Implementation of the ESG agenda in the banking sector: Overview of Russian practice

Abstract

Subject. The article considers the process of ESG transformation and integration of ESG principles in the Russian banking sector. Objectives. The purpose of the study is to assess the current state of ESG transformation and develop the ESG agenda in the Russian banking sector. Methods. The study employs publications of Russian and foreign scientists on ESG issues, analytical materials of RAEX-Europe rating agency, development strategies of individual credit institutions. Based on the SWOT analysis, we identified strengths, weaknesses, opportunities, and threats of ESG transformation in the banking sector. Results. The paper describes the main directions of ESG transformation of the Russian banking sector, experience of the largest Russian banks in implementing ESG principles in their activities and development strategies, and their positions in ESG ratings. We diagnosed advantages and disadvantages, risks and opportunities for ESG principles implementation in the activities of Russian banking structures, prepared a matrix of relevance for Russian commercial banks in achieving Sustainable Development Goals established by the UN (UN SDGs). Conclusions. The findings can be useful for banking structures to generate sustainable development strategies and implement ESG transformation of business models, as well as for the professional community interested in promoting ESG principles.