Wind Farm – Kherson, Ukraine
ESG and Renewable Energy
Macro-Advisory has established a strong reputation and extensive expertise in these increasingly important themes
ESG (Environment, Social, Governance), along with renewable energy development, is now established as a key investment and economic development theme for governments and investors across the Eurasia region.
Macro-Advisory provides extensive bespoke coverage of all relevant topics with the ESG and Renewable Energy theme. This includes monthly updates covering all actions and events, whether from governments, regulators or commercially driven, and which are important for companies and investors working in these sectors or who are looking for opportunities in these fast-growing sectors of all Eurasian economies.
Macro-Advisory also carries out bespoke strategic work for clients who need to understand more about specific topics within the ESG-Renewable Energy topic. This also includes specific project assessments and due-diligence work. We also provide mapping services to help our clients understand how decisions are made, and influenced, as well as the regulatory landscape in each of the countries in the region.
ESG and Companies
Environmental, Social, and Governance (ESG) issues are, increasingly, a key concern for the business community worldwide. Customers are more frequently interrogating companies on ESG before they buy their products and services, while banks and investors are demanding that ESG factors be brought into long-term corporate strategic thinking. Nevertheless, despite the attention given to this issue, ESG is a complex subject that is frequently understood differently, by different people.
- Environmental considerations in ESG relate to how a company impacts and interacts with its natural environment. As such, the factors being assessed vary, depending on the business and the profile of its operations. There are, however, several common factors, such as energy usage, emissions, waste management, pollution control and, more broadly, the way a company engages with the threat of climate change.
- Social factors are those issues that arise in a company’s interaction with its broader community. This often centers on how it treats its workers and what internal culture it chooses to foster; however, it also includes corporate policies on employment and supply chain issues, such as equality and diversity, promotion on merit, transparency of reporting and how it engages with all stakeholders.
- Governance encompasses a company’s internal practices and controls. In short, it is anything relating to how a company governs itself, and can include policies on capital allocation, management incentives, anti-corruption, and corporate transparency.
ESG – Governments
All governments in the Eurasia region recognise the existing and potential impact of climate change in their respective economies. It is accepted that counties need to be much more proactive in managing climate change and in mitigating the potential damage to the economy and the population.
Also, all governments in the Eurasia region have signed up to the global initiative to reduce, and eventually eliminate, carbon emissions by the middle of this century. This is resulting in an increasing allocation of budget resources to fund major climate programmes and to better prepare each country to deal with the challenges ahead.
For investors, this has already led to an increase in investment opportunities in such areas as waste management, pollution control systems and the supply of a wide range of equipment and services. These opportunities will increase significantly in the years ahead.
For governments, the topic of social improvement is more than just about improving workplace conditions and incomes. Many countries in the Eurasia region are also dealing with changing demographics and a need to create more sustainable and income improving employment for their population.
Macro-Advisory provides extensive coverage of the changing demographics and social trends across of the Eurasian states. We highlight opportunities for investors and companies in areas such as healthcare spending, affordable housing subsidies, education facilities and all areas linked with state supported social and employment programmes.
Macro-Advisory also monitors and forecasts the impact of demographic and social changes in consumer sectors and in such key areas a cross-border migration and capital flows.
Many countries in the region suffer from a poor perception of governance. Partly this is a legacy of Soviet-era practices which, while improving, are still not entirely eradicated. It is also because of the often lack of consistency in legal protection and dispute resolution.
The net effect of this is that risk-adverse investors are wary of investing in many countries and this is hampering government efforts to develop and diversify their economies.
Macro-Advisory helps clients to cut through the noise and to better understand the reality of investing and working in each country. We help our clients understand risks and to make informed decisions based on a clear understanding of the reality and not the distractions of often outdated perceptions.
Traditional Hydrocarbons have a dominant role in many countries within the Eurasia region, especially in Russia, Kazakhstan, Azerbaijan, and Turkmenistan. Macro-Advisory provides extensive coverage of these sectors, both from an industry and macroeconomic perspective. We keep clients updated with data, events and trends in all areas related to hydrocarbons, from the production to exports and product processing. We also help our clients understand government strategies for maintaining and developing these industries and what this means in terms of investment opportunities and challenges.
Across the region, there is an increasing focus on renewable energies. All governments have existing programmes to help develop renewable energy within their borders to both achieve the climate targets, which many have committed to at COP26, and to improve domestic energy security. These programmes are expected to increase significantly through the remainder of this decade and into the next decade. This has already created very big opportunities for multinational corporations for the supply of equipment and services across all areas.
Several countries, such as Uzbekistan, have already invested billions of dollars in setting up solar energy projects while others, such as Azerbaijan and Kazakhstan, are building big wind energy projects. Kyrgyzstan and Tajikistan are already big generators of hydroelectricity and plan to export much of the output to neighbouring countries. Russia is a world leader in developing hydrogen as a fuel source for future electricity generation and already views this as a potential replacement for existing hydrocarbon exports.
Macro-Advisory analysts closely follow all of the developments in these areas and keep our clients fully informed about trends and opportunities as well as helping them fully understand the challenges faced.