Report information

The 2016 RusHydro Group Corporate Social Responsibility and Sustainability Report (hereinafter referred to as the Report) reflects the results of the Group’s activities in the field of labour protection, industrial and environmental safety, social and economic development of the regions, stakeholders’ interaction and other aspects of sustainable development and corporate social responsibility in the period from 01/01/2016 to 31/12/2016.

Reports in the field of corporate social responsibility and sustainable development are issued by RusHydro Group annually, this Report is already the ninth.

This Report was prepared in accordance with the Global Reporting Initiative (GRI), “Core” option, and the GRI Electric Utilities Sector Supplement for the companies were used.

In 2016, GRI introduced an updated version of the manual – GRI Standards. Officially, the standard will come into force on July 1, 2018, but it is encouraged to start its implementation from 2017. RusHydro is preparing its 2016 Report in accordance with the GRI Standards and, thus, will become one of the “pioneer” companies in the field of non-financial reporting.

The previous 2015 Corporate Social Responsibility and Sustainability Report was prepared in accordance with the GRI G41 (Core option). It can be found on the Company’s website.

Terminology

“PJSC RusHydro” or “the Company” refers to PJSC RusHydro, including the Executive Office and branches of PJSC RusHydro.

“RAO ES of the East” or “the Holding” refers to PJSC RAO ES of the East, including subsidiaries.

“RusHydro Group” or “the Group”2 refers to PJSC RusHydro, as well as subsidiaries of PJSC RusHydro included in the Report boundaries (including RAO ES of the East). The list of legal entities included in the list below is in the Report Boundaries subsection.

Report boundaries

The main subsidiaries of the Group fall within the Report boundaries, the list of which is given in the tables below. The Group’s subsidiaries outside the Report boundaries are not essential for the purposes of the Report disclosures. The full list of legal entities included in the organizational structure of RusHydro Group see in the Annual Report of JSC RusHydro for 2016.

In 2016, RusHydro Group sold LLC Energy Retail Company of Bashkortostan (LLC ESKB). In addition, the stake of RusHydro Group in the charter capital of PJSC RAO ES of the East increased up to 99.98% in connection with the implementation of voluntary offer transactions and the forced repurchase of shares of PJSC RAO ES of the East.

List of the companies of RusHydro Group (Executive Office, subsidiaries and branches of PJSC RusHydro except for the companies of RAO ES of the East (within the boundaries of the Report) and their activities)

Electricity generation companies
Companies engaged in electricity generation facilities construction

Supply (sales) companiesInstitute (research and design) companiesRepair and construction companies
PJSC RusHydro executive administration and branches:

JSC GeotermАО
JSC PauzhetskayaGeoPP
PJSC Kolymaenergo
PJSC KamHEK
CJSC MEK (the Republic of Armenia)
JSC Boguchanskaya HPP*
JSC Blagoveshchenskaya CHPP**
JSC CHPP in Sovetskaya Gavan
JSC Yakutskaya SDPP-2
JSC Sakhalinskaya SDPP-2
JSC SulakHydroCascade
JSC Nizhne-Bureyskaya HPP
JSC Ust-Srednekanskaya HPP
LLC SHPP of Stavropol Region and KCR
JSC Zagorskaya PSPP-2
JSC SHPP of KBR
JSC Zaramagskye HPPs
JSC ESK RusHydro
PJSC Krasnoyarskenergosbyt
PJSC RERC (Ryazan Energy Retail Company)
JSC Chuvash Energy Retail Company
JSC Vedeneyev VNIIG
JSC NIIES
JSC Lengidroproject
JSC HydroprojectInstitute
JSC MOSOBLHYDROPROJECT
JSC Hydroremont VCC
LLC Montazhenergo
JSC Ust-Srednekanskaya
GESstroy
JSC ESCO UES
JSC ChirkeyGESstroy

List of the companies of RAO ES of the East (within the boundaries of the Report), their activities

Electricity and heat generation companiesRepair and construction companiesOther companies that are essential for CSR
PJSC RAO ES of the East
JSC FEGC (as well as supply)
PJSC Yakutskenergo
JSC Sakhaenergo
JSC Teploenergoservice
PJSC Magadanenergo
JSC Chukotenergo
PJSC Kamchatskenergo
JSC KSEN
PJSC Sakhalinenergo
PJSC Mobile energy (Peredvizhnaya energetika)
JSC KRAC
JSC KPRC
JSC Neriungrienergoremont
JSC FEDC (electricity distribution)
PJSC FEEC (supply)
JSC LUR (coal mining)

Definition of the Report’s content

GRI Standards require the companies to disclose information in their Report on the aspects that reflect significant economic, environmental and social impact of the organization or have a significant impact on the stakeholders’ assessments and decisions. In order to determine the list of such aspects in RusHydro, a procedure for determining significant aspects was carried out in 2017.

While determining the content and the scope of information included in the Report, the Company was guided by the GRI Standards’ report preparation principles.

Stage 1. Drawing up a preliminary list of aspects for prioritization. The list was compiled on the basis of the GRI Standards and GRI Electric Utilities Sector Supplement, amended by topics relevant to the UN-2030 Sustainable Development Goals and the National Energy Agenda. The number of aspects on the preliminary list was 50. The preliminary list of aspects is different from the list used in the previous reporting cycle, which affected the final list of aspects. Please, see the previous list of significant aspects at RusHydro Group Corporate Social Responsibility and Sustainability Report for 2015, p. 8.

Stage 2. Prioritization of aspects. In order to prioritize the aspects from the preliminary list, a survey among the stakeholders’ representatives and RusHydro managers was conducted. The interviewed managers (18 people) assessed the dependence of each aspect on the Group’s activity on a scale from 1 to 5.

In turn, representatives of external stakeholders (investment analysts, representatives of government bodies, local communities, environmental organizations, universities, suppliers and business partners, etc. – 25 people in total) assessed the importance of the aspect for the Group’s activities on a scale from 1 to 5. All survey participants could amend the list with the aspects that, in their opinion, should be disclosed in the Report.

Stage 3. Materiality matrix construction and identification of material aspects. Materiality matrix was built based on the results of the survey of external stakeholders and RusHydro managers. The aspects located on the upper right part of the diagram (20 aspects in total) were recognized as essential.

Stage 4. Addition of the list of material aspects. According to the decision of the Working Group (employees of RusHydro Group, responsible for the Report preparation), the following aspects were added:

  1. Generation and distribution of direct economic value – an integral indicator on the economic impact of the Company.
  2. Biodiversity impact management strategy- as requested by the stakeholders.
  3. The strategy of reducing the greenhouse emission.
  4. Strategy for reducing harmful emissions into the atmosphere.

While determining the content and the scope of information included in the Report, the Company was guided by the GRI Standards’ report preparation principles

1

Drawing up a preliminary list of aspects

GRI Standards
GRI Sector Supplement
Specificity of hydropower industry

2

Prioritization of aspects

Questioning RusHudro managers (18 people)
Questioning external stakeholders (25 people)

3

Identification of material aspects

Materiality matrix construction based on the results of the questionnaires

4

Addition of the list of material aspects

Taking into account the stakeholders’ inquires from last year’s Public Hearings
The Working Group’s decision on the preparation of the Report

Materiality matrix

Materiality matrix

Material aspects

NAspects
1Generation and distribution of direct economic value
2Risks and opportunities for the company's activities related to climate change
3Company's liabilities related to pension plans and established benefits
4Financial assistance received from the state
5Indirect economic impact on the economic development of the locations of operation
6Ratio of standard entry level wage by gender compared to local minimum wage at locations of operation
7Proportion of executives hired from the local community at locations of operation
8Solutions to ensure the commissioning of new capacities and replacement of outgoing ones
9Efficiency of the energy system
10Research and development and costs
11Measures to decommission nuclear power plants
12Construction of new power facilities in Russia and abroad
13Quality control at the stage of design and construction of power facilities
14Safety and reliability of hydraulic structures and infrastructure facilities of thermal stations
15Industrial control of compliance with industrial safety requirements at hazardous production facilities
16System of prevention and liquidation of natural disasters and emergencies (including floods, high and low water levels)
17Risk-assessment methods for risks associated with corruption, the criteria used in assessing these risks
18Communication and training on anti-corruption methods
19Incidents of corruption and anti-corruption actions taken
20Actions for anti-competitive behaviour and monopoly practices
21Compliance with the requirements of environmental legislation
22Assessment of suppliers for compliance with environmental regulations
23Reduction of the consumption of raw materials
Use of recycled materials after processing
24Improving energy efficiency
25Increasing the efficiency of water using
26Biodiversity management strategy
27Strategy for reducing greenhouse gas emissions
28Strategy for reducing harmful emissions into the atmosphere
29Strategy for reducing discharges into sewage and organization of the waste storage
30Development of fair labor practices and compliance with the requirements of labor legislation
31Staff training and education
32Mechanisms of filing appeals against violations in the field of labor practices
33Policies and requirements for the protection of workers' health and safety
34Health and safety topics covered in formal agreements with trade unions
35Efforts to ban child labor
36Efforts to ban forced labor
37Security personnel training on human rights
38Respect for the rights of indigenous peoples
39Promoting respect for fundamental human rights
40Suppliers assessment for violations of human rights and other legislation
41Community engagement programs
42Disaster action plan / emergency plan
43Ensuring participation of the local communities representatives in the decision-making process
44Participation in the development and lobbying public policy
45Participation in charity events to achieve political goals
46Prevention of violations of social and economic legislation
47Reducing the impact of services on health and consumer safety
48Reduction of injuries and deaths caused by the Company's assets
49Compliance with the standards of product and service information and labeling
50Compliance with the personal data protection requirements

*The material aspects defined at stage 3 are shown in bold.

Disclaimer regarding forward-looking statements

The report contains information about the plans and intentions of RusHydro Group for the medium and long term. Plans and intentions are predictive in nature and their feasibility depends, inter alia, on a number of economic, political and legal factors that are beyond the Company’s area of influence (financial, economic and political situation, key markets, changes in taxes, customs and environmental legislation, etc.). For this reason, the actual performance indicators for future years may differ from the forward-looking statements published in this Report.

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