Authors

Dai Yamawaki¹;  ¹ Hokkaido University, Japan

Discussion

This paper aims to elucidate the current state and comprehensive scope of green finance market in Russia by conducting an in-depth analysis of Russian companies' capital structures through the lens of green finance. It also examines recent regulatory advancements on green finance in the country.


Russian green finance market has gradually formed over recent years; for instance, the Moscow Stock Exchange established a green bond segment in August 2019, and in September 2020, Russian Railways issued the nation’s first green bond to advance railway electrification. Additionally, relaxation of capital requirements for green investments has been launched by the Central Bank of Russia since 2022, along with Sberbank's reduction in green loan interest rates, which has significantly bolstered the market development.

Previous research on Russia's finance market has concentrated on the interplay between resource prices and market interest and exchange rates, the transmission mechanisms of monetary policy, and the analysis of its bank-centred market system. In contrast, green finance, encompassing green bonds and loans, is a relatively nascent field, with limited academic accumulation given the recent emergence of the Russian green finance market. Consequently, even an overarching picture of this market remains to be organized.


This study focuses on the constituent companies of the RTS Index, a representative Russian stock index (with 38 constituents as of late October 2024). By analysing each company's capital structure, especially liabilities on their balance sheets, it investigates (1) green bond issuances and (2) green loan financing to elucidate the financing conditions. Furthermore, it quantifies the premium for green bonds (the yield spread when compared to conventional corporate bonds) and the applicable interest rates for green loans.
 

In addition, through a review of integrated and sustainability reports published by these companies, this study also explores the allocation of funds raised through (1) and (2), their positioning within corporate strategies, as well as trends among other market participants and regulatory developments, thereby clarifying the overall landscape of Russia's green finance market.


This research endeavours to approach Russian green finance market both quantitatively and qualitatively. It provides a novel perspective on Russian economic and finance market studies, by introducing a green-focused analytical approach, previously unexplored in existing literature, and conducting a comprehensive analysis beyond individual company case studies.