Environmental policy. Corporate social responsibility

In December 2005, the Management Board of RAO "UES of Russia" approved the Environmental Policy of RAO "UES of Russia" and the Concept for the Implementation of the Environmental Policy of RAO "UES of Russia". Beginning from 2006, RAO "UES of Russia" has adopted and implemented its Annual Programmes for the Implementation of the Environmental Policy. The Holding Company has also approved and put in place the Guidelines for the Implementation of the Environmental Policy for years 2007-2009.

The objective of the Company's environment policy is improving environmental security, ensuring a reliable and environment-friendly power generation, transmission, and distribution, and adopting a comprehensive approach to use of natural energy resources. The environment policy of RAO "UES of Russia" sets out the principles, objectives, goals and principal areas of the Company's activities in environment protection and ensuring environmental safety in the long term.

The Holding Company's environment policy is implemented through:

• participation of the SDCs in the environmental programmes of RAO "UES of Russia";
• implementation of the SDCs' environmental programmes developed by them independently.

By now, all energy companies have drafted, approved and are implementing their own environment protection programmes at power plants for the period 2007-2010.

In 2007, at RAO UES power plants, pollutant emissions into the atmosphere declined significantly compared to 2006:

• sulphur dioxide by 10 percent;
• solid particles by 4 percent;
• nitrogen oxides by 1.3 percent.

The lower emissions of sulphur dioxide and solid particles was due to the reduction in the share of fuel oil and coal with high sulphur and ash content, while the reduction in emissions of nitrogen oxide was achieved by using technical methods and carrying out adjustment operations at the RAO UES thermal power plants.

Also in 2007, the power plants succeeded in reducing consumption and production waste by 2.8 percent compared to 2006, which was due to the decrease in the use of lower-grade coals that adversely affect the environment.

Moreover, greenhouse gas emissions lowered by 2.5 percent in 2007 compared to 2006. It was the result in changes of the fuel mix, namely, reduction in the share of fuel oil and hard fuels which cause higher CO₂ emissions than natural gas.

In 2007, NIEO "Energy Carbon Fund" carried out a review of the Investment Programme of RAO "UES of Russia" with a breakdown by generation facilities of WGCs and TGCs for the period from 2006 to 2010. Of the 198 projects included in the Investment Programme, the Fund selected 96 projects which may be implemented using the Kyoto Protocol mechanisms. After the projects were consolidated based on the territorial principle and list of measures to be carried out on the same facilities, the Fund drew up a list of 75 projects which, according to the Fund's estimates, will generate emission reduction units in excess of 30 million tonnes of СО₂.

ENVIRONMENTAL TRAINING AND MANAGEMENT

In 2007, 1,0076 managers and engineering staff of the SDCs completed the environmental training course "Environmental Audit and Environmental Management in the Energy Companies of RAO "UES of Russia".

In 2007, pilot projects to introduce an environmental management system were carried out in the following companies in accordance with the approved schedule:

• OAO "Southern Generation Company TGC-8" and Kuban Generation Branch;
• OAO "WGC-2" and Stavropolskaya TPP Branch;
• OAO "WGC-4" and Berezovskaya TPP Branch;
• OAO "HydroWGC", OAO "Zhigulevskaya HPP", and OAO "Volzhskaya HPP";
• OAO "FGC UES" and Centre ITC Branch;
• OAO "Center IDC" and OAO "Yarenergo".

ENVIRONMENTAL AUDIT

In 2007, the Company laid down the methodological framework for the conduct of environmental audits. RAO "UES of Russia" adopted Order On Environmental Audit of Energy Companies of RAO "UES of Russia" approving the Regulation on Environmental Audit at Energy Companies of RAO UES Holding Company and the Standard Programme for the Conduct of Environmental Audits at Energy Companies of RAO UES Holding Company. The relevant documents containing methodological guidelines for the organization and conduct of environmental audits were circulated to the RAO UES subsidiaries.

Energy companies started carrying out environmental audits. As of 31 December 2007, environmental audits were completed at 156 power installations of RAO UES Holding Company.

COOPERATION OF RAO "UES OF RUSSIA" WITH NON-GOVERNMENTAL ENVIRONMENTAL ORGANIZATIONS

In 2007, RAO "UES of Russia" continued its interaction with the non-governmental environmental organizations (NGEOs)—Greenpeace of Russia, the World Wildlife Fund, International Social Ecological Union, and other organizations. RAO "UES of Russia" issued an order setting out the principal aspects, topics and issues to be considered within the framework of the dialogue between the Company and the NGEOs.

ENSURING CONTINUITY OF ENVIRONMENT MANAGEMENT IN THE ELECTRICITY INDUSTRY DURING THE POST-REFORM PERIOD

Continuity of the environment management activities in the electricity industry during the post-reform period will be ensured through following measures:

• conclusion and performance of a multilateral Agreement on the Environmental Policy in the Electricity Industry. The draft Agreement provides for the participation of the Ministry of Industry and Energy of the Russian Federation, the Federal Energy Agency of the Russian Federation, RAO "UES of Russia" (until the completion of the sector reform), Agency for Balance Forecasting in the Electricity Industry, Coalition of Non-Governmental Environmental Organizations, with energy companies to accede to the Agreement at a later date. The draft Agreement is currently under review at the Ministry of Industry and Energy, Rosenergo and the Coalition of NGEOs.
• creation and operation of the Interdepartmental Working Group for implementing environmental policy in the electricity industry under the Ministry of Industry and Energy of Russia (a detailed proposal on that matter was prepared by RAO "UES of Russia" in December 2007). It appears advisable that the Working Group should include officials from the relevant ministries and agencies, and representatives form the Agency for Balance Forecasting in the Electricity Industry, All-Russia Thermal Engineering Institute (VTI), Krzhizhanovsky State Energy Scientific Research Institute (ENIN), UES Energy Efficiency Center, Non-profit Partnership "Innovations in Energy Industry", Energy Carbon Fund, and the Coalition of the NGEOs.