PwC research shows ALROSA is the industry leader in social investments

According to the research of sustainable development indicators conducted by PwC, Public Joint Stock Company ALROSA is the leader in the diamond mining industry in terms of investing in social programs.

PwC notes the importance of social and environmental responsibility both in terms of compliance with the best business practices and in terms of existence of reputational and emotional components in the cost of the industry’s final products — diamond jewellery. Within the framework of the research, PwC studied the social and environmental performance indicators of the diamond mining companies as well as the companies belonging to the gold mining segment as these companies are the most comparable to the diamond mining companies in terms of technological process. 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 programs, staff turnover, number of women in staff, intensity of energy and water use and intensity of greenhouse gas emissions.

According to the results of the research conducted by PwC, ALROSA is an absolute leader in terms of investments in social programs directing to social spending on average 2.8 per cent of its revenue (while the respective average level for other participants of the rating is about 0.5 per cent).

In 2016, social investments of ALROSA exceeded RUB 10 billion including RUB 6.5 billion of charity contributions and contributions to support the local infrastructure, education and health, and RUB 3.9 billion of contributions in corporate social programs for employees and their families. Social investments accounted for about 3.3 per cent of revenues or 7.8 per cent of the Company’s net profit under International Financial Reporting Standards (IFRS). On average, about 3 per cent of each carat of rough diamonds sold by the Company are directed for satisfying social needs.

Within the framework of the regional development programs, ALROSA regularly supports the municipalities of the Republic of Sakha (Yakutia) in construction of childcare centres, educational and cultural centres, health, infrastructure, and housing facilities. ALROSA also provides federal-level charitable support to educational institutions as well as culture and sports initiatives.

In 2016, ALROSA directed circa RUB 3.5 billion to charitable projects. In particular, more than RUB 500 million are annually transferred to the Special Purpose Fund for Future Generations of the Republic of Sakha. 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 2016, within the framework of the respective corporate programs, 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. About 4,000 children attend 27 kindergartens financed by the Company. ALROSA organized more than 5,000 cultural and sports events. 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. 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 programs in accordance with the best business practices, for monitoring closely implementation of environmental legislation and for minimizing 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,” said President of ALROSA Sergey Ivanov.

The research of PwC shows the high level of social responsibility of ALROSA not only in terms of investments but also in terms of indirect indicators. In particular, ALROSA has become an absolute leader in the number of women in the overall structure of staff: the respective indicator is 34.9 per cent. 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.

Staff turnover is another important indicator of observance of workers’ rights and successful personnel policy, according to PwC. PwC notes that high level of staff turnover may indicate dissatisfaction of the employees with working conditions or team environment. Having the indicator of 9.13 per cent, ALROSA takes the 5th place in the rating; on the other hand, it left behind other large diamond mining companies.

PwC also compared the performance indicators of the companies in the field of ecology and environmental protection. According to the results of the research, ALROSA takes the second place in the rating for environmental costs directing annually some 2.6 per cent of revenue for environmental protection activities.

In 2016, the expenses of ALROSA for ecological projects exceeded RUB 5.5 billion. 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.

The research of PwC shows high efficiency of the Company’s environment-related activity. Based on the study of environmental pollution, ALROSA is recognized as the leader of the rating, for it generates the least amount of greenhouse gases: about 200 tons per US$1 million of revenue. ALROSA also consumes less water for production purposes than other companies: 4,700 cubic metres per US$1 million of revenue. Energy consumption level indicators of ALROSA are on par with other companies of the industry — 4.55 TJ per US$1 million of revenue.

"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 programs,” said the Company President Sergey Ivanov.