The existing corporate risk management system is integrated into the Company’s business processes and enables effective risk‑based decisions at various organisational levels to achieve strategic and operational goals.
Nornickel has set the following key risk management objectives:
Increase the likelihood of achieving the Company’s goals
Improve resource allocation
Boost Nornickel’s investment case and shareholder value
The risk management system is based on the principles and requirements set forth in Russian laws, as well as professional standards, including the Corporate Governance Code recommended by the Bank of Russia, GOST R ISO 31000‑2019 Risk Management. Principles and Guidelines, COSO Enterprise Risk Management – Integrating with Strategy and Performance, and Recommendations for Public Joint Stock Companies to Organise Risk Management, Internal Controls, Internal Auditing, and the Work of Auditing Committees under Boards of Directors (Supervisory Boards) (Appendix to the Bank of Russia’s Letter No. IN‑06‑28/143 dated 1 October 2020).
To manage production and infrastructure risks, Nornickel develops, approves, updates, and tests business continuity plans to maintain operations and take recovery steps in case of emergency.
Risk management framework
Board of Directors
Audit Committee of the Board of Directors
Approving the corporate Risk Management Policy
Supervising the development of the risk management system
Approving the Corporate Risk Appetite Statement (annualy)
Managing strategic risks on an ongoing basis
Reviewing and approving the risk management development roadmap and assessing its implementation status (annualy)
Reviewing reports on strategic and key risks (annually/quarterly)
Assessing risk management performance at Nornickel (annualy)
Management Board
Risk Management Committee of the Management Board
Reviewing strategic risks and reports on key risks
Reviewing materialised risks and lessons learned
Reviewing risk appetite metrics
Making decisions related to key risk management
Reviewing business continuity plans
Reviewing the strategy and development plans for the Corporate Risk Management System (CRMS) and Internal Control System (ICS)
Reviewing the performance of dedicated risk management committees within business verticals
Internal audit
Making independent assessments of the effectiveness of risk management, internal controls, and corporate governance (annually)
Internal control
Methodological support and participation in risk assessment of business processes
Risk Management Service
Developing and updating the risk management methodology
Preparing reports on Nornickel’s top risks (quarterly)
Preparing reports on strategic risks (annualy)
Enhancing quantitative risk assessment with simulation modeling tools
Improving the Company’s business continuity management svstem
Introducing the practice of using risk appetite
Ensuring employee training in practical approaches to risk management
Risk owners
Day‑to‑day risk management within the integrated risk management model, including risk identification, analysis, assessment, and/or prioritisation, as well as development and execution of response plans and mitigation measures
Risk‑based decision making
In 2023, the Company completed the following projects/initiatives to develop, improve, and maintain the maturity of its risk management system:
Piloted a project to automate project risk management via the existing GRC‑based system, and automated links between risks and control procedures for environmental risks
Ran a quantitative assessment of the cumulative impact of risks on functional strategies
Prepared training materials on project risk management
Trained employees of the Kola and Norilsk Divisions on environmental risk management
Maintained regular activities of the Management Board’s Risk Management Committee and dedicated function‑level risk management committees
Improved integration between risk management and budget planning processes through GRC‑based automation tools
Ran a quantitative assessment of the cumulative impact of key risks on the Company’s 2024 budget, as well as an analysis of the budget sensitivity to key risks, with follow‑up risk management measures included in the budget
Broke down the Company’s risk appetite into lower organisational levels, set up monitoring of relevant metrics, and completed process automation
Further improved quantitative assessment tools for operational risks
Ran regular quantitative assessments of investment risks
Had the risk management system’s maturity independently assessed by a third party, confirming its high maturity level
Developed the concept for assessing long‑term climate‑related risks as part of a project to ensure compliance with TCFD recommendations
In line with risk management system improvement plans for 2024, the following areas have been prioritised:
Further automating risk management processes and system functionality
Expanding the scope of quantitative risk assessment in strategic and operational planning
Enhancing the methodology to analyse, assess, and manage various categories and types of risks
Applying and enhancing the concept for assessing long‑term climate‑related risks in line with TCFD requirements
A high‑level map of Nornickel’s material risks leverages global best practices in risk management. The risk map ranks material risks by effect on the Group’s objectives and by source.
Map of Nornickel’s material risks with year‑on‑year changes in 2023
Risk Map
Risk
Risk: effect of uncertainty on objectives (ISO/GOST R 31000).
Risk source: element which alone or in combination has the potential to give rise to risk (ISO/GOST R 31000). The assessment takes into account the predominance of external or internal factors.
The Effect on Nornickel’s Objectives scale shows the relative impact of risks.
Changes in risk status in 2023 reflect the continued or increased effect of multiple external factors on the Company as it adapted to a new normal.
Key strategic risks
The Company’s strategic risks were updated in 2023. Nornickel sees the following groups of risks as its key risks:
Lower demand for the Company’s products
Lower productivity and disruptions of operations
Mismatch between Nornickel’s financial position and its growing strategic development needs
Failure to achieve targets to reduce environmental footprint
Insurance
Insurance is an essential tool used to manage risks while protecting the property interests of Nornickel and its shareholders against any unforeseen losses related to operations, including due to external effects.
Nornickel has centralised its insurance function to ensure the consistent implementation of its uniform insurance policy and standards. The Company annually approves a comprehensive programme that defines key parameters by insurance type, key business area, and project. Nornickel has developed and implemented a corporate insurance programme that covers assets, equipment failures, and business interruptions across the Group as well as enterprises in the core production chain, all on the same terms. The directors’ and officers’ liability, freight, construction and installation, vehicle, and other types of liability insurance programmes of the Company are also centralised and promote continuity.
Nornickel maintains insurance contracts with major Russian insurers.
The Company applies industry best practice and leverages insurance market trends to negotiate the best insurance and insured risk management terms.
Key risks
Nornickel’s risks are all inherent to its strategic and operational development and business continuity goals. Key risks have a varying degree of effect on Nornickel’s objectives.
Climate‑related risks
Nornickel assesses climate‑related risks and opportunities based on the Bank of Russia’s recommendations for public joint stock companies to disclose non‑financial informationThe Bank of Russia’s Information Letter No. IN‑06‑28/49 On Recommendations for Public Joint Stock Companies to Disclose Non‑financial Information Related to Their Activities, dated 12 July 2021. as well as TCFD recommendations, which prioritise the following risks categories:
Physical risks can manifest themselves as abnormal weather (acute) or lasting changes in weather patterns (chronic). Consequences of climate‑related physical risks for the Company can include permafrost thawing, changes in water levels in water bodies, precipitation amounts and patterns, and other climate risk factors which may adversely affect the Group’s operations.
Transition risks arise from the transition to a low‑carbon economy. Key risks of this type include relevant political, regulatory, technological, market, and reputational risks that can substantially affect demand for Nornickel products.
The Company’s assets are located in regions that have long been affected by climate change, which is reflected in our current technical, production, and environmental risks. The Company continues integrating its climate risk and risk factor management process into its business processes in accordance with TCFD and COSO recommendations. The continued integration of physer‑term risks. Transition risks can be classified in line with TCFD recommendations both as a standalone risk and as a risk factor for other risks. The Company has compiled a list of its transition risks and ran their pilot assessment.
ical risks implies structuring the procedure and rules around managing both current and longAs part of implementing the TCFD Compliance Roadmap and meeting the objectives set in the corporate Environmental and Climate Change Strategy, Nornickel has been improving its climate risk management.
The analysis of physical risks relies on public scenarios of the Intergovernmental Panel on Climate Change (SSP1‑2.6, SSP2‑4.5, SSP5‑8.5) localised for all regions where the Company operates its production facilities. To analyse transition risks, we rely on our own scenarios for global economy and climate change until 2050. As part of permafrost thawing risk management, the Company further develops its facility monitoring system for continuous automated monitoring of permafrost foundation soil temperature and foundation deformations. The monitoring system is developed by the Buildings and Structures Monitoring Centre of the Norilsk Division, which is responsible for technical supervision and permafrost monitoring and serves as a centre of excellence in engineering geology.
Developing climate risk management procedures
Permafrost degradation (physical climate risk)
Loss of bearing capacity by pile foundation beds may lead to deformation and collapse of buildings and structures.
Key risk factors
Climate change, average annual temperature increases over the last 15 to 20 years
Increased depth of seasonal permafrost thawing
Effect on Nornickel’s development goals and strategy
Effective delivery of finished products (metals) in line with the production programme
Social responsibility: comfort and safety of people living in Nornickel’s regions of operation
No emergency situations of interregional or nationwide scale, including environmental damage
Risk assessment
Effect on objectives: medium. Source of risk: external. Year‑on‑year change in risk: stable.
Key mitigants
To manage this risk, Nornickel:
carries out regular monitoring of soil condition under the foundations of buildings and structures
carries out geodetic monitoring of the movement of buildings
uses satellite technology to monitor Nornickel’s assets and further analyse the data
regularly monitors the ongoing condition of Nornickel’s buildings and structures and subsequently processes the results to check for potential risks of Earth surface displacements
regularly monitors the ongoing condition of Nornickel’s buildings and structures by scaling the information and diagnostic system (in particular, by deploying automated observation points to monitor the key factors that affect the safe operation of buildings and structures)
monitors soil temperature in the foundations of buildings and structures
takes corrective and adaptive actions to ensure that buildings and structures are technically operational.
Low water levels in rivers (physical climate risk)
Water shortages in storage reservoirs of Nornickel’s hydropower facilities may result in failure to achieve required water pressures at HPP turbines, leading to lower power output and to drinking water shortages in Norilsk.
Key risk factors
Extreme weather events (droughts) caused by climate change
Effect on Nornickel’s development goals and strategy
Social responsibility: comfort and safety of people living in Nornickel’s regions of operation
Lower share of renewables in the Company’s energy mix
Risk assessment
Effect on objectives: medium. Source of risk: external. Year‑on‑year change in risk: stable.
Key mitigants
To manage this risk, Nornickel:
improves the performance of the closed water circuit to reduce water withdrawal from surface sources (water bodies)
carries out regular hydrological observations to forecast water levels in rivers and other water bodies
cooperates with the Federal Service for Hydrometeorology and Environmental Monitoring (Rosgidromet) on setting up permanent hydrological and meteorological monitoring stations in order to improve the accuracy of water level forecasts for major rivers across Nornickel’s regions of operation
dredges the Norilskaya River in the water withdrawal areas to increase water withdrawal reliability during low water periods
implements a number of measures to reduce water consumption by boosting the performance of equipment and production chains
replaced hydropower units at the Ust‑Khantayskaya HPP to increase power output through improving the hydropower units’ performance.
Transition risks and opportunities
To assess risks and opportunities arising from the global energy transition, Nornickel has developed three own scenarios for global economy and climate change until 2050.
For this exercise, we engaged experts from the Institute for Economic Forecasting of the Russian Academy of Sciences (IEF RAS) and conducted an analysis of some 190 available public scenarios from widely recognised sources, such as the International Energy Agency, the World Energy Council, the International Renewable Energy Agency, OPEC, Bloomberg, NGFS, Shell, BP, DNV, and others. The resulting three global economy and climate change scenarios are aligned with climate change pathways described in public scenarios SSP1‑2.6, SSP2‑4.5, and SSP5‑8.5.
Key characteristics of the scenarios developed to assess transition risks and opportunities until 2050
Rapid Transition
SSP1‑2.6
Sustainable Palladium
SSP2‑4.5
Global Growth
SSP5‑8.5
Probability
25%
70%
5%
Development focus
Low‑carbon development paradigm with the globalcommunity’s efforts focused on the reduction of GHG emissions
Maintaining current socioeconomic trends.Traditional industries remain centre stagealong with the green economy
Abandoning efforts to curb climatechange with further rapid economic growth fuelled by hydrocarbons
Inflation
High
Moderate
Low
Resource/Energy intensity
Low
Moderate reduction
High
Climate regulation
Strict
Moderate
Insignificant
CO2 prices
Major increase
Moderate increase
At 2021 levels
Temperature change by 2050Growth in temperature vs pre‑industrial levels.
+1.7°С
+2.0°С
+2.5°С
Alignment with the ParisAgreement goal
+
‑
‑
The Company has chosen the Sustainable Palladium as its baseline scenario, according to which traditional industries are expected to remain centre stage along with the growing green economy. In particular, internal combustion engine vehicles are expected to retain a large market share, resulting in a steady long‑term demand for palladium. The other two scenarios will be used by the Company to stress‑test climate‑related risks.
Scenario analysisA scenario analysis of the consolidated financial and economic model until 2050 in line with three climate scenarios.
Based on its global economy and climate change scenarios, Nornickel has conducted a scenario analysis of the consolidated financial and economic model until 2050. The analysis has shown revenue growth in all scenarios by 2050 against the average value for 2017–2021. The key revenue growth drivers in the Global Growth scenario are the highest GDP and population growth rate, which will fuel the strongest demand for palladium, nickel, and copper in 2050 vs the other two scenarios.
Although the Rapid Transition scenario is based on the most aggressive decarbonisation rates, which is impossible without green metals – nickel and copper, – the scenario projects the global economy to slow down, with the lowest GDP and population growth rates. On top of that, the total car fleet, along with the fleet of passenger EVs, hydrogen cars, and plug‑in hybrids, in the Rapid Transition scenario will be lower than that in the Sustainable Palladium scenario as a result of the general trend towards reduction in car ownership and use and ride‑sharing development.
Price risk
Potential decrease in sales revenues due to lower prices for Nornickel metals is subject to actual or potential changes in demand and supply in certain metals markets, global macroeconomic trends, and the financial community’s appetite for speculative/investment transactions in the commodity markets.
Key risk factors
Lower demand for metals produced by Nornickel
A slowdown in the global economy in general and in the economies consuming Nornickel metals in particular
Supply and demand imbalance in metals markets
Replacement of metals produced by the Company with alternative materials
Effect on Nornickel’s development goals and strategy
Upgrade of the existing and construction of new facilities to ramp up our output of core metals and maintain financial stability
Risk assessment
Effect on objectives: high. Source of risk: external. Year‑on‑year change in risk: stable.
Key mitigants
Nornickel is consciously accepting the existing price risk. To manage this risk, Nornickel:
continuously monitors and forecasts supply and demand dynamics for key metals
secures feedstock supplies for key consumers through long‑term contracts to supply metals in fixed volumes
as a member of the Nickel Institute and the International Platinum Group Metals Association, works with other nickel and PGM producers to maintain and expand the demand for these metals
searches for new applications and uses for palladium.
Market risk
Lower competitiveness of Nornickel products in the market may result in their lower liquidity, discounts to the market price, and a decrease in Nornickel’s income.
Key risk factors
Foreign regulators imposing new foreign trade restrictions that impact the Company’s activities
Competition from producers of cheaper nickel
More aggressive transport electrification programmes, requirements on metals and their forms
Stricter market requirements for product quality and ESG compliance
Effect on Nornickel’s development goals and strategy
Upgrade of the existing and construction of new facilities to ramp up our output of core metals and maintain financial stability
Risk assessment
Effect on objectives: high Source of risk: mixed Year‑on‑year change in risk: stable
Key mitigants
To manage this risk, Nornickel:
monitors and analyses changes in market demands for product quality and forms and ESG compliance
stimulates the demand for its key metals
monitors changes in the vehicle fleet mix by engine type and requirements for metals used
diversifies its metal product sales across industries and geographies
improves and diversifies its product range
cooperates with industry institutions to maintain access to relevant sales markets for its metals
cooperates with Russian ministries and agencies to prevent/mitigate negative impacts of local or international regulation
implements an ESG roadmap
seeks partnership opportunities with key producers of cathodes for lithium‑ion batteries
maintains strategic partnerships with automakers based on guarantees of long‑term palladium supplies
explores partnership options to drive nickel demand in Russia
works on building and enhancing alternative PGM supply/trading platforms.
Financial risks
This group includes FX, interest rate, and liquidity risks, as well as other risks related to the financial security of the Company’s operations and investments.
Key risk factors
Increased debt financing costs
Deteriorating market conditions
Sharp rouble exchange rate fluctuations
Limitation of the possibility to raise debt financing due to deterioration in financial markets
Lack of access to key segments of global financial markets (debt and derivatives), limited access to the foreign currency debt market
Unexpected major expenses
Counterparty credit risk
Foreign regulators imposing restrictions that affect Nornickel’s operations, its key business partners, and infrastructure partners
Effect on Nornickel’s development goals and strategy
A debt portfolio with a well‑balanced profile in terms of maturity, currency composition, and sources of financing
Maintaining a strong investment case
Risk assessment
Effect on objectives: high Source of risk: mixed Year‑on‑year change in risk: decreased
Key mitigants
To manage this risk, Nornickel:
maintains a balanced debt portfolio
raises additional rouble‑denominated debt to prevent a liquidity shortfall
holds liquidity reserves on the Group’s balance sheet to ensure timely payments
monitors its account balances and existing cash gaps, as well as the availability of liquidity reserves on its balance sheet
regularly evaluates key potential risk events through scenario modelling and develops prevention and response plans
constantly seeks new potential partners among borrowing and financial institutions, expanding and diversifying its financial infrastructure
uses different financial models for various purposes, expands the array of financial risk assessment tools (stress testing and reverse stress testing of all financial risks and risk factors considering their combinations, interrelations, and changes over time).
Technical and production risks
Technical, production, or natural phenomena which, once materialised, could have a negative impact on the implementation of the production programme and cause equipment breakdown or result in the need to compensate damage to third parties.
Key risk factors
Harsh natural and climatic conditions, including low temperatures, storm winds, and snow load
Unscheduled stoppages of core equipment caused by fixed assets’ wear and tear
Release of explosive gases and flooding of mines
Collapse of buildings or structures
Infrastructure breakdowns
Effect on Nornickel’s development goals and strategy
Effective delivery of finished products (metals) in line with the production programme
Risk assessment
Effect on objectives: high Source of risk: mixed Year‑on‑year change in risk: stable
Key mitigants
To manage this risk, Nornickel:
ensures proper and safe operation of its assets in line with the requirements of technical documentation, as well as technical rules and regulations as prescribed by local laws across Nornickel’s geographic footprint
develops ranking criteria and criticality assessment for the Norilsk Nickel Group’s key industrial assets
ensures timely replacement of fixed assets to consistently achieve production safety targets
continuously monitors the ongoing condition of Nornickel’s buildings and structures via an information system for conducting geotechnical surveys
uses satellite technology to monitor Nornickel’s assets and further analyse the data
implements automated systems to control equipment process flows, uses state‑of‑the‑art engineering controls
improves its maintenance and repair system
trains and educates its employees both locally on site and centrally through its corporate training centres
systematically identifies, assesses, and monitors technical and production risks, implements a programme of organisational and technical measures to mitigate relevant risks
continuously monitors the industrial asset management system
ensures risk review by collective bodies at all management levels of the Company
develops the technical and production risk management system, including by engaging independent experts to assess the system’s performance and completeness of risk data
develops and tests business continuity plans, which set out a sequence of actions to be taken by Nornickel’s personnel and internal contractors in case of technical and production risks causing maximum damage. These plans ensure that Nornickel resumes its production operations as soon as possible after any disruption
engages, on an annual basis, independent surveyors to analyse Nornickel’s exposure to disruptions in the production chain and make assessments of related risks.
Investment risks
Risk related to time and budget overruns, and performance targets of Nornickel’s major investment projects.
Key risk factors
Changes in forecasts of ore volumes, grades, and properties resulting from follow‑up exploration
Changes in investment project timelines
Further changes to budgets of investment projects
Amendments to project performance targets in the course of implementation
Effect on Nornickel’s development goals and strategy
Strategic goal: growth driven by Tier 1 assets
Developing the mining, concentration, and metallurgical assets
Developing the mineral resource base and upgrading core production processes at Nornickel’s Tier 1 assets
Risk assessment
Effect on objectives: high Source of risk: mixed Year‑on‑year change in risk: stable
Key mitigants
To manage this risk, Nornickel:
carries out accelerated exploration and updates project performance targets and the mining plan (a long‑term production plan) based on the progress of its major investment projects developing the mineral resource base
conducts resource, geomechanical, and hydrogeological modelling
holds external expert audits of geological data
develops an in‑house geological and mining information system
models mining options in geological and mining information systems
as part of the project assurance process, conducts internal (cross‑functional) audits of major investment projects at each stage in their life cycle
improves incentives to drive project delivery and build skills and capabilities (including staff certification, identification of improvement areas, and provision of tailored training)
promotes the use of pilot units across all technically challenging and unique processing stages
redesigns projects and substitutes supply routes to source materials/services from friendly countries, taking into account sanctions
implements a transformation programme for Gipronickel Institute to improve the quality and reduce the timelines of R&D projects and survey and engineering activities
enhances project management competences of project teams and ensures best practice sharing through its Project Forum held on a regular basis.
Health and safety risks
Failure to comply with Nornickel’s health and safety (H&S) rules may result in threats to health and life or temporary suspension of operations, or cause property damage.
Key risk factors
Suboptimal methods of work organisation
Disruptions in technological processes
Exposure to hazards
Effect on Nornickel’s development goals and strategy
Health and safety
Risk assessment
Effect on objectives: high Source of risk: internal Year‑on‑year change in risk: stable
Key mitigants
Pursuant to the Occupational Health and Safety Policy approved by the Board of Directors, Nornickel:
continuously monitors compliance with H&S requirements
improves the working conditions for its employees and contractors deployed at Nornickel’s production facilities, including by implementing new technologies and labour‑saving solutions as well as enhancing industrial safety at production facilities
provides employees with certified state‑of‑the‑art personal protective equipment
improves the system of stationary gas analysers, provides employees with portable gas analysers
carries out preventive and therapeutic interventions and enforces hygiene protocols to reduce the potential impact of work‑related hazards
provides regular training and briefings to employees on health and safety, assesses their health and safety performance, and conducts corporate workshops, including by deploying special simulator units
enhances methodological support for H&S functions, including through the development and implementation of corporate standards
improves the risk assessment and management framework across Group enterprises as part of the Risk Control project
reviews the competencies of line managers across Nornickel enterprises, develops H&S training programmes, and arranges relevant trainings
holds H&S competitions
communicates the circumstances and causes of accidents to all Nornickel employees, conducts ad hoc safety briefings
introduces frameworks to manage technical, technological, organisational, and HR changes.
Compliance risks
The risk of legal liability, significant financial losses, suspension of production, revocation/suspension of a licence, loss of reputation, or other adverse effects arising from Nornickel’s non‑compliance with applicable laws, regulations, instructions, rules, standards, codes of conduct, or from the imposition of sanctions and/or other corrective measures by external supervisory bodies.
Key risk factors
Discrepancies in rules and regulations
Considerable powers and a high degree of discretion exercised by supervisory bodies
Regulatory instability
Market practices driven by business customs and specific to the country
Effect on Nornickel’s development goals and strategy
Compliance by Nornickel and Russian entities of the Norilsk Nickel Group with applicable laws, regulatory requirements, corporate standards, and business codes
Risk assessment
Effect on objectives: medium Source of risk: mixed Year‑on‑year change in risk: stable
Key mitigants
To manage this risk, Nornickel:
ensures the development and update of key procedural documents on compliance
applies best practices to further improve the compliance system
takes measures to ensure compliance with applicable laws
protects its interests during regulatory inspections and administrative proceedings
ensures that agreements signed by Nornickel contain clauses safeguarding its interests
ensures pre‑contractual due diligence of counterparties, partners, and suppliers
takes measures to prevent and mitigate compliance risks at the Norilsk Nickel Group
consistently keeps employees up to date on the Company’s requirements and measures to mitigate compliance risks
ensures that the Corporate Trust Line receives and handles reports of corruption, fraud, embezzlement, or other wrongdoing, either planned or committed
maintains and enhances an antitrust compliance system
ensures performance evaluation of compliance controls at the Norilsk Nickel Group.
Information security risks
This group includes risks such as potential cybercrimes, an unauthorised transfer, modification, or destruction of data assets, disruption or reduced efficiency of Nornickel’s IT services as well as business, technological, or production processes.
Key risk factors
Growing external threats
Unfair competition
Rapid development of Nornickel’s IT infrastructure and automation of technological and business processes
Unlawful acts by employees and/or third parties
Working from home / hybrid work schedule and hiring remote employees outside Nornickel’s regions of operation
Sanctions restricting the functionality of protection tools
Effect on Nornickel’s development goals and strategy
Mitigation of the information security risk and risk of cyberattacks on Nornickel’s information systems and automated process control systems
Risk assessment
Effect on objectives: medium Source of risk: mixed Year‑on‑year change in risk: stable
Key mitigants
To manage this risk, Nornickel:
ensures compliance with applicable Russian laws and regulations with respect to the protection of personal data, insider information, trade secrets, and critical information infrastructure
implements MMC Norilsk Nickel’s Information Security Policy
categorises data assets and makes information security risk assessments
embeds and monitors compliance with corporate information security standards within information systems and automated process control systems
raises information security awareness among employees
substitutes imported data protection tools whose functionality was restricted due to sanctions
uses technical means to ensure information security of assets and manage access to data assets
monitors threats to information security and the use of technical protection means, including vulnerability analysis, penetration testing, cryptographic protection of communication channels, controlled access to removable media, protection from confidential data leaks, and mobile device management
develops information security regulations
sets up and certifies the Company’s information security management system
implements measures to ensure safe remote access.
Environmental risks
This risk group includes events that result in environmental pollution, are not provided for in approved technological processes and Russian laws, and affect the achievement of the Company’s environmental goals.
Key risk factors
Failure to comply with the requirements of environmental laws when operating the Company’s facilities
Poor internal management and control
Delay in implementing environmental programmes and measures
Natural and climate phenomena
Effect on Nornickel’s development goals and strategy
Compliance of business with applicable environmental laws, regulations, corporate standards, and business codes related to environmental protection
Risk assessment
Effect on objectives: medium Source of risk: mixed Year‑on‑year change in risk: stable
Key mitigants
To manage these risks, Nornickel:
develops, implements, and improves environmentally sustainable business processes and introduces advanced practices and approaches
has in place an incentive system and promotes environmental competencies of its employees
implements its corporate Environmental and Climate Change Strategy
implements environmental initiatives at the Company and Russian entities of the Norilsk Nickel Group
oversees environmental compliance and the implementation of environmental programmes and measures.
Social risk
Tensions may escalate among the workforce due to the deterioration of social and economic conditions in Nornickel’s regions of operation.
Rejection of Nornickel’s values by individual employees and/or third parties
Limited ability to perform annual wage indexation
Dissemination of false and inaccurate information about Nornickel’s plans and operations among Group employees
Reallocation of funds originally intended for social programmes and charity
Effect on Nornickel’s development goals and strategy
Social responsibility:
Partnering with regional and local authorities to develop a social infrastructure that supports a safe and comfortable living environment for local communities
Facilitating the employees’ professional and cultural development and building up talent pools across Nornickel’s regions of operation
Running wide‑ranging charity programmes and projects
Risk assessment
Effect on objectives: medium Source of risk: mixed Year‑on‑year change in risk: stable
Key mitigants
To manage this risk, Nornickel:
strictly adheres to the terms and conditions of collective bargaining agreements between Group companies and employees (the Group has signed a total of 22 collective bargaining agreements)
interacts with regional authorities, municipalities, and civil society institutions
fulfils its social obligations under public‑private partnership agreements
runs corporate social responsibility programmes and the World of New Opportunities charity programme aimed at supporting and promoting regional civil initiatives, including by indigenous peoples of Taimyr, and the Plant of Goodness employee volunteering programme
implements infrastructure projects to support the accelerated development of the service economy and improved living standards across Nornickel’s regions of operation through the Norilsk Development Agency, the Second School centre for community initiatives in the Pechengsky District, and the Monchegorsk Development Agency
carries out regular sociological monitoring across its operations
surveys Norilsk residents on living standards, employment, migration trends, and general social sentiment to identify major issues
runs social projects and programmes aimed at supporting employees and their families, as well as Nornickel’s former employees
maintains dialogues with stakeholders and conducts stakeholder questionnaire surveys when preparing the Group’s public sustainability reports
provides a range of social support measures to redundant staff under Kola MMC’s social programmes and develops the Social and Economic Development Strategy of the Pechengsky District.
Supply chain risks
Supply chain interruption/disruption within the existing transport and logistics system.
Key risk factors
Challenging natural and climatic conditions in the regions of operation
Limitations of the transport and logistics system
Growing inflation, FX rates, pricing pressure from suppliers, poor planning, and other factors
Breach of contracts by contractors
Effect on Nornickel’s development goals and strategy
Effective delivery of finished products in line with the production programme
Timely supply of products to consumers
Risk assessment
Effect on objectives: medium Source of risk: mixed Year‑on‑year change in risk: stable
Key mitigants
To manage this risk, Nornickel:
actively engages Russian manufacturers to expand competition
uses long‑term agreements / contracts / price lists with fixed optimal prices for materials, equipment, and spare parts on terms that are most beneficial for the Company
drafts lists of critical manufacturers of equipment and materials, works to prevent supply disruptions, and monitors suppliers’ performance
implements its Logistics Infrastructure Development Programme.