ESG in Russia: news review. Autumn 2021

Latest ESG news in the Russian equity market

 Rosneft is recognised as the global sustainability leader in its field

  • Rosneft became the first oil and gas company in Russia to achieve the UN’s Global Compact LEAD status
  • The recognition confirms Rosneft as company that pursues sustainable economic development while maintaining a minimal environmental footprint
  • As of 2021, 37 companies around the globe have been awarded this status, of which only four are oil and gas companies.

 Russian government announces budget for environmental initiatives

  • Over the next two years, Russia has budgeted to invest USD 9 billion (RUB 681 billion) in major ecological projects
  • An additional USD 3 billion (RUB 198 billion) will be used for financing 10 federal environmental initiatives including ‘Clean country’ and ‘Clean air’, the development of national parks, protection of forests and regulation of hunting
  • Most of the additional funds, some USD 1 billion (RUB 74 billion), will be invested in the ‘Clean country’ project.

 Nornickel reports on its “CLEAN NORILSK” programme

  • According to Nornickel’s latest report, during summer 2021 the company cleaned one million square meters of land in the industrial area of Norilsk city
  • The company bought 121 cleaning vehicles. Overall, specialist cleaning equipment investment totalled USD 46 million (RUB 3.4 billion)
  • In all, the company cleaned up 37 000 tonnes of scrap metal and
    247 000 tonnes of construction waste.

 Severstal bets on renewables

  • Severstal is increasing the renewables portion of its energy portfolio. To do so, the company has decided to increase the proportion of heat generation from biofuels at its iron ore processing plant, Karelsky Okatysh
  • In 2020, the energy consumed by Karelsky Okatysh totalled some 264 532 Giga calories (Gcal)/year. Of that, 1.2% (3 060 Gcal) came from biofuel and the rest from fuel oil
  • The company plans to increase this share of biofuel from 1.2% to 13.5% by 2026
  • The project should lead to a significant reduction in CO2 emissions.

Sber leads ESG ranking

  • Banking company, Sber, took first place in an environmental, social and governance (ESG) ranking financial sector organisations in Russia
  • The ranking was undertaken by the National Ranking Agency and included companies from insurance, banking, financial and infrastructure institutions
  • The rating agency assessed companies based on 68 indicators that show how well they integrate ESG factors into their business
  • The ranking system scored participants in five groups based on their sustainable development principles implementation, from basic to advanced. Sber was recognised as the highest ranked in the advanced group.

Polymetal maintains its leadership in the sustainability indices

  • Polymetal has once again been recognised as a leader for its sustainability performance, following the 2021 S&P Global assessment, and maintains its place in the Dow Jones Sustainability indices (DJSI)
  • The company outscored 96% of the participants in the global metals and mining sector.
  • This is the second consecutive year that Polymetal has been included in the DJSI World index, and the fourth year in a row in the DJSI Emerging Markets index
  • Polymetal has also received an ESG rating of 15.9 from the Sustainalytics rating agency, indicating that the company is at low risk of being damaged financially due to ESG factors.

 

Sources: Press releases, Vedomosti, TKB Investment Partners (JSC); December 2021

Authors: Egor Kiselev, PhD, Head of International Business & Investment Marketing; Marina Tsutskiridze, Investment Specialist; Aleksandra Kuznetsova, Investment Specialist.

The above-mentioned companies are for illustrative purpose only, are not intended as solicitation of the purchase of such securities, and does not constitute any investment advice or recommendation.

Previous Story

Russian Equities Weekly November 29 – December 3, 2021: In anticipation of easing geopolitical tensions

Next Story

Russian Equities Weekly December 6–10, 2021: Under sanctions fears pressure