The InfraOne Research study assesses the state of infrastructure related to environmental activities, as well as government policy and investment plans for the development of this area in Russia.
The Roscongress Foundation presents the salient points of the publication accompanied by fragments of broadcasts of relevant panel discussions from the business programme of international events held by the Roscongress Foundation.
In 2020, direct and indirect government spending on green programs and projects amounted to about 200 billion rubles The national project «Ecology» made a significant contribution to the increase in funding.
According to the authors of the study, the total expenditures of the Russian government on programs and federal projects related to the environment have reached 200 billion rubles (about 130 billion rubles, excluding indirect measures). At that, the total contribution of both business and the state totaled 870 billion rubles. In total, over the past five years, government spending on state programs supervised by the Ministry of Natural Resources and Environment has ranged from 106 to 134 billion rubles.
The largest areas of program expenditures are environment quality regulation, forest protection and reproduction, mineral resource base and subsoil exploration. In total, over 10 years from 2015 to 2024 they account for 60% of program budgets.
The national project «Ecology», the «greenest» document of strategic planning, according to the authors, has made few innovations in the existing state programs. Its main achievement is to increase spending on the environment: in 2020 alone, they should grow by almost 30% compared to the previous year. In addition, thanks to the national project, environmental aspects of various state programs were combined in one document: for the development of industry, the nuclear energy complex, and utilities.
Russias total need for green investments reaches 5.9-7 trillion rubles until 2024, which is possible only with the participation of business.
This assessment includes the creation of infrastructure for the processing of household waste, the renovation and development of urban public transport, minimal improvement and greening, bringing the share of renewable energy to 45% of the total generation, as well as the minimum necessary measures in the field of environmental protection and restoration. In part, this amount will be covered by budgetary investments in existing programs, but without the participation of business, «greening» the economy is impossible.
However, according to the authors, the bulk of green business investments falls on a small circle of companies (mainly industrial), which simultaneously cause the greatest harm to the environment: the 15 largest of them spent about 0.3 trillion rubles on the environment in 2019 this is almost a third of the total expenditures of the state and the private sector for the entire year. But on average, these companies spent no more than 1% of their revenue.
Often companies that position themselves as environmentally friendly and follow the principles of sustainable development invest in environmental protection to increase their productivity, the ability to gain access to new markets and within the framework of GR and PR campaigns. Even so, the benefits of green investments are substantial. In general, the desire for such spending is more typical for the state than for business.
One of the most effective ways to attract investment in environmental projects in Russia is green financing, which requires improving the legal framework.
Green financing instruments are used both within the framework of public-private partnerships and when launching corporate projects. These include green loans, green bonds, securitized securities, and sovereign green bonds. The emission potential of the latter in Russia, according to the authors, may be up to 700 billion rubles on the horizon of up to five years.
In the world, the volume of the green bond market has not yet exceeded $ 1 trillion, which is less than 2.5% of the global corporate securities market. Domestic issuers of the first green issues appeared almost two years ago, but it was only in the spring of 2020 that the Central Bank of Russia defined «green bonds» in the emission standards.
Today in the Russian market there are green bonds (in the broadest sense) for 119.45 billion rubles, or about 0.8% of the corporate bond market. Due to the lack of a well-developed legal framework in the field of green finance and regulations on investments in such instruments for long-term investors, the development of the sector in Russia is inactive. However, business is especially interested in timely «restructuring» to responsible financing, so as not to lose the opportunity to raise money in the global financial market.
For more information, see the special sections of the Roscongress Foundation Information and Analytical System: The National Project «Ecology», Investment Projects, Infrastructure-based development, devoted to the analysis of the situation in the field of green investments from the state and business.