Definition of material topics GRI 3-1, 3-2

Process to determine material topics

When preparing the 2022 Sustainability Report, we identified material topics in accordance with the GRI Standards. The process of identifying material topics included five stages.

At the first stage, the working group for the Report preparation jointly with external consultants The working group for the Report preparation included employees of MMC Norilsk Nickel’s Sustainable Development Department and two groups of independent consultants. made a base list of the Company’s actual and potential economic, environmental, and social impacts, including those related to human rights.

To assess the identified impacts, we polled a wide range of stakeholders, including internal and external sustainability experts, at the second stage. As a result, 221 respondents were polled in 2022 – twice as many as the average number of respondents in recent years.

The poll included questions that helped us assess the list of impacts made by the Company against the key parameters recommended by the GRI Standards:

• severity, with a breakdown by positive and negative impact;
• regularity and likelihood;
• scale and scope.

At the third stage, based on the results of the poll, average scores for two groups of respondents were calculated for all questions: sustainable development experts and other stakeholders. The average correlation between the scores of the two groups of respondents across all questions was 92%.

For each impact, the severity of the impact was determined (average score for impact severity and scope), and the likelihood/regularity of the impact was assessed.

In order to make a list of material topics, impacts were grouped into material topics (see the Prioritised List of Topics table below).

A materiality matrix reflecting the relative significance of the topics was plotted on the Severity of Impact and Likelihood/Regularity of Impact axes.

The Company has set cut-off thresholds for the materiality boundary in the matrix. A value of 5.0 on the sum of coordinate values (rounded)The average of the sum of the maximum values of the matrix’s parameters. was selected as the cut-off point – 50% of the maximum score. Topics falling below the cut-off point serve as grounds for deeming them insignificant. They are also reported in line with stakeholder needs, but GRI Standards are not mandatory for these topics. As a result of the stage, 15 material topics were identified for disclosure in the 2022 Sustainability Report.

At the fourth stage, the Company conducted stakeholder dialogue to present the materiality matrix to stakeholders. Stakeholders reviewed the results and made recommendations on the report and the details of topics disclosure in the report.

At the last stage, the working group analysed the materiality assessment results, with due regard to the recommendations provided by the session participants, and finalised the materiality matrix.

The final list of material topics contains a number of changes as compared to 2021. The key triggers for the changes were:

• change in the methodology to determine material topics, a new procedure for assessing impacts;
• optimisation of contents, change of focus in disclosure at stakeholder requests, relevant change in the names of topics;
• contextual optimisation (in particular, the topic “Response to the COVID-19 Pandemic” was disclosed in detail in the context of the 2021 reporting year’s events);
• the topic “Compliance” in accordance with the GRI Standards (2021) is mandatory for disclosure and is not subject to the materiality assessment procedure.

Impacts related to material topics