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Industrial giant MMK strengthens ESG focus under guidance of Chairman Viktor Rashnikov

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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. A standout example is Magnitogorsk Iron & Steel Works (MMK), one of the largest industrial enterprises in the CIS. As part of a long-term sustainability programme launched by the company’s Chairman of the Board of Directors, Viktor Rashnikov (pictured) MMK has increased its financing of environmental and social activities to record levels.

Despite deteriorating economic conditions and Western sanctions imposed on Rashnikov over the conflict in Ukraine, the company kept its social investment plans unaltered. MMK’s spending on social investments and charity exceeded €45 million in 2022, more than €30m of which came from the budget of the parent company. A major portion of MMK’s spending – nearly €14m – 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, as well as partnering with local NGOs involved in social issues.

Another key area of investment (around €7.8m) 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 modernize medical services in the region, MMK supported several important projects. These included 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; carrying out repairs at existing facilities; and the purchase of new ambulances. The company also continued to develop its health resorts for children and adults, where its employees 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 have been heavily focused on improving the environmental situation and reducing the plant’s environmental impact. The company has said it 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 between 2017 and 2021, 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 €413m. 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 became the first industrial enterprise in the country to successfully execute energy service agreements.

For this summer, MMK has announced plans to put into operation the first two units of a new coke production plant with a state-of-the-art biochemical unit to treat 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.

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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, offering 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 stages of the World Cup.

Perhaps the largest project launched by Rashnikov recently is the transformation of nearly 400 hectares of undeveloped urban land in Magnitogorsk into a major park complex with cultural, educational and recreational facilities that can be enjoyed year -round. Conceived and financed by the MMK Chairman, the project – which is called Attraction – 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 upon its full completion in 2025. 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 who aim 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, as well as supporting a local children’s technopark and IT training centre, and 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 directs significant efforts towards ensuring compliance with best international practices in the area of occupational health and safety, having become the first company in Russia to receive gold accreditation for its HR work by the UK-based accreditation organisation Investors in People. 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.

As companies around the world play an increasingly important role in empowering societies 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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