Page 4 - FSUOGM Week 23 2021

FSUOGM COMMENTARY FSUOGM

Energy transition takes

centre stage at SPIEF

Russian oil and gas companies are beholden to international investors and customers,

who are eager to see them do more to address their climate footprint

RUSSIA THE energy transition took centre stage at the these companies have made meaningful pro-
St Petersburg International Economic Forum on gress in reducing their emissions, and they have
WHAT: June 3-5, with the event resulting in a raft of deals set even more ambitious goals for the future.
There was unprecedented between Russian and international companies "The extent of the ESG-related news flow
energy transition-related aimed at tackling emissions. from the forum is unprecedented, but this does
news flow at the SPIEF Russia has promoted SPIEF as the “largest not come as a surprise, given how important the
forum in Russia last post-pandemic meeting,” estimating ahead of topic has become over the past year," VTB Capi-
week. the event that 5,000 delegates would attend. Rus- tal (VTBC) said in a research note.
sia is largely perceived as a laggard in addressing Russian companies began taking serious note
WHY: its impact on the climate, and for good reason. of ESG in 2018, after the Norwegian state pen-
ESG scores have become Unlike most other countries, it is yet to adopt sion fund banned its traders from investing in
a major theme for a strategy for reaching net-zero emissions by companies with a bad ESG score. A number of
Russian companies over 2050, and its current policies do not envisage other financial institutions have taken similar
the past year. any significant changes to its energy mix over steps.
the coming decades. Oil, gas and coal accounted
WHAT NEXT: for nearly 90% of the country’s primary energy Novatek
Russian companies have demand in 2019, according to the International Private Russian gas producer Novatek is seen as
set out goals to reduce Energy Agency (IEA). one of the leaders in terms of its environmental
their emissions. Nevertheless, Russian oil and gas companies credentials. This was demonstrated by the fact
are beholden to international investors and cus- that in December last year, it became the first
tomers, who are eager to see them do more to Russian company to be graded A in its environ-
address their climate footprint. In recent years, mental, social and governance (ESG) rating by

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