Tatarstan among leaders in businesses’ green expenditure during pandemic, but its neighbours in Volga region increase it faster

Green expenses of Russian businesses

In 2020, entrepreneurs in Russia started to pay more attention to environmental protection. Expenditure in this area nominally rose by 13,1%, or by 97,2 billion rubles, compared to 2019, before the pandemic.

Current environmental protection costs of businesses, including expenses on payment for environmental protection services, environmental investments in fixed capital and costs on revisions of key environmental protection assets in Russia in 2020 totalled 836,5 billion rubles, At the same time, experts note that real costs increased more than declared some 13%.

Businesses in economically developed and industrial and feedstock regions of Russia with tycoons headquartered there invest more money in the environment.

Moscow, Krasnoyarsk Krai, Moscow Oblast, Khanty-Mansi Autonomous District, Sverdlovsk Oblast, Tatarstan, Chelyabinsk Oblast, Bashkiria, Irkutsk Oblast and Yamal-Nenets Autonomous District are among the leaders in absolute environmental protection expenditure according to estimates of FinExpertiza international audit and consulting network (Realnoe Vremya has the results at its disposal).

Ingushetia, Jewish Autonomous District, Chechnya, Kalmykia, Altai, Dagestan, Tuva, Karachay-Cherkessia, Kabardino-Balkaria and North Ossetia became outsiders in this indicator. Low expenditure and small investments in environmental are characteristic of not rich regions, experts of the consultancy note. This, as a rule, is regions that don’t have big industrial facilities, while the focus is on the development of the agricultural sector.

Entrepreneurs’ considerable part of green costs is spent on water. So 243,9 out of 614,2 billion in current costs and services of Russian enterprises were spent on sewage treatment last year. 91,3 out of 196 billion rubles invested in environmental protection were allocated for water protection.

The experts assert that enterprises’ tendency for environmental friendliness will get only stronger with time, which is particularly favoured by the development of Russian environmental protection legislation. Moreover, entrepreneurs still lack motivation to adapt their business to running it with the lowest environmental impact. The money they invest in production modernisation may not pay back in the mid-term. It is easier for enterprises to pay fines for violations, which are at the moment low in Russia, the report of FinExpertiza reads.

Eco-friendly Tatarstan

As it has been said above, Tatarstan is on the list of leaders with businesses’ absolute environmental expenditure. During the pandemic in 2020, the republic spent 13,2% more money than in 2019, 33,3 and 29,4 billion respectively. However, the rise in expenditure is just 0,1 pp above the Russian digit and far from being the highest in the Volga region.

In Tatarstan, entrepreneurs allocated 22,1 billion rubles (20,1 billion in 2019) for current operational costs and services. The amount of environmental investments in fixed capital with costs on construction, renovation and modernisation of facilities and production capacities, the instalment of air filters in enterprises, traps catching harmful substances, water treatment plants and so on rose from 6,8 to 8,4 billion. Tatarstan businesspeople also paid a lot of attention to key revisions of major environmental assets. Here, environmental expenses reached 2,7 billion in 2020. In 2019, entrepreneurs spent 2,4 billion rubles on these purposes.

Tatarstan’s neighbours — Udmurtia and Bashkiria — demonstrated the biggest dynamics of the annual rise in green costs. In 2020, they outstripped the republic with their growth pace many times. Udmurtia raised environmental expenses from 4,8 to 8,1 billion rubles (+68,4%). More than a twofold rise in businesses’ costs on current operational needs and services considerably facilitated this. Environmental investments in the republic in 2020 didn’t rise significantly (+20 million), while costs on the revision of key environmental protection assets shrank from 777 to 530,1 million rubles.

Last year, Bashkir businesses augmented environmental expenses to 25,8 billion from 18,5 billion in 2019. Unlike Udmurtia, here investments played a significant role — they almost tripled, up to 9,4 billion rubles. Operations costs and services in Bashkiria anyway were higher — 15,7 billion, but they increased just by 1,2 billion rubles since 2019. As well as in Udmurtia, businesses in Bashkiria cut costs on revisions of key environmental assets to 642 million rubles last year.

In 2020, Tatarstan was left behind in environmental expenditure not only by neighbouring Bashkiria and Udmurtia but also Orenburg Oblast (+26,9%), Mordovia (+23,8%), Chuvashia (22,8%), Samara (19,8%), Saratov (+18,2%) and Penza Oblast (+16,5%). Nevertheless, the republic remained a leader in absolute numbers of green costs among the regions of the Volga area. During the pandemic, unlike some regions that went ahead, Tatarstan businesses managed to increase environmental costs in all parameters.

Tatiana Dyomina