Viewpoint: Polina Lion on Rosatom's ESG policies

19 December 2023

Following the COP28 climate summit in Dubai, Polina Lion, the chief sustainability officer for Russia's nuclear energy corporation Rosatom, outlines the company's ESG strategy.

(Image: Rosatom)

What is your background and how have you come to be doing the job of chief
sustainability officer for Rosatom?

I have a masters degree in economics, and my 20-year career has been predominantly in the field of strategy and business process management. Recognising the growing importance of corporate environmental, social, and governance (ESG) transformation for business development, I accepted an offer five years ago to build ESG expertise at Rosatom. I firmly believe that ESG is a new strategic imperative for international companies.

How big a role do you see nuclear energy and nuclear technology playing in tackling
carbon emissions and climate change?

Decarbonisation has to be a global priority to combat climate change, and we firmly advocate for nuclear power as a key solution. Nuclear energy, like wind power, has no direct CO2 emissions. For example, in Russia nuclear power plants help prevent more than 100 million tonnes of greenhouse gas emissions per year, that is 7% of the total country’s greenhouse gas emissions. There is a consensus among international experts that without nuclear energy the Paris Agreement goal cannot be reached. The IEA’s June 2022 reminder underscores that without nuclear energy, achieving sustainable and clean energy systems becomes not only challenging, but also riskier and economically burdensome. The recent International Atomic Energy Agency projection for 2050 emphasises the pressing need for an 120% increase in nuclear electricity production capacity compared with current levels and at COP28 more than 120 companies, including Rosatom, signed the Net Zero Nuclear industry pledge of a goal of tripling global nuclear generation by 2050. While meeting these targets is essential for our net-zero climate goals, substantial challenges arise, particularly in securing the necessary investments for nuclear energy. To put it into financial perspective, achieving net-zero emissions by 2050 requires a more than two-fold increase in annual electricity sector investment between 2023 and 2030, with an estimated annual allocation of USD100 billion specifically for nuclear energy. I believe that financial institutions should reconsider their policies toward nuclear energy projects. Green and ESG-financing should become more accessible for nuclear energy projects - both large-capacity nuclear power plants and small modular reactors (SMRs). Sustainability is a core focus for Rosatom, with projects spanning more than 50 countries worldwide. We actively align our product portfolio with the 17 United Nations Sustainable Development Goals. Over the past five years, we have observed a significant increase in the demand for ESG quality in business operations, a trend that continues to grow. It is evident that ESG and climate considerations have evolved into fundamental requirements for conducting business on a global scale.

What sort of initiatives are taking place in Rosatom?

We put forth efforts to integrate ESG requirements into every aspect of Rosatom’s business and since 2021, we have commissioned ecological monitoring and expeditions to explore the Arctic’s ecology and biodiversity specifics as part of developing the Northern Sea Route maritime navigation. We have made significant efforts to include nuclear energy in the Russian green taxonomy, attracting ESG financing for nuclear power plant construction totaling more than USD3 billion (300 billion Russian rubles). We have advocated for the inclusion of nuclear energy in the national green certificates system currently under development in Russia. The system is set to launch in early 2024, and green nuclear certificates will be available for companies interested in offsetting their greenhouse gas footprint with zero-emission energy. We also keep an eye on our general ESG performance. For the past four years, we have conducted an annual ESG rating procedure, with an obligatory lessons-learned segment where we analyse the results of the rating and elaborate a plan for practical steps to improve these outcomes. We initiated this practice with the independent rating agency Vigeo Eiris in 2020 and continue with the Russian rating agency AKRA. While we have consistently obtained a high score, there is always room for improvement in sustainable development performance. Given the urgency to prevent irreversible climate change, all low-carbon energy sources should be part of the efforts to decarbonise the global economy. Clean, low-carbon nuclear energy complements renewables to create a low-carbon energy mix for our planet. As such, Rosatom is developing its green product portfolio, focusing on sustainable clean energy solutions. We are already one of the major players in Russian wind energy, having commissioned about 1 GW of capacity with plans to increase it to 1.7 GW by 2027. There is a demand for Rosatom wind energy parks abroad. For example, this year we have signed agreements with the Ministry of Energy of Kyrgyzstan and the Republic of Myanmar. We also develop energy storage solutions for the auto industry and the power grid complex, with significant technological capacity in hydrogen energy development. We are also committed to expanding the application of closed nuclear fuel cycle technologies and solutions to ensure the safe storage of radioactive waste. In early November, the Beloyarsk nuclear power plant celebrated the one-year anniversary of its groundbreaking transition to MOX fuel in the BN-800 fast neutron reactor. This significant milestone marked a major step toward a sustainable, closed nuclear fuel cycle.

How has international ESG collaboration changed since February 2022?

I used to say that climate issues have no borders. We need to keep the global dialogue working on climate and ESG issues to align the efforts of different companies and countries. We take part in the IAEA and some other international organisations' working groups on ESG and climate issues, and we participate in international events like COP28. For example, World Nuclear Association has launched an ESG Working Group, and we are considering elaborating a voluntary ESG standard for nuclear energy projects based on the ISSB framework to encourage ESG financing for the nuclear sector. Without joint efforts, there will be no sustainable solutions.

What about COP28?

This year Rosatom conducted several events in the official blue zone of COP28 and on the sidelines, presenting progress in SMR projects development, our integrated approach to developing sustainable clean energy systems in different areas, and discussing the next generation demand for clean energy solutions. It’s essential to remember that COP is a site for official UN country negotiations, with COP28 negotiations dedicated to reviewing interim results of progress toward the Paris Agreement goals and performing specific climate mechanisms. It is time to turn from sound declarations to practical steps in the fight against climate change.

Do you think it is still possible to achieve climate change goals?

As per the Sixth Assessment Report of the United Nations Intergovernmental Panel on Climate Change and scientific research, the increase in global temperatures is now approaching the previously agreed-upon 1.5°C, and reaching this critical turning point will have devastating consequences for the planet. I am an optimist and believe that there is still a chance, as many countries and companies are genuinely concerned about climate change. However, we need to unite our efforts for success. Russia is the world’s fourth-largest emitter of greenhouse gas emissions. We understand that our efforts as a country matter. Rosatom is one of the world’s leading nuclear energy companies, and we recognise that our efforts as a company matter. The future of greenhouse gas emissions will largely depend on development trends in the world economy, green technologies, and transformations in human behaviour.

What developments do you think are needed?

The challenges posed by the climate agenda are global and exceedingly difficult to address. It is crucial that countries and companies align their efforts. Alongside the mantra “we need to act right now”, there is a pressing need for harmonising climate regulations along with corresponding national policies and mechanisms across different countries. Clean, low-carbon nuclear energy should be explicitly included in national green taxonomies with extensive and clear parameters to facilitate access to green financing for nuclear power plants and small modular reactor projects. National carbon markets should be opened and harmonised for international trade exchanges. Both national and international green energy certificate systems should recognise and incorporate nuclear energy, as it is an integral part of the clean energy mix for the future. Maintaining an ongoing international dialogue is essential to exchange best practices in climate solutions, making the path toward a global net-zero more sustainable and effective.