Moscow, 21 December 2020. – The Russian Chapterof Directors’ Climate Forum and its general partner Sberbankhave hosted a roundtable entitled “The Leading Role of Central Banks in Climate Governance across the CIS”roundtable
Taking part in the discussion at the Russian Chapter roundtable, which took place on December 17, 2020, were:
Olga Pascault, Founder and Chair of the Management Board at Russian Chapter
Elena Haykin (Sapozhnikova), Founder and Member of the Management Board at Russian Chapter
Mark Smith, COO at Deloitte CIS, Managing Partner for the Caspian Region
Maxim Morozov, Divisional Head of the Financial Stability Department at the Central Bank of Russia
Tatiana Zavyalova, Senior Vice President for ESG at Sberbank
Asel Nurakhmetova, Advisor at AIFC Green Finance Centre Ltd in Kazakhstan
The importance of climate risks has increased significantly in recent years. Recognizing that they can have a negative impact on financial stability, leading financial regulators around the world, including the Bank of Russia, have started to pay particular attention to climate risks. Although a coherent and internationally agreed approach to analyzing the impact of climate risks on the financial sector has yet to be developed, active work is underway to study the impact of climate risks on the financial sector and the economy as a whole, develop stress tests, information disclosure requirements for companies and guidelines for financial institutions to consider and manage climate risks. Given the specifics of the Russian economy, the Bank of Russia is also paying particular attention to analyzing possible effects of carbon taxes. As a member of key international organizations such as the Community of Central Banks and Supervisors for a Green Financial System (NGFS), the Financial Stability Board, the Bank for International Settlements and the G20, the Bank of Russia is actively involved in sharing best practices in climate risk management.
The role of central banks and financial institutions in climate disclosures is currently focused on developing a scenario-based approach to forecasting the extent of economic resilience, fiscal policystability, minimizing default risks.
Alarmed by the potential destabilizing effects of the climate emergency, financial players and supervisory bodies, such as the Network for Greening the Financial System (NGFS) or the French Prudential Supervision and Resolution Authority (ACPR), recommend that specific work be carried out to identify risks, via modelling, to ensure global economic resilience.
At the same time, the possibility of introduction of regulatory requirements is becoming increasingly pronounced. The European Banking Authority (EBA) believes there is need to integrate climate change into the risk identification process and in the UK, the Prudential Regulation Authority (PRA) encourages banks to manage these same risk factors. Certain financial players anticipate medium-term regulatory restrictions. For banking institutions, this would mean developing a scenario-based climate risk analysis methodology for credit portfolios.
Meanwhile, despite the position of fiscal regulators on climate issues still to be finalized, companies are managing the transition to a low-carbon, resilient and valuable future, with Goal 13 Impact Platform being just one example. Goal 13 Impact Platform is a partnership between multiple organizations (CBI, Deloitte, A4S, Russian Chapter, Chapter Zero (UK and Italy), Dell and the Met Office). It is intended to strengthen existing support for companies in managing the transition to a low carbon, resilient and valuable future, encouraging both ambitious commitments and pragmatic action.
It will provide open access to cross-sector insights into key action companies are pursuing to manage the climate transition, and will serve as a platform for organizations to learn, be inspired to act and collaborate with other organizations.
Finally, it is worth mentioning that climate risksare already partially covered by existing accounting requirements and as an audit firm we are paying attention to disclosure in specific notes and are analyzing qualitative external factors, such as the industry in which a company operates, and investor expectations, which may make some risks ‘material’ and warrant disclosures in financial statements, regardless of their numerical impact.
Tatiana Zavyalova spoke about the ESG transformation of Sber as the largest credit institution in Russia, Central and Eastern Europe.
Today the entire world, and Russia is no exception, faces fundamental upheavals that challenge politics, economics and society alike. Given the long-term implications of today’s actions for global economic and natural systems, it is critical to recognize the need to set the right course and embed ESG principles in the governance of financial institutions straight away. The ESG agenda has already become an integral part of Sber’s new Strategy, recently presented to the investment community. The new Strategy is designed to focus Sber’s ESG activities and initiatives and take them to a new, strategic level. Our team aims to actively manage the ESG agenda by following global trends and best practices in sustainable development; moreover, we already have a lot of experience in this area.
We are also seing the Central Bank deploy significantefforts in climate risk management and understand that government and regulatory support is critical to integrating ESG principles into the economic model and we are certainly interested in developing dialogue and cooperation with the regulator.
AIFC Green Finance Centre (Kazakhstan) is a think-tank for developing new financing instruments, finding beneficial termsfor investors and implementing sustainable economy projects. The main objective of the Centre is to develop and promote sustainable finance in Kazakhstan and the Central Asian region. Green Finance Centre lends full support for green and social bond issuers, provides strategic and business advice on green and social finance, including the development of regulations and policy documents.
The Centre’s achievements include supporting the first green bond issue in Kazakhstan and Central Asia in August 2020, anchoring the definition of green finance in Kazakhstan’s new Environmental Code, developing Kazakhstan’s Green Taxonomy and introducing a mechanism for subsidizing green financial instruments through the Business Roadmap 2025.