Green finance: An uprising trend in the Russian financial market

Abstract

Subject. The article discusses international stock exchanges, which concentrate deals with green investment instruments, which constitute green finance as a very popular and promising segment in advanced economies. We observe how green finance develop in the Moscow Exchange. Objectives. The study reveals trends seen in the Russian and foreign green finance markets. We formulate our recommendations for revising the existing approaches and adapting regulatory documents. Methods. The study is based on the methods of analysis and synthesis, comparative analysis and matching, and a graphical method. Results. Having analyzed the international practices, we discovered that the Russian green investment market lagged behind the global trend in terms of capitalization, the number of instruments and regulatory regulation. However, environmental cases recorded in 2020 will accelerate the implementation of green investment principles. The global green investment market is just at its infancy. Notwithstanding a shortage of instruments, it is actively growing and evolving. Although the regulatory framework is yet underdeveloped in terms of green finance, the market actors actively implement ESG-principles in their corporate structure and use risk assessment models. Investors choose investees more thoroughly and responsibly. The Russian market lacks an underdeveloped regulatory framework, notwithstanding attempts to adapt the effective regulatory documents to purposes of green finance, and create new regulations. Conclusions and Relevance. Administrative and economic actions we propose, such as the establishment of self-regulatory organizations for green investment, distribution of risk through the mutual fund of industrial organizations, will contribute to the effective emergence of ESG principles in the Russian market. Legislative recommendations can be used by public authorities and the megaregulator in order to adapt foreign practices to Russia.