SSA.L Regulatory News (SSA)

Sistema attracts first ESG financing from Sberbank

Moscow, 17 November 2020 - Sistema PJSFC ("Sistema" or the "Corporation") (LSE: SSA, MOEX: AFKS), a publicly traded diversified Russian holding company, is pleased to announce that it has agreed with PJSC Sberbank to open a RUB 10 billion framework credit line, with the option to tie the interest rate on each loan to sustainability performance (Sustainability Improvement Loan). The proceeds will be used for general corporate needs.

By entering this agreement, Sistema has committed to adopting its Environmental Policy and integrating responsible investment principles into its investment process. Sustainable development is an integral part of Sistema's strategy, and will be established as one of the key benchmarks for investment decision-making and asset management.

Vladimir Travkov, Sistema's Vice President for Finance, commented:

"The new agreement with Sberbank confirms our commitment to the principles of sustainability and our readiness to promote the ESG agenda in Russia. This is the first ESG loan deal between a Russian company and a Russian bank, and we are pleased to be setting a new standard for responsible investment in the country's economy."

Alexander Vedyakhin, First Deputy Chairman of the Executive Board, Sberbank:

"ESG - Environmental, Social, and Governance - is a global development trend behind effective and sustainable businesses. It's hard to overestimate its importance for investors, customers, and the country in general. Sber is set out with the aim to become an ESG leader. Therefore, the loan agreement with our partner, the diversified holding company Sistema PJSFC, is extremely important as a precedent for the evolution of market products that allow stakeholders to capitalize on the principles of responsible business development across verticals. We are going to keep developing ESG lending for our customers who are introducing sustainable development approaches pro-actively."

Background information

In 2019, Sistema launched a comprehensive review of its sustainability and responsible investment management. The Board of Directors of the Corporation approved an ESG action plan to improve the sustainability of the investment portfolio, based on indicators of corporate governance, social and environmental responsibility. In 2020, a new version of Sistema's Corporate Governance Code, developed in line with international best ESG practices, was approved. The same year, Sistema adopted its first Sustainability Policy, providing clear guidelines for corporate responsibility​.

The transformation in Sistema's approach to its sustainability performance has led to its improved standing in ESG ratings and indices. Since 2016, Sistema has been one of the leaders in the sustainability indices of the Russian Union of Industrialists and Entrepreneurs (RSPP) and, since 2019, the Corporation's securities have been included in the composition of the Moscow Exchange - RSPP ESG indices. Sistema has also been promoted to the FTSE4Good index, upgraded its MSCI ESG rating to 'BB,' and has secured its position in a number of other ratings.

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Sistema PJSFC is a publicly traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, technology, banking, retail, timber processing, agriculture, real estate, tourism and healthcare services. The company was founded in 1993. In 2019, its revenue was RUB 656.9bn; its total assets equaled RUB 1.3tn as of 31 December 2019. Sistema's global depositary receipts are listed under the "SSA" ticker on the London Stock Exchange, and its ordinary shares are listed under the "AFKS" ticker on Moscow Exchange. Website: www.sistema.ru

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PJSC Sberbank is Russia's largest bank and a leading global financial institution. Holding almost one-third of aggregate Russian banking sector assets, Sberbank is the key lender to the national economy and one of the biggest deposit takers in Russia. The Government of the Russian Federation represented by the Ministry of Finance of the Russian Federation is the principal shareholder of PJSC Sberbank owning 50% plus one voting share of the bank's authorized capital, with the remaining 50% minus one voting share held by domestic and international investors. Sberbank has customers in 18 countries. The bank has a major distribution network in Russia with about 14,000 branches, while its international operations - subsidiary banks, branches, and chapters - include the UK, US, CIS, Central and Eastern Europe, India, China, and other countries. It holds general banking license No. 1481 dd. August 11, 2015, from the Bank of Russia. Official websites of the bank: www.sberbank.com (Sberbank Group website), www.sberbank.ru.

On September 24, 2020, Sberbank underwent a rebranding, offering financial and non-financial services of the bank and Sberbank Group to individual and corporate customers. Today, the Sber ecosystem is a raft of services for life and daily assistance in handling pressing everyday issues for individual customers and businesses. The Sber ecosystem website: www.sber.ru.