MGIMO Centre for Sustainable Development and ESG Transformation Digest #6

MGIMO Centre for Sustainable Development and ESG Transformation Digest #6

21 September 2022

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 sixth issue is focused on the latest news in the above-mentioned areas that were in the spotlight in Russia in June-August 2022. The originals of the news are available via active links in the text. The English version is published monthly.

Sustainable Finance

Financing sustainable development is one of the key areas of the financial market development. Sanctions are not an obstacle to that, a recent report by the Bank of Russia says. The regulator plans to continue developing the ESG financing infrastructure and to continue cooperation with friendly countries. To meet this goal, VEB.RF has proposed to synchronize the national green taxonomies of the countries of the Shanghai Cooperation Organization (SCO). As a representative of VEB.RF mentioned at the meeting of the Council of the SCO Interbank Association, the potential of the Russian market of green projects for the period until 2030 is estimated at about 300 billion US dollars.

Various Russian banks have also been active in the ESG agenda:

  • Center-Invest has launched its Green Mortgage program, which allows customers to receive a preferential rate when buying real estate with an increased energy efficiency class (A++, A+ and A).
  • Sber has released several services which will help Russian companies to undergo ESG transformation. The first is an ESG self-evaluation service based on artificial intelligence, the second is Eco2AI open library, which evaluates the carbon footprint of artificial intelligence models and the third is the Green Supply Chain service.
  • Sovcombank has agreed to provide a green loan to Rosseti Group company. The rate of the loan is linked with the fulfillment of sustainable development criteria.

When it comes to green financing instruments, the issue of 50 billion rubles’ worth of green bonds by VEB.RF was a notable event. The issuance is aimed at refinancing projects in the field of environment and climate protection.

Other news on the topic:

14.06.2022 Sberbank Has Increased Its Portfolio of Green Loans to 395 Billion Rubles by Use of Old Projects
15.06.2022 2022 Will See up to Seven New Issues in the Green Bonds Market, ACRA Head Says
06.07.2022 Sber Has Released Its International ESG Report for 2021
20.07.2022 Center-Invest Bank Has Released Its ESG Report for 2021
16.08.2022 The Supervisory Board of Russian Ecological Operator Has approved Its Green Financing Policy

Climate Policy and Carbon Regulation

Both state and private companies continue to develop and implement climate agenda. In accordance with the national plan of adaptation to climate change, the Russian Government has approved 10 sectoral plans, prioritizing specific measures based on the assessment of climate risks. The plans contain operational and long-term adaptation measures in spheres like transport, fuel and energy, construction and housing, agriculture and fisheries, environmental management, healthcare, management of the Arctic, civil defense and emergencies, industry, foreign trade and sanitary and public sanitation and disease control. Regional plans for adaptation to climate change are also being developed. Seven Russian regions, namely the Republic of Crimea, Belgorod, Volgograd, Vologda, Kemerovo, Kursk and Penza regions, have already developed and approved such plans. Sectoral and regional plans are being developed in accordance with the recommendations provided by the Ministry of Economic Development.

Other news on the topic:

02.06.2022 Major Russian Cities Are Switching Transport to Green Fuel
16.06.2022 Potential Financing of Low-Carbon Energy Projects May Reach 5.5 Trillion Rubles by 2030, VEB.RF Estimates
16.06.2022 A Carbon Landfill Will Be Constructed in the Tambov Region, Works to Start in 2023
07.07.2022 New Climatic Norms Have Been Introduced in Russia, Meteorological Office Spokesperson Says
14.07.2022 A Permafrost Monitoring System to Be Created in Russia
05.08.2022 Yandex Market Has Used Automatic Route Planning to Reduce Carbon Emissions
15.08.2022 Polyus Has Released Its Own Climate Strategy
22.08.2022 Russia to Introduce a 1,000 Rubles per 1 Ton Fine for Exceeding Carbon Quotas
25.08.2022 Digest of Climate Calamities in Russia And Overseas
26.08.2022 Russia’s Green Transformation Problems
27.08.2022 A Register of Greenhouse Gas Emissions Is to Be Launched

Useful materials:

Debate on Climate Change at Izvestia News Center
Transition to a Low-Carbon Economy: Costs and Risks for the Financial Sector

Corporate ESG Strategies

Russian companies stay committed to sustainable development. Throughout summer, MTS, Yandex, Avtotor, Rosneft, VK, Lukoil, Magnit, Uralchem, Novatek, Beeline, Udokan Copper, Fix Price, Moscow Exchange, Uralkali, OMK, Norilsk Nickel and a number of other companies published their non-financial reports. Aeroflot Group released a report on sustainable development for the first time.

Companies continue to implement industry-specific ESG solutions. For example, as the social aspect of ESG increases in importance, food retailers draw attention to the issue of responsible consumption:

  • X5 Group, together with ANO Foodsharing and Rus Food Fund, has launched a pilot version of a foodsharing service, which makes it possible to transfer products with expiring shelf life to people in need.
  • Magnit has joined the voluntary initiative for the efficient management of organic waste. The company became one of the first participants of the «No Loss!» initiative and signed an agreement with the Agency for Strategic Initiatives.

Sibur, a petrochemical company, has announced plans to increase the production of polymers for dairy products packaging in order to support food producers suffering from lack of raw materials and components. What is more, plastic packaging is more environmentally friendly than Tetra Pak, because it can be recycled more efficiently.

Rusal has adopted a biodiversity conservation policy and a waste management strategy. Its actions illustrate the fact that environmental concerns are extremely important for the company.

Other news on the topic:

31.05.2022 Eurocement Has Developed Its Sustainable Development Strategy
08.06.2022 Leaders of Russian Business: Dynamics, Responsibility, Sustainability — 2021 — Winners Announced
27.06.2022 The Most Popular Nomination Was «Responsible ESG Exporter», Russian Export Center Says
05.08.2022 Public Assurance in the Field of ESG: the Best Examples
16.08.2022 Udokan Copper Has Become a Member of the National Network of Global Compact
23.08.2022 Uralkali Has Been Awarded with a Green Standard Badge by Russian Ministry of Agriculture
31.08.2022 Russian Companies Do not Give up on ESG Reports, yet They See a Change in Demand

Useful materials:

Corporate Governance and ESG Transformation of Russian Companies. A Report by the Center for Sustainable Development of SKOLKOVO School of Management

Environmental Protection

Safe environment was one of the important topics of discussion at the sixth Caspian Summit held in Ashgabat in late June. The summit hosted leaders of Russia, Azerbaijan, Iran, Kazakhstan and Turkmenistan. Serdar Berdimuhamedov, President of Turkmenistan, confirmed the country’s initiative to create a new Caspian environmental program. Kassym-Jomart Tokayev, President of Kazakhstan, drew attention to the problem of conservation of Caspian seals. Ilham Aliyev, President of Azerbaijan stressed that the shallowing of the Caspian Sea is a particular concern. Vladimir Putin, President of Russia, noted that the five Caspian countries have to unite their efforts to promptly respond to common challenges, both natural and man-made.

From September 1, the Ministry of Natural Resources of Russia will instruct regions to use administrative fines and compensations for damage to the environment as financing for environmental protection measures. In other words, Russian regions will have to spend eco-income only on the items of the green agenda. In 2021, regional budgets received almost 27 billion rubles’ worth of eco-payments. However, the money was later spent haphazardly. «Labelling» will make it possible to solve urgent environmental problems faster. Based on the list approved by the Government, each region must send its action plan to the Ministry of Natural Resources of Russia by September 9, 2022, specifying where exactly funds received from eco-payments are supposed to be allocated. Only after approval, money will be allowed to be spent. As Mr. Kozlov, Minister of Natural Resources and Ecology, said, «we have already received more than 70 draft environmental action plans from the regions for approval. Most regions plan to spend the „labelled“ payments on dealing with accumulated environmental damage — eliminating landfills and abandoned enterprises».

Other news on the topic:

02.06.2022 Scientists Have Found the Cause for Avacha Bay Disaster
03.06.2022 Waste Processors Call for a Higher Legal Status for the Industry
16.06.2022 The Area of Forest Fires to Be Reduced by 2030
23.06.2022 Dept. Prime Minister Does not Consider Garbage Reform a Failure — Fair Enough?
05.07.2022 Experts Criticize the Recyclables Law
08.07.2022 The Government Has Increased the Number of Cities Participating in the «Clean Air» Federal Project
15.07.2022 Minister of Natural Resources Opened the First Monument to Conservation Area Inspectors in Russia
15.07.2022 Businessmen Protest Against Turnover Fines for Exceeding Quotas
22.07.2022 77.6% of Russians Pay Attention to the Environmental Friendliness of Goods and Services
04.08.2022 How Is Electronic Waste Processed in Russia — a Report By the Ecological Operator
05.08.2022 The Ministry of Natural Resources to Clean up the Streets of Mariupol
23.08.2022 63% of Russians Dispose of Batteries Improperly
25.08.2022 New Garbage Containers Will Appear in Russia
31.08.2022 Why Environmental Volunteers Got Outlawed

Useful materials:

On Conservation of Biodiversity

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:

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