Seminar "The role of development institutions in achieving the Sustainable Development Goals (SDGs)" Of the Russia-OECD center,

Start/End Date
2019-05-31 / 2019-05-31

On May 28 2019, the Russia-OECD Center and VEB Infrastructure held a seminar on the role of development institutions in achieving SDGs.

Today institutions and companies in their efforts to reduce their own non-financial risks should take into account not only the economic potential of projects but also their social and environmental impact. Back in 1976, the OECD developed the concept of responsible business conduct. Furthermore, the OECD has been also elaborating industry standards for due diligence of companies since 2010, and since 2017 - for institutional investors.

The moderator of the event was Antonina Levashenko, head of the Russia-OECD Center. Antonina noted that in 2017 the number of investment funds increased by 300%, including the need to follow the principles of responsible business conduct in their policy, 45% of all investment companies of the world adhere to the RBC.

Ivan Ermokhin, an expert of the Russia-OECD Center, presented the main OECD standards, as well as their application. The OECD adopted Due Diligence Guidance for Responsible Business Conduct in 2018 on what practical steps the company should take to implement responsible business standards. In fact Guidance presents a 6 stages methodology of due diligence of companies. In addition, the experts explained how the standards of RBC may be useful for structure VEB Corporation of the Russian Federation.

During the seminar Natalia Trunova spoke, Vice-President of the Center for strategic development spoke about the sustainable development of the city through the formation of thematic neighborhoods.The speaker proposed to develop the city through the formation of 4 types of neighborhoods.

The discussion was attended by Ivan Medvedev, Associate Professor at the HSE School of urban studies, who noted that the standards of responsible business conduct guarantee the smooth passage of the project for the corporation, as well as jobs for the local population. One of the ways of interaction with the population is the conclusion of contracts of public benefit.

Irina Zhukova, Director of sustainable development and corporate programs, Philip Morris International, spoke about the company approach in developing less harmful alternatives to cigarettes. Philip Morris implements social programs to support the local population, as well as voluntarily installed odor filtration systems in the production. This was not required by law, but the company voluntarily, assessing the risks, installed these filters.

Vera Smirnova, PwC corporate governance and sustainable development Manager identified the TOP 5 global risks for the company: extreme weather events, failure to prevent climate change, natural disasters,fraud and cyber-attacks.

Today, a number of large Russian companies are certified by the FSC (Forest Stewardship Council). Tatiana Yanitskaya, Head of standards and quality Department of FSC Russia, spoke about the functioning of the FSC voluntary forest certification system. FSC recognizes three sources of products as responsible: forests where forest management is certified under the FSC scheme (well-managed forests); FSC controlled wood (unacceptable categories such as illegally harvested wood are excluded) and secondary materials.

Mikhail Babenko, Head of green economy at WWF Russia, spoke about the achievement of the SDGs in the field of a green economy. Mechanisms of integration of the SDGs are the strategies by sector, information disclosure, public comment and appeal of projects.

Manager for socio-environmental assessment of Russian Agency for Export Credit and Investment Insurance Natalia Tsapina gave assessment examples of environmental and social risks of projects. Industries with high risk, as well as the presence of specially protected natural areas of national and international importance were cited as environmental risks. As social – areas of value to indigenous peoples; archaeological and cultural sites and conflicts with the local population.

The seminar was completed by Denis Grigoriev, Head of the financial market development strategy Department of the Bank of Russia, who noted that only 4% of investors take into account the need to implement sustainable standards, and 40% occasionally take into account. A small percentage of investors believe that non-financial reporting affects the value of the business. The speaker noted the importance of third-party opinion (e.g. through certification) as well as disclosure of information properly.

The presentation of the Russia-OECD Center is available here: https://yadi.sk/i/6mbe0nlITKb51w

Translation by Boryana Kiskinova