ESG AGENDA: ROLE OF FINANCIAL INSTITUTIONS
Ilya Torosov, Deputy Minister of Economic Development of the Russian Federation
Ksenia Yudaeva, First Deputy Governor, The Central Bank of the Russian Federation (Bank of Russia)
ESG agenda issues such as sustainable development, climate change, carbon footprint reduction and energy transition have been the focus of government and business over the past year.
The carbon border adjustment of the European Union will be implemented in January 2023, first in the transitional mode, and then, in 2026, as a fully functional program. Shortly after the last COP26 climate summit in Glasgow, the internationally reviewed National Green Finance Methodology developed by VEB was adopted under a decree of the Government of the Russian Federation adopted The Central Bank of the Russian Federation issued a number of recommendations on the procedure for disclosure of non-financial reports by companies and on accounting of ESG factors by boards of directors of public companies.
Several of the country's largest banks, including Sber, VTB and Gazprombank, have initiated the creation of major customer platforms and business associations, offering ESG solutions to companies. However, data from numerous studies and surveys show that Russian business, while declaring commitment to implementing ESG practices, for the most part is not ready to bear the additional costs of implementing sustainable development strategies.
According to the Expert RA, 80% of real sector companies do not take ESG practices seriously.
In the near future, financial institutions will determine the ESG agenda in Russia. In general, to launch a real ESG-transformation of Russian business, it is necessary to revise the development strategies of banks and companies, which is possible only with government initiative and support.
• National business readiness for ESG transformation?
• Strategies of the state and financial institutions in the process of ESG transformation of economy and business: drivers, beneficiaries or...?
• Mechanisms and role of regulation — to stimulate investment or reduce risks?
• How can the government and financial institutions help ESG transformation of companies?