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UN Global Compact Russia

Events

NOWADAY SCOPE OF BUSINESS RESPONSIBILITY: TIME FOR ESG AND SDGS

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On February 17 and 18, 2021 the newspaper "Vedomosti. St. Petersburg Edition" with the support of the UN Global Compact Network Russia held two thematically interrelated online conferences -"Corporate Social Responsibility: Practices of Russian Regions" and "Sustainable Development and ESG Indices", which also focused on the Sustainable Development Goals. Public discussions on the modern understanding of corporate responsibility models have no longer been without the broad context of the SDGs, allowing us to speak of an unprecedented expansion of these responsibility boundaries, to which the Russian economy leaders are adapting rather quickly.

During the conferences, experts discussed topical issues of interaction between business with NGOs and authorities in the regions of operation, the formation of sustainable development ecosystem in Russia; they approached the ESG agenda and the current challenges from a practical point of view, noted active government involvement in the development of responsible finance principles, exchanged experience in implementing social programs, and talked about CSR trends in the context of the pandemic.

According to a general estimate, about 90% of companies are already reviewing CSR with consideration to the SDGs. Companies are involved in solving many problems and have become a reliable partner of the state in improving all levels of life support and wellbeing. Nevertheless, regional authorities expect that even more companies will be ready to take on conscious social and environmental responsibility. “When defining the priorities of its socially and environmentally oriented policy, business should bring its positions closer to that of local authorities and government bodies in the territory of a constituent entity of the Russian Federation,” said Irina Bakhtina, Deputy Chairperson of the Government of the Republic of Komi. “While we are bringing together the social development programs with which companies enter the territory for 2021, clear priorities are not particularly visible. Our task as a republican level of government is to look at both those wonderful projects that are being implemented by companies, and those rather pragmatic and down-to-earth requests and aspirations of the local population, who talk about roads, kindergartens, overhaul, and to find the right balance.

Besides, business noted a general turn from methodology to practice among the main trends of 2020. “Perhaps, largely due to the ESG agenda development, the 2020 pandemic has brought us closer to the needs of the regions and has become an additional catalyst for their growth. And if we look at Russian big business today, we will see that attention is now shifted from the federal center to the regional agenda,” said Vera Kurochkina, Deputy CEO: Public Relations at En+ Group.

Conference experts appreciated many other advantages and importance of introducing ESG culture into the business practice of the Russian business community, relying, inter alia, on the facts of this segment activation in Russia and the growth in number of retail ESG investors on Moscow Exchange.

The ESG agenda has taken a certain place in the practice of government, business and financial institutions. The main driver of increasing the ESG approach significance at present is the need to adapt to climate change, which is considered by more than half the world's countries having already adopted carbon neutrality targets. Among the changes that are taking place in the investment and regulatory environment, it is important to note the presence of ESG policies in companies, the introduction of more rigid requirements by both regulators and the largest investors, a shift from voluntary to mandatory ESG standards of non-financial reporting. “Generally, in January-November 2020, $288 billion was invested worldwide in assets with clearly defined ESG parameters – it’s almost 100% growth compared to 2019. This is the beginning of a long and rapidly unfolding transition to a new economic model,” said Tatyana Zavyalova, Senior Vice President for ESG at Sberbank.

In general, over the past two years in Russia, greater focus has been being noticeably placed on the practical aspects of corporate responsibility in the context of sustainable development.

“Business has come a long way of realizing the specific character of this agenda, and its motivation looks very different from that a few years ago, commercial strategies and sustainable development strategies are increasingly converging. Companies have already reached the stage of public commitments by segments, in such areas as climate and human rights. This includes the level of international obligations, at which they learn quite successfully to report correctly on their involvement and to engage stakeholders and the international community on these complex topics,” - said Marina Vashukova, Executive Director of the Association “National Network of the Global Compact. “Nevertheless, according to the UN and the UN Global Compact, the progress of business on the SDGs and on the main objectives of the sustainable development concept worldwide is insufficient, business goals are not ambitious, and the positive impact is not achieved on the required scale.”

The UN Global Compact calls on business to measure not only its positive, but also its negative impact, to focus not on gradual, but on more noticeable and rapid progress, and to set major and ambitious goals for this. There is also a need to foster the development of a vibrant operating environment that drives action on the SDGs; spreads or mitigates both the risks and investments needed to ensure fundamental sustainable change; supports increased demand of customers and consumers by solving among others the problem of the high cost of eco-friendly products; generates regulatory and market signals for companies to respond to, including setting financial priorities related to the SDGs; harmonizes regulation to level the playing ground and to encourage innovations.


Clear metrics that measure companies’ contribution to individual SDGs at global and sectoral levels are important and much-needed (standardized indicators and reporting, standardized metrics to track progress towards achieving priority SDGs and to support impact-based reporting, including a unified system for assessing financial investments impact on the SDGs, etc.).

The UNGC also calls for the appreciation and development of the potential for cooperation at all levels within and between sectors, including public-private partnerships; of a supportive policy environment that encourages clean, socially inclusive, and healthy work processes; as well as of digitalization and improved traceability of all the processes and results to enable value chain transparency and to increase producers’ responsibility, as well as to integrate green finance and digital services, etc.

The offairs are available on Vedomosti.Conferences website (in Russian only):

Corporate Social Responsibility: Practices of Russian Regions

Sustainable Development and ESG Indices 



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