Alexander Vedyakhin participates in WEF session on the environmental agenda in Emerging Markets
In the framework on the panel session titled Board Challenges in Tackling Сlimate Сhange in Emerging Markets, organized by the Russian Chapter of the World Economic Forum's (WEF) Climate Governance Initiative, Sberbank First Deputy Chairman of the Executive Board Alexander Vedyakhin presented Sber’s position on the ESG agenda.
Ayuna Nechaeva, Head of Europe, Primary Markets, London Stock Exchange (UK), moderated the discussion. Speaking at the session were Silvio Dulinsky, Head of Business Engagement, Latin America, World Economic Forum; Fu Fan, President and CEO, China Pacific Insurance Co., Ltd. (China); Tarcila Ursini, Independent Board Member, Grupo Korin, and Independent Board Member, Sustainability and People Committees, Agrogalaxy SA (Brazil); Silvia Stefini, Non-Executive Independent Director, Italgas and Falck Renewables, Steering Committee Chapter Zero Italy (Italy); Benedikt Sobotka, CEO, Eurasian Resources Group (Kazakhstan, Africa, Brazil); Elena Haykin (Sapozhnikova), Partner, Digital Horizon Investment Group, Independent Director, Inter RAO.
Emerging Markets play a significant role in the implementation of the global green agenda, however, the transition to a carbon-free future brings with it a number of complications. The low participation rate among executives of various business structures in the formulation and implementation of measures for socially responsible management is a pressing issue. Very few boards of directors demonstrate good discipline and professionalism in this area, transferring the responsibility of decision-making to lower-level managers. Nevertheless, the development of the business sector in conjunction with environmental measures and carbon footprint reduction are the key to a company’s successful growth today.
Alexander Vedyakhin noted that climate change in Russia has reached significant proportions. Over the past 20 years, Russia has been warming at a rate faster than the global average by a factor of 2.5. Environmental changes are a legitimate concern. Decarbonization is accelerating in all sectors. Investors consider companies that provide ESG solutions to be the most competitive.
Russia has a long way ahead, both in terms of its adaptation to climate change and its transition to a low-carbon economy. It could probably be the biggest wave of change since the 1920-30s industrialization in the Soviet Union, said Alexander Vedyakhin.
These changes may be associated with major losses in Russia’s national export. However, the challenge has been accepted, and the companies that understand the severity of the upcoming changes are transforming their corporate strategies and management systems. Sber regards cooperation with entities actively implementing the ESG strategy as a top priority, investing in the development of renewable energy, blockchain-based alternative technologies for electricity metering and distribution, and waste recycling. The bank issues green bonds, offers partners bundle solutions for the transition to green energy and ESG investment products. In addition, Sber is looking into contributing to the production of hydrogen, which will be used as a raw material, fuel, and energy carrier in industries like metallurgy, cement production, and transportation.
Sberbank has made a commitment that is unprecedented in Russia, i.e. to become carbon neutral by 2030. This is the first public announcement like that on the Russian market. Alexander Vedyakhin noted the high involvement of Sber's leadership in the implementation of the ESG agenda. The Executive Board and the Supervisory Board ensure the integration of the climate agenda in both the strategy and operations, while the performance evaluation of top executives is linked to ESG-related KPIs.
Companies that seek to be prepared for the upcoming massive technological and economic changes have embarked on an ESG transformation already. The key task facing the boards of such companies in this context is to set clear goals and integrate ESG factors into their decision-making. Sber is leading ESG change. We hope that other financial institutions, our clients and regions will follow suit.
Alexander VedyakhinFirst Deputy Chairman of the Executive Board, Sberbank