Russian agricultural products can be considered climate-optimized, but there are risks for trade within the ESG framework - Agroexport

MOSCOW. Sept 18 (Interfax) - Russian agricultural products can already be called climate-optimized as per the ESG (Environmental, Social, Corporate Governance) framework, but the emergence of barriers to trade as requirements related to the decarbonization of production processes spread throughout the world cannot be excluded, and producers must prepare for them, Dmitry Krasnov, head of the Agroexport center, said at Agroexport's Role of Climate Regulation in the Competitiveness of Russian Agricultural Products conference.

The concept of "Increasing the competitiveness of the Russian agro-industrial complex in global agricultural markets in the context of current international climate regulation" was presented at the conference.

"The share of greenhouse gas emissions in Russian agriculture in total emissions across the territory of the Russian Federation is about 6%, while in the world this figure is 20%. That is, with the correct positioning, and our ability to work with regulatory authorities in this regard, our products can already be positioned as climate-optimized," Krasnov said.

At the same time, he noted, in the long term there is still a possibility that barriers could be introduced to agricultural products that do not fully comply with ESG requirements. "And the more consumers and retailers implement ESG principles in their practices, the higher the risks for suppliers that do not comply with these principles," he said. "If, for example, you look at the Asia-Pacific region, then today 64% of "the largest companies have defined the ESG strategy; more than 70% of companies in the region have defined the requirements regarding the ESG practices of product suppliers, that is, potentially our companies."

ESG "has actively included transnational companies, which in these markets are essentially our main competitors .These are serious challenges for our companies," he said.

In this regard, "a system of evidence and persuasiveness which we can use to push our products into foreign markets," is very important, Krasnov said.

As Deputy Minister of Agriculture Sergei Levin said in his greeting to the conference participants, currently, as part of ESG, many states are creating special programs and implementing adaptation measures. "To date, national adaptation plans in the agricultural sector have already been developed in 45 countries around the world. The formation of this regulatory framework will certainly have an impact on the terms of food trade in both the medium and long term, and it may become one of the new barriers in global trade and export of agricultural products," he said. "Therefore, we need to keep our finger on the pulse of the changes taking place, and watch how climate regulation is developing in the countries where we want to export, so as not to lose important, key markets."

Levin said that last year Russian agricultural exports exceeded $40 billion. Growth is continuing this year. "We are already ahead of last year's figures by more than 20%," he said.