Russian Business and Sustainable Development: Implementation of International Standards in Environmental Risk Management

Abstract

Government environmental regulation in developing countries is often based on lower environmental standards and has high corruption risks. Common rules of global competition with respect to environmental indicators can be achieved by transition to international voluntary environmental standards that are based on a balance of the interests of stakeholders, with compliance certified by a ‘disinterested third party’, such as an independent auditor. The need for movement in this direction is confirmed by the study of trends in use by Russian companies of such voluntary mechanisms as ISO 14001 environmental management systems, GRI non-financial reporting, voluntary forest certification (FSC) and voluntary certification of marine biological resources (MSC). The analysis shows that voluntary international standards are increasingly used by those Russian industries, which have the largest environmental impacts. The trend towards greater use by leading companies of higher voluntary environmental standards, which are also less vulnerable to corruption, will continue as the Russian economy integrates with the global economy and joins the leading international economic communities. The main Russian companies, which have businesses extending beyond national borders and need to use the tools of international finance, will be compelled to use these environmental standards in their corporate governance. Further implementation of international environmental standards and better verification are key factors for improving the competitiveness of Russian companies in world markets and for reducing environmental risks and negative impacts on the environment in the Russian Federation. The Chapter’s conclusions include recommendations for measures by government to encourage environmental responsibility and make Russian companies more competitive.