Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental

Environmental Achievements

• Total pollutant emissions decreased by 1% year-on-year.
• Percentage of water recycled and reused by TMK’s Russian plants reached 95.32%.
• Despite an increase in output, overall water consumption levels remained flat year-on-year.
• Water intake from surface water bodies decreased by 3%
• Wastewater decreased by 2%, and wastewater discharge to natural water bodies was reduced by 10%
• Discharge of pollutants into water bodies decreased by 11%
• 11 of the Company’s plants confirmed their compliance with ISO 14001:2015.

Social Achievements

• 817 TMK’s employees and managers across all levels completed external environmental training and awareness programs.
• TMK’s Corporate University TMK2U launched Ecology for Non-Specialists, a new training program.
• 219 students attended environmental awareness lectures.

Governance Achievements

• 26 investment initiatives undertaken, aimed at fulfilling the requirements of national legislation, ensuring environmental safety and a favorable environment

Climate Goals & Targets

Environmental Challenges

• Increased waste generation due to production growth (684 thousand tonnes in 2018).

Mitigation Strategies

• Implemented waste management software solutions at Volzhsky Pipe Plant and Seversky Pipe Plant.
• Spent $4.8 million to minimize waste impacts, including $1 million on land protection.
• Decommissioned and transferred 452 units of PCB-containing equipment for disposal.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• 4% YoY reduction of total tonnes of GHG emissions due to optimizing operations and improving process solutions
• 4% YoY of total water consumption
• 3% YoY of wastewater discharge
• 9% YoY of waste generation
• 4% YoY pollutant emission

Social Achievements

• Over 40k employees participated in Annual Steel Safety Day
• 100% of production sites took part in Steel Safety Day 2019
• US$10.6m invested in safe working environment measures in Russian and European divisions in 2019
• Comprehensive charity program supporting favourable social climate in the regions of operations
• 31% down in Number of accidents

Governance Achievements

• 5 Independent Directors on the Board; The Board of Directors Committees chaired by independent directors
• TMK ranks in the Top-20 companies in Russia with the best disclosure of corporate governance information, according to the annual survey "National Corporate Governance Index" in 2018

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Occupational safety
• Environmental protection
• Corporate governance
• Social responsibility
• Sustainable development

Environmental Achievements

• Reduced greenhouse gas emissions by 3.4%
• Increased percentage of recycled and reused water by the Russian division to 95.85%
• Reduced total water consumption by 3%
• Reduced water consumption in production by 15%
• Reduced wastewater discharge to natural water bodies by 8%
• Reduced waste generation by 17%
• Reduced waste disposed of at own facilities by 3%
• 9 of the Company’s plants confirmed their compliance with ISO 14001:2015

Social Achievements

• Launched TMK2U Corporate University for employee training and development, investing $1.47 million
• Implemented the Unified Compensation System at 11 production facilities, covering over 31,500 employees
• Reduced accident frequency rate by 28%
• Reduced the number of severe workplace injuries by 25%
• Implemented the largest fundraising project in the Foundation’s history “Stop Coronavirus!”, raising RUB 100 million
• Implemented various socially significant initiatives through the Sinara Charity Foundation

Governance Achievements

• Improved corporate governance system, successfully navigating the challenges of the COVID-19 pandemic
• Revised TMK Group Strategy to 2027, adapting strategic goals and priorities to the new business environment
• Adopted TMK Group’s Risk Management Policy
• Successfully completed share buyback programs
• Improved liquidity profile by extending maturity dates, mitigating foreign exchange risk, and decreasing debt financing costs
• Corporate management system successfully passed recertification audit for conformity with international standards (ISO 9001, EN ISO 9001, BS EN ISO 9001)

Climate Goals & Targets

Environmental Challenges

• Lower prices and demand for tubular products due to oil and gas market volatility and COVID-19 restrictions
• Increase in purchase prices for raw materials
• Legal risks arising from potential actions of state authorities and geopolitical tensions
• Cyber risks due to large-scale digital technology rollout and remote work
• COVID-19 pandemic impacting operations and supply chains

Mitigation Strategies

• Signing long-term contracts, improving internal efficiency, monitoring market situation, expanding geography of supply
• Agreeing formula-based pricing with suppliers, optimizing raw material procurement, improving raw material utilization, inventory management
• Monitoring antitrust compliance, analyzing international regulations, controlling contracts, employee training
• Implementing TMK’s Strategy to Ensure and Improve Cybersecurity, infrastructure upgrades, security analysis, security awareness training
• Implementing crisis response measures, flexible business processes, remote work capabilities

Supply Chain Management

Responsible Procurement

• E-commerce platform for procurement
• Code of Ethics
• Anti-corruption Hotline

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, ISO 50001:2011, ISO 14001:2015, ISO 45001:2018

Certifications: ISO 50001:2011, ISO 14001:2015, ISO 45001:2018, LEED Gold (R&D facility)

Awards & Recognition

• 7th in sustainability ranking of Russian companies (Expert magazine)
• MSCI ESG rating of BB
• ISS corporate governance score of 3
• Forbes ranking among 30 most environmentally friendly companies in Russia
• V.I. Vernadsky Foundation’s “Environmental Culture. Peace and Accord” award
• 16th Russian contest “Environment Leader of Russia 2020” award (TAGMET and Sinarsky Pipe Plant)

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Climate action
• Occupational health and safety
• Business development and economic value creation
• Business ethics
• Human capital development
• Developing the regions of operation

Environmental Achievements

• Decommissioned 447 pieces of electrical equipment containing PCBs
• TAGMET granted an integrated environmental permit valid for seven years
• Sent 1,092.6 thousand tonnes of waste for reuse or utilization (138% y-o-y increase)
• VTZ commissioned the ECO HOUSE TMK administration and laboratory complex
• CHTPZ commissioned a gas-cleaning unit under the Clean Air federal project
• STZ and PNTZ commissioned ladle dryers, eliminating emissions of Hazard Class 1 pollutants
• VTZ has its own advanced waste disposal facility using encapsulation technology

Social Achievements

• 17 thousand people joined TMK following the acquisition of new assets
• Implemented multiple social programs: benefits, allowances, recreation, cultural events, and financial assistance
• Launched Mobi2U mobile app with ~33,000 active users
• Implemented Bring a Friend recruitment program
• 90% of managers appointed in 2021 were selected from the talent pool
• Annual participation in Steel Safety Day
• Rolling out Mobile Audit digital control tool
• Supported local communities and healthcare facilities to prevent COVID-19
• TMK2U Corporate University offered training programs to employees
• Ran programs for sponsored schools and colleges
• Approved Sustainability Policy setting forth principles around human rights
• Successfully operating hotline received 5,692 reports
• Delivered 58 face-to-face trainings on compliance to 3,094 employees
• Vetted 8,816 suppliers in 2021, including anti-corruption clauses in contracts
• Included human rights risks in its 2022 risk map
• Ran programs to support women in the workforce

Governance Achievements

• TMK’s anti-corruption system ranked highest (Class A1) in 2022 Anti-corruption Ranking of Russian Business
• Implemented Code of Ethics on the Shop Floor interactive course completed by >22,000 employees
• 0 incidents of corruption and discrimination reported

Climate Goals & Targets

Supply Chain Management

Supplier Audits: 8,816 suppliers vetted

Responsible Procurement

• Anti-corruption clauses included in contracts with counterparties

Climate-Related Risks & Opportunities

UN Sustainable Development Goals

• 7

TMK aligns its sustainability efforts with the UN Sustainable Development Goals (SDGs), specifically targeting nine priority SDGs.

Awards & Recognition

• Forbes ESG-5, category ESG-C of the ESG Rating
• Best Solution for the Digital Economy Using Artificial Intelligence
• Gold category of Russia’s Best Employers Ranking
• No. 13 among 30 most environmentally friendly companies in Russia
• No. 1 among steelmakers
• Top 5 employers in metals industry
• Leader in ESG ranking of Russian Industrial Companies
• Project of the Year for cloud-based workstations
• Category 2 – above average in NCR ESG Index of Russian Business
• №1 in sustainable development ranking by Expert magazine
• Best Corporate Media 2021 for Code of Ethics video course
• Ecotech-Leader 2022 for AQA project
• Group A – Best Practice in philanthropy
• Fourth place in Steel Challenge Championship

Environmental Metrics

ESG Focus Areas

• Environmental protection
• Climate action
• Occupational health and safety
• Business development and economic value creation
• Human capital development
• Business ethics
• Developing the regions of operation

Environmental Achievements

• Water discharge decreased 9% y-o-y due to organizational measures and the operation of AQA facilities
• 485.5 thousand tonnes of waste was reused, a fivefold increase y-o-y driven by specific measures taken at VTZ, PNTZ, and CHTPZ
• Specific CO₂ emissions decreased 5% and indirect CO₂ emissions fell as a result of energy efficiency initiatives.
• Reductions in energy consumption achieved as a result of efficiency initiatives: 611.1 thousand GJ

Social Achievements

• TMK’s group-wide employee engagement was up 7 p.p. y-o-y.
• VTZ was named the winner of TMK’s Best OHS Organization corporate competition.
• Over 70% of managers appointed at the Company are selected from the talent pool.

Governance Achievements

• 0 incidents of corruption
• 0 incidents of discrimination
• >40 thousand employees trained in corporate ethics and compliance

Climate Goals & Targets

Environmental Challenges

• Pollutant emissions were up 15% y-o-y in 2022 to 21.5 thousand tonnes, driven by higher output.

Mitigation Strategies

• CHTPZ is a participant of the Clean Air federal project, which aims to improve the environmental situation and halve air emissions in major industrial centers by 2030.
• Energy audits conducted at TMK Group pipe plants led to the development and approval of the Energy Efficiency Program for 2023–2027.
• Centers of excellence for climate impact mitigation were established at VTZ, PNTZ, SinTZ, STZ, TAGMET, and CHTPZ.

Supply Chain Management

Responsible Procurement

• TMK and individual Group enterprises include provisions of the Counterparty Management Policy in their contracts with suppliers.

Climate-Related Risks & Opportunities

Opportunities

• TMK launched a new range of pipes for hydrogen energy, Sputnik H and Sputnik C

UN Sustainable Development Goals

• Climate action
• Occupational health and safety
• Business development and economic value creation
• Human capital development
• Business ethics
• Developing the regions of operation

TMK aligns its sustainability efforts with the global agenda, specifically targeting the UN Sustainable Development Goals (SDGs).

Sustainable Products & Innovation

• Sputnik H and Sputnik C pipes for hydrogen energy

Awards & Recognition

• A leader (“advanced level”) in the ESG ranking of Russian Industrial Companies
• The Gold category of Russia’s Best Employers Ranking 2022
• ACRA RSPP ESG-5 level within the ESG-C category (the highest level) of the ESG Rating
• A1 – the highest level of anticorruption efforts and the lowest corruption risks — in the Anticorruption Ranking of Russian Business
• 3rd position in the Top 100 Sustainability Ranking of Russian Companies
• Category 2 (above average) in the ESG Index of Russian Business
• Top category (A+) in the Corporate Philanthropy Leaders ranking
• Winner in Digital Transformation Project, Energy Efficiency Project, and Progress in Human Resources Development categories of the National Competition held by the RSPP
• Winner in Talent Pool category for the development of TMK2U Corporate University (Company of the Future Award)
• Winner in Construction and Operation of Treatment Facilities category (ECOTECH-LEADER 2022)
• Winner in ESG Video, Social Responsibility, and Sustainability category (Best Corporate Media in Russia 2023)

Environmental Metrics

ESG Focus Areas

• Climate action
• Environmental protection
• Occupational health and safety
• Developing the regions of operation
• Human capital development
• Business ethics
• Business development and economic value creation

Environmental Achievements

• Reduced total weight of waste generated by 16% compared with 2022
• Reduced air pollutant emissions intensity by 5.7%
• Reduced energy consumption by 677.5 thousand GJ as a result of energy efficiency measures
• 96% water recycling ratio in production cycles
• 82% share of scrap metal in total materials used
• 30-tonne reduction in air pollutant emissions at CHTPZ due to gas cleaning system upgrades
• Implementation of a biological effluent polishing system at STZ treating 16,000 m3 of water per day

Social Achievements

• Developed and launched an online training course on TMK’s Sustainability Strategy available to all employees
• Annual Safety Day with 46,000 employees (89% of workforce) participating, leading to RUB 230 million allocation to address identified gaps
• Implementation of an electronic medical checkup system at several plants for early cardiovascular disease detection
• PNTZ employees trained in workplace first aid through Volunteer Rescuer movement (147 new employees and 36 instructors in 2023)
• TAGMET installed 113 cameras and a computer vision system to enhance video monitoring for OHS
• Implementation of AR/VR training projects at the Center of Excellence for augmented and virtual reality
• Mobi2U corporate social network with over 52,000 registered users
• 19th Horizons corporate forum held with 191 events and almost 1,000 attendees

Governance Achievements

• Zero incidents of corruption and discrimination reported
• 1,275 reports received and investigated by the whistleblower hotline, with 4 confirmed cases of Code of Ethics violations
• First assessment of 15 key suppliers using sustainability criteria, with 11 categorized as having highly mature sustainability practices
• First customer satisfaction and loyalty survey conducted, identifying nine internal business processes needing improvement

Climate Goals & Targets

Environmental Challenges

• Climate change risks (physical and transition)

Mitigation Strategies

• Identified and assessed physical and transition risks of key production facilities guided by TCFD recommendations
• Developed a Climate Change Adaptation Plan and an Energy Transition Roadmap
• Major enterprises prepared mandatory reports on GHG emissions
• VTZ implementing a carbon farm project at its landfill facility

Supply Chain Management

Supplier Audits: 15 key suppliers assessed

Responsible Procurement

• Sustainability criteria used in supplier assessment

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 45001:2018 or GOST R ISO 45001-2020 (75% of enterprises)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Group 1 in the ESG ranking of Russian industrial companies (NRA)
• ESG-4 level (ACRA)
• Group 2 in the ESG Index of Russian Business (NCR)
• Gold category of Russia’s best employers (Forbes)
• Class AAA in the Anti-corruption Ranking (RSPP)
• Category A in the Corporate Philanthropy Leaders ranking (Donors Forum)
• Company of the Future 2023 award (Corporate Socialization category)
• ECOTECH-LEADER 2023 award
• Russia’s Best Corporate Media 2023 award
• ComNews Awards 2023 award
• The Project of the Year 2023 award