Etalon : Sustainability Report 2022

SUSTAINABILITY REPORT

CONTENTS

1 INTRODUCTION

About the Report 4

Etalon Group in brief 5

Etalon Group: facts and figures 6

Sustainability management 10

ESG policy and strategy 11

2022 Sustainability highlights 15 Chairman's statement 16 CEO's statement 17

4 SAFETY

Occupational health and safety 63

Data protection and cybersecurity 70

Risk management 71

2 FOCUS ON PEOPLE

Stakeholder engagement 19

Human rights 25

Our team 26

Our customers 36

5 TRANSPARENCY

Corporate ethics 80

Corporate governance 85

SUSTAINABILITY REPORT 2022

3 RESPONSIBILITY

Environmental stewardship 40

Social responsibility 46

Responsible supply chain 56

6 APPENDIX

Sustainability Report: approach and methodology 91

GRI standards 95

SASB standards 98

Key performance data 99

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SUSTAINABILITY REPORT 2022

1SUSTAINABILITY REPORT

2022

INTRODUCTION

1 / Introduction

ABOUT

THE REPORT

Reporting period

This Sustainability Report (hereinafter, the "Report") is the first separate Sustainability Report produced by ETALON GROUP PLC ("Etalon Group" or the "Company"). Previously, sustainability issues were covered as part of Etalon Group's integrated Annual Report for 2021. The 2021 Annual Report was published in April 2022 and is available on the Company's website (www.etalongroup.com) and through the NSM (national storage mechanism, the official online platform for storing regulatory information from issuers listed on the London Stock Exchange).

The Report discloses Etalon Group's non-financial performance in the environmental, social and corporate governance (ESG) areas in 2022. Three-year trends - for 2020, 2021 and 2022 - for a number of indicators are reviewed.

Some of the non-financial information, including corporate policies, sustainability practices, and ESG- related efforts and plans (including the environment, personnel and engagement with local communities), from early 2023 is included.

Material topics

The information included in the Report covers topics and metrics that reflect the Company's considerable impact on the environment, society and the economy or that could have a significant influence on the assessments and decisions of stakeholders. Etalon Group's materiality criteria and approach to the selection of material topics are described in more detail in the "Sustainability Report: Approach and Methodology" section.

Reporting standards

Principles:

• In preparing the Report, we relied on the principles and standards recommended by the Global Reporting Initiative's sustainability reporting guidelines.
• In deciding on the content of the Report, the principles of materiality, stakeholder coverage, completeness and sustainability context were used.
• To ensure the quality of disclosure, we used the principles of balance, comparability, accuracy, timeliness, clarity and verifiability.

Sources:

• Data for the Report came from Etalon Group's management reports and accounting statements for 2022, and reports and statements from 2020 and 2021 were used to chart trends for some of the metrics covered.

Standards:

• In preparing the Report, the Global Reporting Initiative Standards (GRI Standards) and individual SASB Real Estate and Homebuilders Standards (SASB Standards) were used as guidance.
• The GHG Protocol was used for the disclosure of greenhouse gas emissions. The results of activities disclosed in the Report are described in light of the UN Sustainable Development Goals (SDGs).

SUSTAINABILITY REPORT 2022

Forward-looking statements

Some of the statements in this document are forward- looking. Words such as "considers", "suggests", "expects", "evaluates", "intends", "plans" and similar expressions indicate that the statement in question is a forward- looking statement; however, this is not the only way to indicate that a statement is forward-looking. Due to their specific nature, forward-looking statements are associated with external uncertainties and risks that are beyond the Company's control. In addition to the factors mentioned in the Report, general and local business conditions, regulatory changes, political events, interest rate fluctuations and other factors could have a material effect on results. The results achieved in future reporting periods may differ from the targets, plans and forecasts specified in this Report.

Assurance

This Report has not undergone independent external assurance. However, we are aware of the importance of third-party assurance of the non-financial information disclosed in the Report, and we are exploring the possibility of engaging an independent auditor to verify the Report in the future.

Contacts

For questions related to the Report and the data presented in it, please contact the Investor Relations and ESG Department: [e-mail]

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1 / Introduction

ETALON GROUP IN BRIEF

GRI 2-1

GRI 2-6

GRI 2-22

Etalon Group is one of Russia's largest and longest-established development and construction companies. During the 35 years of its existence, Etalon Group has become one of the leading nationwide players, with operations in eight regions of Russia and the best margins in the industry. As part of its strategy,1 the Company plans to further scale up its business and improve its efficiency by increasing regional expansion, developing new technologies and digitalising its entire value chain.

Etalon Group PLC GDRs have been listed on the Main Market of the London Stock Exchange since 20 April 2011 and in the Level 1 quotation list of Moscow Exchange since 31 January 2020 under the ticker ETLN2.

One of the Company's main priorities is to ensure the sustainability of its business by maintaining a balance between economic efficiency and the development of its regions of operations.

In 2021, the Company's Board of Directors approved an ESG Policy, which specifies common principles, approaches and areas of activity for Group companies as well as targets and further steps for the development of ESG initiatives within the Company. In line with the Policy, the Company pays close attention to the socio-economic development of the cities where it operates, taking care of its employees, maintaining high standards of responsible production and incorporating innovations.

In 2022, in line with its plans, the Company continued to incorporate ESG practices into its day-to-day operations: it developed and approved a Supplier Code, continued to work on the establishment of specific and measurable ESG-related targets and strategies, and began paying due consideration to its carbon footprint; in 2023, the Company is publishing a separate ESG report and implementing a public-private partnership project as part of a nationwide project for the development of infrastructure for research and training.

The principles of sustainability management are reflected in the following Company standard and policies:

1 Etalon Group PLC ESG Policy

1. Etalon Group Code of Corporate Ethics
2. Etalon Group Anti-corruption Policy
   Regulation on Conducting Tenders within Etalon Group,
3. including the Supplier's Code
4. Etalon Group Occupational Health and Safety Policy
5. Policy on Remuneration of Members of the Board of Directors of Etalon Group PLC
6. Regulation on Etalon Group PLC Committees
7. Etalon Group PLC Management Policy
8. Etalon Group PLC Disclosure Policy

10 Regulation on the Corporate Secretary of Etalon Group PLC

Some of Etalon Group's standards and policies are publicly available on the Company's website.

SUSTAINABILITY REPORT 2022

1. For more information about the Company's strategy and its implementation, see the "Strategy" section of Etalon Group's Annual Report.
2. For more information about Etalon Group's ownership structure and shareholder interactions, see the "Shareholder interaction" section of the Company's Annual Report.

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