29 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 finance and climate agenda.
The eleventh issue is focused on the latest news in the above-mentioned areas that were in the spotlight in Russia in February 2023. The originals of the news are available via active links in the text. The English version is published monthly.
ESG Infrastructure
The Russian sustainable finance market continues its developing:
- The Bank of Russia has held a public discussion on the model methodology of ESG ratings. The authors noted that the future of ESG ratings lies in self-regulation. The proposed methodology is a model example, and rating providers can make adjustments to it. Similar initiatives to regulate the ESG ratings market in 2023 were undertaken by the Securities and Exchange Board of India and the Financial Supervisory Service of South Korea.
- NRA has published a draft methodology for ESG ratings for stakeholders’ open discussion.
- The Moscow Stock Exchange has launched a new stock index named «RAEX ESG Balanced». It has also updated the listing rules by adjusting the structure of the SDG sector.
- Green certification systems are also being developed. DOM.RF and the Ministry of Construction are set to adopt the national standard (GOST) for green construction of private houses. By the end of the first quarter, four pilot projects of Russian developers will receive certificates in accordance with the green standard for apartment buildings. Besides, VEB.RF has developed 2 methodologies for evaluating green commercial buildings. They are expected to replace foreign certification systems for facilities under construction and in operation.
- Segezha Group is also shifting towards the Russian standard of certification and protection of forests. It is now testing a system of voluntary forest certification by the standard of the Forest Certification Development Center.
- DOM.RF Bank has made its first placement of exchange-traded bonds. The issue received green verification from Expert RA and was included in the Sustainable Development Sector of the Moscow Stock Exchange.
In neighbor countries, the ESG agenda has also been an important issue for regulators and companies:
- The Central Bank of Azerbaijan has approved a Roadmap on Sustainable Finance in order to ensure the resilience of financial institutions to ESG risks, as well as to take advantage of the opportunities of the transition to a sustainable development model. The Entrepreneurship Development Fund under the Ministry of Economy of Azerbaijan has developed a pilot model of ESG assessment in accordance with international standards.
- A business breakfast titled «ESG in Belarus: Cases, Strategies, Ratings» will be held in Belarus on March 16. Its participants will discuss the present and the future of the national ESG market.
Other news on the topic:
07.02.2023 Melon Has Presented Its ESG Strategy
07.02.2023 Sber Set to Launch Green Mortgage and Insurance for ESG Clients in 2023
10.02.2023 ESG Ranking of Russian Industrial Companies
13.02.2023 Sberbank Has Been Certified as Energy Efficient
16.02.2023 TransContainer Has Topped the Ranking of 17 Transport and Logistics Companies of ESG Risk Assessments & Insights Limited
27.02.2023 Tatneft Has Improved Its ESG Process Management System
28.02.2023 Sber’s New Corporate Governance Model
02.03.2023 Kaspersky Lab Has Released its First ESG Report
Climate Agenda and Carbon Regulation
In its report titled «Achieving Carbon Neutrality in Russia by 2060», the Center for Sustainable Development of the VEB Research and Expertise Institute forecasts that in order to achieve decarbonization under sanctions pressure, Russia will need 46.9 trillion rubles, or 0.73% of its GDP annually. These estimates turn out to be significantly lower than the previously published estimates of VTB Capital, according to which achieving carbon neutrality would cost Russia almost 102.7 trillion rubles by 2060, that being the most economical path. What is more, full decarbonization by 2060 would cost 479.8 trillion rubles. Researchers at VEB.RF point out that decarbonization largely depends on imported equipment and technologies, especially in spheres like improving energy efficiency, developing renewable energy capacity and hydrogen use. Because of that, due to imposed sanctions, there are certain limits to some of the decarbonization measures.
There are delays in the launch of renewable energy projects, especially wind farms. In his speech at the forum «Russia’s Climate Policy in Changing Conditions: New Priorities and Opportunities» Alexander Shokhin, President of the Russian Union of Industrialists and Entrepreneurs (RSPP), mentioned the data published by VEB and called for reconsidering Western approaches to the climate agenda. According to Mr. Shokhin, Russia needs to stop copying European renewable energy projects and refocus towards its closer partners, in particular BRICS countries. In European countries, unlike Russia, the transition to renewable sources was primarily an energy security issue due to their lack of own energy resources.
Investment restrictions also have a negative impact on decarbonization. In order to replace Western investments, financing is attracted from Russian financial institutions and from friendly countries. In the current conditions, Russia plans to attract Chinese and Arab investors to its climate projects. Ilya Torosov, Deputy Minister of the Ministry of Economic Development, noted that an integrated approach to sustainable development is important. «That implies nuclear technologies, hydrogen technologies, gas and renewable energy sources», he said.
The climate agenda remains a topical issue for the EAEU. The countries’ commitments were confirmed at the meeting of the heads of the Ministries of Economy of the EAEU member states.
Other news on the topic:
02.02.2023 Regulation of the Ministry of Economic Development «On the Register of Greenhouse Gas Emissions»
02.02.2023 The European Commission Has Presented a Plan to Stimulate Green Industry
06.02.2023 The Duma Committee Has Approved a Bill on Penalties for Concealing Data on Greenhouse Gas Emissions
08.02.2023 SIBUR Has Passed International Certification on Greenhouse Gas Reduction
15.02.2023 Gazprombank and Institute of Global Climate and Ecology named after Y.Izraeli Agreed to Develop Methodologies for Climate Projects
17.02.2023 Round Table on Natural and Climate Projects at HSE
26.02.2023 Artificial Intelligence Has Made a Shocking Forecast on Global Warming
Environmental Protection
Experts continue to assess the environmental impact of the sabotage on the Nord Stream gas pipelines on September 26 last year. According to the IEA Global Methane Tracker, methane leaks that followed the incident were insignificant in comparison with larger leaks that happened in the world in 2022.
According to the IEA, the average daily amount of methane released during normal oil and gas operations is comparable with the release that happened on Nord Stream on September 26.
The environmental impact of the incident was also discussed at the meeting of the Expert Council of the State Duma Committee on Ecology, Natural Resources and Environmental Protection titled «Sabotage on the Nord Streams as a Demonstration of Double Standards Policy», which was held on February 12.
Danish scientists point out that explosions on gas pipelines caused pollution of the Baltic Sea with toxic substances from bottom sediments. Large volumes of heavy metals and organic pollutants had been accumulating in the silt and sand in the Bornholm Depression for many decades. A jet of gas lifted these harmful substances and spread them across the whole sea. According to scientists, some 250,000 tons of contaminated sediments were released by the explosions, and it harmed the marine flora and fauna.
Other news on the topic:
07.02.2023 Russia’s Planned Environmental Measures for New Territories
17.02.2023 Garbage Incineration Has Faced Problems Due to Sanctions
21.02.2023 Inventory of Landfills and Places of Hazardous Waste Accumulation Will Be Completed in 2023, Abramchenko Says
27.02.2023 Weedy Cacti Infest Swiss Alpine Slopes
Useful materials:
Russia’s Climate Policy in Changing Conditions (Conference video)
Announcements:
The Earth Hour Campaign Will Be Held on March 25 This Year
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
