Telling your ESG story beyond the sustainability report: Polyus' thematic report

Oct 01, 2021
IR Magazine profiles different channels for ESG communications

Across a series of articles, we look at case studies from investor relations teams that have held an ESG investor day, launched an ESG statbook, discussed ESG on the earnings call and released a thematic report on a single sustainability topic. Are you trying anything else? Get in touch and let us know.

Companies that want to delve deep into a single sustainability topic or showcase industry leadership may choose to produce a thematic report. Polyus did this in March with its first water report – a move that helped the Russian gold miner win best ESG materiality reporting at the IR Magazine Awards – Europe 2021.

As CEO Pavel Grachev explains in his introduction to the report, regulators are placing ever-stricter disclosure requirements on mining companies about their environmental impact. At the same time, new standards for water management disclosure have been developed by the International Council on Mining and Metals, of which Polyus is a member.

‘The growing demands have provided impetus for the preparation of a stand-alone report where water management issues are described more extensively than in the annual sustainability report,’ says Grachev.

The 39-page document includes sections on Polyus’ approach to water management, legal requirements, stakeholder engagement, UN Sustainable Development Goals and water bodies within the company’s footprint. Readers will learn that Polyus’ flagship mine Olimpiada relies in part on the Yenisei River, the longest in Russia and fifth-longest in the world, at around 3,500 kilometers.

A key objective for Polyus is to reduce its reliance on natural water sources and increase the use of recycled water. To track this, the company records the intake of fresh water for each unit of processed ore. The report notes a positive trend: in 2020, water withdrawal per ton of ore stood at 0.22 m3, compared with 0.30 m3 in 2016.

Mining firms have always needed to be one step ahead in terms of ESG reporting, given the environmental risks posed by their industry, Victor Drozdov, director of business communications and IR at Polyus, tells IR Magazine. On top of this, Russian companies tend to trade at a valuation discount to international peers, so they need to work extra hard to get their message across to investors, he adds.

‘We need to disclose more information, share it with the market and always stay in touch with our stakeholders, in effect being trend-setters rather than trend-followers,’ he says. ‘Specifically this year, that means us publishing our water report – the first by a Russian company.

'On the side of both ESG and investor interaction, we strive to do a little more. I’m not comparing us with our peers: we’re just trying to do more than we did a year ago.’

The project to create the water report was led by Polyus’ sustainability team, explains Alex Caicics, who is responsible for ESG communications at the company. ‘[That team is] the ultimate holder of expertise and knowledge here,’ he says. ‘IR has provided input regarding the format of the document and helped to publish and promote it externally, as well as providing external feedback.’

Caicics says Polyus doesn’t plan to produce a new water report each year. ‘It’s not so much about current performance data but rather about describing the framework in which we manage water resources, and the principles according to which we do this,’ he says.

When Polyus scooped the prize for best ESG materiality reporting for a large-cap company at this year’s IR Magazine Awards – Europe, the award winner was selected by a panel of judges, composed mainly of senior members of the buy side.

Polyus’ sustainability reporting is among ‘the most comprehensive we have come across, and it has improved further this year with much greater detail on minimizing water use,’ said one judge. ‘First choice on ESG materiality reporting, in my view.’

Consultants say thematic reports remain fairly uncommon and are more likely to be produced by larger companies that have the resources to create such documents in addition to their sustainability report.

Beyond the mining sector, another example is the human capital management report released by Verizon in April 2021. The report includes an introduction from Christy Pambianchi, chief human resources officer, and sets out how the telecommunications company aims to attract and develop its employees.

This is an extract of an article that was published in the Fall 2021 issue of IR Magazine. Click here to read the full article.

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