By Flemming Heden, Senior Engagement Manager at GES
In everyday life you sometimes get the feeling that nothing is really moving forward the way you want to. A trip back to a place you visited some time ago may serve as a reminder that the world is far from static and that it is actually moving at a considerable pace.
Last time I visited Moscow to meet with companies was four years ago. From that engagement tour I remember a number of meetings where the companies seemed unaware of what GES considers as material risks. In particular I remember saying that I thought it would be helpful if a very big company in a high risk sector would make its anti-corruption policy more prominent on its web site. The company representative replied that an anti-corruption policy was an interesting idea, without actually pointing to where – or whether – it could currently be found.
Fast forward to October 2015 and the majority of the engagement meetings overall had a very different look. Step one: Sustainability report handed over. Step two: Company informing GES that ESG is strategically important and that measures in this area are under review. Step three: Genuine efforts to describe the company’s sustainability activities. And an optional step four: Offer to meet with the company’s top management team in the future to discuss ESG issues further.
Russian companies are in a challenging environment when it comes to environmental, social and governance aspects of their operations, and there are still significant improvement that can be made. One such thing is for major oil and gas producers to improve transparency in carbon emissions and carbon risk management. But if you only consider the rate of change over the last couple of years then the trend is definitely encouraging.