ESG-Digest №3 by Mikhailov & Partners monthly issue Some of the hyperlinks lead to the full version of the article only in Russian July 2021 KEY EVENTS #ESG_global_agenda European Green Deal: Commission proposes transformation of EU economy and society to meet climate ambitions The European Commission adopted a package of proposals to make the EU's climate, energy, land use, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. A new Carbon Border Adjustment Mechanism will put a carbon price on imports of a targeted selection of products to ensure that ambitious climate action in Europe does not lead to "carbon leakage" More Vladimir Putin and John Kerry had a telephone conversation on climate issues Vladimir Putin claimed that Russia attaches great importance to achieving the goals of the Paris Agreement and stands for a depoliticized and professional dialogue in this area. Putin and Kerry exchanged their views on the prospects of bilateral environmental cooperation in the Arctic. Putin came up with a number of initiatives, including a proposal to establish Russian- American cooperation on collecting climate data using satellites. More Blockchain can help us beat climate change Smart contracts – fully traceable, transparent and irreversible self- executing contracts, running on blockchains – can contribute to the fight against climate change. They allow us to design globally accessible and fully automated incentive systems that can directly reward individuals, companies and governments for taking part in sustainable practices – such as regenerative agriculture, carbon offsets, crop insurance and more. More ESG-Digest, No. 3 2 KEY EVENTS DWS Launches ESG Infrastructure Debt Fund DWS, one of the largest asset managers in Europe, announced today the launch of the ESG Infrastructure Debt Fund (EIDF), focused on European sustainability-themed infrastructure sectors that contribute towards making society and economies more sustainable. The new fund will target sectors including renewable energy, digital, energy efficiency/utilities, clean mobility/transportation, and social infrastructure, and will avoid fossil fuel-related investments. More Credit Suisse, JPMorgan Partnering on Sustainable Nutrition Investment Strategy Credit Suisse announced today a partnership with J.P. Morgan Asset & Wealth Management aimed at developing a sustainable nutrition-focused investment strategy. The strategy will be available to Credit Suisse’s wealth management clients globally. Food systems responsible for 20% of global Greenhouse gas emissions and accounting for more than 90% while nearly 700 million people are still undernourished. More Four global banks to launch voluntary carbon offset market platform Britain’s NatWest Group (NWG.L), Canada’s Canadian Imperial Bank of Commerce (CM.TO), Australia’s National Australia Bank and Brazil’s Itaú Unibanco (ITUB4.SA) will next month launch a pilot platform for buying and selling voluntary carbon credits, they said on Wednesday, the latest sign of growing interest from the financial community in the burgeoning carbon offset market. More ESG-Digest, No. 3 3 KEY EVENTS Microsoft: empowering organizations on their path to net zero Microsoft Cloud for Sustainability is designed to help companies take control of their environmental initiatives, offering a set of comprehensive, integrated and automated insights for organizations to accelerate each stage of their sustainability journey. It can discover and connect to real-time data sources, accelerate data integration and reporting, provide accurate carbon accounting, measure performance against goals and enable intelligent insights for organizations to take more effective action. More FCA designed guiding of ESG and sustainable investment funds FCA have therefore developed a set of guiding principles, informed by broad stakeholder liaison and consumer research, to help firms apply our existing rules. The guiding principles are there to ensure that any ESG-related claims are clear and not misleading, both at the time of application and on an ongoing basis, so that consumers can make informed choices. More U.S. firms may have to disclose emissions by partners, suppliers -SEC The top U.S. financial regulator said on Wednesday it may require publicly traded companies to report on greenhouse gas emissions by suppliers and partners, as part of an expected climate risk disclosure rule. More ESG-Digest, No. 3 4 KEY EVENTS #green_funding The Russian Government has approved the goals and main directions of green financing Mikhail Mishustin signed an order defining the goals and main directions in green projects financing and initiatives in the field of sustainable development in Russia. The financing will be carried out at the expense of green or adaptive financial instruments (special bonds or loans). Among the priorities are reducing emissions of pollutants and greenhouse gases, improving the efficiency of resource use, and energy conservation. More Commission puts forward new strategy to make the EU's financial system more sustainable and proposes new European Green Bond Standard The European Commission has adopted a number of measures to increase its level of ambition on sustainable finance. First, the new Sustainable Finance Strategy sets out several initiatives to tackle climate change, and other environmental challenges, while increasing investment – and the inclusiveness of small and medium-sized enterprises (SMEs) – in the EU's transition towards a sustainable economy. More RusHydro enters the market of "green" renewable energy certificates I-REC RusHydro concluded an agreement with the Association of Energy Market Participants "Goal number Seven". The Association will certify RusHydro generating facilities, after which it will ensure the issuance of green I-REC certificates confirming the origin of energy produced by RusHydro power plants from renewable sources. More ESG-Digest, No. 3 5 KEY EVENTS #green_funding The Moscow Stock Exchange started trading in shares of the new "green" fund of Tinkoff Bank The value of the share is tied to the shares of global companies in the field of "green" economy. The emphasis was put on the environment: to form the fund, the bank focused on companies focused on the development of green technologies. The initial price of the share is 7 rubles, or about 10 cents. More Since the beginning of 2021, Sber has issued ESG loans for 52 billion rubles The portfolio of ESG loans of Sberbank has exceeded 52 billion rubles since the beginning of 2021, according to the presentation of the bank’s policy in the field of social and environmental responsibility, corporate governance and sustainable development. More The global issue of socially oriented bonds has increased by 2 times in six months In the first half of 2021, the issue of bonds for sustainable development (for social, environmental purposes, ESG bonds, etc.) amounted to $680 billion. This is 2 times more than in the same period last year. More ESG-Digest, No. 3 6 KEY EVENTS #ESG_research Demand for sustainable thematic funds grows The growth of thematic investing has been remarkable, expanding threefold between 2017 and 2020. More than three-quarters (76%) of investors’ main reason for using thematic funds is for exposure to sustainable and ESG solutions, with the leading preference being an overall focus on the UN SDGs (41%), followed by climate change solutions (21%) and renewable energy (18%). More Sustainable investments account for more than a third of global assets Sustainable investments total $35.3 trillion, or more than a third of all assets in five of the world's biggest markets, a report from the Global Sustainable Investment Alliance on Monday showed. Investors are increasingly driven by environmental, social and governance-related (ESG) factors that traditionally have not been captured in a company's balance sheet, but that can influence future returns. More Demand for ESG Investments Soars Emerging From COVID-19 Pandemic In a survey of Investopedia and Treehugger readers, a majority or 58% of respondents reported that their interest in ESG grew in 2020, and nearly a fifth or 19%, began incorporating ESG standards into their portfolios during that period. More than half or 62% of ESG investors surveyed took up investing in ESG-related products within the last five years. More than over two- thirds or 67% of respondents claim they plan to invest more in companies with strong ESG initiatives over the next five years. More ESG-Digest, No. 3 7 KEY EVENTS #ESG_regulatory_practice Putin signs the law on curbing greenhouse gas emissions Russian President Vladimir Putin signed the country’s first law on introduction of carbon reporting for companies and limitation of greenhouse gas emissions. The law encompasses the introduction of a model for regulating such emissions. It includes the introduction of obligatory carbon reporting. More Bank of Russia recommends that public joint-stock companies disclose information about ESG factors Public companies are encouraged to disclose information about how they take into account factors related to the impact on the environment, the social sphere and corporate governance (the ESG factors), as well as how they implement these factors into their business model and development strategy. The recommendations have been developed based on the international standards TCFD and GRI. More Companies-owners of Russian hydroelectric power plants ask to review the draft "green" taxonomy The Association