ESG with a social bias

The Global Climate Initiative of Russia (CGI Russia), together with MGIMO, presented a study of current risks and new development opportunities in the context of ESG – it is based on a study of the opinions of managers of large Russian companies throughout 2022. The work of CGI shows that immediately after the start of the military operation of the Russian Federation in Ukraine, top management experienced significant skepticism regarding the ESG agenda – however, as the business adapted to new conditions, optimism in its perception returned, and sometimes even exceeded the pre-crisis one: ecology, social projects and management initiatives are the context in which the Russian Federation intends to develop in the same direction as the rest of the world, while the social responsibility of business is also stimulated by a shortage of personnel in the Russian labor market.

Since the beginning of the year, CGI has conducted 40 surveys (in April, June and October) in 31 large Russian companies in ten sectors of the economy, including metallurgy, the financial sector, consulting and state corporations. The surveys of top managers themselves are not comparable to each other (both the wording of the questions and their focus differ), however, according to their results, it is possible to track changes in the attitude of organizations to the ESG agenda as their management becomes aware of the new conditions of sanctions isolation.

Back in April, Russian companies believed that the importance of ESG would decrease in the short term (46%), and the external environment for its development was “negative” (46%) or “moderately negative” (46%) – in general, 83% of respondents expected a slowdown in implementation climate projects and expected that the social agenda, although it would become more relevant, would be tied to the development of the situation. Data for October suggests that, although the development of ESG projects in companies has slowed down, the importance of social practices has grown. The attitude of large Russian companies to the ESG agenda has changed over the past six months from “disbelief in maintaining the ESG strategy in the short term” to “intention to actively develop the direction, despite the difficulties” – this is largely due to the position of the Russian leadership regarding ESG: on the November climate At the UN summit, Ruslan Edelgeriev, the “climate” adviser to the president, urged not to politicize the topic and insisted on maintaining the country’s role on the world agenda (see Kommersant on November 8).

“If at the beginning of spring many business representatives chose the latter from the “hit, run, freeze”, now more than ever they are actively involved in social projects. For companies that interact with foreign organizations, the question of the importance of ESG is not at all – it is clear that these are international standards that must be adhered to, ”confirms the trend, a member of the presidium of the board of Opora Rossii, head of the committee on ecology and sustainable development Yana Kudashkina. Preserving ESG strategies is more of a strategic decision than a tactical one, she says: “Everyone wants to plan their next steps in such a way that they feel the ground under their feet.”

A part of the CGI report is devoted to topical ESG risks for organizations: these are, in particular, the reduction of employee bonuses by companies and the deterioration in the quality of corporate governance associated with the departure of foreign independent directors, as well as the risks of environmental disasters. As measures to prevent them, the authors list additional social support for employees and environmental insurance.

It should be noted that the interest of companies in the social component of ESG can, in particular, be explained by its coincidence with the majority of currently rational personnel strategies. Taking into account the departure of part of the population after February 24 and September 21 and the mobilization of part of working-age men, personnel difficulties for large industrial companies, which are the main conductors of the ESG agenda, will be significant, and increasing or at least maintaining investment in personnel is justified and much more traditional business strategy. However, taking into account socio-political changes, many companies have already become aware of themselves as responsible for their employees to a much greater extent than before, as evidenced, among other things, by the growth in demand for psychological support services in the first six months of this year (for more details, see “ Kommersant, July 9).

Kristina Borovikova, Anastasia Manuylova