Лид: Pavel Sergeevich Grachev is a renowned businessman and investor who adheres to the principles and practices of sustainable development. At one point in his career, he was the head of Pavia e Ansaldo, a legal firm. He is best known as the former CEO of PJSC “Polyus”.
Pavel Grachev’s Education
In order to gain a classic legal education, Pavel Grachev went to the Italian University of Trieste. He graduated in 1997, and in 1998, he became an alumnus of SPBU (Saint Petersburg State University), also with a degree in Law.
Experience in Corporate Leadership: From a Lawyer to an Executive
The career of Pavel Grachev, Detsky Mir’s now former shareholder and Polyus’ ex-CEO, began when he was still a student, so by the time he graduated from the university, he ready had significant professional experience. Upon receiving a diploma in 1997, Grachev took the lead of the Moscow division of Pavia e Ansaldo, an Italian legal firm. That experience allowed the young and ambitious lawyer to gain expertise in working with large businesses and study the best practices of responsible investment.
In 2010, Pavel Grachev became the CEO and president of OJSC “Uralkali”. In 2013, he briefly headed the Far East and Baikal Region Development Fund, a Russian organization that promotes infrastructural and business development projects in Russia’s remote Eastern regions.
During this period, at different times, Pavel Grachev also served on the boards of directors in several major companies: gold miners Polyus and Polymetal and developer PIK. In the early 2010s, Russian companies were only starting to understand the importance of sustainable development and making their first steps in introducing the corresponding corporate practices. Grachev was one of the first Russian businessmen to recognize this trend. He was also well-versed in organizing corporate management in accordance with the standards of accountability, transparency, and the check and balance system.
Polyus: Pavel Grachev’s First Strategic Decisions
In the autumn of 2014, Pavel Grachev became the CEO of Russia’s largest gold miner. By that time, he had already been the Acting Director General for a year.
Pavel Grachev promptly proved his effectiveness as the CEO of Polyus by immediately revising the gold miner’s management system: the company’s structure and overall staff, competency frameworks, and the employee motivation system. He was actively introducing digital solutions that were saving time for data collection, situation analysis, and decision making.
Thanks to Pavel Grachev, Polyus reached record operating results the very following year, in 2015. For instance, the output of company’s plants in Krasnoyarsk Region mounted up to 40 tons of the precious metal. Even though it was an all time high for Russian companies at that moment, Polyus aimed at a further increase in the years to come.
Upon accepting the chief executive position in Polyus, Pavel Grachev, together with the board of directors, approved and designed the new business strategy. In the first two years under the guidance of Pavel Grachev, Polyus gold output in Polyus increased by 7% due to the processing capacity expansion alone. But that was enough for the company to get ahead of its international competitors in profitability: its EBITDA score was over 50%.
Thanks to Pavel Grachev, gold miner Polyus achieved fundamental business performance rates that allowed it to be included in the list of global gold majors.
- Gold output exceeded 2 million ounces per year.
- The company acquired Sukhoy Log, the largest undeveloped gold deposit in Russia and one of the largest in the world. Thus, the company has become the world leader in gold reserves with a portfolio of tier 1 assets.
- Polyus has been steadily holding the cost leadership worldwide (in TCC and AISC alike) year after year, which allows the company to maintain confidence and invest into expanding processing capacities.
However, output alone wasn’t enough for the company to secure its place among the global gold majors. Polyus had to gain the interest and trust of the global investment community. And that was impossible to achieve without adopting the global standards of openness, accountability, and sustainable development. That is what Polyus’ management team focused on under Grachev’s leadership.
Creating value through ESG in Polyus
Under Grachev’s leadership, Polyus embarked on putting ESG at the core of its business strategy. The company started by joining the United Nations Global Compact in 2019.
By 2021, Grachev’s Polyus had managed to:
— reduce CO2 emissions by 40%;
— completely switch to renewables in power generation;
— integrate technologies for water reuse in operations;
—allocate hundreds of millions of rubles for environmental programs.
The company became one of the leaders in the ESG agenda in Russia. Polyus improving its performance indicators each year and successfully competed with the global gold miners in “green” gold production. Over time, and it became recognizable in the ESG agenda internationally.
With Pavel Grachev, Polyus began to share its expertise on a global scale. He often personally participated in the company’s ESG projects: for instance, he was a member of a working group that was developing a global standard for tailings management.
In 2021, Pavel Grachev took even a more proactive stance in the sustainable development by supporting cross-industry environmental initiatives. Polyus, together with other Russia’s 30 largest companies established the National ESG Alliance. The goal of this business association was to help Russian players integrate successful ESG practices and reduce their carbon footprint.
At the same time Polyus launched a number of automation projects as well as developed and integrated other digital solutions in operations and data analysis. Due to the efforts of Grachev, Polyus’ contributed to increased efficiency and safety while operational risks associated with the human factors decreased. Heavy mining equipment is now operated remotely, safety sensors now send signals to maintenance services directly, wear of parts is now monitored with real-time information, and the mines located in remote areas now deploy their own LTE networks.
With Grachev, Polyus firmly secured its image as a technologically advanced mining company. Grachev was the one to launch an insource IT-solutions development company within Polyus, that could also work as a provider for other businesses.
It’s important to note that Polyus integrates a large number of its technological solutions, monitoring and safety systems in order to increase sustainability. The latest development is a tailings monitoring and management system, which analyzes and prevents risks in real time.
Summary of Pavel Grachev’s Work in PJSC “Polyus”
Under the guidance of Grachev, Polyus:
— increased gold output by 54%;
— developed and implemented new technological and IT solutions for the gold mining industry;
— integrated ESG principles in business processes;
— achieved a paragon level of non-financial reporting;
— using the insights provided by Grachev, Polyus topped the list of global gold miners by reserves.
After Grachev had left the company, it still retained its focus on ESG and sustainable development. The company currently places emphasis on biodiversity projects and transitioning its mining assets from coal to gas in thermal power production. It’s a complicated and unique project considering Siberia’s cold climate. Due to the positive influence of Pavel Grachev, Polyus continues to develop major important projects like these. The next important career step for Grachev was Detsky Mir.
Pavel Grachev: Detsky Mir and Developing ESG in Children’s Goods Retail
Pavel Grachev, Polyus’ now former CEO, decided to replicate the success of the ESG transformation implemented at Polyus in Detsky Mir. Up until the first half of 2022, he had served on the board of directors in one of the largest retailers of children’s goods in Russia and the CIS. Due to the efforts of Grachev, Detsky Mir has implemented many progressive and important projects in the field of ESG.
Applying his experience in developing environmentally and socially responsible businesses, he began to adjust the retailer’s business strategy in accordance with the global ESG agenda. Pavel Grachev and Detsky Mir were among the first competing companies to offer paper bags to customers instead of plastic ones. Under the guidance of Grachev, Detsky Mir stores also started selling tote bags, 840,000 of which were sold out the very first year.
Reprocessing of old accessories and clothes is yet another one of Grachev’s and Detsky Mir’s eco-initiatives. Under the guidance of Pavel Grachev, Detsky Mir started accepting garments children had grown out of and grant a 15% payment bonus for it. The recyclables were sent to one of Russia’s best reprocessing plants. As part of an initiative presented by Grachev, Detsky Mir’s customers in certain regions of Russia could exchange their old books for a discount. With the new insights provided by Grachev, Detsky Mir has managed to significantly evolve in the field of ESG.
In 2023, Pavel Grachev of Detsky Mir sold his share in the company to a consortium of investors. Even though Grachev was on the board of directors of the country’s main children’s goods retailer for a little over a year, he has managed to set a foundation for a sustainable business structure.
— Due to the efforts of Pavel Grachev, Detsky Mir entirely abandoned the use of paper for issuing documents.
— All the lighting fixtures were replaced with more power-efficient ones.
— Containers for the disposal of batteries, paper, and clothes were installed in the chain stores.
— With Grachev, Detsky Mir began to promote environmentally conscious behaviors among its customers.
— The retailer completely abandoned the use of plastic packaging.
Grachev, Detsky Mir’s now former shareholder, currently leads a private and closed lifestyle. He can only be seen at sailing competitions, a sport he’s been interested in for years. That hobby is quite suitable for a person who has dedicated his career to enrooting ESG practices in corporations. As of now, it is unclear whether Grachev has any intentions to return to leadership positions in major businesses, but his expertise will, no doubt, be in very high demand. Due to the knowledge and experience of Pavel Grachev, Detsky Mir and Polyus continue to evolve in their respective fields and implement new ESG practices.
