Consistency, Sustainability, Partnership

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1 IV International Expert Conference on Corporate Social Responsibility Consistency, Sustainability, Partnership Jock Mendoza-Wilson Director of International and Investor Relations System Capital Management Kyiv 28 th April 2010

2 SCM Approach Consistency of approach Long-term planning Consistent, adaptive strategy Programmes Accountability Sustainability for business Business model and risk Use of natural resources Communities Power of Partnership Local authorities Government Institutions and NGOs

3 Sustainability and Responsibility Responsibility in business leads to sustainability. Climate change The recession has highlighted this issue. Well run businesses and banks with sustainable business models survive and others fail.

4 Consistency: Reporting on Responsibility 4 th Report on Corporate Responsibility, the second produced to leading international standard - GRI Commitment to measuring and reporting on responsibility across the group with Metinvest and DTEK also reporting to GRI Standard Speaking with stakeholders (local, national, international) Adopting and implementing International Standards in HSE What you cannot measure you cannot manage Warren Buffet

5 What does the Report cover? SCOPE Expanded key business areas mining and metals, energy, and finance PLUS telecoms, media, real estate 32 companies and enterprises of the Group employing 90% of staff STRUCTURE follows SCM s priorities in CSR and takes into account GRI requirements at C level and UNGC requirements to Communications on Progress FOUR CORE THEMES Transparent company: company profile, corporate governance, our understanding of corporate responsibility Our Employees: health and safety, accident rates, salary levels and benefits, training and development Environment policy and strategy, climate change and special section on energy efficiency Society local communities, social investments at national level, partnerships

6 SCM Report Key Facts

7 Consistency: Commitment to Health and Safety HSE is Priority area for Group activity and requires a detailed and consistent approach In DTEK the H&S department transformed into Directorate at the end of 2009 to reflect the importance of the issue In Metinvest the Directorate functions since 2008 and comprises 16 staff, 13 focus on H&S 2009 Metinvest adopted a detailed company wide policy in H&S. Organisational set up and investment is key to good performance Adopting and implementing International Standards OHSAS18001

8 Sustainability and Climate Change Reduction in carbon intensity per unit output requires long-term investment to modernise production Improving measurement and monitoring to international standards is a precondition. Long-term goal t meet industry and EU standards Using Kyoto protocol mechanism to assist in offsetting cost Coal bed methane recovery and utilisation plays a major role in the drive to cut emissions Closely linked with energy efficiency GHG emissions fell 4.7% in 2008 across SCM Group

9 Sustainability: Energy Efficiency Priority area across SCM Group, particularly in industrial business Major investments made in energy improving performance Examples from across the Group Energy Savings achieved in 2008 were significant in both energy used and money spent Commitment to improve energy efficiency and reduce carbon and GHG intensity ENERGY EFFICIENCY

10 Energy Efficiency ENERGY SAVED BY GROUP'S INDUSTRIAL HOLDINGS DUE TO CONSERVATION AND EFFICIENCY IMPROVEMENTS, 2008 Industrial holdings Electricity, thou. KW/h Thermal energy Fuel Economic effect Gcal GJ t.f.e. GJ thou.uah DTEK ,461 Metinvest ,580 Total ,041

11 Sustainability and People To succeed business needs good people across SCM Group we continued investment in developing our greatest natural resource DTEK Academy A centre for Knowledge management Will train 1500 people each year Lectures from DTEK senior mgt and leading European business schools E-learning will be widely used Climate change Segodnya Corporate University An education centre for internal corporate courses to be taught by senior managers of Segodnya Multimedia. Staff taught fundamentals of personnel education and course development techniques. Subjects in Marketing, management, business strategy, business development and journalism

12 Partnership in education Being a partner in the area of contemporary education is strategic priority for SCM in corporate responsibility Compass ratings of Ukraine higher education institutions by employers and specialists Partnership with Focus magazine to highlight the leading projects realised by universities, employers and international schools Partnership with EU agency the European Training Foundation to develop modern professional standards and qualifications in Ukraine.

13 Summary Consistent systematic implementation of corporate responsibility Continued commitment to long term goals of SCM Group s CR strategy and to accountability Sustainability of business is a core element of business strategy In social investment the biggest gains are not made by budget alone but by partnership between business, government and society New Image Here Image here please

14 СКМ заняла первое место в рейтинге открытости и системности компаний