Annual report and accounts 2012

Social Commitment

Our position

Severstal continues to play a crucial role in supporting the development of the communities and regions we operate in. We aim to make a long-term positive impact in key areas, such as access to education and quality of education, youth policy, cultural preservation and sports. Developing and enriching the communities around us improves the sustainability of our business.

Our action

Severstal’s cooperation with regions in the social sphere is based on strategic programmes in such areas as employment, occupational guidance and healthcare, and support for disadvantaged people. Our main commitments are in the form of agreements we enter into with regional authorities. We also provide charitable support to programmes that help children, preserve and support culture, and develop sports. We regard these programmes as an investment in the spiritual and physical development of the younger generation.

In 2012, we continued to support social projects in priority areas such as children’s programmes, education, culture and sports. We spent over US$79 million on various social and community projects.

We are committed to high-quality management of social programmes and support development of innovative approaches and technologies in this area. In 2012, Severstal founded the named professorship in the European University in St. Petersburg for developing educational and research programmes in the areas of Corporate Social Responsibility and Sustainable Development.

We won various awards in 2012 for our social activities, including the competition Leaders of Corporate Charity 2012» (PWC , publishing House Vedomosti, Donors Forum). Our Road Home programme is a winner of the Regional stage of the All-Russian Competition of the best socially focused projects of non-profit organizations “Assistance — 2012” (Agency of the strategic initiatives).

Community

Severstal maintains productive cooperation with local administrations and the general public on acute social, economic and environmental challenges, and works with nationwide and regional non-profit organisations and professional associations. This cooperation helps to foster favourable social conditions in the regions where our businesses are located.

We support universities and colleges, cultural and sports organisations, and provide financial help to war veterans and people with disabilities. We use competitive selection tools to qualify projects and expand our collaboration with professional associations and non-profit organisations. We design tools for multifaceted cooperation focused on addressing specific social issues and on developing the inherent potential of the regions.

The Agency for Urban Development, our non-profit joint venture with the City of Cherepovets, focused on developing small and medium businesses, brought tangible results. In 2012 in Cherepovets, 192 new enterprises (mostly in service, trade, production and building), and 1,860 new jobs were created by this programme, and 701 work places were retained.

In 2012, the Agency for Urban Development received Osnova Rosta Award for support of small and medium entrepreneurship in the Contribution to Development of Regional Entrepreneurship nomination. Osnova Rosta Award is a joint project of the Ministry of Economic Development, RSPP and Russian Chamber of Commerce and Industry.

Vorkutaugol spent more than 20 million roubles on supporting important public facilities in Komi Republic in 2012. The majority of this money was allocated to important facilities through our agreement with the city. According to the agreement, we supported the most important components of public infrastructure including education, healthcare, culture, sports and landscaping in Vorkuta. We provided financial help to public educational and healthcare institutions, and youth sports schools.

Karelsky Okatysh annually finances the upkeep of the cultural and sports centre Druzhba, with more than 90,000 people attending various events. It also provides financial support for children’s educational institutions, sport clubs and schools, organisations for disabled people and veterans.

Olkon supports various festivals, sports and cultural events, which attract a considerable part of the Olenegorsk population.

Children and the future

Child neglect is one of the most acute social problems in Russia. The number of orphans in the country continues to grow and is now nearing 740,000, 3% of the total child population. In 2006, Severstal initiated the unique Road Home programme, which focuses on the comprehensive prevention of child neglect and social orphanhood in Cherepovets.

In 2012, we continued the programme in Vorkuta, Kostomuksha, Balakovo and Veliky Ustyug. To support its launch in these cities, we opened a resources and training centre for 95 social development NGOs and 25 governmental organization to support NGO-related social work in those cities. We started a new project Children of Krasavino, which focuses on decreasing social tension in the region. We launched a programme of corporate volunteerism in 2012.

Culture and the arts

Severstal has worked successfully on a number of rewarding collaborations with Russia’s leading museums and theatres.

In 2012 we continued our partnership with the Bolshoi Theatre (Moscow), Russian Museum (St. Petersburg), State Tretyakov Gallery (Moscow), State Historical Museum (Moscow), Cherepovets Museum Association (Cherepovets), Kirillo-Belozersky Museum- Preserve (Kirillov), Museum of Dionisy Frescoes (Ferapontovo, Kirillovsky District), Vologda Museum and Reserve (Vologda, Semenkovo), Radishchev Arts Museum (Saratov), Balakovo Art Gallery (Balakovo).

Severstal sponsored the Embroidered Trimmings exhibition in the Russian Museum, supported the Children’s art studio, and a project on technical equipment for exhibition halls in Tretyakov Gallery.

In 2012, supported by Severstal, Art That I Live With, an exhibition of Russian artworks from Mikhail Baryshnikov’s collection opened at the ABA Gallery, New York. This is the first time that so many works from the legendary dancer’s collection have been exhibited to the public.

Severstal traditionally supports the Golden Mask Theatre Festival in Moscow, Riga and Cherepovets, and VOICES International Film Festival in Vologda and Cherepovets. This festival is quickly becoming an important forum for young independent European filmmakers and contributes to development of European culture.

Severstal continues to partner with Sergey Andriyaka’s Watercolour School. We helped to arrange a series of painting master classes and exhibitions in Vologda and Volgograd.

In 2012 we continued to work with the Museums of Russian North grants programme, focused on reviving the regional arts museums. We organised the third grants contest among the museums of North-Western Russia as a part of this programme (the first grants contest took place in 2007). Five museums from Vologda region, Komi Republic and Republic of Karelia won the 2012 contest.

In 2012, Severstal supported several important musical events in Kostomuksha, such as the Kanteletar International Folklore Festival, the International Festival of Chamber Art, the Sergey Ozhigov Art Song Festival and the Nord Session International Rock Festival. With our support, Kostomuksha became a cultural centre in north-west Russia.

Sports

Severstal promotes a healthy lifestyle among its employees and their families by supporting the development of sport. Severstal invests in sports at the top competitive level: we believe that training the reserve for national teams is a great way to promote healthy lifestyle, to support psychological, social and spiritual welfare of youth, and to build the prestige of our company. We organise regional sports and public events for employees and local communities, and finance a number of leading sports teams.

Severstal supports Severstal Hockey Club sponsored by Cherepovets Steel Mill. Severstal Sports Club is focused on training athletes at the top competitive level and organising their participation in nationwide and international events. Severstal Sports Club trained 33 international masters and 330 national masters.

We also sponsor the Dynamo women’s volleyball club.