Russian banks to develop national ESG principles and support green taxonomy

Proposals from national banking association will form the basis for future regulations

Russian banks have agreed to jointly develop national ESG principles for banking, and will set up an implementation programme with proposals for ESG banking regulation, feedback to a draft ‘green’ taxonomy and suggested introductory measures to promote ESG integration among lenders.

The announcement was made by the Association of Russian Banks (ARB), a federal association whose 300 or so members make up the bulk of Russia’s banking system, after the first meeting of its ESG working group last Friday. 

Established in September this year, the working group is tasked to “prepare proposals for the formation of a legal framework for promoting the principles of ESG banking in the Russian market”. 

The working group, which is chaired by Professor Vasily Vasilievich Vysokov, Chairman of the Center-invest Bank and a sustainable finance academic, is due to present an update of the group’s work to ARB directors in the fourth quarter of this year.

Commenting on the announcement, Vysokov said: “We have completed the initial task. We have created a roadmap for promoting ESG banking, and a platform for interaction with stakeholders. ESG banking is a constant search for creative solutions in a triangle: scientific and technical results, social interests, regulatory requirements. There are not and cannot be unambiguous solutions; it is necessary to accumulate practice, to replicate the best. The best world practice is not always foreign practice, it is also our national experience” 

The working group has indicated that all proposals and comments from member banks are to be consolidated and passed on to VEB.RF, a Russian development bank which is overseeing the development of a national green finance taxonomy, “in the near future”.

The Russian green taxonomy, currently in draft form, was released for public feedback by VEB.RF earlier this summer. 

Read RI’s interview with VEB.RF Vice Chairman, Alexey Miroshnichenko here.

The move from Russian banks comes soon after the EU-convened International Platform on Sustainable Finance announced efforts to harmonise the sustainable finance taxonomies currently in use by member countries. Notably, a number of countries who are developing their own national taxonomies – including Malaysia, Russia and Japan – are not members of the Platform.