Industrial Giant MMK Enhances ESG Focus under Guidance of its Chairman Viktor Rashnikov

Industrial Giant MMK Enhances ESG Focus under Guidance of its Chairman Viktor Rashnikov

Despite ongoing challenging market conditions, global industry leaders continue to meet their ESG commitments, with some even increasing environmental and social spending over the past year. An outstanding example is Magnitogorsk Iron & Steel Works (MMK), one of the largest industrial enterprises in CIS. As part of the long-term sustainability programme launched by the Chairman of the Board of Directors, Viktor Rashnikov, the Company has increased its financing of environmental and social activities to record levels.

MMK’s spending on social investments and charity exceeded EUR 45 million in 2022, more than EUR 30 million of which came from the budget of the parent company. The Company did not change its social investment programme despite the deterioration of the economic situation. A major portion of MMK’s spending – nearly EUR 14 million – was earmarked for charitable purposes through the Metallurg corporate charitable foundation, which carries out large-scale projects to help vulnerable segments of the population in the regions where the Company operates. The foundation provides medical, educational and other support programmes for children, young people, pensioners, veterans and other social groups, and it also collaborates with local NGOs involved in social issues.

Another key area of investment (around EUR 7.8 million) was aimed at improving healthcare and medical support for the Company’s employees and residents of Magnitogorsk. As part of a programme led by Rashnikov to modernise medical services in the region, MMK supported several important projects, including the acquisition of state-of-the-art medical equipment for one of the city’s main clinics, such as an MRI machine that is unique for Russia; the opening of a rehabilitation centre with high-tech equipment; repairs at existing facilities; and the purchase of new ambulances. The Company also continued to develop its health resorts for both children and adults, where workers receive paid treatment, and launched a new healthy-living programme for employees that offers free access to sports facilities throughout the city.

Under Rashnikov’s leadership, MMK’s sustainability activities focus a great deal of attention on improving the environmental situation and reducing the plant’s environmental impact. The Company remains committed to the UN Sustainable Development Goals and to reducing greenhouse gas emissions to below the global industry average by 2025. Overall, MMK spent around EUR 1 billion to reduce emissions since 2017, and an estimated 60% of its development-related investments are earmarked for environment-related projects.

In 2022 alone, the Company’s investments in environmental activities and the implementation of its Environmental Programme amounted to around EUR 413 million. Among the key investment targets were the construction of new environmental facilities during the reconstruction and modernisation of production plants; projects to reduce atmospheric emissions and discharges into bodies of water; waste management and land reclamation initiatives; and greenification, conservation and the development of biological diversity. MMK also launched a real-time emission monitoring system to ensure compliance with environmental standards.

MMK recently took several important steps to develop environmentally friendly production methods. It incorporated an energy management system to improve the plant’s energy efficiency, and it was awarded an international Energy Management Insight Award for leadership in the area of best energy practices. The Company also increased its own electricity production and expanded the use of waste gases at its power plants, and it also became the first industrial enterprise in the country to successfully execute energy service agreements.

MMK also announced plans to put into operation this summer the first two units of a new coke production plant with a state-of-the-art biochemical unit for the treatment of wastewater generated during the coking process. These and other projects are expected to reduce annual CO2 emissions by 2.2 million tonnes and significantly improve air quality in and around Magnitogorsk.

In addition to projects aimed at improving the local environment and the health of residents, Rashnikov is investing heavily to make Magnitogorsk and the surrounding area a comfortable and attractive place to live. Under his guidance, major facilities are being financed for amateur and professional sports in the region. These include the Metallurg-Magnitogorsk sports club – one of the largest in the country, the club has a number of facilities and sports grounds, including for athletes with disabilities – and two modern ski resorts, in Abzakovo and Bannoe, which have become popular holiday destinations for locals and tourists and have also hosted World Cup stages.

Perhaps the largest project launched by Rashnikov recently is the transformation of nearly 400 hectares of undeveloped urban land into a large park complex with cultural, educational and recreational facilities that can be used all year round. Named Attraction, the project, conceived and financed by the MMK Chairman, is expected to create more than 1,500 new jobs and to become a driving force for the development of tourism and local small and medium-sized businesses once it is fully completed in 2025, while preparations for the opening of the second phase of the impressive park this July are already under way.

Finally, another area of the sustainability programme spearheaded by Rashnikov is support for young people and aspiring professionals whose goal is to work at a high-tech, state-of-the-art industrial production facility. The Company finances various educational and vocational training programmes as part of its long-term partnership with the Nosov Magnitogorsk State Technical University, a local children’s technopark and an IT training centre, as well as a centre that trains personnel for high-tech production work in the metals industry. At the same time, MMK offers a high-performance employee development programme and pays a great deal of attention to compliance with best international practices in the area of occupational health and safety, having become the first company in Russia to receive gold accreditation from Investors in People, a UK-based accreditation organisation, for its HR work. Under Rashnikov’s leadership, MMK has become an industry leader in terms of supporting its own workers and developing the industry as a whole, while promoting social well-being and economic growth in the region.

While companies around the world are playing an increasingly important role in improving the prosperity of society and protecting the environment in the regions where they operate, industrial leaders such as MMK are becoming clear examples of an unwavering commitment to sustainability even amid political and economic turbulence. Continuing this work will be of key importance to long-term growth and prosperity.

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