EEMEA Sector Flash - Russian corporates: Put environment ahead of dividends

  • Last year, the 14 Russian corporates in our coverage paid USD 16.4bn in shareholder distributions in total (34% of their annual EBITDA). At the same time, these corporates jointly spent only USD 1.5-2.0bn in environmental capex. This year, we expect environmental capex to increase by 10-20% yoy, while shareholder distributions should grow by 40-60% yoy. We believe that this is a credit-negative trend.
  • In this report, we analyze the GHG emissions by the 14 Russian corporates in our coverage and outline specific suggestions with respect to disclosing GHG emissions. We encourage all corporates in our coverage to use their strong financial positions to boost environmental capex and to cut GHG emissions.
  • We summarize and comment on the updated GHG reduction targets by major developed and emerging economies.
  • We also analyze the credit investor response to Norilsk Nickel’s diesel spill a year ago, one of the largest environmental disasters in Russia’s recent history.

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