Transforming the Sustainable Development Function in Russian Corporate Governance: Results of an Expert Session Conducted by School of Finance and the ESG Alliance

On 28 January 2026 HSE hosted an expert facilitation session: The Sustainable Development Function in the Corporate Governance Structure: How to Increase its Importance and Influence? It was organized by the ESG Alliance together with School of Finance of HSE University.

The event brought together representatives of the sustainable development and ESG management departments of large Russian companies, heads of consulting companies and representatives of the academic community: business schools and universities which offer sustainable development management programs.

The expert facilitation format was chosen for the session. It combines elements of analytical review, collective ideas generation and joint working out of management solutions. This format provided an opportunity for a productive dialogue between corporate governance practitioners and the expert community on a range of issues related to the institutional positioning of the sustainable development function in the organizational structure of Russian companies.

The following three key problem areas formed the centerpiece of the discussion:

• the value proposition of the sustainable development function against the background of the transforming regulatory and business environment in Russia;
• models of cross-functional interaction, i.e. developing effective communication of sustainable development units with such corporate functions as human resources (HR), government relations (GR), marketing, strategic planning, and finance;
• institutional mechanisms that reinforce the influence of the sustainable development function in the corporate governance system.

Presentation of the results of new research which involved 40 companies from 11 economic sectors was an important substantive component of the session. It was the first time the research findings were presented. Then they became the subject of a collective expert discussion among the session participants. It is planned to publish the complete results of the research in the immediate future.

The discussion revealed a range of systemic challenges and conceptual dilemmas confronting the management of sustainable development units in Russian companies.

Yulia Mazanova (Metalloinvest) made a point of the existing need to legitimize the sustainable development function within the corporate hierarchy. According to her observations, ESG directors when communicating with CEOs and the management have to perform mainly the educational and evidentiary function justifying the expediency and value of their activity. The importance of involving the board members in this process was emphasized particularly.

Marina Bulova (Sber) elaborated upon the topic of the value-based justification of the function focusing on the issue of monetization of its contribution to corporate results. She emphasized that internal strategic units operate on the basis of profit growth and market share, and the sustainable development function should be able to express its contribution in a language that business strategists understand. In this expert’s view, function value monetization is an objective of crucial importance: if there is no clearly-worded value proposition even high‑quality ESG reporting is unable to ensure institutional sustainability of the unit. In such circumstances the decision to retain or eliminate the function depends on CEO’s personal beliefs rather than on an unbiased estimate of its contribution to the company strategic result.

Irina Bakhtina, a representative of En+ and Chairperson of the Supervisory Board of the ESG Alliance, put emphasis on the unique expertise of ESG directors in understanding the interests and problems of a wide range of stakeholders. According to her estimate, no other corporate function features a comparably deep insight into stakeholder aspirations. Thus, the sustainable development function gains an objective competitive advantage in the corporate governance system.

Irina Ivashkovskaya, professor at HSE University, expanded the conceptual scope of the discussion. She offered to rethink the view on the function. When I. Ivashkovskaya answered the question about the proper term for the function given that the ESG acronym induces skepticism in some managers, she proposed the concept of a “department of business value management”. Her idea was grounded in the historical logic of corporate reporting development: first, the paradigm of value reporting emerged and then it was followed by the concept of non‑financial reporting. So, the return to the value paradigm allows one to position the sustainable development function in the categories natural for financial and managerial discourse, thus eliminating the problem of rejection of the term “ESG”.

The session showed relevance and practical significance of the issues of institutionalization of the sustainable development function in the corporate sector of Russia. The informative debate between practitioners and the academic community representatives revealed a common vector of the discussion: the need to proceed from substantiation of the existence of the sustainable development function to its integration into the value‑based management model of the company.

The fact that the ESG Alliance and School of Finance of HSE University organized jointly the event is indicative of the strategic importance of the partnership between academics and practitioners aimed at creating scientifically grounded approaches to integrating sustainable development principles into corporate governance. School of Finance of HSE University continues to serve as a platform for an expert dialogue on the key issues of developing the ESG agenda in Russia fostering convergence of academic research and management practice.