Позитивные изменения. Том 4, №1 (2024). Positive changes. Volume 4, Issue 1 (2024). Редакция журнала «Позитивные изменения»

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the implementation by local authorities being highly contingent upon regional specificity and the engagement of senior officials.

      Based on a 2023 study by hh.ru and the ecological service “Save the Forest,” it appears that the majority of Russia’s economic sectors have decreased the salaries of ESG specialists and scaled back their recruitment.[22]

      The reality is, despite the ratification of UN SDGs by Russia, the national ESG agenda as a basis for financial stability – upon which large investments were forecasted and decisions for significant international financial dealings were made – has seen substantial shifts over the past couple of years. Consequently, the nation’s leading figures have repeatedly emphasized the necessity of creating a bespoke, local ESG agenda.

      By mid-2023, Russia had established the conditions necessary for reevaluating and forming a novel concept, one that would naturally incorporate a human-centered, social agenda addressing the development of transparency and engagement with society, inclusivity, support of volunteer and other civic initiatives, and the overall contribution to and assessment of positive social changes. This approach rests on a broader comprehension of sustainable development, not restricted to a narrow set of ESG benchmarks. Let us now consider a number of recent initiatives that have been introduced, fostering the development of the ESG discourse in Russia.

METHODOLOGICAL RECOMMENDATIONS FOR SUSTAINABLE DEVELOPMENT REPORTING

      In November 2023, the Ministry of Economic Development of the Russian Federation published the document “On Approval of Methodological Recommendations for the Preparation of Sustainable Development Reporting.”[23] It refers to that very Reporting Standard that, at the moment of publishing, was still in the phase of development.

      At the WeAreTogether forum during the “Russia” exhibition in December 2023, experts discussed this approach, suggesting significant refinements for the forthcoming iteration of the standard. This discussion was held within the framework of the strategic session titled “Sustainability Reporting Standard as a tool for fostering volunteerism and social engagement among residents, businesses, and territories.”[24]

      Irina Filippova, the Deputy Director of the Department of Corporate Regulation at the Russian Ministry of Economic Development and Trade, stated in the discourse that the issue of standardizing the assessment of the SDG achievement was initially raised in the 2017 development concept of public non-financial reporting, with the Ministry actively working on it following government directives. This subject was revisited in April last year during the RSPP Congress, leading to a directive issued by the President of the Russian Federation. The culmination of this work was the methodological guidelines developed by the Russian Ministry of Economic Development, approved and then published on the ministry’s website.

      “I want to highlight that this is a discretionary, advisory document,” said Irina Filippova. “We consider it a fundamental set of guidelines that enables companies not yet engaged in sustainability reporting processes to exhibit their work results.”

      The document contains recommendations for organizing stakeholder engagement in report preparation, and for revealing historical data for at least the past three years to understand the development dynamics of the company. Additionally, to prevent dishonest practices and errors, it is advised that reports be professionally verified – through auditing firms (according to the existing draft of the Sustainable Development Reporting Standard available to the editorial board).

      The set of indicators was compiled from an analysis of various reporting standards of companies, with the United Nation’s UNCTAD standards on economic, social, governance, and environmental aspects being the baseline at the initial stage.[25]

      “In the guidelines, we pinpointed the metrics that warrant attention and endeavored to precisely define how to calculate them and their sources,” Filippova says. “For organizations to compare against one another, it’s critical that they consistently disclose and compute these metrics year over year using a uniform approach.”

      The social indicators spectrum now includes factors related to both internal stakeholders, like employees and their families, and external social effects, such as the organization’s involvement in philanthropy. When discussing corporate social responsibility, the economic indicators also encompass those related to sustainable investing.

      Furthermore, Filippova noted that following the publication of the methodological recommendations, legislation supporting additional volunteer activities was enacted, coming into effect on January 1, 2024. Additionally, there have been revisions to the taxonomy of green projects, notably those elements associated with volunteer activities.

      “As we progress with the methodological recommendations, the subsequent phase provides for creating a more comprehensive and detailed Standard,” said the expert. “While these recommendations themselves don’t exert regulatory impact, they signify the priorities of the government regulator and business community.”

      The development of the Standard is being orchestrated by VEB.RF, by mandate of the Ministry of Economic Development. At the “Strong Ideas for New Times” forum in June 2023, VEB.RF presented to the President its alternative to ESG – ‘5C’: consistent strategic development, consideration of employee and family welfare, social programs, environmental care, and dedication to the homeland.[26]

      According to Denis Bokov, Managing Director of the VEB.RF Government Agent Block, in the context of evaluating the achievement of sustainable development goals, it is imperative that the indicators be qualitative. This approach is essential for accurately measuring the effectiveness of efforts in these domains. “We incorporate these principles in our operations,” the expert disclosed when questioned, “although other companies continue to adhere to the international ESG standard.” It is challenging for a single entity, VEB.RF, to rapidly overhaul established practices and redirect them onto domestic tracks. However, I must point out that within the corporation this is happening, and in terms of social impact projects, we’ve been successful.” The objective is not to alter the paradigm, but rather to refine the language within the existing paradigm, to broaden it slightly and make it more precise, Bokov contends.

BUSINESS SOCIAL CAPITAL STANDARD

      There is also an alternative approach to this issue from the Agency for Strategic Initiatives: the “Business Social Capital Standard,” designed to coordinate elements of established corporate practices in the field of responsible business conduct and sustainable development, based on a platform solution, to eliminate contradictions, and to provide a universally recognized mechanism for assessing and accounting for the contribution of organizations’ activities to improving the quality of life in Russia.

      Alexander Sinitsyn, the head of the ASI Sustainable Development Project Office, noted a significantly greater flexibility of this standard as a key difference from the documents prepared by state regulators. “The documents issued by governmental agencies have very strict requirements, and they should not allow for any interpretations, so only iron-clad confirmed indicators are included in such standards,” explains Sinitsyn. “However, the market is, of course, raising questions about the flexibility of assessment models. And that’s where we come in, as the operator of our standard is an NGO that serves the role of a public institution. Consequently, we can afford to be more flexible, meaning we can foster the development of methodologies and take into account factors that aren’t yet so clearly defined and standardized as to be included in the documents of state regulators.”

      A unique feature of the “Business Social Capital Standard” is that it does not merely disclose what goals the company has achieved, but also evaluates the extent to which the results

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