Case study: How Nornickel creates economic value for its stakeholders
Nornickel is a leader of the Russian metals and mining industry and one of the major producers of platinum, copper, and cobalt globally. Nornickel’s customers include over 350 companies in 36 countries across the world. Accordingly, Nornickel is firmly committed to generating sustainable value for all its stakeholders. Tweet This!
This case study is based on the 2021 Sustainability Report by Nornickel, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
For Nornickel, creating long-term value for employees, communities and other stakeholders is a top priority. In order to create economic value for its stakeholders Nornickel took action to:
- create economic value for employees
- create economic value for providers of capital
- create economic value for the state
- create economic value for communities
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With this case study you will see:
- Which are the most important impacts (material issues) Nornickel has identified;
- How Nornickel up proceeded with stakeholder engagement, and
- What actions were taken by Nornickel to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2021 Sustainability Report Nornickel identified a range of material issues, such as compliance, pollutant emissions, biodiversity and land use, emergency preparedness. Among these, creating economic value for its stakeholders stands out as a key material issue for Nornickel.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process s of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Nornickel engages with:
| Stakeholder Group | Method of engagement |
| Shareholders, investors and rating agencies
| · Meetings (including one-on-one meetings) and conference calls · Phone calls and emails · Disclosures through presentations and press releases on the website · Holding Investor Days |
| Staff and trade unions
| · Joint commissions, committees and working groups · Discussions with trade unions and labour councils · Offices for operational, social and labour matters · Opinion polls · Corporate media, booklets, information screens and boards · Corporate web portals |
| Suppliers and contractors
| · Meetings, conferences, in-person and online negotiations · Procurement automation · Comprehensive cost reduction and optimisation programme (dynamic discounting, reverse factoring, implementing electronic workflow, suppliers’ online accounts) |
| Customers
| · Meetings · Annual surveys · Working with customers on matters of product quality · Processing customer complaints and grievances · Official meetings, conferences, exhibitions · Working with customers in connection with the consumption and market growth prospects analysis · Working with regulators and commodity exchanges |
| Federal authorities
| · Participation in working and expert groups, commissions, and committees · Public events and conferences · Obtaining permits · Participation in intergovernmental commissions |
| Regional government authorities and local communities
| · Working and expert groups, commissions, committees and councils · Cooperation agreements · Development plans for the company’s regions of operation · Corporate and partnership programmes and projects · Forums, conferences, fairs, and round table discussions · Joint inspections, drills and training exercises |
| Russian and international non-profit organisations
| · Involvement in the work of committees and commissions of Russian and international organisations · Joint projects · Events (congresses, meetings, round table discussions, conferences and competitions) · Membership in governing bodies and committees · Opinions, proposals, requests |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Nornickel engaged with its stakeholders through an opinion poll among over 130 stakeholders.
What actions were taken by Nornickel to create economic value for its stakeholders?
In its 2021 Sustainability Report Nornickel reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- In 2021, Nornickel paid RUB 163.6 bn for payroll and other employee remuneration and benefits, including payroll taxes.
- Creating economic value for providers of capital
- In 2021, Nornickel paid RUB 412.2 bn to providers of capital (interest, dividends).
- Creating economic value for the state
- In 2021, Nornickel paid RUB 207.6 bn in tax.
- Creating economic value for communities
- In 2021, Nornickel paid RUB 76.0 bn in community investments and charity.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
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References:
This case study is based on published information by Nornickel, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
https://www.nornickel.com/files/en/investors/disclosure/NN_CSO2021_ENG_0706.pdf
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