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Приложения Корпоративное управление Устойчивое развитие Обзор результатов Стратегический отчет
May 2021
2
INTRUDUDCTION
Table of contents
Introduction .................................................................................................................................... 3
About the Company ...................................................................................................................... 3
About this Report .......................................................................................................................... 4
Sustainable Development ............................................................................................................. 5
The United Nations Sustainable Development Goals relevance .................................................. 5
ESG Targets ................................................................................................................................. 6
ESG Performance ......................................................................................................................... 7
Eligible Green Project .................................................................................................................... 8
Green Finance Framework Summary ........................................................................................... 8
“Lastochka” trains purchase project .............................................................................................. 9
Passenger transportation by “Lastochka” trains ......................................................................... 10
2020 CHF Green Bond Overview ................................................................................................ 12
CHF 250mn 0.84% due March 2026, CH0522690715 ............................................................... 12
External review and certification ................................................................................................. 13
Allocation Report ........................................................................................................................ 14
Impact Report ............................................................................................................................. 15
2020 CHF GREEN BOND OVERVIEW SUSTAINABLE DEVELOPMENT
ELIGIBLE GREEN PROJECT INTRODUCTION
Introduction
About the Company
No. 5 In passenger turnover globally
No. 1 In safety globally
Joint Stock Company Russian Railways (the “Company”, “Russian Railways” or “RZD”), and its subsidiaries (the “Group”) is Russia’s largest
railway transportation services provider, and one of the largest transportation companies in the world. The rail system has the world’s
longest electrified railway. As at 31 December 2020, approximately 44,255 kilometers (or 53% of the rail system) was electrified track. The
Company enables the transportation of vital goods to the most remote sites of the country and provides the most accessible transport for
millions of citizens. The founder and sole shareholder of Russian Railways is the Russian Federation. On behalf of the Russian Federation,
the rights of the shareholder are exercised by the Government of the Russian Federation.
3
4
INTRODUCTION SUSTAINABLE DEVELOPMENT ELIGIBLE GREEN PROJECT 2020 CHF GREEN BOND OVERVIEW
About this Report
This is the Company`s second annual Green Financing Report (the “Report”) which aims to provide an overview of the Russian Railways
green bond issued in March 2020 in accordance with the Russian Railways Green Finance Framework, dated May 2019, that was updated
in March 2021 (the “Green Finance Framework”)1.
The Green Finance Framework was designed to demonstrate alignment with the Green Bond Principles 20182, as published by the
International Capital Market Association (ICMA), the Climate Bonds Initiative (CBI) Low Carbon Transport Criteria of Climate Bonds
Standard3, the Loan Market Association (LMA) Green Loan Principles4 and the coherence with the European Union (EU) Taxonomy5.
As at the date of this report, the Company has issued the following green labeled bonds:
Bond Name Issuance parameters Listing Second Party Opinion1 Reporting
2019 EUR Green
Bond
EUR 500,000,000, 2.2%,
due 2027, XS1843437036 Euronext Dublin
Sustainalytics 2019
(in English)
Green Bond Report
(May 2020)6
2020 CHF Green
Bond
CHF 250,000,000, 0.84%,
due 2026, CH0522690715 SIX Swiss Exchange Current Report
2020 RUB Green
Perpetual Bond
RUB 100,000,000,000,
perpetual, RU000A102564 Moscow Exchange
Expert RA 2020
(in Russian)
(separate report will be
issued during 2021)
2021 CHF Green
Perpetual Bond
CHF 250,000,000,
perpetual, CH1100259816 SIX Swiss Exchange
Sustainalytics 2021
(in English)
(separate report will be
issued during 2022)
This report focuses on the overview of the Company`s second green bonds (and the first green bonds in CHF) issued in March 2020 (CHF
250mn, 0.84%, due 2026, CH0522690715 - the “2020 CHF Green Bond”). The Report contains details of the performance of the related
green project, the issuance proceeds allocation and the quantitative environmental impact assessment.
Additionally, it is confirmed that that the 2019 EUR Green Bond remains in conformance with the Certification requirements of the relevant
Climate Bonds Standard. The May 2020 Green Bond Report remains accurate, no significant amendments are required. 1 Published on the company`s website https://eng.rzd.ru/en/9653
2 https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/
3 https://www.climatebonds.net/standard/transport
4 Loan Market Association - https://www.lma.eu.com/
5 https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance_en
6 https://eng.rzd.ru/api/media/resources/1596699?action=download
2020 CHF GREEN BOND OVERVIEW SUSTAINABLE DEVELOPMENT ELIGIBLE GREEN PROJECT INTRODUCTION
Sustainable Development
The United Nations Sustainable Development Goals relevance
The strategic priorities of activities carried out by Russian Railways in the field of
sustainable development are to reach the United Nations Sustainable Development
Goals (UN SDGs)7. The UN SDGs aim to take measures to ensure the optimal utilization
of limited resources, apply environmentally efficient as well as energy and material-
saving technologies, maintain the stability of social and cultural systems and ensure the
integrity of biological and physical natural systems.
Green Finance Framework Relevant the UN SDGs Targets8:
11.2: By 2030, provide access to safe, affordable, accessible and sustainable transport systems for all […]9
9.1: Develop quality, reliable, sustainable and resilient infrastructure […]
9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable […]10
7 https://www.un.org/sustainabledevelopment/
8 The Green Finance Framework is published on the Company`s website at https://eng.rzd.ru/en/9653
9 https://sdgs.un.org/goals/goal11
10 https://sdgs.un.org/goals/goal9
5
6
INTRODUCTION SUSTAINABLE DEVELOPMENT ELIGIBLE GREEN PROJECT 2020 CHF GREEN BOND OVERVIEW
ESG Targets
Russian Railways Environmental Targets according to the Long-Term Development Programme up to 2025 (vs 2018)
by 18% decrease in emission of pollutants into
atmospheric air from stationary sources
by 4.5% decrease in greenhouse gas emissions
into atmospheric air
by 20% decrease in utilization of water
resources
by 18% decrease in discharge of
wastewaters to surface water and land
The environmental activities of Russian Railways are carried out in accordance with the following documents:
The policy of the Russian Railways’ Holding on labour and environmental protection and industrial and fire safety;
The Environmental Strategy of Russian Railways for the Period up to 2020 and the Outlook until 2030;
The Strategy for the Development of Rail Transport in the Russian Federation until 2030;
Declaration on the integrated environmental protection of Lake Baikal when implementing investment projects to develop Eastern Russia;
Environmental corporate standards developed by Russian Railways in accordance with Russian legislation.
Russian Railways has fulfilled the goals set in the Long-Term Development Programme up to 2025 and the Environmental Strategy for the
Period up to 2020 and the Outlook until 2030. The Company is now approving a new version of the Environmental Strategy up to 2030 and
setting more ambitious goals, including achieving carbon neutrality and improving energy efficiency by:
introducing environmentally friendly and resource-saving technologies,
improving the technology for managing the transportation process,
improving the technical condition of the rolling stock,
development of gas engine locomotives operation.
6
7
INTRODUCTION SUSTAINABLE DEVELOPMENT ELIGIBLE GREEN PROJECT 2020 CHF GREEN BOND OVERVIEW
ESG Performance
2020 Green Bond Award
Russian Railways is the winner of the New Market Green Pioneer nomination as the first Russian
company to enter the green finance market, as announced by Climate Bonds Initiative in June 2020.
Maintain leadership in energy efficiency and environmental performance among global freight and passenger railway companies
Russian Railways saved 6,566 TJ (RUB 5.32 bn) on energy efficiency measures in 2020
Enhanced Environmental Responsibility Programme measures helped reduce emissions by 13% y-o-y in 2020, water use reduced by
2.3% y-o-y and polluted waste water discharge reduced by 4.5% y-o-y
In 2020, taking into account the use of indirect emissions from the use of heat and electric energy in the balance sheet, Russian
Railways achieved a reduction of 48% to 36 million tons of CO2 of greenhouse gas emissions compared to 1990 levels with comparable
volumes of traffic
Focus on electrification of the passenger transportation rolling stock and green technologies in order to limit the environmental impact of
railway transport – in 2020, the Group acquired 48 “Lastochka” trains and 328 electric locomotives
Maintain well functioning safety management system
Russian Railways achieved reduction in number of injured employees by 78% from 2010 to 2020
7
SUSTAINABLE
DEVELOPMENT
INTRODUCTION ELIGIBLE GREEN PROJECT 2020 CHF GREEN BOND
OVERVIEW
Eligible Green Project
Green Finance Framework Summary Section Summary
Use of
Proceeds
The Green Financing Instruments net proceeds will be used to finance and / or refinance Russian Railways’ expenditures relating to the Eligible Green Project Categories
Russian Railways will allocate the proceeds from Green Financing Instrument
issuance for financing and / or refinancing of loans relating to acquisition of electric
locomotives or trains for passenger transportation
Project
Evaluation
and Selection
Russian Railways’ Corporate Finance Department, in coordination with the Accounting, the Investments, the Passenger Transportation and the Environment and Sustainable Development Departments, will evaluate and select Projects for eligibility, subject to the relevance of the outstanding or new Green Financing Instrument
Eligible Projects will be recorded in a Green Financing Register and tracked for the
purposes of allocation of proceeds from the Green Financing Instrument
Management
of Proceeds
Russian Railways will track investments in selected projects recorded in the Green Financing Register
An amount equal to the net proceeds will be used to finance and refinance Eligible Green Projects (where expenditures relating to the Projects have been incurred during a three year period prior to the date of issuance of a relevant Green Financing Instrument)
Pending allocation or reallocation to Eligible Projects, an amount equal to the net proceeds of the Green Financing Instrument will be held in bank deposits in cash or invested in liquid securities, and/or used for the repayment of short term indebtedness, where such holdings, investments and/or repayments are not directly linked to the financing of activities which may conflict with the environmental objectives of the Russian Railways Green Financing Instrument.
Both, principal and accrued interest under the Green Financing Instrument will be paid
from Russian Railways’ general funds and will not be directly linked to the performance
of the Eligible Green Projects.
Reporting
As long as the Green Financing Instruments are outstanding (until being
repurchased/called back by the Company at some point in future), and in accordance
with Climate Bonds Initiative (CBI) Certification requirements, Russian Railways will
publish annual Green Financing Reports on the Company’s website. These reports will
include:
Allocations by Eligible Project category including example case studies, and details
of Eligible Green Projects
Relevant outcomes / impacts (e.g. passenger-kilometers, CO2 emissions reduced)
Amount of cash or cash equivalents remaining to be allocated
Share of new financing compared to refinancing
Confirmation by the Company’s management that an amount equal to the net
proceeds was allocated to Eligible Projects
Details of Post-Issuance Certification procedures performed by an accredited
External Reviewer in accordance with the CBI Certification requirements
8
SUSTAINABLE DEVELOPMENT INTRODUCTION ELIGIBLE GREEN PROJECT 2020 CHF GREEN BOND OVERVIEW
“Lastochka” trains purchase project “Lastochka”11 is a modern high-speed electric train based on the Siemens Desiro platform with an
improved security system, special body equipment, and increased comfort for passengers. This is a train
for suburban passenger transportation on the railways of the Russian Federation, equipped with high and
low platforms. The electric train can reach speeds of up to 160 km / h. It is designed by taking into account
the specific features of the Russian climate. Acquisition of electric trains “Lastochka” is selected as
an Eligible green project for the purposes of the Russian Railways 2020 CHF Green Bond.
“Lastochka” trains purchases since 2015-2019 (period of allocation)
The main goal of the project is to service the rising passenger volume as well as to provide
passenger services with new improved quality on the current and new routes and switching from
automobile and bus transport to train transport
In comparison with car and airline transport, transportation by “Lastochka” trains is associated with
lower environmental impacts12
Electric trains “Lastochka” are adapted for people with limited mobility and passengers with children,
convenient for carrying bicycles, strollers. Trains are equipped with toilets, climate control systems
and Wi-Fi
“Lastochka” trains fall within the Eligible Green Project Category of Clean Transportation as recognized
by the Green Bond Principles
Russian Railways intends to refinance “Lastochka” trains purchases with the proceeds from Green
Financing Instrument issuances
11
In translation from Russian means “Swallow” 12
http://ecopassenger.org Values are given for the route Moscow – Nizhny Novgorod
Year 2015 2016 2017 2018 2019
Number of trains 23 30 31 35 33
Invested amount, RUB bn 10.5 12.8 15.1 18.7 21.4
2019 EUR Green Bond allocation
2020 CHF Green Bond allocation
9
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INTRODUCTION SUSTAINABLE DEVELOPMENT ELIGIBLE GREEN PROJECT 2020 CHF GREEN BOND OVERVIEW
0 10 20 30 40
South
Kaliningrad
St. Petersburg Transport Hub
Central Transport Hub
Ural Landfill
The Moscow Central Ring
mn passengers
2019
2018
2017
Passenger transportation by “Lastochka” trains
Passenger transportation volumes by region13
The majority of “Lastochka” trains’ passengers from
2017 to 2019 were transported through the Moscow
Central Ring, the share of this route reached 74% in
2019. The second route with the largest “Lastochka”
trains passenger transportation volumes from 2017 to
2019 was the St. Petersburg Transport Hub. In 2019,
17% of all passengers of “Lastochka” trains were
transported through this hub.
13
Data for the Central Transport Hub excluding the Moscow Central Ring
171 201
986 996
1,157 1,197
2018 2019
mn
pas
se
ng
ers
Passenger transportation volumes
by other trains
by "Lastochka" trains
The share of passengers transported by
“Lastochka” trains in the overall passengers
transported volume was about 17% in 2019,
compared to the 15% in 2018.
Between 2018 and 2019, the number of passengers
transported by “Lastochka” trains increased by 1.2
times.
148
11
INTRODUCTION SUSTAINABLE DEVELOPMENT ELIGIBLE GREEN PROJECT 2020 CHF GREEN BOND OVERVIEW
Operational network of the “Lastochka” high-speed trains is wide. From 2013 to 2020, “Lastochka” electric trains have been successfully
operated at more than 6 ranges of Russian railways and on more than 40 routes. From 2017 to 2020, 19 new routes were launched.
The Central Transport Hub is the largest passenger transportation hub in the Russian rail system, and is responsible for about 71.8% of
suburban transportation and 13.9% of long-haul passenger rail journeys in the country. One of the key parts of the Central Transport Hub has
been the construction of the Moscow Central Ring, a 54-km-long light overland railway network opened in December 2016 which connects the
Moscow metro with the suburban railway. In 2019, approximately 147.5 million passengers travelled on the Moscow Central Ring, an increase
of approximately 13.8% in comparison with 2018. In 2020, approximately 115.3 million passengers travelled on the Moscow Central Ring, a
decrease of approximately 21.9% in comparison with 2019. All passengers of the Moscow Central Ring are served by the “Lastochka” high-
speed trains.
SUSTAINABLE
DEVELOPMENT INTRODUCTION ELIGIBLE GREEN PROJECT SUSTAINABLE DEVELOPMENT
SUSTAINABLE DEVELOPMENT
2020 CHF GREEN BOND
OVERVIEW
2020 CHF Green Bond Overview
CHF 250mn 0.84% due March 2026, CH0522690715 Transaction details
Issuer / Borrower /
Issuance structure
RZD Capital P.L.C.,
JSC Russian Railways,
Loan Participation Notes
Bond rating at issuance Baa2 (Moody’s) / BBB (Fitch)
Second Party Opinion / Verification Report Sustainalytics
Certification CBI
Placement date 12 March 2020
Maturity 12 March 2026 (6 years)
Issuance size CHF 250 000 000
Coupon 0.84% Fixed, Annual
Format / Listing / Law Reg S, SIX Swiss Exchange,
English Law
Joint Lead Managers and Bookrunners J.P. Morgan, UBS and
VTB Capital
Transaction highlights
The first-ever Green Eurobond issuance in CHF out of Russia and CIS and the second-
ever Green Eurobond issuance out of Russia and CIS
The issuance was priced at a yield of 0.84%, the lowest-ever CHF yield for Eurobond
achieved by any issuer out of Russia and CIS, as well as the lowest-ever coupon rate in
the history of Russian Railways Eurobonds issuances in various currencies
12
13
INTRODUCTION SUSTAINABLE
DEVELOPMENT ELIGIBLE GREEN PROJECT SUSTAINABLE DEVELOPMENT 2020 CHF GREEN BOND
OVERVIEW
External review and certification
Compliance with green standards
Russian Railways developed the Green Finance Framework14 aligned with the ICMA Green Bond Principles 2018, the CBI Low Carbon Transport Criteria of Climate Bonds Standard and LMA Green Loan Principles 202115 which aims to demonstrate the environmental benefits of passenger transport via implementation of electric locomotives and trains.
Second-Party Opinion16
Evaluation date May 201917
Climate Bonds Standard Certification
The 2020 CHF Green Bond was certified by CBI in accordance with the Programmatic Certification.
Coherence18 with EU Taxonomy
Russian Railways believes that the activity supported under the current Russian Railways Green Finance Framework is coherent with the latest version of the EU Taxonomy19, which includes the following specified activities:
Passenger Rail Transport (NACE code H49.1.0) - Zero Direct Emissions trains (including electric),
Public Transport (NACE code H49.3.1) - Zero direct emissions land transport activities (e.g. light rail transit, metro, tram, trolleybus, bus and rail)
Russian Railways acknowledges the ongoing EU-level efforts to establish an EU Green Bond Standard20 and intends to keep the development under review, to determine the extent of alignment.
14
https://eng.rzd.ru/en/9653/page/103290?id=17738#main-header 15
Loan Market Association - https://www.lma.eu.com/ 16
https://eng.rzd.ru/en/9653/page/103290?id=17738#main-header 17
This document is an update of a Second-Party Opinion, originally published in May 2019, to which Sustainalytics has made minor revisions. In February 2021, JSC Russian Railways made changes to their Framework, relating primarily to the inclusion of green hybrid/perpetual bonds and loans as an eligible instrument which can be issued under the Framework. The changes have no bearing on the Framework’s compliance with the four core components of the GBP. 18
Use of term ‘coherence’ to reflect the fact that the technology underlying the projects supported by the Russian Railways Green Bond (electric rail transportation) is reflected in the current version of the EU Taxonomy, however no assertions are made regarding the extent of any alignment with the ‘Do No Significant Harm’ components of the Taxonomy. 19
https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance/eu-taxonomy-sustainable-activities_en 20
https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance/eu-green-bond-standard_en
Sustainalytics is of the opinion that the JSC Russian Railways
Green Finance Framework is credible and impactful and aligns
with the four core components of the Green Bond Principles
2018 and the Green Loan Principles 2021.
INTRODUCTION SUSTAINABLE DEVELOPMENT ELIGIBLE GREEN PROJECT 2020 CHF GREEN BOND OVERVIEW
12 6
13 9
98 120
117
141
2018 2019
bn
RU
B
2020 CHF Green Bond proceeds share of the entire rolling stock renovation program
Other sources of financing "Lastochka" trains purchases
"Lastochka" trains refinanced with 2020 CHF Green Bond
"Lastochka" trains refinanced with 2019 EUR Green Bond
Allocation Report
The total net proceeds from the Russian Railways 2020 CHF Green Bond issuance were allocated towards refinancing the “Lastochka”
passenger electric trains purchase during the period from 2018 to 2019. The proceeds from the 2020 CHF Green Bond have now
been fully allocated in alignment with the Green Finance Framework.
Allocation towards “Lastochka” trains purchase
Number of trains Allocated Proceeds
purchased in total during the year refinanced with the 2020 CHF Green Bond CHF mn RUB bn21
2018 35 11 83 6.4
2019 33 22 167 12.7
Total 68 33 250 19.1
The role of the 2020 CHF Green Bond in financing the investment program
Total investment expenditure for the
renovation of locomotive fleet and rolling
stock was RUB 116.7 bn in 2018 and RUB
141.0 bn in 2019.
Funds raised from the 2020 CHF Green
Bond issuance covered financing of
about 48% of all “Lastochka” trains
purchases during the 2018-2019 years.
21
CHF/RUB exchange rate - 76.4570 as at 12.03.2020, in accordance with the Central Bank of Russia exchange rates
14
15
INTRODUCTION SUSTAINABLE DEVELOPMENT 2020 CHF GREEN BOND OVERVIEW ELIGIBLE GREEN PROJECT
Impact Report
CO2 emissions calculation methodology
2018 2019
192 191
879
1,110
tho
usa
nd
to
ns
CO2 emissions
"Lastochka" trains
Automobiles
2018 2019
688
919
tho
usa
nd
to
ns
CO2 savings CO2 emissions from the use of “Lastochka” trains are on average
6 times less than that from the use of cars.
Based on the selected emissions factors, during the period from
2018 to 2019 the use of “Lastochka” trains generated CO2
emissions of app. 382 thousand tons in total, compared to app.
1,989 thousand tons from the potential use of cars.
1. Considering the amount of Electricity consumption,
consumed by the Directorates that operate the high speed
electric trains, in kWh
2. Considering the composition of Electricity consumption,
generated by different electricity source (type of energy) in
%
3. CO2 emissions of “Lastochka” trains (tons / year) =
∑Electricity consumption * Share of certain type of
electricity * CO2 coefficient attributable to this type of
electricity (according to the Ministry of Natural Resources
and Environment of the Russian Federation)
1,607 thousand tons of CO2 for 2018-2019 savings in total.
SUSTAINABLE DEVELOPMENT