ACRA has assigned ESG-2, category ESG-B to PJSC RusHydro (hereinafter, RusHydro, or the Company), which corresponds to a very high assessment in the field of the environment, social responsibility, and governance.
According to the ESG Assessment Methodology, a very high ESG assessment means that the Company pays increased attention to environmental, social responsibility, and governance matters.
The assessment is based on the Company’s moderate indicators in the field of environmental impact, favorable social responsibility indicators compared to peer companies, and high quality of corporate governance. In addition, the Company has policies and procedures for managing key industry ESG risks and a high level of compliance with best practices.
RusHydro is one of the world’s largest public hydroelectric power groups. Its activities are focused on electric and heat energy generation and sales in the wholesale and retail markets of Russia.
key assessment factors
Very high assessment of the Company’s activity in the area of environmental impact and its actions to minimize environmental risks. This assessment is based on the detailed elaboration of environmental risks, as well as the sufficiently high level of compliance with best practices. The Company’s indicators for water consumption, energy consumption, wastewater discharge and greenhouse gas emissions per unit of revenue are close to industry averages. At the same time, the Company received conservative scores for specific indicators of waste generation and pollutant emissions. The Agency expects that in the next few years, the Company’s negative environmental impact indicators will decline due to a change in the structure of generating capacities, the switchover of thermal power plants in Russia’s Far East from coal to gas, as well as due to the modernization of existing assets. The Agency applied positive modifiers in view of the significant share of electricity generated by the Company using renewable energy sources, as well as due to the presence of automated environmental monitoring and control systems. The Company has a very high level of environmental risk management. The Company received maximum scores for practically all the industry risks that the Agency considers to be relevant. The level of elaboration of environmental issues at the Company is also high and is generally in line with best global practices.
Highest assessment of the Company’s social impact and actions to minimize social risks. This assessment is based on RusHydro’s comparatively favorable social impact indicators compared to the companies in the sample, the extent of elaboration of most of the social risks relevant to the Company, and the high degree of compliance with best practices. The Company has a high level of social investments relative to revenues, a low injury rate, and high gender equality indicators. The Company’s fatal injury rate is in line with the industry average. The Company’s most problematic social indicators are the average salary and turnover rate. However, ACRA notes that the Company has many social initiatives, which allowed positive modifiers to be applied during the assessment. The Company applies effective measures to minimize social risks, has top-level regulations on managing these risks, and has adopted internal regulations and procedures. Social responsibility issues, like environmental issues, are a priority for the Company, and the approach to tackling these issues is in line with best global practices.
The very high assessment of corporate governance quality reflects the detailed elaboration of corporate governance risks and sufficiently high compliance with best practices in this area. The Company received a moderately high score for the industry experience of the members of the board of directors, as well as high scores for quality of strategic planning and level of information disclosure. The availability of independently verified non-financial reporting serves as grounds for applying a positive modifier in the corporate governance unit. ACRA highly assesses the quality of work with corporate governance risks at RusHydro. ACRA also gives a sufficiently high score to the Company’s corporate governance policies and procedures.
key assumptions
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Companies from the Diversified Power Industry were selected as benchmarks (i.e. peer companies).
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Data specified in questionnaires and RusHydro’s social responsibility and corporate sustainability report is reliable and comparable to benchmarks.
assessment components
Final ESG assessment: ESG-2.
Final ESG category: ESG-B.
ESG assessment determination: very high assessment in the field of the environment, social responsibility and governance. Increased attention is paid to the environment, social responsibility, and governance matters.
additional information
The ESG assessment has been assigned in accordance with the ESG Assessment Methodology.
An ESG assessment has been assigned to PJSC RusHydro for the first time. The assessment is expected to be revised within one year from the publication date of this press release.
The ESG assessment has been assigned based on data provided by PJSC RusHydro, information from publicly available sources, and ACRA’s databases.
The ESG assessment is solicited and PJSC RusHydro participated its assignment.
In assigning the assessment, ACRA used only information, the quality and reliability of which were, in ACRA’s opinion, appropriate and sufficient to apply the methodology.
No conflicts of interest were discovered in the course of the assessment process.
The assigned assessment is not a credit rating.
