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ALROSA Leads Peers in Social Investments According to PwC Research

Sep 07, 2017

Research conducted by PwC on sustainable development indicators shows that PJSC ALROSA leads other companies in the diamond mining industry, in terms of investing in social programmes, the Company announced yesterday.

 PwC’s research stresses on the significance of social and environmental responsibility. It looks at both compliance with the best business practices, as well as at the “reputational and emotional components” in the cost of the industry’s final products — diamond jewellery. PwC studied the social and environmental performance indicators of diamond mining companies as well as the companies belonging to the gold mining segment. “Based on publicly available data, PwC compared the average performance indicators of companies over several past years in terms of investments in social and environmental programmes, staff turnover, number of women in staff, intensity of energy and water use and intensity of greenhouse gas emissions,” ALROSA explained.

The findings of the research showed that “ALROSA is an absolute leader in terms of investments in social programmes directing to social spending on average 2.8% of its revenue (while the respective average level for other participants of the rating is about 0.5%)”, the Company announced.

Elaborating further, ALROSA stated that in 2016, its “social investments” exceeded RUB 10 billion; which included contributions worth RUB 6.5 billion for charity and towards the support of local infrastructure, education and health. A further contribution of RUB 3.9 billion went towards corporate social programmes for employees and their families. “Social investments accounted for about 3.3% of revenues or 7.8% of the Company’s net profit under International Financial Reporting Standards (IFRS),” ALROSA revealed. “On average, about 3% of each carat of rough diamonds sold by the Company is directed for satisfying social needs.”

The Company also  supports the municipalities of the Republic of Sakha (Yakutia) for the construction of childcare centres, educational and cultural centres, health, infrastructure, and housing facilities, as part of its commitment to  regional development; and it  provides federal-level charitable support to educational institutions as well as culture and sports initiatives as well.

“In 2016, ALROSA directed circa RUB 3.5 billion to charitable projects. In particular, more than RUB 500 million is annually transferred to the Special Purpose Fund for Future Generations of the Republic of Sakha,” ALROSA added. “In 2016, due to ALROSA’s contributions, the abovementioned Fund commissioned the residential building with 71 flats for employees of public health service in Mirny, the dormitory block of the children’s and youth’s football school in Neryungri. The works related to construction of the children’s rehabilitation centre for 250 persons in Yakutsk and the dormitory block of the Nyurba rehabilitation centre for disabled children have been under way.”

In the same year too, more than 2,000 employees and members of their families underwent medical examination and treatment in the leading medical centres of Yakutia and Russia; more than 14,000 persons underwent sanatorium and resort rehabilitation and preventive treatment in the corporate health resorts.

The Company finances 27 kindergartens which cater to about 4,000 children.

ALROSA also organised more than 5,000 cultural and sports events. While more than 4,500 adults and children are engaged in regular sports groups, 400 of them participate in competitions at the regional and federal level.

“Social responsibility and environmental protection have always been very important activities of ALROSA,” said President of ALROSA, Sergey Ivanov. “We understand our responsibility to the employees and the population of the regions where we are mining diamonds, therefore we have always done our best for ensuring decent working conditions and wages, for implementing social programmes in accordance with the best business practices, for monitoring closely implementation of environmental legislation and for minimising negative impact on the environment. Therefore we are indeed happy to see clear confirmation of the fact that the Company is headed in the right direction.”

Apart from the quantum of funds invested in social development areas, ALROSA has also been commended on the basis of other parameters. For one, ALROSA employs the highest number of women overall, and women employees are about 34.9% of staff strength.  “PwC notes that the number of women in staff is an important indicator of observance of workers’ rights because the problem of low female employment and underpayment of women, in general, still remains topical for many countries and industries,” ALROSA noted.

ALROSA was at second place in terms of the amount spent towards environmental protection – it expends about 2.6% of revenue annually towards these activities.

“In 2016, the expenses of ALROSA for ecological projects exceeded RUB 5.5 billion,” the Company elaborated. “The main part of the investments has been directed to capital investments into construction of environmental facilities, sewage treatment facilities, land remediation and scientific and technical support for environment-related activity.”

PwC’s research also recognised ALROSA “as the leader of the rating, for it generates the least amount of greenhouse gases: about 200 tons per USD 1 million of revenue. ALROSA also consumes less water for production purposes than other companies: 4,700 cubic metres per USD 1 million of revenue. Energy consumption level indicators of ALROSA are on par with other companies of the industry — 4.55 TJ per USD 1 million of revenue”, the Company said.

Company President Sergey Ivanov stressed: "ALROSA will continue implementation of social and environmental policies in accordance with its internal documents. Despite the fact that the results are generally good, we also see directions in which we are able to work more efficiently and we should do so. In particular, ALROSA will do its best for the improvement of industrial safety and implementation of energy saving programmes.”

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