Determining material topics

(GRI 3‑1, 3‑2)

In line with GRI Standards, Nornickel conducts an annual comprehensive assessment of sustainability impactsImpact is defined as the effect that the Nornickel Group has or may have on the economy, environment, or people, including on human rights. informed by stakeholder engagement. In 2024, the Company implemented a relevant five‑stage procedure.

Stage 1. Identifying impacts

A list of actual and potential impacts was drawn up. This list includes 30 impacts, which:

were recognised as significant (21 impacts) and non‑significant (six impacts)
were identified in the reporting year based on an analysis of the Company’s business contextIncluding core activities, business relationships, and sustainability context. (three new impacts).

Result: a list of 30 actual and potential impacts of the Company

Stage 2. Assessing impacts

To assess the impacts, we ran an online survey, engaging a wide range of internal and external stakeholders. Respondents were asked either to:

a) confirm the relevance of last year’s average assessments based on key parameters recommended by the GRI Standards, as previously collected from respondents during the preparation of the 2023 Report

b) adjust the assessment if, in 2024, there were changes and the significance of impacts either increased or decreased, i.e. rate potential and actual impacts on a scale from 0 to 5, based on the parameters recommended by the GRI Standards:

Likelihood/frequency of impact

Severity of impact (including its irreversibility, which was rated on a yes/no scale)

Scale (scope) of impact

Additionally, respondents were given the opportunity to evaluate the quality of disclosure of material sustainability topics in the 2023 Report and to provide suggestions on topics of particular interest. This Report reflects most of the comments.

Non‑identifiable, partially completed, and improperly completed questionnaires were excluded from the analysis.

Result: 554 questionnaires with impact assessments completed by stakeholders29% external stakeholders, 71% internal stakeholders. (+53% y‑o‑y)

Stage 3. Making a prioritised list of topics

Average scores were calculated for all impacts and parameters, and the severity of impacts was determined.The average score for impact severity based on the irreversibility factor and impact scale (scope).

All impacts were grouped into 19 topics reflected in a matrix, which was plotted on the Severity of Impact and Likelihood/ Regularity of Impact axes.

To establish the significance boundary, a cut‑off value of 5.0 was set for the sum of coordinate values (rounded) or 50% of the maximum possible score. The Report includes information on topics below the materiality threshold, in line with stakeholder needs as well as sustainability standards and recommendations. For immaterial topics, incomplete disclosure of GRI indicators is allowed.

Result: a list and matrix of 19 topics to be discussed with stakeholders in an open dialogue

Stage 4. Engaging in dialogue with stakeholders

The survey results, including a prioritised list of material topics, were presented to stakeholders in a dialogue held on 29 January 2025 in a mixed format (offline with a live webcast). Participants provided expert commentary and recommendations on the overall content of the Report as well as the disclosure of specific topics.

Result: a list of stakeholder recommendations for the Report

Stage 5. Finalising the list of material topics

A final materiality matrix was developed based on the stakeholder survey results, analysis of respondents’ opinions, and a public discussion of key aspects of the Company’s sustainable development.

Result: a final matrix with 14 material topics

Materiality matrix

Prioritised list of topics and associated impacts

No.Turquoise indicates an environmental topic; light blue, a social topic; and dark blue, a management topic.	Topic wording	Sustainability impacts
1	Training and education	Training and education
2	Employment and decent working conditions in the regions of operation	Employment and decent working conditions in the regions of operation
3	Contribution to the development of local communities	Payment of taxes to budgets of various levels
		The Company’s charitable activities targeting local communities (including indigenous minorities) and non‑profit organisations to support sustainable development
		Development of housing, energy, and other infrastructure in the regions of operation
		Support for entrepreneurship in the regions of operation
4	Contribution to the development of national industry through import substitution	Contribution to the development of the national manufacturing sector through import substitution
5	Emissions	Emissions of sulphur dioxide and other pollutants
6	Innovation projects pursuing sustainable development goals	Innovation projects pursuing sustainable development goals
7	Waste management	Generation of industrial waste from operations
8	Climate change	Greenhouse gas emissions
		Development of a climate change monitoring system
		Metals production needed to combat climate change
		Impacts related to self‑generation, including renewable
		Changes in demand for the Company’s products due to the low‑carbon transition
9	Health and safety	Incidents resulting in an employee injury or fatality
9	Health and safety	A Company employee contracting an occupational disease
10	Biodiversity	Biodiversity across the Company’s footprint
11	Water consumption and wastewater discharge	Wastewater discharge to water bodies
11	Water consumption and wastewater discharge	Water withdrawal from water bodies
12	Information security	Information security incidents at critical information infrastructure facilities
13	Industrial environmental safety of production facilities (including tailings storage facilities)	Incidents at hydraulic structures
13		Incidents causing negative environmental impacts and destruction of operating facilities
14	Responsible exploration and land rehabilitation	Land disturbance
15	Impact of transport on water bodies	Pollution of water bodies by sea and river transport
16	Responsible supply chain	Violation of sustainability principles in the supply chain
17	Corporate governance and risk management	Inadequate corporate governance and risk management leading to adverse outcomes
18	Anti‑corruption and business ethics	Incidents of corruption and breach of business ethics
19	Respect for human rights (including those of indigenous minorities)	Unlawful actions against a Company employee or contractor, including discrimination, child labour, or forced labour
19		Violation of rights of local communities across the Company’s footprint, including members of indigenous minorities

Conclusions derived from the prioritised list of material topics for 2024:

As in 2023, Nornickel’s HR and social policy lead the ranking, demonstrating the continued demand for and relevance of the Company’s programmes and initiatives for employees and local communities
Environmental topics dominate the ranking by number, with a growing emphasis on areas such as pollutant emissions and waste management. This trend may be attributed to the active phase of the Sulphur Project, the Clean Norilsk initiative, and the launch of environmental monitoring of industrial emissions in Norilsk
A new material topic was identified in the reporting year: information security. Its inclusion on the list, along with respondents’ interest in the topic, may be attributed to a rise in cyber attacks, potential threats of information leaks and theft, and the growing need to protect the Company’s infrastructure and data from such incidents
The list of immaterial topics did not change year‑on‑year

Description of sustainability impacts

For a description of impacts related to material topics, please see Nornickel’s 2022 Sustainability ReportSome of the impact descriptions were rephrased as part of the 2024 stakeholder survey; however, their meanings remain unchanged and are consistent with the data presented in the 2022 Report (pp. 310–312).. Below is a description of impacts identified in 2024, based on an analysis of the Company’s current risk register, the risks outlined in the 2023 Report, and SASB Metal & Mining topics:

Impacts related to the development of self‑generation, including renewable (the Company’s mid‑term plans and ongoing measures include the upgrade of the energy infrastructure enabling adaptation to physical risks of climate change and better reliability of production assets and energy efficiency across the Company’s footprint overall)
Changes in the demand for the Company’s products due to the low‑carbon transition (one of the key drivers of Nornickel’s long‑term strategy is the growing demand for the Company’s metals to develop a low‑carbon economy). The very fact of supplying green metals to the market means that the Company is actively contributing to the global transition to cleaner modes of transport and renewable energy. The Sustainable Palladium baseline scenario envisages growing consumption of nickel, copper, and platinum and expects palladium demand to remain at its current level
Information security incidents at critical information infrastructure facilities (Nornickel operates an information security management system compliant with ISO/IEC 27001. In cooperation with strategic partners, the Company implements basic and follow‑up measures to protect its technological infrastructure, data assets and employee personal data; conducts information security audits; provides training to employees on information security requirements; and places emphasis on fostering an overall information security culture, all of which contribute to reducing risks in this area).