ESG-Digest №4 by Mikhailov & Partners Monthly Issue

ESG-Digest №4 by Mikhailov & Partners monthly issue

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August 2021

KEY EVENTS

#ESG_global_agenda

Greening the sector, attracting and managing finance to operate a sustainable shift for the planet The UN Climate Change Secretariat has published a climate action pathway for finance which sets out a roadmap for financial markets and the real economy to align with a sustainable and resilient net- zero emissions future. More

Investors overseeing $14 trln call for vote on company climate plans Investors managing $14 trillion in assets on Friday said they wanted all companies to set a climate transition plan and allow them to vote on it, ahead of next year's season for annual general meetings. The 53 investors, including UBS Asset Management, DWS and Legal & General Investment Management, said they were setting new expectations for companies as more firms publish plans to transition to a low-carbon economy.

Tokyo olympics, the greenest games ever? The Tokyo Olympic Games have been dubbed the greenest Games to date. Despite some criticism levelled against the claims of their eco-friendly nature, it is notable that the Tokyo Olympics Organising Committee has made significant strides to minimise the Games' carbon footprint. However, the long-term sustainability of the Games, as well as the possibility of sustaining, duplicating or improving upon the eco-friendly efforts made by the Organising Committee of the 2021 Games, remains to be seen. More

ESG-Digest, No. 2

KEY EVENTS

Big oil squeezes renewable energy profits as commodities rally The world’s largest oil companies are bidding up prices for renewable energy projects, squeezing profits from wind and solar farms just as they’re needed most to avoid climate catastrophe. Companies from BP Plc to TotalEnergies SE are paying top dollar for clean energy assets as they transition away from fossil fuels, boosting competition and compressing margins for developers. Wind giants Orsted A/S and Vestas Wind Systems A/S reported lower returns in the first quarter, while turbine maker Siemens Gamesa Renewable Energy SA lost money as materials rallied. More

Kazakhstan working on national carbon tax According to Nurlan Nagaev, the country is proactively working on development of a 2050 low-carbon development concept to be approved shortly. "We further consider introduction of a domestic carbon tax on consumption of energy resources, import and export carbon duty and creation of the Carbon Fund," the Minister said, cited by the press service of the Energy Ministry. More

Decarbonisation and shipping: EU Emissions Trading Scheme The current proposal for adding maritime transport to the EU ETS is more detailed than the previous draft and does not yet form part of EU Law. It is intended to take effect from 2023 (which is one year later than the previous implementation date) and proposes to gradually introduce the requirement to surrender allowances over a four-year period.

ESG-Digest, No. 3

KEY EVENTS

#green_funding

Bonuses for the issue of green bonds The head of the Climate Bonds Initiative, Sean Kidney, shared a graph on his LinkedIn page that demonstrates the stable price advantage of green bonds on the example of Germany (Green Bund 2050), even with almost zero rates. More

Google parent alphabet allocates $3.5 billion sustainability bond proceeds The report refers to Alphabet’s issuance last year of $5.75 billion in sustainability bonds, the largest ever corporate sustainability or green bond issue. According to Alphabet’s Sustainability Bond Framework, eligible uses of proceeds from the offering included eight ‘green’ and ‘social’ categories, namely energy efficiency, clean energy, green buildings, clean transportation, circular economy and design, affordable housing, commitment to racial equity, and support for small business and COVID-19 response. More #ESG_research

The risks of a rapid transition to "green" energy have not been fully assessed Forcing plans to turn the Earth into a blooming garden without the smoke of power plant pipes and the smell of gasoline can turn into a frightening disaster. Such a scenario can be avoided if we approach the environmental agenda not from a political or propaganda position, but from the point of view of science and economics. More

ESG-Digest, No. 4

KEY EVENTS

Russian Greenpeace presented the “Rating of the openness of Russian regions to the “Green Deal” The document analyzes regional green initiatives in the Russian Federation. This is Russia's first analysis of the implementation of low-carbon initiatives intended to help combat the climate crisis. To compile it, regional authorities answered the questions and commented on their plans and actions.

Climate change: IPCC report is 'code red for humanity' The sober assessment of our planet's future has been delivered by the UN's Intergovernmental Panel on Climate Change (IPCC), a group of scientists whose findings are endorsed by the world's governments. Their report is the first major review of the science of climate change since 2013. Its release comes less than three months before a key climate summit in Glasgow known as COP26. The report "is a code red for humanity", says the UN chief.

#ESG_regulatory_practice

Head of the Russian Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing (Rospotrebnadzor) called corporations’ environmental reports fake Svetlana Radionova said that auditors and rating agencies, when taking into account the ESG agenda, should be guided not only by their companies’ programmes. First of all, the requirements of the Government should be taken into account.

More ESG-Digest, No. 4 5

KEY EVENTS

Victoria Abramchenko took part in the final board of the Federal Service for Supervision of Natural Resources Deputy Prime Minister Viktoria Abramchenko said that in 1.5 years Rosprirodnadzor conducted almost 10 thousand scheduled and unscheduled inspections, which revealed more than 20 thousand violations, and the total amount of fines imposed amounted to almost 1 billion rubles.

The Ministry of Economic Development proposes to introduce fines for climate regulation violations The Ministry of Economic Development has developed a system of penalties for the largest emitters of greenhouse gas emissions - the so-called regulated organizations, which will fall under the new climate legislation. The ministry proposes to fine companies for disruption of the procedure for filing reports on greenhouse gas emissions, for distorting information in documents. More

The EAEU will create a working group on carbon regulation On August 18, in Nur-Sultan, the Minister of Economic Development of Russia Maxim Reshetnikov met with representatives of the government of Kazakhstan. They discussed investment and trade cooperation, the climate agenda and carbon regulation. The initiative to create a high-level working group within the EAEU on accounting for greenhouse gas emissions and removals and standards for climate projects, proposed by Maxim Reshetnikov, was supported by colleagues from Kazakhstan. More

ESG-Digest, No. 4 6

KEY EVENTS

#ESG_appointments

The direction of information policy in the field of ecology and climate in the Department of Strategic Communications of RUSAL is headed by Anton Niskin Anton Niskin held executive positions in a number of leading PR agencies and headed the Project Office of the TASS news agency that he created. Anton Niskin graduated from the Geography Faculty of Lomonosov Moscow State University with a degree in Meteorology and Climatology.

#ESG_corporate sector

Battery giant LG energy solution launches ESG vision EV battery and grid-scale energy storage solutions company LG Energy Solution (LGES), announced the launch of “We CHARGE toward a better future”, its new ESG vision, with a broad series of sustainability goals encompassing carbon neutrality, management diversity, and circular economy. The company’s new ESG vision is focused on 7 core areas, highlighted by the name, CHARGE: Climate action and circular economy, Human value management, Advanced economic history, Responsible and impactful business, Good governance, and ESG Disclosure & Communication. More

Recycled components and plastic-free packaging: Samsung powers up 2025 sustainability plan Firm launches new Galaxy for the Planet sustainability platform in bid to help deliver on tech giant's environmental goals. All Samsung phones are to feature recycled material from 2025, the company has pledged as part of a new set of wide-ranging sustainability targets. New targets include eliminating the use of plastic packaging, achieving zero waste, and reducing standby power consumption of all smartphone chargers to less than 0.005W by 2025. More ESG-Digest, No. 4 7

KEY EVENTS

How HP Inc. uses sustainability to drive commercial sales Tucked into HP Inc.’s Sustainable Impact Report published in May is a factoid more climate-conscious businesses should monitor and report on — the amount of sales revenue that is directly attributable to environmental, social and governance considerations. In the case of HP, the 2020 fiscal year was the second consecutive year in which the company generated more than $1 billion in commercial business tied directly to those considerations.

#ESG_Russia

RUSAL has been listed among the top 100 Best Emerging Markets performers by Vigeo Eiris UC RUSAL, one of the leading global aluminium producers, has been listed among the top 100 Best Emerging Markets performers by Vigeo Eiris. The companies that are included in the list have received the highest scores within their sector in the following areas: human rights, environmental protection, human capital, corporate governance, business ethics and contributions to social and economic development in the areas in which they operate. More

Gazprombank's investments in ESG projects exceeded 700 billion rubles by the end of 2020 At the end of 2020, Gazprombank's investments in ESG projects amounted to 700 billion rubles. The information is presented in the bank's report on its activities in the field of sustainable development (ESG) for 2020. The published report complies with the international reporting standards GRI and has passed an independent external assurance for compliance with these standards. More

ESG-Digest, No. 4 8

KEY EVENTS

ALROSA joins WEF ESG common metrics initiative ALROSA is the first Russian company to join the World Economic Forum’s Stakeholder Capitalism Metrics initiative and adopt a formal commitment to implement the new ESG reporting standard. Sergey Ivanov, ALROSA’s CEO and Chairman of the Executive Committee, said: “Being a partner of WEF, ALROSA adheres to the highest international ethical business standards and constantly seeks to improve the quality of information disclosure on sustainability aspects.”

VEB.RF memorandum includes social entrepreneurship and ESG The memorandum on the financial policy of the state development corporation VEB.RF, signed by Prime Minister Mikhail Mishustin, fixes its role as a driver of socially responsible entrepreneurship in Russia. This is compliant with the Federal Law "On the state development corporation", the corporation said in a statement.

Three companies from Russia are in the top 100 Moody’s ESG rating ALROSA, Rosneft and Rusal were included in the top 100 companies in the ESG rating of the Moody’s agency This was reported on the website of the rating agency Moody’s. The compilers of the rating assessed the performance of companies according to 38 criteria, which, in turn, are combined into six key ESG areas: environmental protection, respect for human rights, relationships with personnel, contribution to the well-being of local communities, business principles and corporate governance efficiency. More

ESG-Digest, No. 4 9

KEY EVENTS

MKB publishes a certified ESG report for 2020 The report was certified by the international auditing company Deloitte. The report was prepared in accordance with GRI standards. The key results of MKB for 2020 are as follows: the ESG-linked loan from the LBBW, the organization of the first perpetual green bonds issue and social Eurobonds in the history of the Russian market, and the launch of a structural ESG transformation process.

Experts reassessed losses for Russia from the EU carbon tax According to BCG estimates, the annual costs of importers of Russian products from the European "Border Carbon Adjustment Mechanism" (CBAM) by 2030 could reach $ 3.5-6.3 billion. A year ago, the additional burden on the supply of Russian goods to the EU was estimated at $ 3 - 4.8 billion. The volume of Russian exports has more than halved due to the CBAM, as the European Commission's project ultimately did not include oil, gas, coal, non-ferrous metals, paper and glass production.

Concept for the development of hydrogen energy in Russia The government of the Russian Federation adopted its Concept for the development of hydrogen energy in Russia. The Concept testifies to the growing awareness in the country of the inevitability of the ongoing global energy transformation and the need to counteract the marginalisation of Russia’s role in the global energy market. The Russian Federation’s strategic goal for the development of hydrogen energy is to make the country one of the leading producers and exporters of this energy carrier.

ESG-Digest, No. 4 10

KEY EVENTS

The Russian Federation may allow the use of personal packaging of consumers The Consumers’ Union proposed to return consumer containers – for example, milk cans – into circulation. The organization sent such an initiative to Deputy Prime Minister Victoria Abramchenko. Izvestia got acquainted with the document. Earlier, the Ministry of Natural Resources proposed to increase the rate of packaging recycling from the current 23% to 100% by 2022, the union recalled.

New ESG rating from RAEX Europe

The independent European rating agency RAEX-Europe publishes an updated ESG ranking of Russian companies. The August issue covered 140 companies, which is five more than in the July issue. The three leaders have not changed: Polymetal, SIBUR, Lukoil. More

ESG-Digest, No. 4 11

Contacts: Alexander Briskin Director of Corporate Communications and ESG Projects +7 (985) 265-07-22 [email protected]

Mikhailov & Partners is the leading communications company in Russia. We advise leaders of Russian and international business. Our team helps to build reputations,develop relationships and implement projects in all areas of communication, including ESG