Russian Business in Climate Responsibility Ranking

Arkhangelsk Pulp and Paper Mill was ranked best among Russian companies in terms of climate responsibility, based on their performance in 2015. This came as the result of CDP (Carbon Disclosure Project) evaluation, an international project that makes data on carbon emissions public.

The Carbon Disclosure Project (CDP) is an independent not-for-profit organization holding the largest database of primary corporate climate change information in the world. Some 2,500 organizations across the world’s largest economies now measure and disclose their greenhouse gas emissions and climate change strategies through CDP, in order that they can set reduction targets and make performance improvements. The companies’ reports are evaluated according to a specially designed CDP method. According to the outcomes of the evaluation, the companies are ranked according to the transparency and efficiency of their climate-related activities.

Russian companies, as well as their foreign counterparts, have been receiving requests from their foreign buyers, investors and shareholders to disclose the information about their greenhouse gases for several years. (There are currently 767 such investors and the total cost of assets they operate is over $92 trillion.) Last year, a Russian company sent this sort of a request to their Russian supplier – for the first time ever. This was the start of an information exchange of climate data along the chain of supply in Russia.

The largest Russian companies, such as Gazprom, Lukoil, Surgutneftegaz, Novatek, Uralkali, EVRAZ and others take part in the CDP project voluntarily and provide data about their carbon emissions. The total number of Russian companies that contribute to CDP and compete for high climate ratings is growing year after year. There are currently around 20 of them, and the best performer this year was the Arkhangelsk Pulp and Paper Mill (Arkhangelsk PPM) that was solemnly awarded the certificate indicating its high rank. It is notable that the plant, which was also the leader last year, this year managed to improve its results compared to 2014, jumping from point 77C up to 90B, which is the biggest achievement in the history of such ratings in Russia since 2003.

Arkhangelsk PPM took the lead as the first Russian partner to certify its corporate GHG management systems to the ISO 14064-1:2006 standard. In addition to monitoring, accounting, and reporting, Arkhangelsk PPM’s GHG emissions management system also includes an emission limitation and reduction strategy for the period up to 2020 and an action plan to ensure that the targets set forth in this strategy are achieved.

The level of GHG emissions has only recently become one of the most important criteria for businesses. Nowadays, however, special requirements and regulations are contained in legislative documents in a large number of countries, including all developed and the leading developing countries (e.g. China); they are also present in actual international standards, including the GRI (sustainability reporting guidelines) – a standard for non-financial reporting and ISO 26000:2100 “Guidance on Social Responsibility”.

Stock exchange markets require the disclosure of information concerning carbon emissions in operational rules for trading shares and other corporate financial credit documents. It is expected that by the end of 2015 the disclosure of carbon emissions data will become a mandatory requirement for companies-emitters at all major stock exchange platforms, including London Stock Exchange, New York Stock Exchange, NASDAQ, and Hong Kong Exchanges.
Given all that, the CDP climate program is growing in popularity. As part of the CDP program companies representing various sectors of economy, from across the world, submit information about their activities in the field of climate change and on their GHG emissions in a unified electronic format, upon request from the leading international investors and consumers.

CDP climate ratings that the companies receive as the result of evaluation of the reports they provided, are published by the leading information and analytical agencies (Thomson Reuters, Google Finance) along with financial data, and are taken into account by investors when evaluating their assets and corresponding risks.
The Russian Government is now planning to make carbon reporting mandatory for major Russian companies. The decision to introduce it has already been made and the details of its implementation are included in the Russian Government’s Action Plan approved in April 2014. It is also anticipated in the Action Plan that, by the end of the current decade, GHG emissions control and regulation mechanisms will be introduced including the mechanisms to incentivize and support GHG emission reduction projects.
A few platforms are used for involving businesses in the discussion of GHG emissions monitoring, reporting and regulation. The most representative is the Joint Working Group on GHG Emissions Regulation, which was established on the initiative of the Russian Ministry of Economic Development and Delovaya Rossiya business union with participation of the Russian Union of Industrialists and Entrepreneurs (RSPP) and some other business associations. The Interagency Working Group on climate change and sustainable development under the Administration of the Russian President also includes representatives of RSPP and Delovaya Rossiya.

The fact that we see more Russian companies in international climate ratings is not a passing trend, but a necessity. If they disregard it, they run a risk of being left uncompetitive, says Olga Senova, Head of Russian Social Ecological Union’s Climate Secretariat. Low-carbon development cannot be stopped, while climate change and GHG emissions become a decision-making factor in the field of business and national policy in Russia.