Case study: How Polymetal promotes sustainability across its supply chain
Polymetal is a pre-eminent precious metals group with interests in Russia and Kazakhstan and a portfolio of nine gold and silver mines, along with two major development projects. Across its supply chain, Polymetal works in partnership to uphold the highest ethical, social and environmental standards. Tweet This!
This case study is based on the 2020 Sustainability Report by Polymetal, 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.
Polymetal’s Supplier Code of Conduct outlines the ethical and sustainability standards Polymetal expects of all supply chain partners. In 2020, Polymetal updated the Code, to better articulate criteria around safety, labour relations and wider social, environmental and ethical risks. In order to promote sustainability across its supply chain Polymetal took action to:
- monitor suppliers
- apply environmental criteria to contractors
- combat corruption
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With this case study you will see:
- Which are the most important impacts (material issues) Polymetal has identified;
- How Polymetal proceeded with stakeholder engagement, and
- What actions were taken by Polymetal to promote sustainability across its supply chain
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What are the material issues the company has identified?
In its 2020 Sustainability Report Polymetal identified a range of material issues, such as climate change, health and safety, waste and pollutants, biodiversity and lands. Among these, promoting sustainability across its supply chain stands out as a key material issue for Polymetal.
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 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 Polymetal engages with:
To identify and prioritise material topics Polymetal engaged with its stakeholders through the following channels:
Stakeholder Group | Method of engagement |
Employees
| · Employee satisfaction survey · Worker councils and their representatives · Internal hotline, website, intranet and feedback mechanism · Meetings and face-to-face communication with management · Performance reviews · Employee questions to the Group CEO and Board with internally published responses |
Communities
| · Grievance mechanisms (telephone, email, etc.) · Opinion polls and questionnaires · Public hearings · In person and online meetings with company representatives, including annual results meetings and site visits · Press conferences and Q&As · Working groups · Corporate disclosure: website, sustainability reports, media, etc. |
Government/ local authorities
| · Working groups and meetings · Direct correspondence · Industry conferences |
Suppliers, contractors and customers
| · Direct correspondence · Contractual relationships · Meetings and trainings · Industry conferences |
Capital providers
| · Constructive dialogue at the General Meetings · Annual and Sustainability Reports · Timely information disclosures via corporate website and accredited news agency websites · Conferences and Investor days · ESG meetings · Presentations and conference calls · Site visits · Direct communication |
What actions were taken by Polymetal to promote sustainability across its supply chain?
In its 2020 Sustainability Report Polymetal reports that it took the following actions for promoting sustainability across its supply chain:
- Monitoring suppliers
- An e-procurement system helps Polymetal to enforce its Procurement Policy by applying standards consistently across a large number of contractors. Additional monitoring was introduced at the start of the Covid-19 pandemic to ensure supply continuity. In addition to assessing new suppliers selected via tender, Polymetal regularly assesses current suppliers, regardless of how long it has worked with them. In 2020, Polymetal screened 9,296 new and existing suppliers for compliance with its business ethics policies, 463 of whom were deemed non-compliant and removed from the procurement process. Polymetal is starting to engage more with its suppliers on climate issues and in 2020, started to capture data on GHG emissions for its reporting on product carbon footprint. Polymetal also introduced anti-bribery and human rights clauses in contracts, not only with suppliers, but also with its downstream supply partners.
- Applying environmental criteria to contractors
- Polymetal’s Supplier Code of Conduct extends to environmental expectations, with a focus on service providers working at its sites. Polymetal’s contracts stipulate penalties for noncompliance, especially around packaging, noise, pollution and emergency preparedness. Once a supplier is contracted with Polymetal, it conducts periodic formal assessments and audits for environmental compliance and best practice. In addition, cyanide suppliers and carriers must be certified under the International Cyanide Management Code. All contractors are inducted to Polymetal’s Environmental Management System and are required to demonstrate responsible practices and continual improvement. In 2020, Polymetal audited 88 contractors, with no violations resulting in a significant financial impact on the business.
- Combatting corruption
- As one of its top supply chain risks, Polymetal commits to a strict zero-tolerance approach to bribery, fraud and corruption and has established protective safeguards to support this. Polymetal’s internal audit department monitors the implementation of anti-corruption policies at all sites. A dedicated confidential hotline (email or phone – toll-free in Russia and Kazakhstan with the phone messages being recorded) allows anyone to anonymously report suspicions of corruption, bribery, fraud, human rights violations, harassment, insults, threats, moral and psychological abuse, alcohol or drug intoxication, disclosure or misuse of confidential information and other violations of applicable laws and regulations. Reported concerns are processed by the morning of the following business day. All messages are thoroughly investigated on a confidential basis and without bias. Best efforts are used to uphold anonymity if requested by a whistleblower. In 2020, Polymetal received 25 concerns, three of which were validated after a full investigation; the remainder were found to be either lacking evidence or unrelated to business ethics. Concerns included corruption and corporate conduct. Polymetal raises awareness of bribery and corruption risks and in 2020, delivered 245 seminars for high-risk groups, attended by 7,515 people. Polymetal identified eight instances of corruption over the past year – none of these had any impact on its financial position or operations, and none involved public or government officials.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 308-1 New suppliers that were screened using environmental criteria
2) Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken
Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.
Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken does not correspond to any SDG.
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References:
This case study is based on published information by Polymetal, 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.polymetalinternational.com/upload/iblock/b02/Polymetal_Sustainability_Report_2020.pdf
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