National ESG Alliance

Currently in Russia there are no metrics and methodologies that would allow government authorities and society to measure and evaluate how “green” business contributes not only to the 17 UN Sustainable Development Goals, but also to the country’s national goals. That is why the National ESG Alliance, together with partners from Kept (former KPMG), initiated the development of the ESG Standard (ESG Tool), which will help to demonstrate and evaluate the contribution of Russian companies to achieving the National Development Goals of the Russian Federation.

The ESG Tool methodology will include a list of indicators for assessing companies and will be based on both international standards and national regulatory recommendations. Development of the indicators will be preceded by serious analytical work, covering not only the national goals of the Russian Federation, but also federal and national projects. It is necessary to analyze not only the relevance of the legislation, but also the existing requirements for the disclosure of ESG information by companies.

As an outcome, the market will be offered with a user-friendly and practical tool that will allow society and government authorities to determine and evaluate the contribution of Russian companies to achieving the national goals of the Russian Federation, and for businesses to effectively adjust their own development strategies.

ESG-disclosure.ru is the first public service in Russia for comparing key indicators of non-financial reporting of Russian companies. The National ESG Alliance and the Interfax Group, which is an expert in creating systems for effective risk management and disclosure of corporate information, presented a ready-made tool for working with non-financial information. The website covers data on more than 600 companies that disclose non-financial information. For each company, up to 60 ESG parameters are available, reflecting the environmental (E) and social (S) responsibility of the business, and the quality of corporate governance (G) in the company.

The availability of standardized data makes it possible not only to compare the effects of social and environmental initiatives of companies in different industries, but also to evaluate the contribution of business to achieving national goals. The service is useful for both beginners and advanced users of non-financial data. It is valuable, first of all, because it makes non-financial indicators of companies accessible, transparent, comparable and, as a result, most beneficial for market participants, creating common benchmarks which can guide all relevant stakeholders.

The  Atlas of the ESG Ecosystem is an interactive platform about the participants of the sustainable development environment in Russia, their activities and relevance to the implementation of environmental, social and corporate governance objectives in the interests of people.

The Atlas is designed for a wide range of stakeholders with varying levels of understanding of the sustainability agenda. For the beginners, the Atlas can provide a general overview of the concepts, principles and content of sustainable development. For more advanced categories it presents a holistic framework (map) of the domestic ESG infrastructure, including the composition of roles and specific infrastructure participants and provides an opportunity to identify potential counterparts for building cooperation and partnerships.

The Atlas development was based on a crowdsourcing approach to collect information about each role. Leading Russian experts in the field of sustainable development and ESG participated in this process.

In Russia, more than 26 million people live in cities with populations of less than 100,000 people. The Quality of Life Index of the territories where ESG Alliance companies operate  will cover 119 such cities from 44 regions of the Russian Federation and will provide the full picture of the quality of life in cities throughout the country.

The Index is based on the City Life Index developed by VEB.RF and the Sustainable Living City Index of Rusal, the world’s largest aluminium producer and one of the Alliance’s member companies. The Index is operating on a separate digital platform and will allow municipalities, companies and citizens to form a comprehensive vision of the quality of life in medium and small industrial cities of Russia. For companies it is a useful tool to assess the effectiveness of their social investments strategies in the territories where they operate and identify priority areas of development.

The interactive map of climate initiatives is based on a geographic information system and displays existing climate projects of Russian companies at any stage of implementation, giving the user an opportunity to examine all available information on them, filter them by various parameters (currently up to 11) and compare them with each other.

The map is an open database, and any company implementing a climate project has an opportunity to add its project to the map and present it to the market. The map is intended to become a kind of “display” of best practices, giving the market the most complete understanding of the range of existing business initiatives aimed at achieving climate goals. Such a project will stimulate growth in the number and quality of climate projects, encourage companies not only to disclose and promote information about such projects, but also to share experience on implementing climate initiatives.

Within the project, the companies of the Alliance explore a possibility of developing a cross-cutting methodology, which, with further industry specifics, can be used by large companies to evaluate their suppliers. This methodology will not only harmonize approaches to assessing suppliers, but will also provide recommendations for supply chain participants based on the experience of the ESG Alliance companies. As one of the outcomes of the project, the Alliance may form a registry of “responsible suppliers” who are assessed with the use of the methodology recommended by the Alliance.

The ESG Alliance and Kept have prepared methodological recommendations for assessing the risks associated with climate change. The document, designed for the broad market, is a universal guide relevant to both non-financial and financial sectors. It outlines the main approaches to identification, qualitative and quantitative assessment of climate risks, as well as to development and update of risk management measures.