New Directions and Sources of Financing for the Green Agenda

We are entering a new world, a lot of things are changing, and many businesses are starting to think about reducing greenhouse gas emissions. Most companies don’t have to fear such a future. […] There is huge potential for ESG development in Russia. Russia can become a leader in the green economy thanks to its huge reserves of resources and large scientific base. In recent years, we have seen that green business can develop quite well. […] In 2020, we saw that companies that invested in the green economy were less affected by the pandemic. Companies that did not meet the new regulations received less investment. […] A low-carbon economy offers opportunities for different companies — Lord Barker, Executive Chairman of the Board of Directors, En+ Group.

All central banks have a serious green agenda. […] Regulators are responsible for risks. […] Climate change poses significant risks to financial systems. These risks are thought to be underestimated, and their value is not sufficiently taken into account in financial assets. […] All central banks are involved in and support work to create markets for ‘green bonds’ — Ksenia Yudaeva, First Deputy Governor, Bank of Russia .

The Ministry of Economic Development is currently drawing up a comprehensive programme, the so-called ‘big climate package’, which consists of a basic law on the regulation of greenhouse gases. Carbon units, climate projects, and virtually the entire conceptual framework and architecture of the future market are also emerging. […] We have created a working group in the Ministry of Economic Development to develop a ‘green taxonomy’. […] I hope the Prime Minister will sign a directive in the near future and a ‘green taxonomy’ will appear in the Russian Federation — Ilya Torosov, Deputy Minister of Economic Development of the Russian Federation.

Russia has not yet moved ahead of those who are switching to new energy sources, but there is potential. Russia can no longer rely on fossil fuels alone. […] Many [companies] are already starting to invest in renewable energy sources. […] I believe in the power of the market, free enterprise, and innovation, but at the same time I understand that we need appropriate climate programmes that would support the transition to clean technologies. Partnership with national governments is needed. […] Pricing can also be a great tool, but it must be used with caution. It’s also important to understand that not all companies can move at the same speed — Lord Barker, Executive Chairman of the Board of Directors, En+ Group.

The taxonomy of projects is crucial, but then the company itself must be evaluated in terms of climate risks and the quality of its management. […] There are disclosure standards that are used by investors and lenders for this purpose. There are no well-defined and fixed disclosure standards in the world yet. […] We are currently preparing disclosure guidelines, but we don’t have the authority to make disclosure standards mandatory. […] We are working towards assessing climate risks. […] It’s very important for us to be able to attract green financing in order to stop capital outflow from brown markets — Ksenia Yudaeva, First Deputy Governor, Bank of Russia .

Attracting financing and the conditions for this are very important aspects. There are financial flows from one sector to another. Whereas in the past the cost of financing was determined by credit risks, now it’s overlaid with an ESG rating — Oleg Mukhamedshin, RUSAL Director for Strategy and Investor Relations .

We have developed a green taxonomy manual. […] It includes a list of projects that are considered ‘green’. […] The main segments in the taxonomy are waste processing, including both solid waste and sewage, as well as green energy and green transport. I would like to stress that we should also consider nuclear energy green because it is low-carbon. In addition, the main segments include green building and the industrial use of low emission technologies. […] Based on a discussion during a working group, the taxonomy was refined according to a number of criteria and an understanding was formed of what the specific emission should be. […] The manual also contains a section on adaptation projects. It includes projects in traditional energy, transport infrastructure, and industrial sectors – copper, nickel, and lead — Alexey Miroshnichenko, First Deputy Chairman, Member of the Board, VEB.RF.

We are drawing up recommendations on how climate risks, along with other risks or through other risks, should be taken into account by banks and financial companies that invest in various assets, including green ones — Ksenia Yudaeva, First Deputy Governor, Bank of Russia .

The key for us is to improve the quality of life of people in the cities where we have a presence. This is the most important incentive in terms of how we view our projects. This concerns all emissions that come with, for example, aluminium projects — Oleg Mukhamedshin, RUSAL Director for Strategy and Investor Relations .

The government’s job is to create a methodology and playbook for the market. […] We have a roadmap to support green finance. We are already discussing it with our colleagues from the Ministry of Finance and the Central Bank. […] We have already taken some steps and are trying to synchronize Russian taxonomy within the framework of the Asian Parliamentary Assembly. We want to create an investment methodological centre. […] Our job is to comprehensively approach the entire climate package. We want to complete the roadmap within two months — Ilya Torosov, Deputy Minister of Economic Development of the Russian Federation.