New Directions and Sources of Financing for the Green Agenda
The COVID-19 pandemic has forced the entire world to rethink the concept of sustainable development, and most developed countries, particularly in the European Union, are basing economic recovery efforts on ESG principles with the objective of making the world a greener place. Under its Green Deal, the EU aims to achieve net-zero greenhouse gas emissions by 2050, and the called-for transition to renewables will cause a decline in demand for Russian energy resources. Indeed, under the baseline scenario, the EU’s carbon tax is expected to negatively impact the Russian economy to the tune of more than EUR 33 billion between 2025 and 2030. And despite a number of successful initial green finance bond launches by Russian issuers, Russia is only just beginning to implement ESG approaches. By 2023, green technologies could grow to become a RUB 3-trillion industry in Russia. However, sustainability projects, let alone climate-protection projects, are costly, and presently only offer low returns. It is therefore essential for Russia to establish a green finance system. With a national taxonomy in place, it would be possible to verify projects and attract finance from Russian and foreign investors.
