Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic performance
• Socioeconomic development of regions
• Business ethics, risk management and anti-corruption
• Customer satisfaction
• Risks and opportunities posed by climate change
• Responsible water use and reduction of water consumption
• Reduction of energy consumption
• Non-compliance with environmental laws and regulations
• Employment, staff and management relationship
• Employee education and development
• Employee motivation
• Diversity and equal opportunity
• Occupational health and safety
• Corporate volunteering
• Charity

Environmental Achievements

• Total electricity consumption declined by 4% year-on-year due to a continued focus on energy efficiency.
• Total consumption of cold water by BaltTransServis decreased 19% year-on-year.
• Total consumption of cold and hot water by Ural Wagonrepair Company decreased 16% year-on-year.
• Amount of paper sent for recycling by New Forwarding Company and Ural Wagonrepair Company increased by 60% compared with the previous reporting period.
• Empty Run Ratio for gondola cars maintained at the industry-leading level of 38% in 2018.

Social Achievements

• Zero fatalities, zero accidents and zero cases of occupational illness.
• Staff turnover of only 18% (20% among men and 12% among women).
• 350 employees undertook training, totaling 33,238 hours (a 22% increase compared to the previous year).

Governance Achievements

• Continued to work diligently to ensure that its corporate governance framework meets the highest standards of international best practice.
• No reported cases of corrupt or fraudulent activity.

Climate Goals & Targets

Environmental Challenges

• System for capturing and processing statistical data regarding water usage across the Group is still under development.
• Globaltrans’ environmental management system is currently under development.

Mitigation Strategies

• Globaltrans plans to improve the monitoring system to control water quality and consumption.
• Globaltrans is committed to establishing an effective system for recording, collecting and processing information in all of its subsidiaries by next year.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Transparent supply chain

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards – core option

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental
• Human Resources

Environmental Achievements

• Rail is one of the most environmentally friendly modes of transport. The Group ensures that its activities fully comply with local environmental regulations. It also aims to help business and nature co-exist by focusing on applying modern technology in its operations and using natural resources rationally.

Social Achievements

• Globaltrans considers the wellbeing of employees central to its success and strives to maintain exemplary working standards, ensure job satisfaction and create opportunities for professional growth. The Group’s personnel policy focuses on creating a positive atmosphere at all offices and facilities to maximise productivity. As part of this, it offers medical insurance, support for education, opportunities to obtain additional qualifications and training, and financial aid in particularly difficult times.

Governance Achievements

• Globaltrans’ Board of Directors adopted the Company’s Code of Corporate Governance, guaranteeing that the interests of all shareholders are given due consideration. The Group upholds its responsibilities to shareholders. All employees are required to comply with these guidelines and the Group’s management team takes responsibility for ensuring that all departments adhere to these standards.

Climate Goals & Targets

Environmental Challenges

• General economic situation and operating environment in Russia, Kazakhstan, Ukraine, CIS and Baltic countries.
• Regulatory risk relating to the operation of the Russian railway transportation market.
• Highly competitive Russian rail transportation market.
• Significant concentration of the Group’s customer base.
• Cost of borrowing and/or deterioration in market conditions.
• Reliance on RZD for issuing permits.
• Physical state of the Russian, Ukrainian, CIS and Baltic countries railway infrastructure.
• Impact of inflation in Russia.
• Competition for personnel with relevant expertise.
• Reliance on RZD for locomotive traction and infrastructure usage.
• IT availability and continuity.
• Risks of terrorist attacks, natural disasters or other catastrophic events.
• Ambiguity of the law in Russia and CIS countries.
• Market risk (foreign exchange risk, cash flow and fair value interest rate risk), credit risk and liquidity risk.

Mitigation Strategies

• Constantly monitoring developments in the operating environment and regulatory regime.
• Maintaining a balanced fleet.
• Long-term, established relationships with key customers.
• Regularly monitoring competitors’ strategies.
• Ensuring that practically all of the Group’s rolling stock is insured against damage.
• Monitoring rolling stock through the Group’s dispatch centre on a 24/7 basis.
• Monitoring FAS initiatives.
• Increasing operational efficiency and focusing on cost reduction.
• Continuously monitoring costs.
• Regularly monitoring salary levels and other benefits offered by competitors.
• Monitoring customer satisfaction.
• Introducing solutions to maintain the availability of IT services.
• Monitoring IT-related activities and performance.
• Applying a Business Continuity Policy.
• Operating in compliance with tax, currency, labour, customs, antimonopoly and other applicable legislation.
• Using standard forms of agreements.
• Rigorous review of all contracts.
• Controls in place to monitor changes in legislation.
• Retaining external consultants for complex matters.
• Overall risk management program focusing on minimizing potential adverse effects on the Group’s financial results.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Third-party Assurance: PricewaterhouseCoopers Limited

Environmental Metrics

ESG Focus Areas

• Economic impact
• Socioeconomic development of regions
• Business ethics, risk management and anti-corruption
• Customer satisfaction
• Environmental impact
• Risks and opportunities posed by climate change
• Responsible water use and reduction of water consumption
• Reduction of energy consumption
• Non-compliance with environmental laws and regulations
• Social impact
• Employee education and development
• Employee motivation
• Diversity and equal opportunity
• Occupational health and safety
• Corporate governance

Environmental Achievements

• Decreased energy consumption in electricity, diesel, and petroleum by 13%, 14%, and 25% respectively.
• Reduced paper consumption by 42%.
• GHG emissions from the Group’s locomotive fleet were 138,198 tonnes of CO2 equivalent, 14% lower than in 2019.

Social Achievements

• No COVID-related redundancies.
• 21,226 hours of employee training delivered.
• Maintained salaries at pre-COVID levels.
• Low staff turnover rate (14% overall).

Governance Achievements

• Established an ESG Board Committee.
• Adopted ESG, Diversity and Inclusion, Freedom of Association, Human Rights, Supplier Code of Conduct, Environmental and Energy policies.
• Improved ESG disclosure, including Group-wide water consumption and LTIFR.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting operations and employee wellbeing.
• Reduced workplace safety checks due to the pandemic.

Mitigation Strategies

• Shifted almost the entire office workforce to remote working.
• Implemented safety protocols for on-site employees.
• Provided daily communications and updates on COVID-19.
• Provided employees with necessary hardware and software for remote work.
• Focused on providing online occupational health and safety training.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct based on UN Global Compact principles.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI Standards – Core option, EU’s 2014/95/EU Directive

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Safety and wellbeing of employees
• Environmental performance
• Stakeholder engagement
• Climate-related financial disclosure

Environmental Achievements

• Reduced paper consumption by 14% year-on-year
• Reduced water consumption by 2% year-on-year to 16,279 m3
• No cases of non-compliance with environmental laws and regulations

Social Achievements

• Reduced Lost Time Injury Frequency Rate (LTIFR) to zero
• Increased training hours by 2.6 times (55,780 hours)
• No COVID-related redundancies
• Improved safety performance with LTIFR falling from 0.66 to zero
• First time disclosure of gender pay gap (-3%), women earn on average 3% more

Governance Achievements

• Established ESG Committee
• Issued ESG policy
• Improved sustainability scores from Sustainalytics
• Recruited specialists in health and safety, environment, and training and development

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting employee wellbeing and operations
• Increased GHG emissions due to increased locomotive fleet use
• Potential adverse effects of climate change and related regulations on operations and financial results
• Transition risks associated with the transition to a low-carbon society
• Physical risks of climate change such as natural disasters impacting rail infrastructure

Mitigation Strategies

• Promoting hybrid working and enhancing internal policies to support a safe environment
• Focusing on operational efficiency to reduce empty railcar transport
• Planting trees to offset CO2 emissions
• Improving operational efficiency and reducing environmental footprint
• Proactive monitoring of carbon emissions and evaluating operational and technological improvements in fuel efficiency
• Maintaining a balanced fleet to adapt to changing market conditions
• Engaging with stakeholders and improving transparency around ESG topics
• Conducting climate assessments and adapting strategies to enhance business resilience

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct based on UN Global Compact principles

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters, severe weather events, extreme temperatures impacting rail infrastructure

Transition Risks

• Increased fuel and energy costs, regulatory changes, market shifts in demand

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Employee Well-being
• Safety
• Community Investment
• Governance
• Diversity & Inclusion

Environmental Achievements

• 9% decrease in total emissions (Scope 1 and Scope 2)
• Launched Green Office Initiative
• Small tree-planting project launched

Social Achievements

• Achieved zero-harm target with LTIFR maintained at 0
• Increased training hours by 1.4 times
• 88% overall employee engagement score
• Improved employee benefit packages based on employee feedback
• Continued support for various charitable organizations

Governance Achievements

• Improved ESG governance structure
• Formal ESG policy adopted in January 2021
• ESG Committee formed in January 2021
• Second climate-related disclosure published in accordance with TCFD recommendations

Climate Goals & Targets

Environmental Challenges

• Increased employee turnover (19% in 2022)
• Potential climate-related physical risks (natural disasters, extreme weather)
• Transition risks (increased regulation on carbon emissions, higher fuel costs)
• Market risks (potential decline in demand for certain freight due to regulations)
• Reputational risks (increased stakeholder expectations for environmental measures)

Mitigation Strategies

• Implementing business continuity policy
• Refining analysis of potential physical risks and mitigation plans
• Improving operational efficiency and reducing energy consumption
• Proactively monitoring carbon emissions
• Maintaining a balanced fleet to adapt to changing market conditions
• Engaging with stakeholders and improving transparency
• Investing in fuel-efficient locomotives
• Launching a tree-planting project

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Code of Conduct (based on UN Global Compact principles)

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters, severe weather events, extreme temperatures

Transition Risks

• Increased regulation on carbon emissions
• Higher fuel and energy costs
• Carbon taxes
• Market shifts in demand

Opportunities

• Increased demand for lower-carbon transport
• Improved energy efficiency and reduced operating costs
• Enhanced reputation

Reporting Standards

Frameworks Used: GRI Standards – Core option, TCFD recommendations, EU’s 2014/95/EU Directive

Certifications: null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• delivering business efficiency and best-in-class services
• creating long-term value and serving the needs of a vast group of stakeholders
• keeping our employees safe, engaged, motivated and empowered
• minimising our environmental footprint and promoting sustainability
• making positive contributions to the communities where we operate

Environmental Achievements

• 2% year-on-year decrease in the Group’s total emissions (Scope 1 and Scope 2)
• First-time disclosure of waste management data with 99% of waste categorised as low-hazardous
• 1% year-on-year decrease in electricity usage
• 2% year-on-year decrease in diesel consumption
• 13% year-on-year decrease in petrol consumption
• 18% year-on-year decrease in paper consumption per employee

Social Achievements

• Overall staff turnover improved to 16% (2022: 19%)
• 52,184 total training hours recorded across the Group companies
• Increased number of employees with disabilities to 30
• Continued external recognition through various ESG rankings

Governance Achievements

• Adoption of a formal ESG policy in January 2021
• Establishment of the ESG Committee in January 2021
• Strengthening of governance practices and risk management framework

Climate Goals & Targets

Environmental Challenges

• Increase in LTIFR in 2023 from 0 to 0.90 due to work-related injuries
• Potential declines in demand for certain types of freight transported by rail due to increased climate change regulations and shifts in consumer preferences
• Increased expectations among stakeholders of more aggressive environmental measures and climate change actions

Mitigation Strategies

• Thorough investigation of incidents and development of remedial measures
• Maintaining a balanced fleet to adjust to changing market conditions
• Continued engagement with stakeholders and improved transparency around all ESG topics

Supply Chain Management

Responsible Procurement

• Suppliers’ Code of Conduct introduced in 2020

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters, severe weather events and extreme temperatures

Transition Risks

• Increased fuel and energy costs
• Problems operating diesel locomotives due to increased regulations
• Increases in the cost of cleaner locomotives
• Higher costs related to carbon taxes
• Early asset write-downs

Opportunities

• Increased demand for rail transportation due to carbon pricing and decarbonisation
• Improved energy efficiency and reduced operating costs

Reporting Standards

Frameworks Used: GRI, TCFD