The government is considering incentives with the Central Bank to promote ESG finance in Russia within the scope of the green project taxonomy (criteria for assigning projects to this category). According to Deputy Minister of Economic Development Ilya Torosov, the authorities want to establish a green finance market within three years, which would need public assistance, Vedomosti writes.
In May, the Ministry of Economic Development and Trade produced a draft resolution authorizing a bundle of papers and financial instruments for starting sustainable development initiatives in Russia.
The package contains, among other things, criteria for sustainable development initiatives, recommendations for greening financial products, and a technique for selecting verifiers.
A green project, according to the taxonomy, should satisfy the technical indicators of the best available technologies and have a beneficial influence on the environment while not having negative side effects on the environment.
According to Torosov, the following incentives are being discussed to stimulate ESG financing: easing Central Bank regulation, zeroing the tax rate on the income of green bonds for three years (currently, the income on coupons of all bonds is taxed at a rate of 13%), and actual compensation for the verification of green projects of up to 1 million rub.
According to Torosov, not everyone in the government agrees with the suggested approach: some believe that green finance is growing without governmental assistance all over the globe. The decision on benefits is expected to be made before the end of the year.
A spokesperson from the Central Bank informed Vedomosti that a roadmap containing measures to encourage ESG finance is being developed. “In this scenario, the important role is that of the Ministry of Finance.”
The Bank of Russia agrees with the Ministry of Economic Development and Trade that, at the outset of establishing a sustainable development finance market, the state should demonstrate its interest in building and growing such a market, according to the source. According to the Bank of Russia, a significant number of nations are implementing government assistance programs that are producing real benefits.
According to Ivan Chebeskov, head of the Ministry of Finance’s financial policy department, the growth of ESG finance does not need encouragement. He made the remarks during the XVIII International Banking Forum’s round table discussion “ESG-banking: Today and Tomorrow,” which was also attended by officials from the Central Bank, the Ministry of Economic Development, and banks.
