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Legal Framework for Green Finance in the EU and Russia

Author

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  • Larisa V. Sannikova

    (State Academic University for the Humanities, Moscow 119049, Russian Federation)

Abstract

The climate agenda has recently taken on new significance with global climate change threatening all of humanity. The regulation of green finance instruments needs to be improved in order to attract more money to fight global warming. To ensure investor confidence in green instruments, a common standard for them must be created. The European Union and Russia have been forming a regulatory framework aiming to create national standards for green bonds. The present article analyses the European Commission’s proposed package of measures to help improve the flow of money toward financing the transition to a sustainable economy. The author explores the problems of developing legal regulation of sustainable finance in Russia, especially with regard to the creation of a national taxonomy of green projects and national verification of sustainable financial instruments. The comparative legal study of the EU and Russian draft laws on green finance has demonstrated similar approaches to establishing regulatory rules. The article describes the prospects for green finance in the context of digitalization. Based on a study of best practices (Green Assets Wallet, green bonds, etc.), it is concluded that digital solutions for sustainable finance are currently still not well-developed. In the future, however, their use will significantly increase investor trust in green instruments and reduce costs, in particular through digitalization of the verification process.

Suggested Citation

  • Larisa V. Sannikova, 2021. "Legal Framework for Green Finance in the EU and Russia," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 29-43, October.
    • Handle: RePEc:fru:finjrn:210502:p:29-43
    DOI: 10.31107/2075-1990-2021-5-29-43
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    References listed on IDEAS

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    1. Igor A. Yakovlev & Ludmila S. Kabir, 2018. "Green Investment Financing Mechanism as an Element of the National Strategy for Sustainable Development Financing," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 3, pages 9-20, June.
    2. Serena Fatica & Roberto Panzica, 2021. "Green bonds as a tool against climate change?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(5), pages 2688-2701, July.
    3. Flammer, Caroline, 2021. "Corporate green bonds," Journal of Financial Economics, Elsevier, vol. 142(2), pages 499-516.
    4. Olga V. Bogacheva & Oleg V. Smorodinov, 2016. "Green Bonds as a Key Instrument for Financing Green Projects," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 2, pages 70-81, April.
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    2. Alexey Mikhaylov, 2022. "Sustainable Development and Renewable Energy: A New View to a Global Problem," Energies, MDPI, vol. 15(4), pages 1-4, February.

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    More about this item

    Keywords

    green finance; taxonomy for sustainable activities; verification of sustainable financial instruments; digital technologies; distributed ledger technologies;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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