Investment projects

July 2021

Green Light On

The environmental agenda is gradually becoming inseparable from the economic one. Companies around the world are assessing their environmental impact and adopting strategies to not only minimize it, but also take their business to the next level. What are the main green directions chosen by today's industrial companies?
Erase your carbon footprint
The carbon footprint includes all greenhouse gas emissions that enter the atmosphere due to human activities. The term appeared after an ecological footprint discussion in the early 1990s. Today, many enthusiasts are striving to reduce or compensate for their carbon footprint, but this problem is most acute for industrial and transport enterprises. Manufacturing and logistics are responsible for more than half of the world's carbon dioxide (CO2) equivalent emissions from fuel combustion. In order to keep global warming within 1.5 °C (the level stipulated by the Paris Agreement), such emissions will have to be reduced by about 45% by 2030. Many leading companies, including Russian ones, are already implementing the relevant initiatives and expect the same from their counterparts. Energy audit helps to assess the carbon footprint and plan measures to manage it.
THE PARIS AGREEMENT REGULATES MEASURES TO REDUCE THE CARBON DIOXIDE CONTENT IN THE ATMOSPHERE STARTING IN 2020. THE AGREEMENT IS AIMED TO STRENGTHEN THE IMPLEMENTATION OF THE UN FRAMEWORK CONVENTION ON CLIMATE CHANGE, IN PARTICULAR TO MITIGATE THE GLOBAL AVERAGE TEMPERATURE RISE
How do businesses reduce their greenhouse gas emissions? They increase their efficiency, improve their supply chains, implement production processes that generate fewer emissions, and reduce energy consumption or change the type of energy source.

On April 20, the State Duma at first reading adopted the draft law 'On Limiting Greenhouse Gas Emissions' to create a model for soft carbon regulation in Russia. It has been in development since 2017 and initially envisioned emission quota systems and fees for exceeding these quotas. Long negotiations with the business representatives have resulted in the final version of the regulation that does not imply an additional burden on companies.Major greenhouse gas emitters will file carbon reporting and voluntarily implement climate projects to reduce their carbon footprint or increase the absorption of greenhouse gases.
Company carbon footprint:
  • supply of raw materials and energy resources;
  • production employees' activities.
ESG investments
According to global management consulting firm McKinsey, companies that adhere to the principles of responsible ESG investing are already valued 10% more than their less socially responsible competitors. Over time, the enterprises' role in respect of the environment protection, employees' safety and well-being, as well as management transparency and business ethics will only grow.

80% of Russian companies do not yet have an ESG strategy, but the situation is changing, starting with large companies. The ESG elements in corporate strategy (that are predominantly non-financial indicators) have already become a positive signal for investors. Responsible financing means that the company cares about its future viability, follows current trends and is ready to be flexible; and vice versa: for the companies with low ESG scores, it becomes more difficult to enter international markets and work with international regulators.
E – environmental

S – social

G – governance
Everything is recyclable
According to the Ministry of Industry and Trade, Russia is currently losing about 30% of its gross domestic product due to imperfect waste processing systems. The country needs a transition to a cyclical economy, which involves the processing of most of the waste and resource renewal. The Russian Parliament is preparing to consider several bills that will create additional incentives to involve material resources in secondary circulation and create additional opportunities for domestic producers.

The plastic recycling issue is especially acute for the world industry. A few years ago, environmentalists called for the complete avoidance of this material, but today it has become clear that it is indispensable in many areas, and recycling would be more reasonable. Unfortunately, today, only 12% of plastic waste is being recycled in Russia. In the coming years, companies will invest billions in new polymer chemical processing projects to obtain high-quality recycled plastic that does not have the same application restrictions as the plastic obtained as a result of mechanical processing.
IF YOU PROFIT FROM NATURE,
YOU HAVE TO CLEAN UP AFTER
In his message to the Federal Assembly, Vladimir Putin reminded that it is important to apply new comprehensive approaches to solving climate problems. The President asked to speed up the adoption of the law, which would establish the enterprise owners' financial responsibility for the elimination of accumulated damage and reclamation of industrial sites, and also called for using the "polluter pays" principle in waste management. "To do this, it is necessary to launch a mechanism of manufacturers and importers' extended liability for the goods and packaging disposal, already this year," the Russian leader noted. He also promised to support business projects related to environmental modernization.
However, waste recycling will not be an effective environmental tool unless people consciously handle their waste. To make recycling more accessible and technologically advanced, Moscow companies offer fundamentally new waste sorting systems. For example, the GalVent Ventilation Factory solution does not at all imply that a person would have to look for special containers to drop their garbage.

And the EcoBox group of companies produces special containers for hazardous waste disposal. One of the company's developments is "medbox", which is a protected container to collect and dispose of personal protective equipment, that is, among other things, designed to reduce the risk of infection spread.

The production modernization in accordance with the modern eco-standards requires funds, so the city helps enterprises to solve serious environmental issues. Due to the industrial complex or investment priority project statuses, many companies receive tax incentives from the Moscow Government, which makes it possible for them to invest, among other things, in environmental protection measures. For example, food and beverage manufacturer PepsiCo is implementing green processes in its factories thanks to tax incentives; they arrange separate waste collection, control resource consumption, use solar energy, and pay attention to the recycling of plastic packaging.
Life cycle contracts
In 2021, Moscow will continue to conclude life cycle contracts. Abroad, this cooperation principle has been practiced for a long time; LCC means an agreement for a set of works to design, maintain and dispose of high-tech products. Roughly speaking, LCC do not only cover the supply, but the uninterrupted operation of equipment and machinery, the quality of the materials used, and attentive service. Essentially, such a partnership refers to the G Principle from the ESGs described above, which is impossible to comply with without the technological and managerial process transparency, mutual respect and responsible cooperation. Over the past year, Moscow concluded 74 LCCs worth over RUB 74 bn (including 72 contracts for medical equipment supply). Today, such contracts account for more than half of Moscow's public-private partnership projects, but these are only the beginnings of such business cooperation that is beneficial for both parties. Perhaps, this will be exercised by new partnerships between business and science.
Energy is turning green
In 2020, under two LCCs, Moscow acquired electric buses that not only meet modern international standards but help to develop green energy. The green energy program has been effective in Russia since 2014, and was extended by the government until 2035 last fall. Today, the renewable energy facilities are being created in more than 30 constituent entities of the Russian Federation; these include wind farms, as well as solar and small hydroelectric power plants. According to media reports, Deputy Minister of Energy of the Russian Federation Pavel Snikkars, during the final meeting of the Panel of the Ministry of Energy, said that in the next 15 years the green energy support in Russia could reach RUB 360 bn. This will ensure the commissioning of about 6.7 GW of generating capacities based on solar, wind and hydroelectric power plants. The industry will face other changes as well. All over the world, the technologies are being developed to make it possible to apply artificial intelligence and augmented reality in the energy sector. For example, scientists at the Massachusetts Institute of Technology are creating machine learning for wind farms. Such projects will help to fill an important gap in green energy, i. e. the lack of predictability.
Moscow enterprises are actively involved in creating a comfortable infrastructure for electric transport users. For example, Parus Electro produces charging stations for electric vehicles, in addition to uninterruptible power supply systems and other converting equipment. The company is also an importer; it has even won a tender to supply Nepal with electric chargers. Meanwhile, Moscow company NPP ITELMA has developed a project of an intelligent power supply system for electric buses, which is controlled online by a digital platform. At destination points, a stacker and two technicians replace discharged batteries with the charged ones transported by pit-stop vehicles. The discharged batteries are sent to dedicated modular charging stations.

Through developing decarbonization technologies and products for new energy carriers, and striving for a circular economy, Moscow industrial companies are helping the city to remain a sustainable development leader, and most importantly, create a safe and comfortable environment for our common future.
E-mail: pressprom@mos.ru
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