For a Better Future - EVRAZ

 
For a Better Future - EVRAZ
Our approach              Our people   Evolving health, safety,   Supporting          Responsible    Appendices
   to sustainability                      and environment            local communities   supply chain

For a Better Future
Sustainability Report 2020
For a Better Future - EVRAZ
Sustainability report 2020                         Our approach               Our people            Evolving health, safety,       Supporting                    Responsible           Appendices
                                                                                                                 to sustainability                                and environment                local communities             supply chain

CONTENT
2                      8                                              26                                         38                                          60                                                      88
                                                                                                                                                                                                                     Appendix 2 –
Message from the CEO   Our approach                                   Our people                                 Evolving health, safety,                    GHG emissions                                           GRI Content Index
                       to sustainability                                                                         and environment system                      and energy efficiency
                                                                      27      Our approach
                                                                      28      Personnel profile                  39    Health, safety, and environmental     60     GHG emissions                                    94
5                      9    Approach to sustainability                29      Staff recruitment and reduction          governance                            64     Boosting energy efficiency                       Appendix 3 –
                            management                                31      Learning and development           40    External Initiatives                  67     Outlook for 2021                                 UN Global Compact communication
About the Group        13   Ethics and business conduct               32      Motivation                                                                                                                             on progress
                       17   Sustainability risk management            34      Interaction with employees
5   Who we are         19   Stakeholder engagement                    36      Human rights                       41                                          68
6   Where we operate   20   Customer interaction                      37      Outlook for 2021 and the midterm
                                                                                                                 Health and Safety                           Supporting local                                        96
7   What we produce    22   EVRAZ awards in 2020                                                                                                                                                                     Appendix 4 –
                       23   Memberships of associations                                                          management                                  communities                                             Task Force on Climate-related Financial
                            and institutions                                                                                                                                                                         Disclosures
                       23   Tax liabilities                                                                      41    Approach                              69     Management approach
                       25   Direct economic value generated                                                      42    HS initiatives and projects in 2020   71     Local community support projects
                            and distributed                                                                      44    Developing the safety culture         79     Goals for 2021 and the midterm                   97
                                                                                                                 46    Occupational injury prevention                                                                Appendix 5 –
                                                                                                                 47    Health protection                                                                             Environmental performance
                                                                                                                 48    Transport safety                      80
                                                                                                                 48    External OHS activities
                                                                                                                 49    Emergency prevention and response
                                                                                                                                                             Responsible supply chain                                102
                                                                                                                 49    Goals for 2021 and the midterm        management                                              Appendix 6 –
                                                                                                                                                                                                                     Independent practitioner’s assurance report
                                                                                                                                                             81     The Group’s supply chain
                                                                                                                 50                                          82     Management approach
                                                                                                                                                             82     Promoting sustainability throughout
                                                                                                                 Environmental                                      the supply chain
                                                                                                                 management                                  83     Goals for 2021 and the midterm

                                                                                                                 51    Management approach
                                                                                                                 52    Reducing air emissions                84
                                                                                                                 55    Balancing water supply
                                                                                                                 56    Waste stewardship
                                                                                                                                                             Appendix 1 –
                                                                                                                 58    Protecting biodiversity               About this Report
                                                                                                                 59    Outlook for 2021 and the midterm
                                                                                                                                                             84     Approach to reporting
                                                                                                                                                             84     Report boundaries
                                                                                                                                                             84     Identification of material topics
                                                                                                                                                             87     Data preparation methodology
                                                                                                                                                             87     Assurance
                                                                                                                                                             87     Contact Information

                                                                                                                                                                                    EVRAZ                                              EVRAZ
                                                                                                                                                                                    Annual                                             Sustainability
                                                                                                                                                                                    Report 2020                                        Report 2020
For a Better Future - EVRAZ
Sustainability report 2020            2 3             Our approach               Our people             Evolving health, safety,      Supporting                     Responsible              Appendices
                                                                                                                                               to sustainability                                 and environment               local communities              supply chain

GRI 102–14
                                                                                                                                               In the reporting period the health             employees began working remotely.                    to identify and eliminate safety related risks

MESSAGE
                                                                                                                                               and safety of employees became                 The Group believes that these measures               and to bolster the safety culture through
                                                                                                                                               a particularly pertinent issue due to COVID-   helped significantly in reducing the spread          gamification.
                                                                                                                                               19. The Group promptly implemented             of the virus.

FROM THE CEO                                                                                                                                   all necessary measures and successfully
                                                                                                                                               adapted to new working conditions: foreign
                                                                                                                                               business trips were cancelled; business
                                                                                                                                                                                              EVRAZ also endeavours to be one
                                                                                                                                                                                              of the leading companies that actively use
                                                                                                                                                                                                                                                   At Raspadskaya the Group introduced
                                                                                                                                                                                                                                                   the pilot version of a digital network
                                                                                                                                                                                                                                                   that uses artificial intelligence methods
                                                                                                                                               trips in Russia were restricted; transport,    the latest technologies and innovations              to prevent incidents: the 24/7 network
                                                                                                                                               canteens, and work spaces were sanitised       in the area of health and safety. In 2020,           ensures that employees use personal
                                                                                                                                               daily; thermal imagers and pyrometers          as part of the risk management system,               protective equipment. It is also planned
                                                                                                                                               were installed at checkpoints; all mass        the Group launched a new mobile app,                 to roll out the system for vehicles,
                                                                                                                                               events were postponed; and most office         Hunt for Risk, which allows employees                with a view to monitoring that safe driving
                                                                                                                                                                                                                                                   practices are being followed.

                                                                                                                                               HUMAN CAPITAL MANAGEMENT
                                                                                                                                               Our activity in the area of human resources    Top-300 programme was held to train                  additional holiday days in case certain
                                                                                                                                               management is aimed at ensuring that           production managers. Due to the success              events arise, and financial assistance
                                                                                                                                               interaction with employees is based            of the programme it was decided to expand            in difficult life circumstances. In addition,
                                                                                                                                               on respect of human rights. All employees      it, consequently in 2020 the Top-1000                the Group organises cultural and sporting
                                                                                                                                               have equal opportunities in terms              programme was launched, covering                     events for employees and their families.
                                                                                                                                               of professional and personal skills, career    specialists who practice effective goal-
                                                                                                                                               growth, a decent salary, and an attractive     setting and feedback, delegation, and other          EVRAZ strives to adhere to high standards
                                                                                                                                               social package.                                aspects of management.                               in the area of employee engagement.
                                                                                                                                                                                                                                                   In order to be more productive in this
                                                                                                                          Alexander Frolov     Education and training are important           In 2020 EVRAZ completed work to enhance              area, in 2020 the Group began planning its
                                                                                                                      Chief Executive Offcer   aspects of staff management and key drivers    the target remuneration system. Now                  employer brand development strategy. This
                                                                                                                                               of employee development within the Group.      the system is even more transparent                  initiative confirms the Group’s commitment
                                                                                                                                               Each year EVRAZ implements new training        and balanced (in terms of fixed and variable         to being the best employer in the regions
                                                                                                                                               programmes, which often become a regular       parts) and reflects how well the employee,           where we operate and to earn the trust
Dear Stakeholders,                             COVID-19 has encouraged us even more              The year 2020 was a major challenge           feature within the Group, with the most        team, and department are performing.                 and support of our employees.
                                               to make positive change for all groups            for many companies and industries,            effective initiatives being embraced.          The social package includes voluntary
Despite the fact that 2020 was marked          of people that influence and are impacted         including mining and metals. We made          For example, in the reporting year the third   medical insurance, a pension scheme,
by various unprecedented and unexpected        by our business. Although, EVRAZ has              every effort to adapt to the changes
events, which in many ways changed             always adopted a responsible approach             brought about by the COVID-19
the world, EVRAZ maintained its                to doing business, in 2020 we made even           pandemic, and we are proud to report
commitment to creating long-term value         greater efforts to attain UN Sustainable          that we were able to respond rapidly to it.   MANAGING ENVIRONMENTAL IMPACTS
for all stakeholders. In this unstable         Development Goals, and we plan                    We tweaked business processes, fine-
environment EVRAZ once again confirmed         to continue on this course. Also, in August       tuned our performance, and maintained
its status as a responsible employer           2020 EVRAZ joined the UN Global                   high product quality. Despite the difficult   The protection of the environment              that production processes at all enterprises         and quantitative indicators compared
and business partner, and also continued       Compact, one of the world’s foremost              situation across the world, a new working     and combating climate change are gradually     comply with applicable requirements.                 to previous periods. In 2020 the GHG
to implement projects and initiatives          initiatives in the field of sustainable           environment, and demand volatility, EVRAZ     coming to the forefront of the strategies      The system is embraced at all enterprises            emission intensity level was 1.97 tCO2e/tcs
to protect the environment and develop         development.                                      generated EBITDA of US$2,212 million.         of global companies, organisations,            and is based on the plan-do-check-act                (tonnes of carbon dioxide equivalent per
local communities.                                                                                                                             and governments. EVRAZ has also                (PDCA) model. In 2020 EVRAZ made major               tonne of crude steel) and the Group achieved
                                                                                                                                               committed to these initiatives and adheres     improvements in the area of managing its             its goal of a GHG emission indicator of below
                                                                                                                                               to a responsible approach in its operations.   environment impacts. The Group reduced               2 tCO2e/tcs. The Group’s total energy
                                                                                                                                               In 2020 the Group elaborated its               its total atmospheric emissions from steel           consumption fell 5.7% year-on-year.
OCCUPATIONAL HEALTH AND SAFETY                                                                                                                 Environmental strategy, which sets ambitious   production by 3.7% compared to the 2019
                                                                                                                                               climate targets for 2030 and is aligned        level, and recycled 102.7% of non-mining             I am particularly proud to mention that
                                                                                                                                               with sustainable development principles.       waste and by-products (target: 95%). Fresh           EVRAZ’s environmental protection activity
Ensuring comfortable and safe working          approaches their work with an understanding       drop on the figure for 2019. The Group        EVRAZ is also seeking to expand the scope      water consumption in 2020 stood at 206.2             has been recognised at international level.
conditions and monitoring and safeguarding     that safety comes first.                          achieved zero fatalities among contractors,   of its commitments to include United           million m3.                                          The Group took second place in the Wall
employee health are our top priorities.                                                          however, I deeply regret to report that       Nations Sustainable Development Goals,                                                              Street Journal ranking of the world’s 100
The Group seeks to ensure that a safety        Our work in the area of occupational              in 2020 there were five fatalities among      the Paris Agreement, and the requirements      In the reporting period EVRAZ published              most sustainably managed companies;
culture exists at all stages of production     safety is geared towards achieving zero           our employees. The Group carried out          of the Intergovernmental Panel on Climate      its first Climate Change Report, based               over 5,500 global public companies
and covers all employees and contractors.      fatalities and reducing the lost time injury      thorough investigations and took measures     Change (IPCC).                                 on recommendations from the Task Force               were evaluated, across 26 categories,
For this purpose, EVRAZ regularly implements   frequency rate (LTIFR). In 2020 the LTIFR         to prevent such cases from reoccurring                                                       on Climate-Related Financial Disclosures             and EVRAZ gained recognition for its
measures and educational programmes            among the Group’s employees stood at 1.58         in the future.                                The Group has an Environmental                 (TCFD). The report contains detailed                 projects related to reducing emissions
aimed at making sure that everyone             per 1 million hours, which was a 22.5%                                                          Management System (EMS) in place, which        information on the Group’s approach                  and boosting energy efficiency.
                                                                                                                                               manages environmental risks and monitors       to climate change, climate risk management,
For a Better Future - EVRAZ
Sustainability report 2020            4 5              Our approach                 Our people            Evolving health, safety,      Supporting                    Responsible            Appendices
                                                                                                                                                   to sustainability                                  and environment               local communities             supply chain

                                                                                                                                                   ABOUT THE GROUP
                                                                                                                                                   GRI 102-1                                       GRI 102–3

                                                                                                                                                   EVRAZ is a global steel, mining                 Corporate profile
                                                                                                                                                   and vanadium company and the leading
                                                                                                                                                   producer of infrastructure steel products.
                                                                                                                                                                                                                THE GROUP NAME                                               CEO
                                                                                                                                                   The Group has three business production
                                                                                                                                                   segments located in Russia, USA, Canada,                           EVRAZ plc                                      Alexander Frolov
                                                                                                                                                   Kazakhstan and Czech Republic.

                                                                                                                                                   The Group supplies its products                              OFFICE IN THE UK                                   BUSINESS SEGMENT
                                                                                                                                                   to more than 70 countries and stands
                                                                                                                                                   among the top global steel and coal                 England, 2 Portman street, London
                                                                                                                                                                                                                                                           Steel, mining and vanadium business
                                                                                                                                                   producers. EVRAZ is listed on the London                        W1H 6DU
                                                                                                                                                   Stock Exchange and is a constituent
                                                                                                                                                   of the FTSE 100 Index.
                                                                                                                                                                                                            OTHER MAJOR OFFICES                                 YEAR OF ESTABLISHMENT

                                                                                                                                                                                                      Russia, Moscow str. Belovezhskaya, 4,
                                                                                                                                                                                                                                                                             1992
                                                                                                                                                                                                                    Block B

                                                                                                                                                                                                          71 S. Wacker Drive, Suite 1700,
                                                                                                                                                                                                                 Chicago, IL 60606

                                                                                                                                                   GRI 102–6

COMMUNITY RELATIONS
                                                                                                                                                   WHO WE ARE
Maintaining and fostering well-being           The Group is especially proud that                   a challenging year we showed flexibility,
and social stability in the regions            our employees are actively engaged in social         improved our performance in many areas,        Leading industry                                Financially                                          Clean
where we operate are essential aspects         initiatives implemented in the regions               and demonstrated not only the stability
of the EVRAZ sustainability practice.          of operations, acting as volunteers                  of the Group, but also an ability to achieve   positions                                       sustainable company                                  environment
Each year the Group earmarks significant       and helping vulnerable groups and people             sustainable growth. I would like to thank
funds for organising large-scale cultural      in challenging life circumstances.                   all our stakeholders for their support         • a vertically integrated global steelmaker.    • consolidated revenue amounted                      • water consumption amounted
and sporting events, implementing                                                                   and contribution to the Group’s development.   • one of the lowest-cost global steel             to US$9,754 million.                                 to 206.2 million m3.
educational projects, and improving            In the reporting period EVRAZ held its               Under all circumstances EVRAZ in turn            producers.                                    • consolidated EBITDA reached                        • total amount of air pollutant emissions
healthcare and infrastructure.                 traditional annual grant contest: City               will strive to do even more for the overall    • the market leader in construction steel         US$2,212 million.                                    from steel production decreased by 3.7%.
                                               of Friends – City of Ideas, which allows             prosperity of businesses, employees,             products.                                                                                          • the Group recycled or reused 102.7%
Most EVRAZ initiatives are encompassed         representatives from local communities               and communities in the regions where           • the leading global supplier of rails.                                                                of non-mining waste and byproducts.
within three main areas of social              and other stakeholders to present projects           we operate, thereby facilitating sustainable   • a global leader in the production             Sound                                                • total energy consumption fell by 5.7%
investment: EVRAZ for Kids, EVRAZ              to enhance urban spaces and protect                  development for a better future.                 of vanadium.                                                                                         year-on-year.
for Cities, and EVRAZ for Sports.              the environment. This year 44 projects                                                              • the largest coking coal producer in Russia.   employment
As part of its commitment to local             received grants from the Group.                                                                     • a geographically diversified business.
communities, during the reporting                                                                                                                                                                  • 69,699 people have stable employment.
period the Group invested in setting up        In 2020 EVRAZ placed a particular                                                                                                                   • EVRAZ wage ratio is up to three                Safe and healthy
two R&D centres at the Siberian State          emphasis on healthcare support, on account                                                                                                            times higher than wages in the region
Industrial University in Novokuznetsk,         of the pandemic. The Group provided
                                                                                                                                                      AMONG RAIL
                                                                                                                                                       SUPPLIERS
                                                                                                                                                                                AMONG RAIL
                                                                                                                                                                                 SUPPLIERS           of presence.                                   and workspace
one of which – the Digital Competence          financial support to purchase medical                                                                   IN RUSSIA                 IN NORTH          • 337 employees took part in corporate
Centre – allows students to acquire            equipment and personal protective                                                                                                 AMERICA             management development programmes.                 • 100% of EVRAZ employees are covered
highly in-demand IT skills. EVRAZ              equipment for hospitals in the regions where                                                                                                        • Over 43,500 employees were covered                   by the Health and Safety management
also held workshops and educational            we operate and opened new medical centres                                                                                                             by the Target remuneration system,                   system.
programmes for children, and provided          and COVID-19 diagnostic laboratories.                                                                                   WE ARE                        implemented in 2020.                               • the major metallurgical enterprises
                                                                                                                                                                        No 1
financial support for orphanages, schools,                                                                                                                                                                                                                of the Group are certified under ISO 45001
and family centres. Investing in holding       2020 negatively impacted many businesses,                                                                                                                                                                  and OHSAS 18001.
sporting events and development activities     people, and their families. It affirmed                                                                                          AMONG                                                                   • LTIFR stood at 1.58, which was 22.5% lower
                                                                                                                                                   IN CONSTUCTION
for children and adults, as well as building   the importance of being ready for unexpected                                                                                  THE RUSSIAN                                                                  than in 2019.
                                                                                                                                                    STEEL MARKET
                                                                                                                                                                             COKING COAL
sports facilities, are great ways to promote   events and being able to react quickly                                        Alexander Frolov          IN RUSSIA                                                                                        • zero fatalities among contractors in 2020.
                                                                                                                                         CEO                                  PRODUCERS
a healthy lifestyle.                           to change. We are proud that in such                                                                                                                                                                     • 42,136 employees underwent Risk
                                                                                                                                                                                                                                                          Management Project training.
For a Better Future - EVRAZ
Sustainability report 2020                 6 7                 Our approach                Our people             Evolving health, safety,        Supporting                    Responsible            Appendices
                                                                                                                                                                            to sustainability                                  and environment                 local communities             supply chain

 GRI 102-4       GRI 102-7                                                                                                                                                  GRI 102-7

 WHERE WE OPERATE                                                                                                                                                           WHAT WE PRODUCE
                                                                                                                                                                            EVRAZ is a leading producer in steel            specific technical conditions, the purpose             version of the official EVRAZ website).
 EVRAZ OPERATES IN FIVE COUNTRIES: RUSSIA, USA, CANADA,                                                                                                                     markets and supplies its products               of the product and how it will be used                 EVRAZ constantly works on improvement
                                                                                                                                                                            to customers from 70 countries worldwide.       further.                                               of its products and services to strengthen
 KAZAKHSTAN, CZECH REPUBLIC.                                                                                                                                                Our broad product line is used in most                                                                 our long-term relationships with partners
                                                                                                                                                                            production industries, including                The Group’s products meet the highest                  and customers and to create value for all
                                                                                                                                                                            construction, rail infrastructure. Our output   standards and are certified (a number                  stakeholders.
                                                                                                                                                                            is tailored to the customer’s location,         of certificates can be viewed at the English

       Steel                     Coal                     Steel, North              Number                                           5,948
       segment                   segment                  America                   of employees1                                    EVRAZ KGOK                              GRI 102–2
                                                          segment
                                                                                                                                                                            Main and ancillary products

                                                                                                                                          13,359
         178                                                                                                                              EVRAZ NTMK                         Type of products                                             Description

         EVRAZ Red Deer                                                                                                                                                      Construction products                                        EVRAZ produces steel that is used to construct residential homes, office buildings,
                                                                                                                                                                                                                                          stadium, bridges and other infrastructure facilities.
                                                                                                       64
            243                                                                                        EVRAZ Nikom
            EVRAZ Calgary

             91                                                                                                                                              15,578
                                                                                                                                                                             Railway products                                             Our product line is used in production of almost every element of rail infrastructure
                                                                                                                                                                                                                                          (includes rails, parts for carriages, and railway wheels).
             EVRAZ Camrose
                                                                                                                                                             Raspadskaya
                                                                                                                                                             Coal Company
                    1,072
                    EVRAZ Regina                                                                                                                                             Tubular products                                             EVRAZ is a leading supplier of large diameter line pipes for oil and natural gas
                                                                                                                                                                                                                                          transportation, and is the only supplier of LD pipe that is fully made in Canada. We
                                                                                                                                                                                                                                          are also a leading producer of small diameter line pipes used in construction, energy
                                                                                                                                                                                                                                          exploration, and production.

                                                                                                                                                                             Industrial products                                          EVRAZ is a major player in the industrial market. Our products are used in most
                                                                                                                                                                                                                                          industries, as following:
                                                                                                                                                                                                                                          • mining.
                                                                                                                                                                                                                                          • machine-building.
                                                                                                                                                                                                                                          • hardware.

                                                                                                                                                                             Vanadium products                                            EVRAZ is the only full-cycle producer of vanadium in the world, and offers
                                                                                                                                                                                                                                          a complete range of vanadium products. The Group produces around 20 high-
                                                                                                                                                                                                                                          purity, performance-based vanadium chemicals, and also offers an extensive line
                                                                                                                                                                                                                                          of vanadium alloys that can double the strength of mild steel.

                                                                                                                                                        22,531
                                                                                                                                                        EVRAZ ZSMK
                                                                                                                                                                             Raw materials                                                For main metallurgical production EVRAZ also extracts the raw materials such as iron
                                                                                                                                                                                                                                          ore, coking coal, and limestone.
                                                                                                                                                                                                                                          A significant share of The Group’s internal iron ore and coking coal consumption
                                                                                                                                                                                                                                          is covered by own mining operations.

                    1,022                                                                                                                    202
                    EVRAZ Pueblo                                                                                                             EVRAZ Caspian Steel            We greatly value our clients, and therefore     We widely apply a range of modern                      and partners can find interesting EVRAZ
                                                                                                                                                                            strive to improve not only our products,        technologies in all our activities,                    Events application. We also developed
302                                                                                                                     610                                                 but also the process of interaction
                                                                                                                                                                            with customers, ensuring an individual
                                                                                                                                                                                                                            including developing and using mobile
                                                                                                                                                                                                                            applications. EVRAZ employees can get
                                                                                                                                                                                                                                                                                   EVRAZ Wheels and EVRAZ VR applications
                                                                                                                                                                                                                                                                                   that provide virtual reality tours around
EVRAZ Portland
                                                                                                                        EVRAZ Vanady-Tula                                   approach to each.                               access to information and HR services                  our production facilities.
                                                                                                                                                                                                                            by downloading EVRAZ app. Clients
1.
     The map only presents the Group’s key enterprises. For this reason, the sum of the numbers below doesn’t match the total number of the Group’s employees at the end
     of the year.
For a Better Future - EVRAZ
Sustainability report 2020   8 9       Our approach                     Our people                  Evolving health, safety,          Supporting                    Responsible               Appendices
                                                                                                                          to sustainability                                            and environment                   local communities             supply chain

     Our approach                                                                                                         APPROACH TO SUSTAINABILITY
      to sustainability                                                                                                   MANAGEMENT
             for a Better Future                                                                                          As EVRAZ recognises the significant role                 initiatives and by policymakers. We                        “We are proud to announce that
                                                                                                                                                                                                                                              in 2020 EVRAZ has joined one
                                                                                                                          that sustainability principles and values play           act in line with the top international
                                                                                                                          in any business’s growth and prosperity,                 standards, including OECD’s                                of the leading global sustainable
                                                                                                                          it works constantly to integrate them                    Guidelines for Multinational Enterprises                   development initiatives –
                                                                                                                          into its business processes. At EVRAZ,                   and the provisions of the United Nations                   the UN Global Compact.
2020 highlights                                                                                      Global Sustainable   we consider sustainable development                      Universal Declaration of Human Rights.                     We are continuously working
                                                                                                                                                                                                                                              to contribute to the implementation
                                                                                                                          to be an essential part of our success.
                                                                                                     Development                                                                                                                              and promotion of the 10 Principles

       $38 million                                   1.58
                                                                                                                                                                                   In 2020, EVRAZ joined the UN Global
                                                                                                                                                                                                                                              in support of human rights,
                                                                                                                                                                                   Compact initiative.
US                                                                  LTIFR                            Goals                We are convinced that optimal efficiency
                                                                                                                          within our sustainability activities can
                                                                                                                                                                                                                                              labour rights, the environment
                                                     per 1 million hours1                                                                                                                                                                     and anti-corruption.”
spent on social expenses in 2020                                                                                          only be achieved by following the best                   For detailed information please see Appendix 3 –
                                                                                                                          practice enshrined in leading sustainability             UN Global Compact communication on progress. →
                                                                                                                                                                                                                                                                      Alexander Frolov

US     $56.9 million                                 1.97                                                                                                                                                                                                         Chief Executive Offcer

invested in improving environmental                  tCO2e per tonne
performance
                                                     per tonne of steel cast GHG
                                                     intensity rate                                                       In order to ensure that sustainable development issues are considered across the Group’s business processes and operational stages,

69,699                           employee
                                                                                                                          we have organised activities in this area into four main spheres:

headcount at the end of the year
                                                                                                                                                                                 PRIORITY SUSTAINABLE DEVELOPMENT AREAS

1.                                                                                                                          EMPLOYEE WELL-BEING                         ENVIRONMENTAL                             ECONOMIC STABILITY                        LOCAL COMMUNITY
     Excluding fatalities and data on contractors.
                                                                                                                            Providing employees                         PROTECTION                                Ensuring stable economic                  DEVELOPMENT
                                                                                                                            with safe working                           Reducing adverse impacts                  growth and creating long-                 Contributing
                                                                                                                            conditions, wide learning                   from our operations                       term value for the Group.                 to the achievement
                                                                                                                            and development                             on the environment.                       See the sections Ethics                   of economic prosperity
                                                                                                                            opportunities,                              See the section Environmental             and business conduct, p 13 →;             and providing social support
                                                                                                                            and competitive                             management, p 50 →                        and Direct economic value                 in our regions of operation.
                                                                                                                            compensation packages.                                                                generated and distributed,
                                                                                                                                                                                                                                                            See the section Supporting local
                                                                                                                                                                                                                  p 25 →
                                                                                                                            See the sections Our People,                                                                                                    communities, p 68 →
                                                                                                                            p 26, and Health and Safety
                                                                                                                            p 41 →

                                                                                                                          OUR CONTRIBUTION TO ATTAINING
                                                                                                                          SUSTAINABLE DEVELOPMENT GOALS (SDG)
                                                                                                                          GRI 102–12

                                                                                                                          EVRAZ fully supports the Sustainable                     our potential positive and negative                       In 2020, we conducted a questionnaire
                                                                                                                          Development Goals (SDG) adopted                          impacts on the environment, society,                      survey among our internal stakeholders
                                                                                                                          in 2015 by the UN General Assembly.                      and the business community, we created                    to determine the most pressing SDG
                                                                                                                          We are continually performing                            a list of 11 priority Sustainable Development             to focus on in 2020. These goals
                                                                                                                          substantial work in order to contribute                  Goals, which we are constantly striving                   are marked “2020 focus” in the table below.
                                                                                                                          to attaining them. As a result of analysing              to achieve.
For a Better Future - EVRAZ
Sustainability report 2020                  10 11             Our approach                  Our people                Evolving health, safety,        Supporting                     Responsible                   Appendices
                                                                                                                                                       to sustainability                                       and environment                 local communities              supply chain

EVRAZ inputs to meet Sustainable Development Goals
                                                                                                                                                       SDG                 Our inputs

SDG            Our inputs                                                                                                                                                  Ensure inclusive and equitable quality education and promote lifelong learning                See the sections Our People, p. 26;
                                                                                                                                                                           opportunities for all:                                                                        Supporting local communities, p. 68 →
               Ensure healthy lives and promote well-being for all at all ages:                            See the sections Our People, p. 26;                             • Providing employees with quality professional education opportunities.
               • High quality compensation packages for employees, which include comprehensive             Health, Safety, and Environmental                               • Supporting education and improving conditions in local educational organisations.
                 medical insurance for our employees and their families.                                   Governance, p. 39;
                                                                                                           Supporting local communities, p. 68 →
               • Initiatives to promote healthy lifestyles among the Group’s employees and local
                 communities. Particular attention is paid to the younger generation.                                                                                      Promote sustained, inclusive, and sustainable economic growth, full and productive            See the sections Our people, p. 26;
 2020 focus                                                                                                                                                                employment, and decent work for all:                                                          Health, Safety and Environmental
               • Investing in building sports facilities in EVRAZ’s regions of operation.                                                                                                                                                                                Governance, p. 39;
                                                                                                                                                                           • Providing employment opportunities in the regions of operation.
                                                                                                                                                                                                                                                                         Supporting local communities, p. 68;
               Ensure the availability and sustainable management of water and sanitation for all:         See the section Environmental Management,                       • Ensuring equal opportunities for all employees.
                                                                                                                                                                                                                                                                         Responsible supply chain management,
               • Cutting the Group’s freshwater consumption and increasing the quality and volume          p. 50 →                                                         • Ensuring prevention of any modern forms of slavery.                                         p. 80 →
                 of recycled water.                                                                                                                                        • Meeting our tax obligations.
                                                                                                                                                                           • Providing safe working conditions.

 2020 focus                                                                                                                                                                Build resilient infrastructure, promote inclusive and sustainable industrialisation,          See the section Supporting local
                                                                                                                                                                           and foster innovation:                                                                        communities, p. 68 →
               Ensure access to affordable, reliable, sustainable, and modern energy for all:              See the section Environmental Management,                       • Supporting and organising infrastructure development projects in the regions
               • Lowering electricity use in each segment of the Group.                                    p. 50 →                                                           of operation.
               • Promoting initiatives aimed at generating electricity internally.

                                                                                                                                                                           Make cities inclusive, safe, resilient, and sustainable:                                      See the section Supporting local
2020 focus                                                                                                                                                                 • Supporting the development of social infrastructure in the regions of operation.            communities, p. 68 →
                                                                                                                                                                           • Concluding agreements with local authorities to raise living standards.
               Take urgent action to combat climate change and its impacts:                                See the section Environmental Management,
               • Reducing the consumption of energy in the Group’s activities and boosting energy          p. 50 →
                 efficiency in order to reduce CO2 emissions.
                                                                                                                                                                           Ensure sustainable consumption and production patterns:                                       See the section Environmental Management,
                                                                                                                                                                           • Reducing the volume of waste generation and increasing the volume of waste                  p. 50→
2020 focus                                                                                                                                                                   recycled.

                                                                                                                                                                           Promote peaceful and inclusive societies for sustainable development, provide
                                                                                                                                                                           access to justice for all and build effective, accountable, and inclusive institutions
                                                                                                                                                                           at all levels:
                                                                                                                                                                           • Compliance with all applicable legislation.
                                                                                                                                                                           • Respecting human rights.
                                                                                                                                                                           • Fostering anti-corruption and bribery initiatives, preventing conflicts of interest.
                                                                                                                                                                           • Combating modern forms of slavery.

                                                                                                                                                                           Strengthen the means of implementation and revitalise the global partnership                  See the sections Environmental Management,
                                                                                                                                                                           for sustainable developments:                                                                 p. 50;
                                                                                                                                                                           • Implementing and supporting sustainability initiatives promoted by Russian                  Responsible supply chain management,
                                                                                                                                                                                                                                                                         p. 80 →
                                                                                                                                                                             and international sector associations and institutions.

                                                                                                                                                       KEY DOCUMENTS
                                                                                                                                                       EVRAZ has elaborated a number                       the issue of personnel management:                      • Social Investments Guidelines.
                                                                                                                                                       of internal corporate documents that                the Human Rights Policy and the Diversity               • The Anti-Corruption Policy.
                                                                                                                                                       govern the Group’s activities in all                and Inclusion Policy.                                   • The Hotline Policy.
                                                                                                                                                       priority areas of sustainability. The list                                                                  • The Policy on Main Procurement
                                                                                                                                                       of regulations, as well as the documents            The main documents elaborated                             Principles.
                                                                                                                                                       themselves, are regularly revised                   for the Group and EvrazHolding                          • The Human Rights Policy.
                                                                                                                                                       and updated in order to ensure that they            are the following:                                      • The Diversity and Inclusion Policy.
                                                                                                                                                       still conform to the rapidly changing               • The Code of Business Conduct.                         • Modern Slavery Statement.
                                                                                                                                                       external environment. In 2020 EVRAZ                 • EVRAZ Supplier Code of Conduct.
                                                                                                                                                       elaborated two new policies which address           • The Health, Safety, and Environmental Policy.
For a Better Future - EVRAZ
Sustainability report 2020                   12 13          Our approach                Our people                Evolving health, safety,      Supporting                    Responsible               Appendices
                                                                                                                                                          to sustainability                                     and environment               local communities             supply chain

ORGANISATIONAL STRUCTURE                                                                                                                                  ETHICS AND BUSINESS
As the Group strives to ensure
the integration of sustainability
                                                  with determining the general course
                                                  of EVRAZ’s sustainable development.
                                                                                                      corresponding to their functions,
                                                                                                      and the managers of business segments
                                                                                                                                                          CONDUCT
principles into all its business processes,       The CEO and Management Board                        apply the adopted initiatives in their
the sustainable development organisational        monitor activities related to sustainability.       segments in accordance with their business
structure covers all organisational levels        Directorates, headed by vice-presidents,            functions.
of the Group. The Board of Directors              are responsible for setting respective                                                                  APPROACH TO PROMOTING FAIR BUSINESS PRACTICES
and its committees are tasked                     goals and performing specific tasks
                                                                                                                                                          EVRAZ recognises that business                     The Group has elaborated a set of internal           of ethical behaviour adopted by the Group.
GRI 102–18                                                                                                                                                transparency facilitates trust-based relations     documents on business ethics, which                  In the previous reporting period, these
                                                                                                                                                          with all stakeholders and enhances                 must be complied with by all employees               documents were duly updated in order
Sustainable development organisational structure                                                                                                          the economic and social environments               of the Group. These comprise:                        to reflect the changes that took place
                                                                                                                                                          in which the Group operate. The Group              • The Code of Business Conduct.                      in the Group since their first appearance
  Corporate level
                                                                                                                                                          has high standards for employees                   • The Anti-corruption Policy.                        in 2013. In 2020, EVRAZ continued to update
             Audit Committee                                                                                                                              and contractors in terms of fair                   • The Anti-corruption Compliance System              the documents and supplemented the Anti-
                                                                                                                                                          business conduct, and places emphasis                Policy.                                            corruption Policy and Code of Business
         Nominations Committee                                                                                                                            on demonstrating a responsible approach            • The Anti-corruption Training Policy.               Conduct with policies on managing conflicts
                                                                                                                                                          to preventing, identifying, and responding         • The Charitable donation and Sponsorship            of interest and on sponsorship and charity
                                                                                                                                                          to cases of bribery, corruption and other            Policy.                                            activity. These procedures allow more
     Health, Safety, and Environment                              THE BOARD                                                                               types of malpractice. In the event of fraud,       • The Gifts and Business Entertainment               efficient management of corruption-related
                Committee
                                                                                                                                                          EVRAZ makes every effort to eliminate                Policy.                                            risks.
                                                                                                                                                          the consequences, address the causes,              • The Hotline Policy and whistleblowing
        Remuneration Committee                                         CEO                                                 Risk Management Group          and prevent the reoccurrence of such cases           procedures.                                        All employees of the Group are obliged
                                                                                                                                                          in the future.                                     • The Conflicts of Interest Policy.                  to adhere to the ethical principles set
                                                                MANAGEMENT                                                                                                                                   • The Human Rights Policy.                           out in the Code of Business Conduct.
                                                                                                                                                          EVRAZ adheres strictly                             • The Diversity and Inclusion Policy.                The Code refers to such principles
                                                                                                                                                          with the requirements of both Russian              • Modern Slavery Statement.                          as equality of rights and opportunities,
                                                                                                                                                          and international legislation, including                                                                respect for people, rejection of all forms
    Commerce                                           Corporate                                                                       Compliance         the Russian Law “On Preventing                     The Anti-corruption Policy and Code                  of discrimination and slavery, zero tolerance
   and Business                 Health, Safety,         Strategy                           Corporate                Legal              with Business      Corruption”, the UK Bribery Act,                   of Business Conduct are two key documents            towards corruption, as well as the following
                                                                          HR Vice
   Development,       CFO      and Environment      and Performance                     Communications               Vice          Procedures and Asset   and the US Foreign Corrupt Practices Act.          that set forth the principles and norms              principles of conducting business.
                                                                          President
    Senior Vice                 Vice President       Management,                         Vice President           President           Protection Vice
     President                                       Vice President                                                                      President
                                                                                                                                                          GRI 102–16

                                                                                                                                                          The EVRAZ principles of conducting business
    Procurement                                                                                                             Anti-Corruption Compliance
                      IR Directorate                                       PR Directorate     GR Directorate
     Directorate                                                                                                                     Function
                                                                                                                                                                                                           OUR PRINCIPLES FOR CONDUCTING BUSINESS

                                                  Directorates of corresponding functional lines

  Operational level                                                                                                                                         RESPECT                      ENRICHMENT                      VALUE FOR OUR               ACCOUNTABILITY                    ZEAL
                                                                                                                                                            FOR PEOPLE                   THROUGH                         CUSTOMERS                   FOR ACTIONS                       FOR CONTINUOUS
                                            Management of segments and units in Group companies                                                             Safe working                 COLLABORATION                   By continually              AND RESULTS                       IMPROVEMENT
                                                                                                                                                            conditions                   Working together                improving our products      We consistently aspire            By developing
                                                                                                                                                            and the development          as one team,                    and services, we will       to achieve our goals,             and implementing
                                                  Functional areas and units in Group companies                                                             of our people                we achieve optimum              strengthen long-term        and are responsible               new ideas, we facilitate
                                                                                                                                                            and local communities        results.                        relationships with our      for the results.                  the sustainable growth
                                                                                                                                                            are integral parts                                           customers.                                                    of our company.
                                                                                                                                                            of the EVRAZ business.

                                                                                                                                                                                                                                                       For more information on the contents of these documents, see
                                                                                                                                                                                                                                                       our corporate webpage
                                                                                                                                                                                                                                                       https://www.evraz.com/en/sustainability/anti-corruption/ →
For a Better Future - EVRAZ
Sustainability report 2020                14 15           Our approach                 Our people            Evolving health, safety,       Supporting                      Responsible          Appendices
                                                                                                                                                      to sustainability                                  and environment                local communities               supply chain

Approaches to combating corruption                Compliance managers, who have been                 with Business Procedures and Asset               RAISING AWARENESS OF ETHICAL BUSINESS CONDUCT
and adherence to ethical business conduct         appointed at each significant subsidiary,          Protection support.
are applicable for all Group entities             actively monitor employees’ compliance                                                              A commitment to ethical behaviour               For the past several years Group’s                    and tests on issues covered in the Anti-
and are implemented across all levels.            with internal documents, examine                   In addition, compliance managers monitor         underpins EVRAZ’s corporate culture,            employees have attended an online                     corruption Policy. In addition, the Group
The Audit Committee (which reports                reports of possible cases of corruption            charity and hospitality expenses, conduct        and the Group therefore focuses on raising      anti-corruption course. Developed                     has elaborated a course on the Code
to the Board of Directors), together              and other malpractice, conduct respective          checks of potential and existing business        awareness of ethical principles among           by Thomson Reuters, it covers such                    of Business Conduct and is working
with compliance managers, play the key role       investigations when necessary. The results         partners, analyse and prevent potential          employees and contractors.                      topical issues as business gifts, hospitality,        on a conflicts of interest course. Together,
in anti-corruption activity. The committee        of investigations (reports and related             conflicts of interests, and are involved                                                         supplier communications, and charity.                 these courses will form a single programme
                                                                                                                                                      GRI 205–2
is responsible for monitoring the overall         recommendations) are presented                     in monitoring tender procedures.                                                                 The course consistently emphasises that, if           that is mandatory for all managers
effectiveness of the Group’s anti-corruption      to the business unit’s senior management,                                                           Mandatory requirements in the form              an employee suspects that inappropriate               of the Group.
system, investigations in this area, and issues   the Group’s compliance manager,                                                                     of corporate policies and documents             behaviour has taken place, they should
related to corruption risks.                      and the Vice President, сompliance                                                                  are published on EVRAZ’s internal               contact compliance managers or call                   EVRAZ also requires compliance
                                                                                                                                                      and external websites, so that each             the Hotline. In 2020, over 3,400 employees            with the principles of ethical behaviour
                                                                                                                                                      employee and other stakeholders can             throughout the Group completed online                 on the part of suppliers and counterparties.
                                                                                                                                                      refer to them at any time. The Group also       anti-corruption training.                             To this end, each contract contains
ANTI-CORRUPTION RISK MANAGEMENT                                                                                                                       introduces new employees to the principles                                                            an appendix with a reference to the need
                                                                                                                                                      of ethical behaviour and ensures that           In 2020, EVRAZ decided to improve                     to comply with EVRAZ anti-corruption
                                                                                                                                                      all employees are aware of and have             its in-house capabilities and to move                 requirements and a link to the website
EVRAZ adopts a systematic approach                most vulnerable to risks (procurements,           The Group is proud to report that                 access to up-to-date information as well        beyond externally provided trainings.                 where the Anti-corruption Policy
to identifying, assessing, and managing           payments, sales, charity and sponsorship,         the robustness of its anti-corruption             as any changes in regulatory documents.         The Group is now developing its own                   is published. In 2020, the Group worked
risks related to corruption and bribery.          government relations, and others),                practices and policies allowed it to quickly                                                      Learning Management System, which will                out a course on EVRAZ anti-corruption
The main documents governing the Group’s          a detailed analysis of the system of controls     adapt to the uncertainties brought                EVRAZ’s education initiatives in the field      considerably enhance the effectiveness                principles for suppliers and counterparties,
handling of these risks are the Anti-             and procedures is performed. Compliance           on by the pandemic and ensure                     of ethical behaviour make a significant         of employee training management,                      which has already been taken by around
corruption Policy and Anti-corruption             managers monitor existing risks                   the integrity of business ethics. In 2020,        contribution to preventing corruption           as the courses will become more                       300 counterparty managers. In 2021,
Compliance System Policy.                         and proactively identify new and emerging         there were no investigations initiated            and bribery. Top management                     frequent and relevant to the specifics                it is planned to further develop
                                                  ones. Information on risks is reported            into suspected corruption involving state         are committed to raising the employees’         of the Group’s operations. The course                 the Learning Management System, improve
At the end of each year, compliance               to the Audit Committee.                           or public authorities. However, compliance        awareness of strict ethical standards           Anti-corruption Policy Requirements has               the training system for counterparties
managers at all subsidiaries perform                                                                managers’ own leads regarding potential           of business behaviour. They systemically        already been elaborated by the Group                  on the Group’s principles in the sphere
                                                  GRI 205–1
a comprehensive analysis of corruption-                                                             fraudulent schemes between unscrupulous           and regularly elaborate on its importance       and is implemented. The course will                   of ethical business conduct.
related risks in respect to all assets            The corruption risk assessment                    managers and suppliers/providers led              and value in communication with specialists,    be assigned to each employee every
and business processes of the Group.              for 2020 was made in January 2021,                to investigations. The employees involved         managers, and administrative personnel.         two years, it contains assignments
For business processes that are by nature         due to the COVID-19 pandemic.                     were dismissed and vendors banned.

                                                                                                                                                      WHISTLEBLOWING HOTLINE
                                                                                                    For more information on the analysis
                                                                                                    and management of corruption-related risks,                                                                                                             GRI 205–3
                                                                                                    see the Anti-corruption and antibribery section   EVRAZ encourages employees                      depending on the subject of the report.
                                                                                                    of the Annual report. →                           and stakeholders to adhere to the principle     The specialists then analyse the report               As a result of the well-structured process
                                                                                                                                                      of transparency and to report cases             and take specific measures to resolve                 in place for handling reports, year-
                                                                                                                                                      of misconduct or issues that they find          the issue. If the report is not anonymous             to-year there is growing confidence
                                                                                                                                                      concerning or suspicious, using a 24/7          and the person has provided contact                   in the whistleblowing hotlines among
                                                                                                                                                      whistleblowing hotline which guarantees         details, the Group informs them                       the Groups’ employees and stakeholders.
                                                                                                                                                      anonymity.                                      about the status of the report as well                In 2020, 1,096 reports were submitted
                                                                                                                                                                                                      as respective measures taken.                         via the Corporate Whistleblowing
                                                                                                                                                      The Group operates two separate                                                                       hotline, and 49 via the ENA hotline. Out
                                                                                                                                                      whistleblowing hotlines:                        All complicated, controversial, or sensitive          of all the reports received, 50 related
                                                                                                                                                      • The Corporate Whistleblowing hotline          issues and handled by the Hotline                     to fraudulent intent. The respective
                                                                                                                                                        for all major plants, including the Siberia   Committee (for the Corporate                          contracts with the employees concerned
                                                                                                                                                        Region (Steel and Coal segments),             Whistleblowing hotline) and the Hotline               were terminated, and necessary
                                                                                                                                                        the Urals Region (Steel segment), EVRAZ       Team (for the ENA whistleblowing                      measures were taken to prevent such
                                                                                                                                                        Vanady Tula, and EVRAZ Metall Inprom.         hotline), which include senior executives,            cases from reoccurring in the future
                                                                                                                                                      • The EVRAZ North America (“ENA”)               so the Group can be confident that all                and to eliminate the consequences.
                                                                                                                                                        hotline.                                      appropriate measures are taken to address
                                                                                                                                                                                                      reports.
                                                                                                                                                      Incoming reports are registered in the IT
                                                                                                                                                      system and then allocated to relevant
                                                                                                                                                      specialists (e.g. HR, HSE, Security),
For a Better Future - EVRAZ
Sustainability report 2020                   16 17       Our approach                 Our people                 Evolving health, safety,             Supporting                      Responsible                 Appendices
                                                                                                                                                     to sustainability                                       and environment                      local communities               supply chain

Working process of Corporate Whistleblowing hotline                                                                                                  SUSTAINABILITY RISK
 1. AN INDIVIDUAL MAKES A REPORT
                                                                                                                                                     MANAGEMENT
 Communication through available channels:                                                                                                           GRI 102–11
 • email (vopros@evraz.com and hotline@evraz.com)
 • the hotline phone number
 • and internal corporate portal
                                                                                                                                                     APPROACH TO MANAGING SUSTAINABILITY RISKS
                                                                                                                                                     Risk management forms an essential                  There is a unified framework in place                        At EVRAZ, we apply the same approach
 2. CONTACT CENTRE                                                                                                                                   element of the Group’s activities                   in the Group that is used to identify,                       to managing financial and non-financial
                                                                                                                                                     and is aimed at attaining its strategic             assess, and manage risks at both corporate                   risks. Hence the Group takes actions
 Key role: collecting and registering reports                                                                                                        objectives, including those related                 and operational level. Risk management                       to manage risks related to sustainable
 Corporate Whistleblowing hotline: reports are received and registered by an in-house contact centre                                                 to sustainability. The risk management              consists of the timely identification,                       development: environmental, social,
 ENA Whistleblowing hotline: reports are received and registered by a third party, Navex Global
                                                                                                                                                     approach was elaborated in EVRAZ                    analysis, and assessment of risks                            and economic, as well as the other
                                                                                                                                                     to cover all the Group’s business processes         and implementing appropriate measures                        risks that it is exposed to (strategic
 3. RESPONSIBLE EXECUTIVE                                                                                                                            and is adopted in all its operations.               when necessary.                                              and financial).
                                                                                                                                                                                                                                                                      For detailed information about our organisational
 Key role: ensuring the transparency, swiftness, and independence of whistleblowing procedures                                                       The table below describes the Group’s sustainability related risks and gives an overview                         structure of sustainability risk management
 Corporate Whistleblowing hotline: Vice President of Corporate Communications, Internal Audit Director                                               of the Group’s measures to manage them.                                                                          see EVRAZ sustainability report 2019, p. 26. →
 ENA Whistleblowing hotline: General Counsel and Corporate Secretary, Internal Audit Director, Director of Corporate Security
                                                                                                                                                     The Group’s sustainability risks

 4. SERVICES RESPONSIBLE FOR HANDLING REPORTS
                                                                                                                                                      Risk                Description                                                   Risk management actions
 Key role: investigating issues and preparing appropriate responses/solutions                                                                         HSE: environment Steel and mining production carry an inherent risk               • EVRAZ monitors its environmental risk matrix on a regular basis,
 At the end of the investigation feedback is provided to the person that submitted the report (if the message is not anonymous)                                        of environmental impact and incidents relating                     and develops and implements mitigation measures in response to these
                                                                                                                                                                       to issues as diverse as water usage, quality of water              risks. The top management also devotes greater attention to monthly
                                                                                                                                                                       discharged, waste recycling, tailing management,                   monitoring of environmental risk trends and factors.
                                                                                                                                                                       air emissions (including greenhouse gases),                      • The Group implements programmes to reduce air emissions and water use
Topics and percentages of popular issues raised via Corporate Whistleblowing hotline, 2019–2020, %                                                                     and community satisfaction.                                        at its plants, as well as to improve its waste management practices.
                                                                                                                                                                       Consequently, EVRAZ faces risks including                        • EVRAZ has developed an environmental strategy and has updated its list
                                                                                                                                                                       regulatory fines, penalties, adverse reputational                  of projects in accordance to achieve strategic goals regarding emissions
                                                  Labour relations    45                                                 Labour relations      39
                                                    Public services   14                                                   Public services     17                      impact and, in the extreme, the withdrawal of plant                and waste. The strategy is being implemented through dedicated
                                            Hazardous conditions      2                                            Hazardous conditions        4                       environmental licences, which would curtail                        programmes in each division.
                                Violation of Cardinal Safety Rules    1                                Violation of Cardinal Safety Rules      4                       operations indefinitely.                                         • Most of the Group’s operations are certified under ISO 14001 and work
                              Employees and managers relations        1                              Employees and managers relations          2                       Globally, there is an increase in regulatory scrutiny              is ongoing to bring the remaining plants in compliance with this
      2020             Prosecution of employees for using hotline
                                                             Other
                                                                      1
                                                                      20       2019           Prosecution of employees for using hotline
                                                                                                                                    Other
                                                                                                                                               0.3
                                                                                                                                               20
                                                                                                                                                                       and pressure, as well as investor and customer                     international standard. EVRAZ is currently compliant with REACH
                                            Labour compensation       6                                            Labour compensation         6                       expectations.                                                      requirements.
                                             Corruption and fraud     5                                             Corruption and fraud       3.7                                                                                      • The Group has begun to develop a Climate Change Strategy, including
                                                       Information    2                                                       Information      2                                                                                          performing various scenario analyses and identifying appropriate risks.
                                   Personal protective equipment      3                                   Personal protective equipment        2                                                                                        • EVRAZ also participates in the development of GHG emissions regulation
                                                   (except quality)                                                       (except quality)
                                                                                                                                                                                                                                          in Russia. In addition, the Group has achieved reductions in GHG
                                                                                                                                                                                                                                          emissions as a positive side-effect of its energy efficiency projects.

                                                                                                                                                      HSE: health,        Inherent HSE risks include the potential danger               • To mitigate these risks, EVRAZ ensures that its management KPIs place
                                                                                                                                                      safety              of fire, explosions and electrocution, as well as risks         significant emphasis on safety performance and the standardisation
                                                                                                                                                                          specific to individual mines, where elevated methane            of critical safety programmes.
                                                                                                                                                                          levels, rock falls and other accidents could lead             • The Group is implementing an energy isolation programme, further
Topics and percentages of popular issues raised via the ENA whistleblowing hotline, 2019–2020, %                                                                          to loss of personnel, outage or production delays,              developing a programme of safety observations behaviour to drive
                                                                                                                                                                          loss of material, equipment or product, or extensive            a more proactive approach to preventing injuries and incidents,
                      Accounting, Auditing and Internal Financial     2                                      Discrimination or Harassment      33                         damage compensation.                                            as well as launching a series of health and safety initiatives related
                                                        Controls                                                                      Other    21                         In addition, the breach of any HSE laws, regulations            to underground mining.
                                              Conflict of Interest     8                                   Environmental Protection, Health     2                          and standards may result in fines, penalties                  • Other measures include implementing maintenance and repair
                                   Discrimination or Harassment       31                                                      or Safety Law
                                                                                                                                                                          and adverse reputational impacts and, in the extreme,           modernisation programmes, launching a downtime management system,
                                       Environmental Protection,      21                                                             Inquiry   2
      2020                                  Health or Safety Law               2019                                      Conflict of Interest   10                         the withdrawal of mining operational licences, thereby
                                                                                                                                                                          curtailing operations for an indefinite period.
                                                                                                                                                                                                                                          further developing the occupational safety risk assessment methodology,
                                                                                                                                                                                                                                          as well as analysing the effectiveness of corrective measures.
                                                          Inquiry     4                                                               Safety   14
                                                           Other      14                                                           Relation    6                          There is also the risk of infection with COVID-19,            • In addition, the Group conducts mass testing of personnel for COVID-
                                                           Safety     16                                           Gifts and Entertainment     4                          which may be associated with the need for a mass                19 and has introduced reliable barriers to prevent carriers of the virus
                                              Violence or Threat      4                                                  Violence or Threat    8
                                                                                                                                                                          quarantine of workers.                                          from entering its facilities.

                                                                                                                                                      Business            Prolonged outages or production delays, especially • The Group has defined and established disaster recovery procedures
                                                                                                                                                      interruption        in coal mining, could have a material adverse effect   that are subject to regular review. Business interruptions in mining mainly
                                                                                                                                                                          on the Group’s operating performance, production,      relate to production safety. Measures to mitigate these risks include
                                                                                                                                                                          financial condition and future prospects.              methane monitoring and degassing systems, timely mining equipment
                                                                                                                                                                          In addition, any long-term business interruption may   maintenance, as well as employee safety training.
                                                                                                                                                                          result in a loss of customers and competitive        • EVRAZ performs detailed incident cause analyses to develop
                                                                                                                                                                          advantage, as well as damage to the Group’s            and implement preventative actions. Records of minor interruptions
                                                                                                                                                                          reputation.                                            are reviewed to identify any more significant underlying issues.
Sustainability report 2020                 18 19            Our approach                     Our people                   Evolving health, safety,          Supporting                    Responsible             Appendices
                                                                                                                                                                  to sustainability                                             and environment                   local communities             supply chain

Risk
Potential
                     Description
                     New laws, regulations or other requirements
                                                                                 Risk management actions
                                                                                 • EVRAZ and its executive teams are members of various national industry
                                                                                                                                                                  STAKEHOLDER
regulatory actions
by governments,
including trade,
                     and regimes could limit the Group’s ability to obtain
                     financing on international markets, sell its products
                     and purchase equipment. EVRAZ may also
                                                                                   bodies. As a result, they contribute to the development of such bodies
                                                                                   and, when appropriate, participate in relevant discussions with political
                                                                                   and regulatory authorities. The Group seeks to monitor potential legislative
                                                                                                                                                                  ENGAGEMENT
antimonopoly,        be adversely affected by government sanctions                 changes before their introduction, at the point when new laws are being
antidumping          against Russian businesses or otherwise reducing its          drafted.
                                                                                                                                                                  EVRAZ recognises the significance of fully               We are constantly improving our channels                   stakeholders, therefore, we seek to use
regulation,          ability to conduct business with counterparties.            • EVRAZ has implemented and will further develop procedures to ensure
sanctions            There is a risk of adverse geopolitical situations            that sanctions requirements are complied with across its operations. While     addressing concerns and expectations of all              of communication so that they are easier                   the optimal and most convenient means
regimes,             in the countries where the Group operates.                    the Group’s internal compliance controls address the associated risks,         groups of its stakeholders, since this fosters           to use and more effective. Despite                         of communication. For example, the Group
and other laws       Other risks include the possibility that EVRAZ could          the general uncertainty in the area increases management’s focus on this       the building of respectful, transparent,                 having a number of different channels,                     actively participates in developing local
and regulations      fail to adapt to new market conditions or could incur         risk.                                                                          and mutually beneficial relationships                    we promote the idea of having a unified                    communities and cooperates with local
                     losses connected with existing contracts in case            • EVRAZ also continuously monitors changes in temporary legislation              with them.                                               information field and try to demonstrate                   authorities and other industrial enterprises
                     of additional sanctions implementation.                       related to the COVID-19 pandemic.                                                                                                       our vision and values to a broad range                     to improve the ecological situation in our
                                                                                                                                                                  During the process of elaborating                        of stakeholders.                                           regions of operation, through both
Product              Excessive supply on the global market and greater           • EVRAZ works to expand its product portfolio and penetrate new                  communication approaches for different                                                                              combined and individual efforts.
competition          competition, mostly in the steel products market,             geographic and product markets as well as to improve product quality.          groups of stakeholders we strive to ensure               We believe that open communication
                     primarily due to competitors’ activity and introduction     • The Group constantly works on the development and improvement loyalty          that we include all stakeholders, initiate               and information transparency
                     of new facilities. Low demand for construction                and on the implementation of customer focus programmes and initiatives.        a two-way dialogue, and give stakeholders                are a fundamental aspect of having
                     products and increasing competition in this segment.        • EVRAZ strives to expand the share of value-added products.                     an opportunity to provide feedback.                      a constructive dialogue with our
                     Increasing competition in the rail product segment.
                     Excessive supply of slabs on the global market                                                                                               GRI 102–40          GRI 102–42    GRI 102–43        GRI 102–44
                     and intensified competition.

HR and employee Risks related to a lack of skills, a lack of succession          • EVRAZ continuously monitors changes and compliance with applicable                                                                                                                                         INTERNAL COMMUNICATION
                                                                                                                                                                                                                EVRAZ is proud to be one of the best employers in its regions                 CHANNELS
risks           planning, and reduced productivity due to labour                   labour laws and regulations.
                                                                                                                                                                                EMPLOYEES                       of operation. The Group is constantly improving its personnel                 • Corporate TV and newspaper.
                unrest or low job satisfaction levels.                           • The Group implements a human capital development programme,
                                                                                                                                                                                                                management practices to ensure best in-class working conditions.
                                                                                   arranges regular meetings with trade union representatives and analyses                                                                                                                                    • Internal portal and mobile app
                                                                                   employee engagement levels and seeks to find the ways to their                                                                                                                                               for employees.
                                                                                   improvement.                                                                                                                 For more information about employee engagement see Our People section,        • The EVRAZ Hotline.
                                                                                 • EVRAZ has introduced a grading system and remuneration management                                                            p. 34 →                                                                       • Annual staff engagement surveys.
                                                                                   principles. In addition, the Group collaborates with universities                                                                                                                                          • Interpersonal communication.
                                                                                   and colleges to enhance educational programmes.                                                                                                                                                            • Group-wide events.
Social               Risks related to socio-economic instability                 • To mitigate these risks, the Group arranges and proactively supports
and community        in the regions where the Group operates,                      social, infrastructure, sport, educational, and cultural programmes
                                                                                                                                                                                                                                                                                               EXTERNAL
risks                deteriorations in relations with local communities            in the regions of operation.                                                                                                 EVRAZ focuses on acting in shareholders’ best interests
                     and authorities, and loss of the Group’s “social licence”   • EVRAZ pays close attention to stakeholder engagement                                         SHAREHOLDERS                                                                                                   COMMUNICATION
                                                                                                                                                                                                                and works to build an experienced management team, and also
                     to operate.                                                   and collaborations with cities and regional authorities.                                     AND INVESTORS                                                                                                  CHANNELS
                                                                                                                                                                                                                implements corporate governance best practices.
                                                                                                                                                                                                                                                                                               • The media.
                                                                                                                                                                                                                                                                                               • Social media.
Climate change       Risks related to climate change and extreme weather         • EVRAZ implements energy efficiency projects that lead to lowering
                                                                                                                                                                                                                                                                                               • Our official website.
risks                events that could lead to business disruptions,               greenhouse gas emissions The Group supports global programmes                                                                EVRAZ generates value for its clients across the world                         • The EVRAZ Hotline.
                     resource shortages, and damage to the supply chain,           to reduce greenhouse gas emissions.                                                                                          by prioritising value-added products, offering better shipping
                                                                                                                                                                                 CUSTOMERS                                                                                                     • Annual reports.
                     equipment, and reputation.                                  • EVRAZ participates in drawing up greenhouse gas emission regulations                                                         terms, and running a client-orientated business model.
                                                                                   in Russia.                                                                                                                                                                                                  • Face-to-face
                                                                                                                                                                                                                                                                                                 communications
Human rights         Risks related to violations of human rights.                • EVRAZ has adopted a Human Rights Policy and regularly informs                                                                                                                                                 with external stakeholders.
risks                                                                              employees about the principles set forth in the Policy and in the Group’s                 SUPPLIERS                          EVRAZ values its relationships with business partners and ensures
                                                                                   Code of Business Conduct and runs whistleblowing hotlines.                                AND CONTRACTORS                    that its tenders are fully transparent.
                                                                                 • ERVAZ ensures its compliance with all applicable laws and regulations.
                                                                                 • The Group annually discloses a Modern Slavery Transparency Statement.
                                                                                                                                                                                                                EVRAZ endeavours to promote prosperity in the regions
Quality              Risks related to product quality.                           • The Group regularly monitors customer satisfaction levels and arranges                                                       of operations and works to create healthier and more stable local
                                                                                                                                                                                 LOCAL
                                                                                   meetings and feedback sessions with clients.                                                                                 communities by supporting social and economic development
                                                                                                                                                                                 COMMUNITIES
                                                                                 • Site visits to production assets are organized on a regular basis.                                                           programmes.
                                                                                 • EVRAZ implements production and quality improvement programmes.

Digital              A failure to proactively use IT opportunities to increase   • Digital Transformation is a part of the Group’s IT strategy.
effectiveness,       the efficiency of business operations could result          • EVRAZ continuously assesses and monitors information security risks,                                                         EVRAZ is one of Russia’s largest taxpayers and employers
                                                                                                                                                                                GOVERNMENT                      and plays a valuable role for the country by providing
as well              in a loss of competitive advantage and margins.               and it implements mitigation measures upon completion of external                            AND REGULATORY
as effective,        Information technology and information security risks         assessments by an independent advisor.                                                                                       construction and railway products for infrastructure.
                                                                                                                                                                                AUTHORITIES
efficient            have the potential to cause prolonged production            • The Group conducts regular continuity testing for the most critically
and continuous       delays or shutdowns.                                          important IT systems.
IT service           At the same time, increased digital transformation          • Successful mitigation measures include launching the IT Security                                                             EVRAZ’s proactive engagement with the media boosts the quality
                     and the convergence of IT and operational technology          Operation Centre, conducting security awareness training for employees                      MEDIA
                                                                                                                                                                                                                and transparency of information about the Group.
                     make companies more vulnerable.                               and effectively organising remote work for staff during the COVID-19
                                                                                   pandemic.
                                                                                                              For more detailed information about the Group’s                                                   EVRAZ supports a number of industry organisations through
                                                                                                              risks, their impacts, and risk management actions                  INDUSTRY
                                                                                                              see the Principal Risks and Uncertainties section
                                                                                                                                                                                                                joint initiatives and proactively participates in conferences
                                                                                                                                                                                 ORGANISATIONS                  and forums.
                                                                                                              of the 2020 Annual report. →
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