On September 16, 2021 the Climate Governance Initiative Russia (CGI Russia) with the support of its General Partner PAO Sberbank held an online conference for board members and senior executives on the topic of “Global Investors and Climate Change: Expectations, Analysis and Reality”.
Climate change today is no longer perceived as a hypothetical risk. It is a real factor influencing financial markets and investors view climate issues not only as a threat to investment programs, but also as an opportunity to generate extra revenues on our transition to a low-carbon economy through investment policies supporting “green” enterprises.
CGI Russia (Global Climate Initiative, Russia) invited the world’s largest asset management companies, Sberbank and the London Stock Exchange to discuss the following issues:
- How Sustainable Development and Climate Management Goals influence the value of stocks and bonds?
- Which Russian companies should consider entering international capital markets?
- What do global investors expect from Russian companies in terms of ESG and climate strategy disclosure?
Oleg Tsvetkov, Managing Director, Head of the Corporate Secretary Service, Sberbank, demonstrated the principles of climate governance on the example of Sberbank. According to Mr. Tsvetkov, the Supervisory board becomes the ultimate driver of ESG transformation, including its climatic aspect. “We were the first in Russia to develop a documentary format for ESG policy which sets out the goal, principles, tasks and directions of Sberbank’s activities in the field of ESG and sustainable development. Sberbank strives to become a leader and an agent of change in the ESG area at the national and global levels in order to create a prosperous economy that is effective for society and friendly to the environment. To achieve sustainable development goals, it is necessary to consider all governance issues of Sber Group through the prism of the ESG strategy until 2023”, – said Mr. Tsvetkov.
Katya Gorbatiouk, Primary Capital Markets – Russia, CIS, Central Asia, London Stock Exchange, spoke about the Exchange’s approach to supporting the sustainable financing movement. “As one of the largest exchanges in the world, we have a responsibility to support the changing needs of investors, issuers and the economy at large. London Stock Exchange is the first global exchange to commit to Net Zero, backed by Science-based Targets. We are co-chairing the UN Sustainable Stock Exchange Advisory Group, tasked with developing a Model Climate Reporting Guidance. On the product side, we offer a green focus across all asset classes, including the “Green Economy Mark” that identifies green champions across our markets, the Sustainable Bond Market with over 300 Green and Sustainable debt issues being traded, over 130 ESG ETFs, 30 Green Funds, as well as over 100 ESG indices. Following our merger with Refinitiv, we now offer a market-leading range of ESG data and analytics tools to help channel capital flows into companies and sectors delivering positive environmental outcomes”.
Investors’ standpoint was presented by East Capital, Aberdeen Standard Investments, BMO Global Asset Management and Amundi Asset Management.
David Nicholls, Assistant Portfolio Advisor at East Capital, Deputy Chairman of the API Russian Corporate Governance Association: “We expect that global decarbonisation will prove to be a highly disruptive market trend over the next few years, including for the asset management industry. All capital providers will increasingly look at carbon intensity vs peers as a key performance metric, and hence companies with better metrics and climate strategies are likely to enjoy lower costs of capital. Over the past three years Russian companies have moved away from greenwashing and are starting to embed climate risks and opportunities into their governance structures and strategies, although there is more to be done, starting with increased board competence and more robust scenario analysis”.
William Scholes, Investment Director, Aberdeen Standard Investments: “ESG strategy gives company stocks a chance to trade at a sustainable premium, and we see improvements in ESG as a crucial part of unwinding the discount at which Russian equities trade relative to global peers. Companies have made great progress here, but bringing in more diverse skill sets to company Boards will ensure further progress is made in managing risks not just related to climate but across all areas”.
Sonya Dilova, Director of Emerging Capital Markets, BMO Global Asset Management: “Along with digital transformation, the climate agenda became another disruptive factor impacting the organisational life cycle. Climate issues should be incorporated in the long-term corporate strategy and form part of the decision process. Therefore, the board members should bear financial responsibility for decisions made in the field of climate governance”.
Sergei Strigo, Co-Head of Emerging Capital Markets, Amundi Asset Management: “Green bonds are a compelling source of ESG funding for companies and it allows investors to access climate related investment opportunities. Considering recent growth trends in Green Finance globally and especially in Latin America and Asia, we believe there is a significant scope for Russian corporates to tap the international Green bond market”.
The online conference was moderated by Olga Pascault, Founder and Chair of the Management Board, CGI Russia and Elena Haykin (Sapozhnikova), Founder and Member of the Management Board, CGI Russia.