Zubarevich names risks of ESG introduction for Russia

According to the MSU professor, metal and coal industries are to suffer the biggest consequences. This especially applies to coal monotowns, believes Natalia Zubarevich.

Introduction of ESG (Environmental, Social and Governance) approaches and regulations carries social risks and consequences, as stated by Natalia Zubarevich, Professor at the Department of Economic and Social Geography of Russia, Faculty of Geography, Moscow State University, during the VTB Capital's forum "RUSSIA CALLING! The forum is broadcasted by RBC.

“Ecology carries social risks and consequences. The state must take action”, said Zubarevich. According to her, the first to suffer from such risks will be the most environmentally unfriendly metal and coal industries.

“For the metal industry, the social risk will strike the regional budgetary income. A lot of large enterprises in that sphere are basically the biggest providers for their regions <...> Additional costs due to the carbon tax will lead to a decrease in budgetary income”, stated Zubarevich.

The MSU professor believes that there is no “grave risk” for metal factory towns because there are not so many of them and they are not that small. However, she added, it is the businesses that will face the biggest risks.

“Moving to coal, the situation here is much worse <...> Everything to the East from Kuzbass is mostly oriented on coal generation. Since we cannot fix it quickly, it will present enormous modernization costs”, said the professor. Zubarevich believes that the second problem is the large number of coal factory towns, which presents the biggest threat for Kemerovo region.

The first large ESG forum in Russia was held in Moscow on October, 14 and was supported by RBC media holding. Participants discussed perspectives of ESG-transformations, the scientific view on its approaches and regulation training abroad.