Implementation of Environmental, Social and Governance Principles in the Banking Business

Abstract

At the present stage of the development of the global business community, we pay more and more attention to the principles of environmental, social and governance (ESG) responsibility. Financial intermediaries in their activities considered the influence of natural and climatic factors. Their risks sometimes turn out to be more tangible than, for example, the financial condition of customers. The subject of the study is the development of measures to implement ESG principles in banking products, and its purpose is to study implementing the above principles in Russia at the present stage of business models and setting tasks aimed at overcoming the difficulties of software in sustainable development. The research used the methods of comparative, statistical and factor analysis, identification of trends, graphical comparison, etc. The existing studies on this topic allowed us to determine the need to use ESG principles in banking business models and to identify the motives for their implementation. In the author’s conclusion, Russian banks are guides and an example of making business in line with the principles of environmental, social and governance. The speed, depth and sustainability of their application by other financial intermediaries will depend on economic incentives, government support, and the development of regulatory requirements. The transformation of the business community (according to the new rules of conduct) will bring the entire economy of the country to sustainable development. The author considers a promising topic for further study as the introduction by the mega-regulator of mandatory standards for the activities of financial intermediaries for assessing climate and environmental risks, as well as the development of a supplier audit directive on the criteria for implementing ESG principles. This determines the scientific and practical significance of the study.