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Center-invest Bank Ready to Issue Russia’s First Green Bonds

Chairman of the Executive Board of Center-invest Bank, Sergei Smirnov, spoke at the recent conference on "Responsible Financial and Investment Practice in Russia". He presented the bank’s experience of ESG investing and announced that the bank is ready to issue "green bonds".

Modern global investment markets are increasingly taking decisions on the basis of Environmental, Social and Governance (ESG) principles. This same approach was used when devising Center-invest Bank’s 2019-2021 Strategy.

"We have a stock exchange programme and two bond issues trading on the MICEX," says Mr Smirnov. "As soon as a "green section" is opened on the exchange, Center-invest Bank will register its "green bonds". We are willing for this to be a pilot project and benchmark for the financial market."

Center-invest Bank started providing "green" loans in 2005, financing energy efficiency projects for small business in Russia. To date, we have financed 20,000 projects, lending in excess of RUB16.5bn. The environmental impact of these projects is a reduction in CO2 emissions of 183,035 tonnes annually.

Environmental impact

Annual reduction in harmful emissions
is equivalent to:
Per RUB100,000
CO2 183 035 tonnes 2 tonnes
Cars 107 038 cars 1 car
Oil 522 800 barrels 5 barrels
Trees planted 7 321 392 trees 65 trees
Rostov-Moscow return flights 2 047 369 people 18 people

Mr Smirnov also noted that the rules of "green" finance are consistent with the United Nations’ sustainable development principles and Russia’s National Projects. These envisage, for example, the use of much "greener" technologies, and social responsibility. Center-invest Bank’s 2019-2021 Strategy takes account of all these goals and projects, and focuses on long-term development in the interests of current and future generations of customers, investors, employees, partners, and the regulator.

In Russia at present, there is no overall government position on green finance, and methodologies and institutions to assess the risks of ESG investing are lacking. However, experts from the Bank of Russia, the MICEX, the Russian Ministry for Economic Development, the World Bank, and the International Investment Bank consider that, in principle, Russia is ready to start issuing "green" bonds and financing the "green" economy. This will require the introduction of non-financial reporting standards for issuers, regulation of rules and methodologies, and efforts to promote responsible finance and social and environmental responsibility.

Center-invest Bank was the first to enter the international market for social investments: in 2017 the Swiss fund ResponsAbility Investments AG became one of our shareholders; Vigeo Eiris has ranked us 17th out of 76 European banks; we have retained our Ba3 (stable) rating from Moody’s Investors Service; and we have an ACRA А(RU) national rating, outlook stable. In February 2019 Center-invest Bank became a member of The Global Alliance for Banking on Values (GABV).