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Russia-Ukraine: Breach of international law by Russia

Jun 22, 2022

The Russian army’s invasion of Ukraine is an open breach of international law. The international community has adopted sanctions against the Russian government and related parties. The sanctions are far-reaching and are likely to range from exclusion from the payment system, access to financial markets and the ban on the export of technological goods.

They affect large parts of the financial industry, and a “trade black list” is likely to include products and services of numerous companies.

Non-compliance with UN sanctions potentially leads to lower ratings upon disclosure, depending on severity. This information is displayed as part of the screenings (of “controversies”).

In the case of the Russian invasion of Ukraine, the violation of international and human rights goes back to a member of the UN that has a veto right. The prerequisite for a UN decision on sanctions is therefore problematic.

Inrate will therefore review this rule. In individual cases, this could lead to rating changes. The sustainability rating of the Russian Federation is in a low range (deepest quartile) due to poor governance and a resource-inefficient and polluting economy.

Russian companies are part of the Inrate coverage, as they are constituents of market-wide and common indices.

Financial market infrastructure provider SIX announced today the launch of a new climate data offering, aimed at supporting investors in reporting and monitoring of climate factors, and in climate-related investment and risk decision making.

The climate data sets, from various data providers in a range of industries, will provide clients with modelled and reported emissions data, covering over 33,000 companies globally, and bringing together multiple data sets on regulatory, historical and forward-looking climate impacts from providers including MSCI and Inrate. SIX also announced that it has recently entered into an agreement with environmental disclosure platform CDP to offer access to its global Greenhouse Gas (GHG) Emissions Dataset across various industries.

According to SIX, the new data sets come as investors increasingly require ESG and climate data to monitor investment decisions and to meet growing regulatory disclosure requirements, including the EU’s SFDR and the U.S.’ upcoming SEC Climate Disclosure Rules.

Martina Macpherson, Head ESG Product Strategy and Management, Financial Information, SIX, said:

“Understanding, measuring and managing climate risk and opportunities, as well as the impact that these can have on investment decisions, is a critical area of focus for market participants and policy makers alike. As more climate risk monitoring and reporting is required globally, the cost of compliance is increasing – both in operations and in terms of specialist ESG resources. SIX works with established providers of basic and specific ESG and climate data in the market.”