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Russia's VEB to stop financing raw materials extraction in ESG push

GLASGOW, Scotland, Nov 9 (Reuters) - Russian state development bank VEB will stop lending for new projects involving raw materials extraction as part of a push into the environmental, social, and governance (ESG) agenda, first deputy chairman Alexey Miroshnichenko said.

Russia is one of the world’s top carbon dioxide emitters along with China, the United States and India, and has set its own goal of carbon neutrality by 2060 - a process in which Russian forests, hydro and nuclear energy should play key roles.

“We cannot completely stop financing carbon-intensive industries,” Miroshnichenko told Reuters on the sidelines of the U.N. climate summit in Glasgow, referring to the sectors of the economy that contribute most to Russian state finances.

“The only exception we have in our memorandum on financial policy - we do not support new projects in raw materials extraction: no coal, no oil, no mining.”

He did not give a time frame for the transition.

Russia, one of the world’s top oil and gas producers, plans to turn its fossil-fuel rich Pacific island of Sakhalin emissions neutral by 2025, thanks to carbon capture and storage, renewables and other tools, a trial that will be used to help the rest of the country go greener.

According to Miroshnichenko, while VEB will not support pure raw materials extraction, it will still back processing and infrastructure projects even if they are linked to the fossil fuel industry.

“Mining as such (is a) no, processing – yes. This may be transport infrastructure which fits into our mandate – and this may be coal transportation,” he said.

Reporting by Simon Jessop and Jake Spring in Glasgow and Katya Golubkova in Moscow Editing by Giles Elgood

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