Central Bank of Russia Urges for Companies’ ESG Agendas

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On Monday, Russia’s central bank encouraged domestic firms to publish their environmental, social, and governance (ESG) agendas and assess related risks, saying that failing to recognize ESG concerns in a timely manner might result in losses.

Companies that do well on a number of challenges from climate change to boardroom diversity are viewed as better long-term investments than rivals that underperform in these areas, which is driving demand for ESG assets.

The central bank stated that Russian firms should “recommend” that they publish their ESG compliance and analyze risks connected to the global ESG agenda annually, either in their yearly¬†reports or in any other way.

Other central banks across the globe, like Brazil’s, which has been praised by Fitch for its ESG efforts, are looking at the possible dangers to financial stability posed by failing to comply with environmental sustainability problems.

Russia, one of the world’s largest oil and gas producers, wants its overall net carbon dioxide emissions to be lower than the EU’s throughout the following¬†30 years, and the Pacific island of Sakhalin, which is rich in fossil fuels, to be carbon neutral by 2025.

After a number of local firms used the technique, Russia is considering releasing state ‘green bonds,’ a rapidly developing category of fixed-income securities that raise funds for projects with environmental advantages.

Separately, the Russian central bank stated in emailed remarks that suggestions may become obligations in the future, once global ESG disclosure guidelines are established. It did not specify when this may occur.