As an active investment manager, PCM cooperated with the Government, regulators, Supreme Court, stock exchanges and legislators to improve the overall corporate governance and ESG standards in Russia. PCM’s representatives have been involved in the activity of “Corporate Governance Improvements” Working Group within Governmental “Business Climate Transformation” platform, Expert Council on Corporate Governance of the Bank of Russia, Committee on the Interpretation of Provisions of the Corporate Governance Code under the Expert Council on Corporate Governance of the Bank of Russia, Transparency Council of the Bank of Russia and also Moscow Exchange’s Listing Committee.
The PCM’s representatives were involved in the preparation of a number of laws-in-draft and amendments to existing laws-in-draft, related to issues mentioned above and defended the proposals on various meetings with representatives of the Government, Ministry for Economic Development, Ministry of Finance and Central Bank.
Initiatives that became the law during 2019
During such engagements, PCM actively proposed and supported law amendments that were approved in 2019 and provide for:
- Stricter delisting and related buy-back rules.
- Streamlined regulation of related party’s transactions.
- Fairer buy-back price in case of mandatory buy-backs of public JSC shares.
- Improved shareholders’ rights defence in case of new type of shares’ issues (extension of pre-emptive rights).
Over and above legislative corporate governance developments, PCM highlighted and supported a number of positive ESG legislative developments:
During 2019, PCM continued its support and promotion of the steps suggested by the Paris Climate Agreement (Russia formalized its participation in the Paris Climate Agreement in September 2019), including support of Draft Russia’s Greenhouse Gas Law, and proposed by the Governmental Concept of development of public non-financial (ESG) reporting, including law-in-draft on non-financial (ESG) reporting and a draft of the Government’s order “On the approval of the list of key (basic) indicators of public non-financial reporting”.
On soft-law side, following PCM engagements, the Central Bank of Russia (being financial market regulator in Russia) drafted the first Russia’s Stewardship Code and PCM contributed to its promotion and drafting.
Also following PCM engagements, Moscow Exchange (MOEX) became a Partner Exchange of the UN Sustainable Stock Exchanges initiative (and was ranked 16th amongst stock exchanges based on issuers’ ESG disclosure).
As a part of PCM’s ESG promotional efforts, during the year PCM spoke on a number of Moscow ESG events, including one jointly with PRI representative, addressed to local investors, local companies and involving different experts and related state bodies’ representatives (two MOEX round tables, Russia’s Corporate Secretaries Forum, ESG Roundtable at Renaissance Capital Annual Conference, Moscow State University and Kazakhstan’s IFC "Astana" sustainable development expert discussion and Moscow State University program for Board members).
Also, as a part of PCM’s ESG promotion efforts, PCM continued its engagements with Bank of Russia in relation to measures needed to ensure large public companies disclose of “E” and “S” information.