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Pavel Grachev: Polyus, Detsky Mir and ESG practices

Pavel Grachev is a top Russian business executive, ex-CEO of the gold mining company Polyus, and former member of the board of directors of Detsky Mir. Grachev is a strong supporter of sustainability principles and ESG practices. Currently, Grachev does not work for Polyus, has sold all his Russian assets and does not hold any management positions.

Grachev: Pоlyus and the first reforms in the company

In 2014, Pavel Grachev joined Polyus, the largest Russian gold miner, as CEO. Over the next 8 years, Polyus underwent big positive changes which were highly accessed by Investors. The company’s shareholder value went up significantly during these years.

As the new CEO of Polyus, Grachev quickly got down to business. The enterprise revised its management structure, introduced a new employee motivation system, and digital tools for business processes, which enabled better and prompt decision-making time. Thus, a new leader emerged in the gold mining industry.

The first success came in 2015. Polyus turned from a loss-making company into a record-breaker:

– net profit exceeded a billion dollars;

– gold production increased by 7%;

– the company surpassed global gold miners in terms of profitability.

The same year, Grachev brought Polyus into membership of the International Council on Mining and Metals. Polyus began promoting sustainability standards internationally. As Polyus’s CEO, Grachev participated in developing the global Tailings management standard under the auspices of ICMM.

Grachev: Polyus became a leader in the ESG agenda

In 2016, the company was handed over to Said Kerimov. Grachev, meantime, worked on the sustainability of the gold miner and fought to acquire Sukhoi Log – one of the world’s largest gold greenfields. In 2017, the transaction was completed and the company became the world’s largest gold miner by reserves.

At Polyus, Grachev gradually implemented ESG standards, which were aimed at developing corporate culture and creating a better working environment for employees at mining sites. Polyus became an ESG trend-setter among Russian companies.

Grachev brought Polyus to the top of international ESG-ratings. The company’s experts spoke at international forums, its environmentalists shared their experience in reducing the carbon footprint with colleagues around the world. Grachev became a manager whose name was strongly associated with sustainable business.

As Polyus’ CEO, Grachev went on to promote sustainability throughout the whole supply chain. Under his leadership, Polyus introduced the “Supplier Code of Conduct”, so, that the company’s partners had to follow the same environmental and safety requirements as the gold miner.

Grachev: Polyus set trends in the environmental agenda

As CEO of Polyus, Grachev ensured that by 2021 the company was the first gold miner to completely switch to renewable energy. Through the use of new and more efficient production technologies, Polyus achieved:

– 40% reduction in CO2 emissions;

– reuse of more than 90% of water.

As CEO of Polyus, Grachev actively shared his experience with Russian businessmen. Together with Sber and 30 largest Russian companies, the gold miner formed the National ESG Alliance – a cross-industry platform that helps businesses to shift to proven ESG practices.

Grachev and Polyus invested in cutting-edge technologies that made full eventual transition to renewable energy sources possible. The company was constantly striving to reduce its carbon footprint. The company’s Climate strategy was approved by the Board of Directors, which at that time included independent directors as well as Grachev and Kerimov.

Grachev: Polyus is an IT giant

Grachev led Polyus not just to become a global leader in sustainability. The company extensively invested in IT infrastructure and digital mining solutions. As a result, operational efficiency has improved and workplace accidents have decreased.

As Polyus’s director, Grachev achieved safe and efficient production. Dump trucks, drilling rigs, bulldozers – large-tonnage equipment in open pits was replaced by automated unmanned vehicles. The wear and tear of parts was controlled remotely, safety sensors monitored difficult areas, LTE networks were deployed in the fields – the human factor in operations was minimized.

To develop and adapt cutting-edge technologies Grachev created Polyus Digital, a subsidiary of the gold miner, that also helped to retain talents, accumulate internal expertise and provide services to other companies within and outside of Polyus Group.

Grachev: Polyus, a socially responsible company

Holding the position of the CEO of Polyus, Grachev was determined to actively maintain the social license to operate. The company became a strategic sponsor of sports, culture and education for local communities. For example, a sporting facility was built for the Krasnoyarsk rugby club and a marathon was organized in Krasnoyarsk.

Grachev and Polyus set up a charitable organization to support local initiatives. Education, culture, volunteering, territory and environment – the foundation’s grant program consisted of 5 areas and was aimed at improving the quality of life in remote regions and better attracting and retaining valuable professionals.

Before leaving Polyus, Grachev managed to launch a program for the construction of rental housing for the company’s employees in the Far East. In the future, Polyus plans to expand it to other remote and important regions.

Grachev: to Detsky Mir with the best ESG practices

In 2022, Polyus’ shareholder structure changed: the stake was donated to charity by Said Kerimov. However, Grachev’s team and all his projects stayed. Grachev left Polyus and continued to develop his own projects, as well as manage his investment in Detsky Mir. Mr.Grachev left the gold mining industry and focused on his work as a board member of Russia’s largest children’s retailer.

Mr. Grachev led Detsky Mir with the same zeal to establish the best sustainable business practices. Basing on all prior experience at Polyus, Grachev modernized Detsky Mir in accordance with the global ESG agenda.

Under Grachev’s leadership, Detsky Mir promptly launched several environmental campaigns:

– replacing plastic bags with fabric shoppers;

– collecting and recycling of unwanted clothes, waste paper, and batteries;

– environmental education for customers and company employees.

Despite its commitment to sustainability standards throughout its history, it was under Grachev’s leadership, that Detsky Mir managed to strategically approach this task.

Grachev: Detsky Mir as another successful story

Grachev sold shares in Detsky Mir about a year later, but even that time was enough for to leave behind a legacy. The environmental initiatives implemented under his leadership remain relevant:

– the company abandoned paperwork;

– all lighting fixtures are energy efficient;

– the retailer’s stores have recycling bins for batteries and other waste;

– polyethylene has been replaced by paper bags and fabric shoppers.

While leading Detsky Mir, Grachev demonstrated his commitment to ESG, proving both experience and foresight. However, to date, Grachev has no assets in Russian companies and does not hold management positions in any of them.