Assessing the Sustainability of Russian Iron and Steel Companies Amid a Structural Crisis

Abstract

In the present paper the authors developed and tested the sustainability index of Russian iron and steel companies against the background of a structural crisis caused by the sanctions of 2022. Six companies with public reporting, including Nornickel and United Company RUSAL, were analyzed. The index comprises financial sustainability (Altman’s Z-score), operation flexibility, strategic planning horizon, economic value added (EVA), as well as environmental and social aspects. It was established that companies that actively adapt such strategies as market and commodity diversification, supply chain management and environmental standard integration exhibit stronger sustainability. For example, Nornickel managed to
redirect export from Europe to Asia, maintaining its financial stability despite a reduction in EBITDA by 17%. When RUSAL came up against supply chain disruption and an increase in costs, it recouped a part of losses by expanding in Asian markets and domestic operations. Practical recommendations based on the research comprise extending the planning horizon, reducing reliance on a single product or region and reinforcing the environmental and social sustainability. These conclusions confirm the hypothesis that companies that have gained experience in crisis management overcome new challenges with greater success.