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Ukrainian industrial giant Metinvest is proactively addressing the European Union’s escalating sustainability-reporting requirements, viewing robust Environmental, Social, and Governance (ESG) practices not just as an advantage but as a necessity for accessing the EU market.

At a recent training session organized by the Federation of Employers of Ukraine (FEU) and the Danish Business Association, Kristina Rusnak, Metinvest’s ESG and Sustainable Finance Manager, shared the company’s extensive experience in implementing ESG practices, managing sustainability risks, and preparing for new reporting mandates. She also highlighted Metinvest’s commitment to social responsibility during wartime.

The session brought together experts from the FEU, the Confederation of Danish Industry, and other leading Ukrainian companies to discuss the EU’s new regulations, particularly the Corporate Sustainability Reporting Directive (CSRD). A key takeaway was the concept of Double Materiality Assessment, which considers both a company’s impact on the environment and society, and how those factors, in turn, affect the business itself.

Why ESG Matters for Metinvest:

Rusnak emphasized that adhering to ESG principles helps Metinvest:

  • Reduce Risks: Mitigating risks related to environmental protection, employee safety, regulatory compliance, and corporate governance.
  • Enhance Resilience and Stability: Bolstering the company’s overall resilience and financial stability.
  • Meet Regulatory Pressure: Responding to EU requirements like the CSRD and the planned Carbon Border Adjustment Mechanism (CBAM).
  • Secure Financing: Meeting ESG criteria increasingly applied by international and Ukrainian banks and investment funds.
  • Address Consumer Demand: Catering to growing consumer demand for transparency and environmental responsibility throughout supply chains.

Navigating the EU’s New Rules (CSRD):

The CSRD, set to replace the Non-Financial Reporting Directive (NFRD), will significantly expand ESG reporting requirements. From 2028, even large, unlisted companies connected to the EU market will need to publish detailed sustainability reports.

Metinvest’s approach to implementing ESG begins with identifying material topics – understanding its impact on people and the environment, and vice versa. These topics are updated annually using the Global Reporting Initiative (GRI) Standards. Subsequently, the company selects indicators to track progress across all ESG areas, including detailed environmental data.

“In wartime, social responsibility takes on particular significance. Metinvest has already allocated more than US$250 million to support the Armed Forces of Ukraine, humanitarian projects and aid to civilians,” Rusnak stated.

Metinvest annually publishes its sustainability data on its website, aligning with recommendations from the GRI, Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-related Financial Disclosures (TCFD).

Metinvest’s Reporting Journey:

Metinvest’s commitment to sustainability reporting dates back to 2008 with its first corporate social responsibility report based on GRI standards. Key milestones include:

  • 2019: Annual sustainability reports incorporating SASB standards and initial materiality assessments.
  • 2021: First integrated report combining sustainability data with financial results.
  • Last Year: First disclosure of climate-related practices, including risk assessment under Paris Agreement scenarios and a shift in corporate governance to focus on climate change.

The company also uses three ESG ratings to track progress and identify areas for improvement.

Governance and Risk Management:

Metinvest’s ESG practices are guided by principles of accountability, transparency, and alignment with international standards. Core areas like community engagement, workforce relations, occupational health and safety, and environmental protection are governed by internal policies and overseen by the Supervisory Board through dedicated committees and executive directorates.

In 2024, climate governance was integrated, now supervised by the Health, Safety and Environmental Committee. The Internal Audit Directorate monitors ESG risks and reports annually to the Supervisory Board’s Audit and Finance Committee.

Furthermore, Metinvest operates a Code of Ethics for all employees and, in 2024, adopted a Human Rights Policy extending to partners. An anonymous Trust Line is available for reporting misconduct. The company also enforces a Code of Business Conduct for all suppliers, with compliance being a mandatory condition for doing business.

Metinvest continuously reviews and mitigates ESG risks, including emerging threats like climate-related challenges (CBAM and global climate change) and wartime labour shortages. The company is actively strengthening its climate-risk management system, exploring low-carbon technologies, launching decarbonisation initiatives, and expanding human-capital programmes, including pay rises, enhanced employee support, and veteran-focused initiatives.

Source and Credit: metinvestholding.com

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