Mail.ru Group publishes its second ESG report

We published our second ESG Report, for the year ended 31 December 2020 (“2020 ESG Report”), which is available here.

Our mission remains to improve people’s lives by making technologies simple and accessible to all and distribute our services in a way that has the least possible impact on the environment. We aim to design, offer and support sustainable technologies that make a real difference to our users’ lives and follow a responsible approach to the consequences and impact of our products on communities.

To ensure the relevance of our ESG agenda and related priorities, in 2020 we carried a formalised assessment of our sustainability-related activities through a survey of external and internal users, coupled with informal discussions with third parties and our stakeholders to narrow our focus areas and evaluate how we can meet the interests of all the interested parties. In 2020 our stakeholders paid special attention to our efforts in EdTech, compliance & corporate governance, as well as climate-related issues, with these areas having received renewed assessment by management.

Based on our ongoing analysis of trends and topics, we have defined several focus areas for our sustainability agenda. Some of the main related 2020 highlights are provided below. They exclude COVID-19 related initiatives, which we highlighted in detail in the 2019 ESG Report.

PRIVACY & DATA SECURITY: Though the digital world brings many benefits to users, we understand the growing concerns about personal data protection and privacy issues, as more and more sensitive personal data becomes digitalised and transmitted via global networks, with millions of new devices and millions of user accounts. As the leading Russian internet company we take data security and privacy as our top priorities

• Privacy:
  • We adhere to meaningful transparency in providing users with access to the data we are collecting on them and which is stored on our servers
  • Our social networks give users the option to customize the privacy of their data. Our services also allow users to choose the information they are willing to share
  • In 2020 we introduced a Close Friends option in VK to give more protection to personal space
• Data security:
  • We are committed to complying with the applicable data protection laws and use technical and organisational measures to ensure data security by default. As part of our General Data Protection Regulation (GDPR) preparation process, we have revised and updated all our internal processes and procedures, including data systems, the implementation of the Data Impact Assessment and documentation in order to ensure full compliance with the GDPR
  • The Group has a personal data protection system. Group’s Data Protection Officer ensures that our products comply with data protection principles with secure processing of all personal data
  • We conduct security audits to review compliance with data safeguarding requirements. In 2020 we conducted an external audit for VK, OK and MY.GAMES for Data loss or data non-availability, unauthorised access or data leakage, data integrity corruption or unauthorised modification of the design, implementation and operating effectiveness of data controls during 2020
  • To raise awareness among our users and to help them better understand and manage the safety of their email accounts, we launched security highlights site with guidelines. Our VK, OK, Money.Mail.ru and other services run similar safety centers
  • Mail.ru is now ranked #7 vs #14 in 2019 in HackerOne’s 2020 Top 10 public bug bounty programmes
  • We use advanced security technologies in our services, including DKIM, DMARC, two-factor authentication, HSTS, Content Security Policy, Certificate Pinning
  • All cybersecurity issues are handled by the quick response team, which includes the Head of Information Security. We did not experience any major hacker attacks on our services in 2020 and no personal data was stolen
  • We arrange training programs for our employees related to data processing and data security

CORPORATE GOVERNANCE, ETHICS & HUMAN RIGHTS:

• Corporate governance:
  • As part of our corporate governance development process for 2021-22, we plan to further increase our employees’ awareness of the various aspects of corporate governance, having introduced the position of Vice-President of Compliance to facilitate this process
  • The system of remuneration for senior officials includes fixed remuneration (monthly salary), annual short-term incentive based on KPIs, long-term incentives (4 year). Short-term incentives have 3 sets of KPIs: financial, operational as well as specific goals related to key strategic initiatives and ecosystem projects
  • All share-based employee incentive plans have been converted from RSU to PSU-based plans to ensure links to the execution of specific performance targets in all cases
  • We have also formally introduced clawback for granted PSUs in case of a material error in financial statements and/or gross misconduct
  • The number of women on our Board of Directors has doubled to two representatives (20% of total), supporting the board’s diversity
  • We stopped reporting on the basis of pro-forma as of Q1 2021, further narrowing the differences between management and IFRS accounts
  • We moved EdTech into a separate reporting segment as of Q1 2021, improving transparency of our segmental reporting

• Ethics & Human rights: We uphold high ethical standards in our own operations, being committed to principles of fair business practices and compliance with business ethics. Our Code of Ethics sets down the key principles and practices of our ethical business approach and provides clear guidance to our employees
  • We are committed to following and upholding the laws and regulations in all our activities
  • We offer a pre-moderation of all ads to meet the legal requirements and restrictions
  • We have a transparent and robust Group-wide procurement and supplier selection policy in place
  • We encourage our employees to immediately inform us of any potential unethical issues directly or via an anonymous hotline
  • We do not tolerate any form of bullying and immediately respond to any complaint by reviewing and assessing the potentially harmful comment or post. Day against Cyberbullying launched by Mail.ru Group in 2019, in 2020 reached 60mn+ views. Most of our products and services including VK, OK, MY.GAMES and Marusia and 50+ external brands have now joined the project. The campaign was honored by Effie in Gold and a special recognition for supporting Sustainable Development Goals
  • In 2020 VK expanded its efforts against hate speech and added a new “hate speech” category for the Report button. It hosted an experimental “No Hate Speech Day” in November 2020, when neural network helped filter out abusive comments and hate speech, with VK continuing to develop the filter

SOCIAL: We believe that it is our duty to help society in its digital transformation. We work on improving users’ quality of life with our products, while enhancing their opportunities by improving their skillset, and giving back to society and communities in which we operate, including through assisting small and medium businesses

• Education:
  • In 2020 we broadened our educational focus area within ESG agenda from IT education to the more comprehensive EdTech, since we have broadened our ambitions beyond professional training. We now aspire to develop education and make it more accessible by providing digital and hybrid options throughout the entire educational journey: from pre-school and school lessons to professional courses for career development
  • We have developed several new programmes for technical university students in cooperation with major universities and help tens of thousands of pupils to learn about IT professions and technologies via professional orientation days and The Digital Lesson initiative
  • We launched Sferum, a digital education platform focused on remote learning, powered by VK software technology
  • We launched the All Cups unified platform as an open crowdsourcing and educational platform with practical solution databases for various disciplines, with 300,000+ participants from 130 countries as of  the year end of 2020
  • In February 2020 we enrolled 200 new students into the free-of-charge MADE Big Data Academy educational project for experienced specialists we launched in 2019
  • Our ultimate ambition is for ~10mn students to complete our various educational programs by the end of 2023
• Our people: They are our greatest asset, which is why we offer our employees a variety of training opportunities, as well as a comfortable and attractive working environment, including flexible working options and other support and benefits
  • We employ people of all ages, with 48% of our employees being under 30 years of age, while our youngest employee being 17 years old, and the most senior employee aged 82
  • We continue to support diversity, with the share of women rising from 36% to 38% of our staff, with 42% of all new hires in 2020 being women. 17% of senior managers are women
  • We are focused on employee development, having delivered 107 company-wide training sessions and 102 training sessions for managers, totaling 3,942 participants. As a result, the number of training hours has soared to 1.7mn+, with an average number of training hours per employee up >56x YoY to 193 (!)
  • We launched an internal learning platform (WORK), with training available across professional as well as soft skills and languages. We have also re-launched an internal mentoring programme
  • We continue to seek best talent, with 49 ambassadors from 30 major Russian universities and 12 Russian regions joining the third round of enrolment of our Ambassadors programme in 2020. Today every ~7th employee of the Group is a graduate of one of our joint programs with local universities
  • We evaluate our employees, with managers providing feedback to 38 teams and 3,090 team members (~35% of the total) in 2020
  • We support work-life balance, having carried out 500 family events with 5,000+ attendees in April-December 2020 and saw a total of 10,000+ participants for online sports lessons
  • 3,000+ employees participated in 54 online teambuilding events, including 11 Group-wide online events, with 5,000+ employees attending the online New Year celebration
  • We appreciate the views of our employees and use them to further transform and evolve. Since the beginning of 2020 we carried out 6 Group-wide pulse surveys to assess the mental health and wellbeing of our employees and get their feedback on the effectiveness of business processes and workflow management, teamwork effectiveness, involvement and loyalty, additional needs and requirements for remote work
  • We started to regularly organise town hall meetings with senior management to discuss the most relevant issues – from distant work to vaccination – and launched 360Degree sessions with heads of various business units to give our employees more details on the operations and plans of these units
  • Based on staff feedback following an extended remote working regime in light of the pandemic, we launched a hybrid office programme, where employees can choose between full office work, hybrid or fully remote working regime as things normalize
  • As of the end of 2020, ~5% of our total employees worked part-time
  • As a result of all the ongoing efforts, the Group was ranked 6th among the most attractive employers by the FutureToday rating in 2020, compared to #12 position 3 years earlier and our turnover declined to 12% versus 14% in 2019
  • Importantly, there have been no job-related injuries or illnesses among our employees over the last three years
• SMBs: We support small and medium sized businesses, to help them drive their business and create employment opportunities by using efficient sales strategies and building effective communication with customers
  • In March 2020, we set up a crisis response centre and allocated ~RUB 1bn to help entrepreneurs address a wide range of COVID-related issues (more details can be found in 2019 ESG Report)
  • We offer a special VK Business section for ease of doing business through VK
  • In 2020 we presented an internal business manager for SMBs in OK and launched new targeting tools, which allows SMBs to improve the effectiveness of advertising campaigns
  • Youla launched Shops for SMBs, a simple way to set up an online shop on the platform with all the essential business tools
  • AliExpress Russia launched a grant program for SMBs
• Charitable activities:
  • Our Group helped complete 369 charitable projects in 2020, 15% more than a year prior
  • Charitable donations through Dobro (Kindness) increased by 31% YoY in 2020
  • We launched Help for Nature initiative, to divert donations to ecological initiatives, and supported multiple social initiatives proposed by our employees
  • In 2020 OK joined efforts with So-edinenie (Connection), deaf and blind support foundation, for an inclusivity project to mark the World Sight Day and raise awareness of blindness & vision impairment as some of the major public health issues
  • Citymobil users have now driven more than 1.5mn “miles of kindness”, with the foundations using donations to transport their wards and volunteers
  • Delivery Club participated in the World Autism Awareness Day charity project, while Local Kitchen continued to actively develop inclusivity options in employment
  • We formalized our Social reporting by issuing our first annual Social Projects Report for 2020 (to be released in English shortly)

CLIMATE CHANGE: With climate change and reduction of carbon footprint being among the most challenging global issues facing the world today, we cannot stand aside, with this area being among our top ESG agenda items

• Emissions of greenhouse gases:
  • We do not produce substantial emissions of greenhouse gases, since we have no production of our own, with GHG emissions of the Group up <3% YoY in 2020
  • Our direct impact on the environment is limited to the use of fuel to support our uninterrupted operations with diesel generators. Our indirect emissions result from the consumption of electricity from power grids
• Energy consumption:
  • We have opted to purchase only high-quality IT equipment for our data centres, allowing us to meet high energy efficiency standards and ensure low electricity consumption
  • The majority of our data centres are of Tier III level
  • In our efforts to reduce power consumption, we are switching to LED lamps in our office premises. We also regularly replace equipment for more energy efficiency and use energy-efficient IT equipment and UPS of at least 80+Platinum level
  • We launched our first installation with direct chip cooling for 200 high-TDP CPUs. We hope this advanced technology will help us effectively adopt the latest CPU and GPU generations with a TDP of more than 300W. We are planning to scale this system by 400% in 2021
  • In January 2020 we put into operation a warehouse heating system for 1,600 sqm, which uses low-grade heat from server equipment
• Water consumption: Consolidated asset water consumption declined by 57% YoY a result of the shift to remote work
• Waste:
  • In 2020 we transferred ~77.6 tons of used equipment to recycling companies and sold 8,832 units to third parties, with our hazardous waste (luminescent lamps) declining by 83% YoY to 119 units, with 29% decline for medium-hazardous (used cartridges, batteries, discs – 500kg) and 59% decline for low-hazardous waste (to 61kg)
  • In all our offices we have introduced containers to collect recyclable paper and used batteries and opted for biodegradable cutlery and coffee cups in our office kitchens
  • In October 2020 Delivery Club released belt bags for its grocery stores’ workers made of recycled courier thermal backpacks
  • Local Kitchen is using data science to optimise our menus and sales plans for Local Kitchen to avoid excessive supplies and therefore reduce food waste. They have also become one of the first companies in Russia to offer users an option to exclude plastic cutlery from the order, with 30%+ of users currently using the option. We aim to ensure that all utensils offered by our Group could be recycled
  • In 2020, together with PolyER, Local Kitchen launched own packaging, which contains 20% less plastic and consists of 100% recyclable polypropylene with no added pigments or dyes. Such packaging has created a B2B opportunity for Local Kitchen, while allowing them to directly influence the ecological footprint of food tech businesses, with 150+ companies buying 1mn+ packaging units in 2020 and planned growth of 5x YoY in 2021

• We have not received any penalties and sanctions for failure to comply with local environmental laws

There is much in the past year we can take pride in, but there is much more that can be done in the future to fulfill our primary goal - the welfare of our employees and customers, their families, local communities and local businesses, with ESG agenda becoming increasingly important for our strategy and day-to-day operations and decision making and ESG-related disclosure from the Group expected to only increase going forward.