NLMK Group

Stakeholder engagement
Novolipetsk Steel discloses how often and through which channels it engages with various stakeholder groups.

Ecosystem conversion and restoration
Novolipetsk Steel discloses ecosystem restoration efforts beyond areas affected by its own operations or suppliers, including fish repopulation programmes in several Russian rivers.

Water
Novolipetsk Steel has a target to reduce the discharge of pollutants with wastewater into water bodies by 25% in 2023. It reports progress against this target.

Solid and air pollution
Novolipetsk Steel has set a target to reduce specific air emissions from 18.9 kg/t of steel in 2018 to 18.0 kg/t by 2023, a 5% decrease. The company reports regularly against this target.

Safe, clean, healthy and sustainable environment
Novolipetsk Steel demonstrates that its human rights risks and impacts identification process includes a focus on the health of local communities.

Sustainability strategy and accountability
Novolipetsk Steel discloses its process for identifying and prioritising its most relevant sustainability impacts as well as the outcome of this process, in relation to its sustainability strategy. While the company discloses targets on topics such as climate, air pollutants and water quality, no evidence could be found of group-wide targets on key sustainability topics such as soil pollutants, water withdrawals or biodiversity. Nevertheless, the company reports consistently against all its targets. While the company states that the CEO’s key performance indicators (KPIs) include sustainable development targets, and it references a long-term incentive (LTI) programme, no further evidence was found that the company links performance criteria in senior executives’ remuneration policies to targets and objectives which cover nature, including biodiversity, and social issues. The company does not disclose whether its highest governance body has expertise regarding nature-related topics.

Stakeholder engagement
The company discloses an overview of the issues raised during its stakeholder engagement activities.

Lobbying
Novolipetsk Steel discloses a list of its memberships in industry associations and external initiatives. It should, however, disclose the full list. The company does not disclose a clear and detailed framework for assessing alignment of its trade associations with nature-positive policies, nor does it report potential misalignment between the lobbying activities of its trade associations and nature-positive policies.

Impact and dependencies assessment
Novolipetsk Steel assessed its impact on biodiversity for its Russian operations, in line with the stages stipulated in the Natural Capital Protocol. It should, however, do the same for its international sites and at business model level. It does not disclose any assessment of its impacts on nature, including biodiversity, in its supply chain. While the company states it has followed the stages stipulated in the Natural Capital Protocol, no further evidence could be found that the company assesses its dependencies on nature within its own operations. The company does not disclose any assessment of dependencies on nature of its upstream business relationships.

Key areas and species
While Novolipetsk Steel discloses that it does not have sites near environmentally protected land or on land with a high biodiversity value, it is unclear if this is a global policy. The company does not disclose the locations of its suppliers that are in or adjacent to areas important for biodiversity. The company does not disclose species populations existing in or adjacent to its own locations or the locations of its suppliers. The company does not disclose the status according to national and international conservation lists of species identified in its own locations.

Ecosystem conversion and restoration
No evidence was found regarding Novolipetsk Steel’s efforts to avoid ecosystem conversion, including deforestation, or promote restoration. The company has an opportunity to develop a strategy and publicly report on specific, time-bound targets. The company is committed to restoring ecosystems in its science-based biodiversity conservation target AR 3 T, including measures for preventing potential impact, reducing current impact, regenerating and recovering ecosystems. The company discloses details and outcomes of ecosystem restoration projects in areas affected by its own operations or by its suppliers. Swan Lake Environmental Park is a particular example.

Resource exploitation and circularity
While the company discloses most of its inputs, it does not disclose its material footprint information. The company does not report quantitatively on its group-wide circularity performance. The company discloses activities to improve soil health, including reforestation programmes to improve the ecological dynamics of the areas that have been impacted by its activities. The company does not disclose a target to improve soil health in its production or sourcing practices.

Water
No evidence that the company reduces water withdrawal across its own operations was found. The company does not disclose a time-bound target to reduce water withdrawal across its own operations. The company reports how much water is withdrawn for its own operations in water-stressed areas and it regularly monitors the risk to water availability in the regions where it operates.  The company does not engage with suppliers to reduce water withdrawal. The company reports a decrease in water pollution. Discharges are continuously monitored for mineral content and show an improvement of 28% from 2018 to 2021. While the company states that each group company makes use of water purification and treatment technologies, no further evidence was found that the company discloses its processes for managing and monitoring discharge water quality. The company regularly reports on pollutants discharged into water bodies. The company does not disclose a commitment to respect the right to water. The company does not disclose its processes for implementing preventive and corrective action plans for identified specific risks to the right to water and sanitation in its own operations.

Solid and air pollution
Novolipetsk Steel provides qualitative evidence of reducing production of hazardous waste, including mercury contaminants, but no evidence was found that the company reduces plastic use and waste in its own operations. The company does not report on the amount of plastic waste generated and proportions directed from or to disposal. The company reports regularly on air quality parameters of emissions of harmful air pollutants.

GHG emissions
Novolipetsk Steel is reducing its scope 1 and 2 greenhouse gas emissions. The company has multiple targets, notably relating to iron and steel. The company reports progress against its targets, but no evidence was found that the targets are aligned with a 1.5-degree trajectory. No evidence was found that the company is reducing its scope 3 emissions. The company does not disclose a time-bound target to reduce its scope 3 emissions or report progress against this target. No evidence was found that the company’s scope 3 emissions reduction target is aligned with a 1.5-degree trajectory.

Invasive species
The company has not identified any activities that could lead to the introduction of invasive species in its own operations.

Safe, clean, healthy and sustainable environment
Novolipetsk Steel does not disclose a commitment to respect local communities’ right to a safe, clean, healthy and sustainable environment. No evidence that the company tracks its actual or potential negative impacts on the health of local communities was found. The company is not committed to zero tolerance for acts of violence, threats, intimidation or judicial harassment committed against land and environmental rights defenders.

Indigenous Peoples’ and land rights
The company does not disclose a commitment to respect Indigenous Peoples’ rights or land rights of local communities.

While Novolipetsk Steel discloses that it conducts due diligence in general, it has an opportunity to specify that it conducts human rights due diligence that includes a process for identifying human rights risks and impacts through its business relationships. The company has an opportunity to describe a process for assessing the human rights risks it has identified and to disclose what it considers to be its salient human rights issues. A description of this process would include how relevant factors, such as geographical, economic and social, are considered. No evidence was found that the company has a global system to act on its salient human rights issues. While the company discloses the categories of stakeholders it engages with generally on sustainability issues, it is not clear if these stakeholders are those whose human rights have been or may be affected by its activities. While the company provides general examples of engagement with stakeholders, it has an opportunity to clarify if these stakeholders are those whose human rights have been or may be affected by its activities.

Novolipetsk Steel has a publicly available policy statement which shows it is committed to respecting the health and safety of workers. It also has a publicly available policy statement which shows it expects its suppliers to commit to respecting the health and safety of their workers. The company has an opportunity to disclose a time-bound target for paying all workers a living wage or that it has achieved paying all workers a living wage. The company also has an opportunity to describe how it determines a living wage for the regions where it operates. The company discloses the proportion of its total direct operations workforce covered by collective bargaining agreements. While the company states that it encourages its suppliers to respect employees’ right to freedom of association and the right to collective bargaining, it has an opportunity to describe how it works to support the practices of its suppliers in this regard.

No evidence that Novolipetsk Steel has a publicly available global tax strategy was found. The company takes steps to identify and address bribery and corruption and includes anti-bribery and anti-corruption clauses in its contracts with direct business relationships. In a public policy statement, the company discloses its approach to lobbying and political engagement. The company specifies that it does not make political contributions.