22 March 2023
The English version of the MCUR Digest (MGIMO Centre for Sustainable Development and ESG Transformation) is a regular information source accumulating the main news of Russia and the Eurasian Economic Union in the sphere of sustainable development and ESG transformation, responsible financing and climate agenda.
The tenth issue is focused on the latest news in the above-mentioned areas that were in the spotlight in Russia in January 2023. The originals of the news are available via active links in the text. The English version is published monthly.
Sustainable Finance
In 2022 the total issuance of new ESG bonds in the Russian market amounted to more than 80 billion rubles, according to ACRA, Russian rating agency. That is 36 per cent below the level of 2021, which correlates with the global trend. Nevertheless, in late 2022 — early 2023, the following positive developments in the Russian ESG bond market were noted:
- In December 2022, the St. Petersburg Stock Exchange launched its ESG Sector and allowed green and social bonds of Russian companies to be traded.
- DOM.RF issued its first green mortgage bonds in the amount of 5.5 billion rubles.
- Atomenergoprom, a subsidiary of Rosatom, issued green bonds to refinance the construction of a wind farm.
Russian financial institutions continue their ESG track:
- In 2022, Sberbank increased its portfolio of sustainable financing (green, adaptation and ESG loans) to 1.3 trillion rubles, and in 2023 it intends to increase it by another 30 per cent to 1.7 trillion rubles.
- Center-Invest Bank has developed its ESG taxonomy for business evaluation and is developing a scoring model on its basis. According to the bank data, more than 3,000 customers have received an ESG assessment.
- Ingosstrakh and DOM.RF embrace the ESG agenda by introducing electronic document management and paperless contracts.
The Ministry of Finance of the Republic of Belarus has issued green bonds in the amount of 5 billion Russian rubles. The placement is aimed at financing projects related to national environmental goals.
To harmonize green financing within the Eurasian Economic Union, a model taxonomy of green projects has been developed. It will ensure systematic development of green financing instruments and free movement of capital.
Other news on the topic:
30.12.2022 Financial Institutions Are Recommended to Assess ESG Factors in Corporate Management
Useful materials:
Institute of Research and Expertise of VEB. Issuing Green Bonds in Russia
Corporate ESG Transition
Russian companies continue to embrace the ESG agenda, and the following positive developments are of note:
- High officials say that the ESG agenda in Russia will be more focused on achieving national development goals.
- The Expert Council on Sustainable Development of the Ministry of Economic Development met for the first time in 2023. A wide range of sustainable development issues were discussed, including the future national ESG agenda.
- The Russian Union of Industrialists and Entrepreneurs (RSPP) has approved recommendations on maintaining and promoting the sustainable development agenda.
- ESG Alliance has presented a pilot project of the first chapter of the ESG Ecosystem Atlas to the expert and business community.
- The Moscow Exchange has updated its rules on ESG practices titled «Guide for the Issuer: How to Comply With the best Practices of Sustainable Development».
- The All-Russian Society for Nature Protection and the Russian State Social University have prepared and presented the «Manifesto on Balanced Development».
Corporate ESG activity in Russia is also reflected by assignments of ESG ratings:
- Expert RA has assigned the following ratings: Sovcombank PJSC (ESG-II(b)), Credit Bank of Moscow PJSC (ESG-II©), Goldman Group PJSC (ESG-IV(b)), Polyus PJSC (ESG-II(b)).
- ACRA has assigned ratings to Deloports LLC (ESG-C), RusHydro PJSC (ESG-B), TransContainer PJSC (ESG-B), Polyus PJSC (ESG-B), TMK PJSC (ESG-C), Rosatom State Corporation (ESG-B).
- NRA has assigned ratings to Amur Gold LLC (BBB.esg), VimpelCom PJSC (AA.esg).
- RAEX-Europe has assigned an ESG rating to Polyus PJSC (AA), Uralchem JSC (BBB), Uralkali PJSC (A).
In addition, ESG rankings have been updated (ESG rankings are lists of companies sorted by ESG ratings, obtained mainly from open sources):
- ESG ranking of Russian companies (RAEX-Europe)
- ESG ranking of Russian companies in the consumer sector and non-financial services (NRA)
- 2022 ranking of the League of Green Brands
- The best Russian employers ranking (Forbes)
WWF has prepared updates to the environmental information openness ratings which rank companies in oil and gas, mining, metallurgy and energy generation industries.
The joint Moscow Stock Exchange-Russian Union of Industrialists and Entrepreneurs (RSPP) ESG indexes have also been updated: the RSPP has completed the ninth evaluation cycle, and the Moscow Exchange has developed its calculation base, which began to operate from January 20, 2023.
The variety of ESG ratings is not always convenient for users: the ratings of different agencies cannot be compared with each other, because they are based on different methodologies. To solve this problem, the Bank of Russia has developed Discussion Paper on harmonizing ESG ratings and presented a model methodology.
Russian companies are preparing their ESG non-financial reports:
- MMK has invited its stakeholders to participate in the materiality assessment as part of the preparation of its ESG report for 2022.
- BIOCAD, a biotech company, and QIWI, a payment service provider, have presented their ESG reports for 2021.
- Norilsk Nickel has presented its results in the field of sustainable development in 2022.
Other news on the topic:
02.12.2022 Public Expert Council on Sustainable Development Established by RUSAL
07.12.2022 Russian Companies Are Regaining Interest in Sustainable Development
08.12.2022 ESG Strategy for Orenburg SEZ Prepared by Sber
Useful materials:
Announcements:
Climate Agenda and Carbon Regulation
On January 16, Mikhail Mishustin, Prime Minister of Russia, held an operational meeting with deputy prime ministers. Among other things, they discussed the situation in Russia’s fuel and energy sector in 2022 and its future development. Alexander Novak, Deputy Prime Minister for Fuel and Energy, noted that in 2022 Russia’s power generation capacities grew by 1,600 MW, more than a quarter of which are renewable energy production. Electricity generation from renewable energy generation increased by 38 per cent over the past year, at 10 facilities in 10 Russian regions.
The above-mentioned (see section «Corporate ESG Transformation») meeting of the Expert Council on Sustainable Development of Russia’s Ministry of Economic Development, featured the results of COP27 in Sharm El-Sheikh, plans and main goals for COP28 in Dubai and issues of competitiveness of Russian carbon units in the international market. Maxim Reshetnikov, Minister of Economic Development, put forward an idea to establish a common voluntary carbon market of the Eurasian Economic Union. He also noted that in order to meet the national goal to reduce greenhouse gas emissions and to strengthen the position of the EAEU countries on a global level like COP, approaches to the climate agenda should be synchronized, and a system of cross-border trade in carbon units should be created.
The Minister also suggested that the EAEU states should consider an agreement that will consolidate economic cooperation in terms of climate agenda.
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«The global trend towards a low-carbon economy remains. Although we are now shifting from European to Asian markets, we need to continue decarbonization. Our key partners work actively on the climate agenda and have high expectations from Russian companies», Maxim Reshetnikov, Russia’s Minister of Economic Development, said
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The Expert Council consists of 78 entities from industries like metallurgy, nuclear energy, chemicals, telecommunications, banking, retail, etc. The meeting was also attended by Prof. Vladimir Salamatov, Head of Institute of International Trade and Sustainable Development (IMTUR) of MGIMO.
On January 25, synchronization of approaches to climate agenda in the common Eurasian market was discussed at the seminar of EAEU countries. Maksim Reshetnikov, Russia’s Minister of Economic Development, noted that the key results of joint work in terms of climate policies were the approved common criteria for green projects, which will harmonize approaches to green financing in the EAEU market and boost investments in reducing emissions.
Other news on the topic:
03.01.2023 Experts Have Named the Main Energy Trends of 2023
16.01.2023 Solar Power Plants Are Getting More Competitive
19.01.2023 Ruslan Edelgeriev, Advisor to President, Took Part in The Abu Dhabi Sustainable Development Week
Useful materials:
Climate Summits of 2022 and 2023: Are They a Turning Point? An Expert Material by Igor Jurgens and Roman Romanov
Interview with Ruslan Edelgeriev, Advisor to Presdent, Special Representative of the President on Climate Issues — Russian International Affairs Council
Interview with Alexey Kokorin, Head of Climate Program of WWF Russia — Russian International Affairs Council
Environmental Statistics of EAEU
Authors: Andrey Avramenko, Sofia Denisova.
Editors-in-chief: Capitolina Tourbina
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
