Factors facilitating and hindering the development of ESG investments in Russia

Today's discussion about sustainable development has its roots in the 1970-s and evolving along with growing social and environmental crises. For a long time, to integrate non-financial issues into asset management processes, the financial market has experimented with various approaches, using names such as «ethical», «socially responsible» or «sustainable investment». Climate change, as one of the three global problems of mankind creates significant financial problems for the world community. Investors are currently trying to take environmental, social and governance (ESG) into account when making investment decisions. At the same time, market participants are still little aware of the nuances of the ESG integration process, which is sometimes associated with the approach to the withdrawal of individual industries, firms and projects from the portfolio. Investors believe that corporate governance issues are critical as they directly affect profitability and, ultimately, a firm's dividend policy. However, few people are aware of the impact of environmental and social factors on the company's financial performance.