Innovation

SIBUR’s Green Formula is a forestation initiative that the petrochemical giant has implemented from scratch. “Everything was an innovation”, recalls Elena Myakotnikova, CEO Advisor who supervises Green Formula and everything that comes close to SUBUR’s forestation-related activities. It was launched as a way to achieve the strategic goal of planting 5,000,000 trees but later turned into a full-scale project that covers an extensive scope of activities. They range from site selection for trees and ecosystem engineering based on trees’ capacity and characteristics to real-time monitoring of carbon offsets and measuring the “breath” of leaves.

The project started with the opening of the first-ever carbon landfill in Voronezh together with the Voronezh State University of Forestry and Technologies. As of right now, Green Formula is active in every key location of SUBIR's operations which are Tobolsk, Svodobny, Nizhnekamsk, and Kstovo. Now the goal is 1/5 of being completed and there are plans for expanding the carbon landfill and carbon farms.

Green Formula as an ongoing sustainable initiative that addresses three of the UN Sustainable Development Goals. To begin with, the project was launched with SDG #13 to undertake action to combat climate change and its impacts and reduce the amount of CO2 emissions and help SIBUR in making one of its production facilities carbon-neutral. Secondly, forestation is aimed at building and preserving terrestrial ecosystems in different regions of Russia, which is an evident step towards achieving SDG #15. Thirdly, SIBUR has partnered with multiple stakeholders – from universities and enthusiasts to NGOs and state officials – to make Green Formula a reality and therefore the company has strengthened the means for further cooperation in the field (SDG#17) in Russia. There are also indirect impacts on other SDGs, as Green Formula has already become an umbrella initiative with far-reaching implications.

Inspiration

It is not a secret that the effectiveness of every ESG-related initiative directly depends on the leadership. Their results have become a form of indirect measurement of the quality of business management, along with the financial performance of the company.

Green Formula also has an inspirational person who leads the initiative daily. Her name is Elena Myakotnikova and she is CEO Advisor at SIBUR. We were privileged to talk to her about the initiative as there was no better person to share SIBUR’s most recent success story in the area of sustainable development. Her favourite value from the company’s corporate values is “Smart Solutions” because Elena is not only passionate and purpose-driven but also very focused and goal-oriented person. This is evident in the way she talks about Green Formula and her work at SIBUR.

To prove this attitude, Elena has not been scared of lack of clarity when she was given the realms of SIBUR’s major sustainable goal. “Our Sustainable Development Strategy…”, recalls Elena, - “We did this not because external investors demanded it from us, not because there was pressure from the London, Hong Kong, and New York stock exchanges. We created a sustainable development strategy because we thought it was the right thing to do… We have not forgotten and skipped a single commitment. We at SIBUR stick to each word written in our Sustainable Development Strategy”. She adds, that “we see that in the future this is the right honest position, and it is rewarded by the market”. Moreover, Elena is a leader that empowers her team. She is not afraid to delegate and share the spotlight and therefore surrounds herself with like-minded individuals with deeper expertise. Her motto here is “if you can do it now, do it.

Summing up, the fact that Green Formula is on the verge of the ground-breaking project for SIBUR is thanks to such a dedicated ESG leader as Elena Myakotnikova who is not afraid of challenges and has never taken a No for an answer. In our opinion, this is the only way to make the world a better place.

Overall impact

The carbon landfill project had a multifaceted impact both on the project initiator, SIBUR, and on the environment. To date, more than 1,000,000 trees have already been planted. For SIBUR, this is a result that allows it to say that the company is moving in the right direction as part of its sustainable development strategy, and performs not only social and environmental functions but also brings financial benefits to the company. The company is also building long-term relationships both with internal partners (for example, Voronezh State University) for the implementation of the project and with partners from other countries who are interested in purchasing and further scaling the project.

From a government relations perspective, SIBUR has contributed to changing the Forest Code of the Russian Federation to provide socially responsible companies with the opportunity to use the land for tree planting and subsequent care for the long-term improvement of the environmental situation in regions where large industrial enterprises are concentrated. Thus, for the environment, this innovation is a contribution to the biodiversity of forests, to the reduction of the carbon footprint, and to the preservation of natural resources for future generations.

The innovation made a rather strong contribution to the social, scientific, and educational ecosystem since SIBUR actively attracted and trained volunteers to care for the trees and conducted field trips for children and their parents along the eco-paths of the planted forest, laying responsibility for the environment in the new generation. Having planted more than one million trees, the company has built a clear afforestation technology, thanks to which a variety of trees take root well and have a sufficient absorption function. Finally, the trend toward such projects and the strengthening of carbon credits as a “new currency” can have a strong economic impact in the long term on both the company and the country.

Business benefit

For SIBUR, as one of the most important players in the petrochemicals market in Russia and Europe, the implementation of a strategic project to plant 5 million trees in the regions of its operations creates significant benefits and competitive advantages in several key areas at once.

First and foremost, the implementation of such a project is rewarded by the market, both domestic and international. Although this project is a part of the sustainable development strategy, it is considered by the company's management as an investment. The payback period is very short, even taking into account the complexity of implementation and significant financial costs, as Elena mentioned during the interview. A significant cash flow is expected through participation in the carbon trading system. Our interviewee shared information that this project is already of interest to partners from countries such as China and India, as well as colleagues from the Middle East and Europe.

The second area is the potential for expanding the network of partnerships. The general global trend aimed at creating sustainable and responsible partnerships and supply chains requires market participants to fully and strictly comply with modern sustainable development requirements. In this case, SIBUR meets all the criteria and is already one of the best candidates for entering into commercial relations in the local and global markets.

The third area is strengthening of SIBUR's brand. Such an initiative has a positive impact on the company's brand, both on the part of current employees and customers (which is expressed in their satisfaction and loyalty), and on the part of future ones. In addition, as Elena mentioned, this also creates the potential for future brand monetization, which is not currently available.

Social and environmental benefit

Green Formula aims to reduce climate impact. According to the sustainable development strategy until 2025, SIBUR plans to plant at least 5 million trees in the regions of its presence and launch a pilot project to issue carbon credits. Now there are more than 1 million trees planted successfully and the work goes on.

Green Formula has already become a trend-setting undertaking of SIBUR that capture attention of environmentalists worldwide. Not only is this initiative focused on offsetting the company’s carbon footprint, but directly also covers other areas. For instance, it focuses on the reduction of the climate impact in general and supports school forestries and their research projects to further develop the program in the regions.

The environmental dimension of Green Formula allows SIBUR to become even closer to turning one of its manufacturing facilities into a carbon-neutral one. The emissions offset annually by carbon landfills around Russia make a significant contribution to the overall carbon footprint of SIBUR. As for local communities, they seem to be a delight and heavily engaged in SIBUR’s activities under Green Formula. Not only dedicated volunteers and researchers join regular events at newly plated forest areas, but also the locals who have become significantly more aware of climate challenges and mitigation practices. Finally, Green Formula has already helped in the research of ecosystems and therefore scientists from partner universities are now better equipped with means to tackle other threats to natural habitats.

Interviews

Elena Myakotnikova, CEO Advisor

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