Companies and investors join regulators in calling for carbon-free energy
Companies and the investors behind them have joined European regulators and politicians in calling for carbon-free energy, Lord Barker, the Executive Director of Russia’s EN+ group, told a British-Russian Investment forum, which was held online by the Russo-British Chamber of Commerce (RBCC) with the support of the CCI of Russia. The session at the forum,dubbed “RussiaTALK”, was chaired by Sergey Brilev, President of the Global Energy Association.
“This isn’t just coming from the government. There’s a very, very strong push from investors now on the ESG agenda,” Lord Barker, a former British energy minister, told the forum, referring to the acronym of fundamental principles Environment, Social and Governance.
“And that is being driven by the imperative of decarbonising the economy. From an investor’s point of view, there is increasing recognition that if the companies you have invested in aren’t fundamentally sustainable from an environmental point of view, they are not sustainable from an economic, a financial point of view.
“So there is this overarching recognition that unless the companies you are invested in have a very clear strategy to become part of the low-carbon economy, they are going to be left behind and investors will be left with what might known as stranded assets,….What a lot of investors are doing is looking forward to 2030, looking at what the world will look like in 2030, and pricing in 2030 values in today’s stock prices.”
Andrey Bougrov, Senior Vice-President of Norilsk Nickel, told the gathering that the principles of ESG were gradually making themselves felt in Russian companies.
“Of course, it comes at a certain price. But at the same time, it produces a totally new quality of production. And a new culture that is not so widespread, unfortunately, in Russia,” Bougrov said.
“If you look at ESG ratings, the environment takes about 50 percent in the scoring model. The rest is related to issues of corporate responsibility and corporate governance…Why are businesses interested? Firstly, there is no future if you don’t do that. You’ll be squeezed out of your own traditional markets. Secondly, because there is a new generation of managers and they have a new set of values that puts the preservation of nature very high on their list of priorities. And thirdly, there is a changing mood in society towards preservation of nature. You cannot ignore that.”
Emily Olsen, Senior Vice-President of BP Russia, told the form that demands from investors for sustainable development lay behind the British major’s decision to devise a new strategy of making a transition to an energy business based on “clean energy”.
“This is the largest and most significant transformation that BP has had in 111 years…But we are not trading one for the other. Hydrocarbons remain a foundational part of what we do,” Olsen said.
Responding to a question from Sergey Brilev about the role of hydrogen in the energy balance, Olsen predicted greater and greater use for hydrogen.
“When I started with BP 12 years ago, hydrogen was absolutely part of our portfolio. Given our reset of our strategy, hydrogen features very clearly in that strategy. In the reinvention of our company, we have created a hydrogen…division that will look at the merits of hydrogen, how we we can develop and produce it and over time I do believe in hydrogen…And I do think that hydrogen will continue to feature. You’re seeing it in Russia, you’re seeing it in Europe. The attention that we are seeing in the investment that people are starting to make in…really understanding how to get hydrogen at a scalable rate is clear. And I think you will continue to see hydrogen feature in the long term.”