Climate Agenda: New Opportunities in the New Reality

It is obvious that the climate agenda is global and long-term. Its main features became quite definite at the end of last year. Not when the Paris Agreement was signed, but during the conference in Glasgow, when all major countries made a statement about their desire to achieve carbon neutrality in about 50 years, by 2060–2070 — Aleksey Kokorin, Climate Change Officer, World Wildlife Fund.

The attitude of companies to the agenda: they all are now comprehending the new situation, their attitude to the agenda. It is quite different and depends on the context a company operates in. It is, first of all, industry, communication with foreign markets or lack of communication. These are the sources of inside or outside financing of the company — Andrey Sharonov, Chief Executive Officer, National ESG-Alliance.

The topic has surely remained relevant. It has not lost its relevance in any way. Of course, the carbon neutrality goals set for 2060 have not gone anywhere either and, in fact, are also absolutely achievable — Stephan Solzhenitsyn, Chief Executive Officer, SGK; Member of the Board of Directors, SUEK.

Reality has really changed, but climate is a global thing, as is ecology in general. Climate is a part of the environmental agenda. Goods that will be produced, for example, at our plant are export-oriented, and the request to reduce the carbon footprint will remain — Yuliya Shabala, Deputy Director General for Sustainable Development and Corporate Affairs, Udokan Copper.

We did not plan a sharp reduction in emissions. There is no rollback, because it was not planned. No one was going to take any hasty actions — Aleksey Kokorin, Climate Change Officer, World Wildlife Fund.

The national regulatory framework obliges companies to follow this trend, this agenda. Russia has committed to carbon neutrality by 2060. On the other hand, this process has just started, it is not regulated. It would be a big exaggeration to say that national norms impose very strict requirements to follow this agenda right away — Andrey Sharonov, Chief Executive Officer, National ESG-Alliance.

Turning to the East, to Asia, to the Middle East is associated with national requirements companies will face. There are requirements for sure. As they say, the requirements of the Hong Kong Stock Exchange for issuers placing their securities there look tougher than the requirements of the London Stock Exchange in terms of the ESG criteria. This factor of external pressure in the context of regulations remains unchanged — Andrey Sharonov, Chief Executive Officer, National ESG-Alliance.

Today, achieving climate goals is very important for Russia, because it is important for all our trading partners such as Asia, the Middle East, Africa, South America. It is also important, because the whole world, all the countries have their own approaches that are very different — Stephan Solzhenitsyn, Chief Executive Officer, SGK; Member of the Board of Directors, SUEK.

We are wary of such simple solutions as imposing with a tax or any mechanism that should encourage to profitable projects. It doesn't work like that. If climate projects are supported, Russia's potential can be huge: equal to 500–900 million tons of CO2 — Stephan Solzhenitsyn, Chief Executive Officer, SGK; Member of the Board of Directors, SUEK.

This is a task for us that we are already moving forward. But when we ask for support so that we can develop this even more effectively, we run into some kind of deadlock. It turns out that we are creating a system of fines or something else. And where it is necessary to add, we do not have money for some reason — Roman Berdnikov, First Deputy General Director, Member of the Management Board, RusHydro.

Hydropotential is, first of all, the cleanest electricity among the existing ones, but we persistently do not develop it. The world is no longer talking about it, because the world is already familiar with it: 75–80% of the hydropotential is used by Europe. The lowest development potential is in Brazil – up to 50, and in other countries – above 50. In our country, the total capacity of hydroelectric power plants is 50 gigawatts. For example, the set capacity of Swiss hydroelectric power plants is 17 gigawatts. Thrice the difference, only the territory of Switzerland is 400 times smaller than Russian — Roman Berdnikov, First Deputy General Director, Member of the Management Board, RusHydro.

Of course, hydroelectric power plants are one of the main sources for purposes of carbon-neutral development. And, unfortunately, there are no measures to encourage owners not only to build them, but also to modernize existing hydroelectric power plants. I think we need to formulate mechanisms to support, at least, the modernization of existing hydroelectric power plants, especially small ones with a capacity of up to 100 megawatts that are not in good condition — Aleksey Kaplun, Chief Executive Officer, H2 Clean Energy.

A very serious adaptation is required, and possibly expensive. I mean the adaptation of not only your direct activity, but also business assistance in adapting the life of the local population and nature in the general sense of the word — Aleksey Kokorin, Climate Change Officer, World Wildlife Fund.

This is especially important for business in the Far East. There are large territories in the Far East located in permafrost. The implementation of the construction of large industrial facilities in permafrost conditions requires special attention in a changing climate. There are wake-up calls about technogenic accidents or soil thawing. Let’s take the Udokan MMC construction project, for example, we are just completing construction, but we already understand that adaptation to climate change is possible. We already need to think about. The second part of adaptation is to ensure the adaptation of residents of the region to possible changes such as frequent floods and fire accidents — Yuliya Shabala, Deputy Director General for Sustainable Development and Corporate Affairs, Udokan Copper.

This bilateral interaction should be organized at the government level. This is the request from the state so that we do not live in two realities: we control something according to the methodology and measure it, verify it, create some kind of a system and still live in the parallel reality of creating a second accounting system. This is both labour-intensive and probably doesn't make much sense, because export products must be verified according to some uniform standards — Yuliya Shabala, Deputy Director General for Sustainable Development and Corporate Affairs, Udokan Copper.

I hope that we will adopt the concept of low-carbon development. We will be expecting what support measures are included there. But in any case, they should be synchronized with the general climate agenda. There should be a single common logic to achieve all the goals, and carbon neutrality by 2060 will be the main one — Aleksey Kaplun, Chief Executive Officer, H2 Clean Energy.

We have a process of introducing domestic energy certificates. Its final readings are held now in the State Duma. It will be implemented at some point. We are extremely interested in the state's readiness, when implementing a system for the circulation of these certificates, to fully link this system to international standards. If it’s not linked to them, verification and crediting of these certificates outside of Russia will be practically impossible — Victor Drozdov, Member of the Board, Polyus.

In order for climate projects to be really interesting to business, the admission of verifiers of partner countries is probably an important measure that should be considered. The second question: as we know, the methodology for the implementation of the climate project is currently being developed and its implementers are being determined. Probably, we should consider the possibility of approving the methodological base of specific types of climate projects with the participation of accredited verifiers and, for example, on the basis of the Clean Development Mechanism — Ekaterina Salugina-Sorokovaya, General Director, International and Comparative Law Research Center.

Voluntary actions on ESG step forward showing they are very important social and environmental parameters. How does a project help the life of the local population, how does it help nature in the general sense of the word? — Aleksey Kokorin, Climate Change Officer, World Wildlife Fund.

The whole story is about the climate for us, the climate programme is a way to increase efficiency, to a clean economy and, accordingly, to a new quality of life. Therefore, the incentive for us is not so much external, especially in today's realities, we focus on a client. Business focuses on its client; authorities focus on a human. In this sense, we need to act in our interests and put together exactly that system and quotas, business support and encouragement based on the goals set by country, region and company. Development in the common interests only will be sustainable — Milena Milich, Acting Minister of Ecology and Sustainable Development of the Sakhalin Region.