11 Apr 2024 09:54

SPARK integrates ESG indicators into its company rating system

MOSCOW. April 10 (Interfax) - Basic ESG (Environmental, Social and Governance) indicators that allow for the assessment of environmental and social risks as well as the quality of corporate governance of the largest Russian companies are now available to users of the SPARK-Interfax information and analytical system, an announcement at the SPARK-2024: Current Practices in Business Risk Management annual conference on corporate security said.

Hundreds of Russian companies already publish reports on sustainable development voluntarily, but this information is not standardized or homogeneous. To provide opportunities for the comparison of non-financial indicators, Interfax implemented a project for the straight-through processing of this reporting in partnership with the National ESG Alliance, agreeing with market participants on a set of 70 most popular indicators, and initiating a discussion on unified methodological approaches to their calculation and verification.

"Standardized metrics make it possible to see a company's ESG profile in a condensed and comparable form. A set of standard indicators is important for monitoring reputational risks and the sustainability of supply chains; it is data that is requested by creditors and investors, as well as foreign business partners. The state is also actively calling for disclosure of non-financial indicators. These indicators do not "work" in isolation from the entire complex of business risks. The information must be integrated into the professional information and analytical systems familiar to the market," Interfax Deputy General Director and Head of the SPARK project, Roman Laba said.

Interfax has been developing a set of solutions over several years that should ensure the availability of standardized ESG indicators for the widest possible range of companies. They should also ensure the uniformity and comparability of indicators, convenient and effective channels for disclosing this information, and should encourage enterprises to increase information transparency in this sphere.

An electronic questionnaire has been available since 2022 on the website of the Interfax Corporate Information Disclosure Center (CIDC), which is used by several thousand Russian issuers. It is a program-assistant for the preparation of non-financial or integrated reporting with a set of basic standardized indicators. The indicator set is harmonized with the recommendations of the Ministry of Economic Development and the Bank of Russia.

Large companies were given the opportunity to post annual reports in their corporate cards on the CIDC website, and starting in 2024, they will also be able to do so on the portal of the Fedresurs system, which is operated by Interfax.

In partnership with the ESG Alliance, Interfax created a specialized public resource, esg-disclosure.ru in 2023, which makes it possible to analyze and compare the ESG indicators of approximately 600 large companies.

SPARK has also developed functionality that allows supply chain leaders to invite their counterparties to fill out a supplier's ESG questionnaire using automatic email distribution. For this purpose, the SPARK REGISTER platform has been operating since 2023, and it has already been used by thousands of medium and small enterprises for voluntary disclosure.

SPARK REGISTER is integrated with the SPARK system and allows companies who have gone through the identification and verification procedure to enter and update data on their activities including financial, and, more recently, non-financial indicators. This helps increase information transparency and facilitate the approval of loans and receipt of new orders.

This entire set of steps is designed to expand the range of companies for which standardized ESG data is available and create additional incentives for businesses to disclose their sustainability reports.

"The largest Russian banks and corporations are already implementing ESG accreditation for suppliers and borrowers. Customers and lenders tell us that this type of accreditation will become mandatory in the future. The Ministry of Economic Development issued recommendations last year on the preparation of voluntary non-financial reporting, while uniform global standards are being introduced worldwide for businesses to disclose information about sustainable development. In this environment, Russia will need convenient and generally recognized platforms that will allow companies of various sizes to enter the ESG agenda, and for their partners to receive all the information they need. SPARK, which always strives to be the first respond to the expressed needs of business, has created such a platform," Laba said.

The SPARK-Interfax system is the leader and generally recognized industry standard in the Russian market for risk assessment and business security services. RAEX Rating Group estimates that, in recent years, SPARK has been the leading business information and analytical system by a large margin over its competitors.