18 Oct 2017 18:00

Interfax publishes provisional Fundamental Efficiency Rating for top 150 Russian cos

Interfax Group has published its provisional annual Fundamental Efficiency Rating for Russian businesses, which is compiled by environmental and energy rating agency Interfax-ERA and includes the 150 largest Russian companies in the real sector of the economy.

In 2017 the top 150 companies are led by Gazprom Dobycha Urengoi LLC, PJSC IDGC Center and Volga (MOEX: MRKP), PJSC Novatek (MOEX: NVTK), PJSC IDGC of Volga (MOEX: MRKV), PJSC Rosseti (MOEX: RSTI), PJSC Sukhoi Company, Gazprom Dobycha Yamburg LLC, PJSC Uralkali (MOEX: URKA), PJSC IDGC of Siberia (MOEX: MRKS) and JSC Concern Almaz-Antei.

"The rating is provisional in nature as it has been published two months earlier than usual and does not include data for some companies, which have not yet managed to disclose their environmental reporting. If they manage to do so by November 30 they will be included in the final rating. This could be an announcement of the publication of environmental reporting on an official disclosure site or a completed form, which can be downloaded at https://interfax-era.ru/metodologiya/instrukciya," said Alexander Martynov, head of Interfax-ERA.

Martynov also said that the top 150 Fundamental Efficiency Rating would be updated at the beginning of December and the final version presented at the Fifth All-Russian Congress of Environmental Protection in Moscow.

Companies "with a low provisional rating, including due to delays with disclosing environmental reporting, are included in the provisional 2017 rating in a separate list in alphabetical order without a preliminary ranking," Martynov said.

The top 150 companies are taken from almost 5,500 enterprises from the real sector of the economy. Data on their actual energy consumption, environmental impact and output in natural terms are the basis for comparing their production efficiency. The rating includes not just the parent companies or holdings but also their major subsidiaries, including branches without corporate status.

Companies in the top 150 rating are ranked according to five criteria: energy resource efficiency (energy and resource expenditure per unit of output); technological efficiency (consumption of resources and generation of waste per unit of work); ecosystem efficiency (level of pollution and environmental impact by a company‘s enterprises that can be assimilated by the local natural ecosystems); change in efficiency (from 2005 to 2017); and transparency (level of disclosure about energy and resource consumption and environmental impact).

Companies are ranked by each the criteria and the final ranking is determined according to the sum of their places in the five separate rankings.

This year for the first time, fundamental efficiency ratings are published for ten sectoral groups.

The top three Oil & Gas group companies are Gazprom Dobycha Urengoi LLC, PJSC Novatek and Gazprom Transgaz Ukhta LLC.

The biggest companies in the group representing the use of common resources, construction and transport include PJSC Aeroflot (MOEX: AFLT) and JSC Gazprom Gas Distribution, although in sectoral comparisons they are towards the bottom of the rating. This sectoral group is characterized not just by its low efficiency but also by a prevalence of small and medium businesses, which are not ranked among the top 150.

The group of capital infrastructure operators (except pipelines under Oil & Gas) is led by PJSC RusHydro (MOEX: HYDR), OJSC RZD East Siberian Railway and OJSC RZD in general.

There were certain difficulties with rating companies in the mining industry as some holding companies there have mining, chemicals and metallurgical enterprises. In order to determine the leaders here, holdings with a prevalence of mining assets were selected. The top three are PJSC Alrosa (MOEX: ALRS), JSC Apatit and JSC Polyus Gold Company. These companies are also ranked fairly low in the inter-sectoral rating, coming below 50th.

The network systems and management group includes large highly technological power grid holdings with a low environmental footprint. These holdings are common among the upper reaches of the inter-sectoral rating and include PJSC IDGC of Center & Volga, PJSC Rosseti and PJSC Federal Grid Company UES (MOEX: FEES).

Top 150 companies are also strongly represented in the cold manufacturing group, which was led by PJSC Sukhoi Company, JSC Concern Almaz-Antei and PJSC Kamaz (MOEX: KMAZ). The segment includes numerous companies that produce finished goods, including food products, but which due to their small size do not rank among the top 150, so the leaders in this group are best identified at the level of enterprises rather than holdings.

The most energy-efficient companies in the group combining high-temperature manufacturing with gas processing and fertilizer production were PJSC Uralkali, PJSC Acron (MOEX: AKRN) and Gazprom Dobycha Orenburg LLC. These companies rank above metallurgical companies because they have a lower proportion of energy-intensive extractive enterprises.

Chemical companies with water-intensive technologies are high-tech and at the same time very large companies and are well represented among the top 150. The leaders here are JSC Azot (Kemerovo), PJSC Kazanorgsintez (MOEX: KZOS) and PJSC Nizhnekamskneftekhim (MOEX: NKNC).

The energy conversion and supply group also includes a lot of major companies, the leaders being PJSC T Plus (MOEX: VTGK), KINEF LLC and PJSC TGK-1 (MOEX: TGKA).

The agriculture complex has no companies among the top 150 due to their size. This group has to be assessed on the basis of specific enterprises and regions. The Belgorod Region has successfully carried out such a study (http://derbo.ru/news/2017/08/04/raskroj-otchetnost-v-god-ekologii!/).

The full version of the Fundamental Efficiency Rating of Russia‘s biggest companies (top 150) and methodology for compiling it can be found at: https://interfax-era.ru/reitingi/2017.