At the foundation of a sustainable future

"Metafrax Group" presented a systematic approach to the implementation of ESG principles in the development strategy of the group of companies as well as key projects in the field of "green" chemistry.

On June 8-9, a "Metafrax Group" delegation took part in the annual Sochi conference on operational efficiency, sustainable development and decarbonization in the oil, gas and petrochemical industries. This event is the only thematic conference in Russia, where 70% of the participants are key specialists and managers of oil and gas companies. During the discussion, the experts talked about the methods and solutions for achievement of production and operational efficiency, risk management, digital transformation, sustainable development and decarbonization of the industry.

At the conference, "Metafrax Group" was represented by a delegation consisting of Levon Garslyan, the Strategy and Investments Director, Natalia Startseva, the Financial Director, Margarita Belyakova, the Corporate and Legal Affairs Director, Maria Konovalova, the Head of the Department of Strategic Communications, Lilia Kuli, the Chief Strategy Analyst, Nikolay Ilyukhin, the General Director of "Metafrax" ETC, and Vasily Perepelkin, the Head of the ETC's Moscow branch.

In 2021, the Board of Directors of "Metafrax Chemicals" established a work group for the implementation of ESG principles in the activities of the group of companies. The accumulated experience and practical cases have been implemented in a new stage of strategy development according to best practices in such areas as Environmental, Social and Governance.

Investments and "green" chemistry

As part of the section titled "Sustainable development of the oil-and-gas and chemical industry in Russia and the world", Levon Garslyan presented the "Metafrax Group's" view on the development of green chemistry and the group's key projects.

- The environmental agenda always occupies a special place at our strategic sessions. We are a systemic enterprise in every region of our presence – in Gubakha, in Orekhovo-Zuyevo, in Krems. For the long-term and sustainable development of our business, we clearly understand the need to think about which environmental agenda we are forming and what kind of contribution we are making. "Metafrax Group's" "green" projects are the key ones in the group's investment portfolio, - informed Levon Garslyan.

The "green" projects of "Metafrax Group" are divided into three interrelated groups. The first one is aimed at reducing the negative impact on the environment and foresees the development and implementation of solutions aimed at reducing emissions and production waste.

- This is, for example, the construction of a thermal neutralization plant for industrial effluents, which will ensure the collection, reception and neutralization of effluents from three productions of "Metafrax Chemicals" at once - both operating ones and those under construction, - Levon Garslyan noted. - The plant foresees the use of the received thermal energy for the production of water vapour. In addition, the construction of a modern waste water treatment plant at “Metafrax” is among such projects.

The second group of "green projects" is aimed at creating new closed-cycle production facilities with minimal emissions and the most modern reliable equipment.

- First of all, we are talking about the group's project for the erection of the AUM complex, - clarified Nikolay Ilyukhin. - As part of this project, the largest carbon dioxide recovery plant in Russia will be put into operation. The start-up of this plant will eliminate the daily release of 1120 tons of carbon dioxide into the atmosphere. The CO2 emissions from "Metafrax's" production facilities will be reduced by more than half.

The third group of projects foresees the creation of a line of "green" products from biodegradable natural raw materials. The key requirements for the selection of such projects are environmentally friendly production methods and safe solutions with a reduced content of harmful components.

"Metafrax Group's" interests in this area include the production of low–emission formaldehyde resins, bio-methanol from biological raw materials and "fine" chemistry (perfume components, food essences and dyes). One of the largest "product" projects is the engineering of bio–propylene glycol (BIO-MPG) production at the site of "Metadynea" in the Moscow region.

- The BIO-MPG synthesis process used here will reduce greenhouse gas emissions by more than 60% compared to the classical propylene oxide production process, - Levon Garsyan commented on the project. - Now there are only two such plants in the world, we are working to make our plant the third.

ESG initiatives in action

During the same session, Margarita Belyakova presented a detailed overview of the implemented ESG initiatives of "Metafrax Group".

The provision regarding responsible attitude to the environment is established in the strategy of "Metafrax Group" and is implemented in several areas.

According to the adopted strategy, priority is given to projects with an environmental component, investments are made in capital stock for environmental protection and rational use of natural resources. Moreover, a special environmental program is currently ongoing within the Group.

- It is aimed at monitoring, certification, implementation of investment projects for reduction of emissions from existing production facilities, — Margarita Belyakova explained. — The "Metafrax Group's" environmental program is designed for 3 years and foresees more than 5 billion rubles of investments.

In 2021, the scope of investments in capital stock for environmental protection and rational use of natural resources exceeded 294.8 million rubles.

The implementation of the ESG initiative related to corporate responsibility was represented in the overview by the active social policy of the Group of Companies, compliance with industrial safety standards, charitable activities, workplace creation, development of human resources and reserve. In 2021, "Metafrax Group" was highly praised, having received the status of a silver medallist according to Forbes magazine in the ESG rating of "Best Employers".

- Our main task is to preserve the health and well-being of employees. This activity is quite broad and it has a positive impact on the residents of the regions of our presence. In particular, we invest in the purchase of medical equipment in institutions. More than 31.4 million rubles were allocated for charity in 2021, - Margarita Belyakova stressed.

With the support of Seyfeddin Rustamov, the beneficial owner of "Metafrax Chemicals" PJSC, a pool of unique charitable and philanthropic projects in the areas of culture, art, education as well as support for children and youths is being implemented in the regions of the company's presence.

- The education in art is the focus of the philanthropic initiatives of the "Metafrax Group". In general, for our company, charity is not just spending money; each project is both a contribution to the development of the region and sincere support to those in need. It is also important to note that the corporate volunteer movement is actively involved in the implementation of philanthropic projects, - Maria Konovalova notes.

The goals of the "high quality of corporate management" initiative are achieved in the Group of Companies due to the comprehensive analysis and management of a special ESG working group. In 2022, based on an open assessment of the Board of Directors, an action plan was developed; points of critical attention were identified as further implementation of ESG principles, work with risks and continuity.

In particular, several priority areas of the compliance system have been identified in the Metafrax Group. There is a helpline through which anyone can report on significant aspects that they want to convey to the management.

Ways to achieve a sustainable future

The future of the industry and ways to solve current problems became the topic of the discussion part of the conference. Natalia Startseva took part in the round table discussion titled "Project implementation in new conditions. Financing and procurement".

- In today's conditions, active interaction with a financial partner gives the company a resource of stability in terms of the execution of key investment projects, - Natalia Startseva noted, -Mobility and high involvement of partners are valuable for us.

The general trend highlighted by the participants of the discussion turned out to be related to the current business conditions. In order to maintain the required level of project implementation and modernization of production, there is currently an interest to develop relations with suppliers of equipment and processes, the production localization of which is mostly within the territories of suppliers' countries.