Sustainability plan

EL5-Energo has developed an effective sustainability management system. It combines work to achieve production targets and actions for the benefit of the Company, society and the environment.

Within this framework, The Sustainability Plan plays the role of the main planning, monitoring, and control tool for managing ESG aspects. In general, the process is structured as follows:

1. Material topics
Structuring the Plan, taking into account stakeholders expectations, Company's business strategy, industry specifics and the priority of the topic

2. Sustainability plan
Updating targets for key areas in accordance with the Company's current strategy and potential contribution to the UN SDGs

3. Action development and implementation
Engagement of functional units in the development and implementation of ESG initiatives as part of core production activities

4. Sustainability Plan implementation results
ПPlan-fact analysis of the goals implementation, preparation of semi-annual and annual reports

5. Sustainability Report
Reflection of progress for the reporting year in the Sustainability Report

We review the Plan annually and aim to be consistent and to reflect the evolution of our approach to sustainability, while taking into account ongoing changes in strategy, Company priorities, and external and internal context.

Despite the fact that in 2022 we have adjusted the structure, key impact blocks and revised some targets in the Sustainability plan update to reflect the internal and external changes, our primary focus remains on reducing our carbon footprint and decarbonization of the energy mix. Along with Sustainable supply chain and the Economic and financial value creation, these create the core value from our operations. The foundation of our Plan is the ESG backbones, which includes Environmental management, Occupational health and safety, and Sound governance and fair corporate conduct indicators. The People centricity approach remains unchanged from previous planning periods, with priority given to issues of Employees management, development and motivation, as well as initiatives of Engaging the local communities in a mutually beneficial dialogue.

Achieving our ambitious targets and continuous development are impossible without Growth drivers. We believe that these are cross-functional areas that help us move faster along our planned path. For us such directions are Innovation and digital transformation as well as Customer engagement, because it is impossible to move forward successfully in any direction in the modern world without it.

Some of the targets included in the Plan are based on the Company's strategic and business plans, because some targets (as such as specific resource use and GHG emissions) depends on levels of planned electricity and heat generation of our power plants. Virtually all of the Plan's targets are a part in the annual KPIs of the respective Company's units (business process' owners).

Traditionally, the planning horizon for the Sustainability Plan is three years for public disclosure and five years for internal planning. In 2023, due to the transformation processes taking place in the Company, it was decided to publicly disclose targets for the current year only, with the intention of returning to the previously adopted planning horizon in future periods.

We intend to continue to improve our planning system to optimize the targets set by the Company and to reduce factors outside of the Company's control and management, which will allow us to work more effectively to achieve our goals and make more ambitious commitments.