Institutionalization of ESG-principles at the international level and in the Russian Federation, their impact on ferrous metallurgy enterprises. Part 1

Abstract

The idea of ESG (Environmental – Social – Governance) is based on the concept of sustainable development and represents a fundamentally new approach to making business, characterized by the involvement of companies in solving environmental, social and management problems. Despite the fact that at the international level, the formation of an institutional framework in the field of ESG was initiated 74 years ago, in our country this process was launched only in 1996 with the adoption of the Concept for the Transition of the Russian Federation to Sustainable Development. Ratification by Russia of a number of international documents – the UN Framework Convention on Climate Change (1992), the Kyoto Protocol (1997), the Paris Agreement on Climate (2015) and the active promotion climate policy by most countries of the world aimed at preserving ozone in the atmosphere layer, necessitated the institutionalization of ESG principles at the national level. The activation of this process took place in 2020 and by mid-2021, the national framework in the field of ESG was created. Ferrous metallurgy is one of the basic sectors of the national economy. The discrepancy of ferrous metallurgy enterprises with the ESG criteria, as well as the high carbon and energy intensity of the products of this industry, in the future may cause the loss of sales markets and disruption of sustainable development. The stages of institutionalization of ESG principles at the international level and in the Russian Federation are considered. The necessity of reducing the carbon intensity and energy intensity of ferrous metallurgy products is substantiated in connection with the emerging global trend – the transition of most countries of the world to a low-carbon economy due to the gradual abandonment of coal energy and the gradual cessation of «inefficient» subsidizing of fossil fuels.