Financial Journal Vol.13 No.5 2021
Igor A. Yakovlev, Lyudmila S. Kabir, Svetlana I. Nikulina
Changes in Climate Policies and Financial Strategies of Their Implementation in the EU and Russia, p. 11-28
The relevance of the research topic is determined by the need to respond to increased climate risks, which makes countries develop climate policies that can effectively meet sustainable development challenges and protect national economic interests. The transformation of climate policy causes the need to shift capital flows from “brown” economy sectors to “green” ones and integrate environmental factors into the process of making financial and investment decisions. At present, the EU is actively developing a climate finance system which will have an impact on the Russian economy. The article is aimed at outlining the changes in climate policies and financial strategies in the EU and Russia, influenced by the global climate agenda. It analyses the volumes and sources of climate finance mobilized by the EU, as well as regional support instruments in the transition period. The article determines the current changes in the Russian Federation’s climate policy. As a result of the research, the authors have come to the following conclusions. The EU is a vivid example of the fact that countries have long moved from climate change debates to the implementation of specific measures. The Russian Federation lags far behind the EU in terms of both mobilizing financial resources to ensure the transition to a low-carbon economy, and developing proven emission control instruments which help to stimulate the reduction of greenhouse gas emissions and fulfill the obligations under the Paris Agreement.
Keywords: climate finance, low-carbon economy, Paris Agreement, European Green Deal, low-carbon development strategy, climate finance instruments, institutional investors
JEL: F64, O44, Q54, Q42
For citation: Yakovlev I.A., Kabir L.S., Nikulina S.I. (2021) Changes in Climate Policies and Financial Strategies of Their Implementation in the EU and Russia. Financial Journal, vol. 13, no. 5, pp. 11–28 (In Russ.). https://doi.org/10.31107/2075-1990-2021-5-11-28.
© Yakovlev I.A., Kabir L.S., Nikulina S.I., 2021
Larisa V. Sannikova
Legal Framework for Green Finance in the EU and Russia, p. 29-43
The climate agenda has recently taken on new significance with global climate change threatening all of humanity. The regulation of green finance instruments needs to be improved in order to attract more money to fight global warming. To ensure investor confidence in green instruments, a common standard for them must be created. The European Union and Russia have been forming a regulatory framework aiming to create national standards for green bonds. The present article analyses the European Commission’s proposed package of measures to help improve the flow of money toward financing the transition to a sustainable economy. The author explores the problems of developing legal regulation of sustainable finance in Russia, especially with regard to the creation of a national taxonomy of green projects and national verification of sustainable financial instruments. The comparative legal study of the EU and Russian draft laws on green finance has demonstrated similar approaches to establishing regulatory rules. The article describes the prospects for green finance in the context of digitalization. Based on a study of best practices (Green Assets Wallet, green bonds, etc.), it is concluded that digital solutions for sustainable finance are currently still not well-developed. In the future, however, their use will significantly increase investor trust in green instruments and reduce costs, in particular through digitalization of the verification process.
Keywords: green finance, taxonomy for sustainable activities, verification of sustainable financial instruments, digital technologies, distributed ledger technologies
JEL: G18, O13
Acknowledgments: This research was supported by the Russian Foundation for Basic Research via grant No. 18-29-16145 MK, “The Mechanism of Legal Regulation of Relations Using the Distributed Ledger Technology”.
For citation: Sannikova L.V. (2021). Legal Framework for Green Finance in the EU and Russia. Financial Journal, 2021, vol. 13, no. 5, pp. 29–43 (In Russ.). https://doi.org/ 10.31107/2075-1990-2021-5-29-43.
© Sannikova L.V., 2021
Fu Zhihua, Cheng Yu
Promoting Green Development in China's New Development Stage Through Tax Reform, p. 44-50
Green growth is not only an important way to build ecological civilization and promote economic transformation, but also the core essence of ensuring high-quality economic development in the new development stage. Optimization of tax system design is a key measure to release institutional dividend to promote green development. From the perspective of tax reform, this paper analyzes the current situation and the challenges of tax greening in China in recent years, and puts forward general thoughts and suggestions on how to promote green development at the new stage so as to create a two-wheel drive mechanism of carbon tax and environmental protection tax, lead the structural reform of China’s tax system, continuously improve tax regulation, and construct a green tax system with multiple taxes and means to cooperate with each other and to regulate it comprehensively and effectively.
Keywords: tax reform, new stage of development, green development
JEL: Q52, Q53, Q56
For citation: Fu Zhihua, Cheng Yu. Promoting Green Growth in China’s New Development Stage Through Tax Reform. Financial Journal, 2021, vol. 13, no. 5, pp. 44–50. https://doi.org/10.31107/2075-1990-2021-5-44-50.
© Fu Zhihua, Cheng Yu, 2021
Elena I. Kranina
China on the Way to Achieving Carbon Neutrality, p. 51-61
Sustainable development is recognized as a concept that can interrupt a series of crises observed today and bring the world to a new effective and fair level. The mechanism for implementing the concept is an approach that integrates into the decision-making process, in addition to the already existing criterion of economic efficiency, ESG-criteria, namely: criteria of environmental friendliness, social responsibility and managerial efficiency. Countries integrate these criteria in different ways into national development strategies. This is due to the nature of the problems they face and the solution of which seems to be a priority. Of great interest in this regard is the experience of China — the largest economy in the world, which has also embarked on a phase of active integration of ESG criteria into the national strategy, with an emphasis on the E-criterion (environmental), assuming that the achievement of efficiency for the rest criteria is impossible without first-priority solution of the accumulated problems in the field of ecology. The main purpose of the article is to analyze the strategic decisions of the Chinese government under the influence of the environmental factor. The article analyzes the approaches to substantiating the ideology of environmental reforms (building an ecological civilization) and its key components, namely: the national climate program, the ecological red line, combating desertification and mitigating climate change, combating water pollution and eliminating water shortages. The following conclusion was made. China has rich and interesting experience in solving the problem of modernizing production, ensuring its rational distribution and reducing the environmental burden on the territory, primarily in the framework of combating environmental pollution and climate change. The Chinese experience may be interesting for other countries, including Russia.
Keywords: China, climate crisis, carbon neutrality, ecology, ecological civilization, green finance, innovative technologies, 14th five-year plan, Silk Road
JEL: Q52, Q56, Q58
For citation: Kranina E.I. China on the way to achieving carbon neutrality. Financial Journal, 2021, vol. 13, no. 5, pp. 51–61 (In Russ.). https://doi.org/10.31107/2075-1990-2021-5-51-61.
© Kranina E.I., 2021
Rinat I. Rezvanov
Implementation of International Sustainable Financing Practices into the National Debt System.
Can Infrastructure Loans Become Responsible? p. 62-78
The article examines the debt instruments of responsible financing, presented in world practice mainly in the form of green bonds, following the common principles of the International Capital Market Association (ICMA). A brief description of each bond issue model is provided: green bonds, social bonds, sustainability bonds, sustainability-linked bonds, and climate transition bonds. For each of the models for issuing responsible bonds, issuing companies are given as examples, with a brief description of the corresponding target parameters. The article focuses on the special measures of federal monetary support to Russian regions introduced in 2021. Based on the adopted comparative typological research method, these measures are analyzed from the standpoint of correlation with the established principles of sustainable financing and accepted widespread (general) international practice. Moreover, attention is paid both to interbudgetaryfinancial instruments presented in the form of infrastructure loans and new infrastructure projects for the purposes of regional economic development, and to the forthcoming issue of infrastructure bonds by Russian financial development institutions (in particular, Dom.RF). It is emphasized that the states themselves, and not only the corporate sector, are becoming active participants in the markets for sustainable financing, realizing the goals of long-term infrastructure development and the implementation of regional economic policies combined with a sectoral approach based on the principles of green economy (exemplified by Germany). A conclusion is made about the possibility of implementing new federal instruments of regional economic support in the system of target principles of sustainable development (ESG criteria). To achieve such a result, a qualitatively deep structuring of the proposed Russian financial instruments for infrastructure development will be required. Above all, this relates to the inclusion in the responsible debt policy instrument methodology of such four core components of the ICMA’s green bond principles (GBP) as the Use of Proceeds (1), Process for Project Evaluation and Selection (2), Management of Proceeds (3), and Reporting (4).
Keywords: green economy, environmental, social, and corporate governance (ESG), responsible investing, sustainable bonds, Russian financial development institutions, interbudgetary relations, infrastructure loans and bonds, spatial and economic development, green finance
JEL: R58, Q56
For citation: Rezvanov R.I. (2021). Implementation of International Sustainable Financing Practices Into the National Debt System. Can Infrastructure Loans Become Responsible? Financial Journal, vol. 13, no. 5, pp. 62–78 (In Russ.). https://doi.org/10.31107/2075-1990-2021-5-62-78.
© Rezvanov R.I., 2021
Zhanna A. Mingaleva, Yurii V. Starkov
The Role of Environmental Innovation in Green Modernization of Industrial Enterprises, p. 79-92
Environmental innovations, green financing, and green investments are currently aimed at implementing such key areas of “greening” the economy and society as reducing emissions of greenhouse gases and various pollutants into the environment. However, the process of green modernization of industrial enterprises is much more diverse and does not only involve environmental measures in relation to direct environmental pollution. The present article reveals the features of the behavior of Russian enterprises and organizations in the field of environmental innovation introduction. The ranking of environmental innovations by directions and goals of implementation is carried out, and their dynamics are analyzed. Particular attention is paid to such a direction of “greening” the economy and production underestimated to date as the activity of replacing raw and other materials with safe or less hazardous ones. The paper demonstrates the importance and significance of this direction of environmental innovation from the point of view of the formation of a green value chain. The main research methods are statistical, structural and logical, and comparative analysis as well as methods of graphical data presentation. The result of the study is the conclusion that it is necessary to increase the attention given by individual enterprises, the business community, investment organizations, the financial sector, government bodies and other subjects of society to such a direction of green modernization of industrial enterprises as the introduction of innovation in the use of environmentally friendly raw and other materials. First and foremost, the above implies an expansion of production and use of composite materials, which have huge application potential in various sectors of the economy, thus generally corresponding to the country’s technological development program.
Keywords: green investment, green industrial modernization, composite materials, green value chain
JEL: Q54, Q56, Q58, Q52
Acknowledgments: This paper is a result of research projects under the code FSNM-2020-0026 financed by the Ministry of Science and Higher Education of the Russian Federation within a state task to Perm National Research Polytechnic University.
For citation: Mingaleva Zh.A., Starkov Yu.V. (2021). The Role of Environmental Innovation in Green Modernization of Industrial Enterprises. Financial Journal, 2021, vol. 13, no. 5, pp. 79–92 (In Russ.). https://doi.org/ 10.31107/2075-1990-2021-5-79-92.
© Mingaleva Zh.A., Starkov Yu.V., 2021
Victoria I. Bushukina
Specific Features of Renewable Energy Development in the World and Russia, p. 93-107
The purpose of the article is to study the theoretical and practical aspects of investment activities in the field of renewable energy in the world and in Russia. To achieve this goal, during the development of theoretical material, a systematic analysis of existing approaches to the assessment of financing mechanisms for renewable energy projects was carried out. Statistical and econometric research tools include correlation analysis and multivariate regression analysis. The article examines the development of renewable energy, its benefits, and investments in the industry. The financial risks and barriers associated with financing renewable energy projects are considered. The development of the industry over the past 10 years is analyzed, taking into account the impact of the COVID-19 pandemic on the electricity industry in general and on renewable energy in a number of countries. It is established that the world is shifting to the use of renewable energy sources, and in Russia they are not being given due attention. It is revealed that the existing thermal generation units in Russia are of great age and are to be decommissioned in the near future. The current state of renewable energy in Russia, measures to support it and the rate of its development are investigated. The technical potential of wind and solar power plants in the Russian Federation is considered within the aim of diversifying electricity production. The factors that negatively affect the development of the renewable energy industry are identified.
Keywords: renewable energy sources, investments, financing, subsidies, renewable energy, electricity
JEL: D22, F34, G23
For citation: Bushukina V.I. (2021). Specific Features of Renewable Energy Development in the World and Russia. Financial Journal, 2021, vol. 13, no. 5, pp. 93–107 (In Russ.). https://doi.org/10.31107/2075-1990-2021-5-93-107.
© Bushukina V.I., 2021
Igor Yu. Arlashkin
Clustering of Russian Regions by Level of Debt Sustainability, p. 108-124
The subject of the paper is the assessment of regional debt sustainability in accordance to the Budget Code of the Russian Federation. The relevance of the study is due to the aggravation of the regional debt problems at the end of 2020 and the need to have an assessment system that allows to timely respond to a decrease in the level of regional debt sustainability. The novelty of the study consists in the analysis of the system of debt sustainability indicators and their threshold values using the methods of cluster analysis. The article aims to examine if the current assessment system allows to classify regions by the level of debt sustainability quite clearly. As a result of the study, it was shown that the used debt sustainability indicators partially duplicate each other, and the methods of their calculation and the established threshold values discriminate against subsidized regions. In addition, it was shown that the grouping of regions based on the current assessment system does clearly distinguish between regions with high and medium levels of debt sustainability. The conclusion of the study is that in order to improve the system for assessing debt sustainability, it is necessary to change the set of debt sustainability indicators and the procedure for calculating them, as well as to set appropriate new threshold values for the new set of indicators. The prospect of the study is to conduct a similar analysis based on data for 2020 and refine new thresholds for debt sustainability indicators.
Keywords: subject of the Russian Federation, debt sustainability, cluster analysis, Ward’s method, k-means clustering, regional debt, regional debt, debt service, debt repayment
Funding: the article was written on the basis of the RANEPA state assignment research programme
For citation: Arlashkin I.Yu. Clustering of Russian Regions by Level of Debt Sustainability. Financial Journal, 2021, vol. 13, no. 5, pp. 108–124 (In Russ.). https://doi.org/10.31107/2075-1990-2021-5-108-124.
© Arlashkin I.Yu., 2021
Natalia S. Matveeva
Legislative Regulation Financial Statement Preparation by Micro Entities: International Experience, p. 125-138
The article analyzes the experience of legislative regulation of financial statement preparation by micro entities in the Commonwealth of Independent States, the European Union, and the United Kingdom. The legislative acts of the countries, national accounting standards and financial reporting standards serve as the methodological basis for the analysis. For the purpose of this study the article identifies the criteria for categorizing an organization as a micro entity, analyzes the documents regulating the procedure for the preparation of financial statements, and compares the procedures for financial reports formation by micro entities in different countries. Micro entities are an important component of the country’s economy, affecting the level of employment, gross domestic product and other important indicators of the country’s development. In Russia, micro entities account for 96 percent of the small and medium-sized business sector, whose share in the gross domestic product was about 20.6 % in 2019 according to Federal State Statistics Service estimates and which created about 33 % of jobs. For comparison, in the OECD countries small and medium-sized businesses generate, on average, about 55 % of GDP and about 59.1 % of jobs, whereas in the EU countries the percentage is higher: 57.5 % of GDP, and 65 % of the employed. However, in order to support the development of micro entities, it is necessary to create favorable conditions for the implementation of entrepreneurial activities, in particular through simplifying the procedure for the formation and submission of financial statements.
Keywords: financial statement, micro entities, financial reporting standards, financial legislation, international experience
JEL: E62, H83, M48
For citation: Matveeva N.S. Legislative Regulation Financial Statement Preparation by Micro Entities: International Experience. Financial Journal, 2021, vol. 13, no. 5, pp. 125–138 (In Russ.). https://doi.org/10.31107/2075-1990-2021-5-125-138.
© Matveeva N.S., 2021