Environmental responsibility Rating for Mining&Metals Companies of Russia 2020
Russia's mining and metals industry can make a sizeable contribution to the sustainable development of Russian regions and the country as a whole. For the industry to achieve that, aside from showing impressive economic performance, it has to demonstrate high levels of environmental responsibility among mining companies and a willingness to implement the most effective measures to minimize the negative impact of production activities on the environment, as well as introduce resource and energy conservation measures and implement biodiversity conservation programs. In addition to optimizing government regulation, another effective way of achieving high levels of environmental responsibility among businesses is to improve corporate policies, standards, and practices.
The Environmental Transparency Rating for Mining and Metal Companies is a project that provides stakeholders with objective and comparable information on the transparency levels of different companies and the extent of their impact on the environment. We expect this kind of ratings to help improve the quality of environmental risk management in the mining and metals industry. We also hope that ratings will inspire companies to increase their levels of environmental responsibility, encourage businesses to cooperate with stakeholders, and ensure transparency in future project discussions.
Objective Contribute to reducing the environmental burden, improving resource efficiency, and conducting socially responsible business in the Russian mining and metals industry.
- Record the key indicators of the environmental performance of Russian mining and metal companies.
- Compare the key players of the Russian mining and metals sector based on:
- the level of environmental impact;
- the degree of openness and accessibility of environmentally relevant information;
- the quality of environmental management, considering state requirements and best practices from around the world;
- the frequency of violating environmental legislation during project implementation;
- mineral resource efficiency.
- Monitor the companies’ interannual dynamics on the indicators listed above.
- The rating is based on the criteria outlined primarily in the Main Provisions of the Environmental and Social Responsibility Policy for Mining Companies , as well as in a number of international documents, such as the IRMA Standard for Responsible Mining Operations, GRI Sustainability Reporting Guide , the EBRD's Sectoral Strategy and others.
- The methodology is discussed with all stakeholders during face-to-face and virtual meetings. After the discussions, the approved methodology becomes publicly available on the WWF-Russia website.
- The assessment is performed for all segments, from field development and resource extraction to processing.
The rating is based on publicly available information on the companies' activities in Russia.
Publicly available information includes publicly available annual financial and environmental reports and reports on environmental protection (including regional ones); documents published on the company's official websites (including those of the company's subsidiaries) with links to the relevant pages in the website menu; interviews of the company's spokespeople for federal and regional media.
- The rating is calculated by a professional rating agency, selected during a competition.
- The rating is calculated for the largest companies (by key types of minerals) operating in Russia. The selection of companies for the rating is based on the State Report "On the Current Condition and Utilization of Mineral Resources of the Russian Federation." Additionally, the rating includes companies operating in WWF's priority ecoregions (in terms of biodiversity conservation).
- The rating is calculated annually, which helps monitor the dynamics for different companies and for the industry overall.
- In 2009, based on the analysis of Russian and international experience in solving social and environmental problems related to the mining industry, WWF experts created the Main Provisions of the Environmental and Social Responsibility Policy for Mining Companies (https://wwf.ru/upload/iblock/d90/mining.pdf) aimed at reducing potential risks and negative consequences during mineral field development.
- In 2015—2016, based on this document, in partnership with environmental NGOs and with the support of the UNDP/ GEF / Ministry of Natural Resources and Environment of the Russian Federation Project, "Mainstreaming Biodiversity Conservation into Russia’s Energy Sector Policies and Operations", WWF-Russia developed the methodology for the environmental transparency rating for mining companies operating in Russia. At the development stage, the methodology was discussed with stakeholders, including mining companies.
- Starting from 2017, the Environmental Transparency Rating for Mining and Metal Companies has been published annually.
- Since 2019, the rating has been calculated as part of the People for Nature project carried out by WWF-Russia with the support of the European Union.
Structure of the Rating
The rating consists of three sections: environmental management, environmental impact and disclosure of environmental information.
- Environmental Management
assesses the quality of environmental management in the companies. The criteria included in this section are, for the most part, substantially more rigid compared to the Russian legislation on environmental protection. However, they comply with the world's best practices in the field of environmental protection for the mining and metals industry.
- Environmental Impact
It shows the degree of negative impact on the environmental components (air, water bodies, soil) in the course of project implementation. It also demonstrates the level of sustainability for corporate production. Most criteria are composed basing on elements of national statistical reporting in the field of environmental protection. The data sources are represented by 2-TP reports (air, waste, water, land), 4-OS reports (costs and payments), which reflect the impact of the companies on the environment as a result of their activities.
This section presents the quantitative indicators, which are translated into a qualitative scale using average values for each criterion for each subindustry (diamond industry, precious metals mining, extraction and processing of nonferrous metals ores, production and processing of ferrous and alloying metals, mining and chemical industry, coal industry). In the absence of official sources (Federal Service of State Statistics, Ministry of Natural resources, Ministry of Economic Development and affiliated agencies), the average value of the criterion is to be calculated as the arithmetic mean of the values for the subsector companies represented in the rating. For comparative analysis between companies, specific indicators are used, which are calculated by dividing the gross values by the company's revenue.
- Disclosure of Information
It evaluates the extent of the companies' readiness to disclose information with respect to environmental impact of their industrial activities. Historically, Russian mining and metallurgical industry has been quite a closed community, with environmentally significant information not getting completely reflected in the public information domain. Recently, a gradual increase in corporate transparency has been detected to be a new trend.
Criteria 3.5 and 3.6 are assessed as follows. Each environment-related conflict or accident included in the "Review of Environmental-Related Conflicts of Mining and Metal Companies in Russia" (published by WWF Russia on a regular basis) is evaluated in terms of public coverage. If the company provided no comments on the situation, the criterion is colored red. If the company covers one or more situations or incidents, it is assigned a yellow level. If the company publishes information and its comments on several controversial situations and accidents at its website, the criterion is green. If no accidents or environment- related conflicts have been detected, the company is also assigned a green level.
Companies are assigned color flags for each creterion: Red, Yellow, or Green. If the criterion is not relevant for a company (for example, dredging is not among the company's activities), the level is not assigned. For such cases, the company is required to present proof of being irrelevant to the criterion. If no information is publicly available, and the company has not provided a justification for the non- relevance of the criterion at the stage of sending work materials, the company is assigned a red level.
At the next stage, companies are ranked for each section. A Red flag counts as 0, a Yellow one means 1 point, and a Green one, 2 points. For each section, companies are assigned an arithmetic mean of their points for the criteria in the corresponding section. In this calculation, only the criteria that have been assigned color flags are taken into account, i.e. the criteria that are not relevant for a given company are not included. As a result, each company is assigned final points for the Management Section, for the Environmental Impact Section and for the Disclosure Section. Totals range from 0 to 2. At this stage, the leader is determined in each of the three areas: management (Environmental Management), operational (Environmental Impact), information (Disclosure of Information).
In order to prevent the data that were used to calculate the ratings of previous years from disappearing or getting replaced, the organizers proposed the following motivational solution to the problem: a retrospective assessment of each company's activities over the last three years being carried out during the next data collection. If data has disappeared from the public space or has been modified, a request is sent to the company about the reasons for such changes. If there is an adequate explanation (for example, a new website, a new methodology, unaccounted data, etc.), the data modification is registered. If the answer is inadequate or absent, red levels are assigned for the current year to the criteria for which previous years data disappeared or got modified. Thus, the overall score for this section and the total ranking will be reduced for the companies that failed to explain the disappearance or replacement of data on their websites for the previous years of the rating.
The final Rating is then calculated for each company by averaging the three values assigned at the previous stages.
The final profiles of the participating companies are available to the public on the WWF Russia website after the results of the current rating have been published.
The rating organizers reserve the right to apply penalties (up to suspension from the calculation of the current rating) in case of proven violation of laws and norms in the field of human rights (e.g. claims or negative assessment of the company's activities by the Human Rights Council (HRC) or relevant judicial verdicts), as well as in the case of high-profile federal or international accidents with significant damage to the environment.
The Rating is calculated as follows.
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