Позитивные изменения. Том 4, №1 (2024). Positive changes. Volume 4, Issue 1 (2024)

“As we progress with the methodological recommendations, the subsequent phase provides for creating a more comprehensive and detailed Standard,” said the expert. “While these recommendations themselves don’t exert regulatory impact, they signify the priorities of the government regulator and business community.”

The development of the Standard is being orchestrated by VEB.RF, by mandate of the Ministry of Economic Development. At the “Strong Ideas for New Times” forum in June 2023, VEB.RF presented to the President its alternative to ESG — ‘5C’: consistent strategic development, consideration of employee and family welfare, social programs, environmental care, and dedication to the homeland.[26]

According to Denis Bokov, Managing Director of the VEB.RF Government Agent Block, in the context of evaluating the achievement of sustainable development goals, it is imperative that the indicators be qualitative. This approach is essential for accurately measuring the effectiveness of efforts in these domains. “We incorporate these principles in our operations,” the expert disclosed when questioned, “although other companies continue to adhere to the international ESG standard.” It is challenging for a single entity, VEB.RF, to rapidly overhaul established practices and redirect them onto domestic tracks. However, I must point out that within the corporation this is happening, and in terms of social impact projects, we’ve been successful.” The objective is not to alter the paradigm, but rather to refine the language within the existing paradigm, to broaden it slightly and make it more precise, Bokov contends.

BUSINESS SOCIAL CAPITAL STANDARD

There is also an alternative approach to this issue from the Agency for Strategic Initiatives: the “Business Social Capital Standard,” designed to coordinate elements of established corporate practices in the field of responsible business conduct and sustainable development, based on a platform solution, to eliminate contradictions, and to provide a universally recognized mechanism for assessing and accounting for the contribution of organizations’ activities to improving the quality of life in Russia.

Alexander Sinitsyn, the head of the ASI Sustainable Development Project Office, noted a significantly greater flexibility of this standard as a key difference from the documents prepared by state regulators. “The documents issued by governmental agencies have very strict requirements, and they should not allow for any interpretations, so only iron-clad confirmed indicators are included in such standards,” explains Sinitsyn. “However, the market is, of course, raising questions about the flexibility of assessment models. And that’s where we come in, as the operator of our standard is an NGO that serves the role of a public institution. Consequently, we can afford to be more flexible, meaning we can foster the development of methodologies and take into account factors that aren’t yet so clearly defined and standardized as to be included in the documents of state regulators.”

A unique feature of the “Business Social Capital Standard” is that it does not merely disclose what goals the company has achieved, but also evaluates the extent to which the results align with the broadest possible range of sustainability indicators. This includes both quantitative economic indicators, based on methodological recommendations from the Ministry of Economic Development, the Central Bank’s directives, and common practices, as well as qualitative management indicators. Plus, what sets it apart from global ESG practices is its emphasis on contribution to national goals and the reinforcement of the country.

“It’s essential to recognize that we’re assessing dynamics,” says the expert. ”For this, we’ve developed a system encompassing quantitative and qualitative blocks, feedback tools, and a specific methodology that aligns with the overall approach to sustainable development assessment. The qualitative assessment block is extremely important because the field of sustainable development is not yet so established that everything can be accurately and uniformly quantified for everyone.”

Evaluation is an ongoing narrative because the subject varies from company to company, industry to industry, and a one-size-fits-all accounting system has not been set up. Sinitsyn quotes examples such as employee health issues, which different companies may address in various ways, from on-site doctors to comprehensive medical insurance plans, sick pay supplements, and so forth. These practices are not yet standardized, so they are continuously monitored and updated.