The English version of the MCUR Digest (MGIMO Centre for Sustainable Development and ESG Transformation) is a regular information source accumulating the main Russian news in the sphere of sustainable development and ESG transformation, responsible finance and climate agenda.
The first issue is focused on the latest news in the above-mentioned areas that were in the spotlight in Russia in December 2021 and January 2022. The originals of the news are available via active links in the text. English version in published monthly.Sustainable finance
Sustainable finance is one of the strategic priorities
for the development of the Russian financial market. This is evidenced by the Main directions for the financial markets
development by the
Bank of Russia. They consolidate the vectors of development of the financial
sector until 2024. To realize the potential in this direction, a comprehensive
and reliable infrastructure of responsible finance is required. Such
infrastructure continues to build in Russia.
On the instructions of the Ministry of Economic
Development VEB.RF has developed a draft taxonomy for social projects in sustainable
development. The draft regulation includes definitions of key terms, a list of target
social groups, as well as 10 target areas and types of social projects. Among
the target areas are healthcare, education, employment, entrepreneurship and self-employment,
affordable housing, sports, culture, art and tourism, affordable basic
infrastructure (urban environment, transport, digitalization), food security, food
availability, etc. The approval of the taxonomy for social projects, which is
planned in 2022, will increase the volume of social bonds and stimulate the
implementation of socially important projects.
In terms of green projects, even once the necessary
taxonomy has been approved, vague procedures and mechanisms for financing such
projects, especially at the stage of verification, as well as lack of market incentives
will remain the main barriers to market development. In the report at the
Gaidar Forum Mr. Torosov, Deputy Minister of Economic Development, noted that
Ministry is working to expand the number of national verifiers of green
projects, and a full-fledged verification system can be launched in 2023.
Sovcombank has offered an ESG deposit for corporate clients. The funds placed on such a
deposit are directed to environmental, adaptative and social projects. The
first deposit was arranged by Evraz plc. Other Russian banks, such as Otkritie
and Rosbank, are also considering the possibility of creating similar ESG-investment instruments.
Other news on the topic:
29.12.2021 Centr-Invest Bank Promotes Transformation
Of Regional Banks
12/22/2021 Moscow Exchange Upgraded The Sustainable Development Sector And Adjusted
Its Requirements For ETFs
11.01.2022 Russian Environmental Operator Set To Bring Green Bonds To The Stock Exchange
12.01.2022 “There Will Be No Rogue ESG At The
Bank”, Mikhail Avtukhov Told RBC
13.01.2022 VEB.RF Notes That Investors’ Demand For ESG-Instruments Exceeds Supply
13.01.2022 Sber – Global Internet Stock Fund Received
A High ESG-Rating
Useful information:
Climate policy and carbon regulation
The Russian Ministry of Economic Development is designing legislation on a verification system for green
projects, which is planned to be launched by 2023.
Following the European initiative to ban energy-intensive mining, according to a report by the Russian Central Bank, Russia plans to ban
operations with cryptocurrencies, since “an increase in mining volumes
entails huge electricity consumption and may put other enterprises at
risk”.
According to the forecast made in the joint report by WEF and BCG, Russia’s
export potential may reach up to 9-10 million tons of hydrogen/ammonia in the
next 10 years.
On December 23, PJSC Lukoil and JSC Rusatom Overseas signed a Memorandum on Cooperation, according to it they will
cooperate to stimulate the supplies of hydrogen to Romanian refineries, and to
develop the production of green hydrogen at Petrotel-Lukoil S.A. later.
Another vector of decarbonization is transport
electrification. In this area, RusHydro continues to implement its large-scale Silk Road project with the aim to
provide sufficient electric transport infrastructure (80 electric chargers) to
18 regions of Russia to connect Moscow and Khabarovsk. Similarly to the Silk
Road project, Green Drive, a Russian company, plans to install 20 fast electric chargers on the M4
highway between Moscow and Sochi. Russian-made electric chargers designed by
Parus Electro will allow you to charge the car in less than 30 minutes.
Dmitriy Tortev, member of the Expert Council on
ESG-Transformation of the Russian business association “Delovaya Rossiya”:
“There is a credible estimation by Mr. Belousov, Deputy Prime Minister, that in
order to shift the Russian economy to more eco-friendly energy sources an
annual worth of 3.2 trillion rubles for the next 28 years is required. This
amount accounts almost 3 percent of Russian GDP, so it can be balanced by the
investment component”.
Other news on the topic:
21.12.2021 Rosneft Board of Directors Approved Rosneft
2030 Strategy
23.12.2021 Licenses For Construction Of Underground
CO2 Storage Facilities Can Be Obtained From January 1, 2022
27.12.2021 Ctrl2GO Group Summed Up The First Carbon Landfill
Season
28.12.2021 Ruslan Edelgeriev: “Russia Is Against
Mixing The Concepts Of Climate And Security”
20.01.2022 “Russia Will Have To Compensate For The Decline In Hydrocarbon Exports Due
To RES”, Expert Says
20.01.2022 Carbon Detox: How And When Will Greenhouse Gas Emissions Decrease In
Russia?
Corporate ESG strategies
The ESG-transformation of Russian business is at the
stage of institutionalization. At the end of January 2022, the first official
meeting of the founders of the National ESG Alliance was held, and the charter and the structure of its governing
bodies were adopted. The main governing body of the alliance will be the
Supervisory Board, which includes 28 representatives of the founding companies.
Andrey Sharonov, ex-president of Skolkovo and former vice mayor of Moscow, was
elected as Chairman of the Alliance.
In January 2022, the following changes in ESG-ratings
of Russian companies were observed:
- On January 17, RAEX-Europe published the first update of the ESG-ranking of Russian companies in 2022.
- NLMK rating was increased by FTSE Russell from 3.4 to 4.3 points (the maximum
score is 5.0). NLMK Group has entered the top 3% metallurgical companies in the
field of sustainable development.
- Metalloinvest affirmed its EcoVadis rating at the “silver” level,
entering the top-4% metallurgical companies and top-9% most successful companies
worldwide. The largest increase in the rating scores was achieved in the
business ethics and sustainable procurement.
Within corporate ESG-strategies, the following events
of January 2022 should be noted:
- Uralkali expanded its ESG strategy, supplementing it with goals in
employee well-being, product quality, product safety and biodiversity
conservation. In addition, in 2021 Uralkali gained the leading position in two sustainable development
indices of the Russian Union of Industrialists and Entrepreneurs.
- Lukoil adopted a Sustainable Development Policy that reflects the
company’s stance on sustainable development issues, sets principles, goals and
key objectives in this area.
- A similar document was published by the Pipe Metallurgical Co., OJSC (OAO “TMK”).
Experts from Dentsu Russia, a communication group, and
Better, a crowdsourcing platform, together with representatives of brands and
retail, have conducted a large-scale study of sustainable development marketing in Russia for
2021 and compiled a guide for marketers for 2022. According to this study, the
share of the costs on sustainable development marketing in advertising budgets
may grow from 3 to 5 percent. The largest advertisers in terms of media
investments in the field of social responsibility in 2021 were IKEA, Nestlé, VK
Group and X5 Group.
The share of sustainable development marketing in
advertising budgets of Russian companies may grow from 3 to 5 percent in 2022.
Other news on the topic:
10.01.2022 Expert RA Announces A New Methodology For ESG Ratings
10.01.2022 ESG-Agenda Is Reshaping Office Real Estate
19.01.2022 Donstroy Certifies First Russian School
By LEED
27.01.2022 The IPO Boom in Russia May Continue
In 2022, Research Says
Authors: Andrey Avramenko, Sofia Denisova, Polina Raikova, Nikita
Savostitskiy, Egor Solovey, Kristina Zakharcheva
Editors-in-chief: Capitolina Tourbina, Andrey Avramenko, Sofia Denisova
Translator: Stanislav Shurygin
Designer: Maria Bakhireva
Disclaimer: The point of view of the MGIMO Centre for Sustainable
Development and ESG Transformation may differ from the opinions of the authors
of the news cited in the analytical publication. All materials are for
reference only, and the MCUR is not responsible for their implementation in
practice. The links to news sources used in the compilation of the MCUR Digest
are indicated in the text and are active only in online format. The Digest does
not use external copyrighted materials or reproduce them. If you have any
questions, please contact: mcur@inno.mgimo.ru.
The MCUR Digest is being issued as part of the implementation of the
strategic academic leadership program “Priority 2030”.
Department of International Complex Problems of Nature
Management and Ecology
MGIMO Centre for Sustainable Development and ESG
Transformation
