Approaches to Climate Change Management
Nornickel is developing a climate change management system and improving its management structure by allocating responsibilities and describing respective functional roles in the Company's corporate documents.
Climate Change Policy
Since 2021, the Company has in place a Climate Change PolicyClimate Change Policy, setting out the basic principles, commitments and initiatives related to the adaptation to climate change for all business units of the Group.
The Climate Change Policy forms the foundation of the corporate sustainability programme, which targets energy efficiency and reliance on renewable energy and green technologies, including carbon capture, utilisation and storage as well as energy storage technologies.
The Company has the following key obligations under the Policy
Develop and regularly update its climate change strategyPart of the Environmental and Climate Change Strategy..
Identify and measure the contribution of the Company's products to the low-carbon economy in the process of organisational life-cycle assessment.
Аttract and effectively allocate capital to implement the Company’s climate change strategy.
Organise regular audits of climate-related risk management and publicly disclosed climate change indicators.
Implement management systems and risk management tools to respond to climate change and have them integrated into the corporate risk management framework in line with the TCFD requirements.
Review commercially sensible opportunities to reduce carbon footprint, including the use of assessment tools for responsible value chain management and the development of green technology partnerships to accelerate the decarbonisation of the Company's operations.
Promote advance practices and innovations.
Expand engagement and partnership with stakeholders on climate change agenda.
Apply GHG emission offsetting mechanisms, including nature-based solutions (including conservation and restoration of forests and other ecosystems that absorb carbon dioxide) where the application of these solutions appears to be the most feasible and commercially viable solution.
Ensure transparent and regular disclosure of GHG emission targets and other relevant indicators and aspects in accordance with the Russian laws and best global standards.
Adopt key performance indicators (KPIs) related to climate change goals for managers and employees of the Company.
RESPONSIBILITIES
The Board of Directors reviews and approves our Environmental and Climate Change Strategy and risk appetite and supervises climate-related risk management. In 2021, the Board created the Sustainable Development and Climate Change Committee to ensure a deeper focus on these matters. The Committee discusses the following matters:
- integration of sustainability principles, including climate change, into the Company’s operations;
- development and implementation of a strategy on sustainable development and climate change;
- risk management and internal control in the realm of sustainable development and climate change;
- the Company’s internal reporting and disclosures on sustainable development and climate change;
- external audit of the Company’s sustainable development and climate change reports and activities.
In 2022, the Sustainable Development and Climate Change Committee considered the following matters:
- 2021 Sustainability Report;
- the Company’s KPI system (including GHG emission reduction KPIs);
- climate scenarios to assess climaterelated risks.
The implementation of climate-related risk management measures and procedures is inter alia a responsibility of the Company’s Management Board and the Management Board’s Risk Management Committee. Members of the Board agree upon parameters of the Company’s risk appetite, including those relating to climate change, and make recommendations to the Board of Directors regarding their approval. The key risks, including climate change threats, are reviewed on a quarterly basis.
In 2022, the Risk Management Committee held two meetings to discuss the following climate change matters:
- progress against the TCFD Roadmap;
- approval of the selected climate change scenarios of the Intergovernmental Panel on Climate Change and climate change models to analyse and assess physical risks for all of the Company’s assets;
- approval of global economy and climate change scenarios developed by the Company to analyse and assess transition risks;
- approval of the Company’s draft risk appetite statement for 2022, including parameters linked to GHG emissions.
The Vice President for Investor Relations and Sustainable Development, who supervises the Sustainable Development Department, is responsible for setting ambition and vision for climate change and developing and monitoring the implementation of the Company’s Climate Change Policy.
The Sustainable Development Department is responsible for providing methodology support to the Company on climate change and related risks, reporting on climate change in order to adhere to best disclosure practices, and monitoring progress against the TCFD Roadmap. Starting 2022, the Department’s scope of responsibilities also includes methodological support for risk owners to help them incorporate climate risk factors into risk management. Amendments to that effect were introduced to the Regulation on the Sustainable Development Department and the Company’s Risk Management Regulations. Dedicated units of the Head Office, branches and Norilsk Nickel Group companies are responsible for certain aspects of the Climate Change Policy and the Environmental and Climate Change Strategy within their scopeFor full information on responsibilities and functions of the Company’s governance bodies and units, please see PJSC MMC Norilsk Nickel’s Climate Change Policy. .
The Company’s branches and business units that are part of Norilsk Nickel Group develop proposals regarding the Environmental and Climate Change Strategy implementation, ensure the availability of financial and other resources related to the Environmental and Climate Change Strategy implementation, identify and assess physical climate-related risks.
INCORPORATION OF CLIMATE GOALS INTO KPIs IN 2022
To confirm our commitment to deliver against climate goals and integrate the climate agenda into our corporate culture and Norilsk Nickel Group’s annual team KPIs, including those for the top management, our KPIs now include GHG emissions reduction targets (Scope 1 and 2) with a weight of 20%.
Nornickel's TCFD Roadmap
In 2021, we began implementing the TCFD Roadmap. The Roadmap includes over 50 activities to improve strategic and operational management in the area of climate change, including risks and opportunities, and is designed to help achieve goals and targets as recommended by TCFD and to publicly report on our performance.
In 2023, the Company is going to update the Roadmap and develop initiatives for the medium term.
