Moscow exchange creates sustainability segment with government support

The Moscow Exchange is updating its listing rules to create a ‘Sustainability Sector’ for financing projects in the fields of environmental and social sustainability.

The new sector will consist of three independent segments: green bonds, social bonds and “national projects” — and the initiative has government backing.

Deputy Minister of Economic Development Ilya Torosov said: “We support Moscow Exchange’s initiative with our efforts to provide companies and banks raising funds for environmental and social projects with further preferences from the Russian government and the Bank of Russia similar to those that small- and medium-sized enterprises (SMEs) gain on the Innovation and Investment Market.”

Exchange CEO Yury Denisov said the new sector would promote “appropriate positioning of special-purpose issuers and investors and improve financing options for companies working on projects aimed at environmental protection and social importance”.

The segments for green and social bonds are for Russian and international securities that align with the International Capital Market Association’s Green Bond Principles or those of the Climate Bonds Initiative.

The exchange said: “Whether a bond meets these requirements requires confirmation from an external review provider. This corresponds with the concept currently developed for green, social and sustainability bonds by the Russian Ministry of Economic Development, relevant government agencies, the Bank of Russia and business community.“The concept will provide tax incentives for issuers and financial support from the Bank of Russia for investors (including provisioning benefits).”

The ‘national projects’ segment will include Russian and international bonds that meet the objectives of national projects such as “Environment”, “Demography” and “Public Health”, and federal initiatives including “The Adoption of Best Available Technologies”.

Earlier this year the exchange joined the United Nations Sustainable Stock Exchanges (SSE) initiative; in March, MOEX cooperated with the Russian Union of Industrialists and Entrepreneurs (RSPP) to begin calculating sustainability equity indices – the MOEX–RSPP Responsibility and Transparency Index and the MOEX–RSPP Sustainability Vector Index.

The news coincides with the announcement that the Warsaw Stock Exchange (GPW) will begin publishing a new index called WIG–ESG comprising blue chip stocks adjusted for ESG ratings provided by Sustainalytics.

The new measure will be the underlying of a passive fund managed by NN Investment Partners TFI.

“The first edition of WIG–ESG Index, primarily aims at drawing the attention of companies and potential investors to ESG criteria in the investment decision making process,” said GPW management Board Member Izabela Olszewska.