Climate Change Data

Open Joint-Stock Company "Severstal-auto"

Climate Impact & Sustainability Data (2004)

Reporting Period: 2004

Environmental Metrics

ESG Focus Areas

  • Environmental
  • Social
  • Governance

Environmental Achievements

  • Reduced gross discharge of polluting substances into the air by 28% at ZMZ.
  • Reduced water intake by 12% at ZMZ.
  • Wastewater discharge into the Volga was only 6% of the allowed level at ZMZ.

Social Achievements

  • Cost-cutting initiatives generated annual savings of approximately RUB 650 million.
  • Increased export sales revenue by 48% to RUB 3.5 billion.
  • Consolidated net income increased by 49% to RUB 1.3 billion.
  • Paid dividends of RUB 625.8 million.

Governance Achievements

  • Established an audit committee chaired by Seppo Remes.
  • Established a strategy committee chaired by David Herman.
  • Established a Personnel and Remuneration Committee.
  • Increased the number of independent members of the Board of Directors.

Climate Goals & Targets

Long-term Goals:
  • Substantially increase export volume over the next few years.
Medium-term Goals:
  • Gradually replace current light truck and mini-bus product lines with new vehicles based on the UAZ Patriot platform.
  • Begin mass production of a new engine family in 2007.
Short-term Goals:
  • Introduce a new four-wheel-drive vehicle UAZ Patriot in July 2005.
  • Begin exporting 406-series engines to China in 2005.

Environmental Challenges

  • Decline in UAZ sales due to a temporary halting of government procurement.
  • Higher environmental standards in many developed countries.
  • High import duties in most developing countries.
  • Increased competition from foreign automakers.
Mitigation Strategies
  • Increased export sales by developing assembly operations overseas and signing large export contracts.
  • Developing products to satisfy Euro 3 emission standards.
  • Exporting products as assembly kits to reduce import duties.
  • Strategic partnership with SsangYong to manufacture and distribute the SsangYong Rexton SUV in Russia.
  • Cost-cutting and production optimization programs.

Supply Chain Management

Responsible Procurement
  • Diversification of component supplier base.
  • Integrated purchasing of raw materials.
  • Standardisation of purchased materials and components.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Certifications: ISO 9001:2000

Third-party Assurance: ZAO PricewaterhouseCoopers Audit

Sustainable Products & Innovation

  • UAZ Patriot SUV
  • New family of petrol engines
  • New diesel engine

Awards & Recognition

  • OAO ZMZ ranked second in the Rating of environmental responsibility of major Russian companies for 2004.