VEB.RF Tells BRICS Business Forum About Its Green Finance and Responsible Business Initiatives
VEB.RF Deputy Chairman Yuriy Korsun and VEB.RF Senior Vice-President Elena Gushchina spoke at the BRICS Business Forum on 22 October to an audience of businesspeople, financiers and experts from the five member states.
Elena Gushchina, Senior Vice-President of VEB.RF, and Antonina Levashenko, Head of Russia-OECD Center RANEPA, told the audience about the two organisations’ best practices in responsible financing. They worked with other BRICS development institutions in 2020 on the Memorandum on the Principles of Responsible Financing, which is expected to be adopted at the BRICS Summit in November. According to Antonina Levashenko, the memorandum can be divided into two parts: three principles are aimed at improving the internal mechanism, whereas five principles are designed to encourage customer engagement.
Elena Gushchina noted the importance of the memorandum for promoting best practices of responsible financing in the BRICS member states, along with a need for continued joint work in this area, not only within BRICS but also across OECD countries. The OECD held an international seminar in June 2020 where the principles contained in the BRICS memorandum were first presented. Even at that time, the OECD noted that VEB.RF was a leader in creating the principles of responsible financing designed specifically for development institutions. Additionally, Barbara Bielić of the OECD noted at the forum that the memorandum was a unique document based on the organisation’s best practices. Elena Gushchina also underlined that the signing of the memorandum should be followed by more detailed recommendations on how to use its principles.
VEB.RF Deputy Chairman Yuriy Korsun told the audience about the importance of development institutions in a period of economic downturn and described VEB.RF’s achievements in setting up Russia’s national green finance system as part of responsible financing. VEB.RF released the first version of recommended guidelines on green financing in 2020, verifying a green issue of Russian Railways perpetual bonds totalling 100 billion roubles. In addition, VEB.RF integrated the methodology into its credit process and intends to provide funding for green projects at a reduced interest rate.
Representatives of BRICS leading banks also told the meeting about their practice of financing green projects and about the system for assessing projects for compliance with ESG criteria and emphasised the importance of the responsible financing initiative of BRICS development institutions. The panel discussion was attended by representatives of BRICS development institutions (VEB.RF, Banco de Desenvolvimento de Minas Gerais (BDMG), Export-Import Bank of India (EXIM Bank), Development Bank of Southern Africa (DBSA)) and BRICS commercial banks.
An extremely important result of the event was that India, assuming the BRICS presidency in 2021, supported the idea of continuing work launched by VEB.RF in 2020 on the harmonisation of the responsible financing standards of BRICS development institutions.
VEB.RF, RSMB Corporation, SME Bank and Bank DOM.RF have entered into a cooperation agreement with Leroy Merlin Vostok. The parties agreed to join forces to assist small and medium-sized enterprises in the production of building materials and DIY goods. The document was signed by VEB.RF’s Deputy Chairperson Marina Romanova, RSMB Corporation’s General Director Alexander Braverman, Bank DOM.RF’s Board Chairman Artem Fedorko, SME Bank’s Board Chairman Dmitry Golovanov and Leroy Merlin Vostok’s CEO Laurent Desfassiaux.
The parties intend to work together to promote the production of competitive building materials and do-it-yourself goods and create new sales channels, thus contributing to SME job creation under the Small and Medium-Sized Businesses and Individual Entrepreneurial Initiative Support national project. The agreement also specifies the exchange of experience and knowledge in this market segment, regular consultations and work on finding joint approaches to project implementation.
Marina Romanova, Deputy Chairperson, VEB.RF, said: “VEB.RF works to contribute to the transformation of Russian cities, including the redevelopment of urban areas. In this context, projects to develop and grow competitive producers of building materials and goods are of great importance. We plan to organise this work in cooperation with Leroy Merlin, a global leader in the DIY segment.”
Laurent Desfassiaux, CEO, Leroy Merlin Vostok, said: “Russian suppliers today account for more than 70% of our total supply. It’s quite a high proportion, but we’re constantly working to increase their number and helping them to develop. This agreement and cooperation with the VEB.RF Group will be another important step towards the development of small and medium-sized businesses in the production of building materials and DIY goods.”
Secretary of State Natalya Larionova, Deputy General Director, RSMB Corporation, said: “RSMB Corporation has extensive experience in implementing measures to increase the number of active, economically stable SMEs that make competitive products for the market. We are well aware of the needs of SMEs that produce building goods and, in partnership with VEB.RF, SME Bank, Bank DOM.RF and Leroy Merlin Vostok, we’ll offer them comprehensive measures of support for areas from educational programs to financial instruments to help small and medium-sized businesses to sell their products through Leroy Merlin outlets. Therefore, the agreement will enable small and medium-sized enterprises to grow through a new sales channel, while Leroy Merlin customers will have wider access to high-quality Russian goods.”
Dmitry Golovanov, Board Chairman, SME Bank, said: “In 2020, the development of the urban economy became a priority niche for SME Bank. We partnered up with VEB.RF and RSMB Corporation to support SMEs involved in the development of the urban economy and a comfortable urban environment. The document we signed today is a logical continuation of what we’ve done. In cooperation with Leroy Merlin and other parties to the agreement, we will support regional small and medium-sized producers and help to create a convenient infrastructure.”
Danila Litvinov, Deputy Board Chairman, Bank DOM.RF, said: “As a bank actively involved with measures to support small and medium-sized businesses, we offer under the project useful and effective instruments of financing on special terms, which are more attractive than their alternatives on the market. In addition to financing, we are ready to provide information and advice not only on general issues of business optimisation and management, but also on industry-specific issues, since we are a mortgage and housing bank specialising in support for the construction industry.”