Physical risks

TCFD Ra

The Obukhov Institute of Atmospheric Physics of the Russian Academy of Sciences analysed RosgidrometFederal Service for Hydrometeorology and Environmental Monitoring (Rosgidromet). data on various climate factors in the regions where the Company’s production sites are located, covering a period from the 1960s to the present. The observations indicate significant changes in certain climatic factors, such as average air temperatures. Changes recorded by the Norilsk weather station support the conclusion that temperatures in the Arctic are rising significantly faster than the global average: +0.6 °C per decade in Norilsk vs +0.18 °C per decade globally.

Average air temperature in 1961–2022, °C

In addition to evaluating the long‑term climate trends identified in Nornickel’s regions of operation, the Institute of Atmospheric Physics of the Russian Academy of Sciences developed climate projections up to 2050. The regional forecasts are based on three IPCC global scenarios (SSP1‑2.6, SSP2‑4.5, and SSP5‑8.5) and the CMIP6Coupled Model Intercomparison Project. ensemble of climate models. For the SSP2‑4.5 climate scenario, which the Company considers the most likely, the following major changes are projected by 2050.

Projected climate factor changes by 2050 (vs 2022)
Climate factor Norilsk Industrial District Murmansk Region Trans‑Baikal Territory
Average air temperature +1.5 °C +1.1 °C +1 °C

Thickness of the seasonally thawed soil layer

The term “permafrost degradation” is used in the context of the assessment.

This factor is particularly relevant for evaluating infrastructure risks outside urban areas

+0.8 m Irrelevant Irrelevant

Annual precipitation

Mainly due to changes in the trajectory of Atlantic cyclones and increased atmospheric moisture content

+58 mm +4 mm +23 mm

Number of days with a high risk of severe thunderstorm per year

Due to changes in temperature and humidity

+6 days +2 days +5 days

Based on forecasting results, the key climate risk factors for Nornickel facilities are permafrost degradation, an increase in total annual precipitation (including more frequent precipitation anomalies), and a higher likelihood of thunderstorms. Most of the changes are expected to occur after 2040.

To improve threat assessment, it is also necessary to model climate‑dependent factors such as river basin water availability, flood synchronisation, ice conditions along the Northern Sea Route, and others. For example, low river water levels – an issue the Company already faced in 2013 – may pose a threat due to the potential:

  • shortage of water supply for production and social facilities in Norilsk
  • increase in natural gas consumption resulting from the additional load on combined heat and power plants due to low reservoir levels and reduced output at the Ust‑Khantayskaya and Kureyskaya hydropower plants.
IFRS S2 13b

Most industrial buildings and structures in the Norilsk Industrial District are built on stable (rock) foundations. However, linear infrastructure – including power lines, gas pipelines, water pipelines, and railway infrastructure – as well as certain fuel storage tanks, which are primarily located outside urban areas, are vulnerable to permafrost degradation.

Expected changes in climate factors by 2050 vs 2022
IFRS S2 25a (v)

To mitigate risks associated with the condition of permafrost soils in the Norilsk Industrial District, the Company conducts ongoing monitoring of the technical condition of its assets through expert assessments, inspections, and monitoring of permafrost and foundation stability.

Factors
Factors Activities
Monitoring Repairs Reconstruction Construction
Permafrost degradation Fuel storage tanks
Power lines
Gas pipelines
Heat and water supply pipelines
Railway
Increased frequency of thunderstorms Equipping power lines with lightning surge protection systems and monitoring the number of lightning strikes on power grid facilities
Higher annual precipitation Maintaining and modernising hydraulic structures to ensure technical reliability
Higher frequency of heavy precipitation Monitoring the technical condition of facilities and water levels in the Norilskaya River and water reservoirs
According to the initial assessment, the impact of climate risk factors in the short‑ and medium‑term horizon until 2028 is mitigated as part of operational activities and through initiatives and investment projects aimed at enhancing the reliability of industrial assets and infrastructure.