The Bank of Russia held a seminar for BRICS central banks in Brazil and presented possible areas of their cooperation in financing sustainable development.

The seminar was attended by representatives of central banks, financial ministries, commercial banks and law firms of BRICS member states (including new states) as well as members of the United Nations Development Programme and the Brazil-China Chamber of Commerce.

Vladimir Chistyukhin, First Deputy Governor of the Bank of Russia, outlined the regulator’s role in Russia’s ESG agenda. ‘We have created the necessary legal framework for issuing all types of sustainable development bonds and participated in the creation of a system of verification of such instruments and disclosure of information by their issuers,’ he said. ‘We are also actively integrating the issues of sustainable development into corporate governance and conducting stress testing of climate risks.’

To maintain competitiveness in the global market, companies should transform their business processes with this agenda in mind, Mr Chistyukhin emphasised. ‘Physical and transition climate risks, which are translated into traditional risk categories and impact real sector companies, affect the stability of the financial system in one way or another,’ he clarified. ‘Therefore, central banks need to help companies transform their operations and create the conditions for the evolution of the sustainable development finance market.

The Bank of Russia suggested that representatives of BRICS countries develop common standards in the area of green financing, ensure non-discriminatory access of companies from carbon-intensive industries and financial institutions financing them to funding and financial services in the markets of friendly countries that ensure transition to a low greenhouse gas emission economy. An important area of focus for BRICS could be the integration of voluntary carbon markets in partner countries and mutual recognition of recording and disclosure of greenhouse gas emissions.

The seminar also addressed the initiatives of market participants devoted, in particular, to the establishment of the BRICS Climate Council, which is a supranational mechanism for cooperation between stakeholder organisations of the BRICS countries in the area of climate, green economy and sustainable development.

Bank of Russia