Mobile TeleSystems : Sustainability report 2021

MTS Group

Sustainability2021

Report

Introduction	MTS Today: Ecosystem, Business, Development	Sustainable Development is a Priority	E	Environmental Responsibility	S	Social Responsibility	G	Responsible Governance	About the Report	Appendices

CONTENTS

INTRODUCTION	2
President's Statement	3
Chairperson of the ESG Committee Statement	4
MTS TODAY: ECOSYSTEM,	6
BUSINESS, DEVELOPMENT
MTS Group in 2021	7
Business Model	8
Key Markets by Verticals	9
Business Strategy	12
Development of MTS as an Ecosystem	13
Key Financial and Operating Indicators	15
Key ESG Indicators	16
Stability During Turbulence	17
SUSTAINABLE DEVELOPMENT	18
IS A PRIORITY
Approach to Activities in the Field of	19
Sustainable Development
ESG Strategy: Focus Topics	20
Map of ESG Initiatives	21
Contribution to UN SDGs	22
Sustainable Development Management System	23
Organisational Model for	24
Sustainable Development Management
Sustainable Development Risk Management	26
Respect for Human Rights	28
Key Sustainable Development Initiatives	29

	ENVIRONMENTAL	30
E
	RESPONSIBILITY	31
Environmental Impact Management
Carbon Management	33
Responsible use of Resources	35
Eco-Education	41

	SOCIAL	43
S
	RESPONSIBILITY	44
Responsibility to Customers
Responsibility to Society	49
Responsibility to Employees	70

	RESPONSIBLE	84
G
	GOVERNANCE	85
Business Ethics and Compliance
Maturity of the Internal Control System	91
Tax Management	92
Information Security	93
Responsible Supply Chain	94
Interaction with Shareholders and Investors	96
Open Dialogue with Stakeholders	97

ABOUT THE REPORT	99
Methodology and Principles of Preparation	100
Definition of Material Topics	101
Contacts	102

APPENDICES	103
Recognition and Awards	104
Membership in Associations and Organisations	105
Table of Compliance with Company's Initiatives	106
Towards UN SDGs
GRI Index and Indicator Details	120
SASB Index and Indicator Details	125
TCFD index and Indicator Details	127
Glossary	128
List of Regulatory Documents Regarding	130
Sustainable Development
Details of MTS Group Charitable Donations	131

MTS SUSTAINABILITY REPORT 2021

1

Introduction

MTS Today: Ecosystem, Business, Development

Sustainable Development is a Priority

E Environmental Responsibility

S Social Responsibility

G Responsible Governance

About the Report

Appendices

INTRODUCTION

President's Statement	3
Chairperson of the ESG Committee Statement	4

MTS SUSTAINABILITY REPORT 2021

Introduction	MTS Today: Ecosystem, Business, Development	Sustainable Development is a Priority	E	Environmental Responsibility	S	Social Responsibility	G	Responsible Governance	About the Report	Appendices

PRESIDENT'S

STATEMENT

GRI 2-22

Vyacheslav Nikolaev

President of MTS Group

Dear Friends,

Time does not nullify values - true values exist beyond time. Moreover, they are the true foundation of sustainability over time - for the individual, society, and any business. Such values permeate the Company at all levels and govern its activities in every area to eventually become a vector for business development, determining its long- term competitiveness. For us, such a value is

the caring for a person, or rather, the desire to make a person's life better wherever he might come in contact with MTS and our services.

MTS SUSTAINABILITY REPORT 2021

Historically, we have relied on directing our resources and knowledge towards creating affordable products for all our customers and a comfortable environment in the territories where we operate. After strategically transforming our business model over the past year and by developing an ecosystem based on partnership and synergy in digital services, MTS has also put people and their needs at the centre of our growing ecosystem.

Therefore, we closely monitor how customers live and what they expect from us. And we see that our growing attention to their needs and expectations, to our products and quality of service, is already bearing fruit. In 2021, the number of subscribers in the MTS digital ecosystem grew

by 40%, and this confirms the relevance of the business strategy implemented by the Company.

If speaking about expectations, in 2021, it was help that was most expected from us. And all of us, to one degree or another, answered the question, 'How can I help?' In the midst of the pandemic, MTS developed a wide range of support measures for those for whom our help was most important. To reach as many people as possible, we have enlisted the support of volunteers, public organisations, and the media. With our support, over 7,000 people have become volunteers.

At the same time, we have maintained focus on the systematic development of our long-term environmental and social initiatives. MTS not only builds business processes in such a way as to achieve the best indicators to save the planet's key resources and to reduce its impact on the environment, but also to involve our partners in these activities. In the social sphere, we are implementing the charitable educational project 'Generation M', designed to promote the creative development of children

and youth. In 2021, the UN included it amongst the world's best practices for achieving the Sustainable Development Goals. Our proactive contribution

to solving social problems in the interests of local communities was recognised by The Donors Forum, an association of grant-making organisations: in 2021, MTS was awarded the highest A+ category in the annual rating of Leaders of Corporate Charity.

Today, the world is grappling with new challenges that test the strength of our social and economic resilience. But we are optimistic about the future, striving to unlock the enormous potential of technology for the benefit of civilisation: technology should improve safety, empower people, and help everyone create a better future. As a leader in

the technology industry, MTS has been operating for many years, focusing on achieving 14 of the

17 UN Sustainable Development Goals. In 2021, we systematised the implemented environmental, social, and governance (ESG) initiatives, the result of which was the approval of the MTS ESG strategy; thus, in our report, we have examined the Company's activities in the field of sustainable development through its prism. The ESG strategy has identified the main directions for optimising business processes and launching initiatives that contribute to the sustainable development of both MTS Group itself and all spheres of life with which we come into contact.

I am convinced that MTS, with our effective ESG strategy and deep involvement in the life of the regions where we operate, as well as with a

well-established and effective system of partnerships, has significant impact on the achievement of global Sustainable Development Goals. I am proud of MTS's results and hope this report will help you appreciate the scope of work that allows us to remain a leader in sustainable development.

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Introduction	MTS Today: Ecosystem, Business, Development	Sustainable Development is a Priority	E	Environmental Responsibility	S	Social Responsibility	G	Responsible Governance	About the Report	Appendices

CHAIRPERSON OF THE ESG COMMITTEE STATEMENT

GRI 2-22

Regina von Flemming

Chairperson of the ESG Committee,

Deputy Chairperson of the MTS Board of Directors

Friends and Colleagues,

Before you is the MTS Sustainability Report, which we present for the first time through the Environmental, Social, and Governance (ESG) prism, reflecting the ongoing transformation in ESG agenda management at MTS.

The sustainable development of society and business are inextricably linked. Long-term planning and business conduct that take into account not only economic, but also social, environmental, and other intangible factors, make a hefty contribution to the sustainable development of society. In turn, the stability and predictability of the external environment allow us to form the sustainable development and growth of businesses.

MTS SUSTAINABILITY REPORT 2021

Additionally, every year society is growing increasingly sensitive to how business behaves in relation to

the most important social, environmental, and governance issues. All stakeholder groups - our customers and employees, government authorities and representatives of local communities, investors and shareholders, suppliers and partners - regularly evaluate how responsible MTS is in providing services, choosing suppliers, caring for employees, preventing corruption, and complying with the law.

For MTS, the past year of 2021 was a year of significant changes in ESG agenda management at the level

of both operational management and the Board of Directors. In March 2021, the Corporate Governance Committee of the Board of Directors was transformed into the ESG Committee, which, among other things, brought in experts with experience in international ESG issues. With the involvement of international consultants, the Committee participated in developing the Company's ESG strategy, whose key elements were included in MTS's overall business strategy. Using the world's best practices, the ESG Committee paid considerable attention to the development

of MTS's Diversity, Equity, and Inclusion Policy.

The activities of the ESG Committee have significantly developed within the Company, reinforced by international expertise, which has enabled MTS

to scale ESG strategies, policies, processes, and competencies across its business units.

Regular interaction and communication between companies within the ecosystem helps strengthen and emphasise the importance of integrating various ESG aspects. In October 2021, MTS held its annual online conference 'Sustainable Development and ESG: The Social Aspect' for all companies within the ecosystem. It was attended by over 1,500 people, including both Company employees and external participants. The event has already become an effective means of communicating the 'tone

from above', allowing Company management to demonstrate their commitment to solving urgent issues to create a united, more sustainable future.

To effectively integrate the ESG agenda into business processes at MTS, at the beginning of 2022, the ESG Centre was created. It is responsible for developing, implementing, and replicating significant ESG initiatives and practices in various business verticals of the ecosystem, and also develops a portfolio of projects aimed at reducing relevant social and environmental risks.

The culture of business ethics that has taken shape at MTS, the mature compliance programme, our openness and transparency in dialogue with all stakeholders are a matter of special pride for MTS. The Company continues to implement best practices in corporate governance, realising that openness and transparency is a competitive advantage in the modern world. Contemporary society expects businesses not only to provide outstanding services and products, but also to adopt ethically impeccable business decisions.

The MTS Board of Directors fully supports MTS Group's desire to innovate and expand the range of digital services to improve the quality of life. Digital solutions are some of the key drivers behind economic and social development. MTS uses technologies

to help bridge the digital divide, provide access to quality services, and implement a range of significant charitable, social, and environmental initiatives. MTS supports local communities and entrepreneurs and implements inclusive projects that contribute to raising the public's environmental awareness, preserving natural monuments and unique socio- cultural features of the regions where we operate. We promote the ideas of responsible domestic tourism and support projects for the creative and intellectual development of children and youth.

Without a doubt, MTS has done tremendous work over the past year. Moreover, the Company remains true to its unchanging values to conduct sustainable business, ensure transparency according to the highest corporate standards, contribute

to the development of the digital economy, be a driver of social and cultural development, and to maintain and strengthen customer confidence.

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