Interview with GPT-4. What does AI think about Russia’s “sovereign” approach to ESG?
Foreword: ESG GAZETA spoke with GPT-4 about Russia’s sovereign approach to ESG, whether we should abandon the Latin acronym ESG, and how the ESG agenda in Russia and the world will change in the future. Let’s just say we were surprised by the quality of AI’s analysis. Only time will tell if the machine was correct in its conclusions and predictions.
The picture of the future has not been drawn yet, but some sketches of the esg challenges are beginning to emerge on the canvas of time
Can it be said that today Russia is abandoning ESG in the Western sense of the word?
ESG initiatives in Russia and the West share a common foundation. However, they differ fundamentally in three ways.

First, the level of maturity of the ESG framework: in Russia, national guidelines are still in their infancy, while Europe and the US have more advanced and developed ESG frameworks.

Second, Russia’s economy is heavily dependent on carbon-intensive industries such as oil, gas, and coal. This creates challenges for the implementation of ESG practices, as the transition to a low-carbon economy requires significant investment and massive transformation. It also increases ESG risks for Russian companies, particularly in light of potential additional taxes and sanctions.

Third, the roles of business and government are different in Russia and the West, and are largely determined by historical, political, and economic contexts. In the West, business plays a key role in shaping the ESG agenda, while government provides a regulatory framework and standards for the implementation of ESG practices; government assumes the role of a “referee” overseeing compliance with ESG regulations and standards, rather than a “player” directly involved in the game. In Russia, however, the role of the state in shaping the ESG agenda is more significant. Many large companies are state-owned, and their ESG strategies are often a function of public policy.

In general, we can say that the ESG agenda in the West is the result of cooperation between the state, business, and society, while in Russia it is more driven by public policy and the strategies of large corporations.

It should be noted, however, that the development of ESG in Russia is driven not only by external factors, but also by companies’ understanding of the need to embrace sustainable development in order to maintain their competitiveness and attract investment. The ESG agenda is expected to become one of the central elements of Russian companies’ strategies in the coming years. Ergo, Russia is not abandoning ESG in the Western sense of the word, or to put it more accurately: Russia is rethinking ESG in the context of its national realities and interests.
Does Russia have its own sovereign approach to ESG? If so, how could it be described and what are its priorities?
A sovereign approach to ESG means adapting universal principles to the country’s unique context. This does not mean rejecting universally accepted ESG standards, but rather affirming that a “one size fits all” approach to implementing such standards is not always a good strategy.

In the case of Russia, its own approach to ESG may be expressed through increased attention to environmental issues in the context of the country’s significant reserves of natural resources, and an emphasized focus on corporate social responsibility, given the country’s historical and social specifics.

The idea of looking at ESG in the context of a distant past is probably a questionable proposition. However, if we look at the spirit and goals of ESG, namely environmental protection, social responsibility, and transparent governance, we can see that these principles can be traced in one form or another in the history of many countries, including Russia.

In Tsarist Russia, ESG pillars were certainly nowhere near as formalized as they are today, but several initiatives can be interpreted as early manifestations of ESG. For example, concern for nature manifested itself in the creation of nature reserves, such as the Barguzinsky Nature Reserve on Lake Baikal, established in 1917 to protect the seal and the Barguzin sable. At the same time, Tsarist Russia’s efforts to address social and governance issues were very limited; the pressing problems of social inequality and lack of democratic governance were at the root of the Russian Revolution of 1917.

The Soviet Union was very different. There were many social achievements: universal free education, free health care, job creation, development of industry and infrastructure. However, such “achievements” were often made at the expense of environmental damage, such as the massive pollution and ecological damage caused by the drying up of the Aral Sea, or the radioactive contamination after the Chernobyl disaster.

Russia’s current approach to ESG, as in many other countries, is the result of both global trends and specific national historical and cultural aspects. A country’s pursuit of developing its own approach to ESG is important. But it should not mean rejecting universal ESG principles or isolating itself from the global community. On the contrary, it should encourage a deeper and more elaborate application of ESG principles that takes into account the local context and promotes sustainable development at all levels, from local communities to the world.
Do we need to drop the Latin acronym ESG and what Russian alternatives can you suggest?
There are both pros and cons of abandoning the Latin acronym ESG in Russia. The most important thing is that such a decision should be well-considered. Let’s start with the possible pros of dropping the Latin acronym ESG in Russia. The first benefit is cultural adaptation. Replacing the Latin acronym ESG with its Russian alternative will help make the concept of ESG more accessible and understandable to a broad Russian audience. Moreover, Russia, like any other country, has its own unique socio-economic and environmental challenges. Using a local term can help highlight these specific issues and perhaps better reflect local realities.

Now let’s look at the potential downsides. When it comes to international communication, ESG is a globally recognized standard, and dropping it can make it more difficult to communicate with and be understood by the international community. This could negatively affect the participation of Russian companies in ESG-based global investment flows and complicate sustainability cooperation. There is also a risk of misunderstanding, as the introduction of a new term can cause confusion, especially in the early stages when people are not used to the new term. From a resource perspective, developing and implementing a new term or standard requires a lot of effort and resources that could be more effectively spent on ESG projects.
I can suggest three Russian alternatives to the term ESG:
Nature, Ethics, Governance
Here I use the word nature instead of environment to emphasize the relationship between humans and natural environment, which we have an obligation to use rationally and preserve for future generations. Ethics is used instead of social because it covers a broader range of issues, including work ethics, business integrity, and fairness to all members of society.
Interaction, Care, Sustainability
This approach symbolizes the interconnectedness and interdependence of all elements of sustainable development. Interaction in this case becomes the equivalent of environmental, since our planet is a system in which everything is interconnected. Care replaces social, emphasizing proactive measures, care for people and society. Sustainability indicates the need for long-term planning and sustainable resource management.
Responsibility, Solidarity, Sustainability
This interpretation focuses on the ethical side of ESG, emphasizing responsibility for the environment, solidarity on social issues, and sustainability in management and planning.
How will the ESG agenda in Russia and globally change in five years? What will remain important, and what may fade into the background?
What can I say, the picture of the future has not been drawn yet, but some sketches of ESG challenges are beginning to emerge on the “canvas of time”. In my opinion, the main ESG challenges for Russia now and in the near future are obvious:
The environmental burden of industrialization. Russia has one of the largest industrial economies in the world, and as a result, the environmental burden of industrialization is tangible. It ranges from air and water pollution to waste management and post-industrial land reclamation.
Social inequality. Despite considerable effort, social inequality remains a serious problem in Russia, especially in remote and low-income regions.
Corporate governance. Russia needs to further develop transparency, accountability, and integrity in corporate governance.
As for the entire world, I see a number of issues that will become increasingly important:
Cyberecology: The dependence on digital technologies is increasing every day. Cyberecology will become increasingly relevant in the coming years and will include many things: from energy-consuming cloud servers to e-waste. Technology that solves many environmental problems can become a source of new ones.
Water issues: While access to water is already a global issue, it is expected to worsen in the future. Climate change and population growth will put pressure on the world’s water resources, and conflicts over access to water may intensify.
Biodiversity and land use: Biodiversity loss and land-use issues may become even more critical in the future: from the destruction of wildlife for agriculture and urban development to the spread of invasive species and loss of native species.
Work and automation: Changes in work and employment will continue in the future, especially in light of advances in automation and artificial intelligence. This will have a major impact on social standards and jobs.
Changing demographics: Ageing population in developed countries and young population in developing countries will exacerbate tensions. Issues related to health, education, pensions, and social stability will become increasingly important.
Corporate ethics and digital security: With the advent of new technologies, issues of business ethics, digital security, and privacy are coming to the fore.
Moreover, it should already be acknowledged that the ESG agenda is a tool to achieve a more sustainable and equitable society. Therefore, ESG should become an important part of Russian companies’ business strategies over the next five years and beyond.
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Alexander Briskin

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