What kind of financing is there?
ESG instruments are instruments for financing sustainable development. They include "green" (aimed at environmental projects), social (aimed at social projects) loans and bonds, the funds from the issuance of which also go to the relevant projects.
How do I get financing?
In order to obtain financing for ESG projects, the company can use the ESG transformation mechanism – that is, implement ESG practices (internal procedures and measures that determine compliance with the principles and goals of sustainable development approved by the UN in operational and investment activities) and ESG products (investment instruments, funds from which are directed to compliance with the principles and goals of sustainable development). This is public information that allows verifiers (formed by independent research agencies - Bloomberg, S&P Dow Jones Indices, JUST Capital, MSCI, Refinitiv, Expert RA and others) to assess the company's impact on the environment, interaction with society, the quality of corporate governance, the level of compliance with interests in the field of sustainable development when making key decisions and assign the company an ESG rating. For example, the Moscow Metro has taken the initiative to train female drivers, which reflects the ESG principles, thereby increasing its ESG rating.
For example, MSCI divides companies into three categories: leaders with AA and AAA ratings; companies with average indicators - A, BBB, BB; and laggards- B, CCC.
To better understand the methodology of accounting for various metrics in the framework of ESG ratings, you can read the recommendations of ICMA, CBI, VEB.RF.
A company may also have an ESG index – a stock index of traded companies that comply with ESG principles.
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