: Strategy-2030', in the discussion Oleg Deripaska, the President of UC RUSAL, expressed his views on the prospects and current development challenges of the country.

In June 2016, at the XX Saint Petersburg International Economic Forum, Oleg Deripaska participated in two panel sessions: 'Combating climate change — investing in the future' and 'The impact of epidemics on the economy. The role of public-private partnerships in the fight against the Ebola epidemic. Experience and outlook'.

Interaction on environmental issues

UC RUSAL has extensive experience in interacting with stakeholders of environmental issues. As mentioned above, the Company participates in a number of international initiatives.

As part of its cooperation with the UN Development Programme, UC RUSAL has identified quantitative targets for the reduction of greenhouse gas emissions. The Company also participates in the work of the International Aluminium Institute, including the reduction of greenhouse gas emissions and the rational use of energy.

UC RUSAL is the member of the Russian National Committee for the United Nations Environment Programme (UNEPCOM). UNEPCOM is a non-profit partnership of individuals and legal entities aimed at supporting the efforts of the civil society and employers to preserve the environment, improve the health of the population and sustainable development of the Russian Federation, as well as to contribute to the compliance with Russia's international obligations to the United Nations Environment Programme and other international organisations dealing with these issues. The Company intends to continue to work to improve its performance to meet the best international standards.

The Company continues to interact with the all-Russian environmental public movement Green Russia as part of the environmental cooperation agreement signed in 2014. The agreement is aimed at the formulation and implementation of environmental decisions, the enjoyment of citizens' rights to a secure environment, and the preservation of nature for future generations.

The information about the environmental programmes of the Company and the production facilities is regularly made available to the public as well as to regional authorities and local governments. Please see more details in the Environment Protection Section.

Organisation of interaction with stakeholders

Stakeholders

Topics of Interest G4-27

Interaction methods G4-26

Shareholders and investors

 

Performance

Strategic business prospects

Prudent risk management

Quality of corporate governance

    Presentations and conference calls by Company leadership to the investment community (at least once a quarter)

    Publication on the corporate internet site of AGM agenda items (annually)

    Meetings of Company leadership with analysts and investors, including through road show and industry conferences (at least 1-2 times per year)

    Regular meetings with minority shareholders

    Annual general meeting of shareholders

  Financial and non-financial reporting (quarterly, annually)

Customers and suppliers

Quality and reliability of product deliveries

Access to bids and procurement, clarity and transparency of procurement procedures

Nature of the business relationship

Management of the aspects of sustainable development

    Information on tenders and procurement plans (as required)

    Annual consumer satisfaction survey (annually)

    Meetings with customers, including industry conferences, technical seminars and mutual visits of production facilities (systematically, as required)

    Supplier certification and development system (continuously)

    Claims system: weekly review of customer claims (continuously)

    Procedures for monitoring compliance with contracts (continuously)

  Respond to customer inquiries about the Company's sustainable development activities (upon receipt)

Employees and labour
 unions

Remuneration and social guarantees

Working conditions

Career development opportunities

Respect for workers' rights

    Reports on the performance of the collective bargain agreement and the agreements in the area of work safety (annually)

    Collective bargain agreement (once every 3 years)

    Corporate mass media: magazine, social network (monthly)

    Regular meetings with leadership and management (at least 1-2 times per year)

    Management conferences (periodic)

    Consideration of communications on the hotline (continuously)

  Participation in the reputation study (annually)

Federal 
and regional authorities

Payment of tax

Regulatory compliance

Contribution to the development of the regions of operation

Creation/preservation of jobs

    Public hearings and consultations in the modernisation and expansion of existing industries and construction of new facilities (as the projects are ready)

    Dialogue with State authorities on legislative and regulatory issues (continuously)

  Joint projects (as required)

Local communities:

town residents, non-profit organizations, small business, professional and creative organisations, etc.

Development of the regions of operation

Creation/preservation of jobs

State of the environment in the locations of production facilities

Grant support for initiatives

    Public hearings and consultations in the modernisation and expansion of existing industries and construction of new facilities (as projects are ready)

  Social and economic partnership agreements are signed with a number of regional goverments and municuipalities. The duration of agreements differs in various regions of operation from one year to 3 years with annual renewal.