Sustainability ratings, or how to make businesses hold themselves accountable
The Socio-ecological Union is a national public organization, which in 2000 started a project of civilian control over the environmental and energy efficiency of businesses. The core of this project is a methodically transparent rating of fundamental efficiency in the real sector of the economy. With the support of the World Bank, this project launched a unique process, motivating businesses in Russia to become more environmentally sustainable .
An important role in this process was played by Kristalina Georgieva, a head of the World Bank office in Russia. On her initiative, the first discussion of ratings was held with representatives of the largest Russian companies in 2004. She, together with Alexander Martynov and Svet Zabelin, signed a request to the 75 largest Russian companies to disclose data for the next series of ratings. The result of this cooperation was the “Socio-environmental responsibility and ratings of Russian business” handbook published in 2005, with estimates of environmental costs for 75 companies and 500 enterprises. In 2007, the environmental and energy efficiency rating was launched in Kazakhstan, where it also enjoyed considerable public and government support. The transparency of the assessment system has become an important advantage in comparison with other environmental ratings.
In 2010 the project was renamed the Environmental and Energy Rating Agency Interfax-ERA. At a working meeting in 2011 with Dmitry Medvedev, the President of the Russia, Alexander Martynov proposed the idea to dedicate one page in the reports of companies to the data on energy consumption and environmental impacts. Medvedev supported this idea and placed a call on his blog. And it helped!
The Federal agency for financial markets included a disclosure form in the annual reports of “Information on the amount of resources used in the reporting year.” Now the disclosure portals, the largest of which was created by Interfax, contain annual disclosure reports. In 2014, the Concept of public non-financial reporting was created, with the Council for non-financial reporting of the Russian Union of Industrialists and Entrepreneurs. In 2017, the rating team launched the campaign “Disclosure in the Year of Ecology”, which began with a meeting between the sustainability indexes creators and the leaders of these ratingsIn 2018, a draft Federal Law, obliging companies to disclose non-financial data, was submitted and since then, a draft Government Order on the mandatory indicators has been designed.
By 2019, the number of companies in the environmental ratings of Interfax-ERA reached 6,000. The Database, containing verified energy and environmental indicators of the enterprises, representing the Russian economy, has thus been collecting fatar over 19 years. Furthermore, the infographics of 6,000 companies providing a quick audit in the real economy sector, are fully accessible on the website. The dataset allows to compare the effectiveness of enterprises, which can then be used by insurers, banks, investment funds, private equity funds and other development institutions in the scope of “green finance”. Overall this tool encourages companies to upkeep their standards of sustainability and to push their respective sectors into the green direction.
We are looking forward to discuss more about our rating mechanism at the Paris Peace Forum 2019!
Views expressed in this publication are the author’s and do not necessarily reflect the views of the Paris Peace Forum.
Alexander Martynov; Team Leader at Interfax-ERA
A specialist in the field of environmental and economic research and sustainable development, with many years of experience in the integrated study of complex socio-economic and environmental systems. In 2001 he initiated a series of works on an objective assessment of environmental costs of production of leading Russian companies. In 2003, he participated in the creation and became Director of the independent environmental rating Agency (NERA). In 2010, he was invited with a team of specialists to Interfax, where the environmental and energy rating Agency Interfax-ERA was established. In Interfax, he continued to work on the creation of ratings of fundamental efficiency of business and regional economies.